economy - Some of the Lenovo-IBM details

Danwei discloses some of the landmark agreement between PC-producers Lenovo and IBM. IBM's Stephen Ward will become the CEO of the new company, "so the deal will not totally spook IBM's corporate customers, who might not be thrilled at the prospect of buying Chinese boxes."

internet - Hotelchatter starts a conversation on wifi in hotels

One of the more facinating developments on the internet is the way how conversations can develop. Remember my earlier complaint about the bad coffee and the rather poor (but at least available) wifi connection in the Shanghai Hilton?
That entry was picked up by Hotelchatter, a participatory weblog on hotels worldwide. I discovered that thanks to technorati, a search engine which focuses on weblogs. So I registered for Hotelchatter, left a comment and discovered they have a real cool search engine that allows me to find all their stories about hotels in China. Very useful, since I do not care about hotels elsewhere in the world, unless I go there.
What is still missing is an localized RSS-feed, but then, you cannot have everything in one blow.

economy - Yellow ribbons from Jiangsu province



"Texas supports our troops" is one of the unlikely slogans found on yellow ribbons factories in Jiangsu province are producing, the Financial Times found out. A factory in North Carolina did not want to outsource its production to China, saw its sales go down 65 percent in the past four months and had to lay-off 40 workers.

labor - OECD meeting on workers' rights in Beijing cancelled

Visas of visitors planning to attend an high-level OECD meeting in Beijing were suddenly cancelled on Monday, western media report. The meetings was supposed to start a dialogue between China and the international trade unions. The Organization for Economic Cooperation and Development (OECD) was a convenient umbrella to facilitate discussion that were impossible because of the ongoing boycot of China by the international trade unions. The meeting was supposed to be on guidelines for foreign investment, but workers' rights were also high on the agenda.
The OECD is organizing the thirty richest developed countries.
The cancellation of the meeting, for unclear reasons, comes at an awkward moment as Madame Wu Yi has invited personally the president of the American AFL-CIO to come to China. Also the government-run Chinese trade union ACFTU tried for the first time in ages to look like a real trade union by forcing anti-union US giant Wall-Mart to accept trade union branches in their stores.
While a civil society is developing fast in China, labor activity is lagging, compared to for example the fast growth of organizations that represent employers and industries.

law - Shanghai officials deny Playboy has or will get permission for club



Playboy has no permission to open a club and will not get such a permission, say officials of the Shanghai Industrial and Commercial Bureau and of the Cultural Bureau, according to media in Shanghai. Playboy held yesterday its press conference.
According to the Russian News agency Interfax: "Playboy has licensed Shanghai Entertainment Ltd the right to use the company's name and brand. Shanghai Entertainment Ltd, in turn, has formed a joint venture with Shanghai Times Supermarkets that will construct and oversee operations of the new club. Shanghai Entertainment Ltd. CEO Michael Nussbaum emphasized during a press conference attended by Interfax that the new club would strictly follow all rules and regulations under Chinese law."
We will hear more about this, I guess.

job - Looking for a translator

My Dutch publishing house is looking for somebody who is able to translate a Chinese novel into Dutch. In the past they would translate from English, but the author rightfully thinks that in that way too much of her meaning would get lost. A Dutch native speaker is preferred.
The novel does not need a degree in nuclear science or accounting, as you might know if you are familiar with the current taste of foreign publishing houses for Chinese novels. When you think you can do the job, please get in touch.

China goes global – the WTO column

(Soon also in Chinabiz)

The acquisition for US$ 1.25 billion of the PC-division of IBM by Beijing-based Lenovo could not have come at a more appropriate moment, three years after China entered the World Trade Organization.
“All is going fine,” summarized Chen Bingcai, deputy director of the department of capital account of the State Administration of Foreign Affairs (SAFE) the atmosphere at the annual WTO forum organized by the Konrad Adenauer Foundations and the Shanghai Institute for Foreign Trade on Tuesday.
He was asked whether Chinese companies could just go out and buy companies abroad, since capital control in China is otherwise rather strict. Chen did not see a problem, without mentioning Lenova or any other the other large Chinese conglomerates with global aspirations. “We have abundant financial reserves,” Chen said. “We encourage Chinese companies to go global.”

