China Challenges

Hu is Coming to Town

The upcoming summit between George Bush and Hu Jintao should be interesting. What will GWB say about trade relations? Taiwan? North Korea?

How controlled will all the events be? Will Hu actually be forced to answer a real question from the American media?

The IHT writes:

President Hu Jintao's visit to the United States next week is intended to dispel fears among U.S. officials and policy planners about China's international ambitions and rising exports, senior Chinese diplomats said in Beijing on Tuesday.

Hu will meet with President George W. Bush, members of Congress and U.S. business executives and deliver a speech at Yale University to advance the message that China is a "peacefully developing" power, said He Yafei, a Chinese diplomat in charge of dealings with Washington.

Read more at:
http://www.iht.com/articles/2005/08/30/news/china.php

Oil versus Human Rights

China's energy needs continue to grow. The Japan Times reports:

China imports more than 40 percent of its oil. Consumption grew 15 percent last year and is expected to increase another 9 percent in 2005. According to authoritative estimates, Chinese demand for oil will double by 2025. Its dependence on foreign oil will reach 60 percent in five years.

The need to secure energy supplies has galvanized China's leadership and become a pillar of the country's foreign policy. That search has had some unsavory consequences, pushing Beijing ever closer to regimes in Sudan, Uzbekistan, Iran and Venezuela, all of which have questionable human rights records.

Read more at:
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?ed20050829a1.htm

JFK Considered a Nuclear Strike against China

The Democrats revere John F. Kennedy as a sainted figure, even though his actual policies often were those which would be demonized today. Tax cuts. Strong national defense. Willingness to exercise military force in the national interest.

Now comes news that Kennedy pondered the feasibility of a nuclear strike against China if it attacked India in 1963, according to newly declassified audio recordings of White House deliberations. The International Herald Tribune reports:

Over the crackle of the decades-old tapes, President John F. Kennedy and his advisers can be heard debating whether and how to prevent India from becoming, in the parlance of the day, another domino to fall under communism.

"Before any substantial commitment to defend India against China is given, we should recognize that in order to carry out that commitment against any substantial Chinese attack, we would have to use nuclear weapons," Secretary of Defense Robert McNamara is heard telling the president on the tapes, which were released Thursday by the John F. Kennedy Presidential Library in Boston.

Unlike most of today’s liberal Democrats, Presidents Truman and Kennedy were not afraid to stand up to America’s enemies and consider using the full force and capabilities of the American military.

In the 1960s, America’s mission was stopping Communists. Today our mission is stopping fanatical terrorists. As we fight the global war on terror, wouldn’t it be nice to have a few more strong Democrats?

References:
http://www.iht.com/articles/2005/08/25/news/india.php

Koizumi's Election Gamble

Japan's Prime Minister Koizumi has called for a national election on September 11.  While the vast majority of Americans have no idea about the election, the results could have a major impact on the situation in Iraq and across the rest of  Asia.

While I am sure the Communists like having an external enemy to stoke up nationalistic pride, Beijing is probably hoping for Koizumi's defeat.  The question in my mind is how Japan's main opposition party could change Japan's troubled relations with China, if they do in fact, win next month. 

At RealClearPolitics.com, Todd Crowell writes:

The main opposition party, now styled the Democratic Party, long ago abandoned its predecessor's opposition to any kind of Japanese military or the U.S. alliance. But if the party forms the next government it will have significant implications for this country and for Asia.

Democratic Party leader Katsuya Okada has promised to pull Japan's 3,000 soldiers out of Iraq by December if he wins. He would end the visits to the Yasukuni Shrine that roil relations with China and Korea. There would likely be no more talk about amending the pacifistic provisions of Japan's Constitution.         

Read more at:

http://realclearpolitics.com/Commentary/com-8_29_05_TC.html

Seperated Families

In search of job opportunites, millions of Chinese families live away from each other.

According to the China Population Conference, there are at least 120 million farmers who work or conduct business in the big cities throughout the year, leaving about 20 million children at home in the countryside. Of the 360 million kids in China, one out of 18 is not living with their parents.

By the end of 2004, the total number of urban and rural woman workers reached 337 million.

To put these numbers in perspective, the total population of the United States (including 11 million illegal immigrants) is around 300 million.

No Abrupt Yuan Changes

Business Week reports:

The central bank does not plan more abrupt changes in the yuan's value, a senior People's Bank of China official said, squelching speculation over further currency revaluations ahead of a meeting of top international finance officials later this week in China.

Following a 2 percent revaluation on July 21 that raised the yuan's level to 8.11 to the dollar from the previous exchange rate of 8.27, further adjustments will be depend on the yuan's movement in the currency market, state media on Monday cited the official as saying.

The yuan's value surged to a 8.0965 closing against the dollar on Friday, its highest level since July 21, amid speculation that a visit to the United States by Chinese President Hu Jintao early next month might prompt another revaluation.

