China Challenges

New Bankruptcy Law

Asia Times Online reports:

When Zou Hailin was first invited to take part in the drafting of China's new bankruptcy law in 1994, he hardly expected that it would take 12 years for the legislation to see the light of day.

But at last, the Standing Committee of the National People's Congress (NPC), China's top legislature, passed the law on Sunday. It will come into effect on June 1, 2007, and the current enterprise bankruptcy law will be abolished at the same time.

To read more:

http://www.atimes.com/atimes/China_Business/HH31Cb02.html

Growing Scandal in Shanghai

The China Economic Review reports:

Nineteen district governors in Shanghai were removed from their posts in the biggest scandal in the city in decades. Investigators are looking into misuse of the city's pension fund, worth billions of dollars, the Financial Times reported.

The scandal has been loosely linked to the city's mayor in 2002, Chen Liangyu, who is currently Shanghai's most senior official and sits on the Communist party Politburo in Beijing.

Shanghai, China's financial centre, was expected to set an example of good management but the city's pension deficit has grown to US$88 million, the newspaper reported. The man in charge of the Shanghai Labour and Social Security Bureau is under investigation for using funds to speculate in real estate.

To read more:

www.chinaeconomicreview.com

Not Bowing to Beijing

Raymond Ma wrote in the SCMP on August 27:

Jimmy Wales, founder of the open-forum internet encyclopedia Wikipedia, vowed yesterday he would not go down the same path as search engine Google by bowing to pressure from Beijing to censor sensitive articles.

Wikipedia, whose open invitation to write and edit articles has become increasingly popular in China, has been blocked by mainland censors since October. Mainland internet users have had to rely on a similar, but heavily censored clone, put together by Chinese Web portal Baidu, which puts a positive spin on events politically sensitive to Beijing such as the Tiananmen crackdown of 1989.

To read more:

http://asiamedia.ucla.edu/article-eastasia.asp?parentid=51805

Limited Job Creation in Asia

The Shanghai Daily reports:

EYE-POPPING economic growth and productivity gains in East Asia haven't led to adequate job creation, higher wages or improved working conditions in the region, the International Labor Organization said in a report yesterday.

"If East Asia's economies are to enjoy sustainable economic growth, they must ensure a balance between productivity and employment growth," Gyorgy Sziraczki, head of economic and social analysis for the ILO Asia-Pacific regional office, said in a statement.

The report, entitled "Labor and Social Trends in Asia and the Pacific 2006: Progress towards Decent Work," was released as the UN agency prepared to open a four-day meeting in Busan, South Korea today.

To read more:

http://www.shanghaidaily.com/art/2006/08/29/290429/East_Asian_growth_has_not_created_more_jobs__high_wages.htm

Is China Too Rich?

Newsweek reports:

The United States has been worrying for the past 25 years about a mounting trade deficit and the threat it poses to America's financial pre-eminence. But China now views its surplus with growing alarm, too. Its dollar mountain reflects huge demand for Chinese goods and the Chinese currency needed to buy those goods. In mid-2005, Chinese officials, under intense pressure, did allow the renminbi to rise slightly, by just over 2 percent, but they fear—with some reason—that to go further could undermine their export competitiveness and lead to bankruptcies.

To read more:

http://www.msnbc.msn.com/id/14535192/site/newsweek/

The Best Chinese Brands

Chinese banks dominant BusinessWeek's new list of the top 20 Chinese brands.  To view the list:

http://www.businessweek.com/globalbiz/content/aug2006/gb20060825_342949.htm 

The Party is Gaining Educated Members

Mr. David Wall writes in the Japan Times:

The Chinese government recently announced that membership in the Chinese Communist Party (CCP) has grown to a record 71 million; apparently there are also 17 million applicants waiting to join. Last year 2,540,000 people were admitted. Since 1990 party membership has grown by almost one-fifth.

It would appear, then, that increasing numbers of Chinese, especially younger college-educated city-based people, are concerned about the impact of China's development on the poor, especially the rural poor. Are they turning with revolutionary zeal to Marx and Lenin to help them turn China's new capitalists, inside and outside of government, into better communists, fighting for socialist principles? Maybe or maybe not.

