China News - Spring 2008

On November 16 2007, China's ambassador to Britain, Madam Fu Ying, delivered a speech to the Royal Society entitled 'China and Britain in a Changing World'. She spoke of China's achievements and also how they relate to Britain. (From Beijing Review 13/12/07)

She started by quoting Deng Xiaoping, who once said that 'China is both big and small, strong and weak'. She went on to say that no economic theory can adequately explain the robust and sustainable growth of China. Within the next year, China's gross domestic produce (GDP) is expected to exceed Germany's and become the third largest in the world. According to the Korea International Trade Association, in 2006, 958 products made in China ranked first in the world in terms of global market share, compared to the 815 of Germany, the 678 of the USA, the 304 of Italy and the 280 of Japan.

Many who visit Shanghai believe that China is a developed nation, but there is another side. The per capita GDP of China is only one eighteenth that of the UK and in fact ranks behind 100 countries of the world and is similar to that of Ukraine and Angola. In the Quality of Life Index, issued by the Economist, China ranks 116th amongst 183 countries and regions. The top three are Norway, Iceland and Australia, with the UK at 17th.

There has been a significant improvement in living standards in China, especially since 1978 when per capita GDP was $213; the current figure is now $2,000. Gone are the days when the main preoccupation of the one billion people was food. According to the World Wealth Report 2007, issued by the Boston Consulting Group, China's wealth increased by 23.4% over the past five years, which is three times more than the world average. The figure was 31.6% in 2006 alone and during the next five years, it is expected to grow by 17.4%, while the world average is expected to be only 5.6%. There are 310,000 families in China owning more than $1 million in assets. This is the fifth highest in the world, after the USA, Japan, Britain and Germany. The number in China is expected to double by the year 2010. At the end of September 2007, the capitalisation of China's stock markets reached $3.33 trillion, fourth highest in the world. According to the Financial Times, China's stock market will be four times larger by 2010. In 2006, there were 573 publishing houses, bringing out 13,000 books a year. There are 1,938 newspapers and 9,500 varieties of magazines. There are at present 172 million users of the Internet and 32 billion text messages are sent every month. Amongst urban dwellers, for every 100 households, there are 153 mobile phones, 47 computers and four cars. The improvement in living standards also means improved democracy and human rights. The protection of human rights and governance on the basis of rule of law have been written into the Chinese constitution. In 2005, 470 million-rural residents participated in village-level elections and 80% of villages have their own Charter of Self-Administration. During 2006, about two million deputies were directly elected to people's congresses at county and township levels. At the end of 2006, there were 354,000 non-government organisations in China. On the subject of religion, there are 85,000 religious sites with over 100 million people practising religion, mainly Buddhism, Islam, Catholicism, Protestantism, etc. China has acceded to 22 international conventions on human rights and 24 on labour. On the New Economics Foundation's Happiness Index, China is 31st, out of 178 counties. The UK is 108th and the USA 150th.

China's development means new business opportunities for the world. China's foreign trade is currently $1.76 trillion and China is expected to import $1.2 trillion worth of goods in 2010, making it the second largest after the USA. Foreign direct investment in 2006 was $63 billion and 480 out of the world's top 500 companies opened businesses in China. The World Bank recorded that between 2003 and 2005, China's economic growth contributed to world economic growth by 13.8%, second only to the USA. By 2006, China's contribution was 33% and this year, 2007, is expected to be 25%, both higher than that of the USA. China also supplies more commodities at lower prices to consumers in many places, including the USA, Europe and African countries. Challenges being addressed by the Chinese government are many. As Wen Jiabao, the Chinese prime minister said, with a population of 1.3 billion, any trivial problem would become intimidating if multiplied by 1.3 billion and any benefit would become meagre if divided by 1.3 billion. If the poverty line is drawn at $1 per day, then 135 million people in China still live in poverty i.e. about 10% of the population. Shanghai's per capita GDP is 10 times that of the remote southwestern province of Guizhou. And in Beijing itself, the average income of the urban dwellers is twice that of the rural dwellers. Ten million new jobs need to be created each year just to keep pace with the growth of the labour force. Only 12% of the population enjoys medical insurance and half the population cannot go to hospital for treatment, mainly because of economic reasons. Every year, one million children drop out of school because of financial difficulty; 70% of them are girls.

