labor - Fake factory records - FT



Faking payrolls and time sheets has become more sophisticated in China and is hard to track, writes the Financial Times in an article on how Chinese factories are hiding its labor costs behind a smoke curtain of deception, making it hard to enforce corporate social responsibility.

Factory managers' forgery of payroll documents and time cards is increasingly sophisticated, according to auditors and western buyers who work with Chinese factories. Some estimate that more than half of the factories surveyed in social compliance audits have falsified at least some of their records.

Getting figures right in labor issues is still hard. Just had some frustrating months in trying to get our own benchmark for the labor market, the wage indicator, in place, despite initial good prospects. The project, that is already running in eight countries and should be online in twenty by then end of the year, can become a leading source of information on wages and labor conditions in a country. But getting initial funding in place, for a project that would be sustainable within three years, proves to be very hard. Getting commercial funding for what is basically a social project is much harder than for a semiconductor plant or more traditional approaches. Getting money from social funds proves to be hard because a common partner in other countries, an internationally recognized trade union, does not exist in China. Troublesome, since this is really my pet-project.
Books on global trade

economy - Spin masters at the auto show

A happier Shanghai model in 2003

Models were out in full force against at the Shanghai auto show, held this week. I failed to attend, although those shows are more fun when an industry faces a crisis. Fortunately, my AFP-colleague noted some of the more interesting comments, although he failed to translate them into more proper English.

Volkswagen Group China president Brend Leissner said the German carmaker would no longer slash prices on its models to boost sales and instead would seek to cut costs by streamlining operations.

Well, if that would have been such a smart strategy, why did Volkswagen not apply this earlier? In fact all car producers have been saying the same thing in the past years, to do just the opposite. Just wait for more price cuts.

At the same time, Leissner insisted that Volkswagen's performance in China was better than industry figures indicated, putting its first quarter market share at 18.9 per cent instead of the roughly 11 per cent given.
The discrepancy, he said, lay in a change in reporting methods with sales to end-customers recorded instead of sales to dealers. Only a few years ago VW had 40 per cent and more of the market.

This answer deserve a price for the best spin of the show. Why has Volkswagen not earlier complained about the way car sales in China? You only use this trick when you are losing in a market.

In 2005, China vehicle sales are forecast to rise 10-15 per cent, still strong growth but down from 15 per cent last year and a far cry from the heady 75 per cent rates seen in 2003.

Of course, even a rise of ten percent is much more than what car producers in reality expect. But at an auto show, you cannot faces that grim reality.

Books on spin doctors

protest - The dust settles down

Shanghai last Saturday

One week after the slightly violent anti-Japanese protests it is time for a short wrap-up, as Japan's Koizumi and China's Hu are about to meet. I'm not going to link to all the entries of the past ten days: they are most of my entries over the past ten days cover the anti-Japanese protests and they all link to the major other contributions.
Any ambivalence among the Chinese authorities about the protests, abundant last week, is now clearly over. Both the boycot of Japanese consumer goods in May and more demonstrations for May 4 will not even enjoy tacit approval, reported widely, here in pickp-ups at the China Digital Times.
The rather delicate relationship between China's ruling class and their citizens is mostly, and wrongly, perceived as a simple top-down one by the outside world. Only very few academics, mostly antropolists and sociologists, have been able to capture this difficult pull-and-push process, where both the government is very important, but still cannot get away with everything.
One of the more telling account I still find "The trading crowds" by Ellen Hertz, a fascinating account of the Shanghai stock exchange in the first half of the 1990s. It is one of few studies that not only looks at the Chinese government, but also at "the masses" as they define their own reality, partly by reaction on what the government is doing.
That makes it also very hard to assess what is going to happen in the coming weeks. For the time being I stick to the advice of my history professors: do not try to make any forecasts about what is going to happen, looking back and finding out what has happened is tough enough.

