More than four million residents of a central Chinese city face an permanent change of address. Chaohu City, in Anhui province, will be abolished, according to Chinese media reports.

The city will be divided into three zones, which are set to be absorbed into neighboring cities, an official from the Anhui Government is reported to have said.

The idea was first suggested at a meeting of China’s People’s Congress in 2010, when representatives from Anhui argued that the small size of government districts in the province was having a negative impact on economic development.

According to the plan, three districts of Chaohu City will be administered by the neighboring cities of Hefei, Wuhu and Ma’anshan. Hefei, the province’s capital, currently has a smaller population than Chaohu city, and is also smaller than several other cities in the province. With the absorption of parts of Chaohu city, the relative economic importance of Hefei is set to increase.

Anhui has traditionally been one of China’s poorest provinces. American author Pearl Buck set her 1932 novel about Chinese peasants, “The Good Earth,” in Anhui. The province now has one of the fastest GDP growth rates in the country, standing at 14.5% last year, according to Xinhua.

The province hopes to exploit Chaohu city’s position on the Yangtze river, by creating an industrial zone focusing on the steel, automotive and electrical industries.

Chaohu’s official population is 4.5 million. The city last made headlines when a video of an unsucessful attempt to destroy an ornamental gate in the city was posted online. A huge explosion left the gate standing, but successfully damaged several nearby buildings. Here’s the video:

Chaohu demolition attempt

The date for the city’s demise does not seem to have been set, and some reports on the story have been removed from Chinese websites. A few posters on microblogging service Sina Weibo are sceptical. “Will somebody from the government speak out and deny this rumour?” one user writes. Others expressed shock at the decision. “How can they do this? I love Chaohu!”

“At the moment, it must be Chaohu’s party secretary who’s most worried”, writes another user.

An American style rodeo planned for Beijing’s former Olympic stadium has aroused strong opposition from Chinese animal rights activists. Now Hong Kong movie star Jackie Chan has been dragged into the controversy.

A photo showing Jackie Chan holding a cowboy hat and smiling alongside Beijing Rodeo promoters Richard Tucker and Matt Shiozawa is being passed around the Chinese internet.

The photo which started the controversy, with Chan at the center.

Earlier this year, Chan publicly expressed his support for the Rodeo, according to a report by Chinese website Tencent. The event’s organizers, Rodeo China, published a press release on April 25 stating that Chan had said on video that the Rodeo would promote cultural exchange and friendship between China and the USA.

The Beijing Rodeo will take place in Beijing’s Olympic “Bird’s Nest” stadium this October. More than one hundred cowboys will descend on Beijing for the event, which aims to be the biggest ever competition of its kind, with a prize purse of eight million dollars. Promoters have billed the event as “the Super Bowl of rodeo.”

The Rodeo has drawn heavy criticism from Chinese nationalists, who see the event as an imposition of “trashy” American culture into a nationally iconic stadium, according to The Daily Telegraph.

The event was also opposed by Chinese animal rights groups, who fear that animals participating in the rodeo will be abused. A coalition of 68 animal rights groups calls for the cancellation of Rodeo China, according to the LA Times.

Chinese netizens have been outraged by Chan’s apparent support for the rodeo. “Brother Chan, you have offended the Chinese people, and you are a hypocrite” wrote one netizen quoted in Tencent’s report.

Some online commentators have refused to believe that Chan could really support the rodeo. “Brother, have you been tricked?” wrote one commenter.

A video posted on Chinese website Tudou juxtaposes the photo of Chan and the Rodeo organizers with pictures of abused cattle, set against a background of somber synthesized music. The video’s subtitles implore Chan to end his relationship with Rodeo China. The video is currently being shared on China’s most popular microblogging service, Sina Weibo.

Jackie Chan is one of the most famous celebrities in mainland China, often referred to by netizens as “Brother Chan”. Chan speaks Mandarin Chinese fluently, and is often seen on mainland television, promoting his films and appearing in advertisements. He is also known for his charity work. Following a 2008 earthquake in Sichuan province, he visited the site of the disaster, and donated 10 million RMB to earthquake victims.

Last year Chan appeared in a video [YouTube] produced by the World Society for the Protection of Animals, making a passionate plea to bile-farming from bears for use in Chinese medicine.

“You made a video about the protection of bears, and now you’re promoting the mistreatment of cattle, its a massive contradiction. Brother Chan, you’ve hurt me deeply,” one netizen wrote.

Jackie Chan has not made any further comments on his relationship with Rodeo China.

After three large bridges collapse in a single month, Chinese internet users say “I told you so”.

A complete section of the Wuyi mountain bridge in Fujian Province collapsed on July 15, killing a bus driver and injuring 22 bus passengers. The following day, gaps appeared in the middle section of the third Qianjiang River Bridge in Hangzhou, injuring a truck driver.

Earlier this month, a bridge in Binhai county, Jiangsu province partially collapsed, causing two trucks to fall into a river below the bridge.

Injured people on the Wuyi mountain bridge, Fujian.

All three bridges were built in the mid-to-late 1990s. The Qianjiang bridge in Hangzhou was refurbished in 2005, but minutes from a meeting of the local transportation bureau showed that an incorrect ratio of sand to concrete was used in the maintenance, according to the China Daily newspaper.

Internet users predicted the collapse of the Qianjiang bridge several years ago. As early as 2007, posts on popular internet forum Tianya pointed out that the ratio of sand to concrete used to build the bridge was incorrect, according to the Beijing News. Other posts to the forum pointed out that the bridge was built by the same company responsible for a collapsed bridge in Hunan province, and advised drivers to avoid crossing the bridge.

Low quality infrastructure may be caused by corruption amongst officials responsible for overseeing construction projects. The China Daily reports that Zhao Zhanqi, an official responsible for the Qianjiang bridge project, was sentence to life in jail in 2007 for taking over 6 million yuan in bribes during the bidding for the bridge project and during its construction.

The world’s longest ocean bridge, spanning 23 miles, opened in Qingdao, Shandong province last month. Chinese internet users soon complained about the rushed construction of the bridge, after pictures of easily loosened bolts and incomplete safety rails along the bridge were posted online. Last year a bridge in Henan province collapsed, killing 37 people.