To read more:

http://search.japantimes.co.jp/mail/eo20060828a2.html

The Struggle to Find Good Chinese Engineers

The Shanghai Daily reports:

The city's rapidly expanding subway network is facing a severe shortage of engineers and properly trained managers, according to a human resources guidebook published by the Shanghai Personnel Bureau yesterday.

The city's Metro system and maglev line will need 14,000 engineers and managers by 2010, according to the report, but currently there are only 6,049 such professionals working in the city.  The report said similar shortages threaten several other industries, including auto and equipment manufacturing, astronautics, ship building, and construction.

To read more:

http://www.shanghaidaily.com/art/2006/08/24/289961/City_faces_dearth_of_subway_engineers.htm

Another M&A Deal in Banking Sector

The New York Times reported on Friday:

China Construction Bank, one of China's four main state- controlled banks, agreed Thursday to buy the Hong Kong and Macao retail banking operations of Bank of America for $1.25 billion - the first purchase by a big Chinese bank of significant operations from an American one.

American banks have been actively buying stakes in Chinese banks for more than a year, starting with Bank of America's $3 billion acquisition in June 2005 of a 9 percent stake in China Construction Bank. But Chinese institutions have been looking for their own acquisitions outside mainland China, partly as a way to generate foreign currency earnings and limit their exposure to potentially sharp moves in the future value of China's currency against the dollar.

To read more:

http://www.iht.com/articles/2006/08/24/business/bank.php

The American Push to Learn Mandarin

The Washington Post reports:

More than 1.3 billion people worldwide speak Chinese, and about 885 million of those people speak Mandarin, China's official language and dominant dialect. In the United States, only about 24,000 students in grades seven through 12 study the language, according to a report from the Asia Society, a nonprofit, nonpartisan group that seeks to build ties between the United States and Asia. But educators say those students reflect a steady growth in the number of Americans wanting to learn Chinese.

"People are finally beginning to pay attention to Mandarin as a major cultural and economic prospect for students," said Michael H. Levine, executive director of education for the Asia Society. "The push is coming from the defense [community] and government and grass-roots interest from parents."

To read more:

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/25/AR2006082501418.html?referrer=email

Lenovo Poaches Another Dell Executive

The NY Times reports:

Lenovo, the world's third-largest computer maker, has hired its fourth Dell executive in little more than a week, continuing to poach top officers from its bigger rival.

Lenovo, the Chinese computer maker that paid $1.25 billion last year to acquire the personal computer business of I.B.M., has been moving aggressively to strengthen its executive ranks as it tries to transform itself into a global computer giant in a competitive market.

To read more:

http://www.nytimes.com/2006/08/26/technology/26dell.html?_r=1&th=&adxnnl=1&emc=th&adxnnlx=1156580297-6a2tKnN4YZ6k7HkcuBRULg&oref=slogin

Rising Chinese Import Prices

The NY Times reports:

In the United States, data shows that Chinese import prices, which have fallen since data collection began in 2003, are leveling off, as are prices from other low-cost emerging markets.

The price of Chinese goods at the factory gates has leapt upward in the last four months, according to the purchasing managers’ survey taken by the London-based NTC Research. Its index was a tad below 50 — a level indicating stable prices — in March but now stands at 56, a steep increase by the standards of a survey that usually moves in fractional increments.

To read more:
http://www.nytimes.com/2006/08/26/business/worldbusiness/26inflate.html?_r=1&ex=1314244800&oref=login

Report: Yuan Rises Limited to 3% Per Year

Yesterday the Shanghai Daily reported:

China should prevent the value of the yuan from rising "too fast" against other currencies, but an annual increase of 3 percent would be acceptable and not have a large negative affect on foreign trade, the Ministry of Commerce said in a statement.

A sharp increase in the value of the yuan would likely reduce the competitiveness of Chinese products in international markets and cause financial difficulties for labor-intensive industries, the ministry said in a statement posted on its Website late Tuesday.

