China: January 2008 Archives

China's at WAR!

PLA soldiers numbering in the tens of thousands are now on the move. China's defacto 2nd in command, Premier Wen Jiabao, is out rallying the people. The CPC youth league is now being mobilized and pleas are going out to the public to provide financial support.

Now, if you were to read the statement above out of context, of course you might assume that either the CPC finally said 'screw it,' and started lobbing missiles at Taiwan or that some unruly ethnics started another Taiping. But instead, China now has a new enemy that can be mortally wounded by a strong stream of pee!

As far as Xinhua is concerned, China has declared war on snow. Well, actually, it's declared war against the disasters caused by the heavy snow and rain that has hit southeastern China.

Having worked in state-run media here in China for over the last two years, I've stopped banging my head against the wall trying to change the way my Chinese colleagues write their news. I swear, some of these kids come into the job as halfway decent writers. But once they toss them into commie school (AKA, the work environment), any sense of prose that they once had is slowly drained out of them like the fat from a Rosie O'Donnell liposuction. Don't get me wrong, I have tonnes of respect for guys like my friend and contemporary Edwin Maher who take time to try to coach the aspiring journalists to become better broadcasters. Hell, I was a broadcasting instructor before moving here to China myself. But at this point I have just given up hope. And reading the latest Xinhua story about the relief efforts in the southeast has just simply confirmed my apathy.

US President Bush has delivered his swan song to Congress. And while the economy loomed large as the main focus, China's role in it has yet again been ignored. And if there is any consideration amongst the Chinese that this is a snub, I have one piece of advice: Get used to it!

George W. Bush has delivered his final State of the Union speech to lawmakers. And aside from one suggestion of creating a clean energy development plan for developing countries like India and China, Mr. Bush paid no attention to the middle kingdom. Instead, Mr. Bush's focus on trade was more directed toward South America, urging the Congress to approve trade agreements in that hemisphere instead.

So I'm going to be curious to see over the next day or so how the State of the Union address is going to be interpreted in the state-run media here in China. Undoubtedly there will be some attempt to link onto some aspect of the economic direction of the speech and tie China to it somehow. And if and when it happens, you can - at best - equate the impact of any said story to that of...say...a radio station in Lexington, Kentucky running a story about someone from that community who was in Brooklyn when the 9/11 attacks took place in Manhattan. While it may be a 'local' connection to a big story, in the grand scheme of things it means really nothing to anybody. I would argue that today's State of the Union should be a wakeup call for those in this country who have become convinced that China is one of the biggest and most important components when it comes to the politics surrounding the United States economy.

As a Canadian, I've become used to being overlooked by US Presidents and lawmakers when it comes to important policy speeches about economics. This, despite the fact that Canada is not only the United States' largest neighbor, but also shares with it the largest bilateral trade relationship in the world. Well over 500 billion dollars last year. Yet, we as Canadians get lip service, at best, in US politics. But you know what...it's been like that for us for years, and we've become accustomed to being ignored. Sure, we'd like to get a mention every once in a while during big speeches like the State of the Union address. But, you know what, in the grand scheme of things, we know we just don't score very large on the radar screen. And let's face it, sometimes as a Canadian it's nice to not be mentioned by a President with the popularity rating of Mr. Bush!

But for all the bluster and hype that you hear in the Chinese media about bilateral trade with the United States, the trade deficit and the valuation of the Renminbi, today's speech should be an indication that China isn't really carved too high on the political totem pole when it comes to US economics.

Sure, China's got a permanent seat on the UN Security Council. It's got nuclear weapons. It's got the Olympics in a few months. But in the grand scheme of things, when it comes to what's most important in US politics, which is almost always the economy, it's time to realize - if China hasn't already - that politically speaking, it still isn't making big waves.

The latest CPI (Consumer Price Index) figures released by the government today can only be creating more questions about the fate of China's Premier.

As Zhongnanhai recently reported to you, the word making the rounds is that China's Premier, Wen Jiabao, could well end up being the fall guy for China's rising inflation rate. And today, the National Bureau of Statistics released new figures which show that China's CPI for 2007 rose 4.8 percent. At the beginning of last year, the Central Government's mouthpiece, Xinhua, estimated the 2007 CPI target at 2.5 percent. So these latest stats indicate that the government blew that target by almost 100 percent, which, statistically-speaking, is pretty embarrassing. The reason, the NBS points out - and has continued to point out for the last few months - is that the CPI rise has been mainly fueled by rising pork prices. So what does this have to do with the fate of China's Premier? Let me explain:

