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Your daily roundup of the best of The Wall Street Journal’s China coverage:

Beijing Considers Europe Support: Premier Wen said China is considering deeper involvement in the euro zone’s bailout funds, the strongest indication that China may help alleviate Europe’s crisis, but he fell short of offering firm commitments. (Free)

China’s Diplomacy Tested in Sudan Kidnap Drama: China approached South Sudan to help negotiate the release of Chinese captives held by rebels in neighboring Sudan, an unusual diplomatic move that risks complicating China’s ties with the two resource-rich nations. (Free)

China Fuels Its Global Energy Supply: PetroChina agreed to buy a big slice of a shale-gas play in Canada from Shell, bolstering Beijing’s footprint in North America’s energy patch. Two other Chinese companies also sealed energy deals. (Subscriber Content)

Imbalance Seen in Japan-China Deal: Some officials say Japan’s plan to buy up to $10 billion of Chinese bonds reflects frustration with China’s aggressive purchases of Japanese government bonds, and they hope it will encourage faster internationalization of the yuan. (Subscriber Content)

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Yani Tseng

What Acer Inc. really needs is a star product, not a star to promote its products.

That was the reaction from tech watchers after the Taiwanese PC maker named the world’s top professional female golfer Yani Tseng, a Taiwan national, as its “global brand ambassador.” The contract will ask Tseng to wear a cap sporting Acer’s logo in future tournaments and to be featured in commercials as well.

Following quarters of net losses due to the cannibalization of tablets and its internal accounting and inventory issues, Acer is hoping to turn itself around by selling more high-end (and thus higher-margin) products–such as the up-and-coming ultrathin laptops–and spending more money on brand-building.

“By associating Tseng’s characteristics such as efficacy, speed, precision and stability, we hope to enhance consumers’ recognition of Acer’s products,” Acer said in statement.

Acer declined to say how much it will pay Tseng. Whatever the sum, critics seem unconvinced it will be money well spent.

“Brand image is more based on the word of month from user experience. So any company which would like to raise its brand image has to improve its product competitiveness first,” said Raymond Wen, columnist of marketing magazine Brain. “We can’t name any flagship product for Acer so far.”

Yuanta analyst Vincent Chen added: “Investment in building brand awareness doesn’t necessarily translate to sales. What Acer really needs is a star or game-changing product.”

Although Acer has said it will strengthen its in-house hardware and software design, it still relies heavily on external contract designers. Analysts say that explains why it has been slower than its peers, such as Asustek Computer Inc., in responding to fast-changing market needs.

Asustek is widely credited with creating the market for lightweight mini-notebook PCs with the launch of Eee netbook PCs in 2007. The company has continued to try out new things with its latest tablet, the Transformer, which comes with a detachable keyboard.

Acer spent less than 0.4% of its revenue on research and development in 2010, according to the latest data available from the company — significantly less than the 3% Asustek spent for the same period.

– Lorraine Luk

Routledge

If you want to understand China’s reform-era growing pains you can do a lot worse than dig into the coal industry. Coal powers China’s industry, pollutes its environment, and is the site of conflict for the state and private entrepreneurs – each eager to monopolize control of a precious resource.

Tim Wright of the University of Sheffield has made the Chinese coal industry the focus for research stretching over the last few decades. Much of that research appears in his new book “The Political Economy of the Chinese Coal Industry: Black Gold and Blood Stained Coal.”

China Real Time recent caught up with Mr. Wright to discuss the challenges facing China’s coal industry — from safety to corruption to power shortages — and how long the country can count on its stores of coal to fuel its fast-burning economy. Edited excerpts:

Why is coal mining so important in China?

Coal provides around 70% of China’s energy supplies. So it has been central to China’s rapid – and energy intensive – economic growth. Coal is also one of the major causes of pollution and environmental degradation in China, as well as a large contributor to the country’s increasing carbon emissions. Finally, the industry provides employment for well over five million workers.

Coal mining is an area where there’s been a struggle between the state and the private sector?

