labor - Beijing, Shanghai raise minimum wages
Life in China's two leading cities is only expected to get marginally better as they raised the minimum wages.

Shanghai's new minimum wage rose from 635 yuan ($77) to 690 yuan ($83), Xinhua said. Wages in Beijing rose from 545 yuan ($66) to 580 yuan ($70).

Minimum wages in China are in general not enough to survive, while it would be hard for workers to complain when employers do not pay those wages.

labor - Siemens workers project against job cuts

Also from Danwei: in Beijing workers at the German giant Siemens protested against job losses after rumors suggested that 80 percent of the sales force at the mobile phone unit would lose their jobs. Banners asked for a treatment similar to their German colleagues.

internet - Even sex is boring at Chinese weblogs

Danwei reviews the weblog of Furong Jiejie, together with efforts of her little and bigger sisters to juice up the blogosphere. The result is not really shocking: Chinese webloggers seem to avoid anything that might be even mildly exciting.

Furong Jiejie writes boring nonsense about herself and publishes photographs of herself in sexually assertive but unrevealing poses. It is
difficult to understand why she has become a blog start.

Obvious, Danwei prefers the official approach of women.

internet - Lay-out problems

Sorry to annoy you with some lay-out problems blogger.com is currently having. I know the thing is rather mixed up and 'they' are working on some kind of solution.

The upcoming shake-out of the media – The WTO column

(Later also at Chinabiz)
The media scene in China has been a rather remarkable one in the past five years. Titles and broadcasting channels have exploded in numbers, only matched by soaring revenue from ads, a market that grew last year 25 percent, much faster than the overall economy.
No wonder foreign media conglomerates have been watching the industry with a watering mouth, despite the occasional misgivings about government interference in the news industry.

But hold your breath for a while as suggestions from the market indicated that despite the sensational growth a first major shake-out in especially the print media is in the making. Since an authoritative auditing system for print media does not exist, we do have to believe their sales managers on their word when they tell us how many eyeballs there products are actually seeing. As the US experience shows, having an official auditing system does not stop print publications in a desperate need to cheat, but having no checks at all is rather troublesome.

Changing from the mouthpiece of government departments to more market-driven publications is a tough challenge for the current publishing houses and obvious has to lead to some casualties. Rumors from the media market suggest that panic is rife at several editorial desks. “We discovered we are writing for a target group that does not exist,” grins one of the participants in such a discussion. Most of the newcomers in the media market have not done even the most basic market research before they were launched but based their papers on a wild idea that emerged in one of the wealthy state-owned news machines. Calling them clueless would be an understatement.
The emerging media in China developed quite different from their already existing counterparts in other parts of the world, especially in the US. In their effort to optimize profits, news publications in the US focused on mainstream audiences with a combination of local news, sex, crime and sensation. Very few cities have more than one daily paper. In China many of the newcomers in the market actually focused at the top end of the media market.
With a combination of reporters who or had a basis in government-run media, or were newcomers from the expanding schools of journalism, they could not offer the establishment the paper that audience perhaps wanted. Developing a market could be possible, but needs resources – both in money and people - and time. Any new print publication has to face at least four to five years of losses before they can be established. When it takes you more than a year to discover that your target audience does not exist and that makes you panic, you do have a problem.

You do not have to be a clairvoyant to see what is happening. Print publications can make money, but just like in the rest of the world that works better when they focus on the lower end of the market. Developing the media as the fifth estate, like in the US where most Chinese publications take their inspiration from anyway, is tough, also because of its ongoing limitation on what media can publish.

TV media are still far away from such a shake-out, since they are able to generate more revenue and are more important for the government to get their message out. But the dilemmas of the print media are not limited to them.
In the US statistical evidence shows that by April 2014 the last news paper reader will disappear, unless something is being done. In China that might happen much faster.

Fons Tuinstra

internet - Arrests, riots and other news



The peaceful scene at the picture are officials of the department of foreign affairs in the city of Qinhuangdao, destroying the pictures taken by de Japanese reporter.
As things go these days, the reporter recorded the act and wrote about it ons his weblog. (Thanks, Danwei)

It was a classic grade-B HBO moment, then they caught us all, knocking on our hourly-rate hotel room door, yelling "police!" then storming into the room asking who was who and why we were all there. About 25 more cops took our two bureau drivers, both Chinese citizens, to another cop shop after grabbing them by the arms and taking their phones away. Cops to drivers: Why are you working for the "little Japanese"? (小日本人)Were we detained? Caught? No, cop-interrogator Wang Yiming said. No, we just need you to rat out, I mean tell us what the other five were talking about in the hotel room. So I could go now, I asked half way through his questions. He didn't answer. He told me later I had a bad attitude for not telling him what was said in the hotel room during the five minutes
before his squad broke in. I indicated to him that good attitudes could also be
expressed by letting non-suspects out of custody in less than five hours.

