Internet – The Meeker-report

Andrea gives, rightfully reluctantly, the most important and useful conclusions from the Morgan Stanly analyst Mary Meeker (so we do not have to read the whole report). Her positive take seems this time more justified than when she talked many investors into the first internet bubble, some years ago.
Her summary of comments is also useful: “China's internet underground gets it, i.e., they understand what's happening. They were the first to understand the importance and value of P2P, MP3 and podcasting, too. However, corporate IT types in China (and in the States, for that matter) don't really get it,” says one of them.

Media – CNN Hong Kong scraps 30 jobs

Cutting media jobs in Hong Kong has become more contagious than SARS this week. After the Far Economic Review (80), TVB (28) now also CNN Hong Kong will cut ten positions for producers and twenty of freelancers, the South China Morning Post reports today.
The dismissals at CNN are part of a worldwide cost cutting operation that will also involves jobs in London and Atlanta. How many jobs will be lost in this region because of the reduction of the BBC labor force with 6,000 is not yet clear. The BBC announced earlier this week they would get rid of a quarter of their total staff..

NGO's - Writings on civil society

This week I had on different occassions discussions on the emerging civil society in China. It seems an obvious development, the central government is busy dismantling its structures of the former planned economy, but then you need to replace it with new ways of negotiating an agreement about how to organize a country. For those who want to see it, they can see over the past years an upsurge in non-governmental organizations (NGO') that seem the start of that civil society, more clear in the past few years than ever before.
In the past I have accused academics often of writing very insightful studies, while keep them away from the larger audience. In this case it is not different and I will list some of the more recent academic papers on the issue I have located up to now.

Yu Keping, professor and director of the CCCPE at Beijing University gives an overview of how existing civil organizations within the state are encouraged to operate in a more autonomous way. He says that those organization do not have a tradition of operating as independent, autonomous entities.
Dr. Liu Junning paints a slightly more optimistic picture in his case study on the Chinese Chambers of Commerce, officially the All-China Federation of Industry and Commerce. This institution fulfills a role the Party and the government cannot play, the author says. The official trade union in China, the All-China Federation of Trade Unions (ACFTU) seems to fit professor Yu’s description better.
Zhang Ye, Visiting Fellow, Center for Northeast Asian Policy Studies, wrote last year a paper for the Brookings Institute and believes Chinese NGO’s are fundamentally different from those in the rest of the world. I was unfortunately unable to download his full paper in pdf-format.
Thomas Metzger at the more conservative Hoover institute at Stanford University argues that the Western bottom-up way of organizing a civil society does not fit the Chinese tradition. That might be true, but I do see them emerging in China. Traditions can obviously change, partly facilitated by the internet.
A Swedish investigation last year discovered an emerging civil society, but says it is not yet there and might take a few years to develop. “China has seen a dramatic increase in civil society organizations, but in number, size and influence,” the authors write.
The University of Toronto Cheng Yu Tung East Asian Library gives a more comprehensive overview of what is available on this subject.

media - TVB in Hong Kong scraps another 28 jobs

This week job losses in the media seem to occur almost on a daily basis. Today The Standard report that TV-station TVB cuts 28 mostly editorial jobs.
Standard procedure in a shrinking industry, explained one of my financial colleagues last week. Cut your costs, raise your profits and sell. Not a very nice prospect. Who will be next?

law - Testing an emerging civil society

(later today at Chinabiz)

A legal landmark was set on October 12 as the Ningbo company Aux took a court case against the Ministry of Information Industry (MII) not only to court but also to the Chinese media. Aux uses the Law of Administrative Permission, in force since July of this year, meant to curb arbitrary decisions by government departments that cause damage to companies or individuals.
Aux was the only of a group of mobile phone producers who took this step, after MII refused the company for the fifth time a license to produce mobile phones in an already two-year old struggle.
Suing government departments has been on the legal agenda of the central government for a long time. Already two years ago the Supreme People’s Court issued a circular saying that the government could be sued on economic issues, but then large uncertainties remained on whom could sue what government department on what issues and in what courts.
Those issues seemed to have settled now, but actually taking a government department to court means a larger cultural breakthrough in China, one reason the media are reporting extensively about this MII-case.

