China News - Summer 2008

China in Africa

China has a target of $100 billion trade target with Africa by 2010. The author of this article, Regina Jere-Malanda believes that China looks at investment in Africa as a business opportunity and as a partnership, not as a charity case as has been seen with Western economic deals. Of course China is also investing for its own survival as its economic growth requires raw materials. Today, China consumes 25% of the world's copper, 40% of the coal, 35% of the steel, 10% of the oil and 94% of the aluminium. China is exploring and extracting copper and cobalt from Zambia and the Congo, buying timber from Gabon, Cameroon, Mozambique, Equatorial Guinea and Liberia, buying platinum and chrome from Zimbabwe, and buying iron ore, coal, nickel and aluminium from across the continent.

Africa's riches have mostly enriched the Western world, to whose economic yoke Africa has been tethered since independence five decades ago -decades which have had little to show in terms of economic development in Africa. But now almost every African country bears testimony to China's economic presence and it is making a difference.

In very promising ways, China is helping to kick many African economies out of the doldrums by injecting 'Chinese medicine' into their dry veins, for example, oilfields, mines, railways, roads, hospitals and schools. This is not re-colonisation as many in the West allege.

Apart from economic deals, China has made agreements in the areas of health which has facilitated regular exchange of medical teams and training for medical professionals in Africa. China has provided medicine and medical equipment free of charge to several African countries and has set up active programmes to treat infectious diseases, including malaria and HIV/Aids. In recent years, China has sent over 15,000 doctors to more than 47 African countries.

The majority of Africans have for decades lived with discrepancies between what Western economic aid reforms say and what they actually do. China is proving different - it is putting money where its mouth is, without placing austere conditions. Africa has not seen before such inward flows of trade, investment or cheap credit. Because China is going where no Western investors or aid have dared to go, China is now well ahead in the queue for Africa's resources. But the bonus is in the fact that China is making Africa an integral part of its own economic development. (From New African, March 2008)

N.B. There was a 14 page special report on 'China's Thirst for Resources' in The Economist 15-21/3/080. It was titled, 'The New Colonialists'.

Sale of contemporary Chinese Art fetches high prices

The prices obtained in Sotheby's Hong Kong defied fears that the global slowdown would weaken auction prices. Bidding was aggressive by more than 400 people and $18 million worth of works were sold. The 'oil-on-canvas portrait' known as 'Bloodline: The Big Family No. 3' sold for just over $6 million and well above the estimated $3.4 million. The painting depicts a family during the Cultural Revolution. A group of sketches based on Chinese characters created by the artist Xu Bing sold for nearly $1 million and 'Two Wandering Tigers' by Cai Guoqiang sold for more than $900,000. Other artists whose works fetched high prices were Zeng Fan Zhi, Ai Weiwei and Sui Jianguo.

The soaring prices of works of contemporary Chinese artists have stunned the world and helped transform arts districts in Shanghai and Beijing. It has also turned many Chinese artists into multimillionaires. (From International Herald Tribune 10/4/08)

From the British Press

Olympics chief's conciliatory words on China

Mr. Jacques Rogge, the Olympics chief pleads for more time for China. Whilst he understands the depth of emotion in the West to China's human rights record, public expectations about the country's pace of change are unrealistic. 'It took us 200 years from the French Revolution. China started in 1949. At that time it was a country of famine, epidemics, floods and civil war. It had no economy, no health care and no education system and there were 600 million of them.' Back in 1949, the UK was a colonial power. So too were Belgium, France and Portugal, 'with all the abuse attached to colonial powers. It was only 40 years ago that we gave liberty to the colonies. Let's be a little bit more modest'.