First, we have to go back to 2006. The government now admits that in 2006 the price of pork was underestimated. As such, pork production in China - which accounts for 50 percent of the world's total - began to decline. This, on top of Blue Ear disease in pigs spreading from the south to the north of this country, added to a supply shortage, and started the then-unseen push forward in pork prices. From mid-2006 to mid-2007, retail pork prices here in China jumped 50 percent, while wholesale prices rose an astounding 95 percent. This prompted Premier Wen Jiabao in May of last year to call an emergency cabinet meeting and later go on the television and publicly announce a new plan to increase domestic pork production through incentive programs and subsidies to try to level out the prices. However, the plan offered very few specifics. And even though, at that time, pork prices on a global level did appear to be stabilizing, the price has since continued to increase. And because China accounts for 50 percent of the world's pork production, it has to be assumed that these measures the Cabinet talked about last May obviously haven't worked. So who's to blame?

Well, in the grand scheme of things, there are numerous factors involved in the rise of pork prices, including feed shortages due to a global increase in biofuel production and import issues because of live-animal transport restrictions. As such, in reality, it's not really Wen Jiabao's fault. That's the reality. But history has shown us that the CPC will often overlook reality to save face with the people (see: the Mao 70-30 calculation). So if the CPI index continues to rise (which it is likely to do, but not only due to pork prices, of course), this government may eventually be called on to provide an answer and a face to go with it. And unfortunately for Mr. Wen, it was his face that was plastered all over the tube last May.

Today marks an auspicious and disturbing anniversary for my neighborhood here in Beijing. I live a ten minute walk away from Tian'anmen Square, the political heart of the PRC and the favored focal point for those who oppose CPC policies. 7 years ago today, seven people walked onto the square in the mid-afternoon, doused themselves with gasoline and attempted to set themselves on fire. Five of them succeeded, two of them died and the remaining survivors, including a then-19 year old college student, will live the rest of their lives severely disfigured. This extreme act was allegedly committed by FLG members protesting against the CPC's ban of the movement. Though questions have been raised about some of the events and motives in the case, known today as the Tian'anmen Square self-immolation incident, there can be no doubt that this was a protest of one form or another. No one voluntarily lights themselves on fire unless they've got a pretty good statement to make. But the point of this post is not to discuss that particular incident itself, but to heed a reminder to those who would use this summer's Games as a launching pad for protest: Big brother is keeping a very close eye on you!

As I mentioned, I live a very short distance from Tian'anmen. I actually catch the Tian'anmen East subway station every working day, and as such, catch a constant glimpse of what's happening in the neighborhood. And I can tell you that in the last couple of months, security in and around the area has been noticeably increased. The police are now consistently doing random searches of people who appear to be either hocking crappy merchandise or are out there to try to scam unsuspecting tourists. I will admit that personally I have never been stopped or even questioned by the PSB, but then I normally don't make it a habit to hang around Tian'anmen very much. That said, when a guest was in Beijing last fall visiting from Canada, I did get a first-hand demonstration of how quickly the security forces in and around Tian'anmen will react if they see something they don't like.

I was touring my friend around the various locations in the heart of the capital, including the Forbidden City, Tian'anmen Square and so on. As boring as it was for me personally, a short blast of excitement did take place while we were in front of the main Zhongnanhai gate to the west of Tian'anmen. As I was taking a picture of my friend standing in front of the gate, a middle-aged Chinese man and woman walked up to the yellow line in front of Zhongnanhai and pulled out a sign on a piece of cardboard and started holding it up. In the span of less than 3 seconds, 4 plain-clothes security personnel were on them, stripped them of their sign and began grilling them about what exactly they were doing. And though I had a camera in my hand, I've lived in the neighborhood long enough to realize that if you don't want it confiscated, you'd better not have a camera in plain site when trouble starts brewing. Though I wanted to stick around and find out what the outcome would be, I felt it best to get my friend out of the situation and out of any potential harms-way, given that neither of us were carrying our passports (a PSB requirement for all foreigners). And as we were making our way out of the area, more and more security personnel were descending on the area. It was a real eye opener as to just how prepared they are for protest in and around the Tian'anmen area. And this was a time when nothing politically sensitive or interesting was taking place!

Now I'm not going to try to tell anyone what to do. If you have plans to come over here this summer and use the Olympics as a springboard for political points against the CPC, I personally don't care (though I think it will be a wasted effort). But I can tell you what's likely to happen if you do: If you're a foreigner, you will be detained, your visa will be revoked and you will be kicked out of the country permanently. And you'll want to hope it's as simple as that. And consider yourself lucky that you're a foreigner! I don't even want to know what happens to the Chinese nationals who want to make a public protest against the government these days. But if the protesters 7 years ago today are any sort of indication, the long road to recover from their nasty burns is still being - and will continue for the rest of their lives - in a Chinese prison cell.

