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Shale Gas Race

Shale Gas Race

The shale gas revolution in the United States has led to a debate in China over shale gas development. But can the United States really achieve energy self-sufficiency? And if it can, what are the implications for China?

Ever since the Nixon era, almost every American president has discussed energy self-sufficiency. Some have even taken practical steps in that direction. While most countries have taken very little heed of this trend, China has taken even less. So why have business and government circles in China come to discuss it this year? The answer is: Because China has also started to pay attention to the question of energy security.

China has already become the world’s second-largest economy, the world’s greatest consumer of energy, and the world’s second-largest importer of petroleum. After thirty years of reform and opening, China has become deeply entrenched in the global economy.

In recent years, the government has been loudly calling for “free trade,” especially in the wake of the 2008 financial crisis. In fact, some would say the Chinese government is now the world’s greatest advocate of free trade. In the energy sector, however, Chinese views on “free trade” are still quite muddled.

We hope to “freely enter” nations and regions rich in petroleum resources, to participate in the development of those places’ resources and to enter their local markets. And we want to maintain the monopoly on the resources and markets within China. We do not wish to lose control.

We know that the United States is the current maintainer and leader of the international petroleum system. While a stable international petroleum market is beneficial to guaranteeing China’s energy security, China has no faith in this system led by the United States, nor is China willing to participate fully in this system.

Even though China cannot fully extricate itself from this system, it still hopes to distance itself as much as possible. Until now, I thought this was a major reason that China to this day still has no plans to make its own global energy strategy.

We understand that the United States’ presence and influence in the Middle East is a key factor behind that region’s stability. But China is the single greatest purchaser of Middle Eastern oil. The major reason that the United States is seeking energy self-sufficiency is its desire to reduce or even end imports of Middle Eastern oil.

<p.American neoconservatives are the most outspoken advocates of American energy self-sufficiency. Their most important reason for not wanting to buy Middle Eastern oil is their wish to “not subsidize terrorism.” The logic goes like this: If the United States buys large quantities of Middle Eastern oil, the dollars they pay may pass into the hands of terrorists. Only by not purchasing oil from that region can they eliminate the possibility of supporting extremists, force Middle Eastern countries to reform their societies and become modern democracies, fundamentally remove the threat of terrorism, and dispel the largest uncertainty to American security.

We Chinese do not concur with the logic of American neoconservatives at all. Nor do we wish to see the United States completely withdraw from the Middle East. We really don’t want to see the Americans “transform” the Middle East or allow the region to fall into disorder once they are no longer reliant upon its petroleum. China has but little influence on the Middle East and even less power to control the region, but we need its oil, and we need a stable Middle East.

The discoveries of American shale gas, Canadian oil sand, and Brazilian oil beneath salt beds has turned the Americas into the “new Middle East” of the 21st century. In the foreseeable future, it is entirely possible for North and South America to become energy self-sufficient. In other words, the Middle East would no longer be an indispensable source of oil to the United States.

In the first half of this year, U.S. dependence on foreign oil fell below 50 percent for the first time in fifteen years. The United States now imports only 15 percent of its petroleum from the Middle East. The American energy independence sought by U.S. neoconservatives is now technologically and economically possible.

And the United States, which has always sought dominance of geopolitical controls and leadership of the entire world, will not allow control of world energy resources to fall into the hands of another nation. The Middle East is home to over half of the world’s oil reserves and a third of global oil production, and it occupies an extremely important strategic position. The United States will not give up the Middle East.

After decades of hard work, the United States has finally seen transitions in its energy supply that will guarantee it more energy autonomy and more reliable energy safeguards. It has gone from a net importer of natural gas to a net exporter. It now imports most of its oil from the greater Atlantic region and from a greater number of more diverse nations, and its overall dependence on foreign oil has decreased.

We in business, academic, and government circles in China must seriously study the reasons and motivations behind the Americans’ achievements in energy. We must place more emphasis on the creation of institutions and systems that encourage innovation, and we must increase the efficiency of resource development within our own borders. This is of utmost importance.

Chen Weidong is the lead researcher at CNOOC’s Energy Research Center.

From the Caixin Editors

Fracking is coming to China, and a key reason is emphasized in the following commentary by a researcher for state-owned China National Offshore Oil Corp. (CNOOC), the country’s largest producer of offshore crude oil and natural gas. China wants energy independence as much as the United States, where natural gas extraction via high-pressure fracking has overhauled the energy market in recent years. Chen Weidong says China wants to shake off the yoke of a global petroleum system controlled by the United States. On the same day Chen’s piece appeared on Caixin’s website, the head of the National Energy Administration asked state-owned oil and mining companies to step up shale gas development. Big fields are said to lie beneath Sichuan province. State oil companies already have secured mineral rights to vast tracts nationwide. NEA ordered the oil companies to produce 6.5 billion cubic meters of shale gas annually by 2015.

By Chen Weidong

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Caixin Media

12.17.13

Are Changes to China’s Family-Planning Rules Too Little, Too Late?

Among the sixty areas covered in the Communist Party’s “decision” document released after the third plenum of the Eighteenth Central Committee, the most popular among ordinary people is a revision to the family planning policy to allow some couples...

Caixin Media

12.09.13

Traditional Chinese Medicine Struggling to Find Cure for Regulatory Woes in the U.S.

In November, the traditional Chinese medicine (TCM) Fuzheng Huayu Tablets passed the second phase of the U.S. Food and Drug Administration’s (FDA) clinical testing.Before this, only one TCM drug had cleared the second of the three phases needed for...

Caixin Media

12.02.13

How an Expectant Mother Died in Qingdao

One of the fifty-five people to die in an explosion on November 22 at a pipeline owned by China Petroleum &amp; Chemical Corp. (Sinopec) in the eastern city of Qingdao was a twenty-three-year-old pregnant woman named Chen Na.Her husband, who...

Caixin Media

11.25.13

Chinese State Oil Scandal Has Links to Iraq

A legal storm that started with China’s largest state-owned oil company has expanded to include Iraq and led to the detention of more people.Mi Xiaodong, a former mid-level official at China National Offshore Oil Corporation (CNOOC) was detained by...

