Archive for ‘Chindia Alert’

12/09/2014

Soft power: Confucius says | The Economist

“HARMONY is the most valuable of all things,” said the Chinese philosopher Confucius two and a half millennia ago. There is little of it in evidence in the frosty relationship between the woman who was the founding director of the Confucius Institute at the University of Oregon, Bryna Goodman, and her fellow historian, Glenn May. Their offices are separated by a ten-second walk, but the scholars do not exchange visits. Their palpable ill feeling reflects growing discord among Western scholars about a decade-old push by China to open government-funded cultural centres in schools and universities abroad. Intended to boost China’s “soft power”, the centres take the name of the peace-espousing sage. They tap into growing global demand for Chinese-language teaching. But they are also fuelling anxiety about academic freedom.

In America the Confucius programme has been widely welcomed by universities and school districts, which often do not have enough money to provide Chinese-language teachers for all who need them. But critics like Mr May believe China’s funding comes at a price: that Confucius Institutes (as those established on university campuses are known) and school-based Confucius Classrooms restrain freedom of speech by steering discussion of China away from sensitive subjects.

In June the American Association of University Professors called for universities to end or revise their contracts with Confucius Institutes (America has 100 of them) because they “function as an arm of the Chinese state and are allowed to ignore academic freedom”. Mr May has been asking the University of Oregon to close its institute, to no avail. Ms Goodman (who is no longer the institute’s director) says that in funding its interests China is like any other donor to American universities. She says that the institutes have become lodestones of what she calls a “China fear”.

When China opened its first Confucius Institute in 2004 in Seoul, it hoped the new effort would prove as uncontroversial as cultural-outreach programmes sponsored by Western governments, such as the British Council, the Alliance Française and Germany’s Goethe-Institut. The idea was to counter fears of China’s rise by raising awareness of a culture that is often described by Chinese as steeped in traditions of peace.

Through the Hanban, a government entity, China provides the centres with paid-for instructors and sponsors cultural events at them. Its spending is considerable, and growing rapidly. In 2013 it was $278m, more than six times as much as in 2006. China’s funding for Confucius Institutes amounts to about $100,000-200,000 a year on many campuses, and sometimes more (Oregon received nearly $188,000 in the last academic year). By the end of 2013 China had established 440 institutes and 646 classrooms serving 850,000 registered students. They are scattered across more than 100 countries, with America hosting more than 40% of the combined total. There are plans for another 60 institutes and 350 classrooms to be opened worldwide by the end of 2015.

Chinese officials express satisfaction. In June Liu Yunshan, who is in charge of the Communist Party’s vast propaganda apparatus, said Confucius Institutes had “emerged at the right moment”. He described them as a “spiritual high-speed rail”, promoting friendship by connecting Chinese dreams with those of the rest of the world.

Others are less sanguine, however. In America criticism has recently grown stronger. Earlier this year more than 100 members of the faculty at the University of Chicago complained that Confucius Institutes were compromising academic integrity. In an article published in 2013 by Nation magazine, one of the university’s academics, Marshall Sahlins, listed cases in several countries involving what appeared to be deference to the political sensitivities of Confucius Institutes. These included a couple of occasions when universities had invited the Dalai Lama to speak and then either cancelled the invitation or received him off-campus.

In one case, at North Carolina State University in 2009, the provost said after the cancellation of a Dalai Lama visit that the Confucius Institute had indicated the exiled Tibetan’s presence could cause problems with China. This year Steven Levine, an honorary professor at the University of Montana, wrote to hundreds of Confucius Institutes around the world asking them to mark the 25th anniversary in June of the violent suppression of the Tiananmen Square protests. None of them agreed. Global Times, a Beijing newspaper, recently called the protests of foreign academics “a continuation of McCarthyism”.

Ms Goodman argues that the study of China needs all the funding it can get, even if that means taking money from countries with vital interests at stake—whether China, Taiwan, or the United States. She says that if China were ever to meddle politically in Oregon’s institute, the Confucius programme would be quickly shut down.

Such assurances do not address a big concern of critics—that the political influence of Confucius programmes is often subtle and slow-acting. If the critics are right, it is very subtle indeed. Surveys suggest that in many countries China’s image has not markedly improved over the past decade. The Pew Research Centre, an American polling organisation, says 42% of Americans viewed China favourably in 2007. Last year only 37% did. The political dividends of China’s soft-power spending are far from obvious.

via Soft power: Confucius says | The Economist.

