riots in china (2011)

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Wave of Violent Protests, Rioting, Bombings Hits China;
Expect More Riots When China’s Credit Bubble Pops, Exposing Mountains of Fraud
Protests are not uncommon in China. However, most protests have been in rural areas where farmers have had their land stolen by bureaucrats and property developers. The last few weeks have been different. Several large urban areas have seen protests against corruption.
A wave of violent unrest in urban areas of China over the past three weeks is testing the Communist Party’s efforts to maintain control over an increasingly complex and fractious society, forcing it to repeatedly deploy its massive security forces to contain public anger over economic and political grievances.
In the latest disturbance, armed police were struggling to restore order in a manufacturing town in southern China Monday after deploying tear gas and armored vehicles against hundreds of migrant workers who overturned police cars, smashed windows and torched government buildings there the night before.
The protests, which began Friday night in Zengcheng, in the southern province of Guangdong, followed serious rioting in another city in central China last week, plus bomb attacks on government facilities in two other cities in the past three weeks, and ethnic unrest in the northern region of Inner Mongolia last month.
Anti-government protests have become increasingly common in China in recent years, according to the government’s own figures, but they have been mainly confined to rural areas, often where farmers have been thrown off their land by property developers and local officials.
The latest unrest, by contrast, involves violent protests from individuals and large crowds in China’s cities, where public anger is growing over issues including corruption and police abuses.
Protests in China have been occurring at an increasing rate. This is in spite of the fact the Chinese economy has been growing at 10% a year for a decade.
What happens when China’s growth slows to 4%?
For years, investors in Chinese companies have used the reputations of outside auditors, institutional investors and global investment banks as a proxy for reliable financial reporting. Maybe the disclosed data wasn’t always easily understood, transparent or accurate but if a Big Four international accounting firm like Deloitte Touche Tohmatsu signed off on the audit, a big institutional investor like JPMorgan Chase (JPM, news) owned a couple of million shares and an investment bank like Goldman Sachs Group (GS, news) had underwritten the company’s initial public offering, the financials had to be OK, right?
Apparently not.
That’s what’s so depressing, disturbing and disorienting about the fraud recently uncovered at Longtop Financial Technologies (LFT). The company’s books were audited by Deloitte, and Longtop still managed to lie about the $332 million in cash it claimed on its balance sheet.
This was no penny stock that duped only unsophisticated individual investors. JPMorgan Chase owned almost 2 million shares that were worth $62 million as of March 31. FMR, which owns the Fidelity mutual fund family, had $261 million invested. Maverick Capital, a hedge fund with $20 billion under management, owned $177 million of Longtop Financial Technologies shares. The lead underwriters on Longtop’s 2007 IPO had been Goldman Sachs and Deutsche Bank. In 2009, Morgan Stanley was the lead manager of a sale of more shares.
Since March, more than two dozen companies based in China have disclosed auditor resignations or accounting problems, according to the U.S. Securities and Exchange Commission. The SEC has launched a task force charged with examining accounting at overseas companies listed in the United States.
In other words, Longtop Financial Technologies isn’t a bad apple in a barrel of otherwise sound fruit. Instead, it’s symptomatic of a big problem that has tainted an entire sector. And because China is too big an economy and too promising a stock market to simply ignore, investors need to figure out how to deal with the problem.
Expect Mountains of Fraud
Fraud and credit bubbles go hand-in-hand.
When things are booming, everyone is willing to look away. That’s what happened with the US housing bubble as well. Greenspan then Bernanke were both in denial, as was the NAR, real estate flippers, and everyone who stood to profit from the bubble on the long side.
China is currently in the midst of an enormous property bubble and credit bubble, yet some serious cases of fraud have already popped up.
As soon as the Chinese credit bubble implodes, and it will, look for mountains of fraud in the Chinese stock market and the Chinese property market to come to light. Also expect the Chinese Copper Ponzi Financing Trade Gone Wild will implode.
As long as the stock market, the job market, and housing prices hold up, China may be able to contain social unrest. ” When China’s credit bubble implodes, things will likely be anything but “contained”.

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On Tuesday, scores of Chinese business leaders, financiers, entrepreneurs and academics piled into a hotel in Athens for a “premier conference” aimed at increasing Chinese investment in Greece, where foreign direct investment remains among the lowest in Europe.
After taking over day-to-day running of Piraeus, the biggest harbour in the Med, China has signalled it wants to buy the loss-making railway company OSE, as well as other infrastructure projects.
Chinese officials admit they see Greece as the perfect gateway to markets in the Balkans and Europe beyond.

