I’m addicted to Taobao.

I’ve bought everything from Michael Jackson gloves to a swimming pool, and somehow my search results often include sex toys (stay away from search terms including “stick,” “shake,” “love,” “woman,” or… “tail”). I’m not the only Taobao troll; according to ranking site Alexa.com Taobao ranks as the 9th most visited website in the world, and 2nd in China.

Chinese e-commerce giant Jack Ma is the founder of Alibaba Group, which includes my beloved Taobao. Ma revolutionized production and supply chains for businesses all over the world, enacting a rigorous verification program to build a system of trust with overseas buyers, enabling what he calls the “ant army” of Chinese manufacturers.

The Ant Army uses Alipay, which in 2014 was separated from Alibaba Group to make Ant Financial. Super new and a bit secretive, Ant Financial is turning up with a bevy of online banking services, nimbly filling niches that the Chinese banking sector hasn’t been able to. Using rhetoric of building an open financial ecosystem, Ant Financial has created one of the world’s largest money-market funds, is offering peer-to-peer lending for SMEs, and has microfinanced more than 20 million rural merchants last year. Chinese regulators just greenlit the creation of MYBank, an all-digital, branchless bank.

READ: You may never have to go to the bank ever AGAIN.

Want to try your hand at e-banking in China? Zhifu me to support further Sindicator installments.

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For you: a very special Sindicator. Using the sino-indicator of PM2.5 I show how air pollution can really fuck with your emotions. A bit more gravitas in this, a short film documenting a day in shit air, but with a kitschy sci-fi mood and a bit of dark humor.

The underlying motivations for the toxic shroud visible from space are just as nasty as the air. Consumers expect cheap production, investors are gunning for growth, and convenience is king. And as China struggles to provide for the world and its own, developed nations finger wag in reprimand.

I am careful to mention that I have made the choice to live here, as many of you have. Many Chinese do not have a choice. So, N.B.: next time you crank up the heat in your place, take a drag from your smoke, stuff your face with cheese flown in from Switzerland, AND bitch about the air… God kills a coal miner.

Read:

AQI: Beijing v. Shanghai (WSJ)

How society evolves to provide indoor alternatives (if you’ve the money to do so) (The Guardian)

Death rates (SCMP)

Jia Zhangke donating his talents to Greenpeace (YouTube)

Great interactive infographic (SCMP)

BJC’s nod to The Daily Show’s feature on smog, as seen from SPACE (BJC)

An awesome remake of Pharrel’s song “Happy,” tragically shot on a polluted Beijing day (BJC)

Following up on Sindicator’s last episode about Food Security in China, let’s look at how food security and food safety go hand in hand. Simply put: security is about quantity, while safety is about quality. But let’s be real, when we talk about China, we’re always talking about quantity. And quality of that much quantity is difficult to oversee, especially in the context of MEAT.

Recently, China has seen an unparalleled increase of demand for animal products, leading to a meatier Chinese diet. How much meatier? Well, since 2012, China ranks as the No. 1 meat consumer in the world. The country now eats a quarter of the world’s supply, or 71 million tons a year. For you bacon freaks: more than half of the 107 million tons of pork eaten worldwide were consumed in China. Mmmm… bacon.

The rise in demand has been a big topic in food security talks, and has been met with a lot of outsourcing, exemplified by these mega-value “Meal Deals”:

- The Smithfield-Shuanghui pork production deal came to a whopping $4.7 billion; it was the largest buyout of an American company in history.

- Argentina and Brazil have reshaped their landscapes to grow soy feed for China’s livestock.

- New Zealand milking its FTA with China to provide dairy to its new No. 1 importer.

- Australia’s landmark deal in 2014 promises a million live beef cattle valued at more than $1 billion to be shipped to China, where they will be slaughtered and eaten.

And from that great circle of life that your hanbao deluxe sprung, there is a lot of potential for error in the logistics chain. Meaty food scandals include:

- Shuanghui was found using illegal additives such as clenbuterol in their pork. Oh, and maggots. Also there were some maggots.

