This week in China
This week in China
Afghanistan: just say no
“Gentlemen don’t read each other’s mail,” former US Secretary of State Henry Stimson famously remarked on his decision to shut down America’s nascent spying program in 1929. It is a motto the US government has lived by ever since, so a report this week that China caught and detained an alleged CIA official embedded in its security apparatus is obviously false. But as usual, Beijing then did some point-scoring and lashed out at US interference in its domestic affairs … by monitoring air quality in Chinese cities. The principled stand against environmental monitoring was made by the Environment Ministry, so perhaps some in the Foreign Ministry are banging their heads against a wall right now (even the Global Times didn’t tow the line on this one). On the other hand, the head-banging might have more to do with China’s recent decision to play a more active role in Afghanistan, via the Shanghai Cooperation Organization (fun fact: it’s still around). For those recently thawed from a cryogenically frozen state, Afghanistan has transformed itself from the progressive “Switzerland of Asia” you knew in the 1950s to a popular destination for veteran flashbacks today. Russia seemed at pains (literally) to emphasize that this SCO involvement would not include a military role. Can't wait for China to find out why.
A dip in the accounting vortex
Regulators waded into the rumor pond this week to clarify that China will not allow international companies to list in Shanghai anytime soon. Shanghai’s much-vaunted international board has lurked in the shadows for years, but ultimately it’s been harder to pin down than the Yangtze River Dolphin. The reason? CSRC head Guo Shuqing has realized that, given the option, Chinese people would rather not buy Chinese stocks. And who can blame them, what with the general murkiness of company information and occasional occult omens? Judging from the periodic glimpses the media provides into the vortex that is Chinese company information, there is still plenty of sketchy accounting waiting to be uncovered. For example, a government report this week revealed “irregularities” at 17 SOEs – including the faith-restoring news nugget that Sinopec and PetroChina underreported 2010 profits by RMB1.4 billion and RMB1.5 billion, respectively. Add to that the worries that some steel traders could soon go bust after having taken out bank loans in order to invest in stocks and property, and, you know, cover 1 million square meters with gabled Austrian houses. Well, that was China Minmetals, but you get the point: Clearly China's industrial tycoons need more bank loans! Never fear, sweet tycoons, this may be coming soon in the form of a second stimulus package. Gabled houses for everyone!