China Challenges

Guangdong Factories Hit By Strikes in China Manufacturing Slowdown

Rightsite reports:

Already facing a sharp slowdown, factories in China's manufacturing heartland are now experiencing a rash of labor strikes reminiscent of the worker unrest that swept the country last year.

Thousands of workers at a massive shoe factory in the southern city of Dongguan last week clashed with police as they marched to a local government office to protest the loss of overtime.

The strike at the plant owned by the Taiwanese Pou Chen Group came shortly after 18 managers were laid off because of declining orders, according to the Economic Observer, a Chinese newspaper.

Earlier in the week, 1,000 workers walked out of a plant in nearby Shenzhen that manufactured computer keyboards for leading brands such as Apple and IBM. Employees said they were being forced to work excessive hours on weekdays so that owners didn't have to pay overtime on Saturdays, as required by law. The company acquiesced after three days.

"People had to work so late, they couldn't concentrate any longer," said Zhao Xiaobing, 38, a former employee. "They will have more strikes."

A day before in Shenzhen, 400 workers went on strike in a pay dispute at an underwear factory.  Employees reportedly were denied fair wages and forced to meet unachievable production quotas, according to China Labor Watch, a New York-based workers advocacy group.

Read more: http://rightsite.asia/en/article/guangdong-factories-hit-strikes-china-manufacturing-slowdown?utm_source=RightSite+Newsletter+Mailing+List&utm_campaign=16e4d4995d-RS_EN_Newsletter_2011_11_3011_29_2011&utm_medium=email

China may be at policy turning point

Marketwatch reports:

HONG KONG (MarketWatch) — The bad news coming out of China’s economy in recent days has been more a series of thuds than a trickle.

HSBC’s widely watched preliminary manufacturing Purchasing Managers Index fell under 50 last month to reach a 32-month low, while foreign reserves are now falling, as well as property prices.

But the silver lining in this downbeat news could be an early Christmas gift for equity investors in the form of a decisive loosening of monetary policy. China could be ready to unleash its own big bazooka, giving equity markets a lift.

Following the move last week to ease the reserve ratio requirements (RRR) for twenty rural co-operative banks 50 basis points to 16%, expectations are growing this is the forerunner of a more general easing.

IHS Global Insight released a note last week titled “And now the deluge? – China starts loosening policy in earnest.” They say last week’s initial cuts demonstrate a clear shift in policy bias and to expect a headline RRR cut around the end of the year.

Read more: http://www.marketwatch.com/story/china-may-be-at-policy-turning-point-2011-11-27?siteid=rss&rss=1

China to Cancel College Majors That Don’t Pay

The WSJ reports:

Much like the U.S., China is aiming to address a problematic demographic that has recently emerged: a generation of jobless graduates. China’s solution to that problem, however, has some in the country scratching their heads.

China’s Ministry of Education announced this week plans to phase out majors producing unemployable graduates, according to state-run media Xinhua. The government will soon start evaluating college majors by their employment rates, downsizing or cutting those studies in which less than 60% of graduates fail for two consecutive years to find work.

The move is meant to solve a problem that has surfaced as the number of China’s university educated have jumped to 8,930 people per every 100,000 in 2010, up nearly 150% from 2000, according to China’s 2010 Census.

Read more: http://blogs.wsj.com/chinarealtime/2011/11/23/china-to-cancel-college-majors-that-dont-pay/

Bonds show 60% of Chinese companies dabble in property

The Sydney Morning Herald reports:

Almost 60 per cent of Chinese companies that sold bonds in the past six months invest in the property market, undermining government efforts to limit real estate fundraising and curb inflation.

Seventy-four of 121 companies that filed bond prospectuses since May with Chinabond, the nation's clearinghouse, count one of their main businesses as real estate, have property subsidiaries or invest in the market. Engine maker Zongshen Power Machinery Co. said its parent company is involved in development. Kangmei Pharmaceutical Co., which makes medicine to treat high blood pressure, invests in real estate.

While property values dropped in 33 of 70 cities in October, the most in 2011, home prices rose 2.9 per cent in the past year in Shanghai and 4.4 per cent in Shenzhen.

