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I Thought Xi Liked Sports

China's soccer-mad president is heading to Brazil. Why is he skipping the World Cup final?

The private lives of China's leaders have such a black box quality that when state media released a video of President Xi Jinping delivering New Year's greetings from his office on December 31, it caused a stir. Was that a picture of his daughter in the background? How many pencils sit in the cup on his desk? So his love of soccer and willingness to gush about it when he travels comes as a refreshing surprise, a rare glimpse of the man behind the job.

In March in Berlin, Xi visited a group of young Chinese athletes training with German football coaches, and proudly told them they were the future of Chinese football. While visiting Dublin in February 2012, Xi looked delighted to kick around a soccer ball, even though he was restrictively dressed in a big overcoat. Xi's wife Peng Liyuan has said her husband likes to stay up late watching soccer. And Xi enthused to Indonesian journalists in October 2012 about how soccer is great because it's team-focused and not for grandstanders -- perhaps a surprising admission for a leader sometimes described as the "emperor" of the Politburo Standing Committee, China's top decision-making body. Xi is so associated with soccer in China that people on Chinese social media sites like Sina Weibo debated whether he was a World Cup "good luck charm" based on the fanciful notion that countries he had visited in the last two years were advancing.

So why did Xi decline the invitation from Brazilian President Dilma Rousseff to the July 13 World Cup final in Rio de Janeiro? Xi is already heading to the Brazilian city of Fortaleza July 15-16 for the sixth annual BRICS summit. The official line doesn't give much to work with: A Chinese official told reporters that Xi couldn't make it "due to a scheduling issue." Brazil's ambassador to China, Valdemar Carneiro Leão, told state-owned China News Service that Xi would arrive the day after the match. "Unfortunately for some reason he cannot be present but he was invited," he said, adding almost quizzically: "I know he is a very great fan of football."

Perhaps Xi decided to skip it because host Brazil had been so thoroughly humiliated in the tournament. But China had already announced Xi wasn't going on July 7, the day before Brazil's mortifying 7-1 loss to Germany in the semi-finals. And China has suffered plenty of its own football defeats -- not least of which was its failure to qualify for the World Cup (again) this year. In South Korea in July 2011, Xi outlined his hopes for Chinese soccer: "To qualify for the World Cup, to host the World Cup, and to win the World Cup." If China were to host, it would automatically qualify. But the last wish seems a tall order for a country that has only qualified for the World Cup once, in 2002, when it lost all three games it played, and did not score a single goal.

For Xi, going to the match might present an image problem. Bai Qiang, the CEO of a Beijing entertainment company and a huge football fan, is in Brazil for the World Cup and has so far gone to two quarter-final games and two semi-finals. He'll be at the last match in Rio de Janeiro on July 13 but he thinks Xi is smart to stay away. "Never to put personal hobby ahead of political needs has always been China's habit," he wrote by email.

Maybe Xi is leery of being pictured at an event marred by corruption and overspending claims, particularly while he oversees a massive anti-corruption battle at home. But simple frugality probably isn't the motive -- he was flying to Brazil anyway. "It's not about the money," said Zha Daojiong, a professor of political economy at Peking University. If Xi went, people at home would be bound to talk and not favorably, Zha said. "To go as an individual is one thing, but for him to go as a world leader, when his team didn't qualify, would be laughable." It would be different if it was the World Cup of something China is great at, like ping-pong or badminton, Zha said. "Then, of course he would go." Perhaps Zha is right. In that case, until China excels at soccer, Xi might have to contend himself with watching World Cup games from afar. 

Rowan Simons, a Beijing-based Brit who wrote Bamboo Goalposts, a book about his quest to popularize soccer in China, didn't know why Xi would be staying away from the final. But he was certain of one thing. "I am sure it is not because he doesn't want to!" he said.  

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Clash of the State-Owned Titans

Why did China's largest broadcaster attack China's most important bank?

In a rare incidence of one Chinese state behemoth directly attacking another, China Central Television (CCTV), with access to over one billion viewers, ran a report on July 9 accusing the Bank of China (BOC), the nation's largest foreign exchange lender, of money laundering. China maintains strict controls on capital flows, implementing a $50,000 cap on how much of the Chinese currency renminbi a single individual can convert to foreign currency each year. According to the report however, BOC operates a service called "Youhuitong," or "Superior Exchange." Not advertised on the BOC website, the program allegedly allows bank patrons to transfer large sums of money out of the country, for a substantial fee. (BOC issued a statement the same day refuting the allegations and calling Youhuitong "completely legal.")  

CCTV running a take-down on a major brand is not unusual. Roughly every six months it lambastes foreign or domestic companies for high prices, poor customer service, low quality, or potential security threats. CCTV targeted Apple in March 2013, Starbucks in October 2013, and most recently China's e-commerce giant Alibaba in March 2014. But to go after BOC -- one of China's big four state-owned banks and a government heavyweight in its own right -- is an extremely curious move. 

Due to the mud-like opacity of China's one-party political system, it's near impossible to know what big power struggles may be playing out behind the scenes. But here are three possible scenarios underlying this unusual turn of events:

1) Another bold move in the deepening anti-corruption crackdown. Chinese President Xi Jinping's ongoing "tigers and flies" campaign has cast a wide net to root out corruption among government officials. One embarrassing thorn in Beijing's side has long been "naked officials" -- government officials who send their assets and family members abroad, sometimes as a precursor to themselves fleeing the country. On July 2, the latest campaign netted 1,000 of these officials in the wealthy southern province of Guangdong, reportedly the only province where BOC operates Youhuitong. Stronger enforcement of China's capital flows restrictions -- highlighted in CCTV's broadcast -- would likely hinder the attempts of would-be naked officials to send assets abroad.

2) A further consolidation of Xi's power in the banking and financial sectors. At the Third Plenum, a landmark Communist Party meeting in November 2013, the party set out an ambitious slate of economic reforms geared at helping China transition from an export-oriented to a services-oriented economy. But big banks in China have significant political clout. They may oppose reforms such as interest rate liberalization, which might force them to increasingly compete for customers. Exerting pressure on China's banking sector may provide Xi with greater traction as he prepares to push forward with economic reform.

3) The right hand doesn't know what the left hand is doing. The most obvious explanation is that this simply represents a state-owned media organization outing the allegedly shadowy dealings of a state-owned bank. Perhaps no top officials manipulated CCTV, and instead the network decided to conduct excellent investigative journalism.

Or perhaps CCTV attempted that, and made mistakes with their reporting. According to a report in the newspaper Time Weekly, the Guangdong branch of the People's Bank of China, China's central bank, chose BOC to launch a program allowing individuals to transfer funds internationally. In its statement issued in response to CCTV's allegations, BOC stated that it began operations of Youhuitong only after "reporting to the relevant regulatory authorities." If these reports are accurate, then CCTV was either not privy to that information or chose to omit it from the report.

The broadcast only happened July 9, and more information will likely come out in the coming weeks. But don't expect to see anything else like this anytime soon.

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