China Wakes

U.S. ambassador: Political situation in China “very, very delicate” | The Cable

2012-01-19T15:58:00.001-08:00

The Chinese people are increasingly frustrated with the Chinese Communist Party and the political situation in China is "very, very delicate," U.S. Ambassador to China Gary Locke said on Wednesday.

"I do believe that there is a power of the people, and there is a growing frustration among the people over the operations of government, corruption, lack of transparency, and issues that affect the Chinese people on a daily basis that they feel are being neglected," Locke told NPR's Steve Inskeep during a Wednesday interview, part of a media blitz Locke is conducting during his visit to Washington.

"Do you think that the situation is fundamentally stable in China right now?" Inskeep asked Locke.

"I think, very delicate -- very, very delicate," Locke responded. "But there were calls earlier this year for a Jasmine Revolution and nothing came of it. I think it would take something very significant, internal to China, to cause any type of major upheaval."

Locke said that since he took over the ambassadorship from former GOP presidential candidate Jon Huntsman, he has become aware of public demonstrations large and small throughout China that ordinary people were using to pressure the government to address their grievances. He singled out a recent protest in the southern Chinese city of Wukan over the confiscation of land without reasonable compensation.

"[The people] basically prevented anybody from the outside from coming in and brought the city to a halt and forced the Chinese government communist leaders to send people to address their grievances," Locke said.

The discord inside China is partly a result of the income and wealth disparity between China's growing middle class and the masses of poor, rural residents, Locke said. He also said the Chinese government's human rights record was worsening.

"[I]t's very clear that in the run up to the 2008 Beijing Olympics and since then, there's been a greater intolerance of dissent -- and the human rights record of China has been going in the wrong direction," said Locke.

Asked for comment at today's State Department press briefing, spokeswoman Victoria Nuland backed up Locke's comments on human rights and the rule of law in China.

"[Locke] obviously speaks for the administration in expressing continued concern that we seem to have an increasing trend of crackdowns, forced disappearances, extralegal detentions, arrests and convictions of human rights activists, lawyers, religious leaders, ethnic minorities in China," she said.

But Nuland declined to repeat Locke's assertion that the Chinese government was potentially unstable.

"I think our message to the Chinese government on these issues is the same message that we give around the world when we have human rights concerns, that governments are stronger when they protect the human rights of their people and when they allow for peaceful dissent," she said.

via thecable.foreignpolicy.com

This is a very interesting comment from the US Ambassador to China and with the pending transfer of power to the next generation of Communist Party leadership the country could be poised for its largest political upheaval decades.

China's med-tech market to grow 17% in 2012 | MassDevice.com

2012-01-15T16:33:00.001-08:00

January 12, 2012 by MassDevice staff

The Chinese medical device market is slated to grow 17% in 2012, survey says.

MASSDEVICE ON CALL —China's medical device market is set to grow 17% in 2012, according to a Citigroup hospital survey.

Major medical equipment in the Chinese market include medical monitors and life support, diagnostic imaging, in vitro diagnostics and therapeutic systems.

GE Healthcare (NYSE:GE) leads the Chinese medical equipment market, but in orthopedics and drug-eluting stents, Medtronic (NYSE:MDT), Johnson & Johnson (NYSE:JNJ) and Stryker (NYSE:SYK) take the lead, according to the report.

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Citigroup's survey, which was based on responds from 383 Chinese hospitals across 29 provinces and cities, also named med-tech titans Philips (NYSE:PHG) and Siemens (NYSE:SI) as leaders in China's med-tech market.

Domestic manufacturers such as Mindray Medical (NYSE:MR), Wandong and Aeon have tapped into the market with the sale of market of patient monitors, anesthesia machines and radiography machines.

The 2012 growth will be largely due to bigger budgets and planned infrastructure upgrades from Chinese hospitals, according to analysts.

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via massdevice.com

US and EU medical technology companies need to start making plans to take their products to China before the country is able to develop its own medical device national champions. Once the country has the capacity to develop everything themselves, the West should expect their products to be largely shutout of what will be the world's largest market one day.

Ai Weiwei’s taxing conundrum | The World | International affairs blog from the FT – FT.com

2011-11-09T09:22:00.001-08:00

The Chinese are voting again. Having lost their chance to determine the outcome of Happy Girls, an audience-participation talent show that has mysteriously vanished from next year’s schedules, they are voting instead for Ai Weiwei, the artist and thorn in Beijing’s side.

Mr Ai was recently slapped with a tax bill of $2.4m, a financial summons that followed several months’ imprisonment earlier this year. But Chinese people in their thousands are offering to help the controversial artist pay. The BBC reports that, according to Liu Yanping, a volunteer at the artist’s studio in Beijing, nearly 20,000 people have donated a total of $790,000, and counting.

Most have done so by electronic transfer. Some – presumably technophobes – have simply lobbed money over the wall and into the artist’s compound. A few notes, folded into paper planes, have sailed over the wall too.

Last week, Mr Ai, whose release from prison was conditional on his not talking to the press, told the FT: “When Chinese people have no other way to express themselves, this is the way they feel they can vote to express their dissatisfaction.” That probably constituted talking to the press. In fact, he has done several recent interviews in defiance of the ban.

Whether Mr Ai will have the last laugh is not yet clear. The Global Times, an English-language tabloid owned by the People’s Daily, wrote: “This event has been interpreted by some foreign media as the Chinese people donating to Ai’s cause. The action has also been regarded as a special protest by the artist.” But it cautioned: “Since he’s borrowing from the public…. some experts have pointed out this could be an example of illegal fundraising.”

So China’s most famous artist, known for his humorous, provocative and occasionally puzzling art, may be damned if he pays his taxes and damned if he doesn’t. Now that’s just surreal.

via blogs.ft.com

China imposes curbs on buying property

2011-11-09T09:06:00.001-08:00

The southern Chinese city of Zhuhai has introduced restrictions on housing purchases in a sign of the government’s resolve to rein in the property market.

The move on Tuesday came even though prices have started to decline across much of the country.

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Similar restrictions have been rolled out in other big cities since last year, including limits on the number of units households can buy, curbs on purchases by non-residents and caps on the amount developers can charge for apartments.

But a big drop in sales volumes and recent price falls in leading markets had led many to assume Beijing would start to ease restrictions.

Shares in most leading Hong Kong-listed Chinese property developers rebounded by between 30 and 80 per cent in the fortnight to last Friday on expectations of imminent easing, although most were still down by more than a third since the start of the year.

Shares in listed developers such as Evergrande, Longfor and China Vanke fell on Tuesday in Hong Kong and Shanghai on news of the Zhuhai restrictions and reports in Chinese media that some large developers were offering big discounts on developments.

Many in the sector fear such discounts could trigger a wave of price cuts amid weak demand just as a large number of new apartments is expected to come to market across the country.

Adding to those fears, data from the China Real Estate Index System released on Tuesday showed average residential property prices across 100 leading cities in China fell 0.23 per cent in October from the previous month, the biggest decline so far this year.

Average prices were still up 5.21 per cent on the same month a year earlier, but this was a slower increase than the 6.16 per cent rise in September.

For most Chinese citizens the rapid price rises of the past few years have put apartments in big cities far out of their reach and the government wants to bring prices down gradually to make them more affordable.

But because of the importance of real estate to the wider economy – housing construction is estimated to make up one quarter of investment and 10 per cent of the country’s gross domestic product – Beijing is wary of triggering steep price declines.

On Saturday, Wen Jiabao, the Chinese premier, said Beijing was looking for a “reasonable correction” in prices and would resolutely continue its property tightening strategy while forcing local governments to implement existing housing purchase restrictions.

Zhuhai, an industrial city in Guangdong province, announced on Tuesday that people who had not paid taxes or social insurance in the city for more than a year could not buy apartments there, while local families were limited to buying one home unit each.

It also imposed a cap on home prices of Rmb11,285 per sq metre for the rest of the year. Any developer asking for higher prices would not be given permits to sell their developments.

via ft.com

Chinese property buyers get BMW thrown in

2011-11-09T09:04:00.001-08:00

The sudden downturn in China’s property market is bad news for many global companies, but luxury German carmakers stand to benefit, at least in one city.

In Wenzhou, where house prices have fallen sharply, a real estate developer said that from Wednesday it would throw in the keys to a BMW with each apartment at a new residential complex for the first 150 buyers.

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The deal is a sign of the desperation felt by developers in China’s once-booming property market, which has been pounded by government measures aimed at heading off a bubble. The slowdown is a matter of international concern, with Chinese house construction driving demand for commodities and propping up growth in the sputtering global economy.

Chinese developers have been reluctant to cut prices as transactions have slowed this year, but some are finally capitulating after dreadful sales in October. Others, afraid of the stigma of slashing prices, are offering giveaways such as extra garden plots, Louis Vuitton handbags, cruise vacations and now cars.

“Whoever signs a contract and makes the downpayment will be able to drive away in a BMW,” said the sales assistant at Central Mansions, a cluster of brown towers with 868 apartments that have just come on to the Wenzhou market.

“No, it doesn’t mean that sales are bad. It’s just that we’re trying to attract customers,” she said.

Home to legions of entrepreneurs and speculators, Wenzhou’s economy soared when China was flush with cash. But it has been hit harder than most cities by the government’s shift to a much tighter monetary policy to control inflation, as well as the property clampdown.

Wenzhou’s housing sector is now the weakest in the country, with prices falling 1.4 per cent in September month on month. Its smaller firms have suffered from a lack of bank credit, triggering dozens of bankruptcies and prompting the government to

But while Wenzhou is an extreme case of the stress in China’s property market, it is certainly not alone. Housing prices have started to fall nationwide, according to the China Real Estate Index System.

That has been tough to digest for many Chinese who had come to believe that house values could only rise. When several developers in Shanghai cut their asking prices last month, homeowners protested, ransacking showrooms and demanding refunds.

Fearing similar fallout, many developers are trying to entice buyers with special deals instead of discounts. The BMWs in Wenzhou cost Rmb300,000 locally, equivalent to about 10 per cent of the price for an apartment, the sales assistant said.

Xiaoyunli No. 8, a development in Beijing that has sent workers to leaflet cars at busy intersections, said there would be no discount and no car for buyers.

“But you’ll get a deal and it will be no problem for it to amount to the tens of thousands. It will be like giving you a car,” the receptionist said.

via ft.com

Qualcomm and Life Care Networks partner to battle cardiovascular disease using mobile phones || via @imedicalapps

2011-09-11T12:01:00.001-07:00

Qualcomm and Life Care Networks have partnered to launch an initiative called the Wireless Heart Health project to aid in the prevention and treatment of health conditions such as cardiovascular disease in underserved communities in China. According to the World Health Organization (WHO), chronic diseases, such as cardiovascular disease, are a major problem in China with close to 3 million deaths a year.
Because of the prevalence of mobile phones in China, an idea formed that would allow critical medical care to be given in areas of China that would otherwise never have access.
“With a grant from Wireless Reach, the Wireless Heart Health project is deploying a 3G-enabled cardiovascular screening and monitoring system, developed by Life Care Networks, for resource-scarce community health clinics in Shandong, Anhui and Sichuan provinces, as well as the Chongqing municipality. Community Health Association of China is assisting in clinic selection, project implementation and impact analysis.”
The smartphones contain added sensors (such as ECG) that aid in diagnostics.
“The new 3G system includes smartphones with built-in electrocardiogram (ECG) sensors; web-based, electronic medical record software; and 3G wireless workstations located within the clinics. Each workstation includes a computer terminal with Internet access, providing health care workers with instant access to electronic patient records, including ECG data. The project also includes training sessions for all participating community health center clinicians.”
The Wireless Heart Health project allows smartphones to automatically send critical patient data to a cardiac specialist at a call center. This call center contains doctors that provide feedback to patients and clinic staff over the phone or through text messages. Physicians can remotely provide service for simpler cases or suggest a specialist follow-up in-person. Finally, Qualcomm expects to make some of the ECG-enabled smartphones available for patients to rent and take home.
For further reading, please view Yahoo Finance.

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via imedicalapps.com

Qualcomm takes their wireless health technology and vision to China for wireless ECG experiment called Wireless Heart Health in western China.

Ai Weiwei China's Best Known Artist Arrested in Beijing

2011-04-04T13:22:00.001-07:00

via readwriteweb.com

Ai Weiwei, designer of the "Bird's Nest" Beijing's 2008 Olympic stadium, was detained today in Beijing as he attempted to board a flight to Hong Kong. His Beijing studio was also raided and his staff and family taken into custody. Ai had apparently been making plans to relocate his studio to Germany and has long experienced government pressure to silence his creative expression. I think this is a huge mistake by the Chinese government. If they want to avoid the fate of the Middle Eastern and North African governments that have seen their people rise up against autocracy they would be wise to not so blatantly harass the country's most revered artist.

Dubai a willing host as Chinese go cruising || The National

2011-03-30T05:59:00.001-07:00

Dubai a willing host as Chinese go cruising
Daniel Bardsley (Foreign Correspondent)

Last Updated: Mar 27, 2011

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Dubai is established as a global tourist destination but its importance as a stopping-off point for cruise ships is relatively new.

In 2001, just 7,000 cruise ship passengers visited the city, a mere drop in the ocean compared with the 3.6 million tourists in total who arrived that year.

The emirate last year hosted 8.7 million hotel guests, well over double the figure of a decade ago. This increase, while impressive, is put into perspective by the 55-fold growth in cruise ship tourists over the same period, with 390,255 enjoying Dubai as a port of call last year.

The total number of passengers last year was nearly 50 per cent up on 2009's figure of 262,740, with the increase no doubt helped by the launch of Dubai's new cruise terminal.

In future, more of the hearty seafarers who stride happily along their ship's gangway to enjoy a few hours or days of desert safaris and shopping in Dubai are likely to come from China.

Some cruise lines are already offering 25-day no-expense-spared voyages that begin in China and end in Dubai

Other Chinese tourists are splashing out on fly-cruises that see them jet in to the Middle East and then go cruising for a few days - with Dubai often the place where the voyages start and end.

It has been much easier for Chinese travellers to visit the UAE after Beijing's decision in 2009 to give the Emirates "preferred destination status", meaning visa and other red-tape restrictions have been made less onerous.

"In the recent spring festival, we had several groups who travelled to Dubai to take a cruise to Oman or Qatar, then back to Dubai," says Eric Li, the manager of the Middle East and Africa section of Beijing Jin Jiang International Travel.

Increases in the number of cruise-ship visitors from China are part of a wider expansion in the popularity of cruises among residents of the Asia-Pacific in general. Growth is outstripping expectations.

In 2005, UK-based consultants predicted that 2 million people would be taking cruises annually in Asia by 2015.

Late last year, Soo Kok Leng, the chairman of the Singapore Cruise Centre, said these estimates had proved to be way out, forecasting instead the figure would be closer to 7 million.

Less than a year ago, several countries in the region, among them China, Japan, Taiwan and South Korea, formed the Asia Cruise Terminal Association to allow the region to pool expertise and improve standards.

It is no surprise that China's business capital, Shanghai, has seen dramatic increases in the number of cruise ship tourists sailing in.

The cruise operator Royal Caribbean said passenger volumes at Shanghai increased more than 250 per cent in 2009, and as with Dubai, increases have been encouraged by the opening of an international cruise terminal. The number of cruise passengers visiting Chinese sea ports is now running at about 600,000 a year.

Reports indicate China has encouraged growth by making it easier for Chinese ship operators to run cruises, by simplifying customs procedures and by easing the paperwork burden on foreign companies sailing into its ports.

Yet there remains vast scope for further expansion of the industry in Asia. Up until now, the numbers of people taking cruises around the continent has been modest compared with the global total.

The Cruise Lines International Association predicts 16 million people worldwide, three quarters of them from North America, will embark on cruises this year, up 6.6 per cent on last year.

That Chinese are more keen and financially able to travel outside their country is beyond doubt. Last year, 56 million tourists from the mainland travelled abroad, an increase of 8.3 million or 17.5 per cent on 2009's figure of 47.7 million.

Regional destinations, including Taiwan, South Korea and Japan, were the most popular, and many cruise operators are catering to this fondness for relatively local destinations. "A lot of people choose to cruise from Tianjin or Shanghai to Korea or Japan," Mr Li says.

While the much higher cost of European or Caribbean trips is one barrier, language is another reason why Chinese cruise ship passengers like to take shorter cruises from their home country. Chinese travellers taking voyages on the other side of the world often find that few passengers or crew can speak their language.

Things might however be easier for Chinese travellers in future. Just as many UAE hotels have hired Chinese staff to cater to guests from the world's most populous country, so cruise companies have indicated, in discussions with Mr Li's firm, a willingness to employ more Mandarin and Cantonese-speaking crew. This is vital, he says, if they are to attract Chinese passengers.

"There are [Chinese] people who are interested in European and North American cruises, but they fear the language barrier," Mr Li says.

"Sometimes the films and other things are all in English. They feel bored because there's nothing in Chinese."

business@thenational.ae

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via thenational.ae

Very interesting article about the Chinese adventuring abroad as they growth wealthier. Few people appreciate the fact that foreign travel for leisure purposes is a very new concept to mainland Chinese. In fact, I believe it was only made "legal" to travel on vacation to the US within the last 5 years.

HealthGrid11 in Bristol, England || June 27

2011-03-21T20:48:00.001-07:00

Latest Directives From the Ministry of Truth, March 10-18, 2011

2011-03-20T02:16:00.001-07:00

The following examples of censorship instructions, issued to the media and/or Internet companies by various central (and sometimes local) government authorities, have been leaked and distributed online. Chinese journalists and bloggers often refer to those instructions as “Directives from the Ministry of Truth.” CDT has collected the selections we translate here from a variety of sources and has checked them against official Chinese media reports to confirm their implementation

State Council Information Office: Article from China-Tibet Web

March 18, 2011

From the State Council Information Office: All websites are requested to repost, in its entirety and in a prominent location, the article from China-Tibet Web, “Can Seeds of Enmity Bear Fruits of Harmony?” It is not permitted to change the title, and the article must remain up until March 19, 10:00 am.

国新办：中国西藏网文章

国新办：请各地网站在首页最醒目区统一转发中国西藏网的《仇恨的种子能结出和谐的果实吗》一文，不可改标题，并且保留到19日10时。

State Council Information Office: Radiation Levels in Urban Areas

March 16, 2011

From the State Council Information Office: Starting on March 17, all websites are requested to prominently repost on their front pages information regarding radiation levels in main urban areas, provided by the Environmental Protection Department. This information must be placed in a fixed location, and note that it must be updated every day. All provincial-level Internet surveillance and propaganda Departments are requested to strictly examine websites under their jurisdiction, and strictly enforce the demands of this notice.

Every day, all websites that provide cell-phone reports must also issue, “Daily Radiation Levels in Main Urban Areas From the Environmental Protection Department (Office of National Nuclear Safety).” All mobile phone companies must understand that this is a political duty, and immediately implement it.

国新办：城市环境辐射水平

国新办：所有网站请从3月17日起在首页要闻区突出转发环保部发布的全国主要城市环境辐射水平信息，此信息必须置于固定位置，注意每日必须进行更新。各省网管，网宣部门请严格检查属地网站，对照本要求严格执行。

所有设有手机报的网站，也需要每天转发“环境保护部（国家核安全局）发布每日全国主要城市环境辐射水平”。所有手机运营商必须理解这是政治任务，立即执行。

Central Propaganda Department: Property Taxes

March 14, 2011

From the Central Propaganda Department: Regarding Shanghai’s and Chongqing’s experiments with initiating property taxes, opinions that property taxes steal money are not to be reported or hyped.

