Wednesday, August 31, 2005

China, U.S. fail to clinch textile deal


BEIJING (Reuters) - U.S. negotiators headed home on Thursday after failing to agree on China's surging textile shipments, a setback to efforts to showcase progress in bilateral ties when Chinese President     Hu Jintao heads to Washington next week.

Officials from the two sides met again briefly on Thursday morning after two days of haggling over a sweeping deal to cap imports of Chinese garments and textiles without having to invoke emergency curbs on a case-by-case basis.

Beijing and Washington had hoped that Hu and     President Bush could hold up an agreement as a positive development in ties strained over political issues such as Taiwan and economic issues such as China's swelling trade surplus.

Hu begins an official visit to the United States on September 5.

Natalie Hanson, of the U.S. Association of Importers of Textiles and Apparel, which opposes tough curbs on Chinese imports, said she was doubtful a deal could be struck this month.

"I think it's very clear that this is not going to be a quick thing to resolve. I think everyone does want an agreement. Both sides are in agreement on that," Hanson said.

"However, they are very far apart on the details and will need quite a bit more time to iron those things out."

U.S. and Chinese officials have met four times since May when Washington imposed emergency curbs, known as safeguards, to restrict a flood of Chinese imports triggered by the expiry of global textile quotas on January 1.

Negotiators had been eyeing a pact similar to one signed with the     European Union in June that capped growth in 10 categories of textile products at 8 to 12.5 percent a year, instead of the lower 7.5 percent cap allowed by     World Trade Organization rules.

On Wednesday the U.S. National Council of Textile Organizations, which supports restrictions on Chinese imports, said negotiators had not even narrowed their differences during the two days of talks.

China's textile exports to the United States nearly doubled to $7.4 billion in the first half of 2005, alarming textile-producing states.

The exports have also fueled concerns about Beijing's trade surplus with Washington, which hit a record $162 billion in 2004.

Monday, August 29, 2005

Commentary: Could China become target for American WMDs?

2005-08-29
By Franz Schurmann

SAN FRANCISCO -- Chinese leader Hu Jintao might visit President Bush at Crawford Ranch this fall but it's not inconceivable that, in coming years, America could consider using "Weapons of Mass Destruction"(WMD) against China. WMD include nuclear weapons.

China has made great strides in power and wealth both internally and, recently, externally. Since dual victories in Europe and East Asia in 1945, America has considered itself in part the successor to the British Empire. And, like the latter, it fears any rival. China has become such a rival.

During the Cold War (1948-1991), the Soviet Union (now Russia) and China had comparable power.

But though Russia has wealth, especially fossil fuels, it's now trivial compared to China's wealth. However, China and Russia recently launched their most ambitious joint military exercises ever to show their deepening cooperation.

In 1958, during the Quemoy Crisis, when China shelled the small islands held by Taiwan, America seriously considered using a WMD option on Chinese targets, military and civilian. If used, America would have pushed the world to the brink of nuclear war.

Six years later in the American election year of 1964, the Republican candidate for vice president, General Curtis LeMay, kept saying in his campaign speeches that "nuclear weapons are just another weapon." In World War II, he was known for his "frying the cities," which killed thousands of civilians.

In October 1964, the United States came close to bombing the Chinese experimental atomic device at the nuclear Lop-Nor facility in Guangsu Province.

While the Pentagon accepted cooperation with the Soviet military to reduce the chances of nuclear war between the two superpowers, it had only perfunctory contacts with its Chinese counterparts.

Rather, a Pentagon report to Congress this year on Chinese military power claimed that China was now engaged in a "truly alarming" military modernization.

Even before World War I, Kaiser Wilhelm II coined the term "Yellow peril" and many Europeans and Americans agreed. So, it seems, does the Pentagon.

The Western image of China was captured by Suzanne Labin when in 1960 she published "The Ant Hill: The Human Condition in Communist China."

The photographs of hordes of people building big dams with their own hands, coupled with the "ant hill" in the title made it clear Labin saw the Chinese more as human robots than heroes.

Why would America want to nuke China? Twenty years from now, America could be in serious economic decline and feel threatened by China's rise. Or, the growth of unchecked power in the Pentagon could make that body a kind of "state within a state."

However, China will likely survive even if America decides to nuke it.

Over the centuries China has been the one of the few countries in history that has survived huge death tolls to become even stronger than before. In the case of contemporary China, the recovery time is getting shorter and shorter.

In 1960, this Sinologist was in Moscow along with fellow American and European Sinologists. At a time when travel between China and America was forbidden, that conference was to be a rare opportunity for American, Soviet and Chinese scholars to get together.

But the Chinese scholars did not come. Instead, the world media ran headlines like "Chinese and Soviet Communist parties break relations." Some years hence it became clear what made Nikita Khrushchev and Mao Zedong turn away from comradeship into fierce enmity. In 1957, Khrushchev had agreed to help the Chinese physicists and engineers build a nuclear bomb. But in 1959, when Khrushchev visited America, President Eisenhower persuaded the Soviet leader to cancel the 1957 agreement. As a result the two Communist leaders exchanged vilifications that morphed into a mini war in 1969.

Mao Zedong, who had the highest admiration for Joseph Stalin, despised Khrushchev as a liar. When Mao went to Moscow in 1957 (his second trip to Moscow, otherwise he never went abroad), he had grand visions of China's, the Soviet Union's and Marxism's glorious futures all over the world. Mao thought he was an avatar of an emperor going back to the legendary Xia dynasty 2,500 B.C.

In 1958, Mao's visions blossomed. He called his grand vision for China the "Great Leap Forward." But then in 1959, there were signs that the great leap was showing slowdowns. In September 1959, Khrushchev went to the USA and betrayed Mao Zedong. In 1960, famine ravaged rural China. Corpses from China kept washing up in the Portugese colony of Macao, near Hong Kong, during 1959 and 1960. Various sources estimate 50 million died.

In 1961, Mao knew that the only way to abate the famine was to reinstate the traditional rural markets with renewed and credible money instead of the useless paper the Chinese farmers got from the Great Leap Forward. The Chinese farmer had been used to credible currencies from 4,000 years past, when their currency was cowrie shells.

Since 1961, China's potato harvest area increased from 1.3 million hectares in 1961 to 2.4 million hectares in 1981. In 1972, Mao Zedong recalled Deng Xiaoping, who had been in rural exile as a bad guy in Mao's "cultural revolution." Deng cleaned farmers' latrines for six years. Following Mao's death in 1976, he took Mao's position in 1978. And he based his rural successes on Mao's quick turnabout when he realized his visions were nothing more than dreams.

That kind of resilience and leadership should give the Pentagon think-tanks some pause before launching Coalition and American forces into nuclear action. Copyright PNS

Editor's note: Franz Schurmann is emeritus professor of history and sociology at U.C. Berkeley and author of numerous books.  

Chinese visitors boost RP tourism

The Philippine Star 08/30/2005

A dramatic upsurge in the number of Chinese arrivals has made China one of the largest sources of tourists to the Philippines, according to figures released by the Department of Tourism (DOT).

This growth has been fueled by the DOT’s initiatives in China, supported by Philippines Airlines (PAL) and Monitor Group, a leading global management consulting firm.

As one of the largest and fastest-growing outbound tourism markets globally, China is expected to produce an estimated 100 million travelers per year by 2020. Despite the importance of this market, the Philippines only captured approximately 0.2 percent of total Chinese travelers in 2003.

In 2004, Chinese-Filipino industrialist Lucio Tan identified the importance of the China opportunity for the Philippines. Tan suggested to the Federation of Filipino-Chinese Chambers of Commerce and Industry to commission Monitor Group to formulate a strategy for the DOT and the travel industry to boost tourism from China.

According to Tan, "China is a very important market with lots of economic opportunity. Focusing on China grows the entire tourism pie — all travel industry participants benefit and the economy grows."

Based on the study, which identified target segments, prioritized specific geographic markets and developed marketing strategies, the DOT designed and implemented six major campaigns: building an effective China organization, reinforcing the Philippines "brand," driving trade participation, customizing products to meet Chinese tourists’ needs, pushing for priority policy support and driving DOT and private sector collaboration through the establishment of the China Tourism Action Group.

As an active participant in the group, PAL has already taken action by aggressively supporting the campaigns, and planning the launch of a direct route from Beijing to Manila from October.

These campaigns have generated impressive results. The first half of 2005 saw 45,789 Chinese arrivals in Philippines, already exceeding the 2004 total. May and June experienced unprecedented increases of 211.2 percent and 205.8 percent respectively, as compared to corresponding periods last year. At this rate, by the end of 2005, China could become the fourth largest source country of tourists to the Philippines, joining the United States, Korea and Japan.

"The new China strategy has helped us focus our resources invested in China, allowing us to reap the market opportunities," said Tourism Secretary Joseph Ace Durano. "The encouraging results give us a boost to continue and intensify the existing initiatives."

"We are pleased to be engaged in this important China marketing initiative together with the DOT. Our efforts have clearly differentiated the Philippines’ positioning in the China market, and have led to visible results. This will further boost the tourism industry for the Philippines," said PAL president Jaime Bautista.

"We are proud to be part of the successful program and to help the Philippines reinforce its position in the booming China outbound tourism market," said David Pacis, vice president of Monitor Group Asia. "We look forward to continuing our collaboration with the DOT, Mr. Tan, and the Federation to make the Philippines one of the most desired destinations for Chinese travelers."

Looking forward, the challenge shifts, says Durano: "We will begin to turn our attention from creating demand to improving the tourism infrastructure in the Philippines to ensure that each visitor has a wonderful experience. We hope we can count on Mr. Tan and the rest of the China Tourism Action Group to support us."

Sunday, August 28, 2005

Super Girls: boon or farce in China's TV entertainment industry

The finale of "Super Girls," an "American Idol"-type television pop star contest organized by a local satellite television service in central China, became one of the most widely watched TV programs in the country.

Some 200 million people tuned in to Hunan Satellite Television,with headquarters in Changsha, capital of central China's Hunan Province, for the live, three-hour finale of "Super Girls 2005" Friday night, which ended with Li Yuchun, 21, being named champion of the contest after having garnered over 3.52 million votes.

The lanky, shaggy-haired winner from Sichuan Province, southwest China, might have dominated the contest because of her "transgender appeal," which helped her win votes from both male and female viewers.

Votes were accepted via mobile phone text message services and each phone number was allowed 15 votes. Li just topped 20-year-old Zhou Bichang, who got more than 3.2 million votes.

The contest, which began half a year ago, with the participation of 150,000 women above the age of 16 from across the country and the number of viewers estimated at 2 million, was shown once a week. It has become talk of the town.

The contest has also triggered a debate about the development trend in the country's TV entertainment industry.

Yu Zhenyi, a professor with Sichuan Conservatory of Music, argued the popularity of "Super Girls" lied in the fact that it dealt a strong impact on the reserved expression of China's traditional culture and aesthetic standards because people are fed up with the entertainment programs which have long dominated the media as time goes by tend to embrace things anew.

Professor Jiang Yuanlun, also head of the Institute of Journalism and Mass Media with the Beijing Normal University, thought "Super Girls" was appealing to the eyeballs of the Chinese because it satisfied the aspiration of the general public for demonstrating themselves, venting their feelings.

"When most TV program makers still cling to the notion of 'beauties only', viewers find in 'Super Girls' more entertaining elements such as the participants showcasing themselves in their own way though it was obvious that they had had no professional training in singing and dancing," said Jiang.

He even heralded "Super Girls" to foreshadow the start of a new era characterized by real-person shows in the country's TV entertainment industry.

"'Super Girls' are totally different from previous popular entertainment programs such as evening song and dance galas, or quiz tests in which audience acted passively," said Jiang.

Some specialists think the other way. They believe the stardom movement was no good to the growth of teenagers alike.

Xia Xueluan, a professor of social sciences with the elite Beijing University, said it might help teenagers to enrich their experience in life and broaden their horizon by competing in such activities as "Super Girls," but the price has proved to be too high.

"Some teenagers who are weak in self control tends to indulge themselves in the farce: they are so preoccupied with it that they don't have much thought for learning cultural basics or simply miss classes in order to participate in the contest," said Xia.

"The 'Super Girls' craze for popularity overnight also gives way to fickleness in society and speculative psychology among girls."

For weeks, fans have been turning up at venues of the contests,shouting and carrying posters of their favorite "Super Girls" contestants in a bid to rally votes in their favor. On Friday, the streets in Changsha were swamped with thousands of fans doing last minute campaigning, with some supporters promising free pop star photos to people who voted on the spot. There were occasions when the situation ran out of control.

Shi Tongyu, a fellow researcher with the Journalism Institute of the Chinese Academy of Social Sciences, denounced the "Super Girls" contest as vulgar.

"Prime-time TV broadcasts on items such as news and cultural and educational programs should be increased so as to squeeze the time for show of similar vulgar programs as 'Super Girls'," suggested Shi.

Source: Xinhua

Friday, August 26, 2005

CHINA, EU FAIL TO REACH TEXTILE AGREEMENT

Friday August 26, 2005, 3:24 pm
BEIJING, Aug 26 Asia Pulse - China and the European Union failed to reach an agreement yesterday at talks in Beijing aimed at solving the current textile impasse.
The two sides conducted serious talks towards an effective solution to the thorny issue, China's Ministry of Commerce (MOFCOM) said in a statement.
The Chinese side expressed great concern over the Chinese textile stockpile at EU customs, while the EU admitted the policy did not meet the interests of its domestic traders and consumers, MOFCOM said.
The EU delegation was headed by Fritz-Harald Wenig, the trade director of the European Commission. Chinese negotiators were led by the director of MOFCOM's foreign trade department, Lu Jianhua.
According to statistics published by EU customs on Wednesday, eight of 10 categories of Chinese textiles have already reached their quota limit, set in June.
The June agreement restricts annual growth of EU textile imports from China to 8 - 12.5 per cent over the coming three years.
Forty-eight million sweaters, 17 million pairs of trousers and hundreds of tons of other textile products are piling up at EU borders, unable to access the market, statistics from EU show.
Chinese textile dealers are also keeping an eye on the issue, Cao Xinyu, vice-chairman of the China Chamber of Commerce for the Import and Export of Textiles told China Daily yesterday.
"We hope the EU will at least accept shipments for orders agreed before the textile disputes began," he said.
Cao explained that when a quota-free era began in January, importers and exporters had not even considered the possibility of caps being introduced after just a few months.
An urgent meeting was held on Wednesday morning in Brussels among representatives of the European Commission and EU members in a bid to pave the way for talks in Beijing.
EU Trade Commissioner Peter Mandelson, who did not attend the meeting on Wednesday, said in a statement that China and the EU "need a pragmatic solution that deals with the immediate overshoot and with good will on all sides, we can do this."
The two sides have to consider how many categories will be covered by the new amendment; and whether to increase the quotas for this year or to start eating into the quotas for next year, said Mei Xinyu, a trade analyzer form the Chinese Academy of International Trade and Economic Co-operation, the think tank of MOFCOM.
If they decide to use the quotas from next year, the two sides have to take into account whether this will result in additional troubles in 2006, he added.
In another development, China and the United States are expected to reach an agreement on their textile disputes in the near future as the US Government nears a decision on whether to impose new safeguard measures against additional Chinese textile and garment products at the end of this month.
(XIC)

China Rising

The awakening of an economic giant and, perhaps, a nascent superpower.
By John Pomfret
Sunday, March 13, 2005; Page BW05
Writing about China is never easy. The country is so vast and full of contradictions that almost anything said about it at any given time is true. Writing about China is also increasingly fashionable. The country's emergence into a global economic and diplomatic player has made it an attractive topic for specialists and amateurs alike. With its ferocious sprint toward an uncertain future, modern China today makes for a compelling narrative. The trick is how to tell the story right.
Perhaps I am too close to my subject; I have lived in China for 10 of the past 24 years. But the longer I have stayed in China, the less patience I have for fresh-off-the-boat enthusiasts amazed at the spanking new skyline in Shanghai or Beijing. Too often, when these people write about China, they are actually using its successes as a way to mourn perceived problems back home. America is becoming complacent, uneducated, slow and bureaucratic, they say. Look at China; it's got all the answers. It's the future. But is it really?
Skimming the Surface Ted C. Fishman's China, Inc.: How the Rise of the Next Superpower Challenges America and the World (Scribner, $26) is a breathless account of what he predicts will be the country's ascent to the ranks of the world's great economic powers. In his China, the graphs always go up, and the manifold problems with the economy -- its corruption, crumbling banks, feeble legal system, gap between rich and poor, real estate bubbles, and a political system that restricts the free flow of information and rewards connections rather than innovation -- are mere flotsam in the path of the whirlwind from Beijing.
Fishman has done exhaustive research, amassing enough information to have written an interesting and textured book. To illustrate the growth of the sex trade, for instance, he supplies data on the number of out-of-wedlock babies born in Shenzhen, the boomtown abutting Hong Kong. On every page, the reader is treated to lists of the biggest, tallest, longest, fastest whatevers that China is creating.
But secure in his belief that China is going to become a hyperpower in the very near future, Fishman (a former commodities trader and now a writer) often ignores his research or switches the subject. In one section, for example, he explores China's serious demographic problems. In some parts of the country, the population -- using ultrasound equipment and infanticide -- is now having 137 boy babies for every 100 girls. But China, Inc. offers no discussion of the social effects this type of skewed demographics could have. Fishman comes to a dizzying stop, and we're off to a discussion of skyscrapers in Beijing.
He often just scratches the surface of fascinating topics. He writes interestingly about the "China price" -- the way that the prices of goods worldwide are being forced down by China's factories. He concludes that China will benefit greatly from this, but the reality is more complex. Chinese firms are also getting hammered by the very prices they are setting, and many can survive only because of unsustainable state subsidies. The more interesting point is that China, too, is getting crushed by its economic model, but Fishman does not explore this topic.
In a chapter entitled "Pirate Nation," Fishman again uses strong reporting to tell the story of how Chinese firms are ripping off the world, pilfering intellectual property rights and profiting mightily from it. The book's thesis is that "The counterfeiters give China's growing number of globally competitive companies the means to compete with powerful foreign rivals who are forced to pay full fare for proprietary technologies." Stealing may be a great business plan for several years, but it isn't viable over the long term, for one big reason: It means that Chinese firms won't invest in R&D because they know that whatever products they create will be ripped off as well. Without innovation, China's businesses won't achieve anything close to their potential.
Fishman generally avoids the tricky subject of politics. But when he does stray into political reporting, he is often tone-deaf or naive. "China could emerge overnight as the world's largest maker and consumer of movies, computer games, television programming and music," he writes. "All it would take are improvements in the enforcement of laws governing entertainment products and a dash of expressive freedom." A dash of expressive freedom? Obviously, the Chinese people have won substantial personal freedom since Deng Xiaoping instituted economic reforms in 1978. But Fishman seems to be implying that granting "expressive freedom" would be an easy thing for a Communist Party committed to a monopoly on power. Such lines, which pop up often in the book, underscore a lack of understanding of how China's political system works.
The Owlish Engineer On the other hand, Robert Lawrence Kuhn has no qualms about writing about Chinese politics. He has devoted 579 pages to it in The Man Who Changed China: The Life and Legacy of Jiang Zemin (Crown, $35), his massive biography of the man who was at the helm of the Communist Party for 14 years, until stepping down in 2003. Kuhn, a managing director at Smith Barney/Citigroup and host of the PBS series "Closer to Truth," argues that Jiang was "habitually underestimated" by Chinese and foreigners alike. He credits Jiang with laying the foundations for China's record-beating growth in the 1990s, its political stability and the unprecedented expansion in personal freedom for many urban Chinese.
Kuhn's book reads like an official biography; indeed, he must have received official sanction to write it. In the course of his research, he interviewed Jiang's family members, Jiang's mentor in Shanghai and other high-ranking government and party officials. Such access is not granted easily in the People's Republic of China.
Kuhn has painted a detailed portrait of Jiang and provides interesting particulars about a man who was first noticed by Communist Party members as an engineer in an ice-cream factory. Kuhn has obvious affection for Jiang and obvious sympathy for the Communist Party's belief that it knows best what is good for China.
But his portrait of the owlish engineer who steered China into the 21st century has several problems. First, his main argument is that Jiang deserves credit for China's boom decade. That's debatable. Jiang was appointed head of the party after the 1989 Tiananmen Square crackdown on reformist demonstrators. Deng Xiaoping, the country's supreme leader, chose him because Jiang was not associated with the killings; Jiang had been party chief in Shanghai at the time and had moved swiftly to quell demonstrations there with a minimum of bloodshed.
But Jiang did not secure control over the party apparatus until 1995; for much of the 1990s, he was associated more with the hard-line wing of the party than with the economic reformers. The person who deserves credit for the '90s boom is the same one who started China's economic reforms (and ordered the Tiananmen Square crackdown): Deng Xiaoping. In 1992, fed up with three years of stalled economic growth and the increasingly shrill tone of party apparatchiks (which Jiang did not oppose), Deng took his famous "Southern Tour," during which he traveled to the boomtown of Shenzhen and coined the term "socialist market economy." Deng's trip, and his vocal support of private enterprise and privatization, sparked China's major changes -- not anything Jiang did.
Worse, a good deal of Kuhn's book reads as if it were written by a Chinese propaganda team. Kuhn argues that Jiang's political theory, called the "Three Represents," constitutes a brilliant revision of Marxist theory. But another view, held by Jiang's critics and not mentioned in the book, is that the "Three Represents" is actually a veiled justification for the creation of the elitist alliance of party officials, bureaucrats, intellectuals and businessmen that runs China today.
Similarly, Kuhn takes at face value Jiang's claims that he wants to fight corruption. He barely deals with allegations that some of Jiang's closest political allies (such as Jia Qinglin, the former party chief in Beijing and Fujian, whom Jiang placed on the Politburo's all-powerful Standing Committee) were elbow-deep in sleaze. Indeed, at the end of one chapter, Kuhn writes about a poem by Jiang called "Random Thoughts on Climbing Mount Huang." Kuhn waxes lyrical about Jiang's ruminations -- seemingly because he wants us to see Jiang not just as a practical politician but as a sensitive soul, out there on Huang Mountain contemplating the mist.
What Kuhn does not tell the reader is that the poem was published on the front page of the People's Daily in late May 2001, when Jiang was locked in a power struggle with party elders and trying, in his own way, to create a mini-cult of personality around himself. Kuhn also does not note that Jiang's minions in Shanghai immediately included the poem in a textbook for students there, marking the first time since the days of Chairman Mao that students would study the poetry of a living Chinese leader.
The Downside of the Boom Mount Huang is located in Anhui province, which plays heavily in Elizabeth C. Economy's The River Runs Black: The Environmental Challenge to China's Future (Cornell Univ., $29.95). Of all these books, Economy's rings the truest. A fellow at the Council on Foreign Relations, she has written a book that, while academic in style, constitutes a fascinating and often depressing investigation into one of the major downsides of China's boom -- its degraded environment. Economy starts her work with a chapter on the nexus of corruption, bureaucratic breakdown and official incompetence that has combined to stymie efforts to clean up the Huai River -- arguably China's most polluted waterway. It is perhaps for this legacy -- of massive environmental degradation, putrid rivers and smoke-filled skies -- that China and Jiang Zemin will be best remembered.
China's emergence as a global economic and diplomatic player is a compelling story -- one about both a nation ferociously pursuing modernization and a nation that has lost its way. This combination makes for a complex tale -- one that is touched on in Economy's rich book but given short shrift in the works by Fishman and Kuhn. •
John Pomfret was The Washington Post's Beijing bureau chief from 1998 to 2003.