To read more:

http://www.shanghaidaily.com/art/2006/08/24/290012/Yuan_shouldn__039_t_rise_more_than_3__a_year.htm

China's Global M&A Activity is Understated

A new report from McKinsey Quarterly on China's M&A activity says:

The computer maker Lenovo's $1.35 billion acquisition of IBM's personal-computer unit, in May 2005, made Lenovo the world's third-biggest maker of PCs. This move has caught the greatest degree of attention in what is still a relatively small tide of outbound Chinese direct investment.

But the official data—$5.5 billion in 2004 and an estimated $7 billion in 2005—do not include investments (such as the IBM acquisition) made by Chinese subsidiaries listed in Hong Kong or overseas exchanges. We estimate that actual outbound foreign direct investment is two to three times higher than the official figures. China is therefore a material, if not yet massive, new force in the global market for business assets.

To read more:

http://www.mckinseyquarterly.com/article_page.aspx?ar=1845&L2=18&L3=27&srid=17&gp=0

China Unlikely To Live Up to WTO Promises

The China Econmic Review reports:

China is unlikely to live up to WTO commitments on banking, experts said in Washington. Upon joining the WTO in 2001, China committed to provide a uniform environment for all banks within five years, the Hong Kong Standard reported.

"However, it is unlikely that the Chinese government will immediately remove all hurdles to create a level play field," said Vickie Tillman, executive vice president at Standard and Poor's credit market services while testifying in front of a US Congress panel on China's financial system. Foreign banks still face a number of restrictions that do not apply to domestic banks including long licensing procedures, more stringent capital requirements for branch operations, limited participation in local banks and foreign debt quotas.

To read more:

http://www.chinaeconomicreview.com/subscriber/newsdetail/7768.html

The Coming Global Water War?

The IHT reports:

The facts behind the crisis tell their own story. By 2025, more than two billion people are expected to live in countries that find it difficult or impossible to mobilize the water resources needed to meet the needs of agriculture, industry and households. Population growth, urbanization and the rapid development of manufacturing industries are relentlessly increasing demand for finite water resources.

Symptoms of the resulting water stress are increasingly visible. In northern China, rivers now run dry in their lower reaches for much of the year. In parts of India, groundwater levels are falling so rapidly that from 10 percent to 20 percent of agricultural production is under threat.

To read more:

http://www.iht.com/articles/2006/08/23/opinion/edwatkins.php#

A Chinese Offer for Gateway?

The Financial Times reports:

Shares of Gateway, a struggling US computer maker, jumped more than 13 per cent on Wednesday after Lap Shun Hui, a China-born entrepreneur, made an unsolicited $450m bid for the company’s retail operation. Gateway, whose stumbles have relegated the company to a distant third in the US computer market behind Dell and Hewlett-Packard, said its board would review the offer.

In a letter to Gateway on Monday, Mr Hui, who sold eMachines, a low-cost PC maker, to Gateway in 2004 for $290m, urged the company to “adopt a sense of urgency” to address increased competition and a declining stock price.

To read more:

http://www.ft.com/cms/s/5c9c603c-32ec-11db-87ac-0000779e2340,_i_rssPage=81cea682-52a8-11da-8d05-0000779e2340.html

Survey Shows Bribery is Widespread

The International Business Times Reports:

Most Chinese see bribes and kickbacks as an indispensable part of doing business in the country, state media on Monday cited a survey as showing. China is known for its millennium-old business culture centered on "guanxi," or connections, the bulk of which are nurtured through underhand deals with agreements being reached via cash-stuffed envelopes, on dinner tables or at the golf course.

About 94 percent of respondents to the survey by Nankai University thought bribery was widespread in business and 77 percent said they would do so themselves, the state-run China Youth Daily said.

"Most people think their businesses can barely survive if they don't do so," the newspaper said.

To read more:

http://www.ibtimes.com/articles/20060821/china-bribes-business.htm

Conflicting GDP Numbers

Frank Ching writes in the Japan Times:

Each year, China announces before yearend what its growth is for that year. This does not enhance confidence in Chinese figures. After all, it takes time for the different provinces to assemble their figures and send them to Beijing, where they are aggregated.

What is even stranger is that the figure announced is never the sum of those sent in by the provinces. The figure is always less, betraying a belief in Beijing that provincial figures cannot be trusted. So what one has, at the end, is an estimate based on Beijing's best guess of the extent to which various provinces have inflated their figures.