国新办：房产税

中宣部：对上海重庆启动房产税试点，说房产税是抢钱的言论不报道不炒作

State Council Information Office: Unilateralism, Hillary Clinton style

March 14, 2011

From the State Council Information Office: All websites are requested to repost, on the front page and in a prominent position, the story, “Internet Freedom: Unilateralism, Hillary Clinton style.” It is not permitted to change the title, and the article must stay on the front page until March 15, 6:00 am.

国新办：希拉里式的单边主义

国新办：请各网站在首页最醒目位置转载“互联网自由：希拉里式的单边主义”，不可以改标题，文章必须保持在首页至3月15日晚6时。

State Council Information Office: Concern and Love for Tibetan Students

State Council Information Office: Concern and Love for Tibetan Students

State Council Information Office: All websites must post on their front page news section the article, “For 33 years, 75-year-old Professor Yang Changlin has Shown Concern and Love for Tibetan College Students in Almost 10,000 Instances.” Leave this article up until the day after tomorrow (the 15th) at 6 pm.

国新办：请各网站在首页要闻区突出转发《75岁教授杨昌林33年如一日关爱高校藏族学生近万人次》，保留至后天（15日）下午六时。

March 13, 2011

From the State Council Information Office:

Central Propaganda Department: Large Earthquake in Japan

March 13, 2011

From the Central Propaganda Department: Media must solidly grasp reporting on disaster conditions after the large earthquake in Japan, and objectively and quickly report on trends as they develop. Place particular emphasis on grasping the relationship between anti-seismic and relief efforts for the Japan and Yunnan earthquakes and propaganda reporting for the national meetings of the “Two Congresses.” Do not weaken the theme of reporting on the Two Congresses.

We must fully propagandize the state of the rescue work that our teams have initiated in Japan. We must closely follow the circumstances of Chinese people and overseas Chinese in Japan.

Do not deliberately criticize or champion the actions of the Japanese government, and do not make any comparisons with anti-seismic and rescue efforts in our country. Give scientific explanations of the explosions and leaks at the nuclear facilities. Do not play up or casually speculate and analyze the influence of leaks on China.

中宣部：日本特大地震

中宣部：媒体要稳妥把握对日本特大地震灾情报道，客观，及时报道灾情动态信息。注意把握好日本地震和云南地震的抗震救灾和全国两会宣传报道的关系。不要冲淡了两会报道的主题。

要充分宣传好我救援队在日本开展救援的情况。要密切关注我在日华人，华侨的情况。

不要刻意批评或赞扬日政府的有关行为，不要和我国的抗震救灾对比。对日核设施泄露及爆炸要做科学解读。不过分渲染，不随意猜测和分析泄露对我国的影响。

Central Propaganda Department: An Illegal Gathering in Shandong

March 12, 2011

From the Central Propaganda Department: On March 13, there will possibly be illegal gatherings and activities in Jinan, Qingdao, Yantai, Weifang, and Rizhao. Do not give interviews or reports.

中宣部：山东非法集会

中宣部：3月13日济南、青岛、烟台、潍坊、日照可能有非法集会活动，不采访不报道

Central Propaganda Department: The Super Moon

March 12, 2011

From the Central Propaganda Department: Media are not to hype the super moon. It is not permitted to draw connections between the moon, earthquake, fires, and other natural disasters. It is allowed to use scientific explanations circulated by the Xinhua News Agency, and purely astronomical information issued by expert Departments can be published.

中宣部：超级月亮

中宣部：媒体不要炒作超级月亮。不可把超级月亮与地震，火灾等自然灾害相联系。可用新华社所发稿件做科学解读，权威部门发布的纯天文学内容可刊发。

Central Propaganda Department: Housing Rationing in Shenzhen

March 12, 2011

From the Central Propaganda Department: Media are not to hype questions about housing rationing in Qiaoxiang Village and Shenyun Village, Shenzhen. Related information should use information from Shenzhen authorities as the standard. Do not give independent interviews or commentary.

中宣部：深圳房屋配售

中宣部：媒体不炒作深圳侨乡村，深云村房屋配售问题，有关情况以深圳权威部门的信息为准，不自行采访和评论

Central Propaganda Department: The Yunnan Earthquake and the Two Congresses

March 12, 2011

From the Central Propaganda Department: For the Yunnan earthquake, we must mainly report on the active rescue activities of political leaders. We absolutely must not allow the earthquakes to dilute the message of the Two Congresses. We cannot report on representative members being absent from the meetings.

中宣部：云南地震和两会

中宣部：云南地震必须主要报道领导人积极救灾；必须不能让地震冲淡两会；必须不能报道代表委员开会缺席。

Central Propaganda Department: Cultural Industrialization

March 12, 2011

From the Central Propaganda Department: In related reports, media cannot use the term “cultural industrialization.”

中宣部：文化产业化

中宣部：媒体在有关报道中不要使用文化产业化的提法

Central Propaganda Department: Family Planning

March 12, 2011

From the Central Propaganda Department: Media are not to hype family planning problems. Do not report on the issue of having two children. Policy changes on famiy planning will use information issued by authorities as the standard.

中宣部：计划生育

中宣部：媒体不得炒作计划生育问题，生二胎话题不做报道。计划生育在政策调整以权威部门发布信息为准。

The State Administration of Radio Film and Television: Direct Television Broadcasts From Outside our Borders

March 12, 2011

From The State Administration of Radio Film and Television: It is not allowed to directly broadcast television programs originating from outside our borders. If there are currently any such broadcasts reporting on the earthquake in Japan, immediately cut them off.

广电总局：境外电视直播

广电总局：不得直播境外电视节目。如有正在进行的日本大地震相关的境外直播，请立即下线。

Central Propaganda Department: The Earthquakes in Yunnan and Japan

March 12, 2011

From the Central Propaganda Department: When reporting on the current earthquakes, media are not to compare the earthquake in Yunnan with the earthquake in Japan.

中宣部：云南和日本地震

中宣部：各媒体在报道目前地震事件的时候不得把云南地震跟日本地震做比较。

Shanghai Propaganda Department: Han Han

March 12, 2011

Shanghai Party Committee Propaganda Department: Activities and comments related to Han Han, beyond his car racing, are not to be reported.

上海宣传部：韩寒

上海市委宣传部：有关韩寒的活动和言论，除了赛车以外的不报道。

Central Propaganda Department: He Hongsang, Macau Gambling King

March 11, 2011

From the Central Propaganda Department: Do not report on the partitioning of household assets of He Hongsang, the gambling king of Macau.

中宣部：澳门赌王何鸿桑

中宣部：不报道澳门赌王何鸿桑家庭财产分割案。

Central Propaganda Department: Taxi Strike in Lanzhou

March 11, 2011

From the Central Propaganda Department: Do not report on the taxi strike in Lanzhou.

中宣部：兰州出租罢运

中宣部：不报道兰州出租车罢运事件。

Central Propaganda Department: Exchange Student in Norway Injured While Parachuting

March 11, 2011

From the Central Propaganda Department: Do not report on the incident of an exchange student in Norway injuring himself after parachuting from a tower at the Chinese Academy of Science.

中宣部：挪威留学生跳伞受伤

中宣部：不报道挪威籍留学生在中科院高塔跳伞受伤一事

Central Propaganda Department: Xu Commits Suicide

March 11, 2011

From the Central Propaganda Department: Do not report on the suicide and death of Xu, Assistant Director of the Testing Center at the National Administration College.

中宣部：徐某自杀

中宣部：不报道国家行政学院考试中心副主任徐某自杀身亡事件

Central Propaganda Department: Delegate Absences at the Two Congresses

March 11, 2011

From the Central Propaganda Department: Do not report on the absences of delegates from the Two Congresses.

中宣部：两会代表缺席

中宣部：不报道两会的代表委员开会缺席一事

Central Propaganda Department: Tax Evasion by Ma Zhongqi

March 11, 2011

From the Central Propaganda Department: Do not report on the case of tax evasion by Ma Zhongqi in Huaiyuan county, Ningxia.

中宣部：马衷琦逃税案

中宣部：不报道宁夏海源县马衷琦逃税案

Central Propaganda Department: Standardization of Proposals at the Two Congresses

March 11, 2011

From the Central Propaganda Department: Do not report on the need to standardize responses to proposals and motions at the Two Congresses.

中宣部：两会议案程序化

中宣部：不报道需将两会议案和提案回复程序化的话题

Central Propaganda Department: Coal Mining in Shanxi

March 11, 2011

From the Central Propaganda Department: Do not report on the sinkholes caused by coal mining in Shanxi.

中宣部：山西采煤

中宣部：不报道山西因采煤引发的地陷。

Central Propaganda Bureau: Mismanagement of the Automobile Industry

March 11, 2011

From the Central Propaganda Department: On March 9, China Management Report (Zhongguo jingying bao) and Southern Metropolis (Nanfang dushi bao) report on Huang Qifang’s criticism that some people have mismanaged the automobile industry. All newspapers are not to re-publish or report the story.

中宣部：胡搞汽车业

中宣部：三月九日中国经营报和南方都市报报道黄奇帆批评有人胡搞汽车业的稿件，各报不转不报

Central Propaganda Department: Chunxiao Gas Field

March 10, 2011

From the Central Propaganda Department: Do not report on extractions in the Chunxiao gas field by the China National Offshore Oil Corporation (Zhonghaiyou).

中宣部：春晓油田

中宣部：对中海油在春晓油田开采一事不做报道

In China, several political bodies are in charge of Internet content control. At the highest level, there is the Central Propaganda Department, which ensures that media and cultural content follows the official line as mandated by the CCP. Then there is the State Council Information Office (SCIO), which has established an “Internet Affairs Bureau” to oversee all Websites that publish news, including the official sites of news organizations as well as independent sites that post news content.

This “Internet Affairs Bureau,” sends out very specific instructions to all large news websites daily, and often multiple times per day. Those instructions do not always mean that related contents are completely banned online, but they instruct websites to highlight or suppress certain type of opinions or information in a very detailed manner.

Chinese journalists and bloggers often refer to those instructions, as well as other type of censorship orders to media and websites, as “Directives from the Ministry of Truth.” The Ministry of Truth (or Minitrue, in Newspeak) is one of the four ministries that govern Oceania in George Orwell’s novel Nineteen Eighty-Four. In the Chinese blogosphere, it is the online nickname for the Central Propaganda Department and generally speaking, all other subordinate propaganda agencies including Internet supervision departments.

Today, it’s been said that news does not break, it tweets. For the officials in the the Ministry of Truth, the news is that their supposedly confidential instructions get tweeted as well.

via chinadigitaltimes.net

How’s Your Chinese Coming Along?

2011-03-20T02:08:00.001-07:00

via mandmx.com

China’s 12th Five-Year-Plan – Will It Help With the Global Trade Imbalance?

2011-03-20T02:03:00.001-07:00

Amongst all the political upheaval in the Middle East and North Africa, with people rising against dictatorial regimes in Tunisia, Egypt, Libya, Yemen and elsewhere, this week China embarked on its annual legislative session. The legislative session of the National People’s Congress, which officially enacts legislation, will rubber-stamp the government’s 12^th Five-Year-Plan (2011-2015), which was decided at the Communist Party meeting in October, 2010.

Details won’t be made public until the conclusion of the legislative session (which usually lasts 10-14 days), but some elements of China’s next five-year economic plan have been made public. The three elements worth highlighting are a lower growth rate and a more balanced/sustainable economic model, meaningful reductions of pollution through better energy conservation, and a more aggressive fight against inflation.

A New Growth Model:

Set a GDP growth target of 7% (down from the current actual GDP growth rate of 10%). To do that, the government will have to divert money away from construction and corporate subsidies, and instead use public funds to increase household incomes.

Cut import tariffs to reduce input-costs, while boosting consumer demand and reducing China’s reliance for growth on exports which generates trade surpluses and contributes to the global trade imbalance.

Improve the income of farmers and migrant workers, who have benefited the least from China’s phenomenal economic growth, by increasing minimum wages. In particular, provinces across China have announced a string of double-digit wage increases this year as part of the government desire to increase incomes among the rural regions and migrant workers in the cities.

Increase spending on health-care and full nationwide social welfare insurance to reduce the need for “precautionary savings” and encourage more Chinese consumer spending.

Raise the minimum threshold for personal income tax. This could exempt hundreds of millions of people from having to pay taxes, and boost household spending.

New Energy Priorities:

Introduce targets for energy efficiency and consumption that will push China’s energy consumption from non-fossil fuel sources to 12% by 2015. Key sectors expected to benefit include: hydro and nuclear power, power grid technology.

In particular, there will be significant growth in nuclear power (from 10 GW to 40 GW), 63 GW of new hydroelectric power, 48 GW of wind capacity and 5 GW of solar power. Unfortunately, coal generation will continue to provide 260 GW, although its share of China’s energy mix is expected to fall from 72% to 63%.

Double the share of natural gas in Chinese energy consumption to 8% by 2015, up from 4% that it was last year. This will make China a natural buyer of large quantities of Russian gas, and an inevitable competitor to Europe, which already relies heavily on gas from Russia.

Introduce taxes of up to $820 (up from just $100) on vehicles with larger than 2 liters (energy inefficient) engines.

Introduce a tax linked to carbon emissions, first via pilot programs in special regions and industries.

Fighting Inflation:

The most important short-term priority for the government is to address increases in food price, which Beijing intends to do through price controls.

In order to control inflation, the government intends to keep using the tools and methods that it has been employing thus far: manage liquidity, use price controls, curb real-estate speculation, and “adjust and improve” property tax policies. Furthermore, the budget for this year shows a 35% increase in spending on low-income housing.

However, no specific lending targets for banks have been outlined by the government yet. New loans topped a 7.5 trillion RMB ($1.1 trillion) ceiling last year and excessive bank lending is considered by some to be a contributing factor to China’s inflation.

Analyst are already predicting that this Five-Year-Plan will be the most significant in China’s modern history, marking the moment that China finally decided to abandon its fast export-led growth strategy in favor for a more sustainable growth model. However, this new effort by China to rebalance its economy in not addressing the root cause of its monetary problem (inflation), and will not facilitate the rebalancing of global trade, which has been so critical to the overall world recovery.

The root cause of China’s inflation is its weak-currency policy, which is feeding an artificially large trade surplus. This policy hurts both China by producing an overheated, inflation-prone economy, and the rest of the world by increasing unemployment in many other countries.

Theoretically, inflation is the market’s way of undoing currency manipulation. According to Paul Krugman, China has been using a weak currency to keep its wages and prices low in dollar terms; market forces have responded by pushing those wages and prices up, eroding that artificial competitive advantage.

China’s leaders are trying to prevent this outcome, to protect exporters’ interest, and because inflation is even more unpopular in China than it is elsewhere. Don’t forget that it was inflation that fueled public discontent with the government, bore the 1989 protests in Tiananmen Square.

China is already hurting its citizens through financial controls. For example, interest rates on bank deposits are limited to just 2.75 percent, which is below the official inflation rate of 4.9%. Rapidly rising prices, even if matched by wage increases, are making the situation much worse for Chinese consumers.

Unfortunately, Beijing is not willing to deal with the root cause and let the RMB rise. Instead, they are trying to control inflation by raising interest rates and restricting credit. This is destructive for China, because credit limits are proving hard to enforce and are being further undermined by inflows of hot money from abroad. With efforts to cool the economy falling short, China has been trying to limit inflation with price controls, which also rarely work.

Furthermore, this is destructive from a global point of view as well: with much of the world economy still depressed, the last thing the world needs is major players pursuing tight-money policies. The solution to China’s monetary problem (and to the global recovery) is to let the currency rise!

But, any rebalancing efforts will face serious opposition from special interests domestically, primarily the State Owned Enterprises and regional and local officials. The SOE’s benefit from lax environmental regulations, cheep energy and government subsidies, and an overall export led growth strategy. On the other hand, local officials are not always willing to change, have old ideas about growth and tend to favor pet projects that need massive investments. Couple that with China’s one-party state that refuses to do anything that looks like giving in to U.S. demands, and you have a recipe for certain continuation of the status-quo.

The focus of the new Five-Year-Plan is promising, but its success is questionable.

via chinatrade.foreignpolicyblogs.com

Very interesting...

Don’t Look For Jasmine Revolution Or Tea In China || YaleGlobal

2011-03-11T14:10:00.001-08:00

Grounded: Chinese security in plain clothes deal with a foreign journalist hoping to cover the ‘Jasmine’ protest

HONG KONG: If you’re looking for good jasmine tea on Baidu, China’s biggest search engine, you may be in for a surprise. As soon as you type in “good jasmine tea,” Baidu flashes a message: “In accordance with relevant laws, regulations and policies, part of the search results are not shown.”

It’s not that the government discourages the tea, but the word “jasmine” has become toxic – even a song about the beautiful jasmine flower sung by Kenyan students along with President Hu Jintao is censored.

All this stems from the “Jasmine Revolution,” which began in Tunisia last December, leaped to Egypt and now spreads across North Africa and the Middle East. Beijing finds the fall of authoritarian governments in distant Africa embarrassing, recalling scenes of student-led protests in Tiananmen Square in 1989, crushed by the Chinese military.

There are attempts to launch “jasmine rallies” in China, although the anonymous online organizers have little to show for their efforts.

Even worse, there are attempts to launch “jasmine rallies” in China itself, although the organizers, who are anonymous and send messages online, have little to show for their efforts after three weeks. This may well be because China is more economically secure than the countries in the Arab world that are experiencing unrest. After all, it has gone through more than 30 years of rapid economic growth in which hundreds of millions of people have been lifted from poverty and people’s lives have improved dramatically.

In fact, a 22-nation Pew Global Attitudes Survey made public last June showed that while most people were unhappy with the direction of their country, China was an exception. “Only in China,” the survey reported, “does an overwhelming portion of the population (87%) express satisfaction with national conditions.”

So, on the face of it at least, China does not seem ripe for a Jasmine Revolution.

Those organizing “jasmine rallies” in China evidently think otherwise. In an open letter published on overseas website Boxun.com, the organizers called on people to gather every Sunday at 2 pm to demand an independent judiciary, a government supervised by the people and an end to corruption.

On February 20, it
was difficult to tell protesters from shoppers since the designated sites in Beijing and Shanghai are busy shopping areas.

On February 20, the first Sunday, it was difficult to tell protesters from ordinary shoppers since the designated sites in Beijing and Shanghai are busy shopping areas, but the police were out in force, overwhelming foreign journalists out to cover the event, or non-event as it turned out to be. Before that day, the police had preempted any protest by rounding up more than 100 activists. Despite no signs of protest outside MacDonald’s on the busy Wangfujing shopping street, designated as the site for a rally in Beijing, police and security agents tried to stop the journalists from reporting.

Since the first protest was pretty much of a fizzle, one might have assumed that the Chinese authorities would relax. But the next Sunday there was an even bigger turnout of police and security agents who declared war on foreign journalists.

In one case, the Wall Street Journal reported, a Bloomberg television journalist was grabbed by five plainclothes officers, “dragged along the ground by his leg, punched in the head and beaten with a broomstick.” BBC footage showed plainclothes men roughing up the reporter and his colleague, throwing them into a van.

The police removed foreign news staff from the Associated Press, the BBC, Voice of American, German state broadcasters ARD and ZDF, and others from the scene.

Police ferocity was in sharp contrast to the behavior of protesters, told by rally organizers to participate by “strolling…or pretending to pass by.”

The New York Times reported that at least half a dozen journalists and photographers were visited in their homes, repeatedly warned not to cause trouble or, as one officer put it, try to “topple the party.”

Reporting rules were tightened. “No reporting” zones were established in Shanghai and Beijing. The Los Angeles Times reported that journalists were privately told that they could be expelled if caught reporting on protests without permission.