Order "the trading crowds" here

protest - Japan's PM says it is sorry

Even China's state media carried the official apologies by Japan's prime minister Koizumi earlier today for his country's wartime record, after weeks of anti-Japanese demonstrations and deteriorating Sino-Japanese relations.

"Japan squarely faces these facts of history in a spirit of humility. And with feelings of deep remorse and heartfelt apology always engraved in mind, Japan has resolutely maintained, consistently since the end of World War II, never turning into a military power but an economic power," he said.

Now, this is not the first time it happens, but it has never been seen as enough by China. The state-media (as far as I could see) have not yet given a verdicts about Koizumi's remarks.

Books on Japan and the war

Ban on MBO's: not what it seems - the WTO column

Shanghai stock market

(Also at Chinabiz)
When the legal clouds rise up from Beijing it is, just as in a classic Western, very hard to guess what is behind the clouds. Is it the army? Are the Indians coming? Or it is just a storm that passes over?
The latest confusing cloud was caused last week by a regulation of "management buyouts" or MBO's for state-owned companies, reported in the Chinese Media Watch of Chinabiz. The regulation applies to small and medium state-owned companies and larger ones, banks, listed companies are excluded. The first rumors already emerged at the end of last year. One conclusion from media reports could be that the transition from a planned economy to a market economy has yet again run into murky political waters. That conclusion is wrong. The most likely explanation is just the opposite: it shows that big changes in disposing of state assets are on its way.
First, the regulation itself has a rather limited scope. Most of the small and medium companies are losing to private competitors. Larger ones, banks, listed companies are excluded from this regulation. They are good for more than half of the total share of state-owned enterprises in China's economy.
The announced ban on MBO's for the larger state-owned companies is a sign that after four years of tampering the government is going to bring them on to the market, not hold back the privatization. Up to the summer of 2001 the state-owned companies could only put up one-third of their shares for trade when they listed. That part was heavily overvalued and the stock market was used as a cash machines for often badly run state-owned companies. Enthusiasm among the buyers was high despite those bad fundamentals, and demand for shares was much higher than the supply.
A research by the Ministry of Finance in 2001 suggested that the non-tradable two-third of the shares should be put on the stock market to finance the lagging social security system. Since then the Chinese stock markets have been going south and despite comforting noises from financial experts, Chinabiz already predicted that the shares would fall further earlier this month. What has gone wrong is that since that doom-year of 2001 no policy was pushed through. The two-third non-tradable shares were not put on the stock market, but the plan kept on showing up in thousand different variations, suggesting it was also not dead. Tripling the liquidity of the stock markets would have killed them for years and have diminished the overvalued shares. Not doing anything has not caused a dramatic drop, but has also not solved any problems and might have been in the end worse than just selling off those state-owned shares. Now the plans to sell the first non-tradable shares have been announced and more can be expected. The ban for the larger state-owned companies is a sign that the financial authorities want to prevent the current management from selling off key assets of their companies, before the unavoidable clash is coming. That means the coming years will be rough for both the stock markets and the state-owned companies involved. Rather than a backlash, the ban signals that another big economic leap forward is on its way.

Fons Tuinstra

Books on SOE's in China

internet - Fudan middle school podcast

Last night we had our monthly meeting of the Shanghai webloggers. Many subjects caught our attention, but one of the nicer contributions was Tek, teacher at the Fudan Middle School, telling about his efforts to let his 15-year old students podcast. A website is now up and running. Tek had nice stories on how he would try to convince his students to pay some money on copyrights, and not only buy the pirated one, although stopping them from copying and pasting in the podcasts did seem an uphill battle.


