economy - SAFE still strong on Renminbi

An estimated US$ 50 billion in Renminbi flooded last year the Chinese economy, as speculators expected the Renminbi to revalue. That did not happen and China's financial authorities, as the State Administration for Foreign Exchange (SAFE) continu to repreat that a full scale revaluation is not on the agenda.
SAFE does allow Chinese companies to hold larger deposits to aleviate some of the presure. "Letting Chinese companies retain more of their hard currency earnings from the first quarter of this year should reduce pressures on the renminbi money supply. Currently the central bank buys all but a small portion of hard currency earned by exporters and repays them in renminbi," writes the Financial Times today.

The Longbow Papers - review
 
In the blogosphere, as we call the community of webloggers, weblogs are divided in different groups. Life logs write about the life of a person. War logs are kept by people in wars, sometimes soldiers, journalists, but in the case of Iraq also inhabitants of Baghdad who suddenly saw bombs dropping on their city. Sex logs have there own little angle and I’m quite sure there will be a car blog also somewhere.
My most important distinction I would make between blogs are those that have something to say and those who have nothing to say. Of the latter we see quite a lot.
The Longbow Papers by Joseph Bosco belongs to the blogs that have something to say...

Read more at: The Longbow Papers

media - What is news in China?

Yesterday I had at Narita Airport an interesting exchange with another traveler to Shanghai, and it is part of a thought process that is still very much on its way. But it might be interesting to hear your thoughts on this too.
My fellow traveler mentioned the recent hausse in media reports on large accidents and deaths in China. "Ten years ago there would be similar accidents, but the media would not write about it," he said. "Now you see happening in China, what happened ten fifteen years ago in Taiwan. The media start to report also this kind of news."
That change creates also a new dilemma for us journalists: what is news when it comes from China? Ten years ago that was much easier, since there was not that much to report about. Obvious the first reports on large scale accidents were news, but that is not going to remain like that. At Chinabiz, the headline section is a first way to deal with it. When it started off we had a set of basic benchmarks: no stories about investments under 25 million US, unless it means opening of a closed market, like the media.
Even when you look at the business news it is clear we need to develop a new way of selecting the news. Now days passes without a bank preparing for a massive IPO, today Air China joins the mayhem. Bilions of US dollar worth of news are passing by and we have no clear way for selecting news. When you only report on financial news, that might be easy, but how to deal with rest? Is the human rights issue still an issue? When China was a serious candidate for being the new arch enemy of the US after the Soviet-Union collapsed, those discussions mattered. The interest of the world seemed to move to China.
Being just an economic superpower is not enough, as Japan shows. The country is still the second economy of the world, but the media interest has collapsed, as has the number of foreign correspondents in the 1990s.
So, the question is: do we still have a story to tell the rest of the world wants to hear? That seems an interesting enough dilemma to struggle with, in the months to come.

life - Reversed security

After being away for four months it is interesting to see what might have changed. No complaints about Air Nippon (an excellent service and they upgraded me to business class!) but I was curious when they announced that because of security in China our bags would be checked when we entered the country.
Now, I think all the checking when you enter a plane is a nuisance, but I can see the logic of that. Checking us when we leave the plane seemed a bit odd, to put it midly. Perhaps China wanted to check the illegal flows for money that are heading back into the country?
Fortunately, not so much had changed. There were still this SARS-people not checking my temperature, but then having a job is also an art. Then I went through Quarantine, where they stamped my form and took it in. Then I walked through immigrations, where they actually checked my visa, and Customs where they did not check anything.
Nobody checked my back to see whether I was carrying a nail clipper meant to hyjack the country! Glad to be back in this flexible country.

internet - Creating a Chinese echo chamber

I was up in the air in the online place where you cannot not yet get online, and had time to think things over.

Webloggers in the US got in the past few months really upset when their new way of communicating was compared with an echo chamber, a chamber that can produce a lot of noice, but is hardly noticed in the rest of the world.
The next meeting of webloggers, Bloggercon on 17 April in Harvard University, will even focus on that idea: the blogosphere as an echo chamber.
I too think that in the US this qualification is not reflecting the truth, but to be honest, in the rest of the world it is for webloggers even hard to create a bit of an echo. That is not only China, but larger parts of Asia and almost all of Europe.

