‘THE WORKERS WON’T STAY’ Workers removing molten
material from a furnace at the Shizuishan Tianhe Ferroalloy Company, at
an industrial zone in the Ningxia Hui Autonomous Region. An official
there said that it was impossible to squeeze out savings to pay higher
electrical rates and that if wages were lowered, “the workers won’t
stay.” OLYMPICS STORY. Earthquake and after shock: Satellite images
reveal a lake forming in Beichuan County.
Special article on architecture from the TIMES: The
Frontier: Southwestern Shenzhen under
construction. And an eclipse for the Olympics - symbolic? No union label here! Urban Renewal,
Chinese-style; mine down under to
be owned by China? PROTESTS:
Muslim Uighur v. Han Chinese. NYTIMES
10-9-11article on China economy.
china NEWS: In Weston,
Connecticut now
U.S.
Economic Woes Loom Over Biden Visit to China
NYTIMES
By EDWARD WONG
August 13, 2011
WASHINGTON — Over the winter, officials in China and the United States
were trying to turn a new page in relations. In January, during a state
visit to Washington by President Hu Jintao, leaders worked hard to
dispel the rancor that had been slowly building. Soon after, Vice
President Joseph R. Biden Jr. committed to an earlier proposal to meet
this summer with his Chinese counterpart, Xi Jinping, who is expected
to succeed Mr. Hu next year.
But as Mr. Biden prepares to depart for China on Tuesday, a new
uncertainty looms over relations.
Chinese leaders are asking sharp questions about the strength of the
American economy and American leadership, because of the government’s
struggle to meet its debt obligations and the partisan schisms and
political paralysis that turned a problem into a crisis. Mr. Biden
postponed his original departure date in July to help hammer out the
agreement that forestalled default on some obligations but failed to
avert a downgrade of America’s AAA credit rating by Standard &
Poor’s. Xinhua, the state news agency, published a commentary demanding
that the United States “cure its addiction to debts” and “live within
its means.”
The uncertainty about America goes straight to China’s pockets: it
holds more than $1.1 trillion in United States Treasury securities,
making it the country’s largest foreign creditor. Some ordinary Chinese
have publicly criticized the Chinese leadership for investing so much
in American government securities.
Europe’s continuing sovereign debt miseries, the specter of a possible
double-dip recession in the United States, and the turmoil in global
markets last week have only heightened anxiety in China, whose economic
growth depends to a large measure on its vast export sector.
Zhu Feng, a professor of international relations at Peking University,
said he attended a meeting at the Ministry of Finance last week where
officials were wringing their hands.
“The feeling of everyone was that the world economy has just suddenly
become very unpredictable,” he said. “No one wants to see the U.S.
economy keep going downhill and a new financial crisis. China and the
U.S. are very important in keeping the global economy stable.”
As they get to know each other, Mr. Biden and Mr. Xi will no doubt
discuss some of the security issues that have divided the two countries
— American arms sales to Taiwan, North Korea’s nuclear program and
tensions over the South China Sea. But the economic issues have moved
to the fore.
“The primary purpose of the trip, which was planned before recent
economic problems, was to build the relationship with Xi Jinping,” said
Jeffrey A. Bader, who until April was the senior director for East
Asian affairs on the National Security Council. “Recent events in the
economic sphere have undoubtedly put the U.S. economy and U.S. currency
on the agenda.”
Da Wei, deputy director of the Institute of American Studies at the
China Institutes of Contemporary International Relations in Beijing,
said, “U.S. Treasury debt is the biggest concern since it’s about the
safety of China’s financial investment.”
As in the United States, domestic troubles in China have been taking
precedence over foreign relations. The efforts of Chinese leaders to
maintain social stability have been challenged this summer by ethnic
violence in the western region of Xinjiang and a remarkable surge of
public criticism over the government’s handling of a deadly high-speed
rail crash in Zhejiang Province.
Perhaps most unsettling for the country’s leaders is the creeping rise
in the inflation rate; China’s consumer price index went up 6.4 percent
year-on-year in June, the steepest rise in three years. Analysts say
average inflation for the year is certain to surpass the 4 percent
benchmark Chinese leaders had set. Though it may be peaking, “inflation
is likely to remain the policy priority well into the fourth quarter,”
Alistair Thornton, a China analyst at IHS Global Insight, wrote in a
report last week.
Inflation puts China in much more of a policy bind if the West gets
mired in another deep slump. In 2008, when the global financial crisis
hit, China relied on stimulus spending and loose lending by state banks
to pump up infrastructure building and other capital-intensive projects
to maintain economic growth. Now, Chinese officials are concerned about
rampant spending and are trying to tighten bank lending.
One point of tension between the United States and China has faded into
the background in recent months: China’s valuation of its currency. The
Obama administration had long pushed China to appreciate its currency
to correct trade imbalances and help restructure the world economy. The
Chinese government was reluctant to do so, fearing the cost to exports.
But an undervalued renminbi contributes to inflation, so China has been
slowly letting the renminbi rise against the dollar.
The issue may also be losing some of its weight in American politics.
The International Monetary Fund pointed out in a report last month that
a stronger renminbi would not necessarily bolster job creation in the
United States.
So instead of Mr. Biden pressing the Chinese on their currency, Chinese
officials are likely to be pressing him about the stability of the
dollar. All the while, they will be trying to gauge the strength of
President Obama, having witnessed the difficulties he faced in
persuading Republicans in Congress to raise the debt ceiling.
“It always encourages good behavior in China when they think they’re
dealing with a strong U.S. president,” said Kenneth G. Lieberthal, a
China scholar at the Brookings Institution who served on the National
Security Council in the Clinton administration. “It’s hard to see how
recent events would have created an impression that he’s a strong
leader.”
A
"knock-off" train design - results...
China Train Wreck Raises Questions
NYTIMES
By IAN JOHNSON
July 24, 2011
BEIJING — A train accident in eastern China over the weekend has added
to a national sense that safety is taking a back seat to the country’s
spectacular infrastructure development.
The wreck on Saturday night killed 35 and injured 210 after a
high-speed train lost power for more than 20 minutes and then was
rear-ended by another train, according to the Xinhua news agency. Six
cars derailed and two fell off a viaduct near the city of Wenzhou.
By Sunday night, rescuers said they did not expect to recover more
bodies, although some of the dead were still being identified.
Government officials responded switftly, with President Hu Jintao
calling the rescue work a national priority. China’s railway minister,
Sheng Guangzu, rushed to the scene to supervise operations. Mr. Sheng
took control of the powerful ministry earlier this year after his
predecessor and several associates were fired and investigated for
corruption.
But China’s vocal online bloggers expressed anger at the priorities
highlighted by the rescue.
Photos on the popular Weibo microblogging service showed backhoes
burying the wrecked train near the site. Critics said the wreckage
needed to be carefully examined for causes of the malfunction, but the
railway ministry said that the trains contain valuable national
technology and could not be left in the open in case it fell into the
wrong hands. Foreign companies maintain that some crucial
technology was stolen from their imported trains. But more importantly
to domestic audiences is the perception of a coverup. Initial reports
of how the accident occurred are already being partly contradicted by
reports in the official media.
The Railway Ministry issued a statement Saturday night that said the
first train had been struck by lightning and lost power. It did not
explain why the second train was not signaled to stop. In addition, new
reports on Xinhua indicate that the first train had started to move by
the time it was struck. The ministry has not explained the discrepency.
The wreck is one of several high-profile public transportation
accidents in China recently. Early Friday, 41 people died when an
overloaded bus caught fire in central China’s Henan province.
Earlier this month, an escalator at a subway station in Beijing
collapsed, killing one and injuring 28. Last week alone, four bridges
collapsed in various Chinese cities.
Signaling government concern over growing public unease, the government
issued a directive Saturday calling for “intensified efforts in
preventing major deadly accidents.”
Discussion of accidents in China, however, is haphazard. In an
unusually frank editorial in the Communist Party paper, People’s Daily
earlier this month, a commentator said China needed “zero tolerance for
concealing major accidents.” But the commentator said many disasters
are covered up, such as a major oil spill that was hidden from public
view for over a month.
The sense that transparency and safety is secondary to other concerns
was present in many Weibo postings Sunday. One blogger in particular
posted an eloquent appeal for more care and caution in China’s rapid
development:
“China, please stop your flying pace, wait for your people, wait for
your soul, wait for your morality, wait for your conscience! Don’t let
the train run out off track, don’t let the bridges collapse, don’t let
the roads become traps, don’t let houses become ruins. Walk slowly,
allowing every life to have freedom and dignity. No one should be left
behind by our era.”
China’s Treasury Holdings Make U.S. Woes
Its Own
NYTIMES
By DAVID BARBOZA
July 18, 2011
SHANGHAI — However grim Washington’s debt and deficit negotiations may
seem to Americans, the impasse is nearly as disturbing for China.
As the United States’ biggest foreign creditor — holding an estimated
$1.5 trillion in American government debt — China has been a vocal
critic of what it considers Washington’s politicized profligacy.
“We hope that the U.S. government adopts responsible policies and
measures to guarantee the interests of investors,” Hong Lei, a foreign
ministry spokesman, said at a news conference late last week.
Beijing might prefer to respond by starting to dump some of its
American debt. But in this financial version of the cold war, analysts
say, both sides fear mutually assured destruction.
One reason the United States would want to avoid defaulting on its debt
is that such a move could alienate China, which is a steady purchaser
of Treasury bonds. Beijing, meanwhile, already has too much invested in
American debt to do much more but continue to buy, hold and grumble.
It is the ultimate “too big to fail” global relationship, said Andy
Rothman, an analyst in Shanghai for the investment bank CLSA.
If Beijing even hinted that it might try to sell part of its American
debt, “other countries might sell their dollar assets,” Mr. Rothman
said, noting that this would drive down the value of China’s holdings.
“It would be financial suicide for China.”
China got into this situation, experts say, by indulging its own
economic interests. To bolster what has become the world’s largest
export economy, China has focused on policies that encourage domestic
savings and hold down the value of its currency. The result: huge trade
and current-account surpluses. China has accumulated more than $3
trillion in foreign currency reserves, far more than any other nation.
Most of those reserves are held in dollars, and recycled back to the
United States through investments in Treasury bonds and other
dollar-denominated securities — even stocks. And while some of China’s
foreign exchange reserves are plowed into European and Japanese debt,
those bond markets are not big or liquid enough to absorb the bulk of
China’s ever-larger foreign holdings.
Beijing has tried to diversify its foreign exchange portfolio by
creating a sovereign wealth fund that can invest some of the reserves
overseas. The government has also encouraged Chinese companies to
expand overseas and to acquire mines and natural resources to fuel
China’s hungry economy. But because China has too much foreign money
for any other outlet to absorb, the vast majority of its fast-growing
reserves continue to be destined for the United States bond market.
“China has no choice but to keep buying,” said Zhang Ming, an expert at
the Chinese Academy of Social Sciences, a Beijing research group.
“After all, U.S. Treasury bonds are still the largest and most liquid
investment product in the world.”
All of which has helped enable America’s own fiscally dubious habits.
The United States’ huge deficits — not only in government spending, but
in trade and savings as well — have weakened its economy and strangled
consumption. Many economists say that would poison the long-term
prospects for the dollar, if it were not still the world’s reserve
currency and most reliable safe haven.
Helping maintain that role for the dollar are the staggering debt
problems that Europe and Japan are struggling with. With global
investors like China having few good options besides United States
Treasuries, Washington, despite its current debt-ceiling debacle, can
continue to hold down interest rates and wallow in cheap borrowing.
Beijing in recent years has frequently fretted aloud about Washington’s
monetary policies. In 2009, shortly after the global financial crisis
broke out, China’s prime minister, Wen Jiabao, said his country was
“worried” about the safety of its huge cache of United States Treasury
holdings. Last year Chinese policy advisers criticized the Federal
Reserve for undermining the value of holdings by “printing too much
money” with its so-called quantitative easing policies.
But even now, despite Beijing’s scolding about the debt impasse in
Washington, China’s options may be limited.
”There’s really nothing different they can do,” said Eswar S. Prasad, a
Cornell economics professor and former head of the China division at
the International Monetary Fund. “Even if China felt the United States
was going off a cliff, there’s no other place for them to put their
money.”
Over the long run, many economists say the structural imbalances on
both sides of the Chinese-American debt symbiosis could be disastrous.
Already, for example, many say that those dynamics helped create the
global financial crisis by artificially creating the low interest rates
that let housing prices reach bubble-bursting levels.
Now, the United States and China are trying in their different ways to
adjust. American policy makers are urging more savings and less
consumption. Chinese officials take the opposite tack, promising to
encourage more consumption and less saving.
But neither country has made significant headway on these strategies
during the last two years. Both sides see these fixes as too costly and
detrimental to nearer-term economic goals. America is focused on
reviving its economy, while China is intent on cooling its down. And in
both countries, achieving the goals involves changing public behavior,
which is never easy.
Many economists say China could curb its dependence on dollar-pegged
assets by letting the value of its currency rise faster against other
world currencies. That would also make its imports less expensive for
domestic consumers. But it would also make China’s exports more
expensive for global customers, which could hurt Chinese factories and
lead to widespread layoffs.
For all that, if China worries about holding too many
dollar-denominated assets, which could depreciate over time as the
value of its own currency rises, why does it not quietly sell some of
them — or at least stop buying more?
Recent United States government surveys have suggested that China began
doing just that, beginning to slow its purchases of American debt
earlier this year. But analysts warn that those official figures may
not be accounting for purchases made through third-party countries on
China’s behalf. An intermediary buying American bonds in London at the
behest of the Bank of China would not show up in Washington’s tallies.
Many economists, in fact, say they believe China may have actually
stepped up its buying of American debt. The evidence is that its trade
and current-account surpluses almost certainly mean that it has
continued to accumulate huge holdings of dollars.
How might the Beijing-Washington debt standoff be resolved? Mainly, the
Americans hope China will ramp up its domestic consumption and perhaps
make even more direct investments in the United States. The Chinese,
meantime, hope the United States will deal with its huge debt problems
and maintain the value of the dollar — and with it the value of China’s
dollar-based holdings.
For all the stresses in both directions, the fiscal cold war means
“China is increasingly integrated with the future of the U.S.,” said
Mr. Rothman, the Shanghai analyst. “But that could be a good thing, for
both sides.”
China Raises Interest Rates
NYTIMES
By BETTINA WASSENER
July 6, 2011
HONG KONG — China on Wednesday raised interest rates for the fifth time
in nine months, the latest in a series of moves aimed at cooling the
pace of economic growth and the steep price rises that have accompanied
expansion.
The central bank announced that it was raising the key lending and
deposit rates in the world’s second-largest economy, after the United
States, by a quarter of a percentage point. The increase had been
widely expected by analysts.
The central bank said the one-year deposit rate would rise to 3.5
percent, from 3.25 percent, beginning Thursday. The one-year lending
rate was raised to 6.56 percent, from 6.31 percent.
Signs that inflation in China has accelerated to levels well above what
the Chinese authorities are comfortable with have mounted in recent
months and prompted Beijing to step up its efforts at reining in the
ample lending that fueled growth and helped fan sharp rises in property
prices as well as overall inflation.
Data released last month showed that consumer prices in May had risen
5.5 percent from the same period last year, and economists widely
believe that data for June, due next week, will show an even more
marked increase, of 6 percent or more.
The rate announcement came just weeks after news of the latest in a
long line of instructions by Beijing to the nation’s banks to extend
fewer loans — the 12th such move since early 2010.
Beijing’s gradual cutback of lending — by raising reserve-requirement
ratios for banks, which reduces the amount of money available for loans
— has had the desired effect of moderating the sizzling pace of growth
to a level that most economists here believe points to a soft landing
for the Chinese economy.
However, many forecasters also believe that Beijing now has little room
left to increase reserve-requirement ratios much further or to lift
interest rates much more. Another small rate increase may come later in
the year, but over all, the current round of tightening may soon have
run its course, many believe.
The price rises that have accompanied soaring growth, meanwhile, have
so far shown little sign of abating — in part because of sharp
increases globally in the costs of raw materials. Natural disasters in
China also have helped push up the cost of food.
Inflation levels could ebb somewhat later this year, but are widely
expected to remain elevated, presenting Beijing with a headache. The
Chinese authorities are intensely aware that soaring household bills
could lead to widespread public dissatisfaction.
Moody’s Sees Much Bigger Local
Debt in China
NYTIMES
By REUTERS
July 5, 2011
BEIJING — China’s local government debt may be 3.5
trillion renminbi ($540 billion) larger than auditors estimated,
potentially putting banks on the hook for deeper losses that could
threaten their credit ratings, the rating agency Moody’s said Tuesday.
China’s mountain of local government debt has long been seen as a major
risk by investors. The worry is that slower growth in the world’s
second-biggest economy after that of the United States could set off a
wave of loan defaults and hobble its banking system.
“Banks’ exposure to local government borrowers is greater than we
anticipated,” Yvonne Zhang, a Moody’s analyst, said in a statement.
Unless China comes up with a “clear master plan” to clean up the
problem, the credit outlook for Chinese banks could turn negative,
Moody’s said.
Moody’s debt tally is near the midpoint of various estimates from
Chinese authorities, which used different definitions and accounting
methods to compute their debt totals. The varying figures have led to
confusion about just how serious the problem could become if heavily
indebted local governments default, saddling banks with large loan
losses.
Moody’s said it was hard to judge which banks had taken on the most
local government debt, but Bank of China and China Citic Bank were
among those that had lent more aggressively than their peers during
China’s bank lending spree in 2009.
China’s state auditor reported last week that local governments had
accumulated 10.7 trillion renminbi of debt, about half of it amassed
during a stimulus spending binge as Beijing sought to cushion the blow
of the global recession.
Moody’s said the auditor’s report excluded some bank-funded loans
because they were not deemed to be “real claims” on local governments.
But the rating agency said that those loans posed the greatest risk of
delinquency and that banks may face losses.
The warning weighed on Chinese bank shares, which were the biggest drag
on the Hang Seng index for the Hong Kong stock market Tuesday. However,
the share declines were modest, and analysts expressed confidence that
banks could withstand loan losses.
“Even if the worst-case scenario happened, it’s not going to be fatal,”
said Victor Feng, an equity strategist at Everbright Securities in
Shanghai. “Profits may drop, but banks will not go bankrupt.”
The rating agency said a jump in local government loan defaults could
push the nonperforming loan ratio for Chinese banks as high as 12
percent, well above its base-case scenario that envisions losses in the
range of 5 percent to 8 percent.
Government figures show the average nonperforming loan ratio was 1.1
percent at the end of March.
Moody’s outlined three scenarios for resolving the debt problem. Most
likely, Beijing would work on a case-by-case basis to help local
governments to get funding. China might ask banks to absorb losses on
loans for which local governments are not liable. Moody’s said this
scenario would probably involve a fair amount of debt restructuring by
banks.
In the worst-case scenario, Beijing would leave banks and local
governments to thrash out the issue on their own. This could hurt
investor confidence in China, as there would be no clarity on China’s
debt problems and loan disputes could drag on, thereby worsening losses.
The best case would involve Beijing’s stepping in to supply local
governments with funding or take on some of their debt, although
Moody’s acknowledged that this would raise so-called moral hazard
issues of banks’ assuming excessive risk, knowing the government would
always come to their rescue.
Reuters reported on May 31 that China’s regulators planned to shift 2
trillion to 3 trillion renminbi of debt off of local governments to
ease the default threat. About half of the debt dates to the 2008
financial crisis, when Beijing unveiled a 4 trillion-renminbi fiscal
stimulus package that compelled the local authorities to spend their
way back to economic health. But the legacy of the massive
spending is now catching up with China, as maturity dates for the
loans, many of which are due in 2013, draw closer.
While most loans were used to build roads and other infrastructure that
some analysts argue that China needs, it has also generated some
wasteful spending. Peter Elston, a strategist at Aberdeen Asset
Management Asia, said the episode served as a reminder that Chinese
banks can be used as instruments of the state, making them less
attractive as investment options.
“It is very sad, because it is going to take a very long time for them
to convince investors that they are run for the benefit of shareholders
and not for the benefit of the broader economy,” Mr. Elston said in an
interview in Singapore.
10
June 2011 Last updated at 10:25 ET
Christine Lagarde in Beijing.
Leading candidates to become head of the International Monetary Fund
(IMF) are trying to drum up support ahead of the deadline for
nominations later. French Finance Minister Christine Lagarde,
favourite for the job, is in Portugal while Mexico's Central Bank
Governor Agustin Carstens is in India.
He said India shared Mexico's belief that developing nations should
have a louder voice at the IMF.
The post became vacant when Dominique Strauss-Kahn quit last
month. He is currently in New York facing sexual assault charges
relating to an alleged attack on a hotel maid.
Drop out
The final selection for his replacement is expected to be announced by
30 June.
Kazakhstan Central Bank Governor Grigory Marchenko is also in the
running for the job, but former South African finance minister Trevor
Manuel has ruled himself out. Reports suggested Mr Manuel could
be a late entrant into the race, but on Friday he said he had "decided
not to avail" himself.
"Today is the closing date and I certainly haven't put my hat in the
ring."
Ms Lagarde remains the clear favourite. She was expected to learn the
outcome on Friday of an examination by three top French judges of
allegations that she abused her authority in 2008 when she granted a
large payout to a prominent businessman to settle a legal case.
However, a court has now ruled the decision on whether to pursue the
inquiry will be made on 8 July, after the appointment of the new IMF
head.
'Done deal'
Ms Lagarde has been in Brazil, India and China this week to try to
garner support amongst key developing nations. She left Beijing
for Lisbon on Thursday to take part in the African Development Bank's
annual meeting. Before the departure she said she was "very
satisfied" about her meeting with Chinese officials.
"I have a very positive feeling following these talks, but it's up to
them to convey their decision," Ms Lagarde told AFP news agency.
Mr Carstens is also continuing his tour - he is visiting India before
going to the US next week. Meanwhile, Mr Marchenko - whose
candidacy was put forward by Russia and several other former Soviet
republics - said that Ms Lagarde was the favourite to get the job.
"There's a lot of information coming from different sources, which is
implying that there's agreement between G8 countries about support for
Madame Lagarde," Mr Marchenko told Britain's Daily Telegraph newspaper.
"If countries which together have more than 60% of the vote have agreed
to support one candidate, then it's more or less a done deal," he added.
If there are only three candidates for the job, the IMF could announce
them imminently. If there are more, it has one week to announce which
three will go through to the final shortlist. Since its creation,
the top job at the IMF has gone to a European, while his or her
counterpart at the World Bank has been American. China, India,
Brazil and Russia have called for this tradition to come to an end, as
their economies are now becoming more important in the global economy.
Correspondents say that while European countries are keen to appoint a
European, there's some support for picking a leader from the developing
world.
EDITORIAL: The
Great Firewall of
China
The
communists can’t keep 1.3 billion offline forever
By THE WASHINGTON TIMES
7:25 p.m., Tuesday, May 10, 2011
When it comes to the Internet, the People's Republic of China (PRC)
would rather be safe than sorry. Beijing is taking new steps to make
certain the social networking-fueled contagion of freedom that is
sweeping the Arab world will not penetrate mainland China's great
firewall.
Rather than risk another Tiananmen Square uprising, the communist
government is mobilizing to ensure that spontaneous stirrings of
liberty won't take root among its 1.3 billion people. On May 4, Beijing
announced the formation of the State Internet Information Office, which
centralizes the duties of a dozen other government agencies to
rationalize the system and promote "healthy development" in Chinese
cyberspace. Officially, the office will secure "the people's right to
know, to participate, to express and to supervise," but in practice it
will be a one-stop shop for content control and censorship in the
Middle Kingdom. The Internet crackdown is a helpful reminder that the
world's largest country is still controlled by a Maoist totalitarian
cabal.
For decades, the PRC has been in the forefront of Internet censorship,
which is simply an extension of all the other forms of thought control
Beijing has imposed since the 1940s. Criticism of Mao Zedong or the
communist apparatus - words like "democracy," "dictatorship,"
"corruption" and "dissent" - are all banned. The word "jasmine" was
recently added to the list lest anyone use it as a code word for
freedom after Tunisia's recent "Jasmine Revolution." Twitter and
YouTube are unavailable. The party calls this "promoting harmony,"
which is a characteristic euphemism used by those who will not tolerate
any independent thinking.
The Internet has become much more than a source for information; it's
increasingly an avenue for individual interaction. Beijing's new
Internet office will monitor and control social networking, online
gaming, online chat and video services and any other way people might
attempt to commit thoughtcrime. Facebook, currently blocked in China,
is reportedly entering into an agreement with the state-approved search
engine Baidu to break into that market. This would be a good business
opportunity for Facebook, but it should be the going-in premise of any
user of the service in China that everything they post will wind up in
an Interior Ministry file. Whether this will present an increased
privacy and security risk for Facebook's users outside of the People's
Republic remains to be seen.
Maoists have reason to fear freedom. The Chinese communists face
significant risks as Internet connectivity grows in their country. For
every censorship tool deployed or channel of free expression the
authorities shut down, Chinese hackers and dissidents find ways to foil
the heavy cyberhand of the state. Like other fortifications, the
Chinese firewall is defensive; it can be undermined, vaulted or broken.
Dissidents post images of text rather than text itself to thwart
automatic machine-reading censors. Democracy activists post Chinese
characters sideways or backwards, alter or substitute parts of them to
frustrate the filters. They spontaneously come up with code names or
phrases to discuss forbidden topics or people without attracting
attention.
Beijing's censors will have a hard time staying one step ahead of those
striving for free expression. The anti-regime website China Digital
Times has posted the "Grass-Mud Horse Lexicon" (the name in Chinese is
a vulgar play on words), a compilation of "politically-charged terms
which represent the [Chinese] netizens' 'resistance discourse.' " For
example, because criticism of the PRC is forbidden, dissidents instead
excoriate "West Korea." Most online verbiage has similar
double-meanings in Chinese. That's why when someone from China posts
that all the decisions made by the Communist Party are "great, glorious
and correct," you know they mean none of the above.
© Copyright 2011 The Washington
Times, LLC. Click here for reprint permission.
China
suspends nuclear building plans
By Michael Bristow BBC News, Beijing
17
March 2011 Last updated at 04:11 ET
China has suspended approval for new nuclear power
stations following the accident at Japan's Fukushima Daiichi
plant. It will also carry out checks at existing reactors and
those under construction.
China is currently building 27 new reactors - about 40%
of the total number being built around the world.
The news comes as China grows increasingly worried about the nuclear
accident in Japan.
'Top priority'
The decision to temporarily halt approval for nuclear plants came at a
meeting of China's State Council, or Cabinet, chaired by Premier Wen
Jiabao.
"We will temporarily suspend approval for nuclear power projects,
including those that have already begun preliminary work, before
nuclear safety regulations are approved," read a statement from the
State Council.
"Safety is our top priority in developing nuclear power plants."
It went on to say that China's medium and long-term nuclear plans would
be "adjusted and improved".
China currently gets only about 2% of its electricity from nuclear
power from 13 reactors, but it has launched an ambitious project to
drastically increase those figures. It is currently building more
reactors than any other country in the world. According to the
World Nuclear Association, China wants to build a total of 110 nuclear
reactors over the next few years.
This is part of a plan to develop other energy sources - such as wind
and solar power - to reduce the country's dependence on coal, which
currently supplies about three-quarters of its energy needs.
China also recently announced that it had developed its own technology
to reprocess spent nuclear fuel, which could be used to run these new
power plants. Yang Fuqiang, an energy and climate change expert,
said the government's latest move showed it was being responsible.
"There are many nuclear power stations under construction at the moment
- that's risky. We have to go back and check each one," he said.
"If there is an accident it will be worse than in Japan because many of
the new plants are near high-population areas so we need to be careful."
China's State Council has assured people that the country will not be
affected by the radioactive leaks. But shoppers have been buying
up vast quantities of salt in many parts of the country, partly in the
belief that it could protect them against radiation. Potassium
iodide, a salt, protects the thyroid gland against radioactive
iodine. Some people also seem to believe future supplies of salt
could be contaminated by radiation leaking from the Daiichi nuclear
plant, so they are buying up stocks now.
"We need to dispel rumours. Don't let Japan's nuclear crisis become
China's salt crisis," said on online commentator.
Pharmacies are also reporting massive demand for medicine that protects
against radiation.
U.N. Food Agency Issues Warning on China Drought
NYTIMES
By KEITH BRADSHER
February 8, 2011
HONG KONG — The U.N. Food and Agriculture Organization issued an alert
Tuesday that a severe drought was threatening the wheat crop in China,
the world’s largest wheat producer, and was even resulting in shortages
of drinking water for people and livestock.
The state-run news media in China warned Monday that the country’s
major agricultural regions were facing their worst drought in 60 years
and said Tuesday that Shandong Province, a cornerstone of Chinese grain
production, was bracing for its worst drought in 200 years unless
substantial precipitation came by the end of this month.
World wheat prices are already surging and have been widely cited as
one reason for protests in Egypt and elsewhere in the Arab world. China
has been essentially self-sufficient in grain for decades for national
security reasons, and any move by China to import large quantities of
food in response to the drought could drive international prices even
higher, creating serious problems for less affluent countries that rely
on imported food.
“China’s grain situation is critical to the rest of the world — if they
are forced to go out on the market to procure adequate supplies for
their population, it could send huge shock waves through the world’s
grain markets,” said Robert S. Zeigler, the director general of the
International Rice Research Institute in Los Banos, Philippines.
The Food and Agriculture Organization said that 5.16 million hectares,
or 12.75 million acres, of China’s 14 million hectares of wheat fields
had been affected by the drought, and that 2.57 million people and 2.79
million head of livestock faced shortages of drinking water.
Chinese state news media are describing the drought in increasingly
dire terms. “Minimal rainfall or snow this winter has crippled China’s
major agricultural regions, leaving many of them parched,” reported
Xinhua, the state-run news agency. “Crop production has fallen sharply,
as the worst drought in six decades shows no sign of letting up.”
Xinhua said that Shandong Province, in the heart of the Chinese wheat
belt, had received only 1.2 centimeters, or 0.47 inch, of rain since
September but did not provide a comparison for normal rainfall for the
period.
Relatively few days of subzero temperatures and government irrigation
projects have somewhat tempered the effects of the drought so far, the
F.A.O. said in its “special alert,” but it went on to caution that
extreme cold, with temperatures of 18 degrees below Celsius, could have
“devastating” effects. Kisan Gunjal, the F.A.O. food emergency officer
in Rome for Asia alerts, said by telephone that if rain came soon and
temperatures warmed up, then the wheat crop could still be saved and a
bumper crop might even be possible.
Chinese meteorological agencies are warning of frost for each of the
next nine nights in the heart of Shandong Province, with temperatures
falling as low as minus 6 degrees Celsius (21 Fahrenheit), with very
little chance of precipitation in the next 10 days.
Mr. Gunjal said that the special alert on China was the first that the
F.A.O. has issued anywhere in the world this year. There was only one
last year, expressing “grave concern” about food supplies in the Sahel
region of Africa, notably Niger.
President Hu Jintao and Prime Minister Wen Jiabao, China’s top two
officials, made separate visits to drought-stricken areas last week,
and each called for “all-out efforts” to cope with the water shortage.
Ask international grain trade experts about China and their first
reaction is to say that they need to look up how much grain China
actually produces and trades. Yet while world food reports barely
mention China, partly because many details of the country’s agriculture
production and reserves are state secrets, China is actually enormously
important to the world’s food supply — especially if something goes
wrong.
The heat wave in Russia last summer, combined with floods in Australia
in recent months, have drawn worldwide attention to the international
wheat market because both countries have historically been big
exporters. Soaring wheat prices have been a particular trigger for
food-related protests this year, in contrast to three years ago, when
rice led food price increases and caused food riots from Haiti to
Senegal.
China’s wheat industry exists in almost total isolation from the rest
of the world, with virtually no exports or imports until last year,
when modest imports began. Yet it is enormous, accounting for one-sixth
of global output. The statistical database of the U.N. food agency
shows that in 2009, the last year available, China produced almost
twice as much wheat as the United States or Russia and more than five
times as much as Australia.
The ground in the country is so dry at the moment that from Beijing
south through the provinces of Hebei, Henan and Shandong to Jiangsu
Province, just north of Shanghai, the trees and houses are coated with
topsoil that has blown off parched fields.
China’s national obsession with self-sufficiency in food includes corn
as well, another crop that is grown and consumed entirely in China with
minimal imports or exports. Little known outside of China, the
country’s corn industry actually grows one-fifth of the world’s corn,
according to F.A.O. statistics. China’s corn crop is mostly in the
country’s northern provinces, where the drought is worst now.
Mr. Gunjal said that the success or failure of the corn crop, as well
as the rice crop, would depend mostly on rainfall this coming spring
and summer, not the shortage of rain this winter.
Winters tend to be naturally dry in southern China, the world’s largest
rice-producing region. But this winter is drier than most. Hong Kong
received 53 percent of its usual rainfall in December, and 22 percent
of its usual rainfall in January, according to the Hong Kong
Observatory.
With $2.85 trillion in foreign exchange reserves, nearly three times
the reserves of Japan, the country with the second-largest reserves,
China has ample buying power to prevent any recurrence of the periodic
famines that killed millions of Chinese as recently as the early 1960s.
“They can buy whatever they need to buy, and they can outbid anyone,”
Mr. Zeigler said. China’s self-sufficiency in grain prevented world
food prices from moving even higher when they spiked three years ago,
he said.
China had about 55 million tons of wheat in stockpiles as of last
summer, Mr. Gunjal said. That is equal to about half the annual harvest.
China is already the world’s largest importer of soybeans, which are
oilseeds, not a grain.
China buys soybeans mainly for use as animal feed, because the Chinese
diet is shifting toward more meat.
US
pomp meant to improve tone of China relations
YAHOO
By CHRISTOPHER BODEEN, Associated Press
16 January 2011
BEIJING – Chinese leader Hu Jintao is being feted in Washington this
week with a lavish state banquet at the White House and other pomp
usually reserved for close friends and allies — all intended to improve
the tone of relations between a risen, more assertive and prosperous
China and the U.S. superpower in a tenuous economic recovery.
The shaky trust between the United States and China has been eroding
recently because of an array of issues — currency policies and trade
barriers, nuclear proliferation and North Korea, and both sides seem to
recognize the need to recalibrate relations.
The U.S. is one of China's biggest markets, with $380 billion in annual
trade largely in Beijing's favor. Washington increasingly needs
Beijing's help in managing world troubles, from piracy off Africa to
Iran's nuclear program and reinvigorating the world economy.
"It is absolutely critical for the two sides to be setting a tone that
says 'hang on a second, we are committed to an effective, positive
relationship,'" said Center for Strategic and International Studies
scholar Charles Freeman, a former trade negotiator in the George W.
Bush administration.
The state banquet President Barack Obama is hosting will be Hu's first.
In the days before his visit, senior officials from both countries have
spoken publicly in favor of better ties.
Secretary of State Hillary Rodham Clinton said in a speech Friday that
the countries needed to manage their conflicts but their shared
interests were so entwined as to constitute entanglement.
"History teaches us that the rise of new powers often ushers in periods
of conflict and uncertainty," Clinton said. "Indeed, on both sides of
the Pacific, we do see trepidation about the rise of China and the
future of the U.S.-China relationship. We both have much more to gain
from cooperation than from conflict."
Chinese officials have emphasized what they see as common concerns
while acknowledging the complexity of the relationship.
"When the relationship is strained we need to bear in mind the larger
picture and not allow any individual issue to disrupt our overall
cooperation," Vice Foreign Minister Cui Tiankai said in a speech Friday.
Such maxims, however, don't apply to issues China defines as its "core
interests," including Taiwan, Tibet, and the overarching authority of
the Communist Party. That's a condition Hu's visit won't change.
Hu, whose four-day trip starts Tuesday, is expected to talk up China's
intended peaceful rise in a speech to business leaders and
opinion-makers in Washington on Thursday and to highlight the benefits
of China's market and investment when visiting Chicago.
Aware of China's plummeting image in American opinion, Chinese Foreign
Ministry functionaries have in recent weeks been looking for ways to
make the usually stiff Hu, and China as a country, appear more human,
something akin to reformist patriarch Deng Xiaoping's donning a
10-gallon hat in Houston in 1979 just after the opening of diplomatic
relations.
For the protocol-obsessed Chinese leadership, a highlight of the visit
will be Wednesday's state banquet — an honor denied Hu on his last trip
to the White House in 2006. President George W. Bush thought state
banquets should be reserved for allies and like-minded powers and
instead gave Hu a lunch. Even worse, a member of Falun Gong, the
spiritual movement banned by China, disrupted Hu and Bush's joint
appearance, and an announcer incorrectly called China "The Republic of
China," the formal name of democratically ruled Taiwan.
In this visit, no major agreements are expected. Talks over a joint
statement ran aground until last-minute negotiations in Beijing last
week. But the shared recognition to put things right and the bumpy
relations of the last year augur for a better outcome.
The recent disputes make the summit more necessary than ever, said Shi
Yinhong, professor of international relations at Beijing's Renmin
University.
"If you look back to relations over the last year, any progress is
significant," he said.
A successful visit also stands to raise Hu's standing domestically as
he heads toward retirement late next year and seeks to place his
political proteges in positions of influence. "A demonstration that Hu
can handle the U.S. well and show that China is now well respected by
Washington should help Hu to consolidate his legacy," said Oxford
University China scholar Steve Tsang.
Still more difficult will be stopping the larger drift in relations
amid the countries' changing fortunes. Beijing feels its economic,
military and diplomatic strength entitles it to more deference while
Washington tries to shore up its superpower authority, forging
alliances and ties with other countries amid the changing global order.
While the U.S. is weighted down by high unemployment, massive budget
deficits and sluggish growth, China has roared ahead, with the economy
expanding 9.6 percent in the third quarter of last year.
China now holds the world's largest foreign currency reserves at $2.85
trillion and a major chunk of U.S. government debt. At current rates,
economists estimate China will overtake the U.S. as the world's largest
economy within 20 years, possibly by the end of this decade. That
transition could be bumpy, with China's authoritarian one-party
communist political system and sense of historical grievance setting it
at odds with the democratic West.
Feeling its oats, Beijing has largely rebuffed U.S. appeals for help in
reining in bellicose North Korea, curbing Iran's nuclear program and
faster appreciation of China's currency and dismantling of trade
barriers. Chinese officials and the nationalistic state-run media have
criticized Washington's renewed attention to Japan, South Korea and
Southeast Asia, its arms sales to Taiwan and its continued naval
patrols in the Yellow and South China seas as attempts to constrain
China's influence in its backyard.
Chinese officials have accused the U.S. of orchestrating the awarding
of the Nobel Peace Prize to imprisoned Chinese dissident Liu Xiaobo.
And just last week, Chinese military commanders greeted U.S. Defense
Secretary Robert Gates' offer for closer military dialogue by sending a
prototype for a new stealth fighter on its first test-flight.
In recent months, about the only thing the two seem to have agreed on
is that the U.S. and China did not have enough common ground to form a
Group of 2, or "G-2", to solve the world's troubles.
The U.S.-China relationship "is as important as any bilateral
relationship in the world," Clinton said Friday. "But there is no such
thing as a G-2. Both of our countries reject that concept."
China vows lending control to tame inflation
YAHOO
Mon Dec 27,2010 6:33 am ET
BEIJING (Reuters) – China's central bank took aim at inflation once
again on Monday by saying it will control lending and money growth in
the world's second-biggest economy to head off price pressures and
asset bubbles.
In a statement on the central bank's website (www.pbc.gov.cn), Hu
Xiaolian, a deputy governor, said China had been normalizing policy and
will explore new ways to manage excess cash, which is seen as a major
driver behind 28-month high inflation.
Her remarks reinforced statements from China's top leaders that the
task of taming inflation will be a priority for Beijing next year.
"An implementation of prudent monetary policy is helpful in
strengthening the management of inflationary expectations and in
fending off asset bubbles," Hu said.
On Saturday -- Christmas Day -- the central bank surprised investors
with a 25-basis-point rate rise in benchmark deposit and lending rates,
its second increase in just over two months.
Hu reiterated the central bank's determination to drain excess cash
from the financial system by using all tools at its disposal: interest
rates, reserve requirement ratios, open market operations and more.
"We will explore new tools ... to keep a good control on the gate of
liquidity," she said, but did not indicate what these might be.
A steady stream of anti-inflation talk from the Chinese central bank
has led many investors to bet on more rate increases in 2011.
A Reuters poll showed investors see the benchmark one-year deposit rate
rising to 3.25 percent by the end of next year, from 2.75 percent now.
The specter of more tightening cast a pall over Chinese stocks on
Monday, though investors abroad were more sanguine, in part due to
confidence that China's steady tightening is a sign of solid growth in
its vast economy.
In a separate statement, the monetary policy committee within the
central bank noted China's economic resilience, but with a touch of
caution.
"The improving trend in our economy is solidifying and the financial
system is working smoothly," the committee said after a quarterly
meeting.
"But it is still a pressing task to manage credit, money and liquidity
as well as cut financial risks," it said.
The committee has no decision-making powers within the central bank.
The central bank in turn has no autonomy over monetary policy and any
move on interest rates has to be approved by the highest echelons of
power within the government.
China to Tighten Monetary
Policy Next Year
NYTIMES
By EDWARD WONG
December 3, 2010
BEIJING — China’s top leaders announced Friday that the country will
tighten monetary policy next year, a sign that the leaders are
increasingly concerned about inflation and an overheated economy even
as other nations, including the United States, continue to grapple with
a global recession.
The announcement was made in an article by Xinhua, China’s official
news agency. It reported that the Politburo, the elite nine-member team
at the top of the party hierarchy, had decided that China’s monetary
policy should shift “from relatively loose to prudent next year.” The
article also said China “will continue its proactive fiscal policy,”
meaning that investment spending would not be severely curbed.
China’s economy has continued to grow rapidly, bolstered in part by an
enormous government stimulus package and liberal lending by state banks
following the onset of the global financial crisis in late 2008. The
move to rein in liquidity and bank lending, presumably through interest
rate increases and other means, indicates that Chinese leaders feel
confident enough in prospects for future growth that they can afford to
cool down the economy.
The Xinhua article did not discuss the implications of a tighter
monetary policy for the value of the renminbi. But one reason China's
monetary policy has been loose for the last several years has been the
central bank's large-scale issuance of renminbi so as to buy dollars.
This currency market intervention has kept the renminbi weak and has
made Chinese exports more competitive in foreign markets while making
foreign goods more expensive in China. The United States, Europe and
some developing countries have become increasingly concerned by what
some politicians say is the transfer of jobs and economic growth to
China that the relative weakness of the renminbi has caused, and the
Obama administration in particular has been putting pressure on China
to let the renminbi appreciate.
So, to the extent that tightening the money supply might mean less
dollar buying by China's central bank, the new policy could strengthen
the renminbi somewhat against the dollar and other major
currencies -- the effect China's monetary critics have been
seeking. But analysts do not expect the shift in monetary policy to
lead to significant currency appreciation.
