The US dollar, media and other dead horses – the WTO column

(soon also in Chinabiz)

It was a nice scope, last week, of the China Business News, the most recently emerged financial daily, the fourth one competing for the title of the Chinese Wall Street Journal. They revealed that China was quietly selling off its US-dollar denominated treasury bonds. Of course that news did very little to help stop the US dollar in its way south.
The swift denial of the news by the financial authorities in Beijing confirmed only the financial paper was on the right track. It is a dilemma financial authorities worldwide face: when the media are writing you’re selling off your assets, the value of your assets might shrink before you have actually sold them off. The financial authorities in Beijing would not be fit for their job, if they had not been selling off the US dollar valuables, but they can of course never admit it without causing severe damage to their own position.
It is the same with the much-discussed revaluation: as long as the media keep on writing it is coming, as long as the money markets are in a state of panic, no revaluation will be possible.

I cannot remember any other instance where a Chinese medium did so clearly what they had to do: publish the news, regardless of what their bosses in Beijing might think of that. Standard procedure in China would be that the censors would order the media not to write about the issue, and then it was basically over.
That is good news for the media, and I needed to hear some good news about the Chinese media, after I have been catching up with a wide range of colleagues over the past few weeks.

The traditional media are worldwide a shrinking industry. Cost cutting is hitting resources, jobs and payments everywhere. Media owners are not investing in research and development, but try to raise their profitability, sometimes very successful up to 20, 30 percent return on equity. Then they try to sell it off, preferably to some suckers at the international stock exchanges, who do not realize that they are in fact buying a dead horse, whose glory days are already gone.
It is not unlike the Chinese government trying to get rid of as much as possible of their US treasury bonds before everybody knows. As long we can pretend the horse is not yet dead meat, we might still get a good price for it. The sale of the 150 billion Renminbi non-performing loans shows what happens. Foreign investors offered three percent of the nominal value: about the price for the meat of a dead horse.

Are the Chinese media doing better than the foreign counterparts? They are still very new in this game of trying to do as if they are real media, and not a list of governmental announcements. Can Chinese media do a better job, while in the rest of the world’s media participants are looking for a save departure from the industry? Apart from this little incident with the China Business News, the picture really looks rather gloomy and there is no sign media are really investing in their people, also not in China. You know what an editor of the glossy men’s magazine FHM makes a month? About 3,000 Rmb (USD 360), while freelancers earn 300 Rmb (USD 36) for 1,000 words. I was shocked, until I learned that freelancers at the Shanghai Times, one of the more successful dailies in this city, make 100 Rmb (USD 12) per 1,000 words. They have even no room to cut any costs.
Some of the foreign media people are looking at China as the new paradise, at least commercially, they have lost at home. I’m not sure it is here. Like in other industries, the bottom is always much lower than you can imagine.

Fons Tuinstra

labor - Migrant workers take less for granted

A background article in the Washington Post suggest that the erstwhile docile Chinese migrant workers in southern parts of China might lost their patience. Jack Chiang, CEO of the Stella shoe manufacturer that was hit by a massive strike earlier this year sees three reasons in an interview with the Washington Post.
"On the one hand, he acknowledged, assembly-line wages have not risen in recent years nearly as fast as the cost of living. On the other, image-conscious U.S. retailers who buy Dongguan's shoes have demanded better treatment and human rights counseling for the workers, encouraging them to step up and make demands for change.
Finally, Chiang added, broader general freedoms in the country have reduced the Chinese people's traditional fear of authority, and not just among factory workers."
The official trade union ACFTU is not doing its job, says both managers and workers. "With no channels of communication from the assembly line to the manager's office, the only outlets for worker dissatisfaction have been walkouts and confrontations."

book - 'Der Wilde Osten' ist da



The German translation of my book on '15 misunderstandings about China and the Chinese' is available now, published by Local Global. It started with a raving review im Handelsblatt, but since you have to pay to read it, I won't bother to even link it here.
Still looking for an American or British publisher....
For people residing in China, we might have very soon a slightly cheaper offer.

religion - the hostility between religious groups

Jeff adds a few of his own thoughts after reading the excellent piece by Joseph Kahn on religion at the country side.
"The dramatic tension in Kahn's narrative is a little more complex than what the human rights groups used to offer," writes Jeff, "since the most bitter hostility is clearly not between banned religious groups and the state but among the groups themselves. This isn't news to Chinese Christians, of course. More than a decade ago I had a long talk with the Reverend Dennis Balcombe, the pastor of Hong Kong's Revival Christian Church and one of the most aggressive foreign missionaries in mainland China. Balcombe didn't mince words about the legal repression that underground Christians faced, but he was at least as worried about "sects" and deviant teachings: he saw the Shouters in particular (a charismatic movement based in Henan, where Balcombe did most of his early mission work) as one of the more dangerous groups."

