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To China’s many–and sometimes violent –iPhone fans, Apple says the love is mutual.

Apple CEO Tim Cook emphasized the company’s focus on China during their earnings call on Tuesday, calling iPhone demand in the world’s largest mobile market “staggering.”

“I try to be very clear in the past and I’ll do so again that we have a ton more energy in the China market today” than in other emerging geographies, Mr. Cook said, as the company announced its highest quarterly revenue and earnings in history, the first quarter ending after the death of co-founder Steve Jobs.

“That doesn’t mean that there is a lack of effort or focus on the others. It just means that it’s less than what we’re investing in China today,” he said.

The company didn’t offer many details on its retail efforts in China this time, but had said last year that its China Apple Stores were receiving the most traffic and revenue on average than of any Apple Stores in the world.

Mr. Cook said Apple is “selling through our reseller stores and our online store” for the iPhone. The company stopped selling iPhones in its five retail stores in China this month shortly after launching the iPhone 4S because unruly customers in Beijing led police to seal off a store there. “The demand is off the charts.”

Though the company has had discussions with China’s other mobile carriers, Mr. Cook did not provide any information about when the iPhone might be launched with new partners in China. “China Unicom continues to be a very key partner,” he said. “I’ve got nothing to announce today on the expansion there.”

An iPhone compatible with the mobile network of China’ third-largest mobile carrier, China Telecom, cleared a key regulatory hurdle when it was awarded a network access license earlier this month.

Apple’s growing business has also attracted increasing scrutiny from environment and human rights activists, who have complained about conditions at its suppliers and criticized the company for a lack of transparency in its supply chain. Under this pressure, the company disclosed a list of 156 companies this month that represent more of its supply chain spending than ever before. Apple will also be opening its supply chain to an independent assessment by the the non-profit Fair Labor Association, the association said in a recent press release.

“China is an extremely important market for us and we continue to look at how to grow it further,” Mr. Cook said.

– Loretta Chao. Follower on Twitter @lorettac.

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Chinese people line up to buy iPhone 4S in a China Unicom store in the early morning on January 13, 2012 in Beijing, China.

NOTE: This post has been changed since it was first published. See below.

Chinese Apple fans upset over the company’s decision to temporarily halt sales of the iPhone 4S at its retail stores in China may soon have another way to get their hands on the device.

An iPhone compatible with the mobile network of China’ third-largest mobile carrier, China Telecom, has received a network access license, a regulatory website shows, marking a key step toward Apple being able to sell the phone to a broader audience in China.

The iPhone 4S is currently being sold in China through China Unicom, the country’s second-largest mobile carrier, as well as through Apple’s online store and resellers. Once Apple starts offering a version compatible with China Telecom’s network, the latest iteration of the device would presumably also be made available through China Telecom stores.

The license arrives as Apple aims to increase sales of its smartphones and iPad tablet computers in what has become a key growth market for the company. Offering an iPhone compatible with China Telecom technology will open up use of the device to tens of millions more Chinese mobile subscribers.

An iPhone supporting the CDMA-2000 mobile technology used by China Telecom received the license on Tuesday, the website of China’s Telecommunication Equipment Certification Center showed. Vendors in China often start selling new handsets within weeks of devices receiving network access licenses. Some analysts expect China Telecom to start offering the iPhone in the coming months.

Apple and China Telecom both declined to comment.

China Telecom has previously expressed interest in offering Apple devices. In March last year, chairman Wang Xiaochu cited a confidential agreement with Apple as the reason he couldn’t comment on whether China Telecom would offer the iPhone or iPad. The country’s largest fixed-line operator and third-largest mobile operator by subscriber accounts, the company had 123.4 million mobile customers at the end of November, including 33.4 million users of its third-generation mobile services.

China Mobile, the world’s biggest carrier by subscriber accounts, has for years said it is talking to Apple about offering the iPhone. Its homegrown 3G mobile standard, TD-SCDMA, is not compatible with any current version of the Apple device.

CORRECTION: The iPhone 4S is being sold in China through China Unicom stores, Apple’s online store and authorized Apple resellers. A previous post mistakenly said the device was only available through China Unicom.

– Owen Fletcher. Follow him on Twitter @owenfletcher

Agence France-Presse/Getty Images

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

China Seeks Oil Alternatives: As China forges ahead with long-term efforts to reduce a reliance on its traditional oil suppliers, Premier Wen Jiabao signed billions of dollars in deals with key U.S. allies in the Persian Gulf. (Free)

Shangri-La Joins Effort to Ban Shark Fin Soup: A swell of opposition against shark fin soup gained backing from the luxury Shangri-La Hotel chain just days before Chinese New Year. (Free)

Design Chief Quits Changan Auto: A notable Western-trained designer has resigned from Chongqing Changan Automobile Co. after a year, illustrating Chinese car makers’ difficulties in recruiting and retaining talent as they try to create more-distinctive vehicles to better compete both at home and overseas. (Subscriber Content)

Minsheng Banks on Small Borrowers: One of China’s nonstate lenders has found strong profit in an area long underserved by the nation’s state-run banks but key to its economy: small entrepreneurs. (Subscriber Content)

China’s aggressive scalpers sell tickets for concerts and sporting events just like their U.S. counterparts do. But they also make a wider practice of scalping, sometimes devouring the supplies of train tickets, spots in line at crowded hospitals and even iPhones.