However, the cost of economic growth in China is high; the per unit GDP energy cost is 3.5 times that of the USA. With 5.5% of the world's GDP, China is consuming 15% of the world's resources. Of the 20 most polluted cities in the world, 16 are in China and 70% of China's rivers are polluted to varying degrees. At present, China's growth pattern is unsustainable. Processing trade accounts for half of China's total exports. It is low in profit, high in human cost and consumption of resources. A Barbie doll selling for, say, $9.9, results in the Chinese factory getting only 35 cents and China has to export 800 million shirts to buy one Boeing plane.

China will continue the policy of reform and opening up. China's target is to quadruple the per capita GDP of the year 2000, by 2020 to reach $3,500-which is only equivalent to the GDP of Bulgaria today. By this time, China's GDP will exceed $4.5 trillion and overtake that of Japan. To achieve the target, the 17th National Congress of the Communist Party of China set out a comprehensive programme of development termed 'Scientific Outlook on Development' which means a more balanced approach and sustainable growth. There will be emphasis on innovation and a greater contribution of scientific and technological advancement to economic growth and the promotion of international co-operation in science and technology. The overall objective is to increase higher value added production. There is emphasis on technology for conserving energy and reducing emissions to atmosphere and strengthening the capacity to tackle climate change. There will also be emphasis on human-centred policies and more funds will be available for social security development.

China will be a good host for the 1008 Olympic Games and the theme will be 'Green Olympics, Hi-tech Olympics and People's Olympics'. Over 700,000 volunteers have been recruited and 105,000 athletes are expected together with 20,000 referees, 30,000 journalists and 250,000 support staff from 203 countries. Twenty-seven of the 37 stadiums and events venues have been completed. It will be the largest gathering in Olympic history. China-UK trade has been growing at 20% annually and British investment in China, with 5,580 projects involving $27 billion, is the highest of any EU country. But set against the general background of China's international economic relations, Britain does not rank amongst the top. Britain is taking only about 1.5% of China's market share and China accounts for only 3.5% of UK trade. Given the size of the two economies and immense potential that exists, there is certainly room for doing even better.

From the British Press

New strategic partnership UK-China

Gordon Brown, during his meetings with Chinese prime minister, Wen Jiabao, spoke repeatedly of a 'new strategic partnership' between the UK and China. He was attending the UK-China Business Summit at Beijing held on 18 January 2008 and he believed such a relationship would help create 'tens of thousands' of jobs for British people. He saw China as a vast potential market for British companies and the UK as the destination of choice for Chinese business and Chinese investment.

The two prime ministers agreed a target for UK-China trade to rise to $60 billion by 2010. Other targets to achieve by 2010 included:

Agreement was made to set up a partnership on climate change and the UK would build a coal-fired power station in China, which captures carbon and stores the gas. Mr Brown visited Dongtan, in Shanghai and said that the UK and China would 'lead the world' in the development of eco-cities. Twinning arrangements have been set between Dongtan and the Thames Gateway and a sustainable cities 'academy' has been established for experts to exchange information. The London Stock Exchange opened an office in Beijing whilst Mr Brown was there and a wide range of trade and business agreements were signed, including an alliance between Shanghai Industrial Investment Corporation, Arup, HSBC and Sustainable Capital to achieve commercial sustainability for eco-cities in China. There was also a contract for Atkins for the design of the new terminal building at Xi'an airport and a training programme for translators of literary works, being delivered by Penguin. (From The China-Britain Business Review February 2008)

Innovation China-UK (ICUK)

