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Peace Prizes, Political Reform and Leadership Shuffles

China irritated by Nobel Peace Prize. New leadership set for 2012. Political reform talk might only be hot air. Rare earth export policies lead to abundant confusion. Making it and faking it and how China's film industry is hurt by domestic movie product piracy.


Top News: Imprisoned dissident Liu Xiaobo was honored with this year's Nobel Peace Prize on Oct. 8, much to the chagrin of Chinese authorities. For several days the only reaction was a terse statement from China's Foreign Ministry. But by the end of the month China's smear campaign against Liu had gone into overdrive as state-run Xinhua news agency dug through old statements by the writer to paint him as a lackey of the West.

Most Chinese had never heard of Liu before he got the prize, and most still don't know much about him, so Chinese authorities are attempting to get ahead of the curiosity that has been stoked with the award by painting him as anti-China and a spoiled intellectual.

China's government has demanded that the award be taken away from Liu — the first ever ethnic-Han Chinese winner of the Nobel Peace Prize — and that an apology be given by the committee. Liu's wife, Liu Xia has asked that other Chinese dissidents travel to Oslo to accept the prize on his behalf. Liu was sentenced to 11 years in prison on Christmas Day in 2009 for "subverting state power" for his calls for political reform and representative democracy in China in a manifesto Charter 08.

The award came at a time when China was preparing for its 2012 leadership shuffle, installing Vice President Xi Jinping as vice chairman of the Central Military Commission and putting him in line to take over President Hu Jintao's top spot. Not a lot is known about Xi or what kind of leader he will be. He is thought to be in the uncharismatic and bureaucratic mold of current President Hu.

The prize has also spurred others to talk about when and if political reform will come to China, including a couple of dozen retired Communist Party officials.

An August speech by Premier Wen Jiabao in the city of Shenzhen in South China has also stirred the hornet's nest of political reform talk inside and outside China. At that speech Wen talked about the need for political reform to keep pace with an increasing middle class that will demand more say in how their government is run. Shenzhen was an apt choice for such a discussion to start, as the city has been at the forefront of China's economic opening up to the world over the past three decades, and sometimes a laboratory for pilot reform projects that are later rolled out nationwide.

Foreign Affairs analyzed the pace of this reform in a long article, examining not only potential impacts in China, but also how U.S.-China relations could be shaped by further social opening, or a lack thereof. Hopes for faster political liberalization however don't look likely, mainly due to concerns for "social stability" and the fact that an entirely new leadership lineup won't be in place until 2012. By the end of the month, an editorial in People's Daily put any lingering doubt to rest that any such reform would be forthcoming soon.

Money: There has been much confusion about China's rare earth mineral export policies over the past month. China slapped a quota on its exports of the precious stuff for the second half of the year in July.

Recently the Japanese government and Japanese companies have complained that exports of rare earths had been blocked by China, and there is still some uncertainty about whether this was intentional or due to sluggishness of customs officials checking shipments against the quota tallies. To add to the confusion, on Thursday traders began hearing that the rare earth embargo was ending — not from any Chinese government communique, but though back-channel word from their distributors.

China's Ministry of Commerce has attempted to defend its export quotas, but it hasn't been exactly forthcoming on whether it was using rare earths as an economic weapon against Japan at a time when anti-Japanese nationalism is spreading across the country.

China's policies on rare earths may lead to a backlash that could harm its own trade as other countries are forced to look for alternative sources and reopen closed mines.

Elsewhere: Hot on the heels of a visit to China by U.S. Attorney General Eric Holder in mid-October to discuss counterfeiting and intellectual property piracy with his Beijing counterparts, Reuters has an excellent special report about faked goods in China. 

Holder made more headlines calling for the release of dissident Liu than for his talks in Beijing, which did not produce any flashy agreements. China did pledge to lead a crackdown on fake goods but there's no evidence it has started as pirated DVDs, handbags, computer software — virtually anything — can be easily found in a five-minute walk out the door.

It's a wonder that more among China's own film industry don't raise more of a fuss about intellectual piracy, with as much as 80 percent of the share of the film spin-off product market is eaten away by counterfeiters, according a recent China Investment Consulting Company report.