The government reported that the consumer price index, an indicator of
inflation, rose 4.4 percent in October from the same month in 2009. The
increase was the largest in 25 months and higher than what policy
makers in Beijing are comfortable with. The government wants the
average throughout all of 2010 to be no higher than 3 percent; in May,
the index nudged up to 3.1 percent over May 2009 and has been gradually
rising since.
Some analysts say the government will raise interest rates throughout
2011 to curb spending.
In October, the government slightly raised a benchmark lending rate,
apparently to slow real estate speculation. The property market in
China has been booming. Rising property prices, along with the
government stimulus money and loose bank lending, have spurred new
developments across the country, from the windswept plains of Inner
Mongolia to the tropical southern island of Hainan. Some analysts say
this has resulted in a dangerous bubble in the real estate market,
while others argue that the capacity will be put to good use.
A record $560 billion of residential property was sold in 2009, an
increase of 80 percent over 2008, according to government statistics.
Some officials in the central government have indicated they recognize
there is a risk to loose bank lending and presumably want to slow it.
Victor Shih, an associate professor at Northwestern University, has
estimated that state banks have lent $1.6 trillion to companies owned
by local governments, and that a significant portion of this is likely
to pile up as bad loans, posing a risk to state banks.
Low wages have helped to hold down inflation. But those wages, coupled
with the hot property market, mean that migrant workers from the
interior of China are less tolerant of poor work conditions on the
coasts, where many of China’s export manufacturing factories are
located. Many workers are now choosing to stay closer to home in the
interior provinces.
China Daily, an official English-language newspaper, reported on Monday
that two large manufacturing hubs, the Pearl River Delta and the
Yangtze River Delta, are experiencing severe worker shortages. The
Pearl River Delta could be short by as many as 900,000 workers, the
newspaper reported, citing a recent survey by the human resources
department of Guangdong Province.
Keith Bradsher contributed reporting
from Hong Kong.
China to play role in General Motors IPO
YAHOO
By SHARON SILKE CARTY, AP Auto Writer
13 November 2010
DETROIT – Among the banks helping General Motors with its initial
public stock offering next week are two identified by initials only:
ICBC and CICC.
Americans uncomfortable with U.S. government ownership of General
Motors may want to hear more: One of those banks is the Industrial and
Commercial Bank of China, one of China's four big central government
banks. The other, China International Capital Corp., is a joint venture
run primarily by Central Huijin Investment Ltd., an arm of the state,
and Morgan Stanley.
This is the first time Chinese government banks have participated in a
major U.S.-issued IPO, according to IPO tracking firm Dealogic. The
banks are listed as co-managers in the offering, meaning they will sell
a portion of the new shares.
Chinese automaker SAIC, GM's partner in China, is finalizing plans to
buy a roughly 1 percent stake, worth about $500 million, in GM's IPO,
the Wall Street Journal reported Friday. SAIC is owned by the Shanghai
city government.
Other foreign investors that are interested include several sovereign
wealth funds located in the Middle East and Asia. The Journal says
those funds, which manage the finances of royal families and some
nations, could invest $1 billion in GM's IPO. There could be
political backlash for President Barack Obama, who has spent the past
week in Asia addressing economic issues, like currency exchange
differences between the U.S. and China. Obama has argued that China
artificially deflates its currency, the yuan, in an attempt to make its
exports cheaper.
Many Americans were unhappy when the U.S. bailed out GM, calling the
company "Government Motors."
GM 's Nov. 18 stock offering will reduce the U.S. Treasury's stake in
the company from 61 percent to 43 percent, and will help payback the
more than $50 billion that taxpayers invested in GM to keep it from
collapsing. More stock offerings will happen in the next year or so,
letting the government fully divest from the automaker.
"It's a very political topic, but what Americans need to remember is
that General Motors is an international company," says Rebecca
Lindland, an analyst with IHS Automotive. "If we want to get our money
back, we need to understand that they have to do business on a global
basis."
The U.S. Treasury has been clear that international investors are
welcome to invest in GM, and many outside the U.S. are considering
taking stakes in the company.
"We expect that a large and diverse group of institutional investors
will be offered an opportunity to participate, with no single investor
or group of investors receiving a disproportionate share or unusual
treatment," the Treasury said in a recent statement.
The U.S. has become a popular haven for Chinese investors, second only
to Australia in attracting Chinese stock investments, says Derek
Scissors, a research fellow at conservative think-tank The Heritage
Foundation. The first half of 2010 was a record year for China,
Scissors says. China has sunk $45 billion into investments and
engineering projects worldwide. About $1.6 billion of those investments
came to the U.S.
In China, businesses operate with the funding and blessing of the
government, says Tim Dunne, director of global automotive operations
for J.D. Power and Associates. The government behaves like an
interested shareholder, ensuring companies have competent management
and ensuring the companies boost economic growth in their regions.
Many Chinese automakers are looking for a way into the U.S. market, he
says. China is the largest car market in the world, but the U.S. is the
most profitable, he says.
"The amount of money changing hands here is much greater," he says. The
average selling price of a car in the U.S. is $27,500, compared with
about $17,000 in China. "Multiply that over millions of vehicles, and
it's quite a difference."
SAIC and GM already have a long-standing partnership in China -- GM
could not sell cars in China without partnering with a local business
-- and it's unclear what size stake SAIC may take in GM. The deal would
need Chinese government approval.
Chris Theodore, president of consulting firm Theodore &
Associates, says SAIC's investment in GM is likely an attempt to
strengthen its ties with the automaker. Theodore, who was part of a
group that tried to take over Volvo before it was sold to China's Geely
group, says SAIC isn't the kind of company that can branch out into
U.S. sales. Most of its models use GM technology and are essentially GM
cars.
"They rely on GM for a lot of their profitability," Theodore says.
Michael Maduell, president of the Sovereign Wealth Fund Institute, a
California-based group that watches sovereign wealth fund investments,
says global investors are looking at the U.S. because they believe the
overall market is undervalued. Other potential investors in GM include
Abu Dhabi's Mubadala and Singapore's Temasek, which are both known for
actively investing in companies, Maduell says.
Investors are "looking at emerging markets, like China and India, but
all those assets are overvalued," Maduell says. "America still has a
lot of fantastic investment opportunities in real estate and small- to
mid-cap stocks."
China: Boom or bust? (2)
I-BBC
Robert Peston | 07:42 UK time, Wednesday, 10 November 2010
Although it's been a trip of 18 hour working days, and hurried noodles
at midnight in a 24-hour cafe which (thank goodness) shows live
football (though I would have preferred to have missed Flappyarmski v
Andy Carroll), I'll miss China and Beijing.
It's a cliche, I know, but it's nonetheless true that it's impossible
to take your eyes off the scale of change here, or be unimpressed by it.
Which is why China optimists remain convinced that for all the
structural challenges still facing this country - the widening gap
between rich and poor, a rapidly ageing population, the tension between
growth and environmental protection, and (the theme of much of my work
on this trip) growth still too dependent on investment rather than
domestic consumption - these challenges will in time be overcome.
Along the way, however, this is a country which has a propensity to
take adverse trends close to the brink of disaster. The pumping
up of a residential property bubble, as illustrated by such phenomena
as the creation of the peopleless city (see my note on Kangbashi),
appears to be one such trend. This bubble is a consequence of the
enrichment of a new and growing middle class facing huge restrictions
on where they can invest their money.
With interest rates so low and restrictions on investing abroad, buying
new apartments is one of the few investments available to the new
monied class. But here's the thing that appears odd to
westerners: many of these property investors prefer to buy these
apartments and leave them empty rather than rent them out.
Which is why all over China, as manifested in Kangbashi in extreme
form, residential property developments have been sold, but yet remain
largely unoccupied. What will jar in buy-to-let obsessed Britain
is that large numbers of apartments can remain vacant in a country
where urbanisation, the migration of many millions of impoverished
peasants to cities, is one of the so-called mega-trends.
The explanation, according to a Tsinghua University economist, Patrick
Chovanec - corroborated by locals - is that Chinese people regard
apartments as they would cars: brand new is good and top price; used is
bad and lower price. Apparently, the moment someone moves into a
property, its price falls, because it's no longer pristine. So
property investors have little desire or incentive to rent out their
properties, because to do so would be to cut the re-sale value. Better
to keep them empty in the hope that a rising market will deliver
capital gains.
Which means there's nowhere to live for those who have only the means
to rent rather than buy - and large (but unquantified) numbers of homes
are empty. In a country where hundreds of millions still live in
poverty, this feels like something of a social tragedy, as well as a
classic market failure. There is no hard data on the number of
these vacant properties. The best way to gauge it is to travel around
almost any urban area and see how few lights are on in new developments
(not many).
I am sure that the Chinese authorities would deny that this property
bubble is a major social or economic problem. But they have recognised
it exists by making it more expensive to borrow to purchase multiple
homes.
The good news is that this bubble isn't a banking risk in the sense
that it would be in the UK or US. Many, but not all, of these
properties have been bought for cash. So if the bubble is popped, there
shouldn't be enormous losses for banks that undermine their solvency.
But of course, if the cycle of rising asset prices were to go
dramatically into reverse - and there are signs that the froth has
already come off the property market - that would cause problems for
developers and investors, which could then impair the quality of bank
loans. Anyone who says they know this is a huge accident waiting
to happen is going on hunch because - as I say - there is something of
a fog around this market.
But it would be myopic or dim to deny that a bubble - and potentially a
highly dangerous one - is the inevitable consequence of a historically
unprecedented mass movement of personal enrichment combined with severe
restrictions on how and where the newly enriched can invest their cash.
Fast train, big dam show China's engineering might
YAHOO
By ELAINE KURTENBACH, AP Business Writer
26 October 2010
HANGZHOU, China – China rolled out its fastest train yet on Tuesday and
announced that the Three Gorges Dam, the world's biggest hydroelectric
project, is now generating electricity at maximum capacity —
engineering triumphs that signal the nation's growing ambitions as its
economy booms.
The successes demonstrate how, after decades of acquiring technology
from the west, Beijing has begun to push the limits of its new
capabilities, setting the bar higher on mega-projects as it seeks to
promote the image of a powerful, modern China. But many of these
initiatives have come at great human and environmental cost, and some
have questioned whether the country fosters a sufficiently innovative
spirit to compete on the next level.
Still in the works: more nuclear power plants, a gargantuan project to
pump river water from the fertile south to the arid north, and a $32.5
billion, 820-mile (1,300-kilometer) Beijing-to-Shanghai high-speed
railway that is scheduled to open in 2012.
"We are now much faster," Railway Ministry spokesman Wang Yongping said
at Tuesday's inauguration of the super-fast line from Shanghai's
western suburb of Hongqiao to the resort city of Hangzhou. "Now other
countries are hoping to cooperate with us."
The train will cruise at a top speed of 220 mph (350 kph), making the
125-mile (200-kilometer) trip in 45 minutes.
China already has the world's longest high-speed rail network and aims
to more than double its length to 10,000 miles (16,000 kilometers) by
2020.
Chinese companies are also vying for projects overseas, including in
the U.S., which leads the world in freight railway technology but has
almost no high-speed rail expertise. That's a mark of how well and
quickly the technology has been adopted by Chinese companies, who have
traditionally only been able to compete on price in bidding for railway
and other basic infrastructure projects in the developing world.
The Three Gorges Dam has been more controversial, though the government
has relentlessly touted the $23 billion project as the best way to end
centuries of floods along the mighty Yangtze and provide energy to fuel
the country's economic boom.
The water level in the vast reservoir behind it hit its peak height of
574 feet (175 meters) at 9 a.m. on Tuesday, according to project
operator, the China Three Gorges Project Corp. The previous record was
567 feet (172.8 meters), set in 2008, the year the generators began
operating.
In the future, the water level will be adjusted depending on
flood-control needs but kept within 100 feet (30 meters) of the maximum.
While raising the water level increases the electricity production of
the dam, some geologists have warned that damming up too much water in
the reservoir carries a heightened risk of landslides, earthquakes and
prolonged damage to the river's ecology. As officials attempted to
raise water levels in the reservoir last fall, at least one town had to
evacuate dozens of residents after a hairline crack appeared on the
slopes above homes.
In addition, millions have been displaced and great swaths of
productive farmland sacrificed for dam and projects like it.
Company chairman Cao Guangjing called Tuesday's feat a "historical
milestone." He said annual power generation will reach 84.7 billion
kilowatt hours, enabling "the project to fulfill its functions of flood
control, power generation, navigation and water diversion to the full."
Average economic growth rates of more than 9 percent per year over the
past two decades have laid the foundation for rapid progress in a
growing number of fields, including launching three manned space
flights since 2003 and building a railway across the Tibetan plateau
from Beijing to Lhasa. The 2008 Beijing Olympics and this year's
mammoth Shanghai World Expo have demonstrated a growing managerial
sophistication as well as ability to build infrastructure on an
enormous scale.
But while the tremendous growth has enabled China to build big, some
wonder if it can build smart — and become a source of true innovation.
Science and technology research in the country tends to be heavily
topdown, laden with a stifling government bureaucracy. Many of China's
best scholars and scientists depart for greener pastures abroad, while
other top minds are pushed into administrative roles, leaving them
little time for research.
Although China holds the patents on the technology, design and
equipment used by the CRH380 train, some in the industry question the
degree to which China is justified in claiming the latest technology as
its own.
"Everybody knows that a lot of the core technology is European,"
Michael Clausecker, director general of Unife, the Association of the
European Rail Industry, said in a recent interview.
And despite the obvious benefits high-speed railways bring, the
replacement of slower lines with more expensive high-speed trains has
prompted complaints from passengers reluctant to pay higher fares,
especially on shorter routes.
China surprises with first rate rise since 2007
YAHOO
By Aileen Wang and David Stanway
19 October 2010
BEIJING (Reuters) – China's central bank surprised on Tuesday with its
first increase of interest rates in nearly three years, a move that
reflects its concern about rising asset prices and stubborn inflation.
It said it was raising benchmark rates by 25 basis points, taking
one-year deposit rates to 2.5 percent and one-year lending rates to
5.56 percent. The impact was felt by global markets across the
board. Oil prices fell, stock markets turned negative in Europe and the
dollar rose as investors were caught off guard by the tightening step.
"The interest rate rise is entirely outside of market expectations,"
said Zhu Jiangfang, chief economist at CITIC Securities in Beijing.
"The recent rise in headline inflation has put the real rate into
negative territory. And I think that's why the central bank needs to
raise interest rates in such a hasty way," he said.
Although announced by the People's Bank of China, the decision to
increase rates would have received approval from the highest echelons
of Chinese power, with Premier Wen Jiabao likely signing off on
it. Once a consensus has been forged in Beijing to raise or cut
rates, past experience shows that moves often come in bunches. In
the view of some, it is about time for China to embark on a more
aggressive tightening cycle. To date, it has relied on lending
restrictions and banks' reserve requirements to keep growth from
boiling over.
"Fundamentally, policy rates are just too low for an economy that's
growing around 10 percent. To avoid bigger distortions, China needs to
start moving rates to more appropriate levels," said Rob Subbaraman, an
economist with Nomura in Hong Kong.
"China's economy looks as though it's decoupling from other major
economies, and its policies should as well," he said.
DEBATED BUT UNEXPECTED
A number of leading economists, including some advisers to the central
bank, have urged an increase in deposit rates to keep savers' returns
in positive territory. China reported consumer inflation of 3.5
percent in the year to August and economists expect that the pace
climbed to 3.6 percent in September. Still, the increase in rates
is surprising given that several top leaders have recently expressed
confidence that inflation is under control, and have said that higher
rates would potentially suck in speculative capital from abroad.
"They did it now likely because Thursday's GDP and CPI data is too
strong for them," said Dariusz Kowalczyk, senior economist at Credit
Agricole CIB in Hong Kong.
China is due to report third-quarter GDP and a suite of economic data
for September on Thursday. The consensus forecast is that economic
growth slowed to 9.5 percent year-on-year last quarter, down from 10.3
percent in the second quarter. Economists polled by Reuters last
month had expected an extended period of interest rate stability in
China, with no increase until the second quarter of 2011.
Propelled in part by these expectations of low rates, Chinese asset
prices have shown signs of taking off.
The Shanghai stock index, a laggard for much of this year, has jumped
nearly 16 percent in the past nine trading days. And despite a
months-long campaign to clamp down on the real estate market, housing
inflation has started to perk up again.
"This is a bucket of cold water for the market," said Zhang Yuheng, an
analyst with Capital Securities in Shanghai. "The hike itself is not a
big one, but the psychological impact is big as the expectations for
more rate hikes will appear."
Don’t Blame China, Blame
Congress
NATIONAL REVIEW editorial
October 4, 2010 4:00 A.M.
Most members of Congress appear to know two things about China’s
relationship with the United States: We buy a lot of their stuff, and
they buy a lot of our debt. A few members even seem to understand the
connection between the two: Put simply, China takes the money it makes
selling us cheaply manufactured goods and lends it back to us at a low
rate of interest. But most members of the House either don’t understand
that connection or don’t care, because they passed a bill last week
aimed at raising the price of the products we buy from China, on the
theory that doing so would bring manufacturing jobs back to the United
States. Would it?
In a word, no. Advocates of this policy have, wittingly or not, bought
into a myth about why we import so much stuff from China. According to
the myth, China is outcompeting us on the manufacturing front because
it keeps its currency, the renminbi, artificially undervalued, thus
making its exports cheaper in dollar terms than they should be. But how
do these advocates know what the renminbi should be worth? Well, they
know it should be worth more than it is: China’s decision to recycle
the dollars we spend on their exports — using those dollars to buy U.S.
Treasury bonds — keeps the value of the renminbi low and stable
relative to the dollar. If the Chinese followed the more conventional
approach of converting those dollars into their own currency, then its
value would appreciate because of the increase in demand for renminbi.
This would — theoretically — make the stuff we import from China more
expensive in dollar terms and the stuff we sell to them relatively
cheaper.
This would — again, theoretically — create jobs in the United States,
because the Chinese would buy more of our exports and, less plausibly,
corporations would source more of their low-value-added manufacturing
in the United States. The theory breaks down, however, when one
considers that what we buy from China and what we sell to China are
very different things. Consider the facts: Over the last decade, as
U.S. manufacturing employment fell, U.S. manufacturing output went up,
indicating a shift from low-value-added to high-value-added
manufacturing. Unemployment remained low as workers migrated to the
service sector, while low-value-added manufacturing moved overseas —
not just to China, but to other developing countries where lower costs
vis-à-vis U.S. manufacturers offered a comparative advantage. If
China’s currency policy has given it any trade advantage at all, it has
mostly been an advantage over other low-wage countries that export to
the United States.
A crackdown on China would be a full-employment plan for other
developing countries: Unless we hit them all with tariffs, it would
probably not create a single low-skilled job here. It might destroy a
few, however, as retailers would be forced to make costly adjustments
and establish new lines of trade with Vietnam and Bangladesh. How about
exports? Here the case is a bit more plausible, but only a bit: Demand
for the kind of high-value-added manufactured products that the Chinese
buy from us — airplanes from Boeing, construction equipment from
Caterpillar — will not be much affected. The manufacturers of those
products are much more worried about the possibility of a trade war
with China than they are about the value of the renminbi: Just ask them.
Meanwhile, the effects of actually enacting sweeping tariffs on Chinese
imports are unknowable: If China decided to defy the sanctions and
refused to let its exchange rate float, then we suspect the Chinese
government would impose retaliatory countermeasures, leading to
widespread layoffs at the aforementioned U.S. exporting concerns. If,
on the other hand, China succumbed to the pressure to let its currency
appreciate, then its own export-oriented businesses would be forced to
cut back as they lost business to manufacturers in other low-wage
countries. It’s hard to imagine that the consequences for China —
social upheaval, economic ruin, and rampant speculation as financiers
took advantage of the suddenly floating exchange rate — would be good
for a United States interested in international economic accord and
global stability. The consequences could be more pedestrian, though
contrary to the intentions of Congress: The Cato Institute’s Dan
Ikenson has pointed out that the Chinese let the renminbi appreciate by
over 20 percent between 2005 and 2008, and the U.S. trade deficit with
China continued to increase.
All this is to say nothing of what might happen to the other side of
the equation: What happens to long-term interest rates if China stops
lending us our own money back? This question raises another one: At a
time when the Federal Reserve has more than doubled its balance sheet —
when the dollar is taking a beating and the gold price is spiking as
the central bank contemplates further monetary easing — what right does
the United States have to call anyone else a currency manipulator?
Having discovered that we cannot borrow and spend and print our way out
of our own past policy mistakes (and lacking the political will to give
the private sector room to breathe by cutting spending and taxes), the
U.S. government is desperate for something else to boost the economy,
and a growing number of policymakers appear to have decided that we
must export our way out of the crisis. Thus our ultimatum to the
Chinese: Save us at your own expense, or else! That is a disgraceful
admission of weakness, and a fitting coda for one of the worst
Congresses in recent memory.
Steelworkers
Accuse China of
Violating Trade Rules
NYTIMES
By KEITH BRADSHER
September 9, 2010
HONG KONG — The United Steelworkers union plans to file a legal case
with the Obama administration on Thursday, accusing China of violating
World Trade Organization rules by subsidizing exports of clean energy
equipment, the union’s president and his advisers said.
The filing, more than 5,000 pages long and 18 inches thick, contends
that the central government in Beijing and China’s provincial
governments have used land grants, low-interest loans and dozens of
other measures that violate W.T.O. rules.
The union says the violations have helped Chinese companies expand
their share of the world market for wind turbines, solar panels,
nuclear power plants and other clean energy equipment, at the expense
of jobs in the United States and elsewhere. The filing asks the Obama
administration to begin formal proceedings at the W.T.O. in Geneva to
force China to repeal the subsidies.
“Unless China’s policies are urgently addressed, the U.S. may never get
a fair shot at making the green technologies of the future,” the filing
says.
Trade lawyers in Washington have been saying for months that China’s
export subsidies for clean energy were so extensive that sooner or
later, they expected a trade case to be filed. But multinational
companies and trade associations in the clean energy business, as in
many other industries, have been wary of doing so, fearing Chinese
officials’ reputation for retaliating against joint ventures in their
country and potentially denying market access to any company that takes
sides against China.
With clean energy a stated priority of the Obama administration, as a
jobs generator and for environmental reasons, the union says it hopes
to gain support for its case by injecting the trade issue into the
autumn Congressional campaigns.
It is filing the case under a 1974 American trade law that sets an
initial deadline of 45 days for the administration to respond, which
would be Oct. 24, a week and a half before the elections. The
administration is allowed under the law to announce that it is
extending the deadline — although any such delay could have political
ramifications just before the elections.
“Once we file the case, we’re going to take it to the rest of the
public,” said Leo W. Gerard, president of the 850,000-member
Steelworkers union. “We’re going to mobilize around this.”
The filing of the trade case comes at a time of mounting trade and
currency frictions with China. Friday morning in Beijing (late Thursday
night in New York) China is expected to announce that in August it ran
another especially large trade surplus, possibly exceeding $25 billion.
President Obama imposed steep tariffs a year ago on tire imports from
China, a decision that China is itself now challenging before a W.T.O.
panel, which is expected to give an initial ruling this month. The
Commerce Department has separately granted dozens of requests to impose
tariffs on very narrow categories of imports from China, like steel
wire strands for pre-stressed concrete, after finding evidence that
they were subsidized, or dumped, in the American market.
But special tariffs and other import restrictions still cover less than
3 percent of American imports from China. Unions and many Congressional
Democrats have contended that the administration should be more
assertive in forcing China to honor previous free trade commitments.
But the United States government has long depended on companies to
gather commercial information for trade cases, which companies have
been hesitant to do.
China’s manufacture of solar panels, wind power turbines and other
clean energy products — with the strong support of its government,
through land grants and low-interest loans — has turned that nation
into the global leader in those markets. China has more than one
million jobs in all clean energy industries combined.
Meanwhile, American and other Western manufacturers of solar and wind
power equipment have struggled to compete. Some American clean energy
companies have scaled back production and laid off workers, while
moving operations to China.
Mr. Obama called in his State of the Union address in January for the
United States to become a leader in green energy instead of
relinquishing the industry to foreign competitors, including China. But
China continues to gain market share in practically every category of
clean energy technologies, including solar panels and high-speed trains.
“This has the potential to be the tipping point on whether there can be
long-term economic renewal in America,” Mr. Gerard said.
The United Steelworkers union represents employees in a wide range of
energy-related jobs, including manufacturers who make the steel for
wind turbine towers and nuclear reactors, and glassworkers who make
solar panels and various kinds of incandescent and halogen light bulbs.
The union also represents workers involved in the assembly of wind
turbine towers and those who make gears, valves, engines and other
components of clean energy equipment. All those job categories have had
increased competition from China and other countries in recent years.
Another big American union, the International Brotherhood of Electrical
Workers, with more than 700,000 members, is also involved in the
installation of many clean energy systems, although the Steelworkers
have not invited it or other unions to participate in their case.
The Chinese mission to the W.T.O., part of China’s commerce ministry,
declined to respond this week to a series of faxed questions on whether
China subsidizes clean energy exports. Those questions were submitted
by The New York Times last week, in reporting for another article,
before it learned of the United Steelworkers’ case.
China’s commerce ministry in Beijing has not responded to similar
questions The Times first submitted in early June.
Chinese energy-policy makers, though, have said that developing a
strong energy industry is a national priority that contributes to
Chinese energy security. They say China is helping to address global
warming by rapidly increasing its output of renewable energy equipment.
Besides Chinese government assistance to clean energy exporters in the
form of free or discounted land for manufacturing plants and low-cost
loans, the Steelworkers say China has broken W.T.O. rules by tightly
restricting the export of so-called rare earth elements needed for the
manufacture of wind turbines, solar panels and energy-saving compact
fluorescent bulbs.
The filing also accuses the Chinese government of forcing foreign clean
energy companies to license their technology to local partners as a
condition of entry to the Chinese market.
Premier trade law firms in Washington like Dewey LeBoeuf have been
gathering extensive files since early spring in preparation for
possible cases by the clean energy industry.
In the 1980s, many big American companies like Kodak and industrial
groups like the semiconductor industry were willing to give legal
backing and financial support for trade cases against Japan, when it
was still an ascending industrial power. But these days, when facing
China, multinationals have been reluctant to file similar cases.
The difference is that China, unlike Japan in the ’80s, has encouraged
the opening of many foreign-owned factories, making multinationals
loath to file trade cases that could alienate Chinese officials and
make it harder to do business there.
One of the world’s largest manufacturers of solar panels, SolarWorld of
Germany, is an exception in that it is willing to criticize China. It
has not moved its European or American operations to China — at least
not yet — because the company has a corporate philosophy of
manufacturing solar panels in the markets where it sells them.
“China is cordoning off its own solar market to fend off international
competition while arming its industry with bottomless piles of
subsidies and boundless lines of credit,” said Frank A. Asbeck, the
chairman and chief executive of SolarWorld.
The German solar industry association has retained a law firm to review
whether to file a trade case against Chinese exporters of solar panels,
said Mr. Asbeck, a member of the association’s board.
In the United States, the solar industry has been largely quiet on
trade actions and has not retained a law firm to advise it on the
feasibility of a trade case.
So while there have been months of back-channel discussions in the
United States among lawyers, administration officials and corporate
executives about China’s clean energy policies, those discussions have
not led to the filing of any trade cases.
Section 301 of the 1974 trade law, the provision cited by the
steelworkers’ union, gives legal standing to unions as well as
corporations to file trade cases. The law provided the legal basis for
threats of unilateral American trade restrictions in many
confrontations with Japan and South Korea through the 1980s and early
1990s.
Currently, the Steelworkers is one of the few big unions with the legal
resources to challenge China — and it has nothing to fear but the loss
of further jobs in the United States.
Stewart & Stewart, a Washington law firm known for filing
antidumping cases at the Commerce Department, prepared the legal brief
for the union. The union’s trade strategist for the case is Michael R.
Wessel, best known as the trade adviser for many years to the former
House Democratic leader Richard A. Gephardt, who ran for president in
1988 on a platform calling for a more assertive American trade strategy
Lead Poisoning in China: The Hidden Scourge
NYTIMES
By SHARON LaFRANIERE
June 15, 2011
MENGXI VILLAGE, China — On a chilly evening early last month, a
mob of more than 200 people gathered in this tiny eastern China village
at the entrance to the Zhejiang Haijiu Battery Factory, a maker of
lead-acid batteries for motorcycles and electric bikes. They shouldered
through an outer brick wall, swept into the factory office and, in an
outpouring of pure fury, smashed the cabinets, desks and computers
inside.
News had spread that workers and villagers had been poisoned by lead
emissions from the factory, which had operated for six years despite
flagrant environmental violations. But the truth was even worse: 233
adults and 99 children were ultimately found to have concentrations of
lead in their blood, up to seven times the level deemed safe by the
Chinese government.
One of them was 3-year-old Han Tiantian, who lived just across the road
from the plant. Her father, Han Zongyuan, a factory worker, said he
learned in March that she had absorbed enough lead to irreversibly
diminish her intellectual capacity and harm her nervous system.
“At the moment I heard the doctor say that, my heart was shattered,”
Mr. Han said in an interview last week. “We wanted this child to have
everything. That’s why we worked this hard. That’s why we poisoned
ourselves at this factory. Now it turns out the child is poisoned too.
I have no words to describe how I feel.”
Such scenes of heartbreak and anger have been repeated across China in
recent months with the discovery of case after case of mass lead
poisoning — together with instances in which local governments tried to
cover them up.
In the past two and a half years, thousands of workers, villagers and
children in at least 9 of mainland China’s 31 province-level regions
have been found to be suffering from toxic levels of lead exposure,
mostly caused by pollution from battery factories and metal smelters.
The cases underscore a pattern of government neglect seen in industry
after industry as China strives for headlong growth with only embryonic
safeguards.
Chasing the political dividends of economic development, local
officials regularly overlook environmental contamination, worker safety
and dangers to public health until forced to confront them by episodes
like the Haijiu factory riot.
A report by Human Rights Watch released Wednesday states that some
local officials have reacted to mass poisonings by arbitrarily limiting
lead testing, withholding and possibly manipulating test results,
denying proper treatment to children and adults and trying to silence
parents and activists.
“What we are trying to underscore is how little has been done to
address the massive impact of lead pollution in China,” Joe Amon, the
organization’s health and human rights director, said in an interview.
“It really has affected a whole generation of kids.”
In more developed nations, where lead pollution has been tightly
regulated for decades, a pattern of lead poisoning like China’s would
most likely be deemed a public-health emergency.
High levels can damage the brain, kidney, liver, nerves and stomach
and, in extreme cases, cause death. Children are particularly
susceptible because they absorb lead more easily than adults.
“No blood lead level has been found to be safe for a child,” Dr. Mary
Jean Brown, chief of the lead poisoning prevention branch of the
Centers for Disease Control and Prevention, said in an interview last
week.
Here, Chinese leaders have acknowledged that lead contamination is a
grave issue and have raised the priority of reducing heavy-metal
pollution in the government’s latest five-year plan, presented in
March. But despite efforts to step up enforcement, including suspending
production last month at a number of battery factories, the
government’s response remains faltering.
At a meeting last month of China’s State Council, after yet another
disclosure of mass poisoning, Prime Minister Wen Jiabao scolded
Environmental Minister Zhou Shengxian for the lack of progress,
according to an individual with high-level government ties who spoke on
the condition of anonymity.
The government has not ordered a nationwide survey of children’s blood
lead levels, so the number of children who are at risk is purely a
matter of guesswork. Mass poisonings like that at the Haijiu factory
typically come to light only after suspicious parents seek hospital
tests, then alert neighbors or co-workers to the alarming results.
The few published studies point to a huge problem. One 2001 research
paper called lead poisoning one of the most common pediatric health
problems in China. A 2006 review of existing data suggested that
one-third of Chinese children suffer from elevated blood lead levels.
The state Health Ministry said in 2006 that a nationwide test for
children was unnecessary because their blood lead levels had been
falling. But since then, a new source of lead pollution — factories
that produce lead-acid batteries for electric bikes, motorcycles and
cars — has emerged with a vengeance.
The industry has grown by 20 percent a year for the past five or six
years, and is expected to expand further, according to Wang Jingzhong,
vice director of the China Battery Industry Association. China now has
some 2,000 factories and 1,000 battery-recycling plants. For
regulators, Mr. Wang said, “It is a chaotic situation.”
Enforcement is spotty at best. Shen Yulin, the environmental protection
director for Deqing County, where the Haijiu factory is located, said
65 inspectors were responsible for a region of nearly 400 square miles,
with more than 2,000 factories.
Haijiu breezed through six years of inspections, even though many
workers say they were repeatedly hospitalized for lead poisoning. Only
after last month’s protest did authorities criticize the plant for a
host of violations and order the plant closed and production lines
razed.
At a press conference this month, Li Ganjie, the vice minister for
environmental protection, said that every suspected case of lead
poisoning is fully investigated and that “the people involved, whether
they are children or adults, are well-tested and treated.”
Interviews over the past month with 20 families in Henan and Zhejiang
Provinces indicate otherwise. Near Jiyuan City, in Henan Province,
nearly 1,000 children from 10 villages were found to have elevated
blood lead levels in 2009. Government officials ordered the children
treated, families relocated and the smelters cleaned up.
But a recent visitor found children still playing in the streets of one
village literally in the shadow of a privately-owned lead smelter that
nightly belches plumes of dark smoke. In interviews, their parents and
grandparents said that local hospitals now refuse to administer new
blood lead level tests, even if the families pay out of their own
pockets.
“The children are not healthy. We don’t know how sick they are, and we
can’t find out,” said one 66-year-old villager whose two grandsons were
found to have blood lead levels two and three times above the norm when
tested in 2009.
Local officials appeared determined to suppress such complaints. Within
a few hours of a visitor’s arrival this month, Jiyuan City’s propaganda
chief appeared with three carloads of plainclothes officers, bringing
all reporting and interviewing to a screeching halt.
That would not surprise Ye Cai’e, who lives near the Suji battery
factory in Zhejiang Province, 200 miles southeast of Mengxi. After
tests showed 53 children and 120 adults suffered from excessive lead
levels, Ms. Ye said that local officials said: “Whoever makes noise
will not receive compensation or medical treatment.”
Migrant workers and their families were also left out of the program,
villagers said. Yang Fufen, 40, said her 2-year-old son tested at more
than three times the allowable blood lead level in March, but has
received no medical attention, apparently because her legal residence
is elsewhere.
At the Haijiu Battery Factory, which exports to the United States,
regulation of lead emissions was not so much lax as nonexistent.
The factory’s opening in 2005 brought more than 1,000 jobs. Local
authorities allowed the plant to expand to within a rice paddy of the
village. They also ignored the breakdown of ventilation equipment and
the building of a hostel for workers and their spouses and children on
factory grounds.
Workers say managers simply slowed down production lines when
inspectors came. One worker said he had watched a supervisor cover a
device that tests for lead emissions in the air with his cap, then
whisk the inspectors away for tea.
It did not take long for problems to surface. Workers said they
repeatedly had tested above the occupational limit for blood lead
levels and were sent to the local hospital, where drugs were injected
intravenously to reduce the level and toxicity of lead in their bodies.
Zhou Zuyin, 42, said he was hospitalized for treatment of lead
poisoning every year for four years, returning each time to his job of
smoothing the edges of lead sheets. Even after a test revealed liver
damage, he said, “The factory said it was normal.”
He said his biggest worry now is his 13-year-old son’s health. A blood
test showed the boy had nearly double what China considers a safe lead
level. “He is getting more and more scared,” Mr. Zhou said. “I don’t
know what to say to him. I just feel totally powerless.”
Zhao Guogeng, vice president of Zhejiang Haijiu Battery Co., said the
company is covering the medical bills of lead victims. Authorities said
the factory’s legal representative has been arrested and eight
officials disciplined. “This will never happen again,” Zhang Linhua,
spokesman for Deqing County, declared last Thursday.
Maybe not there. But not three days later came a dispatch from a town
55 miles southeast of Mengxi Village: 103 children and 26 adults were
found to be severely poisoned by lead pollution from tinfoil processing
plants, according to China’s official Xinhua news agency. Moderately
poisoned: 494.
Chiyin Sim contributed
reporting from Mengxi and Jonathan Ansfield contributed reporting from
Beijing. Mia Li, Shao Heng and Adam Century contributed research from
Beijing.
China overtakes Japan in
2Q as world's No. 2 economy amid slowdown in recovery
Hartford Courant
TOMOKO A. HOSAKA, Associated Press Writer
10:18 AM EDT, August 16, 2010
TOKYO (AP) — Japan lost its place as the world's No. 2 economy to China
in the second quarter as receding global growth sapped momentum and
stunted a shaky recovery.
Gross domestic product grew at an annualized rate of just 0.4 percent,
the government said Monday, far below the annualized 4.4 percent
expansion in the first quarter and adding to evidence the global
recovery is facing strong headwinds.
The figures underscore China's emergence as an economic power that is
changing everything from the global balance of military and financial
power to how cars are designed. It is already the biggest exporter,
auto buyer and steel producer, and its global influence is expanding.
World stock markets mostly fell Monday on Japan's second-quarter
figures. Japan's benchmark Nikkei 225 stock index fell 0.6 percent,
hovering close to a 13-month low. In Europe, the FTSE 100 index of
leading British shares was down 0.6 percent while France's CAC-40 fell
1 percent. Germany's DAX, however, was up 0.1 percent.
In early morning trading on Wall Street, the Dow Jones industrial
average fell 60.02, or 0.6 percent, to 10,242.83.
China has been a major force behind the world's emergence from deep
recession, delivering much-needed juice to the U.S., Japan and Europe.
Tokyo's latest numbers, however, suggest that Chinese demand alone may
not be enough for Japan or other economic giants.
"Japan is the canary in the gold mine because it depends very much on
demand in Asia and China, and this demand is cooling quite a bit," said
Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo.
"This is a warning sign for all major economies that just focusing on
overseas demand won't be sufficient."
China has surpassed Japan in quarterly GDP figures before, but this
time it's unlikely to relinquish the lead.
China's economy will almost certainly be bigger than Japan's at the end
of 2010 because of the huge difference in each country's growth rates.
China is growing at about 10 percent a year, while Japan's economy is
forecast to grow between 2 to 3 percent this year. The gap between the
size of the two economies at the end of last year was already narrow.
Japan's nominal GDP, which isn't adjusted for price and seasonal
variations, was worth $1.286 trillion in the April-to-June quarter
compared with $1.335 trillion for China. The figures are converted into
dollars based on an average exchange rate for the quarter.
Faced with feeble growth, Japan's government is considering fresh
stimulus measures to support the economy, likely including ways to
boost consumer spending on eco-friendly products, Kyodo News agency
said late Monday, quoting unnamed government sources.
Japan has held the No. 2 spot after the U.S. since 1968, when it
overtook West Germany. From the ashes of World War II, the country rose
to become a global manufacturing and financial powerhouse. But its
so-called "economic miracle" turned into a massive real estate bubble
in the 1980s before imploding in 1991.
What followed was a decade of stagnant growth and economic malaise from
which the country never really recovered. Prime Minister Naoto Kan now
faces a long list of daunting problems: a rapidly aging and shrinking
population, persistently weak domestic demand, deflation, a strong yen
and slowing growth in key export markets.
In contrast, China's growth has been spectacular, its voracious
appetite fueling demand for resources, machinery and products from the
developing world as well as rich economies like Japan and Australia.
China is Japan's top trading partner.
China's rise has produced glaring contradictions. The wealth gap
between an elite who profited most from three decades of reform and its
poor majority is so extreme that China has dozens of billionaires while
average income for the rest of its 1.3 billion people is among the
world's lowest.
Japan's people still are among the world's richest, with a per capita
income of $37,800 last year, compared with China's $3,600. So are
Americans at $42,240, their economy still by far the biggest.
"We should be concerned about per capita GDP," said Kyohei Morita,
chief economist at Barclays Capital in Tokyo. China overtaking Japan
"is just symbolic," he said. "It's nothing more than that."
But the symbolism may be exactly the "wake-up call" Japanese leaders
need, said Schulz of the Fujitsu Research Institute. "Japan is always
strangely inward looking," he said. "And nobody is doing anything about
it."
Japan's people appear resigned to the power shift. A national poll
conducted earlier this year by the Asahi, one of Japan's biggest
newspapers, showed a roughly equal split between those that believed
Japan's fall to No. 3 posed a major problem and those who did not. More
than half of the 2,347 respondents said Japan does not need to be a
global superpower.
The country's annualized growth in the second quarter was also sharply
below expectations of 2.3 percent in a Kyodo news agency survey of
analysts. On a quarterly basis, Japan's GDP — or the total value of the
nation's goods and services — grew 0.1 percent from the January-March
period, the Cabinet Office said.
Consumer spending, which accounts for about 60 percent of GDP, was flat
from the previous quarter, the figures showed. Capital spending by
companies rose 0.5 percent, while public investment fell 3.4 percent.
The outlook for the third quarter is uncertain. Private consumption
appears to be solid so far, helped in part by unusually hot weather,
said Masamichi Adachi, senior economist at JP Morgan Securities Japan.
But the slowing global economy is weakening exports and production.
A stronger yen, which hit a 15-year high against the dollar last week,
also poses a major risk for the country's export-driven economy. Yen
appreciation reduces the value of repatriated profits for companies
like Toyota Motor Corp. and Sony Corp. and makes their products more
expensive abroad.
The currency worries led Finance Minister Yoshihiko Noda to say last
week that he is closely monitoring foreign exchange rates. Bank of
Japan Gov. Masaaki Shirakawa released a similar statement to try to
calm markets.
Yuan gains but China warns it won't fix
economy
YAHOO
By ELAINE KURTENBACH, AP Business Writer
21 June 2010
SHANGHAI – China followed through Monday on its pledge to allow greater
flexibility in exchange rates, but said an appreciation in its currency
alone could not rebalance world growth as it urged world leaders to
carry out more fundamental reforms.
By late Monday, the yuan was trading at about 6.8012 to the U.S. dollar
in the spot market, strengthening from 6.8272 on Friday — as the
central bank delivered on its weekend promise to give up the dollar peg
imposed two years ago to help Chinese exporters cope with the global
downturn. For the past two years, Beijing has kept the yuan
trading in a much narrower band around 6.83 to $1. But analysts
said the move was mainly aimed at countering criticism of Beijing's
currency policies ahead of this weekend's summit of the Group of 20
leading economies and would not result in any significant shifts in
exchange rates. The yuan is still subject to a 0.5 percent daily
trading range, limiting potential volatility.
"The yuan will gain very soon, but definitely not much. It was more of
a strategic maneuver to silence outside criticism," said Qian Qimin, a
market analyst at Shenyin Wanguo Securities, in Shanghai.