media - Report fuels downturn of US dollar

An article in the newly established China Business News in Shanghai has confirmed longstanding rumors China is quietly selling off its US-dollar denominated foreign reserves. The continued fall of the US dollar against all other currencies is eroding China's foreign reserves and by selling it, China tries to limit the damage.
"I think the China story's going to have some legs," said Luke Waddington, head of forex trading at Royal Bank of Scotland in Tokyo in an interview to Reuters. "People don't really need any reasons to sell the dollar. If they are given a reason it's just putting petrol on the fire."
Financial officials in the US have indicated they expect the fall of their currency to continue in 2005.
It is the first success of the newly established daily, in a blood media battle to become the major financial publication in China.

religion - A bull market in sects and cults

Joseph Kahn of the New York Times gives a thorough overview of a booming market missed by many others: religion. The sometimes gruesome story tells how religion and its fierce competiton leads to increasing tensions at the country side. While the government has turned away from repression in the past, they seem now rather clueless on how to deal with the development.

Labor – Protest after conviction of five Stella workers

Unlike earlier predictions, five of the eight workers involved in the strike against the Stella shoe factory in Dongguang have been convicted. The Asian Labour News reports on the international protests against the convictions.

blogger - An emerging Chinese conversation

Xiao Qiang of the journalism school of UC Berkeley and spiritual father of the China Digital News summerizes for the New Scientist the history of the first few years of weblogging in China. Despite is short history, weblogs start to emerge as a growing force.
The article features prominently Isaac Mao and illustrates how, now semi-private, chinanewsman.net developed into a powerful weblog for 5,000 Chinese journalists.
Communication is changing from a lecture into a conversation, to paraphrase Dan Gillmor. It will be a tough call for both traditional media and governments that like to lecture.

Blogging – Muzi Mei re-emerges in Germany

Suddenly China’s most famous weblogger popped up in the publicity as the German radio station Deutsche Welle mentioned an international webloggers meeting where Guangdong columnist Li Li (her real name) emerged. The German site does not reveal much news, apart from the Li Li really likes information about the dogs of soccer hero David Beckham. So much for Beckham.
Muzi Mei, as some might remember, sparked off quite some interested as her weblog detailing her intensive sex life was discovered. The fact that she named quite a few of her male partners and reviewed their performances might have added to the fact that the hosting services broke down and Li Li had to find new employment.
While I thought that she would be taking a shortcut into fame, latest information suggests that the opposite has happened. Her book has not sold as well as expected in Taiwan and Hong Kong and her powerful enemies can keep her from employment in China too. Well, she had quite a way to generate enemies.
More when she is back.

labor - And what is the ACFTU going to do?

What is the ACFTU, many of you will ask. The All-China Federation of Trade Unions is the only officially allowed trade union in China and they catched some headlines after Wal-Mart gave in and said they would no longer stop a trade union in their company, as both Asian Labour News and Danwei report.
Most attention goes to the fact that Wal-Mart has a anti-Union tradition and apart from Quebec it had effectively sabotaged any effort to unionize workers.
The question is of course, what is going to happen in China? The ACFTU has not been in the forefront of trade union actitivities in China - to the relieve of many employers - but have mainly held up their hand for the 3 percent cut of the wages they are allowed to have and to organize annual outings. They have never organized outside the cities and did not engage into collective bargaining.
Now, on the employers' side many lobby-like organizations have emerged over the past few years, while the ACFTU remained dormant, mainly busy in stopping others to set up real trade unions. In the emerging civil society, you would expect also workers to get some kind of representation. The question is whether the ACFTU is going to do an effort to gain some credibility here, or in the end will have to give way to others.

politics - US airlines vie for more lines as customers withdraw

Who is issuing visas for space when Americans and Chinese cooperate together, I wondered while going over de headlines and saw this piece by Ellen Sander. You could not imagine what kind of problems the Chinese would have to enter the US after returning from space.
Three more US airline companies want to have more flights to China: who are they going to look at to buy their seats, I wonder.
The US visa crisis is getting worse, after so many Chinese visitors were refused for the Las Vegas exhibition. CTN reports that also companies whose people got a visa and now withdrawing in solidarity and are looking for alternatives in Europe.

