China Challenges

The Long March Myth

At the Project Syndicate, Shuyun Sun has some interesting insights:

Every nation has its founding myth. For Communist China, it is the Long March – a story on a par with Moses leading the Israelites’ exodus out of Egypt. I was raised on it.

The myth can be stated succinctly. The fledgling Communist Party and its three Red Armies were driven out of their bases in the South in the early 1930’s by Chiang Kaishek’s Nationalist government. Pursued and harried by their enemies, they crossed high mountains, turbulent rivers, and impassable grassland, with Mao steering the course from victory to victory. After two years and 10,000 miles of endurance, courage, and hope against impossible odds, the Red Armies reached northwest China. Only a fifth of the 200,000 soldiers remained, worn out, battered, but defiant. A decade later, they fought back, defeated Chiang Kaishek, and launched Mao’s New China.

How does China’s founding myth stand up to reality?

To read more:

http://www.project-syndicate.org/commentary/sun1

Want to Buy a Bogus Mobile Phone?

The SCMP reports:

Counterfeiters are moving up the technology ladder. Scores of fake name-brand mobile telephones and more than one dozen vendors have been arrested in recent raids in China's commercial centre of Shanghai, the Shanghai Daily newspaper reported on Wednesday.

Confiscated phones that looked like pricey foreign models and bore the trademarks Sony Ericsson, Nokia and Samsung Electronics were actually generic handsets assembled from cheap components, the report said.

To read more:  ($$ required)

http://china.scmp.com/chitech/ZZZHZ7J1DLE.html

Demographic Edge for India

A UPI story notes:

The demographic pattern prevailing in India presently gives it a huge advantage over China and this edge will last over the next few decades, said Dr Jacob A Frenkel, a renowned economist who is also the vice-chairman of global insurance major, AIG.

India's younger-aged population far outnumbers the ageing population and this will favour India's economic growth in the coming years, he said.

''India is the only big country in the world which does not have a demographic problem,'' Dr Frenkel said, while delivering a lecture on the ''World Economic System: Challenges and Prospects'' at the Reserve Bank of India today.

To read more:

http://www.deepika.com/english/ENG5_sub.asp?newscode=135262&catcode=ENG5&subcatcode=

Japan Adjusts History

The Japan Times reports:

Over half of the high school history books screened by the education ministry this year have had their content changed to reflect the government's view of history, ministry officials said Wednesday.

The ministry ordered revisions to most references made to two groups of islets at the center of territorial disputes -- the uninhabited, Japan-controlled Senkaku Islands that China and Taiwan also claim, and the Takeshima islets controlled by South Korea, which calls them Dokdo.

It also requested modifications to references on the death toll in the 1937 Nanjing Massacre and had "official" deleted from a caption on the nature of a visit to Tokyo's war-related Yasukuni Shrine by Prime Minister Junichiro Koizumi.

To read more:

http://search.japantimes.co.jp/cgi-bin/nn20060330a1.html

Sino-Russian Cooperation

At RealClearPolitics.com, Mr. Peter Brookes writes:

A blossoming Sino-Russian romance is undercutting U.S. global interests on an unprecedented scale. Indeed, Russia and China seem to have their eyes on restraining European and Japanese power, too.

To read more:

http://www.realclearpolitics.com/articles/2006/03/china_russia_trouble.html

The Pope Wants to Visit China

An UPI story says:

Pope Benedict XVI told Cardinal Joseph Zen and a visiting delegation from Hong Kong that he desired to visit China, but the timing would be decided by God.  Zen was among 15 new cardinals invited, along with several hundred guests, to an audience with the pope at the Vatican Monday.
      

To read more:

http://www.washingtontimes.com/upi/20060328-023839-2836r.htm

JPMorgan Sees 12% Yuan Jump

Bloomberg reports: The yuan will gain about 12 percent this year as sustained economic growth persuades Chinese policy makers to allow gains in the currency, said JPMorgan Chase & Co.

To read more:

http://story.stlouisstar.com/p.x/ct/9/id/bcf69e1c3d88da65/cid/3a8a80d6f705f8cc/

America's Hidden Strength

Despite the scary headlines and growing competition from Asia, the American economy is stronger than many think.  In the Washington Post, Mr. Sebastian Mallaby writes:

Newspapers bring us the dark stories about American business. The Enron trial serves up tales of lies and looting. The General Motors restructuring dramatizes the death of traditional U.S. manufacturing. Commentators from left and right agree that a growing swath of the economy, from accounting services to non-emergency health care, may one day move offshore. And yet something is going dramatically right inside American corporations. Despite all the nostalgia for the era when GM dominated the world's car industry, the heyday of American business may actually be now.