12/09/2014

Schumpeter: The China wave | The Economist

MANAGEMENT thinkers have paid surprisingly little attention to how Chinese firms are run. They routinely ascribe those firms’ rapid growth in recent years to their copious supply of cheap labour, or to generous financial backing from the state, rather than inventiveness. They have much more time for India, particularly its knack for frugal innovation, with all those colourful stories of banks putting cash machines on bikes and taking them into the countryside, and companies building water purifiers out of coconut husks.

However, it seems unlikely that China’s companies have come as far as they have just by applying lots of labour and capital. It is also hard to imagine that the huge expansion of China’s education system and its technology industries is not producing fresh management thinking. Western companies knew little about Japan’s system of lean production until its carmakers gobbled up their markets. The danger is that the same will happen with Chinese management ideas.

There are, however, signs that these are now getting the attention they deserve. The MIT Sloan Management Review devotes much of its current issue to examining innovation and management lessons from China. Peter Williamson and Eden Yin of Cambridge University’s Judge Business School contribute a fascinating essay on “Accelerated Innovation: the New Challenge from China”. The latest issue of the Harvard Business Review has a piece on “A Chinese Approach to Management” by Thomas Hout of the Monterey Institute of International Studies and David Michael of the Boston Consulting Group.

The first article suggests that the Chinese, like the post-war Japanese, have been doing a great deal of innovation under the radar. The second demonstrates that they are becoming more creative as they seek to solve the problems of a rapidly advancing consumer economy.

Messrs Williamson and Yin focus on the way that many Chinese companies are using mass-production techniques to speed up not just the manufacture but also the development of products. They break up the innovation process into a large number of small steps and then assign (often sizeable) teams to work on each step. For example, WuXiAppTec, a drug company, divided the search for a new treatment for chronic hepatitis C into eight steps, assigning dozens of people to each. The firm also adapted German software that was designed for managing assembly lines to co-ordinate the innovation process. Whereas a Western software firm typically releases an early “beta” version of a product only to a select group of guinea-pigs, Chinese firms are more likely to launch theirs straight into the market: they use consumers as co-creators, seeking their feedback and then rapidly adjusting their products.

This sort of accelerated innovation may not generate stunning breakthroughs. But that is not what it is for. China’s success has depended on its ability to be a “fast follower”, copying foreign ideas and turning them into mass-market products. Messrs Williamson and Yin argue that the Chinese can now apply accelerated innovation in lots of areas; and that the technique helps them make better use of one of the country’s most important resources—a pool of competent but unexceptional technicians.

Messrs Hout and Michael are also struck by Chinese companies’ emphasis on speed, and their willingness to throw things at the market. Goodbaby, which makes prams and car seats, introduces about 100 new products each quarter. Broad Group, a construction firm, puts up buildings rapidly by breaking them up into modules, fabricating those modules in factories, pre-loaded with utilities, and then plugging them together: an idea long talked about in the rich world but not much implemented.

However, their paper’s focus is broader—on how Chinese entrepreneurs are coping with the speed at which technology-related industries are changing. They note that even big companies delegate lots of authority to preserve flexibility: Haier, a home-appliances giant, consists of thousands of mini-companies, each of which reports directly to the chairman. That is an interesting contrast with Japanese firms’ obsession with seniority and consensus-building.

Messrs Hout and Michael also highlight the creativity of some Chinese companies when faced with the need to build entire ecosystems out of thin air, from supply chains to labour pools. Hai Di Lao, a hotpot restaurant chain, deals with one of its biggest problems—recruiting and retaining young people to train as branch managers—by offering them housing, schooling for their children and trips abroad. This sort of imaginative thinking on how to attract good workers will increasingly be needed now that China has used up most of its surplus rural labour.

via Schumpeter: The China wave | The Economist.

12/09/2014

China’s Xi Enlists Party Recruiters in Anticorruption Effort – Businessweek

Zeng Fanyue is a 24-year-old political science graduate student at Shanghai’s Fudan University. Politically speaking, she’s redder than red. “As a Communist Party member, I have additional social responsibilities. I should help people and do things for others,” she says, telling how she choked up with emotion during a ceremony in which she renewed her oath of loyalty to the party.