Read the full article at:
http://www.businessweek.com/ap/financialnews/D8C9BOV00.htm?campaign_id=apn_home_down&chan=db

Chinese Hackers Target Washington

Coming just days before Chinese President Hu’s visit to Washington, a new report is bound to fan the flames anti-Chinese feeling and strengthen the hand of hawks in the Pentagon calling for a stronger policy “to contain” the Middle Kingdom. According to the Washington Post, China-based computer hackers have targeted the unclassified systems at the Pentagon and other federal offices.

While claiming classified systems have not been compromised, The Post writes:

"The scope of this thing is surprisingly big," said one of four government officials who spoke separately about the incidents, which stretch back as far as two or three years and have been code-named Titan Rain by U.S. investigators. All officials insisted on anonymity, given the sensitivity of the matter.

While this report certainly should be a major concern, I would caution against overacting. There are still many unanswered questions. The Post goes on to say:

One official familiar with the investigation said it has not provided definitive evidence of who is behind the attacks. "Is this an orchestrated campaign by PRC or just a bunch of disconnected hackers? We just can't say at this point," the official said, referring to the People's Republic of China.

Millions of nationalistic young Chinese would love to see to their motherland continue to gain economic and political power at America’s expense. With an estimated 119 million Internet users and a strictly-controlled mass media that predictably promotes Beijing’s interests, these Chinese have found another method to express the their patriotic feelings. The Post continues:

(Officials) said this does not mean that China is where all the probes start, only that it is "the last hop" before they reach their targets. (They) noted that China is a convenient "steppingstone" for hackers because of the large number of computers there that can be compromised. Also, tracing hackers who use Chinese networks is complicated by the lack of cyber investigation agreements between China and the United States, another task force official said.

While this story will not come as a surprise to the many people concerned about the growing economic and political power of Beijing, this politically timed report will definitely turn up the pressure on President Bush to take a more hard-line approach in a bilateral relationship plagued by trade disputes and North Korea’s nuclear-arms ambitions.

References:
http://www.washingtonpost.com/wpdyn/content/article/2005/08/24/AR2005082402318.html?sub=AR

Fighting Online Addiction

In a country where millions of young people waste countless hours playing worthless, and often violent, online games, the Chinese government is starting to take action. Businessweek reports:

China is one of the fastest growing markets for online games, but like in other parts of Asia many online gamers in China are very much addicted to online games. Recognizing this, the country's government is working with publishers to set up an anti-addiction program that would limit the length a person could play online. Gamers who go beyond 3 hours will find their characters quickly losing abilities.

According to China's Interfax press agency, Chinese government officials have just unveiled a plan that would attempt to limit online play sessions to three consecutive hours.

To read more:
http://www.businessweek.com/innovate/content/aug2005/id20050825_233297.htm

Trade Deficit in Prespective

Daniel Gross at Slate.com writes about America's large, but often misunderstood trade deficit:

The numbers that make up the trade deficit are really large and are frequently difficult to fathom. In June, the trade deficit was $58.4 billion. For 2004, the trade deficit was $617 billion.

Spurred by a massive increase in (generally one-way) trade in China, the deficit in goods alone was a whopping $665 billion.

Despite the efforts of simplifiers like Thomas Friedman, a system as complex as international trade and numbers this large defy easy comprehension and description.

After all, many of the biggest importers of components are U.S.-based corporations like Dell or General Motors. But we tend to regard their finished products as American-made.

And many of our best exports are invisible. When a French investor hires a New York hedge fund to manage his money, or when a New York publisher sells foreign rights to a German publisher—those are exports, too.

Read more at:
http://www.slate.com/id/2125101/

China is Starving for Energy

Energy-hungry China is increasingly looking for strategies to mitigate soaring world oil prices. China still gets most of its energy from coal, which causes terrible air pollution and health problems for miners.

The American Foreign Policy Council reports:

Zhang Guobao, vice minister of the PRC's National Development and Reform Commission, has told an energy summit in Beijing that China is taking steps to enhance its energy efficiency and develop alternative fuel sources.

"The government is vigorously making efforts to tap clean energies to optimize the current power generation mix, which relies on coal for some 80 per cent of its power output and
is blamed for severe environmental pollution and congested transportation," the official China Daily cites Zhang as saying.

To read more about China visit:
http://www.afpc.org

Walmart's Invasion Continues

Watch out! Falling prices have arrived in Shanghai as Walmart opened its doors to massive crowds. Walmart already operates 47 stores employing over 20,000 people in China, and has its headquarters in the southern city of Shenzhen.

Chinese Kidults

A whopping 30 percent of Chinese adults live their parents, reports the China Research Center on Aging, and they have earned the name, kenlaozu, or "kidult." Reasons include lack of motivation, no skills, and graduates who are too picky about jobs.

After living in China for five years, this doesn't surprise me at all.