To read more:

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/26/AR2006032600878.html?referrer=emailarticle

Backing Down on Tariffs

The China Economic Review reports:

US Senators Charles Schumer and Lindsey Graham were positive about China’s attitude towards a more flexible currency and hinted that they may delay a vote on their bill to place a 27.5% tariff on Chinese exports entering America.

“Before Sunday I would have characterized China’s trade policy as mercantilist,” Schumer said, according to a Financial Times report. “But I am convinced now that the Chinese government agrees that the currency should float.”

It is now believed they will not call for a vote on the bill this week and may even wait until after Hu Jintao’s visit to the US next month. They have said the tariff would balance out the unfair trade advantages China derives from having a currency that is 15-40% undervalued. The yuan was revalued by 2.1% last July but has since risen by less than 1% against the dollar.

To read more:

www.chinaeconomicreview.com

Is Lenovo a Security Concern?

Reuters reports that China's Lenovo Group Ltd. said March 24 it would welcome a U.S. investigation, if necessary, to quell concerns about any spy threat from a State Department order of more than 15,000 of its computers.

To read more:

http://www.eweek.com/article2/0,1759,1942701,00.asp?kc=EWRSS03119TX1K0000594

A Ports Controversy with the Chinese?

Are you ready for another controversy involving America's ports and national security concerns? The Associated Press reports:

In the aftermath of the Dubai ports dispute, the Bush administration is hiring a Hong Kong conglomerate to help detect nuclear materials inside cargo passing through the Bahamas to the United States and elsewhere.

The administration acknowledges the no-bid contract with Hutchison Whampoa Ltd. represents the first time a foreign company will be involved in running a sophisticated U.S. radiation detector at an overseas port without American customs agents present.

To read more:

http://www.wcfcourier.com/articles/2006/03/23/ap/headlines/d8ghhuug1.txt

Beijing 2008, Berlin 1936?

In the Seattle PI, Mr. Jonathon Zimmerman writes:

A fascist regime plans to host the Olympic Games. Critics call for a boycott, but the Games come off as planned. And on the field of world opinion, the host scores an enormous victory.

Berlin in 1936? No, Beijing in 2008.  Now that the Winter Olympics are over, all eyes will soon turn to the Summer Olympics. And that's just what the Chinese want. Like the Germans of the '30s, they will use the Olympics to showcase their economy -- and hide their repressive behavior.

To read more:

http://seattlepi.nwsource.com/opinion/264131_olympics24.html?source=rss

Senators Visit China

A few days ago, at TCS Daily, Mr. Roger Bate wrote:

Senators Charles Schumer (D-NY), Lindsay Graham (R-SC) and Tom Coburn (R-OK) arrive in China today to discuss the US-Chinese relationship. One area the Senators should address is the sustainability of China's growth. Financial and labor constraints may be the current focus of concern, but a far greater threat to China's long-term economic growth lies in its lack of attention to ecosystems.

To read more:

http://www.tcsdaily.com/article.aspx?id=032206E

New Taxes and Environmental Protection

In the name of environmental protection, the Chinese government has imposed many new taxes on its citizens.  The London Daily Telegraph reports:

China's growing environmental consciousness has hit the heart of its culture, with the government yesterday announcing a 5 percent tax on disposable wooden chopsticks. The Finance Ministry said chopstick production used up China's forests at a rate of 70 million cubic feet a year, a waste that it wanted to discourage.

Chopsticks were not the only targets of the regulations, an early fruit of the government's new five-year plan, which stresses energy conservation, efficient use of resources and an end to the environmental despoliation that has accompanied its rapid growth. Wooden floor panels, another high consumer of wood, and even yachts, of which there are few in China, also will fall under the consumption tax.

A 10 percent tax on golf balls and clubs, part of a wider assault on luxury items, might seem to be unconnected, but there is growing concern in Beijing that many municipal drives to attract business by building golf courses are sacrificing land, trees and water supplies for what remains a relatively tiny market.

To read more:

http://www.washingtontimes.com/world/20060323-121845-3811r.htm

A Popular Business Show is Silenced

Last Friday, viewers of the most popular economics talk show on Shanghai television were hit with a disappointment  - their favorite presenter was absent and his show cancelled.

The show was called Lang Commentary of Finance, hosted by Mr. Larry Lang Xianping, a Taiwan-raised and American-educated finance professor at the Chinese University of Hong Kong.  The reason for the cancellation remains in dispute. 

