Simon points to an interview with Chen Xiwen, a vice-minister in charge of agriculture in China, who talks to the SCMP on riots in China. Simon’s full post is here, in which he responds to the vice minister’s main points and comments:

1. Village riots are a sign of democracy. Of
course in most democracies farmers or other aggrieved parties have
easier methods of expressing their problems, such as courts or the
media. In China, apparently, massed riots are the thing. Talk about
democracy with Chinese characteristics.
2. The central leadership quickly responds to farmers’ problems. Which
implies either the central leadership has no idea what’s going in the
countryside and is relying on those who defy the state’s own censors to
hear about it. Talk about communication with Chinese characteristics.
3. Mr Chen lauds the role of the internet and media in reporting on
riots because it allows the central government to respond as in point

2. So are we going to see a massive relaxation in censorship laws
anytime soon? Don’t hold your breath.
4. The protests are an inevitable consequence of the massive social and
economic changes taking place in China. I dare suggest it is just as
likely to be about incompetent and/or corrupt local authorities
fleecing farmers who have no form of redress.

The full SCMP article is reproduced by Howard French and ESWN has a translation of a sections of a Chinese-language version in the Hong Kong press.

I am adding a new category to AsiaPundit; "Riot watch."

Reports of rioting in China are not new and I would have a hard time arguing that they are increasing - given that such events were more likely to go unreported in the past. However, anecdotal evidence seems to indicate that the reasons for the riots are becoming more diverse.

A couple of weeks ago, there was a riot reportedly caused by an attempt by traffic police to do their jobs. On Saturday there was news of rioting college students protesting high tuition fees and bad cafeteria food. This is on top of the continuing reports of riots by farmers and rural residents.

Once again, the title of this post is without sarcasm (via the China Herald).

In an unprecedented protest, almost 2,500 Chinese journalists have written to the Guangdong High People’s Court to voice opposition against the detention of their colleagues at the Guangdong Metropolis News, reports the China Digital Times.
"We are journalists from the Southern Metropolis News, Beijing News, First Financial Daily, Evening News, Shanghai Youth Daily, Sina.com and Sohu.com… we believe this is an unjust case…"

I had lunch with a reporter from one of Shanghai’s business papers today. Amid various points of conversation, she mentioned that she would never consider working for the state press: "There’s  not enough freedom."

China’s critical independent press has been developing for a while, especially in financial media. But an "organized" and upset independent press seems new.

Barron’s has a great item looking at the apparent recent rise in overseas accquisition activities by Chinese companies. I’ll post something separate on that later, for now, here’s a paragraph that caught my attention. (via Howard French):

So far, in any case, the Chinese economy appears quite reluctant to cooperate with even the mildest efforts to cool it off. Industrial production was up a sizzling 16.6% in May over the same month last year, fixed investment has been running upwards of 25% ahead of last year, oil demand continues to spurt and China has its very own, swiftly growing and very large real-estate bubble. A tendency to operate at least part of its industrial plant so that social stability tops profits as the bottom line obviously serves to camouflage weaknesses, but only for so long.
Our own feeling is that the regime’s ambivalence and equivocation about stepping on the brakes in earnest make China’s mother-of-all-booms almost a sure thing to became a big, fat bust, possibly some time next year. We won’t even hazard a guess as to the size and severity of the fallout, except it’ll be huge and it’ll be global.

Simon has been corresponding with Pundita, and has been keeping track of the conversation here. Today, she looks at the (what I trust to be State Department’s view) on the rise of rural protests in China:

What we’re seeing today in China is a growing rebellion among the rural
peoples. This could spell bad news for the ruling party and foreign
companies using China as a plantation.
Beijing hasn’t released
figures since 2003 on the number of yearly riots and with good reason;
riots are breaking out all over the country. The 2003 figure was
58,000. That figure is surely a drop in the bucket next to what’s going
on today, which is a ruthless land grab that the peasants are
increasingly fighting.
The story in China would be familiar to
students of America’s Robber Baron history phase. Corporations that
want to build a plant and officials who want to clear land for
government projects are using thuggery to eject the people from the
land. The cops are paid not to intervene. So the people have no choice
but to pick up arms. There’s a lot of sympathy building in China for
the ones who fight back, so Beijing is increasingly reluctant to punish
the peasants who skirmish.

Milton J Madison thinks the Bank of America just made a $3 billion mistake.:

Bank of America announced today that it was taking a US$2.5 billion dollar stake in China Construction Bank [CCB]. Additionally, BoA plans to take an additional US$500 million stake in the upcoming IPO bringing the total stake to 19.9%….
Credit risk management is the essence of what banking is and they still don’t do it. Today’s Standard has an interesting article on credit risk management in banks in China. Risk controls are practically non-existent and I seriously doubt if they will have anything workable in the next 5 years. I was involved with implementing credit risk management processes at various institutions around the world and I know a little about what is going on in Chinese banks these days….
I am just not very bullish on the Chinese banking system and it will be very difficult for them to adjust to the real world on such a large scale. My guess is that BoA will make very little money from their investment in CCB. The Chinese are probably laughing all the way to the bank. This is an old saying where someone gets ripped off the perpetrators laugh while they take the money stolen from you to the bank. But in this case, the criminals sold the bank, in this case probably a bank that isn’t worth very much, so they are probably laughing at BoA’s stupidity.

Brad Setser looks at the reasons for China’s growth and asks whether it is sustainable. His answer: No.

[Is] China’s current model is sustainable. My strong sense is that the answer is no. 30% y/y export growth implies that China’s exports would more than double every three years…. China now has become big enough that it needs to contribute to global (consumption) demand, not just global supply. How and when that transition will come, however, remains a huge question.

One addition: As a Westerner who was paid in Korean won during the Asian financial crisis, I find myself drawn to Paul Krugman’s old essay on The Myth of Asia’s Miracle. Referencing that, there is also a question of how long China can continue to mobilize new resources. The question is not just how much China has in terms of resources (there is great untapped potential in rural areas) but whether the country stops constraining growth in these areas as it has been doing by following a command economy.

(UPDATE: Original link was to the other econoblogger named Brad, this is the link to Setser. (apologies, I’m blogging before the coffee has kicked in.)

The Telegraph’s Mark Steyn, less than two weeks after saying his money is on China, has refined his view, making sure that his assessment this time cannot be mistaken for something positive.:

I said a while back that China was a better bet for the future than Russia or the European Union. Which is damning with faint praise: trapped in a demographic death spiral, Russia and Europe have no future at all. But that doesn’t mean China will bestride the scene as a geopolitical colossus. When European analysts coo about a "Chinese century", all they mean is "Oh, God, please, anything other than a second American century". But wishing won’t make it so.

l

Via the FEER’s Travellers Tales blog‘:

Jim Walker, chief economist at CLSA, has done the unthinkable, at least for a banker. He has predicted,
gasp, that in a couple years China will be growing at a mere 3% to 5%.
For most countries, the bottom of the economic cycle usually means
negative growth, but then in China anything below 7% has long been
considered a disaster, since those workers being laid off from
state-owned companies would have no chance of finding new jobs. … Still, we
wonder if such a "collapse" can be as benign as this. If there is a
balance-sheet crisis and all the excesses of the last half decade have
to be worked out, wouldn’t it look more like Korea in 1998?

Morgan Stanley’s Stephen Roach says Asia must prepare for a slowing Chinese economy, the key points of his arguments are reproduced at the China Stock Blog.