These moves constitute a big step backwards from the more moderate regulations for foreign correspondents introduced before the Beijing Olympics in 2008, which are theoretically still in force. The police ferocity was in sharp contrast to the behavior of protesters, told by rally organizers to participate by “strolling, watching or pretending to pass by” without shouting slogans or displaying placards.

The organizers, who remain anonymous, originally stipulated 13 cities for the rallies, which they quickly raised to 27 cities and, on March 6, claimed that their movement had spread to more than 100 cities. Since the only cities with a substantial presence of foreign journalists are Beijing and Shanghai, it’s impossible to verify such claims.

Reacting in such a disproportionate manner to mild forms of civil protest exposes a government that does not enjoy the trust of
its people.

Moreover, because posts are typically immediately deleted on online message boards and forums within China, it’s likely that few people in the country actually know about the call for defiance of the Communist authorities.

On March 6, the third Sunday, Beijing was quiet. But uniformed and plainclothes policemen were out in force in Wangfujing, Xidan and other crowded commercial areas.

Mobile phone service was shut down in parts of the city during the three Sundays.

The Chinese leadership evidently feels confronted with a dilemma: If they allow “strolling” to take place unhindered, then such gatherings will likely expand over time. If they clamp down hard, they may be seen as an illegitimate government able to stay in power only through force.

Clearly, China decided to crack down hard early so that a feeble movement does not gain strength.

In fact, budget figures disclosed on Saturday during the annual session of the National People’s Congress showed a sharp increase in funding for domestic security. For the first time, such expenditures exceed the amount spent on national defense.

Total budgeted spending for police, state security, armed civil militia, courts and jails amounted to 624 billion yuan, or US$95 billion, compared to 601.1 billion yuan, or $91.5 billion, for defense. Apparently, the government sees the domestic threat as being graver than any external threat despite the findings of the Pew Survey.

In fact, the government admits that people are unhappy. The China Daily, the official English-language daily, reported last week that a survey conducted by Gallup World Poll ranked China 125^th among 155 countries when measuring people’s overall satisfaction with their lives. The newspaper pointed out that “only 6 percent of Chinese people see themselves as happy” even though 36 percent of respondents said their lives had improved during the past five years.

Moreover, according to the government’s own statistics, unrest is widespread with the number of “mass incidents” rising in recent years and may now exceed 100,000 a year.

By all accounts, most people still have confidence in the central government, with which they rarely come into contact. But many have little confidence in officials at the local level, the people who seize their land, evict them from their homes to make deals with land developers and lock them up if they lodge petitions.

The way to respond to public dissatisfaction is to deal with legitimate grievances. Reacting in such a disproportionate manner to what’s at most a mild form of civil protest exposes a government that does not enjoy the trust of its people. And browbeating – actually beating – foreign reporters will result in that message being magnified rather than muffled.

Political stability maintained through coercive means may well result in political instability. China’s leaders should recall the saying of their founding father, Mao Zedong, “Where there is oppression there is resistance.”

via yaleglobal.yale.edu

China's economy: Bamboo capitalism || The Economist

2011-03-10T14:38:00.001-08:00

FEW would deny that China has been the economic superstar of recent years. Thanks to its relentless double-digit annual growth, it has become the world’s second-largest economy and in many ways the most dynamic. Less obvious is quite what the secret of this success has been. It is often vaguely attributed to “capitalism with Chinese characteristics”–typically taken to mean that bureaucrats with heavy, visible hands have worked much of the magic. That, naturally, is a view that China’s government is happy to encourage.

But is it true? Of course, the state’s activity has been vast and important. It has been effective in eradicating physical and technological obstacles: physical, through the construction of roads, power plants and bridges; technical, by facilitating (through means fair and foul) the transfer of foreign intellectual property. Yet China’s vigour owes much to what has been happening from the bottom up as well as from the top down. Just as Germany has its mighty Mittelstand, the backbone of its economy, so China has a multitude of vigorous, (very) private entrepreneurs: a fast-growing thicket of bamboo capitalism.

These entrepreneurs often operate outside not only the powerful state-controlled companies, but outside the country’s laws. As a result, their significance cannot be well tracked by the state-generated statistics that serve as a flawed window into China’s economy. But as our briefing shows, they are an astonishing force.

Related items
Entrepreneurship in China: Let a million flowers bloomMar 10th 2011
Related topics
China

The Mittel Kingdom

First, there is the scale of their activities. Three decades ago, pretty much all business in China was controlled by one level of the state or another. Now one estimate—and it can only be a stab—puts the share of GDP produced by enterprises that are not majority-owned by the state at 70%. Zheng Yumin, the Communist Party secretary for the commerce department of Zhejiang province, told a conference last year that more than 90% of China’s 43m companies were private. The heartland for entrepreneurial clusters is in regions, like Zhejiang, that have been relatively ignored by Beijing’s bureaucrats, but such businesses have now spread far and wide across the country.

Second, there is their dynamism. Qiao Liu and Alan Siu of the University of Hong Kong calculate that the average return on equity of unlisted private firms is fully ten percentage points higher than the modest 4% achieved by wholly or partly state-owned enterprises. The number of registered private businesses grew at an average of 30% a year in 2000-09. Factories that spring up alongside new roads and railways operate round-the-clock to make whatever nuts and bolts are needed anywhere in the world. The people behind these businesses endlessly adjust what and how they produce in response to extraordinary (often local) competition and fluctuations in demand. Provincial politicians, whose career prospects are tied to growth, often let these outfits operate free not only of direct state management but also from many of the laws tied to land ownership, labour relations, taxation and licensing. Bamboo capitalism lives in a laissez-faire bubble.

But this points to a third, more worrying, characteristic of such businesses: their vulnerability. Chinese regulation of its private sector is often referred to as “one eye open, one eye shut”. It is a wonderfully flexible system, but without a consistent rule of law, companies are prey to the predilections of bureaucrats. A crackdown could come at any time. It is also hard for them to mature into more permanent structures.

Cultivate it, don’t cut it

All this has big implications for China itself and for the wider world. The legal limbo creates ample scope for abuse: limited regard for labour laws, for example, encourages exploitation of workers. Rampant free enterprise also lives uncomfortably alongside the country’s official ideology. So far, China has managed this rather well. But over time, the contradictions between anarchic opportunism and state direction, both vital to China’s rise, will surely result in greater friction. Party conservatives will be tempted to hack away at bamboo capitalism.

It would be much better if they tried instead to provide the entrepreneurs with a proper legal framework. Many entrepreneurs understandably fear such scrutiny: they hate standing out, lest their operations become the focus of an investigation. But without a solid legal basis (including intellectual-property laws), it is very hard to create great enterprises and brands.

The legal uncertainty pushes capital-raising into the shadows, too. The result is a fantastically supple system of financing, but a very costly one. Collateral is suspect and the state-controlled financial system does not reward loan officers for assuming the risks that come with non-state-controlled companies. Instead, money often comes from unofficial sources, at great cost. The so-called Wenzhou rate (after the most famous city for this sort of finance) is said to begin at 18% and can even exceed 200%. A loan rarely extends beyond two years. Outsiders often marvel at the long-term planning tied to China’s economy, but many of its most dynamic manufacturers are limited to sowing and reaping within an agricultural season.

So bamboo capitalism will have to change. But it is changing China. Competition from private companies has driven up wages and benefits more than any new law—helping to create the consumers China (and its firms) need. And behind numerous new businesses created on a shoestring are former factory employees who have seen the rewards that come from running an assembly line rather than merely working on one. In all these respects the private sector plays a vital role in raising living standards—and moving the Chinese economy towards consumption at home rather than just exports abroad.

The West should be grateful for that. And it should also celebrate bamboo capitalism more broadly. Too many people—not just third-world dictators but Western business tycoons—have fallen for the Beijing consensus, the idea that state-directed capitalism and tight political control are the elixir of growth. In fact China has surged forward mainly where the state has stood back. “Capitalism with Chinese characteristics” works because of the capitalism, not the characteristics.

via economist.com

Cleverly written piece by an obviously bright Sinophile - 'Bamboo Capitalism' - finally a much preferred alternative to the often easily misread moniker 'Red Capitalism'! I love the term Mittel Kingdom too!

The Chinese entrepreneur is a misunderstood and underestimated factor in the emerging global economy and they must be engaged aggressively by their western counterparts to create global ventures. America will remain the epicenter of innovation and entrepreneurship for many decades because American culture glorifies the entrepreneur and encourages risk to a degree that may never be possible in a place as communally oriented as China. However, only the entrepreneur can create a sustainable economic growth story in the Mittel Kingdom, because the state by its very nature undermines the true entrepreneurship, this is true even in the US.

There's A 60% Chance Of A Chinese Banking Crisis By 2013 - Fitch Ratings

2011-03-08T02:43:00.001-08:00

China's financial system have been classified as MPI3 since last June. That means there's a 60% chance of a banking crisis by mid-2013, according to comments today from Fitch Ratings senior director Richard Fox to Bloomberg.

Historically an MPI3 classification suggests that crisis will occur within three years, as it did in Ireland and Iceland.

China's vulnerability is related to out of control real estate lending. Fox tells Bloomberg:

Fitch sees the risk of “holes in bank balance sheets” should a property bubble burst...

Chinese banks fueled record property-price gains by extending a record 17.5 trillion yuan ($2.7 trillion) of loans over 2009 and 2010 under the stimulus program that propelled the nation through the financial crisis. Regulators’ efforts to contain the risks for lenders have included stress tests for declines in house prices and a crackdown on lending to local- government financing vehicles.

Don't Miss: Amazing Satellite Pictures Of Chinese Ghost Cities

via feedproxy.google.com

Swimsuit contest to enter college || Danwei.org

2011-03-05T23:12:00.001-08:00

Chutian Jinbao,

Today the front page of Hubei newspaper Chutian Jinbao is a hodgepodge of news, a wonderful snapshot of contemporary China:

10,000 officials to go to 10,000 villages and 10,000 homes
The top headline describes a new program of the Hubei provincial government: officials plan to visit rural and urban households to check on the people's situation and listen to their concerns.

This seems to be part of a nationwide move for the government to be or seem to be more responsive to citizen concerns (see also Wen Jiabao's chat with netizens). While such efforts are not new, there does seem to be an increase in media reports about such citizen outreach programs, possibly connected to the protests in the Middle East and the so far unheeded calls for similar demonstrations in China.

Bikini beauty contest to enter college
The large photo is captioned: "Performance major competition:  Yesterday, there was a lively atmosphere at the entrance tests for modeling and design majors at the Hubei Institute of Fine Arts…

… More than 400 middle school students from across the nation took part in the competition for 24 places."

Bikini beauty competitions seem to be catching on as a form of entrance examination: this gallery of photos of a similar college course entrance competition in Qingdao has been circulating widely on the Internet since it was published a few weeks ago.

March 15, Consumer Day
The smaller pink headline announces that Chutian Jinbao's Consumer Day activity is starting. March 15 is a date that large companies that sell consumer products in China have grown to hate: newspapers and TV programs use the date to organize investigations into companies suspected of harming consumers.

Although there is plenty of legitimate consumer activism, some media have the reputation of using threats of negative Consumer Day coverage to extort advertising fees from companies.

Links and Sources

Chutian Jinbao (Chinese):10,000 officials to go to 10,000 villages and 10,000 homes, Performance major competition, March 15 Consumer Day Chutian Jinbao activity starts

via danwei.org

We should have these types of contests in the US.

FT.com || FT Magazine - Who will be China’s next leaders?