The frequency of bridge collapses in China leads to an attitude of cynicism among some sections of the public. “If the bridges didn’t collapse, how else could we rebuild them and boost our GDP?”, wrote one commentator on Chinese news website Caixin.

There’s a new company in the running to buy a decommissioned British aircraft carrier. Just one problem: the company’s head is in China, serving a 14-year jail sentence for insider trading.

Eagle Vantage, an asset management firm based in Hong Kong, has announced it will enter the bidding to buy the HMS Ark Royal. The 10,000 ton ship was decommissioned by the Royal Navy last year, and is currently listed for auction on the British Ministry Of Defence’s website. According to a spokesperson from Eagle, the company hopes to turn the ship into a “mobile exhibition platform”.

Eagle’s majority stakeholder is Huang Guangyu, founder of China’s largest electronics retailer, Gome. Huang was once China’s richest man, with a fortune of US$6.3 billion. Last year he was put on trial in Beijing and sentenced to 14 years in jail on charges of insider trading and bribery.

The Ark Royal, or 皇家方舟 in Chinese.

Commentators complained that Huang’s case was used by Chinese authorities to send a warning to the business community. Corruption is common in Chinese business circles, and is often ignored by officials who stand to benefit from insider deals. But cultivating good relations with party officials can be crucial. Unlike other successful Chinese entrepreneurs, Huang never joined the Chinese Communist Party, and stayed aloof from politics.

Huang refused to give up control of Gome company even from his prison cell. Using his 34 percent stake in the company, he promoted his sister to the company’s board of directors, and engaged in a year-long campaign to get rid of Gome’s chairman, Chen Xiao. Chen, who was seen as a rival to Huang, left the company this March.

Zhao Qiguang, Eagle’s project manager in charge of the bid, told the Global Times newspaper that the value of the bid was a “a trade secret.” Zhao also said that the company planned to transport the retired aircraft carrier to Hong Kong or Macao, and not to the Chinese mainland.

Chinese media have been speculating about how closely Huang’s asset management firm Eagle is connected with his electronics retail company Gome. A company insider told the Evening News [Chinese] that the two companies were not directly related, but Gome is interested in the project, and may turn the ship into a “giant floating electronics market”, providing a “relaxing shopping experience” aimed at high-end consumers.

British newspapers reported proposals that the Ark Royal be used as a floating heliport on the river Thames. Its unclear how the British press will greet prospect of the ship, which served in the Gulf and Bosnian wars, becoming a pleasure dome for Chinese electronics consumers.

China launched its first aircraft carrier last month.

The results of the Ark Royal auction will be announced next month.

A corruption scandal affecting China’s Red Cross might be a boost to the country’s independent NGOs.

The scandal began after photos of a young woman enjoying a luxury lifestyle involving expensive sports cars, branded handbags and business class flights appeared on Chinese microblogging service Sina Weibo. The woman’s microblog profile, opened under the name GuoMeiMeiBaby, stated that she was employed as a “commercial general manager” at China’s Red Cross, a disaster relief charity operated by the Chinese government.

A few days later, China’s National Audit Office published a report which revealed irregularities in the Red Cross’ accounts, including a contract overpaid by US$650,000, as the New York Times reported. Chinese people have long been suspicious of state run charities, but events last week created a new crisis of confidence in such organizations.

Guo Meimei, the woman at the center of a scandal involving Chinas Red Cross

This week brought better news for non-governmental organizations, in the shape of a reform in the registration system for NGOs. NGOs in China have long been hampered by regulations which state that all charitable organizations need to be sponsored by a government department before they can legally register. Getting sponsorship can be tough, because government departments generally don’t wish to be associated with controversial organizations, causing some NGOs to wait up to three years before they can legally operate, according to the newspaper Beijing Today. The system also means that NGOs can be more easily controlled by the state.

According to an announcement made on Monday by the head of China’s Ministry of Civil Affairs, NGOs which fall under the categories of “public benefit, social service and social benefit” will be allowed to directly register, without needing a government sponsor, the Beijing News reported today [Chinese]. “This really is good news, and will encourage the development of NGOs in China,” wrote one commenter on Sina Weibo. Not all online comment is so optimistic. “Its too early to tell how this will work in practice,” another microblogger wrote.

Some online commentators have linked the timing of the announcement with the scandal affecting the Red Cross. “China’s grassroots NGOs should be grateful to Guo MeiMei,” wrote a columnist on financial website Caixun. “The ministry of civil affairs couldn’t ignore the public opinion, and launched new policy to calm the public’s anger”, he wrote.

Would-be donators looking to avoid the tarnished Red Cross are likely to find more direct ways to donate thier money. Reports also surfaced today that tennis player Li Na will donate the proceeds of a 600,000 RMB (US$92,750) prize she received from the government of Hubei province to a nursing home for old and disabled people. According to a post on Weibo, Li Na and her family stated that they would be giving 500,000 RMB directly to the hospital, thereby avoiding donating to the Chinese Red Cross.

The Chinese Football Association (CFA) has reached an agreement with real estate giant Dalian Wanda over an investment deal that will see 500 million yuan (US$77 million) plugged into the Chinese domestic league, men’s and women’s national teams, and youth development over the next three years.

After being deserted by sponsors Pirelli in April, the Chinese Super League (CSL) will now be sponsored by Dalian Wanda through 2013. The CSL has been plagued by scandal for much of its existence after the Jia-A League was re-branded in 2004, and several top CFA officials, referees and players were recently arrested on allegations of corruption and match-fixing. The result of this have been sagging interest in Chinese football, with fans turning their attention to European leagues.

Dalian Wanda’s return to Chinese football comes after an 11-year exile. Having founded a professional team in 1993, Dalian Wanda soon became the most successful club in the newly established Jia-A League, claiming the title four times in their first six seasons. In 2000, however, Dalian Wanda chairman Wang Jianlin quit the game in disgust over claims of corruption stemming from Dalian Wanda’s controversial CFA cup semi-final loss in 1998 to Liaoning Tianrun. Dalian Wanda was sold-off to Shide, a building materials company, and have since been called Dalian Shide F.C.

Chinese fans cheer on the national team at the 2008 Olympics. Photo: Roberto Candia/AP

Wang Jianlin, who at the time had vowed he would have nothing more to do with football in China, has now been drawn back to the game, but he is returning a little wiser and with clear expectations.

