internet - Changing relationships online

"We discovered that we are not alone," says a gay internet user from Beijing in this NPR-program by Rob Gifford. A nice look-through of the urban internet scene, where people can create their virtual realities, even stand for election, do all these things that are impossible in real life. "If you are a nobody, you can climb to the top on the internet," says one game-organizer.
At least the vibrant dating scene, gay and straight, is a bit less virtual.
While the internet has conquered and changed urban life, the rest of China is still lagging, says also Rebecca MacKinnon in this program.

Changing media, changing society – the WTO column

(later also in Chinabiz)
Shanghai - One of the key lessons I still remember from the Marxism courses at my old university is that when the economic fundamentals of a society change, it will have profound implications for its culture and political organization. It is one of my favorite topics when a meeting with Chinese official threatens to get a bit dull. In most cases they tell me, that I must have had pretty advanced classes in Marxism and that they have not progressed that far in their compulsory learning sessions.

Unfortunately this theory is only marginally helpful in predicting how those changes in China will take place, which mostly belongs to the domain of fortune telling. When people cling to expectations about future developments, it often says more about their background and expectations than about what really is going to happen.
Look for example at the rapid changing playing field of the media in China. The current media explosion, driven by the need to make money or even profits, has caused the previously moribund media in less than half a decade into unprecedented competition, openness and more quality – although the starting point was that low, quality of the media could only improve.
Western observers have often assumed that those changes in the media would be instrumental for other changes, leading to a more open, multi-party democratization of the country. The longer I’m here, the more uncomfortable I feel with the last part of that prediction. Changes, yes, but why assume it will be a multi-party democracy including nationwide elections? Maybe because most observers cannot imagine how any other system could work.
What I saw in the past ten years is that the whole system has been changing very fast, not only economically, but also culturally and politically. An emerging private economy and civil society are just a few elements of that profound change.

A few years ago Dutch police, urged by concerned animal rights activists, raided a warehouse for traditional Chinese medicine to investigate whether they could find any parts of endangered animals in those medicines. They could not, but the flabbergasted researchers also found out that there was no obvious relationship between the content they investigated and the labels of the packages they came from.
The same is happening to China’s political system: profound changes are taking place, but for those who only read and believe what the labels say, China might look like a stagnating country.
Last week I discovered in the Columbia Law Review of January the excellent study of Benjamin Liebman on how the media in China have influenced and changed the legal system. Partly I like it, because it underwrites my observations on what is happening in China. Liebman does it with so much details and thorough understanding of the situation in China, that it is rather refreshing contribution in the international debate.
Liebman describes how the media have gained power in the past two decades partly at the expense of the still hapless legal system. CCTV-journalists tell how they are routinely beaten up when they arrive for shooting in one of the provinces. Locals fear, and for good reason, that the media, who act as watchdog, problem solver, but also often as the leader of a lynch party, are there to create trouble. Courts feel they are forced to hand out harsher sentences, even when it is not according to the law, when the media pack gets involved. Media are more powerful than the courts.
Media have become that influential, because they are perceived and act as an extension of the one-party state, and used their position to gain power, argues Liebman. It is not always a straight-forward relationship, but media who would challenge the one-party state would not only get into trouble, they would effectively undermine also their own power basis.
This very dynamic interaction between the media and the state is a fascinating push-and-pull game that goes beyond the one-liners traditional media can use to describe a country. Such a pity that the truth of often so complicated.

Fons Tuinstra

media - Surprise: Pamela censored!


You did not need too much talent for fortune telling to predict that Pamela Anderson would see her Chinese action against the use of fur to be curtailed. So that happened. And now is the little girl upset.

economy - China's IT firms cannot compete globally

Says a recent study, published by consultant firm McKinsey(registration required).

To compete effectively in global outsourcing, China's software industry
must consolidate. The top ten IT-services companies have only about a 20 percent
share of the market, compared with the 45 percent commanded by India's top ten.
Furthermore, China has about 8,000 software-services providers, and almost
three-quarters of them have fewer than 50 employees. No company has emerged from
this crowded pack; indeed, only 5 have more than 2,000 employees. India, on the
other hand, has fewer than 3,000 software-services companies. Of these, at least
15 have more than 2,000 workers, and some—including Infosys Technologies, Tata
Consultancy Services, and Wipro Technologies—have garnered international
recognition and a global clientele.

economy - Rising prices: 15 percent

Ajinsen restaurant

Restaurants often use Springfestival to raise their prices, but from the menu in my favorite Ajinsen restaurant in Xujiahui I deducted that the 15 percent increase was there to stay. Still a rather affordable place, but a sign that inflation is around us. Still amazing to see this token of Japanese efficiency in the middle of Shanghai.
A Chinabiz we change our original poll, asking whether you saw signs of inflation soon when we discovered inflations was so much a fact. So, now we ask whether your employer has compensated you for inflation. Slightly more than half says they were compensated.

economy - Perry Wu goes after Henry Blodget

Former Merill Lynch's Blodget

I'm glad I'm no longer the only one going after the infamous former securities analyst Henry Blodget. In China Tech News Perry Wu also has a go at Henry. (Thanks for the referral, China Net Investor!)
I do not agree with all of Perry's arguments:

First, most foreign companies in China fail. That begs the question: why do
they still keep on coming?