Caixin Media

11.18.13

What Do Investigative Reporters Do?

With the recent Chen Yongzhou scandal, many have called for an “investigation” into the investigative reporting business.I apply the term “investigative reporters” to those that often wade into the deeper, uncharted waters of the media’s realm. I...

Caixin Media

11.11.13

How Ambition Buried an Official Known As ‘The Digger’

Cranes and bulldozers were quieter in the ancient city of Nanjing on October 16.News broke that day that the city’s fifty-seven-year-old mayor, Ji Jianye, was being investigated for “suspected serious discipline violations,” the Communist Party’s...

Caixin Media

11.04.13

China’s Chilling Effect for Investor Research

Shanghai investor Wang Weihua’s final microblog post October 12 was brief and ominous: “The police are coming.”Three days later, Wang’s family said he’d been taken into custody by police officers who traveled more than 3,600 kilometers to Wang’s...

Caixin Media

10.28.13

How Police Got It So Wrong Arresting a Journalist

The arrest of a journalist for allegedly damaging the reputation of an equipment manufacturer has spurred debate in both the media and legal circles. The discussions revolve around the rights of the press, interpretation of the law, and possible...

Caixin Media

10.21.13

Is Freedom of Thought in China Just a Dream?

The Shanghai Free Trade Zone was recently launched. The measure is commonly regarded as an attempt by the leadership of the Communist Party to further economic reform, which has slowed over the past decade. It is also part of what policymakers call...

Caixin Media

10.15.13

Sip of Death Plagues River Villages

Cancer is claiming fewer lives these days, and Dr. Wang Shiren says he’s been caring for a steadily declining number of patients suffering from gastrointestinal disorders.Yet a decades-long health calamity continues to grip Huangmengying, a Henan...

Caixin Media

10.08.13

Shandong Shipyard’s Lesson: Don’t Rock the Bank

What was initially billed as a lucrative order from a European customer has pushed a Shandong Province shipbuilding company to the brink of bankruptcy and ruined its relationship with one of China’s biggest banks.Rushan City Shipbuilding Co. is...

Caixin Media

09.30.13

Reform of State-Owned Enterprise Requires Adopting Modern Governance

Corruption involving the country’s state-owned enterprises (SOEs) has hogged the headlines. So far, senior executives at China National Petroleum Corp. have been sacked, former railways officials have been hauled to court and, most recently, news...

Caixin Media

09.23.13

Measuring the Wealth Gap

Recent findings by China Society of Economic Reform (CSER) have offered a rare glimpse into growing income inequality in the country.The study shows that in 2011 unidentified “gray income,” or the difference between CSER-surveyed income and that of...

Caixin Media

09.16.13

Chongqing Officials Mired in Web of Sex, Lies and Video

When a sex video involving a Chongqing official went viral on the Internet on November 2012, like millions of others, Tan Linling clicked out of curiosity.To her surprise, Tan recognized the woman in the video as a former colleague and friend named...

Caixin Media

09.10.13

Sober Day Dawns for China’s Baijiu Distillers

Distillers of China’s most popular spirits, baijiu, are sobering up to a business slowdown and tight financing after a decade of outstanding growth.Sales are off and company market values have fallen over the past year, prompting some investors to...

Caixin Media

09.04.13

China’s Shale Gas Development Goals Just Pipe Dreams

China wants to reap the benefits of a shale gas revolution similar to the one in the United States, but there are many obstacles to this happening, experts say.In the first half of 2013, fifty-six shale gas wells were in the exploratory phase in the...

Caixin Media

08.27.13

Inner Mongolia: Where Bankers Sold Bunk

Underlying the trial of a woman authorities say drained bank accounts and kidnapped a banker’s wife are vexing questions about account security and teller supervision at China’s state-run bank branches in Inner Mongolia.Hundreds of millions of yuan...

Caixin Media

08.19.13

Infrequent Flying Snarls Civil Aviation Sector

Getting away for a little surf and sand ought to be easy for Beijingers like Mr. Wang, who recently boarded one of the daily, four-hour flights that link the capital and sub-tropical Hainan Island in China’s far south.But airport delays seriously...

Caixin Media

08.12.13

China’s Urban Sludge Dilemma: Sinking in Stink

Promptly at noon on March 17, a heavy truck hauling a dark substance and on a dark mission pulled out of the Gaobeidian Wastewater Treatment Plant in eastern Beijing.A wastewater treatment engineer helped a Caixin reporter identify the unusual load...

Caixin Media

08.05.13

County in Shaanxi in a Deep Hole as Mining Bubble Pops

A financial crisis triggered by falling coal prices is brewing in Shenmu County, in the northwestern province of Shaanxi.Construction projects have been halted, universal health care has run into payment problems and many private bankers have...

Caixin Media

07.29.13

Why a Reporter Feels Sympathy for an Airport Bomber

These past few years as a reporter, I have met some people with nothing left to live for and now another person can be added to the list. Ji Zhongxing, the disabled man who set off a bomb in a Beijing airport on July 20, is that person.Ji and I are...

Caixin Media

07.22.13

Liberal Urge Gaining Support for Bank Policy

The orchestra is tuning up for an interest rate liberalization initiative that financial analysts are calling music to their ears.Recent high-level comments and policy statements heard in Beijing have clearly sounded a central government call for...

Caixin Media

07.16.13

As Red Cross Probe Stumbles, Critics See Red

Two box lunches—and nothing more. Yuan Yue says that’s what the Red Cross Society of China has frugally handed out so far to each member of a special committee assigned to investigate the charity group’s finances.But critics of the special board...

Caixin Media

07.08.13

Central Bank Raises the Red Flag over P2P Lending Risks

A recent report by the central bank about peer-to-peer (P2P) lending websites in China has shed light on some severe problems in the business for which there is, as yet, little regulation.The original idea for P2P lending websites was that they were...

Caixin Media

07.01.13

Renewed Growth on the New Third Board

The State Council announced on June 19 that it would expand the New Third Board, an over-the-counter (OTC) market for non-listed companies’ shares, to include all small and medium-sized enterprises (SMEs) nationwide.One of the experts estimated the...