So make your stand this summer if you want, but be prepared for the inevitable outcome!

Abortion: The non-China debate

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On this, the 35th anniversary of the historic Roe vs. Wade abortion decision in the United States, I thought I'd wade into the Chinese family planning scenario, and what is increasingly becoming a significant concern among demographers and social scientists here in this country.

Of course, we all know that China has the largest population in the world, standing currently at just over 1.3 billion people. And while the population figures are increasing, the effects of the one-child policy are beginning to produce a number of troubling side effects for the central government.

The first, and some would argue, most obvious problem created by the one-child policy is the development of a society of 'little emperors.' Because most urban families are only allowed one child, (the rules now allow for two if the parents themselves are the product of the one-child policy) parents and grandparents have increasingly become expected and accustomed to lavishing the younger generation, and exempting them from any of the chores and duties that their generation would have been expected to perform. I've come to know many young women in their mid-20's who have never learned to cook or clean properly. (I could say that of the mid-20's Chinese men too, but I don't spend a lot of time with them in socially domestic situations, if you get my drift!) As a result, the social fabric upon which this country has existed for hundreds of years, children taking care of their elderly parents, is starting to unravel, because today's younger generation is unwilling and, more often than not, unable to care for them given their domestic shortcomings.

An aging population is also becoming a significant concern. Chinese people are living much, much longer than they were when the PRC was formed. Back in 1949, the average life expectancy in this country was 32 years. Today, for men it's nearly 71 years old, and 74.5 for women. As such, with less and less young people caring for their elderly parents, the overall health of people as they age can be expected to decrease more rapidly than if they had greater family support, meaning more and more pressure on the health care system.

There is also a financial aspect to the population situation. With the breakdown of the hierarchical social fabric, retirement considerations become a more important factor for the up and coming generation. Knowing that even if they do have children, the likelihood of support into old age is diminishing, meaning that people are going to be forced to tuck more money away for retirement. As such, this creates a problem for a government that is trying to stimulate domestic spending to help solidify this country's massive economic growth.

There is also a gender inequality developing, particularly in the rural areas. A report a few years back in the New England Journal of Medicine noted that in some parts of this country, the male to female live birth ratios are hovering in the range of around 1.3, which means that for every 13 boys born, there will only be 10 girls. Such disparity, over time, is going to lead to problems down the road, particularly when it comes to social competition for potential mates. The desire for families to try to 'select' a male heir has also created social problems as well, including - in some extreme cases - infanticide. The restrictions on childbirth have also created a social animosity situation between the wealthy and the poor. A new trend has developed over the last few years, which is seeing the affluent simply paying the fine to have more than one child.

So as the United States marks the 35th anniversary of Roe vs. Wade, and the Mike Huckabee's of the political world muse about making Constitutional changes surrounding abortion law, I think its incumbent upon the Chinese government to start looking at its reproductive policies as well. Otherwise, this country is going to start hitting serious problems down the road when it comes to its population.

We here at Zhongnanhai don't really like to rumor-monger, which is why I've been holding out on this one for so long. But what's the point of a blog if we can't throw stuff out there?

I mentioned late last year that there may be some high-level government staffing changes announced in March. For the record, nothing has been confirmed. But speak to any foreign journalist in Beijing, and they are all working to confirm the same tid-bit of information.

Rumors that Wen Jiabao may not make it through his second-term began circulating early last year, after a report in the Japanese press. It turned out that those reports were false, and Wen was not removed from his post during the 17th Party Congress in October. But rumors of Wen's future have been persisent since, with some claiming that Wen will be relieved of his duties as a result of China's inflation problems.

With this in mind, we are treated to a story in the Chinese Financial Times, called "Beijing wages a psychological war against spiralling prices", regarding China's inflationary challenges. What stood out to me were these two paragraphs:

By contrast, say Chinese officials, the inflation measures have come from the office of Wen Jiabao, the premier, who has hitherto not displayed decisive leadership on the economy.
If inflation did persist and lead to widespread civil and political unrest, Mr Wen would ultimately be held responsible.

Of course, inflation was a key contributor to another period of unrest in China's history, sometime around the late 1980s. There's no doubt that prices are going up for gasoline, food, and housing -- and going up quickly.

Zhongnanhai makes no prediction on the future of Wen Jiabao, except to say that the chattering classes have zeroed in on him as the culprit for China's inflation problems. We'll see where this story leads.