2011-03-05T11:04:00.001-08:00

Vice-premier Li Keqiang (second from left) and vice-president Xi Jinping (second from right) on their accession to the Politburo Standing Committee in 2007, a key step in their rise to the top. Other members include current premier Wen Jiabao and current president Hu Jintao (fourth and fifth from left respectively)
The streets at the centre of Beijing are eerily quiet over the week-long Chinese New Year holiday, which fell in early February this year, but outside one old house a few blocks from the Forbidden City, a steady stream of cars pulled up.
The holiday is a time to pay respects to family elders and mentors. I know people in their forties and fifties who still visit their -favourite school teacher over the break and among the upper -echelons of the Chinese Communist party, respected older comrades are given their due. The flurry of activity was outside the family home of Hu Yaobang, the former leader of the Chinese -Communist party who died in 1989. Among the dutiful visitors were Xi Jinping, the man slated to be the next president of China, and Li Keqiang, the likely next premier.
EDITOR’S CHOICE
You look beautiful to me - Mar-04
Helen Mirren talks to Simon Schama - Feb-25
Aerotropolis - Feb-25
Brotherhood - Feb-25
Can we have our ball back? - Feb-18
Magic’s moment - Feb-11
Calling on the widow of a former leader might seem run-of-the-mill, but Hu Yaobang is far from a run-of-the-mill figure in Communist party history. During the 1980s, the party split over whether its economic reforms should be combined with political opening. After pushing a liberal line, Hu was dramatically ousted from office in 1987 by more conservative members of the leadership. It was news of his death in April 1989, by then a broken man, that sparked the Tiananmen Square protests. In official celebrations of the party’s history, his name is never mentioned. Along with Zhao Ziyang, the leader who succeeded him and who was then purged after Tiananmen, Hu was China’s Gorbachev.
Next year, China will start a leadership transition, which will give the country a new president in place of Hu Jintao, who is also the head of the party and the military, and a new premier to replace Wen Jiabao, who runs the day-to-day business of the government. In 2007, a key party meeting in effect chose the next leadership team, when Xi -Jinping (pronounced Shee Jin-ping) and Li Keqiang (pronounced Lee Ke-chiang) were both promoted to the country’s top body, the nine-man Politburo Standing Committee. Xi, now aged 57, became vice--president and 55-year-old Li one of four vice-premiers (the most senior, with responsibility for the economy, climate change, health and the environment), giving both five years to play understudy to their bosses.
Tiananmen Square, 1989: shrine to reformer Hu Yaobang, whose death sparked the protests
The names of the next leaders may already be pencilled in, but the easiest way for them to sabotage their promotion would be to start discussing bold ideas now. Instead, they have to spend five years in a form of political purdah, going out of their way to avoid controversial topics. As a result, little is known of their views about many of the big issues that China faces – how to keep the economic boom going, how to manage ties with the US and, perhaps most important of all, whether the Communist party should maintain its iron grip on the country’s political system. Politics in China is often expressed through coded gestures, rather than bold statements, which makes their visits to the family home of Hu Yaobang so symbolic. Were China’s next leaders behaving as dutiful party members, paying respect to a senior comrade in a system that values displays of loyalty, or are they secret liberal sympathisers who are waiting for the right moment to restart the debate about political reform that died in Tiananmen?
There is always an element of wishful thinking to such discussions. For the past two decades, -western observers and governments have projected these questions on to leadership changes, in the hope of finding the new Chinese Gorbachev figure, one who has yet to appear. Yet this is not just a change in leadership but a shift in generations. The stolid engineers who dominate senior positions in China today will be replaced by a group who -studied law, economics and, in a few cases, journalism, and who came of age during the 1980s, a time when China was assailed by western ideas and influences after the intellectual deep freeze of the Mao years. It will be a new era.
. . .
Xi Jinping Age: 57, current position: vice-president
At 6ft 1in and barrel-chested, Xi towers over most of his fellow Chinese. He has an avuncular manner and is good at the sort of glad-handing that is important for political networking, the Communist party version of a good bloke. Among senior party members this makes him more personally popular than Hu Jintao, a dour figure who has cultivated an almost anti-cult of personality. “He is comfortable in his own skin,” as one western politician who has spent a lot of time with him puts it.
A self-confessed fan of American movies with a daughter enrolled at Harvard, Xi is married to a popular folk singer, which will bring a touch of glamour to the post. Peng Liyuan, who also holds the rank of major-general in the army’s song and dance troupe, used to be a regular on the huge television spectacle that airs every year on the eve of the New Year holiday. Her most famous song, “Mount Everest”, has lines such as: “You are warming the Motherland with fresh breezes.”
Ever since he was a young official in the provinces in the mid-1980s, when he created a theme park based on the Chinese fable, Journey to the West, Xi has energetically supported reforms to open up the economy. But it is his family history that brings Xi to the house of Hu Yaobang every year – a -history that raises a lot of questions about his real political beliefs. Xi is one of the nearest things there is to aristocracy in China. His father, Xi Zhongxun, was a communist guerrilla leader in the 1930s and played an important role in the later stages of the Long March, the central event in the civil war. In the 1950s he became a powerful figure in Mao’s China as the youngest vice-premier.
Yet the Xi family soon confronted the worst aspects of Mao’s capriciousness. Xi’s father was purged in the early 1960s, the victim of one of the endless power struggles, and suffered even more during the Cultural Revolution, which started later in the decade, when he was tortured and imprisoned. Xi Jinping was sent at the age of 15 to work as a farmer in a village in the north of the country and remained there for six years, according to his official biography.
When Deng Xiaoping took control after the death of Mao, Xi Zhongxun was rehabilitated, along with tens of thousands of other comrades. (The official who organised the rehabilitation drive was Hu Yaobang, then the head of the party’s organisation department.) From there, Xi became one of the key members of the pro-reform faction during the fierce political debates of the 1980s. As party secretary in Guangdong province in the south, he was one of the fathers of the special economic zone in Shenzhen, the city near Hong Kong that became the symbol of China’s economic take-off. He sided with Hu Yaobang when the leader was forced out in 1987, and after he publicly opposed the military crackdown in Tiananmen Square in 1989, he was pushed into semi-retirement.
“The tantalising thing about Xi Jinping is that here is a guy who really suffered during the Cultural Revolution, much more than most, and whose father actually condemned the killings in Tiananmen,” says a professor at a university in Beijing who knows the family. “That, to say the least, is an interesting biography.”
Li Datong, a liberal journalist, says there may have been other indications of possible liberal sympathies. On the death in 2005 of Zhao Ziyang, the pro-reform leader purged after Tiananmen and who spent the rest of his life under house arrest, the Xi family sent a wreath to the funeral. “That could be a hint that Xi has some respect for Zhao,” says Li. “But we cannot be sure. There are no documents connecting him to Hu Yaobang or Zhao Ziyang, no substantial evidence of a political inheritance. In this system, everyone is acting, everyone is fake, so we cannot really tell.”
China’s likely next president is the son of Xi Zhongxun, a key member of the pro-reform faction of the 1980s
Indeed, there is also another reading of Xi’s climb up the ranks that marks him as a very conservative figure, a careerist who has hugged close to the party’s orthodoxies. In the words of a vividly written US diplomatic cable released by WikiLeaks and based on conversations with a close family friend, Xi decided at an early age to get on by “becoming redder than red”. As the cable points out, Xi actually joined the Communist party while his father was still in prison for falling foul of Mao.
Again, it is his background that holds the key. In the 1950s China of Xi’s birth Mao was trying to forge a classless society, but in the Beijing compounds where the families of senior officials lived, there was a highly stratified sense of status – the schools you went to, the shops you could visit and the car your family drove all depended on your exact -position in the bureaucratic hierarchy.
It is an environment that appears to have inculcated in Xi a sense of being a member of a narrow elite whose duty and right it is to rule the country. After the trauma of the Cultural Revolution when, as the WikiLeaks cable describes, many of his peers found relief in drink, sex and debates about the west, Xi started plotting a path to the top of the political system. Using his father’s contacts, he became the mishu, or personal assistant, to defence minister Geng Biao and wore army uniform to the office every day. Sensing that resentment of his connections might block his career if he stayed in Beijing, he took the unusual step of opting to work in the provinces, starting first as an official in a rural backwater in central China, and ending up as the party boss of the booming east coast province of Zhejiang and then briefly in Shanghai, before being promoted to his current post.
The ambition was evident from an early date. Before he married Peng Liyuan in 1987, Xi was first married to Ke Xiaoming, the daughter of China’s ambassador to the UK in the late 1970s. According to two people who know the family, their often difficult relationship came to a head when she insisted on moving to London to study. Xi is said to have replied that one day he wanted to be a member of the Politburo Standing Committee and that meant there was no way he could live in the west.
One of his university degrees is in Marxist -theories and he is still comfortable spouting the sort of ideological platitudes that remain at the heart of the party’s liturgy, but which are now alien to most Chinese. An article he published last autumn in Qiushi, the party’s main theoretical journal, was entitled: “Study the Theoretical System of Socialism with Chinese Characteristics and Master the Marxist Stand, Viewpoint and Method”.
As his succession approaches, he appears to be trying to consolidate support among the old party families and in the military – elements of the system most attached to the status quo. In the past, talk of a “princeling faction” among the children of revolutionary leaders was often exaggerated because it ignored the intense rivalries within this group. In the early 2000s, Xi’s rise was temporarily stymied by Bo Yibo, another revolutionary hero close to Deng who wanted to push the claims of his own son, Bo Xilai, now the party boss of the central Chinese city of Chongqing. But with his position now stronger, Xi has been laying to rest some of these rivalries and building a base among the princelings. At the end of last year, he visited Chongqing and offered strong support for Bo’s controversial campaign against corruption, which has won him broad popular support but appalled liberals after he had the lawyer of an alleged gangster imprisoned. Bo has also encouraged the public singing of revolutionary songs and has sent out millions of “red” text messages with Maoist slogans – a nostalgic appeal to an era many Chinese see as less corrupt. Xi applauded the propaganda drive, saying that “these activities have gone deeply into the hearts of the people and are worthy of praise”.
During his stints as an official in the provinces, Xi made a point of remaining close to senior officers and over the past few years he has been strengthening his contacts in the military. His wife is also very popular with rank-and-file soldiers, which enhances his prestige. How these close ties will impact on his leadership, however, is harder to judge. Over the past year, there has been an increase in hard-line rhetoric from sections of the military, which appears to have influenced the tougher foreign policy positions China has taken. Some analysts believe this reflects the fact that President Hu, who had little military experience before taking office, is less able than his predecessors to rein in the military. With his good personal contacts, Xi might find it easier to impose his authority on the armed forces, yet the same background could also make him more willing to channel their nationalist instincts. In one of his few unguarded moments since 2007, he ranted at a dinner in Mexico City that “there are a few foreigners, with full bellies, who have nothing better to do than try to point fingers at our country”.
. . .
Li Keqiang Age: 55, current position: vice-premier
Beijingers like political gossip as much as residents of the next capital city, yet little is known about the private lives of China’s leaders. They are literally walled off from the rest of society, operating from the large Zhongnanhai compound just west of the Forbidden City, which accommodates both government and party offices. Mao Zedong lived inside the compound in rooms next to the swimming pool and it boasts several modest flats and houses, although these days the leaders are believed to actually live elsewhere in the city, in part because of the security risk of having them all in one place. Although Wen Jiabao has gone out of his way to craft a particular political persona, the family life of the leaders is off-limits – there are no photos of Michelle-and-Barack-style date nights around town. Given the considerable fortunes that the family members of some leaders have amassed, this is more than just a tactic to maintain a little bit of mystery.
The distance that the leaders keep means that there is little concrete information about how Xi Jinping and Li Keqiang get on. But what can be said is that, within the range of the sort of people who prosper in the Communist party, it would be hard to find two men less alike in background or personality. For Li Keqiang, the speculation about his political views is rooted in his university years. The son of a low-level official from the poor, rural province of Anhui, he was also sent to work – for four years – as a farmer during the Cultural Revolution. During that time, China’s universities only admitted those with a suitable proletarian class background, but in 1977, the competitive entrance exam was restored. A total of 11.6 million people applied. Li was one of 401,000 to win a place, making him a member of the famous “Class of 1982”.
When he arrived at the law department at Peking University, the country’s most prestigious and -liberal university, the campus was becoming a hotbed of discussion about long-banned western political ideas, China’s equivalent of -glasnost. Li studied under Gong Xiangrui, a professor who had studied in the UK and who gave a popular class on constitutional democracy. Along with several other students, he helped to translate The Due Process of Law by Lord Denning, the -campaigning British jurist known as “the people’s judge”.
In this heady intellectual atmosphere, he was an active participant in the many debates with fellow classmates, some of whom became leading figures in political dissident circles. They included Wang Juntao, who was jailed for five years for his role as one of the “black hands” in the Tiananmen Square protests and now lives in exile in the US, and Yuan Zhiming, one of the main writers of the 1988 television series River Elegy, a polemical attack on the ills of Chinese civilisation, which was a big influence on the 1989 protests.
Despite strong opposition from conservative elements in the party, the Peking University campus started to experiment with elections for posts in the different student bodies. According to Cheng Li, an expert on Chinese leadership politics at the Brookings Institution, Li was heavily involved in the democracy experiments, winning election as head of the student assembly. In an article written a few years ago, Wang Juntao recalled Li’s support for the student elections and a later meeting with him during the 1989 protests. Li had lost some of his independence, he said, but “was still active and open-minded”. Wang concluded: “He said he still valued the spirit of people from our university, and if he one day became a leader, he would welcome criticisms from all his classmates.”
The perception of liberal sympathies held back Li’s career for a number of years, but he soon began to show a rare talent for moving up the system’s rigid hierarchy. He managed to win a position in the bureaucracy of the Communist Youth League of China, which has also been the power-base of Hu Jintao. As well as becoming one of Hu Jintao’s protégés, he used an interest in tennis to curry favour with other influential party elders.
Yet although he is widely praised for his sharp intellect, even temper and ability to turn potential enemies into allies, Li has not yet managed to inspire widespread confidence, either within or outside the party. Some of this is rooted in a feeling that he suffers from bad luck – a slight that is surprisingly important among superstitious -Chinese. During his time as governor of Henan province, there was a series of huge fires, including one at a shopping mall in Luoyang which killed 309 people. Shortly after moving to be party secretary of Liaoning province in the north-east, 214 miners died following a massive explosion.
He has also not managed to shake off the more substantial charge that he is a passive leader, who reacts to events rather than getting ahead of them. Li moved to Henan just as the first reports began to appear about a major outbreak of HIV/Aids, which was caused by unhygienic blood-collection practices. The government response was hugely inadequate, trying at first to block news about the epidemic and providing minimal support to victims. The result was a series of mass protests and there were even reports from Henan of Aids victims threatening to infect passers-by with needles. According to China’s New Rulers, a 2003 book allegedly drawing on leaked party personnel evaluations, “many senior leaders in Beijing blamed this desperate behaviour on the ineffectiveness of Li Keqiang”.
Indeed, this sense of indecisiveness has been the reason for some of the behind-the-scenes pressure in Beijing for Wang Qishan, the vice-premier in charge of financial issues, to get the premiership in 2013, instead of Li. However, the campaign in favour of Wang seems to have lost support, especially after Li’s successful trip to Europe in January. (If the contest between the two were decided by nicknames alone, Li would lose out. In Henan province, he became known as “Three Fires Li” after the string of disasters, while Wang’s capacity for handling major problems, such as the 2003 Sars outbreak, has led insiders to call him “The Firefighter”.)
The same negative impressions inform the scepticism of many in the reform camp about whether Li and the other new leaders will seek to push bolder ideas about politics. “We are not expecting much from this next generation of leaders,” says Ai Weiwei, the artist and persistent government critic. “Maybe the generation after. After another decade, they will be more open in their ideas.”
Shanghai, a city transformed in a generation by China’s economic reforms
Even if Xi and Li do have big plans of their own, they will be heavily constrained by the system they are taking over. The orderly leadership succession process that is bringing them to power is part of a drive initiated by Deng Xiaoping to create a more predictable political structure that could never again produce the quixotic, centralised control that Mao exercised. In its place is a collective leadership with the Politburo Standing Committee as the main focus. That means there is much less chance of China suddenly shifting direction, but it has also meant a system less able to take hard decisions, more cautious and interested in defending the status quo.
As it happens, when Hu Jintao and Wen Jiabao were assuming power nearly a decade ago, there was also widespread speculation that they were closet political reformers. Indeed, one of the clues insiders pointed to at the time was their own strong links to Hu Yaobang, who was a mentor to Hu Jintao (no relation), while Wen was one of his senior aides. Both men also visit Hu Yaobang’s widow every year over the New Year holiday.
During the Hu-Wen years, there has been a series of attempts to kickstart a discussion about political reform that has gone nowhere. A 2005 white paper on the Chinese political system concluded that democracy is “the common desire of people all over the world”. Last year, Wen published an article in the People’s Daily extolling Hu Yaobang, which many observers took as a coded appeal for political reform. In the article, Wen recalled a trip he made with Hu in 1986 to a rural area of the poor south-west province of Guizhou. “Every time I think back on this, Comrade Yaobang’s sincere, magnanimous and amiable expression keeps appearing before my eyes. Cherished feelings stored in my heart for all these years swell up like a tide, and it takes a long time for me to calm down,” Wen wrote. He followed this up with a series of speeches and interviews about the importance of “universal values” and on the need for the political system to keep up with the changes in the economy. Yet the initiatives have had little impact. Indeed, some of Wen’s comments about political reform received only cursory coverage in the state media, which is controlled by another official on the Politburo Standing Committee.
Xi and Li will have to navigate the same thicket of vested interests. One western diplomat, who has observed Chinese leaders close-up since Deng Xiaoping in the 1980s, describes how each generation has been better prepared and educated when it took office, but less able to actually exercise real power. Short-term problems are approached with ever-greater professionalism, he argues, but the bigger questions are left for another day. “It is a dictatorship without a dictator,” he says.
Geoff Dyer is the FT’s Beijing bureau chief
To comment on this article, please e-mail magazineletters@ft.com
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A hard act to follow
Wen Jiabao
Within hours of the massive earthquake in Sichuan in May 2008, current premier Wen Jiabao was on a plane to the disaster site. For the next few days, he was constantly filmed tramping around collapsed buildings in an old pair of training shoes. “This is Grandpa Wen here,” he called down to one child trapped in the rubble.
Among political and business circles, Wen has plenty of critics who see him as unwilling to take tough decisions. But among the public he is by far the most popular of the senior leaders, the result of a flair for public relations that many western politicians would envy. The son of rural teachers, he always manages to spend some time over the New Year break in poor, rural areas, cameras on hand. It is a new style of politics for China, which some fear could become a form of rabble-rousing populism. But Wen’s ability to stand out from a pack of leaders, who would all be called grey were it not for their immaculately dyed hair, makes him a hard act to follow.
..................................................
WikiLeaks on the leaders-in-waiting
Xi Jinping:
● According to a long cable based on extensive conversations with a childhood friend, after the Cultural Revolution Xi “chose to survive by becoming redder than red”. Through his father, he had a sense of entitlement as one of “the legitimate heirs” of the revolution and was a member of a generation of princelings who “deserve to rule China”.
● He has a sister who lives in Canada and a brother who at one stage lived in Hong Kong.
● In his early career he “was quite taken with Buddhist mysticism” and fascinated with “Buddhist martial arts, qigong and other mystical powers said to aid health”.
Li Keqiang:
● When he was party secretary of a north-east province, he confessed to the US ambassador that he did not believe official figures for GDP. They were “for reference only”.
● Lee Kuan Yew, Singapore’s founding father, told a US official in 2009 that Li might lose out on the premiership to Wang Qishan, also currently a vice-premier, whom he described as “an exceptional talent”.

via ft.com

Fascinating portrait of China's next generation of party leaders. Xi Jinping appears to be a much more formidable leader than his predecessor Hu Jintao, but Wen Jiabao will be a very tough act to follow and Li Keqiang has an uphill battle to wage to fill "Grandpa Wen's" shoes.

Zheng He's ship compared to Christopher Columbus's - WOW!!

2011-03-04T19:59:00.001-08:00

via en.wikipedia.org

I was blown away by this image, comparing the ships of the Chinese Navy under Zheng He to those captained by Christopher Columbus. And to think they were built nearly 100 years before Columbus sailed the Atlantic to the New World -- absolutely amazing!!

Martin Jacques on the rise of China and the civilization state || TED.com

2011-03-04T19:34:00.001-08:00

What the renminbi means for US inflation | vox - Research-based policy analysis and commentary from leading economists

2011-02-26T09:13:00.001-08:00

What the renminbi means for American inflation

Raphael Auer
21 February 2011

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This column says that low US inflation over the last 15 years is partly attributable to cheap Chinese imports. It argues that if the US trade deficit is reduced – via either Chinese inflation or a nominal appreciation of the renminbi – this disinflationary effect will be reduced. It says that the resulting inflationary impulse could be severe.

China’s recent inflation is turning heads (Raede and Volz 2011, Cavallo and Díaz 2011). At first thought, the recent rise of inflation in China seems to be reassuring news for US policymakers concerned with the trade deficit. On the one hand, price increases in China make US firms more competitive, and on the other, high inflation may also goad China into letting the renminbi appreciate at an accelerated pace to lower the cost of imported goods. Thoughts along these lines have lead treasury secretary Timothy Geithner to note that current economic developments “will bring about the necessary adjustment in exchange rates” without any need for further intervention by policymakers.

What has not entered this policy discussion, however, is that the trade deficit with China arose for a reason, namely that Chinese goods are dirt cheap. In fact, the increasing importance of cheap imports was a major contributing factor to the low-inflation environment of the last decade (see on this site Auer and Fischer 2008).

If the US trade deficit is reduced via either Chinese inflation or a nominal appreciation of the renminbi, the disinflationary effect of cheap Chinese imports will be reversed. Given that nearly a sixth of all US consumption of manufactured goods is actually made in China, any real appreciation would have a substantial direct impact on inflation due to the weight of Chinese goods in America's inflation indexes. In a recent study (Auer 2011), I document that such an appreciation might also substantially alter the competitive environment on many US markets and consequently lead to widespread inflationary dynamics.

The study examines the 2005 to 2008 period when the Chinese government let the renminbi appreciate by a combined 17% against the dollar. Matching this appreciation with sectoral US price data, it documents how a higher renminbi translates into higher import prices and, in turn, how this affects the prices that domestic firms charge. Overall, the results suggest that in the covered sectors, a 1% appreciation of the renminbi causes American producer prices to increase by a little over half a percentage point.

Figure 1. A 25% renminbi appreciation and US producer price inflation

Figure 1 uses these findings to simulate the effect of a renminbi appreciation on producer price inflation. In both scenarios the yuan appreciates by 25%, with the appreciation being spread over either 10 or 25 months. For example, these simulations suggests that a 25% appreciation spread over 10 months is equivalent to a temporary 5 percentage points (!) shock on US producer prices.

Inflation in China will have enormous consequences for the course of US inflation. The key question is, of course, what can one do about it? Many argue not much – a real appreciation in China will sooner or later feed into American inflation, in one of two ways:

First, it can be achieved via a controlled nominal appreciation of the renminbi.

Second, in the absence of such an appreciation it will come via inflation in China, since – as Paul Krugman bluntly puts it – inflation is merely “the market’s way of undoing currency manipulation”.

However, this does not imply that there are no policy options. While the spillover of Chinese inflation into US prices is unavoidable, its timing can be controlled via the timing of the appreciation. US inflation is still low at the current juncture; the core CPI gained a muted 0.8% during 2010 and the ample excess capacity (recently estimated to equal 4%-5% of GDP by Morgan Stanley) suggests that there is no imminent danger of high inflation during 2011.

The inflationary outlook might be very different a year or two down the road. Energy commodities rose by 7.5% in December 2010 alone and across the globe, investors are preparing for a long-lasting commodity rally. These commodity price hikes are likely to affect producer prices and consumer inflation within a couple of years. Although a fully-fledged recovery of the housing market is not foreseeable, it is still highly likely that prices for shelter will increase at a much higher rate in 2013 than the 0.4% increase observed during 2010. What if we add to this upside inflation risk a marked real appreciation of the renminbi, for example taking place during mid 2012?

Given that inflation is still low, but surely on the rise, isn’t now the optimal time for the renminbi to appreciate? A swift appreciation of China's currency on the order of magnitude of 5%-10% followed by a return to the current slow appreciation policy might just be what is needed to contain inflation on both sides of the Pacific. Such a policy would increase short-term inflationary pressure in the US, but not beyond acceptable levels. Since this policy would ease inflationary pressure at home, without disrupting the Chinese export sector, the Chinese government, as well, should be more willing than ever to support such a revaluation.

Author's note: The views expressed in this column are those of the author and do not necessarily reflect those of the Swiss National Bank.

A shorter version of this column was published on 3 February 2011 on the Free Exchange Blog.

References

Auer, RA (2011), “Exchange Rate Pass-Through, Domestic Competition and Inflation: Evidence from the 2005/08 Revaluation of the Renminbi”, Working Paper 68, Globalisation of Monetary Policy Institute, Federal Reserve Bank of Dallas.
Auer, RA and AM Fischer (2008), “The impact of low-income economies on US inflation”, VoxEU.org, 13 June.
Auer, RA (2010a), "The effect of low-wage import competition on US inflationary pressure", Journal of Monetary Economics, 57(4):491-503.
Auer, RA (2010b), “Globalisation and Inflation in Europe”, VoxEU.org, 13 June.
Auer, RA, K Degen, and AM Fischer (2010), “Globalisation and inflation in Europe", CEPR Discussion Paper 6451.
Cavallo, Domingo and Fernando Díaz (2011), “China’s dilemma:Higher inflation or deflation of exportables”, VoxEU.org, 17 February.
Reade, J James and Ulrich Volz (2011), “Chinese inflation, monetary policy and the dollar peg”, VoxEU.org, 17 February.

via voxeu.org

Quick Notes from Beijing - James Fallows | The Atlantic

2011-02-23T04:18:00.001-08:00

By James Fallows
Thanks very much to the latest guest team for their ongoing dispatches. Herewith, on a sanity break from other duties, some quick notes on what I first notice compared with my latest stint here last summer:
1) Pollution in Beijing itself has been as bad as the very worst I remember from the olden era. The view below (11am China time, Feb 23) has been more or less unvarying for the past four days. PM2.5 readings ^[1] through that period have been steadily ^[2] in the "hazardous" or "beyond index" category. I don't recall a stretch this bad, this long, before. Offered less as complaint than as reality check.
2) Prices are higher for everything, especially food. By Western standards they are of course very low. But by Western standards people's incomes are also very low. I see why there is so much talk about the disruptive effects of inflation. (Letting the RMB go up faster would help, but that's a topic for some other time.)
3) Internet blockages and social media interference seem worse than I remember experiencing between 2006 and 2009, except in the tensest Tibet-riot periods. Even VPNs ^[3] sometimes don't work or are slow -- especially this past weekend when no one knew how serious the "Jasmine" demonstrations would become. To illustrate the difference this can make even if you're willing to shell out (as most Chinese citizens wouldn't be ^[4]) $60 a year for a VPN to get around Great Firewall restrictions, here is a download screen showing progress on a file I was trying to save, from a server in the US:
If you can't read the small print, it's estimating 1 hour and 31 minutes to finish downloading a 34MB file. As it happened, shortly thereafter the connection improved and the file eventually loaded in "only" about eight minutes. But extrapolate that as an efficiency tax on the system as a whole. As I have mentioned many times, the whole setup here is quite an amazing combination of laissez-faire/chaos and cumbersome over-control. As many other people have mentioned, this is accompanied at the moment by a big media campaign ^[5] pointing to the Middle East as an example of the kind of disorder China must avoid. The situation makes all the more startling the UN Security Council statement about Libya that China (along with other Permanent Members) approved yesterday:
>>The members of the Security Council underlined the need for the Government of Libya to respect the freedom of peaceful assembly and of expression, including freedom of the press. They called for the immediate lifting of restrictions on all forms of the media.<<
Emphasis mine, to indicate freedoms specifically not respected in China when inconvenient for the government and notably limited right at the moment. Lack of self-awareness on the government's part? Deciding that looking hypocritical was the lesser evil, versus standing alongside Qaddafi? Can't be sure.
4) Smiley curve. As mentioned in the magazine here ^[6] and on this site here ^[7], many "made in China" exports are actually mere repackaging of high-value components from Japan, Germany, Korea, the United States, or someplace else. China is a huge export power, but not as huge as it seems. Latest evidence in this McKinsey report ^[8] (free registration required). It said that if you separate the "real" Chinese content from what is counted as total Chinese exports, exports accounted for only about 1/5th of the recent increase in China's GDP -- rather than 1/3, as most reports would suggest, or nearly 2/3rds, as reported a few years ago. China still has a big trade surplus; it still relies too much on exports for growth; its economy is still out of balance with the rest of the world's. But the picture is a little different from the way it's usually portrayed. Here's the main McKinsey chart showing export-growth as a share of Chinese GDP increase:
Back to typing, and back to this week's guests.

