June | 2013 | CHINDIA ALERT: You'll be living in their world, very soon

21/06/2013

China’s Manufacturers Seek Ways to Cut Costs

Wage inflation and shortage of skilled labour is making outsourcing less easy to justify.

BusinessWeek: “In the southern Chinese city of Zhuhai, two hours by ferry and car from Hong Kong, there’s something new on the rooftop of the large factory complex owned by outsourcing specialist Flextronics International (FLEX): solar panels.

A worker on a communications equipment assembly line in Shenzhen, China

Flextronics first opened shop in Zhuhai in 1999, when the area was a backwater compared with Shenzhen and other industrial hot spots closer to Hong Kong. Today the company’s 50,000 Zhuhai workers produce Microsoft (MSFT) Xbox game consoles, Hewlett-Packard (HPQ) printers, Nike+ (NKE) FuelBands and other electronics. With wages rising quickly throughout Guangdong province along the coast, Flextronics managers must save money wherever they can. “Instead of paying the electric company, I’m able to generate my own electricity,” says Melinda Chong, general manager in charge of infrastructure operations.

A little savings here, a little there—that’s the new focus for multinationals that manufacture in the Pearl River Delta and other coastal export hubs. The country’s one-child policy is taking its toll. The number of working-age Chinese in 2012 fell by 3.45 million, to 937.27 million, according to the National Bureau of Statistics. While that’s just a small drop, it’s the first decline since record-keeping began and marks “the start of a trend expected to accelerate in the next two decades,” the Hong Kong-based China Labour Bulletin wrote in a June 11 report. “China no longer has an inexhaustible supply of young workers.”

China’s government is also mandating big raises: In 2012, 25 provinces increased the minimum wage by an average of 20.2 percent. The current five-year plan ending in 2015 calls for base wages to increase by an average 13 percent a year, part of a policy to address growing income inequality. Coping with mandated wage increases is “very tough,” says Carmen Lau, Asia vice president of human resources for Flextronics. Even when companies offer higher wages, they still find it difficult to hire workers since fewer young people are interested in toiling on factory floors. “We have a smaller and smaller pool” of potential recruits, Lau says.

Some of the biggest electronics manufacturers have relocated to other parts of China where workers are more plentiful and there’s space to grow. “They can’t get land in the Shenzhen area, so they have to be somewhere else,” says Cynthia Meng, an analyst in Hong Kong with Jefferies (JEF). Foxconn Technology (2354), the Taiwan-based maker of iPads and iPhones for Apple (AAPL), has expanded away from the coastal regions. There are 250,000 to 300,000 workers at a Foxconn plant in Zhengzhou in the central province of Henan, according to the company and Bloomberg Industries. Hiring in the interior has helped the manufacturer boost its workforce in China by 50 percent in two years, to 1.2 million.

Wages are going up in the interior, too. “The cost differential is merging very, very fast,” says Jitendra Waral, a Bloomberg Industries analyst in Hong Kong. “If you move inland, it’s not really saving you costs any which way.””

via China’s Manufacturers Seek Ways to Cut Costs – Businessweek.

Mumbai building collapse kills nine

BBC News: “At least nine people have been killed in the collapse of a building on the outskirts of the Indian city of Mumbai.

map

More people are trapped inside the three-storey building in Thane district, 35km (20 miles) from Mumbai. Rescue operations are continuing.

The cause of the collapse in not known, but correspondents say such incidents are common in India and often blamed on poor construction practices.

In April, 74 people were killed in another building collapsed in Thane.

And earlier this month, four people were killed when a five-storey building collapsed in Mumbai.

The latest incident happened early on Friday when the residential building caved in, officials said.

————————————————————————————————————————-

India’s deadly collapses

4 April 2013: 74 die in Thane, near Mumbai

19 Dec 2012: 13 die in Wagholi, Maharashtra

24 Sept 2012: 6 die in Pune, Maharashtra

15 April 2012: 23 workers killed in blanket factory collapse in Jalandhar

16 Nov 2010: 69 killed and more than 80 injured in Delhi

18 Aug 2010: School building collapse kills 18 children in Uttarakhand

26 Jan 2010: 23 killed in Bellary, Karnataka

23 Sept 2009: Chimney of a power plant in Chhattisgarh caves in, 40 killed

13 Aug 2008: 20 die in Mumbai

18 July 2007: 29 killed in Mumbai”

via BBC News – Mumbai building collapse kills nine.

Posted in Construction, Economics, India alert | Leave a Comment »

Tags: architecture, India, Maharashtra, mumbai

21/06/2013

Tibet policy: Bold new proposals

Finally some one with a new idea for Tibet. Hopefully some progress will be made.