Caixin Media

06.25.13

Spoon Half Full for China’s Rural School Kids

A 2010 survey of boarding school students in four of China’s poorest counties found hunger pangs, malnutrition and stunted growth appallingly common.Some 72 percent of the more than 1,000 students questioned for the China Development Research...

Caixin Media

06.25.13

Legal, Economic Reforms Important At Coming Party Session

China’s blueprint for economic reform is finally taking shape. The government has appointed a taskforce to draft the plans, ahead of the third plenary meeting of the 18th Central Committee. With the country’s economy at the crossroads, these plans...

Caixin Media

06.18.13

Will Bond Market Tidying Trigger Clean Sweep?

China’s financial regulators are rewriting rules for the interbank bond market after criminal investigations early this year led to the arrests of several well-known bond traders and exposed serious flaws in the market’s supervision system.The...

Caixin Media

06.03.13

Trading Companies and the Business of Illusion

Last year, the owner of an export-processing company whom we will call Lin Minyao learned of an easy way to make money in Shenzhen, the port city next to Hong Kong.Like his fellow traders, Lin said he could set up two shell companies, one in Hong...

Caixin Media

05.25.13

Honeymoon’s Over for Sweethearts of SOE Reform

Corporate wedding bells were ringing in 2011 when a trust controlled by insurer Ping An Insurance Group forged a partnership with a Shanghai-based cosmetics maker called Jahwa Group and its listed subsidiary, Jahwa United.The tie-up was duly praised...

Caixin Media

05.20.13

Errors of Aggression Catch up with Underwriter

Ping An Securities Co. has been slapped with a fine by the securities regulator and will lose its stock underwriting license for three months because of its sloppy work in underwriting the initial public offering of a company that turned out to be a...

Caixin Media

05.13.13

Competitors Try Curbing China Mobile’s 4G Urge

The wireless Internet technology race is intensifying a longstanding rivalry between China’s largest mobile phone operator, China Mobile, and its smaller competitors China Telecom and China Unicom.Since 2011, China Mobile customers in fifteen cities...

Caixin Media

05.04.13

Earth Moves, China Rallies

Rapeseed was ripening in the lush fields ringing the village of Renjia when a local farmer, forced from his home, stepped into the sea of green stalks and pitched a tent.Less than a day earlier, the farmer and each of his more than 3,000 neighbors...

Caixin Media

04.27.13

Cracking Down on Bond Market’s Knotty Traders

It was a typical workday morning at Wanjia Asset Management Co. in Shanghai’s downtown financial district, but the firm’s star bond trader Zou Yu was not at his desk.Zou, 31, had mysteriously failed to report for his job as head of Wanjia’s fixed-...

Caixin Media

04.22.13

Heading off a China-style Subprime Mortgage Crisis

Warning of local governments’ high exposure to bad debts, the credit agency Fitch recently downgraded China’s long-term local-currency rating from AA– to A+. Officials should take note: the downgrade underlines how closely international markets are...

Caixin Media

04.20.13

Bird Flu’s Latest Talons Force Fresh Defense

A surprise attack by a new strain of the bird flu virus has forced Chinese authorities into the trenches for a two-pronged defense against unseen enemies.The primary threat is the deadly virus that scientists identified as a new strain of H7N9. It...

Caixin Media

04.15.13

China Export Policy Chokes on Vitamin Verdict

Internet cafés covered by the city of Wuhan’s Internet Café Association agreed to set minimum prices for online access nearly a decade ago. And more than one hundred coking coal company-members of the Coke Association of Shanxi Province each agreed...

Caixin Media

04.15.13

Tencent Lets WeChat’s Rapid Growth Do the Talking

Tencent Holdings Ltd.’s free messaging service, WeChat, has seen its popularity grow among both individual users and businesses, even amid a dispute with the Big Three telecom operators [China Mobile, China Telecom, and China Unicom].Since launching...

Caixin Media

04.08.13

A Day in the Life of a Beijing “Black Guard”

After receiving his delayed wages, thirty-year-old Wang Jie decided to change professions.On March 7, he pressed a fingerprint onto a receipt that read: “Today I have received settlement of the 12,000 yuan in wages owed to me by Mr. Shao.”“Actually...

Caixin Media

04.01.13

Staking a New Claim on Internet Insurance

When three household brand names in China announced they would cooperate to form a company offering insurance services on the Internet, excitement naturally was the order of the day.Last year, Alibaba Group, Tencent Holdings, and Ping An Insurance...

Caixin Media

04.01.13

New Hands Take the Financial Regulation Wheel

Who’s steering China’s carefully managed financial system? Speculators were busy name-guessing before and for several months after the Communist Party’s 18th National Congress in November.Finally, the dust started to settle with formal appointments...

Caixin Media

03.23.13

China’s Economic Policymakers Turning a Page

Written into the script for China’s once-in-a-decade leadership shuffle, confirmed at the recently concluded National People’s Congress, are macroeconomic policies for the new government that plot a course for future growth.The policy book has...

Caixin Media

03.23.13

Achieving Real Progress in How Government Functions

After months of speculation, the reorganization of the State Council has finally been approved by the National People’s Congress.Under the shake-up, China’s rail business will no longer be managed by the regulator. Three national agencies will be...

Caixin Media

03.17.13

Ladders, Losers, and Direct-Marketing Schemes

A skin cream customer pays an extra fee and, voilà, instantly becomes a company representative with the right to sell cream and other products, as well as recruit more dealers.Eventually, she persuades other women to buy the cream and join the...

Caixin Media

03.16.13

Spin of a Crooked Record

Hundreds of villagers in Hebei province discovered they were victims of identity theft—and in demanding officials find the culprit, they became the recipients of harassment and legal bills. Instead of seeing a shakeout, the villagers watched...

Caixin Media

03.10.13

Finding IPO Alley

China’s IPO action has been locked in ice since October by China Securities Regulatory Commission (CSRC) officials intent on boosting investor confidence and improving scrutiny of stock market hopefuls.Yet the heat is on for aspiring executives at...

Caixin Media

03.09.13

Is Railway Reform Finally On Track?

