Posts tagged ‘China’

25/07/2014

Ethiopia Vies for China’s Vanishing Factory Jobs – Businessweek

Ethiopian workers walking through the parking lot of Huajian Shoes’ factory outside Addis Ababa in June chose the wrong day to leave their shirts untucked. The company’s president, just arrived from China, spotted them through the window, sprang up, and ran outside. Zhang Huarong, a former People’s Liberation Army soldier, harangued them in Chinese, tugging at one man’s polo shirt and forcing another worker’s into his pants. Amazed, the workers stood silent until the eruption subsided.

Turning Ethiopia Into China's China

Zhang’s factory is part of the next wave of China’s investment in Africa. It started with infrastructure, especially the kind that helped the Chinese extract African oil, copper, and other raw materials to fuel China’s industrial complex. Now China is getting too expensive to do the low-tech work it’s known for. African nations such as Ethiopia, Kenya, Lesotho, Rwanda, Senegal, and Tanzania want their share of the 80 million manufacturing jobs that China is expected to export, according to Justin Lin Yifu, a former World Bank chief economist who teaches economics at Peking University. Weaker consumer spending in the U.S. and Europe has prompted global retailers to speed up their search for lower-cost producers.

Shaping up employees is one part of Zhang’s quest to squeeze more profit out of Huajian’s factory, where wages of about $40 a month are less than 10 percent of what comparable Chinese workers may make. Just as companies discovered with China when they began manufacturing there in the 1980s, Ethiopia’s workforce is untrained, its power supply is intermittent, and its roads are so bad that trips can take six times as long as they should. “Ethiopia is exactly like China 30 years ago,” says Zhang, 55, who quit the military in 1982 to make shoes from his home in Jiangxi province with three sewing machines. He now supplies such well-known brands as Nine West and Guess (GES).

Almost three years after Zhang began his Ethiopian adventure at the invitation of the late Prime Minister Meles Zenawi, he says he’s unhappy with profits at the plant, frustrated by “widespread inefficiency” in the local bureaucracy, and struggling to raise productivity from a level that he says is about a third of China’s. Transportation and logistics that cost as much as four times what they do in China are prompting Huajian to set up its own trucking company, according to Zhang. That will free Huajian from using the inefficient local haulers, but it can’t fix the roads. It takes two hours to drive 30 kilometers (18 miles) to the Huajian factory from the capital along the main artery. Oil tankers and trucks stream along the bumpy, potholed, and at times unpaved road. Goats, donkeys, and cows wander along, occasionally straying into bumper-to-bumper traffic. Minibuses and dented taxis, mostly blue Ladas from Ethiopia’s past as a Soviet ally, weave through oncoming traffic, coughing exhaust.

via Ethiopia Vies for China’s Vanishing Factory Jobs – Businessweek.

25/07/2014

Consumers Drive Chinese Internet But Enterprise Use Lags – China Real Time Report – WSJ

By some measures, China’s Internet dwarfs that of the United States.

China has the world’s largest Internet population with 618 million users, well over twice as many as in the U.S. China also has the world’s largest online retailing industry, with e-commerce giants like Alibaba that sprawl far larger than the likes of eBay EBAY +1.08%.

But a new study by the McKinsey Global Institute argues that enterprise use of the Internet is still lagging in China and that the country’s businesses will need to catch up in this area to unlock economic gains.

“The Web is just beginning to penetrate many Chinese businesses – and the most sweeping changes are yet to come,” said the report, which was published this week.

MGI estimates that increased adoption of Web technologies like cloud computing and big data by China’s enterprises can add 0.3 to 1.0 percentage points to China’s GDP growth rate. By 2025, it could translate to annual economic gains of between 4 trillion yuan ($645.5 billion) and 14 trillion yuan, the research firm said.