Since the middle of the last decade, many commentators inside and outside China have seen a trend towards “the advance of the state and the retreat of the people” (or the private sector). The attempts by central and provincial governments to control myriad small mines, especially in Shanxi, has been a major example of this and, from late 2008, the Shanxi government began a policy where the large mines owned by the province took over the small private mines. This was strongly resisted by the mine owners, many of whom were inter-provincial investors particularly from Wenzhou in Zhejiang.

The attempt to control the private sector is also about controlling the social and environmental costs of mining?

Yes, it is not simply a struggle for control. There are real safety and environmental issues involved. Small private mines certainly tend to be less safe than the large mines, and also lack the resources to tackle environmental pollution – for example by washing the coal. These factors form at least the pretext for the government’s policy.

Corruption seems to be a big part of the story?

Two factors – the high profits to be made from coal, and local governments’ control over most of the licenses necessary to mine it – make corruption both inevitable and widespread. The phenomenon is known as “official-coalmine collusion” and is often exposed in the aftermath of disasters in mines operating illegally under the protection of local governments or individual officials.

But the moralistic tone used by the Chinese press to address the issue doesn’t tell the whole story. First, corruption apart, the small mines play an important part in income and employment generation for many inland areas with few other opportunities; so there is resistance to their closure beyond that just from the owners. Second, the chronic underfunding of local government in China forces local authorities to look for other sources of revenue, so it is in their institutional – as well as personal – interest to support the local mines, even against the wishes of central government.

How have workers fared in the reform process?

Coal mine workers went through a difficult period in the 1990s. They had been the aristocrats of the working class under the planned economy but the low price of coal and the mines’ economic difficulties meant that their incomes rose less than those of other workers. The boom in coal prices and coal profits in the 2000s has, however, provided the resources to increase wages, and there has been a big improvement over the past few years, even if miners still grumble that they lag behind other workers, for example in the electric power industry.

Premier Wen Jiabao spent new year 2005 underground with some miners. Has the central government been able to get to grips with safety?

There has been a spectacular improvement in China’s coal safety record over the last decade – the number of deaths has fallen by about two-thirds during a period when output has more than doubled. Although one has to remain skeptical about the details of the official statistics, at least a major part of the decline in fatalities does reflect a real improvement. This improvement has been due to a number of factors: high profits creating the resources to invest in safety; the beginnings of labor shortages allowing workers to demand better conditions; the higher priority put on social and safety issues by the Wen Jiabao – Hu Jintao government; and collaboration with foreign safety experts.

China’s economy seems to suffer from regular power shortages, what’s the reason for that?

Partly it is just the phenomenal rate of growth of the Chinese economy (which has mostly been concentrated in high energy using sectors) putting pressure on energy supplies. But beyond that it reflects a struggle between the coal and electric power industries over the price of coal supplied to the power stations. The power stations, who have to accept electricity prices fixed by the state, have argued that they cannot afford the ever-increasing price of their main fuel, coal. The state has attempted to pressure the mines to supply coal at cheaper prices, but of course this has reduced the mines’ incentive to produce, resulting in occasional shortages and power cuts.

How much coal has China got left? Any chance of a switch toward significant imports?

China has large amounts of coal left – certainly well over 100 billion tons. But at its very high level of production – not far behind the rest of the world put together – there has already been talk of the resources running out, or at least becoming increasingly expensive to mine. Already imports have increased sharply – from only around 10 million tons a year in the early 2000s to well over 150 million tons by 2010. However, because of China’s massive use of coal, it is almost inconceivable that a major part of its demand could be fulfilled by imports – 150 million tons accounts only for 2 per cent of China’s coal consumption, but close to 20 per cent of global coal trade. For the same reason, China cannot fill the gap with oil imports. So if it is to reduce its reliance on domestically-produced coal, China will have to look for other sources of energy – optimistically renewables but perhaps more likely nuclear power.

– Tom Orlik

Bloomberg

Busy baristas at a Starbucks outlet in Beijing.

For proof that coffee is taking off in China, look no further than Chinese consumers’ reaction to recent price increases at Starbucks Corp.