Wednesday, August 24, 2005

Asian tourism industry to see sharp growth, China seen leading boom

By Anjana Menon, Channel NewsAsia

SINGAPORE : The tourism industry in Asia is set for exponential growth, according to analysts speaking at an industry event on Wednesday.

They say there will be major changes, both in the type of travel and the profile of travellers.

And some cities are finding that they may have to reinvent themselves to attract the numbers.

Travel in Asia is set to shoot to record levels, with overall spending on travel and tourism in the region forecast to hit US$165 billion by 2014.

Within that time frame, China is expected to become the second largest destination globally.

But while China opens its doors to more foreign tourists, the Chinese themselves are fast becoming globe-trotters.

Said Yuwa Hedrick-Wong, economic advisor at MasterCard, "China looms large. China's arrivals are growing extremely fast, both within Asia and outside and my expectation is that it is likely to continue as China improves infrastructure. As we speak, some 80 airports are being constructed in China and also of course the next 20 years we talk about 30,000 kilometres of highways being built in China."

By that time China will have some 293 million people with household incomes of more than US$4,000 annually.

They are not seen as big spenders, but are willing and able to travel, and will dominate the volume and value markets.

As the travel market grows, analysts say tourists are expected to become more demanding and discerning.

There will an increasing number of travellers on the lookout for more exotic locations and variety.

This puts pressure on cities like Singapore to reinvent themselves to attract visitors.

Said Clint Laurent, director at Asian Demographics, "Singapore is under threat. It's had a very nice position of being a safe destination in Asia to go to and obviously a very good shopping destination to go to. They are going to have to move along very quickly. The better educated older class is actually a bit bored with shopping."

But shopping will still remain important, especially for Asian women travellers, whose purchasing powers are growing.

The Asian traveller-shopper segment is forecast to grow substantially, and this will benefit the four cities of Hong Kong, Seoul, Singapore and Bangkok. - CNA /ct

Tuesday, August 23, 2005

China – Rising Asian Powerhous

By Chris Cumming

Napoleon once famously remarked, “China is a sleeping giant. Let her lie and sleep, for when she awakens she will astonish the world.” Attention world, the sleeping giant is now fully awake! First it was in trade, then technologies and now in an ever-increasing military build-up. China is truly becoming a superpower on the world stage.

For decades, Garner Ted Armstrong proclaimed, “The prophecies show that the 'men of the east' will be drawn into a gigantic conflict in the Middle East – in modern-day Israel!” He drew these words from the prophecies of Daniel and specifically Daniel 11: 40-44 where we read of a Beast power descending into the Middle East with its mighty armies conquering many nations. In verse 44 we see this Beast power concerned with opposing armies to the north and to the east…

“But tidings out of the east and out of the north shall trouble him: therefore he shall go forth with great fury to destroy, and utterly to make away many.” – Dan. 11:44

For this prophecy to unfold, we must first witness these “men of the east” attaining a level of strength for which the Beast power could find itself so troubled. Poring over a number of recent news stories, editorials and institutional papers on China, I gleaned the following kinds of phraseology:

  1. A Global Power Shift in the Making

  2. China is the most obvious power on the rise

  3. China is rapidly developing into a global economic force

  4. China is already a regional superpower, and it is in the process of becoming a world power

  5. China – 21st-century giant

China is in the middle of a huge arms build-up aided, ironically, by United Europe. In one editorial I read, the EU is doing this to offset the US as being the lone superpower in the world. Berlin and Paris are, even now, moving to lift an arms embargo against Beijing in place since Tiananmen Square. If the US is forced to focus on breaking events in the Far East, such as possible war between China and Taiwan or the nuclear stand-off with North Korea, the EU could pursue its own interest and agenda unhindered by Washington.

Another indicator I found is a marked increase in China’s demand for oil. Seemingly overnight, China has gone from a five million barrel-a-day to an over eight million barrel-a-day economy. This will only exacerbate the building oil crisis in the region. It will also force a more focused attention by China on the Middle East oil reserves. China could easily find itself in an oil rivalry with the other rising superpower in the Far East, Japan.

Superpower Status

China’s superpower status is not going unnoticed in certain of the World press. Notice this from a Foreign Policy.org editorial by James Hoge, Jr., “A Global Power Shift in the Making”:

“The transfer of power from West to East is gathering pace and soon will dramatically change the context for dealing with international challenges -- as well as the challenges themselves. Many in the West are already aware of Asia's growing strength. This awareness, however, has not yet been translated into preparedness. And therein lies a danger: that Western countries will repeat their past mistakes.

“Major shifts of power between states, not to mention regions, occur infrequently and are rarely peaceful. In the early twentieth century, the imperial order and the aspiring states of Germany and Japan failed to adjust to each other. The conflict that resulted devastated large parts of the globe. Today, the transformation of the international system will be even bigger and will require the assimilation of markedly different political and cultural traditions. This time, the populous states of Asia are the aspirants seeking to play a greater role. Like Japan and Germany back then, these rising powers are nationalistic, seek redress of past grievances, and want to claim their place in the sun. Asia's growing economic power is translating into greater political and military power, thus increasing the potential damage of conflicts.”

Growing World Economy

Later, in the same editorial he states that China’s economy is expected to be double the size of Germany’s by 2010 and to overtake Japan’s, currently the world’s second largest, by 2020. I feel certain that both will take place more rapidly than Mr. Hoge’s estimate.

Still in this same editorial, he states the members of the Association of Southeast Asian Nations (ASEAN) are seriously considering a monetary union. The result could be an enormous trade bloc, which would account for much of Asia's -- and the world's -- economic growth. Can you imagine the impact of first the Euro and now a single Asian currency on the global economy?! Are you aware of the fact the EU has been a trading partner with ASEAN since 1980!!

In a recent on-line audio program on the Internet, “China Rising” it was stated, “Recent projections forecast that China is well on its way to becoming a superpower in manufacturing, technology, and telecommunications. It is now the world's second largest consumer of oil, and is exporting everything from TVs to DVD players to cell phones.”

Military Threat

Peter Brookes, senior fellow at the Heritage Foundation in his July 19th article, “Arming China” about Europe supplying arms and related technologies to China, stated:

“China is engaged in a major military buildup that goes far beyond its defensive needs. In the next few years, China will develop real military options for muscling its democratic neighbor Taiwan (which Beijing considers a renegade province). Down the road, China looks toward dominating Japan and Southeast Asia, too.”

We just recently ran a news story about a new Chinese aircraft-carrier-killing attack submarine that apparently caught the West totally off guard. Is it any wonder the US ran 7 of its 12 aircraft carrier groups out into the Pacific in recent weeks?

Mr. Brookes also stated:

“Ultimately, (China’s) long-term, military modernization game plan is to deter, delay or deny U.S. intervention in any Asian conflict involving China. Beyond that, (China) seeks to ultimately replace America as the preeminent military power in the Pacific.

“China is a notorious weapons proliferator — from weapons of mass destruction to small arms. Its record on export controls is abysmal. Sensitive European technology will surely fall into the hands of China's roguish friends: Iran, North Korea, Syria and Burma.

“So why are the Europeans doing this?

“Two reasons: To balance American global power and — tah dah! — to make money.
“Paris and Berlin have long pushed for a multipolar world, in which the United States' overwhelming power is balanced (read: weakened) by other power centers (i.e., poles) such as the EU, China and Russia.”

There you have it…"such as the EU, China and Russia.” These are the three predicted players in Mr. Armstrong’s predictions regarding Daniel 11:40-44. The EU is the Beast who, while conquering and occupying the Middle East, becomes troubled by the “tidings out of the east and out of the north”, China and Russia respectively.

Prophetic pieces are now falling into place! We are living through changes that may appear slow if observed from the point of view of daily headlines, but we are watching unfolding events with a global eye and a foundation of Bible prophecy where events are moving fast.. As Mr. Armstrong stated many times, “Watch!!" That is precisely what the organization he founded must do.

Eye on China: Yuan reformer 'a rising star'


23.08.05  

BEIJING - Guan Anping remembers when Zhou Xiaochuan first urged China's leaders to let the yuan float in the world marketplace. He didn't know then that Zhou would get his message across - 10 years later.

Zhou advocated freeing the yuan in late 1995, a few months after the Chinese Government had pegged the currency at about 8.3 to the US dollar. Zhou, now China's central bank Governor, was the new director of the State Administration of Foreign Exchange.

"He was a visionary on yuan reform long before it became a global issue," says Guan, 48, managing partner at Beijing law firm Anping & Partners and former counsel to the Trade Ministry.

On July 21, China's Government replaced the yuan's peg with a system allowing limited fluctuation against a basket of currencies that includes the US dollar, euro and yen. China had been resisting US appeals to let the currency appreciate since September 2003. The move suggests Zhou, 57, is gaining influence with policy-makers.

"He certainly is a rising political star and there aren't too many people of his calibre within the leadership," says Joseph Cheng, 55, professor of politics at City University of Hong Kong.

"Given the tremendous importance of the financial services sector, I think he's being groomed for higher office."

Zhou has helped create a technically competent central bank that is the bureaucracy's most capable agent of change, says Jonathan Anderson, 43, chief Asia-Pacific economist in Hong Kong at Zurich-based UBS.

Anderson first worked with Zhou in 1997, when he was a central bank Vice-Governor and Anderson was the International Monetary Fund's representative in Beijing. Zhou became bank Governor in December 2002.

"His ability to push any yuan movement is testament to his skills and ability to move forward a moderate yet reformed agenda," Anderson says.

Two days after the central bank announced the yuan appreciation, Zhou was advocating more. In an impromptu speech to the annual Chinese Bankers Forum at Beijing's Presidential Hotel on July 23, he likened a fixed exchange rate to armour against currency speculators. If it was a fierce battle, the shield might fail under pressure, he said.

"The floating exchange rate is more like a cushion, providing a better protection against assault," Zhou said. "Attackers may not be able to get away unscathed."

He said it was a challenge for China to change its thinking on the yuan. Zhou's speech drew a riposte from Xia Bin, director of finance at the State Council's Development Research Centre in Beijing. He was formerly general manager of the Shenzhen Stock Exchange and an adviser on streamlining the central bank.

"My viewpoint is different from Zhou," Xia, 54, told the forum. "I don't think China should move to a fully floating exchange rate in a rush. That will bring big trouble."

The yuan can trade within a limit of 0.3 per cent on either side of the yuan-US dollar exchange rate published by the central bank each day, and 1.5 per cent on either side of the rate published for a basket of other currencies.

Earlier this month, Zhou said the other currencies included the euro, yen, South Korean won, Singapore dollar, British pound, Malaysian ringgit, Australian dollar, Russian rouble, Thai baht and Canadian dollar. The bank also announced it would open the foreign exchange market to companies that import and export at least US$2 billion a year.

Born in eastern Jiangsu province, Zhou has an engineering degree from Beijing Chemical Engineering Institute and a doctorate in economic engineering from Beijing's Tsinghua University. He speaks fluent English and is the first central bank chief with a doctorate degree.

His father, the late Zhou Jiannan, was Machinery Industry Minister in the early 1980s under Deng Xiaoping. As a "princeling", or child of a high-ranking party cadre, Zhou has benefited from political connections, says Cheng Li, professor of government at Hamilton College in Clinton, New York, and author of China's Leaders: The New Generation. Among Zhou Jiannan's ministry workers was Jiang Zemin. Jiang became Communist Party leader in the purge that followed the June 1989 military crackdown in Tiananmen Square, and China's President from 1993 to 2003. Li said Jiang probably championed Zhou's appointment as central bank Governor.

"His father was Jiang Zemin's close friend and even mentor for quite a while," he says. "There are certainly patron ties."

Through the 1990s, Zhou moved steadily up the banking and finance hierarchy. He was vice- president of Beijing-based Bank of China, the country's second-largest lender, from 1991 to 1995, then spent a year at the State Administration of Foreign Exchange. He was central bank Vice-Governor in 1996 and 1997, president of China Construction Bank from 1998 to 2000 and chairman of the China Securities Regulatory Commission from 2000 until his central bank appointment.

While connections may have helped, Zhou succeeded on his merits, says Guan. The pair met in 1986 at the Beijing-based Ministry of Foreign Trade and Economic Co-operation, now the Commerce Ministry. Zhou left as an assistant minister in 1989.

Zhou began advocating step-by-step changes towards a fully convertible yuan as a means to promote economic growth. Guan says in academic journals in 1995, he wrote that the first move should be to give trading companies and "weak" industries such as steel-making greater access to foreign exchange.

"Many people felt the yuan should be free-floated but disagreed on how it was to be done," Guan says. "Zhou's voice was a pioneer in the debate back then."

Left to his own devices, Zhou probably would have favoured a larger initial move last month, said Nicholas Lardy, senior fellow at the Institute for International Economics in Washington.

As central bank chief, Zhou can only recommend changes to the State Council, China's highest administrative body. The council, in turn, takes a proposal to the nine-member standing committee of the Communist Party's Politburo, headed by President Hu Jintao, 62.

"I'm not sure I would interpret this as a victory for him," says Lardy, who first met Zhou in 1986, when Zhou worked at the Economic System Reform Research Institute in Beijing.

"This has the aura of a compromise."

A larger move might have been hard to sell to some standing committee members. "These are not Alan Greenspans," he says. "Their attitude is, 'We've had this exchange-rate system for nine years, we've had rapid growth, so why should we change now?"'

He thinks Zhou's age and narrow focus on the finance industry mean he's unlikely to rise past the position of Vice-Premier.

- BLOOMBERG  

Monday, August 22, 2005

Internet Companies Set Their Sights On China

Internet Companies Set Their Sights On China
David Ng, 08.22.05, 10:21 AM ET
Merrill Lynch noted that Internet stocks in its coverage universe have underperformed over the past two weeks, down 4.6% versus a relatively flat S&P. E-commerce stocks were all down slightly, with Priceline.com (nasdaq: PCLN - news - people ), IAC/InterActiveCorp (nasdaq: IACID - news - people ) and eBay (nasdaq: EBAY - news - people ) experiencing the widest declines.

The research firm said the Internet sector is showing increasing focus on China, with Google (nasdaq: GOOG - news - people ) signing on three advertising product resellers in China, and speculation in the press that Google was interested in acquiring Baidu, the Chinese Internet portal. Yahoo! (nasdaq: YHOO - news - people ) recently announced it will acquire a 40% stake in Chinese e-business site Alibaba.

In other sector developments, Merrill said Google's new $4 billion public offering will only result in minor dilution to earnings per share of approximately 1% in 2006.

The research firm said acquisition activity remains robust in the sector. Time Warner (nyse: TWX - news - people ) unit AOL and Google made small mobile software and technology acquisitions, while ValueClick (nasdaq: VCLK - news - people ) acquired FastClick, and The New York Times Co. (nyse: NYT - news - people ) acquired Indeed, a job search engine.

Elsewhere in the sector, Merrill initiated coverage of Expedia (nasdaq: EXPE - news - people ) with a "neutral" rating, citing an uncertain margin outlook given industry trends and Expedia's investment plans for technology enhancements, customer affinity programs, Europe and corporate travel. The research firm reiterated "buy" ratings on IAC/InterActiveCorp and eBay. It maintained "neutral" ratings on Google and Priceline.

Common in China, Kickbacks Create Trouble for U.S. Companies at Home

By Peter S. Goodman, Washington Post Foreign Service
Mon Aug 22, 1:00 AM ET

SHANGHAI -- For multinational companies grappling with stagnant sales, China has become a magnet for investment and a huge potential market beckoning with growth. Yet the lure of China profits combined with pervasive local corruption is tempting foreign companies and managers and bringing them into conflict with U.S. anti-bribery laws.

In interviews, China-based executives, sales agents and distributors for nine U.S. multinational companies acknowledged that their firms routinely win sales by paying what could be considered bribes or kickbacks -- often in the form of extravagant entertainment and travel expenses -- to purchasing agents at government offices and state-owned businesses.

The sources, who spoke on condition of anonymity for fear of jeopardizing their businesses, said such payments are usually funneled through distribution companies or public-relations firms to minimize the chance of prosecution by the Justice Department and the Securities and Exchange Commission, which enforce the U.S. Foreign Corrupt Practices Act.

"It's normal industry practice," said a salesperson at a unit of a major U.S.-based technology company with a substantial retail presence in China.

American business leaders often describe their China operations idealistically, suggesting that their presence here will compel Chinese competitors to adopt more ethical business practices. But in one key regard, the dynamic operates in reverse, with U.S. companies adopting Chinese-style tactics to secure sales, as they compete in a market in which Communist Party officials routinely control businesses, and purchasing agents consider kickbacks part of their salary.

Managers of U.S. companies say they are caught in a dilemma: They are answerable to shareholders on Wall Street and home offices that demand a piece of an increasingly lucrative Chinese market. Yet they are also held to account at home by the Department of Justice and the SEC.

"It's a different market, and you can face unrealistic expectations," said Kathryn L. Buer, who said she was fired last year as head of Asia-Pacific operations for Datastream Systems Inc. after she unearthed problems with how the South Carolina software company had been booking sales in China.

Buer recently settled a whistleblower lawsuit she filed against Datastream following her termination. Last month, the Nasdaq stock market delisted Datastream shares after the company failed to file earnings reports on time.

Zhu Jianhua, Datastream's interim China manager from May to July of 2004, said the company had booked revenue after signing contracts without actually delivering goods. Sales agents also used liberal entertainment funds to win business. In one instance, he said, his staff had arranged to fly a buyer to the United States for training, tacking on a tour of New York. "I stopped it," he said. "That's not right."

Datastream President C. Alex Estevez said he would not comment on personnel matters. "Datastream has a strong interest in developing business throughout Asia and the Pacific Rim, including China," Estevez said. "In doing so, we intend to use proper and legal means."

Fueling the aggressive play is the growing recognition that China -- long a graveyard for the dreams of foreign investors -- is finally yielding profit.

"Companies are seeing some of their fastest growth in China, and it's profitable growth," said Kristin J. Forbes, a former member of the White House Council of Economic Advisers and now a professor at MIT's Sloan School of Management.

Writing last year in the China Economic Quarterly, journalist Joe Studwell called 2003 "the best year in at least a century for making money in China." Studwell, author of "The China Dream" and an articulate skeptic of business prospects in China, crunched data filed by mainland China and Hong Kong affiliates of U.S. publicly traded companies, concluding that their China earnings rose from $1.9 billion in 1999 to $4.4 billion in 2003.
But just as the late-1990s technology bubble in the United States fostered a free-money and rule-bending mentality, a series of corruption cases involving U.S.-based multinationals underscores the pressures managers face to make good on the Chinese bonanza.

In December, the Justice Department announced that InVision Technologies, a California-based manufacturer of airport security screening systems, had agreed to pay an $800,000 penalty as part of a settlement after admitting that its distributors in China, Thailand and the Philippines had bribed government officials to gain sales.

In a separate settlement with the SEC filed in February, InVision -- since acquired by General Electric Co. -- paid a $500,000 penalty and surrendered $589,000 in profits. According to the SEC settlement document, in April 2004 InVision paid $95,000 to a Chinese distributor even though it knew of a "high probability" that the agent would use some of this money to pay for foreign travel for government officials to complete the sale of some $2.8 million in security equipment for a state-controlled airport in the southern city of Guangzhou.

In May, the SEC resolved a case against Diagnostic Products Corp., a Los Angeles-based medical equipment firm, with the firm surrendering $2 million in profits. The SEC charged that between 1991 and 2002 the company's Chinese subsidiary, DePu Biotechnological & Medical Products Inc., handed out $1.6 million in bribes to doctors and other workers at state-owned Chinese hospitals to generate business.

The payouts "were made with the knowledge and approval of senior officers of DePu," the SEC said in a notice of enforcement proceedings. DePu's office in Tianjin did not respond to calls.
In March, Chinese media reported that the head of state-owned China Construction Bank, Zhang Enzhao, had been detained on corruption charges. He remains under investigation and house arrest.

A lawsuit filed in Monterey County, Calif., alleges that Zhang and his associates took $1 million in bribes disguised as consulting fees from a U.S.-software company, Alltel Information Services, while also accepting a golf outing to Pebble Beach. In exchange, Alltel Information Services, then a division of Alltel Corp., walked away with contracts worth $176 million from the bank, the lawsuit claims. The suit was filed by Grace & Digital Information Technology Co. Ltd., a Chinese company that asserts its own contract for the bank's software business was breached because of the bribes.

In a reply filed in federal court in San Jose, Jim N. Wilson, former executive with Alltel Information Services -- since purchased by Fidelity National Financial Inc. and renamed Fidelity Information Systems -- dismissed the allegations of bribery as "completely false." In an SEC filing on Aug. 9, Alltel Corp. said the SEC had opened an informal inquiry into the matter. Alltel did not respond to requests for comment about the SEC probe.

Last year, Lucent Technologies Inc., the giant telecommunications firm, sacked its China president and chief operating officer along with a marketing executive and finance officer after what the company described as "internal control deficiencies" that could violate the Foreign Corrupt Practices Act.

Chinese media reported that the executives were found by internal auditors to have bribed officials at state-owned telecommunications companies. Lucent declined to furnish details, asserting that it is cooperating with federal investigators.

The sources at U.S. companies and Chinese distribution firms said the Lucent case was hardly unusual. Most companies that engage in such practices limit their exposure to prosecution by cutting intermediary firms into their sales, leaving it to distributors to close the deal, the sources said.

But using middlemen as conduits for payments does not insulate U.S. and U.S.-listed companies against American anti-corruption statutes, said Patrick M. Norton, managing partner of the Beijing office of the law firm O'Melveny & Myers LLP.

The Foreign Corrupt Practices Act's anti-bribery provisions, which carry criminal penalties of up to five years in prison for individuals and fines reaching $2 million for companies, specifies that "U.S. persons" are forbidden from paying or offering to pay "anything of value" to a "foreign official" with a "corrupt purpose" of gaining business. Norton said the Justice Department has been interpreting the statute to include bribes paid by foreign companies and agents on behalf of U.S. companies.

"Willful ignorance is not a defense," Norton wrote in the journal China Law & Practice last year. "U.S. businesses in China are responsible under the FCPA for ensuring that their agents do not do indirectly what the U.S. businesses are prohibited from doing directly."

Nevertheless, such behavior appears common. "What happened at Lucent is happening at all the big tech companies," said a senior manager at a distribution company that sells products for Hewlett-Packard Co. He said H-P cuts his company in as a means of lubricating deals without handling the money directly.

"This happens 90 percent of the time on H-P's Unix business," the distributor said. "The bosses at H-P know the situation."

In a written statement, H-P said it uses distribution companies "to effectively expand coverage" across China, adding that the company operates "in a legal and ethical manner around the world."