The central bank said plans to allow greater currency flexibility were
in line with China's own needs and would help Beijing fight inflation,
encourage manufacturers to improve efficiency and reduce the country's
reliance on exports as a key driver for growth. China's economy
surged 11.9 percent in the first quarter of this year and exports
jumped by nearly 50 percent over a year earlier in May, despite
expectations that Europe's debt crisis would hit demand in the
27-nation European Union, China's biggest trading partner.
"The large trade surplus gives the government confidence and room to
loosen controls over the exchange rate," Qian said, since a stronger
yuan would make Chinese exports more expensive.
The announcement by the People's Bank of China that it would revert to
relying on a basket of currencies that includes the U.S. dollar to
determine the exchange rate, rather than the dollar alone, reflects a
return to policies in force before the global financial crisis walloped
Chinese manufacturers in 2008, putting millions of workers out of their
jobs.
But while it has pledged to keep moving gradually toward more
market-based exchange rates, Beijing still insists that its policy of
keeping the currency stable is crucial for economic recovery, ruling
out any significant one-off revaluations.
"The official announcement should be interpreted first and foremost as
an important signal towards a more flexible exchange rate, rather than
a significant revaluation of the Chinese yuan," UBS economist Wang Tao
said in a report on the change.
China let the yuan to rise by about 20 percent beginning in 2005, but
halted its rise in 2008. The government sets the rate each day before
the start of trading and retains powerful tools to control its
movement. Many countries have slammed Beijing for this policy,
complaining that an undervalued yuan unfairly drives down the price of
Chinese products and makes them impossible to compete with. China
has sought to deflect this criticism, noting that the causes of the
global crisis lay well beyond its door, and a commentary Monday by the
official Xinhua News Agency said the G-20 leaders must focus on more
urgent global reforms.
"If they cannot make good use of the coming G20 summit to press ahead
with the much-needed overhaul of the global financial system, the
international community will soon find to its disappointment that its
leaders look only for red herrings, rather than real solutions, at a
time when true leadership is badly needed," it said.
Regional markets gained Monday, as investors relieved of uncertainty
over China's currency policy bought airlines and other heavyweight
shares.
"The markets were boosted because investors are becoming less risk
averse than before. They are more aggressive," said Ben Kwong Man Bun,
chief strategist for KGI Securities in Hong Kong.
While foreign manufacturers have welcomed the relief a stronger yuan
would bring, exporters in China, already operating on razor-thin
margins, were less pleased.
"The exchange rate problem is one we would have to face sooner or
later. That is a fact we have to accept," said Bai Ming, deputy general
manager of Zhejiang Mingfeng Car Accesories Co., which exports car
covers to the Americas, Europe and South Korea.
Bai, whose factory employs 950 people, said his company's export orders
were outpacing his capacity to meet them. But with labor and other
costs rising, the company will have to find a ways to stay competitive.
"What we are trying to do is to raise productivity and save costs. We
cannot just sit back and wait," he said.
Open house Sunday for new Mandarin language school in Weston
Weston FORUM
Written by Aline Weiller
Saturday, 05 June 2010 00:00
Grace Brennan, director of Happy Panda Mandarin School, will host an
open house on Sunday, June 6.
A native of China, Grace Brennan has announced the opening of Happy
Panda Mandarin School, a language instruction program based in her
Weston home. Ms. Brennan recently launched her school and is hosting an
open house on Sunday, June 6, from 2 to 4.
Ms. Brennan grew up in Shanghai, where she was a national fencing
champion at age 12. She moved to the United States in the mid-90s to
attend San Mateo College, where she majored in business and studied
English as a second language.
She later returned to Shanghai and began a career in real estate
management, then met her American husband, Jason, who worked in Hong
Kong. They married and stayed overseas until their 2004 return to the
States.
Now a mother of three, Ms. Brennan wants to bring both her native
tongue and China’s culture to her family and beyond.
“My children are my inspiration and have fueled my passion to teach
Mandarin Chinese and share my cultural traditions,” she said.
During her time in Fairfield County, Ms. Brennan has noticed a demand
for Mandarin Chinese due in part to the presence of families with
parents or adopted children of Chinese origin. And so, the Happy Panda
Mandarin School was born.
Ms. Brennan’s school incorporates aspects of Chinese culture such as
history and cooking. “You will leave Happy Panda knowing about the
Great Wall of China, how to paint with Asian writing brushes, and using
chopsticks. Our program goes beyond teaching the national language,”
said Ms. Brennan. “I want students to feel a true connection to China.”
Children four and older are eligible for the school, private lessons
are available for adults, and enrollment is year-round. Classes are 90
minutes long and are offered on Mondays, Wednesdays, and Fridays,
4-5:30. The school’s summer hours, 10-11:30 a.m., will begin Monday,
June 28. Ms. Brennan will work to accommodate adults seeking lessons at
a different time slot
Beginning, intermediate and advanced levels of instruction are offered
and the curriculum spans three months.
The Happy Panda Mandarin School is at 188 Davis Hill Road. For
additional information or to register, call Grace Brennan at
203-227-8088 or e-mail grace.brennan@yahoo.com This e-mail address is
being protected from spambots. You need JavaScript enabled to view it .
A horse of a different color...or
is it a Trojan donkey?
Cyberattack
on Google Said to Hit Password System
NYTIMES
By JOHN MARKOFF
April 19, 2010
Ever since Google disclosed in January that Internet intruders had
stolen information from its computers, the exact nature and extent of
the theft has been a closely guarded company secret. But a person with
direct knowledge of the investigation now says that the losses included
one of Google’s crown jewels, a password system that controls access by
millions of users worldwide to almost all of the company’s Web
services, including e-mail and business applications.
The program, code named Gaia for the Greek goddess of the earth, was
attacked in a lightning raid taking less than two days last December,
the person said. Described publicly only once at a technical conference
four years ago, the software is intended to enable users and employees
to sign in with their password just once to operate a range of services.
The intruders do not appear to have stolen passwords of Gmail users,
and the company quickly started making significant changes to the
security of its networks after the intrusions. But the theft leaves
open the possibility, however faint, that the intruders may find
weaknesses that Google might not even be aware of, independent computer
experts said.
The new details seem likely to increase the debate about the security
and privacy of vast computing systems such as Google’s that now
centralize the personal information of millions of individuals and
businesses. Because vast amounts of digital information are stored in
one place, popularly referred to as “cloud” computing, a single breach
can lead to disastrous losses.
The theft began with an instant message sent to a Google employee in
China who was using Microsoft’s Messenger program, according to the
person with knowledge of the internal inquiry, who spoke on the
condition that he not be identified.
By clicking on a link and connecting to a “poisoned” Web site, the
employee inadvertently permitted the intruders to gain access to his
(or her) personal computer and then to the computers of a critical
group of software developers at Google’s headquarters in Mountain View,
Calif. Ultimately, the intruders were able to gain control of a
software repository used by the development team.
The details surrounding the theft of the software have been a closely
guarded secret by the company. Google first publicly disclosed the
theft in a Jan. 12 posting on the company’s Web site, which stated that
the company was changing its policy toward China in the wake of the
theft of unidentified “intellectual property” and the apparent
compromise of the e-mail accounts of two human rights advocates in
China.
The accusations became a significant source of tension between the
United States and China, leading Secretary of State Hillary Rodham
Clinton to urge China to conduct a “transparent” inquiry into the
attack. In March, after difficult discussions with the Chinese
government, Google said it would move its mainland Chinese-language Web
site and begin rerouting search queries to its Hong Kong-based site.
Company executives on Monday declined to comment about the new details
of the case, saying they had dealt with the security issues raised by
the theft of the company’s intellectual property in their initial
statement in January.
Google executives have also said privately that the company had been
far more transparent about the intrusions than any of the more than two
dozen other companies that were compromised, the vast majority of which
have not acknowledged the attacks.
Google continues to use the Gaia system, now known as Single Sign-On.
Hours after announcing the intrusions, Google said it would activate a
new layer of encryption for Gmail service. The company also tightened
the security of its data centers and further secured the communications
links between its services and the computers of its users.
Several technical experts said that because Google had quickly learned
of the theft of the software, it was unclear what the consequences of
the theft had been. One of the most alarming possibilities is that the
attackers might have intended to insert a Trojan horse — a secret back
door — into the Gaia program and install it in dozens of Google’s
global data centers to establish clandestine entry points. But the
independent security specialists emphasized that such an undertaking
would have been remarkably difficult, particularly because Google’s
security specialists had been alerted to the theft of the program.
However, having access to the original programmer’s instructions, or
source code, could also provide technically skilled hackers with
knowledge about subtle security vulnerabilities in the Gaia code that
may have eluded Google’s engineers.
“If you can get to the software repository where the bugs are housed
before they are patched, that’s the pot of gold at the end of the
rainbow,” said George Kurtz, chief technology officer for McAfee Inc.,
a software security company that was one of the companies that analyzed
the illicit software used in the intrusions at Google and at other
companies last year.
Rodney Joffe, a vice president at Neustar, a developer of Internet
infrastructure services, said, “It’s obviously a real issue if you can
understand how the system works.” Understanding the algorithms on which
the software is based might be of great value to an attacker looking
for weak points in the system, he said.
When Google first announced the thefts, the company said it had
evidence that the intrusions had come from China. The attacks have been
traced to computers at two campuses in China, but investigators
acknowledge that the true origin may have been concealed, a
quintessential problem of cyberattacks.
Several people involved in the investigation of break-ins at more than
two dozen other technology firms said that while there were
similarities between the attacks on the companies, there were also
significant differences, like the use of different types of software in
intrusions. At one high-profile Silicon Valley company, investigators
found evidence of intrusions going back more than two years, according
to the person involved in Google’s inquiry.
In Google’s case, the intruders seemed to have precise intelligence
about the names of the Gaia software developers, and they first tried
to access their work computers and then used a set of sophisticated
techniques to gain access to the repositories where the source code for
the program was stored.
They then transferred the stolen software to computers owned by
Rackspace, a Texas company. Rackspace, which had no knowledge of the
transaction, offers Web-hosting services. It is not known where the
software was sent from there. The intruders had access to an internal
Google corporate directory known as Moma, which holds information about
the work activities of each Google employee, and they may have used it
to find specific employees.
Report: China hackers
stole key Google program
YAHOO
20 April 2010
NEW YORK – Computer hackers stole a program that
controlled access to most of Google Inc.'s services when they attacked
the Internet company late last year, according to a report published
late Monday.
The story in The New York Times provided more details about an
intrusion that provoked a politically charged showdown between Google
and China's government over Internet censorship and computer security.
The Times said it obtained the information from an unnamed person with
direct knowledge of the investigation into the break-in that Google has
traced to China.
Google declined to comment specifically on the Times' story. A
spokeswoman reiterated Google's previous assertions that the attacks on
the company didn't obtain any personal information from its users'
e-mail accounts.
The stolen password system was called Gaia, a reference to the Greek
goddess of earth, according to the Times. Besides e-mail, Gaia also
governed access to the online services that Google sells to businesses,
government agencies and schools.
Without providing specifics, Google acknowledged some of its
intellectual property had been stolen when it announced the hacking
attacks in January. The heist prompted Google to tighten its computer
security.
At least 20 other companies were targeted in similar attacks, according
to Google.
The breach incensed Google so much that the company decided to protest
the country's laws dictating the censorship of Internet search results
deemed to be subversive or pornographic by the government. Google
started censoring in China four years ago when it set up a search
engine inside of the country to gain better access to the world's
largest Web audience.
After unsuccessfully trying to negotiate a compromise with China's
ruling party, Google last month began to shift search requests from
mainland China to Hong Kong, where online censorship isn't required.
China May inflation rises, industrial growth slows
YAHOO
By JOE McDONALD, AP Business Writer
Fri Jun 11, 3:20 am ET
BEIJING – China's inflation rose in May amid signs its rebound from the
global slump is slowing, adding to pressure on Beijing to keep growth
on track and control politically sensitive prices.
Consumer prices rose 3.1 percent from a year earlier, up from April's
2.8 percent rate, the National Bureau of Statistics said Friday. Growth
in investment and factory output slowed but still was at double-digit
levels.
Rising inflation has prompted concern Beijing might hike interest rates
or take other steps to cool growth that hit 11.9 percent in the first
quarter. That could affect the United States, Europe and others that
look to China, the world's No. 3 economy, to help drive demand for
their iron ore, factory machinery and other exports.
A statistics bureau spokesman rejected suggestions China might face
"stagflation" — a damaging mix of rising prices and slowing growth. He
said inflation pressure was easing and the communist government can hit
its target of holding full-year inflation to 3 percent.
"There is no problem of stagnation," said the spokesman, Sheng Laiyun,
at a news conference. He said the economy's "three driving forces" —
trade, investment and consumer spending — "are still rising."
Analysts expect China's rapid expansion to slow as the initial impact
of its 4 trillion yuan ($586 billion) stimulus wanes. The World Bank's
forecast for full-year growth is 9.5 percent.
Slower growth could complicate efforts to control prices because the
standard tool of rate hikes might further chill economic activity.
"In the second half of the year, growth is going to be slightly
disappointing, inflation is going to be slightly too high," said Tom
Orlik, an analyst in Beijing for Stone & McCarthy Research
Associates. "That clearly puts the Chinese government in a policy
quandary."
May exports surged by nearly 50 percent over a year earlier but
analysts expect trade to weaken as Europe's debt crisis cuts demand in
the 27-nation European Union, China's biggest trading partner.
May inflation was driven by a 6.1 percent rise in food costs, a
sensitive issue in a country where some families spend half their
incomes on food. Wholesale inflation accelerated to 7.1 percent from
April's 6.8 percent rate, suggesting shoppers might face higher prices
as retailers pass on rising costs.
May growth in investment in factories and other fixed assets — seen as
an indicator of future growth — slipped from April's 26.1 percent
expansion to 25.9 percent, the statistics bureau reported. Growth in
industrial output declined for a third month, falling to 16.5 percent
from the previous month's 18.8 percent expansion.
Investment growth has been dampened by government curbs aimed at
cooling a credit boom and surging housing costs. Regulators also want
to block overspending on industries such as steel in which production
capacity already exceeds demand.
Total lending by Chinese banks in May shrank by 17 percent from April's
level to 639.4 billion yuan, ($93.6 billion), the central bank reported.
Financial markets have been rattled by concerns the government might
further tighten access to credit. China's main stock index has shed 4
percent since May 25.
Two monthly surveys of industrial activity released earlier showed
Chinese manufacturing growth slowing in May on sluggish new orders.
In a positive sign, growth in retail sales accelerated slightly in May
to 18.7 percent from April's 18.5 percent rate.
Spotlight
Complicates China Steps on Currency
NYTIMES
By KEITH BRADSHER
April 13, 2010
HONG KONG — Even as China’s leaders appear to have reached a consensus
that the nation’s currency policy must change, the timing of any shift
has been complicated by surging nationalism, a media frenzy in China
over the issue and visits by top officials on each side to Beijing and
Washington in recent days.
China has spent several trillion renminbi over the past 21 months to
prevent its currency from rising against the U.S. dollar. American
lawmakers have become increasingly critical of the policy, complaining
that it keeps Chinese exports artificially cheap.
The Chinese news media, which have far more freedom to report on
economic issues than political ones, have framed the currency issue
mainly in terms of protecting Chinese sovereignty. That has prompted a
series of assurances by Chinese officials over the past four days that
China will not be pushed by foreign pressure into doing anything
against its own interests. President Hu Jintao told President
Barack
Obama in Washington on Monday that China would set its currency policy
according to its own social and economic development needs, according
to Xinhua, the official China news agency.
Xinhua, the People’s Daily newspaper and Chinese state television all
gave prominent coverage to what they described as an assurance by Mr.
Obama to Mr. Hu that the United States respected Chinese sovereignty
regarding the currency. White House officials confirmed that the two
leaders had talked about the currency but provided few details.
Mr. Hu’s visit to Washington followed a brief trip by the U.S. Treasury
secretary, Timothy Geithner, to Beijing last week, which drew
considerable attention to the currency issue even though he tried to
keep a low profile. Mr. Geithner flew into the airport, met with Vice
Premier Wang Qishan at the airport VIP lounge and quickly left without
making any public statements.
U.S. officials have been concerned that public opinion in China against
revaluing the currency may make it harder for the government to act.
Robert Hormats, the U.S. undersecretary of state for economic, energy
and agricultural affairs, said during a visit to China over the weekend
that a flurry of public discussion about the renminbi late last week
had proved “counterproductive.”
Over the weekend, blogs in China lit up over the issue. One writer, who
identified himself as Xiang Songzuo, said Saturday that the American
motive in seeking revaluation was “to create an economic bubble and
financial crisis in China and to attack the progress China has made
toward industrialization, urbanization and modernization.”
Although allowing the renminbi to appreciate would make Chinese-made
goods more expensive overseas, many economists, both in China and in
the West, say revaluation would be in China’s interest. Appreciation of
the currency would help control inflation, limit China’s need to
purchase low-yielding U.S. Treasury bonds and free China to raise
interest rates to halt an emerging real estate bubble.
Investment bank economists are generally skeptical that China will
change its currency policy before June, and possibly not until even
later. People close to Chinese policy makers say that officials would
prefer to do it much sooner, but that it became impossible to act in
the days before Mr. Hu’s visit to Washington, as the issue suddenly
drew broad public attention. Mr. Hu’s trip to Washington for a
nuclear
security summit meeting has made any immediate policy shift more
difficult, added these people, who asked not to be identified by name
because of the financial and diplomatic sensitivity of the issue.
An official close to Chinese currency policy makers said that Mr.
Geithner’s visit had also made it harder to handle the issue quietly.
Several people close to Chinese policy makers said that the matter had
been made complicated by an article last week in The New York Times, of
which the International Herald Tribune is the global edition. That
article stirred news media interest by reporting that Chinese officials
were very close to announcing a shift in currency policy and might even
act before Mr. Hu’s Washington visit if no glitch emerged.
The problem for Chinese officials is that the sovereignty issue
re-emerged just as they had finally reached consensus that it was in
China’s economic interest to make the exchange rate more flexible and
allow the renminbi to appreciate gradually against the dollar, people
with knowledge of the Chinese policy development said.
The course of the Chinese policy debate can be tracked in public
comments by Commerce Ministry officials. Through the National
People’s
Congress in Beijing in mid-March and in the following weeks, senior
Commerce Ministry officials had led a chorus of criticism of the United
States and vowed steadfast resistance to any change in the value of the
renminbi. The Commerce Ministry is very closely aligned with exporters,
even measuring its success by how quickly exports increase.
On March 21, Commerce Minister Chen Deming warned that China would post
a trade deficit for the month, its first in nearly six years, and said
that pressuring China to change its currency policy was “irrational” in
light of the trade gap. China’s vice commerce minister, Zhong
Shan,
visited Washington three days later and said that appreciation of the
renminbi was “not a good recipe for solving problems.” The ministry
even distributed to journalists the cellphone numbers of Chinese
academic experts on trade and currency policy, in an attempt to
influence public opinion in China and abroad.
But the Commerce Ministry did an about-face at the end of last week.
Shortly before the customs agency disclosed Saturday that China did
indeed run a $7.2 billion deficit in March, Mr. Chen declared that the
deficit was “only a blip on the radar and will in no way hamper the
country’s strong economic growth.” He added that China would resume
trade surpluses in the months ahead.
Zhou Xiaochuan, the governor of China’s central bank, also seemed to
lend support to the idea of a stronger currency when he said over the
weekend that fighting inflation was the central bank’s top priority. A
weak currency tends to fan inflation, by making imported goods more
expensive.
Geithner to visit
Beijing amid currency dispute
YAHOO
By AIJAZ ANSARI, Associated Press Writer
April 7, 2010
MUMBAI, India – U.S. Treasury Secretary Timothy Geithner will visit
Beijing for talks with a Chinese vice premier for economic affairs on
Thursday, Geithner's spokesman said, in a sign the two sides are moving
toward settling a dispute over China's currency controls.
Geithner will meet with Vice Premier Wang Qishan, spokesman Andrew
Williams said Wednesday, as the Treasury secretary ended a two-day
visit to India.
"The secretary and the vice premier have been working together to find
an opportunity to meet for some time," Williams told reporters in
Mumbai, the Indian financial capital.
Williams gave no details of the agenda, but the decision to hold such a
high-level encounter suggested Washington and Beijing are moving toward
settling the currency dispute, which has threatened to overshadow
cooperation on the global economy, Iran's nuclear program and other
issues.
Washington and other Chinese trading partners are pressing Beijing to
ease exchange rate controls that they say keep its yuan undervalued,
giving China's exporters an unfair price advantage and swelling its
multibillion-dollar trade surplus. Some American lawmakers want
punitive tariffs on Chinese imports if Beijing fails to act.
In another sign of warming ties, Chinese President Hu Jintao is due to
hold talks with President Barack Obama during an April 12-13 visit to
Washington for a nuclear security summit.
"After a time of disturbance and unpleasantness, Chinese-U.S. relations
are entering a track of getting closer to one another," said Liu
Jiangyong, a professor at the Institute of International Studies at
Beijing's Tsinghua University. "I hope the Geithner visit could promote
understanding."
The Obama administration delayed a report to Congress due April 15 in
which it had the option of citing Beijing as a currency manipulator, a
designation that could lead to a World Trade Organization complaint and
possible trade sanctions. The White House denied the delay had anything
to do with seeking Chinese support for penalties over Iran's nuclear
program.
Obama vowed in February to press for an end to exchange rate systems
that he said depress the value of currencies and harm U.S. companies.
Chinese Premier Wen Jiabao, the country's top economic official, and
others have publicly rejected foreign pressure over the yuan, and Wen
said in March the currency was not undervalued.
But economists expect Beijing to allow the yuan to rise some time this
year in order to ease strains in its own economy. A stronger yuan would
increase the buying power of Chinese consumers, helping to increase
domestic consumption and reducing reliance on exports.
Beijing tied the yuan to the dollar for decades but broke that link in
2005 and allowed it to rise by about 20 percent through late 2008. The
government slammed on the brakes after the crisis hit and has held its
currency steady against the greenback to help exporters compete as a
plunge in global demand wiped out millions of Chinese factory jobs.
The United States and Europe downplayed currency complaints as they
worked together with Beijing to revive global growth. But facing
pressure to create jobs, they and governments as farflung as Brazil
have renewed demands for China to act.
On Tuesday, a Chinese foreign ministry spokeswoman, Jiang Yu, said
Beijing never has manipulated the yuan's exchange rate for profit.
On his India trip, Geithner met with Prime Minister Manmohan Singh and
his counterpart, Finance Minister Pranab Mukherjee and entrepreneurs
and chief executives of leading companies.
Mukherjee and Geithner presided over the first meeting of the
U.S.-India Economic and Financial Partnership to promote trade and
investment. The initiative is part of the Obama administration's
efforts to forge closer relations with India, a fast-growing economy,
the most populous democracy and a stable ally in a complex region.
China trims holdings
of Treasury securities
YAHOO
By MARTIN CRUTSINGER, AP Economics Writer Martin
15 March 2010
WASHINGTON – China retained its spot as the biggest foreign holder of
U.S. Treasury debt in January even as it trimmed its holdings for a
third straight month. The string of declines underscored worries that
the U.S. government could face much higher interest rates to finance
soaring budget deficits.
The Treasury Department said Monday that China's holdings dipped by
$5.8 billion to $889 billion in January compared with December. Japan,
the second-largest foreign holder of U.S. government debt, also trimmed
its holdings but by a much smaller $300 million, to $765.4 billion.
Net foreign purchases of long-term securities, a category that includes
both government and corporate debt, totaled $19.1 billion in January,
as net purchases of private corporate bonds fell by $24.8 billion, the
biggest drop on record.
A month ago, Treasury initially reported that China had cut its
holdings so sharply that it had lost its top spot as America's largest
foreign creditor, a position it had held since its holdings overtook
Japan in September 2008.
However, 10 days later, Treasury released its annual update of the
figures. The revised data showed that China, while reducing its
holdings, still retained the top spot. Treasury revises the data based
on more detailed readings of the statistics, which do a better job of
sorting out actual ownership of the bonds. This review determined, for
example, that some bonds credited to Britain because they were
purchased there were actually purchased on behalf of Chinese investors.
The decline in Chinese holdings is coming at a time of increased
tensions between the two nations. Chinese Premier Wen Jiabao on Sunday
rejected American pressure on China to allow its currency to rise in
value against the dollar, saying such efforts amounted to a kind of
trade protectionism.
A group of 130 House members sent a letter to the administration on
Monday urging the Treasury Department to cite China as a currency
manipulator in a report that is scheduled to be released next month.
The group also called on the Commerce Department to impose trade
sanctions on China on the basis that its currency system was an unfair
trade practice.
"If the administration fails to act on this issue it will hold back our
economic recovery and hurt the ability of American small businesses and
manufacturers to increase their production, keep their doors open and
create jobs," said Rep. Mike Michaud, D-Maine, one of the signers of
the letter.
Treasury spokeswoman Natalie Wyeth said Treasury was still reviewing
the congressional letter. She said there would be no direct response to
Wen's comments beyond President Barack Obama's comments in a trade
speech last week. Obama said that China would make an "essential
contribution" to rebalancing the global economy by moving to a more
market-oriented currency regime.
The Obama administration is hoping China will resume allowing its
currency to rise in value against the dollar as a way of trimming the
huge trade gap between the two nations. The United States ran a deficit
of $226.8 billion with China last year, the largest deficit recorded
with any country. A cheaper dollar would make American products less
expensive in China while making Chinese goods more expensive for
American consumers.
Treasury's latest report on international capital flows showed that
foreign holdings of Treasury securities increased by $17 billion in
January to $3.71 trillion.
While China and Japan decreased their holdings, oil exporting countries
boosted their holdings to $218.4 billion, up from $207.4 billion in
December, and holdings of Treasury securities in Great Britain rose to
$206 billion, up from $178.1 billion.
Rick McDonald, an economist at Action Economics, said the January
report reflected a normalization of purchasing activities following a
two-year credit crisis in which investors had flocked to the safety of
U.S. securities in the wake of severe turmoil in global financial
markets.
Julian Jessop, chief international economist at Capital Economics, said
the Treasury report just affirmed market information in January that
showed the dollar rising in value against most currencies with Treasury
interest rates falling. Jessop said this pattern did not support
concerns that foreigners were losing their appetite for U.S. bonds.
Strong foreign demand for U.S. Treasury debt helps to keep the interest
rates that the government pays for that debt from rising. However,
there are other factors that influence U.S. interest rates beyond
foreign demand, including decisions by the Federal Reserve.
Fed policymakers have kept a key short-term interest rate at a record
low of zero to 0.25 percent for more than a year and many economists
believe that the Fed will continue to pledge to keep rates
exceptionally low as a way to boost the economy when they conclude
their regular meeting on Tuesday.
The federal budget deficit hit an all-time high of $1.4 trillion in
2009, and the Obama administration is projecting that this year's
deficit will climb even higher to $1.56 trillion. But the
administration is also pledging to get the deficits under control once
the economy has resumed sustained growth.
Chinese
Leader Firmly Defends Currency and Trade Policies
NYTIMES
By MICHAEL WINES
March 14, 2010
BEIJING — Premier Wen Jiabao sharply
defended China’s currency and trade policies on Sunday against what he
called foreign “finger-pointing,” charging instead that the developed
world seeks to force unfair changes in those policies “just for the
purposes of increasing their own exports.”
Mr. Wen’s remarks, which echoed a
rebuke on Thursday by one of China’s central bankers, were perhaps the
sharpest yet in a brewing disagreement between Beijing and Washington
over the two nations’ economic positions.
In a more than two hour news
conference at the close of China’s annual legislative session, Mr. Wen
repeated that China will keep its currency, the renminbi, “basically
stable” despite calls by the United States and other developed nations
to let its value increase.
He also repeated the concerns he
voiced a year ago, at China’s last legislative session, that the United
States is failing to rebuild its own economy and maintain the value of
the dollar. Protecting the dollar, which dropped sharply since the
global crisis began in late 2008, is a matter of “national credibility”
for the United States, he said.
“Any fluctuation in the value of the
U.S. currency is a big concern for us,” he said. “I hope the United
States will take concrete steps to reassure investors. It is not only
in the interests of the investors, but also the United States itself.”
Chinese leaders fear that the United
States’ vast budget deficits will lead to inflation that effectively
devalues the dollar, and thus the value of China’s vast
foreign-currency reserves. Those reserves exceeded $2.4 trillion at the
end of 2009, with nearly $900 billion of that in dollar-denominated
Treasury bills.
Mr. Wen’s most pointed remarks,
however, were aimed at critics of China’s economic policies, led by the
United States. Those critics accuse China of keeping the value of its
currency artificially low, so that its exports will remain cheap
compared to other nations’ competing products. That boosts China’s
economy, but at the expense of other trading partners, they say.
China has pegged the renminbi to the
declining value of the dollar since the economic crisis began in late
2008. Were it to let the market judge the renminbi’s value, critics
say, the currency — and the cost of Chinese products — would rise.
In Sunday’s news conference, Mr. Wen
bluntly rejected that view. Instead, in remarks that seemed aimed at
the United States, he accused unnamed competitors of trying to bail out
their own slumping economies by hamstringing the Chinese juggernaut.
“I understand some economies want to
increase their exports,” he said, “but what I don’t understand is the
practice of depreciating one’s own currency and attempting to force
other countries to appreciate their own currencies, just for the
purpose of increasing their own exports.”
That amounts to trade protectionism,
he said, and “all countries should be fully alarmed by such
developments.”
Some economic analysts were struck
by the comments.
“I think it’s my first time hearing
government officials saying that. Basically, Premier Wen said it’s a
kind of protectionism to ask other countries to appreciate their
currency and depreciate their own currency,” Shen Minggao, the chief
China economist for Citibank in Hong Kong, said in a telephone
interview. “In that sense, it’s a new understanding of currency
policies.”
Mr. Wen argued that the renminbi is
not unfairly valued, citing government calculations that suggested
that, measured in real terms, China’s currency had actually risen in
value at the height of the economic crisis.
One leading Chinese economist, Bai
Chong-En of Beijing’s Tsinghua University, said in an interview on
Sunday that for a broad range of technical reasons, he does not believe
that the renminbi is seriously undervalued. But he also suggested that
Western jawboning to revalue the currency is having the opposite effect.
“The greater the outside pressure,
the more difficult it is for the Chinese government to raise the
exchange rate, and the more difficult it is for the Chinese people to
accept a revaluation of the Chinese currency,” he said. “People don’t
like to be forced to change things. They have be willing to do it.”
In his wide-ranging news conference,
which drew on both Chinese and foreign questioners, Mr. Wen repeated
some boilerplate government positions — China is an underdeveloped
nation that will need a century or more to reach advanced status, he
said — and a few new ones.
Addressing a chorus of complaints by
foreign investors, he said China will “put in place institutional
arrangements to level the playing ground” for foreign companies in
China, and promised to personally meet with foreign business leaders
during his final years in office. Some of China’s economic stimulus
measures, such as subsidizing purchases of new automobiles and home
appliances, applied to products by foreign as well as domestic
manufacturers, he noted.
He also said that he had been
excluded from a crucial meeting of world leaders at last year’s
Copenhagen conference on climate change, and had not deliberately
skipped the meeting, as some at the conference charged. Mr. Wen’s
absence from that session, which was attended by President Obama and
other leaders, has been touted by critics as a symbol of China’s
intransigence on climate issues at the conference, which ended without
reaching many of its key goals.
“Why was China not notified of this
meeting? So far no one has given us any explanation about it, and it
still is a mystery,” he said.
Mr. Wen’s news conference was
broadcast nationally, but in Beijing, that reply and several following
minutes of the broadcast were abruptly cut off by what was described as
a loss of the television signal.
Li Bibo
contributed research in Beijing.
Economy the focus as
China political session ends
YAHOO
By CARA ANNA, Associated Press Writer
13 March 2010
BEIJING – Mao Zedong's grandson couldn't have put it more simply.
China's biggest challenge? "Economic development," he said, as the
nation's most public political meetings end with sweeping goals to
expand growth — and help more Chinese enjoy it.
Mao's grandson, Mao Xinyu, and thousands of other delegates have sat
patiently through more than a week of what's essentially a display of
political unity: the annual sessions of the national legislature and a
government advisory body that end Sunday. But the issues behind the
speeches — employment, social security, corruption — are grindingly
real.
The world's third-largest economy may have escaped the worst of the
global financial crisis by ordering $1.4 trillion in bank lending and
government stimulus, but major problems remain for the country's 1.3
billion people.
Before its closing Sunday, the National People's Congress will approve
a budget with a more than 10 percent boost in spending to fuel the
economic recovery, with more money for low-cost housing, extending
pension coverage and other social programs. Premier Wen Jiabao, the
country's top economic official, will hold a rare news conference.
The priorities continue Wen and President Hu Jintao's yearslong efforts
to spread the benefits of economic growth more broadly across a rapidly
changing society. This year, inflation is a challenge. Property prices
are soaring. The rich-poor gap is increasing and increasingly
contentious. Millions of migrant workers and farmers go without basic
government aid.
Any of those issues could lead to social unrest — one of the ruling
Communist Party's biggest fears. This year's session had the usual
heavy police presence in Beijing, with dozens of activists reportedly
harassed or detained.
Other economic problems worry the international business community.
Consumer demand in China remains anemic, and generous bank lending may
be creating bubbles in stock and real estate prices.
China's own state-controlled media has shown signs of being more
assertive on issues important to the public.
Just before this year's meetings started, more than a dozen newspapers
published a rare joint editorial demanding changes to the outdated
household registration system that essentially labels each person as
urban or rural. It has kept millions of people from the countryside who
work in cities from getting basic government aid.
The editorial's co-author, however, was quickly punished and apparently
lost his job.
The media also leapt on an incident that happened on the sidelines of
the meetings, when the governor of the central province of Hubei
angrily called a Beijing reporter's question "senseless" and reportedly
took away her tape recorder.
The story spread quickly online and people asked whether the governor,
Li Hongzhong, should apologize.
The debate "has strong echoes of the inability of communist states in
Eastern Europe to control the media as social and economic
liberalization took hold," said Bruce Gilley, a China politics expert
at Portland State University.
In one gesture aimed at narrowing the rural-urban gap at the root of
several issues, Sunday's session is expected to pass an amendment to
the election law to improve representation for rural areas. At the
moment, one rural delegate to the National People's Congress represents
four times as many people as an urban one.
Such a change is mostly symbolic. National and local legislatures
generally adopt decisions made behind closed doors by Communist Party
leaders.
China Shows Little Patience for U.S. Currency Pressure
NYTIMES
By MARK LANDLER
February 5, 2010
BEIJING — A senior Chinese official said on Thursday that China would
not bow to pressure from the United States to revalue its currency,
which President Obama says is kept at an artificially low level to give
China an unfair advantage in selling its exports.
The official, Ma Zhaoxu, a Foreign Ministry spokesman, said at a
regular news conference here that “wrongful accusations and pressure
will not help solve this issue.”
Mr. Ma was reacting to remarks on trade that Mr. Obama made on
Wednesday when he met with Democratic senators in Washington. Mr. Obama
stopped short of saying China manipulates its currency, but his words
on China’s economic policies were harsh — the United States, he said,
has “to make sure our goods are not artificially inflated in price and
their goods are not artificially deflated in price; that puts us at a
huge competitive disadvantage.”
Economists agree with that assessment. They say that the Chinese
currency, the renminbi, is undervalued by 25 to 40 percent compared to
the dollar and other currencies. The gap is wider than at any time
since July 2005, when the Chinese government, under pressure from the
Bush administration, decided to the do away with the renminbi’s peg to
the dollar and allow the currency to float in a narrow band against the
dollar and other currencies.
The renminbi appreciated 21 percent, but since July 2008 it has
remained at the same value — today, one dollar equals about 6.83
renminbi, also called the yuan.
“Judging from the international balance of payments and the currency
market’s supply and demand, the value of the renminbi is getting to a
reasonable and balanced level,” Mr. Ma said on Thursday.
The sharp exchange over China’s currency is only the latest symptom of
rising tensions in American relations with China. Internet censorship,
hacking attacks directed at American companies, arms sales to Taiwan
and the pending visit of the Dalai Lama to Washington have all cropped
up in the last month as points of conflict. China is exhibiting a brash
sense of confidence as its economy continues to boom while much of the
world remains mired in a recession.
On economics, Chinese officials now regularly lecture their American
counterparts on the need to maintain the value of the American dollar.
China, which has more than $2.4 trillion in foreign exchange reserves,
is the largest holder of American debt. On Wednesday, Xinhua, the
official state news agency, .the official state news agency said
Chinese economists are concerned that the American government,
suffering from a record budget deficit, could print more dollars and
issue more bonds, eroding the value of the dollar.
The finger-wagging from the American side is almost certain to
intensify too. With mid-term elections this fall, Mr. Obama is under
pressure to alleviate the high unemployment rate in the United States.
Mr. Obama said last week in his State of the Union speech that he hoped
to double American exports within five years.
In China, the export industry is a large employer in the coastal
regions and draws hordes of migrant workers from interior provinces.
Exports have slowed considerably since the global financial crisis
began, and Chinese leaders and economists have been saying that
domestic consumption should become a larger part of the economy.
Last year, the Chinese economy grew by 8.7 percent, surpassing the 8
percent benchmark set by the government and indicating that China was
managing to push through the global recession with little damage. A
large driver of the growth was domestic spending — the Chinese
government announced in November 2008 a stimulus package worth $585
billion.
But the spending, along with in-flows of foreign currency through
private investments and speculation, what some economists call “hot
money,” is fueling inflation. The consumer price index in the fourth
quarter of 2009 was 1.9 percent. Fears of an overheated economy could
lead the Chinese government to revalue the renminbi later this year to
help contain inflation.
In late January, Jim O’Neill, the chief economist at Goldman Sachs,
told Bloomberg News that he expected the Chinese government to make a
one-off revaluation of the renminbi, letting it appreciate by at least
five percent before the end of 2010. He said the revaluation will
happen suddenly, without any warning from Chinese leaders.
Reopening the battle with Beijing over its currency may pay political
dividends for Mr. Obama at a time of double-digit unemployment and
growing fears that China is stealing American jobs. But experts say the
president will have even less leverage over Beijing than President
George W. Bush did. Mr. Bush prodded China for years to adjust its
exchange rate with little success.
China, they say, is determined to reignite its export machine after a
global recession that sapped demand for Chinese goods. A cheap currency
is vital to that goal. And as indicated by Mr. Ma’s statement on
Thursday, China’s leaders have grown impatient with lectures on
economic policy from their chief debtor, the United States.
“It will be like water off a duck’s back,” said Nicholas R. Lardy, a
China expert at the Peterson Institute for International Economics.
“They’re puzzled by the criticism. They think they should be praised
for keeping their currency stable at a time of global turmoil.”
Criticizing China’s policy, however, is likely to worsen a relationship
already frayed by irritants on both sides.
In two weeks, Mr. Obama is expected to meet with the Dalai Lama, the
Tibetan spiritual leader, over the objections of the Chinese, who
condemn him as a subversive. The administration forged ahead with sales
of weapons to Taiwan, drawing an angry blast from Beijing, which
regards Taiwan as a breakaway province. Secretary of State Hillary
Rodham Clinton criticized China for censoring the Internet, in the wake
of Google’s allegations about hacking.
For its part, the United States is frustrated that the Chinese will not
back tougher sanctions against Iran over its nuclear program. And China
has resisted American initiatives on climate change policy, turning the
recent climate meeting in Copenhagen into a diplomatic drama.
The administration has struggled to prevent the ill will from any
single issue from contaminating the broader relationship. “We can’t
pick the timing of when an issue becomes important,” said a senior
official, who spoke on the condition of anonymity because of the
delicacy of the matter.
Exchange rates are an arcane subject, harder to explain than a meeting
with the Dalai Lama. But they influence easy-to-understand issues like
the competitiveness of American exports and job security.
“The currency issue has the potential to become a very hot political
issue,” said Kenneth G. Lieberthal, who worked on China policy in the
Clinton White House. “We’re in significant danger of hitting a very
rough patch in trade relations, in the latter part of this year.”
China:
Low US interest rates threaten recovery
YAHOO
November 15, 2009
BEIJING – China's top bank regulator said Sunday the weakening U.S.
dollar and low interest rates are spurring speculation in stocks and
property, distorting global asset prices and threatening the global
economic recovery.
The situation poses an "insurmountable risk to the recovery of the
world economy," Liu Mingkang, chairman of the China Banking Regulatory
Commission, warned just hours before President Barack Obama was due to
arrive in China.
Speaking at a conference in Beijing, Liu said the declining U.S. dollar
and reassurances by officials that interest rates will remain low were
encouraging a "massive" U.S. dollar carry trade — the practice of
borrowing money at low rates in one currency to invest in assets in
another currency that offer a higher return.
The carry trade is "dealing a serious blow to global asset prices and
fueling speculation in the stock and real estate markets," he said,
according to a transcript of a speech he made at a financial forum in
Beijing, posted on the Web site of Hong Kong's pro-Beijing Phoenix TV.
The U.S. dollar has declined steadily since spring despite statements
of support from American officials. China is the largest foreign holder
of U.S. debt, mostly in the form of Treasury securities, which have
declined in value as a result of the dollar's weakness.
At the same time, record-low U.S. interest rates, intended to encourage
lending to businesses struggling to recover from the recession, are
spurring investors to transfer funds out of the safety of low-yield
dollar-denominated investments such as Treasury securities and into
higher-yielding assets like stocks, commodities and emerging-market
currencies.
Strong flows of such funds into China's markets, where share prices
have surged by more than 70 percent this year, and property have raised
worries over a possible bubble in asset prices that might later
implode, causing financial problems.
China’s Role as Lender Alters
Dynamics for Obama’s Visit
By HELENE COOPER, MICHAEL WINES and DAVID E. SANGER
November 15, 2009
When President Obama visits China for the first time on Sunday, he
will, in many ways, be assuming the role of profligate spender coming
to pay his respects to his banker.
That stark fact — China is the largest foreign lender to the United
States — has changed the core of the relationship between the United
States and the only country with a reasonable chance of challenging its
status as the world’s sole superpower.
The result: unlike his immediate predecessors, who publicly pushed and
prodded China to follow the Western model and become more open
politically and economically, Mr. Obama will be spending less time
exhorting Beijing and more time reassuring it.
In a July meeting, Chinese officials asked their American counterparts
detailed questions about the health care legislation making its way
through Congress. The president’s budget director, Peter R. Orszag,
answered most of their questions. But the Chinese were not particularly
interested in the public option or universal care for all Americans.
“They wanted to know, in painstaking detail, how the health care plan
would affect the deficit,” one participant in the conversation
recalled. Chinese officials expect that they will help finance whatever
Congress and the White House settle on, mostly through buying Treasury
debt, and like any banker, they wanted evidence that the United States
had a plan to pay them back.
It is a long way from the days when President George W. Bush hectored
China about currency manipulation, or when President Bill Clinton
exhorted the Chinese to improve human rights.