The Seattle-based coffee chain said earlier this week that all coffee drink prices would increase by two yuan, or about $0.32. That bumps up the cost of a small latte – or “tall” latte, in Starbucks’s lingo — to 27 yuan, or $4.20. A large mocha is now 34 yuan, or $5.40. The increases add to prices that are already higher than what similar coffee drinkers pay in the U.S.

Starbucks fans in China turned to the Internet to complain, helping to make the Chinese term for Starbucks, “Xing Ba Ke,” one of the top trending terms on China’s biggest search engine, Baidu.com. They flooded Twitter-like microblogging sites with emoticons of sobbing faces, complaining about what at least one called the “pain.”

“In the past, a larger size cost two more kuai and now it costs three. It’s so painful,” said one user of the Sina Weibo microblogging site, using the Chinese slang term of the yuan, China’s currency. “Where are the price control authorities this time?” a user in Beijing complained, referring to instances last year in which Chinese economic bodies, aiming to prevent unrest due to high inflation, prevented food companies from passing on higher prices to consumers

“We understand this has an impact on our consumers,” said Caren Li, a spokeswoman for Starbucks, adding that the company needs to keep up with China’s rising operational costs, including higher wages for laborers, increasing commodity costs and rising real estate prices.

The public reaction signals the growth of a product that many were skeptical would take off in China, a country with thousands of years of tea culture, said Krista Pederson, a consultant at Shanghai-based WGP Investment Consulting. “What started out as a drink for the few is turning into a mass-market product in China,” Ms. Pederson said.

China’s coffee market, including fresh and instant, is booming. Sales climbed to 6.25 billion yuan in 2011, up 20% from a year earlier and 92% from 2006, according to market research firm Euromonitor International.

To be sure, coffee consumption in China is still tiny compared to other countries. On average, the Chinese consumer drinks three cups of coffee per year, according to data from Swiss food giant Nestle SA.

But the thirst is there and coffee companies have been expanding rapidly to meet the new demand. Starbucks, which now has 550 stores in China, plans to have 1,500 by 2015. Nestle is rolling out more upscale Nespresso stores and in select markets it has recently launched an ad campaign, featuring popular blogger Han Han, to hype up its instant coffee products sold in grocery stores.

Many have been willing to pay the price because coffee has been positioned as an upscale in China. “To carry around a Starbucks cup or to meet in a Costa Coffee is to mark yourself as having status,” said Ms. Pederson. Costa is a coffee chain owned by U.K.-based Whitbread PLC.

Most of the stores charge their Chinese consumers around 50% to 75% more for a cup of coffee than the average U.S consumer would pay in the U.S. A small cup at Starbucks in Beijing is now $3. Customers in smaller cities pay around 30 cents less, Ms. Li said.

But now that coffee is becoming a daily drink for many, the price increases come as a blow, consumers say.

“The prices are overwhelming! The kingdom’s people are now under such great pressure!!,” a Beijing-based Weibo user named YiziluoDevil wrote.

Starbucks doesn’t break out its performance in China. In China and Asia Pacific it said revenue for the quarter end Jan. 1 grew 38% to $166.9 million, while operating income grew 26% to $57.8 million.

–Laurie Burkitt; follow Laurie on Twitter @lburkitt

Reuters

Villagers write ballots at voting booths inside a classroom at a school, turned into a polling station, at Wukan village in Lufeng, Guangdong province February 1, 2012.

In late December, Chinese Internet users searching the country’s Twitter-like microblogging services for information about Wukan, the southern fishing village then in midst of a rebellion against local officials over land grabs, turned up little more than censorship notices. Six weeks later, Wukan has become the subject of an unusually open–and borderline euphoric–online discussion about the prospects for democracy in China.

“This is a model,” Chinese real-estate mogul Ren Zhiqiang said Wednesday via the popular microblogging service Sina Weibo, where searches for Wukan were producing nearly a million posts.

“The start of something new,” observed another user of the service.

