Archive for December, 2012

20/12/2012

* Amid China tensions, Southeast Asia looks to India

ASEAN nations turning to India to counter-balance China’s aggressive position on territorial disputes.

Reuters: “Southeast Asian leaders are expected to lay out a vision for closer cooperation with India on security and the economy at a high-level gathering in New Delhi at a time of tension with China in the potentially oil- and gas-rich South China Sea.

ASEANIndian flagThe meeting is a ceremonial summit to mark 20 years of cooperation with India and will not include detailed negotiations on regional issues, India’s Foreign Minister Salman Khurshid told Reuters.

But ministry officials said the leaders would also produce a statement which is expected to reiterate a commitment to freedom of navigation, a hot issue because of territorial conflicts in the South China Sea.

Some ASEAN countries contest claims by China in the waters, making it the biggest potential flashpoint in the region. The United States has called for calm, but some are also looking to India, the other regional heavyweight, to get involved.

“They want India to play a larger role. Those concerns are only increasing given the uncertain situation that is emerging,” said C. Raja Mohan, a strategic affairs expert at the Observer Research Foundation think-tank.

For India, improved relations with Southeast Asia will give it entry into one of the fastest-growing economic regions in the world and a source of raw materials needed for its own growth.

Poor there are poor transport links between India and the nations to its southeast, and constraints like India’s tiny diplomatic corps – similar in size to New Zealand’s – mean India trails China in relations with the region.

Trade between India and the 10-member ASEAN was up to $80 billion last year compared with $47 billion in 2008. An agreement on free trade in services and investment could be signed at the New Delhi meeting.

But India’s role in the region is dwarfed by that of China, which enjoyed trade worth a record $363 billion with ASEAN countries in 2011 in an already established free trade area.

“What we need is far greater connectivity,” Khurshid said in an interview with Reuters, mentioning roads, railways and flights as areas needing work. He described a 10-year plan to double the number of diplomats to reflect India’s global ambitions.”

via Amid China tensions, Southeast Asia looks to India | Reuters.

20/12/2012

* Land acquisition bill deferred till Budget session

The poor landowners in India have to wait a bit longer.

The Hindu: “The controversial Land Acquisition Bill is set for further delay as its consideration was deferred on Tuesday by the Lok Sabha till the next session bowing to the wishes of Opposition members.

Farmers, adivasis, dalits and other communities, whose lives are being impacted by the indiscriminate and blanket use of Land Acquisition Act 1894, on a dharna in New Delhi on Aug. 22, 2012. A file photo: V.Sudershan.

Parliamentary Affairs Minister Kamal Nath said the Bill will be taken up for consideration as the first measure in the budget session.

His statement came following pleas by BJP member Rajnath Singh, Mulayam Singh Yadav (SP), Basudeb Acharia (CPI-M) and Saugata Roy (TMC) for more time to discuss the provisions of the Bill which will have a wide ranging impact on farmers and industries.

The Bill provides for a fair compensation to land owners in both rural and urban areas with the stipulation that consent of 80 per cent of the people for acquiring land for private industry is necessary.

Despite Sonia Gandhi-led National Advisory Council pushing for the law for long, the Bill has been hanging fire for sometime. It was referred to a GoM in the wake of differences in the Cabinet over certain provisions in the Bill, which has been described by Rural Development Minister Jairam Ramesh as a balanced one.

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 was introduced in Parliament in September last year and was referred to a Parliamentary Standing Committee which submitted its recommendations in May.”

via The Hindu : News / National : Land acquisition bill deferred till Budget session.

20/12/2012

* Foxconn Workers Say, ‘Keep Our Overtime’

An unintended consequence of enforcing ‘fair’ worker treatment – reduced income for migrant workers more than willing to work excessive overtime!

WSJ: “Nets to catch would-be jumpers still sag ominously from Hon Hai Precision Industry Co.’s  buildings.

But two years after a spate of suicides at the Apple Inc.  supplier’s campus here, workers are more concerned about another measure designed to protect them: limits on overtime.

Hon Hai in March said it would change its workplace practices after an audit by a U.S.-based nonprofit worker-safety group found widespread breaches of Chinese law and Apple policies at three plants, including the excessive use of overtime. Hon Hai responded by pledging that it would bring its overtime policies into alignment with Chinese law by next year, allowing workers to work no more than nine hours of overtime a week. The Taiwan-based company, also known as Foxconn, pledged to improve health and safety conditions at its campuses across China as well.

But more than 15 workers on the Shenzhen campus said in interviews that they work more than the legal limit of nine overtime hours a week. A majority said they work 10 to 15 overtime hours and would prefer more, having left their distant homes to make money in this southern Chinese boomtown on the border of Hong Kong.

