law - Harbin citizen sues company after polution

Suing has already become a popular activity in China and now the company causing the benzene polution of the Songhua river causing Harbin to close down, has to face angry citizens, writes Aljazeera.

Ding Ning lodged a claim for damages in court against Jilin PetroChemical on Friday, his lawyer, Hu Fengbin, said in an interview..."Whoever brought risk to everyone's life should take the blame. I hope to use the law to exercise citizen's rights - to send a warning to the perpetrators - so we can avoid a repeat of such problems," Ding told Xinhua news agency.

He only claims 15 renminbi or USD 1. 86, but when millions of citizens follow this example, it might set an interesting precedent. Since the company is a state-owned company, its seems rather unlikely the government itself would sue it for the now enormous damages, although the China Environmental News suggests that individuals could face legal action.
Local officials initially tried to hide the extent of the disaster for the public. After an initial silence, now China's media disclose extensively what has happened, writes the Financial Times.
Then, Russia might take legal action against China, the same China Environmental News writes.

Gary Wang at his Toodou-office

internet - The staggering explosion of podcasting

New York Times columnist Thomas Friedman noted it last week in an interview with the Financial Times with amazement. When his now famous book "The world is flat" was published in March 2004 podcasting was unknown.

Three weeks ago, in the first week of November, the audio version of this book was the number one selling podcast album on Apple’s iTunes, ahead of all kinds of rock and roll, rap and whatever. That got me enormous juice with my teenage daughters.

China is following in lightening speed and Epoch Times interviewed Toodou co-founder Gary Wang (the other founder is fellow-Dutchman Marc van der Chijs). Launched in April it now has 120,000 registered users, responsible for thousands of podcasts, including video. Most users would download only. Gary Wang:

We wouldn't mind following an example, but there is no one to follow. We have really had to forge our own path with this thing, especially in terms of business models. There are so many different approaches to multimedia user generated content. There have actually been a lot of new of these types of websites launched in the US just in the last few months, and while we won't do exactly what they do, we may adopt some elements from others and integrate them into Toodou's website.

Toodou has to employ some staff (five to ten) to check for content that would be against the Chinese rules, Wang says. Since key word filtering does not work for podcasts, Toodou has to check all content piece by piece, at least in theory.

Most of our content producers are 18 to 25 years old. However, there are also several who are in their 30s or 40s, and one of our oldest podcasters is a 75 year old guy who does calligraphy and makes videos of those outdoor gatherings where a mostly older group of people practice ballroom dancing.

(The link to Gary's weblog give a translation of the Epoch interview).

PBOC governor Zhou Xiaochuan

economy - Minor revalution Renminbi expected

Traders expect a revaluation of the Renminbi of at least three percent in the coming twelve months, the unlinkable Wall Street Journal writes. They deduct this from a deal between the PBOC, China's central bank, on the foreign-exchange market with other domestic banks.

The People's Bank of China's "swap" with state banks allows it to buy $6 billion in 12 months at an exchange rate of 7.85 yuan. To make the deal attractive for the central bank, the yuan would need to rise at least 2.9% from current levels, not including interest. Traders said the central bank could therefore be trying to telegraph its expectations that the yuan will edge higher over the coming year.

The Renminbi will be fully convertible by 2010, PBOC governor Zhou Xiaochuan has said in the past.

labor - Emerging middle management

Dr. Irv Beiman of E-Gate consulting wrote this week an interesting column for Chinabiz about how some of the Chinese companies are very able to attract, train and retain a growing number of qualitied middle management. I called him for a podcast, but that failed because of technical problems. A few elements of our conversation I do think are useful for a larger audience.
Compared to ten years ago, China now has a very decent middle management, Beiman says. While larger foreign companies complain about the problems they have in finding and keeping experienced middle-managers, a decent group of Chinese companies do not have that problem and have developed their own middle management.
They do not spend much money on training those people, but make them familiar with the production processes in their company through on-the-job training, rather than formal training. Foreign companies have often their technical operation very well organized but fail to get people involved in strategic management, both foreign managers and their Chinese managers.
Foreign companies also often rely on the relative smaller group of experienced Chinese managers who speak enough English to communicate with foreign management, a problem Chinese companies do not have.
Those Chinese middle managers are very loyal, even though they might earn more in foreign companies, and feel proud to be part of those successful Chinese enterprises. Since they do not speak English, they have fewer opportunities with foreign companies. Those multinational enterprises rely on the relative smaller group of job-hopping middle managers, who are often eager to earn more and feel less loyalty to their own firm.
Next time, I do hope the podcasting goes better.

internet - The expanding blogosphere

The number of weblogs is not only expanding in terms of numbers, but also business-wise expansion is in the pipeline. Have been missing here much of the economic stories, but others have done a nice job.
Blogcn is expecting USD 10 million of private investment, while bokee.com is playing with the idea of going public. Blogcn is losing its position as a market leader, so competition will lead to a better situation for the (according to my estimation) now 4.5 million bloggers in China.