According to Mr. Mark O'Neill, a reporter for the Hong Kong-based South China Morning Post, the Chinese Business News channel, which had aired the show since the fall of 2004, has remained silent on the issue.  He goes on to explain:

However, television journalists in Shanghai confirmed the news, saying the reason given to Mr Lang was that he did not have the licence issued by the government to television comperes to certify they can speak standard Chinese.

This is absurd, as the highly educated Mr Lang speaks Mandarin better than many members of the government -- albeit with a Taiwan accent -- and much better than Mao Zedong or Deng Xiaoping.

The real reason was that Mr Lang did his job too well. He discussed the hot economic issues of the day with a depth and frankness the mainland had never experienced before and which in the end it could not tolerate.

As an outsider, he could say much that local Chinese would not dare. A favourite theme was a critique of what he considers excessively rapid privatisation of state firms. "Russia needed two years for privatisation, whereas China will need 20," he said. He advocated the use of well-paid, professional managers to run state firms and for keeping them in public ownership.

To read more:

http://www.asiamedia.ucla.edu/article.asp?parentid=41168

Sino-Russian Relations

With Mr. Putin visiting Beijing, Sino-Russian ties are back in the headlines.  Newsweek says:

Yet for all its new bullishness, Moscow looks East with a fearful eye. The reality is that China is rising as a military power—thanks in large part to the $5 billion of high-tech Russian arms it buys every year.

And long ago it surpassed Russia economically. Yes, Russia may be sloshing with petrodollars. But China's surplus of trade capital is even bigger—to the point that Chinese investment threatens to swamp Russia's dysfunctional economy, particularly in its impoverished but strategically critical Far East.

To read more: 

http://www.msnbc.msn.com/id/11903907/site/newsweek/#storyContinued

Labor Law Reform: A Step Backward

Western multinationals are expressing concern about possible changes that Beijing is considering to China's labor laws.  The SCMP reports:

The law, as put forward in draft form, would require companies to pay no less than a full year's salary to employees departing under "non-compete" agreements, a level far higher than in western countries.

The planned law also sets the length of probation for new employees and requires companies to make severance payments to workers on fixed-term contracts if their contracts are not renewed.

"What they came up with is a step backwards in Chinese economic reforms. It fits more with a planned economy than a market economy," said a US businessman familiar with the draft law, though he added companies were "cautiously optimistic" they could push for changes.

Although it is uncertain what will be included in the final version and when the legislature will give the draft a final review - necessary for it to become law - foreign companies have already started lobbying the NPC, which gave the draft a first reading in December.

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZGQ9I6VKE.html

Walmart's Hiring Spree

Wal-Mart plans to hire up to 150,000 employees in China over the next five years.  This is five times its current work force.  About 80% of its suppliers are also based in the country.

To read more:

http://story.stlouisstar.com/p.x/ct/9/id/d8955697e8f6681e/cid/3a8a80d6f705f8cc/

The Internet and Government Control

Does the Internet of the future strenghten the hand of Beijing to control its hugh population?  The IHT reports:

Billed as the next generation of the Internet, a new technical standard enthusiastically embraced by China will allow greater traceability of Internet users, potentially endangering those expressing views counter to the government's.

The standard, known as IPv6, solves technical problems faced by the Internet around the world, but Internet freedom advocates outside China warn that the internationally developed norm would also allow Beijing authorities - or any government or company for that matter - to have a better idea of what individuals are doing on the Internet.

To read more:

http://www.iht.com/articles/2006/03/19/business/chinet20.php

Demands Fly Across the Taiwan Strait

The SCMP reports:

More than 20,000 opposition supporters took to the streets of Taipei yesterday, demanding that President Chen Shui-bian stop provoking Beijing and instead focus on improving public well-being.

The demonstration came a week after a similar protest by Kuomintang and a day after Mr Chen's independence-leaning Democratic Progressive Party held a huge rally denouncing Beijing for what it called attempts to annex Taiwan.

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZM6VH6VKE.html

A Chinese Talent Crunch

As noted on this blog months ago, China is slowly losing its cheap labor advantage.  BusinessWeek explains:

Last year turnover at multinationals in China averaged 14%, up from 11.3% in 2004 and 8.3% in 2001. Salaries jumped by 8.4%, according to human resources consultant Hewitt Associates LLC. And a January report by the American Chamber of Commerce in China found that rising labor costs have pinched margins at 48% of U.S. manufacturers on the mainland. "China runs the risk of losing its advantage" of cheap labor, says Teresa Woodland, an author of the report.