Mr. Obama has struck a mollifying note with China. He pointedly singled
out the emerging dynamic at play between the United States and China
during a wide-ranging speech in Tokyo on Saturday that was meant to
outline a new American relationship with Asia.
“The United States does not seek to contain China,” Mr. Obama said. “On
the contrary, the rise of a strong, prosperous China can be a source of
strength for the community of nations.”
He alluded to human rights but did not get specific. “We will not agree
on every issue,” he said, “and the United States will never waver in
speaking up for the fundamental values that we hold dear — and that
includes respect for the religion and cultures of all people.”
White House officials have been working for months to make sure that
Mr. Obama’s three-day visit to Shanghai and Beijing conveys a
conciliatory image. For instance, in June, the White House told the
Dalai Lama that while Mr. Obama would meet him at some point, he would
not do so in October, when the Tibetan spiritual leader visited
Washington, because it was too close to Mr. Obama’s visit to China.
Greeting the Dalai Lama, whom China condemns as a separatist, weeks
before Mr. Obama’s first presidential trip to the country could
alienate Beijing, administration officials said. Every president since
George H. W. Bush in 1991 has met the Dalai Lama when he visited
Washington, usually in private encounters at the White House, although
in 2007 George W. Bush became the first president to welcome him
publicly, bestowing the Congressional Gold Medal on him at the Capitol.
Mr. Obama met the Dalai Lama as a senator.
Similarly, while he was campaigning for the presidency, Mr. Obama
several times accused China of manipulating its currency, an allegation
that the current Treasury secretary, Timothy F. Geithner, repeated
during his confirmation hearings. But in April, the Treasury Department
retreated from that criticism, issuing a report that said China was not
manipulating its currency to increase its exports.
While American officials said privately that they remained frustrated
that China’s currency policies lowered the cost of Chinese goods and
made American products more expensive in foreign markets, they said
that they were relieved that China was fighting the global recession
with an enormous fiscal stimulus program to spur domestic growth, and
added that now was not the time to antagonize Beijing.
China is not viewed as a trouble spot for the United States. But this
administration, like its predecessor, has had difficulty grappling with
a rising power that seems eager to avoid direct clashes with the United
States but affects its interests in many areas, including currency
policy, nuclear proliferation, climate change and military spending.
In that regard, two members of Mr. Obama’s foreign policy team said
that the United States’ interactions with the Chinese had been far too
narrow in past years, focusing on counterterrorism and North Korea. Too
little was done, they said, to address China’s energy and environmental
policies, or its expansion of influence in Southeast Asia, South Asia
and Africa, where China has invested heavily and used billions of
dollars in aid to advance its political influence.
One hint of the Obama administration’s new approach came in a speech
this fall by James B. Steinberg, the deputy secretary of state, who has
deep roots in China policy. He argued that China needed to adopt a
policy of “strategic reassurance” to the rest of the world, a phrase
that appeared intended to be the successor to the framework of the Bush
era, when China was urged to embrace a role as a “responsible
stakeholder.”
“Strategic reassurance rests on a core, if tacit, bargain,” Mr.
Steinberg said. “Just as we and our allies must make clear that we are
prepared to welcome China’s ‘arrival,’ ” he argued, the Chinese “must
reassure the rest of the world that its development and growing global
role will not come at the expense of security and well-being of others.”
The Chinese reaction has been mixed, at best. The official China Daily
newspaper ran a column just before Mr. Obama’s arrival suggesting that
the United States needed to provide some assurance of its own — to
“respect China’s sovereignty and territorial integrity,” code words for
entirely backing away from the issues of how China deals with Taiwan
and Tibet.
In the United States, the phrase “strategic reassurance” has been
attacked by conservative commentators, who argue that any reassurance
that the United States provides to China would be an acknowledgment of
a decline in American power.
In an op-ed article in The Washington Post, the analysts Robert Kagan
and Dan Blumenthal argued that the policy had echoes of Europe “ceding
the Western Hemisphere to American hegemony” a century ago. “Lingering
behind this concept is an assumption of America’s inevitable decline,”
they wrote. White House officials shot back, insisting that it is China
that needs to do the reassurance, not the United States.
In China, Mr. Obama will meet with local political leaders and will
host an American-style town hall meeting with students in Shanghai. He
will then spend two days in Beijing meeting with President Hu Jintao.
It seems unlikely that Mr. Obama will get the same celebrity-type
reception in Beijing that he received in Cairo, Ghana, Paris and
London. China seems mostly immune to the Obama fever that swept other
parts of the world, and the Chinese are growing more confident that
their country has the wherewithal to compete with the United States on
the world stage, analysts say.
“Obama is still a positive guy, and all over the world most people
think he’s more energetic, more sincere, than Bush, more a reformist,”
said Shi Yinhong, a professor and an expert on United States-China
relations at People’s University in Beijing. “But in China, Obama’s
popularity is less than in Europe, than Japan or Southeast Asia.” In
China, he said, “there is no worship of Obama.”
For instance, during the Bush and Clinton years, China might release a
few political dissidents on the eve of a visit by the president as a
good-will gesture. This time, American officials say, they do not
expect any similar gestures, although they say that Mr. Obama will
raise human rights issues privately with Mr. Hu.
“This time China will agree to have a human rights dialogue with the
U.S. on some cases,” Mr. Shi said, but “the arguments have changed
compared to the past. Now we say, ‘We are a different country, we have
our own system, our own culture.’ ”
China:
Low US interest rates threaten recovery
YAHOO
November 15, 2009
BEIJING – China's top bank regulator said Sunday the weakening U.S.
dollar and low interest rates are spurring speculation in stocks and
property, distorting global asset prices and threatening the global
economic recovery.
The situation poses an "insurmountable risk to the recovery of the
world economy," Liu Mingkang, chairman of the China Banking Regulatory
Commission, warned just hours before President Barack Obama was due to
arrive in China.
Speaking at a conference in Beijing, Liu said the declining U.S. dollar
and reassurances by officials that interest rates will remain low were
encouraging a "massive" U.S. dollar carry trade — the practice of
borrowing money at low rates in one currency to invest in assets in
another currency that offer a higher return.
The carry trade is "dealing a serious blow to global asset prices and
fueling speculation in the stock and real estate markets," he said,
according to a transcript of a speech he made at a financial forum in
Beijing, posted on the Web site of Hong Kong's pro-Beijing Phoenix TV.
The U.S. dollar has declined steadily since spring despite statements
of support from American officials. China is the largest foreign holder
of U.S. debt, mostly in the form of Treasury securities, which have
declined in value as a result of the dollar's weakness.
At the same time, record-low U.S. interest rates, intended to encourage
lending to businesses struggling to recover from the recession, are
spurring investors to transfer funds out of the safety of low-yield
dollar-denominated investments such as Treasury securities and into
higher-yielding assets like stocks, commodities and emerging-market
currencies.
Strong flows of such funds into China's markets, where share prices
have surged by more than 70 percent this year, and property have raised
worries over a possible bubble in asset prices that might later
implode, causing financial problems.
China formally launches Nasdaq-style board
YAHOO
Fri Oct 23, 2009 7:31 am ET
SHANGHAI (AFP) – China on Friday raised the curtain on its long-awaited
Nasdaq-style board, ChiNext, in a key step towards setting up a
multi-tier capital market and giving a boost to small and medium-sized
firms.
Gold confetti rained down on a red ticker reading "Formally launched"
in Chinese as the theme from the movie "Superman" blared in a hotel in
the southern boomtown of Shenzhen, where ChiNext trade will begin on
October 30.
The new board will propel the development of high-growth start-ups,
especially high-tech firms, Shang Fulin, chairman of the China
Securities Regulatory Commission, said in a ceremony broadcast live on
television.
"The launch of the growth enterprise board is an important step towards
implementing the national strategy on promoting innovation," Shang said.
Shares in 28 start-ups, ranging from software developers to medical
device producers, will be on offer next week on the board run by the
Shenzhen Stock Exchange.
A total of 188 firms from across China have applied to list on ChiNext,
according to Shang.
China's economic planning agency, the National Development and Reform
Commission, first proposed establishing a Nasdaq-style second board
more than a decade ago, but the plan was shelved after the Internet
bubble popped in 2000.
Regulators hope the new market will help fuel start-ups and other
companies with high-growth potential in the world's third-largest
economy, just as the Nasdaq has in the United States.
But there have also been worries that the new board, which attracted
strong interest from investors, may divert funds from the main indices
and drag stock prices down.
Shang said investors must participate in the growth enterprise market
in a "rational" way, recognising that start-up stocks have high-growth
potential but are also characterised by unstable financial results.
"The growth enterprise market faces relatively higher risks of
irrational and speculative trading and market manipulation," he said.
"The Shenzhen bourse... must closely monitor the debut session trading
to prevent excessive speculation."
The bourse has said if prices move up or down 80 percent during the
first day, trading will be suspended until the final three minutes of
the session.
For more background, click here.
Typhoon Pummels China and Taiwan
NYTIMES
By MICHAEL WINES
August 11, 2009
BEIJING — Rain deluged China’s east coast on Monday hours after Typhoon
Morakot slammed into the region south of Shanghai, packing winds up to
73 miles an hour, destroying hundreds of homes and forcing one million
people to flee.
Chinese officials reported that three people were killed. The
Associated Press quoted a Taiwanese police official, however, as saying
an estimated 400 people remain unaccounted for in a mountainous village
engulfed by a mudslide caused by the typhoon.
The official identified the village as Shiao Lin, in the south of the
island, and said about 100 people had been plucked to safety by
military helicopter, The A.P. said. Taiwan’s official death toll from
Morakot stands at 15. Another 55 — not including the people in Shiao
Lin — are listed as missing.
Taiwan was battered by the typhoon on Saturday, and its Central Weather
Bureau said the downpours broke records across the island for the most
rainfall in 24 hours, causing the worst flooding in a half-century.
The island was swamped by a staggering 83 inches of rain, according to
the weather bureau. In southeastern Taitung County, a six-story hotel
collapsed into a river, but officials said all 300 guests were safe
because the building had been evacuated.
More than 170,000 people remained without power on Monday, the
government said. In China, one of the reported dead was a 4-year-old
child in Wenzhou, a city of nearly 1.4 million people in Zhejiang
Province, where officials said the storm had leveled nearly 1,500
homes. The child was among five people buried when the winds collapsed
five adjacent houses.
The weakened storm was still churning over Wenzhou on Monday morning.
Skies there had cleared, but heavy rain was predicted later. “I’m
living in the center of town, which is not so bad,” one woman, Yang
Weiwei, said from Wenzhou in a telephone interview. “However, some
parts of the city are in a mess.”
On Sunday, the authorities said the storm had whipped up waves as high
as 26 feet in the East China Sea and in the strait between mainland
China and Taiwan, which was battered by the typhoon on Saturday.
In Japan on Monday, at least nine people were killed, and nine others
were missing after Typhoon Etau slammed the western part of the
country, bringing heavy rain that led to floods and landslides, The
A.P. reported. On Sunday evening, an earthquake with a preliminary
magnitude of 6.9 rattled Tokyo and eastern Japan, according to the
Japan Meteorological Agency.
Typhoon Morakot, the eighth of the season, hit the Chinese mainland at
4:20 p.m. on Sunday at Xiapu County, in northern Fujian Province.
China’s state-run Xinhua news service said more than 490,000 people had
been moved to safety in Fujian, and 48,000 boats summoned back to
harbor.
In Zhejiang Province, between Fujian and Shanghai, 505,000 others were
evacuated and 35,000 boats called in.
Both provinces are manufacturing centers with large port cities.
Shanghai, just north of the typhoon’s landfall, was spared the worst
winds but canceled airline flights and lowered river reservoirs to
prepare for flooding. Trees were uprooted and some snapped apart in
Fujian Province, Xinhua reported, and farmers struggled with nets to
recapture fish flushed out of fish farms.
Xinhua said relief teams were distributing food and water to rural
villagers who had been stranded by high waters. By Sunday night,
meteorologists reported that the typhoon had degraded close to tropical
storm status, with 74-mile-an-hour winds.
Morakot, which means emerald in Thai, had struck the Philippines
earlier, killing 21 people, including a French tourist and 2 Belgian
tourists, according to officials there. Seven others were reported
missing.
The government reported that more than 83,000 Philippines residents
were affected by floodwaters and landslides, and 22,000 had been
evacuated.
Afghan Plane Turned Back
BEIJING (AP) — An Afghan plane bound for the restive western Chinese
region of Xinjiang was sent back to Afghanistan after a bomb threat,
the Chinese news media said Sunday.
The airline, Kam Air, said the plane left Kabul, Afghanistan’s capital,
and was crossing Kyrgyzstan on its way to Urumqi, Xinjiang, when it was
told to turn back. The Xinhua News Agency said that there had been a
bomb threat and that the Urumqi airport authorities had been told not
to let the plane land.
The deputy chief of Kam Air, Feda Mohammad Fedawi, said there had been
no bomb threat. He said that Kyrgyz authorities told the crew that
China would not allow the plane into its airspace, and that the plane,
with 160 passengers aboard, was diverted to Kandahar.
There was no immediate way to explain the differing accounts.
Page last
updated at 15:18 GMT, Tuesday, 28 July 2009 16:18 UK
Economy
dominates US-China talks
US and Chinese officials, meeting in
Washington, are to discuss the need for emerging economies to have more
say in the world's financial system.
US Treasury Secretary
Timothy Geithner is meeting Chinese Vice Premier Wang Qishan for a
second day of high-level talks between the two countries.
They will also discuss the world trade system and ways to
cooperate to prevent a repeat of the economic crisis.
China also expressed concern about the dollar's role in the
financial system.
Mr
Geithner said the two countries were committed to building a strong and
stable financial system that would lead to more balanced global growth.
"Today, we will discuss governance reforms to help the IFIs
(international financial institutions) be more representative of
dynamic emerging economies, as well as strengthen their capacity to
prevent future crises," he added.
China has long called for greater say at the International
Monetary Fund and other bodies.
The two will also discuss ways to prevent the financial
crisis leading to a rise in protectionism.
"We
call on China and the United States to refrain from taking any
protectionist measures," Mr Wang said before the talks re-convened
behind closed doors.
Secretary Hillary Clinton was leading a
separate set of discussions at the State Department that were expected
to focus on North Korea.
The two-day Strategic and Economic Dialogue, as the talks are
known, will conclude later with a news conference.
Differences
While the two sides appear to have found common ground in
public, analysts say that differences remain.
In particular, China is worried about the value of the US
dollar.
It holds huge amounts of US debt - more than $800bn
(£486bn) of US Treasury securities alone.
It
fears Mr Obama's stimulus spending will stoke inflation in the United
States, eroding the value of the dollar and making the US debt China
holds worth a lot less.
"As a major reserve currency-issuing
country in the world, the US should properly balance and properly
handle the impact of the dollar supply on the domestic economy and the
world economy as a whole," Mr Wang said.
Meanwhile, US
manufacturers complain they cannot compete fairly with their Chinese
competitors, accusing Beijing of deliberately devaluing its currency to
make its exports seem cheaper.
KEY ISSUES
- Values of dollar and yuan
- The US will press China to rely less on exports and more
on domestic consumption
- China will push for the US to make curbing inflation a
priority
- Both sides will seek reassurances over accusations of
trade protectionism
- North Korea and Iran's nuclear programmes
- Climate change and clean energy
Prior to
pre-election economic melt-down...
Obama:
US-China Relations to Shape 21st Century (link to I-BBC version of how
the financial crisis happened)
NYTIMES
By THE ASSOCIATED PRESS
July 27, 2009, Filed at 11:13 a.m. ET
WASHINGTON (AP) -- President Barack Obama, opening two days of
high-level talks with China, said the discussions could lay the
groundwork for a new era of ''sustained cooperation, not
confrontation'' in a relationship likely to shape the 21st
century. Obama said that Washington and Beijing needed to forge
closer ties to address a host of challenges from lifting the global
economy out of a deep recession to nuclear proliferation and global
climate change.
''I believe that we are poised to make steady progress on some of the
most important issues of our times,'' the president told diplomats from
both countries assembled in the vast hall of the Ronald Reagan Building.
Obama said he was under ''no illusions that the United States and China
will agree on every issue'' but he said closer cooperation in important
areas was critical for the world.
''The relationship between the United States and China will shape the
21st century, which makes it as important as any bilateral relationship
in the world,'' Obama said.
The discussions in Washington represent the continuation of a dialogue
begun by the Bush administration, which focused on economic tensions
between the two nations. Obama chose to expand the talks to include
foreign policy issues as well as economic disputes over trade and
currency values.
Secretary of State Hillary Rodham Clinton, welcoming the Chinese, said
the two nations were ''laying brick by brick the foundation for a
stronger relationship.''
Treasury Secretary Timothy Geithner and Vice Premier Wang Qishan,
China's top economic policymaker, both spoke of hopeful signs that the
global economy was beginning to emerge from its worst financial crisis
since the Great Depression. Geithner said that the so far
successful efforts of the two economic superpowers to move quickly to
deal with the downturns with massive stimulus programs marked a
historic turning point in the relationship of the two nations.
Speaking through a translator, Wang said that ''at present the world
economy is at a critical moment of moving out of crisis and toward
recovery.''
State Councilor Dai Bingguo said that the two countries were trying to
build better relations despite their very different social systems,
cultures, ideologies and histories.
''We are actually all in the same big boat that has been hit by fierce
wind and huge waves,'' Dai said of the global economic and other crises.
Obama said that the United States and China have a shared interest in
clean and secure energy sources. As the world's largest energy
consumers, Obama said that neither country profits from a dependence on
foreign oil. He also said neither country will be able to combat
climate change unless they work together. However, the
discussions this week were not expected to bridge wide differences
between the two nations on climate change and officials cautioned
against expecting any major breakthroughs in other areas either. U.S.
officials said they hoped the talks would set a positive framework for
future talks.
The administration did praise China for the help it has provided in the
nuclear standoff with North Korea.
With the global economy trying to emerge from a deep recession, the
United States and China have enormous stakes in resolving tensions in
such areas as America's huge trade deficit with China and the Chinese
government's unease over America's soaring budget deficits.
Three years ago, then-Treasury Secretary Henry Paulson used the initial
U.S.-China talks to press Beijing to let its currency, the yuan, rise
in value against the dollar to make it cheaper for Chinese to buy U.S.
goods. U.S. manufacturers blame an undervalued yuan for record U.S.
trade deficits with China -- and, in part, for a decline in U.S. jobs.
The U.S. efforts have yielded mixed results. The yuan, after rising in
value about 22 percent since 2005, has scarcely budged in the past
year. Beijing had begun to fear that a stronger yuan could threaten its
exports. Chinese exports already were under pressure from the global
recession.
But the Obama administration intends to remain focused on the trade
gap, telling Beijing that it can't rely on U.S. consumers to pull the
global economy out of recession this time. In part, that's because U.S.
household savings rates are rising, shrinking consumer spending in this
country.
For the United States, suffering from a 9.5 percent unemployment rate,
the ultimate goal is to help put more Americans to work.
While the U.S. trade deficit with China has narrowed slightly this
year, it is still the largest imbalance with any country. Critics in
Congress say that unless China does much more in the currency area,
they will seek to pass legislation to impose economic sanctions on
Beijing, a move that could spark a trade war between the two nations.
For their part, Chinese officials are making clear they want further
explanations of what the administration plans to do about the soaring
U.S. budget deficits. China, the largest foreign holder of U.S.
Treasury debt -- $801.5 billion -- wants to know that those holdings
are safe and won't be jeopardized in case of future inflation.
Geithner said in his opening remarks that the United States was moving
to repair its financial system and overhaul how financial companies are
regulated. He said the administration was also determined to deal with
a budget deficit projected to hit $1.84 trillion this year, more than
four times the previous high.
''We are committed to taking the necessary steps to bringing our fiscal
deficits down to a more sustainable level,'' he said.
RIOT UNIVERSAL
SYMBOL OF UNREST (unless inside a
stadium, then it is called soccer or "football")
Chinese use technique developed in the U.S.A. in the 1960's - URBAN RENEWAL - to get rid of "blight"
Needle Attacks And Rumors Spread In China's Xinjiang
By REUTERS
NYTIMES
September 10, 2009
Filed at 10:22 p.m. ET
BEIJING (Reuters) - Mysterious needle attacks have spread to new cities
in China's restive far-western region of Xinjiang, the China Daily said
on Friday, although once again the assaults appear to be a mix of real
and imagined. Nearly 600 people in Urumqi, the capital of
Xinjiang, home to the native Muslim Uighurs, have said they were
stabbed with needles over the last two weeks, leading to mass
demonstrations by Han Chinese against a government they said could not
guarantee their safety.
Nine suspects were detained in the cities of Hotan, Altay and Kashgar,
the China Daily said.
The pattern of real and imagined attacks appears to be continuing. Of
nine reported attacks in Hotan, three were actually pricked, while in
Altay, four of five reported attacks were false alarms and in Kashgar,
three of five were false alarms, the paper said, citing local
officials. Officials and state media blamed the attacks in Urumqi
on separatists bent on destroying ethnic unity. On July 5, a
demonstration by Uighurs turned into a riot in which 197 people, mostly
Han Chinese, were killed. Han Chinese launched revenge attacks two days
later.
Since then, Urumqi has been cut off from Internet access, international
phone calls, and most text messaging, to avoid a repeat of the
violence. The result is that rumors reign supreme. A police text
message was the spark that ignited the rash of reports in the divided
city of Urumqi. Five people died in unrest last week and tens of
thousands poured into the streets to demand the ouster of the powerful
regional Party Secretary, Wang Lequan.
"Recently, several residents were attacked by hypodermic syringes.
Local police security departments have also uncovered a case in which
assailants used syringes to attack passers-by," read the text message,
sent to Urumqi residents on August 31.
"Please don't panic over the incident, and inform police officers if
you find any suspects."
Panic they did.
By September 4, 513 people had turned up at police stations to report
they had been jabbed, stabbed or pricked. They were tested for HIV,
hepatitis and sexually transmitted diseases, adding to fears that the
attacks would spread AIDS. At least another 77 attacks have since been
reported.
On Sept 3, Han Chinese crowded into People's Square demanding Wang's
resignation for not ensuring their safety during the July riots, or
against the mystery stabbers. The five died on Sept 3, when crowds beat
up a Uighur man accused of jabbing a woman, and then attacked the
ambulance ferrying him to hospital.
New orders punishing rumor-mongers and forbidding citizens from beating
up suspects imply that the city government is trying to dampen the
firestorm it started. Most of the stabbings appear to be simple
hysteria. Only 106 victims had shown signs of jabs, bumps or rashes as
of Sept 4. Some were pricked by sewing needles or pins, not
syringes, doctors said. Other marks might be insect bites.
Authorities have revealed details of four crimes that appear to have
prompted the syringe warning.
On August 28, a 19-year-old Uighur followed a fruit seller home and
stuck a pin in her buttocks.
On August 29, two Uighur drug addicts, a man and woman aged 22 and 34,
used a syringe to mug a cabbie, stealing 710 yuan ($100).
On August 31, a Uighur addict used a syringe with heroin in it to fend
off arresting officers, some of whom were injured.
Authorities have not explained how the crimes by junkies and molesters
comprise an organized plot. It is possible that those who were
actually pricked, many on crowded buses, were targets of people seeking
revenge or trying to stir up hatred, or just bored people looking for
drama.
China's Restive West
Descends Into Mob Violence
NYTIMES
By THE ASSOCIATED PRESS
Filed at 7:40 a.m. ET
July 7, 2009
URUMQI, China (AP) --
Scattered mobs of Muslim Uighurs and Han Chinese
roamed the streets and beat passers-by Tuesday as the capital of
China's Xinjiang region degenerated into communal violence, prompting
the government to impose a curfew in the aftermath of a riot that
killed at least 156 people.
Members of the Muslim Uighur ethnic group attacked people near the
Urumqi's railway station, and women in headscarves protested the
arrests of husbands and sons in another part of the city. Meanwhile,
for much of the afternoon, a mob of 1,000 mostly young Han Chinese
holding clubs and chanting ''Defend the Country'' tore through streets
trying to get to a Uighur neighborhood until they were repulsed by
police firing tear gas.
Panic and anger bubbled up amid the suspicion. In some neighborhoods,
Han Chinese -- China's majority ethnic group -- armed themselves with
pieces of lumber and shovels to defend themselves. People bought up
bottled water out of fear, as one resident said, that ''the Uighurs
might poison the water.''
The outbursts happened despite swarms of paramilitary and riot police
enforcing a dragnet that state media said led to the arrest more than
1,400 participants in Sunday's riot, the worst ethnic violence in the
often tense region in decades.
Trying to control the message, the government has slowed mobile phone
and Internet services, blocked Twitter -- whose servers are overseas --
and censored Chinese social networking and news sites and accused
Uighurs living in exile of inciting Sunday's riot. State media
coverage, however, carried graphic footage and pictures of the unrest
--showing mainly Han Chinese victims and stoking the anger.
The violence is a further embarrassment for a Chinese leadership
preparing for the 60th anniversary of communist rule in October and
calling for the creation of a ''harmonious society'' to celebrate.
Years of rapid development have failed to smooth over the ethnic fault
lines in Xinjiang, where the Uighurs (pronounced WEE-gers) have watched
growing numbers of Han Chinese move in.
Wang Lequan, Xinjiang's Communist Party secretary, declared a curfew in
all but name, imposing traffic restrictions and ordering people off the
streets from 9 p.m. to 8 a.m. Wednesday ''to avoid further chaos.''
''It is needed for the overall situation. I hope people pay great
attention and act immediately,'' he said in an announcement broadcast
on Xinjiang television.
Sunday's riot started as a peaceful demonstration by Uighurs over a
deadly fight at a factory in eastern China between Han Chinese and
Uighur workers. It then spiraled out of control, as mainly Uighur
groups beat people and set fire to vehicles and shops belonging to Han
Chinese.
After retreating from the tear gas, some among the Han Chinese mob were
met by Urumqi's Communist Party leader Li Zhi, who climbed atop a
police vehicle and started chanting with the crowd. Li pumped his
fists, beat his chest, and urged the crowd to strike down Rebiya
Kadeer, a 62-year-old Uighur leader exiled in the United States whom
Chinese leaders accuse of being behind the riots.
''Those Muslims killed so many of our people. We just can't let that
happen,'' said one man in the crowd, surnamed Liu. He carried a long
wooden stick and said the Han Chinese were forced to take up arms.
People walked by with bloodshot eyes from the tear gas.
To the east, on Xingfu road, Han Chinese residents stoned a car with
two Uighurs inside until it crashed, pulling one passenger out and
beating him until police arrived, residents said.
Elsewhere in the city Tuesday, about 200 people, mostly women in
traditional headscarves, took to the streets in another neighborhood,
wailing for the release of their sons and husbands in the crackdown and
confronting lines of paramilitary police. The women said police came
through their neighborhood Monday night and strip-searched men to check
for cuts and other signs of fighting before hauling them away.
''My husband was detained at gunpoint. They were hitting people, they
were stripping people naked. My husband was scared so he locked the
door, but the police broke down the door and took him away,'' said a
woman, who gave her name as Aynir. She said about 300 people were
arrested in the market in the southern section of town.
The protesters briefly scuffled with paramilitary police, who pushed
them back with long sticks before both sides retreated.
Foreign reporters on a government-run tour of the riot's aftermath
witnessed the protest and without their presence, the incident might
have gone unreported given the media controls. Groups of 10 or so
Uighur men with bricks and knives attacked Han Chinese passers-by and
shop-owners midday outside the city's southern railway station, until
police ran them off, witnesses said.
''They were using everything for weapons, like bricks, sticks and
cleavers,'' said a Mr. Ma, an employee at the Dicos fast-food
restaurant nearby. ''Whenever the rioters saw someone on the street,
they would ask 'are you a Uighur?' If they kept silent or couldn't
answer in the Uighur language, they would get beaten or killed.''
It was not immediately clear if anyone was killed in those reported
attacks.
Li, the Communist Party official, told a news conference that more than
1,000 people had been detained as of early Tuesday and suggested more
arrests were under way. ''The number is changing all the time. We will
let those who did not commit serious crimes go back to their work
units.''
The official Xinhua News Agency said earlier Tuesday that 1,434
suspects had been arrested, and that checkpoints had been set up to
stop rioters from escaping. Officials at the news conference said
they could not give a breakdown of how many of the dead were Uighurs
and how many were Han Chinese.
Sunday's riot started as a peaceful demonstration by 1,000 to 3,000
people protesting the June 25 deaths of Uighur factory workers killed
in a brawl in the southern Chinese city of Shaoguan. Xinhua said two
died. Messages circulating on Internet sites popular with Uighurs put
the figure higher, raising tensions in Xinjiang.
In a sign the government was trying to address communal grievances,
Xinhua announced Tuesday that 13 people had been arrested over the
factory fight, including three from Xinjiang. Two others were arrested
for spreading rumors on the Internet that Xinjiang employees had raped
two female workers, the report said, citing a local police deputy
director.
The disturbances in Xinjiang carry reminders of the widespread
anti-Chinese protests that shook Tibet last year and have left large
parts of western China living with police checkpoints and tightened
security. Like the Tibetans, Uighur unrest has not been muted by rapid
economic development, though the government publicly is unwilling to
address ethnic tensions.
Riots Break Out in
Western China Amid Ethnic Tension
NYTIMES
By EDWARD WONG
July 6, 2009
BEIJING — At least 1,000 rioters clashed with the police on Sunday in a
regional capital in western China after days of rising tensions between
Muslim Uighurs and Han Chinese, according to witnesses and photographs
of the riot.
The rioting broke out Sunday afternoon in a large market area of
Urumqi, the capital of the vast, restive desert region of Xinjiang, and
lasted for several hours before riot police officers and paramilitary
or military troops locked down the Uighur quarter of the city. The
rioters threw stones at the police and set vehicles on fire, sending
plumes of smoke into the sky, while police officers used firehoses and
batons to beat back rioters and detain Uighurs who appeared to be
leaders of the protest, witnesses said.
At least three Han Chinese were killed in the rioting and 20 people
were injured, according to Xinhua, the official news agency. Dozens of
Uighur men were led into nearby police stations with their hands behind
their backs and shirts pulled over their heads, one witness said. Early
Monday, the local government announced a curfew banning all traffic in
the city until 8 p.m.
The riot was the largest ethnic clash in China since the Tibetan
uprising of March 2008, and perhaps the biggest protest in Xinjiang in
years. Like the Tibetan unrest, it highlighted the deep-seated
frustrations felt by some ethnic minorities in western China over the
policies of the Communist Party.
Many Uighurs, a Turkic-speaking Muslim group, resent rule by the Han
Chinese, and Chinese security forces have tried to keep oil-rich
Xinjiang under tight control since the 1990s, when cities there were
struck by waves of protests, riots and bombings. Last summer, attacks
on security forces took place in several cities in Xinjiang; the
Chinese government blamed separatist groups.
Uighurs taking part in the riot on Sunday were furious over an ethnic
brawl between Uighur and Han workers that broke out on June 26 in a toy
factory in Guangdong and that resulted in the deaths of two Uighurs. A
total of 116 people were injured. The police later arrested an
ex-employee of the factory who had ignited the brawl by starting a
rumor that six Uighur men had raped two Han women at the work site,
Xinhua reported.
There was also a rumor going around on Sunday in Urumqi that a Han man
had killed a Uighur earlier that day in the city, said Adam Grode, an
English teacher and former Fulbright scholar living in the neighborhood
where the rioting took place.
“This is just crazy,” Mr. Grode said in a telephone interview on Sunday
night. “There was a lot of tear gas in the streets, and I almost
couldn’t get back to my apartment. There’s a huge police presence.”
Rumors of Uighurs attacking Han Chinese spread quickly through parts of
Urumqi, adding to the panic. A worker at Texas Restaurant, a few
hundred yards from the site of the rioting, said her manager urged the
restaurant workers to stay inside. “My boss went home in the evening
and called us saying he had heard that Uighurs were beating Han
Chinese, so we’d better stay in the restaurant,” said the worker, a
woman who gave only her surname, Wang.
Xinhua reported few details of the riot on Sunday night. It said that
“an unknown number of people gathered Sunday afternoon” in Urumqi,
“attacking passers-by and setting fire to vehicles.”
Uighurs are the largest ethnic group in Xinjiang but are a minority in
Urumqi, where Han Chinese make up more than 70 percent of the two
million or so people. The Chinese government has encouraged Han
migration to the city and other parts of Xinjiang, fueling resentment
among the Uighurs. Urumqi is a deeply segregated city, with Han Chinese
there rarely venturing into the Uighur quarter and often warning
visitors to stay away from the area.
The Uighur neighborhood is centered in a warren of narrow alleyways,
food markets and a large shopping area called the Grand Bazaar or the
Erdaoqiao Market, where the rioting reached its peak on Sunday.
Mr. Grode, who lives in an apartment there, said he went outside when
he first heard commotion around 6 p.m. He saw hundreds of Uighurs in
the streets; that quickly swelled to more than 1,000, he said. When
public buses stopped at the scene, Uighurs riding inside opened the
windows and joined the crowd in shouting slogans.
Police officers soon arrived. Around 7 p.m., protesters began hurling
rocks, vegetables and other goods from the market at the police, Mr.
Grode said. Traffic had ground to a halt, and some rioters threw stones
at bus windows.
An hour later, as the riot surged toward the center of the market,
troops in green uniforms and full riot gear showed up, as did armored
vehicles. Chinese government officials often deploy the People’s Armed
Police, a paramilitary force, to quell riots. The troops shot off tear
gas canisters and might have fired other projectiles too, Mr. Grode
said.
By midnight, he said, some of the armored vehicles had begun to leave,
but bursts of gunfire could still be heard.
China Web
Controversy Highlights Public Role
NYTIMES
By THE ASSOCIATED PRESS
Filed at 8:54 a.m. ET
July 1, 2009
BEIJING (AP) -- Beijing's retreat on its latest Internet-censorship
effort highlights the rise of China's increasingly tech-savvy, vocal
public as a factor in the authoritarian government's decisions.
China
gave in late Tuesday to complaints by Web users, manufacturers and
foreign governments and postponed a plan to require producers to supply
a government-endorsed filtering software known as ''Green Dam'' with
every personal computer sold in China.
''We think this is a result of the efforts of all the parties, but we
think public opinion played an even more important role than the
others,'' said Edward Yu, president of Analysys International, an
Internet research company in Beijing.
The retreat marks another significant shift for a Communist Party that
is used to being the final voice in official decisions but is learning
to accommodate a public that is growing more assertive as living
standards rise.
One of the more vocal campaigners against the filtering software,
avant-garde artist Ai Weiwei, threw a party at a Beijing restaurant
Wednesday to celebrate. Guests wore T-shirts with slogans cursing Green
Dam and the ''GFW'' or Great Firewall, the nickname of the government's
extensive system to monitor and filter Internet traffic.
Ai said he wanted July 1 declared Internet Day as ''a reminder that no
one should violate the right to free access to the Internet.''
Though the Chinese leadership remains as determined as ever to crush
challenges to its authority, it also knows that staying in power means
keeping in touch with public attitudes and key interest groups.
The
government polls relentlessly if quietly. It monitors comments on the
Internet from China's nearly 300 million Web users. Sometimes the
government alters decisions -- like it did with Green Dam.
''This is a milestone in the growing role the broader public has in
forming policy decisions,'' said David Wolf, president of Wolf Group
Asia, a technology marketing consultant in Beijing. ''The Chinese
government is getting very comfortable with listening to voices online
and saying, `There's our feedback'.''
Beijing's initial order -- made public last month -- would have
required manufacturers to pre-install or include filtering software
with every PC. Authorities said it was needed to protect children from
obscene and violent material. The order, however, threatened to
take
censorship to a new level of intrusiveness. It touched off an outcry
among Internet users, many of whom represent the privileged educated
elite. Analysts who examined the software said it also would block
political material the government dislikes.
In announcing the delay of its order, the Ministry of Industry and
Information Technology did not say whether Green Dam might be revived
at a later date.
In celebrating, some Web activists warned the victory was temporary.
''It's not as if they have dropped their censorship program but I do
think it will be much harder for them to roll out Green Dam now because
over this past half-year censorship and fighting censorship have become
part of youth consciousness,'' said Zuo La, 28, a blogger from the
southern city of Changsha who uses the online name Zola.
''Even some middle and high school students know about censorship now
and are really annoyed by the controls,'' Zuo said.
Industry analysts expect Beijing may try to mollify users by developing
a less obvious system.
''They certainly will not give up on the effort to filter the
Internet,'' said Duncan Clark, chairman of BDA China Ltd., a Beijing
technology research firm. ''But they're sensitive to mass disquiet.''
Aside from not considering the public reaction, Beijing bungled the
Green Dam roll-out by rushing the software into service and failing to
give adequate notice to computer-makers.
''The response of the public in China was a clear indication that
somebody didn't do their homework,'' James Zimmerman, a partner in
Beijing for the law firm Squire Sanders & Dempsey, said in an
e-mail. ''The government knows that voices of discontent are alive and
well in China, and the government needs to do a better job at
harnessing these voices rather than ignoring them during the
rule-making process.''
The Internet's role in publicizing complaints and focusing government
attention has been gaining momentum. A waitress who was accused
of
fatally stabbing a party official to fend off his demands for sex
became a folk hero after a flood of supportive postings appeared
online. Last month, a court convicted the 21-year-old woman, Deng
Yujiao, but spared her punishment in an apparent effort to mollify the
public.
Green Dam was announced amid a series of official efforts to tighten
Internet controls ahead of the politically sensitive 60th anniversary
in October of the 1949 founding of the communist government.
Earlier
this year, Web sites were ordered to review their content to make sure
they had no pornographic or politically unpalatable material. The
government also has scrapped or modified technology regulations after
complaints by industry and China's trading partners.
In April, the government said it was postponing for a year a
requirement for foreign suppliers of computer security technology to
reveal how their products work. That came after industry groups and the
U.S. government objected.
China, Russia Call For Talks on Iran, North
Korea
By REUTERS
Filed at 8:34 a.m. ET
June 17, 2009
MOSCOW (Reuters) - The presidents of Russia and China on Wednesday
called for a diplomatic push to resolve tensions over the nuclear
programs of Iran and North Korea after wide-ranging talks in Moscow.
In a joint statement Chinese President Hu Jintao and Russia's Dmitry
Medvedev also made a thinly veiled attack on the United States, saying
no country should base its defense on expanding military alliances and
building missile defenses. Medvedev also said the two sides had
agreed
a record $100 billion in energy deals, although it was not clear how
much of this figure represented previously announced agreements.
"Russia and China assert that the regulation of the situation around
the Iranian nuclear program is possible only by political and
diplomatic methods," the statement said.
"The heads of state expressed their serious concerns in relation to the
situation on the Korean peninsula... and call for the speedy restarting
of six-sided talks," it said.
Hu came to Russia for a state visit which included two summits of
developing world countries covering global trade, security and greater
representation for emerging market powers on the world stage.
"Russia and China consider international security indivisible and
all-encompassing," the joint statement said.
"The security of certain countries cannot be ensured at the expense of
the security of others, including through the expansion of military
political alliances and the creation of global and regional
missile-defense systems."
Earlier on Wednesday Hu met Russian Prime Minister Vladimir Putin and
praised efforts by Russia and China to pool their influence on the
world stage.
"We have enacted effective strategic cooperation, which allows us...to
assert our joint forces and provide the necessary contribution to
achieving peace and stability in the world," Hu said, according to a
Russian translation of his comments.
Hu invited Putin to visit Beijing in October. The two leaders know each
other well, having met several times when Putin was president of Russia
from 2000-2008. After the meeting with Putin, Hu laid a wreath at
the
tomb of Russia's unknown soldier at the foot of the Kremlin walls.
Coinciding with Hu's visit, Russia's Economic Development Ministry
released figures showing that in the first months of 2009, China had
become Russia's biggest trading partner, overtaking Germany and the
Netherlands.
(Reporting by Denis Dyomkin and Toni
Vorobyova; writing by Conor Humphries; editing by Philippa Fletcher)
China Charges 4 Rio Tinto Employees; Spying Allegations Are in Question
NYTIMES
By DAVID BARBOZA
August 12, 2009
SHANGHAI — China formally charged an Australian citizen and three other
employees of the British-Australian mining giant Rio Tinto late Tuesday
with commercial bribery and trade secrets infringement in a case that
has rocked the global steel industry and created a diplomatic uproar.
But a brief statement on the case, reported by the official Xinhua news
agency, did not mention the much more serious charges of espionage that
Beijing had earlier alleged and that had frayed relations between China
and Australia in recent weeks. It was unclear if the Chinese government
included those charges in its more detailed filing on the case or had
backed away from them under international pressure.
The case has generated significant anxiety among foreign corporations
and investors worried that China could stifle business by pressing
state secrets charges against executives.
In the statement released through Xinhua, prosecutors said the four Rio
Tinto employees had used “improper means” to obtain commercial secrets
from China’s government-controlled iron and steel industry. Although
commercial bribery is a criminal charge, the sentence for anyone
convicted of the crime is significantly shorter than those for states
secrets violations.
The announcement came more than a month after the four employees were
detained in Shanghai and accused of stealing state secrets from China’s
steel industry and harming the nation’s economic interests. It followed
weeks of diplomatic pressure from the Australian government, which had
complained about a lack of transparency in the case.
After the detentions, Prime Minister Kevin Rudd of Australia had
cautioned China to deal fairly, openly and judiciously with the
employees because the world would be watching how it handled the case.
Australian government officials did not reply early Wednesday to
requests for comment on the statement of the charges.
If China indeed chose not to charge the employees with violating the
country’s state secrets law, it would drastically alter the case
because legal scholars say that prosecutions under that law are not
transparent and are notoriously difficult to defend against.
Jerome A. Cohen, a professor of law at New York University and a expert
on China’s legal system, said the language used in the prosecutor’s
announcement was unclear but suggested that Beijing might have chosen
to downgrade the charges.
“It doesn’t sound like they are doing this under the state secrets
law,” Mr. Cohen said after being read the Xinhua statement. “They may
be trying to lower the temperature in the world by getting it out of
the state secrets context.”
The detentions of the four employees, including three Chinese citizens,
had stunned many multinational companies doing business in the country
because the government had invoked its murky espionage law in a case
that many legal experts said involved allegations that sounded like
commercial bribery rather than spying.
The accusations in the case have also caused turmoil in China’s steel
industry, the world’s largest, and disrupted the country’s already
contentious annual iron-ore negotiations with some of the world’s
biggest producers, including Rio Tinto.
A spokesman at Rio Tinto’s headquarters in London said late Tuesday
that the company was not yet aware that the charges had been filed.
In recent weeks Rio Tinto has strongly denied any wrongdoing in the
case and insisted that the company had no evidence that its employees,
including Stern Hu, a Chinese-born Australian citizen, had ever engaged
in bribery or wrongdoing.
