Archive for ‘China alert’

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30/12/2012

* China tightens loophole on hiring temporary workers

Further labour reform is being implemented. This set will make China more progressive than many western countries!

Reuters: “China amended its labor law on Friday to ensure that workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.

A worker welds steel bars at a construction site for a new train station in Ningbo, Zhejiang province, December 6, 2012. REUTERS/China Daily

Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers’ health insurance and social security benefits and makes firing very difficult.

“Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs,” the amendment reads, according to the Xinhua news agency. It takes effect on July 1, 2013.

Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories, and in some cases account for well over half.

Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.

Under the amendment, “temporary” refers to durations of under six months, while supplementary workers would replace staff who are on maternity or vacation leave, Kan He, vice chairman of the legislative affairs commission of the National People’s Congress standing committee, said at a press conference to introduce the legislation.

The main point is that contracting through agencies should not become the main channel for employment, he said, acknowledging that the definition of backup might differ by industry.

“In order to prevent abuse, the regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim,” Kan said.

“The majority of workers at a company should be under regular labor contracts.”

Although in theory contracted or dispatch workers are paid the same, with benefits supplied by the agencies who are legally their direct employers, in practice many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.

Employment agencies have been set up by local governments and even by companies themselves to keep an arms-length relationship with workers. Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through agencies.

China would increase inspections for violations, Kan said, including the practice of chopping a longer contract into several contracts of shorter duration to maintain the appearance of “temporary” work.”

via China tightens loophole on hiring temporary workers | Reuters.

Posted in China alert, Economics, employment, Labour, labour reform, temporary workers | Leave a Comment »

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30/12/2012

* Signs of Changes Taking Hold in Electronics Factories in China

Labour reforms, urged by major western firms whose products are outsourced to China are beginning to be felt.  However, one aspect, that of reduced overtime, is not welcome by many workers who would rather earn more even at the cost of leisure and health.

NY Times: “One day last summer, Pu Xiaolan was halfway through a shift inspecting iPad cases when she received a beige wooden chair with white stripes and a high, sturdy back.

At first, Ms. Pu wondered if someone had made a mistake. But when her bosses walked by, they just nodded curtly. So Ms. Pu gently sat down and leaned back. Her body relaxed.

The rumors were true.

When Ms. Pu was hired at this Foxconn plant a year earlier, she received a short, green plastic stool that left her unsupported back so sore that she could barely sleep at night. Eventually, she was promoted to a wooden chair, but the backrest was much too small to lean against. The managers of this 164,000-employee factory, she surmised, believed that comfort encouraged sloth.

But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.

Other reforms were more personal. Protective foam sprouted on low stairwell ceilings inside factories. Automatic shut-off devices appeared on whirring machines. Ms. Pu got her chair. This autumn, she even heard that some workers had received cushioned seats.

The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.

Executives at companies like Hewlett-Packard and Intel say those shifts have convinced many electronics companies that they must also overhaul how they interact with foreign plants and workers — often at a cost to their bottom lines, though, analysts say, probably not so much as to affect consumer prices. As Apple and Foxconn became fodder for “Saturday Night Live” and questions during presidential debates, device designers and manufacturers concluded the industry’s reputation was at risk.

“The days of easy globalization are done,” said an Apple executive who, like many people interviewed for this article, requested anonymity because of confidentiality agreements. “We know that we have to get into the muck now.”

Even with these reforms, chronic problems remain. Many laborers still work illegal overtime and some employees’ safety remains at risk, according to interviews and reports published by advocacy organizations.

But the shifts under way in China may prove as transformative to global manufacturing as the iPhone was to consumer technology, say officials at over a dozen electronics companies, worker advocates and even longtime factory critics.

“This is on the front burner for everyone now,” said Gary Niekerk, a director of corporate social responsibility at Intel, which manufactures semiconductors in China. No one inside Intel “wants to end up in a factory that treats people badly, that ends up on the front page.”

The durability of many transformations, however, depends on where Apple, Foxconn and overseas workers go from here. Interviews with more than 70 Foxconn employees in multiple cities indicate a shift among the people on iPad and iPhone assembly lines. The once-anonymous millions assembling the world’s devices are drawing lessons from the changes occurring around them.

As summer turned to autumn and then winter, Ms. Pu began to sign up for Foxconn’s newly offered courses in knitting and sketching. At 25 and unmarried, she already felt old. But she decided that she should view her high-backed chair as a sign. China’s migrant workers are, in a sense, the nation’s boldest risk-takers, transforming entire industries by leaving their villages for far-off factories to power a manufacturing engine that spans the globe.