Donald Trump with Chinese Characteristics

You should never underestimate the importance of culture. The South China Morning Post reports:

The winner of the Chinese version of The Apprentice will be hired on a lucrative 1 million yuan annual salary in the business empire of maverick Beijing property tycoon Pan Shiyi.

Speaking for the first time on being chosen by Donald Trump to front the programme, Mr Pan said he would not adopt the aggressive TV persona of the New York property mogul with losing contestants.

"I definitely won't say, `You're fired!' It's just not in my character," said the 41-year-old, though he has routinely sacked his worst-performing employees over the past decade.

"Chinese people give others face. To tell somebody he's fired in such a tone, especially when this person has literally not been hired, is not the Chinese way.

The Waking Dragon

At RealCearPolitics.com, Kishore Mahbubani from Singapore has very insightful article about Sino-US relationship. He writes:

As the main architect of the world order today, the United States should be among the first to celebrate China's progress.

For if Beijing continues to abide by Washington's rules, peace and stability could reign, and the United States, as both a society and an economy, could benefit a great deal from the renaissance of Chinese civilization.

Curiously, however, the United States is doing more to destabilize China than any other power. And no one in Washington seems to be proposing, much less pursuing, a comprehensive new strategy for U.S.-Chinese relations.

The working assumption appears to be that with a little tinkering here and there, the relationship will stay firmly on track. In fact, however, nagging suspicions and mutual misunderstandings are already threatening to derail it.

One key point needs to be emphasized at the outset: although there is almost nothing China can do to disrupt the political stability of the United States, the United States can do plenty to destabilize China. Hence, the signals that Washington sends to Beijing matter a great deal.

Read the full article at:
http://realclearpolitics.com/Commentary/com-8_25_05_KM.html

Chinese Media: A Glimmer of Hope?

The Christian Science Monitor has a report about the internal struggles inside Chinese newsrooms:

A rare protest by Chinese journalists at a leading national newspaper offers a window into the intensifying severity of information control in China and the sometimes sophisticated resistance to it by Chinese journalists.

A frank 19-page letter by Li Datong, a senior editor at China Youth Daily, details a struggle between the news staff and senior party officials over policies that the journalists say would encourage propaganda. The paper has been seen as a progressive organ within Communist Party media, tackling stories on corruption.

Read the full article at:
http://www.csmonitor.com/2005/0826/p01s04-woap.html?s=hns

The EU Has Egg On Its Face

Failing the understand that protectionist policies, like import quotas and tariffs, eventually hurts everyone, the European Union has a mess on its hands with China over textile trade. 

This story begins in January 1, 2005, when an international quota system regulating trade in many types of textiles ended.  Just as everyone predicted, exports from China into the EU and USA surged ahead.  For the first time in many years, free trade had come to the textile industry.

Feeling political pressure from laid off workers in their dying domestic firms, representatives from both Washington and Brussels agreed with Beijing, two months ago, to set up a new system of quotas.   

As the story below explains, I hope this silly situation sends a clear message to Washington politicians, like President Bush and Senators Shumer and Graham, that pandering to special interest groups over trade (in an attempt to win votes from laid off workers) will only hurt the American economy. 

To the thousands of workers who have lost their jobs, I want to say this:  We live in a global economy.  Yes, I feel your pain, but you must move on, gain more valuable skills, and find yourself a new job.   

Now, the whole situation has backfired on the EU.  The International Herald reports:

As a team of European Union negotiators arrived in Beijing on Thursday for talks on what they described as an urgent and serious problem with the textile quota system established two months ago, European retailers are saying they do not understand how the European Commission and Peter Mandelson, the bloc's trade commissioner, failed to comprehend the basic workings of the European retail industry.

Retailers order their overseas products about nine months before they want them delivered. But according to some industry representatives, Mandelson's decision to bar imports of clothing ordered well before the implementation of the quotas altered the ground rules.

Read the full article at:

http://www.iht.com/articles/2005/08/25/yourmoney/mand.php#

China's Global Strategic Positioning

For a better understanding of China's goals in foreign policy, check out this article at the American Thinker.

The link is: http://www.americanthinker.com/articles.php?article_id=4741

Upcoming Sino-American Summit

According to Reuters, US President George W. Bush will host President Hu Jintao at the White House on September 7 in a meeting that will cap months of trade friction as well as growing co-operation on stopping North Korea's nuclear-arms ambitions.

Mr Bush and Mr Hu would discuss "the full range of issues on the US-China agenda and continue to build a candid, constructive and co-operative bilateral relationship", the White House said on Tuesday.

The first US visit by Mr Hu, 62, since he became president in 2003 follows a stormy summer in bilateral trade ties as China and the US wrangled over energy, textiles, intellectual property rights protection and exchange rate policies.

Reality versus Rhetoric

If you are interested in the ongoing war between Japan and China, I suggest you read today's International Herald Tribune's opinion section. There are two good stories.