I have two standards to assess the result of our cooperation. One is the participation level of teenagers in the sport. If China’s soccer (football) population increases to 700,000 thousand or 800,000 in three years, then our cooperation will be successful.

The second standard is the attendance rate at the domestic league. I hope our cooperation will reawaken people’s passion for soccer.

If we make these changes in three years, then we can talk about further cooperation, but if there’s no change, I think we will be done there.

The two sides have agreed to make youth development a priority, and have launched a ‘Future Stars’ program that will send 100 promising youth players overseas every year to train in foreign leagues.

The aim is to increase the quality of Chinese football. Despite topping the gold medal charts at the 2008 Olympic Games and an increasing dominance in many international competitions, China’s standing in world football has dropped dramatically since qualifying for their first and only World Cup in 2002. The national team failed to progress past the group stage in the Asian Cup in January, and the Under-23 squad were dumped out of the pre-qualifying tournament for the 2012 Olympic Games in controversial fashion by Oman on June 23.

Wang Jianlin does have some cause for optimism though. Since bowing out of the Asian Cup, the national team has gone on a five-match unbeaten run, including victories over 2010 World Cup competitors Honduras and North Korea. Their campaign for the 2014 World Cup in Brazil will kick off on July 23 with a second round match against Laos, who despite battling past Cambodia in the first round, are the lowest ranked team competing in the Asian Football Confederation (AFC) qualification tournament.

Two oil spills which were kept secret from the public have highlighted the lack of transparent accident reporting in China’s offshore oil sector.

The latest incident occurred last month in the Bohai sea, near Shandong province in Eastern China. According to a summary [Chinese] of a press conference held today by China’s state oceanic administration, two leaks occurred at the Penglai field in the Bohai sea. The first was on June 4, when one platform leaked a small amount of oil, followed by a larger leak at another platform which was discovered on June 17. The leaked oil affected a 158 square kilometer area of sea. The causes of the leak are still unclear, according to the summary. The oil field, China’s second largest, was discovered in a joint exploration project between China National Offshore Petroleum (CNOOC) and US company Phillips Petroleum in the late 1990s. Phillips Petroleum has a contract with CNOOC which gives them a controlling stake in the field.

The accidents were not made public by the oceanic administration, or the companies involved, until several weeks after they occurred. The first report [Chinese] on the leaks appeared on microblogging service Sina Weibo (China’s equivalent of Twitter) on June 21, where a post stated that two oil fields in the Bohai sea had leaked oil, and that the original leak occurred two days before the date of posting. On June 30, the Chinese newspaper Southern Weekend, known for its investigative reporting, published a story on the incident which dated the spill to June 10. According to state-run media, which started running stories on the leak this weekend, the CNOOC waited until July 1 to confirm details of the accident to investors.

According to journalist from Chinese business magazine Caixin who attended today’s press conference, the State Oceanic Administration stated that responsibility for the leak lay entirely with Phillips Petroleum. The size of the oil slick created by the leak is much larger than originally reported, according to the journalist. “It’s much more serious than we originally thought,” he said.

Last year's oil spill at the 'South Sea Number 1' platform

This is at least the second time in the last year that CNOOC has failed to publicize an oil spill in one of its oil fields. Caixin reported today that another leak occurred in the same oil field in April last year, creating an oil slick of between 10 and 100 square kilometers. The spill was reported to China’s Oceanic Administration, but was not made public by the department, and was not reported by the mainstream media. According to Caixin’s report, the only coverage of the incident was published in an industry journal called “Ocean Development and Management” in August last year, which also published photos of the clean-up operation.

Risks of oil spills along China’s coast are increasing as China exploits more of its native oil reserves. China’s native crude oil output grew by almost 7% last year, according to China’s National Statistical Bureau. Last year, China’s largest ever oil spill occurred in Dalian, when 1,500 tonnes of oil spilled from a storage depot, creating an oil slick covering more than 900 square kilometers. Local fishermen received little or no compensation from Petrochina, the company responsible for the spill. Chinese laws regarding compensation following oil spills need to be improved, according to a report in the China Daily newspaper last month.

The southern Chinese city of Guangzhou has announced plans to build a more than 600 meters-tall skyscraper called called the “Diamond Mansion”, according to a report from Chinese independent media company Caixin. The announcement highlights a trend in high-rise construction away from China’s richer east coast cities towards the county’s interior, meaning those searching for China’s grandest views will soon have to look further-afield than Beijing and Shanghai.

The design for Guangzhou's "Diamond Mansion"

Western Chinese metropolis Chongqing is building two 500 meter tall towers, due to be completed in 2013 and 2015 respectively, according to the report. This week it emerged that a pair of US architects won the competition to design a 606 meter tower in Wuhan, Central China’s largest city. By comparison, the USA’s tallest building, the Willis tower in Chicago, is just 442 meters tall.

Within the next five years, China will have 800 skyscrapers, four times as many as the US, according to Britain’s Daily Telegraph. “In the past, if American architects could participate in the building of two or three skyscraper projects in their lifetime, that was a great achievement,” Zhou Xuewang, head of China operations at Skidmore, Owens and Merrill, the firm responsible for the 450 meter tall Nanjing Greenland Financial Center, told the China Youth Daily. “But in China today, a designer can work on two or three skyscraper projects in a single year”.

Local governments see skyscrapers as a way of establishing their cities as financial centers, and are also competing with other cities for titles such as ‘”Home of Western China’s tallest building”, according to a report from Chinese magazine Southern Metropolitan Weekly. The rush to build upwards is contagious, it seems. Fangchenggang , a city of 1 million people in Guangxi province, has plans for a 528 meter tall skyscraper.

The wisdom of skyscraper development has been questioned by those who see the buildings as symbols of an overheated property market, and of mis-allocation of funds by local governments. “The taller you make a building, the longer it takes to make the money back, and the bigger the risk is,” SOM’s Zhou said. In some of the cities building skyscrapers “transport facilities aren’t at a level which matches these kinds of projects, and nor does the level of development” he said. Flooding in Wuhan last week showed the poor state of much of that city’s urban infrastructure.

