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Accurate China Insight: China business scam – Beware of unusually large Purchase Orders

A growing number of small to medium sized companies both in the Republic of Ireland and in Northern Ireland have recently contacted Accurate Group to seek our assistance in verifying the existence of China-based companies (many of which are operating out of the Shenzhen area of Guangdong Province) with generic names such as Brightway, etc., that are sending unanticipated, yet conceivable (and therefore tempting), large purchase orders, with attractive upfront payment terms of up to 50%. Following minimal correspondence, the Irish company contact (usually the Managing Director) is invited to travel to China to sign a contract. However, once in China visiting buyer’s office (which appears to be legitimate, but is merely a respectable cover for a criminal activity), and the initial deposit is due, the seller is asked to pay upfront half the bank fees for the transfer, or a commission in cash. Upon return to Ireland the seller will find no initial payment has being transferred and the party they have been communicating with has disappeared as has any cash they have been paid.

Accurate China Insight - China business scam -Beware of unusually large Purchase Orders

The Irish company usually contacts Accurate after a number of email exchanges with the Chinese company, which points to a level of sophistication on the part of the Chinese entity. They have done their homework and know industry specific terminology across a range of sectors including renewables, electrical filaments, and animal feed.

DON’T BE FOOLED BY SUCH SCAMS

  • If the size of the P.O. from a company in China you’ve never heard of reads too good to be true, that’s because it is!
  • There are easier ways to win in China. If you have never dealt with a Chinese company and just want to be sure they are bo na fide then you should contact a long-term hands-on Ireland China business consultancy with offices and Chinese speaking staff on the ground in China.  As veterans of doing business in China, an Irish China business consultancy, knowing the wily tricks played by Chinese companies, can be of invaluable assistance when verifying the true credentials of a Chinese buyer, supplier or business partner

… and, assuming, the Chinese prospective (product buyer, supplier, partner) company is genuine, an Irish China business consultancy can help you to negotiate and make the sale!

  • Never travel to Company to meet a company without verifying the integrity of the product buyer, supplier, or partner company that has invited you to visit them. In any case such a company will need to supply you with a Letter of Invitation (chopped / stamped with the official Chinese company name – any company doing business in Mainland China should be properly legally established [such as a company, a rep office, a branch, etc.] for tax and invoice issuing purpose), which you need to provide to your local Chinese Embassy when applying for a China entry visa. 
  • Even if you have received a contract in English, assume there is always a contract in Chinese. Ask for a copy and have if verified to ensure that contracts are exact copies of each other.

Incidentally it’s not just small and medium companies who fall prey to sophisticated China scams. No company doing business in China is immune: Look at what happened to Caterpillar who recently had to write off most of a China deal after uncovering “deliberate, multi-year, coordinated accounting” fraud (Source:  http://www.reuters.com/article/2013/01/19/us-caterpillar-siwei-idUSBRE90H1C520130119)?

Do note that these kinds of difficulties are experienced by very few Irish companies doing business in China. Follow your gut instinct, use commonsense and take the same precautions as you would doing business anywhere else.

Accurate China Insight - China business scam -Beware of unusually large Purchase Orders 2

Source: http://accuratelimited.com/blog.view.php?id=t8/dwXC9GMw=

Niall O’Reilly

Managing Director, Accurate GroupIreland China Product & Business Development (Export, Source, Import, Partner Due Diligence) Consultants doing business in China for over 24 years

China Office : 1-3 Ying Hui Xing Zhou, Jiang Nan Shui Xiang Lian Sheng Road, Yu Hang District, Hangzhou. China 310023| O: +86 571 8709 1253

Ireland Office: 93 Upper Georges Street, Dun Laoghaire, Dublin, Ireland| O: +353-1271-1830

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New leaders of the Catholic Church and China, Pope Francis and Xi Jinping, have much in common, but little prospect of reconciliation


Change at the helm – New leaders of the Catholic Church and China, Pope Francis and Xi Jinping, have quite a bit in common

Habemus Papam (We have a Pope!) 我们有一个新主席 (We have a new President!)