At first view the Ningbo company seems to have a strong case, as the cell phones do not belong to the group of 700 items that need administrative permission from the government under the Law of Administrative Permission, writes the Beijing Morning Post.

"Cell phones do not need an administrative permission project, but also not excluded from such a permission, the nature is still not decided." Defended Xi Guohua, vice minister of MII, to Beijing Morning Post in an interview in August the ministry’s decision in an obvious attempt to retain control over a larger field than the new law requires.
"From a long time perspective, the cell phone license will be free available, it's just a matter of time." said Xi. The cell phone market is already very competitive, if the license is free, it will create overcapacity in the market, a matter of concern to MII.

The famous economist Wu Jinglian criticized this move by MII in an interview with the Beijing Morning Post on Thursday. "There is a bad tendency, the power of government departments to allocate resources seems to be strengthening, and the power of market is diminishing," said Wu.
"Any administrative permission without going through the National People's Congress is illegal. There were thousands of administrative permissions in the past. To keep consistency, the State Council did the cleaning and kept 700 of them. Obviously wireless communication equipment is not in the list of 700." said Wu.

According to law a court has to decide within seven working but the Beijing No.1 Intermediate Court is already lingering on the issue for two weeks now. "Without a structural reform of the government, it's not possible for us to establish and perfect market economy." said Wu.

Professor Zhang Shuyi of China University of Political Science and Law, one of the experts who drafted the law of administrative permission, said that Aux will for sure win the case and he is willing to appear in court to support Aux.

In July a Nanjing lawyer won a first case when the State Administration for Industry and Commerce initially refused him a licence to provide trade mark services.

internet - Isaac is podcasting, with whom, what about?

Just now I switched on skype and saw that one of my friend, Isaac Mao, signalled he was podcasting. Damned, I thought, with whom is he podcasting, about what and for what? Soon we will know.

Services sluggish in booming market – the WTO column

(Soon at Chinabiz)

The monthly Amcham mixers here in Shanghai are excellent ways to investigate the mood in the corporate market. You are not bothered by boring speakers, and you can set the agenda by yourself.
My scientific conclusion of my investigation at this month’s Amcham mixer is that things are not well in the services market here in China. Manufacturers, chemical companies and other down to earth exporters of goodies might experience a booming market, those who try to sell high-end services in this market report a much bleaker development.
An occasional lawyer still reports booming business, but that is because foreign companies do not mind to spend a fortune on legal and tax advice. “While what you really need is somebody who can explain you how to do business in China, the legal and tax advisors are getting away with completely useless advices,” complaints a business consultant, who has a harder time to sell his services than the average lawyer.
Downright gloomy were the headhunters, who not only encounter stiff competition but also a labor market where hr-department are flooded with eager applicants who are often very overqualified for the jobs they apply for. “My headquarters still expect that my business in Shanghai grows at least as fast as fast as the national GDP, a nine percent,” said one of the three headhunters I ran into. “But it is almost impossible in our branch.”
As some industries grow much faster than that average, some of them much be lagging behind.
Similar stories come from the sellers of software applications. “We are doing very well in developing our business,” said one of them. “But this year we are again not making any money.” He draws a quick chart. The line goes first up very slowly, and then suddenly hits the roof. “You see in all industries in China this kind of development in the business,” he explained. “Unfortunately, in the IT we are still in the lower part.”
Companies come to China to develop software, and make use of the plentitude of cheap engineers. But they face an uphill task when they want to sell their high end services in China. “Companies would rather hire a few engineers they can rely on for 24 hours per days than use our services,” summarizes a representative of a IT-company this ‘contradiction’ in the Chinese labor market.

While China is fast preparing to make the jump from the workplace of the world to a more sophisticated economy, much of the high-end services still find it hard to develop a business. “Our time will come,” most managers say confident at the Amcham mixer. It might come, but perhaps before that time their headquarters might have lost their patience.

