Dear Mr. Hartquist - A letter by Dr. William Hickey

3/12/05

Dear Mr. Hartquist-

http://www.chinacurrencycoalition.com/

I have taken the time to read your coalition about the Chinese currency issues. I am myself, a Chinese management scholar and part user of their currency, so I am also hoping they revalue, but for different reasons, and not anytime soon. There are a few things that should be reinforced though, and you can publish my comments if you wish:
1. China does what is in China's interests. Even if it sinks the entire world. It doesn't matter what the U.S. or Asian neighbors want. Despite the platitudes, they won't budge when it comes to self interest, you should study history about this. And why should they budge? Foreigners have a bad record in colonization of China and forcing Chinese into self reliance. If I were China I would subsidize my currency to the hilt also!
2. Never in world history has a country been asked to REVALUE its currency! Where was the U.S. when Mexico, Bolivia, Argentina, and China before 1990 DEVALUED their currency? The entire U.S. position is RIDICULOUS hypocrisy. Lets be honest about it. The U.S. basically sent in the IMF to create "austerity programs" that hurt average people in these countries. The U.S. has a very spotty record that reinforces hypocrisy and self interest.
3. The U.S. has allowed this selfish economic giant to flourish by way of a demand driven economy dependent on foreign exports (or U.S. imports). Wal Mart is the leading offending conduit in this merchandising exchange. The point is the U.S. consumer is equally responsible: They drive the demand, similarly as illegal drug usage is demand driven. If you want to stop the supply, stop the demand. Not vice-versa.
4. The U.S. has only to blame itself for this currency fiasco. It has set itself up for a fall by letting our leaders sell out our manufacturing base and services to cheaper labor abroad, so the saying goes. Under Classical Economics Theory, which is what most of D.C./Greenspan crowd preaches, and thus the US: as skills and wages increase in other countries, they will have to decrease here for the same work to create an equilibrium, additionally as trade imbalances increase or decrease, this will also be reflected in the value of a currency.Of course, the biggest hole in Classical Economics theory is that we don't operate in a perfect world. Perception can also affect markets, ergo, the Chinese keep buying dollars despite all the above. If U.S. leaders don't want to face that reality, and have created these problems with thier ridiculous stands, then as Marie Antoinette said about the masses having no bread: "Then let them eat cake!" As it stands U.S. manufacturing was sold out a long time ago, it won't be coming back.

Dr. William Hickey

books - Second print run ordered


Just learned from my German publisher that he ordered a second print run of my book. Not bad after three months! Click here if you want to order it in China or here outside China.

China for dummies – the WTO column

(later also at Chinabiz)
My apologies for getting into a rant against the way how the media describe China yet again, but I just had it with the simplicity about how Western media embark into clichés about this country. Fortunately a few of you like it.

Does this sound familiar to you? Most likely not:

All Anti-China Activists (including those who work for the so called China
Democracy Movement worldwide and Falun'shit organisation)Should DIE in
Pain---Screw You!!!

It is the raw voice from the internet in China, in this case by exception in English and from Chinese students in Canberra, Australia, but a standard operation here in China. The so-called chatroom warriors, cursing whoever they can lay their hands on.
But they fall outside the reasonable simple framework of clichés media use to bring their message about China to the rest of the world. That style is, the government is bad, the people are good. It suggests that the good people will rise and bring down the bad government.
Anything that brings the media away from this rather simple but powerful message is sanitized away or seen as an aberration that can easily be ignored. The government doing good things and bad people do not fit that framework. The message that the majority of the people love their country and their government also does not fit here.
It is not just a problem with the reporting about China. To become more profitable, media have to focus on the largest possible audiences. Their mission is to make money, and complicating the image of the world abroad might confuse their audiences. So, countries like China has to be presented as easy-to-digest diets: the government is bad, the people are good.

It is not only in the tabloids and commercial TV-station this happens, also the so-called quality media seem to be unable to distance themselves from this trap, like on the site of the BBC and the New York Times. I was interviewed for the BBC radio program that went along with the article and I have no clue what came out of that one, but the article paints a reality that is at least one-sided.
And then the New York Times: “According to Amnesty International, arrests for the dissemination of information or beliefs via the Internet have been increasing rapidly in China, snaring students, political dissidents and practitioners of the banned spiritual movement Falun Gong, but also many writers, lawyers, teachers and ordinary workers,” the article claims. Again a reality I do not see.
The South China Morning Post jumped this week on the same bandwagon by claiming falsely that over 800,000 Chinese had been incarcerated in 2004 because of “endangering state security”. While this fits of course exactly the bad government, good people story, it was most fortunately not true. The figure of 800,000 was the total number of people detained in 2004. There were no figures about the number of people arrested for endangering the state security in 2004.
Maybe it is not surprising that companies like Nike panic, when the bad people at the internet come after them. It was a reality they did not know, just like a large number of larger foreign invested companies in China have already discovered: there is another reality than that they read in the media.