Within 24 hours of each other two men assumed centre stage as leaders of the two greatest populations on our planet: In the Sistine Chapel Pope Francis – Jesuit Cardinal Jorge Mario Bergoglio of Buenos Aires – was elected the 266th pope and head of 1.2 billion Catholics (and Sovereign of the Vatican State), while inside Beijing’s Great Hall of the People Chinese Communist Party (CPC) leader Xi Jinping became the seventh President of the People’s Republic of China, ruling over 1.4 billion people.

China and the Vatican have had no official relations since 1951 – for 71 years, the Vatican has maintained diplomatic relations with the Republic of China, as Taiwan is formally known – and yet even with the uneasy relationship between China and the Catholic Church both newly appointed leaders actually have quite a bit in common. For instance:

  • Pope Francis and President Xi JinPing will rule over populations experiencing remarkable transformation, in which ‘21st century’-minded reformists and historical followers are losing faith – growing increasingly skeptical and critical of what they view as obsolete and outmoded traditional methods of governance and doctrine. However, there are still many conservatives within the Catholic Church and China who for the most part are opposed to reform, preferring to maintain the status quo and keep things the way they are.
  • Pope Francis and President Xi JinPing will lead hugely powerful and rich institutions whose very raison d’êtres are concern for the marginalised and disadvantaged, but whose supporting structures benefit from levels of advantage undreamed of by most of those they are meant to be serving. Both therefore want to be seen as thrifty, humble and genuinely concerned with the plight of the vulnerable and tackling the causes of poverty. 

– By choosing the name synonymous with the self-denial and poverty of the revered 13th Century preacher and friar, Italy’s patron saint Saint Francis of Assisi, Pope Francis, the son of an immigrant railway worker, already known for his humility, selflessness, and championing of the poor and vulnerable, signaled his intention to place the plight of the poor and marginalized at the heart of his papacy.  

– Despite his celebrated family ties to the CPC hierarchy, being the son of veteran revolutionary Xi Zhongxun (the reforming architect of China’s Special Economic Zones), at the age of 15, during the tumultuous Cultural Revolution he was part of a work brigade sent down by the CPC to the countryside village of Liangjiahe, an insignificant cave dwelling community located in remote and desolate yellow soiled mountains of Shaanxi province in northern China, to serve and learn from the grassroots. There he made a cave his home, patiently “ate bitterness (吃了苦头like the rest of us (villagers)” Source: http://articles.latimes.com/2012/feb/11/world/la-fg-china-xi-20120212 , and laboured the yellow earth for seven years. Aligned with his rise as paramount leader, Xi Jinping has gone to considerable lengths to reconnect with such formative years by cultivating an image as a man of the grassroots who prefers frugality, humility and self-reliance.  Recently, in the run-up to his inauguration as President he vehemently spoken out against extravagance while underlining the need to close China’s yawning income disparities and pull its poor people out of poverty.

Change at the helm – New leaders of the Catholic Church and China, Pope Francis and Xi Jinping, have quite a bit in common

Pope Francis I – Back to core values: Emphasis on the poor and doctrinal conservatism

  • Pope Francis and President Xi JinPing both need to address damaging scandals caused by abuses of power and discord among their membership ranks that threaten the very fabric of their organisations.  Pope Francis needs to tackle the series of detrimental moral and financial disgraces involving the Vatican administration, Cardinals and other clerics that have afflicted the Catholic Church for years. Xi Jinping’s pressing task is to tackle unchecked corruption among officials that is eroding trust and belief in the CPC. Leadership changes at the top of Catholic Church and CPC have raised the hope that at last meaningful reform and revitalization is on the way. The future cohesiveness of both organisations lies in whether Pope Francis and Xi Jinping can successfully reverse the rot.
  • Pope Francis and President Xi JinPing are both known to be unwavering traditionalists on key issues. 