Fons Tuinstra

Media – Feer sheds 80 jobs, turns monthly

The Far Eastern Economic Review has become the next victim of media consolidation and eighty staff will lose their jobs as the magazines turns into a monthly, media report today. The announcement comes only days after the BBC told it would dismiss 6,000 people, a quarter of its total payroll.
After Time Warner closed down Asiaweek a few years ago, FEER was the only English language quality magazine reporting about Asian affairs. After it was incorporated with Dow Jones, quality has gone down slowly and its closure was actually already expected much earlier.
The closure is part of a worldwide consolidation of the media that have to meet higher profit margins than ever before.

Internet – Truth is slowly getting out

"The Net has opened up my mind to other points of view," says Grace. "But sometimes it makes me more confused than before." One of a whole set of nice quotes in an article in the Globe and Mail on China, this time on the internet.
The outside world has kept its eyes long shut and ignored the profound changes that take place because of the internet in China. Maybe because they take a form that is unexpected, or even unwanted. But it is there and it there to stay.
Another quote: In the gloom, a red-shirted kid is chatting on-line with a pal. "What are you talking about?" I ask. "Falun Gong," he says nonchalantly.

Internet – HKU media professor Andrew Lih on podcasting

The meetup of Shanghai webloggers will have Andrew Lih of the journalism school at the Hong Kong University as a guest on its monthly meeting at November 10. Andrew focuses on the technical side of the new media and will demonstrate how to create podcasts, RSS info and other techniques that can facilitate grass root publishing.
Click here to register for the meeting.

censorship - What is scaring and what is not?

Just had an interesting email exchange with people at the Berkman Center at Harvard Law School. They conducted two years ago an investigation into the Chinese filtering system of the internet. The tone was a bit hush, hush, and they promised not to reveal my name to anybody.
Hold on, I said, I have been writing myself and RSI-arm about these issues and you want to keep my name secret?
What I fear most at this stage is not whether I get into problems here in China. My main worry is whether I get into the US next month again without pretenting I'm an accountant.

Media – Lesbian internet radio from Shanghai


Jen was kind enough to send me the url of the online lesbian radio station in Shanghai I mentioned a few days earlier. It’s so simple, I could have thought of it myself. The site looks cool, but I could not get the radio running. I did not want to register as a member here: it seems too far out of track for me.

media - WOW hits cyberspace

The new journalistic website WOW - We Observe the World is now online. The weblog is done by journalism students of the Beijing Foreign Studies Universities and a first in China, as far as I know. The subjects are still rather US focused, while there is much more to cover in the world - say China for example. I have put them on my RSS-feeds.

NGO's - You are relatively cheap, aren't you?

How to negotiate fees with a European trade union? Tonight a I got a call and suddenly I had to figure out what a photographer would cost here in China. They were not very clear about what they wanted, but, said the voice at the other side of the line "you guys are pretty cheap overthere, aren't you?"
I laughed my head off and said I could not confirm that nasty rumor. We only work for trade union fees!

protest - Government steps into Tomson protest





(Pictures of the earlier actions in September)
Protest will continue at the Tomson Golf course, even after the Group chairman and owner Tan Junnian died earlier this month. The compound is now plastered with banners, say the residents. Government officials will attend new meetings on Tuesday, they say, in an effort to solve the conflict.

media - Shanghai, flavour of the year

The Globe and Mail, signalled by the China Digital News, was the first to get their full section on China and Shanghai in print and online, but it is part of a major trend that will make waves in the coming months. Last Friday I attended a farewell party of twelve journalists of The Guardian, who had been roaming through Shanghai. They were very eager to get their section on this booming part of the world out, since they also noted they were not alone. Although the Toronto Star does not believe Shanghai has it, the paper writes in a rather superficial story.
But also for TV-stations Shanghai is a must and trendy department stores are preparing their Shanghai month, along with a lot of publicity.
The only thing that is sure about such a trend is that it will be over in de few months time, so better make the best out of it as we are riding the wave.