The End of Chinese Internet Civility

Simmering tensions between Qihoo 360 and Tencent broke into open war last week, as Tencent disabled its chat software on computers running 360 antivirus software. This move was the most aggressive yet in a serious of escalating attacks between the two companies that resemble nothing so much as a barnyard brawl. Microsoft appears to be the only winner of the fighting to date, with MSN Messenger acquiring a number of users fed up with the behavior of both companies.

A Hero of Our Time

On October 8, Liu Xiaobo became the first Chinese to receive the Nobel Peace Prize and one of only three winners ever to receive it while in prison. The Oslo committee had already received a warning from Beijing not to give Liu the prize because he was a “criminal,” serving eleven years for “subversion of state power.” After Oslo made its announcement, Beijing labeled the award an “obscenity.” By Beijing’s standards it certainly is.

How Reds Smashed Reds

July and August 1966, the first months of the ten-year Cultural Revolution, were the summer of what Andrew Walder, a sociologist at Stanford, calls “The Maoist Shrug.” Jiang Qing, Mao Zedong’s wife, told high school Red Guards, “We do not advocate beating people, but beating people is no big deal.” A few weeks later Mao himself heard a report about a mass meeting in Beijing at which Red Guards “struggled” against “hooligan” students. In those days “struggle” included physical violence.

Staff Report of the People’s Republic of China—Hong Kong Special Administrative Region: 2010 Article IV Consultation Discussions

Two potent forces continue to influence Hong Kong SAR's prospects: the unprecedented monetary policy easing in the United States and the solid domestic recovery, in part driven by spillovers from the Mainland. While the substantial expansion of the monetary base (which began in 2008) has stopped, the banking system remains exceptionally liquid and credit growth is now beginning to pick up. Despite the government's efforts, with tighter lending standards, higher real estate transaction taxes, and an increased supply of land-property prices continue to rise. The most pressing challenge over the near term will be to ensure that the ongoing acceleration of property price inflation does not translate into financial risks or unduly amplify the macroeconomic cycle. The government should continue to proactively deploy countervailing prudential regulations—to ensure the quality of bank credit remains high—and put in place a sufficiently counter-cyclical budget in the coming fiscal year. Over a longer horizon, policies will need to ensure that Hong Kong SAR can fully capitalize on its unique status as an offshore renminbi center and adapt to the ongoing changes in the global financial regulatory environment.

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Economy

The Li Gang Scandal

A deadly hit-and-run at Hebei University by the unapologetic son of a high-ranking official has sparked outrage across China, with early efforts to cover up the incident ultimately leading to father and son both making tearful apologies on national television. In other news, China stands accused of clamping down on the export of sensitive rare metals, while a new Chinese prize makes a surprise international debut. This week on Sinica, we discuss these developments and more from our studios in the heart of downtown Beijing.

Did Higher Inequality Impede Growth in Rural China?

Since the start of economic reform in the early 1980s, China has experienced plenty of growth and inequality; per capita income has grown nearly 8 percent annually, while the Gini coefficient rose from 0.28 to 0.39. Using a rich longitudinal survey spanning the years 1987-2002, this paper finds that households located in higher inequality villages experienced significantly lower income growth through the 1990s. However, local inequality's predictive power and effects are significantly diminished by the end of the sample. Evidence points to unobserved village institutions at the time of economic reforms that were associated with household access to higher income activities as the source of the link between inequality and growth. The empirical analysis addresses a number of pertinent econometric issues including measurement error and attrition, but underscores others that are likely to be intractable for all investigations of the inequality-growth relationship.

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World Bank

On the Road to Prosperity? The Economic Geography of China’s National Expressway Network

Over the past two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims both to promote efficiency at the national level and to contribute to the catch-up of lagging inland regions with prosperous eastern ones. This paper evaluates the aggregate and spatial economic impacts of China's newly constructed National Expressway Network, focusing, in particular, on its short-run impacts. To achieve this aim, the authors adopt a counterfactual approach based on the estimation and simulation of a structural "new economic geography" model. Overall, they find that aggregate Chinese real income was approximately 6 percent higher than it would have been in 2007 had the expressway network not been built. Although there is considerable heterogeneity in the results, the authors do not find evidence of a significant reduction in disparities across prefectural level regions or of a reduction in urban-rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality, although, over time, these will likely be reduced by enhanced migration.

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Economy
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World Bank

Energy Innovation

Driving Technology Competition and Cooperation Among the U.S., China, India, and Brazil

Low-carbon technology innovation and diffusion are both essential aspects of an effective response to climate change. Studying China, India, and Brazil, the authors of this report examine how innovation in low-carbon technologies occurs and how the resulting developments are diffused and adopted.

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He Jianan
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Coming to Terms with the Nation

China is a vast nation comprised of hundreds of distinct ethnic communities, each with its own language, history, and culture. Today the government of China recognizes just 56 ethnic nationalities, or minzu, as groups entitled to representation. This controversial new book recounts the history of the most sweeping attempt to sort and categorize the nation's enormous population: the 1954 Ethnic Classification project (minzu shibie). Thomas S. Mullaney draws on recently declassified material and extensive oral histories to describe how the communist government, in power less than a decade, launched this process in ethnically diverse Yunnan. Mullaney shows how the government drew on Republican-era scholarship for conceptual and methodological inspiration as it developed a strategy for identifying minzu and how non-Party-member Chinese ethnologists produced a “scientific” survey that would become the basis for a policy on nationalities.  —University of California Press

Heart of Buddha, Heart of China

The Buddhist monk Tanxu surmounted extraordinary obstacles—poverty, wars, famine, and foreign occupation—to become one of the most prominent monks in China, founding numerous temples and schools, and attracting crowds of students and disciples wherever he went. Now, in Heart of Buddha, Heart of China, James Carter draws on untapped archival materials to provide a book that is part travelogue, part history, and part biography of this remarkable man. This revealing biography shows a Chinese man, neither an intellectual nor a peasant, trying to reconcile his desire for a bold and activist Chinese nationalism with his own belief in China's cultural and social traditions, especially Buddhism. As it follows Tanxu's extraordinary life, the book also illuminates the pivotal events in China's modern history, showing how one individual experienced the fall of China's last empire, its descent into occupation and civil war, and its eventual birth as modern nation. Indeed, Tanxu lived in a time of almost constant warfare—from the Sino-Japanese War of 1895, to the Boxer Uprising, the Russo-Japanese War, the Japanese occupation, and World War II. He and his followers were robbed by river pirates, and waylaid by bandits on the road. Caught in the struggle between nationalist and communist forces, Tanxu finally sought refuge in the British colony of Hong Kong. At the time of his death, at the age of 89, he was revered as "Master Tanxu," one of Hong Kong's leading religious figures. Capturing all this in a magnificent portrait, Carter gives first-person immediacy to one of the most turbulent periods in Chinese history.  —Oxford University Press