The China Story Dossier is a frequently updated archive of texts, links, news summaries and miscellanea connected to the China Story.

Salt licensing retooled, monopoly remains

Refined Iodized Salt (Source: China Salt)

Refined Iodized Salt (Source: China Salt)

On 21 April, the National Development and Reform Commission released a notice announcing the cancellation of the Measures on Exclusive Licensing for Table Salt 食盐专营许可证管理办法, regulations implemented in 2006 to govern the licensing process for salt production, distribution, and sales.

The announcement does not have any immediate significance, according to a post made the same day by the China National Salt Industry Corporation 中国盐业总公司, or China Salt, the SOE that controls the salt monopoly. Instead, it reflects changes that have already been made to the industry: authority was transferred from the NDRC to the MIIT in 2008, and last year the MIIT handed of management duties to individual provinces. The post ended on an emphatic note: ‘Repealing the Measures does not mean the abolition of the salt monopoly. The interpretation by some media outlets that the salt monopoly is abolished is a misunderstanding.’

Central government control of the salt trade varied widely throughout Chinese history, as The Beijing News notes in a timeline appended to its report, but salt sales now contribute a negligible amount to government coffers, raising questions about the need for a continued monopoly. Under the present system, for example, online retailers are largely barred from selling table salt due to restrictions on out-of-region sales. In both 2011 and 2013, Taobao and other ecommerce platforms suspended sales after complaints about price gouging, quality concerns, and infringement on local controls.

Additionally, like other areas of government licensing, the salt sector has its own allegations of corrupt practices. In a 23 April report in China Business News, a retired official previously involved in the salt industry said that producers frequently pay bribes to salt companies to boost the volume of annual supply orders.

Links and sources
NDRC Website 国家发展和改革委员会官网: 中华人民共和国国家发展和改革委员会令第10号 (2014-04-21), 食盐专营许可证管理办法 (2006-05-12)
China Salt 中国盐业总公司: 《食盐专营许可证管理办法》废止不等于废止食盐专营 (2014-04-21)
The Beijing News 新京报: 食盐专营管理办法废止 (2014-04-22)
China Business News 第一财经日报: 消失的暴利:中盐垄断为何还会巨亏 (2014-04-23)
21st Century Business Herald 21世纪经济报道: 电商食盐下架 盐业运输环节整顿 (2013-02-28)
Sina Tech 新浪科技: 中国盐业总公司称淘宝售盐违法 淘宝已主动下架 (2011-03-17)

Premier Li writes letter to first 24-hour bookstore in Beijing

Letter from Premier Li (Source: Xinhuanet.com)

Letter from Premier Li (Source: Xinhuanet.com)

On April 22, the day before World Reading Day, Chinese Premier Li Keqiang wrote a letter to Sanlian Taofen Bookstore, a Beijing bookstore that recently launched 24-hour services. In the letter Premier Li spoke highly of this 24-hour idea and expressed hope that the store could become a spiritual landmark in the city. 

According to a report in the Global Times, Fan Xi’an, general manager of the SDX Joint Publishing Company, said that the bookstore is not aiming to make a fortune from this 24-hour plan but rather trying to promote a cultural concept: “We will keep on doing this even though we lose money.”

Over the past several years, facing competition from online bookstores and e-books, many physical bookstores in China have closed down. To try and arrest this decline in bookstores, the Ministry of Finance and the State Taxation Administration recently jointly issued a new decree exempting wholesale tax and value added tax for books sold at bookstores. This new decree took effect in January 2014, according to Global Times

Links and sources
Xinhuanet.com: 李克强世界读书日致信三联韬奋书店
Global TimesBlackout bookstore

“Olympic babies” see increase in primary school enrollment in Beijing

20140422A01_pdfBeijing’s Mirror Evening News (法制晚报) yesterday reported that Beijing’s intake for primary school students for 2014 reached 176,000 pupils, which is 10,000 more than last years intake. Statistics show that the primary as well as middle school intakes in the city have increased in recent years, but this year the increase is being ascribed largely to the so-called “Olympic babies”.

While the city’s population has also just expanded naturally, much of this year’s growth is being ascribed to “Olympic babies”, i.e. the increased number of babies born in 2008, when China hosted the Olympic Games, who are now at the age of first entering primary school.

Links and sources
Mirror Evening News (法制晚报): 17.6万孩子扎堆“幼升小”

Shoddy construction found in dams destroyed during 2010 Zhugqu Mudslide

Excavated rubble inside the dam (Source: Zhang Shuling / Beijing Times)

Excavated rubble inside the dam (Source: Zhang Shuling / Beijing Times)

Earlier this month, a Beijing Times reporter visited Zhugqu (zhouqu 舟曲) County, Gansu Province, where 1,700 people died in flooding and mudslides that hit the area on 8 August 2010. Shortly before the disaster, the county completed work on four dams meant to prevent mudslides, all of which were destroyed by the flooding. Nearly four years on, county government and environmental authorities deflected questions about responsibility, but the locals and construction company employees the reporter spoke to described the dams as ‘tofu dregs’ doufuzha 豆腐渣 engineering.