“I think a lot of the more experienced people from the technology production lines will leave” if the policy to limit overtime goes into effect, said a worker who asked to be identified only by his surname, Ma. “We don’t know how much our salary will go up. But after being here three years, I don’t have much incentive to stay, since my wage probably won’t rise much.”

Mr. Ma, who earned roughly 3,400 yuan ($540) a month including overtime when he arrived three years ago, said he now earns about 5,000 yuan. To make extra money, the 26-year-old buys used car parts cheaply on an e-commerce website and then resells them.

Basic pay at the Shenzhen Longhua plant is 2,200 yuan, before overtime.

Keeping Mr. Ma and its 1.5 million other Chinese workers satisfied, while manufacturing complex, time-sensitive consumer electronics profitably is becoming more challenging for Hon Hai. The company’s labor costs will rise by roughly $1.4 billion when the new labor policies roll out next year, according to a Bernstein Research estimate. Hon Hai’s operating profit margin had declined since the second quarter of 2010 because of rising wages. The figure rose to 3.4% in this year’s third quarter from 2.2% a year earlier as the company raised what it charged customers, analysts said.

Hon Hai isn’t alone in facing such challenges. Employee protests over working conditions and the willingness of staff to change employer for more pay have forced electronics manufacturers to raise wages throughout China. Hon Hai and other companies have moved some operations to countries such as Vietnam and Mexico, where costs for labor or transportation to end markets are lower.”

via Foxconn Workers Say, ‘Keep Our Overtime’ – WSJ.com.

17/12/2012

* Testing time for China’s migrants as they demand access to education

If 1/3 of the population of Beijing consists of migrant workers, then the city authority better watch out. Sooner rather than  later the anger and frustration will erupt into something very violent.  That applies equally to central government unless it reforms the Hukou system that is at least two if not three decades out-of-date.

SCMP: “Dozens of frustrated parents crowded into a Beijing office, surrounding an education official and brandishing copies of the constitution to demand their children be allowed to take an exam.

china_gaokao.jpg

Mothers and fathers around the world fight to send their children to the best schools they can, in the hopes of drastically improving their futures.

But China’s migrant families are victims of a decade-old residency system that denies urban incomers equal access to advantages from jobs and healthcare to the right to buy a home or car – and education.

Chinese university admission is based on a single test, the “gaokao”.

Cities such as Beijing that host China’s best universities – and large incomer populations – only allow those with official residency permits, or “hukou”, to take their exam and benefit from preferential quotas for places.

Around a third of the capital’s 20 million population are migrants, but many of their families become split by rules requiring their children to go to their “home” provinces – even if they have never lived there – sometimes for years, to study for and take the test, which varies by location.

Even then, because of the quota system they will have to score higher to win places at top schools.

“Either you let the country share in your education resources or you accept the reality that outsiders are stuck in your education gutter,” said Du Guowang, a 12-year Beijing resident from Inner Mongolia.

He and dozens of parents packed Beijing’s education bureau each week hoping – in vain – it would let their children take next year’s exam. But registration closed last week.

“This will directly affect their studies and their future prospects so of course it’s unfair,” said Xu Zhiyong, a prominent legal activist who has assisted the parents.

Over the past three decades more than 230 million people – four times the entire population of Britain – have moved to China’s cities in a phenomenal mass migration.

The hukou system restrictions date back to 1958, when the government sought, among its many controls, to designate where people should farm in rural areas, and work or live for those in towns.

It has loosened the rules in recent decades to encourage urbanisation, and acknowledges the need to better accommodate newcomers – especially as resentment mounts over China’s widening rural-urban inequality.

At a key gathering of the ruling Communist Party last month, President Hu Jintao urged officials to “accelerate” hukou reform and work to “ensure that all permanent urban residents have access to basic urban public services”.

But bigger cities are less willing to share residency or benefits, fearing doing so would burden their already strained resources and spur a new influx.

Some point to congested roads and overcrowded hospitals to argue that cities cannot handle larger loads.

But critics say the system is discriminatory.

Full reform would need years, but should begin sooner to defuse resentment, said Wang Zhenyu, deputy director of a public policy research centre at China University of Political Science and Law.

“From the basics like education and healthcare to social security to employment to buying a home or car, hukou-based discrimination covers every aspect,” he said. “Your hukou will affect you your entire life.””

via Testing time for China’s migrants as they demand access to education | South China Morning Post.

10/12/2012

* China wealth gap continues to widen, survey finds

This is the kind of disparity that is most worrying to the Party. Unless it gets the support of the majority, including the poor, its mandate is suspect.