Ms. Pu had always felt brave, and as this year progressed and conditions inside her factory improved, she became convinced that a better life was within reach. Her parents had told her that she was free to choose any husband, as long as he was from Sichuan. Then she found someone who seemed ideal, except that he came from another province.

Reclining in her new seat, she decided to ignore her family’s demands, she said. The couple are seeing each other.

“There was a change this year,” she said. “I’m realizing my value.””

via Signs of Changes Taking Hold in Electronics Factories in China – NYTimes.com.

Posted in China alert, Economics, Good news, Labour, labour reform, Manufacturing | 1 Comment »

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30/12/2012

* Corrupt Chinese Officials Draw Unusual Publicity

Yet more evidence that the new leadership is serious when declaring that corruption must be stopped.

NY Times: ““Something has shifted,” said Zhu Ruifeng, a Beijing journalist who has exposed more than a hundred cases of alleged corruption on his Web site, including the lurid exertions of Mr. Lei. “In the past, it might take 10 days for an official involved in a sex scandal to lose his job. This time he was gone in 66 hours.”

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The Chinese have become largely inured to tales of voracious officials stockpiling luxury apartments, $30,000 Swiss watches or enough stolen cash to buy their mistress a Porsche.

But when images of a bulbous-faced Communist Party functionary in southwest China having sex with an 18-year-old girl spread on the Internet late last month, even the most jaded citizens took note — as did the local party watchdogs who ordered his dismissal.

These have been especially nerve-racking times for Chinese officials who cheat, steal and bribe. Since the local bureaucrat, Lei Zhengfu, became an unwilling celebrity here, a succession of others have been publicly exposed. And despite the usual cries of innocence, most have been removed from office while party investigators sort through their bedrooms and bank accounts.

In the weeks since the Communist Party elevated a new slate of top leaders, the state media, often fed by freelance vigilantes, have been serving up a head-spinning collection of scandals.

Highlights include a deputy district official in Shanxi Province who fathered 10 children with four wives; a prefecture chief from Yunnan with an opium habit who managed to accumulate 23 homes, including 6 in Australia; and a Hunan bureaucrat with $19 million in unexplained assets who once gave his young daughter $32,000 in cash for her birthday.

“The anticorruption storm has begun,” People’s Daily, the party mouthpiece, wrote on its Web site this month.

The flurry of revelations suggests that members of China’s new leadership may be more serious than their predecessors about trying to tame the cronyism, bribery and debauchery that afflict state-run companies and local governments, right down to the outwardly dowdy neighborhood committees that oversee sanitation. Efforts began just days after Xi Jinping, the newly appointed Communist Party chief and China’s incoming president, warned that failing to curb corruption could put the party’s grip on power at risk.””

via Corrupt Chinese Officials Draw Unusual Publicity – NYTimes.com.

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30/12/2012

* Chinese state secrets revealed: Details of leaders’ families

Is this the first signs of China’s ‘glasnost’?

Straits Times: “China’s top two leaders have revealed photographs and details of their families, breaking a long-held taboo where such information is considered a state secret.

A picture taken in 1988 shows a young Mr Xi (above), then the secretary of the&nbsp;Ningde Prefecture Committee of the Communist Party, participating in farm work&nbsp;during a visit to the countryside in Fujian province. -- PHOTO: XINHUA<br />

In a surprise move, clearly aimed at boosting their public support, the official Xinhua news agency released previously unpublished photographs of Communist Party chief Xi Jinping and incoming premier Li Keqiang late on Sunday night.

It also carried lengthy profiles that chronicled their careers from early grassroots days up to their recent activities since taking over the helm of the Communist Party last month.

But what struck observers most was the information on the pair’s families, including what is believed to be the first mention in state media of the name of Mr Xi’s daughter.”

via Chinese state secrets revealed: Details of leaders’ families.

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30/12/2012

* China Pledges Rural Reforms to Boost Incomes, Consumption

Another angle on narrowing the wealth gap.

Bloomberg: “China said it will better protect farmers’ land rights and boost rural incomes and public services to help narrow the divide with urban areas.

China Pledges Land Reforms to Boost Incomes as Wealth Gap Grows

A farmer works in a field in Pinggu, on the outskirts of Beijing. Photographer: Tomohiro Ohsumi/Bloomberg

The government will increase agricultural subsidies and ensure “reasonable returns” from planting crops, the official Xinhua news agency reported on Dec. 22, citing an annual work conference to set rural policy.