I have now begun the process of mentally preparing myself for the onslaught of "new" China stories hitting the international media. As a trained journalist and former journalism instructor, I have always expounded the need for news to be new. But unfortunately, I suspect this is going to be less and less likely the case as the Olympics draw ever closer. As the foreign media steadily work their way over here to begin their coverage of the Olympics, and China, I can guarantee that we are going to be hearing, reading and seeing the same stories repeated over and over again. A case in point is the recent 'revelation' from AFPTV.

Chinese village goes back to complete Communism

NANJIE, China, January 10 (AFPTV) - Huang Zunxian's living room is lit by just one dim lightbulb. It's dark...but not gloomy. His faith in the Communist Party is his guiding light.
"As common people we only have one thing to do," says 72 year old Nanjie Village Resident Huang Zunxian, "Listen to the Party leadership, and do whatever they say. To stay healthy and contribute more to Nanjie Village, thats what we think."
The people of Nanjie Village in China's Central Province of Henan are living history, a throw back to 1960s China. They have rejected the market reforms that have swept the country and returned to a collective economy.
Residents here say they have no desire for the luxury products the rest of China is flocking to buy. There are few people in the streets, most are at work in the village-owned factories. There products range from instant noodles to consumer packaging, and the profits sustain the local economy. Instead of a salary, workers receive free housing and food, health care and education.
Wang Hongbin has been the Communist Party Secretary in Nanjie for more than 30 years. As the senior most official , he oversees the running of the village. The sign hanging over his desk is an old Chairman Mao quote, and reads "Serve the People."
"Nanjie village has developed a collective economy," says Hongbin, "To walk down the path of gaining wealth. This was Mao Zedong's thought, strategy and policy."
There is no advertising in Nanjie, but Communist propaganda is plastered on buildings, and blasted over the airways. Nanjie also has a multi-million-dollar park dedicated to showcasing the life of Mao. In it are replicas of various houses where he once lived.
Mao's prominence here, and the fact that people are still living out his ideologies, have turned Nanjie into a tourist attraction. Soveigner shops are capitalising on the steady flow of curious visitors. No one in Nanjie is opposed to bringing in money; they've just opted to share it equally.
"All the tourists are jealous," whispers shop owner Wang Xinchao, "We live by Mao's philosophy."
The village's 3,500 commune members are proud to still be living according to Mao's word. But they are a tiny holdout, as the rest of China's 1.3 billion people rush towards capitalism.

I'm not for a moment saying that the story about Nanjie isn't at all interesting. But the fact is, this is not a new story. Anthony Kuhn, an excellent journalist with NPR here in China, did the same story in August of 2006. And a google search of Nanjie+China will get you even more stories about this Maoist throwback.

I believe a lot of the expectation from the expats in China is that we're going to be getting a lot of crack journalism and enthrauling new stories about China that we've never heard before because the western media horde is on its way to help educate us. Unfortunately, I fear that what I like to term as "pack mentality" is going to kick in, and we are going to be left hearing a lot about the Nanjie's of China, and not nearly enough about what is actually happening in this country. And I suspect this is exactly what the CPC is banking on.

My attention was recently turned to an article in the China Daily written by columnist Kang Bing (h/t to JFK Miller at Shanghaiist). In the article, titled "Handing media criticism," Mr. Kang argues that media have unfairly criticized Beijing in the lead-up to the games, more-so than other host cities. He also says reporters must re-evaluate their coverage and strive to be more fair:

I have no intention to criticize my journalist colleagues regarding any of the Games. I believe they were trying to live up to the trust of their readers and viewers to ensure the Games become better and fairer. But when we look back at our past reporting, can we come to the conclusion that we, as the media, could have been fairer and better?
Beijing seems to have received more criticism than other hosts. Air pollution and traffic problems are the issues widely expounded by the media.
While some overseas media are demonizing Beijing's air pollution and traffic problems, Beijing citizens seem to be happy to get more days of blue skies each year as compared with 2001 when the city won the Olympic bid. As for the traffic, while about half a dozen new subway lines will be open to the public before the Olympics, the authorities are working out traffic control plans which, according to them, should ensure a smooth flow during the Games. Meanwhile, subway and bus lines have been added while fares have been reduced.
The Chinese capital would be lucky if criticism against it ended just there. Beijing has kept its promise to the IOC on press freedom, but some media seem to be asking the host to adopt freedom and democracy according to their understanding and explanation. When not satisfied, they threaten to call for a boycott of the Games.