Chinese skyscraper enthusiasts now have online forums where they can exchange pictures of the monoliths in their midst, but not everyone is happy about the government-financed race into the heavens. “This isn’t government officials’ money [they're spending], its the blood and sweat of the taxpayers,” one commenter on Caixin’s website wrote. “According to the completion dates mentioned in the article, China’s economic crisis should be due by 2014″ wrote another.

Dual pressures on private businesses in China from rising costs and tighter monetary policies from Beijing are highlighted in two reports from the Chinese-language 21st Business Herald.

According to one report, the number of cigarette lighter manufacturers in the southern Chinese city of Wenzhou has fallen from a peak of 4,000 at turn of this century to just 100 today. Wenzhou is responsible for 90% of the world’s cigarette lighter manufacturing.

Costs of raw materials and wages have risen in the last two years, with the cost of zinc, an essential ingredient in lighter production, tripling in price over the last two years, while labor costs are rising at a rate of 20% annually, according to the article.

After a glut of lending was ordered by the China’s central government in 2008 in response to the global financial crisis, the central government is now attempting to rein in lending as part of an effort to control inflation, which Hu Jintao labelled as the biggest problem facing China’s economy this year.

China has raised the reserve requirement ratio for banks every month this year, and upped the interest rate twice. The measures are having an effect: last week China’s seven-day repurchase rate, which measures funding availability between banks, rose to a three-year high.

That means that smaller, local banks are having a tougher time getting access to funds, and small and medium sized enterprises (SMEs) mainly rely on these smaller banks. The head of a loan department at one bank in Wenzhou told the Herald that only 10 percent of SMEs in Wenzhou now take loans from banks.  Many are turning to private lenders as a way to raise funds.

Wenzhou is renowned for the role that SMEs play in its lively private economy, but a similar situation is occurring in China’s manufacturing hub of Guangdong. The Herald reports that toy makers in the province are facing their worst financial situation since 2008. “Banks see the industry as too risky, and don’t lend to us,” one toy factory owner told the Herald.

SME closure is worrying for China’s government. SMEs account for 80% of manufacturing employment in China, according to Forbes. Riots in the town of Xintang in Guangdong province earlier this month were connected with unemployment amongst migrant workers in textile factories, which saw a decline in orders following the financial crisis. More factory closures could lead to similar incidents this year.

On Friday, the head of Guangdong provinces SME bureau stated that he was aware of the pressure on SMEs, stating that “profits are down, and some SMEs are making losses”. Whether measures will be taken by local governments to aid SMEs remains to be seen.

Ai Weiwei was released on bail late Wednesday night after being detained by Chinese authorities for nearly three months.

Xinhua first reported the artist’s release in a brief dispatch shortly after 10pm Wednesday:

The Beijing police department said Wednesday that Ai Weiwei has been released on bail because of his good attitude in confessing his crimes as well as a chronic disease he suffers from.

The decision comes also in consideration of the fact that Ai has repeatedly said he is willing to pay the taxes he evaded, police said.

The Beijing Fake Cultural Development Ltd., a company Ai controlled, was found to have evaded a huge amount of taxes and intentionally destroyed accounting documents, police said.

The Chinese term for the condition of his release is ‘qubao houshen’, which roughly translates to obtaining a guarantee pending trial.  In practice, this usually means that prosecutors have decided to drop charges, though suspects effectively remain on probation for a year and can be subject to restrictions on their movement, who they meet and communicate with, and other arbitrary measures that can lead to a subsequent detention.

Ai Weiwei outside his studio after being released. Photo: The Telegraph

Speaking to the New York Times, Jerome A. Cohen, an expert in Chinese law at New York University explained that Ai’s release on qubao houshen was the best possible outcome given the circumstances of the case:

This is a technique that the public security authorities sometimes use as a face-saving device to end controversial cases that are unwise or unnecessary for them to prosecute.

Often in such cases, a compromise has been reached in negotiation with the suspect, as apparently it has been here.

Ai declined to speak at length with the media upon returning home, explaining that he was on bail and wasn’t able to comment about his detention.

Despite the conditions tied to his release, it appears that international pressure on the Chinese government has paid off. Fabricated or not, tax evasion is taken very seriously in China, and until this year was punishable by death in extreme cases.

The government may also be looking to pick their battles as they go on the defensive with Omar al-Bashir, President of Sudan due to arrive in Beijing next week. Bashir is wanted by the International Criminal Court on charges of war crimes and genocide.

—————-

Ai Weiwei speaking to The Telegraph after his release

Negotiations between Russia and China over one of the largest prospective energy deals in history have stalled after China balked at the price demanded by Russia for supplying natural gas through state-owned Gazprom. The deal would guarantee 68 billion cubic meters of gas a year to China for 30 years beginning in 2015, and has been in the works since 2006 when an initial agreement was signed between Beijing and Moscow over the construction of the Atlai pipeline system – two lines running along an Eastern and Western route into China. China’s consumption of gas was 107 billion cubic meters in 2010, but this is expected to expand to nearly 400 billion cubic meters by 2020.

Price has been the primary sticking point, however, as China has sought a lower rate than the $300-400 per 1,000 cubic meters (tcm) paid by European markets for Russian-supplied gas. Insiders involved in the discussions have indicated that there is currently a $100 price difference between the two camps, but that they are both looking to compromise. China is believed to be asking for an average price of $235-250 per tcm a year, while Russia is looking to start at a minimum of $300-350 per tcm.

Russia sold gas to Europe at an average of $346 per tcm in the first half of 2011, but Gazprom CEO Alexei Miller has stated that he expects the average price for 2011 to be at $100 higher than in 2010 as a result of the price of oil, which could see gas as high as $500 per tcm by the end of the year. At this upper range of the price spectrum, the prospective deal with China could net Gazprom nearly $1 trillion by 2045.

Chinese President Hu Jintao meets with Gazprom CEO Alexei Miller and Russian Prime Minister Vladmir Putin. Photo: China Daily

Disagreement over pricing particulars

Gazprom typically negotiates long-term pipeline supply contracts that are linked to the price of oil, but whereas Gazprom’s European contracts are tied to Brent Crude, China uses Japan’s oil basket as a benchmark, which Moscow and Beijing both admit demands an alternative formula for any prospective contract. The oil benchmark issue has become even more pronounced over the last few months, as West Texas Intermediate (WTI) and Brent have decoupled significantly. The gap between the two main international oil standards hit a record high of nearly $23 on June 14.