Mr. Hu, the general manager of Rio Tinto’s Shanghai office and the
company’s top iron ore salesman in China, is believed to be one of the
highest ranking foreign executives ever charged with commercial bribery
and trade secrets infringement involving a state-controlled industry.
China
Backs Off Accusations Against Mining Giant
NYTIMES
By DAVID BARBOZA
August 11, 2009
SHANGHAI — China appeared on Monday to step away from accusations made
over the weekend that the British-Australian mining giant Rio Tinto had
engaged in commercial espionage against China for six years that cost
the country about $100 billion.
The accusations were published late Saturday or early Sunday on
baomi.org, a Web site affiliated with China’s State Secrets bureau, but
on Monday, the Web site was down for part of the day, and when it
resumed operating, the article was no longer posted.
Since late June, after China broke off acrimonious iron ore
negotiations with Rio Tinto and other big mining companies, its
state-controlled media and Web sites have published a series of
damaging reports about Rio Tinto, bribery and corruption in China’s
steel and iron ore industry. The negotiations have recently resumed.
The author of the baomi.org article, Jiang Ruqin, is an official with
the State Secrets bureau. In an interview on Monday with the Bloomberg
and Dow Jones news agencies, he said that he had not been assigned to
write the article, but was expressing his own opinion. “I just wanted
to write the article because this situation’s impact is really big,” he
said. “It affects the country’s economic security.”
Mr. Jiang said his main accusation — that because of Rio’s spying,
China’s steel industry was overcharged by about $100 billion — came
from China Central Television, another propaganda arm of the Chinese
government.
A call to Mr. Jiang’s office was not returned Monday afternoon.
An official at the propaganda department of the state secrets agency,
the National Administration for the Protection of State Secrets, told
Dow Jones Newswires on Monday that the agency had not authorized anyone
to release comments on the case.
The step back added another twist to a case that has strained relations
between China and Australia and created chaos and fear in China’s steel
and iron ore industry.
Last month, the Shanghai branch of the secrets bureau detained four Rio
Tinto employees, including a Chinese-born Australian citizen, on
suspicions of stealing confidential documents from the country’s huge
government-controlled steel industry.
Rio Tinto has strongly denied any wrongdoing in the case and insisted
that its employees follow strict ethics policies.
The Australian government has been pressing China for more transparency
in the case and for a speedy resolution.
The reports accusing Rio Tinto of illegal business practices here have
appeared in China’s official propaganda publications, including Xinhua
and China Daily, the country’s largest English-language daily. The
baomi.org Web site and another site affiliated with the State Secrets
bureau have also released information.
China’s state-runs news media is often used to deliver government
messages. But analysts have cautioned before that because of warring
factions within the government, that information can sometimes be
confusing.
China
Accuses Rio Tinto of Long-Term Conspiracy
NYTIMES
By DAVID BARBOZA
August 10, 2009
SHANGHAI — China said Sunday that it had evidence showing that for at
least six years, employees working for the British-Australian mining
giant Rio Tinto had engaged in commercial espionage, costing the
country about $120 billion.
The sensational allegation was published on a Web site affiliated with
China’s State Secrets Bureau, which detained four Rio Tinto employees,
including an Australian citizen, in Shanghai last month on suspicions
of espionage and stealing state secrets from the country’s huge,
government-controlled steel industry. The comments marked the first
time that China had suggested that the case involved a long-running
conspiracy.
The case has strained China’s relations with Australia and rocked
China’s steel industry, which purchases billions of dollars’ worth of
iron ore every year from Rio Tinto and other huge mining companies.
The detentions have also thrown China’s annual negotiations with the
world’s biggest iron ore producers into chaos at a time when demand for
iron ore and steel is soaring in China because of an economic recovery.
Iron ore is a key ingredient in steel.
Multinational corporations operating in China have also grown concerned
because there could be serious risks for executives gathering
information or doing business with state-owned Chinese companies.
Rio Tinto officials could not be reached Sunday for comment. But the
company has strongly denied any wrongdoing in the case. The
British-Australian company BHP Billiton, the world’s biggest mining
company and also a major supplier of iron ore, declined to comment.
The new allegations, published by the National Administration for the
Protection of State Secrets in China, named only Rio Tinto but
suggested that all foreign iron ore suppliers had benefited from fraud
committed by Rio Tinto employees.
The major iron ore producers generally follow the same benchmark price
set during annual negotiations. The article offered very few details
but said evidence China had found on Rio Tinto computers showed that
the company had gathered extensive intelligence on China’s steel
industry and that the information it acquired had given the company an
edge in setting annual benchmark prices for iron ore over the past six
years.
“The computer data Rio Tinto staff held showed that they have gained
extensive, detailed inside information on the steel industry,” the
article said, “and were definitely spying on China’s economic interests
and security.”
The price of iron ore has skyrocketed in China during that period; it
peaked in 2008 at more than $200 a ton. But analysts have generally
attributed the price increase to soaring demand from China’s
fast-growing steel industry, which is now the world’s largest.
China, however, contends that the price was manipulated, costing the
government-controlled steel industry an additional $120 billion.
In earlier statements, China had accused Rio Tinto employees of
stealing confidential information by bribing Chinese steel mill
executives. Australian officials said recently that the four Rio
employees had been detained largely because of their role in this
year’s iron ore negotiations.
Legal scholars have expressed surprise that China detained the four Rio
Tinto employees on state secrets suspicions rather than for commercial
spying. Under Chinese law, violating state secrets is much more serious
and very difficult to defend against, partly because much of the
evidence is not made public.
China has not yet charged any of the four employees, including three
Chinese citizens. But Australian officials have been pressing China for
transparency in the case and to expedite the process because Stern Hu,
an Australian citizen, is being held without formal charges and has not
even been allowed a visit by a lawyer or family member.
China
Holds Rio Tinto Executive on Spying Charges
NYTIMES
By DAVID BARBOZA
July 9, 2009
BEIJING — An Australian executive of Rio Tinto, one of the world’s
biggest mining companies and a major player in the Chinese market, is
being held by Chinese officials on suspicion of stealing state secrets,
an Australian government official said Wednesday.
Australia’s foreign affairs minister, Stephen Smith, made the
announcement to journalists in Perth, Australia, a day after Rio Tinto
said that four workers from its Shanghai office had been held by the
police since Sunday and that the company did not know why. Last month,
the company decided to scrap a planned $19.5 billion investment by
Chinalco, a state-owned Chinese company.
Public security officials in Shanghai and China’s Foreign Ministry
declined to comment on the case. China has not issued any statement
about the employees of Rio, an Anglo-Australian company.
Mr. Smith said that Stern Hu, an Australian citizen and general manager
of Rio Tinto’s iron ore business in China, was being held on espionage
charges and could also face criminal charges. He said he did not
believe the case was related to commercial matters or to the scrapped
deal.. Mr. Hu and the other three workers being held all worked in the
company’s sales and marketing division.
Australian diplomats in Shanghai were urgently seeking access to Mr.
Hu, Mr. Smith said.
The Sydney Morning Herald in Australia reported Wednesday that the
three other Rio workers being held in Shanghai were Chinese citizens.
Chinese courts can impose severe penalties, including death, in
espionage cases, particularly on Chinese citizens.
The case adds a strange twist to developments in the steel and iron ore
business in China in the last year.
China is in the midst of tough negotiations with Australian iron ore
producers and is seeking a reduction from prices of last year before
agreeing to buy large supplies of the ore, a main component in
producing steel, which China desperately needs to build its cities.
The Chinalco-Rio Tinto deal, which would effectively have expanded
Chinalco’s stake of 9.3 percent in Rio to 18.5 percent, had drawn stiff
political opposition in Australia, where mineral riches have fueled
prosperity and where some have begun to fear China’s power in the
region. Institutional investors had also expressed skepticism about the
agreement, with some calling it a sweetheart deal for the Chinese
government.
BHP Billiton, another Anglo-Australian mining giant, agreed to form a
series of ventures with Rio Tinto after the China deal was broken off.
Rio Tinto investors were also given an opportunity to make additional
investments in the company to help Rio strengthen its balance sheet.
Some Chinese officials later reacted strongly to Rio Tinto’s decision
to back out of the deal, suggesting that Rio Tinto and BHP Billiton
could have near monopoly power over iron ore production.
In its statement Tuesday, Rio Tinto said: “It appears four employees
from Rio Tinto’s Shanghai office have been detained for questioning by
Chinese authorities in Shanghai. The reasons for these actions are
unclear. Rio Tinto intends to cooperate fully with any investigation
the Chinese authorities may wish to undertake and has sought
clarification on what has occurred.”
The statement continued, “Rio Tinto is concerned about the employees’
well-being and is doing everything possible to help them and support
their families.”
On Wednesday, The Shanghai Securities News said the case could involve
commercial bribery. That article was posted on the web site of Xinhua,
China’s official news agency.
Mr. Smith, the foreign affairs minister, said Mr. Hu was a longtime Rio
employee who had worked in China for many years. His wife is also an
Australian citizen.
In his remarks to journalists Wednesday, Mr. Smith said: “The
Australian government was very surprised by both the detention and the
reason for the detention given by the Chinese authorities.”
Mining
Giant Scraps China Deal
NYTIMES
By DAVID BARBOZA and MICHAEL WINES
June 6, 2009
SHANGHAI — The Chinese government’s largest investment in a Western
company, a proposed $19.5 billion stake in the Australian-British
mining giant Rio Tinto Group, collapsed Friday, dealing a blow to
China’s global corporate ambitions and its efforts to gain clout in the
natural resources market.
The board of Rio Tinto announced the decision after meeting in London
on Thursday, saying the company had ended the deal struck in February
to sell the stake to the Chinese state-owned Aluminum Corp. of China,
also known as Chinalco.
The board said in a statement Friday that it would instead raise about
$20 billion by issuing new stock and forming a joint venture with its
longtime rival, the Anglo-Australian mining giant BHP Billiton.
The China deal, which would effectively have expanded Chinalco’s stake
of 9.3 percent in Rio to 18.5 percent, had drawn stiff political
opposition in Australia, where mineral riches have fueled prosperity
and where some have begun to fear China’s power in the region.
Institutional investors had also expressed skepticism about the
agreement, with some calling it a sweetheart deal for the Chinese
government.
Chinalco said it regretted the decision and had worked hard to try to
revise the deal to reflect changed market conditions, as well as the
response from shareholders and regulators.
“As a result, we are very disappointed with this outcome,” Chinalco’s
president, Xiong Weiping, said in a statement.
In its statement, Rio Tinto said that it had agreed to raise $5.8
billion through a venture with BHP Billiton and that it planned to
raise $15.2 billion more through a stock offering. Rio agreed to pay
Chinalco a $195 million breakup fee.
In Australia and elsewhere, the Rio-Chinalco deal has been viewed as a
corporate landmark, a crucial test of whether the West’s
shareholder-driven capitalism could mesh with a Chinese model that is
ultimately under state control.
The collapse of the deal will rank alongside the failure by a Chinese
company in an attempt to take over Unocal, the American oil company, in
2005. It will provide new evidence that Chinese attempts to extend its
global corporate reach are often limited by nationalistic reactions
abroad.
The Unocal deal collapsed amid furious debate in the United States
about the wisdom of selling strategic assets to China and over China’s
human rights record.
Until recently, Rio and Chinalco had strongly defended the investment,
which would have made the Chinese government Rio’s single biggest
shareholder by far and given it an advisory role in the company’s
operations. Chinalco would also have gained substantial stakes in
individual mines in several countries.
In return, Rio would have received a sorely needed injection of cash to
retire a portion of its $39 billion in debt, amassed mostly in an
ill-timed 2007 purchase of the Canadian aluminum maker Alcan. Rio would
have formed a strategic partnership with Chinalco that company
officials say would have given it greater access to Chinese customers
and opportunities to search for ores in China.
The deal was struck at the depths of the collapse in global commodities
and stock markets last year. The share price for Rio had been severely
depressed, not only by falling commodity prices but also by a costly
defense against a proposed and potentially lucrative takeover by BHP
Billiton.
But the tentative agreement came under increasing fire as the global
downturn waned, raising metals prices and Rio’s stock price
considerably from their earlier lows. Last February, shares in Rio
Tinto sold for $26.31 in London. On Friday, they were at $48.01 in
early trading.
Institutional shareholders complained that Rio should raise money
through a new stock issue instead of selling a dominant stake to the
Chinese government, which they argued had an interest in keeping the
price of ores as low as possible.
Chinalco insisted that it was independent of the Chinese government,
and Australian regulators ruled that the Chinese would not be able to
affect the price of iron ore, one of Rio’s main products, even with the
proposed stake in the company.
But those declarations failed to sway some critics, who argued that
Chinalco’s proposed investment followed the government’s declared
strategy of diversifying its global investments in resources as a way
of hedging against price increases. The Chinese are such large
consumers of some metals, like iron ore, that they already have some
say over prices.
Opposition politicians in Australia savaged the deal, calling it
evidence that Prime Minister Kevin Rudd, a Mandarin-speaking former
envoy to Beijing, was too cozy with the Chinese government. A
television commercial nationally broadcast in the past week showed
scenes of the Chinese Army’s 1989 assault on pro-democracy
demonstrators in Tiananmen Square and charged that Mr. Rudd “bears
gifts to the Chinese military regime by allowing control of strategic
mineral resources in Australia.”
A Nationals senator, Barnaby Joyce, one of the Australian politicians
who opposed the Rio-Chinalco deal, said the falling out was “great for
the Australian people.”
“We do not have the complications of the Communist Peoples’ Republic of
China’s government owning the wealth of Australia, in the ground in
Australia,” Mr. Joyce told the Australian Broadcasting Corp. on Friday.
Mr. Rudd said the country was still open to further Chinese investment,
but that future bids would be weighed against Australian national
interests. He said that politics were not responsible for the collapse
of the deal.
As the debate over the Rio investment grew louder, Chinese officials
complained about what they called protectionism and nationalism. The
Australian Foreign Investment Review Board, which scrutinizes deals
that involve big stakes in Australian companies, was expected to rule
on the Chinalco investment this month or early next month.
The proposed investment was seen as another sign of China’s growing
global clout and its need for the ingredients that help produce the
steel used in the country’s fast-paced building boom. Chinese companies
have been on the prowl around the world over the past few years,
striking supply contracts and buying corporate stakes that secure
long-term access to oil, iron ore, rare earth metals and other natural
resources.
The Chinese have also made major investments in recent years in real
estate, agriculture and international finance. Just in the past week,
the Chinese sovereign wealth fund agreed to spend more than $1 billion
to increase its already significant stake in Morgan Stanley, the Wall
Street investment bank.
Under the Rio deal, Chinalco had offered $7.2 billion to purchase
convertible bonds in Rio Tinto and $12.3 billion in cash for stakes in
Rio’s aluminum, iron ore and copper assets in the United States,
Australia and Chile. The bonds could have been converted to stock.
Uneasy
Engagement: Australia, Nourishing China’s Economic Engine, Questions
Ties
NYTIMES
By MICHAEL WINES
June 3, 2009
SYDNEY, Australia — If outlanders tend to associate Australia with
kangaroos, broad-brim leather hats and an opera house, many Australians
are different. They think of iron ore and bauxite, copper and coal,
nickel, gold and uranium, a trove of mineral riches that is their
nation’s birthright and the bedrock of its prosperity.
Which explains much of the breast-beating that has ensued since the
Chinese announced plans this year to buy a big chunk of it.
Since three state owned Chinese companies said they would buy stakes in
Australia’s storied mining industry totaling $22 billion — as much as
China’s entire investment here in the last three years — some of this
nation’s 21.3 million people have reacted with aggrieved nationalism.
The government of Prime Minister Kevin Rudd, which generally favors the
sales, has been savaged as naïvely cozy with China, a view some in
his own military appear to share. Opposition politicians have flogged
the specter of an Australian future more or less as a giant open-pit
mine in which the locals toil, but Beijing takes the profits.
“It’s the Communist People’s Republic of China, 100 percent
Communist-owned, buying up sections of the country and minerals in the
ground which they will then sell to the Communist People’s Republic of
China,” said Barnaby Joyce, who is a leader of the National Party in
Parliament. “And we’re going to live off the commission on the way
through. They’ll try to make sure we get as little as possible.”
But a few months after the first of the deals was announced, a sharp
initial backlash has given way to a more subtle queasiness over whether
Australia’s place in the region, anomalous but secure for so long, is
about to be altered by the new Chinese giant looming over its horizon.
Nor is Australia alone. From the Philippines to Vietnam, China’s
neighbors are recalculating the benefits — and potential deficits — of
life in the shadow of a newly dominant nation.
Australia has always been the West’s outpost in the East, the British
penal colony with American spunk and European joie de vivre. But
seemingly overnight, China has become Australia’s biggest trading
partner, one of its biggest tourism customers, the largest single buyer
of its government debt, a major buyer of farmland and real estate.
China’s hunger for steel gobbles up half of Australia’s iron ore
exports, and its textile factories buy more than half of Australia’s
wool. Over 120,000 Chinese students throng to Australian schools and
universities.
Although China’s purchases remain dwarfed by cumulative investments of
the Americans and the British, they are growing much faster.
And suddenly, Australians are stepping back, realizing that their new
best friend is someone they really do not know very well, much less
trust.
“The momentum has shifted from being broadly receptive to these deals
to having a hard think at this,” said Alan DuPont, who heads the Center
for International Security Studies at the University of Sydney. “This
is not just about China and Australia. It’s about how the world sees
China playing its role in the future as a great power.”
Surviving Corporate Invasions
This is not a new question. More than a century ago, Australians
fretted about becoming vassals of the resource-hungry British Empire;
then, in the mid-1900s, they feared becoming an American subsidiary.
When Japan Inc. began snapping up companies in the 1970s, suspicion of
Tokyo ran rampant.
The British and Americans proved good corporate citizens, however, and
Japan’s expansion faded amid economic problems. Now, Australians are
asking whether China will be different.
In one way, it assuredly is. Western companies, if at one time equally
ravenous for Australia’s resources, are not direct appendages of their
national governments. The dominant shareholder in major Chinese
resources companies is the Chinese government.
China has 115,000 state owned companies; the cream are more than 150
giants controlled by the central government. Those corporations — in
mining, steel, finance, communications and other crucial areas — seek
to make profits much as Western companies do. Government boards audit
them, appoint their top executives and evaluate their performance, but
in general, the companies insist, Communist Party leaders do not meddle
in business strategy.
Even if that is true, China has long insisted on maintaining state
control over companies in crucial industries, blurring the line between
national and corporate interests.
Take steel. China makes more steel than any other nation, but it is
highly dependent on iron ore imports to keep its mills humming. That
raises suspicions that China may want big stakes in mining companies
now to help ensure stable prices in the future.
But if China works to keep iron ore prices stable, that might benefit
steel producers more than it does Australian mining companies. That
concern has only grown in recent months, as China’s largest steel
producers have rejected as insufficient offers of lower prices from
Australian mining companies.
There is also the question of whether China’s stake in strategic
industries — like its investment in United States Treasury bonds —
could one day morph from a business deal to an instrument of diplomatic
influence.
The Chinese bids for parts of the three Australian mining companies —
Fortescue Metals, Oz Minerals and Rio Tinto Ltd. — have been raptly
watched for Australia’s answers. So far, they are mixed.
The smallest deal, an $840 million bid for part of Fortescue, a
struggling iron ore miner, won Australian regulators’ quick approval.
But Australia’s foreign investments review board, the central
gatekeeper for overseas purchases, vetoed part of a $1.8 billion bid
for Oz, the world’s second largest zinc miner. The reason: Australia’s
military raised the prospect of Chinese espionage at an Oz mine not far
from an aerospace test site. A pared-down deal was approved after the
suspect mine, the core of Oz Minerals’ assets, was excised from the
deal.
But it is the proposed purchase by the Aluminum Company of China, or
Chinalco, of $19.5 billion in Rio Tinto stock, bonds and mining rights
— China’s biggest investment in a foreign company — that has caused the
most angst.
Chinalco, which bought 9.3 percent of Rio Tinto in 2008, proposed
taking a larger stake after the global economic collapse drove Rio into
financial straits. If approved, the new investment would give China an
18.5 percent share of the world’s third largest mining company.
Chinalco unequivocally asserts its independence. “Chinalco operates as
a commercial entity, at arm’s length from Chinese political processes,”
the company’s Australian spokesman said in a written response to
questions.
Many Australian experts agree. Modern Chinese corporations are
state-run in name only, Ross Garnaut, an economist, former Australian
ambassador to Beijing and himself the head of a gold-mining company,
said in an interview. In practice, he said, they are just like their
Western counterparts — fiercely competitive, and focused on profit.
“You don’t know anything about the dynamics of relations between major
corporations in China if you think a major aluminum company like
Chinalco would sacrifice its profits to increase profits for one of its
rivals in the steel industry,” he said. Even Australia’s antitrust
regulators have concluded that the Chinese would be unable to influence
the price of iron ore, a crucial Rio Tinto product, were the Rio deal
to go through.
Intentions Arouse Suspicions
Yet other experts have a much different view of China’s intentions.
Paul Glasson, a Shanghai-based Australian who brokers deals between
Chinese and Australian businesses, notes that China’s domestic reserves
can meet demand for fewer than half of 45 strategic minerals. By 2020,
it will have sufficient supplies of only six.
“In a nation of 1.3 billion people, with the complex issues they face,
with such resource deprivation, would it be wise for the government to
abdicate that responsibility to S.O.E.’s?” he asked, using the
abbreviation for state owned enterprises. “Claiming the head doesn’t
know what the body is doing just makes the situation difficult.”
Mr. Glasson says state ownership actually brings advantages — among
them, deep pockets and a focus beyond the next quarterly statement —
that any merger partner might find attractive. But Beijing’s denial of
a role in its state owned companies, he said, is creating a credibility
problem.
In fact, Chinalco would be very much a junior partner if the Rio deal
were to go through, with just two seats on a 17-seat board of
directors. Chinalco would have to recuse itself from any Rio issues
that posed a conflict of interest.
Chinalco would also not be able to guarantee a supply of ore to other
Chinese companies, although the companies envision new efforts to
market iron and aluminum ore inside China.
Shareholders at Rio’s annual meeting in April were unimpressed. They
denounced the proposed deal as a fire sale of assets to a government
buyer whose interests were starkly at odds with their own. As if to
underscore the point, Rio’s share price has risen sharply since the
Chinalco agreement was announced, suggesting that Chinalco shrewdly
struck a deal at the nadir of the financial crisis. With every gain in
Rio’s stock price, the Chinalco deal looks less attractive.
Some institutional investors have suggested that they will oppose the
bid, which requires shareholder approval, even if regulators approve it
this year. And that seems in some question.
Allies of Prime Minister Rudd argue that increased Chinese investment
pumps money into Australia’s economy and opens new trade opportunities.
But Mr. Rudd’s opponents say he does Beijing’s bidding. Among a drip of
well-timed news leaks were claims that Chinese spies sought to hack
into Mr. Rudd’s laptop during last year’s Olympic Games, and that his
defense minister had failed to disclose gifts from a Chinese friend
with ties to Beijing’s military establishment.
Those allegations have been flying even as the Australian military has
become more focused on China as a potential rival. A newly issued
defense strategy proposes the biggest Australian military buildup since
World War II, driven in part by a forecast of rising Chinese economic
and military power, and a slow American fade in the Pacific.
And recently, a wealthy Australian businessman began a television
advertising blitz opposing the Rio-Chinalco deal, featuring Mr. Joyce,
an opposition leader. The theme — that Australia is selling its mineral
wealth to a “foreign government” that may not have Australians’
interest foremost — is unlikely to affect regulators’ deliberations.
But it stokes a larger disquiet of which Mr. Rudd’s government is
acutely aware.
Mr. Rudd, a Mandarin-speaking ex-diplomat in Beijing, has not helped
his cause: after an unannounced meeting with China’s propaganda
minister in Canberra, Australia’s capital, he lobbied for a greater
Chinese role in global finance at the Group of 20 economic meeting in
London, leading critics to dub him China’s “roving ambassador.”
Mr. Rudd shrugged off the gibes, but seemed stung: in London, his staff
quietly asked that he not be seated next to Beijing’s ambassador to
Australia during a television broadcast (the request was refused).
Australia’s foreign investments board has given itself an additional 60
days to consider the Chinalco-Rio deal. But hopes that some of
Australians’ unease might ebb during that breather took a hit in May,
when another state owned Chinese company, China Nonferrous Metal Mining
Group, proposed a $184 million purchase of 51.6 percent of another
miner, Lynas Corporation.
Lynas, which mines rare-earth minerals, also has been left short of
cash by the global economic crisis. Critics were quick to note that
China Nonferrous operates huge nickel and iron ore mines in Myanmar,
widely denounced as one of the world’s most repressive nations, and has
extensive gold-mining operations in North Korea.
“So Lynas would become part of a group which makes hay in Burma. Can
the government live with that?” The Australian, one of the nation’s
major newspapers, asked. “What are the rules about ethical investments?”
The executives at Chinalco, which also has operations in Myanmar, might
be expected to rue the bad timing of China Nonferrous. On the other
hand, it could be promoted as evidence that the government does not
stage-manage corporate strategy.
But at least one Chinalco executive no longer has those worries. The
company’s chairman, Xiao Yaqing, the architect of both the 2008 and
2009 purchases of Rio assets, left the company in March after being
promoted — to deputy head of the State Council, the team of cabinet
ministers that sets policy for all China.
CHINA
STIMULUS PACKAGE? Out with the old and historic neighborhoods, in with
the high density new - dated before it is ever built!
To Protect an Ancient City, China Moves to Raze It
NYTIMES
By MICHAEL WINES
May 28, 2009
KASHGAR, China — A thousand years ago, the
northern and southern branches of the Silk Road converged at this oasis
town near the western edge of the Taklamakan Desert. Traders from Delhi
and Samarkand, wearied by frigid treks through the world’s most
daunting mountain ranges, unloaded their pack horses here and sold
saffron and lutes along the city’s cramped streets. Chinese traders,
their camels laden with silk and porcelain, did the same.
The traders are now joined by tourists exploring the donkey-cart alleys
and mud-and-straw buildings once window-shopped, then sacked, by
Tamerlane and Genghis Khan.
Now, Kashgar is about to be sacked again.
Nine hundred families already have been moved from Kashgar’s Old City,
“the best-preserved example of a traditional Islamic city to be found
anywhere in central Asia,” as the architect and historian George
Michell wrote in the 2008 book “Kashgar: Oasis City on China’s Old Silk
Road.”
Over the next few years, city officials say, they will demolish at
least 85 percent of this warren of picturesque, if run-down homes and
shops. Many of its 13,000 families, Muslims from a Turkic ethnic group
called the Uighurs (pronounced WEE-gurs), will be moved.
In its place will rise a new Old City, a mix of midrise apartments,
plazas, alleys widened into avenues and reproductions of ancient
Islamic architecture “to preserve the Uighur culture,” Kashgar’s vice
mayor, Xu Jianrong, said in a phone interview.
Demolition is deemed an urgent necessity because an earthquake could
strike at any time, collapsing centuries-old buildings and killing
thousands. “The entire Kashgar area is in a special area in danger of
earthquakes,” Mr. Xu said. “I ask you: What country’s government would
not protect its citizens from the dangers of natural disaster?”
Critics fret about a different disaster.
“From a cultural and historical perspective, this plan of theirs is
stupid,” said Wu Lili, the managing director of the Beijing Cultural
Protection Center, a nongovernmental group devoted to historic
preservation. “From the perspective of the locals, it’s cruel.”
Urban reconstruction during China’s long boom has razed many old city
centers, including most of the ancient alleyways and courtyard homes of
the capital, Beijing.
Kashgar, though, is not a typical Chinese city. Chinese security
officials consider it a breeding ground for a small but resilient
movement of Uighur separatists who Beijing claims have ties to
international jihadis. So redevelopment of this ancient center of
Islamic culture comes with a tinge of forced conformity.
Chinese officials have offered somewhat befuddling explanations for
their plans. Mr. Xu calls Kashgar “a prime example of rich cultural
history and at the same time a major tourism city in China.” Yet the
demolition plan would reduce to rubble Kashgar’s principal tourist
attraction, a magnet for many of the million-plus people who visit each
year.
China supports an international plan to designate major Silk Road
landmarks as United Nations World Heritage sites — a powerful draw for
tourists, and a powerful incentive for governments to preserve
historical areas. But Kashgar is missing from China’s list of
proposed sites. One foreign official who refused to be identified for
fear of damaging relations with Beijing said the Old City project had
unusually strong backing high in the government.
The project, said to cost $440 million, began abruptly this year, soon
after China’s central government said it would spend $584 billion on
public works to combat the global financial crisis. It would
complete a piecemeal dismantling of old Kashgar that began decades ago.
The city wall, a 25-foot-thick earthen berm nearly 35 feet high, has
largely been torn down. In the 1980s, the city paved the surrounding
moat to create a ring highway. Then it opened a main street through the
old town center.
Still, much of the Old City remains as it was and has always been. From
atop 40 vest-pocket mosques, muezzins still cast calls to prayer down
the narrow lanes: no loudspeakers here. Hundreds of artisans still
hammer copper pots, carve wood, hone scimitars and hawk everything from
fresh-baked flatbread to dried toads to Islamic prayer hats.
And tens of thousands of Uighurs still live here behind hand-carved
poplar doors, many in tumbledown rentals, others in two-story homes
that vault over the alleys and open on courtyards filled with roses and
cloth banners.
The city says the Uighur residents have been consulted at every step of
planning. Residents mostly say they are summoned to meetings at which
eviction timetables and compensation sums are announced.
Although the city offers the displaced residents the opportunity to
build new homes on the sites of their old ones, some also complain that
the proposed compensation does not pay for the cost of rebuilding.
“My family built this house 500 years ago,” said a beefy 56-year-old
man with a white crew cut, who called himself Hajji, as his wife served
tea inside their two-story Old City house. “It was made of mud. It’s
been improved over the years, but there has been no change to the
rooms.”
In Uighur style, the home has few furnishings. Tapestries hang from the
walls, and carpets cover the floors and raised areas used for sleeping
and entertaining. The winter room has a pot-bellied coal stove; the
garage has been converted into a shop from which the family sells
sweets and trinkets. Nine rooms downstairs, and seven up, the home has
sprawled over the centuries into a mansion by Kashgar standards.
But Hajji and his wife lost their life’s savings caring for a sick
child, and the city’s payment to demolish their home will not cover
rebuilding it. Their option is to move to a distant apartment, which
will force them to close their shop, their only source of income.
“The house belongs to us,” said Hajji’s wife, who refused to give her
name. “In this kind of house, many, many generations can live, one by
one. But if we move to an apartment, every 50 or 70 years, that
apartment is torn down again.
“This is the biggest problem in our lives. How can our children inherit
an apartment?”
Building inspectors have deemed most of the oldest homes unsafe,
including all mud-and-straw structures, the earliest form of
construction. They will be leveled and, in many cases, rebuilt in an
earthquake-resistant Uighur style, the city promises.
But three of the Old City’s seven sectors are judged unfit for Uighur
architecture and will be rebuilt with decidedly generic apartment
buildings. Two thousand other homes will be razed to build public
plazas and schools. Poor residents, who live in the smallest homes,
already are being permanently moved to boxy, concrete public housing on
Kashgar’s outskirts.
What will remain of old Kashgar is unclear. Mr. Xu said that “important
buildings and areas of the Old City have already been included in the
country’s special preservation list” and would not be disturbed.
No archaeologists monitor the razings, he said, because the government
already knows everything about old Kashgar.
Kashgar officials do have good reason to worry about earthquakes. Last
October, a 6.8 magnitude quake struck barely 100 miles away. In 1902,
an 8.0-magnitude quake, one of the 20th century’s biggest, killed 667
residents.
Some residents say they also prefer a more modern environment. The
thousand-year-old design that gives the Old City its charm often
precludes basics like garbage pickup, sewers and fire hydrants.
In Mr. Xu’s view, demolition will give the Uighurs a better life and
spare them from disaster in one fell swoop.
All that said, there is a certain aura of forcible eviction about the
demolition, an urgency that fear of earthquakes does not completely
explain. The city is offering cash bonuses to residents who move out
early — about $30 for those who vacate within 20 days; $15 if they move
in a month. Homes are razed as soon as they become empty, giving some
alleys a gap-tooth look.
On Kashgar television, a nightly 15-minute infomercial hawks the
project like ginsu knives, mixing dire statistics on seismic activity
with scenes of happy Uighurs dancing in front of their new concrete
apartments.
“Never has such a great event, such a major event happened to Kashgar,”
the announcer intones. He boasts that the new buildings “will be
difficult to match in the world” and that citizens will “completely
experience the care and warmth of the party” toward the Uighur ethnic
minority.
The infomercial also notes that Communist Party officials from Kashgar
to Beijing are so edgy over the prospect of an earthquake “that it is
disturbing their rest.”
China has actually bought Treasury
bonds at an accelerating pace over the last year, but the borrowing
needs of the United States government have grown even faster. Prime
Minister Wen Jiabao of China, right, and President Obama. Sec'y
of the Treasury leaves lunch early with banking industry to practice
using chop sticks.
Treasury: Geither Will Discuss Deficits With China
NYTIMES
By THE ASSOCIATED PRESS
May 28, 2009Filed at 11:43 a.m. ET
WASHINGTON (AP) -- A Treasury official says Secretary Timothy Geithner
will discuss the Obama administration's efforts to deal with record
U.S. budget deficits in talks next week with top Chinese officials.
The senior Treasury official said that Geithner would stress to the
Chinese that the administration was committed to bringing down the
deficits once the country has emerged from the current recession and
financial crisis. Officials in China, the largest foreign holder of
U.S. Treasury securities.
The Treasury official briefed reporters on talks Geithner will hold
next Monday and Tuesday in Beijing under ground rules that prohibited
use of his name in advance of the meeting.
Speaker
Pelosi Dodges Human Rights on China Visit
NYTIMES
By THE ASSOCIATED PRESS
May 25, 2009Filed at 9:48 a.m. ET
SHANGHAI (AP) -- U.S. House Speaker Nancy Pelosi, long a fierce critic
of Beijing, toured China's financial capital on Monday but stayed clear
of human rights issues, though her presence emboldened protesters.
Pelosi's silence -- at least in public -- is especially notable since
her visit comes a week ahead of the 20th anniversary of the 1989
crackdown on the Tiananmen Square democracy protests. During a 1991
visit to Beijing, she unfurled a banner that read ''To those who died
for democracy in China'' in the square.
The apparent shift in her approach dovetails with President Barack
Obama's new emphasis on engagement with Beijing, rather than
confrontation over its human rights record. Visits by Pelosi and other
senior U.S. figures have been aimed at highlighting cooperation between
the two countries on a slew of issues.
The leading Democratic lawmaker's reputation as a strong human rights
defender galvanized petitioners in Beijing, where several hundreds
gathered Monday morning near the capital's South Railway Station to air
their grievances. Dozens of police stood guard and most protesters were
kept at bay behind police lines.
While many complaints were about individual cases, photos posted on the
Chinese-language Web site Boxun.com, a U.S.-hosted Web site banned in
China, showed one group of demonstrators holding up a black-and-white
cloth banner that said: ''Welcome Pelosi. Pay close attention to human
rights. SOS.''
In the past, Pelosi has been seen as an ardent supporter of China's
oppressed. When Tibetans staged protests against Chinese rule last
year, Pelosi visited their exiled spiritual leader, the Dalai
Lama. Pelosi did speak out on North Korea's nuclear program after
Pyongyang announced that it had successfully carried out an underground
nuclear test, weeks after threatening to restart its rogue atomic
program.
''If today's announcement is true, these tests would be a clear
violation of United Nations Security Council Resolution 1718, which
requires that North Korea not conduct any further nuclear tests. Such
action by North Korea is unacceptable and cause for great alarm,''
Pelosi said in a written statement.
Pelosi said she and other members of her delegation planned to urge
Chinese leaders to use their influence to get the North to return to
six-nation talks aimed at ending its nuclear program. The
lawmaker arrived over the weekend accompanied by a delegation of four
Democrats and one Republican, all members of the House Select Committee on Energy
Independence and Global Warming. The main focus of their
visit is on the shared goal of promoting clean energy and combatting
climate change.
Pelosi met Monday with Shanghai Mayor Han Zheng. The two exchanged
pleasantries but made no substantive remarks before reporters. The
delegation will later meet in Beijing with President Hu Jintao and
other leaders.
U.S. Senate Foreign Relations Committee chairman and Democrat Sen. John
Kerry is also in China, and Treasury Secretary Timothy Geithner will
arrive next week. He is expected to reassure Beijing about the strength
of the U.S. dollar and thus the value of China's vast holdings of U.S.
Treasury notes.
China
Grows
More Picky About Debt
NYTIMES
By KEITH BRADSHER
May 21, 2009
HONG KONG — Leaders in both Washington and Beijing have been fretting
openly about the mutual dependence — some would say codependence —
created by China’s vast holdings of United States bonds. But beyond the
talk, the relationship is already changing with surprising speed.
China is growing more picky about which American debt it is willing to
finance, and is changing laws to make it easier for Chinese companies
to invest abroad the billions of dollars they take in each year by
exporting to America. For its part, the United States is becoming
relatively less dependent on Chinese financing.
China has actually bought Treasury bonds at an accelerating pace over
the last year — notwithstanding Chinese officials’ complaints about
American profligacy. But the borrowing needs of the United States
government have grown even faster. So China represents a rapidly
shrinking share of overall purchases of Treasury securities. “China’s
demand for Treasuries has increased over the past year, but it hasn’t
increased at anything like the pace of the Treasury’s sale of new
Treasury bonds,” said Brad W. Setser, a specialist in Chinese financial
flows at the Council on Foreign Relations.
Americans and investors elsewhere are buying Treasuries instead. They
are saving more and have been shifting out of other investments —
including equities until the past two months — and into Treasuries.
China bought less than a sixth of the Treasuries issued in the 12
months through March. Less than two years ago, by contrast, Chinese
purchases of Treasuries, which included purchases in the secondary
market as well as newly issued securities, briefly exceeded the entire
borrowing needs of the United States.
Financial statistics released by both countries in recent days show
that China paradoxically stepped up its lending to the American
government over the winter even as it virtually stopped putting fresh
money into dollars.
This combination is possible because China has been exchanging one
dollar-denominated asset for another — selling the debt of
government-sponsored enterprises like Fannie Mae and Freddie Mac in a
hurry to buy Treasuries. While this has been clear for months, new data
shows that China is also trading long-term Treasuries for short-term
notes, highlighting Beijing’s concerns that inflation will erode the
dollar’s value in the long run as America amasses record debt.
So China’s rising purchases of Treasuries do not represent the
confident bet on America’s future that they might seem to be on the
surface. For instance, China does not appear to be dumping euros or yen
to buy Treasuries, economists said.
That said, recent Chinese and American data suggest that an astounding
82 percent of China’s $2 trillion in foreign reserves is in dollars,
according to calculations by Standard Chartered.
The development has caught the attention of the leaders of both
countries.
“The long-term deficit and debt that we have accumulated is
unsustainable — we can’t keep on just borrowing from China,” President
Obama said last Thursday.
Wen Jiabao, prime minister of China, also has expressed concern.
“We have lent a huge amount of money to the U.S. Of course we are
concerned about the safety of our assets. To be honest, I am definitely
a little worried,” Mr. Wen said earlier this year.
China now earns more than $50 billion a year in interest from the
United States, Mr. Setser at the Council on Foreign Relations
calculated.
China’s leaders were able to buy more Treasuries in recent months
without buying more dollars because they have abruptly turned their
back on the market for securities issued by government-sponsored
enterprises.
China was the world’s biggest buyer of these securities a year ago,
splashing out more than $10 billion a month.
But in the 12 months through March, it actually had net sales of $7
billion, and ramped up purchases of Treasuries instead.
China has also changed which Treasuries it buys. It has done so in ways
calculated to reduce its exposure to inflation or other problems in the
United States. As recently as a year ago, China actively bought
long-dated bonds, seeking the extra yield they could bring compared to
Treasury securities with short maturities, of which China bought
virtually none.
But in each month since November, China has been buying more Treasury
bills, with a maturity of a year or less, than Treasuries with longer
maturities. This gives China the option of cashing out its positions in
a hurry, by not rolling over its investments into new Treasury bills as
they come due should inflation in the United States start rising and
make Treasury securities less attractive.
The big question now for policy makers and economists alike lies in
whether the Chinese government’s purchases of American securities will
rise or fall in the coming months.
Two big forces are at work — but they are pushing Chinese investments
in opposite directions and might cancel each other out.
The first big shift is that Chinese foreign exchange reserves might
start growing again, after shrinking early this year.
A senior Chinese economic policy maker, Xu Lin, expressed concern here
on Monday that the reserves might grow faster if speculators started
pushing more foreign exchange into China in the months ahead.
China is strongly opposed to any significant appreciation or
depreciation of its currency, Mr. Xu said at a press conference. But if
international investors conclude that the Chinese economy has
stabilized ahead of economies elsewhere, they may start pumping more
money into the Chinese economy, he said.
To keep its currency at the same level, the Chinese government buys
foreign currency flowing into the country in excess of China’s needs.
If overseas demand for Chinese exports recovers, then China’s trade
surplus could start widening again as well. This would also tend to
fatten Chinese reserves.
But the countervailing trend is that the Chinese government is trying
to foster channels for foreign currency to be pumped out of the country
without the involvement of the central bank. The government has been
buying a wider range of assets and encouraging the private sector to
invest more money overseas.
“That’s part of a strategic move by the authorities to diversify,” said
Wensheng Peng, the head of China research at Barclays Capital. “The
reserves growth should accelerate because of inflows, but it will not
be as large as what we observed in 2007 and the first half of 2008.”
The State Administration of Foreign Exchange, which is part of the
central bank, issued draft regulations on Monday that would make it
considerably easier for private companies to raise dollars in China to
spend on overseas investments — a step that would lessen the need for
the Chinese government to buy up those dollars.
This spring China has also been stepping up its purchases of
commodities, which are usually bought in dollars. Iron ore has been
piling up on Chinese docks, government stockpiles of crude oil and
grain are being expanded and stockpiles are being started for products
like gasoline, diesel and sugar.
After six years of silence, China unexpectedly disclosed last month
that it had been gradually buying gold from domestic producers. The
country’s reserves had climbed from 600 tons in 2003 to 1,054 tons,
worth $31.8 billion at prices late Wednesday.
The disclosure, which produced a frisson of excitement in gold markets,
may have been aimed at reassuring a domestic audience that the Chinese
government was not putting all the nation’s savings into American
dollars. But the actual investment was tiny compared with China’s
foreign exchange reserves — and showed that China was accumulating gold
at a much slower rate than foreign currency.
A person in periodic contact with China’s central bank, who insisted on
anonymity to preserve his access, said that a Chinese central banker
complained to him last year that “we have so much money and there’s so
little gold, we can’t buy much without driving up the price.”