- Husi Food Co, a unit of American OSI group, was videoed reusing expired meat, and meat that had fallen to the factory floor.

- In 2013 16,000 pigs were found floating in Shanghai’s Huangpu river, in a fantastically dark Porkpocalypse.

A reason why much of China’s animal product supply comes from abroad is because safety standards are more developed in other countries. Another reason is because China only has 12% of the world’s arable land, which is not enough to support the livestock needed to feed 1.3 billion people. This means the most carnivorous country (by volume) is getting the meat sweats in maintaining viable food security policies. Can’t wait to see what this year’s No. 1 document has to say about the situation.

Our beloved China, the new social-political-economic butterfly on the scene, wowed at APEC before jetting off for the ASEAN East Asia Summit and the G20 Summit.

Hosting APEC for the first time since 2011, Beijing did things 大气, spending $6 billion on a lakeside campus, a new elevated expressway, and a no-costs-spared spectacular opening complete with fireworks. But how did they really do?

Silk Road: A Mod Look

The leader of the world’s largest economy kicked off the event with a bold statement, boasting a $40 billion price tag for the revival of an old classic: the Silk Road trade route. The fund’s goal is to “break the connectivity bottleneck” in Asia, focusing on connecting nations Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan. The Asia Infrastructure Investment Bank (AIIB) will be set up as the major mechanism for funding infrastructure development. Oh, you got your own development bank now, huh? Xi, you so smoov.

Diplomacy + Drama = Dipl-o-rama!  

With 21 of the hottest Pacific Rim economies mingling to promote free trade and economic cooperation throughout the region, dangran there was a bit of drama! Analysts and amateurs alike gossiped over…

…bad boy Putin’s interaction with errbody. Hot topics included Russia’s invasion of Crimea, its poking at ailing eastern Ukraine, that time it shot down MH17… oh, and did you see Putin hitting on the missus, Lady Peng Liyuan?? Omg, I bet he was like, “here you can take my shirt, too.”

…APEC Blue: The color of this season. You gotta spend money to make money, and apparently you make money by turning the sky blue again for the economic giants of the world. For a costly hiatus, Beijing took half of the cars off local roads, closed more than 1,000 heavy industrial plants, and delayed central heating services in Tianjin.

…Japan’s Shinzo Abe and Xi Jinping breaking their “cold spell” of chilly diplomatic relations with a SUPER awkward handshake. #theresthebeef

…shirt-frontin’! With this type of posturing, why not flatter your figure(head) with a Star Trek-inspired tunic! Shiny yet understated, the APEC uniform even included a communicator-esque badge. I myself am thoroughly delighted that we’re evolving into The Next Generation.

Kinda a Big Deal in Asia

After the pomp and circumstance, the press junket did graduate to a body of bilateral negotiations. What was kinda a big deal?

ITA: a U.S.-Sino commitment to eliminating tariffs on such items as computers and computer software, telecommunication equipment and other advanced technology products.

Climate: a U.S.-Sino pact to reduce emissions, which emerged from seeming nothingness

Visas: a U.S.-Sino pact (seeing any patterns?) allowing Chinese visas for 10-year American tourists/businessmen and 5-year students. The application process for which I’m assuming is proportionately long, and will be subject to change NOW.

Putin’s not just keeping Xi’s wife warm – an agreement for 30 billion cubic meters of natural gas pipelined in from Western Siberian deposits to China should keep China toasty for 30 years.

FTAs, he-eeyy: South Korea and Australia are #winning. Tony Abbott is besides himself, apparent in a 30-second handshake during which it was unclear how much Xi Jinping was listening.

For more APEC goodies, read on! Links you’ll l-o-v-e <3:

- Tony Abbott shook hands with Xi FOREVER at APEC. You should know why.

- A throwback article to Xi’s call for a “regional security architecture” at CICA.

- Popup Chinese’s Sinica podcast, again with their finger on the pulse.