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The US, must necessarily “ride the tiger”….of China’s rise, of China’s holdings of $2 trillion in dollar reserves and Fanny Mae and Freddie Mac bonds, of China’s growing involvement in Africa and Latin America for natural resources, hoping to either cement China’s involvement an international status quo that will continue to subsidize America’s relentless economic decline in coming decades, or failing that, find its Chinese Lech Walesa to lead a Chinese labor movement friendly to “free markets” and bourgeois democracy.
We must hope that both sides of this strategem fail, and that, unlike in 1917-1921 with Russia, the world working class will this time meet the Chinese working class at the rendez-vous.

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In scenes captured on a mobile phone, rioters overwhelmed and destroyed the police headquarters. And such disturbances are occurring more frequently, according to human rights groups.

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Officials sacked over riots in Guangdong
Two officials were sacked and several others were given verbal warnings yesterday for one of the worst outbreaks of unrest in southern Guangdong Province, the Guangzhou Daily reported today.
The Party secretary and deputy Party secretary of Xintang Township in Zengcheng City have been removed from their posts after the unrest which erupted on June 10 in the export-oriented area, the report said.
During the unrest, some people gathered around a police station, vandalizing vehicles and bank’s cash machines and attacking police officers in Xintang after a pregnant woman got involved in a dispute with local security personnel who asked her to move her stall from the front of a supermarket, according to previous media reports.
The woman was a migrant worker from southwest China’s Sichuan Province who seeks a living in the town.
A security guard involved in the dispute with the woman and her husband will be fired and detained by police for 10 days, the newspaper reported.
Eleven suspects involved in the unrest have been charged by local procurators for obstruction of official affairs, causing a disturbance and intentional damage of property, according to the report.

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SIX people received jail terms yesterday from nine months to three years and a half for one of the worst outbreaks of unrest in southern Guangdong Province, the Guangzhou Daily reported today.
Li Zhonghuang was sentenced to three years and six months in prison on the crime of creating disturbances. Li led a group of people on June 11 to destroy three police vehicles at the Xintang Township in Zengcheng City, causing damages worth 160,880 yuan (US$25,000), the report said, citing the local court.
Yang Fajun and Ran Qinghua received a two-year jail term each for vandalizing vehicles on June 12 in Xintang. Ou Lin was sentenced to nine months while Kang Chuan got a term of two years and a half for destroying public facilities and vehicles on June 11.
Zhao Jiu, who resisted arrest and hurt a policeman, was sentenced to two years in prison for obstruction of official affairs, according to the newspaper.
Earlier media reports said that 11 suspects involved in the unrest have been charged by local procurators for obstruction of official affairs, causing a disturbance and intentional damage of property.
The Party secretary and deputy Party secretary of Xintang Township have been removed from their posts after the unrest which erupted in the export-oriented area.
During the unrest, some people gathered around a police station, damaging vehicles and bank’s cash machines and attacking police officers in Xintang after a pregnant woman got involved in a dispute with local security personnel who asked her to move her stall from the front of a supermarket, according to previous media reports.

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SHANGHAI (Reuters) – Eleven people have been jailed for their roles in riots that hit a city in the southern Chinese export hub of Guangdong province last month, state media said on Saturday.
The riots in mid-June, which were sparked by the abuse of a pregnant migrant street hawker, flared over three days and saw rampaging mobs smash and burn government offices, pelt police with stones and bottles and overturn scores of vehicles.
A court in the city of Zengcheng on Thursday sentenced five people to terms ranging from a year and a half to nearly six years, the official Xinhua news agency said…..
Other clashes have erupted in southern China in recent months, including in Chaozhou, where hundreds of migrant workers demanding payment of their wages at a ceramics factory attacked government buildings and set vehicles ablaze.

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China police killed 14 in Xinjiang attack
11:00 p.m. EDT, July 19, 2011
BEIJING (Reuters) – Chinese police said 14 “rioters” were among 18 people killed in a clash at a police station in the restive Xinjiang region, a government website reported on Wednesday, an account that more closely reflected the tally reported by an exile Uighur group.
Government officials previously said at least four people were killed in what they described as a terrorist attack but which the Germany-based exile group World Uyghur Congress said was an attack on peaceful protesters.
The group had said 20 Uighurs were killed — 14 beaten to death and 6 shot dead — and 70 arrested, when police opened fire on protesters, leading to fighting between the two sides.
The clash marked the worst violence in about a year in the far western region, home to many Uighurs, a Turkic-speaking people native to the area that is strategically significant because of its oil, gas and coal deposits.
The Xinjiang government-run Website tianshannet.com said that police fatally shot the 14 rioters after giving “legal education and warnings,” adding that 18 rioters had bought and made weapons and sneaked into the desert city of Hotan days before the clash on Monday.
The report said the rioters, armed with axes, knives, daggers, Molotov cocktails and explosive devices, “crazily beat, smashed and set on fire” the police station, and hung “flags of extreme religion” on the top of the station.
It said two policemen and two hostages were also killed in the clash, and that four of the rioters were arrested.
“It was an organized, premeditated and severe violent terrorist attack to local politics-and-law departments,” the report said.
The differing accounts from the government and exile group could not be independently verified.