Another factor weighing on the talks is the current spot market price for gas, which has been driven low by supply from ship-borne liquefied natural gas (LNG) cargoes. A number of major European purchasers of Russian gas have already entered into price re-negotiations with Gazprom this year, but Miller has emphasized that the company would continue to negotiate future deals based on a link to oil, as he doesn’t believe oil and gas prices will decouple substantially within the next five years.

Deal inevitable

Despite the pricing disagreement, both sides are confident that the deal will eventually be signed. Gazprom deputy CEO Alexander Medvedev revealed Monday that “the talks are going on uneasily, but we have an understanding… there are very good chances to reach an agreement by the year’s end.”

Analysts agree that although neither side has as of yet been under enough pressure to budge on their negotiating positions, a deal on a pricing structure will inevitably be  ironed-out, with too much at stake for both sides to let it fall through. The massive cash flow from the prospective China contract would be a major boost for Gazprom, who have recently had to cope with reduced demand for piped Russian gas as LNG cargoes, from Qatar in particular, have swamped European markets. China’s booming energy demands, meanwhile, prevent it from playing too much of a waiting game. Gas demand in 2010 grew by 22%, and with demand expected to surge to 400 billion cubic meters per year in the next decade, China is coming under increasing pressure to put together the key pieces of their long term energy puzzle.

Remember back in May of this year when Donald Trump tricked us into thinking he was seriously considering running for President of the United States? Okay, well, he didn’t actually succeed in tricking us; we all saw right through his megalomaniacal publicity stunt. Nonetheless, the billionaire brilliantly managed to still get himself a billion dollars worth of free publicity.

But more than any other demographic, it was the expat populace right here in China who were most traumatized by Trump’s tactics. First came Trump’s threats to levy a 25-40% tax (the figure varies by newspaper) on Chinese imports.

“Listen you M*therf*ckers, we’re gonna tax the hell out of you,” he was quoted as shouting before an audience of frothing-at-the-mouth Republicans. And by “M*therf*ckers,” we all knew he meant the Chinese.

Donald Trump. Pic: AP.

A collective groan could be heard in gweilo communities from Shanghai to Shenzhen as fears of a second Boxer Rebellion loomed over us as a result of Trump’s trash talk of China.

When Xinhua, China’s government-run media agency, confronted the business tycoon about his proposed trade tariffs, Trump reportedly defended his “Chinese credentials” by citing a list of books about China which he claimed helped him formulate his foreign policies.

“I’ve read hundreds of books about China,” boasted Trump, “I understand the Chinese mind.”

The Xinhua interview was immediately pulled offline by Communist censors (purportedly because it mentioned banned books such as Mao: The Untold Story by Jung Chang and Richard McGregor’s The Party). But Trump’s “Best China Books” list nonetheless went viral across the world wide web. Everyone from book critics to Sinophiles were now abuzz not about Trump’s trade war with the Chinese, but the LITERATURE that had lead him to making such extreme policy decisions.

Wall Street Journal, International Business Times and even the Times of India all ran Trump’s top 20 reading list, as did the Los Angeles Times, who put a comical spin on the story by comparing the list with Katie Couric’s interview with Sarah Palin, in which the empty-headed Vice Presidential candidate was unable to name a single newspaper or book that she reads.

Back in China, expatriates were dissecting Trump’s list and debating the merits of each book therein. Beijing rock star-turned-writer Kaiser Kuo twittered: “Trump’s China book list is funny in so many ways. Gavin Menzies?? And how does Amy Chua’s “BHotTM” count as a China book?”  Indeed most bloggers, including The Shanghaiist, reached a general consensus that the Tiger Mother had no business being on a China reading list (or any other reading list for that matter), while fans of Gavin Menzies’ controversial “faction” novel 1421 rejoiced that their man had finally received mainstream recognition by appearing on Trump’s bookshelf.

But what of the other books on Trump’s recommended reading list? Nobody seemed surprised that Trump had endorsed expatriate extraordinaire Peter Hessler. Hessler, who has been on literary cruise control ever since his best-selling novel River Town turned him into a millionaire, probably sips Cristal with The Donald when Hessler is not out hogging headlines at the Shanghai Literary Festival.

The Coming China Wars by Peter Navarro is another “no duh” for being exactly the kind of Trump-esque fear-mongering book that appeals to xenophobes who have never met a real Chinese person. And then there’s Mr. China, aka, Tim Clissold, who has managed to polarize sponsored expatriates (i.e. bankers and businessmen) with his self-depreciating memoir about his Sino-business failures while at the same time categorically accusing all Chinese CEOs of being inherently dishonest.

Other oddities that appear on Trump’s book list include The Heavenly Man by Brother Yun (for Bible-thumpers), CHINA: Portrait of a People by Tom Carter (a coffee table book, WTF?) and Heinrich Harrer’s Seven Years in Tibet (no doubt Trump’s attempt at kissing Tibet-hugging Hollywood hiney).

All in all, it is such an eclectic reading list that, when you think about it, it seems perfectly in line with Trump’s erratic, mercurial formula for success: one-part politics, a fifth of fear-mongering, a twist of business, and a splash of sensationalism and, voila, there you have a Trump literary cocktail.

Below is the now-notorious list in its entirety, just in case anyone actually wants to get bombed on books. Beware the wicked hangover, however:

1. The Party by Richard McGregor

2. On China by Henry Kissinger

3. Mao: The Untold Story by Jung Chang

4. Tide Players by Jianying Zha

5. One Billion Customers by James McGregor

6. The Coming China Wars by Peter W. Navarro

7. The Beijing Consensus by Stefan Halper

8. China CEO by Juan Antonio Fernandez and Laurie Underwood

9. Poorly Made in China by Paul Midler

10. CHINA: Portrait of a People by Tom Carter

11. The Man Who Loved China by Simon Winchester

12. China Shakes the World by James Kynge

13. Mr. China by Tim Clissold

14. Country Driving by Peter Hessler

15. The Dragon’s Gift by Deborah Brautigam

16. Factory Girls by Leslie T. Chang

17. The Heavenly Man by Brother Yun

18. 1421 by Gavin Menzies

19. Seven Years in Tibet by Heinrich Harrer

20. Battle Hymn of the Tiger Mother by Amy Chua

Tammy Bai has worked in China for 9.9 years and divides her time between Beijing and Shanghai. If she’s not there, she’s in Shenzhen. Otherwise you can find her in Hong Kong. But right now she’s in Chengdu.