Pop quiz, nerds! Chinese take their food seriously. Very. Seriously. How is that (s)indicated by policy? Today, we take a look at food security.

What does the PRC deem the “number one document”?

It’s a policy document issued every January by the Central Committee of the Communist Party. It sets the country’s policy priorities for the year.

The primary focus?

Number one’s number one has focused on rural matters every year since 2003, making China’s agricultural economy top priority. This year, like many years before, food security took precedence.

What the hell does “China needs to TAKE GOOD CONTROL OF ITS BOWL” mean?

It’s state-speak (via Xinhua and other party mouthpieces) taken from the document that posits, “Taking good control of its own bowl is a fundamental principle the government must stick to over a long period of time.” It emphasizes that the number one priority is to ensure that China can provide its people with adequate food supplies, focused on grain sufficiency. Food security is all about independence, or controlled interdependency in a global market. China’s campaign to “control its bowl” stems from pricing and shortage fears, seeking to insulate its people from internal and international volatility.

Food Security Measures: Then and Now

Early state measures protected food supplies for the good people of Communist China by… wait for it… ridding the country of sparrows. The flying pests were thought to be eating all the grain, so Mao instigated a campaign against the beasts and decimated the population. Naturally, the ecosystem responded with a huge bug problem, in which the crops were overrun with pests of a different kind, a contributing cause to the famine during the Great Leap Forward.

Now, China’s food security campaigns are a bit more sophisticated. The number one document focuses on agro-business, encouraging modern biotech and empowering farmers to maximize output.

Toxic Assets

But modern development in other sectors competes with the Committee’s land-loving, grain-hugging food security policies. China’s prolific urbanization has undercut these environmentally-friendly efforts and caused toxic levels of cadmium, lead, mercury, nickel, and arsenic to contaminate the water and soil.

For the first time ever, this year the Ministry of Environmental Protection and the Ministry of Land and Resources has publicly reported on state land in the country. The survey reveals almost one-fifth of Chinese soil is fallow. Three-point-three million hectares — an area the size of Belgium — has become too contaminated to grow crops! Still, the survey maintained China’s arable land is still above the self-proclaimed “red line” of 120 million hectares.

Those American Pigs

This year American pork producer Smithfield Foods was bought by China’s Shuanghui International Holdings Ltd. for $4.7 billion. It’s the largest takeover of a U.S. company by a Chinese firm ever. Diet changes for the Chinese, including an ever-growing demand for meat, has now led to outsourcing industrial pork production to the U.S. So this grain sufficiency thing has gone beyond filling bowls with rice. The buyout has transferred a water-intensive, grain depleting, environmentally taxing process to the States.

Opinions and predictions I’ll leave to the experts, but look out for part 2 and see how Shuanghui-Smithfield also plays into food safety in China.

Big Red, bringing home the bacon! Mmmm. Bacon.

Read on!

– This guy does a much better of explaining the “Number One Document” and its implications than I do.

– Listen to this NPR podcast on a perceived rice shortage in Asia and how everyone lost their goddamn MIND over it.

– Toxicity.

– Two examples why the U.S.-China food trade is more dramatic than your relationship with your ex:

– Bring us your fine swine.

– But we’ll pass on the corn.

Chairman Mao once said, “Without destruction there is not construction. The destruction is the criticism, the revolution. The destruction comes first, it of course brings the construction.”  In recent years this quote has been taken literally, and the character 拆 (chāi), which means to “tear down,” adorns the entrances of many-a-doomed domiciles. The phenomenon has evolved so that the Chinese have nicknamed their country 拆那 (chāinà – get it?), referring to the daily razings that make way for growth.

This HULK SMASH!!!! approach to development has led to some stubborn residents refusing to give up their homes, “squatting” in nail houses that impede new construction. Those forced out leave messages telling others how they lost their homes. The graffiti protests are often painted over, silencing the affected.

Institutionalized Incentives

Land is owned by the state, with individuals and groups being able to lease the land for 70 years or less. Local and municipal governments leverage this asset by selling land leases to developers, leaving the residents with little say and little compensation. Developers get rich. Government officials get rich.