The reason for the outpouring: An election–-the first of two-–to select Wukan’s new leaders. Elections at the village level are common in China, but this one was unique for coming on the heels of December’s protests and for appearing to be free of the Communist Party meddling that typically mars Chinese election results. While the process still has a ways to go, images of Wukan’s villagers filling out ballots in voting booths made of pressboard boxes and sheets of garish pink cloth have sent waves of giddiness rippling through the mostly cynical confines of Chinese cyberspace.

For many, the election brought to mind one of Mao Zedong’s favorite revolutionary slogans: “If you want freedom and democracy, you have to fight for it yourself,” wrote one Internet user in the popular discussion forum Maoyan Kanren. “A single spark can start a prairie fire.”

Others saw in the elections a rebuke of people, like martial-arts star Jackie Chan, who’ve questioned whether Chinese culture is compatible with democratic government.

“After this, whoever says Chinese people aren’t good enough for democracy, I’ll sue the bastard,” one particularly excited blogger promised on Sina Weibo.

The enthusiasm around the topic of Wukan on Sina Weibo appears to be due in part to Sina Corp. executive and top editor Chen Tong, who gave his implicit blessing to the discussion by forwarding a photo from the village with a note: “Broadcasting the Wukan village committee elections.”

Not everyone saw the election as the harbinger of a democratic China. Some dismissed it as a show, saying Wukan’s election, like elections in other villages, would be bought. Others tried to temper expectations.

“This is an election supported by detailed regulations in the constitution of the People’s Republic of China,” Yang Hua, a fire control engineer from Shandong province, wrote on his Weibo feed. “It’s not new and it doesn’t count as reform, but it is a symbol of the implementation of the constitution.”

Still others found time to poke fun at makeshift quality of the vote. “That’s unique,” one Weibo user wrote in response to a photo of several people crammed into a single pink voting booth. “Are they a family?”

Still, the mood among those who took the time to comment was overwhelmingly optimistic.

“History always moves forward. This is something no one can change,” read one post in the Maoyan Kanren forum. “Congratulations to the people of Wukan!”

– Josh Chin. Follow him on Twitter @joshchin

The Muscatine Journal

Your daily roundup of the best of The Wall Street Journal’s China coverage:

China Faces New Threats Abroad: China’s appetite for oil, iron ore and other raw materials has put the country in places other investors might fear to tread, from Pakistan and Libya to Egypt and Sudan. For insurgents and criminal gangs, the Chinese can be sought-after targets, raising questions about how well Beijing protects its citizens abroad. (Free)

Heartland Return for Chinese Leader: Xi Jinping’s planned trip to Muscatine, Iowa, later this month sheds light on how the man expected to become China’s top leader this fall differs from the nation’s prior leaders. (Subscriber Content)

China Gets Tough on Superships: China’s central government put a tight rein on the ability of a new breed of supersize iron-ore freighters to stop at Chinese ports, potentially complicating efforts by Brazilian mining company Vale SA to gain access to the lucrative market. (Subscriber Content)

Hong Kong-Mainland Tiffs Worry Beijing: Resentment is escalating among Hong Kongers toward the ever-growing presence of mainland Chinese in the city, a shift that has Beijing both incensed and worried. (Free)

Tide of Yuan Ebbs in Hong Kong: In recent months, the growth in yuan deposits in Hong Kong has almost halted as investors shift to the safe-haven U.S. dollar in response to market gyrations caused by the euro-zone debt crisis and U.S. credit-rating downgrade in August. (Free)

Bloomberg News

John Tsang

Hong Kong’s coffers are full again as the city’s government prepares to announce another hefty budget surplus Wednesday, with calls for sweeteners to support the slowing economy and the city’s low-income groups. But any budget plans are likely to be constrained by political reality: a change of government in a few months.

Financial Secretary John Tsang will deliver the speech at 11am, with economists forecasting goodies similar to previous budgets like one-off tax rebates and temporary waivers of public housing rental, but no big surprises.