The first UK-China joint innovation and knowledge transfer partnership was launched in November by Fu Ying, the PRC ambassador and Ian Pearson, UK minister of science and innovation. This collaborative research and knowledge transfer partnership involves five British and over 20 Chinese higher education institutions. ICUK is led by Queen Mary College, University of London, and supports academic and business collaboration, research experts on both sides to exchange information, research and commercialisation of joint intellectual property in the UK and China. The UK Higher Education Innovation Fund has supplied £5 million and complementary funding is to be provided by the Chinese Ministry of Science and Technology. (From China-Britain Business Review Dec 07/Jan 08)

Communist Party's 17th Congress

At the 17th Congress of the Communist Party of China, President Hu Jintao promised to put a more human face on Communist rule and hailed a 'new epic' in the country's history. However, he criticised the small number of Party cadres who were not honest and upright. He told the 2,300 delegates that these cadres' extravagance, waste, corruption and other undesirable behaviour are still serious problems. He also added that the governance capability of the Party falls somewhat short of the need to deal with the new situation and tasks.

Much of Mr Hu's two-hour speech was devoted to the huge social and environmental costs of China's extraordinary growth, including widening gaps between rich and poor and over-consumption of resources. Since he became president in 2003, China's economy has expanded by more than 10% every year. Mr Hu announced an even more ambitious target, pledging to quadruple China's gross domestic produce per head between 2000 and 2020. He also proposed reforming the tax system to redistribute wealth to the poor. In addition, he outlined plans for more elections for local Party congresses, the mainstay of provincial government. However, he signalled his rejection of major democratic reforms, saying that Marxism must continue its guiding role. (From The Telegraph 16/10/07)

CPC Congress-Further material

In the political sphere Mr Hu held out the prospect of only limited change, none of which would challenge the one-party system. An expansion of 'inner party democracy' will give 73 million party members more opportunities to vote on policy and leadership. It will introduce a tenure system for delegates to congress and make the decision-making process more open to scrutiny. For most of the 1.3 billion population there was no clear timetable for an expansion of accountability beyond choosing village chiefs, the lowest level of government. Mr Hu said, 'Citizens' participation in political affairs will expand in an orderly way. Power must be exercised in the sunshine to ensure that it is exercised correctly',

On the subject of Taiwan, Mr Hu was conciliatory and held out an olive branch, 'We would like to make a solemn appeal: On the basis of the one-China principle, let us discuss a formal end to the state of hostility between the two sides, reach a peace agreement. We are willing to make every effort with the utmost sincerity to achieve peaceful reunification of the two sides and will never allow anyone to separate Taiwan from the motherland in any name or by any means'.

At the end of the congress, the party will unveil a new line-up of the standing committee of the politburo, China's most powerful political body. Mr Hu will promote several supporters, but given the influence of his predecessor Jiang Zemin and the need to balance factional interests, he is also expected to make compromises that would have been undreamed of by past leaders. (From The Guardian 16/10/07)

Saving the world with chickens

Dung from chickens is being used for generating green energy in rural China. The De Qing Yuan farm outside of Beijing is starting up a 'biogas digester' plant which will process 192 metric tons of droppings a day from three million chickens to generate electricity. The energy will be sold to the Chinese national grid and earn $1 million per year. This plant is part of a programme by Beijing to make use of dung that is piling up in farms and spilling over into villages and lakes. Dung is a serious climate issue, because it gives off methane, a potent greenhouse gas. Biogas plants treat the dung in water to release the methane, which is used to drive generators. The only by-products are heat and solid waste, which can be used as fertiliser.