In the first commentary, Jonathan Mirsky writes:

No one living in China is more daring than the maverick writer Yu Jie. He recently said of the memorial to Japan's war dead: "We criticize the Yasukuni Shrine, but we have Mao Zedong's shrine in the middle of Beijing, which is our own Yasukuni. This is a shame to me, because Mao Zedong killed more Chinese than the Japanese did. Until we are able to recognize our own problems, the Japanese won't take us seriously."

Read the full commentary at:
http://www.iht.com/articles/2005/08/24/opinion/edmirsky.php#

In the second commentary, Fei-Ling Wang writes:

Few nations are culturally so similar yet have disliked each other so deeply and so long as China and Japan. As the Chinese proverb goes, "Two tigers cannot live on the same hill." Mutual respect based on equality and understanding is sorely lacking in both China and Japan, a situation that could destine them to a violent showdown.

Read the full commentary at:
http://www.iht.com/articles/2005/08/24/opinion/edwang.php#

Another Food Scare in China

China is having a tough time of late with its food supply. This story comes from Reuters in Hong Kong:

First, it was a deadly bacteria in pigs, then it was a suspected cancer-causing chemical in fish. Now people in Hong Kong are wondering what's left to eat.

There are just fewer and fewer things left to buy in the market. I've stopped buying fish because we have children in the family," said Madam Loke, an office worker. "But it's hard to go without pork. I just make sure I cook it thoroughly."

In the last month, Hong Kong has reeled from a string of scares over food from China, including pork, eels and fish.

They come after years of warnings from environmental groups about excessive pesticide levels in vegetables from China, and worries about eating poultry since an outbreak of bird flu in Hong Kong killed six people in 1997.

Read the full story at Yahoo:
http://news.yahoo.com/s/nm/20050823/wl_nm/hongkong_food_dc

Beijing is Nervous about Stability

Beijing seems to be very concerned about social instability in some parts of the country. The problems seem to be more severe in the poorer inland regions. Shanghai and Beijing seem to be calm.

As usual, Mr. Frank Ching has an excellent column today in the South China Morning Post. He seems very nervous, too. Sorry, subscriptions are needed to read the full article. He writes

While some officials have applauded the actions of protesters as an indication that Chinese are finally standing up for their rights, the government is clearly alarmed that even retired soldiers are demonstrating.

On August 1, the anniversary of the founding of the People's Liberation Army, hundreds - possibly thousands - of former servicemen staged a protest against their lack of social security.

Two weeks later, a circular was issued banning soldiers from taking part in protests and petitions. The circular threatened expulsion from the Communist Party and other penalties for those who disobeyed.

While the leadership of President Hu Jintao and Premier Wen Jiabao has cultivated an image of caring for the people, there are increasing signs that the government is preparing to crack down.

On July 28, the People's Daily published a front-page commentary saying: "Protecting stability comes before all else ... Any behaviour that wrecks stability and challenges the law will directly damage the people's fundamental interest."

Sino-Russian Military Exercises

The South China Morning Post has a commentary about the growing military cooperation between Beijing and Moscow. Elizabeth Wishnik writes:

Should China's and Russia's neighbours in the Asia-Pacific be alarmed by their military exercises? Yes and no.

On the one hand, the Peace Mission exercises attest to a potential challenge by the two nations to a US-dominated security order in Asia.

Yet they also reveal differences in Sino-Russian political goals that will limit future strategic co-operation.

Peace Mission 2005, organised within the framework of the Shanghai Co-operation Organisation (SCO), reflects growing concern in Moscow and Beijing over the destabilising political consequences of US military involvement in Central Asia.

Russian and Chinese leaders view US support for the revolutions in Georgia, Ukraine and Kyrgyzstan as evidence of a US commitment to regime change in the region, and see a double standard in counter-terrorism policy in its condemnation of Uzbekistan's repression of demonstrators in Andijon in May.

Read the full article at:
http://focus.scmp.com/focusnews/ZZZDJSJROCE.html

Beijing Fears Social Instability by 2010

The South China Morning Post reports on Beijing's fears of social instability by 2010. They write:

The mainland's rapidly widening income gap has reached dangerous levels and could trigger social instability in five years if the trend continues, a government report warned yesterday.

"China's growing income gap is likely to trigger social instability after 2010 if the government finds no effective solutions to end the disparity," the Ministry of Labour and Social Security said in the China Daily.

Su Hainan, president of the ministry's income research institute, found the income disparity had reached "yellow" - the second most serious stage in a scale of four defined by the institute.

The situation would worsen to the most dangerous "red" stage in 2010 if no effective measures were taken, he said.

Violent protests and riots have become common among mainlanders frustrated by growing social inequality, massive corruption and illegal land requisitions, sparking government fears of mass instability.