Job hunters in Chongqing

economy - Complicated discussions on unemploymency rate

Just like in any country, the number of unemployed is a politically charged one in China. Last month I already pointed at an upcoming change in counting the urban unemployed.
An expected spike in urban unemployed, here reported by the China Daily, to 17 million is still nothing compared to the 150 million unemployed at the country side, but who expects politics to be logic?
The article in the China Daily reveals a heavy infighting between different departments on who gets the honor of bringing the bad news. The headline says, the urban unemploymency "might' reach a record height, does not say it is certain.
The Ministry of Labour and Social Security rather uses the 11th Five Year Plan as their benchmark, which is politically always safer although not more true. Also our partners at the China Wage Indicator (both research institutes of the same ministry and the Chinese Academy of Social Science) just hope that our future data-set do not challenge any official number on the unemploymency. Well, that is not going to be the case, since our data focus on relatively micro-data, but their fear is telling.

media - Is being censored not profitable anymore?

Shanghaiist suggest that the British publisher of Zhou Wei Hui would be happy her newest book Marrying Buddha is not banned in China anymore. I have my doubts about that, since getting censored has always been a major sales argument abroad.
Her first hit, Shanghai Baby, has never been great literature but made it because of the combination of sex and censorship.
Making a profit on the book market in China would be rather difficult, as really successful books are pirated and success is mainly counted in the number of pirated editions of a book.
Of top of that, Wei Hui admits to have omitted interesting details to get re-admitted to China again.

“I was so happy that (the government) had allowed me to return that I deleted some parts of the book myself,” she was quoted as saying. “I took out some sexual parts and some things about Chinese male authors who get monthly allowances from the government.”

Getting on the government payroll is actually the only secure way of making a profit on the Chinese book market.

economy - Why foreign companies hate to make a profit

Sun Bin follows up on my earlier piece on P&G and Unilever. Sun explains from the inside how and why foreign companies reduce their profitability. Guess? To avoid the relatively higher tax on profits in China. Some good tips for those who do not want to hire some expensive tax experts.

life - 300 Chinese died from bird flu, scientist

China has been praised officially for dealing with the bird flu for not repeating the mistakes it made a few years ago, when government officials tried to hide SARS for the outside world. Not true, says a Japanese scientist, Masato Tashiro, in the New Scientist today, based on information he got from his Chinese colleagues. Threehundred people have died from the virus, seven in human-to-human transmission.

He says he was given the information in confidence by Chinese colleagues who have been threatened with arrest if they disclosed the extent of the problem.

Apart from the 300 deaths, Tashiro said 3,000 people have been put into isolation. The New Scientist has a reputation of sometimes blowing stories out of proportion, but the references to experts and German newspapers look pretty sound. If this story proves to be true, it will take about a week for China to change into a state of panic.

Update I: Scientist clarifies report
Masato Tashiro has put some new light on the figures as quoted by the New Scientist. The story is not true without reservation.

Update II: Here is the original report in the Frankfurter Allgemeine Zeitung. Not surprising a misunderstanding arose from that report.

internet - Talking about the big-elephant-in-the-room

The discussion on how to deal with the western media obsession regarding the censorship on the internet in China, ESWN comes with his take on the issue. Since he is becoming very fast the object of many media-interviews, his dissenting views (dissenting from the Western media) are relevant, and funny too as he forces interviewers to ask not relevant questions.

Question: Can you imagine for us how it feels to live in a society in which speech is censored?

My actual response depends on the rapport that I have with the interviewer by this point. I may demur and simply say that I imagine that it must not be good. Or else I may snap back and say that this question is like asking a man whether a woman must be feeling a lot of pain when delivering a baby -- if you want the answer to that question, you ought to ask someone who is experiencing or has experienced it!!! This was just not a fair question to ask me.
All in all, I am a lousy subject for the big-elephant-in-the-room question.