Finally, it seems the railways ministry may soon be restructured as part of a wider exercise by the government to streamline its ministries. Putting railway reform on the agenda of this year’s meetings of the National People’s Congress and the...

Caixin Media

03.04.13

China’s Frills and Posh Market Springs a Leak

Imagine a luxury goods shopper so confident and flush with cash that one day he walks into a Shanghai handbag shop, flashes 300,000 yuan, and waltzes out with almost every bag in stock.That’s what happened last year at a Prada store where Benny Lu...

Caixin Media

03.02.13

Poison Eaters of Gansu Province

Barely any rainfall on a bone-dry landscape has always made crop farming in the province of Gansu a rough gamble between the sky and local irrigation policies. But now, farmers reap only sorrow from fields that experts say are severely contaminated...

Caixin Media

02.24.13

Dirty Business for China’s Internet Scrubbers

Flames of a public relations disaster were licking at the heels of a private equity firm when China’s most notorious Internet-scrubbing company rode to the rescue.Saving the Shenzhen-based firm’s image was not cheap, and it took more than two months...

Caixin Media

02.23.13

China’s 3D Printing: Not a Revolution—Yet

Engineers, inventors, and industrial futurists in China are setting sights on a new technological frontier as three-dimensional printing slowly revolutionizes manufacturing.A Beijing University research team, for example, has been working on what...

Caixin Media

02.04.13

Lights, Camera, Pending IPOs for Filmmakers

The cameras could be rolling soon for long-anticipated stock listings by the nation’s largest movie producer and foreign flick importer China Film Group, as well as a smaller but ambitious rival, Shanghai Film Group.The state-owned companies’ names...

Caixin Media

02.04.13

Defining the Chinese Dream

A new phase of Sino-American relations is poised to begin now that Xi Jinping has been confirmed as China’s next leader and Barack Obama re-elected U.S. president.In both countries, the debate about foreign policy options has been robust,...

Caixin Media

01.28.13

Cleaning Up China’s Secret Police Sleuthing

Wiretapping, email hacking, cell phone tracking, and secret videotaping are just a few of the cloak-and-dagger techniques long employed by police in the course of criminal investigations in China.But now, for the first time, new rules say that...

Caixin Media

01.26.13

Garden of Lost Children

It started with a baby that was left in the doorway of a hospital bathroom. Yuan Lihai took in the girl with a cleft lip while working at a Henan province hospital in 1989. At the department of gynecology and obstetrics, she was paid 20 yuan for...

Caixin Media

01.20.13

How to Implement the “Going Out” Strategy

Now is the right time for China to implement its global outreach strategy.While seizing this opportunity, we should also guard against risk first, with a sense of calmness. This means adhering to business decisions and sound operations, considering...

Caixin Media

01.19.13

Shandong’s Slippery Gutter Oil Man

It’s oil with an extra something, but there’s nothing virgin about it. Pumped from sewers outside restaurants and drained from dumpsters, it’s cooking oil born from waste both human and mechanical.Known in China as “gutter oil,” it’s commonly used...

Caixin Media

01.13.13

China Development Bank Cancels Loans for Ping An Deal

The Hong Kong branch of China Development Bank (CDB) has been ordered by its Beijing headquarters to cancel loans that would have been used to finance an acquisition involving the nation’s second-largest insurer, a bank source said.The source said...

Caixin Media

01.13.13

Police to Stop Camps This Year, Politburo Member Says

The notorious system that lets police send detainees to labor camps without trial will be halted this year, said Meng Jianzhu, secretary of the Central Politics and Law Commission, at a conference on January 7.Meng said the Communist Party’s Central...

Caixin Media

01.13.13

Shutter Labor Camp System for Good, Legal Experts Urge

Legal experts have called on the government to follow through with hints at abolishing the country’s notorious system of labor camps.On January 7, Politburo member Meng Jianzhu said at a top conference that the system would “cease to be used.” His...

Caixin Media

01.04.13

Twisted Tongues

China’s cultural progress in the year 2012 can be summed up with eight words: weibo (microblog), diaosi (commoners), yuanfangti (a Yuanfang-like inquiry), shejian (tip of the tongue), yangsheng (keeping fit), shisanchai (thirteen hairpins, from a...

Caixin Media

01.04.13

Why Are Entrepreneurs So Uneasy?

I’m often asked whether it’s more difficult for a Chinese company to survive now than it was in the 1980s, when I started my business. The two eras are indeed different. Many entrepreneurs with whom I shared the stage at awards ceremonies have since...

Caixin Media

12.28.12

Desperate Cash Infusions Driving Blood Trade

The tumor was growing, and the family of cancer patient Xia Jianqing was growing desperate.Doctors at a military hospital in Beijing had warned Xia’s family that he would die without the blood needed for a lifesaving operation. But the hospital had...

Caixin Media

12.28.12

Uncertain Future for Architectural Treasures

Nestled between mountains and a winding river in a scenic corner of Shanxi province is Zhongyang County, the home of an exquisite Confucian temple built during the Ming dynasty.The colorful wooden temple graced this idyllic valley for hundreds of...

Caixin Media

12.24.12

U.S.-China Auditing Spat Turns Ugly

The latest twist in a long-running dispute between Beijing and Washington securities regulators over Chinese audits is threatening to boot Chinese companies from America stock exchanges.The plot thickened on December 3, when the U.S. Securities and...

Caixin Media

12.21.12

When I Met Xi Jinping

I was informed in late November that the State Administration of Foreign Experts Affairs (SAFEA) had invited me to a whole-day meeting in Beijing to discuss my impressions of the 18th National Party Congress and give advice to the Chinese government...

Caixin Media

12.16.12

In Bo Xilai’s City, a Legacy of Backstabbing

A deathbed plea brought an unexpected guest to Li Zhuang’s home one day last March, setting in motion a legal process that soon may clear the Beijing lawyer’s name, throw out a number of convictions, and close a sordid chapter of the Bo Xilai story...

Caixin Media

12.16.12

Mobile Phones Souring Africa’s Image of China

Every day, about a dozen mobile phone wholesalers field orders and manufacturer offers from offices inside a nondescript, five-story building on Luthuli Avenue in downtown Nairobi.The building doesn’t look like a hub for global commerce, nor does it...