If you are a subsciber to SCMP.com, you can read the full article at:
http://china.scmp.com/chimain/ZZZYPEYWOCE.html

China's Managerial Shortage

China faces numerous economic challenges in the years ahead.  Consider Newsweek International's recent report:

China faces a critical shortage: experienced, highly skilled managers. The numbers are astounding. The country has some 25,000 state companies, 4.3 million private firms and massive industrial overcapacity.

But it has too few experienced managers for even the elite firms. The consulting firm McKinsey & Co. estimates that even the relatively small number of Chinese companies trying to expand abroad will need up to 75,000 internationally experienced leaders if they want to continue to grow over the next 10 to 15 years.

Currently, McKinsey estimates, there are only 3,000 to 5,000 such men and women in China.

Read the full article at:

http://www.msnbc.msn.com/id/9024843/site/newsweek/

Children: Japan versus China

As China and Japan compete for economic leadership in Asia, one issue often overlooked is children.  A commentary by Mitsuko Murakami in the South China Morning Post makes the following points:

While China's one-child policy is imposed by the government, in Japan it has been a voluntary preference for married couples for decades.

They claim they cannot afford another child because of high education costs, the responsibilities of rearing children, limited space at home and young parents' greater interest in a world outside family life.

The two countries face similar consequences - a fast-greying population and often excessive spending on the only child.

Communist Country in Name Only

In economic terms, China is a very capitalistic country.  There is a limited social welfare system for people to fall back on when they are unemployed.  While family obligations remain strong, many young people are determined to start their own business and be financially independent. 

Gone are the days when government-controlled businesses dominated the economy.  In an interview in BusinessWeek, economist Fan Gang says 70% of China's GDP is now in private hands, but he rightfully says that much improvement is still needed.  Read his thoughts at:

http://www.businessweek.com/magazine/content/05_34/b3948478.htm

Terrorism Police In Chinese Cities

There were 74,000 protests and riots last year in China. This story comes from the Financial Times:

China has set up a new police force in large cities, equipped with helicopters and armoured vehicles, to combat the threat of terrorism and the rising incidence of rioting and social unrest across the country.

The squads, to be stationed in 36 large cities, reflect the need for a more professional police force amid concerns that it is currently ill-equipped to manage such issues, scholars and analysts said on Thursday.

Combating urban and rural rioting has traditionally been the preserve of the People's Armed Police, a paramilitary force formed in 1983 to relieve the military of any internal security responsibilities.

But the Public Security Bureau, the mainstream policing body, has in practice been forced to handle an increasing number of incidents of domestic unrest and under a powerful minister, Zhou Yongkang, may have been able to make a case for funds for a new force.

"The new squads are aimed at improving the ability of the police to handle terrorist crimes, riots and other emergencies," said a statement on Xinhua, the official news agency.

Mr Zhou said the authorities dealt with 74,000 protests and riots nationwide last year, involving more than 3.7m people, compared with 10,000 incidents in 1994.

Read the full article at:

http://news.ft.com/cms/s/447c6022-100d-11da-bd5c-00000e2511c8.html

The Image of Hu

The Economist draws an interesting picture of President Hu. They write:

In the nearly three years since Hu Jintao assumed the leadership of the Chinese Communist Party, his image has changed markedly.

Mr Hu was once seen by many as a potential liberal reformer—admittedly an assessment drawn from limited evidence. Now, he is widely regarded as a conservative authoritarian.

Many Hu-watchers had seized on signs that he might be determined to open up China's secretive bureaucracy.

Now, he is said to be holding up Cuba and North Korea as examples of how the party should keep its ideological grip.

While Mr Hu has probably changed far less than his mercurial portrayal might suggest, it is increasingly clear that China under his leadership has wavered over economic reform and shunned political liberalisation.

Read the full article:
http://www.economist.com/world/asia/displayStory.cfm?story_id=4300177

The Pentagon's View of China

The Cato Institute provides an analysis of the Pentagon's view of the Chinese military in 2005. The article is written by Ted Galen Carpenter and Justin Logan. They say:

After numerous delays reflecting disagreements within the Bush administration, the Pentagon has finally released its Annual Report to Congress on the Military Power of the People's Republic of China.

Previous reports conveyed a very hawkish, worst-case portrait of the PRC's capabilities and intent. The 2005 version, however, presents a reasonably even-handed assessment of the PRC military, and of China-U.S. relations generally.

Read the full report at:
http://www.cato.org/pub_display.php?pub_id=4246

Car Crazy China

Detroit better watch out. The Chinese automotive industry is coming of age. Businessweek reports:

By 2008, Chinese passenger car capacity could reach 8.7 million vehicles annually -- double the number of expected buyers. Quality is increasing.

At Honda's new $82 million export plant in Guangzhou, you'll see the same efficiency as at plants in Nagoya, Japan, or East Liberty, Ohio. Honda can crank out 50,000 1.2- and 1.4-liter versions of the Jazz compact, and there's plenty of unused land for expansion.

At another jointly managed plant, where the Accord is produced, Honda officials were surprised to learn from in-house quality tests that the China-made version of the car is superior to the U.S.-manufactured model.