Click to join shanghaiwebloggers
Buy an MP3-player

media - Liberalization print licenses expected

The rigid system for licensing print media in China, under the General Administration of Press and Publications (GAPP), is expected to see a dramatic change before the summer, media sources indicate.
The ongoing explosion in publications and the need for more licenses in the booming Chinese market has grown finally GAPP over its head and it will defer its licensing duties to the responsible ministries. “They anyway had not time to read all those magazines they had to censor,” says one of the people involved in a new media venture. “Many of those magazines were anyway to often specialist publications they would not understand.”
The changes include private companies and wholly foreign owned entities.
While the official censorship through the Ministry of Propaganda will remain in place, taking away many of the bureaucratic barriers to obtain a publishing license will probably lead to another wave of new publications. The ministries are expected to be more liberal in allowing publication on their field in exchange for a fee. More general publications are expected to remain under the GAPP, but the majority of the market will be liberalized.

Urgent: see also my update here.

Books on media in China

media - The Japanese coverage

Andrea of t-salon points at this article in the Financial Times that gives an overview of the rather sensationalist take the Japanese media give when they report about the anti-Japanese demonstrations in China.

"Unfortunately, Japanese coverage of the riots has been very sensationalist, so the parent companies' risk management teams have been getting in touch with their people in China and setting off a chain reaction," Mr [Tomoharu] Washio [of Japan's external trade organization Jetro] said. "Now everyone has become a little bit more nervous."
Mr Washio said manufacturers were so far largely unaffected, in spite of weekend reports of an anti-Japanese strike at a plant in Guandong province belonging to Taiyo Yuden, a manufacturer of electronics parts. But consumer companies were worried about the possible spread of boycotts, he said. "From what we are hearing, [new] advertising and public relations activities have stopped," he said.

It reminds me also of an anecdote told me on Saturday by a Japanese reporter, who complaints about the way the Japanese consulate had facilitated their work. A week before the consulate reported that two Japanese had been hurt in a fight at a university in Shanghai, the East China Normal University. It took the reporter three days and many calls before the consulate admitted that a fight over de Chinese girlfriend was the cause of all this, suggesting wrongly for days this was a racists attack. The local police was less then forthcoming in assisting the (one) victim, suggesting it happened because the victim was Japanese. That is bad enough, but by withholding crucial information, the role of the consulate also got bad reviews.
In terms of new media Japan is far ahead of China, with now one million weblogs and 15 million Japanese who have commented on weblogs, 40 percent of all internet users, reports the Blog Herald. I'm not sure whether the weblogs would do better in setting up a conversation compared to the traditional media, not sure at all.

Books on media in Japan

The water crisis in North China



(published at chinabiz)
The WTO-column “Are we doomed?” on the impact of the environmental degradation on China’s future has sparked off a wide range of reactions from our readers. One of them pointed at a recent presentation by John T. McAlister, PhD, for the Deutsche Bank on the water crisis in North China. With the kind permission of Mr. McAlister we republish here his summery of his viewpoints, while you can download the whole presentation here.

The crisis
China's annual renewable per capita water supply falls 50% below the UN-defined danger threshold for minimum social and economic stability in North China, a regionthat produces 45% of the country's economic output and is home to 40% of itspeople.

Policy promotes scarcity
China uses about 7-15 times more water to produce a unit of GDP thandeveloped economies. Chinese water prices do not reflect scarcity: they are 70- 80% below prices in countries with adequate water per capita. Unrealistic water prices and lax pollution policies are accelerating depletion of dangerously low watersupplies.

Risk of catastrophe: flu pandemic
About 700 million people, over half of China's population, have access only to drinking water of a quality below World Health Organization (WHO) standards. The water is contaminated by industrial pollution, and by human and animal waste. Lack of water for animals is a source of disease passing from poultry to pigs to humans and a threat of "Avian Flu". WHO warns of the high risk of a globalpandemic.

Investor risk
Capital projects that lack autonomous, proven, renewable water supplies for their operation are at risk. Projects whose success depends on China's domestic market consumption are at risk of economic reversal due to the water crisis. Internationally financed projects lacking full disclosure of water dependency and assurance of supply could face litigation.

