China Life and ICBC in fraud investigation

China's second largest insurer China Life and the ICBC, on of its four largest banks, have been accused of irregularities by the National Audit Office, reports the financial newswire Dow Jones. China Life listed a month ago and raised US$ 3 billion, while ICBC is preparing a listing.
While an announcement on its website did not provide any figures, China's central TV CCTV said it involved 35 billion Renminbi (US$ 4.2 billion).
"The audit office said certain entities and individuals used false documentation to apply and receive housing and auto loans, while some local governments overstepped their lending limits when receiving loans from ICBC for infrastructure projects....The audit office also said ICBC's management of the commercial paper market was "a mess" as some companies under false pretenses received funding purportedly for trade-related purposes. It said the bank has sustained "serious losses" from the illegal loans. The audit included ICBC headquarters and 21 of its branches," Dow Jones writes.
Officials of both companies could not be reached for comments.

Update: The Standard from Hong Kong suggests that the 35 billion Renminbi (US$4.2 billion) concerns only the insurance company China Life and an addition 67.1 billion Renminbi 'lost' by the ICBC through fraude.

'Blogspot' blockade again firmly in place

The blockade of the access to the so-called 'blogspot' domains at the internet seems to be again firmly in place. During the past holidays in some places like Beijing, Liaoning and Tianjin access was possible, while other places reported that they could not access the weblogs that belong tot the Google-company Blogger.com. (See also earlier entries).
Two theories emerged. The first suggested a change in policy that was not yet implemented all over China, because of the holidays. The second, suggested by former Harvard researchers Ben Edelman was that because of the changing url's not everywhere the blockade was kept up-to-date, also because of the holidays.
Latest information suggests that the second theory is going to win and the blockade will remain in place, although the logic for the blockade is lacking, now other weblog-providers have no problem in getting business from China-based internet users.

Mass suicide among Party members

More than 1,200 members of the Communist Party have killed themselves and 8,000 have fled abroad during the first half of 2003, according to the Beijing oriented Wen Wei Po in Hong Kong, reports Reuters and many other news media.
And then people worry about the chicken flu. On 65 million Party members it might not be that many as a percentage, but the totals are staggering anyway.
It is one of the first times that this kind of figures are released. The fight against corruption has taken on a rather serious character since the new government got into place at the beginning of last year.

Hospitals rake in during holidays

Of all the human rushes triggered off by the weeklong Springfestival, the price for the most interesting twist goes to the Shanghai Daily who discovered that more people spend their holidays in the hospital.
Routine health checks, mental health services and plastic surgery were the toppers.
After education, medical services belong to the more favorite expenditures for Chinese; having a long and healthy life is a high priority, making Chinese inside and out China to the highest users of medicine worldwide.
According to Ye Shanlong, director of Changning District Mental Health Center, after resuming out-patient service on Sunday, his center received more than 20 people every day, doubling the usual number, and most are stressed office clerks, writes the Shanghai Daily.
"Nose reshaping, eye-lid processing, liposuction and skin treatment were the most popular during the holiday. We received more than 40 patients every day, compared with some 20 in usual days," said Liu Chunlong from Ren'ai Hospital.

Email and the computer virus

The number of emails I got this morning has been on its lowest level since the beginning of this century, including the few hundred spam messages I get every day. I had expected the opposite as China has resumed work yesterday.
I assume it's the virus that has slowed down the internet over the past few days. Do not expect any answers very soon.

Fortunately, there is still normal mail. Today was a special day as I have sent off my applications for a one-year fellowship in the US. Chances I get it are 50/50 I think, but then I have always been too much of an optimist. Keep your fingers crossed!

SCMP calls for 'United Front'

Some words in China (even when they are use in English) have an additional meaning that should make observers like us rather careful. Central governments of large countries like China do have many priorities and some of these coded words mean that we have to take this more serious than other priorities.
So when Chinese state-owned media call for a 'United Front' I tend to struggle through rather boring announcements, since this refers to the Chinese call for unity, against the splittists from Taiwan or wherever they might come from. It means serious business.
When the South China Morning Post described this morning the fight against the chicken flu as a 'United Front', I got confused. Is the paper in a new phase of complying with governmentel jargon in the mainland? Are they employing more people from the China Daily? And how important is the struggle against our feathered enemies? Is the country breaking down?
I know times are changing and this is not the time to get upset about the way sayings are being used, but, please: no united front anymore, unless it is really serious.