SCMP: “The chasm between China’s rich and poor has widened to alarming levels, according to survey results released by the Survey and Research Centre for China Household Finance.

china-economy-property_mrr328_23611263.jpg

The survey, released on Sunday, reported a rise in China’s Gini coefficient, a key yardstick of income or wealth inequality, to 0.61 in 2010, the latest year for which there is data on China.

That number is significantly higher than the global average of 0.44 and 50 per cent above the “risk level” for social unrest, the Beijing Times reported.

The figure was 0.56 for urban households and 0.60 for rural households.

Measured on a scale of 0 to 1, a Gini coefficient of 0 represents perfect equality in which everyone has the same income, and 1 represents maximal inequality in which just one person holds all the wealth.

Since China first published data on the Gini-coefficient in 2000, the official figure has stayed level at 0.412. In 2005, the World Bank data put the figure at 0.425, the last year it published a Gini index for the country.

Li Shi, executive dean of Beijing Normal University’s China Institute of Income Distribution, who compiled his own Gini survey in 2007, told Bloomberg News in September that a poll of 20,000 households gave an index of 0.48.

“A high Gini coefficient is a common phenomenon in the process of rapid economic development. It is the natural result of the market allocating resources efficiently,” said Gan Li, the director of the research centre, at a briefing in Beijing.

“Relying on market forces alone can’t narrow the gap so China must change the structure of income distribution and rely on massive fiscal transfers to narrow the yawning disparity.””

via China wealth gap continues to widen, survey finds | South China Morning Post.

10/12/2012

* Defiant villager leaves developers stumped over gravesite

Having seen the success of ‘nail house’ resisters in gaining better compensation, we now have ‘nail graves’. Wonder what will come next.

SCMP: “A villager refusing to concede to a property developer’s demands to move a family gravesite off a piece of land left construction workers no choice but to dig around the grave, leaving behind a bizarre sight that has since spread on social media.

china-society-property-nail_grave_wh426_32901317.jpg

The solitary grave, which now sits on a mound of earth 10 metres off the ground in the middle of a construction site in Taiyuan, Shanxi province, has been given the term “nail grave” by netizens.

The term is a play on “nail house”, which was coined by developers for homes belonging to people – “stubborn as nails” – who refused to move even after being offered compensation.

Media reports speculate that developers had offered to pay about one million yuan (US$160,400) to move the grave and headstone.

The construction site, which once served as a public graveyard for local villagers, is giving way to a residential complex expected to be completed in April.

Since construction started in 2009, most villagers had already moved their family’s graves after compensation agreements with the developer.

In the face of China’s rapid economic development, Chinese property developers have been meeting much greater public resistance to what many see as forced land-grabs. Most are compensated with amounts less than their property’s net worth.

“Nail graves are an inevitable product of our country’s progress…the souls of the dead can not rest in peace,” wrote one blogger on Sina Weibo, China’s main microblogging site.

Although China has long encouraged cremation due to an alleged shortage of land for burials, ancestors are traditionally held in deep respect and many in the countryside continue to construct tombs in accordance with culture.

A similar incident occurred last month when authorities from the city of Zhoukou, Henan province, were forced to stop a campaign to clear graves for farmland after the demolition of more than two million tombs sparked an outcry across the country.”

via Defiant villager leaves developers stumped over gravesite | South China Morning Post.

10/12/2012

* Uproar in Rajya Sabha over Wal-Mart lobbying disclosure; opposition seeks probe

Retail entry into India; two steps forward, one step back?

Times of India: “The issue of FDI in retail came to haunt the government again in Parliament with a united opposition demanding an inquiry and reply from Prime Minister Manmohan Singh on reports of Wal-Mart spending huge money to lobby for entry into the Indian market.

Forcing two adjournments in the Rajya Sabha before lunch, members from BJP, CPM, CPI, SP, JD-U, Trinamool Congress, AGP and AIADMK said the measure should be withdrawn as “corruption” has come to fore now because lobbying is illegal in India.

Raising the issue during Zero Hour, Ravishankar Prasad (BJP) said apprehensions were raised earlier also about Wal-Mart spending huge money to lobby for entering the Indian market, which has now been proved true.

“Wal-Mart has in its lobbying disclosure report to the US Senate said it has spent Rs 125 crore on lobbying and $ 3 million have been spent in 2012 itself for entering the Indian market.

“Lobbying is illegal in India. Lobbying is a kind of bribe. If Wal-Mart has said that hundreds of crores of rupees were spent in India, then it is a kind of bribe. Government should tell who was given this bribe. This raises a question mark on the implementation of FDI in retail,” Prasad said.