For the first half of 2006, all China's provinces reported double-digit growth, with an overall growth rate of 12 percent. However, the National Bureau of Statistics put the country's growth at 10.9 percent -- 1.1 percent less -- discounting $ 10.06 billion in growth.

What is even stranger is that the figure announced is never the sum of those sent in by the provinces. The figure is always less, betraying a belief in Beijing that provincial figures cannot be trusted. So what one has, at the end, is an estimate based on Beijing's best guess of the extent to which various provinces have inflated their figures.

Local statisticians know which side their bread is buttered on. Local governments pay them and decide if and when they should be promoted. Changing this situation should result in more reliable figures.

To read more:

http://www.asiamedia.ucla.edu/article.asp?parentid=51227

Is the Property Market Ready to Rebound?

The Standard reported ealier this month:

JPMorgan, the US investment bank, and Jones Lang LaSalle, the property agency, both say they remain bullish on the mainland property market for the long run and believe the worst for the sector is over. After all the austerity measures the central government and related government bodies have implemented over the previous months, it was the first brave comment from the investment community that it is time for foreign investors to kick-start their hunting - both in the stock and property markets.

To read more:

http://www.thestandard.com.hk/news_detail.asp?we_cat=2&art_id=24557&sid=9213373&con_type=1&d_str=20060808

China's Pension Time Bomb

The China Daily reports:

According to a United Nations study released last year, the number of people aged 60 or over is expected to rise to 31 percent of the population in 2050, or more than 430 million people, from just 10.9 percent last year. That would be well above the projected world average of 21.7 percent in 2050.

The report said the appearance of an aging population in a developing country where per capita GDP has only just exceeded $1,000 was "unprecedented". "The country is unique in the world in that is it aging first without becoming affluent," it said.

Since China began opening up to the outside world almost 30 years ago, millions of people have flooded to cities from the countryside looking for work, and have helped turn the country into the world's factory, making everything from shoes to cars. Analysts have warned that China faces a "pension time bomb" from its aging population.

To read more:

http://www.chinadaily.com.cn/bizchina/2006-08/21/content_669739.htm

Excessive Overtime is Common

As Apple fights sweatshop claims at a key Chinese supplier, Businessweek notes:

Excessive overtime has been a persistent problem for companies doing business in China. A 2004 study by the nonprofit social research and auditing organization Verité found that of 142 Chinese factories it audited during 2002 and 2003, 93% used excessive overtime, which it defines as more than 60 hours per week.

To read more:

http://www.businessweek.com/technology/content/aug2006/tc20060818_244959.htm?chan=top+news_top+news+index_technology

Another IPR Crackdown

The China Economic Review reports:

More than eight million pirated CDs and DVDs have been seized as part of a 100-day crackdown on illegal movies and computer software, state media reported Thursday. Since the campaign began on July 25, more than 89,000 shops and street vendors have been raided, leading to the closure of 3,000 outlets while punishments have been handed out to more than 9,500 businesses. A total of 8.3 million CDs and DVDs have been confiscated by the authorities so far. However, an AFP report noted that despite these periodic crackdowns, the supply of counterfeit DVDs appears undiminished.

To read more:

www.chinaeconomicreview.com

Asian Free Trade Community

ChannelNewsAsia reports:

KUALA LUMPUR : Japanese officials have proposed a sprawling 16-nation free-trade grouping with China, South Korea, Australia, India, New Zealand and the 10-nation Southeast Asian bloc. The 16 last year formed the East Asia Summit - seen as a precursor of a giant free-trade community embracing half the world's population.

To read more:

http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/225409/1/.html

Not So High Savings Rate

The Development Bank Research blog notes:

According to a new report by McKinsey “Putting China's capital to work”, Chinese households save 23.8% of their disposable income, not particularly high compared to the saving rates of Asian tigers in their high growth period.

Indian households save 31.9% of their income, a ratio that is much higher than Chinese. The current saving rate of French is 16.6%

Chinese = high saving rate? Myth busted!