via theatlantic.com

Finally Official: China Takes the #2 Spot

2011-02-14T19:05:00.001-08:00

by Damien Ma
Japan has confirmed it. China indeed emerged from 2010 as the world's second largest economy after the United States, at $5.88 trillion to Japan's $5.47 trillion. (In case you're wondering, that's just above 1/3 of the U.S. economy.) Last time when China overtook Japan in a single quarter in 2010, I asked the question "so now what?" Judging by some of the latest reactions from a small sampling of Chinese, helpfully compiled by the WSJ, they seem to largely reflect my previous sentiment. Anything but celebratory, the new status seems to only highlight the deficiencies, large and small, that have accompanied that stellar GDP performance.
This kind of self-deprecation is commonplace, and you hear Chinese officials often describe Chinese industry as "big but not strong," like a pliable giant that could stumble and easily hurt itself. And of course, the dearth of international Chinese brands has proven a huge conundrum for policymakers in China. At a hotpot dinner over the Chinese new year, I engaged with others in one of my favorite topics to explore: why China's cultural appeal (or "soft power") is not commensurate with its seeming economic heft. Since Japan is being used here for comparison, it seems to me that Japanese cultural products had much broader appeal and resonance globally at a similar stage of development. Not to mention the eventual "just-in-time" industrial model that found wide favor and spawned imitators.
It's certainly not for the lack of talent and creative energy in China. Check out, for example, these guys rap battling in Beijing. It looks like a scene straight outta 8 Mile, except replace a pale Eminem with a frizzy-haired Xinjianger Ma Jun (he might even be Uighur -- marginalized minority, liberated in hip hop?) schooling the other guy on stage.
2010 Iron Mic Freestyle Battle Finals - Yugong Yishan, Beijing, China - 2010/10/27 from Matthew Niederhauser on Vimeo.
Or what about this four-year old Chinese kid flooring an audience on the streets of LA with his Michael Jackson moves (the kid seriously breaks it down around the 2:15 mark).

One reaction, given the current breathless commentary on "China does it best" might be "Oh no, the Chinese are outmaneuvering us in rap and street dancing! They're training an army of 4-year-olds to erode our comparative advantage in spontaneity and bottom-up creative output! What's next, stealing our Broadway jobs??!!" I think Gary Shteyngart captured this exaggerated view of Chinese omnipotence best in his recent "Super Sad True Love Story", in which the denizens of a spiritless New York live in mortal fear of the Chinese central banker arriving to take his country's money back (which Ben Bernanke apparently revealed to be an eye-popping $2 trillion).
But in fact, these episodes demonstrate the acute resilience of American soft power and appeal. There's not much "indigenous innovation" in those videos, only talented co-optation of what was pioneered in the American urban cauldron. And those migrant worker DIY rockers I wrote about rode to fame on a cover rather than an original, and now seem to be facing copyright troubles. Nonetheless, these grassroots creative elements are highly encouraging. I hope sooner rather than later, China will be exporting products that are um ... more effective than that ad in Times Square during Hu Jintao's visit.
Note: the rap battle video is from photographer Matthew Niederhauser, who has done some great work on documenting the underground music scene in China. He has more at his site.

Damien Ma is a China analyst at Eurasia Group.

via feedproxy.google.com

Its quite a big deal for China to officially pass Japan as the world's second largest economy in GDP terms. However, while the US may be clearly in the cross-hairs of the rising Chinese economic juggernaut, it will be many generations before China supplants the US as the epicenter of popular culture.

China's reaction: Build a wall | The Economist

2011-02-12T14:22:00.001-08:00

Build a wall

The Year of the Rabbit starts badly

China's reaction

Feb 3rd 2011 | BEIJING | from PRINT EDITION

THE Chinese Communist Party’s Publicity Department (or Propaganda Department, a closer rendering of the Chinese) is adept at controlling news from abroad that might inflame sentiment at home. As communism collapsed in Eastern Europe 20 years ago, it kept all but the barest news out of the domestic media, jammed foreign broadcasts and ordered vigilance over fax machines.

In response to the unrest in Egypt, the department has apparently instructed the Chinese media to use only dispatches sent by the official news agency, Xinhua, and either to bury news of events there or play up aspects that show the costs of turmoil. Reporting the travails of stranded Chinese tourists, or the government’s noble attempts to rescue them, is fine, but sympathy with the protesters is taboo. The department’s instructions to the media are, as usual, a secret, but their effect is clear.

The party has also been busy trying to control the internet. Twitter has been blocked in China since 2009, but home-grown versions are hugely popular. Anyone trying to follow postings by users with an interest in Egypt, however, might struggle. Merely searching for the word “Egypt” in Sina Weibo, one of China’s leading Twitter-like services, produces a warning that “according to the relevant laws, regulations and policies, the search results have not been displayed”. On Baidu, a big news portal, a prominent list of “hot search terms” includes “the return of compatriots stranded in Egypt”, but nothing else.

Related topics
China

Egypt

Chinese news reports have briefly mentioned the disruption of internet and mobile-phone services in Egypt. They have not, however, discussed China’s pioneering use of such techniques to impede the mobilisation of crowds. Use of the internet and mobile phones for international calls and text-messaging was cut off for months in the far-western region of Xinjiang after ethnic clashes there in 2009.

On February 1st the party’s main mouthpiece, the People’s Daily, relegated Egyptian politics to five terse paragraphs on page three but published a full page of articles under the headline, “The Internet is Warming the Whole of Society”. The internet, one scholar was quoted as saying, is a “great promoter of social change”. The party knows that all too well.

from PRINT EDITION | Briefing

via economist.com

Its always interesting to watch the Chinese media react to events with significant geopolitical implications because of the overt control over the media exerted by Beijing. Revolutions rarely carry the historical significance of these past weeks events in Eygpt, and the moment has clearly not been lost on the leaders of the Chinese Communist Party.

I cannot say that I totally understand why the Chinese political leaders fear such news making it into the hands and minds of the Chinese people. Its not as if the people aren't well aware that they are in control of the status quo in China, of course they understand that if they wanted a new government it would almost certainly be theirs to take. If anything, IMHO, the party is the chosen vehicle of the people as the fast means of achieving prestige and respect as a culture/civilization on the global stage.

FT.com / China in fresh interest rate rise

2011-02-08T07:57:00.001-08:00

China in fresh interest rate rise
By Patti Waldmeir in Shanghai and Robert Cookson in Hong Kong
Published: February 8 2011 11:58 | Last updated: February 8 2011 11:58
China has raised benchmark interest rates for the third time since October, as Beijing intensifies its battle against stubbornly high inflation.
The benchmark one-year lending rate would rise to 6.06 per cent from 5.81 per cent, effective from Wednesday, the People’s Bank of China said on its website on Tuesday. The one-year deposit rate will rise to 3 per cent from 2.75 per cent but longer term deposit rates will rise by as much as 45 basis points.
EDITOR’S CHOICE
Lex: China’s interest rates - Feb-08
FT Alphaville: China’s lunar rates rise - Feb-08
Investors pull $7bn from emerging funds - Feb-04
China has much to gain from euro support - Feb-03
Strong data raise Asian inflation fears - Feb-01
“The goal is to encourage savers to keep their money in bank deposits rather than shifting to equities or property,” said Mark Williams of Capital Economics.
The timing of the increase, which came on the final day of the week-long Chinese new year holiday, appeared to be aimed at avoiding unsettling global and domestic markets. The previous increase came on Christmas day.
“Clearly, Chinese policymakers are increasingly focused on fighting inflation and asset price bubbles,” said Dariusz Kowalczyk, economist at Crédit Agricole. The fact that deposit rates were raised by more than lending rates “shows the determination to bring the real savings rate closer to positive territory”, he said.
The rate rise comes as China seeks to curb rising inflation, particularly in food prices, following a huge expansion in the money supply in the wake of the financial crisis. Goldman Sachs forecasts that year-on-year consumer price inflation in China is likely to have risen to 5.3 per cent in January from 4.6 per cent in December.
In addition to interest rate rises, Beijing has sought to tighten liquidity in the economy by raising the amount of deposits that China’s biggest lenders must hold on reserve with the central bank.
“For China, the year of rabbit is the year of inflation,” said Qu Hongbin, greater China chief economist at HSBC. “Given that growth is still strong, Beijing can now fight against inflation single-mindedly”. Most economists expect a further interest rate rise and a further increase in bank reserve ratios in coming months.
Last month, the PBoC increased the reserve requirement ratio for China’s biggest banks by 0.5 percentage points to 19.5 per cent, its highest level since reserve requirements were introduced in the mid-1980s and the eighth such move since the start of 2010.
Jing Ulrich, head of China equities for JPMorgan, said she expected inflation to remain high in spite of the move. “We expect that inflation will remain elevated in the next several months due to a number of factors, including rising food prices, as well as inflation passed through from increasing wages, commodities prices, and possibly energy costs if they are liberalised.”

via ft.com

Chinese central bankers take action to cool inflation by raising interest rates again (eighth consecutive such move) to 3% from 2.75% for the one-year benchmark lending rate.

China follows British footsteps to African wealth | BBC News

2011-02-07T16:36:00.001-08:00

China follows British footsteps to African wealth

By Justin Rowlatt
BBC News, Angola

Chinese investment in Angola is bringing back to life one of the greatest rail routes in Africa, the Benguela Railway. In return, China gets oil - but are accusations of a colonial-style scramble for resources fair?
The passengers squatted beside the railway tracks. It was impossible to tell how many there were.
In the darkness their bodies merged with great shapeless bundles of luggage, but there were certainly hundreds.
Then with the first flush of dawn, and bang on time, the bright beam of headlights appeared in the far distance.
The crowd immediately began to stir and jostle for position, even before the train had eased to a halt.
They threw up their boxes and bags into the open cattle trucks and scruffy passenger carriages, then scrambled after them.

The line stretches from Angola's west coast to the Zambia border

Tony, the railway official who was looking after us, urged us to get moving too.
"It will not wait for you," he warned.
He hurried down to the very last carriage, and gestured at us to board this battered old compartment.
"You can leave your things safely here," he said.
We did as he said and climbed up the steps, and into another world.
Teak-lined stateroom
The contrast with modern Africa could not have been greater.
We were in a teak-lined stateroom, the windows shaded by slatted blinds.

TV SERIES

Justin Rowlatt has embarked on a global journey to explore the effects of China's policy of "going out" into the world to secure the energy and raw materials its rapidly growing economy needs.

A two-part documentary series will air on BBC Two in early 2011.

He will also be reporting regularly for the BBC News website.

Chinese karaoke fans sing Angola's praises

An invitation to dine in the Amazon

Brazil's Chinese bikini problem

Difficult times for blue-collar America

Chinese chicken farmers ruffle Zambian feathers

There was a table with a crisp white tablecloth surrounded by four heavy chairs and, in the ceiling, a big silver fan.
We had stepped back into Edwardian England.
Tony laughed at my astonishment. He had known we would be impressed.
"You should feel at home," he teased.
"This is one of the original British carriages, where the directors of the railway company would travel."
Our grand accommodation was a remnant of what was once one of the great routes of Africa - the Benguela Railway.
It was an engineering triumph, stretching 1,000 miles up from the Angolan coast, right into the southern Congo.

Some people mutter that it is really just another scramble for oil and other resources

Angola's railways back on track

The railway took almost 30 years to build and cost the equivalent of hundreds of millions of pounds - as well as the lives of many of the indentured labourers who worked on it.
But little remains of the glory of the Benguela now. Until very recently all but a tiny stretch of the line was closed.
The railway was one of the many victims of Angola's 27-year-long civil war.
Now it is being rebuilt. Not, needless to say, by the British, but by the Chinese.
Back in Luanda, the Angolan capital, I had heard a lot of anxiety about the Chinese move into Africa.
Some people mutter that it is really just another scramble for oil and other resources.
It is true that Angola has some of the biggest oil reserves in Africa.
But as I looked around at the expensive fittings in our state car on rails, it looked as if motives of the men who built this railway were pretty similar.
The Benguela railway was not a philanthropic project, but a business investment. It was built to ship out the incredible copper wealth of central Africa.
Rolling supermarket
As soon as the train pulled into the first station - a dusty stop in the middle of dry scrubland - it was clear that the recent Chinese work on the railway is providing economic benefits too.
Those huge bundles I had seen by the passengers were thrown open.

Our people have been fighting for so long, they don't know how to build anymore

Angolan woman

Inside were huge mounds of tomatoes, onions, greens, dried fish and great bloody lumps of meat.
The hundreds of people waiting surged forward, yelling and rushing from one carriage to another to barter for the goods on offer.
I realised that this train was, in effect, a rolling supermarket and the passengers were small businessmen and women.
"I couldn't do this before the railway was fixed," one large woman selling plump red tomatoes told me.
"Before, I had to travel by car which was much more expensive."
She giggled shyly and acknowledged that she was making better money now. "I am not rich, but a bit richer," she told me.
So how did these traders feel about the Chinese helping to refurbish the line?
They all agreed that the Chinese were very hard workers and had done a fine job.
But should the work not have gone to Angolans, I wanted to know?
"Our people have been fighting for so long, they don't know how to build any more," the woman with the tomatoes told me with a wry smile.
Fair deal?
Of course the Chinese labourers get paid - and their wages come out of a cheap loan which the Chinese government made to the Angolan government.
And that loan, in turn, is paid for in oil.
So in some sense oil money is still the motive.

BENGUELA RAILWAY

Opened in 1928 to transport copper deposits

It consists of 840 miles (1344 kilometres) of track

Twenty-seven years of civil war destroyed much of the railway

But, as the train grunted and clanked on through the savannah, with its occasional vivid red acacia tree, it seemed to me that what was happening now was very different from what the British had done here.
The Angolan oil which pays off that loan is now sold abroad at the prevailing market rate.
Very different terms from those of the British, who carted hundreds of millions of tons of precious African copper down this line without paying anyone a penny for it.
So, while it may be tempting to see today's China as just another imperial power out to exploit the riches of Africa, it seemed to me that there is a big difference between the Chinese presence and the British one.
Though, sitting back in my state car as the train rattled on up the line, I had to admit those British railway pioneers did know how to travel in style.
How to listen to: From Our Own Correspondent
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Story by story at the programme website

via news.bbc.co.uk

The Chinese have been wisely exporting their culture to the developing world in hopes of spreading their uniquely Chinese model for economic development, much the same way the west was able to export its model of free market capitalism to emerging markets post-WWII up until Reagan and the collapse of the Soviet Union. I have been blogging about this phenomenon for years, but the mainstream press is finally starting to wake up.

Chinese family businesses: Dusk for the patriarchs | The Economist

2011-02-06T23:47:00.001-08:00

Chinese family businesses

Feb 3rd 2011 | HONG KONG | from PRINT EDITION

COMPANIES can survive for hundreds of years. Their founders cannot. Hence the problem that eventually faces all family-owned firms: how to hand over from one generation to the next. In Stanley Ho’s case, the transition is proving stormy.

Mr Ho is the gambling king of Macau: the founder of an empire that includes casinos, ferries, an airline, hotels and commercial property. He is also 89 years old, in poor health and less lucid than he once was. His four families are fighting like harpies over his assets, which are held within an array of complex structures.

It is messy: Mr Ho (pictured, with his third wife and their daughter) had four concurrent “wives” in a territory that does not recognise polygamy. Three are still alive, plus at least 16 children. Mr Ho apparently had a stroke in 2009, prompting his relatives to start struggling for control.

Their feud has become a YouTube sensation. Every few days, a wheelchair-bound Mr Ho issues a statement that contradicts his previous one: either accusing his relatives of robbery or exonerating them. Throngs of Hong Kongers have joined the journalists outside the family’s many opulent residences, straining for the latest whispers. Two photographers have had their feet run over by limousines.

The Ho saga has prompted fresh scrutiny of other firms that will soon face succession tussles. A major investor in two of Mr Ho’s Macau companies (one controlling casinos, the other ferries) is Cheng Yu-tung, 85, who runs his own swelling conglomerate, New World Development, with unresolved succession issues.

At Sun Hung Kai, Hong Kong’s largest property owner, the succession seemed settled in 1990 with the death of the founder and management passing to his three sons. But turmoil erupted in 2008 when the founder’s then 79-year-old widow, Kwong Siu-hing, emerged as the true power, pushing out her eldest son, Walter, who had been chief executive. On Sun Hung Kai’s board sits Lee Shau-kee, 82, who runs another property company, Henderson Land, with its own succession issues.

Any talk in Hong Kong about succession soon touches upon Li Ka-shing, 82, the territory’s richest resident, whose empire encompasses utilities and property. Much of his wealth has been pledged to charity, but no one knows who will run his firms when Mr Li dies. When he was abruptly hospitalised in 2006, shares in his listed companies immediately sank.

Many Hong Kong tycoons are getting old (see table). Typically, their fortunes date back to the early post-war years, when Hong Kong was a desolate rock, Macau was in decline and Singapore was a swamp. They built empires while keeping tight personal control, often using bewildering interlinked corporate structures.

Within a few years, dozens of publicly listed (but family-controlled) Asian companies will change hands. If history is any guide, the process will hurt, says Joseph Fan, a professor at the Chinese University of Hong Kong. A study he jointly conducted of 250 companies in Hong Kong, Taiwan and Singapore controlled by Chinese families found that successions tended to coincide with tremendous destruction of value (see chart).

There are exceptions. Sir Run Run Shaw, a 103-year-old media mogul, appears to be retiring in peace. On January 26th he announced that he would sell his controlling stake in TVB, Hong Kong’s largest television network, for more than $1 billion. It was the last public link to an empire that once included the largest private film studio in the world. Mr Shaw retired from active management on his 100th birthday, in favour of a much younger manager, his then 77-year-old second wife, Mona Fong.

Many patriarchs built their fortunes with risky bets: movies, the first casino, manufacturing. But many have shifted into merely collecting rents from property and related businesses (ports, hotels, retail) or from government concessions (electricity, telecommunications, gas, casino licences).

The simplicity of the underlying businesses may account for the ferocity of the family battles—it is not hard to make money if you own a casino near mainland China these days. However, in areas that are genuinely competitive, such as banking, Hong Kong’s family firms have been largely elbowed aside by multinationals.

Patriarchs add value in two ways that do not appear on balance-sheets, says Mr Fan. Their reputation ensures that banks will lend money to their companies. And their relationships with government are often lucrative. Alas, these strengths are hard to bequeath to one’s children. Which is why some Asian empires will struggle to outlive their founders.

via economist.com

Very interesting article on the tumultuous fall of Hong Kong's great 20th century tycoons, or the inglorious rise of the next generation of Chinese business leaders, depending on your perspective.