In the US, because of the large number of webloggers and an increased level of quality of the top-bloggers, the effects are much larger. Traditional media take up the habit and there is no subject or webloggers have an influence on it.
In developing the blogosphere, many things cannot be influenced. The relative connectivity of people, the availability of enough tools, much are independent forces. But in a few fields we can make a difference, and that is what I will try to do in the China Herald.
I want to create an echo, maybe not a large one, but one that bumps into other walls of the internet and comes back. Yes, perhaps an echo chamber, in China we would be very happy to have an echo chamber.

Economy – US officials sing pro-China song

US Trade representative Robert Zoellick targeted the growing anti-China sentiment in his country during a speech on Wednesday at the Asia Society in New York.
He warned that the US could not keep Chinese goods out.

"Just (when) the Chinese are learning the win-win nature of trade, Americans should not forget how the idea works," the chief architect of the Bush administration's trade policy said in a speech to the Asia Society. "There is much at stake for both countries, and the world, in how China and the United States exercise power and responsibility,” he said according to a report by Reuters.
Earlier Zoellick had also warned the US manufacturers that the peg between the Chinese Renminbi and the US dollar would not go against the regulations of the World Trade Organization (WTO). American lobby groups try to seek a legal way to attack that peg, which hurts their interests they say.
During the campaigns for presidential elections in the US in November 2004 a tougher tone would be expected of both president Bush and the Democratic contenders, but high level official tend to take at this stage a more moderate approach. The presidential economic advisor Gregory Mankiw too earlier some heat when he said that outsourcing was actually good for the US economy.

international relations - Its official: long delays for US visa procedures

The US General Accounting Office - an internal auditing office - has investigated the delays in issuing US visas: click here for the (lenghty) report. (A pdf-file)

internet - Do not try www.F*.com

Did I tell you already about my tribulations with www.pluck.com? They show up once too often in the ads on my site, so I guess a warning is in place. They promise a free RSS-reader on your Internet Explorer. When I downloaded their software I could not restart IE anymore, so their claim might be true, I could not check it anymore. They push RSS-links I do not want and I found it impossible to get in working. F* pluck, I would say.

economy - Shanghai's troublesome bicycle tax

Small stories in China can be rather revealing and this story in the Shanghai Daily really tells a lot about how the society works.
Bicyle owners have to pay an annual tax of eight Renminbi (just a bit less than one US dollar) and that is about double the tax ten years ago when I arrived. Needless to say that I never bothered to pay that tax. Foreigners were never asked to pay that tax and even the Shanghainese never took up the habit in a serious way. Officially Shanghai has nine million bicycles, but on 1.68 million, about one fifth, pays the bicycle tax.
Some of the Shanghainese would do everything to save money, even those lousy eight Renminbi, but for most it is just too troublesome to pay. And for the tax office it is too troublesome to go after the people that do not pay. On top of that, since there is no fine, even no authority that can enforce the bicycle tax, it is rather easy to avoid the bureaucracy.
Only very few jurisdictions in China have a bicycle tax. Just scrapping it would be the easiest thing to do, probably be much cheaper than trying to collect it. But who wants to have things easy when they can be difficult too?

internet - Wang Jianshuo reviews his review

In the US the weblogs are sometimes compared to an echo chamber, where one review or article can trigger off hundreds, sometimes thousands of reactions all over what is called the 'blogosphere'. That is not a correct comparison, I feel, then traditional media have to take those weblogs more into account than they sometimes want to admit. Weblogs have grown their to a new medium.
In China even the echo still has to start, although our sexblogger Muzimei did a pretty good job.
Today Wang Jianshou react after reading my review of his weblog.
He corrects my assumption that his employer Microsoft had a problem when they were mentioned in his weblog: a fairly common problem for employees in the US blogger about their employer. "I never wanted to hide the fact that I am working for Microsoft, which I am very proud of. Microsoft is very open to blogging, more open than I could imagine," writes Jian Shuo. "The real reason is simple. I just want to be known as a normal person, "telling about the daily worries of a Shanghainese citizen" (as Fons commented). Talking about job related stuff is out of the topic of this site. Actually, I am seriously thinking of creating another blog (not hosted on this site. Maybe another business oriented domain) and share my job related stuff with people who do business with my team outside Microsoft. Blogging is a better tool of effective communicating, then email, even website."
Well: this is the echo. Since I'm just starting monitoring I can still see interesting changes in the traffic, and I can assure you it works.
O yes: he is only renting cars at this moment, not owning one. And I thought Microsoft paid decent salaries. :-)