Editorial desks across China should’ve been burning the midnight oil yesterday  – this year’s anniversary of the 1989 Tiananmen Square crackdown in Beijing is one of the most-nerve racking in years for Chinese officials, in the midst of the ‘Arab Spring’ revolutions playing out in the Middle East, the continued detention of popular dissident Ai Weiwei, and protests over the past two weeks in Inner Mongolia.

Life is relaxed as ever though at the mouthpiece of the Communist Party, the People’s Daily (人民日报). Among the featured stories on their China news page on the eve of June 4 was a heart-wrenching piece on the plight of 18,000 migratory birds that have been forced to flee Honghu Lake in Hubei province due to the ongoing drought in Central China.

According to Wen Feng, head of marsh protection at the Honghu Wetland Nature Reserve:

Normally, about 20,000 summer birds come to the lake in early April and fly away by the end of August. But this year, most of the birds have come and gone…migratory birds are very sensitive to the marsh environment.

The China Daily (中国日报) also tackled core issues, reporting on a campaign by equestrian enthusiasts to promote riding horses to work this week to mark World Environment Day on Sunday.

Compared to being stuck in traffic jams during rush hour, riding a horse is a much more convenient mode of transportation.

Xinhua (新华通讯社), meanwhile, stuck to slightly more serious matters, leading with a story on a visit to Beijing by a delegation from Mozambique. Of particular note was their use of the word ‘fruitful’ and their insightful summary of China’s policy on Africa:

[China] supports the practice that African nations solve their own problems through dialogues and in the Africa-style way.

Students gather in Tiananmen Square, June 1989. Photo: cromacom

To be fair, even the privately owned and widely respected Economic Observer didn’t cover Tiananmen, though it is occasionally critical on certain economic and political policies.

The Southern Metropolis Daily in Guangzhou has, however, tested the waters recently and is one of the more daring papers in the country. Last year it briefly ran a cartoon on its website to mark International Children’s Day on June 1, which depicted a child drawing a row of tanks very similar to the famous ‘Tank Man’ photo. And three weeks ago, the paper reposted a daring editorial on the 2008 Sichuan earthquake that had previously been taken down from its site.

Tiananmen may seem to be too sensitive a starting point towards a freer press, but put in context with other taboos such as the Great Leap Forward and Cultural Revolution, which killed millions, it shouldn’t be.  Thankfully the rapidly developing presence of the blogosphere and social media in China has ensured that mainstream Chinese media outlets feel the pressure to get a little more assertive if they want stay relevant and maintain their readership. In the future, hopefully the big Chinese papers will have something more substantial than stories on migratory birds to contribute on June 4.

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The Chinese Media Project run by the Journalism and Media Studies Centre at The University of Hong Kong is great site that tracks media reform in China.

Below is a clip from the PBS Frontline documentary ‘The Tank Man’. Students from the prestigious University of Beijing (北京大学) are shown the famous Tank Man photo and asked what it means to them. Beijing Daxue students were among the main participants in the 1989 demonstrations.

A trade mission to China led by Calgary Economic Development (CED) will wrap up on May 31 following week-long discussions between industry representatives from the Alberta energy and financial services sector, and their counterparts in Beijing and Shanghai. While plans to boost tourism links have also been on the agenda, the focus of the talks has undoubtedly centered on Chinese investment in the Alberta oil sands, which in the past two years has topped $13 billion dollars from the likes of energy giants Sinopec, CNOOC and PetroChina. This already substantial foray into Canada’s Northwest may be just the tip of the iceberg, however, with the Chinese government eager to secure an oil and gas supply network, and the deep pockets to pay for it.

Oil Sands a Key Component of China’s Energy Strategy

The massive Chinese investment in overseas oil and gas projects over the past few years stems from the need to fuel an economy growing at a blistering clip. Annual growth rates have hovered around 10 per cent for the better part of 20 years, and fuel consumption has inevitably surged to keep pace with the increasingly industrialized and modern economy. Oil consumption, which in 2010 stood at roughly 9 million barrels per day (bpd), is expected to grow by 4-5 percent a year to reach 10.6-11.3 million bpd in 2015, and 11.8-13 million bpd in 2020 according to the Energy Research Institute of the National Development and Reform Commission (NDRC), China’s economic planning agency. The NDRC expects foreign imports to make up 65 per cent of total oil consumption by 2020, up from the current mark of around 54 percent, which means China will need to bring in an additional 2.8-3.6 million bpd of foreign oil in 10 years time.

A Caterpillar 797B at the Muskeg-River oil sands mine. Photo: Popular Mechanics

The Alberta oil sands, one of the largest deposits of oil in the world and still underdeveloped, are therefore clearly attractive to Chinese energy firms. Production currently stands at 1.5 million bpd, but is expected to jump to anywhere from 3 to 5 million bpd before 2030. To get to this point, however, the Canadian Energy Research Association (CERI) estimates that capital investments to the tune of $253 billion are required. Of this infrastructure, key to China’s ambitions is the Northern Gateway Pipeline, which would link the Albertan interior to the Pacific coast with a terminal in Kitimat, British Columbia.

Large-scale Investment Contingent On Pipeline Approval

The Northern Gateway Pipeline, a $5.5 billion project spearheaded by Enbridge, is envisioned to be a lucrative link to Asian markets for Canada, but has run into opposition over potential environmental impacts, as well as land-rights issues related to native groups whose territory the pipeline would cross through. Despite this, the majority government recently won by the Conservative party may prove to be a critical spark towards approval of the project; only 3 days after the May 2 election, the National Energy Board (NEB) issued an order for a public hearing scheduled to begin on January 10 2012, and which is expected to last until July 2012. Roughly 12 weeks after this a ‘Reason for Decision’ will be released, and by end of summer 2012 should confirm whether or not the project will be granted federal approval. The recent decision over the Northwest Transmission Line, which will link up the ‘Golden Triangle’ region of BC to the province’s hydropower grid, will buoy those keen to see the project break ground soon after the hearings wrap up.