How serious is this flu according to people in Asia? Not there at the moment and saw that the WHO has raised the orange alert (yes, I'm in the US as you might notice). Is there reason for that?

Update: Just saw where the SCMP got it from: a cultural less sensitive editor must have picked it from the AFP dispatch.

Amnesty: more internet users in jail

The rights organisation Amnesty International has released a report on, what it says, the growing number of people getting into trouble because of internet-related activities, writes Reuters and many other media.
They have counted 54 cases of people being detained or imprisoned, an increase of 60 percent since November 2002. The number of cases goes up much faster than the spread of the internet, Amnesty says, indicating increased policing.

Looking for China's middle class

An interesting study by Dr. Li Chun Ling of the Chinese Academy of Social Sciences, today in The Strait Times, triggers off even more interesting reactions in the portal 'Living in China'.
We journalists and academics love this kind of discussion, since it appeals to the fascination of our audiences. It is the benchmark for China's developing prosperity.
I find it in most cases a very funny, but not very useful discussion. The participants first set their own criteria, start counting and - hurray - there is a fast developing middle class or there is not really a middle class. Dr. Li found out that according to her criteria only 4 percent of the Chinese might qualify as middle class, but I'm quite sure that with other criteria that middle class might grow very fast.
Maybe we should forget about the whole concept, especially since there is no general agreement on the question what the middle class actually is. Finding out what people earn is hard enough, since I estimate that up to half the income of most urbanites is not registered at all. Tell us how much they earn, whether they want to buy a car or an education in the US, those are questions that are more relevant.

The evil car strategy – the WTO column

(Later also at Chinabiz)

Ann Arbor – My regular readers might recall that I have been worrying quite a lot about the possibilities of the foreign car industry to recoup the many billions of US dollars they are investing at this stage in China.
The car industry in China is inefficiently organized, export is a far away dream and the domestic market does not seem large enough to support all those investments that have been flooding the automotive market. The infrastructure is lacking: after one year of decent growth traffic has come to a standstill in larger cities and on major highways. At some moments the average speed of cars in cities is lower than eight km per hours, slower than a bicycle. Add the problems with pollution and the need to import more oil to keep those cars moving and you might see that the most recent predictions, an annual demand of 20 millions cars by 2020, seems a bit far fetched.

Obvious, now China has become already the 4th largest car producer in the world, the contribution to the national and local economies of those industries is something no government would like to discount. So, how can we solve that dilemma?
This week dr. Zhao Jimin, working at the universities of Harvard and Michigan came in a lecture of the Center of Chinese Studies in Ann Arbor with an ideal solution. I would have called it a Chinese solution, if it had not been used in the US already rather successfully, since it solves almost all problems. There is no way you can stop Chinese citizens from buying the car that offers, said Zhao, and probably she is right. So, how can you limit the problems without losing a booming automotive industry? All those car users should use the bus or other means of public transportation.

It took a few minutes before I really realized the brilliance of that solution. “Beijing now has two million cars,” explained Zhao. “The problem is all two million are also being used. In New York people own over twelve million cars, but they use only two million.” That would be a good way to manage this problem.
Do you really think the Chinese consumers are so stupid they will pay their hard-earned savings for a car they can hardly use, I asked her after the lecture. The American audience became slightly unruly, since it works in the US, why should it not work in China?

Perhaps she is right. Anyway, the restriction on the usage of cars will only come in a sneaky way, get tougher as the traffic gets more often into a gridlock. The car industry has dictated the way Americans use how public space is being used in their country, who should the car industry not impose their doctrine on the Chinese?

Fons Tuinstra

Mixed messages on Google-blockade

Still, the information on the possible end on the internet ban for both the Google caches and the blogspot-weblogs keep on being mixed. Latest reports confirm that the caches are accessible in Shanghai, but not the weblog produced by Blogger.com
Not many hits from China and none from Shanghai - the few I see came from Beijing and Liaoning as noted before.