The Economist: “FEW outside China think the Communist Party’s strategy for Tibet is working. A combination of economic development and political repression was meant to reconcile Tibetans to Chinese rule and wean them off their loyalty to the Dalai Lama, the exiled spiritual leader. Instead disaffection is still rife, especially among the young. And all across Tibetan areas of China, Tibetans still display the Dalai Lama’s portrait, sometimes openly. Since March 2011 more than 100 Tibetans—especially in Tibetan areas of provinces bordering what China calls the Tibet Autonomous Region (TAR)—have set themselves on fire. Most have done so in part to call for the Dalai Lama’s homecoming. An overwhelming security presence and the Dalai Lama’s commitment to non-violence mean that the unrest is easily contained. Hence little has suggested that China’s leaders are concerned about the bleak implications for the future: that their rule in Tibet can be maintained only by the indefinite deployment of massive coercive force.

So for a Chinese scholar, Jin Wei, who is director of ethnic and religious studies at the Central Party School in Beijing, to call for a “creative” new approach is startling. For her to do so publicly, in an interview this month with a Hong Kong magazine, Asia Weekly, suggests that she has high-level backing. A report from a Beijing think-tank in 2009 challenged the official line that rioting in Tibet the year before was instigated from abroad. But Robert Barnett, a professor of Tibetan studies at Columbia University in New York, describes Ms Jin’s intervention as a sign that, after two decades, “debate has re-emerged within China about the government’s hard-line policies in Tibet”. Ms Jin even accused former party chiefs in Tibet of being “biased against the practice of religious affairs”. This, she said, “foreshadowed the accumulation of grievances today.”

Bold new proposals

One former party secretary in Tibet (from 1988-92) was Hu Jintao, who went on to head the party nationally for ten years until last November, when he gave way to Xi Jinping. Those who have forecast that Mr Xi might prove a bolder reformer than the cautious Mr Hu have so far seen little to back them up. Here, on Tibet, is at least a hint of a crack in the hardline consensus. Some have detected another in the appointment of Yu Zhengsheng to head the party’s main policy group on Tibet and Xinjiang, a Muslim-majority region in the north-west. Mr Yu is the head of an advisory body designed to promote national unity. Previous heads of the group have been security specialists.

This is new

Ms Jin’s analysis, though couched in the terminology of party orthodoxy, is similar to that of many foreign observers. She argues that, by demonising the Dalai Lama, and viewing any expression of Tibetan culture as potentially subversive, the party has turned even those Tibetans sympathetic to its aims against it. The struggle has evolved from “a contradiction between the central government and the Dalai Lama separatist clique into an ethnic conflict between Han Chinese and Tibetans”.

She is not advocating a new soft approach to “political” issues, such as the Dalai Lama’s call for greater autonomy for Tibet and Tibetans’ hankering after a “greater Tibet”—ie, within its historic borders, beyond the TAR. But in fact, most protests in Tibet are not about “politics”, defined like this. Many have been sparked by anger at Chinese repression—of Tibetan culture, language and tradition, or of individual protesters. It is a vicious circle, made worse by anger at the large-scale immigration into Tibet of Han Chinese.

Ms Jin has ideas on how to break the impasse. Talks with the Dalai Lama’s representatives, stalled since the most recent of nine fruitless rounds in 2010, should resume, she says. They should concentrate on “easy” issues first, setting contentious debate about Tibet’s status to one side for now. China should consider inviting the Dalai Lama to visit one of its semi-autonomous cities, Hong Kong or Macau, and eventually allowing him back to Tibet. It should also try to defuse the crisis his death will bring by agreeing with him on a chosen reincarnation from inside China’s borders. Otherwise, China risks having to deal with two incarnations: one it endorses and one in exile who is more likely to be revered by most Tibetans.”

via Tibet policy: Bold new proposals | The Economist.

Posted in China alert, Dissident, Ethnic clash, Politics, Religious clash | Leave a Comment »

Tags: Beijing, China, Dalai Lama, Han Chinese, Tibet, Tibet Autonomous Region, Tibetan people

20/06/2013

China’s Latest Discount Product: Drones

Will the availability of drones add to or decrease tensions? Will it reduce or increase the chances of open conflict? Wish I knew the answers.

Posted in Aerospace, China alert, Economics, innovation, Politics, Technology | Leave a Comment »

Tags: China, Federal Bureau of Investigation, Surveillance, Unmanned aerial vehicle

19/06/2013

China’s next food scandal: honey laundering

SCMP: “China‘s National Television has brought another case of “food forgery” to the spotlight in a country where fake eggs, beef and tofu have become staple items in national news coverage.