If and when the Northern Gateway Pipeline is approved, Alberta Finance Minister Lloyd Snelgrove expects investment from China into the oil and gas sector to triple what has already come in the last 2 years. Snelgrove and others currently in China for the talks believe Canada can ill afford to spurn Chinese advances, with the implications of closer ties for the energy industry and the broader Canadian economy too vital. “Recognize that the whole world is beating a path to the door of China”, remarks Gordon Houlden, head of the China Institute at the University of Alberta. “Relationships need to be built.” Snelgove echoes these sentiments: “China has become the second-biggest economy in the world”, he notes, “and just about everything they want, we have.”

by Robert Sullivan

The latest stop on the U.S. lecture circuit, the U.S.-China Strategic and Economic Dialogue, wrapped up on May 10, with the lion’s share of the discussion centered on the value of the Chinese Yuan.

The U.S. has consistently called China out on the currency issue in recent years, arguing that the Chinese government is keeping the value of the Yuan artificially low by pegging it to the U.S. dollar, making Chinese exports and industry far more competitive and skewing the U.S.-China balance of trade. China counters that it cannot allow the Yuan to appreciate too quickly or it will risk grave damage to its economy, and that in any case, the Yuan issue is not the root of the trade imbalance but rather a problem of the U.S. economy’s own making.

To begin with, it’s worth considering that most people wouldn’t have much time for unsolicited financial advice from a debt-ridden acquaintance. China seems to agree, even when that acquaintance is Treasury Secretary Timothy Geithner himself, pockets brimming with American Express cards and spare mortgages, moaning about the value of the Yuan and the damage it is causing the U.S. economy.

To be fair, most economists (even in China) agree that Beijing will eventually have to let the Yuan appreciate significantly so it can combat inflation, increase its purchasing power for dollar-denominated commodities like oil and iron ore, and shift from being an export-focused economy to one with a greater emphasis on domestic spending. The Chinese leadership has indeed hinted at this from time to time and has been slowly strengthening the Yuan since 2005, so the sticking point is not a matter of if, but how fast. The U.S. is asking for a substantial readjustment immediately; China says it will let the Yuan rise when it is good and ready.

An employee at Huaxia Bank in Shenyang counts US bank notes - Photo: Sheng Li / Reuters

Originally, having the Yuan pegged to the dollar provided some much-needed stability for the Chinese currency during a fragile period of reintegration into the global system, but China is now an economic powerhouse, and moving forward it isn’t realistic for the currencies of the top two economies in the world to be fixed together. China’s frequent cop-out that it is still just a poor, developing country becomes less of a reality every year its economy expands at its current blistering clip.

That said, China should not be under any obligation to abruptly readjust its currency at the behest of the U.S. if it believes its economy will suffer as a result. Japan bowed to U.S. pressure in the mid-‘80’s when they argued the yen was undervalued, and after signing the Plaza Accord in 1985 the yen appreciated rapidly, leaving the export and industry sectors scrambling to head overseas.

Making that same mistake too early could deprive China of one of its greatest current economic advantages during a key stage in its upwards trajectory. The economy will inevitably need to become more self-supportive and phase out state-directed distortions as all modern economies do eventually, but the pace of that change needs to be based on what is best for China.

Besides, the U.S. may need to be careful what it wishes for. Once ‘Made in China’ becomes ‘Made in America’ again, there may be a rude awakening for a majority of the country when they find out what all that fantastically cheap stuff at Walmart now costs.

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Robert Mundell on the Yuan-USD debate:

http://www.bloomberg.com/news/2010-06-21/nobel-prize-winner-mundell-signals-yuan-shift-may-erode-economic-stability.html

By Ming Ou Lü

Liu Shiru, Chen Guangcheng and Hu Jie. For most people, even their fellow Chinese, the names do not ring any bells. It is but three names in the vast sea of ​​more than 1.3 billion Chinese names. Human fates so remote from our everyday life, that even the most distressing and grueling stories have a hard time striking any chord in our own busy lives.

Suicide bombings in the Middle East and arbitrary arrests of human rights activists in China can become just mere words on a piece of paper. One may even experience an emotional gap that paralyzes and prevents identification with the tragedies that take place on the other side of the globe.

Though the book “Out of Mao’s Shadow – The Struggle for the Soul of a New China” has been out for more than two years, it is a book that is still very relevant, especially in the light of the Chinese government’s recent crackdowns on any dissent. The book strives to bridge the emotional gap, when hearing about tragedies far removed from our everyday lives. The author is Philip Pan, who from 2000 to 2007 was China correspondent for the American newspaper Washington Post. Throughout his time as a journalist in China, Pan has had access to many, interesting sources, which he makes good use of in the book.

Struggle for justice

Pan describes the lives of a number of Chinese individuals, who have in some way angered the complex Chinese system. The protagonists are ordinary people, who are fighting against expropriation, forced abortions or maybe just have a dream of producing a historical documentary. None of these people wanted to be labeled a human rights activist but their actions do merit, that their cause can no longer be described as just a personal battle against the Chinese system.

Their struggle has become a symbol of the injustice in China.

As each story unfolds, the reader senses the enormous interests at stake. There is an ongoing struggle on how China will evolve over the upcoming years. The dispute is over whether China will remain an authoritarian society with little respect for individual civil rights, or if China can for the first time in its several thousand years of history proceed towards a society based on Western democratic ideals.

Liu Shiru’s story is one of those told in the book. He has lived for a generation in the same house in one of Beijing’s hutongs. Up to the Olympics a property developer wanted to tear down his house, so she could build a major business center in the area. As the property developer had very good friends at the top of the Chinese Communist Party, it was an uphill battle for Liu Shiru. In the end, even Liu Shiru’s own brother betrays him for a large amount of cash.

Potential for good or evil

Each personal struggle is a fight for the dream that all Chinese people can grow up in a more just China. However, the book does not resort to simple black and white narratives. Instead it draws a plausible picture of all the parties involved in the struggle for China’s future.

Although the book consists of several individual stories, there is a clear connection between the various parts of the book. It is a road trip through China’s past and present, between country and city – a snapshot of China’s huge potential for good or evil.

He has never seen his homeland. Now he is prime minister of a government in exile trying to demand concessions from one of the world’s fastest growing powers, China.