Some Chinese media reports blamed scuffles involving organized bands of scalpers for Apple’s decision not to open its flagship Beijing store on Friday, the day it was scheduled to start selling the new iPhone 4S. It wasn’t possible to verify those claims, but history suggests they’re highly plausible.

Scalpers have been a regular presence around the flagship Apple outlet in Beijing’s Sanlitun Village mall ever since the launch of the iPhone 4 in 2010, offering customers the chance to skip waiting in line in exchange for mark-ups that vary depending on demand. Some blamed scalpers for a scuffle that broke out at the same store in May as customers lined up to buy the white iPhone 4.

At least one unhappy Apple customer pelted the Sanlitun Apple store with a handful of eggs Friday morning, as a crowd of people waiting in line grew impatient when the store didn’t open. Soon afterward, several men from the crowd chased and attacked a man who had stepped in and claimed to be an employee of the shopping mall.

State-run Xinhua news agency said many of the people in line at the Sanlitun store had been hired by scalpers to wait for the phone to go on sale (in Chinese). Other media reports (in Chinese) said disputes occurred among scalpers as a crowd gathered outside the store Thursday evening.

Friday morning ended with police pushing the crowd away from the Apple store and cordoning it off.

Apple later said it was unable to open the Sanlitun store Friday “due to the large crowd.”

The company also said it would suspend sales of all iPhone models in its China retail stores “for the time being” to ensure the safety of its customers and employees. The iPhone 4S will still be available from resellers and mobile carrier China Unicom, Apple said. It added that its China stores had already sold out of iPhone 4S handsets.

Besides those who were waiting to buy the new iPhone, the identities of other people at the chaotic scene outside the Sanlitun store were also unclear. As police began to clear the area, plainclothes men with megaphones announced sales of the iPhone 4S wouldn’t start and everyone should go home. When asked if he was associated with the police or with Apple, one of the megaphone bearers would only describe his job simply: “I’m someone who shouts things for people.”

– Owen Fletcher. Follow him on Twitter @owenfletcher

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Shanghai’s people are letting off steam as their powerhouse economy loses momentum.

Delivering an annual work report to city officials Wednesday, Shanghai Mayor Han Zheng cited evidence of across-the-board economic weakening last year and said the government needs fresh approaches to resolving “social conflicts.” Forecasting 2012, he said Shanghai is looking at an “even more complicated external economic environment and ingrained problems in transformation.”

According to the 49-page text of the mayor’s presentation, Mr. Han didn’t dwell on the weakening, saying that the city “withstood the test of a complex and ever-changing environment in 2011.” Just the same, he said it is the government’s duty “to answer the call of our times” and become more “empathetic.”

China’s economic slowdown has put a crick in Shanghai’s traditional swagger. Dependent on investment, exports, manufacturing and real estate, the east coast city epitomizes China’s broader economic challenge to restructure and live with less robust growth. The city’s underbelly, not its sparkle, made international headlines last year: trucker strikes, railway snafus and home-owner protests defined Shanghai’s 2011.

Barbie even packed up and left the city, as Mattel Inc. closed its only store dedicated to the doll. So did Best Buy Co.

Shanghai isn’t dying. The economy grew at least 8% in 2011 and will do so again in 2012, the mayor said. But that’s down from 9.9% in 2010. For over 15 years, the city’s economy had topped 10% growth.

Other figures Mr. Han presented suggested slowing throughout the economy during 2011. Retail sales were up 12% (compared to 17.5% growth in 2010), despite nearly 14% growth in urban per capita income to 36,200 yuan ($5,730). With its 900-plus foreign regional headquarters and research labs, its foreign direct investment was $12.6 billion (down from $15 billion in 2010).

Mr. Han said merchandise trade was ahead 18% in 2011. For 2010, the local government said exports rose over 27% and imports by nearly 39%.

He pledged continued spending on subways, bridges and parks, but somewhat less largess.

The city will start construction of 170,800 subsidized housing units (versus 267,000 for 2011), he said while also pledging 40 new kindergartens and 5000 new beds for elder care.

Shanghai was the Expo city in 2010, drawing over 70 million visitors for the event, but its big international sporting event this year is the World Short Track Speed Skating Championships 2012.

Mr. Han’s sobering delivery may be deliberate: It dovetails with the message of his bosses in Beijing, who have de-emphasized economic growth and supported social programs. He said fixed asset investment was little changed as a contributor to the GDP last year while property was a bit of drag.

In his job since 2003, one of the longest tenures for a Shanghai mayor, the 57-year-old already survived a politicized purge in 2006 when leading members of the Shanghai leadership, including the Communist Party boss Chen Liangyu, were ousted on corruption charges. Mr. Han is young and powerful enough to be in the running for a high-level position during this year’s reshuffle.

Using words like “holistic” and “mediation,” Mr. Han said the government will win trust from its people and diffuse social tension with transparency – including its official account on the Twitter-like microblogging service Sina Weibo, which he mentioned twice.

“We are committed to building a service-oriented government that is always empathetic with its people, a responsible government that is efficient, diligent and innovative, a law-based government that is impartial, disciplined and well-organized, and a clean government that is honest, open and transparent,” Mr. Han said.