– here

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the latest incident erupted after a group of Uighurs tried to seize a number of police officers as leverage in their demands for the release of family members detained previously.
The attackers also set fire to the police station, located near the city’s bustling bazaar, reports said. The situation in Hotan, an ancient oasis trading post on the famed Silk Road, remained tense after the attack, with police sealing off roads in and out of the city and “large numbers” of anti-Chinese flyers circulating, Raxit said in an emailed statement. The flyers demanded the release of detained people, rejected the growing influence of the Han and called for independence, he said.

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Crowd riots after death of vendorAnshun, Guizhou – The death of a vendor, who was believed to have been killed by urban management officers in Southwest China’s Guizhou province on Tuesday afternoon, caused a gathering of thousands of angry local residents.

The unidentified vendor died in front of the gate of a market at Nanhua Lu, Xixiu district of Anshun city, at about 1:43 pm on Tuesday, which led to the gathering of the local people, according to a statement sent to China Daily from the publicity department of Anshun.

The statement did not give details of the cause of the vendor’s death, only saying that “before the incident occurred, chengguan (urban management officers) were working in the area”.

According to a video clip uploaded onto the youku.com website by an unidentified netizen, a vehicle with the sign “12319” on it, the local phone number of chengguan, was destroyed and turned over in the middle of the road. Many police officers were trying to break up the angry crowd.

The footage also showed a man with a false leg, wearing a brown T-shirt and blue trousers, lying still on a pit cover on the roadside. He was surrounded by a large group of people.

“They grabbed him and beat him,” said an onlooker in the footage.

An eyewitness surnamed Jiang told China Daily that the vendor was a disabled fruit seller and people in the angry crowd claimed that “the murderer must be punished”.

“It was a total mess,” Jiang said. “The people threw stones at the police officers, and my feet were hit by flying rocks.”

Armed officers were seen guarding the site to prevent the crowds from getting close to the destroyed vehicle, according to photos circulated on the micro-blog website of weibo.com.

Local officials, including the city’s Party chief and the mayor, had arrived at the site and were guiding the work. The incident is still under investigation, according to the statement from Anshun publicity department.

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15 killed in Kashgar weekend of riots

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A tense calm appeared to hold over the weekend in the southern Chinese city of Lufeng, following days of riots over alleged government land grabs—unrest that reflected growing resentment over ties between Communist Party officials and property developers.
Local officials met with residential leaders from the area where the riots had taken place, and promised to investigate their complaints, according to a report in the Southern Daily, an official newspaper in Guangdong province. The Saturday report, posted on the website of Shanwei—a city with jurisdictional responsibility over Lufeng—said the situation had “basically settled down.”
The protests began Wednesday and continued Thursday, following complaints that land had been seized without compensation, a practice central authorities have struggled to stamp out in recent years. Land disputes have become one of the Communist Party’s greatest sources of instability.
Local residents said more than 1,000 people took part in the protests, some of them smashing businesses and destroying police vehicles. More than 10 police were injured, as were several protesters, according to a government statement and local residents.
“I’m just a farmer. I don’t know much about politics,” said one disgruntled local woman last week. Her husband has gone to work in the provincial capital of Guangzhou, a metropolis of around 13 million people. “I just don’t want to be treated like this. They are taking my land and they are taking our lives.”
The protests represent at least the second violent outburst in Guangdong in three months and reflect growing concerns across China over corruption, land-right abuses and a growing wealth gap, among other problems. Hundreds of migrant workers in June torched government buildings and overturned police vehicles in the city of Zengcheng, after security personnel pushed to the ground a pregnant migrant worker who had been working as a street vendor there.
Similar unrest has appeared in some other parts of the country. The central province of Hubei experienced violent protests in June after the death of a local bureaucrat who objected to a land deal backed by higher-ranking officials. In May, a man in an apparent house-demolition dispute with local government officials in Jiangxi set off explosions at three government buildings, killing himself and two others.
Central authorities have tried to standardize land-acquisition regulations. New regulations that came into effect earlier this year stipulate that compensation for homeowners should at least equal market value, as well as moving and other costs.
Beijing has said local governments must adopt new central regulations by Oct. 1. Guangdong is home to millions from China’s migrant work force, who flock to the region’s Pearl River Delta in search of work. It has become an incubator for protests among the country’s poor, many of whom are increasingly conscious of legal rights and bold in challenging abuses by local authorities, analysts say.