The government of President Xi Jinping, who’s also chairman of the Communist Party of China (CPC), says it wants more true believers like Zeng. At the same time, it wants to weed out the party’s corrupt members. Last year the number of Chinese joining the party dropped 25 percent as young people saw little to gain from joining an organization in convulsions over the prosecutions of party notables such as ex-Chongqing boss Bo Xilai and former Security Minister Zhou Yongkang. In just the first five months of this year, authorities investigated 26,523 officials, including seven at the ministerial level, for crimes related to their jobs, reported the official Xinhua News Agency on July 3. The CPC—now 87 million strong—is facing “severe dangers,” particularly from corruption, Xi warned in a June 30 speech.

Three weeks before Xi’s speech, the party had issued new recruitment rules, the first major revision in 24 years, that aim to further slow the growth of the world’s largest political organization. Only people likely to be so dedicated to party doctrine that they won’t succumb to the temptations of graft will be welcomed.

Ding Xueliang, professor of social science at the Hong Kong University of Science & Technology, says Xi and other top leaders became convinced China needed a smaller, purer party after close study of the collapse of Communist rule in the former Soviet Union. “The major problem they identified about the Soviet Communist Party was: No. 1, the senior cadres didn’t believe in party principles, didn’t believe in communism or socialism, and only believed in their own self-interest,” Ding says. “No. 2, within the cadre system—amongst the higher- and middle-level officials—there were extensive networks of corruption.”

via China’s Xi Enlists Party Recruiters in Anticorruption Effort – Businessweek.

12/09/2014

When China Cleans Its Air, Health-Care Costs Plummet – Businessweek

Beijing residents checking the hourly air-quality index online and strapping air-pollution facemasks on their children may miss the halcyon days just before the 2008 Olympics, when the city temporarily cleaned up its skies (at least, relatively speaking). But not every city in China has seen the air grow darker over the past half decade.

Unidentified emissions from a coal-fired power plant in Taiyuan, Shanxi, China, in 2007

The northern city of Taiyuan, capital of coal-rich Shanxi province, has launched several measures to reduce coal burning and emissions. Although its skies are hardly clear, they are clearer. And that has made a noticeable difference in health outcomes and health-care costs, according to a new study published in the journal Environmental Health.

Over the past decade, Taiyuan has closed several large coal-burning power plants and increased environmental monitoring of its other factories—effectively lowering the average concentration of PM 10 (particulate matter 10 micrometers in diameter or less). As a result, average PM 10 concentrations dropped more than 50 percent from 2001 to 2010.

The economic costs associated with pollution—including health-care expenses, loss of labor productivity, and premature death—correspondingly dropped more than 50 percent, according to estimates by the researchers. Specifically, the researchers correlated reduced air pollution over the course of a decade with 141,457 fewer hospital or doctor visits, 31,810 fewer hospital stays, 969 fewer trips to the emergency room, 951 fewer cases of bronchitis, and 2,810 fewer premature deaths.

via When China Cleans Its Air, Health-Care Costs Plummet – Businessweek.

11/09/2014

India and China in wary dance as Xi Jinping prepares for South Asia trip | South China Morning Post

Xi Jinping will start his first South Asia tour with a visit to Beijing’s latest investment in Sri Lanka, a US$1.4-billion port city development to include a marina and a Formula One track – all just 250km from India’s coast.

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The president’s trip to the site, next to a major Chinese-funded commercial port, will provide a vivid reminder of Beijing’s growing economic clout in India’s backyard ahead of his maiden visit to New Delhi next week.

Despite his hardline nationalist reputation, India’s Prime Minister Narendra Modi moved quickly to engage with traditional rival China after taking office in May, inviting Xi to India.

But he has also sought to stop India’s neighbours falling further into China’s embrace, choosing Bhutan and Nepal for his first foreign trips as prime minister and extending an olive branch of peace to arch-rival Pakistan.

That may not worry China too much. Modi’s close relationship with Tokyo, on the other hand, is likely to raise alarm bells in Beijing that analysts say he may be able to use to his advantage.

Indian Prime Minister Narendra Modi pictured in New Delhi earlier this month. Photo: EPA

Modi enjoys a particularly warm friendship with his Japanese counterpart Shinzo Abe, who welcomed him even as he was shunned by Western powers over claims he failed to stop deadly religious riots in Gujarat, the state he used to run.

Both India and Japan are wary of what many see as Beijing’s growing territorial assertiveness, and Washington is eager for them to step up their cooperation by way of counterweight to China.