Caixin Media

12.07.12

Who Pays When a Wealth Product Fails?

A crowd of angry investors packed a Shanghai branch of Huaxia Bank on December 3 after they heard that the money wasn’t there for the first of four repayments for a 119 million-yuan wealth management plan. They demanded their money back from Huaxia...

Caixin Media

12.07.12

China’s Dream Team

Stephen S. Roach
The country’s recent leadership transition was widely depicted as a triumph for conservative hardliners and a setback for the cause of reform—a characterization that has deepened the gloominess that pervades Western perceptions of China.In fact,...

Caixin Media

12.03.12

When Hope Dies

A nationwide uproar paralleled the investigation that led to the identification of five street children who suffocated in a large rubbish bin in the city of Bijie, Guizhou province.Officials learned the victims were the sons of three brothers. The...

Caixin Media

12.03.12

Toxic Effects and Environmental Nondisclosure

High-profile talk emphasizing environmental action at the Communist Party’s 18th national congress attracted a lot of attention. News from the November proceedings spurred industry demands for more information and pushed stock prices higher for...

Caixin Media

11.26.12

When Tradition is Flattened by Policy

A “tomb-flattening policy” in Henan province has sparked intense controversy, with millions of tombs reportedly destroyed by local authorities in a quest to turn graveyards into farmland.The policy can be seen as a historical extension of land-...

Caixin Media

11.23.12

Asset Transparency Urged to Fight Government Graft

Calls for government officials to disclose personal and family assets are growing louder in China, mainly in reaction to the rising number of corruption cases affecting officialdom.And some officials are listening. A local Communist Party official...

Caixin Media

11.17.12

As 18th Congress Ends, a Peek into the Process

Over the past twenty years, economist Zhang Zhuoyuan has witnessed and actively participated in building the nation’s economic policy.He participated in the drafting of reports at each of the Communist Party’s three previous national congresses,...

Caixin Media

11.17.12

Political Reform: The Way to Go

Sections of the 18th National Party Congress report that have justifiably generated the most attention are references to political reform.Anyone who did not harbor unrealistic hopes about the congress and its outcome can read the report and find...

Caixin Media

11.12.12

Weighing Risks Amid a Wealth Management Boom

Is China’s wealth management business a booming profit volcano for investors, or just another smoke-and-mirrors pyramid scheme?It’s a question dividing the nation’s bankers and banking regulators as investors of all kinds pour cash into bank-...

Caixin Media

11.05.12

Scenes from a Leadership Transition

Jiang Zemin’s Lyrical MemoryCompiled by Caixin(Beijing)—A glance at off-hours correspondence between two veteran leaders has added a lighter dimension to the recent public appearances of former Politburo members in the run-up to the party’s 18th...

Caixin Media

11.05.12

Thanks, But No Thanks

On the last day of Zhao Xiang’s short life, her request to donate every organ possible to save the lives of others was brushed off by the president of Shenzhen Liulian Hospital.Zhao, her parents, and transplant specialists from the Shenzhen branch...

Caixin Media

11.02.12

18 Reforms for the Party’s 18th Congress

China’s leadership handover comes at a critical moment for society and the economy, and changes are in order.The 18th National Congress of the Communist Party this month comes at a critical time described by economist Wu Jinglian as “a tipping...

Caixin Media

10.26.12

Below-Belt Blows in Kungfu Restaurant Battle

The crestfallen former chairman of fast-food restaurant giant Kungfu Catering Management Co. Ltd. is awaiting a verdict after a trial on corporate embezzlement charges apparently instigated by his former business partner’s wife.If Cai Dabiao is...

Caixin Media

10.19.12

Flying Splinters

Liu Futang expressed a sense of foreboding just before his recent arrest by posting a microblog entry that began, “If one day I’m invited out for tea, please don’t worry about me.”“Drink tea” is a euphemism in China for an unwanted interrogation by...

Caixin Media

10.19.12

Tapping into Crowd Power with Website Finance

Investing like an angel now costs no more than an average duck dinner in Beijing.The force driving China’s growing ranks of small-scale angel investors are crowdfunding websites, which offer individuals access to business financing pools for as...

Caixin Media

10.12.12

Bo Xilai as a Catalyst for Political Reform

No matter how you look at it, the disciplinary process surrounding the case of Bo Xilai will have historic implications.Details of the crimes committed by Bo, his wife, Bogu Kailai, and his former right-hand man, Wang Lijun, reflect a level of...

Caixin Media

09.28.12

Bo Xilai Ousted from Communist Party

The Communist Party has expelled Bo Xilai, the former party chief of Chongqing, who’s been embroiled in corruption allegations since early this year.The Politburo made the decision on September 28, the official Xinhua News Agency said. Bo will next...

Caixin Media

09.28.12

Living on Dangerous Ground

Fractures had long plagued the rocky mountainside next to Huang Daihong’s home. When an earthquake jolted Luozehe County in Yunnan province, Huang watched a large black boulder release a shower of stones that instantly killed her neighbor.The...

Caixin Media

09.26.12

After Panjin Killing, Public Deserves to Know

There is growing public skepticism about the veracity of a government report detailing a demolition-related incident in Panjin, Liaoning province, during which a police officer killed a villager for allegedly threatening his life.Questions revolve...

Caixin Media

09.20.12

Hit TV Show Sings Song of Media Model Success

A reality-talent TV songfest popular in more than forty countries around the world has become an instant hit in China, underpinning enthusiasm for an experimental business model linked to media sector reform.The Voice of China’s debut show in July...

Caixin Media

09.17.12

How a Protest in Beijing Stuck to the Script

On the afternoon of September 16, rows of policemen and security personnel in black T-shirts lined Beijing’s Liangmaqiao Road near the Japanese embassy during protests over the Diaoyu Islands controversy. Security guards were visible everywhere,...

Caixin Media

09.16.12

No Excuse for the Excuses Officials Hand Us

Putting the right spin on one’s words is a science, and civil servants with fiduciary responsibility have to master this subject. It helps to shift blame to someone else; a child, a spouse, or a convenient foreigner will do.Several weeks ago Yang...