The day is coming, declares Honda Senior Managing Director for China, Atsuyoshi Hyogo, when the Japanese auto maker "will use China as one of our export production bases" for global markets.

Read the full article at:
http://www.businessweek.com/magazine/content/05_34/b3948503.htm

A Win-Win Medical Relationship

Close cooperation in medical research is one area where the Sino-US relationship is really bringing benefits to both sides.  Businessweek reports:

More important, China's rise doesn't have to be America's loss. Besides leading to benefits at home, Chinese R&D will add to the world's pool of knowledge.

"Science really doesn't have boundaries," explains Shu Chien, the China-born director of the Institute for Biomedical Engineering at the University of California at San Diego and a frequent visitor to the mainland. "Whatever the Chinese publish, we will see here in the U.S., and we can step on each other's shoulders to move ahead faster. If we look at it as a friendly competition, everyone gets better."

Read the full article at:

http://www.businessweek.com/magazine/content/05_34/b3948500.htm

Labor Shortage in China

The biggest unemployment challenge in China is not finding work for young people, but finding new jobs for middle-aged workers in their 40s and 50s who have lost their jobs at government-run factories.

Many of these older workers have lost hope because of their skills are out-of-date. Many of them depend on their one-child for financial support.

The August 22 Businessweek coverstory about China and India reports these interesting set of facts:

Worker shortages are popping up in the manufacturing strongholds in eastern China. Rising rural incomes incomes mean fewer people are migrating in search of work. The one-child policy has cut population growth, which means there are fewer young people. After years of wage stagnation, salaries are starting to creep up.

In the city of Dongguan near Hong Kong, for instance, there are an estimated 267,000 unfilled jobs.

The Ghosts of Unit 731

While America celebrates the 60th anniversary of the end of the World War II, two recently declassified documents show the Allies gave monetary rewards to a group of Imperial Japanese Army officers responsible for some of most horrific and brutal activities in the Pacific.

According to an editorial in the Japan Times on August 15 (the same day the rest of the world was celebrating the anniversary), the American government had keen interest in Japan's notorious Unit 731.

In 1947, military leaders in Washington advocated paying hundreds of thousands of dollars and giving other benefits to former members of this Japanese germ warfare unit to obtain data on human experiments conducted on thousands of innocent Chinese.

As an American who has taught young people in both countries, I have closely followed the growing debate over Japan’s inability to “sincerely” apologize for its wartime aggression and the intense hatred many Chinese have for their East Asian neighbor.

In 1998, while I was teaching high school English near Nagoya, Japan, I purchased a book prominently displayed at a popular bookstore about Unit 731's gruesome wartime chemical and biological experiments on Chinese civilians near the northeastern city of Harbin, in the late 1930s.

While few Japanese want to talk about the painful events of 60 years ago, the vast majority realize their soldiers committed some very terrible crimes.

The story of Unit 731 holds an important lesson for today’s global war on terror where chemical and biological warfare pose a threat to our safety.

The Japan Times editorial says Brigadier General Charles Willoughby, head of the intelligence unit of the Occupation forces in Japan was behind Washington's efforts to gain access to Unit 731's biological and chemical research:

In the documents, Willoughby described the achievements of his unit's investigations, saying the "information procured will have the greatest value in future development of the U.S. BW (bacteria warfare) program."

Citing a U.S. War Department specialist in charge of the investigation, Willoughby wrote in the report that "data on human experiments may prove invaluable" and the information was "only obtainable through the skillful, psychological approach to top-flight pathologists" involved in Unit 731 experiments.

The U.S. provided money, food, gifts, entertainment and other kinds of rewards to the former Unit 731 members, according to the report

According to Keiichi Tsuneishi, a professor at Kanagawa University and an expert on biological and chemical weapons who uncovered the documents at the U.S. National Archives, members of 731 were forced by Washington to choose between cooperating and facing war crime charges.

Looking back, it would be easy to condemn the actions of Charles Willoughby as morally wrong – paying wartime criminals for their knowledge about chemical and biological warfare.

But, as many Americans have painfully realized since the tragedy of 9/11, we live in a world where such an attack is certainly possible.

Therefore, it is sometimes necessary to cooperate with a few bad guys so we can continue to enjoy the peace and prosperity we all strive for.

Japan Times Reference:
http://www.japantimes.com/cgi-bin/getarticle.pl5?nn20050815a1.htm

Is China's Economy Slowing?

Newsweek International reports:

These days the word "slow" is not often paired in the same sentence with the famously roaring Chinese economy. Indeed, Beijing has been trying for two years to restrain the excesses of a country growing at the precipitous pace of 9.5 percent. Yet there are emerging signs that the campaign is starting to work. Inflation is slowing, particularly in go-go housing markets like Shanghai's, and for the steel that goes into so many of China's exports. Investment in roads and factories is cooling.