China’s Internet has outpaced the U.S. among consumers. Alibaba’s online shopping platforms Taobao and Tmall have nearly twice as many active buyers than the U.S. site eBay. Jonathan Woetzel, one of the MGI study’s authors and a partner of the firm, told The Wall Street Journal that Chinese consumers spend more time shopping online and make more purchases than their American counterparts.

“China’s consumer generation has shown up at the same time as the Internet,” he said. “They have the money, but the offline shopping platforms like malls haven’t been built up fast enough to accommodate their expectations and needs. So more of them shop online.”

But when it comes to China’s businesses, they still lag in use of Web technologies, he says. The typical Chinese company spends 2% of revenue on IT, half of the international average, according to an MGI survey of CIOs. The enterprise cloud adoption rate in China is 21% compared to 55%-63% in the U.S.

Some sectors that stand the most to benefit in China include the financial services, health care and automotive industries, MGI says. Big data can help financial firms manage risks and reduce non-performing loans, while remote monitoring of chronic diseases can save costs for the health care industry.

via Consumers Drive Chinese Internet But Enterprise Use Lags – China Real Time Report – WSJ.

24/07/2014

China plans railway to India, Nepal borders by 2020 | Reuters

China plans to extend a railway line linking Tibet with the rest of the country to the borders of India, Nepal and Bhutan by 2020 once an extension to a key site in Tibetan Buddhism opens, a state-run newspaper reported on Thursday.

Tibetan railway bridge

Tibetan railway bridge (Photo credit: Wikipedia)

China opened the railway to Tibet’s capital Lhasa in 2006, which passes spectacular icy peaks on the Tibetan highlands, touching altitudes as high as 5,000 meters (16,400 feet) above sea level, as part of government efforts to boost development.

Critics of the railway, including exiled Tibetans and rights groups, say it has spurred an influx of long-term migrants who threaten Tibetans’ cultural integrity, which rests on Buddhist beliefs and a traditional herding lifestyle.

The Global Times, published by the ruling Communist Party’s official People’s Daily, said that an extention to Shigatse, the traditional seat of Tibetan Buddhism’s second-highest figure, the Panchen Lama, would formally open next month.

That link is scheduled for its own extension during the 2016-2020 period to two separate points, one on the border of Nepal and the other on the border with India and Bhutan, the newspaper cited Yang Yulin, deputy head of Tibet’s railways, as saying, without providing details.

China has long mooted this plan, but the difficulty and expense of building in such a rugged and remote region has slowed efforts.

Tibet is a highly sensitive region, not just because of continued Tibetan opposition to Chinese control, but because of its strategic position next to India, Nepal and Myanmar.

The Chinese announcement coincides with a drive by India, under its new prime minister Narendra Modi, to consolidate its influence with its smaller neighbors.

via China plans railway to India, Nepal borders by 2020 | Reuters.

23/07/2014

China’s Next Great Water Project Uproots More Than 330,000 – Businessweek

China’s track record for forced relocations that accompany large infrastructure projects is dismal. Many of the 1.3 million people relocated during the construction of Three Gorges Dam in the 1990s and early 2000s were moved from ancestral villages and farmland, where they could profitably grow crops, to newly (often shoddily) built apartments, with no job training or employment help. The result: vanished earnings and increased social dislocation.

A child standing next to his family's possessions as residents in central China's Henan province make way for the South-to-North Water Diversion Project in 2010

So far, it appears that the relocation of more than 330,000 people during the ongoing construction of the South-to-North Water Transfer Project is somewhat better planned, although still deeply flawed. Beijing News looked at the fate of approximately 70,000 people relocated from homes in Hubei Province for the construction of the middle leg of the project, which aims to redirect water from China’s lush south to its arid north. The local government seems to be more aware of the importance of protecting migrants’ livelihoods, but that awareness hasn’t yielded simple solutions.