The sad truth is that companies everywhere in the world mostly fail, including the Chinese companies in China. Succeeding is just not that simple, and China's stiff growth figures does not change that. Perry closes:

I could write many books to answer your questions, and I have posed some of my
own. Libraries are filled with some good, and some poor, writings on what it
takes to do business in China. But just as Oscar Wilde described marriage as the
"triumph of imagination over intelligence," I think many foreigners in China
have fallen in love with a fantasyland.

economy - Chinese firms conquer Germany

Business Week sees an upswing in the number of Chinese companies buying up German manufacturers. Quicker service to some of their customers is one reason.

But it's also clear that the Chinese have something else in mind, acquiring
German patents and engineering expertise.

labor - Job seekers: stay away from Shanghai

The Shanghai Labor and Social Security Bureau warns job seekers to stay away from downtown Shanghai. After Springfestival job hoppers and future graduates alike start looking for new jobs, but their chances in Shanghai continue to look grim, writes the state news agency Xinhua.
Competition is expecially fierce in the Huangpu, Luwan, Jing'an, Changning and Xuhui districts, where last year over 300,000 vacancies were available.
On average five to six professionals were available for each job, the article says.

media - Five killed in Chongming Island

A 'wanted'-poster in the elevator of my office building this morning, beating in speed the traditional media who probably still have to make up their mind on whether they can publish this news or not. Yesterday two men killed five on Chongming Island, just off Shanghai, and fled right away. Of course it is now the talk of the town.
For me it is still an indication how safe this part of China is: when I go through the Dutch media every now and then, murdering and killing seems much more common than in Shanghai. I would not bet on other parts of the country though.

internet - Skipping the Financial Times from now on

Damned, the Financial Times has changed its firewall policies, forcing me to skip referrals to their articles from now on. Until last week a part of their often very solid articles would available for free at the internet, allowing others to link to those articles.
Now, they only offer access to the first two paragraphs of the article, then you would have to pay. It show that their previous policy did not work out good enough, but I fear this is also not going to work. They go against the tide, where even the New York Times - whose links would disappear after one week - has offered a special link generator for us bloggers that allows us permanent access to their archive. Watch my prediction: the Financial Times will within this year reverse this strategy.
Also the Chinabiz headline service will avoid to link to the FT from now on. Just when we were getting RSS-feeds for our services in place.

internet - What is wrong with the connectivity in China?

No day passed without meeting people who complain about the problems they are having in using the internet in China. While we can get broadband everywhere, I often switch to the dialup (like I'm doing today from my high-end office in Shanghai) because that is faster than the broadband. Even the growth of the number of users dropped last year.
Part of the problem is of course the internet filters up in Beijing that are unable to cope with the current traffic. But more basic seems to be the lagging investments. After the internet bubble collapsed, investments were already planned and capacity went up very fast, although it was not justified with the economic results. Now the internet as a tool is picking up fast, but the level of investments today seems to reflect the gloomy days after the bubble was gone.
Looks like we have to sit this out.

economy - Is the Renminbi climbing?

Yes, says business professor Dr. Will Hickey, and China Herald reader, currently teaching at Almaty, Kazakhstan. The Renminbi is doing there currently 8.29 against the US dollar. You still need to change quite a lot to make a profit here and Will Hickey has not yet promised to take any orders.
But we would be interested to hear more about this, from other regions surrounding China too. Is the Renminbi starting to climb?

academia - Voting on a crisis in China

Professor Ding Yuanfu of Beijing University has been polling experts on a possible major crisis in China, and a majority expects this before 2010, reports 'China Elections', noted by China Digital News.
Most likely it will be a social crisis, rather than an economic crisis. "Of the 77 experts who replied to the questions, 51 believed that a crisis with big consequences for China‘s economic and social development would happen. "
There is no indication on who those experts are, I only know that I was not included. I find democratic procedures very useful, but voting on a potential crisis seems a bit like fortunetelling, isn't it?

lecture - Two misunderstandings about China



Tomorrow evening I will tell, and debate with members of ShARE, about two of the fifteen misunderstandings about China and the Chinese, I documented in my book with the same title, unfortunately only available in German and Dutch. I will explain how networking in China works, and why that is better to understand China than the often misused 'guanxi'. Then I will explain how China's largest network works, its administration, and why it works different from what the outside world often expects.

The gloomy year of the rooster – the WTO column

(soon also in Chinabiz)
I might be revealing a bit of a state-secret here, but I can only do my sad duty. The story wants that the year of the rooster is going to be a pretty gloomy one, according to the Chinese tradition. In Korea, the rooster brings happiness, but in China parents have already been voting with their feet and tried to get their children as much as possible in the previous year of the monkey.
Unconfirmed rumors even say that the government ban on using SMS for fortunetelling was initiated that negative stories on the influence of the rooster on business might hurt the economy. The ban was the cause – together with other reasons – for a slump in revenues for IT companies like sohu.com and sina.com in the fourth quarter and sent their stocks south. That is what you call a self-fulfilling prophecy. In China you can otherwise predict anything, as long as it helps the economy. You cannot talk the economy down, despite all the propaganda on ‘cooling down the economy’.