– James T. Areddy, follow him on Twitter @jamestareddy

European Pressphoto Agency

A large sign promoting the iPhone 4 in the background as shoppers browse products inside an Apple store in Beijing, on November 25, 2011.

China Telecom may soon become the second Chinese mobile carrier to offer the iPhone.

Both Apple and China Unicom, currently the country’s only carrier to offer the U.S. company’s smartphones, are scheduled to start selling the iPhone 4S in China on Friday, a move likely to further drive Apple’s growth in what has become a key market for the company.

Analysts expect that the version of the iPhone 4S due this week won’t work on China Telecom’s network. Just like AT&T and Verizon Wireless in the U.S., China Unicom and China Telecom use different wireless technologies. That means phones made for one usually don’t work on the other’s network.

But an Apple-made mobile phone that does use the same technology as China Telecom’s network has been approved by the national telecom regulator’s China Radio Management agency, which certifies radio-signal-emitting devices for use in the country, according to an agency website (in Chinese).

While the website only identifies the phone by a model number, A1387, it says the phone is compatible with “CDMA-2000,” the third-generation mobile technology used by China Telecom. An employee reached by phone at the agency on Monday confirmed that the device had been approved.

The approval doesn’t mean sales of the device are imminent. Mobile phones must also get other certifications, including a network access license, before being sold in China.

But it is a signpost. If Apple is indeed taking the phone through the usual regulatory steps, the process could be finished in a matter of weeks. Its completion would open the door to China Telecom partnering with Apple to offer the phone.

China Telecom is China’s largest fixed-line operator and third-largest mobile operator by subscriber accounts. The nation’s largest mobile operator, China Mobile, has repeatedly said it is in talks with Apple about also offering the iPhone in China, but its homegrown 3G mobile standard, TD-SCDMA, is not compatible with any current version of the Apple device.

An iPhone compatible with China Telecom’s network could attract buyers who don’t currently use the iPhone. China Telecom had 123 million mobile subscriber accounts at the end of November, including 33 million 3G accounts. But China Telecom’s expenses could also surge if it offers the iPhone, since it might heavily subsidize the phone’s retail price to attract mobile subscribers—just as China Unicom has done.

Jefferies analyst Cynthia Meng said Monday that she expects China Telecom to start offering the iPhone 4S sometime in the first quarter.

The phone that got the approval is also compatible with WCDMA technology, according to the agency website. That refers to the technology used by China Unicom, suggesting the model might work on either company’s network.

A China Telecom spokesman declined to comment on any talks about offering the iPhone. But company chairman Wang Xiaochu in March last year cited a confidential agreement with Apple as the reason he couldn’t comment on whether China Telecom would offer the iPhone or iPad. The company has also previously expressed interest in offering the devices.

An Apple spokeswoman declined to comment.

– Owen Fletcher. Follow him on Twitter @owenfletcher

News:

* Second thoughts? Authorities have agreed to review Ai Weiwei’s $2.4 million tax bill (AFP)

* The U.S. wants China to pressure North Korea into playing nice as Kim Jong-il’s son takes power (NYT)

* China’s presumptive president-to-be calls for stronger measures to maintain “harmony and stability” at universities (Telegraph)

* A big boost for China’s biggest helicopter (Associated Press)

Analysis and Commentary:

* China taking aim at Western culture? Eurasia Group analyst Damien Ma argues it’s not about the U.S. (Atlantic)

* Veteran Hong Kong journalist Rose Luqiu offers thoughts on China in a letter to her daughter (China Media Project)

* Why being first hasn’t paid off for China Mobile (Businessweek)

Just Because:

* A painful look at life as a child gymnast in China (chinaSMACK)

Agence France-Presse

A Nokia display an exhibition in Singapore in June 2011.

Notch one more victory for China in the battle to lure investment from the Western world.

Finland’s Nokia Corp., the world’s largest mobile phone maker by volume, said it is moving its Asia-Pacific headquarters to Beijing from Singapore as part of plans to raise business efficiencies and meet savings targets.

The move is a disappointment for Singapore, which along with other Southeast Asian nations has been scrambling to hold on to (or win back) Western investment after years of rising interest in China, whose rapid growth and giant consumer market helped it eclipse the one-time “tiger” economies of Southeast Asia over the past decade.

More recently, many analysts have argued Southeast Asia is starting to look more attractive again as disenchantment with China spreads due to rising costs, intellectual property violations, and other problems there, along with rising incomes in Southeast Asia.

Google, for instance, unveiled plans to open new offices in Kuala Lumpur and Bangkok last year, and a number of giant auto makers, including Suzuki Motor Corp., have recently announced plans to expand in Indonesia.

But at the end of the day, it’s hard to beat China.

Continue reading at Southeast Asia Real Time.