“It isn’t easy to tell people they must leave their homes,” Gufang Yan, a staffer at the Nanzhang Bureau of Immigration, told the newspaper. “Nobody gave us information about how to find a job; we did not know anything about recruitment,” said a man named Chen Yan, who was relocated for the project four years ago. He eventually managed to find work near his new home repairing cars, and he learned on the job.

via China’s Next Great Water Project Uproots More Than 330,000 – Businessweek.

22/07/2014

China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan | Reuters

The latest food scandal in China is spreading fast, dragging in U.S. coffee chain Starbucks, Burger King Worldwide Inc and others, as well as McDonald’s products as far away as Japan.

The logo of a Starbucks coffee shop is seen in New York June 25, 2013. REUTERS/Brendan McDermid

McDonald’s Corp and KFC’s parent Yum Brands Inc apologized to Chinese customers on Monday after it emerged that Shanghai Husi Food Co Ltd, a unit of U.S.-based OSI Group LLC, had supplied expired meat to the two chains.

On Tuesday, Starbucks said some of its cafes previously sold products containing chicken originally sourced from Shanghai Husi, a firm that was shut down on Sunday by local regulators after a TV report showed staff using expired meat and picking up meat from the floor to add to the mix.

A Tokyo-based spokesman at McDonald’s Holdings Co (Japan) Ltd said the company had sourced about a fifth of its Chicken McNuggets from Shanghai Husi and had halted sales of the product on Monday. Alternative supplies of chicken have been found in Thailand and China, he added. The company’s shares briefly fell as much as 1.4 percent to a 15-month low before closing down 0.4 percent.

China’s food watchdog said it ordered regional offices to carry out spot checks on all firms which had used Shanghai Husi products, and would inspect all of parent OSI’s sites around China to see if enough has been done to ensure food safety. It said the case could be handed over to the police.

The regulator’s Shanghai branch said in a statement on Tuesday it had demanded production, quality control and sales records from OSI. It added it already ordered McDonald’s to seal over 4,500 boxes of suspected meat products and Yum’s Pizza Hut to seal over 500 boxes of beef.

Fast-food chain Burger King and Dicos, China’s third-ranked fast food chain owned by Ting Hsin International, said they would remove Shanghai Husi food products from their outlets. Pizza chain Papa John’s International Inc said on its Weibo blog that it had taken down all meat products supplied by Shanghai Husi and cut ties with the supplier.

via China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan | Reuters.

21/07/2014

China and the Arctic: Polar bearings | The Economist

CHINA does not loan out its pandas to just anyone, so a deal in April for two of the bears to head to Copenhagen zoo raised some eyebrows in Scandinavia. Some commentators suggested that this was all about the Arctic and especially about Greenland, which Denmark partly administers, and its mineral resources.

Certainly China is interested in the Arctic. On July 11th its icebreaker, Xue Long (“Snow Dragon”), embarks on the country’s sixth Arctic expedition, with 65 scientists on board. A new 1.3 billion yuan ($210m) icebreaker will soon be launched, and last December a China-Nordic research centre was opened in Shanghai.

New freight opportunities interest China along the Northern Sea Route (NSR) as ice recedes. In 2010 four ships took the route. Last summer 71 vessels did so. Each ship that takes the route must, at certain points, be accompanied by an ice-breaker, so it is unclear how soon the NSR will be suitable for mass transit, if at all.

Some climate models predict the Arctic Ocean could be ice-free in summer by the middle of this century. The route cuts the distance between Rotterdam and Shanghai by 22% and Yang Huigen of the Polar Research Institute of China has predicted that 5-15% of China’s international trade will use the NSR by 2020. But Linda Jakobson, of the US Studies Centre at the University of Sydney, says that is a “rather optimistic assessment” and that talk of the NSR as a new Suez Canal is overblown. Weather conditions and environmental sensitivities will make the route a difficult one.

As for energy, China is one of the biggest investors in mining in Greenland. A deal with Rosneft, a state-controlled Russian company, will explore offshore Arctic fields for oil. But the undersea resources in the Arctic are largely within the Exclusive Economic Zones of the littoral states (notably Russia), so if China wants to look for energy it will have to do so jointly.