China Reports Dolphins
Foiled Pirate Attack
NYTIMES
By Robert Mackey
April 15, 2009, 4:01 pm
According to a report from China’s official news agency
Xinhua, “thousands of dolphins” recently prevented an attack on Chinese
merchant ships by Somali pirates in the Gulf of Aden. Xinhua’s Web site
published the photograph above, and three others, which first appeared
on the Web site of China Radio International on Monday.
It has to be said that none of the photographs actually shows the boats
said to contain Somali pirates being blocked by the dolphins, but
Xinhua reported news of the dolphin intervention as fact. Xinhua’s
English-language report, about a group of merchant ships escorted
through the dangerous waters by vessels from the Chinese navy, contains
some translation errors, but describes the efforts of the newest
members of the anti-piracy coalition in glowing, even poetic, detail:
"The Chinese merchant ships escorted by a
China’s fleet sailed on the Gulf of Aden when they met some suspected
pirate ships. Thousands of dolphins suddenly leaped out of water
between pirates and merchants when the pirate ships headed for the
China’s.
"The suspected pirates ships stopped and then
turned away. The pirates could only lament their littleness befor the
vast number of dolphins. The spectacular scene continued for a while."
Xinhua does not suggest that the cetacean force may have
been part of a classified military program, but given that we know that
the United States military has at least tried to train dolphins to work
for the government, The Lede is not yet willing to rule out the
possibility...
China’s
Leader Says He Is ‘Worried’ Over U.S. Treasuries
NYTIMES
By MICHAEL WINES and KEITH BRADSHER
March 14, 2009
BEIJING — The Chinese prime minister, Wen Jiabao,
expressed unusually blunt concern on Friday about the safety of China’s
$1 trillion investment in American government debt, the world’s largest
such holding, and urged the Obama administration to provide assurances
that its investment would keep its value in the face of a global
financial crisis.
Speaking at a news conference at the end of the Chinese parliament’s
annual session, Mr. Wen said he was “worried” about China’s holdings of
Treasury bonds and other debt, and that China was watching United
States economic developments closely.
“President Obama and his new government have adopted a series of
measures to deal with the financial crisis. We have expectations as to
the effects of these measures,” Mr. Wen said. “We have lent a huge
amount of money to the U.S. Of course we are concerned about the safety
of our assets. To be honest, I am definitely a little worried.”
He called on the United States to “maintain its good credit, to honor
its promises and to guarantee the safety of China’s assets.”
But he stopped short of any threat to reduce purchases of American
bonds, much less sell any of them. Still, it is rare for any world
leader to raise questions about the strength of United States
treasuries.
It Mr. Wen raised the concerns at a session in which he praised China’s
comparatively healthy economy and said that his government would take
whatever steps were needed to end the country’s economic slump. He also
predicted that the world economy would improve in 2010.
Mr. Wen’s remarks appeared to have been aimed partly at a domestic
audience that is increasingly worried about the global economic
turndown, and partly at the United States, which appears to be moving
toward a “Buy American” strategy in its economic stimulus plans. His
confident performance underscored the growing financial and
geopolitical importance of China, one of the few countries to retain
massive spending power despite slowing growth. It has the world’s
largest reserves of foreign exchange, estimated at $2 trillion, the
product of years of double-digit growth.
Economists say half of that money has been invested in United States
Treasury notes and other government-backed debt. Some has also been
deployed in major investment projects intended to prop up flagging
growth at home.
The bulk of China’s investment in the United States consists of bonds
issued by the Treasury and government-sponsored enterprises and
purchased by the State Administration of Foreign Exchange, which is
part of the People’s Bank of China.
China was the biggest single winner when the Bush administration put
Fannie Mae and Freddie Mac into conservatorship late last summer and
extended an explicit Treasury guarantee to the bonds issued by both of
these government-sponsored enterprises. China’s holdings of the two
enterprises’ bonds, estimated by credit rating agencies at $340 billion
then, suddenly leaped in value by billions of dollars in a single day
with the sharp narrowing then of the discount at which Fannie’s and
Freddie’s bonds had previously traded with respect to Treasury bonds.
The Chinese government is in a difficult position on its American
investments. If the United States government borrows less and engages
in less fiscal stimulus, this could help prevent interest rates from
rising in the United States and would preserve the value of China’s
existing bond holdings.
But less government spending in the United States could also mean a
slower recovery for the American economy and reduced American demand
for Chinese goods. The United States imported 17.4 percent less from
China in the first two months of this year compared to the same period
last year, contributing to a record drop in Chinese exports that is
braking the entire Chinese economy.
Some of China’s most controversial investments on the other side of the
Pacific Ocean, judging by comments in Internet chat rooms, have been
the purchases of shares in American financial institutions in 2007 by
the China Investment Corporation, the country’s sovereign wealth fund,
which was bankrolled nearly two years ago with $200 billion from its
foreign reserves.
The China Investment Corporation’s most-publicized deal came in June
2007, when it spent $3 billion on shares of the Blackstone Group, a big
private-equity fund, paying $29.605 a share. The stock closed on
Thursday at $6.10, for a loss of 80 percent, or $2.4 billion of the
initial investment.
A sharp narrowing of China’s trade surplus with the United States may
result in reduced Chinese purchases of American bonds in any case.
After China announced on Wednesday that its exports had plunged a
record 25.7 percent in February, investment bank economists predicted
that China’s trade surplus could fall by as much as half from last
year, to around $155 billion. That would leave China with fewer dollars
with which to buy foreign bonds, particularly as the pace of investment
flows into China has also slowed sharply.
During her visit to China last month, Secretary of State Hillary Rodham
Clinton publicly assured Beijing that its American holdings remained a
reliable investment. On Friday, Mr. Wen neither detailed his concerns
about their safety nor said what sorts of new assurances he expected
the United States to deliver.
But economists have cited several possible threats, led by the prospect
that the dollar’s value will depreciate over time, lowering the value
of China’s holdings.
“In the short run, the dollar is appreciating” because global investors
see the American currency as a safe haven at a time of crisis, Bai
Chong-En, who heads the economics department at Tsinghua University in
Beijing, said in a telephone interview. “But we don’t know what’s going
to happen in the long run. If the American stimulus package is financed
mainly by borrowing, then that may affect the future value of Treasury
securities.”
Some specialists also say that high inflation could erode the dollar’s
value. Finally, some believe that China’s investment in American debt
is now so vast that, should it need foreign exchange in some emergency,
it would be unable to sell its Treasury securities without flooding the
market and driving down their price.
“The only possibility, really, is that China will have to hold these
bonds until maturity,” said Shen Minggao, the chief economist at
Caijing, a Beijing-based business magazine. “If you start to sell those
bonds, the market may collapse.”
At Friday’s news conference, Mr. Wen said he believed that China’s
economic problems were less severe than in many Western nations
because, he said, China’s banks remain relatively healthy. While the
United States and Europe are battling both a recession and
financial-system collapse, he said, “we haven’t had to use money to
fill a financial hole.”
But he also conceded that it would be difficult to meet the
government’s 2009 goal of an 8 percent growth in G.D.P., a rate that
government experts have repeatedly said was needed to create sufficient
new jobs and reduce the chance of social unrest.
China has lost millions of jobs in recent months, including at least 20
million factory and construction jobs once held by migrant laborers.
He also defended the government’s own four trillion yuan, or $585
billion, stimulus program, saying it had been “misunderstood” by some
who questioned whether the package was completely new or partly
composed of older projects for which money had already been allotted.
He said that the national government’s 1.18 trillion yuan, or $173
billion, contribution to the plan was a new investment in “public
welfare, technological innovation, environmental protection and
infrastructure projects. The remainder of the package is to be financed
by local governments, banks and private investors.
That two-year investment should be sufficient to help China’s recovery,
he said, but “we have prepared enough ammunition and we can launch new
economic stimulus policies at any time.”
Mr. Wen’s two-hour news conference — by tradition, his only meeting
with the media each year — was dominated by questions about the
economy. But he also sidestepped a question about North Korea’s
apparent plans to launch a new missile capable of delivering a warhead
to parts of the United States, saying only that “the most important
thing is to resolve the key issues affecting the six-party talks” over
rolling back North Korea’s nuclear-weapons program.
Mr. Wen also rejected suggestions that the massive Chinese military
presence in Tibet and ethnic Tibetan parts of China — parts of which
are under a virtual lockdown this month, the 50th anniversary of a
failed uprising against the Beijing government — indicated that China’s
policies toward Tibet were flawed.
“The general situation in Tibet is stable and peaceful,” he said. “The
peacefulness of Tibet and its ongoing progress have proven that the
policies we have adopted are correct.”
Oliver Weiken/European Pressphoto
Agency
The opening ceremony of
the Chinese People’s
Political Consultative Conference at the Great Hall of the People in
Beijing on Tuesday.
China Reports Falling Prices
NYTIMES
By KEITH BRADSHER
March 11, 2009
HONG KONG — Most economists still do not expect the Chinese economy to
suffer a broad decline in prices this year, but statistics released on
Tuesday did provide disturbing whiffs of possible deflation.
Consumer prices were 1.6 percent lower last month than a year earlier,
the first decline since December 2002, the National Bureau of
Statistics announced in Beijing. February’s result represented a
precipitous drop from an inflation rate of 8.7 percent in February of
last year, when rising prices were a top priority for the Chinese
government.
Producer prices are falling even faster, dragged down mainly by lower
prices for oil and other commodities, but also by a glut of factory
capacity and a shortage of demand from exporters and Chinese buyers
alike. Producer prices were 4.5 percent lower last month than a year
earlier, after having shown annual increases of as much as 10 percent
as recently as last summer.
There are few signs yet that demand is returning. Commerce Minister
Chen Deming warned at a news conference in Beijing on Tuesday that
China’s trade had continued to shrink in February -- exact figures are
due for release later this week. And he cautioned that, “It’s fair to
say in coming months we will see quite a grim picture.”
In yet another possible hint of deflation, an index of real estate
prices in 70 Chinese cities also fell in February, inching down 0.3
percent from January and down 1.2 percent from a year ago.
For now, few economists are predicting that deflation will prove a
chronic problem. For starters, the Chinese government has been very
aggressively expanding the country’s money supply — and China’s
state-controlled banks, having suffered few of the losses of their
Western counterparts, have been following regulators’ instructions to
step up their lending. The Chinese government also plays a
greater role in the market and in prices than many governments in the
West. The government is moving to increase the prices at which it buys
rice and wheat by 18 percent, for example, which should help peasants’
incomes and halt a decline in food prices that helped to drag down
broader price indices in February.
The National Bureau of Statistics took the unusual step of issuing a
statement on Tuesday that denied China faced possible deflation. The
government agency noted that raw material prices had plunged around the
world, a drop that may not be repeated this year, and that the timing
of Chinese New Year may have had an effect — it fell in late January
this year instead of in February. Prices were also particularly
high for many foods in February of last year because of severe
snowstorms that were not repeated this year.
“The fact that the consumer price index and producer price index both
declined in February cannot be used to come to a conclusion that
deflation has appeared,” the National Bureau of Statistics said.
Prime Minister Wen Jiabao set a target last week of 4 percent inflation
this year. Yet there are many signs that supply exceeds demand
for a wide range of goods and services. Hong Kong business leaders warn
that most of their mainland factories are not running at full capacity,
although only a few percent of 65,000 Hong Kong-owned factories in
nearby areas of mainland China have actually closed.
“They may be operating at one-third or half of production” capacity,
said Clement Chen, the chairman of the Federation of Hong Kong
Industries, while adding that, “We haven’t seen a large number of
closures.”
In a possible sign that real estate developers are running into
financial difficulty and having to unload new houses and apartments at
a faster pace, the real estate index of 70 cities was led downwards by
a drop of 1.8 percent in new homes compared to a year ago. Prices of
existing homes fell 0.7 percent.
Moody’s Economy.com predicted that real estate prices would continue to
fall through this year in China. “In most parts of China, households
will likely choose to hold on to their savings for the rest of the year
rather than committing themselves to property purchases, especially
since the recent decline in prices has been disheartening,” wrote
Sherman Chan, an analyst in the company’s Sydney office, in a research
note.
The Shanghai A-share stock market shrugged off the decline in consumer,
producer and real estate prices, climbing 1.9 percent on Tuesday.
Economy to Dominate
Annual Chinese Gathering
NYTIMES
By MICHAEL WINES
March 5, 2009
BEIJING — China’s national Legislature begins
its tightly scripted annual meeting on Thursday with an agenda
dominated by the ruling Communist Party’s two overriding concerns:
riding out the global economic crisis and keeping citizens’ unhappiness
with their lot from boiling over into public unrest.
In the nine-day session of the National People’s Congress, about the
only suspense involves whether the government will propose to add still
more stimulus spending to the $584 billion that China’s leaders already
have pledged to help the slumping economy. On Wednesday, Asian and
European stocks rose in part on hopes that it would.
Prime Minister Wen Jiabao is to speaking early on Thursday to the
3,000-odd delegates, and is expected by many analysts to set a target
for 8 percent growth of China’s gross domestic product in 2009, the
same as in previous years. The government has long said that that rate
is needed to hold down unemployment and the potential for social
unrest. The economy logged a 9 percent rate last year, even after a
sharp slowdown in the last quarter.
But a number of experts believe that a 2009 growth rate of 6.5 percent
or 7 percent, meager by recent Chinese standards, is increasingly
likely. Some financial analysts predicted this week that the government
will propose spending vast new amounts to head off a sharper decline,
although the consensus view is that new spending, if any, will be more
modest.
“The government could enlarge the plan a bit,” Shen Minggao, the chief
economist for Caijing, a Chinese business magazine, said in an
interview. But he said that fiscal conservatives would be wary of
increasing a 2009 budget deficit that already appeared to be headed for
a record.
The projected deficit is widely expected to reach 950 billion yuan, or
nearly $140 billion, about 3 percent of China’s GDP. The previous
record deficit, about 2.6 percent of a far smaller economy, was
recorded in 2002.
One certainty is that whatever is proposed will be adopted. The
delegates, the handpicked cream of the Communist Party establishment,
have little taste for revolt. On Thursday, they will gather in the
wedding-cake Great Hall of the People, on Tiananmen Square, for Wen’s
two-and-a-half hour overview of China’s domestic and foreign-policy
goals. Much of the rest of the session will be spent giving those goals
ritual approval.
The lockstep is likely to be especially tight this year, because the
government wants to present a united and confident front to a public
battered by rising unemployment and falling incomes. The government
estimated a month ago that 20 million of the nation’s 130 million
migrant workers — the cheap-labor force that powered much of China’s
construction and export booms — had lost their jobs.
A signal goal of China’s stimulus program is to ensure that the idle
jobless do not become an engine of social unrest. Protests by laid-off
or cheated workers are a not-infrequent occurrence, and the government
has suggested that demonstrations will increase this year.
Already, the Beijing authorities have rounded up hundreds of would-be
petitioners who traveled from other cities to the capital, many hoping
to present grievances personally to the National People’s Congress
delegates.
But if the National People’s Congress suffers a rubber-stamp image, its
deliberations remain likely to illuminate the government’s still-murky
plans toward economic and social stability — and, perhaps, a bit of its
political calculation as well.
Experts will be watching Wen’s proposals closely to see not only how
the proposed 4 trillion yuan stimulus will be spent, but how much is
actually genuinely new spending. China’s central government is
allotting only about 1.2 trillion yuan , or $175 billion, of the total;
the rest is supposed to come from banks, investors and local
governments, whose finances are especially opaque.
Most of the money is set to go to infrastructure projects, like roads
and dams, that pump money quickly into the economy. But many outside
experts and some party figures are calling for more money to be spent
directly on people’s basic needs, from medical care to education to
poverty, and the need for more social spending is likely to be
vigorously debated at the meeting.
The delegates will consider one bill that would pour 850 billion yuan,
or about $124 billion, into health care reform, setting up a national
health insurance program and overhauling the medical care system. But
even that amount would only boost annual health care spending to about
120 yuan, or $20, per person, a sum some analysts say is too little to
provide meaningful relief.
“There’s an overinvestment in infrastructure,” Mao Yushi, the respected
80-year-old head of a Beijing research organization, said in an
interview this week. “Money should be directed to help small
businesses, for employment and social security, for medical insurance.”
In the past, such decisions have been the exclusive purview of party
leaders. As this People’s Congress convenes, there are small signs that
that is slowly changing.
On Sunday, Wen went on the Internet for nearly two hours to answer
questions from Web-surfing citizens, issuing his own call for the
government to be more transparent in its dealings. This week, the
National Development and Reform Commission — the government body that
is directing much of the stimulus spending — announced that it will
post details of its spending plans on the Internet.
The delegates themselves also plan to engage in Internet chats with
citizens, a Congress spokesman said this week.
Chinese stocks rose the most in four months on Wednesday as investors
bet that further economic stimulus measures would be announced and that
a wide range of Chinese companies would benefit. The Shanghai stock
market gained 6.1 percent on Wednesday.
Reports of New
Stimulus in China Lift Shares
NYTIMES
By DAVID JOLLY
March 5, 2009
Stocks rose around the world on Wednesday, as investors reacted to
speculation that China may expand its stimulus measures.
Shares increased on reports that Premier Wen Jiabao of China was
considering new spending measures on top of the $585 billion plan
already proposed. An announcement could come as early as Thursday in
China.
In early trading, the Dow Jones industrial average was 75 points or 1.1
percent higher, while the Standard & Poor’s 500-stock index rose
1.3 percent, climbing above 700. The Nasdaq rose 1.6 percent.
Producers of basic materials like steel, chemicals and plastic, which
could benefit from government-financed construction projects, rose in
early trading in New York. Energy shares also climbed as crude oil
prices rose $2.41 to $44.06 a barrel.
The morning’s gains pared two days of losses that dragged two major
stock indexes to their lowest levels since 1997. On Monday, the Dow
fell below 7,000, and a day later, the S.&P. 500 fell 0.6 percent
to dip below 700, taking its 2009 loss to 23 percent.
In afternoon trading, the DJ Euro Stoxx 50 index, a barometer of euro
zone blue chips, rose 2.9 percent, while the FTSE 100 index in London
increased 2.7 percent. The CAC 40 in Paris was up 2.4 percent and the
DAX in Frankfurt 3.3 percent.
Most Asian markets were higher, breaking a three-day losing streak. The
Tokyo benchmark Nikkei 225 stock average rose 0.9 percent, while the
Hang Seng index in Hong Kong rose 2.5 percent, and the Shanghai Stock
Exchange composite index gained 6.1 percent.
The S&P/ASX 200 in Sydney fell 1.6 percent, after a report showed
the Australian economy contracted 0.5 percent in the fourth quarter. It
was the first such decline in eight years, and came as a surprise to
most economists, who had been expecting the country to eke out positive
growth in the period.
Investors seemed to shrug off a report by ADP Employer Services that
private sector job losses increased in February. Index futures fell
slightly after the report, but eventually came back. ADP said private
employers cut 697,000 jobs in February compared with a revised 614,000
jobs lost in January. The January job cuts were originally reported at
522,000.
Investors were bracing for another bleak monthly unemployment report to
be released on Friday. The national unemployment rate has climbed to
7.6 percent since the recession began in December 2007, and economists
expect it to reach 7.9 percent for February.
Market participants were also focused on the interest rate policy
meetings Thursday of the European Central Bank and the Bank of England.
The dollar gained against most major currencies. The euro fell to
$1.2532 from $1.2562 late Tuesday in New York, while the British pound
rose to $1.4105 from $1.4051.
Prices of most government bonds slipped. The yield on the 10-year
Treasury, which moves in the opposite direction of the price, ticked up
one-tenth of a percent to 2.98 percent.
Question:
how long do you think China will keep propping up our economy?
Geithner Says China Is Manipulating Its Currency
NYTIMES
By JACKIE CALMES and DAVID STOUT
January 23, 2009
- a day ahead, again!
WASHINGTON — Timothy F. Geithner, who took a big step toward
confirmation as Treasury secretary on Thursday, told senators that the
Obama administration believes China is “manipulating” its currency,
suggesting a more confrontational trade stance toward that country than
under the Bush administration.
Mr. Geithner’s comment, made in writing to the Senate Finance Committee
hours before it voted 18 to 5 to recommend that the full Senate confirm
him, is certain to anger the Chinese government and raise fears that it
could sell off some of its huge reserves of dollars.
But it remained unclear whether Mr. Geithner was signaling that the new
administration would make a legal finding that China is engaging in
currency manipulation this spring, when it is required by a 20-year-old
law to report to Congress on such issues.
“President Obama backed by the conclusions of a broad range of
economists believes that China is manipulating its currency,” Mr.
Geithner wrote. That stopped short of a charge that China is
manipulating its currency intentionally to gain an unfair trade
advantage, as the 1988 trade law requires for an official citation of
“manipulation,” which in turn would trigger a United States diplomatic
effort to get China to let the value of its currency, the yuan, rise.
Mr. Geithner’s statement was in response to a question submitted by
Senator Charles E. Schumer, Democrat of New York, a Finance Committee
member who has been among the most vocal China trade critics in
Congress. Mr. Schumer welcomed the Geithner reply, saying in a
statement, “Change is coming in a lot of places. This new
administration has correctly declared the obvious.”
The National Association of Manufacturers, whose members have long
pushed administrations of both parties to get tougher with China,
likewise was pleased but also cautious given the potential for a
U.S.-China confrontation to exacerbate the global economic crisis.
“It has to be done very carefully,” said Frank Vargo, vice president
for international economic affairs at the N.A.M. “You know the world
has changed a lot with the financial crisis and China has a lot in U.S.
Treasuries. This needs to be done in a cooperative, not a
confrontational, way.”
The vote came a day after Mr. Geithner endured hours of grilling over
his failure to pay thousands of dollars in back taxes. That lapse
caused considerable embarrassment for Mr. Geithner, even as some
members of the panel said they were willing to accept his word that the
failure was an honest mistake.
As president of the Federal Reserve Bank of New York, Mr. Geithner has
played a central role in the financial rescue efforts of recent months,
and President Obama has described him as the person who will be “the
chief economic spokesman for my administration.”
As he awaited the committee vote on Mr. Geithner, the new president was
holding a second day of meetings with his economic advisers.
“In the current grave economic circumstances, America’s next Treasury
secretary will not have the luxury of being simply at expert or simply
a leader,” said Senator Max Baucus, the Montana Democrat who heads the
Finance Committee. “Tim Geithner will need to be both.”
Senator Maria Cantwell, Democrat of Washington, said she looked forward
to working with the new Treasury chief, and that she hoped he would
help put in place “a very strong regulatory framework” to prevent
future financial crises like the one gripping the nation now.
Mr. Geithner’s abilities and credentials were never at issue, and even
those conservative Republicans who differ with Mr. Geithner
ideologically said they were glad to support him.
“I’m not sure he comes from where I come from, but he’s the president’s
nominee,” said Senator Mike Crapo, Republican of Idaho.
Senator Orrin G. Hatch, Republican of Utah, said he was sure Mr.
Geithner was “a person of great integrity, even though he’s made these
mistakes,” an allusion to the back-taxes issue. Mr. Hatch praised Mr.
Geithner as “non-ideological, which to me is very important.”
Senator John Cornyn, Republican of Texas, said he was “willing to give
Mr. Geithner the benefit of the doubt” on his tax mistakes. But, he
added pointedly, he was not willing to give the benefit of the doubt to
the so-called “masters of the universe,” apparently meaning the
once-mighty Wall Street figures who have borne much of the blame for
the current economic troubles. The other Republicans who endorsed
Mr. Geithner were Olympia J. Snowe of Maine and John Ensign of Nevada.
The five senators who voted “no” are all Republicans: Charles E.
Grassley of Iowa, Jon Kyl of Arizona, Jim Bunning of Kentucky, Pat
Roberts of Kansas and Michael B. Enzi of Wyoming.
Mr. Kyl was Mr. Geithner’s chief antagonist on the tax issue. “He has
not been as candid with me or the committee as I think he should have
been,” Mr. Kyl said.
Mr. Enzi said, “I’m really disappointed that we’re even voting on
this,” adding that past nominees for office have been disqualified for
lesser infractions.
Arrests Increased in Chinese Region
NYTIMES
By EDWARD WONG
January 6, 2009
BEIJING — Authorities in the western Chinese region of Xinjiang
approved the arrests of nearly 1,300 people in the first 11 months of
last year on suspicion of “endangering state security,” according to a
report published Sunday in an official newspaper. That is an
extraordinary increase in the arrests on that particular charge
compared with the number in 2007 and is drawing scrutiny from human
rights groups.
The official newspaper, the Procuratorial Daily, which is published by
the Chinese equivalent of the attorney general’s office, said that
prosecutors in Xinjiang approved 1,295 arrests of individuals and
indicted 1,154 of them. In total, there were 204 cases that were
opened. The newspaper article was also posted on a Xinjiang government
Web site, lending legitimacy to the statistics.
In 2007, the number of people arrested across all of China on suspicion
of endangering state security was 742, according to government
statistics. Prosecutors indicted 619 of them.
Of those total numbers, about half were from Xinjiang, said Nicholas
Bequelin, a China researcher for Human Rights Watch, citing statistics
from the Xinjiang Yearbook, a government publication of regional
statistics. So the numbers reported on Sunday by the official newspaper
are a vast increase over the numbers from 2007.
“If this is confirmed, this is very alarming because it reflects that
the threshold of what constitutes a state security crime was
considerably lowered last year, in line with the campaign,” Mr.
Bequelin said, referring to a campaign against political crimes and
terrorism that the authorities in Xinjiang announced last year ahead of
the Beijing Olympics.
Chinese officials have said that elements in Xinjiang, a large region
that is the homeland of a Turkic-speaking Muslim people called the
Uighurs, are a special threat to the regional and national governments,
which are controlled by ethnic Han Chinese.
Many Uighurs chafe at what they call discriminatory policies in
Xinjiang, and some advocate for independence. Since 2001, when the Bush
administration began its war on terror, Chinese authorities have said
they are battling the “three forces” of separatism, terrorism and
religious extremism in Xinjiang. Waves of crackdowns have taken place.
In 2008, officials made many announcements of arrests and raids in
Xinjiang, especially during the approach of the Beijing Olympics, which
took place in August. That month, a series of attacks on security
forces unfolded in parts of Xinjiang. Wang Lequan, the regional
secretary of the Communist Party, said at a meeting on Aug. 13 that the
battle against the “three forces” was a “life or death struggle.”
The charge of endangering state security includes inciting separatism,
inciting subversion, stealing state secrets and giving state secrets to
foreigners. It can carry the death penalty.
The Duihua Foundation, a nonprofit organization based in San Francisco
that advocates for human rights in China, reported early last year that
the number of arrests and legal cases in which people were accused of
endangering state security has risen across China in recent years.
Government statistics show that of all the regions and provinces in
China, Xinjiang has had by far the most number of cases of arrests on
charges of endangering state security, Mr. Bequelin said.
Last month, Xinhua, the official state news agency, reported that two
Uighur men had been sentenced to death for carrying out an attack on
Aug. 4 in the city of Kashgar that ended up killing 17 paramilitary
officers and wounding 15 others. But the Xinhua report said the men had
been sentenced for murder and illegally producing weapons, not for
endangering state security.
As for the statistics published Sunday, “there are a lot of unanswered
questions,” Mr. Bequelin said.
“Nobody doubts there are individuals and groups that are advocating the
use of anti-state violence, although these people seem to be very low
in number and don’t constitute major threats to China’s state
security,” he said. “The problem is that it’s impossible to tell from
Chinese accounts what proportion of the total are these cases and what
are illegitimate cases based on political reasons — people who have
expressed dissenting religious and political views.”
The Chinese government maintains strict control over the practice of
Islam in Xinjiang. For example, government workers are not allowed to
worship at mosques, and the private teaching of the Koran and other
religious material is forbidden. According to the law, though, these
should not fall under the crime of endangering state security.
Chinese Court Jails 11 in Microsoft Piracy Ring
NYTIMES
By DAVID BARBOZA
January 1, 2009
SHANGHAI — A court in southern China convicted 11 people on Wednesday
of violating national copyright laws and participating in a
sophisticated counterfeiting ring that for years manufactured and
distributed pirated Microsoft software throughout the world. The
men were sentenced by a court in the city of Shenzhen to between
one-and-a-half to six-and-a-half years in prison, according to court
papers released late Wednesday.
Microsoft applauded the sentence in a statement released late Wednesday
Beijing time, saying they were the stiffest sentences ever handed down
in this type of Chinese copyright infringement case. Microsoft
has called the group part of “the biggest software counterfeiting
organization we have ever seen, by far” and estimated its global sales
at more than $2 billion.
The case is considered by some legal specialists to be a landmark
because it involved a joint anti-piracy effort by the Federal Bureau of
Investigation and China’s Ministry of Public Security. Law enforcement
officials said it was also notable because the group operated like a
multinational corporation, producing and distributing high quality
counterfeit software that was created and packaged almost identically
to the real products, despite Microsoft’s anti-piracy measures.
The counterfeit goods, like Windows XP and Office 2007, were sold using
the Internet and exported from China, mostly shipped to the United
States and Europe, where they commanded relatively high prices,
investigators say. American and Chinese officials say they broke up the
criminal ring in July 2007 with the arrest of 25 people in China, the
dismantling of several manufacturing facilities and the confiscation of
counterfeit software valued at more than $500 million.
“This is absolutely unprecedented,” David Finn, Microsoft’s associate
general counsel for worldwide piracy and counterfeiting issues, said.
“The size and scope of the operation is unlike anything we’ve seen
before. We found their products in 36 countries.”
A separate trial involving nine suspects in Shanghai has not yet
reached a verdict. That group has been accused of counterfeiting
Microsoft and Symantec software and distributing it worldwide.
Legal specialists say that software pirates are becoming increasingly
sophisticated and that the two court cases show that China is capable
of exporting high quality, fully packaged software that could be easily
sold as if it were the real thing. Even customs officials have been
fooled by the counterfeits, which contained hologram markings and
Microsoft’s difficult to replicate “certificates of authenticity,”
investigators say.
Counterfeiting experts say the ring appeared to be less interested in
selling its products inside of China, where counterfeit Microsoft
software can be purchased for as little as $3. They were seeking the
higher value export market. Microsoft says its 75-member
anti-piracy team had been tracking the ring since 2001. The F.B.I.
began its operation, code-named “Summer Solstice,” in 2005 and
cooperated with Chinese officials.
American politicians and corporate executives have been pressing China
for years to crack down on piracy and intellectual property rights
abuses involving everything from music and film to expensive software
products. Software piracy is rampant in China, where about 80 percent
of computers are believed to use counterfeit software, according to the
Business Software Alliance.
The counterfeiting has caused some friction between American and
Chinese officials, but China insists that it has made significant
progress in its fight against intellectual property violators. Now, the
successful prosecution of one of the biggest software counterfeiting
rings is seen by the government as a major breakthrough. Shenzhen
officials declined to comment Wednesday on the court verdict.
Still, while the F.B.I. and Chinese officials say hundreds of millions
of dollars worth of material were seized in a variety of international
raids, the Shenzhen court found on Wednesday that the suspects on trial
there had sold less than $200,000 worth of counterfeit products
overseas.
It is unclear whether others pocketed much greater sums or whether many
more ringleaders are still at large. Most of those convicted
Wednesday had only completed middle school, according to court
documents. But members of the group had access to one of China’s
biggest disk manufacturing companies in Shenzhen through the use of
phony licenses, court papers said.
The counterfeit Microsoft software was produced using manufacturing
equipment that costs millions of dollars, investigators said, and
appeared in English, German, Italian, Korean, Spanish as well as other
languages. The Chinese government found warehouses filled with molding
machines, guilding machines, sealing machines and air compressors.
3
Chinese Ships to Leave Friday for Somalia
NYTIMES
By THE ASSOCIATED PRESS
Filed at 8:40 a.m. ET
December 23, 2008
BEIJING (AP) -- Chinese warships on a mission to protect their
country's vessels and crews from pirate attacks off Somalia will depart
Friday, armed with special forces, helicopters and plans to share
information with other countries working in the area.
The operation, China's first major naval mission abroad, will include
destroyers Haikou and Wuhan as well as a large supply ship, said Rear
Adm. Xiao Xinnian, Deputy Chief of Staff of the People's Liberation
Army Navy. On board will be two helicopters and traditional weapons
such as missiles and cannons.
''In light of the peculiarity of this operation, we have also
dispatched some special forces ... these special forces will also carry
some light weapons that correspond with the specific features and needs
of this operation,'' Xiao said at a news conference Tuesday, without
giving additional details.
Though the purpose of the mission was to protect Chinese ships and
crews, Beijing has called for stepped up cooperation in anti-piracy
efforts. China announced it was sending warships to the area after the
U.N. Security Council authorized nations to conduct land and air
attacks on pirate bases.
''During the escort operation, Chinese ships are ready and willing to
strengthen information and intelligence sharing as well as (conduct)
humanitarian rescue operations with vessels of relevant countries
according to the situation on the ground,'' said Senior Col. Huang
Xueping, spokesman of the Ministry of National Defense.
A Communist Party newspaper has said the mission would initially last
three months, but Huang did not give an exact length, saying the
duration would depend on the U.N. mandate and conditions in the area.
The ships will depart Friday from the island province of Hainan in
southern China.
A German Navy frigate, meanwhile, sailed out of Djibouti's harbor
Tuesday to protect civilian ships in the region from Somali-based
pirates.
The Karlsruhe, with some 240 sailors on board as well as speedboats and
a helicopter, set off after lawmakers in Berlin last week approved
Germany's participation in a one-year, European Union-led anti-piracy
mission.
''There may be combat situations, and in this respect it would of
course be a combat deployment,'' Defense Minister Franz Josef Jung said.
Piracy has taken an increasing toll on international shipping,
especially in the Gulf of Aden, one of the world's busiest sea lanes.
Pirates have made an estimated $30 million hijacking ships for ransom
this year, seizing more than 40 vessels off Somalia's 1,880-mile
(3,000-kilometer) coastline. The shipping route now plagued by
pirates
is important to Germany, the world's largest exporter. Many of its
goods are sent abroad by sea and the Gulf of Aden, which leads to the
Suez Canal, is the quickest route from Europe to Asia.
China to the Rescue?
Not!
NYTIMES
By THOMAS L. FRIEDMAN
December 21, 2008
Hong Kong
I had no idea that many of those oil paintings that hang in
hotel rooms and starter homes across America are actually produced by
just one Chinese village, Dafen, north of Hong Kong. And I had no idea
that Dafen’s artist colony — the world’s leading center for
mass-produced artwork and knockoffs of masterpieces — had been
devastated by the bursting of the U.S. housing bubble. I should have,
though.
“American property owners and hotels were usually the biggest
consumers of Dafen’s works,” Zhou Xiaohong, deputy head of the Art
Industry Association of Dafen, told Hong Kong’s Sunday Morning Post.
“The more houses built in the United States, the more walls that needed
our paintings. Now our business has frozen following the crash of the
Western property market.”
Dafen is just one of a million Chinese and American
enterprises that constitute the most important economic engine in the
world today — what historian Niall Ferguson calls “Chimerica,” the de
facto partnership between Chinese savers and producers and U.S.
spenders and borrowers. That 30-year-old partnership is about to
undergo a radical restructuring as a result of the current economic
crisis, and the global economy will be highly impacted by the outcome.
After all, it was China’s willingness to hold the dollars and
Treasury bills it had earned from exporting to America that helped keep
U.S. interest rates low, giving Americans the money they needed to keep
buying shoes, flat-screen TVs and paintings from China, as well as
homes in America. Americans then borrowed against those homes to
consume even more — one reason we enjoyed rising wealth without rising
incomes.
This division of labor not only nourished our respective
economies, but also shaped our politics. It enabled China’s ruling
Communist Party to say to its people: “We will guarantee you
ever-higher standards of living and in return you will stay out of
politics and let us rule.” So China’s leaders could enjoy double-digit
growth without political reform. And it enabled successive U.S.
administrations, particularly the current one, to tell Americans: “You
can have guns and butter — subprime mortgages with nothing down and
nothing to pay for two years, ever-higher consumption and two wars,
without tax increases!”
It all worked — until it didn’t.
With unemployment now soaring across the U.S., said Stephen
Roach, the chairman of Morgan Stanley Asia, Americans — “the most
over-extended consumer in world history” — can no longer buy so many
Chinese exports. We need to save more, invest more, consume less and
throw out most of our credit cards to bail ourselves out of this crisis.
But as that happens, we need China to take our discarded
credit cards and distribute them to its own people so they can buy more
of what China produces and more imports from the rest of the world.
That’s the only way Beijing can sustain the minimum 8 percent growth it
needs to maintain the political bargain between China’s leaders and led
— not to mention pick up some of the slack in the global economy from
America’s slowdown.
However, if I’ve learned one thing here, it’s just how hard
doing that will be. China’s whole system and culture nourish saving,
not spending, and changing that will require a huge “cultural and
structural” shift, said Fred Hu, chairman for Greater China for Goldman
Sachs.
In China, for instance, to buy a home you have to put at
least 20 percent down, and the average is 40 percent. If you try to
walk away from the mortgage, the bank will come after your personal
assets. Moreover, China can’t just shift production from the U.S.
market to its own consumers. Not many Chinese villagers want to buy
$400 tennis shoes or Christmas tree ornaments.
Also, China has no real Social Security, health insurance or
unemployment insurance. Without that social safety net, it’s hard to
see how Chinese don’t end up saving most of their stimulus. “You open
up the newspaper every day and you hear about this factory shutting
down or that supplier going belly up,” said Willie Fung, whose company,
Top Form International, is the world’s leading bra maker. “You can
never be too careful in this financial climate.”
As such, “the world should not have a false hope that China
can cushion the global downturn,” by stimulating its domestic demand in
a big way, said Frank Gong, head of China research for JPMorgan Chase.
“The best thing China can do is keep its own economy stable.”
It’s good advice. China is not going to rescue us or the
world economy. We’re going to have to get out of this crisis the
old-fashioned way: by digging inside ourselves and getting back to
basics — improving U.S. productivity, saving more, studying harder and
inventing more stuff to export. The days of phony prosperity — I borrow
cheap money from China to build a house and then borrow on that house
to buy cheap paintings from China to decorate my walls and everybody is
a winner — are over.
China Subway Tunnel Collapses; 1 Dead,
16 Missing
NYTIMES
By THE ASSOCIATED PRESS
Published: November 15, 2008
Filed at 9:07 a.m. ET
BEIJING (AP) -- A subway tunnel under construction in eastern China
collapsed Saturday, trapping workers and creating a huge crater into
which more than 10 vehicles plunged, a local official said. At least
one person died and 16 were missing, state media reported.
A 65-foot (20-meter) -wide section of road over the construction site
collapsed in the eastern city of Hangzhou, said a city official who
gave only his surname, Zheng, as is customary. He said at least 10
vehicles had fallen into the crater.
Nineteen people were hospitalized, the official Xinhua News Agency said.
Water from a nearby river was seeping into the tunnel and had reached a
depth of about 16 feet (five meters), Xinhua said. About 2,000 rescuers
were struggling to pump out the water and search for the trapped
people, who were believed to be mostly construction workers, it said.
Five scuba divers were searching for people inside the vehicles, the
news agency said.
Witnesses said 27 people aboard a bus that fell into the crater managed
to escape, it said.
A rescue spokesman said one person was killed and 16 were missing,
Xinhua said.
It said the exact number of people trapped underground was still not
known.
The 43-mile (68.8-kilometer) subway project is being built at a cost of
$5.1 billion as is due to be completed in 2011, Xinhua said.
Attack in China Kills 16 Border Patrol Officers
NYTIMES
By ANDREW JACOBS
Published: August 5, 2008
BEIJING — Two men armed with knives and explosives ambushed a military
police unit in China’s majority Muslim northwest Monday morning,
killing 16 officers and wounding 16 others before being arrested,
according to the state media.
The assault, the deadliest terrorist attack in China since the early
1990s, took place 2,100 miles from Beijing, but just four days before
the start of the Olympics, adding to security concerns in the capital
as hundreds of thousands of foreign athletes, journalists and
spectators begin to arrive.
China, anxious to avert any possibility of terrorist attack during the
Games, has girded Beijing with soldiers, missile launchers and sidewalk
cameras. The heavy surveillance did not prevent a small protest near
Tiananmen Square on Monday by people who said they had not been
compensated after their homes were demolished for a redevelopment
project, but a swarm of police officers rapidly broke it up.
Security officials say they remain confident the events will take place
without incident.
“We are prepared to deal with any kind of security threat and we are
confident we will have a safe and peaceful Olympic Games,” said Sun
Weide, a spokesman for the Beijing Organizing Committee.
The assault took place at dawn in the oasis city of Kashgar, as a
brigade of border patrol officers jogged outside their barracks near
the city center.
Officials suggested the attackers were associated with a murky
separatist movement seeking independence for China’s Uighur minority, a
Turkic-speaking Muslim people who dominate the Xinjiang Uighur
Autonomous Region. Details were reported by Xinhua, the official news
agency, and could not be independently verified Monday.
According to those accounts, two men driving a dump truck rammed their
vehicle into the jogging soldiers, killing or wounding 10. The
attackers jumped out of the truck, stabbing the soldiers with knives,
and then lobbed homemade bombs at the barracks, although they exploded
outside the compound, Xinhua said. The police arrested the attackers,
whom they described as Uighurs, 28 and 33 years old, but did not
release their names. Xinhua said the arm of one man was badly injured
when an explosive device detonated in his hand. The police later
discovered another 10 such devices and what it described as a
“home-made gun” in the dump truck.
Images reportedly taken from local Kashgar television and briefly
posted on the Internet showed bodies shrouded in white sheets or on
stretchers. The attack, however, received no mention on the evening
news in Beijing.
In recent years, China has waged an increasingly muscular battle
against those it describes as radical Muslims. The East Turkestan
Islamic Movement, a group listed as a terrorist organization by the
United States and China, is blamed for much of the violence in
Xinjiang. The attacks, as recounted by the Chinese government, often
involve bombings targeting police stations, public buses, factories and
oil pipelines.
Human rights advocates say the official accounts are often exaggerated
to justify wide-ranging crackdowns on Uighur advocates of all stripes.
Dilxat Raxit, a spokesman for the World Uyghur Congress, an exile group
based in Germany, said the Chinese government had been systematically
repressing the culture and religion of Xinjiang residents, and that
such policies were radicalizing a growing number of people. “These
policies are forcing more Uighurs to turn to more militant protest,” he
said.
Chinese security strategists have cited groups like the East Turkestan
Islamic Movement as the greatest threat to the Olympics. At a news
conference last week, officials said a crackdown on Uighur separatists
this year had led to the arrest of 82 people who they said were
plotting to disrupt the Games through acts of terrorism.
Last month, the authorities executed two men and meted out heavy
sentences to 15 others who they said were members of the East Turkestan
Islamic Movement. The men were seized during a raid on what officials
said was as a terrorist training camp. Also last month, the police
raided an apartment in Urumqi, the capital of Xinjiang, and shot dead
five men who they said were planning a “holy war” against the region’s
ethnic Han population.