The report points out that the high total saving rate of China is mostly the result of higher corporate saving rate, which stands at twice world average. The report however also cautions readers that the higher household saving rate of Indians could be the result of small and micro businesses reporting themselves as households.

To read more:
http://www.bankresearch.org/economicpolicyblog/india/index.html

The China/Iran Mismatch

The Jamestown Foundation has a new article (PDF) about the relationship between Iran and China. 

It can be downloaded at the following URL:

http://www.jamestown.org/docs/Jamestown-ChinaIranMismatch.pdf

Hu's Unions at Walmart

The CER reports:

The creation of Wal-Mart's first Chinese union in the southeastern city of Quanzhou followed personal prompting from President Hu Jintao, state media reported, indicating efforts to unionize China's 150,000 foreign companies could intensify. In a written order to the All-China Federation of Trade Unions (ACFTU) in March, Hu told the union to "do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises," the newspaper said, citing the group's records.

The ACFTU responded by establishing an office to target the Quanzhou Wal-Mart store, where employees voted to form a union on July 29. Since then, employees at 16 other Wal-Marts in China also have formed unions, and the company has agreed to cooperate. Only 26% percent of China's foreign companies have unions, but the ACFTU is aiming to boost that to 70% by the end of next year.

To read more:
www.chinaeconomicreview.com

Small Demonstration against Koizumi

The Washington Post reports:

BEIJING, Aug. 15 -- As uniformed and plainclothes police looked on, Chinese protesters incensed at the Japanese prime minister for visiting a controversial war shrine gathered Tuesday in front of the Japanese Embassy in Beijing, chanting "Down with Japanese imperialism!" and "An eye for an eye, blood for blood!"

The demonstration followed Prime Minister Junichiro Koizumi's trip earlier Tuesday to the Yasukuni Shrine in Tokyo, which honors Japan's war dead, including 14 officers judged as World War II criminals. He had made visits to the shrine before but never on such a symbolic date, the anniversary of the end of World War II in the Pacific.

To read more:

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/15/AR2006081501055.html?referrer=email

Old Jiang's Travels

AP reports:

BEIJING - He speaks English and shows it off by reciting the Gettysburg Address. Now former President Jiang Zemin is adopting another Western custom: the post-retirement publishing binge.

Ahead of his 80th birthday Thursday, government publishers have released a retrospective on Jiang's foreign travels - the closest thing yet to a Chinese presidential memoir - and a three-volume set of speeches, letters and decrees.

To read more:

http://www.msnbc.msn.com/id/14363317/

Koizumi Visits Yasukuni Again

AsiaOne reports:

TOKYO (AP) -- Prime Minister Junichiro Koizumi made a pilgrimage Tuesday to a Tokyo war shrine reviled by critics as a symbol of militarism, triggering a further erosion in Japan's ties with its neighbors just a month before he leaves office.

The impact of the visit to Yasukuni Shrine, Koizumi's sixth as prime minister, was heightened by its timing on Aug. 15, a date viewed with sadness in Japan as the anniversary of its World War II surrender, but celebrated as a day of liberation from Japanese colonial rule elsewhere in Asia.

The early morning pilgrimage prompted protests in China and South Korea, which suffered heavily under Japanese occupation. The countries view the shrine, which honors war criminals among Japan's 2.5 million war dead, as a glorification of imperialism.

South Korean President Roh Moo-hyun called on Japan to "prove it has no intention to repeat" its past aggression as his government summoned the Japanese ambassador to issue an official protest.

To read more:

http://hosted.ap.org/dynamic/stories/J/JAPAN_WAR_SHRINE?SITE=ASIAONE

Outsourcing: No Longer So Scary

Mr. Daniel Gross writes in the NY Times:

In December 2005, the McKinsey Global Institute predicted that 1.4 million jobs would be outsourced overseas from 2004 to 2008, or about 280,000 a year. That's a drop in the bucket. In July, there were 135.35 million payroll jobs in the United States, according to the Bureau of Labor Statistics. Thanks to the forces of creative destruction, more jobs are created and lost in a few months than will be outsourced in a year. Diana Farrell, director of the McKinsey Global Institute, notes that in May 2005 alone, 4.7 million Americans started new jobs with new employers.

