Posts tagged ‘China’

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.

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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.

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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

* 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.

Related articles

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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09/12/2012

* Canada OK’s foreign energy takeovers, but slams door on any more

China acquires more natural resources.

Reuters: “Canada approved China’s biggest ever foreign takeover on Friday, a $15.1 billion bid by state-controlled CNOOC Ltd for energy company Nexen Inc., but drew a line in the sand against future buys by state-owned enterprises.

A man walks into the Nexen building in downtown Calgary, Alberta, July 23, 2012. REUTERS/Todd Korol

In a fierce defense of a tough, new foreign investment framework, Prime Minister Stephen Harper said Canada would not deliver control of the oil sands – the world’s third-largest proven reserves of crude – to a foreign government.

The ruling, anxiously awaited by investors and politicians alike, followed months of heated debate about how much of Canada’s energy sector could and should be absorbed by companies run by other nations.

The bid triggered unusually open dissent among legislators in the ruling right-of-center Conservatives, many of whom were particularly nervous about the idea of allowing China to gain control of the oil sands.

Canada said yes to this deal, but will not do so next time.

“To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead,” Harper told reporters after Ottawa gave the deal the green light, along with approval for the less controversial takeover of gas company Progress Energy Resources Corp by another state-owned energy company, Petronas of Malaysia.

“Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada,” he added.”

via Canada OK’s foreign energy takeovers, but slams door on any more | Reuters.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

09/12/2012

* China’s Wanxiang wins auction for U.S. government-backed A123

Chinese firms continue to acquire foreign firms’ expertise and assets.

Reuters: “China’s largest maker of auto parts won a politically sensitive auction for A123 Systems Inc (AONEQ.PK), a bankrupt maker of batteries for electric cars that was funded partly with U.S. government money, A123’s investment banker said on Saturday.

Battery maker A123 Systems Inc. has struggled for years.

Timothy Pohl of Lazard Freres said Wanxiang Group Corp’s bid of about $260 million topped a joint bid from Johnson Controls Inc (JCI.N) of Milwaukee and Japan’s NEC Corp (6701.T) for the maker of lithium-ion batteries.

Siemens AG (SIEGn.DE) of Germany had also qualified to bid, according to two people familiar with the auction, who asked not to be identified. The auction began on Thursday.

Chinese companies have launched $51.3 billion worth of outbound deals this year, making it Asia’s second-biggest spender on overseas acquisitions behind Japan, according to Thomson Reuters data.

While state-owned oil giants continue to dominate outbound deals, recently Chinese companies have targeted deals aimed at securing technology know-how. That shift is supported by China’s five-year development plan that puts emphasis on industries such as high-end manufacturing equipment.

Earlier this year, Shandong Heavy Industry Group agreed to buy a quarter stake in Germany’s Kion Group KIONG.UL, giving China access to industrial technology from the world’s number two fork lift truck maker.

Before that, Xuzhou Construction Machinery Group agreed to buy a majority stake in privately held German machinery manufacturer Schwing, while Sany Heavy Industry (600031.SS) bought rival Putzmeister in a 360 million euro ($472 million) deal.

Wanxiang, one of the largest non-government-owned companies in China, has annual revenue of more than $13 billion and supplies auto parts to many of China’s largest automakers.”

via China’s Wanxiang wins auction for U.S. government-backed A123 | Reuters.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

09/12/2012

* China to Flatten 700 Mountains to Build a City

Is there anything the Chinese won’t attempt?

Times: “Last month China made news with the surprising announcement that a firm in the city of Changsha would attempt to build the world’s tallest skyscraper in 90 days. Now, the country is making headlines with another ambitious challenge — flattening 700 mountains in order to build a city.

Lanzhou, China

The so-called “mountain-moving project,” was actually launched in October, and not only is the scale gargantuan, but the costs are astronomical. As much as $3.5 billion will be used to blow up 700 mountains, the Guardian reports, to make room for a full-fledged city in a poor, mountainous province in northwestern China. The country’s state council approved the plan in August after years of preparation, according to China Economic Weekly magazine.