– Moderate Catholics hoping the church under the guidance Pope Francis will modify its social views in accordance with their own beliefs will have to wait much longer. The new Pontiff is an explicit opponent of contraception, women priests, clerical celibacy, and gay marriage, the latter which he considers “an attempt to destroy God’s plan”. Source: http://www.irishtimes.com/news/social-affairs/religion-and-beliefs/first-pope-from-the-americas-francis-raises-hopes-of-change-among-faithful-1.1324325

– Those amongst the burgeoning middle classes in China who like to think that Xi Jinping’s accession to the seat of power is going to result in a wave of political reforms will be sorely disappointed. Holding a doctorate in Marxist theory and ideological education from Tsinghua University’s School of Humanities and Social Sciences, and as a former President of the CPC Central Party School, Xi Jinping is believed to hold much more conservative views than his father Xi Zhongxun (who expressed his opposition to the nature of the Tiananmen Square massacre of 4th June 1989), a supporter of former ‘liberal’ CPC General Secretary Hu Yaobang. In speeches Xi has frequently called on rising cadres to immerse themselves in Marxism-Leninism and Mao Zedong Thought, declaring that political morality, “Marxist rectitude” and loyalty to the CPC are more important than professional competence. Source: “PLA Gains Clout: Xi Jinping Elevated to CMC Vice-Chairman,” China Brief, October 23, 2010. He was also an avowed supporter of the ‘Chongqing Model’ for upholding “core socialist norms”. Source: People’s Daily, December 13, 2010; Sina.com, December 10, 2010. [Note: The Chongqing Model was the series of social and economic policies adopted by Bo Xilai, the Chongqing CPC Chief, which epitomised increased state control and the promotion of a neo-leftist ideology. Following Bo’s removal in March 2012 the policies were either discontinued or scaled back.]

  • Pope Francis and President Xi JinPing were appointed to power through a guarded process in which the only persons who were allowed to participate were old men who are fully dedicated to the cause they stand for.

In terms of the likelihood of the Vatican one day switching its affiliation to Beijing, the similarities between the two established leaders as described above are cosmetic at best. Despite the growing appetite for spiritual values within mainland China’s officially atheist population, there is little prospect the CPC will recognise a foreign pope, rather than the secular Chinese Catholic Patriotic Association, as the leader of all Chinese Catholics.  Besides faced with momentous internal challenges both the Pope Francis and President Xi Jinping will be too focused on ensuring the survival and prosperity of their own increasingly unmanageable institutions to care.

Source: http://www.accuratelimited.com/blog.view.php?id=7Mnfy0l093k=

Additional source:  https://nialljoreilly.wordpress.com/2008/06/29/hangzhou-reflections-the-hangzhou-catholic-church-the-most-church-beautiful-in-china/  is an article about the Chinese Catholic Patriotic Association and the Catholic Church of Our Lady Of The Immaculate Conception in Hangzhou.

Change at the helm – New leaders of the Catholic Church and China, Pope Francis and Xi Jinping, have quite a bit in common

President Xi Jinping – Back to core values: Emphasis on the poor and doctrinal conservatism

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China – Under The Hood: Tinder box – China’s long hot summer

It’s the height of summer here in Hangzhou and it’s extremely hot…. Like sizzling! However, the degree of how hot varies between what is official and what the common man and woman on the street knows and feels.

Official hot (government offices, factories, etc are mandated to close if the official temperature hits 40 degrees Celsius) versus unofficial hot: Mary, who runs the GoMax tea and fruit drink outlet near my apartment, insists her thermometer showed an outside temperature reading of 42 degrees Celsius, but officially it was still 37 degrees Celsius.

People like Mary are increasingly aware of the alternative perspective: The truth uniquely experienced and the massive amount of shared beliefs gleaned from micro-blogging websites such as Sina Weibo.   Worn out by the never-ending official pronouncements, a tinder box situation of growing antipathy towards the way Official China is being run and directed is palpable.

Today, China’s rising prices, ever increasing income disparities, a mode of governance that pursues rapid economic growth and infrastructue development above all else, unrelenting corruption scandals, and a lack of transparency and accountability are testing this populace like never before.

And the spark?

Translation: “The Derailed Country

You ask, why are they acting like a bunch of lunatics?

They think they’re the picture of restraint.

You ask, why can’t they tell black from white, fact from fiction?

They think they’re straight shooters, telling it like it is.

You ask, why are they running interference for murders?

They think they’ve thrown their friends under the bus. And they’re ashamed.

You ask, why all the cover-ups?

They think they’re letting it all hang out.

You ask, why are they so irretrievably corrupt?

They think they’re hardworking and plain-living.

You ask, why are they so infuriatingly arrogant?

They think they’re the picture of humility.