Of course you cannot use such generic predictions to tell how specific industries are doing. Even in a booming economy, the fortune can quickly take another direction, as the car industry is trying to prove this year. Audi, part of the much-battered Volkswagen Group, saw its sales increase in 0.8 percent in 2004, after two booming years. Mercedes Benz saw an increase of only 5 percent. Bets are that in 2005 the situation might even be worse. When suppliers for the automotive industry euphemistically suggest in their publications that the “Chinese market shows signs of maturing”, you know that disaster looms ahead.
New government restrictions, more competition, unpredictable consumer behavior, all had their influence on the sharp downturn in the automotive industry and nobody will be able to predict what will happen in the next twelve months. And the automotive industry is not alone in this very uncertain market.
In this very unpredictable climate it is rather funny to see somebody like the former securities analyst Henry Bloget starting to advises American investors on China. Bloget got fame during the first internet bubble when as a securities analyst he talked up internet stock. He was shamed out of his job at Merill Lynch when people discovered he kept on pumping air in a deflating bubble, while privately advising investors to run for their money. When people like Bloget start to advice on China, it is better to run for your money right away.

Investors like clear and authoritative advice on where they should put their money. In the case of China general observations like Bloget tries to collect, border to misleading. China is a very attractive market, but only when you know the dirty little details that matter. A good knowledge of specific markets, possible trends and tricks that might help or destroy your business is key for success. Making armchair decisions from the US is the fastest way for disaster.

Fons Tuinstra

media - Celebrate a 12-year ban on firecrackers

Chinese media are a funny bunch. Today, led by state-news agency Xinhua, all major news outlets celebrated the way people in Beijing ignore a 12-year ban on firecrackers. "Even a lawyer set off firecrackers near his downtown resident in Dongzhimen, where the explosive is strictly banned," writes the China Daily, identifying him as Wang Xiaohui (37), with a 15-year legal practice in the capital.

Tradition and morality still are more important than any legal system or ban.

labor - Lawyer wins fights for workers' wages

The Australian follows an earlier story in The Standard about peasant turned lawyer Sun Wusheng who has suddenly discovered he can win in court cases against builders who do not pay their workers. Non-paid salaries at construction sites amount to an estimated 100 billion Renminbi (US$ 16.1 billion).
A different political wind, initiated by premier Wen Jiabao, has made China's courts more willing to honor complaints about non-paid wages. A nice illustration also how the media support this political change.

economy - New roads, documentary about China's change


The Shanghai Foreign Correspondents Club and the Australian Chamber of Commerce in Shanghai show on the 22nd of February the documentary "New Roads" by Jim Lambert and Richard Hughes. The one hour documentary film, following a year in the life of Fan Hengjin, a farmer-turned-businessman from one of the poorest parts of rural China, will be followed by Q&A with director Hughes.
"Fan Hengjin is a businessman, a businessman with a difference," says the synopsis. "Born and raised in rural Anhui Province, one of the poorest parts of China, Fan's childhood memories are of food shortages under Mao. Yet, when Deng Xiaoping set China on the path to reform, the young Fan grasped the bull by the horns and set himself up in business." The documentary follows Fan in 2003, a year marked by SARS, but also by two express ways that improve his business. "New Roads is an intimate portrayal of a very different kind of businessman."
From 7 PM at Sasha. The SFCC-website is not yet updated, but for information and rsvp you can turn to Elyn.

internet - Got my Skype voice mail done


It works, what else can I say? Last week I asked whether somebody could invite me for the new Skype voice mail. Jan Jaap Braam from Holland noticed my request and could send me an invitation. It took a while before I got it running. The system is still in beta, and the number of error messages were countless. But now you can skype me, even when I'm not around.

media - Watchdog, demagogue, trouble solver and rioter

I tipped you off a few days ago, when I disovered Liebman's study on the influence of Chinese media on the legal system in the Columbia Law Review, and I see no reason to mitigate my initial impression. The very detailed picture is a complicated one, it does not allow to reduce the conclusions to a few handy cliches, as for many of the media developments the qualification 'ambiguous' would be an understatement.
Some of Liebman's lines of thought. While the media have become more open, better, they only do so, because of the authority they derive from the one-party state. So, in stead of undermining the current regime - as is often wrongly assumed in writings about the media in China - revent media development actually strengthen the one-party state. They are certainly not consolidating the status quo: the profound changes in the Chinese society are too devastating for that. But the assumption that China might look more like 'us' as it develops, might be profoundly wrong.
As you might note, some of these conclusions fit also my own - quirky - viewpoints on China. Liebman does not see the internet as a new, more independent force as I would hope to see it. His own assumption, that the courts might follow a similar way as the media towards a more powerful and autonomous force in the society, is expectation I would not share. But then, we are all allowed to have our own dreams.