Weekly chat on blogger

Every week I will (try to) host a chatroom so this whole venture can become a bit more interactive in the long run. I have planned to do this every Wednesday at 9:30 AM Beijing time. Please click here to get connected. It provides your access to the IRC-channel of the China Herald and is for free, although you might need to register if you have never used the system.
Please write to me if you encounter any problems.

Wednesday will be quiet I expect: it is the first time and China is still very much on holiday. When people to check in, I would like to discuss the (lifting of) the internet ban on Google companies, about your experiences and expectation.
Session will be at 8:30 PM EST/5:30 PM PST on Tuesday in the US if my timing is correct and on a rather inconvenient hour for Europe. Depending on the interest we might decide to shift timing.

Try to join me if you can.

China's low wages

Call me single-minded, but when I surf the internet 'China' is my most important key word. When I look into the New York Times or the Financial Times, I first look what they have on China. I start looking into the rest of the world when I'm a bit bored or when a major war is expected. So, when the Catholic Agency for Overseas Development (CAFOD) issued a report about the labor condition in the computer industry, I skipped Mexico, Thailand and dived into their evidence on China.
Now, that could potentially be a big story. Getting the large Dell, HP-like corporations nailed down on their inhuman way of producing computers and their components in China. Well, I will not use the word "unfortunately" but there is no story, I found out. I guessed the researches should have asked the Holy Spirit for a bit more inspiration.
Their main discovery: China offers cheap labor, and often does not stick to its own legislatiominimumnumum wages.
Blimey!
For this shocking conclusion they used figures dating from last century, 1998 to be precise. Although the conclusion might still be valid more than half a decade after the figures were collected, I was not really impressed. They were also unable to connect concrete companies with concrete problems in concrete factories: it was only general assessments.
I find this kind of reports more shocking than the low wages in China itself. Of course, wages are low, but migrants do work in those places because at home they would earn less. Does that justifies the lack of compliance with China’s own laminimuminumum wages, no of course, but it is a damned good explanation.

Click here for the full report in PDF-format.

The Google conspiracy

One of the striking features in the way foreigners look at changes in China is that there is no shortage of conspiracy-theories. Now the - still untested rumor - is going around that two Google features, their cache and the 'blogspot' domains are no longer blocked in some parts of China. It would be a good moment, as their IPO is nearing and they are pushing out new initiatives also in other fields.
In other parts the blocks are still firmly in place: I only got a bit of feedback from Shanghai and there the blockade still works like in old times.
In an email Ben Edelman, previously doing research on internet filtering at the Berkman center of Harvard Law School, dismisses the possibility of a deal between Google and Chinese authorities on the issue. He dismisses this as very unlikely: "All recent tests indicate that China is perfectly able to filter according to the part of the URL after the question mark (the "URL parameters"). So China could block those Google searches that contain the word "cache" as well as the domain name of a blocked site. That's just to say: There's plenty to criticize about Google, but I don't think the evidence is in place to accuse them of conspiring with China.

Also the regional differences in how the filters work are not new. It is a misunderstanding to view China as a communist country including a central command in Beijing. Almost all politics - including the internet filtering - is done on a more local level. There might be lists going around on what sites to block or unblock, but there always have been differences in timing and differences in what is blocked or not.
While information is still lacking, we might for the time being hope that the blocks on the Google-features are on the way out, but are still lingering around in some areas, because the people in charge have not yet returned to work.

The blogspot rumor investigated

Despite the ongoing holidays (here in the US we now also have weekend) some more details from China are coming in, thanks to some active bloggers over there, especially Peking Duck and Brainsmurf.
The stories differ very much, also per region. That would not be so strange, since provincial and local authorities would have a large say in what is being blocked, it is never a unilateral decisions by a big brother in Beijing.
A few interesting speculations pop up. First a cooperation between Google and the mainland authorities is being suggested as it seems that the Google caches are partially blocked, allowing users to access most of them without proxy, but some not. That would most likely need help from Google.
The unexpected lift of the ban is also linked to the emergence of RSS and syndication services that would easy circumvent the internet filters, unless China wants to block whole new systems again. Interesting enough to keep on following actively.