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

China Property Malaise Spreads to Furnishings: China’s property prices fell for the fourth straight month in December, adding further pressure on Chinese consumers at a time when both the domestic and global economy increasingly depend on their spending. (Subscriber content)

U.S. Lawmakers Ask for Huawei Probe: Six U.S. lawmakers have asked the State Department to investigate whether Chinese telecommunications-equipment maker Huawei Technologies Co. has violated U.S. sanctions on Iran by supplying it with sensitive communications technology that has been used for censorship. (Subscriber content)

China to Ease Yuan Clearing: China is developing a payment system that will make it more efficient for banks to clear yuan funds across its borders, in another move aimed at promoting the global use of the Chinese currency. (Subscriber content)

Audit Shows Local Financing Flaws: Chinese government auditors said they found more than 530 billion yuan (about $84.2 billion) worth of irregularities in local-government debt, in a potentially revealing but incomplete look at an increasingly important part of the nation’s financial system. (Subscriber content)

Fewer Hong Kong Property Deals: With the market volatile and mortgage rates rising, the number of property transactions in Hong Kong fell to a five-year low in 2011, the city’s largest real-estate agency said. (Free)

China Telecom to Launch U.K. Mobile Services: China Telecom plans to launch mobile services in the U.K. in the first quarter after securing a network deal with British mobile operator Everything Everywhere Ltd., as the Chinese company seeks to drive growth in its mobile business and tap overseas markets. (Subscriber content)

Apple Plans IPhone 4S Launch: Apple plans to launch its newest iPhone model in China on Jan. 13. (Bottom of article.) (Subscriber content)

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For Chinese people, 2011 was a year of little sleep and a lot of anxiety, particularly over food.

Such, at least, is the picture suggested in the 2011 edition of Baidu Internet Hotspot, Chinese search giant Baidu’s answer to Google’s year-end “Zeitgeist” summary of web searches.

Baidu searches aren’t a perfect reflection of Chinese sentiment. Of the country’s population of 1.3 billion, regular search engine users still number only around 400 million, according a report released this week by the government-backed China Internet Network Information Center (pdf). And unlike Google, Baidu is known to censor politically sensitive searches.

But with Baidu accounting for four out of every five searches on the Chinese mainland according to third-party estimates, the company’s year-end summary nevertheless offers fascinating insight into lives of many who call the world’s second-largest economy home.

Some of the best insights in this year’s summary come, not from the standard rundown of top search terms, but from a series of specialized topic lists.

Those who imagine China as a nation of relentless robot workers, for example, might be surprised by Baidu’s list of the top 10 “urbanite dreams,” where “sleeping in” came in fifth behind “travel the world” (3) and “lose weight” (1).

Similar signs that Chinese people are tiring of the rat race appear in the company’s list of top dream jobs, dominated by leisurely pursuits like wedding planner (1), Internet writer (2) and, yes, mattress tester (4).

While sleep appears to have featured heavily in the fantasies of Baidu users this year, food quality ranked among the top issues keeping them up at night.

“Food safety” finished fifth on the company’s list of top search terms and first on its list of top health concerns. So deep was the concern that Baidu decided to devote an entire list to food safety problems. Plasticizers took the top spot, followed by lean meat powder and recycled cooking oil, otherwise known as gutter (or ditch) oil. (A CRT favorite, glow-in-the-dark pork, failed to make it into the top 10)

This year “was a year in which social trust came into question,” Baidu said in a press release announcing this year’s search summary, noting not only food fears but also widespread concerns over transportation safety stemming from this year’s deadly high-speed train crash in Wenzhou.

The Wenzhou crash, arguably the biggest domestic story of the year in China, finished second on Baidu’s list of top trending topics, nudged out of No. 1 spot by Steve Jobs’s death. (Two family-related topics – “naked marriage” and “Singles Day” – finished third and fourth on the list respectively.)

Meanwhile, a list of comparable list of trending topics in Google’s “Zeitgeist” report for China reveals as much about Google’s remaining devotees in the country as it does about the interests of Chinese Internet users. Apple’s iPad2, Google’s Android mobile software, the popular messaging service QQ and mobile messaging service Weixin all finished in the top 10 – further evidence that Chinese people who still use Google’s uncensored Chinese-language service tend to be those tech-savvy enough to get around China’s Great Firewall.

Select lists from the Baidu summary are partially translated below. More translations and explanations are also available at the company’s English-language blog Baidu Beat.

Top search terms:

1) Tiangong 1 (China’s space lab)

2) Steve Jobs

3) Gadhafi

4) Earthquake

5) Food safety

Top trending topics:

1) Steve Jobs death

2) High-speed train collision

3) Naked marriage

4) Singles’ Day

5) Red Cross

Top dream jobs:

1) Wedding planner

2) Internet writer

3) Internet wage laborer

4) Mattress tester

5) Personal finance planner

Top urban dreams:

1) Lose weight

2) Buy a house

3) Travel the world

4) Find a reliable person to marry

5) Sleep in

Top dream travel destinations:

1) Maldives

2) Shangri-La

3) Dubai

4) Tibet

5) Hoh Xil

Top “how-tos”:

1) How do I deal with a boyfriend exhibiting violent tendencies?

2) What should I do if I’ve consumed ditch oil?

3) How to repair broken porcelain?

4) What do I do if my brother is taken in by a pyramid scheme?

5) What do I do about sleepless nights?

– Josh Chin. Follow him on Twitter @joshchin

MillwardBrown

Baidu, China’s 6th most valuable brand according to MillwardBrown.

China's Top 20 Brands in 2011

View Slideshow

 

A list of the top 20 most valuable brands in China as determined by MillwardBrown in the 2011 edition of "BrandZ Most Value Chinese Brands."

Outside of China, the majority of consumers can’t name a single Chinese brand.

According to research from agency Millward Brown and media company WPP on the top 50 most valuable Chinese brands, 83% of consumers beyond China’s borders couldn’t recall a Chinese brand or company.