The goals, which include increasing rural incomes by at least as much as those in urban areas, reflect a new leadership’s focus on reforming the land system and addressing wealth disparities as it encourages migration into towns and cities to boost consumption. Li Keqiang, set to take over from Wen Jiabao as premier in March, is championing urbanization as a growth engine.

“A completely new policy approach is emerging under Li Keqiang,” said Yuan Gangming, a researcher in Beijing with the Chinese Academy of Social Sciences. “It’s about giving farmers a bigger share from land deals, it’s about changing local governments’ reliance on revenues from land, and it’s ultimately about a fairer system of sharing China’s economic growth.”

Yuan said he expects the government to be appointed in March to announce “a slew of policy initiatives” from changes to the household registration, or hukou, system to trading in land-use rights as part of Li’s urbanization drive.

The Shanghai Composite Index closed up 0.3 percent. Some Asian markets are closed today, while trading hours are restricted in some others.”

via China Pledges Rural Reforms to Boost Incomes, Consumption – Bloomberg.

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30/12/2012

* Wealth gap to be cut, Han Changfu tells Central Rural Work Conference

The new regime seems to be determined to make substantial changes for the better.  This is but one of several declared changes in policy or practice since Xi and LI took over in mid-November.

SCMP: “Beijing will look to boost farmers’ income, protect their land rights and seek more equitable treatment for migrant workers in cities, reports from the annual rural work conference said yesterday.

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Agriculture Minister Han Changfu told the two-day Central Rural Work Conference that the government would aim to narrow the gap between rural and urban residents by keeping the annual rate of income growth in the countryside at least 7.5 per cent, according to the People’s Daily. He said urban policies should focus on fostering new sustainable agricultural business models to encourage young migrant workers to return home to farm, Xinhua reported.

Han highlighted a critical “lack of sustainable manpower” in the country’s agriculture sector, with more than 60 per cent of young migrant workers saying they have no plans to return to farming, Caixin reported.

Supporting agricultural development would require maintaining stable land contract management while allowing the orderly transfer of farmers’ land management rights, Han said, according to Xinhua.

The central government would also help expand support to include family farms and specialised co-operatives, he added.

Despite being one of the world’s biggest agricultural producers, China increasingly needs to import food as demand for grain continues to outstrip supply, Han said, according to Caixin. He would not say how much food the country is importing.

The meeting’s participants included academics, businessmen and regulators, and other agriculture sector officials. In addition to ensuring the country’s grain supply, they said steps were needed to ensure farmers can profit during times of rising grain prices and production costs.

The government would also work to better balance urban and rural development, and ensure fair treatment for migrant workers in cities, participants said.”

via Wealth gap to be cut, Han Changfu tells Central Rural Work Conference | South China Morning Post.

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30/12/2012

* Chinese College Dropout Turns Market Blog Into Pundits’ Favorite

It’s not only US kids who can start successful on-line business from home! As some author commented: Chinese now dream what used to be the American dream – “We can do it”.

Bloomberg: “When Hu Bin started his blog in early 2008, he was a skinny 22-year-old college dropout with a perpetually skeptical look on his face and little doubt he’d soon be a household name.

Chinese College Dropout Turns Market Blog Into Pundits’ Favorite

The previous year, the Shanghai Stock Exchange had been flooded by speculators. For a brief period, it was the second- busiest exchange in the world. It was also beginning a dramatic fall ushered in by the global financial crisis. Hu says he considered the market, considered his audience, and sensed it was time to make his mark.

Enlarge image

Blogger Hu Bin spent his early days predicting the rise of the Shanghai Stock Exchange and now foresees its continuing decline. Photographer: Kevin Lee/Bloomberg

“It really started when Premier Wen Jiabao announced a 4 trillion renminbi rescue plan for the economy,” Hu says. “I knew I just needed to be clever and use this chance of high liquidity in the market to make myself famous.”

Now 26, Hu is China’s most popular online market commentator, Bloomberg Businessweek reports in its Dec. 24 edition. His blog has gotten more than 400 million visits. His posts are equal parts outlandish and thoughtful, and employ liberal use of bolded, multicolored text and exclamation points.

Hu writes under the name Yerongtian, a character from a real estate-themed Hong Kong soap opera, and has been known to pick fights with other commentators, whom he says suffer from a “lack of emotion.” He has posted at least one picture of cats, and multiple pictures of himself wearing sunglasses to help illustrate his opinions.

‘Eccentric Behavior’

In 2009, the state-run newspaper China Daily listed him, under his alias, among the 10 people in the nation with the most influence on China’s stock market.

“Back then,” Hu says of 2008, “any eccentric behavior would attract people’s attention. If you understood this vital point, you could control people’s minds.”