He went on to say that you don't obtain anything in China with a loud voice. That is the big mistake of people in the West wanting to add their views. To keep face in Asia is of paramount importance. All the Chinese specialists will tell you that only one thing works: respectful, quiet but firm discussion.(From The Financial Times 26-27/4/08)

China upgrades nuclear arsenal

China is undertaking a dramatic overhaul of its nuclear weapons in an effort to modernise and expand its arsenal. Bates Gill, head of the Stockholm Peace Research Institute, said that as a result it was developing more flexible delivery systems, including from submarines, and the capacity to use multiple warheads. China has now stated a policy of never using nuclear weapons against a non-nuclear country and never as 'a first strike'. Dr Gill said that China's static nuclear delivery system had left it vulnerable to a first strike and a sea-based capacity would make it less likely that an adversary could wipe out the possibility of a response. China's arsenal is the smallest of those of the big powers, namely the USA, Russia, Britain and France. The increase in spending was partly as a result of improving living conditions and equipment for its troops. Dr Gill also pointed out that despite criticism over China's arm sales to Africa and other unstable regions, China's share of the global arms tade had fallen to about two percent. (From The Telegraph 9/5/08)

Tesco Express in China

To continue expanding, Tesco needs to grow in international markets. It already has 55 hypermarkets across China but opened the first Tesco Express mini-supermarket in Shanghai, Yaan Pu district last Tuesday. In neighbourhood shopping, the Chinese have traditionally flocked to wet markets, but Tesco Express hopes to change this by creating a new kind of neighbourhood store that can offer convenience together with the quality and value for money that a big western brand can give. Tesco intends to capitalise on growing consumer concerns about food safety. About 500,000 Chinese suffer from pesticide poisoning every year, so Tesco guarantee that pesticide levels are monitored and the store's slogan is 'food you can trust'. The time appears to be right, because new cash-rich, time poor Chinese consumers are raising their spending on food by 17% per year. (From The Sunday Times 13/4/08)

Wine in China

The Future of Wine report drawn up by leading wine merchants Berry Brothers and Rudd speculates on the state of the industry in 50 years has made predictions on China's wine industry which is already the world's sixth largest producer. It will, with the right soil, low labour costs and soaring domestic demand, take the world by storm in both the volume wine (under £10) and fine wines sector. 'China has the vineyards, but not the technical expertise,' said Alun Griffiths the company's wine director. 'However, if good people from wine producing countries think there is an opportunity to make wine in China, they will go there and invest.' The report predicts China's 400 wineries will rise at least 10 fold., with a quarter producing fine quality wine. Some wines could rival the best of Bordeaux. (From The Guardian 9/5/08)

Cricket in China

India plans to send coaches, umpires and grounds men from its National Cricket Academy in Bangalore to China to help cultivate the sport in China. This was in response to a request from the Chinese authorities. A Board of Control for Cricket in India (BCCI) spokesman said that 'China had already taken to cricket in a big way; it's time to support a blossoming love of the game'. However, the commercial opportunities are recognised. The BCCI recently created the Indian Premier League (for cricket), which is a six week tournament and which has raised $1 billion (£500 million) this year. Auction of the eight regional teams brought in a further $720 million and sale of individual players raised further large sums of money. At present in China, there are 15,000 players and the Chinese Cricket Association aims to have 60,000 by 2012 plus enough umpires and coaches to allow them to play in a league. The Asian cricket council is aiming for 150,000 Chinese players by 2020 and was involved with the appointment of Rashid Khan, the former Pakistani Test player as the Chinese national coach. (From The Times 2/4/08)

Beijing Olympics and Sudan

Liu Gujin, China's special envoy for Darfur acknowledged that the situation in Darfur is a 'humanitarian disaster' but said he recently visited Sudan to convince the government there to accept a deployment of UN and African peacekeeping troops. He said he has conveyed to Sudanese president Omar Hassan al-Bashir China's grave concerns about the deterioration of conditions. Sudan says it is willing to accept international peacekeepers, but has continued to add conditions. Mr Liu's trip abroad also included stops in France and England, where he met with government officials and think tanks to lay out the Chinese position on Darfur. On the issue of critics of China trying to connect the Olympics to Darfur, Mr Liu stated that people with a Cold War mentality should abandon such thinking. (From The Wall Street Journal 10/3/08)

The Independent newspaper reported that Lord Malloch-Brown, the UK minister for Africa, met Mr Liu on his visit. Lord Malloch- Brown praised Steven Spielberg for withdrawing from the Olympics, putting pressure on the Chinese leaders and making them 'sit up and take notice'. John Prescott, the former deputy prime minister, also welcomed Spielberg's and other people's criticism. However, he also said, 'But I do worry that the language seems to be wrapped in the Cold War and I do think that would be very unfortunate, because China is coming more and more out into the world, playing a bigger part and we should encourage that.' (From The Independent 18/2/08)