The trend goes beyond the factory. Only about 10% of Chinese candidates for jobs in key areas such as finance, accounting, and engineering are qualified to work for a foreign company, estimates consultant McKinsey & Co. While China today has fewer than 5,000 managers with the skills needed by multinationals, 75,000 jobs for such managers are expected to be created over the next five years, McKinsey says. The talent crunch "is the No. 1 constraint on China's growth," says Andrew Grant, McKinsey's China chief. "It will hit earlier and be more powerful than any [other] constraint," such as raw materials shortages.

To read more:

http://www.businessweek.com/magazine/content/06_13/b3977049.htm

Airbus Plans Assembly in China

The New York Times reports that Airbus is moving closer to assembling its A320 aircraft in China.  In my view, this is the key section in the article:

The plant would essentially clamp together parts of the A320, a small fraction of the manufacturing process. More than half the components, including technology-rich elements like the cockpit, would be produced in Europe and flown to China. Two senior executives close to Airbus said the portion of work at the assembly plant would represent 4 percent to 5 percent of the value of the aircraft.

To read more:

http://www.iht.com/articles/2006/03/15/business/airbus.php

Do Corporations Run America's China Policy?

In Foreign Policy, human rights activist Harry Wu noted some twists and turns in American policy toward China.  Question: How do you feel about the United States's current relationship with China?

Wu: During the 2004 presidential debates between John Kerry and George Bush, there was not a single word about China. But everybody is aware that this is a big issue. The United States has no long-term policy towards China. The Republicans talk about free enterprise and free markets for China.

The first President Bush wanted to give China technologies, weapons, and business to open up the market there. In 1992, [Bill] Clinton said in his campaign speeches that he would cancel [China's] MFN status if he were to be elected. In 1993, his first year as president, he issued an executive order for China to meet certain conditions [to maintain its trading privileges]. But in 1994 he did away with the executive order because he needed the support of corporations.

So what is the difference between Republicans and Democrats when it comes to doing business with China? It's like what Senator Daniel Patrick Moynihan said: “Corporations run the United States.” 

To read more:

http://www.foreignpolicy.com/story/cms.php?story_id=3413

Zhou Allows the Foreign "Wolves" to Enter

The influential Chinese central bank governor Zhou Xiaochuan has come under attack in Beijing.  AsiaOne reports:

Mr Zhou, a supporter of market initiatives, attracted foreign investment to the financial sector, partly delinked the yuan from the US dollar and steered the three biggest state-owned banks towards stock market listings overseas.

He was attacked directly in a widely circulated Hong Kong newspaper article and indirectly by commentators in Beijing, who accuse financial officials of selling China's most valuable assets too cheaply.

To read more:

http://www.asiaone.com.sg/./st/st_20060316_378277.html

For my thoughts on Mr. Zhou, read this article at the American Thinker:

http://www.americanthinker.com/articles.php?article_id=5155

Plagiarizing Professors

The SCMP has a story today about a growing number of university professors fabricating research results.  They write:

A recent survey of 180 PhD holders found that 60 per cent had paid to have papers published and a similar percentage had copied others' work. In the latest scandal, Sichuan University biomedicine professor Qiu Xiaoqing has been accused of fabricating results in a research paper published in the November 2003 issue of international journal Nature Biotechnology.

And in December, a court in Tianjin found that an associate professor at the Tianjin Foreign Studies University, Shen Luwei , had plagiarised 10 articles in one of his publications. He was ordered to pay 2,000 yuan to the author of the work and was removed from his teaching post.

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZJ63VH8JE.html

Western R&D Spending in China

In the Wall Street Journal, Kathy Chen and Jason Dean make some interesting points about Western multinationals investing in China.  They note:

The total number of foreign-invested R&D centers in the country has surged to about 750 from 200 four years ago, according to China's Ministry of Commerce. And in a survey of multinationals published in September by the United Nations Conference on Trade and Development, China was by far the most frequently cited location for R&D expansion, well ahead of the U.S. and third-place India, China's chief rival as an emerging innovator.

Still, China's growth as a global R&D hub faces some constraints. Among them is the country's weak protection of patents and other intellectual-property rights. That has encouraged some foreign companies, fearful of risking their trade secrets, to keep more cutting-edge research out of China, analysts say. But others have rushed to expand the scope of their development efforts here.