“China is looking at India under Modi as a serious and credible partner as well as potential adversary.” POLITICAL ANALYST SHYAM SARAN

“China is concerned that we would get closer to Japan and to the US under Modi. They don’t want that to happen,” said Jayadeva Ranade, president of the Centre for China Analysis and Strategy in New Delhi.

via India and China in wary dance as Xi Jinping prepares for South Asia trip | South China Morning Post.

11/09/2014

Can Jack Ma’s Alibaba Fortune Jump-Start Chinese Philanthropy? – Businessweek

Harvard just announced its largest-ever donation: a $350 million unrestricted gift to its School of Public Health. The donor is Hong Kong-based Morningside Foundation, led by two brothers who earned their fortunes in real estate, private equity, and venture capital. One brother, Gerald Chan, earned a graduate degree from Harvard. The school will be renamed in honor of their late father as the Harvard T.H. Chan School of Public Health.

Jack Ma on July 15

Greater China is home to 358 billionaires (including 64 Hong Kong billionaires), according to the 2014 Hurun Global Rich List. Yet with a few exceptions—including the Harvard gift and Chinese tech titans’ recent fondness for the ice bucket challenge—a culture of domestic philanthropy has been relatively slow to take root. Bill Gates and Warren Buffet hosted a lavish 2010 dinner in Beijing intended to encourage the Chinese elite to embrace philanthropy, but several tycoons snubbed the Americans’ invitations and declined to open their wallets.

Now, at last, China has a powerful homegrown evangelist for philanthropy: Jack Ma. As co-founder and executive chairman of Alibaba Group, which filed paperwork last week to raise as much as  $21.2 billion in an initial public offering on the New York Stock Exchange, he is one of China’s most respected and closely watched tycoons—and he’s publicly embracing a culture of giving.

Ma joined Alibaba co-founder Joe Tsai earlier this year in establishing a personal philanthropic trust to be “funded by share options granted by Alibaba … for approximately two percent (2%) of Alibaba’s equity,” according to a statement. The trust will focus on the “environment, medicine, education, and culture.” In Ma’s words, “Alibaba was founded 15 years ago with a mission ‘to make it easy to do business anywhere’ and a set of principles and values that emphasize our responsibility to society. Giving back to society is deeply embedded in Alibaba’s culture.”

The total value of the fund will depend on the performance of Alibaba’s upcoming IPO. If the company is valued at $120 billion, or more, the charitable trust will be worth at least $2.4 billion.

via Can Jack Ma’s Alibaba Fortune Jump-Start Chinese Philanthropy? – Businessweek.

11/09/2014

The Change in China’s Hukou Policy Is Slow to Help Migrant Families – Businessweek

On July 30, China’s State Council announced plans to abolish the old residence registration permit—or hukou—that distinguished rural from urban households. The move was long overdue.

Young Chinese children attend a kindergarten set up for migrant workers in Beijing

The hukou system was enacted in 1958 as away to limit movement between the countryside and cities. At that time, the Chinese Communist Party was explicitly anti-urban and antibusiness. After economic reform began in 1978, the hukou became increasingly anachronistic as millions of migrant workers left farms and villages for new jobs in factories and private companies in the cities. Yet they were penalized because, without local household registration papers, these migrants were denied access to public health care, education, and other social services.

The new system, however, will be only a partial fix. Discrepancies between rural and urban tax collection will gradually be phased out, but access to services will still be linked to location. While smaller cities may be willing to accept newly registered residents, the governments of China’s leading metropolises—including Beijing and Shanghai—are overburdened and still actively trying to discourage new residents (other than wealthy arrivals) from putting down roots.

via The Change in China’s Hukou Policy Is Slow to Help Migrant Families – Businessweek.

11/09/2014

Despite Sluggish Economy, China Has Yet Again More Millionaires – China Real Time Report – WSJ

Perhaps the Chinese economy is doing OK after all: The country’s ranks of the rich are growing slightly faster, according to a new report.

By slightly, we mean very: one percentage point.

Still, those who track the rich point to it as an optimistic signal. At the end of 2013, there were 1,090,000 people with a net worth of more than 10 million yuan ($1.6 million) and 67,000 with more than 100 million yuan, according to the Hurun Wealth Report 2014. That’s an increase of 4% for both categories. In the previous year, the growth rate was 3% and 2%, respectively, which represented the lowest increase over the six years Hurun has compiled the report.