Caixin Media

09.14.12

Why War is Not a Possibility

There won’t be a war in East Asia.The United States has five military alliances in the western Pacific. Its allies are South Korea, Japan, Thailand, the Philippines, and Singapore. And American battleships are busy patrolling the seas.Without a go-...

Caixin Media

09.14.12

Moneyless Pensions Yield No Gold for the Old

SHENYANG—Morning breezes turn chilly in late August, signaling fall’s approach in the Tiexi factory district.For the unemployed men and women standing on sidewalks between a labor bureau office and a park every day at 6 a.m., the change of seasons...

Caixin Media

09.07.12

Local Governments Bet Big on New Investment

They’re still hung over from a 4 trillion yuan spending spree initiated by the central government nearly four years ago, but local governments across China are pressing ahead anyway with huge new investment plans.In late August, for example, the...

Caixin Media

09.07.12

Despite Regulations, Bus Travel Still Risky

Thirty-six people died recently on a Shaanxi province highway when a double-decker bus slammed into a fuel tanker.The crash underscored ongoing demands for beefing up traffic law enforcement and improving the design of these often-crowded overnight...

Caixin Media

09.07.12

Long Ride for Justice

Lea Cao had his first inkling that something was wrong when he got a long-distance phone call from relatives in southeastern China.His family members in Fuzhou phoned Cao in New York to say that his parents and brother had failed to arrive at the...

Caixin Media

09.05.12

Making a Killing on Herbal Medicine

Mushroom gatherers converge and crawl on hillsides in Qinghai province every March while foraging for wild caterpillar fungus.Theirs is not a garden-variety morel hunt. Caterpillar fungus is a hard-to-find parasite that infects and mummifies a host...

Caixin Media

08.31.12

In Guangdong, Tea Oil Greases Official Palms

In the financial documents for a Guangdong province grower and processor of tea seed oil is a list of key shareholders who also happen to be the relatives of local government officials.Off the record, Guangdong Xindadi Biotechnology Co. Ltd. and its...

Caixin Media

08.31.12

Tall Order in Ordos

A desert city infamously littered with new but vacant apartment buildings and idle construction sites is getting no relief in the parched climate for local government budgets.Ordos, where local leaders have been trying for years to build a thriving...

Caixin Media

08.25.12

Revamping the Landscape of Forex Flow

Capital flows out of China may be accelerating, a phenomenon commonly associated with waning confidence in a nation’s economy. But the foreign exchange regulator says the change is a step in the right direction.In the first six months of the year,...

Caixin Media

08.25.12

Gu Kailai: Getting Away with Murder?

Closer Look: Nearly Getting Away with MurderBy Zhang JianjingShortly after Bogu Kailai received a death sentence with a two-year reprieve, four former high-ranking Chongqing police officers were sentenced to jail terms ranging from five to eleven...

Caixin Media

08.18.12

Economist Lin Yifu on State-Sustained Growth

Standing up to a wave of pessimism about China’s prospects for continuing high-level economic growth is no easy task.But economist Lin Yifu, who recently retired as a senior vice president and chief economist at the World Bank, is holding his ground...

Caixin Media

08.16.12

Rise Of The Online Titans

China’s titans of online retailing have unsheathed their marketing swords for a war in cyberspace that industry watchers say will decide the future of everyday shopping habits for nearly a billion consumers.Dozens of retail companies have staked out...

Caixin Media

08.13.12

We Make It Pour, Declare Cloud-Seeders

Will it be clear or gray skies today? Increasingly, the answer in China may be decided by the government.The Chinese have been seeding clouds for decades. Airplanes equipped with rocket-launchers and chemicals for inducing rainfall are based in...

Caixin Media

08.09.12

Subsidized Cartoons, Comics Tickling Too Few

Breaking into the animated film industry usually requires a basic plan for blending colorful images and clever storytelling in ways that entertain the public—and make money.Since 2006, however, animated film start-ups in China have done quite well...

Caixin Media

08.07.12

Shenyang Businesses Closed By Inspection Panic

Most shop owners in a city of roughly 8 million people have pulled down their shutters to avoid what they fear will be stringent enforcement of a city ordinance tied to the hosting of the 2013 National Games.Small business owners in Shenyang,...

Caixin Media

08.03.12

Queerly Not Dangerous

Several authors of a “danmei” fiction website were recently detained by authorities. The injustice is so glaringly obvious that I can’t stop myself from saying something.Danmei (or “boys' love”) fiction is particularly interesting only to a...

Caixin Media

08.02.12

Landlords of the Rings Push Urban Rents Higher

A twenty-six-year-old woman who moved to Beijing from a distant town for work could be a poster child for urban China’s latest housing market phenomenon: skyrocketing rents.The woman, surnamed Fang, said goodbye to Liaoning province three years ago...

Caixin Media

07.31.12

Shedding Light on the Solar Crisis

After Suntech Power Holdings Co. Ltd., a Wuxi-headquartered photovoltaic cell producer, went public on the New York Stock Exchange in 2005, China’s solar industry grew at an astonishing speed. More than 200 photovoltaic product manufacturers are...

Caixin Media

07.27.12

LDK Solar Owes Twenty Suppliers 600 Million Yuan

Debt-ridden Jiangxi LDK Solar has defaulted on at least 600 million yuan in unpaid bills for raw materials and equipment, twenty suppliers say.“Starting from late last year, LDK Solar was delinquent on 15 million yuan to our company,” Liu Qingfeng,...

Caixin Media

07.26.12

Buried Under Water

Ding Zhijian, a 34-year-old editor at a children’s literature publishing company, was on his way home after meeting a colleague when a horrific rainstorm hit Beijing.Earlier that day, his wife had asked Ding not to leave the house. It was the...

Caixin Media

07.26.12

Mass Medal Preparedness

China’s Olympic training system demands its athletes give their all—and not expect much in return.It’s a structured, planned, and government-funded system specifically designed to churn out winners.While other countries around the world build...