The argument was picked up and dissected by JFK Miller, who I think did an admirable job of explaining that many host cities - most notably and recently, Athens - have received substantial media criticism prior to the big event. In this respect, Beijing is no different.

But this article made me consider another side of the story, which is the vastly different way foreign media coverage is portrayed by people (both foreigners and Chinese) inside and outside China. To many Chinese and long-term foreign residents, it often seems like foreign reporters only pick on the negative aspects of China. Yes, we know the pollution is bad, the traffic is gridlocked, and we still stumble on dirty squat toilets in what should be respectable restaurants. Having somebody harp on these items long after we've gotten used to them is a boring storyline, and mildly annoying.

Many of us have chosen to live in China for a plethora of reasons: careers, business opportunities, marriages, studying, or whatever your particular case is. And like Mr. Kang, we can, occassionally, tend to react negatively when somebody is slamming the place we choose to live. But that doesn't make the foreign stories untrue, or any less worthy of being published.

There's no doubt, to this correspondent's eyes, that the media is having a field day with Beijing's pollution, the country's human rights record, traffic, and other controversial issues. And I say, good on 'em. Only through a thorough vetting of these issues, in a public light, can change be possible. Face means everything in China, and losing it can spur the authorities to accomplish great things.

Also, focusing on the negative reporting isn't entirely fair. One trip to a bookstore or news shop in the United States or Canada will reveal a plethora of magazines, periodicals, newspapers, and books touting China's rise, China's glittering new buildings, China's growing entertainment industry, China's increasing influence, etc. If one only wishes to find negative coverage, that's all one will see.

Finally, with regards to Mr. Kang's last comment surrounding foreign reporters' understanding of China's obligations for a free reporting environment: foreign reporters don't give a damn what China has promised to the IOC. They are here to follow their own leads, break news, and be first with stories to beat the competition. That's what foreign journalism is about, and that's what China's authorities are going to have to contend with.

So far, the lead-up to the Beijing Olympics has been rather uneventful, but that can change quickly. As has been mentioned elsewhere, protests are not the biggest challenge facing the government, it's how it will handle them. If somebody unfurls a FLG banner in Tiananmen Square, so be it. If a posse of officers come and beat the guy before hauling him off, then we have a story. It's up to the Chinese government to determine which way it chooses to go, and how it chooses to be viewed by the world community.

If the likes of Mr. Kang are concerned about negative reporting already, one only hopes the Chinese government sends its goons to the provinces prior to the opening ceremonies.

Once again, the Central Government has asked its media organs to bury their collective heads in the sand again when it comes to a contentious issue. This time, it's all an effort not to ruffle the feathers of China's largest and most competitive neighbor, India.

Of course, this week Indian Prime Minister Dr. Manmohan Singh was in China as part of his first official state visit to this country. Dr. Singh uncorked all the usual pleasantries during a speech at the Chinese Academy of Social Sciences this week, giving out political pleasantries such as: "The rise of China is among the most important developments of our time. As China's largest neighbor, and a friend, we cannot remain untouched by this momentous process."

As for the nuts and bolts of the trip, the Indian delegation pressed China to create more market access to things like fruits, vegetables and pharmaceuticals. The Indian delegation also put pressure on the Chinese government on the issue of downlinking Indian television stations into China, given that India allows CCTV to broadcast in its country. But one of the biggest things on the trip for both sides, which you didn't see or hear much of anything about during Dr. Singh's time in China, was the contentious issue surrounding the two countries' shared border.

For reasons that were unexplained, (discussion surrounding the border dispute in the state media was allowed before his arrival) the Foreign Ministry issued an edict for the media not to focus on the border dispute issue in reports during Dr. Singh's time here. The reason was obviously to try to keep the focus on the economic issues, and an attempt by the government to help soften ties with India. And while it does make for better political ties, I find the Chinese government's move a bit curious.

China and India have had a pretty turbulent history since the CPC took over in 1949. For those who are not particularly familiar with the issues, let me try to put them into as brief a synopsis as possible.