Inflation in China

Inflation in China has surged to an 11 year high and is likely to rise further as damage to crops from winter storms is felt. However, rising food prices are not the only factor. China's consumer price index (CPI) climbed 6.1% in January because of higher commodity prices and transport problems blamed on the snowstorms. The expectation is that Beijing will stick to a tight monetary policy despite softening economic growth. Inflation is staring to hurt ordinary people some who spend as much as 50% of their household income on groceries and tens of millions live in poverty. Food, which makes up one third of China's consumer basket, cost 18.2% more in January than a year earlier. Pork, the staple meat for Chinese people, has soared 58.8% since January last year. This is blamed on swine disease, surging feed grain costs and low pork prices during 2006, which deterred farmers from rearing pigs.

Many economists say they do not expect a long-term impact from the worst snowstorms in half a century that swept large areas of central and southern China last month and early this month. The storms disrupted transport and damaged crops. An encouraging note is that non-food inflation rose modestly to 1.5% in January from the 1.4% of December. (From The Times 20/2/08)

Judicial Management

In Liu Yang, Hunan province, 50 Chinese judges from the Supreme People's Court, Hunan and other provinces attended a workshop on UK reforms. These were; the role of the government in judicial appointments, the UK's Judicial Appointment Commission and the Judge's appraisal system in district courts.

This project has been developed by the Great Britain-China Centre with the support of Justice Jiang Bixin who is President of Hunan province High Court. Jiang was recently appointed a Vice-president of the Supreme People's Court. The programme intends to promote the on-going reform of the Chinese judicial management system and to raise standards of judicial professionalism in China. (From China Review, GB-China Centre, Spring 2008)

Legal Ethics

A seminar on Legal Service Reform and Professional Ethics of Lawyers in China was held on 8 and 9 December 2007 in Beijing. This was the last seminar in the 'Effective Defence Lawyers' project which was funded by the Dutch Embassy in Beijing. The two-day seminar was attended by about 70 participants, including senior officials, judges, prosecutors and lawyers. Grand Justice Mr Xiong Xuanguo from the Supreme People's Court, Deputy Chief Prosecutor Mr Dai Yuzhong from the Supreme People's Procuratorate, the president of All China Lawyers Association, Mr Yun Ning and also senior officials from the Chinese Ministry of Justice took part in the discussions. Seven EU experts recruited by The Great Britain-China Council from the Netherlands, the UK and Portugal delivered presentations. Subjects covered included lawyers' professional ethics and strengthening the criminal defence. The seminar also provided an opportunity for introducing the draft Lawyers Code of Conduct which was prepared by the China Academy of Special Sciences. (From China Review, GB-China Centre, Spring 2008)

Beijing considering a change of the 'single child policy?'

An official at the National Population and Family Planning Commission in China has said that detailed studies into the environmental, social and other implications of changing the laws had begun. The reason is concerns about gender imbalance (shortage of girls) and the ageing population (one worker supporting two parents and four grandparents) . It is believed that the policy has prevented the birth of as many as 400 million babies. Some experts have called for a uniform two-child policy. But some government officials are afraid that reform could lead to a drastic increase in the population, currently 1.3 billion. They see population control as essential to stable economic growth.

During the 1960s, the birth rate was 5.8 babies for each woman, due to Mao's promotion of large families. When Mao's successors made contraceptives and abortions available, this fell to 2.9 babies per woman and after the implementation of the single child policy, it fell further to 1.8 - well below the replacement rate of 2.1. The Chinese government predicts that the population will peak at 1.5 billion in 2033. While there is no prospect of controls being completely lifted, changes could be rolled out region by region or be introduced for certain households. Already in some areas, people in second marriages are allowed to have a second child if their spouse has none and in addition couples without siblings are allowed to have two children. But officials are nervous of announcing possible relaxations in case people pre-empt them. In 1983, discussions about relaxations led to the birth of up to 30 million babies in that year. (From The Guardian 29/2/08)

From the Chinese Press

Cutting off funds to polluters

The State Environmental Protection Administration (SEPA), the People's Bank of China and the China Banking Regulatory comission jointly issued the 'green credit' policy last July. The green credit policy is aimed at curbing loans issued to projects that are potentially damaging to the environment. High interest rates would be imposed to punish polluters. SEPA have reported 30,000 violation cases to the central bank. A chemical company in Anhui province not only had its loans stopped, but the bank also recalled the five million yuan loan already on its account. Since the green credit policy became active, 12 heavily polluting companies have had crucial bank loans recalled, suspended or rejected. (From Beijing Review 6/3/08)