You feel like you’re the victim. So do they.

They think: “During the Qing Dynasty, no one had television. Now everyone has a television. Progress!”

They think: “We’re building you all this stuff, what do you care what happens in the process? Why should you care who it’s really for, so long as you get to use it? The train from Shanghai to Beijing used to take a whole day. Now you’re there in five hours (as long as there’s no lightning). Why aren’t you grateful? What’s with all the questions?

“Every now and then, there’s an accident. The top leaders all show how worried they are. We make someone available to answer journalists’ questions. First we say we’ll give the victims 170,000 kuai apiece. Then we say we’ll give them 500,000. We fire a buddy of ours. We’ve done all that, and you still want to nitpick? How could you all be so close-minded? You’re not thinking of the big picture! Why do you want us to apologize when we haven’t done anything wrong? It’s the price of development.

“Taking care of the bodies quickly is just the way we do things. The earlier we start signing things, the more we’ll have to pay out in the end. The later we sign, the smaller the damages. Our pals in the other departments—the ones who knock down all the houses—taught us that one. Burying the train car was a bonehead move, true, but the folks upstairs told us to do it. That’s how they think: if there’s something that could give you trouble, just bury it. Anyway, the real mistake was trying to dig such a huge hole in broad daylight. And not talking it over with the Propaganda Department beforehand. And not getting a handle on all the photographers at the site. We were busy, ok? If there’s anything we’ve learned from all this, it’s that when you need to bury something, make sure you think about how big it is, and make sure you keep the whole thing quiet. We underestimated all that.”

They think that, on the whole, it was a textbook rescue operation—well planned, promptly executed, and well managed. It’s a shame public opinion’s gotten a little out of hand, but they think, “That part’s not our responsibility. We don’t do public opinion.”

They’re thinking: “Look at the big picture: We had the Olympics, we canceled the agricultural tax, and you guys still won’t cut us a break. You’re always glomming on to these piddling little details. No can-do spirit. We could be more authoritarian than North Korea. We could make this place poorer than the Sudan. We could be more evil than the Khmer Rouge. Our army’s bigger than any of theirs, but we don’t do any of that. And not only are you not thankful, but you want us to apologize! As if we’ve done something wrong?”

Society has people of means, and those without. There’s people with power, and those that have none. And they all think they’re the victim. In a country where everyone’s the victim, where the classes have started to decouple from one another, where it’s every man for himself, in this huge country whose constituent parts slide forward on inertia alone—in this country, if there’s no further reform, even tiny decouplings make the derailings hard to put right.

The country’s not moving forward because a lot of them judge themselves as if Stalin and Mao were still alive. So they’ll always feel like the victim. They’ll always feel like they’re the enlightened ones, the impartial ones, the merciful ones, the humble ones, the put-upon ones. They think the technological drumbeat of historical progress is a dream of their own making.
The more you criticize him, the more he longs for autocracy. The more you gaomao him (piss him off), the more he misses Mao.

A friend in the state apparatus told me, “You’re all too greedy. Forty years ago, writers like you would’ve been shot. So you tell me, have things gotten better, or have they gotten worse?”

I said, “No, you’re all too greedy. Ninety years ago, that kind of thinking would have gotten you laughed out of the room. So you tell me: after all that, have things gotten better, or have they gotten worse?”

Source:

Attributed to China blogger Han Han and posted on Sina Weibo 27th July 2011 (it was subsequently deleted). 23 July 2011, two high-speed CRH ‘Harmony’ trains collided on a viaduct in the suburbs of Wenzhou, in southern Zhejiang province killing at least 40 people. Inept officials reacted to the accident by hurriedly finishing rescue operations and ordering the burial of the derailed cars. Result: Uproar.

http://chinageeks.org/2011/07/han-han-the-derailed-country/

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China – Under The Hood: The Curious Incident Of The Dissolving Peach

No, I’m not being self-absorbed, and it’s not as if loads of locals around me are succumbing to nasty, mysterious illnesses (anyway the local tabloids always tone down the numbers). Nevertheless, of late in conversations with Hangzhouers I’ve noticed three questions coming up again and again in a tone verging on alarm.

-What are we eating?

-What are we drinking?

-and…. What the hell are we breathing?