Whereas R&D investment in China initially focused on adapting existing products and technologies to the Chinese market, companies such as Procter & Gamble Co., Motorola Inc. and International Business Machines Corp., among many others, have been investing to expand their Chinese R&D operations to develop products for the global market.

To read more:

http://yaleglobal.yale.edu/display.article?id=7123

John Rabe: A Nazi Hero in Nanjing

Few in West realize that a loyal German Nazi is responsible for saving hundreds, if not thousands of Chinese lives during Imperial Japan's invasion of the capital city of Nanjing in December 1937.  Mr. Howard French reports in the NY Times: 

From the outside it does not look like much: the shell of a two-story brick building with scaffolding running up its sides and, on this drizzly winter day, a pair of construction workers kicking around in a courtyard littered with building materials.

But 69 years ago, the courtyard was filled with hundreds of Chinese seeking refuge from Japanese troops who were rampaging through the city, then China's capital. The invaders subjected Nanjing to a six-week reign of terror, summarily killing large numbers of Chinese soldiers, who had thrown down their weapons, as well as murdering and raping many thousands of civilians.

The house now undergoing restoration was the home of John Rabe, a German Nazi employee of Siemens. In addition to sheltering people in his own compound, Rabe led a score of other foreigners in the city to form an international safety zone that shielded more than 200,000 Chinese from the Japanese.

Despite his heroism, Rabe was for decades all but forgotten here. Even the location of his house, today all but swallowed up by the sprawling campus of Nanjing University, was unknown.

To read more:

http://www.iht.com/articles/2006/03/14/news/journal.php#

Long List of Worries

For a summary of the social challenges in China, take a look at this coverstory in the Ethical Corporation magazine.  Mr. James Rose writes:

Often-understated government figures give an indication of the extent of growing social unrest in China. A recent Ministry of Public Security report says there were 8,700 “mass incidents” in 1993; 32,000 in 1999; 50,000 in 2002; and, 58,000 in 2003. If true this is an increase of some 670% in ten years. In 2004, the number of incidents surged again, according to government figures, to 74,000: a jump of almost 30% in just one year.

To read more:

http://www.ethicalcorp.com/content.asp?ContentID=4153

China's Narrowing Trade Surplus

The China Economic Review reports:

China’s trade surplus has narrowed to its lowest since July 2004, with exports slowing and imports growing at their fastest for more than a year. The customs bureau said the surplus fell to US$2.45 billion from US$9.49 billion in January. Higher oil prices boosted the value of overseas purchases, giving imports a rise of 30%.

Last year’s record surplus of US$102 billion led to political friction that China could well do without, particularly if the United States decides to impose punitive tariffs. Exports increased by 22% in February following a 28% rise in January - a difference that could be put down to changing business habits around the Lunar New Year.

To read more:

www.chinaeconomicreview.com

Chinese Carmakers Coming on Strong in Local Market

Multinational joint ventures in China produced a total of 2.3 million family vehicles last year, they face growing competition in the Chinese market from local companies like Geely, Chery and Lifan.  In the NY Times, Mr. Keith Bradsher explains:

These indigenous Chinese automakers captured 28.7 percent of the market in January, the first time in many years that Chinese brands have been pre-eminent — ahead of brands from Japan (27.8 percent), Europe (19 percent), the United States (14 percent) and South Korea (10.3 percent), according to Automotive Resources Asia, a consulting firm in Shanghai.

The multinationals "really have to bring their latest models," said Yale Zhang, an analyst in the Shanghai office of CSM Worldwide, an auto consulting company based in the Detroit suburbs. "Even average consumers understand if this is not the latest model."

To read more:

http://www.nytimes.com/2006/03/12/business/yourmoney/12ford.html?_r=1&8ym&emc=ym&oref=slogin

An Official Museum about the Revolution

Are Communist leaders ready to have an open and honest discussion about the past?  In the Hong Kong based South China Morning Post, Josephine Ma reports:

A proposal to build a Cultural Revolution Museum has been submitted to the Chinese People's Political Consultative Conference by 48 top scientists and writers in the run-up to the 40th anniversary of the start of the tumultuous period.

The group also sought relaxed controls governing writing and research on the topic, one of the most sensitive in the history of China.  The proposal is the first to call for an official Cultural Revolution Museum by CPPCC members in 18 years, although Ba Jin , a former CPPCC vice-chairman and contemporary writer, had been an advocate of such a museum. Ba died in October at the age of 100.

"Forty years have passed, but most young people know almost nothing about the Cultural Revolution," the proposal said.

To read more: ($$ required)

http://china.scmp.com/chimain/ZZZT01VH8JE.html

Lazy Single Children?