Police in Chongqing‘s Hechuan district have discovered a production site for fake honey and confiscated about 500 kilograms of the fake nectar, the national broadcaster said in a report on Sunday.

“The artificial honey contained zero per cent real honey,” the report said, showing a chemical analysis report according to which the honey contained 187 milligrams of aluminium residue to every kilogram of honey.

The report has gone viral on Chinese microblogs, where it has been shared more than 300,000 times, making it one of the most trending topics on Wednesday. Newspapers have followed up with reports on how to identify fake honey.

“Artificial honey has a chemical odour, it either has a pungent or a fruity smell, whereas real, pure honey has a subtle scent of flowers,” one report reads.”

via China’s next food scandal: honey laundering | South China Morning Post.

Unless You Like Toxic Chemicals, Skip This Chinese Delicacy (blogs.smithsonianmag.com)
Seventy-five percent of honey bought at the supermarket Not real honey (lavanderhoney.wordpress.com)

Posted in China alert, Economics, food safety | Leave a Comment »

Tags: China, Chongqing, Food Safety News, Honey, World Health Organization

19/06/2013

The yuan: The cheapest thing going is gone

The Economist: “After enduring a decade of criticism for its weakness, China’s currency now looks uncomfortably strong

TEN years ago, the yuan made its debut as a global economic bugbear. In June 2003, America’s then treasury secretary, John Snow, publicly encouraged China to loosen a policy under which its currency was pegged at 8.28 to the dollar. The next month four senators wrote an angry letter urging Mr Snow to investigate China for “currency manipulation”. The country was intentionally undervaluing its currency, argued Charles Schumer, a Democratic senator for New York. “The result is that everything they sell to other countries is the cheapest thing going.”

A decade later, Mr Schumer and other senators are still bashing the yuan: eight of them re-introduced a bill last week that would slap duties on currency manipulators. But much else has changed. Now allowed to float by 1% a day on either side of a reference rate set each morning by the central bank, the yuan closed trading on May 27th at 6.12 to the dollar, 35% stronger than its June 2003 rate. It has risen more against the dollar since March than it rose in the whole of last year, and its climb against Japan’s currency has been even steeper. Since November, when the markets began to anticipate dramatic monetary easing in Japan, the yuan has gained over 20% against a weakened yen.

China’s competitiveness on world markets depends not only on the price of its currency but also on the price of its goods and workers at home. The Bank for International Settlements calculates a “real” exchange rate for 61 economies that takes account of inflation differences between them. Since 2010 China’s real exchange rate, weighted by trade, has risen faster than any other, with the sole exception of Venezuela’s.

The price of labour is also rising faster in China than in its principal trading partners. The Economist has calculated an alternative “real” exchange rate, weighted by trade with America, the euro area and Japan, which takes account of unit labour costs in all four economies. By this measure, China’s real exchange rate has strengthened by almost 50% since Messrs Snow and Schumer began their currency-bashing ten years ago. If the yuan was the cheapest thing going back then, now its cheapness has all but gone. Some economists, such as Diana Choyleva of Lombard Street Research, even wonder if the yuan is now overvalued.”

via The yuan: The cheapest thing going is gone | The Economist.

China’s Currency Gains On Dollar (forbes.com)
Rising yuan lowering China’s exports (wantchinatimes.com)
China Names Yuan Convertibility Plan as Goal This Year – Bloomberg (bloomberg.com)
Meet the New Gold-backed World Reserve Currency (theburningplatform.com)

Posted in China alert, Economics | Leave a Comment »

Tags: Bank for International Settlements, Business, Central bank, China, economy, Exchange rate, Japan, Lombard Street Research, United States

19/06/2013

Rich Chinese Provinces ‘Outsource’ Pollution to Poor Ones

BusinessWeek: “A flurry of citizen-led protests against polluting (or proposed) chemical factories in Chinese cities has recently made headlines. And for good reason, as hundreds of peaceful marchers parading in front of government buildings and waving hand-made signs (such as “We Want to Survive” and “Say No to PX,” a hazardous chemical) isn’t something you see every day in authoritarian China.

The sun sets behind commercial buildings shrouded in haze in Shanghai

In recent years, such environmental demonstrations have erupted in the prosperous coastal cities of Xiamen, Dalian, Ningbo, and the southern city of Kunming. Middle-class citizens, wielding smartphones and sharing information about pollutants via social media, have organized the protests. When developers’ plans have been put on hold—as happened last month in Kunming—popular Chinese and Western media have declared a victory for nascent people power in China.