The government is likely to report about HK$65 billion (US$8.4 billion) budget surplus for the current fiscal year ending March 31, 2012, a person familiar with the situation said Monday, adding that Tsang will also say Hong Kong’s GDP rose about 5% in 2011, but forecasts slower growth, of below 3%, this year due to the weakening global economy.

“Given the imminent change in top government posts, we expect the upcoming budget to be long on one-off concessions and short on new vision,” Standard Chartered economist Kelvin Lau said. “One-off relief measures should prove timely given that growth is set to slow further in 2012.”

For the property market, Citigroup also believes the Hong Kong government is unlikely to announce any new measures in the upcoming budget that may hurt the property market, given prices stopped rising in June.

“Hong Kong government officials have no intention of causing a home price collapse, especially when senior government officials are worried about the European debt crisis,” Citigroup said in a report.

While Mr. Tsang is expected to push forward infrastructure projects that have been widely flagged to create jobs as an economic slowdown starts to bite, Hong Kongers probably can’t count too much on other measures.

– Chester Yung

Imaginechina

By Yiyi Lu

There has been a long and on-going debate between some Chinese and westerners on whether the western media are biased in their China coverage or not. As defenders of western media rightly point out, negative news and critical commentaries may displease the Chinese, but they do not necessarily amount to biased coverage. Besides, there are plenty of positive stories about China in the western media too.

But the accusation of bias does not seem entirely unfounded. A case in point: Western media’s treatment of Zhang Yimou’s Nanjing massacre film “The Flowers of War.”

When news came out that “Flowers” had failed to win a Golden Globe award and was not even shortlisted for an Oscar nomination in the best foreign-language film category, some Chinese said the result was just what they had expected given that the film had been described as an anti-Japanese propaganda in biased western media reports.

On the issue of China’s dispute with Japan over the presentation of World War II history, there is a clear tendency for many western media reports to employ double standards, underplay the sufferings of the Chinese people during Japanese occupation and turn the coverage of the history dispute into attacks on the Chinese government.

In a post entitled “The Flowers of War Brings out the Worst of Western Media,” Cfensi, a general news blog on Chinese entertainment, comments on some examples of tendentious western media reports about the film:

Jonathan Landreth at the AFP skillfully uses the title “Christian Bale denies his Chinese film is propaganda” followed by the statement that the film is one of “a string of films and TV series from China promoting national unity against an evil Japan.” …he’s excellent at making falsehoods true – first make an arbitrary accusation, then make the accusation’s denial the headline, and finally affirm the accusation as fact without any evidence whatsoever.

Laurie Burkitt and Tom Orlik at the WSJ…complain that “nuanced treatment of the Chinese characters is in stark contrast with portrayal of the Japanese as monochrome monsters.” Do these people not realize the immorality that comes from humanizing (aka: finding excuses) for rapists and mass murderers? Maybe, just maybe, there’s a reason why we don’t expect films with good Japanese soldiers during the Nanking massacres, just like how we don’t expect there to be good Nazis in a Holocaust movie.

While the Cfensi post may be too harsh, the comparison of “Flowers” with Holocaust movies is telling. Numerous Holocaust movies have been made that portray Nazis as evil incarnate, but one does not see western media describing them as anti-German propaganda that “lacks subtlety.” Yet, when Chinese films on the Japanese occupation during World War II come out, western media reports are often quick to deplore their portrayal of Japanese soldiers as “one-dimensional savages” and their “demonization of the Japanese army,” despite acknowledging that the Japanese army had committed many atrocities, including during the Nanjing Massacre.

According to Cfensi, a number of western media outlets, including Variety, Los Angeles Times, The Guardian and CNN, also erroneously claimed that the Flowers of War was partially funded by the Chinese state, implying that the film was state-backed nationalistic propaganda. In fact, it only received a loan from a private Chinese bank.