That message is significant, given that China wants badly to create its own global brands, said Adrian Gonzalez, head of Greater China at Millward Brown. Chinese companies like appliance maker Haier and computer electronics company Lenovo that aspire to global household names will need to better distinguish themselves to become more recognizable to the world’s consumers, Mr. Gonzalez said.

At home, it’s a different story.

The brand study, which analyzed financial information of listed companies’ brands and paired it with data from a survey of 35,000 consumers, reveals that value of Chinese brands has grown by to $325 billion in the past year, up 16% from a year earlier.

The top Chinese brands–ranging from banks and telecommunications to fashion and food companies– are not only competitive in pricing, but are resonating and connecting emotionally with Chinese shoppers, the study said. Chinese companies are also narrowing the wide gap they once had with multi-national counterparts, which had for years built better trust and service for Chinese consumers.

Dairy giant Mengniu (18) and its rival Yi Li (22) have proven themselves, even after having been implicated in a 2008 scandal in which the chemical melamine added to milk caused the death of an infant and illnesses in 300,000 others, to be on par with foreign competitors, such as Swiss food company Nestle SA, and are offering products of similar quality, Mr. Gonzalez said. Technology companies, such as Sina (25) and Baidu (6), are creating new programs and products specific to Chinese needs.

Sina, which operates China’s most popular Weibo microblogging service, saw its brand value increase 244% compared with last year, according to the report.

“We’re seeing in many cases now that foreign companies feel the best way to succeed in China now is through acquiring a Chinese company,” Mr. Gonzalez said, adding that a decade ago that was not the case.

Results of the study reveal another shift occurring within China: a fall of the country’s state-owned enterprises. While China Mobile, the top Chinese brand, and state-owned banks still dominate the Chinese brand landscape, seven of the 14 brands on the list that lost ground with consumers were state-owned. China Mobile held on to its No. 1 ranking from last year but dropped 4% in value in 2011. Bank of China (4) fell 17%.

“Government protectionism is starting to wear thin,” the study said – a marked contrast with the study’s 2010 results.

Don’t expect the fall to transfer beyond state-companies, the study’s authors said. If there’s any wake up call to foreign brands—even outside of China— it’s that Chinese brands are on the rise.

To see a list of the top 20 Chinese brands and how much they’re worth, click on the slideshow tab above.

– Laurie Burkitt. Follow her on Twitter @lburkitt

Agence France-Presse/Getty Images

Chinese girls wear face masks to protect against pollution on the streets of Beijing on December 7, 2011.

Beijing is facing its third air-pollution “crisis” of recent years and needs to crank up its efforts to cut emissions, a city environmental official said Monday, acknowledging a big metaphorical cloud hanging over the city.

Beijing faced air-quality crises in 1998 and ahead of the 2008 Olympics, and it now faces another that it needs to address by cutting emissions, Du Shaozhong, deputy head of the Beijing Environmental Protection Bureau, said at a forum about how Chinese government offices can make use of microblogging services like the popular Sina Weibo.

Beijing’s air has improved significantly since 1998, but the city can still cut emissions from sources including automobiles, coal-burning, industry and dust, Mr. Du said. (Beijing has been notorious for its dust storms, fueled by an expanding desert farther west in China.)

Though Beijing’s skies have been fairly blue in the last few days, the recognition of a need for improvement might hearten residents of a city that is sometimes beset by darkness at noon. Mr. Du’s comments follow years of Chinese officials downplaying the soupiness of Beijing’s air. The inky dark clouds that loom over the city on too many days represent for many Beijingers the disconnect between official statements and the reality of life in China’s capital.

But Mr. Du didn’t elaborate on measures that Beijing may be planning, and he was dismissive of the idea that air-pollution readings released by the U.S. Embassy in Beijing could bring pressure on the government.

Mr. Du declined to say if he thinks Beijing should monitor and release data for smaller particulate matter in the air, as the U.S. embassy in Beijing does.

Authorities in Beijing and most other Chinese cities measure air pollution by counting only particles between 2.5 and 10 micrometers in diameter. But the U.S. embassy, which broadcasts readings from its own pollution-monitoring equipment through Twitter, counts particles smaller than 2.5 micrometers. Experts say those particles make up the most of the city’s air pollution and cause more damage to the lungs. While Twitter is blocked in China, third-party developers have used the embassy’s feed to build mobile apps that are accessible inside the country.

The embassy’s numbers have sparked much discussion online, including on Sina Weibo. That didn’t seem to faze Mr. Du, who praised Weibo as a good channel through which to hear public comments and to express personal opinions, and said improving Beijing’s air will in itself reduce public attention to pollution readings.

Mr. Du’s remarks—and his own use of Sina Weibo, where he has more than 111,000 followers —reflect how Beijing is working to use the Internet to its advantage, as a tool to help publicize government positions, even as it also ensures that sensitive content posted by normal Internet users content online is systematically censored.

Mr. Du said he isn’t worried that the U.S. embassy’s pollution readings could undermine Chinese citizens’ trust in their government. “Which pollutants we monitor is based on what is needed for preventing atmospheric pollution, not on what an embassy is doing,” Mr. Du said.

“Whether [citizens] trust the Chinese government, that depends on what things you are doing. I at least have self-confidence about that,” he said.