Bamboo scaffolding (more images)

2011-01-29T21:06:00.001-08:00

See the full gallery on posterous

Gas Prices in Hong Kong

2011-01-29T20:56:00.001-08:00

While there are few gas stations to be found throughout Hong Kong, the prices are quite reasonable by US standards. I found this station while wandering by myself in the middle of the night down a secluded street near the US consulate (Kennedy Road I believe). With the HK$ exchanged at a pegged rate of approximately US$7.75, the cost of regular unleaded is a bit less than $2 and premium is slightly over $2. This at least partially explains the city's very reasonable taxi fares.

Bamboo Scaffolding

2011-01-29T20:35:00.001-08:00

I cannot seem to get over my fascination with bamboo scaffolding. Its almost as if the scaffolding is weaved (woven?) together with the excess material sticking out the top, much like an unfinished wicker basket.

China the Mother of All Grey Swans / Japan Past the Point of No Return - October 2010 - By Vitaliy Katsenelson

2011-01-29T15:40:00.001-08:00

via scribd.com

Is China on the verge of imploding? Is the excess and idle capacity going to drag the entire country under, and with it the rest of the world?

Many very interesting points raised in this presentation from Vitaliy N. Katsenelson of Investment Management Associates.

China Permits Foreign Investment WFOEs in Medical Industry | China Briefing News

2011-01-29T12:26:00.001-08:00

China Permits Foreign Investment WFOEs in Medical Industry

Dec. 14 – In a follow up to the piece we wrote last week on China opening up its medical industries to foreign investment, here we offer readers a direct translation of the pertinent text taken from Guobanfa [2010] No. 58 issued on November 26.

Article 5: Allowing overseas capital to establish medical institutions

Opening up shall be further deepened for medical institutions and investments in medical institutions by overseas capital shall be adjusted into permitted foreign-invested projects.

Overseas medical institutions, enterprises and other economic organizations shall be allowed to set up medical institutions through the form of joint ventures or cooperative joint ventures within China with Chinese medical institutions, enterprises and other economic organizations to gradually cancel restrictions over the proportion of equity held by overseas capital.

Eligible overseas capital may establish wholly-owned medical institutions within China on a pilot basis and restrictions shall be removed gradually.

Overseas capital may make investments in both for profit medical institutions and non-profit medical institutions.

Overseas capital shall be encouraged to establish medical institutions in the central and western parts of China.

Capital from Hong Kong SAR, Macau SAR and Taiwan region in establishing medical institutions in the mainland shall enjoy priority support policy in accordance with relevant provisions.

Article 6: Simplifying and standardizing examination and approval procedures for overseas capital making investments in medical institutions

The establishment of Sino-foreign joint venture medical institution and Sino-foreign cooperative joint venture medical institution shall examined and approved by health authorities and commerce authorities at the provincial level, among which the establishment of Chinese medicine hospital, Chinese and western medicine hospital and minority medicine hospital shall seek the opinions of Chinese medicine administration authorities at the provincial level.

The establishment of foreign wholly-owned medical institutions shall be examined and approved by the Ministry of Health and the Ministry of Commerce, among which the establishment of Chinese medicine hospitals, Chinese and western medicine hospitals and traditional Chinese medicine hospitals shall seek the opinions of the State Administration of Traditional Chinese Medicine. Specific measures shall be separately formulated by relevant authorities.

At present, foreign investment is only permitted (with very rare exceptions) in the form of Joint Ventures, however the circular states the equity amount in favor of the Chinese partner may now be reduced. Initial pilot schemes will be permitted for the establishment of WFOEs, while the promulgation of the application procedures is still being worked on.

Also within the circular are the provisions for more “social capital” to be made available for the reform of public hospitals. It dictates the circular is intended to “stably transform some public medical hospitals into non-public medical institutions, appropriately lower the proportion of public hospitals, promote the reasonable distribution of public hospitals and create the situation in which multiple investments are made in medical institutions,” effectively meaning the door has now opened for a class of private hospitals to be both funded from overseas to service the domestic market.

This circular paves the way for far easier access to the large medical care industry in China for foreign investors. Further information concerning this development and the implications for interested parties may be made to Richard Hoffmann, senior legal associate at Dezan Shira & Associates. The firm handles numerous clients in China’s health care and medical industry and can be contact at legal@dezshira.com.

via china-briefing.com

Big news for the opening up of Chinese markets to foreign competition. It still probably makes little sense to try to operate on the mainland without a local partner, but a major step in policy regardless.

Bamboo scaffolding, the ultimate culture shock

2011-01-24T21:02:00.001-08:00

The one thing that really jumped out at me within minutes of stepping off the train the night I arrived in Hong Kong on my recent visit was the bamboo scaffolding.

Perhaps its because I am the son, grandson and great-grandson of contractors. Or maybe its because I spent my summers during high school building steel staffolding for my dad's crews as a part-time job. Whatever the reason, I found myself absolutely fascinated by the skyscrappers built of what from a distance looks like popsicle sticks, but upon closer inspection is in fact bamboo tied together by nimble Chinese labors scrammbling up and down without harness.

Its truly an amazing sight of modern engineering that an innovative and modern skyscape like Hong Kong's could be born from such a 19th century building technique!

U.S. and China Agree to New Public/Private Healthcare Partnership | China Briefing News

2011-01-20T09:50:00.001-08:00

U.S. and China Agree to New Public/Private Healthcare Partnership

Jan. 20 – China and the United States announced a new public/private sector joint partnership yesterday focusing on the healthcare industry. The U.S. Trade and Development Agency, the U.S. Department of Health and Human Services and the U.S. Department of Commerce joined with China’s Ministries of Health and Commerce to announce their support for the establishment of the new organization.

“The economic and social development of any nation depends on the health and productivity of its people,” said U.S. Department of Health and Human Services Secretary Kathleen Sebelius. “This partnership builds on a strong foundation of bilateral cooperation in this critical sector of our economies.”

The American Chamber of Commerce in China (AmCham-China) was an early proponent of this partnership on the U.S. side and applauds its establishment.

The Healthcare Partnership Program follows two highly successful, existing public/private partnerships that operate under AmCham-China’s umbrella, namely the Aviation Cooperation Program and the Energy Cooperation Program.

“The Healthcare Partnership Program is a milestone in U.S.-China cooperation in healthcare and will strengthen the contribution of U.S. companies to China’s healthcare reforms,” said AmCham-China Chairman Ted Dean. “Public/private partnerships like the Healthcare Partnership Program are important examples of how the two countries can come together for mutual benefit.”

The new public/private partnership was announced as part of Chinese President Hu Jintao’s official state visit to the United States this week. The Healthcare Partnership Program will be headquartered in AmCham-China’s Beijing office.

China Briefing broke the news of foreign investment being allowed into China’s healthcare and medical industries six weeks ago. Foreign investors may now establish WFOEs in the sector, our full overview of the applicable regulations are contained in our article “China to Allow Foreign Capital into Medical Organizations” and a translation of the regulations in this piece, “Foreign Investment WFOEs in China’s Medical Industry.”

Dezan Shira & Associates have been advising foreign manufacturers and pharmaceutical companies about establishing a presence in the China market, and obtaining the pertinent licenses, since 1992. Please contact the firm for legal and tax advice concerning investments into this industry at info@dezshira.com, or download the firm’s brochure here.

via china-briefing.com

The puzzle of China’s rising household saving rate | vox - Research-based policy analysis and commentary from leading economists

2011-01-19T23:31:00.001-08:00

In an effort to reduce its sizeable current-account surplus, the Chinese government has made it a priority to “rebalance” growth in China by stoking private consumption. This column examines the determinants of the high household saving rate that keeps Chinese consumption so low.

Economists have repeatedly warned policy-makers about imbalances in the global economy, including those caused by the actions of China in running up a colossal current-account surplus. During the global financial crisis and the following global recession, this surplus shrank from 11% of GDP in 2007 to an estimated 5% in 2010, but many analysts view this as a temporary respite related to the contraction in trade and expect China’s current-account surplus to rise again (Baldwin 2009). Chinese government officials, meanwhile, have argued that the current-account surplus is driven by structural factors and that the exchange rate has little role to play in influencing the saving-investment balance. They have also made it a priority to “rebalance” growth in China by stoking private consumption. As part of this debate, we ask what determines the high household savings that have been keeping China’s consumption so low.

The facts

Gross domestic saving in China has surged since 2000, climbing to over 50% of GDP starting in 2007 (Figure 1). In particular, enterprise saving – including that of state-owned enterprises – has risen sharply in recent years. Government saving has also increased. Over this period, the share of household saving in national saving has not changed much, but this is mainly because of a fall in the share of household income in national income rather than a decline in the household saving rate (Prasad 2011).

Figure 1. Gross saving rates by sector

Source: National Bureau of Statistics (Flow of Funds data).

Figure 2. Household saving rates

Source: National Bureau of Statistics, Flow of Funds data and Urban and Rural Household Survey. Saving rate from national accounts is significantly higher than that from the household surveys. This discrepancy is common (it is present in most countries), and can be due to differences in definitions of income and consumption, methodology and sample coverage.

Chinese households save a large share of their disposable incomes and their average saving rate has increased over the last decade and a half (Figure 2). This pattern is particularly pronounced for urban households, which account for about two-thirds of national income. After remaining relatively flat during the early 1990s, the average saving rate of urban households relative to their disposable incomes rose from 18% in 1995 to nearly 29% in 2009.

This increase took place against a background of rapid income growth and a real interest rate on bank deposits that has been low over this period (and even negative in some years, as nominal deposit rates are capped by the government). This pattern of a rising household saving rate at a time of high income growth seems inconsistent with a certainty-equivalent life-cycle hypothesis model, which would imply that future high income growth should cause households to postpone their savings.

New explanations: Evidence from survey data

In our first paper (Chamon and Prasad 2010), we use data from the annual Urban Household Surveys to characterise household saving patterns. These are large annual cross-sectional surveys conducted by the National Bureau of Statistics.

We document that saving rates have risen across the board in urban China, but especially among households with relatively younger and older household heads. That has led to an unusual “U-shaped” age-saving profile (see Figure 3), where the saving rates are higher at the two ends of the age distribution of household heads. Typically, one would expect saving rates to increase with the household head’s age, peaking prior to his or her retirement, and then turning negative in retirement.

Figure 3. Urban household saving rates by age of head

Notes: Based on a 10 province/municipality subsample of the National Bureau of Statistics Urban Household Survey. Saving rates smoothed by a moving average with 4 neighbouring age averages. For details on the data, and how saving rates are defined, please refer to Chamon and Prasad (2010).

We test a number of conventional theories and find little evidence that they can explain these patterns. For instance, the data suggest a limited role for demographic shifts in explaining saving behaviour. The cohorts most affected by the one-child policy are not among the highest savers.

Instead, the declining public provision of education, health, and housing services (the breaking of the “iron rice bowl”) appears to have created new motives for saving. This can contribute to rising savings as younger households accumulate assets to prepare for future education expenditures and older households prepare for uncertain (and lumpy) health expenditures.

The inefficiency of “self-insurance” contributes to higher aggregate savings (as many households save in order to protect against a shock while relatively few may actually be hit by one). We estimate that the motive of saving for health expenditures accounts for an increase of more than 5 percentage points. The extensive privatisation of the housing stock has also contributed to savings. We estimate that saving for house purchases increased average saving rates by 3 percentage points relative to the 1990s, with the effect concentrated among households with younger household heads (that are less likely to own their dwellings).

While cross-sectional household data can help evaluate the importance of competing channels, it is less informative when saving rates have risen across the board, as is the case in urban China. If indeed rising uncertainty and the related increase in precautionary saving is an important driving force behind the trend in saving rates, the availability of panel data on household income could help quantify that uncertainty and gauge its potential impact on savings.

In a second paper (Chamon et al. 2010), we use a panel dataset from the China Health and Nutrition Survey. That survey does not provide information on consumption or savings but does have data on incomes that allows us to quantify the rise in income uncertainty and decompose the variance of income into components attributable to permanent versus temporary income shocks. We find strong trend growth in both the mean and the variance of total household income. Interestingly, the variance of permanent shocks to household income has remained relatively stable, while the variance of transitory shocks trends upwards. This result is in line with a large literature on how technological and sectoral shifts and the associated labour reallocation can generate higher transitory uncertainty even though some of these shifts themselves are permanent in nature.

Based on these results, we calibrate a simple buffer-stock/life-cycle model of savings to evaluate the implications of rising uncertainty on household saving rates. Under plausible parameter values, the rising transitory variance of income can explain about 4 percentage points of the increase in the saving rate among the households with younger heads. Households with older household heads that have already accumulated significant savings can more easily accommodate transitory shocks and this factor does not add much to their savings.

On the other hand, households with older heads are more affected by the pension reforms in 1997, which transferred urban pension obligations from employers (predominantly state-owned enterprises) to provincial governments. We estimate that a decline in the pension replacement rate from 75% to 60% of pre-retirement income (in line with estimates for the transition generation under the reform) can explain a 6-8 percentage point increase in saving rates for households with heads in their 50s. The initial effect is more muted for younger households, who have a longer time to adjust to the pension reforms. Thus, we are able to trace much of the increase in savings, concentrated among households with relatively young and relatively old household heads (the “U-shaped” pattern described above), to higher income uncertainty and pension reforms.

Conclusions

Our analysis based on cross-sectional and panel data sheds light on different motives that drive the saving behaviour of Chinese households. While the combined effect may be smaller than the separate estimates from the two independent approaches, the results are able to account for a substantial portion of the increase in average saving rates of urban households as well as the U-shaped age-saving profile of savings.

We find that motives of saving for precautionary purposes due to rising income uncertainty and for housing purchases explains the rising saving rates of households with young household heads.

Pension reforms and rising medical expenditures account for much of the rise in the saving rates of households with older heads.

The views expressed in this column are those of the authors and should not be attributed to the institutions they represent.

References

Baldwin, Richard (2009), The Great Trade Collapse: Causes, Consequences and Prospects, VoxEU.org, 27 November.

Chamon, Marcos, and Eswar Prasad (2010), “Why are Saving Rates of Urban Households in China Rising?”, American Economic Journal: Macroeconomics, 2(1):93-130.

Chamon, Marcos, Kai Liu, and Eswar Prasad (2011), “Income Uncertainty and Household Savings in China”, NBER Working Paper 16565.

Prasad, Eswar (2011), “Rebalancing Growth in Asia”, International Finance, forthcoming. NBER Working Paper 15169.

via voxeu.org

China Link Exchange (01.18.2011)

2011-01-18T14:14:00.001-08:00

US, China ink $574mm in trade deals (MarketWatch)

The Short View | China's economic tightrope (FT.com)

China sovereign wealth fund to open an office in Toronto (MarketWatch)

China President Hu's Chicago visit will be trade mission, too (Crain's Chicago Business)

In US-China talks, which side has the upper hand? (Fortune)

'China factor' lures global hedge funds to Hong Kong (People's Daily)

Chinese ban on foreign real estate investment profits (Property Wire)

Download now or preview on posterous
100728chinareport_0.pdf (660 KB)

Finally: China stops shock therapy for Internet addicts due to lack of effectiveness data

2009-07-14T20:10:00.000-07:00

China stops shock therapy for Internet addicts - Yahoo! Finance

It was more than two years ago when I first blogged about China's use of shock therapy to "cure" individuals of their internet addictions, and today it seems as if the Chinese have decided to abandon such cruel techniques.

Of course, the treatments are only stopping because research conducted at the institution administering the treatments showed it had no measurable effect on the usage of video games by the 3000 young Chinese who were chosen to participate in the program. I am not sure if this speaks more to the Chinese diligence for measuring and quantifying anything/everything, or to their cruel pragmatism when asserting their authority over its citizens. Either way, we should all take note of the casual acceptance of such draconian practices by the one government we are counting on to keep our country out of bankruptcy and our economy from going even deeper into the crapper. It is a scary future for America, a scary future indeed.
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Zhou Xiaochuan breaths fire into US Treasury markets with bold proposal: SDRs and the fall of the Dollar as global reserve...

2009-03-26T05:27:00.000-07:00

Cross posted from my blog The World We'll Inherit.

Zhou Xiaochuan, Governor of the Central Bank of China has called for an internationally endorsed shift away from the Dollar as the world's reserve currency "as soon as possible" in advance of the G20 Summit. Zhou urged the International Monetary Fund (IMF) to expand use of Special Drawing Rights (SDRs) and move toward a "super-sovereign reserve currency".
Special Drawing Rights are defined on the IMF website as "The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies."

This is a very radical idea and cannot be dismissed because (a) Zhou truly does hold the fate of the Dollar and the US economy in his back pocket; (b) the IMF Board of Governors has advocated expansion of the SDR allocations since 1997, with 131 members (77.7%) officially endorsing the proposal. 85% is needed to implement recommendations from the internal SDR review committee, which convenes every 5 years (next 2010). The US controls 16.75% of the total IMF vote, which granting the Obama administration de facto veto of all IMF resolutions. Zhou's plan called for additional currencies to be added to the basket used to value SDRs; encouraged SDRs to be accepted in international trade and investment so they can become established reserve; SDR denominated securities to be introduced. Obama has indicated he opposes any and all such measures.

It is hard to imagine the Dollar, the underlying grease that makes the world work smoothly for American businesses and politicians, is actually on the verge of becoming merely "part of the basket" as opposed to the peg to which each currency is valued. China is the largest holder of US debt and has tremendous leverage in the debate over the realignment of international currency regimes.

What is to prevent Beijing from coordinating a massive pooling of US debt holders in a Chinese managed international and developing market counter-part to the Federal Reserve? The collective Treasury holdings of the central banks in the 131 dissenting IMF member-states, Ivy Leagueuniversity endowments and personal fortunes of Billionaire philanthropists like Warren Buffettand Bill Gates alone would be enough to leverage a new mint for global reserve notes. It would be like stock-piling gold in Fort Knox to guarantee US debt to its creditors during the Depression (or at least I think it would be).

At what could have been a watershed in American history, Obama and his half-staffed Treasury have gone nearly 100 days in the opposite direction of the hopeful, Reagan-esque vision that candidate Obama was so widely praised for forging during his two-year campaign. The president has been either uncertain or unsatisfied with the qualifications of applicants for many critical bureaucratic appoints under his chief deputy Timothy Geithner. Perhaps Geithner is to blame for the lack of decisiveness within his department, but it matters very little for the freshman president with a HUGE to-do list. Regardless, these posts are critical for managing relations with foreign central banks and finance ministers and needed to be filled last-December.

Beijing ordered Zhou to make his aggressive proposal at a crucial moment for Tim Geithner, who had only begun to unveil their plans to combat the morgaged backed securities ailing the financial markets and clearly failed to fully ascertain the significance of Zhou's comments. Geithner was initially receptive and open to suggestions from Zhou, but his comments spurred a 4.2% decline in the Dollar across all currencies in less than 10 minutes. 15 minutes later he backtracked, and in his second press conference Obama reaffirmed the strength and long-term viability of the Dollar as the global reserve currency. Perhaps Geithner has yet to be briefed by his Under-Secretary for Foreign Affairs on the concerns of Chinese policy-makers.

**I searched for photos of Secretary Geithner with the Zhou, and found none - though I did find dozens of candid snapshots of Geithner's predecessor Hank Paulson enjoying face-time with China's top banker. Perhaps Geithner should call on Paulson to fill the void while he continues to recruit his underlings...