Does China's one-child policy encourage young people to be lazy?  The China Daily says:

Shanghai job hunters, especially youngsters from single-child families, have to learn to stand on their own feet or lose out to job seekers from outside the city, several recruiters said at a tourism job fair over the weekend.

To read more:

http://www.chinadaily.com.cn/english/home/../doc/2006-03/13/content_533475.htm

Does Repression Pay?

In the Washington Post, Mr. Jim Hoagland argues that repression of personal freedom pays. He explains:

Until that reality is acknowledged by American companies operating in China, they will have little influence over social and political change in the Middle Kingdom or even over their own operations there.

To read more:

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/10/AR2006031001862_pf.html

Chinese Leftist Thinkers Say Not So Fast

Leftists are gaining ground at the Communist gathering in Beijing this week.  In the NY Times, Joseph Kahn explains:

The controversy has forced the government to shelve a draft law to protect property rights that had been expected to win pro forma passage and highlighted the resurgent influence of a small but vocal group of socialist-leaning scholars and policy advisers.

These old-style leftist thinkers have used China's rising income gap and increasing social unrest to raise doubts about what they see as the country's headlong pursuit of private wealth and market-driven economic development.

To read more:

http://www.nytimes.com/2006/03/12/international/asia/12china.html?_r=1&th&emc=th&oref=slogin

Market-Based Land Reform

The China Economic Review reports:

Compensation payments made to farmers whose land is seized by the state could be tied to a market rate under plans being examined by the National Development and Reform Commission, the Financial Times reported. Given that the current system sees compensation calculated according to the agricultural value of the land, a market-based approach is likely to dramatically increase the amounts paid to rural residents.

The government hopes that this would not only cut down on social tension surrounding land disputes but also prevent local authorities and developers from making huge profits from the subsequent sale of the land for commercial use. "Our current system for requisitioning rural land has not kept pace with the needs of the time and must be reformed," said Du Ying, an NDRC deputy minister.

To read more:

www.chinaeconomicreview.com

New Book: The Rape of Nanking

Mr. Takashi Yoshida has written a new book about the Rape of Nanking in 1937.  A review at Amazon says:

In The Making of the "Rape of Nanking" Takashi Yoshida examines how views of the Nanjing Massacre have evolved in history writing and public memory in Japan, China, and the United States. For these nations, the question of how to treat the legacy of Nanjing--whether to deplore it, sanitize it, rationalize it, or even ignore it--has aroused passions revolving around ethics, nationality, and historical identity.

Drawing on a rich analysis of Chinese, Japanese, and American history textbooks and newspapers, Yoshida traces the evolving--and often conflicting--understandings of the Nanjing Massacre, revealing how changing social and political environments have influenced the debate. Yoshida suggests that, from the 1970s on, the dispute over Nanjing has become more lively, more globalized, and immeasurably more intense, due in part to Japanese revisionist history and a renewed emphasis on patriotic education in China. 

To read more:

http://www.amazon.com/gp/product/0195180968/ref=pe_snp_968/104-3789613-7848739?n=283155

Foreign Firms and IPR

As I wrote about last October, Western people who complain about intellectual property violations in China should listen to Mr. Jiang Zhipei, the chief justice of China's Intellectual Property Rights Tribunal.  In today's SCMP,  he says that while foreign governments complained about the problem, their companies take little action. Reuters explains:

"China is anxious about the situation too and we hope foreign companies and personnel can send rights violators to the courts in good time," Mr Jiang said on the sidelines of the National People's Congress. "Otherwise, the judge will have no means to punish them."

He added: "If we don't get them into the courts, we can't judge them."

About 95 per cent of product piracy cases involved violations against domestic companies, with only 5 per cent stemming from complaints from foreign companies, Mr Jiang said.

"So it's a strange phenomenon that foreign governments, and some US congressmen, have made very strong complaints about this."

Court spokesman Sun Huapu said judicial protection of intellectual property was improving. Among the measures he outlined were better training of local judges and reforms to allow more courts to handle piracy cases.

But Zhang Qin, vice-director of the State Intellectual Property Office, said the procedure for handling such cases was too cumbersome and advocated a national court to handle appeals.  "The current judicial procedure to safeguard IPR is not efficient enough," the China Daily quoted Mr Zhang as saying.

Last year mainland courts convicted 741 people in 505 criminal product piracy cases, Mr Sun said. He did not elaborate on the penalties they received or give figures for the previous year.