China has been using biogas for decades but Beijing plans to install 4,700 big farm-based digesters by 2010 and to double the number of households that run on biogas from 18 million to 40 million. Last year, the government increased annual subsidies for rural biogas development to $338 million-up from $135 million. (From Newsweek 24/12/07)

Troops help alleviate transport chaos

China has called out half a million soldiers to help clear roads and railways blocked by snow in the worst weather conditions for 50 years. Fallen electricity wires and disruption of coal deliveries to power stations have caused blackouts across central and southern China. Wen Jiabao, the prime minister, toured the worst hit cities to apologise to the millions of people trying to go home for the Chinese New Year. In tropical Guangzhou, 200,000 people are sleeping in temporary shelters after trains were cancelled. Local governments are trying to encourage stranded workers to stay put for the holidays. An estimated 178 million people were due to travel by train during the holiday season. Wider problems due to the credit crisis in the West may arise. The snow can only make matters worse as it sends food and energy prices up and puts more pressure on inflation. The economic problems have been reflected in big falls on the Shanghai and Hong Kong stock exchanges. Ford, Honda and Toyota began halting production due to shortages of labour and electricity. (From The Daily Telegraph 31/1/08)

The internet in China

China has 210 million users and very soon, within a few months, will have more users than the USA. The proportion of the population who are users is just 16% and so the rapid growth is likely to continue for some time. More than 70% of Chinese internet users are under the age of 30, which is precisely the opposite of America. There is enormous pent-up demand for entertainment, amusement and social interaction says Richard Ji, an analyst at Morgan Stanley. Some of the main uses of the internet in China seem to be the distribution of (free pirated) films, TV shows and music, the delivery of mobile-internet to mobile phones and online multiplayer games. China has 500 million mobile phone users-more than the USA, Japan, Germany and the UK combined. (From The Economist 2/2/08)

Dunkin' Donuts move into China

The US coffee and pastry chain announced plans to open 100 franchise outlets in Shanghai over the next 10 years from this spring. They are already in Taiwan. The Chinese outlets will have more seating than existing branches and expect to sell more food than beverages. Dunkin' Donuts move into China is belated and is behind McDonalds and others. They hope to exploit the growing market in China for Western food and the newly- rich Chinese middle classes that have developed a sweet tooth and a taste for dairy products. (From The Times 26/1/08)

Migration to the suburbs

In a migration dwarfing that of America after 1945, millions of newly affluent Chinese are moving to the vast suburbs which are arising on the fringes of China's megacities. It is estimated that five million will move to Shanghai's suburbs in the next ten years. There are ten satellite cities sprouting around Shanghai , such as New Songjiang, which offers benefits such as more space and cleaner air, as well as better value accommodation. A five bedroom house occupying 2,400 sq ft in the suburbs coats $165,000, compared to a two bedroom apartment in the city, occupying 1,000 sq ft, at the same price. (From Time Magazine 25/2/08)

From the Chinese Press

China expands rural social security

Ten years ago, the Chinese government set up a basic living guarantee system for low-income urban dwellers. Under this scheme, a family whose income is lower than the basic living expenses level assessed by the local government can apply for a basic living allowance from the local government. This system is being extended to rural areas and is expected to cover the whole rural population of China (800 million people) by the end of this year. The allowance will bridge the gap between the level of income and the basic life expenses level.

In the 2007 government report to the annual session of the National People's Congress (China's parliament), Wen Jiabao emphasised that the central government's plan to complete the nation-wide rural basic living guarantee system in 2007, is a cornerstone measurement in promoting social fairness and building a harmonious society. (From Beijing Review 20/9/07)

US/China trade balance

Chen Deming, vice minister of commerce, declared at the third Sino-US cabinet level meeting of strategic economic dialogue that if the RMB (Chinese currency) was over-appreciated, it would harm both China and the rest of the world. He said that economic theories that seek to redress the trade balance between China and the US by appreciating China's currency are unscientific. Since 2005, the accumulated appreciation of the RMB against the dollar has been 11.9%, but the trade balance has not decreased. (From China Today February 2008)

China climbs ten places in doing business

According to the World Bank's 2008 Doing Business Report, China has climbed to 83rd place, ten places higher than last year. The reason for the improvement includes the new bankruptcy law and the new property law. The 'doing business ranking' is calculated through a series of indexes measuring items such as the ease of conducting business, efficiency in granting licences and tax rates. A survey conducted by Deloitte Touche Tomatsu shows that China's new bankruptcy law has considerably strengthened the confidence of enterprises and investors. The world's top ten are: Singapore, New Zealand, USA, Hong Kong, Denmark, UK, Canada, Ireland, Australia and Iceland. (From China Today December 2007)