Moreover, this push for land development has been institutionalized by the central government in a series of incentives set by the Communist Party of China Organization Department. A long list of performance indicators gauge the efficacy of local party bosses, and GDP growth tops the list.  The easiest way to hit that target? Why, land sales and infrastructure investment, of course!

In fact, these incentives have warped the construction sector to the point of projects of planned obsolescence. Poor materials, untrained workers and accelerated timelines have led to some shoddy construction, with the lifespan of many residential structures clocking in at 20 years. The logic behind such irresponsible development? Demolition to make way for construction looks better for the numbers than renovation. It’s doubtful Mao foresaw such capitalist implications when he espoused his theory on destruction and construction.

Bubble Glut, Bubble Bubble Bubble Glut

This has created a property glut of epic proportions. Land-rich areas with few tax-paying individuals depend on real estate leases to generate revenue. Thus, gargantuan development projects have sprung up where no one wants them, initially designed to boost growth and business tax revenue, but ultimately leading to a lot of waste and pollution. Ghost towns pepper the country to the tune of some 68 million empty units. Meanwhile in urban centers, skyrocketing rent prices and strict purchasing restrictions have caused a massive housing shortage. Groups known as “rat and ant tribes” live in a modern dystopia, sardined underground as a testament to the ugly imbalance of resources and development (Vice Japan does an awesome feature about them).

It’s the Economy, Stupid

China saw housing market downturns after 2008 and 2011, but 2014’s looking at a possible property bubble pop, splooging a mix of sticky self-pity and gooey regret everywhere. That would be bad — real bad — since real estate accounts for 15% of China’s GDP, and such a large sector of the world’s second largest economy deflated too quickly would mean the entire globe would get splooge all over it.

In response to ballooning government debt, developer funding shortages and falling home sales, Premiere Li Keqiang has enacted a few “micro-stimuli” measures to avoid a crash. The PRC is now regulating loans made to developers and using targeted measures to encourage home-buying of existing units. To come: structural reforms moving the economy from an investment-led growth model into a consumption-based one. China will hopefully grow out of its “chai na” phase, an anti-climatic maturing that would be way better than any alternative… SPLOOGE.

Further reading:

- Seriously, China File’s people are killin’ the infographic game.

- Many thanks to fellow Carletonian Austin Hall for letting me showcase his deft hands from the video “Daft Hands.”

- Shoutout to Shanghai’s Basement 6 for their creative destruction with Shanghai 拆’s.

Sindicator is monthly webseries on China econ and finance, written, produced, and directed by Danielle Sumita. The previous episode was about Xi Jinping’s austerity measures.

In 2020, almost one of every 10 people in the world will live in a Chinese city. Every year from now, an estimated 18 million Chinese will move to urban areas. That’s like taking the population of Tokyo and adding it to the nation’s urban centers every year.

“China’s Apartheid”

A hùkǒu (户口) contains key information on every Chinese citizen, including where each person was born. This household registration system, called hùjí (汇集), dates back 2,000 years and has always been riddled with problems, but in recent years it’s come to be called “China’s Apartheid.”

This internal passport is used as way for the government to direct urbanization trends and allocate social spending. Attached to the hukou are benefits including free education privileges, health care, and a pension. Urban hukous are most sought after, since social services in rural areas are kind of a joke. The disparity in these government services has created a serious divide in access among Chinese citizens. Poor migrants get almost nothing, since they can’t take advantage of government services in their place of residence or travel home to access hukou benefits. This has created a tier of second-class citizens, feeding the apartheid between the “hukou haves” and “hukou have-nots.”

Loopholes

If not born as hukou fortunate, there are a few ways to get your papers changed. One is by marriage. Marriage is a BUSINESS in China, and the hukou factors in heavy for a couple’s “chemistry.” Becoming a social science, the transactions of marriage and divorce are being used to navigate hukou restrictions, like those on buying property. For example, in cities like Beijing, those without a Beijing hukou can’t buy homes. So the “hukou haves,” dubbed hūntuō (婚托), or marriage trustees, are getting married and divorced to non-Beijing hukou holders, sometimes several times in a year.