Locals described attempts to have material from the dam tested, only to be informed that of orders from above that no tests were to be performed. An unnamed senior executive with Gannan Hengda Construction, the company behind the four dams, told the newspaper how construction workers took shortcuts by blasting the surrounding hillsides for earth to mix into the cement rather than sourcing sand from the river, and that they ignored orders to return to standard procedures.

The county court alluded to construction problems in 2011, when it gave Chen Shengchang 陈生昌, the Hengda manager in charge of the projects, with a suspended sentence of two years for negligence in failing to foresee that substandard quality would lead to major accidents and economic loss. However, the paper’s source within Hengda told the newspaper that Chen was made a scapegoat, since various government agencies had signed off on the dams. The initial budget for the four dams approved by the provincial environmental bureau was 9 million yuan, but the company’s bid was for 7 million; Chen took out a loan for the remaining 2 million. “But later, a county leader told him the most they could give was 5 million yuan, and then it was only 3 million, and ultimately, he only received 1 million,” the source told the Beijing Times.

The newspaper reported that the dam project was conceived in 1996 and had its design approved by the State Planning Commission in 1998. However, the originally planned reinforced concrete dams were instead built as masonry dams.

Links and sources
Beijing Times 京华时报: 谁为冲垮的豆腐渣大坝负责 (2014-04-21), 泥石流冲击舟曲县城 (2010-08-09)

Xi at the helm – PLA generals vow support for Xi’s directives on military development

20140418105205d1d73_550

On April 18, 17 senior PLA leaders, including Zhang Jianping, PLA Air Force deputy commander, and Chen Fu’en, PLA Second Artillery Corps deputy commander, published articles in the PLA Daily in which they expressed support for Xi Jinping’s directives relating to China’s development of national defence and military power.

Previously, the PLA Publishing House published a collection called Selection of Xi Jinping’s Significant Statements on National Defense and Military Development 习近平关于国防和军队建设重要论述选编 in February, and the book was subsequently distributed to senior PLA officers, at and above the regiment leader level, who are supposed to thoroughly study Xi’s thought. The full text of the book is not available on the Internet, but judging from the articles, its emphasis is on strengthening the Party’s control of the military, zero-tolerance for corruption, cultivating a ‘problem-solving mentality’ 问题意识, and increasing combat-readiness.

Links and sources

PLA Daily深入学习贯彻习主席关于国防和军队建设重要论述 在新的起点上推进强军兴军伟大实践

SOE “hospitality fees” disappear from many annual reports; “other fees” increase

Hospitality fees and annual report (Source: Xinhuanet.com)

 Source: Xinhuanet.com

“Hospitality fees,” which have ignited considerable discussion in the past few years, have disappeared from the annual reports of many listed state-owned enterprises (SOEs). So far, of the 251 SOEs that have released their annual reports for 2013, only 156 (62% of the total) have released details on their “hospitality fees”. However, such data was released by 168 companies in 2012, hence 12 SOEs concealed this information in 2013.

Xinhua reports that, according to insiders, concealed “hospitality fees” might have been categorized as “other fees”. For example, the “hospitality fees” of 837 million yuan reported by China Railway Construction Corporation in 2012 (the highest “hospitality fees” reported on both the Shanghai and Shenzhen stock exchanges in 2012), dropped to zero in the company’s 2013 annual report. “Other fees”, on the other hand, increased to 322.6 million yuan from 224 million yuan in 2012, a 44% increase.

According to an individual in the accounting industry, media reporting on high “hospitality fees” is the reason why many companies now choose to conceal this data.

Links and sources
Xinhuanet.com: 部分国企招待费由数亿元归零 “其他”费用暴增

15 years of Tencent’s popular QQ messaging app

Chengshi Kuaibao Apr 16The City Express newspaper, published in Tianjin, today ran a piece looking back at 15 years of the popular Tencent messaging app QQ, and included an expansive infographic on use of the app as well.

The newspaper recounts tales of young men who recount how they first met female friends on QQ, maintained an ongoing connection, and eventually married them. Other users tell of how QQ helped them to maintain connections with former student friends over the years.

The piece includes statistics on the use of QQ in China, apparently based on data provided by QQ itself. For example, the following are the eight most popular activities that QQ is used for in China:

  1. Text chatting
  2. Scanning friends’ pages
  3. Playing games
  4. Audio chatting
  5.  Video chatting
  6. Reading of QQ pages
  7. Sharing documents
  8. Reading news

The newspaper also notes that the number of people simultaneously using QQ increased from 100 million in 2010 to 200 million in 2014. (more…)

Oil leak and cover-up in Lanzhou water scare

Lanzhou's water test site (Source: People Online)

Lanzhou’s water test site (Source: People Online)

On April 11, the Lanzhou government revealed that Veolia Water, a French joint venture company that supplies water to the city, had measured benzene levels of 78 micrograms per liter, far higher than the national limit of 10 μg/L, in one of the city’s supply pipelines. The city government set an investigation team to work and cautioned residents not to drink tap water for the next 24 hours.