Unfortunately, other, less media-savvy bloggers might not that easy get off the hook. Just ignoring this clash in culture is only helping ESWN.

internet - The blogging party members

It's now official, since the New York Times writes about it, China's party members are just like normal people, so party members like Mu Mu also blog, dance and try to talk to people. Howard French explores the explosion of weblogs in China since the beginning of this year.

...in a strong new wave of online activity that is challenging China's ever-vigilant online censors and giving flesh to the kind of free-spoken civil society whose emergence the government has long been determined to prevent, or at least tightly control.

Since the party is party of the blogging party, it might again not cause a classic revolution, just major changes.

Song Xiuyan

politics - Qinghai governor new Shanghai mayor

"They send us a maoist," rages one of my Shanghai friends. "She is totally unfit to lead Shanghai." According to yet-unconfirmed rumors the current governor of Qinghai Song Xiuyuan is going to be the next mayor of Shanghai.
Song has been making her way though the Chinese bureaucracy mainly in China's provinces and it seen as an effort by the current central leadership to get rid of the more city-oriented officials that emerged under former president Jiang Zemin. "It shows how much the central leadership hates Shanghai," says my friend.

economy - The shampoo wars continued

When Poctor&Gamble and Unilever start to talk about their operation in China, like here Laurent Philippe does at the McKinsey Quarterly, they can be sure they will have my attention. Five years ago I compared for the magazine Asiaweek the profitability of both companies after Unilever had announced they would open up for the media.
P&G never promised that, the openness of Unilever was very shortlived, so I had to collect evidence from cooperative retailers, suppliers and actually went out to stores to measure up the length of the shampoo displays in Shanghai supermarkets.
The conclusion was that P&G was making some profit since a few years, while Unilever was losing money. Both were in China since the second half of the 1980s, so the magic mantra that foreign companies were in China for the long term, got for me closely associated with losing much money.
Unilever was up in arms, flew in PR-consultants from all over the world in an effort to kill, what they feared, a flood of other articles about the same subject. I did not have that intention, so I enjoyed nice lunches and rather unexpected level of attention from a company that had ignored me just weeks earlier. A few years later P&G lost its advantage and also lost money again.
It made me very sensitive for the way how both companies answer when the question about profitability comes up. Also in the McKinsey piece the familiar high-end corporate bullshitting was easy to find. Philippe says:

Our profitability in China today is comparable to the company average. With developing markets—and China, in particular—becoming an increasingly important part of the company's total operations, our shareholders would not accept a dilution of its financial performance. It is a financial imperative to continue delivering superior returns to our shareholders.... We have set adequate, definable profit objectives for ourselves and believe that from both a strategic and an organizational focus this is the best way to take on the cost challenge involved in serving the midtier consumer segment in China. Tough profit objectives force you to get your cost structure competitive.

Translation: We do not make a profit, despite competitive targets.
There is nothing wrong with that: tough domestic competition, piracy, expensive expats, high marketing costs: China is just a very difficult market.
Of course, you cannot expect McKinsey Quarterly to ask the same critical questions I could ask for the now defunct Asiaweek. But they should have asked about the SK-II skin cream scandal that has hit the company's trust among Chinese consumers. Even McKinsey has to watch their reputation when they sell fried air.

internet - Conference new media and social transformation

Hong Kong will host a new media conference on 9 and 10 December, including some of the usual suspects like Isaac Mao and ESWN.

Harbin

internet - Harbin: people flee after water cut off

Troublesome news from Harbin in northeast China where yesterday 3.8 million inhabitants were cut off from their water supplies, because of the benzene fallout of a chemical explosion upriver.
Western media report that inhabitants are fleeing the scene, report here AP and here the BBC.
I wanted to move ahead with my podcasting experiments and call some inhabitants of Harbin, as my (indeed Chinese fabricated) headset collapsed. Will be back with podcasting after I obtain a new set.