"We are unaware of any specific examples of inappropriate behavior by our partners at this time," the statement continued. "Should proof be provided to the contrary we will clarify and pursue the matter, and follow up with appropriate action."

Most kickbacks are handled as rebates that land in a communal fund inside the government agency or company responsible for the purchase, to avoid making individuals vulnerable to corruption charges, sources said.

"The fund is for the department's use," said a former executive for a major U.S. technology company. "It pays for vacations to Las Vegas and Hong Kong, visits to hostess bars, gifts for spouses. Everybody knows about this."

Staff Researcher Richard Drezen in New York and Special Correspondents Eva Woo and Jason Cai in Shanghai contributed to this report.

Novell Announces Expansion Plans for China

Courtesy of TechWeb News

Novell is making major strides as it expands into China.
The company announced plans Wednesday to create a research and development center, open new regional branches, offer local technology support, and strengthen ties with Asian partners.
"Novell is increasing its investment in China because we believe we can have an enormous positive impact on economic growth in the region," Jack Messman, chairman and CEO of Novell, said in a statement. "Together with our Chinese partners, we are dedicated to promoting the development of Linux and open source in the local market, as well as accelerating the Chinese software industry more broadly."
The Chinese offices will be in Beijing, Guangzhou and Shanghai. Novell is also launching openSUSE.org.cn, a dedicated Chinese language site offering free, easy access to Linux.
"Investing in the Chinese market is a key strategy for Novell," added Novell Asia-Pacific President Rhonda O'Donnell in the company statement. "We are poised for a new era in China, ready to significantly contribute to China's development of its software industry."

Destinator Technologies and Partners Lead China into New Era of Personal Navigation

Monday August 22, 8:00 am ET

BEIJING--(BUSINESS WIRE)--Aug. 22, 2005--Destinator Technologies (formerly Homeland Security Technology Corporation), a world-leading provider of GPS navigation, location-based solutions and value-added services, held a press conference on August 18, 2005 to celebrate its official entry into the China market. Several prominent business partners, including Microsoft, Lenovo, Dopod, OrientPower, Nav2 and Hisys, attended the event.

Destinator Technologies enters China at a time when GPS technology is maturing rapidly. While there remains a lack of a sustainable growth model and a value chain, comprised of hardware manufacturer, map provider, software provider, OEM, telecom operation and sales channel, that has not taken shape, demand for PNS has increased exponentially. Destinator Technologies expects to ship more than 1 million sets of its products to markets around the world, up 233% from the 300,000 units delivered in 2004.

Leveraging the company's successes in the global market, Destinator Technologies has gained overwhelming support from local partners in various capacities early on. Destinator Technologies established a strategic partnership with Shanghai's Nav Information Technology Co., Ltd (Nav2), the first Chinese company licensed by the State Bureau of Surveying and Mapping (SBSM) to provide map data for commercial use. A joint venture company invested by Navteq, a global leader in mapping, and Navinfo, established under the auspices of SBSM, Nav2 is currently the leading map supplier in China with its high-precision maps. Maps of more than 180 Chinese cities are available in each Destinator product.

Destinator Technologies' global partnership with Microsoft in developing applications for Microsoft's Windows Mobile platform was extended into China, where all products feature seamless compatibility on the Windows OS. This cooperation has facilitated partnerships with OEMs and channel partners, priority areas for development in China. Currently, Destinator has already partnered with Dopod to embed Destinator SP on its Smartphones. Destinator PN (Personal Navigation) is available for pocket PCs made by Lenovo. Destinator Technologies has already reached agreements with several leading local OEMs and on-board system integrators to develop the PNS industry in China, such as Shanghai-based Hisys; Taiwan-based Acer, Asus, OrientPower and Mitac; Eten; Korean Thinkware; and, GPS receiver manufacturer Royaltek. Destinator Technologies is also in talks with Sanjiang to extend distribution to the military sector.

Destinator Technologies in China

Founded in November 2004, Destinator Technologies Inc (China) brings the convenience of personal navigation to consumers in China. The company also strives to develop the location-based services market by providing innovative solutions to carriers, enterprises, government organizations, and individual consumers. Regarded as the OEM partner of choice for some of the world's largest hardware manufacturers, systems integrators, and map providers, Destinator Technologies cooperates with companies such as Microsoft, Eten, Orient Power, ZTE, Dopod, Mitac, Acer, Asus, Thinkware, Carpoint, Leadteck, Road Tech, CASIC, Hisys, and Nav2 in China.

About Destinator Software Suite

A core product designed for personal navigation systems (PNS), the Destinator suite of products currently includes Destinator SP (Smartphone) for Smartphones, Destinator PN (Personal Navigation) for pocket PCs, and Destinator ND (Navigation Device) for on-board applications. With the seamless integration of cutting-edge mobile navigation technologies and precise map information, Destinator provides easy and convenient operating use. The Destinator suite of products provides a full spectrum of features, including:

Intelligent routing
Optimum route planning for multiple destinations
Millions of points-of-interest (POI)
Route optimization based on real-time traffic information
Multiple language support
SMS support
An extensive library of map information updated regularly
Destinator Technologies' personal navigation products have won many major awards, including:

Destinator PN Awarded the "Editorial Staff Recommendation" in PocketPC Magazine (July/August 2005)
Destinator PN given "Editor's Recommendation" in special interest magazine, "Notebook, Organizer & Handy" (July 2005)
Destinator PN Awarded "Price Tip" Distinction by Germany's Connect Magazine (June 19, 2005)
Destinator SP Awarded "Test Winner" Commendation in Germany's PC Magazin (February 2005)
Destinator SP is voted 2nd best Smartphone Navigation 2004 by pocket.at
Please visit DESTINATOR TECHNOLOGIES at www.destinatortechnologies.com



--------------------------------------------------------------------------------
Contact:
     Destinator Technologies (Beijing) Co., Ltd.
     Mr. Daniel Tao, 010-8511 1446 ext. 106
     Fax: 010-8511 6947
     dtao@hstcglobal.com
         or
     Hill & Knowlton China
     Ms. Tzyy Wang, 010-6512-8811 ext. 575
     Fax: 010-6512-4381
     twang@hillandknowlton.com.cn
--------------------------------------------------------------------------------
Source: Destinator Technologies

China raises U.S., HK dollar deposit rates

China raises U.S., HK dollar deposit rates
Mon Aug 22, 2005 06:01 AM ET
(Recasts, updates with details, background)
BEIJING, Aug 22 (Reuters) - China raised interest rates on deposits of U.S. and Hong Kong dollars on Monday, a move that may help relieve upwards pressure on the yuan.
The increase of 0.375 percentage points, is the second in just over a month and the third since mid-May.
The previous increase was on July 21, the same day that China revalued the yuan by 2.1 percent and dropped its peg to the dollar in favour of a system that manages the exchange rate with reference to a currency basket.
Some $160 billion in foreign currency deposits are held in China and officials are worried they might be converted into yuan amid expectations that the Chinese currency could rise further.
The lastest increase in deposit rates, announced by the central bank and effective from Tuesday, raises the one-year rate for U.S. dollar deposits to 2 percent and for Hong Kong dollar deposits to 1.875 percent.
Analysts say Beijing is trying to make sure that local dollar rates track moves by the U.S. Federal Reserve, which has raised interest rates 10 consecutive times in its recent monetary tightening phase.

Sunday, August 21, 2005

Of stem cells, what would Gandhi say?

By Pankaj Mishra The New York Times MONDAY, AUGUST 22, 2005

In 2001, President George W. Bush restricted U.S. federal financing for stem cell research. The decision, which was shaped at least partly by the Republican Party's evangelical Christian base, and which disappointed many American scientists and businessmen, provoked joy in India.

The weekly newsmagazine India Today, read mostly by the country's ambitious middle class, spoke of a "new pot of gold" for Indian science and businesses. "If Indians are smart," the magazine said, American qualms about stem cell research "can open an opportunity to march ahead."

Just four years later, this seems to have occurred. According to Ernst & Young's Global Biotechnology Report in 2004, Indian biotechnology companies are expected to grow tenfold in the next five years, creating more than a million jobs. With more than 10,000 highly trained and cheaply available scientists, the country is one of the leading biotechnology powers along with Korea, Singapore, China, Japan, Sweden, Britain and Israel.

A top Indian corporation, the Reliance Group, owns Reliance Life Sciences, which is trying to devise new treatments for diabetes and Parkinson's and Alzheimer's diseases, and create human skin, blood and replacement organs genetically matched to their intended recipients.

Some scientists have even more ambitious ideas. Encouraged by the cloning of a sheep by British scientists in 1996, they plan to do the same with endangered species of Indian lions and cheetahs.

American scientists and businessmen note enviously that religious and moral considerations do not seem to inhibit Indian biotechnologists. But this indifference to ethical issues would have certainly appalled Gandhi, father of the Indian nation. Gandhi accused Western medicine, along with much of modern science and technology, of inflicting violence upon human nature. His vegetarianism and belief in nonviolence were derived from Indian traditions, mainly Hinduism, which is also the faith, though loosely defined, of most Indian scientists and businessmen.

Indeed, most evangelical Christians, who believe that the embryo is a person, may find more support in ancient Hindu texts than in the Bible. Many Hindus see the soul - the true Self (or atman) - as the spiritual and imperishable component of human personality.

After death destroys the body, the soul soon finds a new temporal home. Thus, for Hindus as much as for Catholics, life begins at conception.

The ancient system of Indian medicine known as Ayurveda assumes that fetuses are alive and conscious when it prescribes a particular mental and spiritual regimen to pregnant women. This same assumption is implicit in "The Mahabharata," the Hindu epic about a fratricidal war apparently fought in the first millennium B.C.

In one of its famous stories, the warrior Arjuna describes to his pregnant wife a seven-stage military strategy. His yet-to-be-born son Abhimanyu is listening, too. But as Arjuna describes the seventh and last stage, his wife falls asleep, presumably out of boredom. Years later, while fighting his father's cousins, the hundred Kaurava brothers, Abhimanyu uses well the military training he has learned in his mother's womb, until the seventh stage, where he falters and is killed.

But the religions and traditions we know as Hinduism are less monolithic and more diverse than Islam and Christianity; they can yield contradictory arguments. Early in "The Mahabharata," there is a story about how the hundred Kaurava brothers came into being. Their mother had produced a mass of flesh after two years of pregnancy. But then a sage divided the flesh into 100 parts, which were treated with herbs and ghee, and kept in pots for two years - from which the Kaurava brothers emerged.

Indian proponents of stem-cell research often offer this story as an early instance of human cloning through stem cells extracted from human embryos. They do not mention that "The Mahabharata" presents the birth of the hundred Kaurava brothers as an ominous event.

In any case, biotechnology may offer only pseudo-answers to many of India's urgent problems. For one thing, if and when lions and cheetahs emerge from biotechnology labs, the steadily deforested Indian countryside may not have a place for them. Stem cell research is also expensive, and seems glaringly so in a country which does not provide basic health care for most of its people. The advanced treatments promised by biotechnology are likely to benefit the rich, at least for the first few years.

In the meantime, the poor may be asked to offer themselves as guinea pigs. In an article on biotechnology last year, India Today asserted: "India has another gold mine - the world's largest population of 'naïve' sick patients, on whom no medicine has ever been tried. India's distinct communities and large families are ideal subjects for genetic and clinical research."

Scientism has few detractors in India; and the elites find it easy to propose technological rather than political and moral solutions to the problems of poverty, inequality and environmental damage.

Obsessed with imitating Western consumer lifestyles, most middle-class Indians are unlikely to have much time for Gandhi's belief that "civilization consists not in the multiplication of wants but in the deliberate and voluntary reduction of wants." They subscribe to a worldly form of Hinduism - one that now proves to be infinitely adjustable to the modern era, endorsing nuclear bombs and biotechnology as well as India's claim to be taken seriously as an emerging economic and scientific superpower.

Pankaj Mishra, an Indian novelist and journalist, is the author, most recently, of "An End to Suffering: The Buddha in the World." He lives in London and India.

China: Continuing Embryonic Stem Cell Research


China is to maintain its opposition to human reproductive cloning, but will continue to allow closely monitored embryo stem cell research for the treatment and prevention of disease, a senior Chinese expert said.
"Therapeutic cloning opens up prospects for the replacement of dead stem cells and will improve the health of individuals and mankind as a whole," said Wang Hongguang, president of the China National Centre for Biotechnology Development.
Wang told China Daily that China's technology in embryo stem cell research is currently taking a leading role among developing countries and "several products in the field of skin are facing clinical examinations now."
However, Wang said, compared with developed countries, China still has a long way to go.
China's stance on human cloning was reiterated after the United Nations became divided over the life-and-death question - whether human beings should be cloned in the name of medical research - over the weekend.
The Legal Committee of the United Nations passed a declaration banning all forms of human cloning that were contrary to human dignity on Friday night.
Two competing views of the issue maintain different aspects of the United Nations declaration.
Against the declaration are 35 countries including China, Belgium and Britain that believe limited cloning is helpful.
All have expressed their willingness to continue therapeutic cloning.
Seventy-one supporters of the declaration include Honduras, the United States and Germany.
Chinese representative Su Wei said that the wording of the declaration was vague and the banning of all forms of human cloning contrary to human dignity may be misunderstood as covering therapeutic cloning, Xinhua News Agency reported.
The Legal Committee has been discussing the issue of human cloning since 2001.
The committee at the end of last year avoided a divisive vote on the question of an international convention against human reproductive cloning by deciding to take up the issue again as a declaration.
Source: China Daily

Hush! BBStar Sister Furong is 'daydreaming'


By Wendy Liu (City Weekend)

Who the hell is Sister Furong? To answer, don't bother combing through pop singer and celebrity archives on Google or glue yourself to the glorious pop karaoke shows on TV.
She's another blogger turned amateur celebrity like the sultry and sensational writer, Mu Zimei.
Her detailed explorations into the sexual world of young Chinese men and women revealed that you don't have to be a Pepsi star or a Hong Kong actor to become famous on the mainland.
Sister Furong or Lotus Flower, as she likes to be called, quietly captured the spotlight with her gaudy photos and proclamation that she needs a man.

It is a comedy not without precedent - self-humiliation - but one of some subtle confusion: Is the joke on her or us?

Beginning early this year on the Qinghua and Beijing University BBS, a girl named 'Frjj' (Furong Jiejie) began to upload her photos.

Accompanying each photo was a brief diary entry. At first read they proclaimed, "I'm pure and noble (this is how my classmates describe me, which isn't my fault).' Harmless enough.
However, they began to take a much more self-aggrandizing angle when this seemingly average looking university student turned to comments like, "My life is now so annoying. All the time I am the focus on the street. Why do the eyes of the men fall hot upon me? I have no place to hide."

As her popularity grows, Sister Furong goes on to let her audience know that she is also a dance expert.

"I have a pair of beautiful hands which go harmoniously with my outstandingly slim body (1.66cm or maybe taller). My skin is as smooth as a baby and all of these talents have helped me to become a good dancer. I understand life in my dance; I am looking for my lover in my dance."
Sizzle and bristle does the BBS that other chat rooms co-subscribe and soon a debate begins to rage.

Is she funny simply because she doesn't know she is? According to Lotus Flower herself, the original idea was to set up a BBS posting to expose her natural beauty and grace... and ahem, to find a good lover.

Posting, websites, comments, water cooler chats and taxicab confessions criticize and laugh about her apparent and complete lack of modesty.

What difference does it make to Sister Furong? She's famous! Her site is checked for new photo postings daily and the inertia of her original fan base has snowballed into a viral publicity scheme that even the likes of Dan Brown's publisher would envy.

Whatever the comment or criticism, people admit that Sister Furong is brave.

A girl should have the right to be confident and at least at this point, we should respect her.
While the highbrow attitude she emits seems baseless given her common looks, whether she knows it or not, her popularity is exposing how glaring aesthetics dictate our behavior.

No one yet has asked, would she still be 'funny' if she were actually pretty? For now, everyone is playing along and no one knows if our Lotus Flower is in on it.

If Mu Zimei's accounts of sexuality can publish books, maybe Sister Furong's over the top poses can inspire. She may be dreaming but please don't wake her up.

Chinese Internet-born star Furong Jiejie


Chinese Internet-born star Furong Jiejie aka Sister Furong dances on a roof in Beijing August 10, 2005. Furong, whose real name is Shi Hengxia, started the craze by posting pictures of herself on Internet bulletin boards of two top universities in Beijing. In late July, authorities told the country's top blog host to move Furong-related content to low-profile parts of the site. Picture taken August 10, 2005. To match feature China-Internet REUTERS/Alfred Cheng Jin

China and Russia flag true agendas


By Hamish McDonaldBeijingAugust 22, 2005

A PARACHUTE drop by Russian special forces at a Chinese Army training ground has signalled an intensifying challenge by two former communist rivals to the US strategic presence in Asia.
The 86 Russian paratroopers dropped near Weifang City on the Shandong Peninsula, jutting out of China's north-east coast into the Yellow Sea, on Saturday as part of eight days of unprecedented joint exercises.
Before they end on Thursday, the drills will see more jumps by airborne forces, Chinese and Russian marines storming ashore, cruise missile launches by Russian Tu-95 and Tu-22 strategic bombers, Russian air tankers refuelling Chinese fighters, and ships and submarines imposing a simulated naval blockade.
All this, codenamed Peace Mission 2005, is supposed to be an anti-terrorist exercise.
China's first proposed location, the coast of Fujian province facing Taiwan, would have made its main interest a little clearer. The Russians, anxious not to be dragged into a war over the island republic, wanted the war games on the border of landlocked Xinjiang, in China's north-west.
Shandong, the compromise, is closer to China's objective. A Russian military source, quoted by the Japanese news agency Kyodo, said: "This scenario envisages blitzing into Taiwan's nerve centres while enforcing naval blockades for containing the US military's intervention."
Wu Min-chieh, a writer for Hong Kong's Communist Party-linked newspaper Wen Wei Po, said the exercises had multiple objectives — showing off the level of military co-operation between China and Russia; demonstrating the ability to intervene in Korea, just across the Yellow Sea; and deterring independence forces in Taiwan.
Other analysts see it as continuing pressure by the two powers to force the US out of its military presence in central Asia as part of the Afghanistan invention since 2001, especially following Uzbekistan's recent order for the US to quit an air base.
Russia, which has traded territory with China along the Amur River border, the scene of large-scale Sino-Soviet military clashes a little over 30 years ago, is also using the exercise to show it remains a formidable military power in the region, despite the declining Russian population in its resource-rich far east.
The exercise is also a chance to show some of the weapons it hopes to sell to the Chinese, including the Tu-22 bomber, aerial tankers, and airborne radar planes.
American defence attaches, like those of its allied countries including Australia, have not been invited to observe. Only the central Asian republics in the Chinese-led Shanghai Co-operation Agreement are allowed to watch, along with SCO observer countries — India, Iran, Pakistan and Mongolia — that Beijing and Moscow would like to lure away from US influence.
The Americans are still getting a close look — having sent two EP-3 spy planes and at least two ships into the area, according to reports from Washington.
"We're very interested in the exercise," said Admiral Gary Roughead, the new US Fleet Commander in the Pacific.

China’s Space Program


Review: China’s Space Program

by Jeff FoustMonday, August 22, 2005

China’s Space Program: From Conception to Manned Spaceflightby Brian HarveyPraxis, 2004softcover, 350 pp., illus.ISBN 1-85233-566-1US$34.95
Some time in the next two months, in all likelihood, China will launch Shenzhou 6, its second manned mission. Like the Shenzhou 5 flight two years ago, this mission will capture the world’s attention for at least a brief time, and be the focus of intense speculation about China’s future plans in space. Some of that speculation will claim that China’s manned spaceflight plans will create a new “space race” with the United States to see who will be the first to land humans (back) on the Moon. Indeed, that has already started: Newsday columnist James Pinkerton suggested earlier this month that “soon enough, it will become apparent that the Chinese are serious about space exploration, including colonization of the moon” and that “when we realize that a new rival is beating us, we will get moving again and start competing to get our kind to the moon.” Such claims are hard to justify given the glacial progress of the Chinese space program, which has launched less than 100 missions since its first satellite launch in 1970. (See “The phony space race”, The Space Review, June 9, 2003.) By the same token, though, Chinese progress to date cannot be written off: it takes considerable technical expertise to safely fly humans in space.

What complicates analysis of Chinese space efforts is the lack of freely available information about the Chinese space program. Few Chinese launches are announced in advance, and proposals by individual scientists and engineers for future missions are often conflated with actual government-approved missions. This leads to reports like a Reuters article earlier this week that breathlessly proclaimed that China would launch its first lunar orbiter mission in 2007, an announcement that was hardly news since Chinese officials had been saying the same thing for many months. Brian Harvey makes a noble effort to rectify this problem by shedding some light on Chinese space efforts and providing some crucial historical background in his book China’s Space Program.

China’s Space Program is perhaps the best single-volume summary of Chinese space efforts, at least among those written in English.

China’s Space Program starts with a detailed narrative of the flight of Shenzhou 5, from the pre-launch preparations through the actual mission to the safe recovery of Yang Liwei. Harvey then provides a detailed history of Chinese space efforts, which began in earnest when the Chinese-born, American-educated scientist Tsien Hsue Shen returned to China in the 1950s, a victim of McCarthy-era persecution for alleged communist ties. Tsien and other Chinese engineers (many of whom were also graduates of American universities) embarked on a series of efforts to develop guided missiles and, later, satellite launch vehicles. This culminated in the successful launch of China’s first satellite, Dong Fang Hong (“East is Red”), in 1970.

Harvey’s book is not a strictly chronological account of the history of China’s space program: after examining the early history of China’s program, various chapters explore in detail satellite and launch vehicle development, China’s foray into the commercial launch market (and the technology transfer controversy with the US in the late 1990s that effectively shut down those efforts), the various organizations and facilities used by the program, and, of course, the development of a manned program, including an abortive attempt to develop human spaceflight capability in the early 1970s, just a few years after China launched its first satellite. Not surprisingly, a final chapter examines the future of China’s space program, including a potential space station and robotic (but not human) missions to the Moon and even Mars. (This makes the cover which purports to show a manned Chinese lunar mission, complete with a rover that prominently displays the word “China” in several places, a bit misleading.)
China’s Space Program is perhaps the best single-volume summary of Chinese space efforts, at least among those written in English. The book is thoroughly researched, with references at the end of each chapter and an extensive bibliography at the end. (Harvey appears to limit himself primarily to English-language sources for his research; it’s not clear how limiting the exclusion Chinese-language sources is, given the tight control the government puts on the release of any information on the program.) The book contains many photos and illustrations from Chinese and Western sources. Unfortunately, some of them have the fuzzy, muddy look of low-resolution images pulled from the Web.

While published a year ago, China’s Space Program is still very relevant: the book is only missing some additional details about the Chang’e lunar exploration program and the upcoming Shenzhou 6 mission that have been revealed in the last 12 months. That makes this book just as timely as ever: with Shenzhou 6 to launch in the coming weeks, a book like this offers the reader a better perspective on China’s space program and helps to weed out the hype and hysteria that is sure to follow the mission in the media.

Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review. He also operates the Spacetoday.net web site and the Space Politics weblog. Views and opinions expressed in this article are those of the author alone, and do not represent the official positions of any organization or company, including the Futron Corporation, the author’s employer.