Hu grew up in Kunming, a southwestern city of 6.4 million that’s far from China’s centers of finance. He learned about the stock market by watching his mother invest in her spare time, he says. She put money into the market in the 1990s, early days for Chinese investment, and lost it all. “Now she invests her money in gold,” Hu says.

He started at Kunming University, intending to study philosophy and Marxism, however quit, thinking he would take up investing himself.

“I was interested in psychology,” he says. “I wanted to know why everyone wanted to bet their future on an uncontrollable thing.”

Commander in Chief

Hu says that in the early days of his blog, his knowledge of the market was thinner than it is now. He has always, however, understood his audience and how to keep it interested.

Hu’s approach to his blog is purposefully bombastic, earning him vocal critics along with followers. In 2009, he got into a spat with another stock commentator, Hou Ning. Hou, at least according to Chinese news reports from the time, holds the record for the longest nickname of any stock commentator in history: Commander in Chief of the Stock Market Army.

The two made a 1 million yuan ($160,500) bet on the future of the Shanghai Composite Index (SHCOMP), with Hu wagering it would reach 4,000 by the end of the year. It didn’t, and Hu didn’t pay, though he got what he wanted out of the rivalry.

“Who would have paid attention to me if I had said 3,000?” he asks. “Everyone already knew it would reach 3,000.” In 2010, he promised to throw himself off one of Shanghai’s tallest buildings if the benchmark Shanghai Composite didn’t reach 5,800 by the end of the year. It didn’t: Hu is still with us.

‘Weather Vane’

Stunts aside, Hu has spent the last four years working through his thinking on the ups and downs of China’s economy in public, slipping thoughtful essays in between bouts of hyperbole.

He spent his early days predicting the rise of the Shanghai Stock Exchange and now foresees its continuing decline. One recent headline: “Doomsday Runs Wild, the Stock Market will likely drop 200 points!!” In another post, he explains that a drop in the market may not be bad. It could give the authorities some space to make reforms without worrying about overheating, and help to attract more foreign investment.

“The stock market is not only an economic weather vane,” he writes. “It is a political weather vane.”

Hu says he is not a financial rabble-rouser. Most laypeople should stay away from investing in individual stocks, he says. The people who read his blog, however, are generally not professionals; retail investors make up the majority of the volume of trading in the Chinese market. There are about 72 million retail investors in China, accounting for three-quarters of the trading on domestic exchanges, according to the China Securities Regulatory Commission.”

via Chinese College Dropout Turns Market Blog Into Pundits’ Favorite – Bloomberg.

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29/12/2012

Hope the author is correct!

Posted in China alert, GeoPolitics, Politics, Taiwan | 7 Comments »

22/12/2012

* Yiwu’s purveyors of Christmas tat give China a dose of ho-ho-ho

This article illustrates extremely well our view that the Chinese mindset is practical, materialistic and down-to-earth. And I am talking about the entrepreneurs at Yiwu City and the shopkeepers embracing the Christmas spirit (or at least the Christmas decorations anyway); as well as the average urbanite who wants to celebrate international festivals whatever the origin and raison d’etre.

The Times: “On Thursday the Ling Guo massage parlour, in the central business district of Beijing, suddenly turned festive.

A vendor hangs Christmas decorations in between Santa Claus dolls at her stall ahead of Christmas at a wholesale market in Wuhan, Hubei province, ChinaAn outsized image of Father Christmas beamed from the window, flanked by a manic array of snowmen, reindeer and present-stuffed stockings. The masseuses greeted customers in Santa hats.

It is not a triumph of Western culture, but of raw Chinese salesmanship, entrepreneurial flair and desperation.

Elsewhere, the festive decorations are up, adorning everything from roadside noodle shops to suburban shopping malls. Where China’s Christmas lights used to be restricted to the big hotels and stores in Beijing and Shanghai, the briskest sales are now to small shops in provincial cities.

“We are absolutely focused more on the Chinese market and we are shifting 2,000 plastic Christmas trees a day domestically,” said Liu Qing, from Yanghang Art and Crafts, who has been part of the all-out push by manufacturers to persuade the Chinese to celebrate someone else’s season of goodwill.

“Our biggest buyers are now from Shandong and Chongqing, which is so different from a couple of years ago,” Mr Liu said. “Chinese people’s living standards have improved so much, so people start going after something more spiritual. Christmas is a lively holiday. The younger generations like it.”