In 1950, after the PRC was formed, the CPC decided it was going to exert its influence over Tibet. India didn't do anything at this point, even though it had some interests in Tibet, because then-Indian Prime Minister Jawaharlal Nehru was more concerned about stabilizing his own country, which had just recently broken free of direct British rule. As such, when the Chinese troops moved in to 'liberate' Tibet, they moved into areas which India recognized as its own. This went unchecked at first. But as the progressions continued, and the CPC refused to recognize the so-called McMahon Line (the traditional dividing line between Tibet and India) tensions escalated to the point in October of 1962 when the Sino-Indian Border War began. Though over relatively quickly with comparatively few casualties, the skirmishes continued along the border into the 70's and nearly culminated in another war in the 1980's. You combine this dispute, along with India's support of China's rival the Soviet Union in the 1970's, while at the same time the CPC was giving its full support to Pakistan during its conflict with India, as well as the Indian government's sheltering of the Tibetan Government in Exile...a lot of historical tension was being built up. And even as the border tensions diminished between India and China in the 1990's, other issues began to surface between them. It's been revealed that China was at the center of Pakistan's ability to become a nuclear power, providing its long-time friend with virtually all the technology to build the bomb. On top of that, when India unleashed its first nuclear test in 1998, China - under the urging of the United States - was quick to chastise India for its nukes. As such, all of this has led to a lot of pent up aggression between the two countries. And while admittedly the tensions have backed off considerably in the 21st century, China and India now face a new challenge between each other: energy.

Of course, both countries have massive populations and are developing rapidly, and - despite what either side says - are in a heavy competition for energy all over the globe. And it's for this main reason that I find it curious that the CPC is taking a much more conciliatory approach to India. The CPC has demonstrated consistently that it has no qualms about taking an aggressive approach when it comes to what it views as China's (re: Tibet and Taiwan). So why now all of a sudden take a step back? I believe the main reason is energy. India has a solid reputation around the world, and is a much more politically trustworthy country than China. As such, if China continues to poke its finger in New Delhi's eye over the border issue, it may just provoke the Indian government to start using its considerable world influence to block Chinese expansion into ripe energy markets.

As such, I think at this stage of the game, we can expect to see a lot more Africa-like 'feel good' stories popping up in the Chinese state run media about India in the months ahead.

So what's he going to do now? This is the question that has to be riding high amongst the leadership inside Zhongnanhai right now (and I'm not talking about Cam) when it comes to Chen Shui-bian. The outgoing leader of the ruling DPP in Taiwan was handed a resounding rebuke of his policies over the weekend in the legislative elections on the island. The Democratic Progressive Party only won 27 of the 113 seats in the Yuan. And, of course, this doesn't bode well for Mr. Chen's replacement, Frank Hsieh, in the upcoming Presidential elections. But that being said, Mr. Chen still has a few more months in the hot seat. So how does he play this out?

Of course, Chen Shui-bian has been long known as an agitator and an irritant to the CPC, but has so far done nothing to provoke the heavy hand of Beijing. But I'm wondering now with his back against the wall, somewhat like a frightened animal, if Mr. Chen will use his remaining time in office to set a legacy for himself, by doing something definitive to peeve the Mainland. And if I'm in Hu Jintao's shoes right now, I'm probably starting to get worried.

Given that the Olympics, "China's coming out party," is not too far off, and all the government's attention will be focused on putting the spit and polish to the country before the world arrives, now would be a critical time for Mr. Chen to pull the rip cord and make a push for full independence. It would push China to make a choice: Go to war with Taiwan and ruin the best chance you've got to try to convince the world that you're actually a pretty decent country (re: Olympic Games), or lose face with your own population and let Mr. Chen get away with it? And at this point, I'm not convinced that Beijing would do anything if Mr. Chen were to make any moves.

So politically speaking, my guess is that Hu Jintao is going to be dancing on the head of a pin for a while!

A fascinating headline recently caught my attention and got me doing some reading. You may have read recently about a new report from a coalition of Washington-based think tanks which noted that Beijing would consider the option of sending PLA troops into North Korea if the Kim Jong-Il regime ever went in the tank. The splashy headlines belie the fact that the report is actually quite vague, and makes reference to this concept as coming from Chinese academics. That is to say that no government official was quoted as saying the idea of direct Chinese intervention into a destabilized North Korea was on the table. That's not to say that there aren't such plans swirling around somewhere. However, having read "Keeping an Eye on an Unruly Neighbor" myself, I think you have to take what's contained in it with a grain of salt.

But in reading through the 28 page document, I did discover a couple of highlights worth noting. One part of it points out that within academic circles, there is interest now in discussing North Korean stability directly with the United States.

There is apparent new willingness among Chinese institute analysts and PLA researchers to discuss the warning signs of instability in North Korea and how China might respond if the situation gets out of control and threatens Chinese security. Some Chinese experts say explicitly that they favor holding a discussion on stability in North Korea in official channels with the United States, including possible joint responses in support of common objectives such as securing nuclear weapons and fissile material. Other analysts maintain that such discussions are premature.