At a press conference on April 13, Zheng Zhiqiang 郑志强, deputy head of the investigation team, blamed the problem on two underground oil leaks, one in 1987 and a second in 2002.

Apart from questions about the cause of the contamination, Lanzhou residents are also upset at the delay in notifying the public of the problem. The initial timetable of the incident put Veolia’s discovery of the problem in the afternoon of April 10, but on April 13, Zheng Zhiqiang said that Veolia’s water line tests on April 2 already showed benzine levels above the national limit, at 10.66 and 13 μg/L. The company then discovered seriously elevated levels at 3pm on April 10 and filed its report late that night; the government learned about the problem at 7am April 11 and informed the public at noon.

In an April 14 article, China National Radio posed the question:

It only filed a report nearly 12 hours after discovering seriously elevated benzine levels, and the public was only notified after nearly 24 hours. Water safety is the concern of more than a million inhabitants of the city. As the sole supplier of water to Lanzhou, were Veolia’s actions in compliance?

National Business Daily quoted experts who suggested that pollutants had likely entered Lanzhou’s water supply through seams its aging cement pipelines. The paper intimated that Veolia had neglected its duty to conduct proper upkeep, possibly by handing over actual operational duties to a subsidiary in which it does not have a controlling stake. 

Links and sources
China National Radio 中国广播网: 兰州水污染应急措施基本解除 疑似延报情节浮出水面 (2014-04-14)
National Business Daily 每日经济新闻: 威立雅的中国“水生意”:高溢价收购拷问系统维护质量 (2014-04-14)
People Online 人民网: 记者首次镜头直击兰州威立雅自来水厂自流沟 (2014-04-12)
People Online 人民网: 
兰州市政府回应自来水发生苯指标超标:未来24小时居民不宜饮用自来水 (2014-04-11)
Veolia Water 威立雅水务中国: Homepage

House prices soar in Baoding amid regional integration rumors

A picture connecting Beijing, Tianjin and Baoding (Source:Soufun.com)

A map of the rumored new regional agglomeration Jing-Jin-Ji showing Beijing, Tianjin and Baoding (Source:Soufun.com)

Due to a recent rumor that the political centre of the new Jing-Jin-Ji regional agglomeration will be established in Baoding, a city in Hebei province, house and share prices in or related to Hebei province have soared recently. It is rumored that Baoding, situated 140 kilometres to the southwest of Beijing, will be the centre of a new Jing-Jin-Ji regional agglomeration, consisting of Beijing (Jing), Tianjin (Jin) and Henan province (Ji).

Property prices in Baoding rose by over 10% during the last week, while the price of some properties rose by as much as 40% from around 5,000 yuan/m² to almost 7,000 yuan/m². During the last 20 trading days, stock prices of the Hebei sector have risen 14%. Stock prices of companies such as Tangshan Port, Langfang Development and Risesun rose by more than 50%, and that of Hebei Baoshuo by a full 80%.

However, so far no official timetable for the integration of Beijing, Tianjin and Hebei has been released at the national level. An expert close to the National Development and Reform Commission explained that a “new subsidiary political center is the wrong interpretation, but it’s true that some functions of Beijing will be distributed to certain cities in Hebei.”

Links and sources
Xinhuanet.com: 京津冀一体化概念遭热炒 规划未出股价房价先行
Sohu.com: 地方发改委知情人:保定被定政治副中心是炒作

War and Party heroes honored for Tomb Sweeping Festival in Jiaozuo, Henan

Jiaozuo Wanbao Apr8The newspaper Jiaozuo Evening News from Henan province today has a front page and three-page special section devoted to the Tomb Sweeping Festival that took place during the last three days. The newspaper tells the story of a local Party hero whose life was commemorated on April 4, as well as a group of Korean War veterans that meet every year to honor their fallen comrades.

On April 4, around 30 people of the Cui (崔) clan gathered at the grave of Cui Changyong (崔长永) in Jiaozuo, Henan province, to unveil a memorial to the revolutionary hero. The newspaper tells us that Cui is a famous Party figure in the history of Jiaozuo. He started out working at a local company, and participated in and was a witness of mining strikes and then the liberation of the city by the Communist Party. He passed away in 1982, but the city government in 2012 made the decision to erect a memorial in his honor.

The strike that Cui played a leading role in occurred in 1925 against British overlords in local coal mines. In the mid-1940s Cui played a leading role in Jiaozuo to prepare the city for the Communist take-over, notably assisting with drawing maps of the local area. In the early 1950s Cui made a large donation of his own to assist China’s effort in the Korean War. After many years of Party work, Cui was made director of a power plant. He finally retired in 1965, and died in 1982 at the age of 89.

The newspaper also tells the story of the group of now all 80-plus aged Korean War veterans, all clad in green uniforms, who gathered at a cemetery in Jiaozuo, as they do every year at this time. The 25 veterans lined up and saluted their fallen comrades, and laid flowers on the memorial.

Links and sources
Jiaozuo Evening News: 楷模永生天地间 革命家风代代传; 好兄弟,我们看您来了