Crisis manageable, solution profitable
Rational pricing of water and recycling for reuse can help avert catastrophe. Recycling is believed to be too costly. With historical "Industrial Age" mechanical methods, this may be true, but "Information Age" recycling offers convenient, profitable methods for turning China's most serious vulnerability into one of its most historic achievements.

John T. McAlister is founder/CEO of ecological services company that developed from university research an all-natural-biotechnology to recycle pollutants in water and other resources for their profitable reuse. Co-Founder/Director of Stanford University’s Center for Technology Assessment and Resource Policy.

Books by John T. McAlister

internet - Not yet making money on Amazon

Now I'm doing some house-hold announcement anyway. Some of you have noted the links I now use to Amazon, with sometimes very specific key word searches, like in this case to Amazon.com. Some very popular bloggers said they were making heaps of money for products they sold over Amazon they would mention anyway in their podcasts or weblogs. You can get this service too by going to the amazon-site and look for the associates links, somewhere left at the bottom.

I have been using the links for some time and can report good and bad news. The good news is that hundreds of people have been clicking on the links, it makes the site look good and is a nice service for the readers. Unfortunately, I still have to generate the first sale, so it is certainly not a quick money maker.

For each entry - unless I cannot spare the extra two minutes - I have to generate two seperate html-codes. The link with the pictures does not show up at the RSS-readers, so for those I have added also a text link. I will continue this for as long as it makes sense. Sales would of course be most encouraging, but do not expect too much from that.

Books on Amazon.com

internet - Want a link? Get an RSS feed!

Apart from a rising number of visitors, I do get most request for link-exchange. When a weblog first my agenda (China, weblogs, new media) I'm happy to do so, but I do need an RSS-feed to include your website or weblog. Click here for more information: the business case of RSS. (thanks to the RSS-feed of Frankwatching).

Books on RSS

protest - Shanghai gets act together

Hongqiao, Shanghai last Saturday

Last night a meeting of the Shanghai Foreign Correspondents Club and a good moment to compare notes with colleagues on the recent anti-Japanese demonstrations in the city. One warning ahead: remember that all politics in China is local politics. What can be valid conclusions for Shanghai, might be different in Beijing, Shenzhen or Hong Kong.
First conclusion: Shanghai government was sending out different messages to different constituencies. At the level of work units people was told not to demonstrate, at universities students was told they could if they behaved. And the local police send out a rather ambivalent messages that could be read either way. Many demonstrators believe the government did not approve their 'patriottic deeds'.
Second: the message is now clear: no more demonstrations. The number of real demonstrators (10,000 plus 10,000 police men) was lower than the Shanghai government feared, so they seem confident enough to stop new demonstrations. Students have been told that it is over now.
One of the reasons for the rather ambivalent attitude towards the demonstrations was a noted decrease of popularity over the past three years of the local authorities. While there are no elections, the government is following popular sentiment very closely and in Shanghai it does not look good. Scandals on real estate have tarnished the previously very popular local government and the efforts to keep the real-estate bubble growing are associated with certain parts of the government, who can cash in massively as long as the bubble does not burst. While a bursting bubble would cause financial damage for the current house owners, the drop in prices would benefit larger numbers of Shanghainese. At least, that is one of the explanations going around.

Books on China's government

protest - Riot control with Chinese characteristics

tear gas unit

One of the unsettling experiences of the anti-Japanese demonstration last Saturday in Shanghai was the very different way the police tried to control this urban unrest. As a journalist, also for your own protection, you check what arms both sides are using. You look where the water canons are standing, if there are any dogs, if the usage of tear and pepper gas is likely (and from what direction the wind is coming) and how the arrest units are behaving. Are they part of the crowd, or more likely to act from behind the police lines?

There were enough plainclothes police men around, although I did not realize at the moment that up to half of the 20,000 demonstrators was actually part of the Shanghai police force. (Shanghai has about 30,000 of them, so not all of them were on duty.) But otherwise, none of the usual equipment. No water canons, no equipment that suggested the usage of plastic bullets, tear gas or dogs. Even the very tiny soldiers of the PAP in green uniforms only had their plastic shields.