I find this somewhat interesting. Of course, if the North Korean government did collapse, it's in China's interest to make sure that it doesn't get a flood of refugees filing over its border. But what I find curious is that there is desire to discuss the issue with the United States. China has long been shoring up its influence in the Asian theatre as the big player on the block. So why get the US involved in its own back yard? In theory, China has the resources and apparent ability to deal with a collapsing North Korea. So why involve a country that is likely going to insist that a democracy be the order of day as the replacement for the Kim Jong-Il regime? Why invite trouble to your doorstep if you are China? This revelation makes me think that China isn't nearly as able to keep stability in the Northeast 'rustbelt' as we might be led to believe.

The other nugget that caught my attention was the obvious concern being expressed by the Chinese academics about a rapid increase in the US-North Korean relationship. Of course, the official line is that the Chinese would encourage strengthened bi-lateral ties between Washington and Pyongyang. However, this report notes something that you won't hear about from the Chinese:

Some Chinese experts even worry that Washington and Pyongyang will cut a deal that will permit North Korea to keep its nuclear weapons in exchange for concessions by the DPRK. A leading Chinese analyst suggested, for example, that the DPRK could pledge to not proliferate and give up long-range nuclear missiles in return for U.S. acceptance of the country as a nuclear weapons state.

The report goes on to point out that if this were to happen outside of the 6 party framework that it would essentially leave Beijing twisting in the wind, because China has insisted that Pyongyang has to give up its nukes. The report also notes that the United States urged China to put pressure on India after its nuclear test in 1998, only to reverse its position and condone India's nuclear program, leaving China cleaning up a political mess between itself and India for the next two years.

So will the United States allow Pyongyang to hang on to its nukes? A year ago, I would have said no way. Personally meeting Assistant US Secretary of State and lead US negotiator Christopher Hill last year (over a pint at the Irish Embassy for St. Paddies day), he seemed quite confident that North Korea was going to be totally disarmed by the end of the year. Well, 2008 is upon us, and Pyongyang still has the bomb. And with the Bush Administration's time ticking down, there may be additional pressure on Mr. Hill to get a deal done to give the outgoing President a legacy in Asia. As such, I'm starting to wonder if there's maybe something like the Chinese are worried about brewing between the US and North Korea.

All in all, "Keeping an Eye on an Unruly Neighbor" -- in my mind -- holds minimal appeal and merely reinforces what most of us already know.

I've always been fascinated by the world of business. And living in China right now, there are no lack of interesting business stories to sift through. But this most recent story from the airline industry in this country strikes me as particularly interesting, given the nature of the situation.

Air China's parent company, China National Aviation Corporation - a state-run enterprise - put the state in a tough spot on the PR front. Allow me to explain:

Last September, Singapore Airlines announced that it was going to try to snap up a 24-percent stake in China Eastern Airlines. Nothing to surprising about this move, given that many analysts predict China's airline industry is ripe for investment and growth. And the State Council approved the move. All seemed to be running along smoothly until this week when CNAC announced that it wants China Eastern shareholders to reject the Singaporean bid and accept an offer of 5 HK dollars a share, instead of the 3.80 HKD Singapore Air is offering. So if, and when, the shareholders accept the Air China offer, CNAC will have put the government in a very difficult situation, and one that may prove to be none-too-appealing on the business PR front.

This government desperately wants to encourage foreign investment in key areas where China has been traditionally weak. One of these areas is the airline industry. The main reason is because they want to bring in foreign talent in the managerial sector given the strong growth potential in the sector. As such, it seemed a no-brainer for the government to green-light the Singapore Air investment in China Eastern. But now that Air China is making a move, the government's image in this situation has been irreparably tarnished. When it comes to business, particularly with the state-run organizations, the government wants to appear hands off because it sends a bad message to the market when the government has its stink on any transactions. But Air China wouldn't have made the offer to the China Eastern shareholders unless it had a pretty good indication that the government was going to green-light the deal. And what makes matters worse is that a number of analysts believe that the Singapore Air offer of 3.80 HKD per share is about right for the current financial situation. As such, it appears the government is undercutting foreign investment in favor of a financially inefficient 'local' offer.

So the question I have is how much consensus is there within government circles about what is actually going to happen in this situation? Is the leadership within the China National Aviation Corporation going against the government? Has the CNAC stepped where it shouldn't have? And what will the government ultimately do? Will it approve the deal or not? If I was a betting man, this would be my prediction: The government will allow the Air China offer to stand, saying that it wants the markets to dictate the outcome. However, don't be surprised in a few months if we suddenly see the head of CNAC suddenly 'retire.'

We'll keep you posted on the results.