Accusing “Flowers” of being anti-Japanese propaganda or “one-dimensional” is but the latest manifestation of mainstream western media’s propensity to criticize China when covering the history of China’s fraught relations with Japan. Often, reports on Chinese protests over perceived Japanese attempts to whitewash its militaristic past are turned into warnings about rising Chinese nationalism deliberately fostered and manipulated by the Chinese government. Stories about new Japanese history textbooks that gloss over Japan’s wartime aggression become discussions of problems with China’s own history textbooks.

For example, in April 2005, after protests broke out in China following the approval of new Japanese textbooks that whitewashed Japan’s wartime atrocities, AFP’s coverage contained the following:

While learning materials in [Chinese] mainland high schools take special pains to outline Japanese aggression beginning with the 1874 invasion of Taiwan, China’s involvement in the 1950-53 Korean war is dismissed in one sentence.

The Los Angeles Times said:

China has criticized Japan in recent weeks for whitewashing its militarist history, focusing in particular on a junior high school textbook recently approved by Tokyo.

“Yes, what Japan did in World War II is horrible,” said Sam Crane, Asian studies professor at Williams College in Massachusetts. “But the embarrassing fact for the Communist Party, and one that is not taught in Chinese schools, is that the party itself is responsible for many more deaths of Chinese people than those caused by Japanese militarism.”

And the Financial Times offered its readers the following:

For those seeking graphic if not necessarily balanced accounts of Japanese infamy, there is no better place to look than China…

But China’s schoolbooks, carefully edited to ensure they do not contradict the official historical verdicts of the ruling Communist party, have their own conspicuous absences. Texts for middle and upper school students give great detail about the party’s resistance against Japanese oppression, but gloss over or ignore most of its less glorious moments. The brutal 1989 suppression of pro-democracy protests centred on Beijing’s Tiananmen Square is ignored.

It is not that Chinese history textbooks do not have their own problems, or that western media do not have the right to discuss those problems. But there is an appropriate time and place for such discussions. To attack Chinese schoolbooks in the middle of reports about Japanese attempts to whitewash its history of invasion and occupation of other countries is morally dubious to say the least.

Suppose, when discussing Nazi Germany’s treatment of Jews, western media reports were to say: “Yes, the Jewish people suffered a great deal during World War II, but Israel has also occupied Palestinian territories and killed innocent Palestinian civilians.” They would cause public outrage and may even be accused of trying to make excuses for the Holocaust. Yet, it has been perfectly acceptable for western media to effectively say “Yes, Japan did horrible things to the Chinese, but the Chinese government did horrible things to its own people too.”

Do we take this to mean Japan’s wartime atrocities in China are insignificant? Do the Chinese have no right to criticize Japanese textbooks?

It is one thing for western media to be critical of the Chinese government and the Chinese Communist Party. It’s quite another to let their views of the CCP color their reports on the history row between China and Japan. Using criticisms of the CCP to divert attention away from the suffering of the Chinese people at the hands of Japanese militarists during World War II — and the refusal of some Japanese to fully acknowledge the past — and to do so consistently, this is what I would call biased media coverage.

Yiyi Lu, an expert on Chinese civil society, is currently working on a project to promote open government information in China. She is the author of “Non-Governmental Organisations in China: The Rise of Dependent Autonomy” (Routledge 2008).

News:

* A patrol for every village: 8,000 new police headed to Xinjiang (Associated Press)

* Efforts to contain the recent cadmium spill upstream from Liuzhou aren’t going well (Guardian)

* China’s fuel prices hit the hike threshold (Reuters)

* A fitting end: Real estate developers demolish the former home of architects famous for trying to save old Beijing (Guardian)

* Signs China’s shopping spree may be slowing down (FT)

Analysis and Commentary:

* David Bandurski examines the evolving legacy of Wukan, China’s rebel village (China Media Project)

* Veteran journalist Chang Ping offers the pragmatists’ case for democracy in China (NYRB blog)

* Boycott Apple over it’s China supply chain? Tim Worstall says the idea is based on nonsense (Forbes)

Just Because:

* Want to buy a knife in Beijing? We’ll need to see your ID (Tea Leaf Nation)

* J.R. Smith’s family making a habit of dramatic exits at Chinese basketball games (Deadspin)