But what happens next? Chances are that factory plans won’t fizzle entirely, but rather that construction will move to another location—usually in a poorer province, with a less informed and media-savvy local population.

In a paper published in the June 10 issue of the Proceedings of the National Academy of Sciences (pdf), researchers at the Chinese Academy of Sciences, University of Maryland, and University of Cambridge mapped the flow of goods, money, and interprovincial emissions to document what they call the “outsourcing” of pollution “within China.” Their study focused in particular on CO2 emissions, which spew from the same coal-fired power plants and other factories responsible for smog-causing domestic pollution.

As the researchers discovered, “the most afﬂuent cities of Beijing, Shanghai, and Tianjin, and provinces such as Guangdong and Zhejiang, outsource more than 50% of the emissions related to the products they consume” to provinces in the central and western hinterlands. In short, eastern urbanites enjoy the fruits of energy, steel, cement, and other goods produced in China’s less-developed regions. (To be sure, Western consumers also benefit from goods produced in China, at an even greater distance from the pollution.)

“Although China is often seen as a homogeneous entity, it is a vast country with substantial regional variation in physical geography, economic development, infrastructure, population density, demographics, and lifestyles” the researchers wrote. One example: The carbon footprint of residents of Shanghai, Beijing, and Tianjin, three wealthy eastern cities, is four times higher than that of residents of Guangxi, Yunnan, and Guizhou, three poor southwestern provinces.”

via Rich Chinese Provinces ‘Outsource’ Pollution to Poor Ones – Businessweek.

Posted in carbon emission, China alert, Climate change, Ecology, Economics, Environment | 1 Comment »

Tags: chemical factories, China, Chinese Academy of Sciences, climate, coal fired power plants, environment, Kunming, pollution, Proceedings of the National Academy of Sciences of the United States of America, prosperous coastal cities, Shanghai, Tianjin

19/06/2013

Wang Shu, China’s Champion of Slow Architecture

BusinessWeek: “The day after Chinese architect Wang Shu was awarded the $100,000 Pritzker Architecture Prize, the field’s equivalent of a Nobel, in May 2012, he returned to the old Beijing neighborhood where he grew up and found it in the process of being demolished. The hutong, with its maze of narrow streets and traditional courtyard houses, was being sacrificed to make room for a new philosophy center.

While European cities that exploded with industrialization in the 19th and 20th centuries are still sorting out the consequences of modernization, their boom times appear sedate compared with China’s last two decades. By 2030 the mainland will be home to 13 megacities—those with a population of 10 million or more—up from six today, estimates a McKinsey report. That breakneck urbanization is fast obliterating 5,000 years of architecture and culture. “Cities today have become far too large,” Wang says. “I’m really worried, because it’s happening too fast and we have already lost so much.””

via Wang Shu, China’s Champion of Slow Architecture – Businessweek.

Posted in China alert, Economics, Social & cultural, urban development | Leave a Comment »

Tags: architecture, arts, Beijing, China, mckinsey report, Nobel Prize, philosophy center, Pritzker Architecture Prize

19/06/2013

Chinese Voice Anger and Nostalgia Over Urbanization

From NY Times: “Chinese Voice Anger and Nostalgia Over Urbanization

Chinese residents have turned to the microblogging site Weibo to express their feelings on the government’s efforts to drastically expand the urban population. While there are glimmers of hope about the prospects of city life and the opportunities afforded by compensation, the majority of the discussion focuses on resentment over perceived corruption and sadness over the loss of land, farm animals and a way of life. Here is a selection of recent posts presented in their original Chinese and translated into English.”

Weibo.com Logo (Photo credit: bfishadow)

http://www.nytimes.com/interactive/2013/06/16/world/asia/weibo-voices-land-seizures.html?ref=asia&_r=0

Posted in China alert, Economics, Social & cultural, urban development | 1 Comment »

Tags: China, Chinese, chinese residents, chinese voice, land seizures, Microblogging, Sina Weibo, Social science, Twitter, Weibo

CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

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China’s Manufacturers Seek Ways to Cut Costs

Mumbai building collapse kills nine

Tibet policy: Bold new proposals

China’s Latest Discount Product: Drones

China’s next food scandal: honey laundering

The yuan: The cheapest thing going is gone

Rich Chinese Provinces ‘Outsource’ Pollution to Poor Ones

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Chindia Alert: You’ll be Living in their World Very Soon

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