Saturday, August 20, 2005

China Rising: Time Magazine's special report


Contents

By the Numbers: China is an economic powerhouse that's growing, competing for resources and bursting with consumers

Graphic
Living Large: A map of China's population growth and density

Interactive
The Woman Who Made Your Jacket
The world of Chinese garmet worker Liu Li

Audio
Behind the Cover Story: TIME's Dinda Elliott on the new China

Web Exclusive
Changing the Game in China (China Rising) : From tycoon to nationalist, gay-rights lawyer to maverick moviemaker, these people are shaping a proud new country
Power to the People (China Rising): All over China, peasants are speaking out on grass-roots concerns-- and building a new civil society
The Last Frontier (China Rising): Almost anything goes these days--but you still can't oppose the Communist Party. Will China ever really be free?
But Can China Innovate? (China Rising)
They Export Pollution Too (China Rising)

The Map of China

China Web Guide

China Web Guide

China Travel Guide
From the Great Wall of China to the Forbidden City, this site is a comprehensive guide for the traveler. The tours, cruises, hotels and city guide sections offer numerous possibilities for vacationing and traveling.
A China Information Base
General information about China including links to the country's top news sites. Other sections include trade and investments, cites and people, culture and art, life and entertainment and travel and weather.
Xinhua News
Keep up-to-date on China's latest news. Browse the featured sections to learn about the latest developments in life and health, science and technology, culture and education, sports, entertainment, business and travel.
The History of China
For the history buff, this site offers a detailed history of China's development from the ancient dynasties to the development of the People's Republic.
Interactive China Map
Explore the cities in China using this interactive map, which displays economic, geographic and environmental information.
China Window: The Best Way to China
Take a look through the window and experience China through history, culture and tourism. Learn about China's financial situation by exploring the economy, market and business sections.
People's Daily Online
Another news site, but with a unique focus on the people's voice. Online forums allow readers to comment on interesting and controversial news.
China Online: The Information Network for China
A site devoted to business and technology news and information throughout China.
China's Religions
An overview of the country's major religions including Confucianism, Buddhism, Taoism, Christianity and Islam are described on this site. Additional resources include digital archives, texts and guides to religious associations.

Rice concerned over China's economic challenge


Fri Aug 19,10:37 AM ET

WASHINGTON (AFP) - US Secretary of State
Condoleezza Condoleezza Rice said in an interview published that China must modify its economic policies to shed its status as a "problem for the international economy."

Though faulting China on its military buildup and human rights and religious freedom, Rice however told the New York Times that Beijing and Washington still enjoyed a "good relationship."

The interview was published three weeks after China National Offshore Oil Corp (CNOOC) abandoned an 18.5-billion-dollar takeover bid for California firm Unocal Corp. which had sparked fierce criticism of Beijing among US lawmakers.

There have also been calls for China to revalue its currency, which the United States says currently make Chinese exports more attractive to US consumers and US goods more expensive in China.

China last month freed the yuan from an 11-year-old peg to the US dollar and allowed the unit to appreciate 2.1 percent.

Rice said she had told Chinese leaders in recent meetings that they should take note of unrest in Congress about Sino-US relations.

"Don't ignore what people are saying to you about the problems of a Chinese economy that is both big and unreformed," Rice said she told China's leaders.

"We remind them that the president is a free trader, but he is a free trader who believes there has to be a level playing field for American workers and farmers and American goods."

Rice also cautioned that she was concerned about China's military buildup which she termed "outsized for its regional interests" and registered concern about human rights and religious freedom.

"But on balance," Rice was quoted as saying, "it is a good relationship" with "a considerable benefit in the war on terrorism" and over the North Korea nuclear crisis.

Could China Become Target for U.S. WMD?

Commentary, Franz Schurmann,Pacific News Service, Aug 19, 2005

Editor's Note: The U.S.-China relationship may experience an upswing when Chinese President Hu Jintao visits President Bush this fall. But by 2025, argues veteran Sinologist Franz Schurmann, it could deteriorate to dangerous levels.

SAN FRANCISCO--Chinese leader Hu Jintao might visit President Bush at Crawford Ranch this fall but it's not inconceivable that, in coming years, America could consider using "Weapons of Mass Destruction"(WMD) against China. WMD include nuclear weapons.
China has made great strides in power and wealth both internally and, recently, externally. Since dual victories in Europe and East Asia in 1945, America has considered itself in part the successor to the British Empire. And, like the latter, it fears any rival. China has become such a rival.

During the Cold War (1948-1991) the Soviet Union (now Russia) and China had comparable power. But though Russia has wealth, especially fossil fuels, it's now trivial compared to China's wealth. However, China and Russia recently launched their most ambitious joint military exercises ever to show their deepening cooperation.

In 1958, during the Quemoy Crisis, when China shelled the small islands held by Taiwan, America seriously considered using a WMD option on Chinese targets, military and civilian. If used, America would have pushed the world to the brink of nuclear war.

Six years later in the American election year of 1964, the Republican candidate for Vice President, General Curtis LeMay, kept saying in his campaign speeches that "nuclear weapons are just another weapon." In World War II he was known for his "frying the cities," which killed thousands of civilians.

In October 1964, the United States came close to bombing the Chinese experimental atomic device at the nuclear Lop-Nor facility in Guangsu Province. While the Pentagon accepted cooperation with the Soviet military to reduce the chances of nuclear war between the two superpowers, it had only perfunctory contacts with its Chinese counterparts. Rather, a Pentagon report to Congress this year on Chinese military power claimed that China was now engaged in a "truly alarming" military modernization.

Even before World War I, Kaiser Wilhelm II coined the term "Yellow peril" and many Europeans and Americans agreed. So, it seems, does the Pentagon.

The Western image of China was captured by Suzanne Labin when in 1960 she published "The Ant Hill: The Human Condition in Communist China." The photographs of hordes of people building big dams with their own hands, coupled with the "ant hill" in the title made it clear Labin saw the Chinese more as human robots than heroes.

Why would America want to nuke China? Twenty years from now, America could be in serious economic decline and feel threatened by China's rise. Or, the growth of unchecked power in the Pentagon could make that body a kind of "state within a state."

However, China will likely survive even if America decides to nuke it. Over the centuries China has been the one of the few countries in history that has survived huge death tolls to become even stronger than before. In the case of contemporary China, the recovery time is getting shorter and shorter.

In 1960, this Sinologist was in Moscow along with fellow American and European Sinologists. At a time when travel between China and America was forbidden, that conference was to be a rare opportunity for American, Soviet and Chinese scholars to get together.

But the Chinese scholars did not come. Instead, the world media ran headlines like "Chinese and Soviet Communist parties break relations." Some years hence it became clear what made Nikita Khrushchev and Mao Zedong turn away from comradeship into fierce enmity. In 1957, Khrushchev had agreed to help the Chinese physicists and engineers build a nuclear bomb. But in 1959, when Khrushchev visited America, President Eisenhower persuaded the Soviet leader to cancel the 1957 agreement. As a result the two Communist leaders exchanged vilifications that morphed into a mini war in 1969.

Mao Zedong, who had the highest admiration for Joseph Stalin, despised Khrushchev as a liar. When Mao went to Moscow in 1957 (his second trip to Moscow, otherwise he never went abroad), he had grand visions of China's, the Soviet Union's and Marxism's glorious futures all over the world. Mao thought he was an avatar of an emperor going back to the legendary Xia dynasty 2,500 B.C.

In 1958, Mao's visions blossomed. He called his grand vision for China the "Great Leap Forward." But then in 1959, there were signs that the great leap was showing slowdowns. In September 1959, Khrushchev went to the USA and betrayed Mao Zedong. In 1960, famine ravaged rural China. Corpses from China kept washing up in the Portugese colony of Macao, near Hong Kong, during 1959 and 1960. Various sources estimate 50 million died.

In 1961, Mao knew that the only way to abate the famine was to re-instate the traditional rural markets with renewed and credible money instead of the useless paper the Chinese farmers got from the Great Leap Forward. The Chinese farmer had been used to credible currencies from 4,000 years past, when their currency was cowrie shells.

Since 1961, China's potato harvest area increased from 1.3 million hectares in 1961 to 2.4 million hectares in 1981. In 1972, Mao Zedong recalled Deng Xiaoping, who had been in rural exile as a bad guy in Mao's "cultural revolution." Deng cleaned farmers' latrines for six years. Following Mao's death in 1976, he took Mao's position in 1978. And he based his rural successes on Mao's quick turnabout when he realized his visions were nothing more than dreams.

That kind of resilience and leadership should give the Pentagon think-tanks some pause before launching Coalition and American forces into nuclear action.

Schurmann is emeritus professor of history and sociology at U.C. Berkeley and author of numerous books.

'The World' opens a new window on modern China

'The World' opens a new window on modern China

By Bob StraussFilm Critic

China's awakening from the long sleep of Maoism was bound to have profound social impact. And it was just as inevitable that serious filmmakers would set their penetrating gaze on the human dimension of all those changes.
Jia Zhangke, whose latest movie is both ironically and quite straightforwardly called "The World," observes with his heart.
A growing cult figure in the West for "Platform" and "Unknown Pleasures," his studies of provincial youth coming to bewildered terms with the new possibilities of capitalism, technology and the incomplete transition to freedom, Zia not only takes his latest film to the big city but goes international with it.
Sort of. "The World" is about workers at World Park, an EPCOT-like entertainment center in which famous landmarks from Red Square to the Eiffel Tower are presented in smaller scale. "See the world without ever leaving Beijing" is cheerily blared over the monorail's P.A. system while passing such incongruous sights such as maintenance men carrying water-cooler bottles past the Pyramids of Giza. The ad line also serves as a depressing reminder that even in a time of economic boom and eased travel restrictions, the vast majority of Chinese will never be able to actually take a trip out of their country.
The underpaid park employees we meet certainly won't. Mostly young people from smaller cities and towns, they live in dorms that are barely up to 19th-century standards, even as they present almost state-of-the-art entertainment for the attraction's guests. Though the film examines several of these workers, the central drama revolves around Tao (Zhao Tao), who dances in ethnically themed, sub-Vegas stage productions, and her boyfriend Taisheng (Chen Taisheng), a security guard.
She aspires to serious artistic stardom. He's just making more money than he could up north, and appears to be the one most in love. But like their place of employment and the elusive dreams it nurtures, their relationship's appearances are deceptive.
Tao seems devoted to Taisheng but has a strange way of showing it. She'll let him get around most bases in a grounded airliner cockpit (it's another World Park travel simulation attraction) but never actually make love to her. He understandably asks if she's waiting for someone better, richer; someone who can offer broader horizons. Tao says that's not it, and when an opportunity of that sort arises, she proves to be a woman of her word.
Still, her persistent virginity can only appear to Taisheng as another facet of life at World Park, where not really getting there seems to operate on many levels. He takes up with Qun (Huang Yiqun), a knockoff clothing designer whose husband departed for France years ago. Meanwhile, tragedy and shame strike those closest to him, while Tao watches co-workers rise, establish households or slip from the fake comfort of the park world into more dangerous zones of the booming economy. As fears for her own fulfillment grow, so does her emotional dependence on her frustrated beau.
This couple's and others' stories sometimes veer into melodrama. But Jia's formal technique and insight into cultural change always raise matters above the soap opera level.
Jia has a passion for long-held shots that probe both character and institutional contradictions without mercy. But with some compassion and much dry wit. When a visitor mentions that there are no longer twin towers in the real New York, a World Park employee says "We still have them" with a mix of pride and rueful laughter at the surreal place his life's become tied to.
While their actual surroundings are either dreary or imitation, people of "The World" revel in digital fantasy. The animated sequences on their ubiquitous cell phones suggest both emotional states and an illusion of mobility these mobile users may never actually enjoy. Though not a complete pessimist, Jia ends on a note of tragedy as classically timeless as both change itself and the longing for a better future.
THE WORLD
Our Rating: *****
(Not rated: language)Starring: Zhao Tao, Chen Taishen, Huang Yiqun.Director: Jia Zhangke.Running time: 2 hr. 19 min.Playing: Laemmle One Colorado, Pasadena; Laemmle Fairfax, Los Angeles; Landmark Westside Pavilion, West Los Angeles.In a nutshell: The constricted lives of workers at a Beijing theme park are ironically and often brilliantly contrasted with the EPCOT-like facility's promise to bring China the world. In Mandarin and Shanxi dialect with English subtitles.
Bob Strauss, (818) 713-3670 bob.strauss@dailynews.com

Friday, August 19, 2005

Novell Expands Presence in China

Novell Expands Presence in China August 19, 2005 -- (WEB HOST INDUSTRY REVIEW) -- Linux distributor Novell (novell.com) announced this week that it would expand its commitment to the market in China. The company plans to set up a research and development office, open regional branches, develop a technology support center and strengthen its ties to local partners. Novell says the moves will position the company to expand the open source software infrastructure and promote Linux adoption in China. "This expansion of our presence in China is a strong signal of our commitment to the region," says Rhonda O'Donnell, president of Novell Asia-Pacific. "Investing in the Chinese market is a key strategy for Novell. We are poised for a new era in China, ready to significantly contribute to China's development of its software industry." According to Novell, a research and development center will be opened in Beijing by the end of the year. A support center will open in Shenzhen and offices are planned for Shanghai and Guangzhou. The company also launched openSUSE.org.cn, a Chinese language site for the recently announced openSUSE project.

Wednesday, August 17, 2005

China Exclusive: Glorious SEZ striving hard for further growth

China's vanguard city in reform and opening-up is seeking to continue its decades-long boom, though Shenzhen no longer enjoys preferential treatment from the central government, the city's leader Li Hongzhong said in Shenzhen Wednesday.
"The Shenzhen Special Economic Zone (SEZ) is pursuing healthy, stable development," Li, secretary of the Shenzhen municipal committee of the Chinese Communist Party, told the press on the eve of the 25th anniversary marking the SEZ's establishment.
Shenzhen, the country's first and most successful SEZ, reported a per capita gross domestic product (GDP) of more than 7,100 US dollars in 2004, the highest among all Chinese cities. It's target is 12,000 dollars for 2010.
Even when China as a whole was endeavoring to cool down its roaring economy, Shenzhen's economy grew at a blistering rate of 14-17 percent annually, Li said.
One of Shenzhen's biggest advantages, according to him, lies in the market-oriented mechanism built up over the past two decades and more and local people's foreknowledge on development.
"We are a real immigrant city. The number of registered citizens here is just 1.65 million, but more than 8 million people from elsewhere are working in this city. Most of them are enterprising."
Li said Shenzhen also benefits greatly from its neighborhood with Hong Kong, a world-class financial and trade center. "Close links with Hong Kong give us more advantages than any other places in China."
Large numbers of Hong Kong firms have moved their operations to Shenzhen to take advantage of cheap labor force. By the end of June, 20 Hong Kong banks had opened business outlets in Shenzhen.
As a matter of fact, the territory of Hong Kong and current Shenzhen belonged to a single county, namely Bao'an, before Britain occupied Hong Kong. Bao'an is now the name of one of Shenzhen's six districts.
Late Chinese leader Deng Xiaoping proposed the idea of SEZ to kick off China's sweeping reform and opening-up efforts. A host of SEZs including Shantou, Zhuhai and Hainan were inaugurated on the heels of Shenzhen.
Shenzhen, the bellwether, is facing a dilemma: On the one hand, the central government will not grant any more preferential treatment for it in terms of taxation and project allocation; on the other, all the Chinese are paying attention to its development as an SEZ -- the pressure is there, analysts say.
The Shenzhen Stock Exchange, one of China's two bourses, has not been allowed to accept the issuance of A- and B-shares for years.
"We do not need any kind of special treatment. We should depend on ourselves now," said Li Hongzhong, adding that reform is the "nickname" of Shenzhen. Shenzhen should further shift its development philosophy from processing to high-tech industry, he said. High-tech exports reached 35.1 billion US dollars last year, making up 45 percent of the city's total, figures show.
Li said the financial sector and modern logistics should also be a boon to Shenzhen's economy, which soared an average 28 percent annually since the SEZ was set up in 1980.
The latest challenge for Shenzhen is energy crunch. In the past few days, local drivers are permitted to purchase oil worth no more than 100 yuan (about 12 dollars) at oil stations. "I have joined the queue here for three hours for the oil," a driver surnamed Li told Xinhua.
"The phenomenon gave us a warning and we will attach great importance to it," Mayor Xu Zongheng told Wednesday's press conference.
He acknowledged that energy and resources including land, water and electricity power are posing a threat to the sustained growth of Shenzhen.
He said his government will speed up urbanization to "create" more land for industrial use and usher in more water and electricity from other places.
Meanwhile, Shenzhen will curb the excessive growth of population, Xu said, but adding that "Shenzhen's door is always open to the talented people the city needs."
August 18, 2005
Source: Xinhua

Tuesday, August 16, 2005

A New Era for China

Tuesday August 16, 2:16 am ET

By Jonathan Bernstein, ETFzone Trading Specialist

It is just over three weeks since the Chinese government announced the revaluation of its currency the yuan (also known as the renminbi). On July 21st, the yuan was taken off the dollar peg and tied to a basket of currencies -- primarily the dollar, euro, yen and South Korean won. Pegged for a decade at 8.28 yuan to the dollar, the yuan was allowed to depreciate a mere 8.11 or 2.1%, an amount not uncommonly seen in a single day of dollar fluctuation against the euro, yen, or pound. In fact, on the day of its revaluation, July 21st, the dollar fell further against the yen (2.3%) than against the yuan.

As the yuan is still undervalued 25-40% against the dollar, according to most estimates, many market watchers called the revaluation by the Chinese government purely symbolic. However, though trifling, the very fact of this move by the Chinese government is more important than its size. Since the revaluation, the Chinese market and Chinese ETFs have reflected this new paradigm, skyrocketing far beyond the paltry move in the currency. What excites post-revaluation investors in Chinese companies is that China now appears formally committed to a full integration with the world economy, a change that most investors expect will eventually lead to a freely floating currency and unprecedented, and almost unimaginable opportunity. The yuan revaluation to many signals a shift to this fundamental new reality and a young-hearted excitement about the future.

The new popularity of Chinese stock is apparent from the price chart below showing the performance of the iShares FTSE/Xinhua China 25 Index Fund (NYSE:FXI - News), itself a newcomer to the market since mid-October of last year.

As the chart above shows, despite all the hype regarding China, since its inception FXI has been trading within a five dollar (10%) range. The revaluation broke this trend pushing the FXI since July 21st up 10% to new all-time highs.

Since the revaluation, the pace of investor interest in China has increased significantly. In the three weeks since the revaluation, Shanghai's B-Index, which contains shares open to investment from foreign investors, has soared 31%. The biggest news last week was the sizzling IPO of Baidu.com (Nasdaq:BIDU - News), the internet search portal and so-called 'Chinese Google'. This week China was in the news again, as two key Chinese ADRs leap ahead: oil company Cnooc (NYSE:CEO - News) on the news that Unocal (NYSE:UNC - News) shareholders would agree to a Chevron (NYSE:CVX - News) takeover, and China Mobile (NYSE:CHL - News), now the world's top mobile phone carrier on a subscriber basis, which posted a 35.5% increase in quarterly profits.

The chart below compares the returns last week of CEO, CHL and FXI, which holds large stakes in both.
News of both the Chevron merger and the profit release from China Mobile came out pre-market Wednesday. The news positively impacted FXI, which holds 9.87% of its assets in China Mobile and 7.42% in Cnooc.

China continues to have the one of the best growth stories of today, with an economy expanding at a 9% annual pace, but like the shares of Chinese internet search engine Baidu.com, there are some signs that in the near term Chinese stocks may be getting a little ahead of themselves. Although the perception among investors is that China will not stop at a 2.1% revaluation, economists predict that the yuan will continue to devalue by 3% or less against the dollar by the end of 2005. This slight dollar appreciation does not alone merit the 31% increase in the Shanghai ADR market.

The difference, then, is anticipation of further revaluation, and the perceived new reality for China. Judging by the last three weeks, that perception looks real enough, but the reality is not yet here. The revaluation of the currency may have fundamentally changed the demand for Chinese securities forever. But the Chinese market has moved so far, so fast, that there may be a cooling off period here before the market trends higher. Investors seeking to diversify into Chinese ETFs may want to procede cautiously, staggering their China allocations at these recently elevated levels.

Jonathan Bernstein,PhD has specialized in short-term trading of equities and equity options since 1998.

Monday, August 15, 2005

Internet giants deepen push into China

by David Shabelman in San Francisco
Updated 06:11 PM EST, Aug-12-2005

The California gold rush had nothing on the stampede by U.S. Internet companies to stake their claim in that modern-day commercial phenomenon: China.

Yahoo! Inc.'s $1 billion bet on Chinese Web auctioneer Alibaba.com Corp. and its swashbuckling CEO Jack Ma is only the latest move in what is a growing wave of American Internet companies entering the nascent, but already vast, Chinese online market.

In 2005, U.S. companies have spent $1.5 billion acquiring Chinese technology companies, compared with $513 million for all of last year, according to market researcher Dealogic. Across industry, U.S. companies have spent a total of $6.9 billion on Chinese companies in 2005, compared with $4.8 billion for 2004. China has roughly 120 million Internet users, second to the U.S. with 200 million, although China is expected to surpass that number within the next two years.

"As a U.S. Internet company, you have to have a China strategy," said Matt Comyns co-founder of Internet advisory firm BlackInc China. "You can't just cede the market to local players or just say, 'It's too complicated,' because in three or five years that business could be bigger than your U.S. business."

Indeed, in taking a 40% stake in Alibaba, Yahoo! is choosing to raise the stakes on its closest competitors. Google Inc. last year invested $5 million in Chinese search engine Baidu.com Inc., which on August 5 launched a highly successful initial public offering, and in July opened a research and development center in China. EBay Inc., which first entered China in 2002 with an investment in, and subsequent acquisition of, auction site EachNet Inc., said in January it would invest $100 million in its Chinese operations; it also expects to launch its PayPal payment service in the country by year's end. Online job recruitment firm Monster Worldwide Inc. in February spent $50 million to acquire a 40% stake in ChinaHR.com Holdings Ltd., and Barry Diller's IAC/InterActiveCorp recently spent $167 million for a 52% stake in Chinese travel service eLong Inc. Meanwhile, Microsoft Corp. in May said it would form two new ventures for its MSN Internet service in China and also bought the assets of Chinese mobile-phone software provider TSSX.

"In the Internet sector, the winners and losers are chosen rapidly," said David Liu, managing director of technology investment banking with Jefferies Broadview. "If you're a successful Internet company in the U.S., you have to be forward-looking and have some kind of strategy in China no matter what the downside is."

That downside consists of investing in a country that remains under authoritarian rule and in an economy that, although growing rapidly, continues to lag behind that of more developed countries.

Liu expects some of the major Chinese Internet companies, such as online portals Sina Corp. and Sohu.com Inc. and wireless content provider NetEase.com Inc., either to be acquired by or to form partnerships with U.S. companies. Sina already has teamed with Yahoo! to offer auction-related services, NetEase and Google have a content distribution partnership, and Sohu has a content deal with Walt Disney Co.'s Internet subsidiary.