politics - US visa policies keep on hurting economic ties

Earlier this year the American Chamber of Commerce in China complained that the stringent US visa policies had cost already US$ 30 billion over the past two years. That figure might only go north, shows a round-up by Chinabiz. Many Chinese firms have withdrawn from a electronics show in Las Vegas, after half of the visa applications by attendants was refused. More conferences on US soil might be under threat and move to Europe or Asia.

blogging - Let the comments come

Dan Gillmor republished his column on Shanghai on his weblog, allowing his audience to have their say. The new medium in action.

media - 60 publication banned for improper licenses

Danwei found out that sixty newspapers and magazines have been shut down, because they were lacking the proper licences. Some were using international licences others fake Chinese ones, according to a document issued by the Press and Publication Administration.
Getting a new license is almost impossible and much relies on trading of existing licences of defunct publications or more illegal ways.
Three of the magazines closed belonged to the Caijing stable: Voyage, Office and Housing. Often those publication reappear again after some time when they settle the problem, or hope yet again they will be ignored.
The name 'Voyage' rang a bell. Mark Kitto seems to be in familiar waters again, unfortunately.

Update: Fortunately, things are not always as bad as they sound. Mark's Voyage is a different Voyage than the banned one.

fashion - Boots are back in Shanghai



For some time jeans dominated the fashion in Shanghai, even during the sweltering heat of the summer, they were unbeatable. But now the boots are back, often but not always in combination with a miniskirt, and they are certainly harder to combine with the jeans. I'm not talking about the smallish, pupish-like boots, they are huge this year, often until just under or even over the knee.

Blogging - An amazed Dan Gillmor hopes for more

Dan Gillmor reports in the Mercury News about his visit to Shanghai. "China is a welter of contradictions. There are free local Internet dial-up phone numbers in big cities, where anyone can get onto the Net anonymously. But the Great Firewall Internet filtering system -- built by the government but assisted by U.S. tech companies (including San Jose's own Cisco) that only see dollar signs -- blocks so much useful and thought-provoking information from the people."
That much is not blocked, even the Mercury News that was blocked in the past, and circumventing them is dead easy.
"I hope China's regime will loosen up in more than economic ways. It really has to. In the end, freedom to say what you want is a prerequisite for genuine economic freedom.
Blogs are part of an emergent global conversation. They are individualistic, human voices. They will emerge as a vital set of Chinese voices, too -- if they're given the chance.
I will be watching his weblog for comments of his trol.

media – Take your money and run

A last comment on the media industry from our new Wall Street colleague Maria Trombly, who just obtained her accreditation for Thomson Financial, who gave her take on what I see as huge profit-taking in the media industry, and organized the party.
“A typical reaction in a shrinking industry,” says Maria. “You do not invest anymore in R&D or improved quality of your products. You just try to raise your profits and then sell off your assets slowly.”That assessment seems correct for the traditional media worldwide, although very hard to see how this will work out in China, where traditional media are just getting used to taking market shares and are in fierce competition. For the time being it seems a rather unattractive industry for journalists. Just learned yesterday that en editor of a glossy magazine in Shanghai earns 3,000 Renminbi per month (USD 360) and freelancers 300 Renminbi for 1,000 words (USD 36). No wonder they have to make some money on the side by selling editorial space to companies

economy – All is well in the automotive industry

Apart from some panic among the suppliers, of course, added a cheerful Alysha Webb, China correspondent of Automotive News, already on the way out from my party last night, commenting on the slump in car sales in China after more than two golden years. “Sales are still growing faster in China than anywhere else in the world.”
“A minor hiccup,” Alysha called the temporary downturn. I’m not that sure, but then I’m not making a living from the automotive industry.

blogging – Jeff recounts the dead miner statistics

Yesterday I ended up in an informal webloggers meeting as both Andres and Jeff showed up at the same party and took the opportunity to review the world. One of many issues: the lack of trustworthy statistics in China. After I got set straight by others on a few of the statistics I used, I decided to be a bit more careful, since almost everything seems a fabrication.
When the ministry of culture says it has closed down 1,600 internet cafes, why should we believe that? When the government sets a GDP-figure, why should be believe that since all the provincial figures are already for years well ahead of the national average.
We ended up accusing Jeff of taking those official figures far too serious, but only today I saw his more serious analysis of the number of miners that get killed on the job in China.
A nice illustration of “sheer statistical cluelessness”.