The future city, called the Lanzhou New Area, will be built on the outskirts of Lanzhou, the capital of Gansu province with a population of 3.6 million. The company behind the proposal, China Pacific Construction Group,  promises to build an urban paradise, 10 square miles in size and capable of generating as much as $43 billion in GDP by 2030, China Daily reports.

The promotional video shows the new metropolis, which will cost another $11 billion to build, will be filled with high-rises, lakes, beaches and gardens.

It sounds grand — except for the fact that Lanzhou has some of the worst pollution in China, according to World Health Organization. Factories producing textiles, fertilizer and chemicals have clogged the air with smoke and particulates, while their waste has discolored the Yellow River, which runs through the province.

Experts have raised concerns about whether the project is environmentally viable. Gansu is an arid province, surrounded by deserts and scoured by sandstorms. But China Pacific Construction Group, one of the nation’s biggest construction companies, said there is no need to worry.

“Lanzhou’s environment is already really poor, it’s all desolate mountains which are extremely short of water,” a spokesperson told the Guardian via email. “Our protective style of development will divert water to the area, achieve reforestation and make things better than before.””

via China to Flatten 700 Mountains to Build a City | TIME.com.

07/12/2012

* Apple to return some Mac production to U.S. in 2013

Yet another instance of reverse offshoring or re-onshoring.

Reuters: “Apple Inc plans to move some production of Macintosh computers to the United States from China next year, Chief Executive Tim Cook said in remarks published on Thursday, in what could be a important test of the nascent comeback in U.S. electronics manufacturing.

An Apple logo is seen at the Apple Worldwide Developers Conference 2012 in San Francisco, California June 11, 2012. REUTERS/Stephen Lam

Apple makes the majority of its products, from Macs to the iPhone and iPad, in China, the world’s factory floor for electronics. But like other U.S. corporations, it has come under fire for relying on low-cost Asian labor and contributing to the decline of the U.S. manufacturing sector.

Cook did not say which Macintosh products will be produced in the United States. But the effort is expected to go well beyond simple final assembly of devices, with Apple and unnamed partners building most or all of the components in the United States as well.

The company will spend more than $100 million on the U.S. manufacturing initiative, Cook said in an interview with Bloomberg Businessweek, published on Thursday.”

via Apple to return some Mac production to U.S. in 2013 | Reuters.

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07/12/2012

* PLA signs preliminary deal for 24 Russian Su-35 jet fighters

Rare admission that China’s technology may not be up to it.

South China Morning Post: “A preliminary deal for the sale of 24 advanced Russian Su-35 jet fighters to the People’s Liberation Army indicates the technological hurdles China faces in developing its own J-20, especially in terms of engine technology, military analysts say.

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Mainland and Russian media reported last month that Beijing might purchase 24 Su-35s, an updated version of the fourth generation Su-27, for US$1.5 billion. The deal was first proposed by Moscow two years ago.

Beijing expressed interest in purchasing only four Su-35s last year, but that was rejected by Moscow, which had originally expected China to buy 48 planes, Moscow’s Vedomosti business daily quoted an official from Russia’s Federal Service for Military and Technical Co-operation as saying.

It also quoted Igor Korotchenko, head of the Russian Defence Ministry’s public council, as saying Moscow also asked Beijing to sign an agreement not to make copies of the Su-35.

A Beijing-based PLA senior colonel, who requested anonymity, said: “We decided to buy the Su-35 because it’s a fact that our home-made engines have failed to measure up to the Russian products.”

He said China was still playing catch-up, despite recent headlines hailing its progress on military modernisation.

“Engines have been the biggest headache and we are still trying to cope with it,” he said. “The purchase of the Su-35s might help our J-20 project, but there are too many deeper problems hiding in our military industrial system that are hindering our research and development.””

via PLA signs preliminary deal for 24 Russian Su-35 jet fighters | South China Morning Post.

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