The official media has publicized other acts in recent months,
including what the authorities said was a thwarted attack by three
airline passengers who were planning to crash a Beijing-bound plane.
The suspects were armed with containers of gasoline, according to
Xinhua.
As in previous cases, the authorities presented little evidence to back
up their claims. Yitzhak Shichor, a professor of East Asian studies at
the University of Haifa in Israel who specializes in the East Turkestan
Islamic Movement, voiced doubt that the attack Monday in Kashgar had
been an act of terrorism. He said he thought the government was trying
to continue its vilification of the group, which if it exists at all,
does not have the manpower or weaponry to carry out a sophisticated
attack. “I am very skeptical of this kind of information that comes
only from Chinese sources,” he said.
But Li Wei, a counterterrorism expert at the China Institutes of
Contemporary International Relations, disagreed, saying he thought the
attack bore the hallmarks of Uighur separatists determined to grab the
spotlight at a time when all the world is focusing on China. “They are
trying to use the international media to make some noise, to let more
people know them and create panic in society,” he said.
Trade Talks Broke Down Over Chinese Shift on Food
NYTIMES
By KEITH BRADSHER
Published: July 31, 2008
HONG KONG — China and India have seldom shared the same views on free
trade in recent years, but they ended up on the same side at the
collapse of world trade talks in Geneva on Tuesday because China made
an abrupt about-face.
Growing worries in China about food security now appear to have
overridden the country’s previous commitment to free trade — a
commitment that has served it well until now as the country with the
world’s second-largest trade surplus after Germany.
Since joining the World Trade Organization in November 2001, China has
been a strong and outspoken defender of free-trade principles. It has
been especially critical of the United States, for example, for
invoking so-called “safeguard” rules to prevent an increase of Chinese
textile imports that threatened to put American manufacturers out of
business.
But this week, China allied itself with Indian negotiators in insisting
on safeguard rules for agriculture. China and India insisted that
developing countries be allowed to impose prohibitively high tariffs on
food imports from affluent countries to halt increases in imports that
might put farmers in poor countries out of business.
The United States and other food exporters refused to accept the
Chinese and Indian position on food safeguards, and talks broke down.
In an editorial Wednesday, the official newspaper China Daily denounced
the draft text that had been under negotiation. “This proposal would
put the livelihoods of vulnerable farmers of the developing world in
danger due to cheap farms imports from the rich world,” the editorial
said.
By contrast, the Chinese Commerce Ministry had denounced the American
use of textile safeguards in 2003 by saying that it was contrary to
international principles on “free trade, transparency and
nondiscrimination.”
The strong Chinese stance on farm goods comes at a time of rapidly
rising worry in Beijing about food security.
Food prices have soared around the globe in recent months, particularly
for rice, and many countries with a food surplus have imposed limits on
exports to retain supplies for their own populations. China has become
increasingly focused on making sure that its farmers can continue to
produce most of the food needed for the 1.3 billion people in that
country, and leery of having to rely on imports.
President Hu Jintao of China made this point when he met with leaders
from the Group of 8 nations in Japan on July 9. According to a Chinese
government statement issued afterward, “Hu said China attaches great
importance to agriculture and especially the food issue,” and he noted
that China “pursues a food-security policy of relying on domestic
supply, ensuring basic self-sufficiency and striking a balance through
appropriate import and export.”
Chinese officials have put increasingly stringent limits on the paving
over of farmland for factories, office towers and residential projects.
They have also held domestic grain prices well below international
levels through heavy subsidies, to the point that Chinese officials
have been aggressively chasing smugglers who try to buy cheap Chinese
rice and other grain and ship it to neighboring countries for resale.
Until now, China and India have had divergent vested interests in
international trade negotiations because they joined the World Trade
Organization under very different circumstances and are covered by
remarkably different trade rules.
The world’s major trading powers forced China to lower or eliminate
most of its trade barriers in exchange for letting it into the trade
group in November 2001. China accepted this deal because its membership
forced other countries to eliminate quotas and cut tariffs on Chinese
exports _ — and these exports have been soaring ever since.
Since China has relatively few trade barriers to defend, and since its
exports are highly competitive in many industries, it has tended until
now to favor open markets.
By contrast, India still has some of the world’s highest barriers to
imports.
India was one of the 23 founding members in 1947 of the trade group’s
predecessor, the General Agreement on Tariffs and Trade. Since then, it
has successfully argued that developing countries already in the global
trading system should be allowed to keep much higher trade barriers to
imports than affluent countries.
Kamal Nath, the Indian minister of commerce and industry,
and the top Indian trade negotiator, said in a recent interview that
developing countries needed to be able to protect their own food
supplies. “Every country must first ensure its own food security,” he
said.
Mr. Nath also contended that developing countries’ farmers have too
often faced unfair competition from industrialized countries — a point
that China repeated this week. The United States and the European Union
agreed to accept some limits on their farm subsidies in negotiations
this week, but their reductions were much more limited than developing
countries wanted.
Western manufacturers facing competition from China have sometimes
contended that China indirectly subsidizes its exports by controlling
currency markets on a massive scale to hold down the value of its
currency. China has accumulated $1.8 trillion in foreign exchange
reserves through these controls, most of it in the past five years.
But currency market activities are not covered by World Trade
Organization rules, and China has begun to allow gradual appreciation
of its currency since 2005 — although it continues to put heavy limits
on this appreciation.
There is a long history of countries’ endorsing free trade in
manufactured goods while opposing free trade in farm products. The
United States and Western European nations created the current
international trading system after World War II and dismantled many
trade barriers for industrial products but did relatively little for
farm trade until the completion of the Uruguay Round talks in 1993.
A seemingly obscure technical issue had the unlikely but crucial effect
of helping to bring China and India together in an unbreakable
partnership this week on the issue of food safeguards.
Negotiators had agreed that developing countries could impose some
safeguard tariffs to restrict farm imports in case of a sudden rise.
But there was no agreement on how high these extra tariffs could go.
Reducing agricultural tariffs has been an important part of the global
talks. Food-exporting nations argued that in imposing safeguard
tariffs, developing countries could only let their tariffs bounce back
up to current levels — in other words, they could revoke whatever
tariff reductions they endorse in the current trade talks and no more.
China, with support from India, demanded the allowance of safeguard
tariffs that would actually be higher than prevailing tariffs now — a
demand that the United States and other food exporters found
unacceptable.
In Changing Face of Beijing, a Look at the New China
NYTIMES
By NICOLAI OUROUSSOFF
Published: July 13, 2008
BEIJING — If Westerners feel dazed and confused upon exiting the plane
at the new international airport terminal here, it’s understandable.
It’s not just the grandeur of the space. It’s the inescapable feeling
that you’re passing through a portal to another world, one whose fierce
embrace of change has left Western nations in the dust.
The sensation is comparable to the epiphany that Adolf Loos, the
Viennese architect, experienced when he stepped off a steamship in New
York Harbor more than a century ago. He had crossed a threshold into
the future; Europe, he realized, was now culturally obsolete.
Designed by Norman Foster, Beijing’s glittering air terminal is joined
by a remarkable list of other new monuments here: Paul Andreu’s
egg-shaped National Theater; Herzog & de Meuron’s National Stadium,
known as the bird’s nest; PTW’s National Aquatics Center, with its
pillowy translucent exterior; and Rem Koolhaas’s headquarters for the
CCTV television authority, whose slanting, interconnected forms are
among the most imaginative architectural feats in recent memory.
Critics have incessantly described these high-profile projects as
bullish expressions of the nation’s budding global primacy. Yet these
buildings are not simply blunt expressions of power. Like the great
monuments of 16th-century Rome or 19th-century Paris, China’s new
architecture exudes an aura that has as much to do with intellectual
ferment as economic clout.
Each building, in its own way, embodies an intense struggle over the
meaning of public space in the new China. And although at times
terrifying in their aggressive scale, they also reflect the country’s
effort to give shape to an emerging national identity.
Mr. Foster’s airport terminal, the world’s largest, is the purest
expression of China’s embrace of the Modernist creed. Its swooping
form, which suggests two boomerangs placed side by side, has been
compared to a dragon. Yet its real precedent is Tempelhof Airport in
Berlin, a monument to air travel conceived by Albert Speer in the 1930s
as a gateway to a new Europe. Both are part of a vision of a mobile
society, one that extends back through Grand Central Terminal to the
great train halls of Paris.
Like Tempelhof, the Beijing air terminal boasts a sweeping concourse
that evokes the glamour of air travel while enclosing a surprisingly
intimate interior. But Mr. Foster pushes the ideal of mobility to a new
extreme. Guided by twinkling lights embedded in the terminal’s ceiling,
arriving visitors glide up ramped floors and across broad pedestrian
bridges before spilling out onto the elevated concourse. From there
they can disperse along a fluid network of roads, trains, subways,
canals and parks whose tentacles extend out through the region.
This sprawling web has completely reshaped Beijing since the city was
awarded the Olympic Games seven years ago. It is impossible not to
think of the enormous public works projects built in the United States
at midcentury, when faith in technology’s promise seemed boundless. Who
would have guessed then that this faith would crumble for Americans,
paving the way for a post-Katrina New Orleans just as the dream was
being reborn in 21st-century China at 10 times the scale?
Soaring Art, Deadening Frame
Yet your sense of marvel at China’s transformation is easily deflated
on the drive from the airport. A banal landscape of ugly new towers
flanks both sides. Many of those towers are sealed off in gated
compounds, a reflection of the widening disparity between affluent and
poor. Although most of them were built in the run-up to the Olympics,
the poor quality of construction makes them look decrepit and decades
old.
It’s the flip side of China’s Modernist embrace: tabula rasa planning
of the sort that also tainted the Modernist movement in Europe and the
United States in the postwar years. China’s architectural experiment
thus brims with both promise and misery. Everything, it seems, is
possible here, from utopian triumphs of the imagination to soul-sapping
expressions of a disregard for individual lives.
These tensions and contradictions are encoded in Mr. Andreu’s National
Theater, just west of Tiananmen Square. Topped by an elliptical
titanium-and-glass dome and surrounded by a shallow reflecting pool,
the theater complex stands along the Avenue of Eternal Peace, the great
east-west corridor that borders Tiananmen Gate.
Lining the avenue are many of the Socialist landmarks built for the
10th anniversary of China’s 1949 revolution, from the Great Hall of the
People to the Beijing Railway Station and the Revolutionary Museum. The
theater is one of the few major cultural monuments to rise in this
historic core since Mao’s mausoleum was built opposite the Forbidden
Palace three decades ago.
“It is a place that is very calm,” he said. “It is a building that you
cannot touch. I didn’t want to remove the mystery. You arrive through
trees to the edge of the water. But you can also penetrate it. I wanted
people to understand that this is for them.”
Yet the building’s symmetrical layout and monolithic
scale invite other interpretations. The isolation imposed by the
surrounding reflecting pool is reinforced by the entry sequence:
visitors must descend a grand staircase into the earth before passing
under the pool and re-emerging in the cavernous dome. It’s as if the
theater were connected to the city by a gigantic umbilical cord.
The entry passage suggests more haunting comparisons. Yan Meng, a
Chinese architect who grew up in Beijing in the aftermath of the
Cultural Revolution, told me that in the 1970s and ’80s Tiananmen
Square was in many ways the city’s social heart. “There were fewer
cars, it was more accessible,” he said as we drove past the square one
afternoon. “You would see people playing cards and flying kites.”
After the Tiananmen Square protests and the government’s violent
crackdown in 1989, the city added pedestrian barriers around the
square. Today it can be reached only through underpasses patrolled by
security forces, an experience that is more bleak than intimidating.
Once you emerge, the square feels like a tourist zone; the Chinese are
there mostly to buy and sell cheap souvenirs.
Mr. Yan suggests that the National Theater’s circuitous entry echoes
the clampdown on public life after the 1989 massacre. “It no longer
belongs to anyone,” he said of the square. “It is about control.”
Pushing What’s Possible
But some of the most imposing architectural symbols of China’s rising
stature reflect a more enlightened reading of how the future might
unfold. At their most self-aware, they probe the edges of the possible.
The Olympic Stadium and the National Aquatics Center lie 10 miles north
of the city center along its ancient ceremonial axis, putting them on
par with the Forbidden City and Mao’s mausoleum in national importance.
Of the two, Jacques Herzog and Pierre de Meuron’s stadium is the more
photographed and familiar symbol of the Games. Its huge elliptical form
is enveloped in a dense latticework of steel columns.
The columns, which twist and bend as they rise, are conceived as a
gigantic work of public sculpture. Their outward thrust suggests they
are straining to contain the activity inside. That intensity is
strangely magnified when the building is empty, as if trembling in
anticipation of a mass event.
Yet a conflict over the stadium’s future underscores tensions over how
the new China will be defined. The stadium is in the center of a
sprawling park surrounded by regimented rows of housing towers. After
the Games, Mr. Herzog and Mr. de Meuron hope to transform the building
into a vast public forum and a visual anchor for the community.
The government prefers to build a fence around it, which would
eliminate the parklike openness that is one of its most attractive
features. A local developer has proposed creating a subterranean
shopping mall at one end of the structure, further undermining the
design’s public spirit.
“The building is made to be open,” Mr. Herzog said. “It is a work of
public sculpture.” Still, as the architect, all he can do is press for
flexibility. “Even if they put up a fence, they can take it down again
one day in the future,” he said hopefully.
Mr. Koolhaas faces similar strains in his headquarters for CCTV, the
state television authority, several miles to the south in Beijing’s new
business district. Long negotiations have unfolded over how much public
access will be allowed: to the architect’s distress, CCTV’s directors
have threatened to close off two public roads that cut through the
site. An enormous plaza will also be restricted to the company’s
employees.
A year away from completion, the CCTV building has
already attracted huge global attention and some controversy. Some have
condemned Mr. Koolhaas for accepting the commission, likening it to
participating in the 1931-33 competition for a Palace of the Soviets in
Stalinist Russia. Essentially, they argue, he has designed a monument
to a vast propaganda machine.
But the project is a formidable challenge to all of our
expectations of what a monumental building should be. Like Mr. Herzog
and Mr. de Meuron, Mr. Koolhaas is part of a generation of architects,
now in their late 50s and early 60s, whose early careers were shaped in
opposition to the oppressive formal purity of mainstream Modernism.
They fashioned asymmetrical forms to break down the movement’s
monolithic scale and make room for outcasts and misfits. The problem
they face now is how to adjust that language for clients that include
authoritarian governments and multinational corporations.
In his design for the CCTV headquarters, Mr. Koolhaas begins by
obliterating any trace of the human scale from the exteriors. There are
no conventional windows, no clear indication of where the floors begin
and end. The forms completely distort your perspective of the building;
it seems to flatten out from some vantage points and bear down on you
from others.
As a result it is almost impossible to get a fix on the building’s
scale. Seen through the surrounding skyline of generic glass-and-steel
towers, it sometimes seems to shrink to the size of a child’s toy. From
other angles it seems to be under a Herculean strain, as if fighting to
support the enormous weight of the cantilevered floors above.
This is not just a game. Mr. Koolhaas has set out to express the
elasticity of the new global culture, and in the process explore ways
architecture can bridge the gap between the intimate scale of the
individual life and the whirling tide of mass society. The image of
authority he conveys is pointedly ambiguous. Imposing at one moment,
shy and retiring the next, the building’s unstable forms say as much
about collective anxieties as they do about centralized power.
He has carved out ample space for places of social exchange. The
interior of the building is conceived as an endless loop of public
activities, with cafes, viewing decks and galleries extending up
through one leg of the structure and back down through the other, where
it connects to an underground subway.
The architect sees the dividing line between public and private spheres
as an active battleground, one that is constantly shifting and
readjusting as society’s norms change and evolve. For now, however, it
is not the architect who will determine the degree of openness at CCTV
but the company’s government-appointed board of directors.
It remains to be seen where this will lead. For centuries, architects
have aspired to create buildings that enlighten or transform
civilization, only to see them remain isolated splendors, with little
impact on society at large. That may prove to be the case in China,
too.
But there is no question that its role as a great laboratory for
architectural ideas will endure for years to come. One wonders if the
West will ever catch up.
The New, New City
NYTIMES
By NICOLAI OUROUSSOFF
Published: June 8, 2008
“Don’t tell anyone,” Rem Koolhaas said to me several years ago as we
headed down the F.D.R. Drive in New York, “but the 20th-century city is
over. It has nothing new to teach us anymore. Our job is simply to
maintain it.” Koolhaas’s viewpoint is widely shared by close observers
of the evolution of cities. But not even Koolhaas, it seems, was
completely prepared for what would come next.
In both China and the Persian Gulf, cities comparable in size to New
York have sprouted up almost overnight...full
story here.
Agency Calls for
‘Energy Revolution’
NYTIMES
By JAMES KANTER
Published: June 7, 2008
BRUSSELS — The International Energy Agency, a group that advises
industrialized countries, said Friday in a report that investments of
at least $45 trillion might be needed over the next half-century to
prevent energy shortages and greenhouse gas emissions from slowing
economic growth.
Nobuo Tanaka, the agency’s executive director, called for “immediate
policy action and technological transition on an unprecedented scale.”
Mr. Tanaka said the world would “essentially require a new global
energy revolution which would completely transform the way we produce
and use energy.”
The report sends a strong warning that the combination of growing
demand for energy in countries like China and India, the dangers of
climate change and the scarcity of resources are going to require huge
shifts in the global economy. Countries will have to overcome
objections to building nuclear power plants and to storing large
amounts of carbon dioxide underground or beneath the ocean floor.
The report also described emissions-cutting pathways that broadly match
the advice of some leading scientists who have recommended cutting
emissions in half by 2050 as a way of avoiding devastating climate
change. Environment ministers from the Group of 8 industrialized
countries have backed a 50 percent target. The ministers said
governments should endorse that target at a G-8 summit in July.
Among the International Energy Agency’s chief messages is that current
policies are unsustainable with carbon dioxide emissions expected to
rise 130 percent and demand for oil expected to rise 70 percent by
2050. Tanaka warned that oil demand could be five times the current
production of Saudi Arabia by that time.
A crucial problem is that the rising cost of oil and gas is prompting a
switch to coal, particularly in India and China. Coal is cheap and
plentiful but its increasing use is contributing to the accelerating
growth in emissions of carbon dioxide.
The International Energy Agency offers advice on energy policy to its
27 member nations, including the United States, Canada, Japan,
Australia, New Zealand, South Korea and most of Europe. It recommended
taking measures now that would ensure that carbon emissions are down to
at least present-day levels by mid-century by, among other strategies,
using energy efficiency measures and reducing emissions from power
generation.
The agency also mapped out a second situation aimed at bringing
emissions to half their current levels by mid-century by emphasizing
technologies and strategies for “weaning the world off oil.” The agency
estimated the cost of that process at $45 trillion, or 1.1 percent of
annual global output, over the period to 2050. Investments of $100
billion to $200 billion would be needed each year over the next 10
years, rising to $1 trillion to $2 trillion each year in the coming
decades.
To reach the goal of halving emissions, it said, among the most
important measures would be equipping more than 50 gas and coal power
plants each year with equipment to capture and sequester carbon
dioxide. There would also be a need for 32 new nuclear plants each
year, while the number of wind turbines would need to increase by
17,500 a year.
Other strategies included accelerating the development of solar
electricity and so-called second-generation biofuels that do not
compete with food for farmland. The report acknowledged that
numerous objections to these technologies would need to be overcome, in
particular local opposition to building nuclear power plants and
long-term nuclear waste repositories.
But the most difficult and costly step, it said, would be reducing
carbon emissions from transportation at a time when the use of cars,
airplanes and ships would still be growing rapidly but few technologies
would exist to limit emissions from those sources.
Even so, Mr. Tanaka sounded an optimistic note, saying that although a
global energy technology revolution “will be a tough challenge” it was
“both necessary and achievable.”
Photo above shows town being flooded. Watch I-BBC video
of demolition
of structures and draining of "lakes" here.
Homeless. More trouble in Sichuan Province.
In Xiaohe, Yunnan, officials said the side of a mountain collapsed
Deadly landslides hit
south-west China
Page last updated at 08:44 GMT,
Tuesday, 13 July 2010 09:44 UK
At least 17 people
have been killed and dozens more are missing after a series of
landslides in south-west China, state media says.
The landslides, which were triggered by days of heavy rain,
struck three rural communities in Sichuan and Yunnan provinces.
Four people were killed and 42 others were missing after one
landslide in Xiaohe in Yunnan's Zhaotong city.
In Sichuan, two separate landslides left 13 people dead and
two missing.
Meanwhile further to the west in Qinghai province, 10,000
people have been evacuated from the area around an overflowing
reservoir.
Teams are trying to dig a channel to drain the reservoir,
which has been filled far beyond capacity by recent heavy rain.
It is the latest in a spate of weather-related incidents to
hit China. Although seasonal, the rains are particularly heavy this
year and disruption is severe.
At least 43 people had died and 18 were missing after heavy
rains along the Yangtze River in central and eastern China since 8
July, state media said.
Reservoir
fears
In Xiaohe in Yunnan, an official said that the side of a
mountain crashed down on houses.
"The township is located in a river valley surrounded by
mountains, people were buried in their homes," the government official,
who asked not to be named, told AFP news agency.
The other two landslides struck Yandai village in Garze and
Sima village in Luzhou city.
Search teams were working at all three sites, Xinhua news
agency said, and relief supplies had been sent to Xiaohe.
In Qinghai, soldiers were using bulldozers to cut a channel
to drain water from the Wenquan reservoir, Xinhua reported.
If it bursts, the reservoir could damage the nearby
Qinghai-Tibet railway, along with the city of Golmud's power and water
plants, the agency said.
Some parts of the city are reportedly already under 2m of
water.
Xinhua said the soldiers hoped to start draining the
reservoir within the day.
Six die in
China bridge landslide
I-BBC
Page last updated at 16:25 GMT, Saturday, 25 July 2009 17:25 UK
At least six people have been killed in a
landslide in the Chinese province of Sichuan.
The
landslide also destroyed a bridge that is a major link to areas where
reconstruction work is being carried out after last year's earthquake.
Falling rocks dislodged by heavy rain smashed into the bridge
in Wenchuan county, sending vehicles plunging into the river.
Rescue officials warned that the number of dead might rise.
The
China Daily newspaper said more than 10,000 vehicles crossed the bridge
each day and it was a lifeline for the reconstruction effort.
Wenchuan was the epicentre of the earthquake last May in
which more than 85,000 people lost their lives.
Thousands Camp in Tents After 6.0 Quake in China
NYTIMES
By THE ASSOCIATED PRESS
Filed at 8:36 a.m. ET
July 11, 2009
GUANTUNXIANG, China (AP) -- Thousands camped in tents in southwestern
China on Saturday after a magnitude-6.0 earthquake destroyed thousands
of homes, killed one person and injured 320, state media reported.
At the epicenter of Thursday's quake in Yao'an county, nearly 22,000
people took shelter in some 3,000 tents, and emergency crews rushed in
quilts, rice, cooking oil and other supplies, the official Xinhua News
Agency said.
The quake displaced some 250,000 people, the report said, sharply
revising downward an initial estimate of 400,000. Xinhua, which cited a
deputy governor of Yunnan province where the quake occurred, did not
give a reason for the discrepancy. A duty officer at the provincial
government offices declined to comment, saying the media office was
closed for the weekend.
Yao'an, a hilly area, sustained the worst damage, accounting for nearly
half the people displaced.
In Guantunxiang, one of the hardest-hit villages, Li Fashun's house was
reduced to a pile of red bricks.
''I don't think I'll be able to rebuild my house because I'm not strong
enough to make enough money,'' the 56-year-old farmer told an AP
Television News reporter Saturday.
Elsewhere, several Chinese soldiers wearing fatigues sifted through a
collapsed building as a woman recovered a live chicken from the rubble.
Nearby, another three soldiers carrying hoes walked in single file,
their leader holding a flagpole displaying the red Chinese national
flag. Three stray pigs sniffed through another big heap of rubble.
Xinhua previously reported that 18,000 homes were destroyed and another
75,000 were damaged in Yao'an and five neighboring counties. A disaster
relief official said late Friday that other collapsed homes may be
found in more mountainous and sparsely populated areas.
People often leave even undamaged houses after earthquakes because they
are afraid to sleep indoors while aftershocks continue to shake the
area. Those who did not sleep in tents went to stay with relatives,
Xinhua said.
Yunnan is part of a quake-prone region bordered on the north by Sichuan
province, where a magnitude-7.9 quake last year left almost 90,000
people dead or missing.
In 1988, a magnitude-7.1 quake in Yunnan near Myanmar killed 930
people. More than 15,000 people died after a magnitude-7.7 quake in the
province in 1970, though authorities at the time covered up information
on casualties and damage amid the chaos of the Cultural Revolution.
400, 000 Leave Their Homes After Quake in
China
By THE ASSOCIATED PRESS
Filed at 9:32 a.m. ET
July 10, 2009
BEIJING (AP) -- More than 400,000 people have left their homes after an
earthquake rocked southwestern China, killing one person and destroying
thousands of houses, state media said Friday.
Thursday's magnitude-6.0 temblor, centered in Yunnan province's Yao'an
county, also injured 325 others, 24 seriously, the Xinhua News Agency
said.
Yunnan Television showed displaced residents sleeping outdoors in
makeshift beds made up of brightly colored quilts. Others packed into
emergency tents, bundles of provisions and clothing in tow. Often
people leave even undamaged houses after earthquakes because they are
afraid to sleep indoors while aftershocks continue to shake the area.
Piles of rubble from damaged houses made of brick and clay were
scattered on the ground in the footage. At a hospital, nurses gave
intravenous drips to the elderly.
Eight aftershocks have followed Thursday's quake, with the latest
registering a 5.2-magnitude Friday evening, Xinhua said. There were no
immediate reports of casualties.
An official at Yao'an's disaster relief command center said late Friday
that rescuers at the scene were still assessing the damage, but he did
not expect the death toll to rise. More collapsed homes, however, may
be discovered in the mountainous, sparsely populated area, he said. He
hung up without giving his name or any more details.
So far, Xinhua said that about 18,000 homes have been destroyed and
another 75,000 were damaged, Xinhua said.
It said China's civil affairs ministry has ordered the immediate
delivery of 5,000 tents and other relief materials. The provincial
civil affairs department has already allocated 4,000 tents, 3,000
quilts and other relief materials to Yao'an.
More than 1,000 police and soldiers have been dispatched to the
disaster zone, Xinhua said.
''By using simple tools and even their bare hands, the soldiers and
militia have saved at least seven residents including two children,''
Xinhua said.
China allocated 38 million yuan ($5.56 million) to the quake-hit area.
Yunnan is a quake-prone, mountainous region that lies on China's
southern border with Thailand and Myanmar. It also borders Sichuan
province, where a magnitude-7.9 quake last year left almost 90,000
people dead or missing.
In 1988, a 7.1-magnitude quake in Yunnan near Myanmar killed 930
people. More than 15,000 people died after a magnitude-7.7 earthquake
in the province in 1970, though authorities at the time covered up
information on casualties and damage amid the chaos of the Cultural
Revolution.
Link
to previous year's floods here.
Three Gorges Dam Is Said to Hurt Areas
Downstream
NYTIMES
By EDWARD WONG
June 2, 2011
CHONGQING, China — A Chinese official says the planners of the Three
Gorges Dam failed to properly gauge its effects on lakes and other
bodies of water downstream, according to a report on Thursday in
Shanghai Daily, an English-language newspaper.
As a result, the dam has contributed to lower water levels in two of
China’s largest freshwater lakes, raising the threat to them during
long droughts, the report said. Large areas of central and southern
China are suffering from the worst drought in 50 years, and the levels
have plummeted in the Yangtze River and other bodies of water,
including here in Chongqing.
Wang Jingquan, the official quoted by the newspaper, said water levels
in the two lakes — Dongting in Hunan Province and Poyang in Jiangxi
Province — had fallen in part because of the storage of water in the
reservoir behind the dam, which is on the Yangtze.
In addition, the dam has had an impact on fish breeding and the growth
of plants in the lower reaches of the Yangtze, said Mr. Wang, who works
in a flood control and drought relief office that is linked to the
Yangtze River Water Resources Committee. He said proper discharge from
the reservoir would help the lakes.
“We failed to think of all the impacts that the dam might bring about
when designing the dam, but its advantages should outweigh the
disadvantages,” he said, according to Shanghai Daily, which cited
Xinmin Evening News. The dam provided 84 billion kilowatt-hours of
electricity last year.
Mr. Wang’s statements are the latest by an official and come as Chinese
news organizations are increasingly discussing the impact of the dam as
the drought drags on. Two weeks ago, senior Chinese officials admitted
that there were “urgent problems” associated with the dam, the world’s
largest hydroelectric project. The admission came in a vague statement
from the State Council, China’s cabinet. “Although the Three Gorges
project provides huge comprehensive benefits, urgent problems must be
resolved regarding the smooth relocation of residents, ecological
protection and geological disaster prevention,” the Council said.
Plans for the 600-foot-high dam were criticized at an early stage, but
the Chinese government pressed ahead. Besides the ecological impact,
the dam displaced 1.4 million people when the water levels upstream
were raised.
The central government is also trying to deal with concerns over
another ambitious water project, the South-North Water Diversion, which
would siphon water from the Yangtze to Beijing and other northern
cities. The drought in the regions along the middle and lower reaches
of the Yangtze has underscored worries about channeling the river’s
water to the north.
Cities are turning to increasingly desperate measures to combat the
drought’s effects. The island city of Zhoushan in Zhejiang Province
started water rationing on Wednesday, according to Xinhua, the state
news agency. Residents have been told they can use running water for
only five hours a day because the city can no longer depend on 20 of
its 29 reservoirs. From January to May, rainfall in Zhoushan was the
lowest on record, Xinhua said.
On Thursday, Xinhua said that rainfall along the middle and lower
reaches of the Yangtze was down 40 percent to 60 percent from the
average, with the totals being lower than at any time since 1951. The
report cited data from the State Flood Control and Drought Relief
Headquarters.
In Jiangsu Province’s Sushui County, fish and clams are dying, and
crab-breeding farms are parched and cracked, Xinhua said. At Honghu
Lake, fish spawning has been affected, said Zeng Xiaodong, leader of
the Honghu marshland management office. “The drought has done
considerable damage to the ecological environment of Honghu Lake,” he
said.
19 May 2011 Last updated at 03:18 ET
China acknowledges Three Gorges dam 'problems'
By Michael Bristow BBC News, Beijing
China has admitted that the Three Gorges Dam has created a range of
major problems that need solving quickly. Top leaders say the
project
has led to environmental problems and issues involving relocating 1.3m
people. The Three Gorges is the world's largest dam and could
have
cost up to $40bn. This appears to be the first time that central
government leaders have admitted to problems with the project.
The admission came in a statement from top government body, the State
Council. The statement initially praised the scheme's
achievements,
saying it had helped alleviate flooding, improve navigation and
generate electricity. But it went on: "There are urgent problems
that
need to be addressed, such as stabilising and improving living
conditions for relocated people, protecting the environment, and
preventing geological disasters."
'Catastrophe'
China's revolutionary leader Mao Zedong dreamed of building the Three
Gorges Dam. Construction started in 1994. The dam was completed
in
2006, with the reservoir reaching its full height last year after
submerging 13 cities, 140 towns and 1,350 villages. Local leaders
and
campaign groups have for some time complained about problems associated
with the project.
At a government-organised conference in 2007, local officials warned of
"environmental catastrophe".
One problem appears to have been caused by fluctuations in the water
level of the vast reservoir, which stretches for 660km (360 miles).
This causes frequent landslides. The government said more also
needs
to be done to help those forced to move because of the
construction.
They need more jobs, better transport facilities and improved social
security benefits, said the State Council, chaired by Premier Wen
Jiabao.
Known problems
The Three Gorges was a contentious scheme even before it was approved.
A third of the members sitting in China's normally compliant parliament
voted against the plan or abstained. Perhaps in a tacit
acknowledgement of the problems, there were no major celebrations when
the reservoir reached its full height last year. In this latest
statement, the State Council said it knew about some of the problems
even before work started 17 years ago.
It says others arose while the dam was being built and some have
happened since, because of "new demands as the social and economical
situation developed".
The task now was to begin sorting out some of these problems, said the
government.
Dams in the
US...
Possible Link Between Dam and China Quake
NYTIMES
By SHARON LaFRANIERE
February 6, 2009
BEIJING
— Nearly nine months after a devastating earthquake in Sichuan
Province, China, left 80,000 people dead or missing, a growing number
of American and Chinese scientists are suggesting that the calamity was
triggered by a four-year-old reservoir built close to the earthquake’s
geological fault line.
A Columbia University scientist who studied the quake has said that it
may have been triggered by the weight of 320 million tons of water in
the Zipingpu Reservoir less than a mile from a well-known major fault.
His conclusions, presented to the American Geophysical Union in
December, coincide with a new finding by Chinese geophysicists that the
dam caused significant seismic changes before the earthquake.
Scientists emphasize that the link between the dam and the failure of
the fault has not been conclusively proved, and that even if the dam
acted as a trigger, it would only have hastened a quake that would have
occurred at some point.
Nonetheless, any suggestion that a government project played a role in
one of the biggest natural disasters in recent Chinese history is
likely to be politically explosive.
The issue of government accountability and responsiveness has boiled
over in China in the past year. The grieving parents of thousands of
schoolchildren killed in the disaster have already made the
7.9-magnitude earthquake a political issue, charging that children died
needlessly in unsafe school buildings approved by negligent or corrupt
officials.
More public anger erupted last year when the government failed to
prevent the sale of tainted milk powder that sickened nearly 300,000
children and killed six.
“Any kind of government-related disaster presently is very, very
damaging and politically extremely sensitive,” said Cheng Li, the China
research director at the Brookings Institution.
If it is proved that the earthquake “was related to a man-made
situation and not just a natural disaster, the government will be very
uncomfortable with that kind of report because of the whole issue of
government accountability,” Mr. Li said.
Questions about the Zipingpu Dam are especially delicate because China
is building many major hydroelectric dams in the southwest, a region
which has abundant water resources but is considered prone to
earthquakes.
In a petition to the government in July, a group of environmentalists
and scholars said the fact that government scientists had
underestimated the risk of the May earthquake raised questions about a
host of other dams built in the same valley and along five other major
rivers, according to an article published by Probe International, an
environmental advocacy group. Chinese authorities have steadfastly
dismissed any notion that reservoir-building in Sichuan Province placed
citizens at any added risk, and they have blocked some Web sites of
environmental groups that suggest that dangers have been overlooked.
In a December article in the Chinese magazine Science Times, two
scientists from the Chinese Academy of Sciences strongly denied that
the dam played any role in the earthquake. “The earthquake research
community outside and inside China has widely accepted the notion that
the May 12 Wenchuan earthquake was a huge natural disaster caused by
massive crustal movement, because no reservoir triggered-quake with a
magnitude eight has ever occurred in history,” said Pan Jiazheng, an
expert in hydroengineering, according to a translation published by
Probe International.
Scientists generally agree that a reservoir, no matter how big, cannot
by itself cause an earthquake. But Leonardo Seeber, a senior scientist
with the Lamont-Doherty Earth Observatory of Columbia University, said
the impact of so much water could hasten an earthquake’s occurrence if
geological conditions for a quake already existed. He said the best
known example was a 1967 earthquake triggered by the Koyna Dam in a
remote area of India, with a magnitude of about 6.5 and a death toll of
about 180 people.
Mr. Seeber said that while the link between the Sichuan earthquake and
the Zipingpu Dam was not yet proved, work by Christian Klose, a
Columbia University researcher specializing in geophysical hazards,
suggested the stress caused by the water’s weight might have hastened
the quake by a few hundred years.
“It would have occurred anyway,” Mr. Seeber said. “But of course the
people who were affected might think the timing is an important
difference.”
Mr. Klose estimated that the weight of the water in the Zipingpu
reservoir amounted to 25 times the natural stress that tectonic
movements exert in a year. The added pressure, he wrote in an abstract
to an unpublished study, “resulted in the Beichaun fault coming close
to failure.”
Fifty stories tall and big enough to hold more than one billion cubic
meters of water, the Zipingpu Dam astride the Minjiang River was billed
as one of China’s biggest water control projects.
Officials said the $750 million project, part of a grand plan to
develop regions in China’s south and west, would generate 760,000
kilowatts of electricity, irrigate more farmland, help control flooding
and provide more water to industries and residents of nearby Chengdu, a
city of more than 10 million.
Almost as soon as construction got under way in 2001, one expert, Li
Youcai, voiced fears that officials were underplaying the risk of a
major earthquake in the region, but government officials rejected his
argument, according to an article published last year on China
Dialogue, a Web site devoted to environmental news.
Officials allowed the reservoir to fill with water in late 2004. Fan
Xiao, a chief engineer with the Sichuan Geology and Mineral Bureau,
said that from late 2004 to late 2005, the data showed 730 minor
earthquakes, with magnitudes of 3 or less.
When the major earthquake struck last May, it originated 3.4 miles from
the reservoir. The rupture in the Earth’s crust stretched for 185
miles, initially moving in a direction that Mr. Klose said was
consistent with the pressure from the water’s weight.
Mr. Fan, the chief engineer for the regional geology investigation
team, told reporters soon afterward that he believed that the reservoir
influenced the timing, magnitude and location of the earthquake.
“The main lesson is that in building these kinds of projects we need to
give more consideration to scientific planning and not simply consider
the electricity or water or the economic interests,” Mr. Fan said.
The debate reignited in December when two scientists with the China
Earthquake Administration and three other researchers published a study
in the Chinese journal Seismology and Geology. They concluded only that
the weight of the reservoir’s water and diffusion of water from the
reservoir below the Earth’s surface “clearly affected the local
seismicity” over a period of nearly four years before the fault
ruptured.
The Chinese researchers called for further study to see whether the
reservoir helped trigger the earthquake. One of them, Du Fang, with the
Sichuan Earthquake Administration, said Thursday that it was impossible
to know whether the reservoir influenced the earthquake without more
research. “The possibility exists,” she said.
Ms. Du said she and other scientists were free to research the issue
fully. “We scientists are free to research the topic we proposed, as
long as it is worth studying,” she said. “I don’t feel any restrictions
on access to the data from the government.”
China Concedes Building Flaws in Quake
NYTIMES
By EDWARD WONG
Published: September 4, 2008
BEIJING — A Chinese government committee said Thursday that a rush to
build schools during the country’s recent economic boom might have led
to shoddy construction that resulted in the deaths of thousands of
students during a devastating earthquake in May.
The statement by Ma Zongjin, the chairman of an official committee of
experts assessing damage from the May 12 earthquake, is the first time
that a representative of the Chinese government has acknowledged that
poor construction may have led to the collapses. Until now, officials
in Beijing and in southwest China’s Sichuan Province, which suffered
the most damage, had said the sheer force of the 7.9-magnitude quake
caused the collapses.
The school collapses have become the most politically sensitive issue
to emerge in the aftermath of the earthquake. This summer, grieving
parents held street protests to challenge local governments and demand
that officials conduct proper investigations into construction quality.
Local officials felt so threatened by the parents that they ordered
riot police to break up protests — officers even dragged away crying
mothers — and offered the parents compensation money in exchange for
them dropping their demands.
Many schools in the earthquake zone crumbled while buildings around
them remained standing. According to some estimates, as many as 7,000
classrooms collapsed and up to 10,000 students may have died. In all,
nearly 70,000 people died in the quake and 18,000 are considered
missing; officials now say those still missing are almost certainly
dead. The quake was the deadliest natural disaster in China in more
than three decades.
At a news conference in Beijing on Thursday, Mr. Ma said more than
1,000 schools suffered from at least one of two major problems: they
were built on the fault line and collapsed like many other buildings
around them, or they were poorly built.
This second problem “is the construction quality of the building itself
— its structure is not completely sound or its materials are not very
strong, which is possible,” Mr. Ma said. “Recently, we’ve built school
buildings relatively fast, so some construction problems might exist.”
Mr. Ma also acknowledged how important the issue had become to the
public, and said the government had sent 2,000 experts to the quake
zone to examine the schools.
“This is an issue people are paying attention to,” he said. “First, the
parents of schoolchildren are paying a lot of attention, as well as
education departments. And even people across the entire country are
very much paying attention to this issue.”
When the teams from the central government showed up in the quake zone,
some local officials wanted to exaggerate to them the intensity of the
earthquake so that poor construction or corruption would not be blamed
for building collapses, Mr. Ma said. Some officials also wanted to
report greater financial losses in their areas than what had actually
occurred to get more aid money, he added.
Shi Peijun, vice chairman of the earthquake committee, said at the news
conference that the total direct financial loss from the earthquake was
$123 billion.
Mr. Ma did not give any further details on the findings of the experts
or say when the government would release a final report. The purpose of
the news conference was to update reporters on recovery efforts. Mr. Ma
did not mention the school collapses until asked about them.
It is well-known that construction firms and other companies often cut
corners in China’s rapidly growing economy. But it is rare for
government officials to admit to reporters not only that the problem
exists, but that it could have fatal consequences, as Mr. Ma did. If
properly conducted, further investigations into school construction
could implicate local governments, which ordered up the buildings and
are supposed to have inspectors who ensure compliance with codes.
Some Chinese news organizations are once again taking a more aggressive
approach to the issue of the school collapses, even though the central
government ordered the news media to stop any such reporting. Xinhua,
the state news agency, reported Mr. Ma’s comments on Thursday and said
the large number of student deaths had “aroused wide suspicion and
anger over shoddy construction and sub-standard materials allegedly
used to build schools.”
An article in the latest issue of Caijing, a news magazine that
sometimes criticizes official views, questioned why the government had
still not released a tally of the students who died in the quake.
Mr. Shi said at the news conference that officials were still
classifying the dead and that the final numbers would be released.
Despite Mr. Ma’s admission that poor construction might have been at
fault in the school collapses, grieving parents or families of
survivors will have a hard time suing construction companies or local
governments, a well-known civil lawyer said in an interview on Thursday.
The lawyer, Pu Zhiqiang, said he would advise parents not to file a
lawsuit because few if any courts would accept it. Even if the case
were to go to trial, he said, the plaintiffs would have to gather
substantial evidence to establish the culpability of the government or
the construction company.
Over the summer, local governments in Sichuan Province began offering
angry parents cash payments if the parents promised in writing not to
raise the issue of school construction. The governments acted as if
they were corporations seeking to settle embarrassing lawsuits. The
compensation amounts varied by government but were roughly the same -
parents whose children died in a school collapse in the town of Hanwang
said in July that they were offered the equivalent of $8,800 in cash
and a per-parent pension of nearly $5,600.
Many parents signed but said they were still furious at the local
governments for not carrying out any proper investigations. Around the
same time, several governments began bulldozing the remnants of
collapsed schools, closing the door on any chance to collect further
evidence.