– Owen Fletcher. Follow him on Twitter @owenfletcher

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Your round up of the best of The Wall Street Journal’s China coverage over the weekend:

Huawei to Scale Back Business in Iran: Chinese telecom-equipment maker Huawei Technologies will scale back its business in Iran, following reports that Iranian police were using mobile-network technology to track down and arrest dissidents. (Subscriber Content)

Commodities Lose Allure: Increased speculation that a drop off in demand from China could herald the end of the boom in commodities prices is leading investors to search out more exotic plays, the prices of which are not necessarily linked to Chinese growth. (Free)

IMF Official Cites ‘Gaps’ in China Data: Chinese regulators need to improve the data they use to assess whether their banks could withstand a sudden economic downturn, the IMF’s director of monetary and capital markets said. (Subscriber Content)

China Deploys Patrols Along Mekong River: China, Thailand, Laos and Myanmar launched armed joint patrols along the Mekong River in response to the killing of 13 Chinese sailors in attacks on two cargo ships. (Subscriber Content)

European Pressphoto Agency

The Chinese national flag flies in front of a building barely visible due to heavy smog in Beijing, December 02, 2011.

Fog or smog?

For years, China’s meteorologists have been telling the country’s urban residents that what looks and smells suspiciously like that latter is, in fact, just the former. With no way to disprove the claim, most Chinese urbanites have appeared content to accept it as true and go about their business minus the facemasks and indoor air-filters they might otherwise bring to bear.

Lately, however, there seems to have been a fundamental shift in the willingness of Chinese city-dwellers to accept the government’s definition of fog at face value.

Case in point: A thick grey cloud currently enveloping northern China that has closed highways across multiple provinces and caused more than 300 flights into Beijing to be delayed or cancelled.

While state media have described the cloud as a “heavy fog,” millions of posts on popular Chinese microblogging service Sina Weibo and other Internet sites are treating it as something else. “How many thousands died because of London’s fog back in the day?” Weibo user Zheng Wuxie wrote on Monday. “Beijing is dangerous.”

“Friends in Beijing, are you OK?” wrote another Weibo user, CAPF Green, attaching a screenshot of a mobile app powered by the U.S. Embassy’s @BeijingAir Twitter feed showing dangerous pollution levels.

The U.S. Embassy in Beijing, which broadcasts readings from its own pollution monitoring equipment on an hourly basis through Twitter and an iPhone app, has been instrumental in piercing the veil around air quality in China’s capital — particularly in the month or so since celebrity real estate mogul Pan Shiyi cited its readings in calling for tougher air monitoring standards.

Authorities in Beijing and most other Chinese cities measure air pollution by counting only particles between 2.5 and 10 micrometers in diameter. The embassy counts particles smaller than 2.5 micrometers (PM2.5), which experts say make up the most of the city’s air pollution and cause more damage to the lungs.

The most recent online outpouring seems to have been set off on Sunday night, when the embassy published a PM2.5 air quality index reading above 500 – a level expats refer to as “Crazy Bad” – that contrasted sharply with the Beijing Municipal Bureau of Environmental Protection’s description of air pollution over the weekend as “light.”

While many Internet users have marveled at the discrepancy, others have been busy trading advice on the best types of facemasks to wear and what brands of air purifiers offered the best cost-benefit ratios.

“I searched for half the day and asked some experts,” Caijing magazine editor He Gang wrote in a Weibo post on the topic of facemasks that had been forwarded more than 4600 times by Monday evening. “Everyone recommends 3M masks. There’s all kinds – I hear the ones most suited to Beijing are No. 8264 and No. 8210, 3-5 yuan a piece. I’m going out to buy a few tomorrow.”

All this may be a boon to producers of purification paraphernalia, but it bodes poorly for the credibility of the government.

An article in the state-run Global Times tabloid on Monday quoted Yu Jianhua, director of the air pollution division of the Beijing environmental protection bureau, insisting that pollution in Beijing has not gotten worse since the 2008 Olympics. “If you compare the air quality on an annual basis, it is actually improving,” he said, according to the paper. Yet the government’s pointed refusal last week to release PM2.5 readings – data that’s officially reserved for researchers and won’t be made public on a national level until 2016, according to current plans – has lately made that claim a hard sell.

The same holds for the government’s claim that what has kept planes from landing at the Beijing airport and blocked the city’s residents from seeing more than a couple blocks in any direction over the past few days is primarily fog. It’s a claim that might very well be true, but the online reaction suggests few are buying it.

Amateur video of what Beijing’s street’s looked like Sunday morning:

– Josh Chin. Follow him on Twitter @joshchin

European Pressphoto Agency

The Chinese national flag flies in front of a building barely visible due to heavy smog in Beijing, December 02, 2011.

NOTE: This post has been changed since it was first posted. See below.

Fog or smog?

For years, China’s meteorologists have been telling the country’s urban residents that what looks and smells suspiciously like that latter is, in fact, just the former. With no way to disprove the claim, most Chinese urbanites have appeared content to accept it as true and go about their business minus the facemasks and indoor air-filters they might otherwise bring to bear.

Lately, however, there seems to have been a fundamental shift in the willingness of Chinese city-dwellers to accept the government’s definition of fog at face value.

Case in point: A thick grey cloud currently enveloping northern China that has closed highways across multiple provinces and caused more than 300 flights into Beijing to be delayed or cancelled.