-and I’ll toss in another issue…. How can one of the two peaches I bought in the local fruit shop last Sunday turn from unripe into a liquefied mush within 36 hours of purchase? That toxic peach dissolved right before my eyes!

[Anecdote:  A couple of weeks ago having enjoyed a second Kelloggs Nutri-Grain bar (courtesy of a Red-Cross parcel from my mother back home in Ireland, also filled with a critical supply of Barry’s Tea bags) I found myself checking out the nutritional label on the back of the wrapper. Clueless as to what I was reading, it suddenly dawned on me what I was reading wasn’t anything about food.  Why did I just eat a load of preservatives which are of zero benefit to my body? Why indeed..]

If you want to participate in a live laboratory in which the food – [and air-we-breath] – chain(s) are “unintentionally” (yeah right! the expressions of innocence on the faces of those perpetrators regularly showcased to the media are as fake as the vile products they have been caught tainting) exposed to poisonous industrial chemicals with the potential to totally wreck our bodily processes, then all roads lead to China.

I’d never even heard of most of these chemicals by name. Sure I can hardly pronounce them:

  • Watermelons overdosing (exploding melons of mass destruction) on forchlorfenuron growth hormones (May 2011)

  • Sports and fruit drinks laced with “particularly damaging to a young male’s fertility” dioctyl phthalate (imported from Taiwan, June 2011)
  • The “high blood pressure” yielding heavy metal cadmium in rice (February 2011); toxic “kidney failure” conducive melamine in milk (ongoing?)
  • Arsenic in soy sauce (ongoing?)
  • Copper in coffee (imported from Japan, 2008)
  • Bleach in mushrooms (December 2010)
  • The detergent borax in pork (added to make it resemble beef, April 2011)
  • and a whole host of fruit and vegetables smeared in deltamethrin, a synthetic insecticide, and preservatives with extremely long names!

Sure it only seems like yesterday when my buddy Umberto, who being Italian takes his cooking very seriously, watched a pot of fresh tomatoes turn white in a boiling confusion of red artificial colouring (2006).

Here in Hangzhou, affectionately known as “The Pond”, on account of its scenic West Lake,  so far (and counting…)we have:

  • Lead in the air (a lot of it apparently, courtesy of the local battery manufacturing industry)
  • Phenol in the water (courtesy of a tanker driver whose load tipped into the water supply, June 2011)… anyway phenol only causes severe eye damage, and sure what’s 25 tons of the stuff?

Spare a thought for those Harbiners up north whose Songhua River water supply was  contaminated with at least 80 tons of the carcinogen Benzine (ok, so that was back  in 2005 –‘water under the bridge’…so the local officials will tell you, long-term cancer risks notwithstanding).  No doubt, these same faceless apparatchiks will point to Germany’s e-coli cucumbers and bean sprouts (last week), the UK’s Mad Cows (hmmm) and Ireland’s contaminated pig meat (2008) as symptomatic of a global problem not just a China problem   – I’ve noticed they don’t really like talking about the “far worse than governments are revealing to the public” Fukushima nucleur disaster.

The Good News

Yes there is. Multiple the uproar each food scandal outside China receives by 1,000 times and you’ll get a sense of the disgust local Chinese feel about the continuing government incompetence and cynical manipulation of consumers by devious producers. China’s ‘You Are What You Eat’ sensitive generation is becoming increasingly aware of potential hazards of almost everything they eat and drink. What they see all around them are poor public hygiene surveillance and low standards of food quality all of which are cultivated by official incompetence, slapdash law enforcement, corruption and a corner-cutting culture among some businesses. It’s common knowledge that corrupt manufacturers and growers still use bribery and corruption to escape scrutiny.

Which brings me back to the bad news – that peach.

Eat The Peach? Certainly Not!

The facts:

  • Sunday evening in the neighbourhood fruit store

A shop widely considered to trade in Hangzhou’s finest selection of fruits. A large store, open 24×7, all year round, I supposed its popularity was simply down to the fact you are given what you pay for: natural fruit, preservative and pesticide free, as in normal fruit, grown locally… generating visions of suppliers being meticulously selected by a resident ‘Man from Del Monte’, giving his nod of approval to the perfect pineapple or apple… Well not quite, clearly a figment of my imagination.