"Technology is a winner-take-all type industry," Liu said. "I don't see any reason why the Chinese market would play out any differently than in the U.S."

And while the headlines have focused on the activities of high-profile Internet players in China, opportunities also exist for smaller industry companies to establish their own operations or team with Chinese firms, Comyns said. BlackInc, for example, has advised online consumer information firm About.com, a unit of The New York Times Co., and consumer banking firm Bankrate.com Inc. on doing business in China.

"In many cases a lot of these Chinese companies, even if they're competing with you, are happy to partner with you," he said. "I don't think the Chinese Internet companies view the U.S. Internet interest as a negative."

Technorati Inc., a San Francisco company that provides real-time indexing of Web content for blogs, among other services, is working with BlackInc to explore ways to tap the Chinese market. Richard Ault, director of product marketing for Technorati, said the company earlier this year began noticing a marked increase in blog activity in China, driving it to take a closer look at business opportunities in China.

"People in China aren't building home pages, they're coming online and starting blogs," Ault said. "Everything I've seen in the past two years says China's economy is going to experience a high-tech leapfrog. They're not going to have a Web 1.0 ramp, they're going to be leapfrogging to 2.0 because the infrastructure is going to be more sophisticated than what was built in the U.S."

 

China Odyssey: Globetrotting engineers ponder China's past and future

 

Marco Polo first arrived in China in 1275 A.D. I arrived in the summer of 2004 and doubt that Marco Polo was any more amazed. This journey profoundly impressed me, not so much as a tourist but as an agricultural and biological engineer. I saw sustainability in action in competition with a rapidly growing economy; the effect of population density on energy, environment, food production, and transportation; and the critical importance of agricultural and biological engineering to the future of our planet.

My 16-day trip included eight days of touring: from the Great Wall near Beijing to the ancient Silk Road in Xian to a modern city of skyscrapers, Shanghai. I tramped large cities, major tourist stops, university campuses, and several hundred miles of countryside, albeit never far from a major city. I saw a race between a people striving to obtain a higher standard of living and their ability to sustain it. For the last eight days, I was a guest of the College of Biosystems Engineering and Food Science, Zhejiang University, Hangzhou, where hospitality abounds.

" ... the national bird [of China] is the construction crane," comments Loewer. Above: Ever-ongoing construction in the city center of Xian.

There is little in the plant or animal kingdom that the Chinese can't tastefully prepare as a food source - food engineering in action! And it is true: the national bird is the construction crane. But can rapid economic growth coupled with an increasing population be sustained in the long run?

I am no expert - only a first-time-in-town Marco Polo. But ASABE members have had extensive experiences in China; what do they think? And what about those who were born, raised, educated, and have leadership roles in agricultural and biological engineering in China?

In this, the first of occasional features with travel narrative and reflection as theme, the American analysis is given by two adventuring "Marco Polos" like myself. Then, the other side of the yen: the Chinese perspective by three "homegrown" analysts.

Norm Scott

Former ASAE president Norm Scott has made 18 trips to China seeing many changes that will impact sustainability. He believes agricultural and biological engineers must play an increasing role if China is to raise her standard of living while improving its natural environment.

"Air quality and smog are extremely bad at times, especially in cities where a huge amount of coal is burned," Scott says. "Some restrictions are now coming into play, and China is moving to nuclear and, perhaps, natural gas.

"Untreated point and nonpoint sources of water discharges have existed too long. Industrial, agricultural, and municipal resources have all been contributors. China is currently being challenged to implement treatment processes, and its version of the Environmental Protection Agency is getting stronger."

Scott is intrigued by China's "agro-eco villages," designed to create an integrated energy and living environment with an agricultural focus. "These villages use waste to produce methane mostly for cooking and some heating with the possibility for conversion to electricity. The heating and electrical component is provided centrally to the village using a combined heat-and-power approach. The agro-eco village is where our profession could play an important role, but there are many forces at work that will increase the importance of our profession in China."

Bill Stout

ASABE member and former CIGR president Bill Stout attended the October 2004 CIGR International Agricultural Engineering Conference in Beijing.

"The Chinese national economic growth rate is about 9 percent per year and has been growing at this high rate for quite a few years," says Stout. "Impressive office skyscrapers, apartments, and shopping malls offer a spectacular variety. Superhighways connect many of the major cities. However, while traveling into deeply rural areas by train, I observed farmers tilling the soil with water buffalo and primitive implements. Fields are small, averaging only a fraction of a hectare. Chinese leaders are well aware of the problems and have plans to strengthen the farm economy. Agricultural engineers will have a major role to play.

"Air quality and smog are extremely bad at times, especially in cities where a huge amount of coal is burned," says Norm Scott. Loewer captures the haze on his digital canvas: a typical off-to- work morning of vehicular travel and combustion on a side street in Xian.

"While I cannot speak for all Chinese universities, the three agricultural engineering departments I have visited are better funded than many American counterparts, with well-equipped laboratories and computer facilities with cutting-edge research underway. Great emphasis is placed on the English language. My guest lectures were all in English with no interpreters, and the student groups seemed to understand. The culture does not encourage student questioning of professors and interaction is limited, but with prodding we achieved a reasonable level of discussion.

"I think China will become the world's economic leader in the next few decades, displacing the United States and Europe. They are well on their way to achieving that goal. With more emphasis on rural development, including expanded input from agricultural engineers, I see no reason for their economy to stop growing at a rapid pace.

"My message to American agricultural engineers: if you are not already working with our Chinese colleagues, by all means do so. They are eager to work with you, and you can develop a mutually beneficial collaborative relationship. Both sides will be stronger as a result."

Yibin Ying

ASABE member Yibin Ying is executive associate dean of the College of Biosystems Engineering and Food Science at Zhejiang University. He has spent considerable time in the United States sharing a research interest in biosensors.

"In China," says Ying, "agricultural engineering is classified as a Class 1 discipline under an engineering branch. It contains four Class 2 disciplines: agricultural mechanization, water and construction engineering, bioenvironmental and energy engineering, agricultural electrification and automation - four undergraduate majors in agricultural engineering. There are more than 70 universities with agricultural engineering colleges or departments. Thirteen offer a Ph.D., 11 have postdoctoral programs, and five Class 2 disciplines in four universities are listed as national key disciplines.

"The realization of agricultural mechanization, electrification, hybridization, and chemicalization in the past century laid the foundation for the rapid development of agriculture. Since the late 1970s, there has been rapid development in the fields of biotechnology, computing and information technology, new energy resources, and material sciences. Agricultural engineering in China entered a new era as a result of four major trends: improvement and reform of agricultural engineering curriculum, broadening scope of research, acceleration of research and extension of application technologies, and development of research and teaching dependent on the support of other related sciences and technologies.

"There has been significant change in the development of the social economy and science and technology. Thus, the position, scope, and clients of agricultural engineering curriculums have also changed significantly. The modern agricultural engineering discipline not only serves production and processing, but it also relates to bioproduction and bioprocessing. The end result: our program is becoming one of basic science, and engineering disciplines need to support the continuous development of our country.

"Every two years, the Agricultural Engineering Society in China holds a national forum on the reform of the agricultural engineering discipline. In 2002, the forum was renamed 'Agricultural and Biosystems Engineering.' An influencing factor was what was happening elsewhere in the world regarding agricultural engineering.

"Agricultural engineering is becoming multidisciplinary by its emerging first into biology and then into other new technologies. Research and extension of application technologies are accelerating. Application technologies play an important role in assisting modern agricultural businesses, developing modern agricultural communities, and enhancing the agricultural economy."

Yun Zhao

Yun Zhao is a leader of the Chinese Society of Agricultural Engineers and president of Zhejiang Sci-Tech University. His campus was filled with visitors and recent graduates with no shortage of social activities on the day of my interview. Added to this was massive ongoing construction. Zhejiang Sci-Tech University occupies a new campus, with over 600,000 m^sup 2^ (6.5 million ft^sup 2^) of space.

"The role of engineers depends on the education they can obtain from the college or university," says Zhao. "There are two important things in undergraduate programs: to give students a good foundation and broad knowledge that includes both arts and sciences. What students take from a university are the tools that create an environment sufficient to make them ready for their continuing education after graduation. The second is that a university should offer the c\urriculum that reflects the major tasks and problems in the future work of agricultural and biological engineers, an example being the continuous development of post-harvest processing.

"At the same time, there is also the need in China for agricultural engineers to have the basic ability for research and development of agricultural equipment.

"There is a Chinese saying, 'One's contribution makes one's position.' Compared to other disciplines, Chinese experts in agricultural engineering have not contributed enough to the development of agriculture in China for the past several years. Some problems should have been solved, but have not, and this has resulted in not enough support from the government. In comparison, some disciplines, such as breeding science, have obtained more support in funding and higher ranks in national research needs. Considering the limited cultivable land per person and limited natural resources (except human resources), we must ensure the availability of food and clothing for the world's most populous country. Then we are faced with needs for better food and clothing, requiring more advanced science and engineering.

"Large-scale agricultural production is found mainly in countries in North America, Europe, and Australia, whereas small-scale agriculture is found mostly in Asia and Africa. Therefore, there are many differences in agricultural products and equipment, depending on the stage of development. Yet we have common concerns, and we can cooperate to work on the need for continuous agricultural development and full use of agricultural resources."

Yanbin Li

Yanbin Li, a University of Arkansas professor, grew up in China where he obtained an undergraduate degree. He left China in 1983 for a University of Nebraska-Lincoln ag engineering M.S. and Penn State University Ph.D. "At that time," says Li, "the major tasks for Chinese agricultural engineers were agricultural mechanization and agricultural electrification with the initiation of agricultural energy resources and food processing engineering."

"For the past decade, I traveled to China almost every year to give a short lecture or seminar or to attend an international meeting. But this last four-month teaching stay made me realize the changes in agricultural engineering. Agricultural engineering is now a major university department and covers all applications of engineering to biology and agriculture.

Zhejiang Sci-Tech University President Yun Zhao (left) and Yanbin Li (right) flank Loewer on a stroll through the expansive new campus.

"The number of agricultural engineering students in China graduating in 2004 numbered more than 11,000 with B.S. degrees, 1,200 with M.S. degrees, and 80 with Ph.D.s, and enrollment is increasing every year. China is currently producing four times the number of agricultural and biological engineers as the United States. There are a lot of exchange activities between China and other countries, with more than 427,000 Chinese studying or doing research overseas, and more than 25,000 returned to China in 2004.

"With a population of 1.3 billion, the life support system is a top issue in the society. Population keeps increasing, and resources keep decreasing. The Chinese have more and more waste to manage and more and more pollution problems. Agricultural and biological engineering has a unique role in modernizing our current life support system and in envisioning our future life support system. In fact, this is the most important issue on our planet for next century. Agricultural and biological engineers in China have a great opportunity to make contributions to the development of the national economy and the whole society.

"Chinese agricultural and biological engineers have learned a lot from developed countries in the past 20 years, but they will face their own unique challenges due to the specific features of agriculture and the economy in China, as well as Chinese culture. The agricultural population in China is estimated at 800 million, but more and more are immigrating to urban areas. This results in a shortage of human resources and educated people in remote areas. Second, the economy of remote farming regions is far behind that of the coastal regions, presenting a highly unbalanced agricultural system. Third, the economy has been growing continuously. Annual growth in GDP exceeded 8 percent for the past 20 years, and was 9.1 percent last year.

Above, the stone and earth Great Wall in the north - an amazing 2,414 km (1,500 mile) long - was built in the third century as a defense against intruders. Today, the welcome mat is out, and airports are bustling with student/academic travel oportunities. "There are a lot of exchange activities between China and other countries, with more than 427,000 Chinese studying or doing research overseas, and more than 25,000 returned to China in 2004," says Lanbin Li.

China, no longer isolationist, remains a constant contrast in old world and new. Loewer stands amidst the bustle of the main shopping area of busy Shanghai's high-end department stores.

"World Bank President, James Wolfensohn, says, 'The Chinese have gained achievements in only 20 years that would take many other countries two centuries to accomplish.' Agricultural and biological engineers must work in a very dynamic situation with a lot of new problems to solve in a very short time, and there are no examples to follow in many cases. But challenge is opportunity. China needs not only to learn more from the developed countries, but also needs to incorporate unique features into its educational system and associated applications based on the situation in China. Chinese engineers need not only to reform their own discipline, but to work closely with people in other disciplines in research, education, and extension. China provides a great opportunity for agricultural and biological engineers in China, in the United States, and throughout the world. If we look at what agricultural and biological engineers can do in China, we can better understand the future needs of our world and our profession's role in it."

"I did not tell half of what I saw"

When Marco Polo returned, few believed his stories of the riches he found in Asia, though his souvenirs made him famous. Near death, a priest asked if he'd like to confess some false tales. Not recanting, his purported last words were, "I did not tell half of what I saw."

In looking back at my experience in China, I see no conflict between what I saw and the opinions of those interviewed - the American as well as the Chinese perspectives on China. I've seen agricultural and biological engineers in the United States and Canada address a wide range of problems using a variety of technologies depending on the value of the end product. Using crop production as an example, a lot more technology and investment per unit area can be applied to the production of high-value horticultural crops than to non-irrigated grain production.

But what if the investment is literally in life support systems where the final product is the sustainability of human life itself at an increasing standard of quality? I see this as the dominant issue in China. And I see the people of China turning increasingly to agricultural and biological engineers to provide technological solutions to the challenges that face them. In a shrinking world, the problems of China become those of the rest of the world, whether those problems manifest themselves as technological, economic, or political. Indeed, these are going to be exciting times for the world in general and for our profession in particular. I imagine that Marco Polo would have thought the same thing.

ASABE president Otto J. Loewer is director and professor at the University of Arkansas Economic Development Institute, 226 Engineering Hall, Fayetteville, AR 72701 USA; 479-575-57 18, fax 479- 575-2412, ojl@uark.edu.

Copyright American Society of Agricultural Engineers Aug 2005

Sunday, August 14, 2005

An iPod's Quick Journey From China Marks Arrival of Just-in-Time Global Economy

An iPod's Quick Journey From China Marks Arrival of Just-in-Time Global Economy

Aug. 14--You can get a glimpse of how the just-in-time global economy has evolved by tracing the trip of more than 7,000 miles an Apple iPod took from Shanghai, China, where it was manufactured, to Pittsburgh.

In contrast to the 90 days it took a cargo-laden clipper ship to travel from Shanghai to New York 150 years ago, consumer products such as an iPod can now make it from the factory dock in China to a home address in Pittsburgh in just a few days.

"This is lean manufacturing, just-in-time-delivery and supply chain (management) in action. It's globalization at work, where the production moves to the countries that cost the least" and the products end up at customers' doorsteps in a matter of days, not weeks or months, said Satish Jindel, president of Sewickley-based SJ Consulting Group Inc., a transportation and logistics consulting and design business.

Apple sold 6.16 million iPods in the just-ended fiscal third quarter, a whopping 616 percent increase from the 860,000 sold in the same three months a year earlier. They were distributed through a mix of company-owned Apple brand stores, third-party retailers such as Circuit City and Best Buy and over the Internet.

Bitten by the iPod bug, I ordered the music player online through Apple's Internet store on a Sunday afternoon, enticed in part by the promise of free shipping and not having to leave the house to shop. I passed on the express option to save the additional fee.

By the next morning, there was a flurry of e-mails acknowledging the order and informing me that the iPod had been shipped via FedEx. It showed up on my doorstep by 9:15 a.m. Thursday -- never having been in a store in the United States or in a warehouse other than FedEx shipping depots.

Why so fast? Jindel said the quick turnaround is important because of three converging factors: the iPod is a relatively high value product that is low in weight and has the potential of quickly becoming obsolescent. In other words, what's new now may be old in a few months, making speedy delivery critical.

"This (electronics) industry changes so fast. The iPod you buy today is different from the one you bought six months ago," Jindel said. "You can't have inventory in stock. You don't want to sell an older product."

Even though I knew the iPod, like many other consumer products, was made in China, I had erroneously assumed it would be shipped to Pittsburgh from a U.S. warehouse, perhaps in California where Apple is based.

To find out, I logged onto the FedEx tracking site on Monday and saw that the iPod spent its first shipment day at a "local FedEx facility" in Shanghai, where Inventec Appliances -- Apple's contract manufacturer there -- has a factory.

It took another day or so to move to a large FedEx hub in Shanghai that supports 23 weekly flights between China and the United States. FedEx has won approval from the U.S. Department of Transportation to add three more flights next year.

From Shanghai, the iPod moved to Anchorage, Alaska, where FedEx operates a 1,200- employee hub that has become a gateway for exported products leaving China for the United States. In the same overnight jaunt, the iPod went to another U.S. hub in Indianapolis, and then to Pittsburgh.

Jindel said the quick trip is a testament to the reliability of an international transportation network that has developed over the last few years by such large shipping companies as FedEx, UPS and DHL.

"If you were to fly, it probably would have taken you longer," said Jindel. "You would have missed a flight or you would have been rescheduled."

China, which shipped $342.3 billion worth of electronics, toys and textiles and other products overseas in the first half of this year, is becoming such an important market for FedEx Express that in July it announced it was building a $150 million Asia Pacific hub at the Guangzhou Baiyun International Airport in southern China. It also announced direct flights to Europe in March.

FedEx ships the iPod through a program it calls International Priority Direct Distribution, which allows a shipper to send multiple pieces from a single location, such as China, to multiple recipients in the receiving country.

The benefits to the customer are a streamlined shipping process, reduced transit times and the ability of customers to track their packages through FedEx's computer system.

An Internet search brings up a raft of comments from new iPod buyers who anxiously track their new gadgets as they travel from Shanghai to the United States. More than 3 million electronic tracking requests for packages are made by FedEx customers every day.

"There are a lot of obsessed people out there," Allison Sobczak, a spokeswoman for Moon-based FedEx Ground, said after reviewing Internet blogs about the iPod's international travels. "It's really what customers want. Customers want package information."

Hal Walker, an advertising executive for Ketchum in New York, counts himself among the obsessed package trackers. He uses Internet tracking systems by various shippers to follow computers and other purchases, mostly so he can get home from work in time to receive them.

But there's pleasure in the chase, too. "I always imagine the secret life of these packages and how they wind up in different places than they would never imagine," Walker said. "I always feel comfortable when they are sort of near me."

Key to all this tracking is the bar code. FedEx scans the bar codes on domestic ground packages 10 to 12 times from the point of pickup to end delivery. The number of scans is as high as 23 on international packages.

Apple declined to comment for this story. But it seems clear that the company and its contract manufactures are emulating lean manufacturing techniques made famous by Toyota, the Japanese car company envied for its quality and cost advantages, and by Dell Inc.

The Austin, Texas-based computer maker is admired for its ability to build a high volume of competitively priced customized computers in response to individual orders placed through catalogs, the Internet and over the telephone. No computer is built until payment is received.

"They (Dell) don't incur any expenses until after the order is placed and you come up with the money, which is definitely not in most business models," Jindel said.

Typically a lean manufacturer such as Apple contractor Inventec would set up operations so that products are built in a matter of hours from the time an order is received, said Mark Sewell, managing director of productivity improvement services at Catalyst Connection, a private nonprofit regional economic development organization in Pittsburgh.

That means everything from the ordering to manufacturing and shipping had to be streamlined with unnecessary steps and waiting taken from the process at every possible turn.

"It's a matter of looking at the steps that used to take days or weeks and getting it down to hours or even minutes," Sewell said.

Meanwhile, my new iPod's four-day journey from the time the order was placed ended with the arrival of a beautifully packaged small box that contained everything I need.

Now if I could only figure out how to operate it.

-----

To see more of the Pittsburgh Post-Gazette, or to subscribe to the newspaper, go to http://www.post-gazette.com.

Copyright (c) 2005, Pittsburgh Post-Gazette Posted on: Sunday, 14 August 2005, 12:00 CDT

China makes, U.S. takes

 

Susan Kuperman pulls a 12-cup Mr. Coffee machine off a shelf at the Target in Hackensack and spies a label on the box.

"Made in China."

She glances down the row of models by Black & Decker, Melitta, Juan Valdez/Salton and Hamilton Beach - all made in China.

"Anything made in the U.S.A.?" she wryly asks her partner, Lois Maskell.

At the checkout, the women - co-owners of The Bag Lady, a company that distributes plastic trash bags - pay for a 123-piece Durabuilt tool set and an Oxo spoon and spatula, also made in China. Then they return to their New Milford home, which is stocked with dozens more Chinese-made items - from a Proctor-Silex toaster and Henckels cutlery to a set of Disney Seven Dwarfs soft toys and a blue-and-silver Yankee commemorative baseball.

These days, such a household is the American norm. China makes 50 percent of the world's cameras, a third of its air conditioners and 25 percent of its washing machines, as Western manufacturers, many in the United States, look for ever-cheaper ways to produce goods.

With relentless drive, rock-bottom wages and a government-controlled economy, China has tapped America's voracious demand for consumer items and created an unprecedented economic tsunami that has swamped - some would say battered - the United States.

The sheer scale of the Chinese onslaught is graphically demonstrated daily in New Jersey ports.

In one typical week this spring, ships docking in New York and New Jersey unloaded the equivalent of 12,800 20-foot-long containers packed with more than 300 categories of goods from China, including neckties, cologne, frogs and snails, rainwear and tractors.

Air conditioners filled 263 containers, 280 held lamps and lamp parts, 656 had toys. The biggest shipment, wooden furniture, filled 2,900 containers. Laid end to end, the containers would have stretched 48 miles.

"The growth rate is phenomenal," says Thomas Danjczek, president of the U.S. Steel Manufacturers Association, who has visited China repeatedly. "[It's] past phenomenal, it's almost unbelievable."

The Chinese advances have also raised anew some unsettling questions about free trade, globalization and who wins - and who loses - when a rich country like the United States imports inexpensive foreign-made goods, or shifts white-collar jobs to low-wage countries.

Few American consumers would deny the benefits of $1 wooden trains, queen-size comforters that go for $32 or leather handbags for $14.99. After all, Wal-Mart has built a retail colossus around Chinese imports.

But the bargains have come with high price tags: shuttered American factories, lost manufacturing jobs, a widening trade deficit and a dread of what China's emergence means for the future.

Economists predict China will overtake the United States as the world's largest economy sometime in mid-century. And some observers wonder how America's once-indomitable economy will fare then.

The concern stems in part from China's sheer size: 1.3 billion people and a labor force of 760 million - six times the size of its American counterpart - with many workers paid less than 50 cents an hour.

China's surging production needs have also pushed up global prices for oil, steel and other raw materials. And the Asian giant has invested so much of its export profits that it is now the second largest holder of U.S. treasury bills, the debt sold by the government to raise money.

Congress was so concerned with China's growing trade influence this year that at least 15 measures were introduced to rein in the export behemoth, most demanding that the Bush administration levy tariffs on Chinese goods.

It is primarily the speed and force of China's offensive that has stunned U.S. manufacturers.

Since 1996, as the number and diversity of Chinese-made products have mushroomed, American imports from China have quadrupled to $196 billion.

Three decades ago, China exported 510 items to the United States; by 2001, that figure had multiplied almost twentyfold to 10,200 items, according to a study by the Federal Reserve Bank of New York, released in April.