Caixin Media

07.19.12

Vineyards Pop Corks on Chinese Wine Investors

Wine-tasting party conversations among investors in China are increasingly sounding like sour grapes.Some well-heeled wine investors have been anxiously debating whether a price bubble for investment-grade wine is getting ready to burst. Others...

Caixin Media

07.19.12

More than Medals for China’s Olympic Stars

China’s best athletes have not only broken records but they’ve hauled in increasingly sizeable cash bonuses from central and local governments for their champion, medal-winning performances at Olympic events.Between 1984, when China re-entered the...

Caixin Media

07.18.12

Financial Reform Has Only Begun

The Chinese economy’s rapid growth over the past thirty years has fundamentally changed global economic structures. But our achievements have come at a price: We have run up against hard limits in many areas, including factor investment costs and...

Caixin Media

07.11.12

Railroaded into a Fast-Train Technology Trap

The professional dreams of a team of locomotive designers and rail systems engineers sped along steel tracks through the countryside of northeastern China.The year was 2003, and high-speed track testing was under way between the cities of Shenyang...

Caixin Media

07.11.12

Economic Ties that Bind

Labor leader Wayne Swan has his finger on the pulse of the Australian economy as the nation’s deputy prime minister and treasurer, which means he’s well-equipped to explain factors defining the increasingly robust relationship between China and...

Caixin Media

07.06.12

Land of Vanishing Lakes

The last lakes in Hubei province are shrinking so fast that no one knows whether new government regulations—the latest leg of a sixteen-year-old environmental scramble—can reverse the disappearing act.The province has been losing its once-bountiful...

Caixin Media

07.06.12

Fighting the Filth

Has the division of spoils from China’s rapid economic growth become a one-sided affair? The answer is less abstract when one considers the state of the nation’s environment.Waterways are barricaded by garbage, mountains gouged with dusty pits, and...

Caixin Media

07.06.12

Powering Down Coal-Fired Economic Expansion

Slowing nationwide power demand and coal consumption, twin barometers for economic growth, suggest the Chinese economy may be sailing into the doldrums while at the same time changing its course.Electricity use in May rose a relatively mild 5.2...

Caixin Media

07.02.12

Deal Puts Saab in Green Technology Driver’s Seat

The dark clouds over bankrupt Swedish car maker Saab have finally cleared.Saab Automobile AB’s liquidator signed an agreement in mid-June with National Electric Vehicle Sweden AB (NEVS) to sell the company’s main assets to the Sino-Japanese...

Caixin Media

06.29.12

Barclay’s Diamond Offers an Optimistic Vision

A calm, confident Robert Diamond discussed financial restructuring in Europe and economic options for the Chinese government during a June 14 interview—thirteen days before the British bank where he serves as CEO, Barclays Group, was fined for...

Caixin Media

06.27.12

Cash for China’s Homegrown Smartphone

Xiaomi Mobile Internet Co. has raised US$216 million, its CEO says, raising the total value of the upstart, homegrown Chinese smartphone maker to US$4 billion.If Lei Jun’s claim is accurate, his two-year-old company’s value is close to the market...

Caixin Media

06.21.12

Economist Sees Room for Slashing Taxes

Increasing government spending would be a disservice to society rather than a benefit if Beijing wants to create a consumption-led economy, one economist says in a recent research report.“The so-called ‘structural optimization,’ which refers to...

Caixin Media

06.20.12

China’s Food Fright

There’s no denying that the gastronomic horizons of Chinese cuisines sometimes verge on the infinite. But on factors of food quality, there’s little subtlety or nuance for safety standards.In the past five years, the number of public food and drug...

Caixin Media

06.18.12

Recurring Dreams for the Rule of Law

On the Beijing campus of the China University of Political Science and Law stands a dramatic monument inscribed with the words of legal expert and former university president Jiang Ping: “Rule of Law for Everyone.”Jiang’s words carry special weight...

Caixin Media

06.14.12

Private Economy’s Original Sin

Whether measured in terms of gross domestic product, tax contributions or job creation, statistics prove that the private economy plays a crucial role in China.In some well-developed parts of the country the private sector, when factoring in...

Caixin Media

06.14.12

Uproar over Aborted Fetus Photo

{vertical_photo_right}A Shaanxi Province woman provoked an uproar with an online posting of a photo showing her with her seven-month-old fetus after what she said was a forced abortion.The gruesome photo was reposted across the Internet in China,...

Caixin Media

06.08.12

Road Show Media Bandits Squeeze IPO Hopefuls

Buying media silence is a common first step toward an initial public offering in China that siphons billions of yuan every year from companies seeking investors in Shanghai and Shenzhen.The phenomenon has been documented by the China Securities...

Caixin Media

05.31.12

Heading Deep for the First Time

On May 9, China National Offshore Oil Corp.’s (CNOOC) first deepwater drilling platform began operating in the South China Sea. The world-class vessel is stationed in the Liwan 6-1-1 field, about 320 kilometers southeast of Hong Kong, in waters...

Caixin Media

05.28.12

Rail Builders Shift Interest to Overseas Mines

After a three-year wait, China Railway Construction Corp. Ltd. (CRCC) recently won permission to launch a major copper mining project in Ecuador.The production agreement signed April 25 by Ecuador’s government and Corriente Resources, a Canadian...

Caixin Media

05.25.12

Hard Lesson for China Concept-Stock Investors

Imagine discovering on your first day as a new CEO that your employer is merely a shell that may be destined for a shameful delisting on the Nasdaq Stock Market.That’s what happened recently to ChinaCast Education Corp. CEO Feng Yiyi, who is now...

Caixin Media

05.25.12

Policeman Burned for Dealing With the Devil

On March 17, the Chenzhou Public Security Bureau announced Huang Bailian had been removed as head of the police department’s drug squad.Huang offered a simple explanation for his sacking: “This is retaliation.”Three years earlier Huang, who is forty...

Caixin Media

05.23.12

Identity Crisis Rattles Volvo’s Chinese Owner

New models bearing the Chinese-owned Volvo badge shared a luxury spotlight at the Beijing International Auto Show in April with perennial stars Mercedes-Benz, BMW, and Lexus.But behind the diamond-studded presentation was confusion over the legal...