While state media have described the cloud as a “heavy fog,” millions of posts on popular Chinese microblogging service Sina Weibo and other Internet sites are treating it as something else. “How many thousands died because of London’s fog back in the day?” Weibo user Zheng Wuxie wrote on Monday. “Beijing is dangerous.”

“Friends in Beijing, are you OK?” wrote another Weibo user, CAPF Green, attaching a screenshot of a mobile app powered by the U.S. Embassy’s @BeijingAir Twitter feed showing dangerous pollution levels.

The U.S. Embassy in Beijing, which broadcasts readings from its own pollution monitoring equipment on an hourly basis through Twitter, has been instrumental in piercing the veil around air quality in China’s capital — particularly in the month or so since celebrity real estate mogul Pan Shiyi cited its readings in calling for tougher air monitoring standards.

Authorities in Beijing and most other Chinese cities measure air pollution by counting only particles between 2.5 and 10 micrometers in diameter. The embassy counts particles smaller than 2.5 micrometers (PM2.5), which experts say make up the most of the city’s air pollution and cause more damage to the lungs. While Twitter is blocked in China, third-party developers have used the embassy’s feed to build mobile apps that are accessible inside the country.

The most recent online outpouring seems to have been set off on Sunday night, when the embassy published a PM2.5 air quality index reading above 500 – a level expats refer to as “Crazy Bad” – that contrasted sharply with the Beijing Municipal Bureau of Environmental Protection’s description of air pollution over the weekend as “light.”

While many Internet users have marveled at the discrepancy, others have been busy trading advice on the best types of facemasks to wear and what brands of air purifiers offered the best cost-benefit ratios.

“I searched for half the day and asked some experts,” Caijing magazine editor He Gang wrote in a Weibo post on the topic of facemasks that had been forwarded more than 4600 times by Monday evening. “Everyone recommends 3M masks. There’s all kinds – I hear the ones most suited to Beijing are No. 8264 and No. 8210, 3-5 yuan a piece. I’m going out to buy a few tomorrow.”

All this may be a boon to producers of purification paraphernalia, but it bodes poorly for the credibility of the government.

An article in the state-run Global Times tabloid on Monday quoted Yu Jianhua, director of the air pollution division of the Beijing environmental protection bureau, insisting that pollution in Beijing has not gotten worse since the 2008 Olympics. “If you compare the air quality on an annual basis, it is actually improving,” he said, according to the paper. Yet the government’s pointed refusal last week to release PM2.5 readings – data that’s officially reserved for researchers and won’t be made public on a national level until 2016, according to current plans – has lately made that claim a hard sell.

The same holds for the government’s claim that what has kept planes from landing at the Beijing airport and blocked the city’s residents from seeing more than a couple blocks in any direction over the past few days is primarily fog. It’s a claim that might very well be true, but the online reaction suggests few are buying it.

Amateur video of what Beijing’s street’s looked like Sunday morning:

CORRECTION: The U.S. Embassy in Beijing publishes pollution readings through a Twitter account. A previous version of this post mistakenly said the embassy also publishes the readings through an iPhone app. The iPhone app, as well as other mobile apps that make use of the @BeijingAir Twitter feed, are not associated with the embassy.

– Josh Chin. Follow him on Twitter @joshchin

Reuters

A list of what The Wall Street Journal’s reporters in China are reading and watching online. (NOTE: WSJ has not verified items in the ‘News’ section and doesn’t vouch for their accuracy.)

News:

* HIV/AIDS cases are skyrocketing in China, and spreading by different means (Reuters)

* How a Chinese cave got listed on the U.S. stock market (Reuters)

* Fight China? Nah, say Taiwanese youth (AP)

* Hot: Mobile spyware for catching cheating spouses (PC World)

Analysis and Commentary:

* Didi Kirsten Tatlow reads jailed Noble Peace Prize-winner Liu Xiaobo’s new book (NYT)

* Thomas Glucksmann-Smith wonders where socialism fits in with China’s soft power push (China Beat)

Just Because:

* What to do when you get slapped with an excessive hospital bill? Strip naked and go for a walk, of course (Shanghaiist)

* Commuters — lots and lots of them — get stuck on a Beijing subway platform (Sina Weibo)

Qoros

A Qoros concept car

As brands mushroom in China’s slowing auto market, worries of a shake-out are mounting. Yet, despite the fear, more auto brands are being launched in China, and existing global brands are piling in to grab a piece of the world’s biggest auto market.

The latest addition: a new brand called Qoros launched officially Monday by investment firm Israel Corp. and China’s Chery Automobile Co.

Qoros Automotive Co., a 50-50 joint venture between the two companies, is led by Chief Executive Officer Guo Qian, a Chery official, and former Volkswagen AG executive Volker Steinwascher, who serves Qoros as vice chairman. Mr. Steinwascher said in a telephone interview over the weekend that Qoros is aiming to generate annual sales of about 150,000 vehicles a year by 2015 or 2016. It plans to manufacture those cars at a plant in Changshu, a city northwest of Shanghai, and market roughly half of those vehicles in China and export the rest to Europe.

The company, Mr. Steinwascher said, is currently developing three compact cars, one of which is a sedan and is expected to hit the market in China and Europe by the end of 2013.