Today we also got our dosis of reports in massive riots, for example in Anhui's Chizhou, by Reuters and they were of course beaten by ESWN by at least half a day. The problem with all this news hitting my computer is similar to what I call my mining-syndrome. A three, four years ago the internet revealed a larger mining accident, while the local authorities tried to keep it out of the media. They failed and since then every mining accident is also reported by the traditinal media. It has not helped the miners, who die every year in larger numbers, while I try not to get bored with it. That seems an interesting challenge: how to report on evil deeds of the government without losing the effect of those reports.

economy - How threathening is the wealth gab?

One of my favorite theories that should explain why China will be falling apart is that of the growing gab in wealth that seems to divide the country. I cannot resist an article that starts like this (from the HK Standard, picked up by Howard French):

The darkest side of China’s miraculous economic takeoff is probably its ever-widening wealth gap, which has become a major source of social unrest.

I do not agree. The wealth of assumptions is just amazing. The basic assumption is based on the frustration theory, a classic theory in sociology that suggests the upsurge in anger when existing expectations are not met. That theory has been very useful in explaining with hindsight why things have happened, but less than helpful in predicting the future.
In one of my favorite books on poor people's movements, the much more relevant question is being asked: why do they fail anyway even if the conditions for their success seem to be present. That would already be at least one step too far for China, where people very often do not have the assumed expectations that could cause frustration. Migration has been an excellent tool that allowed hundreds of millions Chinese to use their energy in getting a better existence, even though very often it has only been marginally. Do not expect a full scale revolution soon.

Books on poor people's movements

internet - How to censor the internet?

How to censor the internet for example against pornography, asked ESWN and got a thoughtfull rebuttal by Imagethief. While the outside world is trying to secure the freedom of speech on the internet in China, the question whether you (meaning often the government) should stop expressions at the internet that would damage other legitimate interests.
While concerned parents might think off porn their children are confronted with, foreign and domestic companies might be less happy in the way consumers sometimes use the internet to vent their anger.
The discussion outside China mainly focuses on political issues and often narrows down to technicalities on filtering regimes - and how foreign companies assists in that limiting of free speech. I firmly believe that discussion should be broader, especially since filtering-systems reflex a very small part of the complicated reality in China.
I do not believe cracking down on the internet can be effective in the end, but a discussion on both legitimate concerns and excesses at the internet do make sense, as an excercise for educators more than engineers.

economy - Consumer anger also hits domestic companies

Not only foreign enterprises are hit by the anger of consumers, also the Shanghai Bright Dairy feels the backlash of consumer anger, the Financial Times reports.

media - Thousands of Chinese journalists protest detention colleague

In an unprecedented protest, almost 2,500 Chinese journalists have writting to the Guangdong High People's Court to voice opposition against the detention of their colleagues at the Guangdong Metropolis News, reports the China Digital Times.

"We are journalists from the Southern Metropolis News, Beijing News, First Financial Daily, Evening News, Shanghai Youth Daily, Sina.com and Sohu.com... we believe this is an unjust case..."

Also more links at the CDT.

economy - The epic struggle between Ebay and Taobao

The struggle between auction sites Ebay (former Eachnet) and Taobao in China is getting more and more fascinating. There are many similarities with silimilar clashes between foreign companies entering the China market and their domestic competitors.
The strange part is that Ebay, despite the purchage of a succesful domestic player, has been able to lose its ability to compete on the domestic market.
Jack Ma in the Red Herring:

Mr. Ma, 40, can’t resist the war metaphors when speaking of the struggle for China’s online auction market. He draws on the Vietnam War in particular: eBay “carpet bombs” Chinese cities with advertising, while his Taobao team “hides out in our caves” in its headquarters in Hangzhou, he says. He likens eBay’s implementation of its global technology platform in China to “trying to land advanced jets in muddy rice paddies.” And while eBay’s generals are “very good at commanding regular troops, they don’t know how to fight a guerrilla war,” says Mr. Ma. He believes the online auction giant should have taken an important page from American military history: never fight a land war in Asia.

Books on Ebay

China’s financial quagmire – The WTO-column

(Later also at Chinabiz)
When there would a an official raking of China’s major financial problems, this week the defunct stock markets in Shenzhen and Shanghai would be on number one, well ahead of the real estate bubble, the non-performing loans and smaller predicaments I cannot recall this morning.

Even when you are use to the always swinging pendulum of the endless bureaucratic power struggles, the reversal of the sales of state-owned assets on the stock market was quite amazing.
Of course, the official message on Monday was that China will still sell of the majority of non-tradable shares in its listed state-owned companies in due time, but retaining government control was firmly back on the agenda. It is similar to the signals about an upcoming floating of the renminbi; that will come too, when the government thinks it is ready for it. It might be a pretty long wait for those who have in interest in those changes.