Fons Tuinstra

life - Preparing for a long night at the office

Expect a few extra postings today, as we prepare ourselves for a long night at the Chinabiz-office, while the rest of Shanghai is having fun. Tonight we have prepared three conference calls at both US coasts, to prepare for a new expansion of our business.
Still in an early phase of negotiations, but you will hear more of our new businesses soon.

NGO's - Tibet stays with China, Dalai Lama

"That must make it awkward for the 'Free Tibet' crowd, comments Simon World in his link to this AFP-story.

"As long as I am responsible for the affairs of Tibet we remain fully committed to ... not seeking independence for Tibet and (are) willing to remain within the People's Republic of China," he said.

In the past year negotiations between the central government and the Dalai Lama seemed to have made considerable progress.

internet - Patriottic voices online


Most observers outside China get a pretty sanatized view of what is happening on the internet in China. Just like the bitter left-right fights in the US blogs is missed by most of the people in the rest of the world, most of the patriottic, nationalistic and anti-Japanese and anti-Taiwanese indepence voices remain out of view.
Some do pop up, and the Chinese students in Canberra, Canada (oops: Australia), express themselves in Patriot China.

All Anti-China Activists(including those who work for the so called China Democracy Movement worldwide and Falun'shit organisation)Should DIE in Pain---Screw You!!!

I guess that summerizes nicely the opinion of many of the more educated Chinese in China too.

internet - RSS-problems limited to Bloglines

Since last weekend also Chinabiz has its RSS-feeds, a bit of a breakthrough on this side of the world. So, I was pretty pissed off when the feeds did not show up on my favorite RSS-reader Bloglines. After discussions with our IT-people I discovered that Bloglines was the problem, not our excellent state-of-the-art RSS-feeds.
Actually, a whole lot of people are complaining about Bloglines not being able to search their weblogs and websites in a timely matter. It is a free service, so complaining is all you can do about their service. I hate so say it, but perhaps I should change to another service. My RSS-reader and my Gmail are two services that have become rather critical.

economy - The richest Chinese according to Forbes

The China Stock Blog links to Forbes' rich list and makes a selections of the Chinese. Up to no 413 Larry Rong Zhijian, they all live outside Mainland China. A nice overview of how they did it.

media - Shanghainese even do not want their business paper for free

The whole week the China Business Week, yet another business daily launched in Shanghai last year, has been handing out free copies of their newspaper at my subway station in Xujiahui. Even though it was handed out for free, very few Shanghainese accepted the paper. There are just too many free hand-out nowaday.
It show the up-hill struggle for newspapers, especially those who are not yet established. They might never make it.

media- Chinabiz starts monitoring Chinese media

As a new service to its readers, Chinabiz will give English summeries of the most important news in Chinese media, the China Media Watch. The first stories were about how Bosch and Siemens had to return the trademarks they had registered before HiSense had done so and about the permission nine Chinese insurers got to invest on the domestic stock markets.
Just like the other Chinabiz service, no effort to be comprehensive. That would be an impossible task in China, but we will pick those stories we think are important for our constituency of foreign invested businesses in China.

media - Almost 800,000 not arrested for endangering state security

An all too typical mistake in the South China Morning Post, explained in the China Digital News by Bruce Gilley. The Hong Kong based daily had reported that China had arrested last year over 800,000 citizens for endangering the state security. That is the cliche about China as the paper used to distribute in the past.
Gilley points out that the figure is the total number of people that were arrested, while the arrests based on 'state security' charges was not given.

The last time I can find a report on that figure at the NPC was in 2003, when Han Zubin said 3,400 were arrested and 3,550 charged under the state security law in 2002.

That is still thousands too much, but compared to the hundreds of thousands falsely reported by the SCMP China seems to look like a paradise for human rights.

media - Pamela poster at Shanghai subway


This morning, as I walked out of the Huangpi Nanlu station, Pamela looked at me from a anti-fur poster, a poster that has been banned earlier. As we know, sometimes by getting things banned, it is easier to get them. An in terms of decency, this poster is rather tame, between all the push-up-bra's and other flesh-showing posters. The interesting thing is that here a foreign NGO protests against fur, that could be a first-timer for China, apart from this earlier real-life protest.

media - China Digital News tests new format

The already indispensible China Digital News at UC Berkeley, led by chief editor Xiao Qiang, is testing a few format, including a new name: China Digital Times. You can have a peek here.
In the recent months the number of dispatches has grown and I saw a tendency of focusing on the more traditional media to refer to.
Here is their (new) mission statement.

internet - Reading all those funny things on blocked websites

Surfing the internet is a pretty dangerous thing to do I read here in Shanghai on the (blocked) website of the BBC:

Many activists used to think that the more people that were online the harder it
would be to censor, said Mr Pain [of Reporters without Borders]. But, by contrast, censorship of political debate in China seems to be getting more effective...Said Mr Pain: "Surveillance is much easier in cyberspace than in the real world."