China does have all those riot control gear, we know from reports elsewhere and not hesitant to use. Perhaps the law enforcement units were so confident they could win this without too much violence. Reports suggest that initially many more real demonstrators were expected and the police force was toned down when only 10,000 materialized.

Books on riot control

protest - A Japanese view on the anti-Japanese demonstrations

Joi Ito, one of the more prolific webloggers, gives reluctantly his view on the anti-Japanese demonstrations in China. Joi Ito is Japanese, but has spend much of his life also in the US.

As a Japanese who has a great deal of sympathy and empathy for China, what I find difficult is trying to understand the various threads and how Japanese people can try to make a difference. In particular, the hateful and extreme actions of some of the Chinese make it difficult, if not scary to even try to open a dialog. At the same time, the extremes in China are fueling the nationalists in Japan and not helping the cause for the more moderate voices. I believe hate will never help communications.

He explaines the problematic relationship of the military in Japan with the rest of the Japanese.

I think about the Japanese military taking over the government [in 1932] and sending Japan into once of the worst periods in its history. I think about the small children being sent off to war as Kamikaze or human torpedos and I think about the letters homes from them that are enshrined in Yasukuni Shrine. There are letters from terrified little boys writing about how scared they are about going to war. Most Japanese do not trust the military and most Japanese believe that the military run government of the 30's was an illegitimate government as a result of a coup. Many Japanese believe that the Japanese people were victims of the military.

Books on Japan's military

law - Guthrie gets 2.5 year sentence

American business man Randolph Guthrie has been convicted by a Shanghai court to two years and six months of prison for selling pirated DVD's online, writes AP. Another accusation of operating an illegal business was thrown out by the court.
Shanghai socialite Guthrie was arrested last year with his business partner Cody Thrush, who got a sentence of one year. Both can still appeal their sentence.
The arrest has been used as a show case to illustrate China's efforts to do something about the infringements of intellectual property in China.

Books on IPR

protest - Who has been demonstrating in Shanghai?

Just received some details from a confidential police report on last Saturday's anti-Japanese demonstration. They come from a rather reliable source, but I have not seen the material myself so should be treated with some caution.
According the the report the number of demonstrators has been around 20,000, half of whom were police officers. Yes, indeed: 10,000 police officers. I could recognize larger number of plain clothes police men, but would have never come to that number.
According to the report "no major accidents or disturbances" took place. That now might be an assessment that is not shared by the owners of the establishments that were demolished. Fifty people have been arrested for damaging property or stealing. The demonstrations have not been organized by any organization, the report says. I conclude then, that since nobody applied for an approval, the demonstration was not approved.
Next time, when all the police men stay at home, it might be a minor disturbance.

Books on riots

NGO's - Does registration mean a crackdown?

When you do not pay enough attention you might in China easily miss a crackdown or two, three. China Digital News points at an article in Asia Times that suggests that a re-registration of non-governmental organizations might actually be a crackdown.

The source or sources behind this series of stifling moves was not known, but they contradict Hu's positive recognition of NGOs last year. When meeting with representatives at the eighth national conference of the Red Cross Society of China on October 27, Hu said that the organization had bright prospects in the nation's process of building a well-off society.

While it is important to watch this process, I would not right away go for the most negative conclusions. What is happening is that NGO's who were registered as companies now have to re-register under the civil affairs bureau. In the past NGO's registered as companies because the civil affairs authorities refused to register them, so you might as well draw the opposite conclusion.
It is not unlike what happened in the 1990s when the authorities required private companies to re-register under their right title, as the first step in legalizating private companies. The civil society seems to be heading into the same direction.