Do you remember the atmosphere three years ago when China entered the WTO? Foreign companies were jubilant, since they would get unprecedented access to the Chinese market. In the agriculture especially US companies said they would wipe away the Chinese competition and conquer the mainland with their cheap quality products. In many other industries representatives did not say it that loudly, but were at least thinking it.
In the automotive industry developments followed the optimistic scenario as the sales expanded for two years with more than 60 percent annually. But in de rollercoaster movement that is typical for China that stellar growth has now come to a standstill and some of the gloomy predictions for domestic car sales expect a decline in 2005. An export market is still very far away.
In some markets foreign companies are doing quite ok, but the picture is very mixed at best.

Some of the foreign industries represented at the WTO forum on Tuesday did much worse than expected, for example in banking, insurance and logistics. The market share of foreign banks shrank to about one percent of all the loans being issued, and in insurance foreign companies are still in the phase of expanding. All blamed restrictive government regulations, but while listening to their complaints I kept on wondering whether they were not fighting for markets they cannot conquer anyway.
Foreign banks and logistical companies claim they can offer a much higher quality of service and can reduce their costs by MBA-driven management skills, when the Chinese government allows them. Most Chinese companies do survive by not making too much cost in the first place and they seem to survive very well at the bottom end of the markets, the place to be in much of China and maybe elsewhere too.
A representative of China Life invited his foreign counterparts kindly to make some money in the insurances industry at the country-side. His company, he claimed, gets 65 percent of their business from the country-side.
Now, China Life still has to prove it can make a profit in the insurance anyway, but other Chinese industries are proving they can do so, at the expense of foreign competition. China’s agricultural products are not wiped away, but – also helped by a bumper harvest – are doing exactly the opposite. Because the China pie is growing fast, the undermining effect of Chinese competition is not yet felt in many other industries, but I see Chinese competition coming up everywhere, not only in IT and agriculture, also in more unlikely areas as legal services and financial newswire services.
Three years after China’s accession into the WTO it is not only time for foreign firms to rethink the euphoria of three years ago and wonder how well equipped they are in conquering the China market. They should also see whether they have covered their back well enough back home.

Fons Tuinstra

internet - My RSS-feed went crazy

Just now my RSS-reader said the China Herald had almost twohundred new entries. Since I had not done anything myself I went to have a look what was happening. Twohundred entries from April were listed again, so I did not get any backdoor support.

blogging - Bad coffee, but a kind of wifi at the Hilton

The current Hilton in Shanghai is one of the oldest five-star hotels in the city, so my expectations were pretty low when I tried to do some blogging on a WTO-conference today. Amazingly enough the conference room offered wifi. It was a poor one, inter-touch, since the signal was so weak it often fell away.
It was for free and to be honest, I would never have paid for such a lousy service. But always nice to check the RSS-reader and email when the speakers are too boring. The coffee really sucked: so much for a five-star treatment.

internet - Uproar pushes administration to ban Nike commercial

The web talked back in the past week, to paraphrase an unfortunate headline in the New York Times earlier in the week. Beijing loves the web, until the web talks back, it said. The article misses an important development, that perhaps does not fit the way how the New York Times wants to frame their China story.
The point is that the government not only listens to what is being said, but sometimes also acts - and not always in a smart way. The ban of the Nike commercial for example was the latest illustration of a trend where goverment departments in a panic do what chatroom warriors at the bbs's demand them to do.
People who have seen the Nike commercial didn't think there was anything wrong with it and they certainly did not feel that China's dignity was at stake. The interesting part is that goverment departments do listen to the internet, and take it damned serious, too serious in some cases.
There is much more to say about this subject, but that has to wait for another time.