Three parents or relatives of children who died in separate school
collapses on May 12 said in telephone interviews on Thursday that local
governments had yet to issue any findings.
One woman, Huang Lianfen, the aunt of an 18-year-old boy who died in
Hanwang, said parents met with local officials last month to demand
more compensation. But the officials refused to give more money and
said the collapse of Dongqi Middle School was solely due to the
earthquake.
China Daily, the official English-language newspaper, reported Thursday
that 21 tremors of magnitude-5 or higher have struck China in the first
eight months of this year. On average, the country experiences 18 such
quakes per year, the report said. The latest tremor hit the provinces
of Sichuan and Yunnan on Saturday, killing at least 32 people and
leaving about 1.2 million people homeless.
U.S.'S Rice to Travel to Quake - Hit
Chengdu, China
NYTIMES
By REUTERS
Published: June 19, 2008
Filed at 1:14 p.m. ET
WASHINGTON (Reuters) - U.S. Secretary of State Condoleezza Rice will
travel this month to Chengdu, China, the capital of Sichuan province
that was struck by a massive earthquake in May, the State Department
said.
Rice will visit Chengdu June 29 as part of an Asian trip that will also
include stops in Japan, Seoul and Beijing, State Department spokesman
Tom Casey said.
Rice would be the highest-ranking U.S. official to have visited Chengdu
since the earthquake. Casey said she would express the "condolences of
the American people" for the disaster, which killed more than 70,000
people in China.
Strong Aftershock
Rocks China Lake, Creates Landslides
DAY
By Cara Anna , Associated Press
Published on 6/9/2008
Qinglian, China - A magnitude 5.0 aftershock
shook a brimming, earthquake-formed lake and sent landslides tumbling
down surrounding mountains Sunday, underscoring the persistent threat
of flooding to more than 1 million weary refugees downstream.
No new evacuations were ordered and the lake's dam of unstable mud and
rocks did not collapse, said Hu Peng, a media officer at the disaster
relief headquarters of the lake. He had no additional details.
More than 250,000 people downstream have been evacuated in recent weeks.
The effect of the 20-second temblor on Tangjiashan lake, as it is
known, was not clear and its dam was under surveillance, said the
state-run Xinhua News Agency, which had a reporter at the site. A
diversion channel draining the lake appeared to be operating smoothly
following the aftershock and a rainstorm about the same time, the
agency said.
The temblor was centered about seven miles northwest of the lake,
according to data reported by the U.S. Geological Survey. It set off
landslides on nearby mountains, Xinhua said, without indicating whether
any rubble landed in the lake and pushed water levels even higher.
One evacuee in a mountainside tent camp about 25 miles downstream said
the situation remained stable.
”We felt the aftershock but it wasn't anything bad. We're numb to this
by now,” said Yu Taichun, a doctor living with about 2,500 people on
Taohua Mountain, overlooking the riverside town of Qinglian.
The Tangjiashan lake was formed when rubble from a landslide set off by
the deadly May 12 earthquake blocked the flow of the Tongkou River.
Despite a hastily dug diversion channel that began draining the lake
early Saturday, water levels have continued rising dangerously.
Soldiers blew up wooden houses, boulders and other debris Sunday to
speed the flow of water into the spillway. Other troops were deepening
the channel and digging on a second spillway.
Managing Tangjiashan lake has become a priority for the government as
it works to head off another catastrophe even as it cares for millions
left homeless from the quake. More than 1.3 million people live
downriver from the lake.
The death toll from the quake climbed Sunday to 69,136, with 17,686
people still missing.
The Tangjiashan lake is the largest of more than 30 created by last
month's quake, which was centered in Sichuan province. Government
experts quoted by state media have played down the threat of imminent
flooding, though a variety of factors could set off a dam collapse:
rain, aftershocks, landslides, increased leakage from the barrier.
Photo from I-BBC
Chinese Battle Against Time to Drain Quake Lake
NYTIMES
By REUTERS
Published: May 30, 2008
Filed at 7:31 a.m. ET
MIANYANG, China (Reuters) - China's struggle to overcome earthquake
devastation was compounded by confusion after an official denied a
report that 1.3 million people would evacuate from a city threatened by
a swelling "quake lake."
The landslide-blocked river at Tangjiashan in southwest China's Sichuan
province is the most pressing danger after an earthquake devastated the
region on May 12. The official death toll from the quake is
68,858 and is sure to rise with 18,618 missing, and there is widespread
worry that more than 30 landslide-blocked rivers could burst through
and bring more havoc by flooding downstream towns and reservoirs.
The official Xinhua news agency said Tan Li, Communist Party Secretary
of Mianyang in the quake zone, ordered 1.3 million people living
downstream from Tangjiashan to "evacuate to higher ground."
But Zhou Hua, a Mianyang city official who is a spokesman for the lake
relief effort, told Reuters the report was inaccurate.
"There is a virtual training exercise scheduled for tomorrow to test
our contingency plan to move that many people," he said. "But there is
no public participation, and we see no reason at all to actually
implement the plan at this stage."
In villages outside Mianyang city there were no immediate signs of
either mass panic or exodus.
"The government and the army are working on it and won't let it burst,"
said Jin Dongsheng, a farmer in Qingyi town near the city. He and about
3,000 town residents had been moved about half an hour's walk uphill
from homes close the river bank.
Xinhua's Chinese-language service later also said there was merely a
training exercise planned in Mianyang, a city of 5.3 million people
including many in rural areas. At the unstable Tangjiashan lake,
hundreds of troops have removed more than a third of the earth for a
channel intended to ease pressure from the rising waters, Zhou
said. Up to 190,000 residents downstream had moved to higher
ground, usually hillsides close to where they were living before, to
avoid a surge if the blockage suddenly gave way, he said.
Xinhua said the water level was nearly 23 meters (75 feet) below the
lowest point of the barrier, which experts have said could give way
quickly once breached. Troops have also built escape paths in the event
that happens. A Chinese meteorological authority official, Zhai
Panmao, said the authority did not expect heavy rain in the area in the
next 10 days.
"We've adopted extremely important measures and are opening up a breach
and so on," he said of the Tangjiashan build-up. "We have full
confidence in solving this problem."
Post-quake reconstruction work has only begun, with many displaced
people facing a cramped, sweltering summer in tents. The
government has received 35.28 billion yuan ($5.09 billion) in donations
of cash and relief goods from home and abroad to date, officials
said. But some aid pledged has yet to be received, and a deputy
head of the Ministry of Civil Affairs disaster relief office, Pang
Chenmin, warned tardy donors they could be publicly shamed.
"The aid ought to be given to the recipient as promised and in a timely
manner. If it needs to be delayed for a day or two, they can coordinate
with the relevant department," Pang told a news conference in Beijing.
"But if it is not given, the recipient has the right to go after
payment, and inform the public in an appropriate way," Pang said,
without elaborating.
Japan had shelved plans for its military to fly tents and blankets to
China, a Japanese government official said on Friday, after messages on
Chinese Internet sites recalled Tokyo's World War Two atrocities in the
country.
CHILDREN
Meanwhile, an official investigator pinpointed the poor design and
construction of at least one of the many schools that collapsed during
the quake, killing thousands of children. Domestic media reports
compiled by Reuters put the combined toll from deaths of children and
teachers in the rubble of schools at more than 9,000. The Chinese
public has been outraged by the disproportionate number. An
official investigator said one the schools that crumpled, the Juyuan
Middle School, where hundreds of children died, was fatally weakened by
poor design and materials.
"There were certainly problems with site selection, the building's
structure and structural features, the construction and materials,"
Chen Baosheng, an expert from Tongji University in Shanghai, told the
Southern Weekend.
The number of prospective orphans in the quake area has dropped
dramatically as more children were reunited with their parents, Xinhua
quoted local officials as saying. There were about 1,000
"unclaimed children" in Sichuan as of Wednesday, down from more than
8,000 immediately after the earthquake, Xinhua said, adding civil
affairs authorities had been overwhelmed by calls seeking to adopt
those quake orphans.
Officials in China
rush to evacuate 80,000
DAY
By AUDRA ANG, Associated Press Writer
Posted on May 27, 9:04 AM EDT
MIANYANG, China (AP) -- Chinese officials rushed Tuesday to evacuate
another 80,000 people in the path of potential floodwaters building up
behind a quake-spawned dam as soldiers carved a channel to try to drain
away the threat. The official Xinhua News Agency reported
emergency workers would try to complete the evacuation by midnight
Tuesday, taking the number of people moved out of the threatened valley
to almost 160,000, from more than 30 townships.
The Tangjiashan lake in northern Sichuan province, formed when a
massive landslide blocked a river, is one of dozens of fragile dams
created during the earthquake that pose a new destructive threat in the
disaster zone. Soldiers hauled explosives through the mountains
to reach the area, and the official Chinese Daily said Tuesday on its
Web site they were "preparing to dynamite the barrier." State
television showed live footage of heavy earth-moving equipment being
used to carve out a 200-yard channel to drain the water.
"We are prepared to get rid of the trees by chopping and explosion.
After that, the second batch of equipment will be moved in," Liu Ning,
chief engineer at the Ministry of Water Resources, was quoted as saying
on CCTV.
The lake is swelling behind a landslide near Beichuan, one of the towns
hit hardest by the May 12 tremor that devastated Sichuan.
The number of deaths from the quake has climbed further toward an
expected toll of 80,000 or more. The Cabinet said Tuesday that 67,183
people were confirmed killed - up by about 2,000 from a day earlier -
and 20,790 were still missing. Also Tuesday, health officials
said higher-than-normal rates of stomach pains and fever had been
reported among the millions of quake survivors, but that no major
disease outbreaks had occurred.
Some 5 million people were left homeless by the quake, and many of them
are living in tents or makeshift communities that are clustered
throughout the disaster zone. Qi Xiaoqiu, the director of disease
prevention at the health ministry, said the quake had knocked out much
of the region's health infrastructure, but 12 field hospitals had been
erected and tens of thousands of health professionals were working in
the zone.
"With the destruction by the quake, the living and sanitary conditions
have worsened for the local population," Qi told reporters in Beijing.
"Their physical conditions are weakened (and they are) more vulnerable
to disease."
Diseases such as tuberculosis, hepatitis and diarrhea remained a
threat, but so far no outbreaks had been reported, he said.
About 1,800 soldiers clambered up mountain paths to reach Tangjiashan
with plans to dig and blast their way through the debris and drain the
water, Xinhua reported. It did not say when the blasting operation
would take place. The Tangjiashan lake is one of dozens created
when the magnitude 7.9 quake sent millions of tons of earth and rock
tumbling into some of the region's narrow valleys. Some rising
floodwaters have already swallowed villages. Tangjiashan now
holds 34 billion gallons of water and was rising by more than three
feet every 24 hours, Liu said.
Xinhua said troops were working around the clock to remove at least 1.8
million cubic feet of debris to build the channel, which would not be
completed before June 5. Pressure is building behind the dams as
rivers and streams feed into the newly formed lakes. Officials fear the
loose soil and debris walls of the dams could crumble easily,
especially once the water level reaches the top and begins cascading
over.
Adding to the threat, thunderstorms were forecast for parts of Sichuan
this week - a foretaste of the coming summer rainy season that accounts
for more than 70 percent of the two feet of rain that falls on the area
each year. Also in northern Sichuan in Qingchuan county, 1,300
people have been evacuated from Guanzhuang because of landslide
worries. Local official Li Guoping said plans were being drawn up to
evacuate all 23,000 people in the area if needed. He said
landslides that blocked rivers had formed 10 lakes, but only three had
the potential to be dangerous if there were heavy rains.
"I worry about the start of the rainy season," Li said.
Aftershocks have rumbled across the region since the major quake -
including one Tuesday measured by the U.S. Geological Survey at
magnitude 5.7 - adding to jitters among survivors and in some cases
causing more damage. No damage or injuries were reported from Tuesday's
tremor. A major temblor Sunday knocked down thousands of
buildings that had survived the initial quake, and killed eight
people. One quake expert said Tuesday that aftershocks in the
area could continue for several months.
"Judging from previous earthquakes of a similar magnitude, this time
the aftershocks may last for two or three months," He Yongnian, a
former deputy director of China Seismological Bureau, was quoted as
saying by Xinhua.
The aftershocks were likely to grow weaker as time passed, he said.
Bereft Chinese Families May Have Second Child
NYTIMES
By JAKE HOOKER and GRAHAM BOWLEY
Published: May 27, 2008
BEIJING — As the death toll in southwest China rose to
more than 65,000, a provincial planning authority on Monday said that
families who had lost their only child in the earthquake could apply
for a certificate to have another child, in what it said was a
clarification of the existing policy.
As many as 10,000 of those killed in the May 12 earthquake were
children, adding to the tragedy in a country where most families are
allowed to have only one.
Many children lost their lives in the scores of schools that collapsed,
and that issue has become a simmering controversy for the government,
as grieving parents say their children might have lived had the schools
been better constructed.
On Sunday afternoon, a powerful aftershock hit a poor, mountainous
region of Sichuan Province, toppling thousands of buildings and
injuring hundreds, and the death toll from that aftershock rose Monday
to eight, with 1,000 injured, the official Xinhua news agency reported.
The United States Geological Survey measured the tremor at a magnitude
of 6.0. It struck at 4:21 p.m. in Qingchuan County, a remote area of
northern Sichuan, on the border of Gansu Province.
An official in Guangyuan City, east of Qingchuan, told Xinhua that the
aftershock had caused thousands of homes to collapse. It damaged roads,
toppled old buildings and caused several fires in one town, Xinhua
reported.
Meanwhile, state media reported that rescuers were
preparing Monday to dynamite and drain a lake caused by landslides. On
Sunday, Xinhua reported that 1,600 soldiers were marching to lake
created by landslides in Tangjiashan, with orders to blast away at the
debris behind which water had been rising for days. Helicopters have
not been able to land troops in the region because of bad weather.
The water in the lake, two miles upstream from devastated Beichuan
County, rose by about six feet on Saturday, raising the possibility of
flash flooding that could threaten the lives of 70,000 people
downstream, state media said.
Also on Sunday, state television reported that rescuers had saved an
80-year-old man who had lived for nearly two weeks in a collapsed
building.
The rescue, made on Friday, was trumpeted in the state-run media, but
with the likelihood of finding more survivors dwindling, Chinese
officials are shifting the relief effort toward finding shelter for
millions of refugees. The government has said the earthquake left five
million people homeless, although one official in Sichuan Province said
the number could be as high as 11 million, according to a report on
Sunday from Xinhua.
Meanwhile, a senior official in Beijing warned that 69 dams in the
earthquake-stricken region could present “dangerous situations” and
risked some danger of collapsing. To ease pressure on the dams, many
reservoirs in the region have been drained.
On Saturday, in his second visit to the devastated areas since the
earthquake struck on May 12, China’s prime minister, Wen Jiabao, said
the government was on alert for secondary disasters, particularly, as
in the case with Tangjiashan, possible flashfloods from so-called quake
lakes. At an impromptu news conference at a tent camp in Yingxiu, near
the earthquake’s epicenter, on Saturday, Mr. Wen said that the
government’s efforts were shifting from rescuing people buried under
fallen buildings to caring for the homeless.
Speaking through a megaphone, he said that tents had been transported
to disaster areas from other provinces, but that there was a severe
shortage, official news reports said.
In the city of Dujiangyan, thousands of people are now sleeping in blue
disaster tents set up in rows on the open-air track of a college
campus. A local restaurant chain serves hot meals everyday. Doctors
with the Chinese Red Cross prepare stews of medicinal herbs for the
ailing. Last week, volunteers from a hair salon gave refugees free
haircuts.
Zhou Dezheng, 58, a retired architect, has been staying in a
government-issued tent with his family and two others. “We are better
off than refugees in most countries,” he said in an interview last
week. “We have tents. We have food.”
Many buildings in Dujiangyan, like Mr. Zhou’s home, cracked but did not
collapse. Virtually every apartment building in the city of 100,000 is
now empty. Sitting beside his tent in the yellow glow of a flashlight
last week, Mr. Zhou said, “I am afraid to go home.”
But in hundreds of villages in the surrounding countryside, many
families have not received sturdy steel-framed tents. Instead, they
must make do with makeshift shelters made from bamboo poles and
tarpaulins. Late last week, several farmers who hiked out of the
mountainous Hongkou Township, west of Dujiangyan, said there was not
enough food and drinking water there.
QUAKE
STATISTICS - Up to Sunday 25
May:
62,664 people dead
358,816 injured
23,775 still missing
More than 5.4 million homeless
638,305 rescued and resettled
More than 8,000 aftershocks, biggest 6.0
69 dams faced danger of collapse, 310 in dangerous state and
another 1,424 facing moderate risks
Source: Chinese government
---------------------------------------------
From
across the pond...I-BBC. Page last updated at 12:00 GMT, Sunday, 25 May 2008
13:00 UK
China quake
zone braced for rain
There
are fears that lakes created by the earthquake could burst.
China's earthquake zone has been warned to prepare for heavy
rains which could hamper further relief efforts. There are
concerns that construction of temporary shelters for five million
homeless could be delayed, while water levels in dams and lakes remain
high. A 5.8 magnitude aftershock hit the area on Sunday, and was
felt in Beijing, though there were no reports of damage.
State TV said one person was killed, several hundred were injured, and
70,000 homes were destroyed. It was one of the strongest of about
8,000 aftershocks detected since the 7.9 quake on 12 May.
The tremor thought to be the biggest, measuring 6.0, came six
days after the quake and killed three people and injured more than
1,000. Earlier a survivor was pulled from the rubble in Mianzhu,
more than 11 days after the quake, state TV said.
Eighty-year-old Xiao Zhihu, who was partially paralysed before the
quake, was trapped under a pillar of his house. He had been fed
by his wife while trapped and was in a stable condition, the reports
said.
Government officials said the death toll had now risen to 62,664, and
few more survivors are expected to be found. Rescuers are still
searching for 24 miners trapped underground by the earthquake in three
mines, but it is not known whether they are still alive.
Premier Wen Jiabao has said the final death toll could be more than
80,000.
More than five million buildings collapsed in the earthquake and more
than five million people are homeless, officials say.
Dam fears
Sunday's aftershock sent residents of the provincial capital Chengdu
running out into the streets. It was centred on Qingchuan, some
way to the north of the epicentre of the main earthquake. Rains
are expected later on Sunday and on Monday, which forecasters said
would be torrential in some areas and could cause mudslides.
There is also continuing concern over the state of dams in the region,
and a number of new lakes formed by the force of the earthquake.
China's Water Ministry said 69 dams were at one time in danger of
bursting, although steps have been taken to reduce the risk. More
than 300 more were affected by the earthquake, it added, saying many
had been drained or had their water levels reduced. There have
been no reports of any dams breaking.
Thirty-four lakes were created in the province when landslides blocked
rivers, Xinhua news agency said.
Eight held more than three million cubic metres of water and a
lake at Tangjiashan, less than 3km (two miles) from Beichuan town, had
doubled in size in four days. Troops carrying explosives are
heading for the lake to dig a sluice channel to allow a controlled
release of water and prevent it from bursting.
State TV: China
quake death toll could hit 50,000
DAY
By WILLIAM FOREMAN, Associated Press Writer
Posted on May 15, 7:53 AM EDT
LUOSHUI TOWN, China (AP) -- China warned the death toll from this
week's earthquake could soar to some 50,000, while the government
issued a rare public appeal Thursday for rescue equipment as it
struggled to cope with the disaster. Rescue workers broke through key
roads to the epicenter in the race to find survivors.
More than 72 hours after the quake rattled central China, rescuers
appeared to shift from poring through downed buildings for survivors to
the grim duty of searching for bodies - with 10 million directly
affected by Monday's temblor.
The official death toll reached at least 19,500 in Sichuan province
alone where Monday's quake was centered, vice governor Li Chengyun told
a news conference in the provincial capital of Chengdu. The figure was
up from nearly 15,000 confirmed dead the day before.
But the State Council, the country's Cabinet, said the number could
rise to some 50,000, state TV reported.
In Luoshui town - on the road to an industrial zone in Shifang city
where two chemical plants collapsed, burying hundreds of people -
troops used a mechanical shovel to dig a pit on a hilltop to bury the
dead. Two bodies wrapped in white sheets lie near the pit.
Police and militia in Dujiangyan pulverized rubble with cranes and
backhoes while crews used shovels to pick around larger pieces of
debris. On one sidestreet, about a dozen bodies were laid on a
sidewalk, while incense sticks placed in a pile of sand sent smoke into
the air as a tribute and to dull the stench of death.
The bodies were later lifted onto a flatbed truck, joining some
half-dozen corpses. Ambulances sped past, sirens wailing, filled with
survivors. Workers asked those left homeless to sign up for temporary
housing, although it was unclear where they would live.
Some key roads to other towns in the worst affected areas were cleared
Thursday, and rescue workers were able to begin moving heavy equipment
in for the first time. Previously, soldiers riding to isolated mountain
villages on helicopters and small boats had been forced to dig for
survivors with their hands.
Plans for the Defense Ministry to deploy 101 more helicopters
underscored worries that the death toll would continue to skyrocket as
time runs out to find survivors. Nearly 26,000 people remained buried
in collapsed buildings.
Not all hope of finding survivors was lost. After more than three days
trapped under debris, a 22-year-old woman was pulled to safety in
Dujiangyan. Covered in dust and peering out through a small opening,
she was shown waving on state television shortly before being rescued.
"I was confident that you were coming to rescue me. I'm alive. I'm so
happy," the unnamed woman said on CCTV.
One earthquake expert said the time for rescues was growing short.
"Within 72 hours after the disaster is the critical period. Generally,
the sooner the rescue of the buried, the better," the chief engineer of
Shijiazhuang Bureau of Seismology, Liang Guiping, told state TV.
The government issued a rare appeal to the Chinese public calling for
donations of rescue equipment including hammers, shovels, demolition
tools and rubber boats. The plea on the Ministry of Information
Industry's Web Site said, for example, that 100 cranes were needed.
The public request is emblematic of China's relative openness in
dealing with the tragedy, as compared to past crises.
"This is only a beginning of this battle, and a long way lies ahead of
us," Vice Health Minister Gao Qiang told reporters in Beijing.
No outbreaks of disease had struck refugees, who were being immunized
against some illnesses, Gao said. Workers were seeking to ensure safety
of drinking water and removing corpses to prevent the spread of
bacteria.
After days of refusing foreign relief workers, China accepted an offer
from Japan to send a rescue team, Foreign Ministry spokesman Qin Gang
said in an announcement posted on the ministry Web site. Tawan's Red
Cross said rival China also agreed to accept a 20-person emergency
relief team from the island.
Taiwan is also sending a cargo plane to Chengdu with tents and medical
supplies. The Air Macau plane will make a brief stop in Macau.
Taiwan and China, which split during civil war in 1949, have banned
regular direct links and other formal contacts as political disputes
persist.
The International Federation of Red Cross and Red Crescent Societies
also issued an emergency appeal for medical help, food, water and tents.
Gu Qinghui, the federation's disaster management director for East Asia
who visited Beichuan county near the epicenter, said more than 4
million homes were shattered across the quake area.
"The whole county has been destroyed. Basically there is no Beichuan
county anymore," Gu said in Beijing, adding the death toll was sure to
rise.
Forty-four counties and districts in Sichuan were severely hit, with
about half of the 20 million people living there directly affected,
Xinhua said.
Roads were cleared to two key areas that bore the brunt of the quake's
force, with workers making it to the border of Wenchuan county at the
epicenter and also through to hard-hit Beichuan county, Xinhua
reported. Communication cables were also reconnected to Wenchuan.
The Chengdu Military Area Command also planned to airdrop 50,000
packets of food, 5,000 cotton-padded quilts and clothes there, part of
the military rescue operation that has grown to include more than
116,000 soldiers and police.
Dujiangyan city was clogged with buses and trucks decked out with
banners from companies saying they were offering aid to disaster
victims. One tour bus was stuffed full of water bottles, cartons of
biscuits and instant noodles.
Public donations so far have totaled $125 million in both cash and
goods.
NBA star Yao Ming, China's most famous athlete, was planning to donate
$285,000 to the relief effort, agent Erik Zhang said.
"My thoughts are with everyone back in my home country of China during
this very dark and emotional time," Yao said in a statement from
Houston, where he is recovering from a broken left foot with hopes of
competing in the Beijing Olympics this August.
As the rescue effort gathered momentum, the depth of the problem of
tens of thousands homeless stretched government resources.
North of Chengdu in Deyang, the largest town near the devastated areas
of Hanwang and Mianyang, thousands of people have streamed into the
city hospital since Monday, mostly with head or bone injuries.
Patients heavily wrapped in bandages and with cuts and bruises were
huddled in canvas tents in the hospital's parking lot.
"Our doctors have worked continuously since Monday and people keep
coming in. We have to keep strengthening our measures to keep up," said
Luo Mingxuan, the Communist Party secretary of the hospital.
There were piles of donated clothing for survivors at the hospital and
stands for them to make free telephone calls. Handwritten notes with
names of the injured were posted on a board in front of the hospital's
emergency section, where ambulances arrived every few minutes.
A group of 33 American, British and French tourists were airlifted from
Wolong, site of the world's most famous panda preserve, to the
provincial capital of Chengdu on Thursday morning, Xinhua reported. All
were in good health, Xinhua said.
China Attacks Pelosi
Over Tibet Remarks
DAY
By CARA ANNA, Associated Press Writer
Posted on Mar 23, 10:49 AM EDT
CHENGDU, China (AP) -- China attacked House Speaker Nancy Pelosi Sunday
for her recent meeting with the Dalai Lama, accusing her and other
"human rights police" of double standards and ignoring the truth about
the unrest in Tibet.
China also again accused the Dalai Lama, the exiled Tibetan spiritual
leader, of orchestrating anti-government riots in Tibet and neighboring
provinces this month in a bid to mar the Beijing Summer Olympics and
overthrow the area's communist leaders.
Pelosi's visit to the Dalai Lama in Dharmsala, India, on Friday was the
first by a major foreign official since the protests broke out. The
Democratic leader said if people don't speak out against China's
oppression in Tibet, "we have lost all moral authority to speak on
behalf of human rights anywhere in the world."
China's official Xinhua New Agency published commentary Sunday accusing
Pelosi of ignoring the violence caused by the Tibetan rioters.
"'Human rights police' like Pelosi are habitually bad tempered and
ungenerous when it comes to China, refusing to check their facts and
find out the truth of the case," it said.
"Her views are like so many other politicians and western media.
Beneath the double standards lies their intention to serve the interest
groups behind them, who want to contain or smear China," it said.
The Chinese government has sought to portray itself and Chinese
businesses as the victims of the riots.
China's reported death toll from the protests in the Tibetan capital
Lhasa earlier this month is 22. Tibet's exiled government says 99
Tibetans have been killed.
Xinhua said Sunday that 94 people had been injured in four counties and
one city in Gansu province in riots on March 15-16. The report also
said 19 rioters had surrendered in Gannan, a prefecture in Gansu, but
it did not give any details.
The violence has turned into a public relations disaster for China
ahead of the August Olympics, which it had been hoping to use to
bolster its international image.
The Chinese government over the weekend was trying to give its own
version of the events while clamping down on information coming from
Tibet and neighboring provinces. The government said through official
media that formerly restive areas were under control and again accused
the Dalai Lama, a Nobel Peace Prize winner, of trying to harm China's
image ahead of the summer games.
"The Dalai clique is scheming to take the Beijing Olympics hostage to
force the Chinese government to make concessions to Tibet
independence," said the People's Daily, the main mouthpiece of the
Communist Party.
The Dalai Lama called the accusations against him "baseless," asserting
that he supported China's hosting of the summer games.
"I always support (that) the Olympics should ... take place in Beijing
... so that more than 1 billion human beings, that means Chinese, they
feel proud of it," he said Sunday in New Delhi, India.
The official lighting of the Olympic torch is set for Monday in Greece,
and some 1,000 police will surround Ancient Olympia to keep away
pro-Tibetan protesters from the ceremony. The torch is scheduled to
travel through 20 countries before the Beijing Olympics open on Aug. 8.
One of Thailand's six torchbearers withdrew Sunday in protest.
Environmentalist Narisa Chakrabongse said in an open letter that she
decided against taking part in the relay to "send a strong message to
China that the world community could not accept its actions."
Despite the media restrictions by the Chinese government, some
information was leaking out. An American backpacker who traveled to
Chengdu, the capital of western Sichuan province, said he had seen
soldiers or paramilitary troops in Deqen in northwest Yunnan province,
which borders Tibet.
"What was an empty parking lot by the library was full of military
trucks and people practicing with shields. I saw hundreds of soldiers,"
said the backpacker, who would give only his first name, Ralpha.
There have been no reported protests in Yunnan.
Monks at the Gedan Song Zan Monastery outside of Zhongdian in northwest
Yunnan prayed Sunday for peace and an end to the recent unrest among
ethnic Tibetan populations in China. The monks, who characterized
themselves as both Tibetan and Chinese, said they felt that the
upheaval and riots had helped no one.
The government has insisted that stability has returned to the troubled
areas. State broadcaster China Central Television said Sunday that
electricity and telecommunications had been restored in Lhasa.
China oil imports
soar; refinery pact with Chad
By William Spain, MarketWatch
Last Update: 12:10 PM ET Oct 7, 2007
CHICAGO (MarketWatch) -- China's net imports of crude oil in the first
eight months of 2007 soared more than 18% as demand for petroleum
products to fuel the country's fast-growing economy continued to
increase.
China brought in 110.4 million tons of crude oil while exporting
exported 2.18 million tons, according to a Sunday report from official
news agency Xinhua, citing data from the General Administration of
Customs (GAC).
Meanwhile, domestic output of crude hit 124.7 million tons in the same
period, up 1.3%. Refined oil imports hit 24.28 million tons, exceeding
exports by 14 million tons. China produced 39.9 million tons of
gasoline, up 8.8%, 7.68 million tons of kerosene, up 17.5% and 81.5
million tons of diesel oil, a 6.3% rise, Xinhau said.
China is now the world's second largest consumer of oil, after the U.S.
Earlier, the news agency reported that the China National Petroleum
Corporation (CNPC) is planning to invest in a joint venture refinery in
the African nation of Chad. A subsidiary of CNPC has signed an
agreement with the Chadian government to jointly invest in the
refinery, to be built north of N'Djamena, the capital.
The Chinese will be in charge of all engineering construction and use
their own design specifications, manufacturing standards and equipment.
CNPC is not yet saying how much it will invest or when. Land-locked
Chad has been producing oil since 2003 and has found 13 oil fields to
date but has no refineries and has to import gasoline and other
petroleum products.
E C O N O M I C P I C T U R E
Gas leak kills 25 at mine in China
CTPOST
The Associated Press
Updated: 05/30/2009 07:27:44 AM EDT
BEIJING—A gas leak killed 25 miners and 20 others remained trapped
underground Saturday at a coal mine in China's southwestern city of
Chongqing, the official Xinhua News Agency said.
Rescuers are working to release those trapped, the news agency said.
The cause of the accident is still being investigated.
There were 131 people working in the Tonghua mine when the accident
happened at 11 a.m. (0300GMT), but 86 escaped safely, the report said.
No other details were immediately available.
China's mining industry remains the world's deadliest, despite
government promises to improve mining safety.
Most accidents are blamed on corruption, poor regulation, and cutting
corners on safety to feed the growing economy's insatiable demand for
coal.
Rapid
Declines in Manufacturing Spread Global Anxiety
NYTIMES
By NELSON D. SCHWARTZ
March 20, 2009
Since it was founded by his great-grandfather in 1880, Carl Martin
Welcker’s company in Cologne, Germany, has mirrored the fortunes of
manufacturing, not just in Europe but around the world.
That is still true today. In a pattern familiar to industrial
businesses in Europe, Asia and the United States, Mr. Welcker says his
company, Schütte, which makes the machines that churn out 80
percent of the world’s spark plugs, is facing “a tragedy.”
Orders are down 50 percent from a year ago, and Mr. Welcker is cutting
costs and contemplating layoffs to prevent Schütte from falling
into the red. That manufacturing is in decline is hardly
surprising, but the depth and speed of the plunge are striking and,
most worrisome for economists, a self-reinforcing trend not unlike the
cascading bust that led to the Great Depression.
In Europe, for example, where manufacturing accounts for nearly a fifth
of gross domestic product, industrial production is down 12 percent
from a year ago. In Brazil, it has fallen 15 percent; in Taiwan, a
staggering 43 percent. Even in China, which has become the
workshop of the world, production growth has slowed, with exports
falling more than 25 percent and millions of factory workers being laid
off. In the United States, until recently a relative bright spot
for manufacturing despite the steady erosion of blue-collar jobs,
industrial output fell 11 percent in February from a year ago,
according to statistics released Monday by the Federal Reserve.
“Manufacturing has fallen off the cliff, and it’s certainly the biggest
decline since the Second World War,” said Dirk Schumacher, senior
European economist with Goldman Sachs in Frankfurt.
The pattern of manufacturing and trade ominously recalls how the
financial crisis of 1929 grew into the Great Depression: tightening
credit and consumer fear reduced demand for manufactured goods in one
country after another, creating a downward spiral that reduced global
trade.
“Plunging manufacturing suggests that as bad as things were in the
fourth quarter, they are at least as bad now,” said Robert J. Barbera,
chief economist at ITG, a New York research and trading business. “This
is a classic adverse feedback loop. It won’t quickly correct itself.”
That means more workers can expect to lose their jobs around the world
in coming months as manufacturers continue to cut production,
especially as global trade contracts. In fact, trade is shrinking
even faster than production. Germany’s exports down are 20 percent from
a year ago, Japan’s have plunged 46 percent, and in the United States,
exports fell at an annualized rate of 23.6 percent in the fourth
quarter of 2008.
Mr. Welcker says he has never seen anything like it. For parallels, he
has to hark back to the Great Depression and World War II, when
Schütte’s factory was destroyed.
After focusing on Germany and Europe in the decades after the war,
Schütte thrived recently as globalization opened new markets in
Eastern Europe and Asia. In the last five years, Schütte’s sales
soared to about 100 million euros ($131 million) from 58 million.
The sudden reversal in global manufacturing suggests that Americans
should not expect economic relief from abroad soon, despite a slightly
more optimistic mood on Wall Street lately and President Obama’s call
for more stimulus spending by foreign governments.
While manufacturing equals about 14 percent of gross domestic product
in the United States, it totals 18 percent worldwide, and accounts for
33 percent of G.D.P. in China, according to the World Bank.
That means that China, Brazil, India and other fast-growing emerging
market countries that have escaped the worst of the fallout from the
credit crisis will increasingly suffer, dragging down demand in more
advanced Western economies even as government-led stimulus packages
kick in.
The damping effect works both ways. Despite the misperception
that America no longer makes anything, falling demand for goods made in
the United States, including jet engines, locomotives, medical
equipment, pharmaceuticals and some high-tech products, will hurt
American growth prospects.
“Manufacturing makes up about two-thirds of U.S. exports, and
contributed more to G.D.P. growth over the last 20 years than any other
sector of the U.S. economy,” said David Huether, chief economist for
the National Association of Manufacturers in Washington. “Our share of
global manufacturing output has remained steady at 20 to 23 percent
over the past decade.”
Elsewhere, even relatively healthy industrial companies like Toyota are
also slashing production, which contributed to Japan’s huge export
decline. Toyota halted work at its 12 auto plants in Japan beyond
its normal break in February and March. It also cut its production
forecast for the year ending March 31 by 20 percent, to slightly more
than seven million vehicles, and has warned that it will post a net
loss of 350 billion yen ($3.6 billion), its first in decades.
In Europe, new figures for January manufacturing are due Friday, and
they are expected to show that the decline is still worsening.
Although the problems of manufacturers supplying the auto industry and
other so-called big iron manufacturers of products like locomotives,
jet engines and power turbines have gotten the most attention, makers
of a variety of other products, including handicrafts, clothes and
jewelry, are suffering too. India’s manufacturing sector, which
accounts for about 16 percent of G.D.P., recently recorded its first
quarterly production decline in more than a decade.
Since last April, handicraft exports have fallen by 55 percent to $1.35
billion, and textile makers estimate they have slashed half a million
jobs. Banks, meanwhile, are restructuring loans for diamond makers and
polishers. And despite tax cuts and a $64 million stimulus
package announced in February, Indian textile makers are pushing for
more government help.
“We’re competing with countries like Bangladesh, where wages are
lower,” said Rakesh Vaid, the chairman of Usha Fabs, a Delhi textile
manufacturer. “We’re competing with China where the currency is well
managed, and Vietnam where the industry is getting strong support from
the government.”
At Schütte, which has 550 workers and is emblematic of Germany’s
bedrock Mittelstand sector of family-run businesses, perilous times are
part of the company’s history. Mr. Welcker recalls family tales
of trucks filled with cash to pay workers during the hyperinflation of
the Weimar era, and how after G.I.’s crossed the Rhine in 1945 near
where his factory stands today, “not one stone stood atop another.”
Today, he is thankful the situation is nothing like those days. “But
the speed of the decline in orders,” he said, “is the worst we’ve ever
seen.”
China
Fears Tremors as Jobs Vanish From Coast
NYTIMES
By ANDREW JACOBS
February 23, 2009
TANJIA, China — Tan Tianying might not look like a troublemaker, but
she and millions of other workers like her have government leaders
fretting about the country’s stability.
A shy, delicately built seamstress who makes aprons and coveralls in
Guangzhou, Ms. Tan, 24, is part of an army of migrants, 130 million
strong, who have flocked to cities for jobs, but whose prospects for
continued employment are increasingly dim.
As the global economic crisis deepens and the demand for Chinese
exports slackens, manufacturing jobs in the Pearl River Delta and all
along the once-booming coast are disappearing at a stunning pace. Over
the last few months, more than 20 million migrant workers have been
cast into the ranks of the unemployed, depriving impoverished towns
like Tanjia of the much-needed income the workers sent home.
Since December, hundreds of employees at Ms. Tan’s uniform factory have
been let go and wages have been cut by a third as orders from the
United States dry up. Last year, 2,400 factories in and around
Guangzhou closed.
“I hope I still have a job,” Ms. Tan said this month, a few hours
before leaving Tanjia on a train for the 10-hour ride that in recent
years has carried away most of the town’s working-age residents. “I
don’t want to go back to being a poor farmer.”
In a nation obsessed with social harmony, the well-being of China’s
mobile work force has become the top priority for a government that has
long seen its fortunes tied to those of the country’s 800 million rural
dwellers. Mao’s revolution, after all, was fueled by embittered
peasants, and it has not gone unnoticed in Beijing that decades of
heady growth has fed a widening gap between urban residents and those
who live in the rural interior.
Although the government has not released updated information about
rural unrest, officials have been strategizing about how best to keep
large protests and riots from spreading, should the dispossessed grow
unruly.
This week, more than 3,000 public security directors from across the
country are gathering in the capital to learn how to neutralize rallies
and strikes before they blossom into so-called mass incidents. At a
meeting of the Chinese cabinet last month, Prime Minister Wen Jiabao
told government leaders they should prepare for rough times ahead. “The
country’s employment situation is extremely grim,” he said.
To ameliorate the hardship of idled migrants, the central government
has announced a series of initiatives that include vocational training,
an expansion of rural health care and crop subsidies to ensure that
those who return to the land can make a living despite a slump in
agricultural prices. A $585 billion stimulus package introduced in
November, much of it weighted toward labor-intensive construction
projects, is also expected to absorb some of the newly unemployed.
But here in Tanjia and the surrounding countryside of northeast Hunan
Province, most people say they have yet to see much in the way of
government largess. As the Lunar New Year came to an end two weeks ago,
many migrants who had come home for the holidays were anxious to return
south, where they hoped to reclaim their old jobs or find new ones.
About 40 percent of the town’s 2,000 residents work outside the
province, and their remittances have been a lifeline for the children
and elderly people who remain behind. Much of that money has been spent
on motorcycles, high school educations and new homes, some trimmed with
Corinthian columns and ceramic dragons, that are the brick-and-mortar
embodiment of this newfound prosperity.
Ms. Tan’s family home, like those of her neighbors, is a work in
progress. Since 2005, her mother, father and brother, all migrant
workers, have poured $15,000 into the two-story house, but they still
need another $9,000 for appliances, fixtures and a white tiled facade.
“We have no savings,” said her father, Tan Liangsheng, 52, a
haggard-looking man who recently lost his job as a construction worker.
“All our hard work and bitterness is invested in this house.”
Just behind him sat the mud-brick structure where the extended Tan clan
used to live.
In some ways, Tanjia’s residents are luckier than most. Unlike China’s
drought-stricken north and its chronically arid west, Hunan Province is
well watered and blessed with a temperate climate that allows farmers
to grow food much of the year.
Still, with 64 million people squeezed into an area the size of Kansas,
most people make do with tiny plots of land; in Tanjia the average size
is a tenth of an acre. “Maybe we won’t starve to death, but life would
become very difficult if everyone came back home,” said Long Feng, 29,
who works at a car repair shop in Shenzhen, not far from the Hong Kong
border.
In Zhuzhou, the nearest city of any consequence, government officials
are not very concerned about a surge in jobless farmers.
Chen Shuxian, director of Zhuzhou’s employment center, said he was more
worried about the 3.7 million people who live in and around his booming
city, people who have become accustomed to relatively comfortable
lives. “They have cellphone bills and rent to pay,” he said. “The
migrants don’t have a lot of expectations and they can always fall back
on the land and their family savings.”
Such sentiments are common in China, where rural laborers are often
viewed as dime-a-dozen workhorses capable of enduring enormous
hardship. He Xuefeng, a professor who studies rural life, said many
manufacturers believed the most productive workers were spent by 40.
“As workers grow older, they can’t work as quickly or accurately, so
they are naturally eliminated,” said Mr. He, who teaches at Huazhong
University of Science and Technology in Hubei Province. “The financial
crisis will simply speed up that process by two or three years and
force them to return home earlier.”
After he lost his job at a glass factory in Guangzhou last year, Wang
Liming, 39, returned to his home on the outskirts of Zhuzhou thinking
he could find employment nearby. Things turned more dire after his wife
lost her job just before the New Year festivities.
He acknowledged that there was work to be had in Zhuzhou, but those
jobs generally pay less than $100 a month, about half what a
semiskilled assembly line position pays in Guangzhou.
“I couldn’t even afford my daughter’s high school tuition on that kind
of salary,” he said, standing in front of his home, a half-built box
that lacks windows and a refrigerator.
A gruff, chain-smoking man, Mr. Wang said the decade he spent in the
south turned him off to agricultural work. “I hate working the fields,”
he said as his neighbors nodded in agreement. Even if they wanted to,
he and his fellow villagers could not make much money from farming:
some of the best patches of land have been swallowed up by Zhuzhou’s
rapid development, including the electric generating plant that
dominates the view from his front door.
Asked about his plans, Mr. Wang shook his head, glanced at his
cellphone and said he was waiting for friends in