The Harvard educated lawyer, Lobsang Sangay was elected as prime minister of the Tibetan government in exile this week. One of his main tasks will be to engage the Chinese government in a dialogue about the Tibetan autonomy and ensure that the Tibetan government in exile in the Indian town of Dharamshala also has a chance to affect developments in Tibet, which is currently ruled from Beijing. The question is whether he can achieve what the Dalai Lama has been unable to achieve, a free Tibet.

Previously, it has been the Dalai Lama, who has been the Tibetan exile government leader. However, Dalai Lama announced in March that he would resign as political leader of the Tibetan government in exile. This meant that the Prime Minister, who until now only had an administrative role, would have to assume a more political role. I’ve spoken to Lobsang Sangay recently about his thoughts on the relationship with China.

“The Middle Way or seeking ‘genuine autonomy within China’ is the official policy of the Tibetan government in exile as per three resolutions passed by the Tibetan parliament and the expressed view of His Holiness the Dalai Lama. Whoever is the Kalon Tripa should implement the existing policy of the Tibetan government in exile and I for one will do that,” says Lobsang Sangay.

Lobsang Sangay, who is 43 years, has since 1995 resided in the U.S., where he is currently a fellow researcher at Harvard University. For the last 16 years, he has been specializing in international law and conflict resolution.

Conflict resolution

This knowledge may well prove useful in the present conflict between the Chinese government and the Tibetan government in exile.

“His Holiness the Dalai Lama and the Tibetan government-in-exile have been advocating for genuine autonomy for Tibet for quite some time and we have been very clear and consistent in our position. A genuine autonomous Tibet would link up all Tibetans living in provinces of Sichuan, Yunan, Gansu and Qinghai,” says Lobsang Sangay and continues.

“It would safeguard the interest of all parties concerned. Tibetans would receive protection and preservation of their culture, religion, identity, and have a say in the shaping and implementation of economic development policies on the Tibetan plateau.  The starting point for China is sincerity and a serious intent to address the Tibet issue. So far Beijing has maintained its hardline policy and has failed to recognize the moderate and reasonable gestures by His Holiness the Dalai Lama to seek genuine autonomy for Tibet. From our side, we are willing to negotiate with China anytime and anywhere.”

Lobsang Sangay is not unknown to negotiations and discussions with Chinese people. At Harvard, he has engaged in many discussions with his Chinese colleagues.

There are however some profoundly different views on how the Tibetan issue should be resolved.

Challenging reforms

The Chinese Government believes that Tibet has been part of China since Yuan Dynasty in 1300-century. During the Chinese revolution in 1911, China lost control of Tibet and therefore Tibet was de facto independently from 1912 to 1950. When the Chinese Communists came to power in China in 1949, they declared that Tibet was an inseparable part of China and sent an army to the Tibet in 1950. After a battle near the town of Qamdo, where the Chinese defeated the Tibetan army, the Tibetan government chose to sign a 17-point agreement in which, they accepted Chinese sovereignty over Tibet.

However, after a failed uprising against Chinese central government in 1959, the Dalai Lama fled from Lhasa to the Indian town of Dharamshala, where the Tibetan government in exile has resided since then.

The Dalai Lama has been both spiritual and political head of the Tibetan government in exile. However, the institution of the Dalai Lama has had a leading role in the Tibetan community since the 17^th-century. Therefore it was a shock to many Tibetans, when the Dalai Lama in March chose to step down as political leader of the Tibetan government in exile.

“The Tibetan movement and community are in the middle of some momentous changes. Along with the generational shift in Tibetan political leadership, we also have to deal with His Holiness’ decision to devolve all political authority to elected Tibetan representatives. His Holiness is irreplaceable. He is and will always remain our spiritual leader and give us guidance. The transition to a more secularized Tibetan government will be challenging to say the least, “says Lobsang Sangay and continues.

“However, if we could look at things positively one could say that it is good such dramatic changes are happening as per the vision of and while His Holiness the Dalai Lama is still healthy and available for counseling and guidance. Plus we have many elders in our community with experience and long institutional memory of the Tibetan government-in-exile. I plan to include some of our elders and senior leaders in my cabinet and will reach out to others for advice. I’m also confident that the democratic institutions and government we have in place will help sustain the Tibetan movement and help us successfully cope with the transition.”

The detention of Ai Weiwei on April 3 has drawn international attention to what appears to be the peak of yet another crackdown on dissent by Chinese authorities. Mr. Ai has been held incommunicado over the past three weeks, and a number of the artist’s associates have also been whisked away with few details on where or why they are being held.

Many see this latest campaign on dissent as just another overreaction by the government in the wake of political unrest that has spread across the Middle East and has prompted calls by some in the activist community at home and abroad for China’s own “jasmine revolution”.

The fact remains though, that unprecedented economic growth over the past 30 years has lifted hundreds of millions of Chinese out of poverty and vaulted China back onto the world stage as a genuine power. There are some who fall foul of the Communist Party, but a majority of Chinese do not want to see the revolutionary overthrow of their government.

So why the concern then? Mr. Ai may be a thorn in the side of the authorities, but he alone is not about to orchestrate the collapse of the government, and the Party leadership must surely know that.

Ai Weiwei's "Study in Perspective - Forbidden City" - Photo: PBS

Even so, what does make the Party uneasy is the capacity of individuals or groups to mobilize unsanctioned support. Mobilizing public support was one of the fundamental elements in the rise of the Communist Party and they have had a monopoly on it in China over the past 60 years. So while this latest crackdown by the authorities may still be a little overzealously cautious, the descendants of the revolution now in charge may also know something we don’t about spotting the winds of change.

Strange then, that the masters of mobilization have been so clumsy over the past few years in dealing with relatively limited cases of dissent such as that of Mr. Ai and Liu Xiaobo, now a recipient of the Nobel Peace Prize. The only thing governments the world over have ever achieved by jailing dissidents is hardening the individual’s resolve, and consolidating public support for their cause.

Unless this clumsy policy is re-evaluated, the Party leadership may eventually find that they’ve opened up their monopoly on mobilization to competition, which is when their real scare might come.

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Below is a clip from the PBS series Frontline, which ran a short piece called “Who’s Afraid of Ai Weiwei”. The piece itself was put together from a full length documentary by filmmaker and journalist Alison Klayman titled “Ai Weiwei: Never Sorry” which will be released this year.