Read more: http://www.smh.com.au/business/world-business/bonds-show-60-of-chinese-companies-dabble-in-property-20111124-1nw20.html

3 Reasons Why The U.S. Economy Is Better Than China's

An article at Seeking Alpha says:

Source: The United States vs. China— Which Economy Is Bigger, Which Is Better by Derek Scissors, Ph.D, The Heritage Foundation

To read more: http://seekingalpha.com/article/307565-3-reasons-why-the-u-s-economy-is-better-than-china-s?ifp=0&source=email_global_markets

Apple launches audit of Chinese suppliers

The FT reports:

Apple has hired an outside specialist firm to help audit the environmental practices of its suppliers in China following a series of critical reports by activists.

The maker of iPhones and iPads met a coalition of environmental groups in China on Tuesday and told them the firm was engaged in audits of suppliers with which they had found fault. The audits of 11 suppliers so far followed a meeting in August as the coalition prepared to release a sharply critical report.

Read more:http://www.ft.com/intl/cms/s/2/b257cdcc-107c-11e1-8010-00144feabdc0.html?ftcamp=rss&ftcamp=crm%2Femail%2F20111116%2Fnbe%2FAsiaMorningHeadlines%2Fproduct#axzz1e6vOAbbY

China to Get Tough on Employers Shirking Social Insurance Payments

China Briefing says:

Nov. 16 – China is mulling stronger enforcement of its latest Social Insurance Law by specifying harsher penalties for enterprises that delay or do not fulfill their payment obligations towards all five of the required social insurance items.

A draft document of the “Regulations on Social Insurance Declaration and Payment” was unveiled yesterday by the Ministry of Human Resources and Social Security (MOHRSS), clarifying that employers will be required to pay the whole social insurance package, which includes pension, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance. In contrast to the newly proposed Regulations, the previous legal document that is to be replaced (MOHRSS Decree [1999] No.2) imposed most of its emphasis on mandatory employer contributions to only three items (pension, medical insurance and unemployment insurance) and payment on work-related injury insurance and maternity insurance was not strongly enforced.

Read more: http://www.china-briefing.com/news/2011/11/16/china-to-get-tough-on-employers-shirking-social-insurance-payments.html?utm_campaign=20111117_ab&utm_medium=email&utm_source=asia_briefing_mail_list&utm_content=top_2

Obsession with exam scores in China results in dull minds

The Shanghai Daily says:

A POPULAR saying on the Chinese mainland goes: "Exams, exams, exams, the magic weapon of teachers; marks, marks, marks, the lifeblood of students."

Understandably, students do what their culture expects of them: They study hard to achieve good results in examinations. However, examination results are a function of the manner in which examinations are conducted.

As presently conducted, examinations assess mostly knowledge acquisition and retention, at the expense of knowledge application and generation. Typically, school examinations emphasize accuracy in the reproduction of informational content, a relatively low-level cognitive activity.

To concentrate their efforts on reproducing information accurately, students rely on memorization and repeated practice. Symptomatic of the syllabus-bound mentality, teachers cover and students study only or mainly materials prescribed in the syllabus. Students often approach their teachers prior to examinations in the hope of getting "tips" on what questions might be set in examinations.

In short, students have learned to play the examination game; failure to do so means elimination from the educational system - a personal failure, and a disgrace to the family. They view education in utilitarian terms, as a means to an end.

Read more: http://www.shanghaidaily.com/article/?id=487452&type=Opinion

Big City versus Countryside in China

The Shanghai Daily reports:

Complex social relationships and soaring home prices in small cities are major forces driving people back to the big cities, according to the survey.

"Small towns and counties are not a Xanadu (a fabled city of opulence)," said Li Liang, a cartoonist.

"There are lots of construction sites, and pedestrians and vehicles ignoring traffic rules. Moreover, unfairness is more prevalent in the small towns," Li said.

Many young Chinese from less-privileged families say they are judged according to family background rather than ability, claiming offspring from wealthy families get the good jobs because of their parents' networking and wealth.