What's more, the threat of outsourcing varies widely by industry. Lots of services require face-to-face interaction for people to do their jobs. That is particularly true for the biggest sectors, retail and health care. As a result, according to a McKinsey study, only 3 percent of retail jobs and 8 percent of health care jobs can possibly be outsourced. By contrast, McKinsey found that nearly half the jobs in packaged software and information technology services could be done offshore. But those sectors account for only about 2 percent of total employment. The upshot: “Only 11 percent of all U.S. services job could theoretically be performed offshore,” Ms. Farrell says.

To read more:

http://www.nytimes.com/2006/08/13/business/yourmoney/13view.html?_r=1&8ym&emc=ym&oref=slogin

Dell to Offer Refunds

WinBeta reports:

Dell is offering refunds to customers in China who sued the company saying their laptops had different microprocessors than advertised. Dell, the second biggest PC maker in China after Lenovo, was sued by 19 people on Tuesday in Xiamen in the eastern province of Fujian, China Daily reported on its Web site on Friday. In July, a case was brought in Shanghai.

To read more:

http://www.winbeta.org/comments.php?id=4441

Disney Will Come to Shanghai

The Hindu reports:

China has denied media reports that it has started relocation of thousands of residents from an area in Shanghai identified for constructing the first Disney theme park on the mainland.

Rejecting media reports, local officials claimed that no relocation plan exists for local residents for the construction of the Disney theme park in Chuansha Township.

An official with the Chuansha Township of the city's Pudong New District denied to have seen "any so-called layout blueprint", Xinhua news agency reported.

To read more:

http://www.hindu.com/thehindu/holnus/003200608130311.htm

Human Corpse Repair Work

The NY Times reports from Dalian, China:

Inside a series of unmarked buildings, hundreds of Chinese workers, some seated in assembly line formations, are cleaning, cutting, dissecting, preserving and re-engineering human corpses, preparing them for the international museum exhibition market.

To read more:

http://www.nytimes.com/2006/08/08/business/worldbusiness/08bodies.htm?_r=1&oref=slogin

One Human = 18,000 Dogs

Back on August 4, the Financial Times reported:

The government-ordered slaughter of tens of thousands of dogs has shone a spotlight on the changing feelings of ordinary Chinese towards their canine companions – and exposed the officials behind the killings to unusual criticism.

The "dog-beating storm" was ignited this week by newspaper reports from south-western Yunnan province, where 54,429 dogs – 99 per cent of the Mouding county canine population – were destroyed after three local people died of rabies.

To read more:

https://registration.ft.com/registration/barrier?referer=http://blog.chinaeconomicreview.com/&location=http%3A//www.ft.com/cms/s/49871928-23e8-11db-ae89-0000779e2340.html

A Soaring Trade Surplus

The China Economic Review reports:

China's trade surplus rose to a record high for the third straight month in July, the Wall Street Journal reported, quoting figures from Dow Jones Newswires. The July surplus hit US$14.6 billio, breaking the US$14.5 billion record set in June. Exports rose 22.6% in July from a year earlier and imports increased by 19.7% to $65.72 billion. If the trend continues, China's trade surplus at the end of the year may be 50% higher than in 2005, when it hit US$101.88 billion, Julian Jesson, chief international economist with Capital Economics told the newspaper. Economists believe the record surpluses may push Beijing to allow for faster appreciation of the yuan. To read more: www.chinaeconomicreview.com

Trophy University Degrees

At Businessweek, Nandani Lynton notes some educational problems in China and India.  She explains:

By some other measures, both countries look pretty good. China graduates about 1.7 million students from 1,500 colleges and universities annually, of whom 350,000 are engineers. India produces about 3 million college and university graduates, including 440,000 engineers. Those numbers, though, don't tell the whole story. The McKinsey report states that only 10% to 25% of these graduates are employable by multinationals, and this is only partially because of language challenges. Every human resources executive I've met who works in China or India agrees with this evaluation.