He was supported by members from other opposition parties with TMC leader D Bandopadhyay waving a newspaper report and CPM member P Rajeeve asking for an “independent inquiry” into the whole episode alleging that there are some reports saying Wal-Mart invested money even before FEMA was amended.

“This is bribery,” he said as the opposition members shouted slogans in favour of withdrawing FDI.

The opposition was reacting to media report that global retail giant Wal-Mart — waiting for years to open its supermarkets in India — had been lobbying with the US lawmakers since 2008 to facilitate its entry into the highly lucrative Indian market.

via Uproar in Rajya Sabha over Wal-Mart lobbying disclosure; opposition seeks probe – The Times of India.

10/12/2012

* As China’s clout grows, sea policy proves unfathomable

This analogy is most interesting. One wonders if it is a sign of “the mess China’s foreign policy is” or something much cleverer: like letting Hainan Province appear to be the instigator. If all goes well, central government ratifies the policy and instead of provincial police boats, Chinese naval vessel enter the fray.  But if the uproar continues and grows in both volume and participation well beyond the South China Sea, central government disavows itself and ‘reprimand’s Hainan Province for over stepping its mandate. We will see within the next few weeks which it will be. But I’m not taking any bets!

Reuters: “Imagine if the U.S. state of Hawaii passed a law allowing harbor police to board and seize foreign boats operating up to 1,000 km (600 miles) from Honolulu.

A Chinese marine surveillance ship is seen offshore of Vietnam's central Phu Yen province May 26, 2011 and released by Petrovietnam in this May 29, 2011 file handout photo. REUTERS-Handout-Files

That, in effect, is what happened in China about a week ago. The tropical province of Hainan, home to beachfront resorts and one of China’s largest naval bases, authorized a unit of the police to interdict foreign vessels operating “illegally” in the island’s waters, which, according to China, include much of the heavily disputed South China Sea.

At a time when the global community is looking to the world’s second-biggest economy and a burgeoning superpower for increasing maturity and leadership on the international stage, China’s opaque and disjointed foreign policy process is causing confusion and escalating tensions throughout its backyard.

Vietnam and the Philippines, which claim sovereignty over swathes of the South China Sea along with Brunei, Malaysia and Taiwan, have issued verbal protests against the Hainan rules.

India, which jointly conducts some oil exploration with Vietnam in the South China Sea, said last week it was prepared to send navy ships to the region to safeguard its interests. And the United States has publicly asked Beijing for clarification as to what, if anything, the new rules mean — thus far to no avail.

“It is really unclear, I think, to most nations (what the regulations mean),” U.S. Ambassador to Beijing Gary Locke told Reuters last week. “Until we really understand what these things are, there is no way to comment. First we need clarification of the extent, the purpose and the reach of these regulations.”

The fact that a provincial government can unilaterally worsen one of China’s most sensitive diplomatic problems highlights the dysfunctionality, and potential danger, of policymaking in this arena, analysts say.

“It shows what a mess Chinese foreign policy is when it comes to the South China Sea,” said a Western diplomat in China, speaking on condition of anonymity.

According to a report by the International Crisis Group (ICG) earlier this year, no fewer than 11 government entities — from the tourism administration to the navy — play a role in the South China Sea. All, the ICG said, have the potential to take action that could cause diplomatic fallout.

via Analysis: As China’s clout grows, sea policy proves unfathomable | Reuters.

10/12/2012

* On the brink of gunboat diplomacy

It is truly ironic that China, the nation who suffered from ‘gunboat diplomacy 170 years ago, is apparently adopting the same measures against its smaller and weaker neighbours. If, as a result, we see a resurgence of Japanese militarism, China will only have itself to blame. What is worrying is that amongst leader Xi’s recent pronouncements since becoming head of the Party is the recurrent term ‘nationalism’.  This can mean something innocent such as resuming China’s global pre-eminence which it had until 200 years ago or something more sinister. Let’s hope it is the former.

Inquirer Opinion (Philippines): “The past four weeks saw the swiftest escalation in recent years of tensions over the territorial disputes between China and its neighbors in the Asia-Pacific.

China Gunboat Diplomacy

The tensions spiraled in late November when the province of Hainan, in the southern coastal region of China, issued an imperial-sounding  edict that its so-called lawmaking body had authorized its police patrol boats to board and search foreign ships of any nationality that illegally enter what it considers Chinese territories in the South China Sea. The plan was announced to take effect on short notice: on Jan. 1.