This phenomenon is apparently rife in small towns and cities. Though unfairness exists in big cities, they at least have greater opportunities, survey respondents said.

"If I was born in a rich family, maybe I would be satisfied with the easy life in small towns," Xu said. "But I have to push myself to work hard just to afford my apartment."

Because of high home prices in big cities, she bought an apartment with her husband in Jiangxi Province as an investment. But she will not move back there to live.

"I have suffered the disadvantage of being born in a rural village. I cannot let my children suffer the same loss," she said.

Read more: http://www.shanghaidaily.com/nsp/Metro/2011/11/12/Young%2Bpeople%2Breturn%2Bto%2Bmake%2Bthe%2Bbest%2Bof%2Bthe%2Bcity/

How Walmart Is Changing China

The Atlantic has this long article:

The world’s biggest corporation and the world’s most populous nation have launched a bold experiment in consumer behavior and environmental stewardship: to set green standards for 20,000 suppliers making several hundred thousand items sold to billions of shoppers worldwide. Will that effort take hold, or will it unravel in a recriminatory tangle of misguided expectations and broken promises?

Read more:

http://www.theatlantic.com/magazine/archive/2011/12/how-walmart-is-changing-china/8709/?single_page=true

Selecting the Right Chinese Students

The Chronicle of Higher Education says:

The toughest question you can ask a Chinese student is also the easiest you can ask an American: "What do you think?" Many Chinese students don't know what they think because their parents and teachers just order them about. Their education alienates them from one another, from the world in which they live, and ultimately from themselves. Unable to construct a self-narrative, they may live comfortably in their bubble but have problems overcoming new challenges. In short, a Chinese education does not prepare most students to study abroad.

And it's easy to figure this out in a 30-minute interview, which must become a mandatory part of the application process if American colleges and universities are to recruit Chinese students who will thrive on campus.

Here's how to conduct the interview. First, it ought to be focused, detailed, and deliberate. Here are some examples of good interview questions that look for empathy, imagination, and resilience:

• Pick a novel or a movie, and discuss the characters. Which character did you identify with? Why? Which part of the book or movie made you sad? Made you angry? Why? What experiences have you had that remind you of events in the book or movie?
• Pick a memorable experience, and explain why it was so memorable. Tell the story. Explain your feelings during the experience. Why did you have these feelings? Do you know anyone either real or fictional who has had a similar experience? Did they behave the same as you did? Do you think their feelings were the same as yours?
• When was the last time you were angry or sad? What made you angry or sad? How did you get over your anger or sadness? What do you think will happen the next time you encounter the same situation?

Persist in asking "why?" Look for sincerity, for logic, and for clarity of thought.

Read more: http://chronicle.com/article/Selecting-the-Right-Chinese/129621/?sid=gn&utm_source=gn&utm_medium=en

Foxconn Building Robots to Solve China Labour Crisis

RightSite Asia reports:

Apple iPhone supplier and Taiwan electronics giant Foxconn moved a step closer to resolving its China labour woes recently by signing an MOU in Taiwan to start a "Robot Kingdom" to automate manufacturing.

The company had already announced in late July that it would be developing robots to do simple and routine work such as spraying, welding and assembling which are now mainly conducted by workers.

Foxconn currently has 10,000 robots and the number will be increased to 300,000 next year and 1 million in three years, according to its chairman, Terry Gou.

Foxconn, which has been plagued by a rash of worker suicides and other controversial labour issues, signed the agreement with the city of Taichung on October 29th, and Gou was on hand for the signing and to break ground for the first facility in the Robot Kingdom.

The robotics and automation facilities may generate some $4 billion in production value in the next three to five years and create about 2,000 jobs, Gou was quoted as saying.

Read more: http://rightsite.asia/en/article/foxconn-building-robots-solve-china-labour-crisis?utm_source=RightSite+Newsletter+Mailing+List&utm_campaign=0e0f8d7763-RS_EN_Newsletter_2011_11_0911_8_2011&utm_medium=email

Air in many China cities remains highly polluted

Shanghai Daily reports:

Nearly 40 percent of major Chinese cities, including the capital of Beijing, had air pollution exceeding the country's official limits during the first six months this year, according to a wide-ranging environmental report from the state environmental watchdog.