Meanwhile, other relationships have thawed. A rift with Norway over the awarding of the Nobel peace prize to Liu Xiaobo, a detained Chinese activist, is healing. But the new Chinese presence is not without concerns. Huang Nubo, a tycoon, recently bought 100 hectares (250 acres) of land in northern Norway and has bid for a plot on the island of Svalbard, where China has a research station. He aims to develop a resort for Chinese tourists. Mr Huang had similar plans in Iceland in 2011, but local protests quashed them. A Norwegian newspaper has called him a “suspected imperialist”. Perhaps Norway is in need of some pandas.

via China and the Arctic: Polar bearings | The Economist.

21/07/2014

To No End: Why China’s Corruption Crackdown Won’t Be Stopping Soon – China Real Time Report – WSJ

One major question hovering over China’s anti-corruption campaign – already the longest the country has ever seen — is when it’s going to wind down.

According to anti-corruption czar Wang Qishan, who briefed fellow officials on the campaign last week (in Chinese), it won’t be any time soon.

And the major reason for that may well be that Beijing hasn’t yet figured out how to end it.

Wang laid out the anti-corruption strategy in unusual detail during these meetings, supplying a road map that outlined where the campaign had been and where it’s now headed (in Chinese).

Beijing’s anti-graft crusade isn’t just a one-off initiative, but an extended battle which began last year, taking down, as President Xi promised, both high-ranking “tigers” and lower-level “flies.”

And it’s accelerating.  According to an analysis that appeared on the website of the People’s Daily earlier this month, from January to May this year, Wang’s inspection teams disciplined 62,953 people, an increase of 34.7% over the same period the previous year (in Chinese).

In his briefing last week, Wang conceded that the campaign didn’t start all that well.  Indeed, in the early stages of the campaign, Wang said, the sense among his inspection teams was that corruption was buried so deep within China’s political marrow that it couldn’t be defeated, only deterred from growing.  Party officials were only too comfortable with political business as usual, where bribes and personal connections overrode considerations of actual talent when it came to selecting and promoting cadres.

“Some localities and departments, as well as some party organizations saw the pursuit of honest government as not their main responsibility,” Wang said, adding that the only option at that point was to “not allow corrupt elements to gain a foothold” in the few institutions where corruption was not already omnipresent.

The tide turned, he said, when cadres were finally given political cover by Beijing to report on their comrades engaging in corruption, especially those selling access to government officials and offering bribes for promotion.  That routine had become worrisome to Beijing because unqualified and immoral officials were becoming policy-makers.

Moreover, Wang argued, by focusing on specific areas known to be rife with graft—such as land development and real estate projects, mining rights, and public welfare funds—inspectors showed skeptics and potential targets that this campaign was a serious effort to rollback misconduct.

So what’s next?

That’s the tricky part.  Punishing corruption is one thing; preventing its reemergence could be a far-greater problem.  As one Chinese analyst admitted despondently in the pages of the People’s Daily (in Chinese), unless the system is thoroughly reformed, there’s a good chance that “the rot will come back.”

Continuing to press hard against corruption seems to make sense if Beijing’s expanding fight against graft is finally starting to show success and developing the party’s legitimacy as a problem-solver on issues that matter to the masses. But there’s also concern about just how much longer the campaign can be maintained when, as the analysis above notes, there is “a danger of overdoing something, leaving some people in a constant state of anxiety.”

Fear is evidently freezing some officials from becoming more actively engaged in supporting Xi’s call for changes in how the government operates—a passivity that has led to complaints in the Party media (in Chinese).

And there’s a greater danger:  That this effort to tear down corruption is simply dealing with the existing problems and not doing anything about building a new way of decision-making.

As a leading Chinese commentator on the current leadership’s policies put it in the same People’s Daily essay, the real need is “to create a good political environment, allowing officials to devote oneself, heart and soul, to do things, and not focus on the small circle of relationships one has with one’s superiors, doing always what one is told to do.”