logistics - French Alstom courted for Beijing-Shanghai line

The French company Alstom is now a frontrunner in the efforts to build the US$ 12 billion railway track between Beijing and Shanghai. The project, based on traditional railway technology, is supposed to cut back the travel time between the two cities from twelve to five hours.
Consortia of German and Japanese companies have been trying to sell their high-speed solution to China, but all in vain. The German consortium even build a test line in Shanghai of 30 km as a showcase, but otherwise logistically useless project.
Now it is the turn of the French to kiss the emperor's feet and part of the high-profile visit of president Hu Jintao was meant to smoothen the ties between the two countries for this 1,300 kilometer project.
In a similar case a German consortium of Adtranz and Siemens participated in the first two subway lines in Shanghai, supported by an undisclosed subsidy by the German government. When Germany did not want to participate in a third line, the privilege of subsidize Shanghai's infrastructure went to France.

globalization - Lastest update

I know I promised you an update on the ILO-view point regarding globalization. I went through it and decided to leave that up to others. This I got just now from a Dutch diplomat and that summerizes the situation much better:

GLOBAL ECONOMICS DE-MYSTIFIED

TRADITIONAL CAPITALISM: You have 2 cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.

SOCIALISM: You have 2 cows. You give one to your neighbour.

COMMUNISM: You have 2 cows. The Government takes both and gives you some
milk.

FASCISM: You have 2 cows. The Government takes both and sells you some milk.


NAZISM: You have 2 cows. The Government takes both and shoots you.

BUREAUCRATISM: You have 2 cows. The Government takes both, shoots one, milks the other and throws the milk away.

AN AMERICAN CORPORATION: You have 2 cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyse why the cow dropped dead.

A FRENCH CORPORATION: You have 2 cows. You go on strike because you want three cows.

A JAPANESE CORPORATION: You have 2 cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called Cowkimon and market them worldwide.

A GERMAN CORPORATION: You have 2 cows. You reengineer them so they live for 100 years, eat once a month, and milk themselves.

AN ITALIAN CORPORATION: You have 2 cows, but you don't know where they are. You break for lunch.

A RUSSIAN CORPORATION: You have 2 cows. You count them and learn you have 5 cows. You count them again and learn you have 42 cows. You count them again and learn you have 2 cows. You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION: You have 5000 cows, none of which belong to you. You charge others for storing them.

A CHINESE CORPORATION: You have 2 cows. You have 300 people milking them. You claim full employment, high bovine productivity, and arrest the newsman who reported the numbers.

AN INDIAN CORPORATION: You have 2 cows. You worship them.

A BRITISH CORPORATION: You have 2 cows. Both are mad.

A DUTCH CORPORATION: You have 2 cows. They start a stakeholders' council and demand counselling for the pyschological trauma they sustain being milked.

economy - 'Forget it' China tells US treasury specialists

China will not revalue its currency the central bank told when US officials moved in to 'help' the country to rethink its monetary policies, writes the Wall Street Journal.
Receiving the officials of the US Treasury department was the main concession China did during the past months as the US wanted a revaluation of the renminbi, although all specialists wondered why that was.
The meeting today raised again expectations, but apart from slight adjustments a really effective change - says an 20 percent devaluation - would be unthinkable. While the US trade has prospered because of the fall of the US dollar, the peg between the US dollar and the Chinese Renminbi made China a second beneficiary of this fall. At the end of the 1990s, as the US dollar and the Renminbi went up together, China also refused to change its policy, although the development then hurted China's economy considerably.

globalization - the ILO-report

The International Labour Organization (ILO) issued its report on globalization, one of the more important ideological debate of these days - at least it should be.
No time to read it yet, but will come back on this later.

logistics - Shipping lines scrambling for Shanghai berths

Berth space in Shanghai cannot keep up with the demand from shipping lines, writes leading shipping magazine Lloyd's List this week. Container terminals push through cargo 30 percent in excess of their capacity, while the construction of the new port only has started.
Last year transport through the Shanghai port increased 32 percent, to 11.4 million TEU, pushing it close to the top-ranking of the Pearl delta. The first of the 52 newly planned berth are expected to be operational by the end of 2005. The first phase has a capacity of 2.2 million TEU.
The Shanghai Port Authority has up to now ignored foreign developers, who have been lining up to participate in this prestigious project. They still have hope to get a piece of the action as the second phase materializes.