For a growing number of Chinese businesses making Christmas-related goods, domestic sales now represent their single biggest — and often fastest-growing — market. It is an unexpected development in a country that does not celebrate Christmas. Without it, though, hundreds of factories would be driven to bankruptcy because, despite strong sales, Santa’s Chinese elves are working on tiny margins.

The key to the tinsel-strewn, gold-baubled Christmas-ification of China is to be found on the country’s east coast in Yiwu, the acknowledged world hub of yuletide tat — or “ornamental handicrafts” as they are described by the city’s factory owners.

It is from these workshops that Yiwu annually exports about £200 million of plastic trees, self-illuminating angel choirs and every other Christmas decoration conceivable. Other manufacturing centres in China also feed into the great £1.3 billion flow of Christmas exports, but none do it with such determination and concentration as Yiwu.

The problem, however, is that Yiwu became too good at its trade at just the wrong moment. In 2010 the city had 400 companies making Christmas products; now there are more than 750, with about 120,000 workers engaged in making Christmas goods.

The huge jump in capacity and competition coincided with a drop of about 25 per cent in what had traditionally been Yiwu’s strongest markets for its tawdry wares, Europe and the United States. The effect on profits has been harsh. This year labour costs in Yiwu have risen by 15 per cent and material prices have risen by about 10 per cent.

Chen Jinlin, from the Yiwu Christmas Products Industry Association, said that some of his members have suffered 20 per cent to 25 per cent declines in orders. “There are nearly twice as many companies as there were two years ago fighting for pieces of a smaller cake,” he said. “We are encouraging manufacturers to develop new products, especially lower-cost ones, to adjust to the new economic reality.”

But the longer-term answer, said Mr Hu, the sales manager of the Youlide Art & Crafts Company, has to be to look for new markets, China being the most convenient and potentially vast. Many of Yiwu’s Christmas goodsmakers have seen the domestic share of their sales rocket to 20 per cent of the total over one or two years.

They have also changed the way that they look at opportunities abroad: a shift of marketing focus has made Brazil the largest export destination for Yiwu’s Christmas goods, accounting for 12 per cent of the total. A similar drive has proved successful in Russia, where sales of Yiwu’s seasonal goods have tripled in the past year.

“About 80 per cent of our products go to South America, so we’ve had to change things to reflect that,” Mr Hu said. “Brazilians like their artificial Christmas trees in a paler shade of green than the Europeans.””

via Yiwu’s purveyors of Christmas tat give China a dose of ho-ho-ho | The Times.

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22/12/2012

* China opens second railway to Kazakhstan

China’s “go west” policy now extends even further west than its most western province! This is good news for Xinjiang, long deemed by its Muslim residents to be looked down upon and mistreated by the majority Han Chinese, for Chinese migrants who would otherwise have headed east into heavily crowded and over-competitive eastern sea board, and for Kazakhstan and countries beyond. A win-win-win situation, indeed.

Xinhua: “A second cross-border railway between China and Kazakhstan opened Saturday.

The railway is composed of a 292-km section in China and the remaining 293-km section in Kazakhstan. They were joined at the Korgas Pass in Xinjiang Uygur autonomous region.

Contruction of the Chinese side of the railway cost 6 billion yuan (962 million U.S. dollars), railway officials said.

The rail line is expected to ease the burden of the Alataw trade pass, where the first China-central Asia railway traverses. It handles 15.6 million tonnes of train-laden cargo a year.

Industry observers expect the Korgas pass, which now connects China and Kazakhstan by a railway, a highway, and an oil pipeline, to handle 20 million tonnes of cargo a year by 2020 and 35 million tonnes a year by 2030.

The railway launch followed the meet of Chinese Vice Premier Wang Qishan and his Kazakh counterpart Kairat Kelimbetov in Astana earlier this month, vowing to enhance bilateral cooperation in energy, trade, communication and other fields.

Wang suggested enhancing the China-Kazzkhstan interconnection by the rails and a trans-continental highway that links China with Europe.

China and five central Asian countries have been deepening trade and economic cooperations in recent years. The total trade volume between China and central, west, and south Asian countries increased from 25.4 billion U.S. dollars to more than 370 billion, up about 30 percent annually.

In particular, trade between Xinjiang and five central Asian countries reached a historical high of 16.98 billion U.S. dollars last year, according to the customs figures.

Observers said the railway will also help the border city of Korgas become a key logistics hub with a network of highways, railways and pipelines.

Since 2010, the central government has been redoubling the efforts to build Xinjiang into a regional economic center, eyeing its geological closeness to central Asia and the region’s abundant natural resources including oil, coal and natural gas.”

via China opens second railway to Kazakhstan – Xinhua | English.news.cn.

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