Books on civil society

protest - What the bloggers had to say

Andrea Leung of t-salon guestblogs at "Global Voices Online" and gives an overview of what the bloggers had to say about the anti-Japanese demonstrations over the past few weeks.

They showed a sense of pride that they have done the right thing to speak out for justice that would leave a mark in history. That the people in Shanghai are also patriots and not just people who would money first as people from around the country alleged previously.
“Boycott Japanese goods and strengthened China” is the slogan used most throughout the protest in Shanghai, it was also the rationale behind the protest, one angry Anti-Japan blogger said in a blog post where he captured the most memorable moments and accomplishments of the protest.
He was most provoked when protesters tried to pass through the police line. “1, 2, 3! Patriotism is not a crime! Break the (police) protection line!”, he recalled.

"Japanese pig" was more popular I recall. When I read Andrea's overview I get the idea that not only traditional media sanatize reality to accomodate their audiences, Chinese bloggers show the same tendency.

Books on weblogs

protest - Japanese tourists cancel trips

First indication show that Japanese tourists are cancelling trips to Shanghai, writes AP today, although numbers were not given.

Japan's consul general in Shanghai said Sunday that the city's director of foreign affairs, Yang Guoqiang, told him the protest "tarnished" the city's reputation. China has refused to apologize or pay compensation over the damage caused by the protesters.

Shanghai has about 4,500 Japanese offices and factories. At the upcoming car show in Shanghai, no Japanese cancellations were noted.

Books on China's tourism

people - GM's Murtaugh to join SAIC



It is not yet official official, but the rumor of former China GM-chief Philip Murtaugh joining SAIC to oversee their Korean venture and possible other international cooperation has been confirmed by sources inside SAIC. With the upcoming auto show, more stories might materialize, for example the reshuffle of the China Volkswagen team by FT.

Books on Detroit

How to deal with anti-Japanese riots in China?

“So much for Shanghai as an international city.” Some of the assessments of observers of the anti-Japanese riots in Shanghai last Saturday were pretty harsh. Many questions come up at foreign invested companies in China, also the ones that are not Japanese. A few answers. This is a unique moment to show some moral leadership in your company.

1. Do not underestimate the anti-Japanese feelings at your work place. Chinese have a longstanding tradition of hate against the Japanese. Although very few people have for example read the much-discussed Japanese history books and the rhetoric is often flimsy, you should take those anti-Japanese feelings serious. Especially when your people have to deal with Japanese customers or suppliers, it makes sense to discuss the issue. In some cases you might even have to reassign people.
2. Do not make the issue bigger than it is. Although the riot was racist in nature and became violent, the violence had a rather symbolic value, compared to the damage violent demonstrations sometime cause outside China.
3. While the issue can become highly emotional, most Chinese employees will vote with their feet. Rather then engaging in anti-Japanese activities, they would keep their jobs, customers and suppliers.
4. Special attention needs the position of Japanese employees in your company. They might feel very uncomfortable in the current situation. This does not allow a “watch and let go” attitude.
5. Some of the Japanese companies will opt out. Consumer oriented businesses saw already a drop in their sales since last year, the announced boycott of Japanese products will add to the momentum. Japanese tourists will pick different destinations. Some Japanese companies are considering moving out their non-essential staff and family members as they did during SARS. Whether there will be a long-term effects, depends on the weeks and months to come. Tensions at Japanese companies in China will be higher.
6. Local reaction of the government has been diverse when it comes to protecting property against attacks by demonstrators. In Shenzhen Japanese property was protected, while in Shanghai thousands of police men and demonstrators looked on while property was being demolished. Among the demonstrators in Shanghai the feeling was clearly that the government was not supporting them. The last thing the government wants is the have anti-Japanese riots turn into a anti-government riot, but the rope it is walking is pretty thin. That ambivalent attitude can be expected more.
7. The organization behind the demonstration is strengthening every day and because of the internet activities can be announced and coordinated better than ever on a national level. The government has been moving against the main organizers, but because of the same ambivalent attitude it is unclear whether this anti-Japanese movement can be contained very easy.
8. One of the more troublesome scenarios could be an effort of the government not to contain, but to lead this movement, when there is no other way out to contain the developments.
9. While people now take to the streets to express their anti-Japanese feelings, there is no reason why to should be limited to that. Taiwan could be another nationalistic issue that would go down with the Chinese patriotic feelings. US diplomatic missions have been warning their citizens too. That was pretty premature, but any subject or country that would incite nationalistic feelings in one way or the other could be the target of future demonstrations.
10. Chinese media are not allowed to discuss these issues and lack the moral leadership you would expect from media in this kind of situation. So people will use different means, including your offices and the internet to exchange their thoughts. This is a good moment to show moral leadership too, not by banning those activities (that would be hard anyway), but for example by dealing with the racist and violent character of the demonstrations and share your opinions.