The shop has a large imported section, offering exotic fruits from all over the world to their bàofā hù (nouveau riche) patrons mad for anything deemed exotic, to know off their knowledge and sophistication.  In my mind best to avoid this part of the shop for the same reason I’d avoid purchasing any ‘fresh’ consumable products from outside China, knowing the length it took to get from source to shelf (Kiwi from New Zealand, Apples from the USA? Bananas from South America? Hmm, imported fruit just looks too perfect and do we really believe they’re all air-freighted in?).

So the local fruit section it is.

  • Discerning shoppers everywhere like pawing their fruit for ripeness and the masses here are no different

However, in a big fruit shop that can make for a lot of grubby paws feeling up the goods: ‘The greener the fruit, the less manhandled its likely to be; let it ripen at home’, so the prevailing wisdom goes.

Two curvy, still hard, peaches caught my attention. I reckoned after being stored at an average room temperature of about 22 Celsius they’d be perfect to eat in three days. Back in the apartment, I left them on the table in their open plastic bag and went about my business, as in business trip to another city.

36 hours later I noticed a damp blot on the table cloth under the plastic bag and lifted it up. Liquid is seeping right through the plastic bag, and while one of the peaches looks exactly like it did when purchased, the other has simply dissolved into a gooey toxic mush.

  • And the upshot of this morbid tale about defiled peaches?

Yesterday, still incredulous, I recounted the story to the wife of Umberto, who, Umberto often complains, is overly preoccupied by a fear of preservatives, toxic chemicals, phony foods, and corrupt practices. Mother of three, Wu Bei wasn’t in the least bit surprised offering me the following prudent advice the next time I go fruit hunting in China:

“.. pick the fruit that’s looks somewhat chewed  and scarred by insects, because if  it’s good enough for them it’s good enough for you…. The most flawless delicious looking fruit is the most dangerous of all”.

A slightly more resigned Umberto quips that perhaps the best rule of thumb is to keep changing your poisons.

Seeing is believing…

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Fast forward to March 2013

– Rivers of blood: the dead pigs rotting in China’s water supply

“Shanghai’s drinking water is under threat after 16,000 diseased pig carcasses are found in tributaries of the Huangpu river…” Source / read more: http://www.theguardian.com/world/2013/mar/29/dead-pigs-china-water-supply?guni=Article:in%20body%20link

The reason why 16,000 pigs ended up in the Huangpu River was never fully explained by the authorities.

Fast forward to April 2013

– Bottled water scandal highlights food safety challenges

“The quality “..criteria Zhejiang’s Nongfu Spring uses are looser than national tap water standards in terms of the amount of arsenic and cadmium allowed in its products…. Nongfu Spring uses criteria that were set by the government of east China’s Zhejiang Province in 2005. National standards were upgraded in 2007…. Nongfu Spring was the only drinking water company to participate in drafting the Zhejiang provincial standards….. enterprises are only allowed to adopt local standards in exceptional cases when there are no relevant national standards….Nongfu Spring’s products do not meet the requirements for such an exception… China has formulated nearly 5,000 compulsory food safety criteria due to its excessive number of government departments….”

” Source / read more: http://news.xinhuanet.com/english/china/2013-04/12/c_132304484.htm

Fast forward to May 2013

– Forget mutton: in China, it’s rat, fox and mink dressed as lamb

Sold in thinly sliced rolls for consumption in hotpots  the “…”lamb” was mixed with rat, fox and mink with additives including gelatin. The meat was sold to farmers’ markets in the two cities…” Source / read more: http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130505000018&cid=1103

Fast forward to October 2013

– China’s Gutter Oil Scandal: 1/10 Of China’s Cooking Oil May Be Recycled From Garbage

“… In our current society everybody tries to swindle everybody else there’s nothing we can do about it.”

http://www.youtube.com/watch?v=Kne4PL5uH7c

….. and this food scandal concerning the cat meat trade…

“.. selling cat meat to butchers who then repackaged it and sold it as rabbit…” Source / read more: http://www.telegraph.co.uk/news/worldnews/asia/china/10417032/Chinese-police-find-slaughterhouse-selling-cat-meat.html

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