That's good news for consumers. Over the same 30 years, the variety of items available to consumers tripled, thanks to imports from China and other countries, the bank says.

"China has given American consumers the best values they have seen in their lifetime," says C. Britt Beemer, a South Carolina consumer research consultant.

Yet China also has done more than any other country to strip the "Made in America" label from homegrown products.

Such American consumer icons as Stanley tools, Fedders air conditioners, Huffy bikes, Sunbeam mixers and Radio Flyer wagons are just some of the items now made in China because their producers couldn't compete against foreign factories.

That flight contributed to a loss of 1.5 million U.S. jobs to China from 1989 to 2003, according to a report released in January by the Economic Policy Institute, a Washington-based think tank. Some 39,000 of those lost jobs came from New Jersey.

What all that means for the United States may depend on where you stand.

Free-trade proponents insist that everyone wins in the long run if countries produce only those goods they make best and trade for other needs. The United States may be buying a lot of imports, but the benefits are cheap goods for American consumers and a growing prosperity in exporting nations that will eventually provide enough money to buy goods from the United States. Meanwhile, China's purchase of U.S. treasury notes helps keep America's economy humming.

But critics of free trade say it mostly means lost jobs and shrunken salaries in the United States and exploited workers overseas. They argue that the more the United States becomes a consumer rather than a producer, the less likely it will be an innovator and competitor in the world marketplace.

Somewhere in the middle is the average American consumer, who would like the best of both visions, says William Ward, a business professor who specializes in China at Susquehanna University in Pennsylvania.

"Americans universally want to have high wages, high benefits and low prices," he says. "But in the modern, globalized competitive world, that's probably a tough thing to do."

Growth benefits ports

On a sweltering July day in Jersey City, a dark-blue freight container - a 40-footer owned by P&O Nedlloyd - hangs 50 feet in the air, suspended from the cables of a massive white crane operated by Sean Thomas, a 22-year-old longshoreman from Middletown.

He sits in a tiny glass cockpit 120 feet above the Oriental Bay, a 950-foot-long British steamer that docked the night before, stacked with 3,800 containers, most of them from Shanghai and the southern Chinese port of Shekou.

With the push of a black joystick from Thomas' right hand, the box rises, sways, crosses the ship and descends in one smooth arc. It touches down with a bang onto a white tractor-trailer below.

Around it, the dock at Global Terminal and Container Services Inc. buzzes with activity. Red, tan and gray containers are whisked away and stacked up to six boxes high by forklift trucks the size of houses, ready to be shipped to a distributor and sent to stores.

"We're at record volume now," says J. Shannon Pender, Global's safety/environmental officer, as she looks down at the activity from a gangway at the top of the crane. "In June, we hit one of our largest production days."

The volume of goods handled in New York ports in 2004 grew by 14 percent over 2003. China is a key driver as clogged West Coast ports push more ships here; one-third of all New York port business is now from the Far East.

These days, one in four ships that dock at Global are from China, says Global president Maurice Byan.

"Everybody seems to indicate that there will be continued growth," he says.

That prospect has been good news for jobs and investment at the docks. The Port Authority is spending $1.63 billion to deepen the channel to take ships that carry 8,000 containers. The current maximum is 6,000 per ship.

At Global, the terminal workforce on a busy day is now 250, compared with 150 five years ago, Byan says. Global is awaiting permission to expand its docks, a $35 million project that will allow it to handle more or larger ships.

And in the fall, Global will take delivery of two $6 million cranes: Like much of the cargo they will lift, the cranes will be made in China.

Chinese quality on rise

China's ascent to such manufacturing heights began with the production of simple goods, such as plastic toys, shoes and clothes. Most historians attribute the seeds of China's boom to Deng Xiaoping, who took the nation's helm after the 1976 death of Mao Tse-tung.

Deng privatized state-owned factories and allowed them to make profits. He permitted foreigners to invest in Chinese companies. And in a defining moment in the early 1980s, he promoted a shift to capitalism with the phrase "to get rich is glorious."

Initially, Chinese goods were so poorly made that U.S. manufacturers dismissed the industrial newcomer, figuring the Chinese couldn't meet the rigorous demands of American consumers.

That's what Techni Edge Manufacturing Corp thought. For years, it proudly made industrial blades and utility knives in factories in Little Ferry and Maplewood, confident the Chinese couldn't compete.

"A lot of times, the quality wasn't there," says Deborah Williams, Techni Edge's president. "We were very stubborn; we wanted to put out blades with 'Made in U.S.A.' on them."

But 18 months ago, the company decided to expand production by making knives under contract in a factory in southern China.

One reason for the shift was "the price thing," she says - competitors had gone abroad and could sell knives for less. The other was the quality of work that Williams saw firsthand when she visited China last year.

"It was an eye-opener," she says. "They were very advanced. They could take a product and redesign it."

That transformation has been relentlessly repeated as China has climbed the skill ladder, producing ever more complex products.

Ten years ago, electronics, machinery and transportation equipment accounted for 18 percent of Chinese exports to the United States, according to an Economic Policy Institute study. Now that figure is 42 percent.

That's one reason the United States last year spent $162 billion more on Chinese goods than China spent on American goods. The gap contributed to a $617 billion trade deficit between the United States and the world.

The same imbalance is evident in trade at the New York area's ports, of which Newark, Elizabeth and Jersey City are the busiest: The value of goods sent by China to New York in 2004 was five times as much as the goods New York sent back.

Moreover, although China's imports from New York include high-value items such as plastics, machinery and computers, many are quite the opposite.

In the same week in April that New York ports received 12,800 containers from China, the ports sent back 3,100 containers, many of them filled with paper, cardboard, metal and foam waste.

Waste brokers in the United States say the scrap exports are another sign of China's relentless appetite for raw materials, some of which will end up in U.S. consumer goods.

"They are very, very hungry for scrap metal," says Craig Cinelli, owner of Hackensack-based Cinelli Iron and Metal Co., which sends six containers a week to China.

He says most of the containers are full of plastic-coated copper wire and electric motors that are too difficult - and so expensive - to recycle in the United States, but which are picked apart by Chinese workers earning mere pittances.

"I use the word 'feed'," he says of his shipments. "[They're] to feed their giant, evolving economy."

An uncertain future

What all this means for the United States - now and in the future - is unclear.

Take raw materials. Sure, China has pushed up prices. That's bad news for buyers, but good for producers.

The struggling American steel industry, for instance, last year had its strongest sales in 30 years, says Danjczek, of the U.S. Steel Manufacturers Association. One reason, he says, is that global steel makers sold to China instead of competing with companies in the United States.

But economists and politicians fret about America's trade deficit, especially the amount of U.S. debt held by China.

"The concern is that if you go into an economic war, if China reduces the flow of investments to the United States, maybe the United States will have to raise interest rates," says Jorge Pinto, director of the Center for Global Finance at Pace University in New York.

While skeptical of that possibility, Pinto nonetheless says it would "definitely hurt the U.S. economy."

The most contentious issue, however, is what - if anything - should be done to slow the flood of Chinese imports.

Some industries want the United States to place tariffs, essentially a tax, on Chinese goods. Others want quotas, or limits on the number of items that can be imported.

That is the demand of U.S. textile and apparel makers, who have been hammered since January, when quotas that had limited imports of clothing and textiles since the 1970s were lifted.

China's rise helped push Ge-Ray Fabrics, a Morganville textile manufacturer, and its North Carolina factory into bankruptcy, says Larry Casper, the factory's general manager.

In South Hackensack, Spinnerin Dye, a textile dye company, closed in February. After years of losing customers to foreign competition, the quota removal was "the icing on the cake," says owner Bill Rabidan.

Compared with last year, Chinese imports are up by more than 50 percent, even after President Bush reintroduced limits on a few items of apparel in response to industry pressure.

Last Thursday, the administration announced it would begin negotiations this week toward a comprehensive agreement with China to try to staunch the flood of clothing and textile imports.

Opponents of tariffs and quotas, however, say such measures merely protect weak and uncompetitive industries. The answer, they say, is not protection but stronger American businesses.

"It's good to have competition," Pinto says. "The United States will accommodate in a different way and will continue to be a superpower."

That was the case two decades ago, with Japan. An influx of Japanese imports - especially cars, electronic goods and microchips - was prompting similar concerns that the United States would lose jobs and be hurt economically.

It didn't happen, and no one is worried about Japan today. But that was an entirely different situation, says George T. Haley, a business professor at the University of New Haven in Connecticut and an author of books on China.

With a population "bigger than the United States, Europe and Japan combined," China presents a challenge unlike any other, Haley says.

"The optimistic people basically argue that it's a natural event - that it happens throughout history and we are basically going to have to find a way to tolerate it," he says. But, he adds, there is no doubt some concerns are warranted.

"They're single-minded," he says of the Chinese. "They have ambitions to be basically a world superpower, and a very wealthy, dominant economy in the world."

E-mail: morley@northjersey.com

Saturday, August 13, 2005

China's growth signals the birth of a new superpower

By As'ad Abdul Rahman, Special to Gulf News

When China awakes it will shake the world, Napoleon Bonaparte once said. It seems China is now awakened and rapidly so. With a population of 1.3 billion, the country looms large in the world's imagination.
Its growing economic power ensures it will play a larger role on the world stage in the years ahead. China is now the world's largest producer of coal, steel and cement, the second largest consumer of energy and the third largest importer of energy, which explains the soaring gas prices in the world.
The country's exports to the United States have grown by 1,600 per cent over the past 15 years while US exports to China have grown by 45 per cent.
The history of China is both fascinating and complex. Its culture has been described as both peaceful and warlike. China was created by conquests and has essentially been ruled by a series of warlords.
The past century has been extremely difficult for China. The occupation by the Japanese in the 1930's and 1940's and the civil war which brought the Communist Party to power in 1949 were extremely turbulent times.
Series of reforms
From this civil war, the People's Republic of China emerged. Following Mao's death in 1976, the new leader, Deng Xiaoping, commenced a series of reforms that radically changed the country.
Deng delivered a speech that turned out to be the most important one in modern Chinese history. He urged the regime focus on development and modernisation, and let facts, not ideology, guide its path.
Since then, China has done just that, pursuing a modernisation path that is "ruthlessly" pragmatic and non-ideological.
Deng encouraged international trade and allowed foreign investment. The result has been China's phenomenal entry into world markets and a booming economy.
The specific aim of these policies was to obtain large foreign exchange earnings, which would allow China to both modernise and become more independent.
The results have been astonishing. China has grown around 9 per cent a year for more than 25 years, the fastest growth rate for a major economy in recorded history.
In the same period, it has moved 300 million people out of poverty and quadrupled the average Chinese person's income. And all this has happened without catastrophic social upheavals.
As China emerges as a global power it is important to know what role it will play and the security perceptions it has of both Asia and the rest of the world.
The most important issue for China today is political stability at home. Any attempt to influence the status quo is not welcome and is deemed to be an interference in the country's internal affairs.
Many Chinese believe the United States represents the core values of Western civilisation and is in conflict with Eastern civilisation which is represented by China. As a result, the Chinese leadership views any American influence as a challenge to China's political stability.
The Western view of China's emergence is mixed. Following a period of condemnation after the 1989 Tiananmen Square turbulence, Western countries have thought of normalising relations with China.
The US granted China Most Favoured Nation trading status and a 1995 decision determined that human rights would no longer be tied to commerce.
The issue of China's military modernisation has attracted attention. China's military strategy underwent a major change in the mid-1980's when it embarked upon an ambitious modernisation programme. Its economic growth has been key in the implementation of this programme.
The actual size of China's military spending is hard to determine due to the secrecy that usually surround military matters. The country currently has the world's largest military.
The Peoples' Liberation Army consists of over two million men and is complemented by the world's third largest air force and largest small-ship navy.
Some American officials chiefly neoconservatives and Pentagon strategists tend to exaggerate the Chinese military threat. But facts remain facts, and they belie what American strategists are claiming.
Small fraction
China is certainly expanding its military, with a budget that rises 10 per cent or more every year. But this is only a small fraction of what the US is spending. America's military spending is equal to the rest of the world's military budgets combined.
The arrival of a new super power usually produces tension, if not turmoil, as the newcomer tries to fit into the established order or overturns it to serve its purposes.
Great powers' conflict is something the world has not seen since the Cold War. But differing attitudes on the rise of China are likely to produce permanent strains in the Western alliance.
Inevitably, the China challenge looms largest for the United States. Historically, when the world's leading power is challenged by a rising one, the two have had a difficult relationship.
While neither side will admit it publicly, both China and the US worry and plan for the future. Beneath this calm, there is probably going to be a soft war, a quiet competition for power and influence across the globe.
Professor As'ad Abdul Rahman is the Chairman of the Palestinian Encyclopedia

A Capitalist Paradise

The Urban Middle Class has a Lifestyle that looks Familiar

BEIJING--Four-year-old An-An is tearing through the store, looking for toy cars. His mother, Dong Wei, chases after him, dodging couples measuring kitchen cabinets and reclining chairs bearing unpronounceable faux-Scandinavian names translated into Chinese.

It is a Sunday afternoon at the Ikea superstore here, and Dong and her family are on a mission--along, it seems, with a substantial part of the rest of the city. The line for the parking lot is almost an hour long, the norm for a weekend. The store teems with families in a consumerist frenzy, armed with pencils, measuring tapes, and photographs of their new homes. Dong Wei and her husband, Cao Jie, are there to buy a bookcase for An-An and a new computer table for the study. Really. But then a television stand catches her eye, and a colorful CD rack his, and oh yes, doesn't An-An need a new bedspread?

Dreams. Like the other middle-class couples proliferating in China, Dong and Cao are living a life their parents could never have imagined. They recently bought an apartment, which they spend most of their time decorating. They eat out often. On the weekends, they take An-An to play with other pampered only-children, at a "fun center" filled with spongy balls and trampolines. Their ambitions are less of the traditional Chinese "be a good worker and serve your country" variety. Instead they fall more in line with middle-class U.S. families who focus on making more money, buying a bigger house, and getting their kids into a good school. Dong, a 38-year-old wearing jeans, eyeliner, and a Samsonite shoulder bag, works in the Ministry of Commerce's Latin America division and travels to the region four or five times a year. Her husband worked in the government until recently but just left to start a business with a partner, selling medical equipment. "In a state-owned enterprise, it's hard to fully exercise your potential," says Cao. "In the past, we felt like we needed to hug the iron rice bowl and not let go. Now I want to see how far I can go."

A generation ago, young couples worked in state-owned enterprises, living in company housing with few possessions of their own. The most they wished for was having enough for their family to eat. With the dismantling of the state system over the past decade, more people are exploring other options--both for work and for life. Dong and Cao bought a car--"a Jetta!" An-An pipes up--back in 1997, and they aspire to save enough to buy a bigger home, so that An-An can have his own room. "Life in China is not that different from America right now," says Cao.

On the road out to the airport, new developments have sprung up over the past year or two, with names like Central Park, Yosemite, Palm Springs, and Orange County. In these planned utopias, trappings of American middle-class life are on offer: backyards, barbecues, and basements with pool tables. While some cater to foreigners and very wealthy Chinese, an increasing number are being marketed to this new tier of young Chinese families with global tastes.

In the past, couples lived with the man's parents, even after marriage. Now, the trend is for young couples to buy their own apartments and move out. Although Cao's parents live in Beijing, they live separately. "Very few of our friends live with their parents," says Dong. "We need more space now."

They are also saving up for a lifetime of schooling for An-An, which in China, with state-sponsored education but growing disparities in its schools, can get expensive. The couple now spend the equivalent of $100 per month on kindergarten for their son, which they say is cheap compared with some of the private kindergartens currently in vogue with their friends, which can run over $12,000 for three years.

Looking to the future, they hope An-An will go overseas to study--but not until after high school, when he can decide for himself. "Our generation did not have the opportunity to learn instruments or play sports," says Cao. "Our lives are better than our parents', but I want our son to have even more freedom than us." -Bay Fang

6/20/05 US News & World Report

Friday, August 12, 2005

A view on China's foreign trade and economic relations 1st half 2005 (I)

A good scenario has been seen in China's foreign trade and international economic cooperation over the first six months of this year, as a result of efforts on exploiting the "two markets" (domestic and overseas), improving bilateral and multi-lateral trade relations, and handling trade disputes properly.

A good scenario

Exports grew rapidly whilst imports slowed down during the 1st half. The 32.7 percent exports increase over the same period of the previous year reflected a sustained upturn of exports for the latest 3 years. A favorable external environment, embedded in the world's economic growth and robust international market demand combined the internal incentives represented by central government's subsidies for areas heavily burdened with export tax rebates.

A series of measures to transform the export mix have been taken and worked, including a push-start to exports of ships, large equipment and outfit, auto parts and regional airplanes. Exports of mechanical and electronic products and hi-tech products jumped 33 percent and 32.4 percent respectively. Conversely, tax rebates were cut down or removed on products featured with heavy energy consumption, heavy pollution and resource-related, such as billet, rolled steel and aluminum not forged or rolled. Processing trade was even banned for 7 categories, such as iron ore and the policy of "production replacing imports" in the steel sector was also halted. Therefore, growth of imports of all these products lagged behind that of the same period of last year by 29 percentage points and stood well below the exports growth by 18.7 percentage points.

Imports in the general trade, more affected by investment slowdown, only moved up 7.5 percent and the share in total imports was down by 2.5 percentage points. Less orders were placed for products which were closely depended on the investment climate, such as billet, rolled steel, refined oil and plastic in primary form. Imports were also affected by expanded production capacity, excessive imports last year, downward equipment imports by foreign investors, and rising expectation for RMB revaluation.

The trade surplus soared to 39.6 billion USD for the first half year which was higher than last year's total. Favorable balance inflated robustly in trade with the US and Europe.

The actual absorption of foreign capital has been down and contracted foreign investment has been up since the beginning of the year. Manufacturing remained the favorite in the eyes of foreign investors, which actually used 20.3 billion USD of foreign capital, down by 0.8 percent year on year and taking up 71.1 percent of the total amount of foreign capital influx used. The actual use of foreign investment rose 20 percent in chemical raw materials and chemical manufacturing whilst that of electronic equipment manufacturing jumped 9.2 percent.

The wholesale and retailing sector used more foreign capital by 0.9 percent compared with the same period of last year, contrasting with the 4.7 percent decline in the housing sector.

In addition, geographical distribution of foreign investment varied distinctly. 89.9 percent of foreign investment, or 25.7 billion USD went to the east, compared with the 1.9 billion USD to the central areas, down by 31.4 percent, and the 900 million USD to the west, up 28.4 percent. In the northeast where the old industrial base was struggling for revival, the actual use of foreign investment shrank 56.6 percent. The old 15 EU members pumped more in China by 18.3 percent while the US input less by 28.9 percent.

The "Go global" strategy continued making progress. Chinese businesses launched more mergers and acquisitions and sought more investment opportunities on the overseas market. A circular on encouraging the information industry to tap the overseas market has been issued and a guiding catalogue for investing in specific countries has also been released. China made nearly 2 billion USD non-financial direct investment outside the country. 474 businesses built their presence on the overseas market under the approval and registration by the Ministry of Commerce, a jump of 44.5 percent. There were more large projects, as well as more mergers and acquisitions. More attention was given to those large projects to make sure these contracts are fulfilled. 7 big deals were inked during the 2nd China-Russia Investment Promotion Fair. Lenovo's acquisition of IBM PC business was handled properly.

Exploitation of overseas resources was pushed forward. The contracted projects for the first half of the year valued 8.56 billion USD and overseas labor cooperation brought 2 billion USD turnover, increasing 30.7 percent and 26.1 percent respectively. By the end of June 523,000 laborers had worked outside China.

Relations with trading partners were improving. More than 7,000 kinds of products enjoyed lower tariffs on the trade between China and ASEAN nations. Two rounds of free trade talks completed with the Golf Cooperation Council and Chile. Three rounds completed with New Zealand. Talks on free trade agreement were officially launched with Australia and Pakistan.

Planning of China-India and China-ROK trade and economic cooperation has been done. Zero-tariffs were granted to some imports from 25 least developed countries in Africa. The first China-Caribbean Economic and Trade Cooperation Forum was held. 18 kinds of Taiwan fruits were allowed into the mainland market, with 15 free from tariffs.

Achievements were made in the integration of textile trade. China and EU finally reached a consensus on the textile trade, which secured the bilateral strategic partnership and won more room and stable environment for Chinese textile exporters. Major trade row cases were dealt with more seriously. 25 businesses finally won the market economy status in the EU MMF fiber cloth case. 5 got zero tariffs in the EU steel cast case. Involvement in the response to and negotiations with India and the US for silk and art canvas helped settlement of the disputes. Aggressive efforts were made of the issue of China's market economy status. 7 countries, such as Australia, recognized China as a market economy during the first six months. And China-US and China-EU consultation on this issue proceeded at the technical level.

A view on China's foreign trade and economic relations 1st half 2005 (II)

A good scenario has been seen in China's foreign trade and international economic cooperation over the first six months of this year, as a result of efforts on exploiting the "two markets" (domestic and overseas), improving bilateral and multi-lateral trade relations, and handling trade disputes properly.

Problems

Trade imbalance with different partners became imminent when the trade surplus soared. The macro economic situation at home and abroad showed that the robust increase in export and moderate rise of imports would be hardly reversible. The trade surplus would likely approach 80 billion USD for the whole year if export rose 25 percent and imports 18 percent. That would double the highest record in history.

In the meantime, the situation varied on trade with different partners. Surplus normally took place in trade with the US and EU while more deficit was created in trade with ROK, Russia and Australia. A conservative estimation set China's favorable balance of trade with US at more than 100 billion USD and 60 billion USD with the EU. That would provide new pretexts for trade protectionism on those markets.

Exports of high energy consumption and resource products kept rising rapidly, indicating a challenge for the macro-control campaign. The government cut or removed some export tax rebates and banned processing trade of some categories of such products. As a result, export of primary steel products and rolled steel dropped. In June export of billet only went up slightly by 9.6 percent, while in March the export surged 14.3 times. Export of rolled steel doubled in June, compare with that in March when the amount was jumped 2.4 times. However, generally, exports of high energy consumption, heavy pollution and resource related products still spiraled up. Rises of export of billet, rolled steel and aluminum not forged reached 2.6 times, 1.5 times and 21.5 percent respectively. It is no easy task to rein in these exports due to the rapid expansion of investment on the production capacity in the previous years.

There is increasing trade protectionism sentiment against China. Textile will face a difficult road ahead. The consultation on the textile trade between China and the US is still under way. If it fails, China-made cotton trousers and cotton shirts which are under the US restriction will be kept out of the US customs.

Some developing countries are also likely to activate Article 242 and safeguard measures against Chinese goods. Trade friction has intensified between China and the US whose five out of 11 investigations under Article 337 this year have targeted at China, more than any other country. Over the first six months of this year alone, the US has raised its trade deficit, the yuan exchange rate and the intellectual rights protection to China as its most concerned issues. The US Congress proposed 11 bills asking the Bush administration for harsh measures against China on trade and economic exchanges.