Another loophole is through university, since higher education adds points for one’s application in changing a hukou. Unfortunately, acceptance rates are particularly skewed against rural hukou holders, since city universities take in a higher percentage of their own urbanites. And before uni, migrants need to pay exorbitant fees for private schooling, adding to the difficulties migrant families face.

For those with the means, a black market hukou can be procured for about 150,000 RMB. So. There’s always that.

For the unfortunate souls that don’t meet any of those requirements, life is rough. Rural migrant workers, or nóngmín gōng (农民工), are estimated to make up almost 20 percent of the country’s population. They often live in temporary housing on construction sites, underground, or wherever they can find shelter.

The reformation, powering consumption

By 2020, 100 million Chinese citizens will be awarded urban hukous.

Every city with more than 200,000 residents will be covered by standard railways. The civil aviation network will cover about 90 percent of the population. Urban construction, both residential and commercial, will boom. And it will be funded by transparent, responsible financing, using municipal bonds issued and managed by the cities themselves.

People-centered, sustainable development is some of the rhetoric of the CPC’s New-Type Urbanization plan. Dressed up in fancy language or not, hukou reforms are part of a larger campaign to increase domestic demand. To avoid placing more stress on the major urban hubs, the government is guiding urban migration trends away from megacities like Beijing and Shanghai toward city clusters in central, western and northeastern China. Those cities will be engines of growth and, of course, consumption.

And to be sure, this will still all be thanks the very affordable labor of: our migrant friends!

Further reading:

Infographics make learning fun (China File)

A documentary about where migrants end up living in big cities (Vice)

Animated film depicting two migrant youths in Beijing (Youku)

Interactive map about China’s urban trends (McKinsey)

Sindicator is monthly webseries on China econ and finance, written, produced, and directed by Danielle Sumita. The previous episode was about cash injections during Chinese New Year.

Communist Party cadres throw down rapper-level cash on luxury brands, especially in the name of “gifts of guanxi,” but a shrinkage in the gift market has affected some key industries in the domestic policy game, like Moutai, which has seen sales plummet over the last year. Luxury darlings Gucci, Louis Vuitton and Cartier also have all seen a slump in demand.

March 14 marked the one-year anniversary of presidential power for Xi Jinping, who has put away nearly a dozen ministerial and provincial-level senior leaders on corruption charges. Twenty high-level officials have been probed since his rise to Party chairman, including leaders within the country’s special interest groups, like oil. The department designated to enforce these reforms? It’s lovingly named the Central Commission for Discipline Inspection of the Communist Party of China, or Zhōngguó gòngchǎndǎng zhōngyāng jìlǜ jiǎnchá wěiyuánhuì.

During the Third Plenum the president sought to tighten Internet security through the creation of a National Security Committee. In January, Xi was appointed as head. In February, Xi was quoted that guiding public opinion “requires innovative Internet propaganda, Internet broadcasting discipline.” What (de)materializes for the rest of 2014 will be a drama worth following.

A monthly webseries on China econ and finance, written, produced, and directed by Danielle Sumita.

The ubiquitous red envelope may seem innocent enough, but accommodating a billion or so hongbao exchanges puts great pressure on the Chinese banking system. After experiencing several cash crunches in 2013, the People’s Bank of China very publicly injected 255 billion RMB (42 billion USD) into the system leading up to the holiday. You care, because the inflation this caused means your holiday (cash) bonus was just a touch undervalued.

But the holiday spikes and dips of economic activity mean you shouldn’t sweat the short term. In fact, to account for seasonal distortion, even the Public Bureau of Statistics waits until March to release the economic data of January and February together. The “Jabruary” Indicators, as I like to call them, make for a more accurate depiction of the year to date.

Until then, ignore any sensationalist headlines. There are plenty of real CNY fires to be dealt with.