The Shanghai and Shenzhen stock exchanges have been in the doldrums since the beginning of this century, the moment when the financial authorities started to play with the idea of retting rid of its majority control in listed state-owned enterprises in an effort to modernize its economy and fill the empty pension funds. The value of the shares has been dropping since and both larger and smaller shareholders have lost their appetite for participating in the always dropping exchanges. Every new plan, and we have seen thousands of them, caused a new drop.
If it had not been for the always optimistic government-run media, nobody would have reported anymore about China’s domestic stock markets. In other economies stock markets would be an integral part of the tools to facilitate trade in capital, but in China they have ever matured. Perhaps the early enthusiasm of the Chinese citizens when the stock markets opened for business in the early 1990s was not very healthy; an economy without a functioning stock market seems equally unwanted.
So, when new leaders were appointed last year to rule the commissions in charge of China’s financial markets last year expectations began to rise. The restart of a modest but apparent steadfast sale of the first non-tradable shares caused an effect everybody had expected. Just like in the past half decade, shares plunged to a new low. That effect should have been included when plans were announced, not only for this year, but at least for the three, four years to come. Then a healthy system of stock market could be in place.
Unfortunately, the counter-forces have prevailed once again. Like so often the pendulum of power moved back, as the central authorities refocused on other economic problems, like the overheated economy and a real estate sector that seemed out of control. The current push back of conservative forces, who want to stick to overall government control of the state-owned firms, is a real setback for all parties involved. The current central government started with an agenda two years ago that focused very much on reducing the bureaucracy and pushing market-driven solutions where possible. That agenda has been reversed this week rather firmly for the stock markets and that is unfortunately, since both the sales of non-tradable shares and finding a solution to fill the coffers of the social security are both issues that will remain firmly high on the list of dilemmas that have to be dealt with.

Fons Tuinstra

media - Updates on the McDonalds, P&G rows

Perhaps we are more alert on these rising conflicts between foreign companies and the Chinese consumers/governments, but it keeps on amazing me. Danwei gives its latest update on a kneeling McDonalds.
In terms of political risks, foreign companies can add this to the already long list of potential downturns that can substatially hurt their revenues in China.

economy - Mixed messages on selling off state assets

I have not been following the development on the sale of non-tradable shares in state-owned enterprises over the past few weeks all to close, but from this dispatch of Bloomberg I conclude that the financial authorities are as clueless as they were before:

"The country still needs to hold enough shares to absolutely or comparatively control pivotal companies after making all shares tradable,'' Shang Fulin, chairman of the China Securities Regulatory Commission, said in a statement handed out ahead of a briefing in China today in Beijing today.

The confident start of the sales earlier this year seems to be gone, yet again. They should have continued, despite the expected structural downturn of the domestic stock exchanges. It could hardly have gone worser than it did.

Update: Hey, what a surprise, the Shenzhen and Shanghai stock exchanges ended up higher. Bad news for the long run anyway as the financial regulators move away from selling off the SOE's.

media - Have Shanghai' parks a problem ?

When China's media start talking about a problem the country might have it mostly is worthwhile to look at the background for a twist. Apart from distorting the truth, like when they reported about the large number of musea in Shanghai, there might also be other things going on.
Take this Xinhua article about the problems in the large number of parks in Shanghai. Here there is no problem with the numbers, I enjoy often strolls myself in the now 122 mostly newly established parks in the booming city, mostly the Xujiahui park on a two minutes walk from my apartment. It is a proof that the local government can push also other priorities than only tall buildings.
But according to the government news agency there are major problems:

But visitors are often hassled by beggars and fortune-tellers, and put off by the smell of urine left behind by someone using the grass as a toilet.

Now, those were problems I would encounter much more in other parts of the city and hardly in the well-policed Xujiahui Park, that is stuffed with public toilets. A quote gives a hint of a slightly different problem in the eyes of the authorities:

"The regulations were laid out many years ago and many parts are not in line with the need for maintenance of the increasing number of free parks," said Gao. Patrols could be introduced to help park managers.

Indeed, especially on hot summer evenings those parks are used for even hotter sexual exchanges, although not as explicit as you would sometimes see them in Europe. That seems to worry the authorities more than the beggards.

law - Regulating MBO's

China's legislators try again to limit damage to its state assets by new regulations for the smaller and middle-size enterprises, to prevent its current management to sell off assets for too low prices, says state-owned news agency Xinhua.

According to official statistic, China losses 40 billion yuan (4.8 billion US dollars) of state-owned assets annually. There are tens of trillions yuan of state-owned assets under the supervisionof governments at all levels in the country.

That is only an assessment, of course.

internet - MII announces closure of non-registered websites

The Ministry of Information Industry (MII) has announced on Friday it will close down all not registered websites. I learned this from the headline service of Chinabiz, that found the announcement in the China Daily. Temporarily closed down websites would get a grace period to register after the deadline that ends on June 30.
The registration drive has already costs quite some mayham and the estimations are that 25, 30 percent of the websites have not registered. Hosting services, like those for weblogs, can register on behave of their users, the article says. The measure might cause a major dent in the revenue stream of ISP - who are all government-owned - when large numbers of not-registered websites are forcefully kicked off.