Thursday China roundup

SCMP has a bunch of articles painting a declining social mood.
New strike hits Honda parts supplier

A strike has broken out at a Guangdong factory supplying parts for Japan’s Honda Motor, the latest in a string of stoppages by mainland workers demanding a bigger piece of the country’s economic wealth.

The strike, at Atsumitec Company in the city of Foshan, began on Monday, with 170 workers striking after management fired about 100, a worker who declined to give his name told reporters by telephone.

This is becoming a regular occurrence and the English press is probably only covering a fraction of the stories.

HK shares fall, Henderson Land down after police raid

Property developer Henderson Land (SEHK: 0012) fell 2.1 per cent after Hong Kong police raided the company's headquarters as part of an investigation into the group's aborted sale of luxury apartments.

Henderson is one of the largest property developers in Hong Kong.

Subdued ABC debut dampens fundraising outlook

“Apparently, investors think the ABC IPO was overvalued, and the only reason it isn’t falling is that it’s a political task to keep it above the IPO price,” said Qiu Zhicheng, an analyst at Guosen Securities Co in Shanghai. “This is not good for other banks’ fundraisings going forward.”

However, some retail investors looked to ABC’s modest day-one performance as a positive sign for the long run.

“A debut like this means the stock price will soon choose a direction, and I think it’s more likely to rise,” said Tony Shu, a lawyer who bought 20,000 shares, worth around US$8,000, in the IPO. “I won’t sell ABC until it reaches 3 yuan, which I think is very possible,” he said.

ABC has about a 5 per cent weighting in the Shanghai Composite Index, putting it neck-and-neck with China Construction Bank (SEHK: 0939, announcements, news) (CCB) as the index’s third-biggest component.

Further weakness could bode ill for upcoming fundraisings by peers including Industrial & Commercial Bank of China (ICBC) and Bank of China, who are returning to capital markets to raise tens of billions of dollars to supplement their capital.

“I am naturally inclined to resist judging a stock on one day, but it’s certainly becoming clear that investors I’m talking to are taking this as a poor indicator for financing this quarter,” said Ben Collett, Head of Equities at Louis Capital in Hong Kong.

China's economy slows to 10.3pc

Annual gross domestic product growth moderated to 10.3 per cent from 11.9 per cent in the first quarter, the National Bureau of Statistics (NBS) said on Thursday. The reading was slightly below market forecasts of 10.5 per cent growth.

Other data suggested that curbs on lending to home buyers and local authorities, along with an ebbing of government stimulus spending and an end to inventory rebuilding, were biting with greater force as the quarter drew to a close.

TV switch from Cantonese rekindles fight over cultural diversity

Alarmed at the threat to his mother tongue, Guangzhou resident Yao Cheuk last month sent more than 100 e-mails and instant messages to friends and relatives.
His plea was simple: join an online survey and register a protest over Guangzhou Television's plan to switch the broadcast language on its two leading channels from Cantonese to Putonghua.

Yao was not alone in resisting the official effort to impose broadcasts in the national language. Like-minded residents on June 7 launched a discussion forum on a popular Guangzhou website to speak up for Cantonese.

"Their plan is ridiculous," Yao said. "Can't they show some respect for our culture? The United Nations says cultural diversity should be preserved because it is mankind's heritage."

Yao need not have worried about support for his plea. More than 80 per cent of the 30,000 respondents to a survey by the Guangzhou committee of the Chinese People's Political Consultative Conference opposed the plan.

This story is interesting. They've made the change for the upcoming Asian games, but listen to the arguments. Yesterday I linked to the story about gating migrant communities in Beijing and how that parallels the migration from Mexico into the United States. The arguments made by the Cantonese speakers to protect their language are the same as those made by Americans promoting English.

"We are talking about a harmonious society," he said. "How can our television be so selfish as to cater only to the needs of locals?

"We have 13 million people in Guangzhou, and at least six million of them are immigrants. They don't understand Cantonese and we can't exclude them."

Cantonese, which is spoken in Guangdong, Hong Kong, Macau and parts of the Guangxi Zhuang Autonomous Region , is regarded as a modern variant of the ancient Han language. In pronunciation, vocabulary and usage, it is very similar to the official language used during the Tang dynasty (618-907) and is a much older language than Putonghua, according to experts in linguistics.

To standardise Putonghua, officials decided to eliminate the indigenous usage and vocabulary of the Beijing dialect while including terms in wide use across the north, making the northern dialects the basis of the language.

As a result, Putonghua is not the native tongue of anyone, according to some experts who describe it as a linguistic artefact.

The government has stepped up efforts in recent years to promote Putonghua in Cantonese-speaking areas. Schools post banners reminding students of the importance of speaking Putonghua and equate the use of the national language to civilised behaviour. Some Guangzhou parents complain their children are now reluctant to speak Cantonese, even at home.

This assault on Cantonese is compounded by the increasing population of immigrants working and living in cities like Guangzhou.

Yao estimates the Cantonese-speaking community in the city has dwindled to less than half of the total population.

Newspaper slams mining firm after spill

One of China’s leading newspapers slammed a major mining firm on Thursday for its poor handling of a poisonous leak at a copper mine, as the company said it would cooperate with regulators in an investigation.
Zijin Mining Group (SEHK: 2899) suspended trading of its shares on Monday after news broke about the spill of wastewater containing acidic copper from its Zijinshan Copper Mine, into the Ting river in the southeastern province of Fujian.

But the contamination began much earlier, on the afternoon of July 3, and the public was initially kept in the dark about the spill, which went on for nearly 24 hours.

Communist Party mouthpiece the People’s Daily said the company explained that it did not report the accident earlier as “they thought it was just as small matter”.

“How can a company like Zijin Mining, which is an industry with a high risk of pollution, not take a ‘small problem’ seriously?” the newspaper said in a commentary.

“In industries with a high risk of pollution, small problems are the hidden dangers that lead to large accidents, and you can’t ever just count on your luck,” it added.

It's not every day that major state-owned corporations are slammed by the government mouthpiece, even if they deserve it.

64.5 million mainland houses lying vacant: economist

Mainland’s property market remains dangerously overheated and failing to tame the speculative bubble could threaten financial and social stability, a prominent economist said in an official newspaper on Friday.

Yi Xianrong, an economist at the Chinese Academy of Social Sciences, a government think tank in Beijing, noted estimates from electricity meter readings that there are about 64.5 million empty apartments and houses in urban areas of the country, many of them bought up by people wagering on a constantly rising property market.

I don't think electricity meter readings give a clear picture, but there are undoubtedly many apartments purchased for investment that are vacant.