Hurun, which also puts together an annual list of the richest people in China, said it came up with its headcount by two methods. First, it looked at the sales of high-end real estate and cars, as well as income tax returns and other data related to wealthy individuals. Then, it rounded out its headcount by taking into account macroeconomic data like gross domestic product growth and gross national product.

So who are the new rich? Mostly private business owners, said Hurun, who make up 55% of all millionaires (up from 50% last year). The report said the wealthy typically own a personal residence worth at least 2 million yuan, multiple cars worth more than 200,000 yuan as well as 1.7 million yuan in “investable assets.”

via Despite Sluggish Economy, China Has Yet Again More Millionaires – China Real Time Report – WSJ.

11/09/2014

Tech factory workers strike in China over mooncakes, benefits | Reuters

About 16,000 workers at two subsidiaries of Taiwanese touch-screen maker Wintek Corp went on strike over holiday benefits this week in southern China in one of the biggest work stoppages this year, the Xinhua news agency reported.

A Wintek executive said the strikes started on Tuesday at subsidiary Dongguan Masstop Liquid Crystal Display Co Ltd and spread on Wednesday to Wintek (China) Technology Ltd. Each factory employs about 8,000 workers, said the executive who declined to be identified as he was not authorised to speak on behalf of the company.

The strikes ended on Wednesday and Thursday, respectively, and the company did not expect production to be affected, the executive added. He did not say how many workers had participated.

Wintek is a long-time supplier to Apple Inc, but it was not immediately clear who the factories’ main customers were. A Wintek Corp facility in the eastern city of Suzhou, near Shanghai, is on the iPhone and iPad maker’s list of 2014 suppliers, but not the factories in Dongguan.

An Apple spokesman in California said the company generally did not comment on supplier relationships beyond the list.

Six police vehicles were parked in the rain outside the gates of the Wintek factory in an industrial estate in the southern city of Dongguan on Thursday, although there were no workers in sight.

A manager surnamed Wu said: “Things have been settled now. The workers are back to work.”

China has seen a surge in the number of strikes at its factories in recent years as the economy slowed and a worsening labor shortage has shifted the balance of power in labour relations. Smartphones and social media have also helped workers become more aware than ever of the changing environment.

The largest strike in decades took place in April when about 40,000 workers halted production at a shoe factory complex in Dongguan that supplies Nike Inc, Adidas AG and other major sneaker brands. Those workers were unhappy about insufficient social insurance payments.

Workers involved in the Wintek strike told Xinhua that recruitment advertisements had offered cash bonuses equal to half of their monthly base salary on three holidays: the Dragon Boat Festival, Mid-Autumn Festival and Spring Festival.

A worker surnamed Zhang told Xinhua they were only given 100 yuan, a piece of chicken and a banana for Mid-Autumn Festival, which was on Monday. Last year each staff member received 700 yuan ($114.17) in cash and a box of traditional mooncakes.

The workers returned to work after officials explained that the downgraded holiday benefits were a reflection of the company’s relatively weak performance so far this year, the Wintek official said. Wintek incurred a loss in the first half.

via Tech factory workers strike in China over mooncakes, benefits | Reuters.

05/09/2014

Chinese woman wrongfully jailed for theft given apology and payout 25 years after | South China Morning Post

Twenty-five years after she was locked up behind bars, a Guangdong woman on Thursday received more than 650,000 yuan (HK$818,000) in compensation for being wrongfully imprisoned – in the latest case of corrective measures for miscarried justice in China.

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Bai Chunrong was sentenced to eight years in prison for theft on July 28, 1989, and served time until she was released in 1996, the Guangdong province newspaper New Express reported.

Bai filed an appeal in March 1990 but the Foshan Intermediate People’s Court upheld the conviction. There were no further details about her crime given in the court announcement.

The same court reopened the case in late March and the judge declared her innocent on the grounds of insufficient evidence.

Bai received the compensation from the Foshan court judge, who apologised to Bai for the wrongful conviction.

Bai, crying while kneeling on the floor and kowtowing to the magistrate, said: “I really thank the current court and judge for helping me get vindicated.”

Last month, in a rare acquittal, a court in southeastern Fujian province overturned the death penalty against a food hawker convicted of double murder.

via Chinese woman wrongfully jailed for theft given apology and payout 25 years after | South China Morning Post.

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