Courts handled 16,453 civil cases of intellectual property rights violations last year, up more than 20 per cent from the previous year, Mr Sun said.

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZYLYUH8JE.html

For my thoughts on Mr. Jiang, see this comment at the American Thinker:

http://www.americanthinker.com/comments.php?comments_id=3305

Google: An Imperfect Contribution in China

The Phoenix News makes some interesting points about the recent Google uproar on Capital Hill.

From their public testimony, at least, some Internet companies working in China indicated they are genuinely conflicted about their roles. Not surprisingly, though, they ultimately concluded that conducting business is a better option than withdrawal.

Google vice-president Elliot Schrage was honest enough to acknowledge that “there is no question that, as a matter of business, we want to be active in China. It is a huge, rapidly growing, and enormous market.”

“The requirements of doing business in China include self-censorship, something that runs counter to Google’s most basic values and commitments as a company,” Schrage continued in his testimony.

“Our decision was based on a judgment that Google.cn will make a meaningful — though imperfect — contribution to the overall access of information in China.” In order to bolster his company’s contention that its services were beneficial on “human rights and freedom of expression” grounds, Microsoft associate general counsel Jack Krumholtz cited a survey in which 60 percent of Chinese Internet users said that they believed the Internet would allow them more opportunities to criticize the government.

To read more:

http://thephoenix.com/article_ektid6072.aspx

One-Sided Reporting about Trade Numbers

An article in today's Christian Science Monitor is a good example, in my view, of lazy reporting about China.  Mr. Mark Trumbell does a poor job of explaining both sides of the issue.  He writes:

Each year of gargantuan deficits with trade partners represents another year of erosion for America's economy, because it means US consumers are buying cheaper goods from abroad at the expense of jobs at home, say those who worry about the size of America's trade deficit.

"We're hollowing the economy out," says Charles McMillion, an economist who follows trade patterns at MBG Information Services in Washington. "It's having enormous negative consequences for families and individuals." When IBM sold its personal-computer manufacturing business to China's Lenovo, he notes, that $1.7 billion deal covered only about one day's worth of the deficit.

To read more:

http://www.csmonitor.com/2006/0310/p01s03-usec.html?s=hns

Made in USA, Again?

CNNMoney.com writes:

As the need for speed in fashion retailing becomes ever more crucial to merchants, industry observers say "Made in U.S.A" is once again looking more attractive to some U.S. retailers versus importing from China.

Marshal Cohen, chief retail industry analyst with the NPD Group, a market research firm, points out that several specialty retailers are very interested in moving at least part of their product sourcing either back home -- for instance to California -- or closer to home to countries like Mexico, Guatemala or Honduras, for example.

"U.S. retailers are finally looking at lost sales as lost revenue," said Cohen. "They know that in order to capture maximum sales they need to turn their inventory much quicker." The disadvantage of importing from China, he said, is that it requires a longer lead time of between three to six month from the time an order is placed to when the inventory is stocked in stores.

To read more:

http://money.cnn.com/2006/02/28/news/economy/retail_localsourcing/index.htm

China's Space Claims are "Ridiculous"

Mr. Shi Jiangtao writes in the SCMP:

China's space technology is unlikely to catch up with America's in the next decade, according to a mainland space expert who also called for Hong Kong's involvement in the nation's first lunar mission, scheduled for April next year.

The remarks, made by Luan Enjie, commander-in-chief of the country's lunar probe programme, comes after an optimistic forecast by another senior scientist who said China would be able to narrow the gap within 10 years.

"It is ridiculous [to say that]," Mr Luan told the South China Morning Post. "China still lags far behind the US and Russia in terms of the overall development of space technology."

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZZQQUH8JE.html

China's Underpopulation Problem

As noted on this blog many weeks ago, China's one-child policy has led to many hidden social problems.  At Slate, Mr. Ian Bremmer explains:

Recent reports from researchers at Deutsche Bank and Goldman Sachs suggest that China's workforce may begin to shrink sooner than we thought. According to Deutsche Bank's analysis, the percentage of working-age Chinese in the population (those aged 15 to 64) will peak around 2010 at 72.2 percent.

Over the next 40 years, that number will fall steadily to just 60.7 percent, according to U.N. forecasts. The steep drop is due in large part to China's one-child policy, first implemented in 1979. Also, many Chinese retire before they are 64; China's current retirement age is 50 for most women and 60 for most men.