Read the full article:
http://www.msnbc.msn.com/id/8940949/site/newsweek/

Will Koizumi Visit Yasukuni?

Everyone in Asia is watching the Japanese prime minister today. The South China Morning Post reports:

Asia prepared yesterday to mark the 60th anniversary of Japan's surrender in the second world war amid rekindled tensions between Japan and countries it invaded.

Looming over today's celebrations will be the spectre of the Yasukuni Shrine honouring Japan's war dead, which nationalists hope Prime Minister Junichiro Koizumi will visit. Despite mounting speculation and Mr Koizumi's refusal to comment, a close aide said a visit today was unlikely.

Housing Protests in Shanghai

The South China Morning Post reported on August 11:

Nearly 100 people demonstrated outside a meeting of Shanghai's legislature for the second day in a row, chanting slogans and waving handwritten signs protesting over housing disputes.

The protesters shouted "Government robbers return our housing" and called for the city's leaders to step down as they stood across the street from the Shanghai Exhibition Centre, where the Shanghai People's Congress Standing Committee is meeting until tomorrow.

Public protests are rare in Shanghai, though residents have staged a series of rallies over compensation packages offered for being evicted from their homes to make way for property and infrastructure projects. At a full legislature meeting in January, protests occurred daily.

BusinessWeek Cover Story

Businessweek Online magazine has a great series of articles about the economic rise of China and India. You can find it at:

http://www.businessweek.com/magazine/toc/05_34/B3948chinaindia.htm

Enjoy reading and learning!

China Goes To School

There is college and university boom in China. The Christian Science Monitor reports:

Since 1998, when Jiang Zemin, then president of China, spoke on the 100th anniversary of top-ranked Peking University and issued his bracing call for change, overall college enrollment in China has roughly tripled.

The country now outpaces leaders like the US, India, Russia, and Japan in numbers of students in colleges and universities.

By 2010, Chinese officials estimate, at least 20 percent of high school grads will be enrolled in some form of higher education; that number is expected to rise to 50 percent by 2050. China currently has about 20 million students pursuing higher education.

But the change is wrenching long-accepted practices from their foundations. The introduction of market forces throughout the 1990s has yielded tuition fees and new private colleges.

Educators are adding courses that will feed a booming appetite for skilled workers. Schools have had to adjust quickly as enrollment has soared: a newly reorganized Zhejiang University, near Shanghai, for example, has grown from about 10,000 students in the mid-1990s to about 45,000, in part through consolidation with other universities.

Read the full article at:
http://www.csmonitor.com/2005/0729/p01s01-woap.html

Creating Hostility Against China

Rarely do I agree with a New York Times editorial, but I think they are right about the current state of Sino-US relations. They write:

When analysts and economic historians look back, this summer may well prove to be the turning point in Chinese-American relations, the time when America chose short-range paranoia over rational behavior.

From the dozen or so proposals in Congress for across-the-board tariffs against Chinese imports to the Pentagon's rumblings about Chinese military buildups, the rhetoric from Washington keeps escalating.

America seems to be on the run, fueled by the false perception that China's rapid economic rise poses an inevitable threat to the United States. By repeatedly demonizing China, Washington risks creating the hostility it fears.

Read the full editorial at:
http://www.nytimes.com/2005/08/11/opinion/11thu1.html

Asian Critical Eyes

According to the Japan Times, a survey conducted by Kyodo News in mid-May, with some 1,000 people responding each in Japan, China and South Korea, show that our neighbors look at Japan with critical eyes.

In China, 83 percent of the pollees say they feel little or no warmth toward Japan. The corresponding figure in South Korea is 75 percent.

Both figures represent a worsening of sentiment toward Japan since the previous poll in 2002. At that time, people who felt little or no warmth toward Japan accounted for 67 percent in China and 69 percent in South Korea.

By contrast, 48 percent in Japan hold either some or strong feelings of warmth toward China; and 58 percent toward South Korea.

Read the full results at:
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?ed20050811a1.htm

GM Rolls On in China

While it struggles in its home market, General Motors is getting a much needed boost in China. The New York Times reports from the city of Liuzhou:

In this obscure corner of southern China, General Motors seems to have hit on a hot new formula: $5,000 minivans that get 43 miles to the gallon in city driving. That combination of advantages has captivated Chinese buyers, propelling G.M. into the leading spot in this nascent car market.

Read the full article at:
http://www.nytimes.com/2005/08/09/automobiles/09mini.html?th&emc=th

East versus West: America's Brain Drain

I strongly suggest you take a moment to read Robert Samuelson's column in Newsweek about America's Brain Drain. I think this is the key section:

Not every new Chinese or Indian engineer and scientist threatens an American, through outsourcing or some other channel. Actually, most don't. As countries become richer, they need more scientists and engineers simply to make their societies work: to design bridges and buildings, to maintain communications systems, and to test products. This is a natural process. The U.S. share of the world's technology workforce has declined for decades and will continue to do so. By itself, this is not dangerous.