international relations - US main problem in North Korea talks

I'm going here a bit off-beat, but the North Korea talks in Beijing raise enough interest to do so. The Chinese media, like the China Daily, try to cover this event and signal even a US plan.
The real problem here are is more the US itself than North Korea, say anonymous sources close to the negotiations. North Korea felt the need for a deterrence only last year, as the US invaded Iraq and North Korea felt threatened. Efforts to resolve the problem - and nobody really is in a position to put effective pressure on North Korea - have failed, because of internal differences within the US administration.
US president Bush agreed to multilateral talks with North Korea, but the Pentagon more or less ignored that new policy and went on to fight their imaginary 'axis of evil'. We all need a purpose in life, don't we. So, the question is not only whether the US have a plan, but also whether the president has enough leverage over the US ministry of Defense.
Well, better read the experts on this, for example the website of colleague Rebecca MacKinnon, whose beat this really is. Oops, her website is down now: you can find it for later at your right hand side.

Update: Rebecca back in action at NK zone.

economy - Inflation hits record height

Inflation of producer prices in China went up 3.5 % year-on-year, compared to 1.9% in November, the Wall Street Journal reports, quoting official figures.
Prices for raw material and fuel went up 7.4 % and are the main reason for the spike in inflation. Inflation has not been that high in about a decade, when China mainly saw deflation.

media - China Daily confuses colleague

How refreshing! My colleague of the New York Times is confused and admits it: "While China Daily serves as Beijing's mouthpiece on issues involving Taiwan and Hong Kong and on diplomatic affairs, its business and economic coverage sometimes shows a little independence from government policies."
The economic supplement of the former mouthpiece of the Chinese government had interviewed three economists and one of them had suggested that the interest might be raised. Only a few years ago such a statement would have set off the alarm among international bankers. Chinese media desperately try to act as real, independent media, but the foreign colleagues are not too sure about it.
Only some years ago the same paper triggered off an international panic, just because they tried to give a range of different opinions. Still, Keith Bradsher is not hundred percent sure it is not an advanced warning for a change in the interest rate. He will learn, just another five years and Chinese media will be taken more serious.

internet - RSS/atom feeds in place

I know I announced this success already before, but now I'm more sure than ever. My RSS-reader came up with a result! Again, after days of desperation another technological victory. I suddenly discovered my atom feed. And I discovered what I did wrong with my RSS-feed. It is working! Now I can show my mother what her son is able to do.

economy - Big, bigger, biggest: IPO's are in the air

Undeterred by stories on fraud, non-performing loans or other Chinese financial diseases a hausse in IPO will be hitting the financial markets in the coming months. A new financial China craze is in the making.
The expected US$ 7.2 billion worth listing of the China Construction Bank is going to be the largest, reports The Standard today. Both its size, with listings in Hong Kong, New York and Shanghai, and its industry, banking, makes this a tricky exercise. For a mainland company it will be a record listing.
In the past few months the CCB has tried to get rid of much of its non-performing loans, a whoppy US$ 22.5 billion for a severely discounted return, and has restructured its management. Because of the backing by the Chinese government, the listing will be rather safe, but in the long run it might be hard to keep all the skeletons on the closets that have not yet been opened.
The domestic IPO of the China Oriental Group got oversubscribed 700 times, the international one eleven times, indicating a favorable mood among investors regarding mainland companies, despite sometimes weak fundamentals. Tom.com is yet another, rather small, internet company that tries to catch the current upswing in the market. An upswing that is mostly followed by a wake-up call.

Photo - Caught in the act



I'm speeding up postings because I will be traveling most of this week, so this weeks picture come ahead of time. Do not forget to send your contribution to my email box for next week's 'Caught in the act'.

politics - China needs more police

One guaranteed way to get a discussion on China going outside China is my favorite statement that this country needs more police.
I had to think about some interesting encounter I had over this statement when I read today's Reuters dispatch (copied from the official newswire Xinhua) on corruption in the police force. China is still perceived as a classical 'police-state' and especially people who have only seen Beijing and Shanghai cannot imagine that the shortage of police is an acute problem. The article says that almost 8,000 police officers have been punished last year for negligence, "58.7 percent more" than in 2002. We do love those very precise statistics.
Most police officers are very much underpaid, poorly equipped and hardly trained for the duties they have to perform. Outside the large cities policing is done so poorly that Mafia-like organization are a better tool to maintain maybe not law, but at least a certain level of order.
But unfortunately does not fit the cliches the outside world likes to hear about China.