Caixin Media

05.18.12

Near Three Gorges Dam, the Exodus Continues

Walls inside Zhang Haomin’s home in Zhenxi Township, in Chongqing, started cracking in 2008, around the time the reservoir behind the new Three Gorges Dam neared capacity.“Early on, the cracks were small,” said Zhang, whose home is about three...

Caixin Media

05.18.12

Demography and Destiny

China is facing a demographic reckoning that is approaching a nightmare.For thirty years, the government has been obsessed with keeping population growth down, often resorting to late-term abortions and other brutal measures. The panic now is that...

Caixin Media

05.18.12

Message in a Bottle for Spirits Maker Moutai

A glass of Feitian Moutai packs a wallop, which is one reason why the 106-proof baijiu is a hit among influential government officials.They also like Feitian Moutai because a single bottle, thanks to special arrangements between state agencies and...

Caixin Media

05.18.12

Era Ends for China’s Legendary Stock Picker

Investors who closely followed the stock picks of one of China’s most successful brokers are wandering in the wilderness—and wondering what will happen next to their unemployed luminary Wang Yawei.In April, and without warning, Wang resigned from...

Caixin Media

05.09.12

Along the Xiang, It’s Toxic from the Tap

Water flowing from the Xiang River into the faucets of Hunan Province homes has been dangerous for decades. The central government first classified the river’s water as toxic in the 1980s. But the river was being called the most polluted in China as...

Caixin Media

05.04.12

Chinese Firms Try Scoring with Spanish Soccer

When NBA journeyman Damon Jones signed a shoe deal with sporting goods maker Li Ning in 2006, he became the first in a long line of American basketball players to win a sponsorship from a Chinese company.Today, China’s Peak Sport Products leads...

Caixin Media

05.04.12

The Ruins of Yuanmingyuan

Sheila Melvin
On a balmy, moonlit evening in the autumn of 2010, I took my son out to Yuanmingyuan to wander among the ruins. The 150th anniversary of the destruction of “The Garden of Perfect Brightness”—often called the Old Summer Palace—was approaching and I...

Caixin Media

05.02.12

Yearning for the Yuan

London is forging ahead with plans for yuan-based financial services by developing an infrastructure and banking services that match its ambitions for the Chinese currency.On April 18, the city welcomed the first yuan-denominated bond issuance...

Caixin Media

05.02.12

Garish Flowers of War

The Flowers of War begins December 13, 1937, with young convent girls fleeing for their lives through a besieged Nanjing shrouded in mist. The first words heard are those of the lead girl Shujuan: “Everybody was running that day but no one could...

Caixin Media

04.25.12

Watery Grave for Yangtze River Fish

(Beijing)—Fishermen along the banks of the mighty {vertical_image_right} Yangtze River have long spoken of emptier nets and longer waits for a catch.On April 2, an unusual auction held in a downstream city in Jiangsu Province added weight to their...

Caixin Media

04.24.12

China’s Tax Burden: A Mysterious Lead Sinker

(Beijing)—In much of the world, admiration and envy are common reactions to China’s consistently high GDP growth rates. But closer to home, the Chinese public’s admiration of their own economic miracle is shadowed by tax increases that consistently...

Caixin Media

04.19.12

Strategic Reserves

(Beijing)—In an odd twist for China’s powerful banks, the biggest state-owned lenders last year started running low on the foreign currency needed for loans to enterprises investing overseas.“Some commercial banks suspended U.S. dollar loans” after...

Caixin Media

04.18.12

Unscathed by Scandals, Official Promoted

{vertical_photo_right}(Beijing)—Although sacked once for the coverup of the 2003 SARS epidemic and a second time for blocking media coverage of the 2008 Shanxi mudslides, Meng Xuenong’s career has always bounced back.According to the website of the...

Caixin Media

04.09.12

Dalian Businessman Who Built an Empire Vanishes

(Dalian)—The sudden disappearance of a self-made billionaire in the coastal city of Dalian has unnerved not only bank executives concerned about loans they made to his companies, but also government officials who have lent generous support to the...

Caixin Media

04.06.12

China: The Worst Place To Retire

China is facing a crisis over providing for the elderly as its population ages and the supply of labor diminishes.The Beijing News reported in late March that state-run homes for the elderly in the capital are overcrowded. One had 7,000 applicants...

Caixin Media

04.01.12

China’s African Challenge

Roughly 1 million Chinese nationals are working or doing business in Africa, from Egypt’s Mediterranean shore to the Cape of Good Hope.Theirs are the faces behind China’s soaring direct investment in Africa, which, according to the Ministry of...

Caixin Media

03.29.12

Give Wenzhou What It Needs

The development of China's private economy requires financial support, especially private financial support. Wenzhou is the home of the private economy. With 99.5 percent of companies falling into the category of small and micro enterprises,...

Caixin Media

03.27.12

Wang Shu, Wary of the New

At a time when China was bursting with an urge to cover buildings in shimmering silver and gray, Wang Shu, the first Chinese winner of the Pritzker Prize, was an architect who felt that changing tastes didn’t have to mean changing one’s sense of...

Caixin Media

03.19.12

Fair Trade

A typically opaque investigation can begin with a tip from a Shanghai Stock Exchange official and end with a ten-year jail term for a businessman convicted of insider trading. What happens in between is a carefully guarded secret.Likewise hidden...

Caixin Media

03.19.12

An Insider's Account of the Wukan Protest

For months, thousands of villagers in Wukan, Guangdong Province, staged large protests over illegal land seizures, rigged elections and official corruption. The unrest started in September, and as the months wore on they attracted nationwide, then...

Caixin Media

03.09.12

Ex-Officials Battle Plan to Build Nuclear Plants

Work on China’s nuclear power plants started picking up again about a year after the Fukushima disaster in Japan. But the meltdown in March 2011 was still fresh on the minds of four retired cadres in Anhui Province’s Wangjiang County.They filed a...

Caixin Media

01.20.12

Melodies of My Youth

When I was a child, my family had an old-fashioned phonograph that had been passed down from my grandfather. It required hand-winding and used a bamboo needle, and it came with special silver tweezers for cutting the bamboo needles.On the side of...