The edict caused considerable alarm among China’s smaller neighbors, including the Philippines, Vietnam, Malaysia, Brunei, and Taiwan, all of whom have overlapping claims on islands in portions of the South China Sea, which China has claimed as exclusively belonging to it on the strength of ancient maps. It also caused consternation among other world powers such as the United States and India, which do not have territorial claims in the South China Sea, which is the shortest route between the Pacific and Indian Oceans and through  which more than half of the globe’s oil tanker traffic passes. The concern of the United States and India, both of which have powerful navies to challenge China’s aggressive assertion of its hegemonic ambitions, involves freedom of navigation and trade routes in the entire China Sea.

The new rules emanating from Hainan will allow its local police—not China’s navy—to seize control of foreign ships that “illegally enter” Chinese waters and order them to change course. The determination of what is illegal is left entirely in the hands of the Hainan authorities. What has affronted the rest of the world is this arbitrary exercise by China to enforce its territorial claims while intimidating its weaker neighbors with threats of its expanding naval power.

The rules shocked China’s neighbors so powerfully because these were issued, not by a democratic political system, but by a provincial government, and was addressed to rival claimants of disputed territories in both the South China Sea and the East China Sea, most of which are democracies. These rival claimants are the Philippines, Vietnam, Malaysia, Brunei, and Taiwan.

The Hainan decision empowering its border police to intercept foreign ships sailing in waters claimed by China as its territory, which also overlaps territories in the South China Sea, affronts other claimants because it is seen as condescending and treating them as vassal states of the suzerain province.

There are now questions raised over whether the new rules were handed down at the instigation of the central Chinese government in Beijing or were initiated by the Hainan provincial government. Whatever is the source of the initiative, the new rules have galvanized countries affected by it to call for a clarification. The rules have accelerated the spiraling of tensions close to a flashpoint, of armed confrontation between Chinese gunboats and those of smaller countries whose ships are being intercepted even in waters claimed by them.

Under the new rules, Hainanese patrols are to prowl the seas far beyond the “baseline” of China’s 12-nautical-mile zone, which is allowed archipelagic countries. The Philippines has joined other nations in a coalition calling for clarification. A report in the Wall Street Journal said experts were unclear how the rules would be applied in practice. According to the report, Wu Sichun, the director of the foreign affairs office of Hainan province, who is also president of the National Institute for South China Sea, gave a narrow interpretation of the regulations.

He said the main purpose was to deal with Vietnamese fishing boats operating in waters near Yonxing Islands in the Paracels, which China calls the Xisha Island.

Wu said the regulations applied to waters around islands which announced “baselines.” He said the baseline is the low-water line along the coast from which countries measure their territorial waters, according to the UN Convention on the Law of the Sea (Unclos).

Wu also said the rules allowed police to check and expel vessels that will enter, or conduct illegal activity  within, the 12 nautical miles of the islands for which China has announced baselines. It is not clear how this rules apply. The problem is that the Chinese are handing down their set of rules, interpreting these at their own convenience, and enforcing these with their own police patrols.

With their unilateral interventions, they have decreed a new law of the sea without the consent of the users of the sea. What worries us is: What happens when the boats they intercept are our gunboats patrolling our own national territory also claimed by China? That can be an act of war. We are on the brink of gunboat diplomacy.

via On the brink of gunboat diplomacy | Inquirer Opinion.

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10/12/2012

* China’s Great Wall Motor in talks for India entry

China is sensing that India’s time is about to come.  Earlier it offered to support infrastructure projects, now it is hoping to make and sell cars in India.

Reuters: “Great Wall Motor Co, China’s biggest SUV maker, is in talks to set up a wholly-owned business in India, an Indian industry official said on Monday, in what would be the first Chinese car maker to enter the country alone.

People look at cars of Chinese automaker Great Wall Motor Co Ltd displayed during the Sofia Motor Show 2011 in Sofia June 15, 2011. REUTERS/Stoyan Nenov

Great Wall, China’s eighth-largest car maker, sent a delegation to India last week, and targets starting manufacturing of vehicles in India in 2016, Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM), told Reuters in an interview.

“They are looking at coming into India to set up manufacturing,” said Mathur. “They are meeting industry, they are meeting government, they are meeting suppliers.”

Great Wall executives met with SIAM representatives last week, Mathur said. He did not provide details of investments planned.

Great Wall representatives could not be reached by Reuters for comment.

India’s car market has attracted billions of dollars in investment from overseas manufacturers, such as General Motors (GM.N), Ford (F.N) and Toyota (7203.T). But Chinese car makers have not yet made significant inroads into the country.”

via China’s Great Wall Motor in talks for India entry: industry official | Reuters.

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