China Reform Monitor: No. 804

January 4:

Nasdaq-listed UTStarcom Inc. will pay a $3 million penalty to settle a bribery scandal involving its relations with employees from Chinese state-owned telecommunications firms, the U.S. Department of Justice announced. UTStarcom allegedly used nearly $7 million to arrange and pay for overseas trips for Chinese state-owned telecom companies’ employees between 2002 and 2007. The trips to Hawaii, Las Vegas and New York City, which were intended to facilitate telecom contracts, constituted violations of the Foreign Corrupt Practices Act. UTStarcom is headquartered in Alameda, California. The company designs, manufacturers and sells network equipment and handsets globally.

January 5:

According to a new General Administration of Press and Publications (GAPP) directive, China will further open up its publishing industry in some sectors, expand in others, and encourage large-scale media consolidation and develop more foreign publications. Xinhua, and Russia’s Interfax News Agency, report that Chinese state-owned publishing companies will issue bonds, form partnerships with investors, and launch initial public offerings (IPO) in capital markets. Private investors will operate in nonpolitical publishing fields including science and technology, finance, education, music and the arts. State-media will expand into electronic publishing, animation and gaming sectors. To consolidate the industry over the next 3 to 5 years GAPP will support state-owned presses’ acquisitions of smaller companies to create a half dozen publishing giants. GAPP will also facilitate these companies’ overseas expansion and acquisitions.

[Editor’s Note: In 2009, there were a total of 31 listed Chinese publishing companies which have raised a combined RMB 200 billion ($29.37 billion) through IPOs, according to GAPP statistics.]

This year China will establish its first space lab and continue with its plan to explore the moon, according to a directive by the China Aerospace Science and Technology Corporation this week, the Beijing-owned Hong Kong daily Wen Wei Po reports.

January 6:

The Chinese Foreign Ministry is preparing a white paper of China's diplomacy in 2010. Wen Wei Po has revealed that the soon-to-be-released white paper will stress “that China is unable to fulfill the demand of the western world because China does not have such strength to do this at present and they have over-estimated China.” The white paper also refutes the "China threat theory" which continues to gain strength within some international circles.

January 7:

The official Hong Kong-based Zhongguo Tongxun She has published a provocative editorial on U.S.-China relations claiming “China and the U.S. are restricting each other.” The article accuses Washington of “acting willfully regardless of China's interests” and says warns that “the U.S. may pay a heavy price, heavier than any time in the past.” U.S. weapons sales to Taiwan and President Obama’s planned meeting with the Dali Lama are among Beijing’s gripes. An article in Shijie Xinwen Bao also warned that “in the long run the U.S. cannot ignore its relations with Beijing,” and asked: “Will China be an economic partner of the U.S. or just its huge creditor?”

January 8:

Conflicts between property developers and Chinese citizens are common place in China, yet one story stands out. In Foshan, Guangdong more than 300 residents clashed with police after they learned a construction company was about to develop a 120,000 square meter tract of village land. In 2007 a court ruled that the government controlled the land and it was auctioned for 562 million yuan to the Poly Group for real estate development. Hundreds of villagers, who received no compensation, arrived at 4 am and. determined to stop the construction from proceeding. linked arms and held their ground. After authorities were unable to disperse the crowd with batons police trucks were called in to fire water cannons and tear gas. In all more than 30 people were wounded and the police detained over 70 villagers, Ming Pao reports.