When that would be true,many more people would be in problems. Playing hide and seek is much easier in cyberspace and that is why - for example - the most effective tools in the People's war against Pornography were a phone number and an email address. Not sophisticated software. (Apologies to all those dilligent IT-engineers.)
It is a pity that western media treat their audiences as dummies, who can only understand China in pretty straight forward (and often untrue) cliches.

jobs - Number Chinese students to US keeps dropping

Less Chinese students have applied to study in the US, compared to last year, when the number already went down 28 percent, reports AP. While visa application procedures have been streamlined, the current restrictions are still blamed to a big part of the reduction in foreign students in the US.
While on average the number of foreign students is expected to drop 6 percent, the expected drop of Chinese and Indian students is larger, respectively 13 and 9 percent.
Apart from visa restrictions, also a difficult labor market in China is deterring Chinese from investing now in their education. With few exceptions, very few returning Chinese students can find better or better paid jobs than they had before they left.

economy - China is going to collapse, edition 538

The story that China is going to collapse has followed me in my ten years in this country in all kind of different variations. The death of Deng Xiaoping, the clash between Jiang Zemin and the army, local warlords, the accession into the WTO, SARS: there has been no shortage of causes for China collapse.
They have only one weak point in common: China did not collapse. Not yet, will the analysts of the Strategic Forecasting Inc. says, who try to generate some revenue by predicting China will collapse this time in 2015. They signal a "Capital flight by Western investors", I have not yet noticed, but then, I cannot keep an eye on everything.
(tipped by the China Net Investor.)
For about US$ 400 you can read why China might collapse in 2015, for US$ 30 you can read in my book why this is not going to happen. (Only in Dutch and German available, though)

Update: Please note the remark by Dylan in the comments. The collapse will come much earlier than 2015. Darn.

media – Ministry of Health proposes ban medical ads

Gao Qiang, the executive vice-minister of health has announced medical ads in China will be banned, the People’s Daily reports from the meeting of the CPPCC in Beijing. The measure will cost the industry 12.7 billion Renminbi (1.5 billion US dollar) in revenue.
The proposal still has to be approved by the State Council. While the industry is troubled by ads with false claims, the blanket ban will certainly cause much unrest in the industry. Just image you just started a company publishing medical information, paid through ads by the industry. I know some people who will be very, very worried.

NGO - Anti-fur protest in Beijing?

It might have been an anti-fur demonstration in Beijing, Danwei says, but we are not sure. So, if you have any information on this action that seems to be located at Wanfujing, please get in touch with Danwei. No Pamela Anderson, so much I can tell.

life - "Please leave off"

Shanghai has a special committee that has to deal with the most urgent cases of Chinglish in the city. For good reason. At the Beihai Park in Beijing you might piss yourself laughing, when you first bump into these instructions, the Image Thief found.

life - Winter is over

This winter has been more gruesome than ever, we might still get a backlash, but most of the suffering seems to be over. Today, temperature in Shanghai went up to 17 degrees and I had my first cup of coffee outside at the Starbucks at Xintiandi. Life is nice again.

media - PR guys admits he pays journalists

After six months in Beijing, a blogging PR-guy, makes his first entry about his work and admits he is paying Chinese journalists bribes, discovered Danwei.

I can now hear the collective, outraged gasp from my peers around the world. But, as adventurers throughout history have discovered, it is asking for a short trip to the dog-headed guillotine to judge China by your imperialist standards. Unless you have gunboats.

Honesty is of course a good thing, but there must be a reason why in the past ten years in China all the PR-people I have asked about it have denied they were paying Chinese journalist, while we all knew they were lying. Very often you find in China a gab between what people say and what people do, and they might do it to save their arse.
Microsoft has only one rule for its over 3,000 corporate bloggers: be smart. I'm not sure whether this entry by Image Thief was smart.

labor - Training knowledge workers in China fails

Will Hickey paints a grim picture of the way how China largest assets, its people, are being training, today in Chinabiz. All parties involved suffer from largely misguided perceptions on their roles:

There is a large assumption about exactly who develops and how to develop talent
of both workforce and management in China. Foreign direct investment (FDI)
believes it to be local Chinese polytechnical schools and universities,
alternatively, the Chinese government looks for Western expertise to develop
their citizenry. A real time assessment shows that MNC management, whether
ex-patriate or Western educated Chinese management, believe consulting and
training companies in China can do the job. All three are misguided.

economy - China keeps on paying for US debts

China will not sell off its reser es in US-dollars despite a falling exchange rate, Guo Shuqing, director of the State Admininistration of Foreign Exchange, said this weekend, according to the New York Times. Rumors about China getting a more balanced foreign exchange mix has put the US-dollar more under pressure in the recent months.

