On democracy and Asian economic crises - William Overholt

William Overholt

I have just started to read Bill Overholt's latest book Asia, America and the Transformation of Geopolitics and arrived in the introductory chapters, but want to share already some of his more provocative statements and not wait till I'm ready for a classic review.
He refers to a unfortunately in Iraq forgotten lesson that you cannot bomb people into a democracy. Overholt warns against the current policy to link aid to African countries to their level of democracy:

The elevation of democracy to a primary criterion for aid, is inconsistent with the Asian experience and may ironically inhibit replication of the Asian miricle elsewhere, particularly in Central Asia.

What is that experience? Countries like South Korea, Taiwan, Malaysia, Indonesia and Thailand were under martial law when they got US aids. Only after they developed economically, a development towards a more democratic governance developed. Economic success and democracy are interlinked in so far that countries that remained poor, were unable to turn into democracies: Burma, North Korea. The Philippines, starting off as most democratic country in Asia, has become Asia's economic laggard.
Another interesting link Overholt makes between the Japanese economic crisis (1990) and the Asian crisis (1997/1998). The latter one has been wrongly labelled as a "foreign currency" crisis, Overholt says, but was caused by the collapsing Japanese financial system and their withdrawal of funding:

In short, the scope and intensity of the Asian crisis were epiphenomena of Japan's domestic financial crisis, and the Asian crisis of 1997-1998 was just a continuation of the Japanese-Taiwanese crisis of 1990.

More to come.
William Overholt is also one of the key speakers at Chinabiz Speakers. Do get in touch when you want to book him as a speaker.

Next: the labor arbitration law

After the heated debate on the labor contract law - a debate that might continue as the law will be in place on January 1 - the next labor issue is reporting for duty: the labor dispute law. A current draft can be found here.

Labour%20dispute%20settlement%20law%28En%29.doc

I have not yet seen much debate, but if you want to react already, feel free.

New profiles online at Chinabiz Speakers

Ken Carroll

We have been putting a few more speakers online at the website of our speakers' bureau. You will find the following people here:
Ken Carroll, founder of Chinesepod.com, the leading online language education program;
Jim Enters, former CEO of Akzo Nobel China;
Charles Freeman, former assistant USTR in charge of China;
Bill Thompson, a fighter in the frontline in protecting IPR;
Arthur Kroeber, leading writer and commentator on China's economic development;
Jan Kiely, co-director of the John Hopkins Institute in Nanjing; leading writer on China's recent history;
Sylvie Levey, award-winning documentary maker and journalist;
More profiles are on their way. We have only a small number of speakers on this online list. Do get in touch for information on more speakers, their availability and pricing.

China's economy "40 percent smaller than estimated"

A US-based economist claims - based on figures of the Asian Development Bank (ADB) - that China's economy is 40 percent smaller than estimated, writes AFP (following an unlinkable article in the FT).

Albert Keidel, a senior associate at the Carnegie Endowment for International Peace and a former US Treasury official and World Bank economist, made the comments in a report published by the US think tank and in a commentary in the Financial Times.
Keidel told AFP he made the calculations based on a recent ADB report that made its first analysis of China's economy based on so-called purchasing power parity (PPP), which strips out the impact of exchange rates.

Keidel says that now also the World Bank is rethinking its figures on China's economy. "These calculations are not just esoteric academic tweaks."

Who is in charge of the foreign journalists?

I was just waiting for the fight to get started. My first thought was, when media started to report of efforts by the Beijing Olympic Comittee and the General Administration of the Press and Publication to put files of 28,000 foreign journalists into a database, what is the Ministry of Foreign Affairs going to do about it?
Now Richard Spencer reports about this unavoidable turf fight within the Chinese bureaucracy. The ministry of foreign affairs claims jurisdiction over the foreign journalists and won't put them in any database, its spokesperson announced today.
Spencer notes:

I thought I would put that on record, but add that I think Mr Liu [the spokesperson] doth protest too much. We are all, indeed, beholden to the Foreign Ministry, and very nice people they are too, but they can't control what BOCOG or GAPP do with accreditation info any more than they can stop the police fining us for speeding.

This is, as we would call it, a gray area in China. Turf fights are not uncommon between different government entities, to put it mildly, but now the stakes are very high. When I started off as a foreign correspondent in Shanghai, under the Foreign Ministry, also the local branch of the propaganda ministry started to organize events for the foreign correspondents. Both would for example organize an annual outing somewhere else in China. In one year they organized the outing both in the same week, illustrating that they would not be talking to each other very much.

Moviegoer sues censor for cutting steamy pictures

Governmental scissors in Ang Lee's move Lust and Caution, cutting away the more steamy and sexual explicit scenes in the movie, have angered a moviegoer so much he want so sue the censor, writes Reuters.
Suing the government, unthinkable less than five years ago, has become increasingly the tool of choice of citizens who think their interests are being hurted. Seems a rather peaceful way of resolving conflicts.
He could have bought of course a DVD on the street, but that is of course a too pragmatic to avoid censorship.

Update: Global Voices has many more details on this.

The quest for the xiao long bao

The main culinary asset of Shanghai nowadays it that you can get food from almost every kitchen, both internationally and the many Chinese cooking styles, so we are no longer mainly relying on the Shanghainese kitchen. The greasy, overcooked and often tasteless food that is called Shanghainese should be in the lower ranges of rankings for ways to prepare food.
But there is one exception and that is my favorite xiao long bao. I was please to see that the International Herald Tribune has sent one of its more diligent reporters for a three-day hunt for the best xiao long bao in Shanghai.