The source of the problem is cultural. Young people in these countries are highly motivated to study and learn, but only in theory. There is no tradition of practical application. So engineers don't go into operations, factories, or mines, and don't really know the machines and conditions for which they are designing processes. Chinese and Indian students who have just earned BAs want to pursue MBAs right away, and neither they nor their parents understand the value of practical experience. The degree is seen as a trophy, a traditional ticket to higher status.

To read more:

http://www.businessweek.com/globalbiz/content/jul2006/gb20060731_767149.htm

Hong Kong - Surveillance Law Passes

The IHT reports:

Pro-Beijing lawmakers approved legislation here Sunday giving broad authority to the police to conduct covert surveillance, including wiretapping phones, bugging homes and offices, and monitoring e-mail.

The bill was passed by the 60-member Legislative Council in a vote of 32 to 0 soon after pro-democracy lawmakers walked out of the chamber in protest Sunday morning. The Democratic Party and its allies had tried to introduce nearly 200 amendments through four days of marathon debates, but all were defeated or ruled out of order.

To read more:

http://www.iht.com/articles/2006/08/06/news/hong.php

Its a Small World

Businessweek says:

Radical change in the structure of the world economy is rare. But make no mistake: The emergence of world-class companies from developing nations is a shift that portends a new global game.

Indeed, emerging economies are no longer just about outsourcing or tapping into local markets. We are seeing the first wave of emerging-nation players that have clear advantages in their industries. Rather than the competition among three or four countries that long dominated global commerce, we have entered an evolving game of multiple geographies. The importance of that change -- and the challenge it poses to the dominance of the West and Japan -- cannot be overstated.

To read more:

http://businessweek.com/magazine/content/06_31/b3995011.htm

Tojo's Views On Yasukuni Shrine

The Japan Times reports:

Wartime Prime Minister Gen. Hideki Tojo gave orders in a secret document that Yasukuni Shrine should honor only those who are killed in battle, according to the document made available Saturday.

The document, dated July 15, 1944, and issued under the name of Army Minister Hideki Tojo, says only military personnel and civilian military employees whose deaths "resulted directly from military service" should be enshrined at Yasukuni. Tojo was concurrently serving as army minister.

The document says those who died in places other than on the battlefield are in principle not entitled to be honored at the war-related Shinto shrine. If his orders were observed, Tojo and other Class-A war criminals should not have been entitled.

To read more:

http://search.japantimes.co.jp/mail/nn20060806a1.html

World's Biggest Importer by 2010?

The Progressive Policy Institute says China could become the world's largest importer by 2010.  They write:

Ships full of cameras, furniture, and clothes flow in an unbroken chain from Shanghai, Tianjin, and the Pearl River Delta into America's Pacific ports. Is anything going in the other direction? Well, yes. China has embarked on an import binge with no precedent in American history, and probably few in world history.

To read more:

http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=108&subsecID=900003&contentID=252810

Abe Made Secret Shrine Visit in April

Xinhua reports:

China on Friday expressed concern over reports that Japanese Chief Cabinet Secretary Shinzo Abe visited the Yasukuni Shrine in April, Foreign Ministry spokesman said.

"We hope that the Japanese side will make similar efforts along with the Chinese side to push Sino-Japanese ties back to the track of normal development at an early date," spokesman Qin Gang said while asked for comments.

To read more:

http://english.peopledaily.com.cn/200608/05/eng20060805_290077.html

Refusing to Take Chinese Illegals Back

June Kronholz in the Wall Street Journal writes:

What can the U.S. do if a huge trading partner like China won't take back thousands of illegal immigrants? Not much, apparently.

In a spat over U.S. asylum policy, China is refusing to take back 40,000 deportable immigrants, insisting that asylum-seekers such as Falun Gong members and other political opponents of Beijing be returned as well. That has put the U.S. in a sticky position.

If illegal immigrants "are not accepted back, then, for all intents and purposes, they are free to remain in this country because we have no place to remove them to," Homeland Security Secretary Michael Chertoff recently told an audience at the American Enterprise Institute, a conservative Washington think tank.