'The denial comes as Chinese media worry about the damage done to China's
financial stability,' the article says.
'Mr. Guo appeared to be trying to address an undercurrent of popular dismay
in China over the rapid accumulation of dollar-denominated assets even as the
dollar has weakened. Chinese media have published numerous articles in recent
months asking if the country has lost money by investing so heavily in dollars.
The official New China News Agency on Sunday carried a rare defense of
Chinese currency policies by Mr. Guo. "We will not adjust the structure of our
foreign exchange reserves according to short-term fluctuations," he was quoted
as saying Saturday on the sidelines of a meeting of the Chinese People's
Political Consultative Conference, an advisory group. "If we sell U.S. dollars
now when it is tumbling, it means we lose money. If we do sell them, we have to
buy other currencies such as the euro. But what if the euro drops?"'

internet - At last Chinabiz has its RSS-feeds

It took a while, but in the end it was so simple: Chinabiz now has two RSS-feeds, one for its articles and one for its headlines. I guess I do not have to explain too much about the features to my readers, or should I? Later we will add a really simple explanation for our more innocent readers.
While RSS is state of the art for media in the US, fast catching on in Europe, it is still a rather seldom used tool in Asia. In China I know the People's Daily and Xinhua use it, and of course all the weblogs, but it still not is close to mainstream, as it is in the US. That will change and at least we are running ahead a little bit.

Will the Chinese media survive? – the WTO-column

(Later also at Chinabiz)
“What we are seeing is a Teutonic shift in how people get their information and when media, companies, governments and pr-agencies do not get it by now, they might be losing out.,” I wrote two weeks ago, focusing on the dramatic changes taking place in the non-Chinese media world.
But the Chinese media are doing pretty well, or not, asked some of my Chinese colleagues.

It is a legitimate question, since the Chinese media industry seems to expand very fast, quite unlike those in Europe and the Americas. Add spending has grown 25 percent last year, much faster than the economy did on average. Growing room to maneuver makes at least the print media much more interesting than a decade ago. The number of titles is growing very fast to such a degree that nobody is able to really follow the Chinese media scene. Competition between different media outlets is fiercer than ever. During the World Soccer tournament for the first time Chinese media sent out larger number of journalists to cover a global event. After the tsunami about hundred of them found themselves back in Indonesia and other country, for many journalists the first time on an international assignment to a disaster area.

A few of the media will survive and be real power brokers, as Benjamin Liebman indicated in the Columbia Law Review of January. When media maintain a solid link with the one-party state, like CCTV or the People’s Daily, they will be safe.
But the majority of media outlets has to survive on a market that has become in the past 18 months time as vicious as the market for TV-sets or cars. Some of the already established papers can still be wildly profitable, but many of the newcomers on the media market have not even a beginning of a clue how to make money. They often have financial solid backers, that might be able to keep on funding for some time, but a gruesome consolidation seems unavoidable. Despite the financial backing they sometimes have, the lack of resources, both financial and in human experience, makes it very tough for them to increase their standards very fast.
Especially in the fields where political control has diminished, competition is killing: technology, sport, finance and lifestyle. Already four daily papers claim to be the Wall Street Journal and I have lost count on how many want to be the New York Times of China. None of them can live up to those standards, because they still have to groom a new generation of journalists, struggle on crucial issues still with the censorship demands and seems mostly unable to convince a skeptical audience.
By the time they are able to deliver, the economic rational of the mass media might have diminished so fast because of the fast changing technology. That extra challenge, how to compete with the new ways to deliver news and information, might be too much for those emerging media.

Every media consumer has only 60 minutes to use in every hour, and those minutes are increasingly used to watch DVD’s, get their information and entertainment from the internet. Fast increasing revenues from ads might delay the inevitable downturn, but advertisers find new ways to spend their money others than on the traditional media very fast. Shanghai seems to have an LCD-screen on every free spot between elevators and in parks. The recent emergence of Craig-like websites for free classifieds is yet another sign also the Chinese media scene is heading for rough weather.

Of course the Chinese media will survive, but I’m nut sure whether they look like the Wall Street Journal or the New York Times. With a booming economy damage control is easier, but it needs pretty clever more that go further than just copying foreign examples.

Fons Tuinstra