Chinese children adopted into USA

China is the largest source of orphans adopted by American families. Figures released by the US State Department show that between October 2006 and October 2007, American families adopted 5,453 Chinese orphans. American regulations require that adopting parents should be between the ages of 30 and 50 and healthy in body and mind. In total, American families have adopted over 70,000 Chinese children . (From China Today February 2008)

Easing traffic congestion in China's cities

Beijing's traffic has eased since Line 5 of the metro system opened in October. The city's rail network now comprises 142 kilometres of track conveying two million people each day. By the time of the Beijing Olympics, in August 2008 the network will have expanded to 200 kilometres.

At the end of 2006, China's total urban rail network comprised 20 lines and 600 kilometres of track in ten cities. Within the next few years, this will be increased to 61 lines, 1,700 kilometres of track in 15 cities. The cost will be over 600 billion yuan. These projects are expected to help relieve traffic congestion in China's cities. (From China Today December 2007)

China-India upgrade relationship

The Indian and Chinese prime ministers signed a document in Beijing showing their commitment to intensifying bilateral co-operation from a global perspective. They had reached a consensus on a wide range of topics and resolved to promote the building of 'a harmonious world of durable peace and common prosperity' by the two counties. The document was entitled, 'A Shared Vision for the 21st Century of the Peoples Republic of China and the Republic of India. The two countries' foreign ministers will visit each other's countries and the fourth round of the China-India Strategic Dialogue will be held in 2008. (From Beijing Review 24/1/08)

Japanese prime minister visits China

Yasuo Fukuda, the Japanese prime minister, paid his first state visit to China during 27-30 December 2007. He hoped to cement official bonds with China and establish personal trust with the Chinese. During the talks he reached a broad consensus on structuring and developing strategic and mutual beneficial relations between the two countries. He visited Tianjin, where a joint venture car factory operated by Toyota and China's First Automobile Works is situated. He also visited Qufu, the birthplace of Confucius where he underlined the two nation's shared cultural traditions. During his time in China, Fukuda and Wen Jiabao, the Chinese prime minister, signed three co-operation documents in the areas of youth exchange, climate change and energy research. (From Beijing Review 10/1/08)

The Wang Genealogy Update

A celebration to mark the updated Wang genealogy was held in the Wang Ancestral Temple in Pengzhou village, Anxi county, Fujian province. The ancestral temple was originally built during the Ming Dynasty (1368-1644) and rebuilt during the Republican Period (1912-1949) after being destroyed by bandits, according to Wang Quancheng, president of the Huayuan Association in Singapore. He and other clan members made donations in 2001 and raised sufficient funds to rebuild the temple in Fujian brick and tile upturned eaves style.

Integrated Chinese genealogy provides a detailed history of each clan, its family history tree, famous names and other ancestral details. It is believed that famous names bearing the surname Wang outnumber any of the other 100 most common Chinese surnames. Wang clan (Wang means 'king') members have become scattered in many countries over the centuries. The last update of the Wang genealogy took place 136 years ago and the ceremony is a significant event in the village. Wang clan members from the village itself as well as from other areas of China and from overseas attended. The whole village was decorated with lanterns and streamers but the focal point was the ancestral temple where Wang clan members offered sacrifices and prayed for happiness. (From China Today February 2008)

Simplified characters accepted as global standard by UN

The United Nations conducts its business in six official languages, including Chinese and will from this year only accept the simplified form of characters used in mainland China. The traditional characters have been accepted since 1945. An online petition at the UN signed by 400,000 people expressed their objection and stated that it was an act of annihilation of Chinese culture and tradition. The UN decision is the latest victory by the mainland in its drive to make simplified characters, which were introduced during the 1950s, the global standard. The majority of foreign universities that teach Chinese use them as do the more than 90 Confucius Institutes established by Beijing around the world.