The dangers arise when other countries use new technologies to erode America's advantage in weaponry; that obviously is an issue with China. We are also threatened if other countries skew their economic policies to attract an unnatural share of strategic industries—electronics, biotechnology and aerospace, among others. That is an issue with China, some other Asian countries and Europe (Airbus).

What's crucial is sustaining our technological vitality. Despite the pay, America seems to have ample scientists and engineers. But half or more of new scientific and engineering PhDs are immigrants; we need to remain open to foreign-born talent. We need to maintain spectacular rewards for companies that succeed in commercializing new products and technologies. The prospect of a big payoff compensates for mediocre pay and fuels ambition. Finally, we must scour the world for good ideas. No country ever had a monopoly on new knowledge, and none ever will.

Read the full article at:
http://www.msnbc.msn.com/id/8896977/site/newsweek/

A Asian Bloc Against the US?

To really understand the changing geopolitical landscape in Central Asia, I suggest reading this article over at AmericanThinker.com.

A new bloc emerges?
August 5th, 2005

In July, permanent members of the Shanghai Cooperation Organization (SCO) , China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, met in the Kazakh capital of Astana to discuss matters of mutual importance which included trade, energy, security and technology cooperation.

Read the full article at:

http://www.americanthinker.com/articles.php?article_id=4703

China Creates US jobs, too

Many Americans are rightfully concerned about China's economic rise and what this means for their job security and future wages.  It is important to realize China creates many opportunities, too.

USA Today reports:

Four Chinese airlines agreed on Monday to buy 42 Boeing 787 Dreamliner jets for about $5 billion. The big sale provides a lift for Chicago-based Boeing, and is the latest sign of the growing importance of the Asian giant as a customer for planemakers.

Air China and China Eastern Airlines will each buy 15 planes. Shanghai Airlines will buy nine, and Xiamen Airlines will buy three.

China is Boeing's second-largest customer for the 787, trailing only Japan. China will need 2,300 new planes, worth $183 billion, in the next 20 years, Boeing estimates.

Confirmation of the Chinese plane orders comes as president Hu Jintao prepares to visit the USA in September.

China has been one of the most active customers in recent years for Boeing and Airbus. The country is already one of the most visited places in the world, and its domestic travel is expected to rise rapidly as the economy grows and more people have the freedom and money to travel.

Read the full article at:

http://www.usatoday.com/money/biztravel/2005-08-08-china-jets-usat_x.htm

Secret Christians in China

The Washington Times writes:

Chinese are embracing Christianity in a social revolution that is spreading through town and countryside to the point where Christians already may outnumber members of the Communist Party of China. 

Visits to villages in backward rural provinces or to urban churches in Beijing, where even on weekdays the young and middle-aged gather to proclaim their faith, confirm the ease with which conversions can be won.

Read more at:

http://insider.washingtontimes.com/articles/normal.php?StoryID=20050802-115449-8165r

DDT Found in Milk

Newsweek has the following item:

High levels of DDT were found in the breastmilk of new mothers in Hong Kong even though the pesticide has long been banned in many places, including Hong Kong and China, a scientist said on Friday.

The findings by researchers from Hong Kong’s Baptist University suggest that DDT is still being illegally used in mainland China, on which Hong Kong depends for most of its food supplies, he said.

Read more at:

http://www.msnbc.msn.com/id/8667105/

Coming East Asian Summit

Newsweek's Fareed Zakaria has some interesting comments about Sino-American relations.  He discusses the recent announcement of the "East Asian Summit" in Kuala Lumpur this December.  He writes:

The summit will include the Southeast Asian countries plus China, Japan, South Korea, India, New Zealand and Australia. In other words, it is not simply an East Asian gathering but rather a broader one encompassing the major nations of the Asia-Pacific, with one notable exclusion: the United States of America.

Despite being the dominant military and political player in the region, America has not been invited, the first time it has been excluded in such discussions.

This is how the Chinese challenge presents itself. It is not a crude attempt to corner the world's energy supplies but rather a quiet effort to establish itself as the dominant player in Asia. China pursues this strategy not by making noisy threats, but by making itself crucial to other countries in the region.

Consider the turnaround in Indonesia. Ten years ago, when Indonesian officials spoke of their security concerns, China was usually on top of the list. Today, they speak of China only as a partner.

China's growth strategy has been different from that of Japan. When Japan rose to power, it did so in a predatory fashion, pushing its products and investments in other countries but keeping its own market closed.

China has done the opposite, opening itself up to foreign trade and investment. The result is that growth in countries from Brazil to Australia increasingly depends on the Chinese market. China is making itself indispensable to the world. Even India, which is wary of China's rise and is a counterweight to it, will not ignore this reality. In three years its largest trading partner will be China, displacing the United States of America.

Read more at:

http://www.msnbc.msn.com/id/8853602/site/newsweek/