education - The brain drain continues

Efforts by the government to get the number of Chinese students abroad to return to their motherland have no effect, if we can believe the figures of the Chinese Ministry of Education, released earlier this month.
Over the past 15 years 700,200 students have left to study abroad and 172,800 returned to China, almost a quarter. In 2002 125,000 students left abroad, up from 17,000 in 1998. The increase came mostly from self-funded students, whose number multiplied 11 times over the past five year to 117,000 last year, compared to government-funded students.
The number of students going abroad is dropping dramatically: down from 125,000 in 2002 to 117.300 in 2003. Last year 20,100 students returned to China.
The figures have to be treated with cautious, since most information the Ministry suggests some underreporting of those returning. The figures seem to relate to those students returning right away after finish their study, while especially in the US students are allowed to remain to work for a year and sometimes longer after graduation.

internet - Weekly chat on Wednesday (BT)

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 or on the logo 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. You do not have to pay for the usage.
Please write to me if you encounter any problems.

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.

Please check this site before you start: it will be also my last evening in Ann Arbor and I might have other obligations.

Wang Jian Shuo - weblog review

The IT-engineer Wang Jian Shuo is one of very few English language web logs that does not have the overly pretentious approach like most English language weblogs on China - including the China Herald. Here is Jian Shuo, telling about the daily worries of a Shanghainese citizen.

He got already quite some exposure as a weblogger in foreign media, especially in the Spring of 2003 when SARS hit China, but he seems to be keeping his both legs on the ground.

He got a nice wife, Wendy, got married,

Read more at Wang Jian Shuo

internet - the Google ads

Have you seen the Google Ads? The ads pop up depending on what words you use at your weblog, so nine out of ten ads nowadays are about weblogs. Last month I had a story on squirrels and that triggered off ads on wildlife ads and associations for terminal diseases, but now we are back into 95 percent web log ads.
I have sent them an email to ask whether they could change that. Guess: I had an add "Kerry for President". Do you in China get those too? Hope that does not raise any misunderstandings in China about where John Kerry wants to be a president.
I put my bets on Chris P. Carrot for president of the universe.

(Do not click on www.pluck.com from those same ads: I tried the services and it sucks!)

life - Winter back in Shanghai

Damned, I was just planning my return to Shanghai, later in the week. The stories about the nice weather, up to 24C, made the switch from icy Michigan very easy. Spring has arrived, but the winter is not yet gone in Shanghai, the Shanghai Daily warns. Time for the government to step in, I would say.

economy - Traffic jams "no threat for Olympics" - Beijing mayor



What is the first problem the newly elected Beijing mayor has to address in a meeting with the press: the traffic jams. The new political agenda of China might upset both human rights activists and car manufacturers, but that is how it is.
The mayor said on Saturday the traffic jams will not cause a problem during the 2008 Olympic Games. Why? He will ask the people to leave their cars at home, reports the official newswire Xinhua.
"The traffic problem is an integral part of the entire process of Beijing modernization," he said, blaming irrational city planning, the increasing number of private cars, malpractice and people's lack of awareness of the importance of obeying the traffic regulations for traffic jams.
Wang is already in place since April last year, as he had to replace his predecessor who tried to keep the SARS-epidemic under wraps.

international relations - Bush-spot suggests Kerry – Li Ka Shing link

A TV-spot on the election website of President George W. Bush links his Democratic opponent John Kerry with the ‘special interests’ of Hong Kong tycoon Li Ka shing.
In a less than subtle TV-spot, called ‘Unprincipled’ an imaginary female voter surfs the internet looking – rather successfully – for the ‘special interests’ John Kerry has with the large corporations. In a list of ‘ties’ the women repeats verbally, she also mentions “Kai-shing”.
Li Ka Shing is Hong Kong’s most successful and richest business man, key to many companies in telecommunication, logistics and manufacturing.
In a summery of the New York Times on Saturday it says: ‘The answer flashes on the screen: $640,000. “Ooh, for what?’’ she says, typing out ‘‘Paybacks?’’ and then reading aloud from the screen, she says, ‘‘Millions from executives at HMO’s, telecoms, drug companies.’’ She add, "Ka-Ching!"
She can only come to one damning conclusion: Mr. Kerry, she says, is ‘‘Unprincipled.’’