The law and transparency

China has been moving towards a 'rule of law' for more than a decade, during which period ordinary people have been given an increasing say in lawmaking. For years in China, administrative regulations issued by government agencies have constituted a major basis of the legal system and have proven effective in a large proportion of judicial proceedings. However, because the regulations placed more emphasis on feasibility, most are case orientated and their formulation always follows simplified procedures. A direct result of insufficient consultation is their failure to take into consideration different interest groups and unexpected circumstances. In addition, loopholes in these statutes were abused.

In 2000, China promulgated its first Legislation Law, which clarifies the obligation of law makers to ensure that laws are made by the people for the people. Article 5 states, 'Lawmaking shall reflect the will of the people, promote socialist democracy, and ensure that people are able to participate in the lawmaking process through various channels'. The first successful attempt at this process was the revision of the Marriage Law in 2001. After the draft of the amendment was published, there were floods of feedback from people aged 13 to 90. During the formulation of the Real Right Law, which involved seven hearings over 13 years, there were 10,000 responses from the public to the draft which was published on 10 July 1005. Revisions following this feedback meant that the first Chinese statute on private property protection conformed much better to the requirements of the people.

Following this, 20 representatives from over 5,000 applicants aired their opinions on personal taxation legislation during September 2005. In 2007, there were public debates on the Labour Contract Law and the Employment Promotion Law. In the next five years and beyond, people can expect more transparent lawmaking to contribute to the rule of law. (From Beijing Review 6/3/08)

No more free plastic bags

China's State Council General Office recently issued a circular restricting the production, sale and use of plastic shopping bags. These bags are the main source of 'white pollution' and the production and distribution of bags thinner than 0.025 mm. are banned as of 1 June 2008. Statistics show that Chinese consumers use more than three billion plastic bags each day, most of which are non-biodegradable. (From China Today March 2008)

Tomb-sweeping Day (Qing Ming)

For the first time, this traditional festival has been made a national holiday in mainland China. On this day (April 4th this year), Chinese people make sacrifices and honour their ancestors. In addition, many local governments organise various ceremonies to show respect to ancestors of the Chinese nation such as the Yellow Emperor (Huangdi) and ancient iconic figures such as Confucius. However, this year there appeared a number of luxurious sacrificial rituals. In some cases, different areas competed with each other in terms of the splendour of the ceremony. Some of the ceremonies were at artificial places of interest, had little genuine cultural significance and did not make a profit as expected.

The People's Daily newspaper commented that the luxury and waste in some extravagant ceremonies goes against the Chinese nation's traditional virtue of thrift and show the organisers' misunderstanding of the essence of Tomb-sweeping Day, which is to spread and promote Chinese virtues of frugality and fine traditional culture. (From Beijing Review 17/4/08)

More than 100 million people mourned for the deceased at graveyards or memorial parks and halls on Tomb-sweeping Day, the Chinese Ministry of Civil Affairs estimated. The State Council, China's cabinet, revised the nation's official holiday schedule last year to add three traditional festivals, including Tomb-sweeping Day in response to public demand. (From Beijing Review 17/4/08)

A road map for one billion city dwellers

China's population is crowding into its cities on an unprecedented scale and pressures on land, national resources, city finance and the social fabric are intensifying. By 2025, nearly one billion people - two thirds of the population - will be urban dwellers, posing an immense challenge for leaders. Success or failure will shape the economy and society for decades. Cities capacity for generating wealth has been crucial to China's rapid growth and rising living standards. The success of urban China will be even more central in the future. About 100 million people moved from rural to urban areas between 1990 and 2005. Over the next 20 years, a staggering 240 million migrants will move into the cities, according to research by the McKinsey Global Institute (MGI). By 2025, cities will account for more than 90% of total GDP, up from 75% in 2005. Hundreds of cities are growing in parallel, competing for investment and resources.