The EU has shown increasing protectionism against China. It has consolidated its control over shoes import. One of its steps was the decision on anti-dumping investigations into Chinese shoes on June 12. China's home appliance export will face more pressure after the EU's two instructions on recycling of appliances, WEEE and ROHS, are effective as of August 13.

New frictions have been triggered in developing countries. Argentina, Colombia, Mexico and Brazil are considering safeguard measures and India, along with other markets, is making more anti-dumping probes into Chinese products.

Mounting pressure continues on the further appreciation of the Chinese currency. The fast growth of the exports and the upsurging trade surplus have pushed China's forex reserves up remarkably. This in turn adds difficulty into the central bank's decision making on its monetary policy.

The US attributed the RMB to its trade deficit with China and the US Congress, government and industrial associations have kept pressurizing China for stronger yuan. There is voice from the Capitol Hill even requiring punitive tariffs on all Chinese products.

China needs to improve its tax rebate system. As local governments have to shoulder more to fund tax rebates, some places deliberately constrain the growth of foreign trade firms, discourage or limit export-oriented foreign-funded projects, or block procurement beyond the local suppliers and export of general trade. New defaulted tax rebates have taken place in some places.

China's foreign trade and economic cooperation will enjoy a favorable overall environment nationally and internationally. The Ministry of Commerce predicts that the scenario of exports exceeding imports would be unlikely to be reversed, which would lead to the fulfillment of the 15 percent growth goal for the whole year. In addition, foreign investors are still optimistic toward China's environment and will hopefully bring more foreign capital influx into China than last year.

Priorities for the second half of the year will be placed on further transformation of the way of export growth, boosting imports, improving the utilization of foreign capital, upgrading the national development zones, accelerating the implement of the "go global" strategy with the focus on the diversified places of origin for textile products, making more efforts on bilateral and multilateral trade and economic relations including more participation into the regional economic cooperation, and handling the world trade disputes properly to protect domestic industries. Source: Xinhua

By People's Daily Online

Why China Is Buying?

Bill PowellTime New York: Jul 4, 2005.  Vol. 166,  Iss. 1,  p. 33 (1 pp.)

The bid for Unocal is by far the most audacious move any Chinese company has made. CNOOC, whose market value is only about $22 billion (compared with $119 billion for Chevron), offered about $18.5 billion, or $67 a share, for Unocal. Since it's an all-cash offer, the Chinese company would have to take on a huge chunk of debt to finance the deal.


AS A GRADUATE STUDENT AT THE University of Southern California in the mid-1980s, the CEO of China's third largest oil company remembers seeing Union 76 signs plastered all along America's Left Coast-emblems of California's car-crazed lifestyle. For Fu Chengyu, then a poor student from northern China, culture shock doesn't even begin to describe it. Try future shock. "Back then," he says, "China seemed like it was 100 years behind the United States."

It is making up for lost time quickly. Never has China's rapid rise been more evident than last week, when two big Chinese companies entered the auctions for two high-profile U.S. competitors: Haier, well known among college students as the maker of small refrigerators popular in dorm rooms, is teaming with a U.S. private-equity firm to bid for Maytag, the struggling appliance maker based in Iowa. And 19 years after getting his M.A. in petroleum engineering from U.S.C., Fu wants to own Unocal, once the parent of those Union 76 gas stations. The company he heads, China National Offshore Oil Corp. (CNOOC), topped a $16.5 billion bid from Chevron for the ninth largest U.S. oil company.

In China, with its surging trade surplus and huge holdings of dollar reserves, CNOOC's action is called the "go out" strategy: for the past two years, the Beijing government has been urging Chinese firms to expand their presence in overseas markets. Some have begun to respond. Late last year computer giant Lenovo bought the highprofile but money-losing personal-computer business from IBM for $1.75 billion. Prior to that, TCL, a consumer-electronics maker, bought the RCA TV business from French giant Thomson. And all the while, Chinese energy companies have been making deals with governments and private companies, desperately trying to acquire oil-and-gas reserves needed to power an economy still growing 9% annually.

But the bid for Unocal is by far the most audacious move any Chinese company has made. CNOOC, whose market value is only about $22 billion (compared with $119 billion for Chevron), offered about $18.5 billion, or $67 a share, for Unocal. Since it's an all-cash offer, the Chinese company would have to take on a huge chunk of debt to finance the deal. Fu insists that no one in the government pushed the company to buy Unocal, and sources close to CNOOC's board tell TIME that Fu, not some shadowy stringpulling figure in Beijing, has been the driving force behind the bid. Indeed, a banker close to the deal says that Fu is convinced the value of Unocal is actually "much higher" than what his company is offering for it (attention Unocal shareholders!) and that if Chevron counters, CNOOC might not be shy about raising its bid. "If you know our history" Fu told analysts last week, "you'll know we are a value-driven company. Value creation drives our acquisition strategy, nothing else."

The Chinese company's "it's just business" approach won't mute the deal's critics in Washington. To them, a takeover of Maytag is one thing-"We don't go to war over washing machines," said Republican Congressman Richard Pombo of California-but energy is a different story. With the Chinese government subsidizing the dealCNOOC's parent company, wholly owned by the state, will give it an $8.5 billion, 30year loan at just 3.5% interest-cries of predatory financing are inevitable. So too are complaints (accurate enough) that there is little chance a Western oil major could buy outright one of China's biggest energy companies if it wanted to. A level playing field China is not, and with trade tensions between Washington and Beijing strained already, the Bush Administration promises to scrutinize any proposed deal carefully.

To which free traders respond: Don't bother. If a Chinese company wants to pay a hefty premium to (mostly) U.S. shareholders, and guarantee the bulk of Unocal's jobs to boot, why should those shareholders be prevented from selling? After all, Japan 15 years ago wasn't exactly an open economy when its flagship companies began buying everything from Rockefeller Center to Hollywood movie studios. The Japanese, it turned out, got taken like tourists. -Reported by Eric Boston/Washington

What to Do About China (1)

6/20/05
By Richard N. Haass

A good deal of history is determined by relations between and among great powers. The 21st century promises to be no different. The most critical relationship will be that between the United States, today's dominant power, and China, the world's rising power. And have no doubt about it, China is rising. China's gross domestic product is roughly half that of the United States, but in three decades, the total value of the goods and services it produces should be about the same. China is also converting some of its wealth into military might. It now boasts the third-largest military budget in the world.

At the same time, it is important not to exaggerate China's accomplishments. Income per capita is less than $5,000. China's leaders understand that the country requires a generation or more of peace and stability so that it can focus on economic growth and help its hundreds of millions of poor people.

Still, foreign policy "realists," citing history, argue that China will inevitably challenge American primacy and that it is a question of "when" and not "if" the U.S.-China relationship turns competitive or worse. Their conclusion? The United States should seek to prevent China's rise.

One problem with this thinking is that the rise and fall of countries is largely beyond the ability of the United States or any other outsider to control. The performance of states is mostly the result of demographics, culture, natural resources, educational systems, economic policy, political stability, and foreign policy. It is not clear the United States could prevent China's rise even if it wanted to. But should the United States want to? The answer is no. For one thing, attempting to block China's rise would guarantee its animosity and all but ensure its working against U.S. interests around the world.

Test case. More important, the United States shouldn't want to discourage the rise of a strong China. America needs other countries to be strong if it is to have the partners it needs to meet the many challenges posed by globalization: the spread of nuclear weapons, terrorism, infectious diseases, drugs, and global climate change. The issue for American foreign policy shouldn't be whether China becomes strong but how China uses its growing strength.

Working with India, Japan, and others, our goal should be to integrate China into the international system, to make it a pillar of the global establishment. China is already working with the United States against terrorism, but the most pressing area for expanded cooperation is North Korea. The problem is that China isn't using its considerable economic ties with North Korea to pressure it to stop developing nuclear weapons. It needs to do more. The United States should also do more to change China's stance: by offering North Korea some attractive incentives to give up its nuclear materials and weapons, by reassuring China that if that happens, Washington will oppose the emergence of any new nuclear-weapons state in the region, and by underscoring that this is a test case for U.S.-China ties.

US News and World Report

Yahoo stakes a claim on Chinese Web

By Joe McDonald
Associated Press
 
Yahoo announced Thursday it will pay $1 billion in cash to acquire a 40 percent stake in Alibaba.com.
BEIJING - Yahoo Inc. announced Thursday it would pay $1 billion in cash for a 40 percent stake in the Chinese e-commerce firm Alibaba.com, heating up the race to dominate China�s fledgling online auctions industry.

The alliance is the biggest deal yet in a flurry of recent investments in China by foreign Internet companies eager for a share of a market with more than 100 million people online.

Alibaba runs Chinese- and English-language auction sites for foreign companies looking for Chinese wholesale suppliers and individual Chinese buyers and sellers.

Yahoo also will merge its China-based subsidiaries into Alibaba, the two companies said. The combined entity will include 3721.com, a Chinese-language search engine that Yahoo acquired last year.

The deal represents a challenge to auction powerhouse eBay, which in 2003 bought a Chinese portal, eachnet.com.

"This is really probably the knockout blow for eBay in China," said Porter Erisman, Alibaba�s vice president for international relations.

Erisman said the deal makes Yahoo and its local partners such as Alibaba the dominant players in online auctions in China, Japan, Taiwan and Hong Kong.

"This is going to make it hard for eBay to win in Asia," he said. "It totally reshapes the landscape for auctions in Asia."

San Jose, Calif.-based eBay rejected suggestions that the Yahoo-Alibaba tie-up was a threat, saying eBay expects to dominate the market.

"We will maintain our leading position in China," said Liu Wei, a spokeswoman in Shanghai for eBay eachnet.

Yahoo will have 35 percent of voting rights in Alibaba as a result of the investment, in a deal expected to be completed in the fourth quarter of this year, the two companies said.

"This is Yahoo getting much bigger in China," Daniel Rosensweig, chief operating officer of Yahoo, said at a news conference with Alibaba�s founder, Jack Ma. "We look at this as an opportunity to get much bigger much faster working with a great management team."

Rosensweig said the deal creates an entity with assets to compete across the full range of Internet businesses in China - search engines, e-mail and online commerce.

Yahoo expects China to be the world's biggest Internet market within five years, he said.

Alibaba, founded in 1999, has made Ma one of China's most prominent Internet entrepreneurs. The company is based in the eastern Chinese city of Hangzhou, southwest of Shanghai.

According to Erisman, it had $68 million in revenue last year from advertisers and companies that pay $5,000-$10,000 per year for membership in its commercial online auction service.

Alibaba plans to use Yahoo�s $1 billion investment to expand its search, e-mail and other services, said Joe Tsai, the company�s chief financial officer.

"These are all relatively capital-intensive businesses," he said in a telephone interview. "So this cash is quite welcome for us to execute the strategy."

News of the deal comes just days after an initial stock offering in the United States by another Chinese online firm, search engine Baidu.com, set off a frenzy of buying. Its shares soared more than 350 percent in their first day of trading last Friday before declining slightly this week.

What to Do About China (2)

 
(Page 2 of 2)

The other issue that could seriously hurt U.S.-China ties, or even bring the two powers into conflict, is Taiwan. Taiwan must be pressed not to take unilateral steps that would be tantamount to independence and risk a military response from the mainland. China needs to be reminded not to use force to unify the country. Neither China nor Taiwan should count on Washington standing aside if they change the status quo.

Yet another source of growing irritation is trade. China now exports to the United States some $160 billion more than it takes in. What's important is that U.S. exports to China enjoy fair access and that disputes are settled by the World Trade Organization. What we want to avoid is having trade becoming a source of friction rather than integration.

A final consideration is China's domestic politics. China is more open economically than politically and more open politically than it was a decade ago. But it has a long way to go. The best way to promote democratization is by bolstering the middle class, extending the rule of law, and limiting the role of the state. Such political evolution is crucial; as the lure of communism fades, it is important that nationalism not fill the political and ideological void.

This is easier said than done, of course. The rise of Chinese nationalism is a reminder of just how difficult it will be for America and China to reach an accommodation. A U.S.-China cold war would be costly, dangerous, and distracting, robbing attention and resources from pressing internal and global challenges. Both countries have a stake in avoiding this outcome; the course of this century will depend in no small part on whether they succeed.

Thursday, August 11, 2005

The Rise of a New Power (6)

6/20/05
(Page 6 of 6)

For all its talk about market magic, China's overpopulated state sector is a massive job bank compared with western governments, which leaves some of the Beijing's byzantine ministries woefully inefficient. One Indian software supplier, for instance, tried to sell the Chinese government a program to automate parts of the state-owned railroad industry, which employs 20 million people. The idea flopped. "Greater efficiency creates a social problem," explains an executive for a major American software company. "Yes, 20 million are inefficient, but a more efficient system lops off heads."

If China's leaders truly aim to create the Chinese century, the Communist Party itself will probably have to recede into history. One scenario outlined by the National Intelligence Council: an "Asian way of democracy" with elections at the local level and a looser central government. Some think the party is already irrelevant. "I don't think communism really exists anymore," says a former senior official at the Bank of China. "At a certain point, being a party member is a burden. If you're related to the party, you're not doing business." And if you're not doing business, you're not cutting it in China.
More from the Experts. U.S. News and the Levin Institute have assembled a group of experts to respond to your inquiries about China. Questions can go to china@usnews.com.

The Rise of a New Power (5)

6/20/05
(Page 5 of 6)

Still, many of the old hallmarks of Marxist planning are quickly being junked. Nearly 2,300 outdated laws have been repealed since China joined the WTO, according to Dion Wiggins of the Gartner Group, the U.S. consulting firm. Just five years ago, companies constantly hit roadblocks the government called "internal documents" --secret laws, often meant to protect some apparatchik's personal empire. "We never run into that anymore," says Mitch Dudek, a partner at Paul, Hastings in Shanghai. The central government even seems to be purging corrupt officials--proving that communism can still be ruthless. Last year the government executed four bankers accused of fraud.

Foreigners are usually treated much better. Shanghai woos western conglomerates with favorable tax treatment and other perks, the same way American cities and states compete to lure businesses. Western firms often discover that when it comes to business, an authoritarian government isn't such a bad thing. "Usually, if the government says a road is going to be built by September, it will," says Jerry Nissen, a former U.S. investment banker who is executive director of SmartLink International Holdings, a Shanghai-based consultancy. "There's no second party to create opposition."
The more warmly China's leaders embrace capitalism, however, the more standing they have to pursue territorial or political goals at odds with Washington. In March, the Chinese government adopted a resolution stating its right to use force if Taiwan were to declare its independence. A war with Taiwan, or even an outbreak of anti-Taiwan fervor, is one scenario that could unnerve western businesses. Recent anti-Japanese protests have also worried China's trading partners.
And there are limits on how rapidly China can become an economic superpower and employ the geopolitical muscle that comes with such status. Most big Chinese firms, for instance, are a web of entangled interests, both party and private. "The question about Chinese corporations is always, Where does it begin, and where does it end?" says Marshall Meyer of Wharton. "The line between the government and the corporation is very indistinct." That makes it difficult for firms to get listed on respectable stock exchanges and to raise public money through equity offerings or bond issues. Sometimes it's hard to tell whether a state-owned company is even profitable, since published financial results don't always add up. The lack of standardized accounting and a robust, transparent financial system could keep China out of the world's economic big leagues for a long time. "People see China running," says Jeffrey Bernstein, chairman of the American Chamber of Commerce in Shanghai, "but they don't see how many heavy bags they're carrying."
Big brother. There are also limits to how much control the Communist Party is willing to relinquish. More than 30,000 government censors, for example, monitor Internet and E-mail traffic, which is filtered through eight gateways that the government can shut down at will--making China the only country in the world able to effectively monitor its citizens' E-mail. A true test of the party's commitment to free markets will be the growth of China's own companies. "The question is, To what extent can China tolerate the globalization of its firms, since then you lose control?" says Denis Simon, provost of the Levin Institute, the international relations school at the State University of New York. "These companies are going to face major challenges as they go overseas. They're going to have trouble maintaining their Chineseness."

The Rise of a New Power (4)


6/20/05

(Page 4 of 6)

Big companies come here for the people, too. General Electric opened one of four global research centers in Shanghai in 2002 to serve the Chinese market but also to tap into Chinese talent. Universities in China issue about 160,000 advanced degrees every year--four times as many as in the United States. And they're not knockoff diplomas. "The quality of university graduates is every bit as good as in other countries," says Bijan Dorri, managing director of GE's China Technology Center.

Flying high . At a brand-new glass-and-steel structure in Shanghai's Pudong area--a swamp until it was filled in and started sprouting skyscrapers 10 years ago--600 engineers, most of them Chinese, do groundbreaking research on electronics, solar energy, plastics, and other advanced materials. Typical pay is about $35,000 per year. One major project involves GE-made jet engines that China is buying for the 100-passenger ARJ-21 jet, the first Chinese-built airliner. GE originally designed the engines to be mounted on the wings and engineers here are figuring out how to retrofit them to the fuselage, to satisfy the Chinese design.
GE plans to staff up the Shanghai lab by about 25 percent this year--but not at the expense of U.S. jobs, according to Dorri. "It's not like we have stopped hiring in the U.S. and are hiring people here," he says. "We need more talent wherever we can find it." Some of GE's employees even prefer China to the States. Chang Wei, an electrochemist, worked at a GE lab in upstate New York for several years, then came here two years ago. "It's where the growth is right now," he says. "It gives me more responsibility and helps me grow."
There are still plenty of danger zones for western firms coming to China. Companies like Intel and Microsoft are so worried about theft of key technology that they won't even do certain kinds of research in the country. Motorola's experience is a cautionary tale studied by many newcomers to China. The company led the market for cellular phones in the 1980s and '90s. But as it invested millions of dollars in local suppliers, those companies learned the business and began to offer their own phones--much cheaper than Motorola's. The local firms have since captured many of the smaller markets and are gobbling up business in big cities, too. Meanwhile, stealing of intellectual property is a problem that's getting worse, not better, according to a recent report by the American Chamber of Commerce in Shanghai, which represents U.S. business interests.
Credit check. The peculiarities of the Chinese market also force creative workarounds. Last year, General Motors Acceptance Corp., the automaker's highly profitable lending arm, got the first license issued to a foreign company to grant auto loans in China, where most people still pay cash for cars. Doing credit checks in China, however, is almost as labor intensive as building a car. Since there are no established credit bureaus, field investigators check out every applicant individually. They visit homes, making sure somebody actually lives there, and even check out their employers' offices if something looks fishy. Christian Weidemann, president of GMAC-China, recently turned down one applicant after looking at photos of his workplace taken by the field investigator. "There were no pictures on the walls. It felt like nobody worked there," he says. "We were the first to open, but we don't want to be the first to get burned."

The Rise of a New Power (3)

6/20/05
(Page 3 of 6)

Former party leader Deng Xiaoping, who first put many of China's economic reforms in place in the 1980s, famously told his compatriots, "To get rich is glorious." Now that some are finally figuring out how to do it, a booming professional class is starting to generate an information society tailor-made for western services firms. When AIG, the huge New York-based insurance company, first got a license to operate in Shanghai in 1992, most Chinese didn't even know what insurance was. Now, with more personal property and fewer state pensions, "people here are starting to realize, 'Hey, I have these things I could lose,' " says Chia-Yan Chang, AIG's chief officer in Shanghai. "And it's not going to take China 30 years to catch up."

AIG's sales in China hit $500 million last year, and like other western firms, it's looking to double China revenues every year--a nifty offset to setbacks elsewhere, such as the accounting scandal that has engulfed the company in the United States. In China, many of AIG's 2,400 agents, in eight cities, have master's, medical, or law degrees. Some agents make over $100,000 per year.
Copycats. As always in China, there are growing pains. Local competitors have copied AIG's policies word for word--seemingly anything can be pirated in China--and priced their coverage cheaper. Several high-profile scams have soured consumers on insurance. And AIG still is not allowed to sell lucrative group policies to companies or other organizations. Senior executives, however, are undeterred. "It will become the largest market in the world over a couple of decades," predicts Edmund Tse, AIG's senior vice chairman.
Executives in countless other industries believe the same thing. Citigroup expects China to become one of its biggest markets--and sees a rare opportunity to be present at the creation of a consumer juggernaut. With a savings rate higher than 30 percent--compared with less than 2 percent in the United States--China has a vast fortune in its bank vaults. But most accounts are simple savings plans earning minimal interest. Citigroup and dozens of other financial service providers hope to offer more-sophisticated accounts producing better returns once the Chinese banking sector opens fully to foreign competition by the end of 2006, the deadline set when China joined the World Trade Organization four years ago. Of course, savings may drift down as Chinese consumers learn how to shop--but Citigroup hopes to get a cut of that action, too. Fewer than 5 percent of Chinese have a credit card, compared with 80 percent or more in the West. Citi is already pitching plastic in Shanghai in partnership with a local bank.
The lopsided U.S. trade deficit with China and the "offshoring" of manufacturing work there have focused attention on lost jobs and the fading fortunes of industries such as textiles, decimated by cheap Chinese imports. But America's interdependence with China has benefits, too. Cheap goods keep U.S. inflation and interest rates low. And the growth of China's service sector--likely to be heavily fueled by American companies--will bring a well-heeled new consumer to the global market, with less threat to American jobs. "China will be a second driver of economic growth in the world after the United States," says Richard Stanley, CEO of Citigroup China. Stanley claims the 2001-2002 U.S. recession would have been worse if not for Chinese demand for goods from America and elsewhere.

The Rise of a New Power (2)

6/20/05
(Page 2 of 6)

The booty in this battle is jobs and prosperity. A recent report by the National Intelligence Council warns that by 2020, the rise of China could drive the world's most powerful companies to lean more toward the east than the west, cause more displacement of middle-class workers in the United States and Europe, and make Washington "increasingly irrelevant." Congress has formed a panel to monitor China's economic policies, and one bill, which has bipartisan support, would slap hefty fees on all Chinese imports. "It will not be Communist militarists that most threaten the U.S. standard of living," Ted Fishman writes in the bestseller China Inc., "but a Communist-capitalist rival that is a much more formidable economic competitor."

Open for business. Strange, then, that the planefuls of American business experts flocking to China are discovering a country that greatly resembles . . . their own. Premier American corporations like Microsoft, General Electric, and IBM have arrived in China not so much for the ubiquitous 50-cents-an-hour assembly workers as for the English-speaking engineering talent and, of all things, a pro-business political climate. World-class manufacturers like General Motors and Motorola are more interested in building products to sell to the Chinese than to ship back home. Businesses worry more about missing out on "the Chinese century" than about losing their way in terra incognita. "This is the late-19th-century United States, except that it's happening on a faster and broader scale," says Marshall Meyer, a professor at the Wharton School. "It's Chinese manifest destiny."
To rejuvenate its dormant state-run economy, China in the 1980s began wooing foreign multinationals to form joint ventures with Chinese companies, most of them government owned. That gives China the "last-mover advantage," says Spencer White, Asia Pacific chief equity strategist for Merrill Lynch. Home-grown firms extract business know-how from those who have perfected it, offering access to the Chinese market in return. "The size of their market makes them uniquely assimilated to attract technology," says White. "China knows it can just drop a couple of huge orders, and it blows away the critics."
Government directives over the past decade have prodded China's closet capitalists to test their entrepreneurial mettle. In the mid-1990s, when it became evident that lawyers were scarce, the government encouraged people with legal training to start practicing law--which few were doing. It worked. Ji Zou had graduated from law school in Beijing in 1990, but law was considered a shabby profession at the time, and only a few of the graduates in her class of 160 went to work as lawyers. So Zou moved to New York to work as an attorney. In 2003, she returned to China, eventually joining Paul, Hastings in Shanghai. Now, she says, nearly 70 percent of her old classmates have rejoined the legal profession, typically earning $35,000 per year or more--plenty, in Shanghai, for a car, nice house, and a few luxuries.
Fleeced. Command capitalism doesn't always work. In 2000, the government instructed China's four state-owned banks to start offering car loans to juice growth in the automotive sector. Car sales exploded--but the banks were massively fleeced by phantom borrowers who disappeared with their new cars. Still, forced enterprise is not a bad second to free enterprise. A 2002 "go global" campaign led by Premier Hu Jintao, which urged Chinese firms to explore other markets and develop new brands, has brought a number of Chinese firms to the world stage. Chinese computer maker Lenovo grabbed the spotlight late last year when it agreed to purchase IBM's personal computer division.