The Shanghai dumpling, an elegant culinary achievement masquerading as a humble snack, consists of a ball of minced pork (sometimes with an added dollop of crab or crab roe), wrapped in a pleated flour dough skin, which is then steamed. But every xiao lung bao also holds a delightful surprise: there's a spoonful of hot soup, made from chicken or pork, sometimes both, inside.

I had missed the news earlier, but the xiao long bao has been put by the Shanghai government on the list of protected traditional treasures. It is good to know that sometimes the government does set its priorities right.
No stone remained unturned:

The unexpected discovery - and the lovely, tree-lined residential neighborhood - compensated for Fu Chun's disappointing dumplings, which contained a bit too much greasy soup, had a slightly rubbery feel to the meatball and an odd aftertaste, as if they'd been made with less than prime pork. (Which makes sense, considering that pork dumplings cost 8 RMB a basket here, compared to $45 at Din Tai Fung).

Do read the story only with a full stomach.

Hip-hop Shanghai style by Dave Liang

Dave Liang

A few weeks ago I was attending a meeting of Christine Lu of the China Business Network and found myself sitting next to Dave Liang, who was telling about what sounded like a brilliant music project: the Shanghai Restauration project.
"Shanghai hip-hop", he summarized his music style. Just now Christine posted a video that very nicely illustrates what Dave is doing. I like it.

1933 - From slaughterhouse to design center

Before the renovation
(through Sinosplice)

The Shanghai Foreign Correspondents Club organized last night a wonderful evening on the state of the Shanghai real estate. Patrick Kelly, Director – Commercial, Shanghai for Cushman Wakefield first answered the question "Bubble or balloon" by just giving figures and anecdotes. Quite obvious there is no bubble looming for the next years, not in the top-end of the office, retail and residential markets, but also not down the line.

Then Paul Liu, in a previous life responsible for the development of Three on the Bund, explaining the ideas behind a new project "1933". A new fashionable design center concentration in and around the former Shanghai Slaughterhouse at Shajing Road in the Hongkou district. Reaction in the room where initial sceptical, of course it is nice to have yet another high-end Disneyland-like attraction in Shanghai, but...
Paul Liu explained that his assignment was to develop something that was certainly "not something like Xintiandi" where the old inhabitants were removed for a fake reflection of the old Shanghai. They have set strict standards for the tenants and the beverage part is actually going to be rather limited. Very interesting, I might go there very soon.
More about the project can be found here.

Asia, America and the transformation of geopolitics

William Overholt

Asia, America and the Transformation of Geopolitics is the latest book by William H. Overholt, director at the RAND's Center for Asia Pacific Policy and one of our key speakers at Chinabiz Speakers.
I just got a copy at my office so I cannot join the cheerleaders at the cover yet, but their comments sound very convincing:

"Deng Xiaoping is right. orbachov is wrong. Which American dared to say to say this when they were in office? Bill Overholt."

If you are interested in the book, do follow the link: Asia, America and the Transformation of Geopolitics.

Labor contract law is getting lawyers pretty excited

Judging from the latest comments at the China Law Blog, China will be different after the 1st of January 2008:

CLB's Steve Dickinson has been working with many foreign companies to get them ready for the new law, called the labor contract law (LCL) and he just wrote a column for China International Business magazine on the basics involved. The article is entitled, "Power to the People," with the "people" being employees and Chinese lawyers, who are already salivating about suing foreign companies on this. And when I say salivating, I mean salivating. We have heard from Chinese lawyers who already have plaintiffs all lined up and ready to sue various foreign companies for when those foreign companies fail to comply. I kid you not.

The new labor law is going to apply to all employers, no matter how few employees (even one!) they might have. It is going to require all labor contracts be in writing and it will impose significant penalties on employers for failing to comply with this. Employees can claim double salary for months worked without a contract for up to 12 months’ salary. This rule is absolutely going to apply to "informal" employment relationships common to so many foreign businesses doing business in China. Expect a whole slew of lawsuits to be filed on January 1, 2008, by employees seeking double damages for the 12 months they just completed without a contract.

Do I see some salivation dripping from this piece too? One of the good things of China, compared to the US, is that lawyers are not defining the law, and the way they make their livelihood, but the government. And the government is going for a harmonious society, not for a battle field in court. I agree that the Labor Contract Law is meant to make a change, but it will not be going that fast.

One of the arguments in the run-up to this law was that China had been unable to implement the previous law, so how would it be able to uphold a much tougher law? No reason for panic, I would say.

Huawei suspends "dismissal plan" under union pressure

The Shenzhen-based IT-giant Huawei has suspended a highly controversial plan to dismiss and then rehire 7,000 senior managers to avoid labor protection clauses under the upcoming labor contract law after pressure from China's official trade union ACFTU, state-news agency Xinhua reports.

The ACFTU and union organizations in Guangdong Province and Shenzhen City called on Huawei to solicit workers' opinions and respect their rights while making regulations related to their benefits.

Huawei would soon hold a workers' conference to review the interim regulations, sources with the ACFTU said Saturday. A company source confirmed on condition of anonymity they had reached a consensus with the trade unions.

He told Xinhua the company agreed to suspend the plan but the exact date to implement the suspension will be decided after workers' opinions were solicited at the impending workers' conference since the plan was launched with the consent of workers.

The move is interesting because up to now the ACFTU only publicly interfered with foreign companies like Wal-Mart and Foxconn, but obviously wanted to show it did not support the Huawei management in this obvious attemped to undermine the labor contract law. Huawei had called upom 7,000 senior workers to voluntarily resign and give up on their existing historical labor rights.

For Chinese standards Huawei has a highly centralised command structuring in the way the company is organizing, deriving from its origins in the People's Liberation Army. When the government would call during national disasters like floodings or SARS to voluntarily give money, Huawei would typically deduct money automatically from their employees' accounts.