Books on crisis management

media - The real story cannot be reported

While foreign reporters had no problem in documenting the anti-Japanese demonstration, reporters coming back from the riot in Zhejiang, Huaxi village, saw themselves detained, notes conficated. While their treatment was polite, included even a banquet, the message was clear: back off.
Simon World was kind enough to retype the unlinkable story in the South China Morning Post by Didi Tatlow.

"Please understand that we have to do this," said Zhang Fahao, director of the local foreign affairs office, my chief captor for six hours that evening. "I'm very sorry. But you broke the law."

Books on riots in China

protest - Pressure on Japan mounts as demo's spread

The pressure on Japan to act is increasing as the number of demonstrations in China goes up, while Nobutaka Machimura, the Japanese minister of foreign affairs started talks in Beijing today, writes Bloomberg.

"Tensions between Japan and China have risen to a point where Japan needs to do something,'' said Noriko Hama, a professor of economics at Doshisha University
in Kyoto. ``They are worried the situation may worsen if they leave it. They
probably hope to ease tension at least by taking action from the Japanese side.''

New demonstrations are reported from Shenyang, Zhuhai, Dongguan, Hong Kong and a smaller one in Shanghai again. Shenzhen reported 30,000 demonstrators today, matching yesterdays record in Shanghai. According to AFP a labor conflict at a Japanese company turned political in Guangdong.

media - Standard procedure: silence

Yesterday morning before the demonstration arrived in Hongqiao are I made a pretty fundamental mistake. I bumped to a photographer and assumed it was a Chinese colleague. Wrong, not Chinese colleagues, but state security. They thought it was a pretty funny misunderstanding too.
Of course the Chinese media were not there, since they are not supposed to publish anything apart from the Xinhua dispatch. But the debate on this issue will take place outside the traditional media, partly on the internet. In that way the Chinese media will do themselves a disservice by letting their position erode much faster than the traditional media elsewhere.

Books on Chinese media

protest - China's nationalistic revolution


Symbolic presence

“Japanese pigs” and “Japanese out” were just few of the less flattering slogans the close to 30,000 demonstrators shouted last Saturday at the Japanese consulate in Shanghai – the largest anti-Japanese gathering in China of the past few weeks.

People are “dissatisfied with Japan's attitudes and action on a series of issues such as its history of aggression,'' municipal spokeswoman Jiao Yang said in remarks reported today on Xinhua News Agency, the Chinese government's official voice on political issues, according to Bloomberg.