Update: A decent overview of China's environmental problems in the International Herald Tribune.

economy - Selling a train in China not that easy

Has China been buying 60 high-speed train and if they did so, did they buy German or Japanese trains. Both Germany and now Japan have been struggling to get an answer to a question that should be so easy to answer. Just show the receipts.
Sending out enthusiastic press releasese by the different competitors seem to be part of the negotiation strategy; unfortunately, the Chinese buyers do not play along with the game.

internet - The clash of cultures, the BBC talks back

Earlier this month some of China's more famous bloggers started to complain about how they were treated by the BBC and objected against the way they were questioned. Especially the one-sided way they were always and only asked about censorship on the internet in China annoyed for example Wang Jianshuo. Fortunately, the BBC is one of few traditional media who are getting familiar with the new media and yesterday they actually started to reply.
As a professional fence-sitter I can only appreciate that, although I do not see both sides getting much closer either.
Lets have a closer look at what I think both sides might be doing wrong in the eyes of the others. What most certainly did not help the 'Chinese' viewpoint is the fact that first bloggers complain western media only ask them about censorship and then refuse to discuss why that is a big problem as the Western media suggest. By doing so it only adds to this mystic feelings there is a big secret in the Chinese internet where people are afraid to talk about.
So asks Alan Connor on behave of the BBC:

So how can this be? Is the BBC (gulp) fallible, not to mention Amnesty, PoliticsOnline, openDemocracy and Reporters Sans Frontieres, which named China the winner of the 2005 Internet-Censor World Championship?

That is a very justified question to ask for somebody who is looking at Chinese from a Western media mindset and you cannot just deal with that issue by publicly ignoring it. I know that it is easier for me as a fence-sitter to discuss those issues, but it would help if more bloggers would explain what censorship really means for them. You cannot deal with what your preceive as wrong perceptions without actually dealing with them.
Much of the Chinese complaints are - as Alan Connor and others explain - standard journalistic procedures. You mostly do not publish whole interviews, journalists make their own picks. When you want to convince the 'British' side there is more to the Chinese internet, it helps to push those issues. I agree with the 'Chinese' complaints that so many interesting issues are just overrun by the censorship question only. How the internet is changing traditional media. How life of internet users is changing dramatically. How the divisions between different groups of active internet users influence the domestic discussion. Just a few of many interesting issues.
Yes, Western journalists can be tough, also when they deal with their own governments, some Chinese bloggers noted with disgust. That is something bloggers simply have to get used to: there is no reason why they should get a special treatment. They should deal with realities too.

Update: More clashes here. (A tip by Bingfeng Teahouse.)

internet - The Yahoo-dilemma

ESWN uses the case of a false bomb threat in Hong Kong to make his point on the dilemma Yahoo and other information services face when they have to deal with requests from a government to hand them over information on one of their users. Comply or refuse are the only two options, he argues, as nobody wants to even consider a third option:

This leaves the third option, which is a mixture between the first two options. This is hinted by Philip Bowring in Yahoo's mess of pottage: "Assisting in tracking murderers, suicide bombers and drug smugglers is not the same as handing over providers of what in most countries would be legitimate news to which the public had a reasonable right." Of course, we would all like to see a responsible corporate citizen assisting in legitimate law enforcement on one hand and rejecting suppression of human rights on the other hand. But my challenge in that previous post was how to design and implement such a system in China.
If several hundred requests come into Yahoo! every day, how would they know which is which? As Jerry Yang said, "We do not know why they want that information. We're not told what they look for." So in order to tell which is which, Yahoo! will have an in-house Chief Privacy Officer, who will demand the law enforcement agency to produce the full evidence, explain the purpose of the inquiry and then he/she will play God/Supreme Court Justice and render a decision in his/her Infinite Wisdom. Routinely, this CPO will have to make several hundred potentially life-and-death decisions every day. Now who wants that Chief Privacy Officer job, with all the pressures and the legal and moral liabilities?

ESWN writes he know this is not going to make him popular, but I agree that this is a serious dilemma. I do think it makes sense to raise the alarm when - like in the case of Shi Tao - a government uses its legal power to jail for example journalists for what is considered to be improper reasons. It makes sense that larger IT-companies use their leverage with Chinese legal autorities to explain that when they are forced to give information in this kind of widely disputed cases, it might be harder for them to provide evidence in cases where everybody would agree Yaoo-likes would comply with judicial demands for information.

economy - China's push for the Amazon basin

No, not the US online book retailer, but that river in South-America. The International Herald Tribune adds some details to China's global push for resources, including mining activities that are in need of huge powersupplies.