This will have its inefficiencies and cause intense strains as the urban need for water and energy will double. Water pollution could increase fivefold over the next 15 years and China could lose more than 15% of available farmland. MGI research suggests that it would maximise the economic growth opportunities and mitigate the pressures of urbanisation more effectively by promoting a more concentrated pattern of growth. This could mean the emergence of 15 super- cities, each with an average population of 25 million. Another approach would be the development if 11 urban 'networks' of cities, each with a combined population of over 60 million. Each of these urban models could deliver 20% higher per capita GDP than current trends. Energy efficiency would be 20% higher due to economies of scale. Also the loss of arable land could be limited to 7%. Large cities generally attract the most investment and talent, which would provide China with the best chance of moving up the value scale.

The top priorities for city mayors include maximising their transport infrastructure to fight congestion; encouraging dense, 'vertical' development; managing demand for resources by increasing energy productivity; adopting policies to ensure that the 'right talent is available at the right location; and improving the productivity of public-service delivery. A change of emphasis from growth at all costs to one of urban productivity is urgent because continuing urbanisation will put pressure on those least able to sustain themselves, including smaller cities and migrant workers. China should seize the opportunity to use its growing wealth to invest in farsighted policies, pursued at the local level that will sustain economic growth while creating the harmonious society Beijing desires. (Written by Jonathan Woetzel and Janamitra Devan of McKinsey). (From South China Morning Post 10/5/08)

China fights unemployment

China's Ministry of Finance will allocate 26 billion yuan ($3.7 billion) this year to reducing unemployment, ministry official You Mingchun said. Funding is mainly for training and subsidies and also offers small loans to start-up companies. The country has been increasing spending to promote employment since 2002, Mr You said, adding that spending rose to 23.8 billion yuan ($3.4 billion) last year from 4.1 billion yuan ($0.59 billion) in 2003. He said that the regional government would also earmark more funds this year. (Xinhua-South China Morning Post 10/5/08)

Migrant workers begin to demand equal rights

Over the last 20 years, 210 million rural workers have moved into China's cities in search of a better life. By comparison, the combined labour force in the USA and Europe is 300 million. Ted Fishman, writing in The New York Times, has called it the 'largest human migration in history'. The Chinese government has set itself the goal of building China into a moderately prosperous nation by 2020, by which time several hundred million rural inhabitants will have become urban dwellers.

At this year's meeting of the National People's Congress, the deputies who represented these migrant workers tabled motions calling for improved working conditions, greater educational opportunities for their children, reliable and affordable health-care, access to social protections and the establishment of a national social security programme.

In short, the members of one of China's largest and most disadvantaged groups are beginning to demand equal rights and the social security guarantees already enjoyed by city residents. (From China Today, May 2008)

China's food supply and rural support

Chinese Premier Wen Jiabao has stated that China is fully capable of feeding itself. The nation's self-reliance in feeding 1.3 billion people is a great contribution to the world. There are abundant grain reserves totalling 150 million to 200 million tonnes. The Central Government vowed this year to spend 562.5 billion yuan ($80.4 billion) to support farms and the rural sector, 130.7 billion yuan ($18.7 billion) more than last year. The State Council decided last month to spend another 25.25 billion yuan ($3.6 billion) in addition to this year's rural budget, mainly to subsidise farmers' purchases of seed, diesel, fertilizers and other production materials. (From Beijing Review 17/4/08)

Smoking Ban

Beijing will ban smoking in most public places starting from 1 May to meet China's pledge of a smoke-free Olympics. Many Chinese cities already have limited restrictions in place, but Beijing will be the first to ban smoking in all restaurants and public places. Beijing first introduced some smoking restrictions in 1996, when the municipal government prohibited lighting up in large public venues such as schools, sports arenas and movie theatres. The new rule expands the restriction to include restaurants, bars, Internet cafes, hotels, offices, holiday resorts and all indoor areas of medical facilities.

China joined the fight against tobacco consumption when it signed the Framework Convention on Tobacco Control of the World Health Organisation (WHO) in March 2003. In 2005 China ratified WHO rules that urged, within three years, to restrict tobacco advertising and sponsorship, put tougher health warnings on cigarette packets, raise tobacco prices and taxes, curb secondary smoke, prohibit cigarette sales to minors and clamp down on cigarette smuggling. (From Beijing Reviews on 10/4/08 and 24/4/08)

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

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