The situation is a bit more complicated than that, not only for the relations between China and Japan, but also for the rather tricky relationship between the different sections of the Chinese government and the anti-Japanese demonstrators.
Yesterday brought together a broad spectrum of China’s population, university students, white collar workers, migrant workers and visitors from outside the city. Also a smaller group of scholars and journalists from Japan added their bit of flavor to the ongoing discussions on what is really going on, what does the rhetoric of different players mean.
A few of the demonstrators came to me to explain that their anger only focused on the small group of Japanese rightwing extremists. “We have nothing against the Japanese in general, they are our friends.”
That now might be a subtlety that has been lost for most of the Japanese, as well as for the majority of the demonstrators. The rather verbal racist attacks on the Japanese might not do down very well at the Japanese networks and a first exodus of Japanese family members might be well on its way later this week. Japanese tourists will decide to skip China and when rioting continues, business might use that as a reason to avoid China.
Some demonstrators suggested China’s economy could easily do without Japan; I would see major trouble ahead when the second economy in the world would pull out, even when it is only a partial withdrawal.
Anti-Japanese feelings have been around for decades and have offered a rather volatile climate as long as I know China. But the events of the past few weeks show a change in intensity, scale and aggressiveness that might work as a watershed.
The announced boycott of Japanese goods for May, might hurt China economically more than it hurts Japan, as most Japanese products are made in China anyway. Maybe Chinese want to put up with those self-inflicted wounds, but managers and workers at those Japanese companies might disagree. As a signal it is a troublesome one.
The effects might not be limited to Japanese business only. Also the US diplomatic missions have been warning their citizens for possible fallout for the American citizens. Some of the Americans I met yesterday were rather reluctant to identify themselves as American for that same reason.

A destroyed restaurant.

Close to 2,000 uniformed police officers and other military forces, apart from a huge number of plainclothes officials, watched scenes that increasingly became more violent during the more than half a day of demonstrations in the Hongqiao area. What started as throwing eggs and plastic bottles, evolved into the demolition of shops as individual demonstrators saw that nobody was going to stop them anyway. While the consulate was pretty well protected, it was no comparison to the demonstrations against the American consulate in 1999 after NATO destroyed the Chinese embassy in Belgrade. Then only students with ID’s were allowed into the area in small batches to vent their anger. Yesterday everybody could get to the consulate and the police mostly watched when violence started to spread out in the area.
Police seemed to have one major assignment: not to incite the feelings of the demonstrators. For very good reasons, since the demonstrators felt they were not supported by their government in what they perceived as patriotic acts. In the past few days before the demonstration, the Shanghai government tried to convince people not to join, signaling to Japan and demonstrators alike it did not support the actions. That signal was well noted by the demonstrators. Police actions against the demonstrators could have very fast turned against the law enforcement agencies too. Apart from a few noted arrests, mostly there was no reaction as demonstrators took out shop after shop.
Police officers were seemed also not equipped for any possible massive clashes with the demonstrators.
Violence was not limited to the Hongqiao area, but reports suggested that also in other parts of Shanghai shops were demolished. Those were mostly Chinese owned-shops with Japanese signs on it, some even with faulty Romanization of the Japanese characters, but that again might have been a subtlety that might be lost for a Japanese audience.

The Chinese authorities have maneuvered themselves in a situation where they almost cannot do anything else apart from going along with the anti-Japanese mood, unless they want to run the chance to be taken on by the protestors themselves. The non-governmental organization behind the demonstrations has won in strength, by organizing themselves over the internet and collecting funds from both individuals and companies.
Most likely Chinese authorities will try behind the scenes try to move against this organization, but in a more open society, connected through the internet, and on such a hot issue that might offer great challenges.
“The main problem is that both the Chinese and Japanese ministries of foreign affairs are notoriously bad in communicating,” says James Farrer, China-scholar at the Sophia University in Tokyo. “The Japanese think they have been apologizing to China all the time, but have been unable to get that message across. The Chinese have not been very eager to pick up that signal too.”
Farrer sees one possibility to solve the current deadlock. “Only the Japanese emperor can make a gesture that could not be missed by the Chinese,” he says. “He should come to China and apologize. But that seems rather unlikely since the rightwing forces in Japan keep the imperial family almost as their hostages.”

More reports: AP, Danwei, Kyodo, more AP, Shanghai Diaries, Philippe Roy, Chris Myrick (2x), who kindly provided some pictures.

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