Chinese detail ambitious space program in 2008

2008-01-10T00:50:00.000-08:00

AP: China to Launch Rockets in Olympic Year

Wired Science: China Details 2008 Space Plans

The Chinese government has just released details of its planned space flights for 2008, leaving few to doubt the true emergence of a third player in the geo-political battle for control over near-Earth orbit. The boldest mission will be the third manned space flight launched by China and will feature the first spacewalk by a Chinese astronaut.

The much anticipated mission will be Shenzhou 7, and is slated for October. This will be a glorious time in Chinese history, provided the government can manage the seemingly impossible challenge of the Summer Olympics, and this human spacewalk will be the cherry on the proverbial sundae for the CCP leadership.

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2008 brings the reality of modern China to Western living rooms...

2008-01-04T18:54:00.000-08:00
Image by kk+ via FlickrImage by kk+ via Flickr
For the last decade, China has been meticulously grooming its capital city, Beijing, for the curious eyes of eager Western consumers and potential business opportunities offered by the 2008 Summer Olympics. The Chinese Communist Party (CCP) has made grand promises of wealth and universal well-being to its vast citizenry, all of which hinge upon the near flawless production of the most anticipated event in the history of the Middle Kingdom.

Can the government contain the political powder-keg over which it rules? Will the world accept a Chinese superpower under Communist rule? History is hanging in the balance and nobody (least of all the CCP) knows what to expect in 2008, but I certainly look forward to sharing my thoughts on how America, and the West generally, should respond to the emergence of a more powerful and confident Chinese people.

I also welcome the submissions of papers, presentations, essays or videos anyone would like to contribute. Below I have embedded a great presentation compiled by a dear friend of mine, Victor Lang, who is a native of Hong Kong. Victor and I share many similar interests, such as China-Africa relations, international perception of Chinese politics, and domestic censorship by the CCP and corporations it intimidates to comply with their ridiculous media policies.

Happy New Year to all China Wakes readers and a toast to what will hopefully be remembered as the greatest year in the history of mankind's largest and oldest civilization.

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China sees US as a partner in future space exploration initiatives...

2007-10-18T05:36:00.000-07:00
Image via WikipediaSPACE.com -- China Hopes for Place on Space Station

The Chinese have announced that they hope to be included in the international space station (ISS) project, which has been in operation since 2000 under the control of US, Russian and European astronauts. China has only recently become the third nation to launch a man into space on its own, and if it joins the ISS it would be the 17th nation participating in the long-term orbital experimentation platform. The US has thus far relented from including the Chinese in ISS missions because of the ideological stigma of a strong Communist Chinese space program operating as an equal with NASA and its now democratic Russian partners.
China frightened many in the scientific community last year when it obliterated an aging weather satellite with a ground-based anti-satellite missile. It was the first time any nation, the US and Russia included, had conducted such a test of a land-based missile and has fueled concerns around the world that we are on the verge of an arms race in space. Such experiments can pose real threats to the long-term space exploration capability of mankind, as debris clutters and inhibits near-Earth orbit, making missions to the furtherest reaches of the solar system more complicated and dangerous.

China will launch a lunar probe to map the moon's surface later this month, though they are significantly behind their Japanese rivals, who have just this week seen their lunar orbiter around Earth's only natural satellite. The regional space race will become even more heated once India launches their lunar module next April.
Tags: China, China Space Program, International Space Station, Japan, India, Lunar Explorer

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Americans are in no position to judge Chinese human rights...

2007-07-12T18:49:00.000-07:00

Olympics Highlight Human Rights in China - washingtonpost.com

I used to think that I was a moral absolutist, and I would regularly dismiss my friends when they would attempt to justify something I considered "inhumane" as the position of a moral relativist, who sees fundamental differences in the way one human-being values the life of another based on cultural differences. It did not take long after I became interested in China for me to abandon my preconceived notions, which were likely the by-product of nearly two decades attending Catholic schools, and an attempt to more fully understand why it is that human life is not valued equally by all, or more importantly, why it cannot be such.

I always knew China was huge, but it never registered with me exactly how huge until I began studying the Chinese Communist Revolution and the major social movements subsequently led by Mao Zedong in an effort to "purge" his country of right-wing dissidents that may eventually pose a threat to the Communist Party's universal authority. The two largest massacres of human life in the 20th century were at the hands of Communist Chinese cadre, some of whom reverted to truly barbaric practices like cannibalism at the instigation of local and national party leaders. Literally tens-of-millions of Chinese citizens were murdered piecemeal during the "Long March" and "Cultural Revolution", yet still the country's population multiplied exponentially during the baby boom era. Growth was so amazing and untenable that the Party was forced to institute drastic population control laws, which we know as the "One Child Policy". Every living Chinese citizen has spent most, if not all, of their life in a fractured society built according to a strict social plan that harshly punished even the slightest deviation.

It is through the lens of this grossly incomplete history of 20th century Chinese growth and development that the West has chosen to judge the ethical standards of a civilization that makes up one-fifth of the worlds population, and has been wholly isolated from the world community until the last thirty years because of internal strife and political instability. I would never pretend that these are ideal circumstances from a Western perspective, or that these tragedies were unavoidable, but I believe it is essential that we not hold the common Chinese citizen responsible for the sins of paranoid men now but a memory. We must recognize that the Chinese people are aware of the differences between our cultures, and are ashamed of the history that we consider to be barbaric.

I have friends from China who comment to me often on how compassionate American culture is compared to their own. They can hardly believe it when they turn on the news to see 30 minutes of coverage on the investigation into the disappearance of one person, and they comment often on the propensity of Chinese media to completely ignore incidents such as floods, and poisonings of water reserves that literally kill whole towns of people in rural provinces.

I had a very difficult time trying to understand what the fundamental difference between the two civilizations that creates this culture of apathy on matters that we in America mourn daily as a nation. The value of each individual life in the US is truly held sacred by the media, which is largely due to the fact that these stories are the driving force behind stronger ratings because of the emotional response they elicit from viewers. Chinese media are much more interested in telling stories about great economic growth and massive engineering projects instead of the more emotionally charged stories, both because they cast the government in the most favorable light possible, and because this is what draws the attention and fascination of the average Chinese citizen.

You may be asking yourself, what is the underlying cause of this cultural divide? After much thought and reflection, I have reached two conclusions. First, Chinese society is essentially atheist, the antithesis of traditional American society, which has largely evolved from small communities built around the local church. Those who are deeply religious in China are absolutely in the minority, and their activities are viewed with great suspicion by the political classes of society because of the role religion has played historically in revolutionary political movements around the world. Secondly, the collective pride of Chinese society and the feelings of inferiority and lack of appreciation they have received from the more "developed" societies of the world, have created within the greater society a more focused and goal oriented vision of where their country is going and how progress toward that end earns them the respect they deserve around the world.

Though this narrow-minded, and less compassionate view on the world is largely the result of government suppression of dissent and censorship of news that serves as a distraction from Party plan, we should not be so jingoistic as to assume that we have any right or reason to pass judgment on a society that we should not even claim to understand. 1.5 billion human-beings is a staggering thought, and such circumstances are truly unprecedented in the history of nation-states.

To judge the undoubtedly complex and morally taxing decisions of the Communist Party Officials according to moral absolutes that we have concluded to be non-negotiable measures of social progress and worthiness of full diplomatic and economic recognition, is to me one of the most ignorant distortions of 21st century realities and further evidence of the poisonous opportunistic political culture that currently reigns in Washington. We cannot presume to understand the responsibility facing the Chinese Communist Party, and it is highly ignorant and dangerously presumptuous to arbitrarily decide that we can better judge the method of governance that is best for a country that in no way, demographically or ethically, resembles our own.

Continuing the movement to boycott the Beijing Olympics next summer is one of the most disturbing examples of political opportunism, worse than most because it is based on an assumption of clearly non-existent moral absolutisms. The only way to effect the social ethos of Chinese, or any other civilization, is to earn both their trust and respect. The more American politicians deride the "values" of our competitors, the greater the chances that mutual prosperity will fall victim to cultural resentment and unhealthy competition between the two greatest and most dynamic societies the world has ever known.

This was written in a stream of consciousness, so it may be fractured and incoherent. I would appreciate any comments that you may have so I can revise and clarify my thought. Thanks.

Tags: Beijing Olympics, Olympic Boycott, CCP, Chinese Civilization, Moral Relativism, Moral Absolutism

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Great web tool for understanding censorship in China...

2007-03-31T15:20:00.000-07:00

Great Firewall of China

I was very intrigued to stumble upon this web service which offers bloggers and web developers a tool for determining if their site's url is blocked by the censors employed by the Chinese Communist Party in an effort to control the information made available to its country's citizens via the internet. I have two primary blogs on which I write frequently about issues of international politics, economics and globalization more generally. This is one of those blogs, and as you can see, it is entirely devoted to my thought and evaluation of all things Chinese.

Naturally, I take great pleasure in receiving feedback from similarly thoughtful and curious Chinese who are moved one way or the other by things that I have written about their country, culture and future as a global superpower. I use Google Analytics to track the visitors to this blog, and one of the features of Google's service is a geographical representation of visitors. I am always excited to see a dot super-imposed over Beijing, or Shanghai, which I have noticed on several occasions on both of my blogs, and I just assumed they represented curious young students of the world like myself. However, when I typed my web addresses into The Great Firewall of China, I was shocked and disappointed to find out that my pages are in fact censored from web searches in China.

I guess that the visits I have received from China must have been individuals working for the state's massive internet censoring armies, which have been rumored to number in the tens of thousands. I cannot imagine what about my opinions are seen to be threatening, or worth censoring, with perhaps the previous criticism I have leveled against these very paranoid and unnecessary actions of the the CCP to retain their fleeting control over a society that deserves the right to express itself freely. Otherwise, I think that I am one of the most aggressively pro-Chinese conservative American bloggers on the internet, and it is too bad that my ideas aren't even available for consumption where they would be most appreciated. I hope there will be a day when the Chinese people are truly brought into the global community and allowed to flourish in the arena of free and open thought.

Tags: China, Internet Censorship, Great Firewall of China, Chinese Communist Party

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Internet forum from People's Daily offers elaborate and engaging glimpse into Chinese perception of US post-9/11 policy...

2007-03-20T23:48:00.000-07:00

Chinadaily BBS - Powered by Discuz! Board

"Subject: A nation bickering about smoking while Iraq burns"

A discussion forum feed published by a People's Daily blogger named Shanhuang on the day of the US invasion of Iraq that I stumbled upon this evening is full of some very astute and disconcerting thoughts on the US and the priorities of American culture. With the fourth anniversary of "Shock and Awe" passing just yesterday (with little notice since the media is more concerned over the Justice Dept. and the who is Anna Nicole Smith's baby-daddy) this thread provides a voluminous log of the day-to-day and week-to-week sway of the cerebral tides between the different factions that emerged around the world in the post-September 11th world, and has once again set me thinking about the perception of the US in China.

I have written recently on the flawed perception of the Chinese amongst nearly every person within Middle Class America. I fret regularly to my friend Victor about what I feel will be the ultimate determinant of whether or not China and the US will come to a peaceful understanding and cultural diffusion (a la Japan and South Korea)-- the oft overlooked and underestimated possibility that there could arise a jealousy and spite for China across the United States if/when the US loses its economic stranglehold on the global markets.

Political realities and national interests across the Western Hemisphere will undoubtedly result in a unified resistance to the first substantial threat posed it by another civilization in several centuries time. The lack of careful consideration of the how to best manage/balance the Sino-American alliance by the American press (which I will elaborate on in a subsequent post) coupled with a preoccupation with a sensationalized conflict in the Middle East among concerned citizens (a.k.a. voters) is likely to be remembered as the primary catalyst of opportunistic political pandering by politicians who were similarly complacent, or more accurately negligent, in their careful consideration of the countries interests.

An America that exists under the institutions of our founding Republican principles will not, and must not, allow China to establish an alternative political model under the banner of Mao, even if the guiding wisdom which underlies it be rooted in a less draconian code. There are several reasons why I believe this is an indispensable maxim, the least of which is my nostalgia for the greatness of the the colonial founder's experiment. However, the Chinese must also never become a casualty of US domestic politics in the same manner that the Soviet Union became the issue of greatest concern and source of ideological alliances during the bygone, bi-lateral era of the Cold War, because if the Chinese are anything, they are VERY proud (similar to most Americans as this article makes clear).

Consequently, I see the future of Chinese politics (in light of both the China and the United State's long term interests) through the lens of Japan's US-styled (authored) system, which is basically a rotation of leadership of one political party, the LDP, through the occasional polling of the general populace. So essentially, the political realities faced by the US in the far Pacific Rim as they compete in the 21st century global economy have the potential to be at once unified, at least stylistically between the Japanese and Chinese peoples. However, one need not get too close before the glaring differences in lifestyle and social values- as well as the echo's of bitter diplomatic rifts stemming from Japanese aggression at the outset of the 20th century- rush into view and cloud the thoughts of men tasked with forgetting about these issues and getting on with the jobs of making peace and creating wealth.

It is so easy to forget about China these days, as it seems the only region of the world that is worthy of the media's time, well at least the US media. So many thoughts are provoked by just this one statement; thoughts that send the mind irrecoverably into the depths of my political consciousness. With hope, this issue can soon emerge from suppression and regain its importance on the mantle of US foreign policy, in the spot now occupied by the criminal files of radical Islamic terrorists and politicians, where it will soon so apparently belong.

China uses "shock therapy" to cure internet addiction...

2007-02-24T16:45:00.000-08:00

Tech2.com India > China Launches Campaign For Net Addicts > News on Internet

MSNBC- China treats internet "addicts" sternly

According to several international news outlets, the Chinese government has decided to take severe measures to curb the internet addiction that has afflicted many of the countries younger citizens. Using shock therapy, the government hopes to discourage these internet users, who often spend every minute they are awake in internet cafes playing video games and chatting with their friends, from maintaining unhealthy levels of usage. I doubt that the government will find the international reaction to this controversial program to be very favorable, and it certainly won't do very much to bolster the countries image in the eyes of the world. Can anyone seriously consider China to be a civilized nation when they have such Draconian policies for dealing with excessive internet usage?

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China sentences man convicted of "ant" fraud to death..

2007-02-16T03:31:00.000-08:00
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The Chinese government has sentenced a man convicted of defrauding several unsuspecting investors out of millions by selling them ants at a disgustingly inflated price. Wang Zhendong promised investors returns of up to 60% if they put their money into the fake ant-breeding program. Wang's scheme caused great distress to his victims, with one man committing suicide because of the despair he suffered after learning that he had squandered his savings on a false investment opportunity.

Human rights activists will likely strike out at the disturbing impudence used by Chinese officials when it comes to the liberal use of the death penalty for matters of economic corruption and fraud. Rent seeking and favor-trading dominate in local Chinese economies, and fraudulent scams are common, but it is difficult for a Western perspective to ever understand how death is a proportionate penalty for fraud. However, it is impossible for a Westerner to ever truly understand the pressures of governing a country of the size and complexity that characterizes modern China.

I suspect that a government truly of the people would never endorse such Draconian policies, but it is unclear to me whether a government "of" 1.4 Billion people could ever effectively manage the development the country has undergone in the post-modern era under the authoritarian Chinese Communist Party.

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Chicago's Mayor Daley announces Chicago-China Development Corporation...

2007-02-16T03:05:00.000-08:00

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Chicago Tribune- Chicago Opening Office in Shanghai

Chicago's Mayor Richard Daley announced on Thursday the creation of the Chicago China Development Corporation, a non-profit economic development agency under the administration of the the Mayor's office and charged with exposing the benefits of Chicago as a location for investment and US-based operations for Chinese companies. Contrived during a 2004 visit to the Chinese mainland, the group will bring much needed and deserved exposure to the Second City as it continues to expand its sphere of influence around the world. With expectations of hosting the Olympics in 2016, Chicago is anticipating a surge in direct investment.

In political terms, China and Chicago share many similar characteristics. Effectively, both have a political structure akin to a publicly-endorsed monarchy, with formal dissent all but silenced. A fair argument could be made that this a common-flaw shared by the two far-left political administrations. In my opinion, as long as a constructive and prosperous partnership can be established between the Chicago and China, political reform can wait...

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Chinese launch rival to US Global Positioning System (GPS)...

2007-02-16T03:01:00.000-08:00

FT.com / Asia-Pacific / China - China launches first navigation satellite

Beidou Navigation System

After nearly twenty years of geo-spacial monopoly, the US GPS system, which so many people around the world have come to rely on when traveling to an unknown destination. The European Union has recently closed in on full operational capability of their real-time navigational system Galileo, and the Chinese took major steps toward implementing a third in the launch of a key satellite over the weekend in their Beidou Navigation System.

There exists fundamental differences between the US system and its EU contemporary which are as indicative of the fundamental differences in the guiding economic philosophies of the two continents. The GPS system that has been in operation under the Department of Defense since the 1970's has, since its declassification, been open for use at no cost to any company that can harness its vast capacities for use at the level of the individual consumer or corporate entity. Since that time the US has embraced GPS culture and all of our ground based commercial traffic is guided by the pulsing satellites that make up the GPS network. Galileo will take a different approach, instead charging its users a fee for usage with the value-added benefits not entirely clear as of yet, though to be fair, the system is hardly up and running.

The Beidou (Chinese name for the "Big Dipper" constellation) Navigation System is even further down the road than Magellan, and just as the US and EU networks are reflections of the fundamental economic differences that exist between the two Western civilizations, the Chinese strategy for its commercialization strategy is like all other economic policies in China: vague and highly speculative.

As the Chinese become wealthier and their country-sides are transformed into concrete jungles awash in semi-trucks and FedEx vans, their decision to enter the Global-Positioning market early and aggressively will likely prove to have been wise. If they choose, as I suspect they will, to follow the path of the free markets paved by their American competitor they will most likely outshine the Galileo network even if they are years behind in bringing the service to consumers.

Considering China is still a developing economy by official classification, it should be noted that they are making aggressive commercial, and not just militaristic advances in the space industry. If American policymakers, entrepreneurs and bankers heed the warnings that such an aggressive push by a growing competitor into an industry with limitless potential the US should have no problem competing with the Middle Kingdom anywhere in the known universe.

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China holds the key to unlocking growth in Africa...

2006-12-29T21:52:00.000-08:00

The recent Beijing Summit made it clear that the Chinese government is becoming more publicly emboldened in their African policy initiatives. Many mainstream pundits and analysts have recently written about this topic, and I thought I would interject with my thoughts while the debate is still young and minds are still impressionable. I have for some time felt that it was essential for the Chinese to take the lead in Africa, and my confidence in this opinion has only been strengthened as coalition forces face increased difficulty in Iraq, and the situation in the Palestinian territories continues to deteriorate.

Though I wish the Chinese would take more responsibility in the current Middle Eastern crisis, I can understand their unwillingness to get involved in a situation that they are neither responsible for nor capable of substantially pacifying. Instead, they should use their experience in managing the development of their own impoverished regions to shape a more prosperous future for the people of Africa, and they should do so without the fear of igniting a diplomatic firestorm among Western governments that view a more proactive China as a threat rather than an opportunity. Africa now faces rampant disease, famine, violence, economic malaise, and is plagued desertification; all the while Western diplomats sit on their thumbs on the upper-east side and squabble over the merits of peacekeeping missions to halt genocidal slaughter in Sudan.

For decades, U.N. policy has failed the people it was established to benefit, those in the developing world, and until recently, there was no end to the destitution is in sight. There is no government in the world more experienced with and successful in the implementation of development policy than the Chinese. Its immense population has required its leaders to climb down from their perches in Beijing and travel to the poor villages in its western provinces to better understand the nature of poverty and conceive of more realistic and effective policies to combat its debilitating consequences. However, China has heretofore been unwilling to assert itself on issues which it fears may derail its economic prosperity because of political opportunists in Western capitols eager to keep them in check as they grow and expand their influence beyond their borders.