That’s an attractive vision, but one that would require a major restructuring of politics in China.

via To No End: Why China’s Corruption Crackdown Won’t Be Stopping Soon – China Real Time Report – WSJ.

20/07/2014

Seven People Attempt Suicide Protesting Illegal Land Seizures – Businessweek

On Wednesday morning at about 8:10 a.m., seven people who had traveled together to Beijing from southeastern Jiangsu province met outside the offices of the China Youth Daily newspaper. They carried with them black bottles containing pesticides, which they opened and quickly drank.

Seven People Attempt Suicide Protest in Beijing Over Illegal Land Seizures

In rural China, consuming pesticides is one of the most common methods of suicide; the seven chose this as an act of desperate protest. Petition papers that lay askew, near where the five men and two women fell unconscious on the pavement, indicate that the group had come to Beijing to petition national authorities to intervene over land seizures and forced demolitions in their hometown.

Photos of the seven lying on the ground, all wearing white t-shirts, were distributed widely over Chinese social media. Soon police and ambulances arrived, and the victims were taken to local hospitals. According to China newspaper reports, they remained alive and in stable condition as of Thursday evening.

via Seven People Attempt Suicide Protesting Illegal Land Seizures – Businessweek.

20/07/2014

China, Brazil close plane, finance, infrastructure deals | Reuters

In a raft of energy, finance and industry accords signed before presidents Xi Jinping and Dilma Rousseff, the two nations agreed to join forces to build railways to help Brazil cut its infrastructure deficit and feed China’s appetite for commodities.

English: Official photo of President Rousseff,...

English: Official photo of President Rousseff, taken by official photographer, at Alvorada Palace on January 9th, 2011. Français : Photo de Dilma Rousseff, prise par un photographe officiel, dans le Palácio da Alvorada le 9 janvier, 2011. Português: Foto oficial da presidente Dilma Rousseff feita no Palácio do Alvorada no dia 9 de janeiro de 2011 pelo fotografo oficial. (Photo credit: Wikipedia)

Trade between China and Brazil soared to $83.3 billion last year from $3.2 billion in 2002, with iron ore, soy and oil making up the bulk of Brazilian exports, making China the South American nation’s biggest trade partner.

China’s Eximbank extended a $5 billion credit line to Vale to buy ships and equipment from Chinese companies, but there was no mention of a solution to an impasse over China’s refusal to allow giant, bulk iron ore carriers used by Vale SA to dock at Chinese ports.

In a sign of deepening financial ties between the two members of the BRICs bloc of emerging nations, the China Construction Bank formalized acquisition of 72 percent of Brazilian mid-size lender Banco Industrial e Comercial SA, a 1.62 billion real deal agreed in October.

Xi visited Brasilia after a BRICS summit that set up a new $100 billion development bank, to be based in Shanghai, that will fund infrastructure projects, providing developing nations with an alternative source of funding to Western-dominated multilateral financial institutions.

via China, Brazil close plane, finance, infrastructure deals | Reuters.

20/07/2014

China appoints special envoy for Afghanistan | Reuters

China’s Foreign Ministry said on Friday that it had appointed a special envoy for Afghanistan, underscoring Beijing’s concerns that the withdrawal of NATO troops will leave a hotbed of militancy on its doorstep.

English: US Army map of Afghanistan -- circa 2...

English: US Army map of Afghanistan — circa 2001-09. (Photo credit: Wikipedia)

Sun Yuxi, a former ambassador to both Afghanistan and India, has been named to the new position and will have “close communication” with Afghanistan and other relevant parties, the ministry said in a statement.

“China and Afghanistan are traditional friendly neighbors. China pays great attention to developments in Afghanistan and is committed to deepening both countries’ strategic partnership, and so decided to appoint a special envoy,” it added.

via China appoints special envoy for Afghanistan | Reuters.

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