To read more:

http://www.slate.com/id/2137680/

Another Day, Another Banking Scandal

Wang Xiangwei reports in the SCMP:

Media reports that the Bank of China has been defrauded of more than 400 million yuan, the latest scandal to hit the mainland's second largest commercial lender, are likely to provide fresh ammunition to mainland critics of its plans for a multi-billion US dollar listing in Hong Kong by June and the overseas listing of other large state banks.

Ask any banker about the latest scandal and their typical reaction would be something like: what else is new? That is naturally followed by another question: can a scandal-ridden bank like the BOC still make it to the Hong Kong market as planned? And more importantly, should it?

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZCNMUH8JE.html

Selling-Out to Foreign Investors

Things are heating up at the big Communist Party meeting in Beijing.  Jane Cai in the SCMP reports:

Renmin University president Ji Baocheng has blasted Beijing's efforts to list state banks and other state-owned enterprises overseas as a sell-out to foreign investors and unfair to mainlanders.

The outspoken academic yesterday said overseas listings of large SOEs resulted in US$370 billion in assets lost to the nation last year, according to research conducted by a team at Renmin University.

"Their stocks were offered overseas at low price-to-earnings ratios, in many cases 20 per cent less than the prices on domestic stock markets," he said. "It means we are losing our assets to overseas investors."

At a Beijing panel meeting discussing the 11th Five-Year Programme, Professor Ji attacked the overseas listing practice, saying it was "blindly sacrificing the interests of China and its people".

To read more:  ($$ required)

http://china.scmp.com/chimain/ZZZ8MMUH8JE.html

Trade Policy Limitations

In the Washington Post, Mr. Sebastian Mallaby writes:

Strange though this may sound, China's policy toward the United States resembles U.S. policy toward China. The Chinese leadership, like the Bush administration, has tried to make economic relations go well, tackling domestic lobbies in the process. Since China's accession to the WTO five years ago, it has changed thousands of statutes and regulations in order to comply with WTO rules, so much so that the United States has brought fewer WTO cases against China than it has brought against Europe.

But there is a limit to what the Chinese regime feels able to do, just as there is a limit to the political risks that the Bush administration will run to head off a trade war.

To read more:

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/05/AR2006030500943.html

Delay in Space Ambitions

The China Economic Review reports:

China’s third manned space mission will be delayed by six months as scientists work on creating a spacesuit that can withstand a spacewalk, state media reported. Having announced last year that Shenzhou 7 would launch at some point in 2007, the government is now likely to postpone this date until 2008.

The mission is to be manned by three astronauts and the authorities are particularly keen on seeing it feature China’s first ever spacewalk. The country’s first manned space mission took place in 2003 and a second, longer mission carrying two astronauts took place last year.

To read more:

www.chinaeconomicreview.com

China's Noodle Controversy

Mr. Jim Yardley reports on China's noodle controversy. He writes:

One difference between China's remote west and much of the rest of the country is what people choose to put in their stomachs. Noodles, not rice, are the local favorite, particularly a steaming bowl of beef noodles named after Lanzhou, the decaying capital of Gansu Province on the Yellow River.

To read more: http://www.iht.com/articles/2006/03/05/news/noodles.php#

Defense Spending Rises by 15%

The China Post reports:

China's military budget will increase almost 15 percent this year to US$35 billion, a senior official said Saturday, amid warnings that Taiwan's "secessionist forces" were moving toward independence.

"According to the draft budget given to this year's congress by the State Council, the proposed national defense expenditures for 2006 total 283.8 billion yuan (US$35 billion) ... up 14.7 percent from last year's," said Jiang Enzhu, a spokesman for the National People's Congress (NPC).

"I want to stress that China is a peace-loving country... China insists on a road of peaceful development and China has no desire nor the ability to considerably expand its military armaments," Jiang told a press conference.

To read more:

http://www.sinolinx.com/frame/sinolinx.php?XML=0421mkw90sinolinxnewsfeed4vhjHi4341&url=http://www.chinapost.com.tw/asiapacific/detail.asp?ID=78086%26GRP=C

What the Future Might Bring

Mr. Authur Bright in the CSM writes:

A democratic China may bring as much harm to Asia as it does good, according to a new report from an Australian defense think tank. In an Australian Strategic Policy Institute report, economist David Hale warned that the peaceful, predictable economic engagement policies of the current Beijing could be undone by the greater democracy the next generation of Chinese leaders might bring.

To read more:

http://www.csmonitor.com/2006/0302/dailyUpdate.html

A Darker Picture

Mr. Minxin Pei at ForeignPolicy.com paints a very disturbing picture about China's economic rise in his essay The Dark Side Of China's Rise.