Economy – No real restrictions to buy firms abroad – SAFE

Chinese companies hardly face any restrictions when they want to buy foreign companies abroad, according to Chen Bingcai, deputy director of the department of Capital Account at the State Administration of Foreign Exchange (SAFE). “We have abundant foreign reserves, so there are not really any problems.”
The issue has become important now the Beijing-based computer company Lenonovo intends to purchase the computer division of IBM.
Many more domestic companies intend to go abroad. “We encourage that development,” said prof Chen on Tuesday in Shanghai at the WTO forum organized by the Konrad Adenauer Stiftung and the Shanghai Institute of Foreign Trade.
The State Commission for Reform and Development and the Ministry of Commerce also have to look into the issue, but here Chen also did not see a problem.

Law – More action against IPR infringement – minister

Selling brand articles like bags on smaller markets will be banned in China to help in the struggle against fake goods, assistant minister of commerce Huang Hai said on Tuesday in Shanghai. Also government departments would have to adopt only legal software for all their operation. “Shanghai municipality has already complied with much of that upcoming rule,” Huang added.
The assistant minister spoke at the Annual WTO forum organized by the Konrad Adenauer Foundation and the Shanghai Institute of Foreign Trade.
A market for fake goods in Beijing has already been moved, and in the past month Shanghai also undertook massive policing of the XiangYang market, just around the corner of the Hilton Hotel where the conference took place.
By banning brand articles from this kind of markets, proving that the goods are actually fake would not be an issue anymore, giving the enforcement agencies a huge advantage.

blogging - Geek speak and other blogger-meetings

The Shanghai webloggers meetup will gather this month on the 17th with Isaac Mao as its guest. Isaac featured earlier in an article in the New Scientist on Chinese weblogs as one of the spiritual fathers of weblogs in this country. Isaac summerizes the discussion that caused here.

Two days earlier, on the 15th, I organize in the evening a class meant for journalists who are clueless on the new media jargon and its basic tool. I will show how proxies, weblogs and RSS-feeds work. There is limited place, but you can email me to see if there is still room.

media - A canned story for new Western journalists

A hilarious template (thanks for the tip, Danwei) for Western journalists in China who just arrived and have to clue, by Kaiser Kuo. "____ Comes to China": you only have to fill in the blanks.
"Ten years ago, who would have believed they'd have ______ in China?" says (FOREIGN NAME), a long-time Beijing expatriate who has lived in China for almost two years and has witnessed much of the dizzying change. "All the Chinese people I know - my ayi, my driver and my secretary - are already talking about it." ______-related ads are now commonplace on city subways, but they hardly even merit a second glance from jaded Beijingers, who drink Coca-Cola and send one another messages on their cell phones using an advanced technology called 'SMS,' for Short Messaging System."
Another chapter in framing the China story.

economy - the Holiday debate


Last night I went out with my small group of friends and veteran China-analysts to Hongqiao, where we decided that our visit to Hooters would be the last ever. But at the nearby Fresco Pasta we had good food and some time to discuss some hot topics. The idea of quitting the three golden weeks in stead of paid annual leave stirred up some emotions.
The golden weeks were installed only at 1999 to let the Chinese shop their economy out of the economic crisis, with amazing results. Now, increasingly, the idea of sending 1.3 billion people at the same time on a holiday has also its drawbacks. The question is: what would be the alternative.
One of my friends just returned from business at Hainan island - the last place he would ever go for a holiday, he said. Thousands beds at holiday resorts are added to the many thousands that already stand empty, outside the three weeklong holidays. But there would be major problems in getting tourism rolling at Hainan.
Getting people there would already be a logistical challenge, since you would need a larger number of 747's to get tourists there, and those are lacking. Then, there was nothing there, apart from the beaches and the expensive hotels, so that would not be very attractive to a non-Chinese audience, who would rather visit Thailand.
Reshuffling the golden weeks would create another problems, we analyzed. Looking at our friends and staff, we estimated that a larger number would not go on a holiday, when they could decide themselves. The Golden Weeks forces them not to work, in most cases people would otherwise rather go to work.
Transportation to Hongqiao sucks, but otherwise the area has changed greatly for the better.