The brand’s competitive edge, according to Mr. Steinwascher: cars that have been designed by “seasoned” engineers with experience in working for companies like Volkswagen and BMW AG – and sell some “10% lower” in retail prices compared with comparable Volkswagen cars marketed in China. Qoros engines are being designed by Austrian engine-technology firm AVL List GmbH. and will be produced and supplied by Chery.

Qoros cars, Mr. Steinwascher said, “combine German design quality and craftsmanship with Japanese convenience and functionality” to appeal to “young, international-minded, urban consumers” in China. Those target consumers are “looking for quality and distinctive styling, and they’d like to be connected even when they are driving,” the Qoros executive said.

As ambitious as Mr. Steinwascher and his new China auto brand may be, the field is already becoming crowded, even before Qoros’ first car hits showrooms in late 2013.

“If the market continued to grow sluggishly, posting low single-digit growth, for a few years straight, a shakeout would become inevitable,” said Yale Zhang, head of consulting firm Automotive Foresight Co. in Shanghai. Mr. Zhang noted that China has about 70 brands of locally produced cars, run by homegrown Chinese companies and global auto makers. Most notably, Japan’s Daihatsu Motor Co. exited the Chinese market a few years ago when it failed to generate sales to a profitable level, he said.

Yet, more foreign brands are entering China. Just last week, at the Guangzhou auto show, Volkswagen and Fiat SpA of Italy announced plans to launch the Seat and Alfa Romeo brands next year in China, respectively.

By 2013, China’s auto marketplace also will see an addition of a host of affordably priced China-only brands launched by foreign joint ventures. In August, GM and its Chinese partners launched the first product for their Baojun brand — a compact sedan called the Baojun 630. The car is priced – between 62,800 yuan (about $9,800) and 73,800 yuan – to appeal to people who are becoming just rich enough to buy cars.

Nissan Motor Co. and its Chinese partner are expected to launch their own no-frills China brand, Venucia, in the first half of 2012 when they start marketing the brand’s first product, also a small car.

Venucia is starting with 100 retail outlets, operated mostly by current Nissan dealers and plans to add a second vehicle to the lineup by the end of next year.

By 2015, Kimiyasu Nakamura, chief executive of Nissan’s main joint venture with Dongfeng Motor Group Co., said Nissan hopes to generate sales volume of about 300,000 vehicles a year – the sales scale that would rival that of carmakers like BYD Co., Chery and Zhejiang Geely Holding Group Co.

–Norihiko Shirouzu

Reuters

Rescuers pull a body out of a school bus after it collided with a truck at a traffic accident site in Yulinzi township of Zhengning county, Gansu province, November 16, 2011. Nineteen people, including 17 preschoolers and two adults, died in the head-on collision between the two vehicles.

Chinese Premier Wen Jiabao promised that the country would take measures to improve school bus safety on Sunday, a day after China saw its second major school bus accident in November and amid widespread public mockery of the country’s recent donation of school buses to Macedonia.

“School buses should be safe mobile campuses for students,” the premier said at a national meeting on women’s and children’s affairs, according to the state-run China Daily. “Society should bear in mind that children should be the first to enjoy all kinds of social welfare and the last ones to suffer from any disaster.”

School buses have become a hotly debated topic in China since the deaths of 21 people, including 19 pre-school students, in a head-on collision between a coal truck and a school-owned minibus in rural Gansu province earlier this month. The nine-seat minivan was carrying 64 people at the time of the accident, according to local media reports.

The second accident, in which a school bus in the northern province of Liaoning rolled over on Friday, left 35 people injured, according to China Daily.

The Liaoning accident was the second-most searched item on Chinese search site Baidu Monday afternoon, while the Gansu crash has consistently ranked among the site’s most searched topics since it happened on Nov. 16.

“In recent days, a series of big accidents involving school buses has led to bitter hatred among the people. These accidents have also made me uneasy,” Agence France-Presse quoted Mr. Wen as saying, citing a transcript of his remarks posted on government websites. “School bus safety must become a focal point of every region and every government department.”

Mr. Wen urged the central government to “rapidly” develop new safety regulations for school buses and pledged to help local government with procuring safe buses for school-age children, China Daily said.

That fact that Mr. Wen felt compelled to comment on the accidents can be read as a measure of the central government’s concern over the issue. The premier, often referred to in China as “Grandpa Wen,” is widely considered to be the most popular of China’s top leaders and is frequently trotted out to utter soothing words when public anger threatens to boil over.

Frustration over the state of Chinese school buses appears to have been made worse by a statement posted Friday on the website of the Ministry of Foreign Affairs saying China had donated a number of brand new buses to Macedonia to help improve the study environment for Macedonian students.

The statement, which appears to have been removed from the ministry’s website, was accompanied by photos of three shining yellow buses decorated with the Chinese and Macedonian flags. A statement posted on the website of the Macedonian government confirmed the donation, putting the number of buses at 23.

The revelation has produced hundreds of thousands of comments on the popular Sina Weibo microblogging platform, most of them negative.

“Your own children are crushed to death and you give safe school buses to foreigners,” wrote one Weibo user going by the handle Ancient Moon. “I don’t even know how to respond.”

“Can this sort of thing be considered treason?” asked another user writing under the handle Catherine_wangshihong.

– Josh Chin. Follow him on Twitter @joshchin