To read more:

http://yaleglobal.yale.edu/display.article?id=7921

Delay in Higher Auto Parts Tariff

The China Economic Review reports:

Foreign auto manufacturers operating in China received a boost as Beijing decided to delay a planned increase in tariffs on auto parts, the Wall Street Journal reported. As of July 1, tariffs were set to rise for auto parts that cost 60% or more of the total price of the completed vehicle. But a statement, dated July 5, posted on the General Administration of Customs’ website said the increase would be postponed until July 1, 2008.

Since April 2005, China has imposed tariffs of up to 30% on certain auto parts – well in excess of the international standard of 13-17% – much to the irritation of the US and EU who complained to the WTO this breached trading principles as it discriminated against foreign-made components in favor of local ones. It is thought that the Chinese decision to postpone the increase will help further talks between the three parties at the WTO, which have so far failed to find a resolution.

To read more:

www.chinaeconomicreview.com

Notes on Japan A-bomb Program Found

The Japan Times writes:

The U.S. Library of Congress has two books of notes written by two scientists involved in Japan's unsuccessful attempt to develop atomic bombs during the war, it was learned recently.

To read more:
http://search.japantimes.co.jp/mail/nn20060804a2.html

Prioritizing Service Outsourcing

On July 27, the China Daily reported:

The government is poised to prioritize service outsourcing in the coming years, in a bid to boost service industries, according to Ministry of Commerce officials.

"The government will establish specific policies to encourage service outsourcing in China," said Li Zhiqun, director of the ministry's department of foreign investment administration.

He said the ministry would consult with related ministries to have outsourcing listed as one of the industries in which investment is most encouraged.

To read more:

http://www.chinadaily.com.cn/bizchina/2006-07/27/content_650676.htm

Next Missile Test in Taiwan?

On July 31, the CSM reported:

As Asia grapples with the fallout from North Korea's projectile posturing, another military flashpoint in the region - the Taiwan Strait - is in the midst of missile tensions as well.

A private TV station reported earlier this month that Taiwan's military was preparing to test-fire a tactical missile in September capable of striking targets in China. While the details were sketchy and the claim was swiftly denied by the Ministry of National Defense, they struck a chord with analysts who have heeded the frustration among hawks in Taiwan over the island's vulnerability in the face of China's military might, including its expanding missile arsenal.

To read more:

http://www.csmonitor.com/2006/0731/p07s02-woap.html?s=u

Organ Harvesting Allegations

An editorial in the CSM says:

China is scurrying to welcome the world when it hosts the 2008 Olympic Games. That event will bring thousands of visitors with laptops and video cameras, along with TV networks. What kind of country will these foreigners find? Will it be one whose government respects its own citizens' rights?

To read more:

http://www.csmonitor.com/2006/0803/p08s02-comv.html?s=hns

Lessons from Tangshan

Kristine Kwok writes in the SCMP on July 28:

Mainland media reports have accused the Yunnan government of failing to alert the public about seismic warnings ahead of last week's earthquake that claimed at least 22 lives.

The magnitude-5.1 quake hit northeast Yunnan near Zhaotong on July 22 and a spate of  reports has accused the authorities of not heeding predictions that an earthquake was imminent.

The reports came on the eve of today's 30th anniversary of the 7.8-magnitude Tangshan earthquake that killed more than 240,000 people. Since the 1976  disaster, claims have surfaced that the Tangshan government did not heed experts' early warnings.

Last weekend's jolt, centred in Zhaotong's Yanjin county, drew media attention earlier this week when CCTV's Law Report said the Yunnan Earthquake Bureau had predicted early this month that a quake would hit the area.

To read more:

http://www.asiamedia.ucla.edu/article-eastasia.asp?parentid=49977

Dumping Products on the West

My new article about anti-dumping laws in the West is posted on the EuroBiz website:

The EU's decision to impose new anti-dumping duties on Chinese and Vietnamese-made shoes in March has led to a new round of heated debate about low-priced imports from East Asia and the painful impact they are having on some sectors of the European economy.

In recent years, protectionist advocates have urged EU officials to strictly enforce anti-dumping regulations and impose retaliatory duties, if needed, against their rivals from the developing world in industries ranging from leather, DVDs, tungsten electrodes and shoes.

To read more:

http://www.sinomedia.net/eurobiz/v200608/trade0608.html