Nobody questions the merits of exploring innovative solutions to problems that have vexed policymakers for decades. However, few Western politicians or bureaucrats have been willing to admit that when their initiatives to stimulate economic growth abroad are compared with the initiatives undertaken by the Chinese government to combat similar inequalities domestically the proof is in the pudding. The Chinese economy is booming, its peasantry is becoming increasingly self-sufficient and educated, and most people would agree that the future for the Chinese people (ALL Chinese people) is bright, and their international prestige and influence growing. This leaves western leaders in the precarious position of having to confront a communist government whose success challenges the legitimacy of their own democratic systems. As the U.S. and her allies battle for the hearts and minds of impoverished, war-torn peoples in the Middle East, for whose current situation they bear the lions-share of the responsibility, it is essential that other less-developed regions do not become lost in the chaos. Missions that have been relegated to the back-burner since 9/11 because of the shift in our foreign policy mustn't be permanently retarded, for social stability in a world growing in both population and inequality is not guaranteed and should not be taken for granted anywhere or on any issue.

It seems logical to me that governments in the developed world would feel threatened by the rapid ascendancy of such a formidable competitor in the less-developed world, but I doubt that they have the resources necessary to offer a viable alternative strategy while they become further bogged down in the "War on Terror". As the Chinese begin to spread their wings and establish friendships with countries on the African continent that have felt slighted by the West for years, they are undoubtedly going to earn the respect of the people and governments of these countries, and will finally enter the realm of nations which share collective responsibility to provide aid and assistance to the developing world (G8 members). Therefore, I think it would be in the West's self-interest to allow, in fact encourage, the Chinese to expand into Africa unabated to both relieve themselves of the distraction it poses to progress on current initiatives elsewhere. It is important to make sure the Chinese do not become too ambitious for their own good but rather stay focused on international projects that they are best suited to manage, of which African economic development is clearly one.

Some may argue that by ignoring the African continent and allowing the Chinese to build their prestige through cooperation in economic development projects and poverty alleviation, the West would be squandering their opportunity to build the partnerships necessary to capitalize on the rich natural resources the developing economies in that region will become increasingly adept at harnessing, packaging, and exporting.

I take a contrary view, as I feel that the best way to substantially benefit from the vast reserves of oil, uranium, iron ore, and other minerals and fuels that have only begun to be realized is by allowing the Chinese multi-national companies to take responsibility for financing, constructing, and operating the sorely needed infrastructure that will allow these goods to be extracted and brought to market in a manner that is both efficient and has a real effect on the currently inflated market prices that are currently under the sole discretion of the OPEC ministers.

I suspect that the Chinese are not going to make an investment in these countries unless they have reason to believe that their return on that investment will be substantial. Even if the Chinese and their partners are reluctant to open up their co-ops to full participation from foreign companies and governments, there is likely to be a tangible easing of the pressure the economy's unprecedented growth has placed on global markets, so by allowing them to have preferential access to these reserves it should result in a decline in the price of oil contracts traded in Chicago, New York, and other major commodity markets around the world. This is Economics 101, simple supply and demand.

In terms of realizing benefit on behalf of the American people and the citizens of our Western allies, this tweak in the fundamental market makeup could have a tangible downward effect on the price of gasoline for consumers, as well as ease the burden on airlines that are struggling to cut costs and climb out of bankruptcy. Thus, it would be positive for American industry generally to encourage the Chinese to explore possible partnerships in countries like Zimbabwe, Zaire, Nigeria, Kenya, and others that are ready to test the waters of globalization and improve their embattled economies.

Another comparative advantage China offers its potential African partners is its rich experience in building a domestic economy upon a manufacturing force that can both produce at unparalleled levels while simultaneously maintaining a cost of production well below that sought by countries in the America's and Eastern Europe, which are its only true competitors in terms of quality of labor. The last great untapped labor force in the world occupies most of the African continent and if provided the proper industrial management, the continent has enough raw material to become very competitive in numerous industries by following the Chinese economic development model.

I believe strongly that one of the most debilitating handicaps endured by G8 nations is their irreversible and misguided obsession with framing the debate on international development and poverty alleviation as a domestic political issue, instead of leaving the diplomats to contrive of innovative solutions to the complex problems of the 21st century which are devoid of political calculation. After spending several months considering the merits of the solution I have proposed it seems apparent to me that it will be successful based upon one precondition: the US and her allies acknowledge China's right to use the arena of international trade and developmental economics to enhance its prestige among its peers atop the international community. The ideas I have articulated in this post are an attempt to refocus the debate on development policy in the West away from the prevailing approach of "what should we be doing", towards one that asks the question, "what should we be encouraging others to do?" I hope to stimulate thought, and I welcome all feedback.

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Will China throw annoying neighbor under the bus before 2008 Games?

2006-12-29T21:49:00.000-08:00

As I am sitting here watching the pundits tear each other to pieces on the FoxNews show Forbes on Fox, I am struck by what should have been a rather obvious point. The Beijing Olympics (a.k.a. China's great coming show) has the potential to make or break the emerging superpower in the eyes of the apprehensive western world. In Nicholas Kristof's brilliant book, and the inspiration for the name of my other blog, China Wakes he descibes a rather gruesome story that was recounted to him by a local party official in Beijing about the extent to which the government was willing to go to ensure the cities selection as the host of the '08 games. In touching detail and sincerity he tells the story of a young man who suffered from downs syndrome and suffered and sudden fits of seizure. This young man's parents' home was located along the route planned for the Olympic Committee's tour of Beijing and local police began to worry that he may unwittingly embarrass the city and cause the country their opportunity at securing the games. The government's solution was to kidnap him from his crying mother's arms and send him to a rural prison camp, where he was subsequently beaten to death without any recourse taken by the local government to compensate the family or bring to justice the guilty party. If the government is that paranoid about the impact a single mentally disabled Chinese may have on the image of their country in the eyes of the world, I find little reason to believe they are going find any benefit in allowing the North Korean leader to stay in power for very much longer. I have yet to see any indication that the US plans to change their policy, which is the obvious goal of the recent brazen tactics of Kim Jong-Il's regime, an thus it seems likely they will continue to flex their muscle and further pressure the Chinese to withdraw their support. Either way, a peaceful solution is quickly fading on the horizon.

EU takes proper stand against Chinese censorship

2006-09-11T05:24:00.000-07:00
Image by MrGluSniffer via Flickr
Bloomberg.com: EU Says It Opposes Chinese Restriction on Foreign News Agencies

It has been mere hours since my last posting, in which I make clear my fealings about the newly issued rules for foreign media outlets operating in China, and already I am impressed by the reaction of the Europeans. Can't say that I often agree with the EU, but on this issue all citizens who live in societies free of government censorship should be deeply disturbed by such measures.

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China's Draconian Media Policies Get Worse

2006-09-11T01:56:00.000-07:00
Image via WikipediaFOXNews.com - China Tightens Controls on Foreign Media - Asia

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The state-owned media outlet Xinhua Press today issued strict restrictions on the content distributed by foreign media on the mainland. Bloomberg summed up the scope of the new rules as follows,

Foreign news agencies are subject to approval by Xinhua and may face warnings, demands for rectification, suspension or cancellation of their qualifications to release information for breaching the rules, the statement said.
Under the rules, foreign agencies must not release information that undermines China's national unity, sovereignty or territorial integrity; endangers China's national security, reputation and interests; or violates China's religious policies or preaches ``evil cults or superstition.''
The regulations also ban incitement of hatred or discrimination among ethnic groups, spreading false information, disrupting China's economic and social order, or undermining China's ``social ethics'' or cultural traditions.

Bloomberg LP, Reuters Plc and Dow Jones & Co. are among overseas companies that sell news and information to subscribers in China. Xinhua, while acting as the industry regulator, also competes with foreign news agencies to sell information.

Effectively, Beijing is drawing a line in the sand and the west is simply expected to respect China's sovereignty and stay on the other side. Unfortunately, the Chinese people have decided to go along with its government's overt attempts to drastically limit their access to information. This fact simply astonishes me, especially considering the countries growing exposure to the west and dependence on foreign markets to feed their industrialization. One would think that businesses and individuals in less accessible Chinese villages would demand access to information as the internet becomes more widely available. This could be an attempt by the communist government to institute these rules early, before the entire Chinese internet market becomes too accustomed to certain media outlets, but how can they realistically expect foreign media conglomerates not to declare all out war on the government. I think such careless decisions by the current leadership could prove disastrous in the long term, but these rules aren't set in stone and a little pressure from the west now could avert a crisis situation.

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China Launches "Super Fruit" Satellite

2006-09-11T01:00:00.000-07:00
Image via WikipediaDNA - Evolutions - Shijian-8: China launches satellite for super fruit and vegetables - Daily News & Analysis

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The Chinese have launched an ambitious agricultural program into orbit in the form of 2000 seeds on a recoverable platform, which will be exposed to cosmic radiation and micro gravity. China has been experimenting with similar research involving rice and wheat seeds with the result being a substantial increase in yields. This is China's 23rd 'recoverable' satellite launch and marks the first solely dedicated to seed enrichment. As the country continues to grow and more Chinese become accustomed to a higher standard of living, the demand for food in the PRC is also going to continue to rise indefinitely.

Rising populations in Africa and other less developed regions will undoubtedly put strain on global markets, and desertification of China's already scarce farmland has already put the country in a position of great dependence on global markets to feed its population. It will be important for Beijing to successfully reap the maximum yields from the arable land it still hasn't polluted if it is to confidently promise its citizens that they will have sufficient food stocks to prevent the onset of famine in the event of a natural disaster or other crisis. This research is absolutely a step in the right direction, and I hope the US and other governments have green-lighted similar programs to help China, India and every other developing nations deal with the strain of growing populations with limited resources.

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Guangdong workers get guaranteed wage levels

2006-09-01T08:11:00.000-07:00
Guangdong workers get guaranteed wage levels

China's Southeastern province of Guangdong has announced that it has formally instituted minimum wage standards for its companies. The wage rate varies depending on the location of the company, but most workers below management level should receive some raise in the monthly wage.

"The minimum wage ranges from a high of 780 yuan (US$96.18) a month in Guangzhou to the lowest rate in rural regions of 450 yuan (US$55.49) a month." Though these levels probably seem repugnant to Americans who are used to making these monthly salaries in one hour of work, every extra dollar offers Chinese peasants hope for a brighter future.

Chinese Expand Internet Censorship- Set Sights on Google Earth

2006-09-01T05:45:00.000-07:00
Image via CrunchBaseMapping China and the law

I found this posting from the Ogle Earth weblog, a Google Earth development community, particularly interesting. I am not surprised that the CCP has grown wary of companies such as Google, whose stated goal is to undermine suppression of individual freedom, and I used to believe that Google would never succumb to the pressures that be when pressed about their sensitive technologies. However, I have been very disappointed in the company since they decided to comply with Chinese censorship guidelines for their blogs and search results.
For the companies executives and founders to seriously claim that they are "doing no evil" by removing any reference to the 1989 Tiananmen Square massacre from their search results, they must not have meant it when they made it their companies mission in the first place. I still hold out hope that they will soon do the right thing and refuse to self-censor their content. Who cares, the government censors still control the network, so they can just filter anything they want themselves, there is no reason to make it any easier for them. Some estimates place the number of government employed internet censors at roughly 30,000, giving them a more than adequate cyber-Gestapo to make sure the government doesn't look too bad.
I have no doubt that any attempt to restrict satellite imagery of their territory would be quickly met with protest and even temporary shutdown from Google's Chinese operation, but it should not take such a drastic event for the greatest company in the history of the world (at least as far as I am concerned) to do the right thing.
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"Red Capitalism" Growing In Global Appeal

2006-08-30T22:47:00.000-07:00
Image via WikipediaImage via Wikipedia- Google News-- Chinese Success Creates New Paradigm for Developing Nations

For years the prevailing model for growing the economies of developing countries was the Washington Consensus- brain-child of the Clinton Administration focused on creating dynamic regional and bi-lateral trade agreements to help bridge gaps in comparative advantage and lower protectionist trade barriers. In terms of maximizing the benefits of globalization for the United States and its most valued allies, both developed and developing nations, it was a very effective. However, many lesser developed nations have failed to find their niche in the global marketplace and have floundered for years, usually under political turmoil.
The unrelenting growth exhibited by the Chinese economy since opening its borders to the west has given the Chinese Communist Party immeasurable credibility in the eyes of developed and developing nations alike. The CCP's policy framework for building a 21st century economy under great demographic strain and a hostile political climate, otherwise known as "socialism with Chinese characteristics"-- but more aptly termed "Red Capitalism" by many China scholars-- has been embraced by many 3rd world states struggling to feed their people.

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China and Venezuela Get Cozy

2006-08-24T18:36:00.000-07:00

Associated Press Business News: Venezuela Says China Backs U.N. Bid - MSN Money

China, Venezuela ink 8 agreements to boost bilateral ties

I have been totally caught off guard by the recent headlines coming out of Beijing, which is currently courting Hugo Chavez and his countries vast oil reserves using uncharacteristically audacious public diplomacy to emphatically embrace their lone legitimate Communist Ally. Several major agreements have been brokered recently which have clearly been launched with the intention of legitimizing the Venezuelan government as it aspires to bolster its regional and global profile. In addition to the recent announcement of support for Venezuela's bid for a seat on the UN Security Council, which is also supported by Moscow, the two Communist allies inked pacts on issues ranging from housing to oil. Chavez has declared that by 2009 China will receive 500,000 barrels of oil per day from his country, with that number reaching 1 million sometime next decade.

I don't see any reason why the US shouldn't support Venezuela's bid for a Security Council seat- for what better place is there to humble a spirited populist like Chavez. I would take John Bolton over Hugo Chavez in a cage fight (which is how I like to refer to Security Council sessions) any day.

Chavez has been emboldened by electoral victories and his government has made great efforts to brand itself recently as the most virulently anti-American in the western hemisphere, which has brought them the respect and financial incentives from the East, specifically Russia and China. Venezuelan oil ministers have recently threatened to cut-off shipment to the US if their is suspicion of subversive tactics by the CIA or any other US-backed anti-Communist activists in the country. Statistics for the first four months of 2006 put the total Venezuelan import figure at roughly 1.5 million barrels per day, which is far greater than Chavez has yet promised to Beijing, but that number is down from the 1.7 million barrels during the mid-1990's. If Caracas continues to divert exports typically bound for the US to Beijing, there will be a marked increase in the price of gasoline across the United States. I think the best policy would be for the US consumer to recognize the overtly hostile rhetoric of the Venezuelan President and make the conscious decision to not contribute to the coffers of a clearly irresponsible individual. CITGO is the Venezuelan state-owned oil company, and for this reason I never buy gasoline from a CITGO station. I call on all American's who care about the future of gas prices and the security of the US economy to join me in my boycott, and tell a friend.

Report: Legislation Could Stop Chinese Censorship - CIO News Alerts - Blog - CIO

2006-08-12T17:57:00.000-07:00
Report: Legislation Could Stop Chinese Censorship - CIO News Alerts - Blog - CIO

I think the ideas put forth in this post on CIO magazine's blog, which entertain the possibility of legislation resticting US companies from self-censoring their content on their foreign based services, are very intriguing (as well as consistent with the principles of our foreign policy since the end of WWII- anti-Communist). However, I doubt Microsoft and Google are going to be thrilled about the possibility of being forced to shut down their entire Chinese operation. Can these companies, and the US market withstand the impact of a confrontation between Capitol Hill and Wall Street over the fate of the Chinese nation? Can the Chinese government justify its suppression of the freedom of information when the issue comes before the international media? There are hundreds, maybe thousands of possible outcomes of such a bold policy initiative in Washington- but I have to admit, there are a great many that could further the revolutionary objectives of true democrats around the world, all of whom see a bright future for a China freed of the crimson shroud cast by its draconian government. The Chinese are excused to govern their country as they wish, but the free world must stay united in the pursuit of a world united in adherence to the progression of democratic sovereignty in every country in the world. To fail to do so, would be a failure to safegaurd the legitimacy of our philosophy of government as it meets its most formidable foe since the annialation of the fascists in WWII.

The Heart of the Dragon

2006-07-27T23:13:00.000-07:00
Chinese teens more conservative than their elders | Business | The Australian

Having befriended my fair-share of Chinese expats, I find this article to be unsettling. It is hard to understand the expectation of children to care for their parents, despite a cultural denial of such responsibility. This indicates to me that the emerging generations of Chinese leaders will be responsible in their social policy, but it also signals a possible tipping point for Communist leaders left over from the previous generations, who now must successfully provide the institutional transition toward a true welfare state. If the remaining years under China's Fifth Generation go smoothly, I think the current leadership in Beijing will have solidified the Party's legitimacy in the eyes of the Chinese people, who will take great pride in the achievements of their children and grand-children and China's burgeoning international prestige. If the Communist Government is allowed to frame the West, specifically the United States, as acting so as to counter the growing wealth and prosperity with policies aimed at suppressing China's success, it may be able to stave off the brain-drain suffered in Europe and other parts of Asia once the people were exposed to the possibilities of political and economic stability and security in the United States. US policy-makers have so far taken a 'wait-and-see' approach to Chinese affairs, but as the once impoverished nation becomes a truly legitimate competitor we must become more aggressive in our public diplomacy within the western mainland of China- where the heart of the dragon lays.

Chinese In Africa

2006-07-21T00:36:00.000-07:00

BBC NEWS | Business | China defends its African relations

If there is one continent in the world that still elicits feelings of uncertainty in the minds of global political and economic leaders it is unquestionably Africa. The cradle of civilization now faces rampant disease, famine, violence and economic malaise, while Western diplomats sit on their thumbs on the upper-east side and squabble over the merits of peacekeeping missions to halt genocidal slaughter in Sudan. For decades UN policy has utterly failed the people it was established to benefit above any other, and no end to the destitution is in sight, at least until recently.

There is no government in the world more experienced with and successful in the implementation of development policy than the Chinese. Its population has demanded that its leaders climb down from their perch in Beijing and travel to the villages, so as to better understand the nature of poverty and conceive of realistic and effective policies to combat its debilitating consequences. Well, the proof is in the pudding.

The Chinese economy is booming, its peasantry is becoming increasingly self-sufficient and educated, and few people would argue that the future for the Chinese people is not bright and their international prestige and influence not growing. This leaves Western leaders in the precarious position of having to confront a Communist government, who's success challenges the legitimacy of their own democratic systems as they battle for the hearts and minds of impoverished, war torn countries in the Middle East, which are far more valuable to their self-interest than trying to tackle the complicated problems that plague the African continent.

It seems logical to me that governments in the developed world both feel threatened by the rapid ascendancy of such a formidable competitor, but I doubt that they have the resources necessary to combat the Chinese as they begin to spread their wings and establish friendships with countries that have felt slighted by the West for years. Therefore, I think it would be in the West's self-interest to allow the Chinese to expand into Africa unabated, so as to both relieve themselves of the distraction it poses to progress on initiatives currently under way elsewhere, as well as to make sure the Chinese do not become too ambitious for their own good but rather stay focused on international projects that they are best suited to manage.

The Chinese are well aware of where their comparative advantages lie, and I don't think they are eager to bite off more responsibility than they can chew. We will have to wait and see how the US and other governments engage the Chinese, but with any hope they will be viewed as a partner who shares our goals of global prosperity and alleviation of destitution around the world. Until we are given a reason to feel otherwise, it would be both irresponsible and ignorant to act otherwise.

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References

Quick Notes from Beijing - James Fallows | The Atlantic

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