Simplified characters are passionately opposed by million of Chinese in Taiwan, Hong Kong and overseas Chinese. Mr Ma Ying-jeou, the leader of the Kuomintang, who is likely to become, Taiwan's president in March, opposes them and on his last day as Taipei's mayor in December 2006, he attended a ceremony to honour Cang Jie, the mythical inventor of Chinese characters. It is seen as part of an effort to make Taipei the world capital of traditional characters. Mr Ma has said that 50 million Chinese in the world use traditional characters - much less than simplified users on the mainland - but the Taiwanese publishing industry has nearly 40,000 titles, making it the world publishing capital for Chinese. He went on to say that 'Traditional characters are our link to our history and culture. We can never give them up'.

The simplified characters were introduced by the Chinese Communist government in two stages in 1956 and 1964. The objective was to make them easier to learn and to increase literacy. Mao Zedong had considered using the Roman alphabet, similar to Vietnam, but the number of homonyms in Chinese would have made the language incomprehensible.

The Taiwanese government regarded Mao's reforms as a way to cut off Chinese from their traditions because knowing only simplified characters, many would not be able to read material published before 1949. The split between the two forms became ideological and political. With the economic growth of the mainland, the status and prestige of simplified characters grew and they have been increasingly accepted overseas, such as the schools of Singapore and Malaysia.

For the past 17 years, scholars in East Asia have been trying to agree on a common standard. The first International Seminar on Chinese characters was held in South Korea in 1991 and the most recent, the eighth, in Beijing 2007. It was attended by experts from the Chinese mainland, Taiwan, Hong Kong, Macau, Japan, South Korea, Singapore, Malaysia and Thailand.

The South Koreans are the most enthusiastic about a common standard, which would enable Chinese, Japanese and Koreans to read the same meaning from agreed characters. They believe that the characters are the joint cultural heritage of the three countries.

Last December, Mr Ma said that he would file an application to make traditional characters a world cultural heritage item. They must be protected to pass the treasure of Chinese culture from one generation to another. The characters are the oldest form of writing in the world. Wang Ning, professor of Chinese at Beijing Normal University, said that the characters did not need protection because characters are constantly evolving and have constantly developed over thousands of years. He believed that preservation orders are for cultures close to extinction, which is not the case with Chinese characters.

Opinion in Hong Kong is divided. Many have signed the petition to the UN, others believe that simplified characters should be used because Hong Kong is now part of the mainland. On the mainland, traditional characters have reappeared in shop fronts, advertisements, calligraphy and dedications. (From South China Morning Post 4/2/08)

Beijing closes polluters

Ten industrial polluters have been closed down as Beijing tries to curb emissions to fulfil Olympic commitments. They are mainly cement, steel and chemical plants and have been shut down in the latest round of mandatory emission control work. The agency which closed the factories controls the emissions in six municipal and provincial level environmental protection departments in Beijing, Tianjin, Hebei, Shanxi, Shandong and the Inner Mongolia Autonomous Region. More factories will be closed down this year, but no exact figure was given. There has been an improvement; Beijing experienced 22 'blue sky' days, or days with fairly good air quality, in January. This is the best run of clear days since 2000, although cold weather was also cited as a major factor in keeping the air clear. (From China Daily, Xinhua 2/2/08)

First Confucius TCM Institute

London South Bank University recently signed an agreement with the Office of Chinese Language Council International to set up the world's first Confucius Institute of Traditional Chinese Medicine. The first students, from the UK and overseas, are expected to enrol in September 2008 for courses in acupuncture, massage and health care. Chinese culture will also be taught in both English and Chinese. The Confucius Institute is a non-profit making organisation and is one of the key Chinese Bridge Projects. To date, more than 180 Confucius Institutes have been set up in about 50 countries of the world. (From China Today November 2007)

Sino File is compiled by Walter Fung with some input for From the Chinese Press by Teresa Ray.

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