One of the pluses of this new job is traveling around China, and most of my time has been spent in the city of Tianjin. Tianjin, at least for me, was never on the radar. I lived in Beijing for a year and nine months before I left for Guangzhou, and I never once visited the city -- in fact, I never really even considered it. It's nothing against Tianjin... it's just it wasn't top of mind. When I wanted a vacation, Tianjin wasn't on the list.

So color me surprised when I had several hours of free time on a Sunday night. I wanted to grab a bite, and, in my mood, felt like sitting down in a pub and eating western food with a beer. Lo and behold, Tianjin has a number of such places. I picked Broadie's Tavern. It had a menu straight out of Tucson, Arizona. Lots of Mexican food, chicken wings (medium, hot, or "suicide"), cheese sticks and chicken fingers "deep fried to perfection". The menu was so extensive that I thought it was much moreso than anything I'd seen at a similar-style pub in Beijing. But when the food came, I realized I was still in a second-tier market. The "hot" wings were in a honey glaze with an odd, hard to describe "blue cheese" dip that was anything but blue cheese, and the caesar salad was in some kind of lemon dressing. But the menu still looked good....

Perhaps pub food isn't Tianjin's speciality. But's it's growing in many other areas, often under the radar of most people who are zeroed in on Shanghai, Guangzhou, and Beijing. According to an article in Jin Magazine (yes, Tianjin has its own glossy expat magazine, too!), real estate is booming:

...Michael Heart, Managing director of Tianjin Jones Lang LaSalle noted, "The appearance of new retail brands and MNCs opening offices help illustrate just how important Tianjin is becoming for companies' China strategies."

Really? Tianjin is important to companies' China strategies? Here's the synopsis of the city's retail real estate:

The booming economy and rising incomes will continue to drive the retail market. The annual growth rate of total retail sales of Tianjin has been above 14% since 2003. Effective rentals reached RMB 357.75/sqm/month 2007, and incrase of 25% over the same period last year.

The residential market is doing equally well:

In 2007, the Tianjin residential market began to mimic those of first tier cities, with rapid price rises and high absolute prices.... The firm's research analyst, Stefanie Zou noted "High-end residential prices increased 45.87% over the same period (4Q06), reaching RMB 13,712/square meter."

Now, Imagethief wrote in That's Beijing that expats in China would do well to get to know both Shanghai and Beijing, rather than people in each city bashing the other (and I admit, I quote Imagethief far too often in this blog, but it just seems to fit). But I'd like to go a step further: those foreigners who live in Shanghai and Beijing - and spend time solely in those cities - are missing out on the bigger changes happening elsewhere.

(Quick... what is the largest ferris wheel in the world? The London Eye? Nope... as of this moment, the Tianjin Eye is the world's highest.)

I've written extensively about Guangzhou, Shenzhen, Dongguan, Zhuhai, and the Pearl River Delta region and how it's frequently overlooked by those in Beijing and Shanghai. The PRD generates most of this country's wealth, yet gets no respect. And other cities are starting to chime in with their own success stories, too.

I was also surprised to find out that Sephora, the popular high-end cosmetics chain, has opened in Tianjin. In fact, I was also surprised to learn that Sephora is already in eight Chinese cities. Vancouver has been clamoring for a Sephora for as long as I can remember, and Tianjin, China, gets one first? Zara is next to move into Tianjin.

Each time I travel outside of the main Chinese cities (Beijing, Shanghai, Guangzhou, Hong Kong, Shenzhen), I'm amazed at the development I see. Perhaps it's my own naivete, but I always figured things were must more rustic out there. Make no mistake, in many parts of this country they are; but the developed world is encroaching on those areas, and fast.

When it comes to the Internet, the Chinese government is doing its utmost to ensure that we don't view any pornographic material, that we adhere to harmonious principles, and we are protected. Which doesn't explain why Wikipedia is blocked... but alas.

We all have our favorite proxies to view this dangerous material, and one of the most popular ones is Anonymouse. So it was great to see that it has finally come out with a full toolbar for Internet Explorer and Firefox:

The Anonymouse Toolbar enables privacy-aware users to use Anonymouse easily independently of the Anonymouse website and is also offering additional data-security-functions. The Toolbar is available for the browsers Internet Explorer and Mozilla Firefox for Windows, Mac OS and Linux, it can be downloaded for free at http://Anonymouse.org/addons/toolbar/.

This makes it much easier to stop by Wikipedia and other blogs that are routinely blocked. A nice present to ring in 2008.

About this Archive

This page is a archive of entries in the China category from January 2008.

China: December 2007 is the previous archive.

China: February 2008 is the next archive.

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