Shanghai's air quality reached the national "fair quality" standard but the results were not comforting. The report showed that inhalable particulates measuring less than 10 microns in diameter, a benchmark airborne pollution indicator, rose by 25 percent in Shanghai during the first half of this year from a year earlier.

The fine particles are small enough to lodge in people's lungs, causing great health risks. The other major air pollutant indicators - sulfur dioxide and nitrogen dioxide, components in acid rain - increased about 17 and 16 percent, respectively, in Shanghai, the report said.

Read more: http://www.shanghaidaily.com/nsp/National/2011/11/08/Air%2Bin%2Bmany%2BChina%2Bcities%2Bremains%2Bhighly%2Bpolluted/

Chinese Students in US - Application Fraud

NY Times reports:

Zinch China, a consulting company that advises American colleges and universities about China, last year published a report based on interviews with 250 Beijing high school students bound for the United States, their parents, and a dozen agents and admissions consultants. The company concluded that 90 percent of Chinese applicants submit false recommendations, 70 percent have other people write their personal essays, 50 percent have forged high school transcripts and 10 percent list academic awards and other achievements they did not receive. The “tide of application fraud,” the report predicted, will likely only worsen as more students go to America.

Tom Melcher, Zinch China’s chairman and the report’s author, says it’s simplistic to vilify agents who provide these services. They’re responding, he says, to the demands of students and parents.

Thanks to China’s one-child policy, today’s college students are part of a generation of singletons, and their newly affluent parents — and, in all likelihood, both sets of grandparents — are deeply invested in their success. At Aoji Education Group, a large college counseling company based in China, one of the most popular services is the guaranteed-placement package: apply to five colleges and get your money back if you’re not accepted at any of your choices. “If a student isn’t placed, we’ve got screaming, yelling parents in the lobby,” says Kathryn O’Hehir, who works in the company’s American admissions department in Beijing. “They don’t want their money back. They want their kid in an Ivy League school.”

Read more: http://www.nytimes.com/2011/11/06/education/edlife/the-china-conundrum.html?_r=2&pagewanted=all

Nike Faces Marketing Challenge in China: Make Running Cool

AdAge Global says:

Can a young woman named Salad inspire young Chinese to lace up and go running?

Nike hopes so, taking a grass-roots approach as it features the stories of ordinary people who choose to jog city streets at night as a way to change local perceptions that the sport is boring, lonely or even a punishment.

"Running is a very poor cousin of the other sports like basketball and [soccer]," said Gavin Lum, strategy director for digital agency AKQA in Shanghai. The target consumers "never see it as something they enjoy doing; it's something very rigorous and painful."

Read more: http://adage.com/article/global-news/nike-faces-marketing-challenge-china-make-running-cool/230717/?utm_source=global_news&utm_medium=newsletter&utm_campaign=adage

China. Smells Like 2008, Gloom And Doom Edition.

Dan Harris writes:

I know nobody wants to hear this and I know this is going to cause me to get hate mail from those whose livelihoods are tied in to China's continuing to boom, but I am seeing all sorts of bad news on the horizon with respect to China's economy.

A client meeting yesterday was the last straw. The client I met with is very sophisticated, very large, and, most importantly, very experienced. The client is a very large commodity seller who sells massive amounts to China. This company typically sells its product to Chinese private companies that use letters of credit. Prior to 2008, this client's Chinese customers pretty much always paid. Then in 2008, they started contesting the letters of credit and seeking lower prices than that to which they had agreed. Soon after that, they started rejecting the shipments entirely. My client told me that in the last 3-4 weeks, nearly all of his non SOE (State Owned Entity) Chinese clients have contested the letters of credit and have sought lower prices of around twenty percent. They are confessing to my client that they cannot get loans and without loans they cannot pay so much.

If it were just that, I might chalk it up to problems in one industry, but it is not just that.

Read more: http://www.chinalawblog.com/2011/10/china_smells_like_2008_gloom_and_doom_edition.html