Zhang Baoqing, last year before his retirement

politics - The lacking power of the central government

ESWN translates a remarkable exchange from the China Youth Daily, where the lack of effectiveness of the central government is discussed. It is a subject where I'm very much at odds with other observers of the Chinese realities. Too often the Chinese government is seen as a powerful, coherent and regularly evil entity that can push ahead its politices at will.
I see as one of China's largest challenges the eroding power of the central government, who is only marginally in charge of its country. That makes it possible for lower level governments to avoid, ignore or even oppose central policies. Fine, if you think that those policies do no make sense, but in many cases they do make sense, like in the case of fighting AIDS, polution, proliferation of arms, reform of the banking systems and some other details.
In an interview with the China Youth Daily, Zhang Baoqing, a former vice-minister of education, complaints that many policies by the central government simply do not leave Zhongnanhai, the Beijing compound of the central leadership, talking about regulations to promote education for students who cannot afford to pay it themselves.
Tan Xiongwei of the paper continues in an opinion piece with other rules, on the safety of mines, making the issue broader. "These events reflect the crisis facing the rule of law," he writes.

In a country ruled by law, whether the national laws or the orders from the upper-level government, they reflect the spirit and power of the rule of law. If the various orders and policies from the upper-level government are distorted or ignored during the execution, then it is not just the authority of the central government but also the rule of law are being challenged. Therefore, it is not enough to issue more orders and announcements to promote the central government policies. It is not enough to focus on specific cases and apply pressure or issue penalties against defiant local officials. In order to put a stop to the phenomenon of "policies decided at Zhongnanhai not making it out of Zhongnanhai", the most basic step is to build up a system of rule of law. To establish the authority of the central government, we must first establish the authority of the rule of law, and then use the rule of law to protect the authority of the central government. That would be the best path.

law - Anti-trust trials against Chinese companies in US

Anti-dumping actions are no exception anymore, writes the financial magazine Caijing, but now also anti-trust suits in US-courts have entered the scene. (Picked up from the Chinabiz headline service). Magnesite producers and vitamin C producers are targets of the legal procedings.

United States antitrust law combats practices that restrain free competition. Compared to cases involving other areas of US trade law, like antidumping, antitrust lawsuits often carry much more severe penalties, including fines for the company and even criminal prosecution for its executives.

Price manipulation is considered a critical factor in determining whether monopolistic conditions exist, and thus is a key focus of both suits. The magnesite complaint alleges that the defendant companies formed a price union in April 2000, after magnesite prices dropped in 1999.

A high-tech condom

life - the invisible condom for women

Interesting news according to the Xinhua news agency. They have noted this liquid condom for women in a store in Yichang, Hubei province and should make life much easier for all involved.

The invisible condom, developed by a company in south China's Guangdong Province, has won approval from the province's drug administration and is now available in drugstores in the country.

I'm not giving any guarantees here. In the past I have seen in China too many dodgy products that would cure AIDS or get your hair back. I do look forward to some scientific tests of this product (in other words: do not count on me for the testing).

Hu Yaobang

politics - Remembering Hu Yaobang, start of a new tradition?

I try to avoid too much cynicism in my pieces, but when it concerns politics with a big P, it is very hard to avoid. Much has already been written about the backgrounds of former reformist leader Hu Yaobang, just ahead of the visit of US president George Bush.
Traditionally such a visit would cause under Hu Jintao's predecessor Jiang Zemin some major political upheaval. The release of high-profile prisoners would be demanded before the high-level US visitor would arrive. Often those prisoners seemed to be arrested just weeks ahead of the visit, sometimes by rogue security forces eager to embarress their leaders. I would always look up who was on his way to China, when people were rounded up. They often go a one-way ticket to the US days or even hours before the honored guests would arrive in Beijing.
That routine has disappeared over the past few years. People are still arrested now and then, but they seldom seem to make it to the political agenda.
The move to reinstate former leader Hu Yaobang, possibly as a first careful step to more change, must just be a new way to serve different political agenda's, including putting a high-level visitor in a good mood.

life - Eating in Eindhoven

Not that much news from China this weekend, I noted, even George Bush repeated some familiar mantra. So, I did not miss too much while touring southern parts of the Netherlands, passing through Maastricht and Eindhoven. We had an excellent late lunch at the Nieuw Nanking Restaurant in Eindhoven, a must if you like Chinese food. Mostly, I'm not that enthusiastic about Chinese food in this part of the world. Conveniently located opposite the Holland Casino at the Markt in Eindhoven, so enough entertainment if you have some visiting Chinese guests.