The Rise of a New Power (1)

6/20/05
A communist Economic juggernaut emerges to challenge the west
By Richard J. Newman

SHANGHAI--Richard Qiang could be an archetypal American. The son of blue-collar workers, Qiang thrived in school and graduated with a law degree from prestigious Fudan University. Then he landed a job here with Paul, Hastings, Janofsky & Walker, a New York law firm with dozens of corporate clients. The 25-year-old attorney owns a car and apartment, and his only complaint involves the long workdays. "I have no time to find a girlfriend," he grins.

Only one thing distinguishes Qiang from a yuppie in Chicago or San Francisco or Manhattan: He belongs to the Communist Party. Like many ambitious young Americans who get involved in politics, Qiang's motives are pragmatic. He hopes to work for the government someday, helping craft China's budding legal system. Party membership is one way to open the right doors.
Angst. But Qiang's path to upward mobility--like that of China itself--is causing angst among Washington policymakers, Midwestern factory workers, and millions of others worried about the emergence of China as an economic and military superpower. It's an article of faith in the West that democracy and free enterprise must exist hand in hand. Yet China is transforming itself from a moribund state-run economy into one of the world's most vibrant marketplaces--and crowning thousands of millionaires in the process--all within the grasp of the Chinese Communist Party.
China is teaching the West something new. Its economy, growing at 9 percent per year, will most likely become the second largest in the world by 2020, behind only the United States. Last year Americans spent $162 billion more on Chinese goods than the Chinese spent on U.S. products. And that gap has been growing by more than 25 percent per year, as China moves from building toys and tchotchkes into more-sophisticated appliances, auto parts, and semiconductors. China's consumer class, meanwhile, is spending like lottery winners on everything from bagels to Bentleys--and will soon outnumber the entire U.S. population. China's explosive growth "could be the dominant event of this century," says Stapleton Roy, former U.S. ambassador to China. "Never before has a country risen as fast as China is doing."
A communist rival--with wealth--is a new worry for Washington. Some fret about another Soviet Union in the making, flush with cash for missiles, satellites, and other advanced weapons--as well as a target to use them on: the island of Taiwan, which China considers a renegade province. Defense Secretary Donald Rumsfeld claimed earlier this month that China's military budget is much higher than it acknowledges--probably the third biggest in the world. "Since no nation threatens China," he mused, "one must wonder: Why this growing investment?"
Yet there may be even more at stake in an economic confrontation with China. Since the expiration of long-standing trade quotas in January, Chinese textile imports to the United States have leapt by 48 percent, prompting the Bush administration to enact new quotas to protect U.S. jobs. Washington and Beijing have also been lobbing verbal missiles over China's fixed exchange rate, which makes Chinese products even cheaper than they'd be with a floating currency.

China's Turn

Its exploding economy has tipped the world on its axis. At what point does it become a real danger?
By Richard J. Newman

It is easy to forget that China is a place of grand ambition. During most of the 20th century, China staggered backward, beset by 40 years of war and political turmoil and, after the Communists seized power in 1949, another 40 years of calamitous government policies and crushing brutality.

Yet for centuries, China was the world's most advanced civilization. As Marco Polo related it in the 13th century, China had paper currency and an efficient postal service before Europe even envisioned such things. Beijing's Forbidden City, completed in 1422, remains the largest palace complex in the world. The Great Wall, which stretched farther than the distance from New York to Los Angeles, is still staggering in its scope.
Today, China aims to reclaim the grandeur of its past. Two decades of reform, a more pragmatic Communist government, and the raw industry of the Chinese people have produced an economy growing faster than any other in modern history. China has become a juggernaut that is the world's second-largest purchaser of oil, and it will soon buy more cars, computers, and appliances than any other place on Earth. Perhaps more important: In its people and its policies, China today is infused with a profound sense of destiny, a steely determination to regain primacy in world affairs. The rest of the world is just beginning to digest what that might mean.

U. S. News & World Report

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Tuesday, August 09, 2005

News about China

  1. Inside Yahoo's China Push Open this result in new window
    Forbes - Aug 09 11:23 AM
    A record investment may lead to consolidation of Yahoo's China businesses.
  2. Feared death toll in China mine disaster rises to 123 Open this result in new window
    AFP via Yahoo! News - Aug 09 10:47 AM
    The number of miners trapped and feared dead after an illegal coal mine was flooded in southern China rose to 123 as rescue teams continued pumping water from the shaft in the faint hope they will be found alive.
  3. Battle of blogs in China Open this result in new window
    International Herald Tribune - 59 minutes ago
    Blogging is blooming in China as the country's vast pool of Web users try to make their mark online and ambitious local start-ups battle foreign heavyweights for a piece of the market.
  4. China loves Levis Open this result in new window
    CNN Money - Aug 09 10:24 AM
    In China, high-quality personal care toiletries and consumer electronics led the list of most desired American products, according to a survey released Tuesday.
  5. Medmira Inc. forms China joint venture with Tianhe Pharmaceutical Open this result in new window
    Canadian Press via Yahoo! News - Aug 09 8:11 AM
    HALIFAX (CP) - MedMira Inc. has begun a partnership with Chinese pharmaceutical firm Tianhe Pharmaceutical Co. Ltd. it says will open new over-the-counter markets in China for its rapid diagnostic products.
  6. Report: Yahoo seeks stake in China firm Open this result in new window
    SiliconValley.com via Yahoo! News - Aug 09 7:04 AM
    EBay could soon be facing old nemesis Yahoo in its efforts to conquer China's online auction market.
  7. China says 123 miners now known trapped by flood Open this result in new window
    Reuters via Yahoo! News - Aug 09 7:43 AM
    At least 123 miners are now known to have been trapped deep underground in a flooded shaft in south China, not 102 as first reported, and they have little chance of survival, official media reported late on Tuesday.
  8. Toshiba eyes 20 percent annual growth in China to lift fortunes Open this result in new window
    AFP via Yahoo! News - Aug 09 7:17 AM
    Toshiba, which has been mired in the red because of falling prices for its electronics goods, said it aimed to expand sales by 20 percent each year in China and invest to keep a technology edge.
  9. UBS eyes Bank of China IPO Open this result in new window
    Reuters via Yahoo! News - Aug 09 5:41 AM
    UBS would like to win the business of bringing Bank of China to the stock exchange, but its current talks about taking a stake in BOC are not aimed at securing that business, UBS' finance chief said.
  10. Australia to start formal negotiations on uranium exports to China Open this result in new window
    International Herald Tribune - Aug 09 7:06 AM
    Australia, one of the biggest exporters of uranium, said Tuesday that it would hold formal talks to start selling and shipping uranium to China, which plans to increase nuclear energy output fourfold by 2020.

Battle of blogs in China

Reuters
WEDNESDAY, AUGUST 10, 2005


HONG KONG Blogging is blooming in China as the country's vast pool of Web users try to make their mark online and ambitious local start-ups battle foreign heavyweights for a piece of the market.

China now has a 14.2 million-site "blogosphere," with a new blog, or Web log, created every second, according to Technorati, a Web site that tracks blogs.

The growing stable of online scribes, still small by global standards, has attracted homegrown companies and foreign giants like Microsoft, Google and Yahoo offering blogging Web pages to outspoken Chinese Internet users.

The medium has already produced at least one celebrity of sorts, a woman who goes by the blog name Furong Jiejie, whose steamy online entries include passages like: "I have a physique that gives men nosebleeds."

"Users don't care too much if the blog company is foreign or local, but I think local companies have more understanding of the community," said Kevin Wen, a spokesman for a Beijing-based start-up, Bokee.com, whose name is the Chinese word for blog.

Bokee, formerly called BlogChina, has attracted 5 million yuan, or $616,500, in seed money as well as $10 million in venture capital funding from six U.S. and Chinese firms.

It aims to become the first Chinese blogging company to list on the Nasdaq, said its chief executive, Fang Xingdong, adding that the company expected its revenue to grow to five times its August level by the end of this year and its user base to reach 10 million.

Two rivals, Blogbus.com and BlogCN.com, have also said that they are in discussions with venture capital firms.

Initial public stock offerings from Chinese technology companies have proved popular so far, with the Web search company Baidu.com the latest to strike gold. Its shares more than quadrupled in value in their U.S. market debut last week.

China is the second-largest Internet market in the world after the United States, with 120 million users forecast by the end of the year. But the number of bloggers is still relatively small, about six million, according to various sources.

Microsoft says more than a million users in China have joined its MSN Spaces service, which is operated out of China and was started in the country just three months ago. That number is growing by an average of 30 percent per month, said Sally Ip, MSN Asia's regional trade marketing manager.

Bokee, which was set up in 2002, claims the biggest share of the Chinese blogging market, with about two million registered users, and it said it was adding 6,000 to 10,000 daily.

Since blogging services are usually free, companies make most of their revenue from advertising.

Wen, of Bokee, said he might begin to charge for blogging services at the end of this year, but still saw most of the company's revenue coming from advertising and wireless charges.

Bokee's site carries ads from companies including Dell, Nokia, Hewlett-Packard and International Business Machines. Bokee declined to say how much advertising revenue it generates.

But speaking one's mind online can be risky in a country where the media are tightly controlled and chat forums and online bulletin boards are routinely monitored for controversial political comments.

China has been cracking down on Internet content, from politics to pornography, but it has struggled to control the medium as more Chinese get Web access and use it to gain information from other than official sources.

By comparison, bloggers in the United States have come to hold considerable sway over public discourse, debunking news reports and influencing decision-makers.

Whether blogging will give rise to a comparable class of self-made political pundits in China may depend on the tradeoffs both foreign and domestic companies make to operate there.

Microsoft's blog venture in China recently came under fire for censoring words like "freedom," "democracy," "human rights" and "Taiwan independence" from the subject lines of its free online journals.

Microsoft rivals like Yahoo and Google and homegrown players Sina and Sohu.com have also been known to censor content in China.

"It's hard for us to avoid the censorship, but we have to protect the business," said Wen, of Bokee. "When you do business in China, you have to follow the rules."


HONG KONG Blogging is blooming in China as the country's vast pool of Web users try to make their mark online and ambitious local start-ups battle foreign heavyweights for a piece of the market.

China now has a 14.2 million-site "blogosphere," with a new blog, or Web log, created every second, according to Technorati, a Web site that tracks blogs.

The growing stable of online scribes, still small by global standards, has attracted homegrown companies and foreign giants like Microsoft, Google and Yahoo offering blogging Web pages to outspoken Chinese Internet users.

The medium has already produced at least one celebrity of sorts, a woman who goes by the blog name Furong Jiejie, whose steamy online entries include passages like: "I have a physique that gives men nosebleeds."

"Users don't care too much if the blog company is foreign or local, but I think local companies have more understanding of the community," said Kevin Wen, a spokesman for a Beijing-based start-up, Bokee.com, whose name is the Chinese word for blog.

Bokee, formerly called BlogChina, has attracted 5 million yuan, or $616,500, in seed money as well as $10 million in venture capital funding from six U.S. and Chinese firms.

It aims to become the first Chinese blogging company to list on the Nasdaq, said its chief executive, Fang Xingdong, adding that the company expected its revenue to grow to five times its August level by the end of this year and its user base to reach 10 million.

Two rivals, Blogbus.com and BlogCN.com, have also said that they are in discussions with venture capital firms.

Initial public stock offerings from Chinese technology companies have proved popular so far, with the Web search company Baidu.com the latest to strike gold. Its shares more than quadrupled in value in their U.S. market debut last week.

China is the second-largest Internet market in the world after the United States, with 120 million users forecast by the end of the year. But the number of bloggers is still relatively small, about six million, according to various sources.

Microsoft says more than a million users in China have joined its MSN Spaces service, which is operated out of China and was started in the country just three months ago. That number is growing by an average of 30 percent per month, said Sally Ip, MSN Asia's regional trade marketing manager.

Bokee, which was set up in 2002, claims the biggest share of the Chinese blogging market, with about two million registered users, and it said it was adding 6,000 to 10,000 daily.

Since blogging services are usually free, companies make most of their revenue from advertising.

Wen, of Bokee, said he might begin to charge for blogging services at the end of this year, but still saw most of the company's revenue coming from advertising and wireless charges.

Bokee's site carries ads from companies including Dell, Nokia, Hewlett-Packard and International Business Machines. Bokee declined to say how much advertising revenue it generates.

But speaking one's mind online can be risky in a country where the media are tightly controlled and chat forums and online bulletin boards are routinely monitored for controversial political comments.

China has been cracking down on Internet content, from politics to pornography, but it has struggled to control the medium as more Chinese get Web access and use it to gain information from other than official sources.

By comparison, bloggers in the United States have come to hold considerable sway over public discourse, debunking news reports and influencing decision-makers.

Whether blogging will give rise to a comparable class of self-made political pundits in China may depend on the tradeoffs both foreign and domestic companies make to operate there.

Microsoft's blog venture in China recently came under fire for censoring words like "freedom," "democracy," "human rights" and "Taiwan independence" from the subject lines of its free online journals.

Microsoft rivals like Yahoo and Google and homegrown players Sina and Sohu.com have also been known to censor content in China.

"It's hard for us to avoid the censorship, but we have to protect the business," said Wen, of Bokee. "When you do business in China, you have to follow the rules."

Sunday, August 07, 2005

"The Painted Veil" remake to start shooting in Beijing

"The Painted Veil" remake to start shooting in Beijing
www.chinaview.cn 2005-08-06 12:51:55


BEIJING, Aug. 6 -- A remake of the 1934 Hollywood classic "The Painted Veil" will begin August 15 at Beijing Film Studios.
Based on the same name novel by W. Somerset Maugham, "The Painted Veil" tells the story of a woman, whose husband ignores her in favor of his medical research, begins a journey of self-discovery while fighting a cholera epidemic with her husband in China.
In the remake, Naomi Watts, replacing Nicole Kidman, and Edward Norton will take the roles originally played by Greta Garbo and Herbert Marshall.
This US$ 34 million production is helmed by John Curran (We Don't Live Here Anymore).
Inside Beijing Film Studios, several sets, including a "Chinese style of straw house" have been constructed and the costume department has completed its share of the work.
Shooting will last about 12 weeks in Beijing, Shanghai and the southeastern province of Guangxi. The original plan of shooting the feature in London and Hong Kong had been scrapped.  

English blogs in China

English blogs in China:the disappointing ethnocentrismmajones
bbs.chinadaily.com.cn Updated: 2005-07-22 09:48

I would like to draw the attention of readers to the plethora of English-language China blog sites that currently pollute cyberspace. As a foreigner living here in China, I am deeply disturbed and embarrassed by the blatant anti-Chinese discourse that most of these sites peddle.
Sites like Peking Duck (www.pekingduck.org), The Horse's Mouth (thehorsesmouth.blog-city.com/) and the Angry Chinese Blogger (angrychineseblogger.blog-city.com/) all identify themselves as anti-Chinese Communist Party sites, though they also pretend to like and to admire the Chinese people.
The problem with these sites is that they not only attract anti-CCP rants, but also vomit loads of puerile China-bashing. Just take one of today's threads from the Peking Duck for example: one contributor, a guy by the name of Gordon (who also happens to run the Horse's Mouth site), posted a passage from John Mandeville's "Travels" which he described as "humorous" even though it is blatantly insulting to Chinese culture. Here is the "humorous" passage:
"The aims of meals in China are to transfer food onto the table and floor, and to get other people's spit into your mouth. These purposes are facilitated by eating with sticks, and by swirling your sticks round in the communal dishes. It's also polite to talk with your mouth full, so that everyone can see exactly what you're eating. And the Chinese love dogs and cats; normally one between two is enough. Amuse your friends by showing how far you can spit the bones! Chinese restaurants are easy to locate: just look out for what appears to be a pet shop. Most Chinese people like the idea of trying Western food, but in practice they are invariably disappointed that it does not taste like Chinese food. Ideally, Chinese food should not taste of food at all, but instead of chilli paste, salt, vinegar and of course MSG."
This kind of "humor" in my opinion is outright insulting to all Chinese people and their food culture. But what I find particularly sad is that this kind of vindictiveness is typical of many of the contributors and hosts of English-language China blogs. They seem to always find it necessary to ridicule China every chance they get, and most of the bile that dribbles from the mouths of these self-proclaimed China "experts" constitute little more than pure nonsense. Today's conversation over at the Peking Dork (sorry, Duck) centres around the safety of Chinese food, with some commentators arguing that the only safe food to eat in China is KFC or McDonald's! Everything that grows in China, some of them are claiming, is far too toxic to consume.
Earlier this week, the Peking Duck crowd were busy filling in their time whinging about how many Chinese are in the habit of allowing their young children to defecate everywhere in public, and even on the floor of other peoples' homes. The subtext in all of these rants is always the same: that the Chinese are somehow less civilised than Westerners.
Here is yet another typical example of the kind of ridiculing so common to these blogs, this time from Gordon of The Horse's Mouth: "Not only does this country lack the rule of law," he says, "but it also lacks quality control for any and every goddamned thing it produces. It doesn't matter if you buy a 30rmb CD or a 300,000rmb flat, you still get short-changed."
It's absolute nonsense of course, but Gordon would rather portray China as being dysfunctional and inferior instead of producing far more balanced assessments.
In another of Gordon's threads, titled "China, the beautiful", a guest blogger complains how he thinks "China is a nasty filthy country" characterised by extreme pollution, populated by people who spit everywhere and whose public toilets are too dirty to even describe. The point of this rambling overstated case soon becomes clear when the guest blogger draws a comparison with his own country: "I am willing to concede that there are places in my own country, the US of A," he says, "that sometimes are not clean, but by far, the United States most certainly exceeds anything in China in hygiene, hospitalization, and charitable trusts."
And that sums up what these blogs are really all about: they provide forums for arrogant ethnocentric Westerners to boast about how great they think their own countries are when compared to China - and in doing so they can't help but to ridicule and to belittle and to exaggerate and to distort.
The other thing that these sites all share in common of course is that they reserve all of their most stinging attacks for the Chinese Communist Party, and when doing so, they almost always fail to acknowledge any of the positive legacies of the Party. They prefer instead to view the CCP as monolithic and "evil". Richard Burger, who runs Peking Duck, outlines the "purpose" of his site in his rant titled "Looking back at China, the purpose of this blog": The CCP is a "destructive" force he claims, "like an elephant brushing up against a sapling and crushing it....I also have understood for a long time that the current CCP is amazingly similar to the ancient emperors' regimes, in which government was to be used not for the benefits and protection of its subjects, but for ensuring the survival of its leaders."
And Richard's ranting silliness continues: "As far as trade and commerce goes, I think the CCP has been a bungler, hardly the geniuses some would have it. The people made their money because the government got out of their way, not because the CCP offered great financial wisdom. With foreign trade, the party deserves even less credit. Ask any foreign company doing business in China what kind of hoops they had to jump through and how many palms they had to grease along the way. It's as though the CCP has put up every conceivable obstacle to real free trade for outsiders. This is a key component of the corruption system that keeps Party members rich and that created the 'princeling' phenomenon."
What Richard and others like him fail to appreciate and to adequately acknowledge is that the CCP has brought about more good than it has bad. They refuse to see that China's stunning economic development has produced a dramatic political liberalisation in this society compared to two decades ago, one that promises to eventually transform China into a modern nation. Impatient Westerners like Richard do not understand how much China has changed. Consider Deng Xiaoping's wider legacy for example: according to the World Bank, since China opened its economy in 1978, when Deng first came to power, its gross domestic product has increased from $362 billion to $11.9 trillion. Last year alone, GDP grew 9.1 percent. As a result of the rapid economic growth and adequate poverty reduction policies that include having wealthy cities forming partnerships with poorer areas, the number of people in China living on less than $1 per day dropped from 490 million in 1981 to 88 million last year. During this period the country's output has increased more than eightfold and the average income has risen by 7% a year, passing $1,000 for the first time in 2003. China's economic expansion has been on a scale and at a speed the world has never seen before. Since opening its economy in 1978, China has accounted for three-quarters of all the people in the world lifted out of abject poverty! Perhaps no other world leader can claim to have done so much for humanity, as Deng Xiaoping. Still, his legacy is certainly a mixed one, for he nevertheless does have some blood on his hands - but too many foreigners prefer to fixate themselves on "that" incident, rather than to open their eyes to the bigger picture.
If we accept the notion of modernity with Chinese characteristics, as I do, then the need for a critical reading of it cannot be denied because Western modernity itself has also been subjected to sharp criticism. Many of the criticisms raised in these English-language China bog sites are valid, for sure, but the problem with most of them is that they seriously lack in fairness and balance. They are nowhere near objective enough. Instead, they serve as little more than hate sites.
by China-lover!
The above content represents the view of the author only.

Thursday, August 04, 2005

Do you also want to make money via internet?

Do you also want to make money via internet?

There are a lot of people who have earned some extra money throught their computers, if you have a computer and if you can surf internet, or you have a blog, msn space and so on, it is very easy to begin, why not to have a try?

Via Google AdSense

Google AdSense is a fast and easy way for website publishers of all sizes to display relevant Google ads on their website's content pages and earn money. Because the ads are related to what your visitors are looking for on your site — or matched to the characteristics and interests of the visitors your content attracts — you'll finally have a way to both monetize and enhance your content pages. It's also a way for website publishers to provide Google web and site search to their visitors, and to earn money by displaying Google ads on the search results pages. You can use it if you have a blog. So you even don't need to have a website, just go to apply for a free weblog and then write some thing, and then you can use this methode to earn money. It is very easy to begin for beginners to get cash income .

Via Affiliate Programs

eCommerce program under which owners of one website (for instance, a website about mountain biking) send users to another website (such as an on-line bookstore) to purchase related items. The owner of the target site shares its profits from the sales with the owner of the referring site.Affiliate programs are the ideal way to make your web site profitable. There are such a huge range of web affiliate programs now available, that there is almost certainly something that will suit you and your site. For this you need a website, so it is a bit difficult for beginners, of couse you can aslo use it by using a free blog to put affiliate programs in it. Maybe you can earn up to $525- $1950 per month just from home affiliate.