Professional Documents
Culture Documents
7, 2006
3 EDITOR’S DESK
3 Cooperating on IPR Protection
18
marks another step toward
regional harmony
12 YEAR-ENDER: A Positive
Outlook
Generally smoother sailing for
Latin America COVER STORY It’s common knowledge that piracy
14 YEAR-ENDER: Bumpy Road Ahead of films and other forms of entertainment is still
Sino-Japanese relations take an upward turn, widespread in China, but the government has begun
but will that last? to fight back in a more intensive way. As part of that
effort, China has been expanding its cooperation
16 VIEWPOINT with other countries. Recently, Twentieth Century
Fox, a major U.S. entertainment company, signed an
16 Americans’ Changing View of China
agreement with Zoke Culture Group, China’s
17 China Is Not the Cause of Global Inflation
largest video distributor, to provide legitimate copies
of its movies in a more timely manner in the hopes
18 NATION of weaning people away from pirated versions. Yet
the battle won’t be won easily, as new file-sharing
18 Black DVD Market Gets New Black Eyes
Promoting affordable authentic DVDs technology enables people to illegally download
22 The Battle for the Internet films, music and other entertainment much more
IPR protection clashes with new file-sharing easily.
software
26 Cause for Cheer 40 Not Just a 2008 Thing
Progress in protecting human rights Olympics will have long-lasting economic
28 YEAR-ENDER: Equal Education effects
Leveling the playing field for urban and rural 42 Legal-Ease:Doing Business in China
students 44 State of the Market
32 BUSINESS 46 FORUM
32 Foreign Companies See Green 46 Should Government Relief Recipients Be
Multinationals doing well in China Kept From Owning ‘Luxuries?’
35 Europe vs. America in China
Different approaches to success
38 PriceSmart’s Dumb Moves 48 EXPAT’S EYE
Lessons from a company’s failure 48 Pinning My Hopes on Needles
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http: //www.bjreview.com.cn
E-mail: contact@bjreview.com.cn wentieth Century Fox Home Entertainment signed in Beijing in
President & Editor in Chief: Wang Gangyi mid-October an exclusive cooperation agreement with Zoke
Vice President: Qi Wengong Culture Group, a Chinese audio and video publisher, with a
Associate Editors in Chief: Li Jianguo view to offering DVDs and VCDs of its classic and latest movies
Huang Wei
Executive Editor: Zhou Jianxiong to China’s home entertainment market through Zoke’s extensive
network. This can be seen as a new step forward in intellectual
Assistant Executive Editors: Yao Bin, Ding Zhitao,
Zhang Zhiping, Francisco Little property rights (IPR) cooperation between China and the United
Editorial Administrators: Li Ning, Shi Bosen States.
Senior Consultant: Shao Haiming U.S. Commerce Secretary Carlos Gutierrez, who was then vis-
Opinion Editor: Yao Bin iting China, attended the signing ceremony. He said that inter-
World Editor: Ding Zhitao
Nation Editor: Tang Qinghua enterprise cooperation of this kind would become another “strate-
Business Editors: Yu Shujun, Lan Xinzhen gic weapon” in the two countries’ joint fight against piracy.
Editorial Consultants: Linda Mattson, IPR protection is of rising importance to China-U.S. economic
Matt Young
Staff Reporters: Tang Yuankai, Feng Jianhua,
relations. Both sides have reached a consensus that piracy in China
Zan Jifang, Ding Ying, Ni Yanshuo, not only hurts American companies’ interests, but also hinders the
Ding Wenlei, Wang Jun, Yan Wei, further development of bilateral trade.
Tan Wei, Li Li, Liu Yu, Liu Yunyun, Chinese Commerce Minster Bo Xilai made it very clear that
Yin Pumin, Jing Xiaolei, Pan Xiaoqiao
Photo Editor: Wang Xiang while China is making great efforts to encourage creativity, the
Photographers: Jiang Xiaoying, Wei Yao country regards IPR protection as a national strategy. The Ministry
Art: Li Shigong of Commerce has set up centers in 50 cities around the country to
Design & Layout: Xu Husheng, Hou Lina,
Wang Yajuan
handle complaints about IPR infringements, which by the end of
Proof Reading: Qin Wenli September had investigated more than 15,600 cases.
Online Editor: Li Zhenzhou In accordance with the Chinese Government’s Action Plan on
Advertising Director: Cheng Guangyan Intellectual Property Protection 2006, released at the beginning of
Distribution Directors: Wang Weiwei, Pan Changqing this year, China has already carried out 19 international exchange
Human Resources: Zhang Xiaoli and cooperation projects, covering IPR legislation, as well as pro-
International Cooperation: Pan Shuangqin
Legal Counsel: Yue Cheng
tection of trademarks, copyrights and patents. Seven of the pro-
grams are happening between China and the United States. These
North America Bureau include China’s import of American expertise on the fight against
Chief: Wang Yanjuan
Reporter: Chen Wen online piracy, the training of law enforcement personnel, and joint
Tel/Fax: 001-201-792-0334 studies of the influence of piracy on national security, cultural secu-
E-mail: yanj_wang@yahoo.com rity and the development of human society.
General Editorial Office
Tel: 86-10-68996252
Dialogue is the best way for Beijing and Washington to solve
Fax: 86-10-68326628 their disputes regarding IPR protection. According to Gutierrez, the
English Edition U.S. Government had sent an intellectual property attaché to Beijing
Tel: 86-10-68996259 and at the beginning of 2007 one more attaché will be dispatched to
Advertising Department
Tel: 86-10-68995813, 68326072
Guangzhou, capital of south China’s Guangdong Province, to
Fax: 86-10-68329398 strengthen dialogue and cooperation between the two countries.
E-mail: ad@bjreview.com.cn It must be pointed out that IPR protection is a global concern.
Distribution Department According to statistics from the American Film Institute, the
Tel: 86-10-68310644, 68995807
Fax: 86-10-68328738 United States suffered a loss of $6.1 billion from movie piracy
E-mail: circulation@bjreview.com.cn around the world in 2005, of which $240 million was attributed to
Published every Thursday by pirated products in China. That is to say, quite a few countries apart
BEIJING REVIEW, 24 Baiwanzhuang Lu, from China have done harm to U.S. movie copyrights. Hence, it is
Beijing 100037, China.
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necessary for the United States to protect its intellectual property in
Corporation (Guoji Shudian), P. O. BOX 399, a more extensive manner.
Beijing 100044, China The Chinese Government understands clearly that IPR protec-
Tel: 86-10-68413849 Fax: 86-10-68412166 tion is not only compulsory under World Trade Organization rules,
E-mail: fp@mail.cibtc.com.cn
Website: http://www.cnokay.com but more importantly, it is crucial to China’s own development.
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“I
is not
only the
government’s responsibility
with total payments
reaching 40 million
yuan.
But Zhang pays
of each other.”
Iranian President Mahmoud
Ahmadinejad, pledging help for security
and peace in Iraq during a meeting with
to help students in difficulties, more attention to his Iraqi counterpart Jalal Talabani in
but the responsibility of us all.” the 200,000 Tehran
Zhang Baoqing applications for
help his founda- “Increased demand for energy
tion has
he state supports nongovern- from China isn’t the only thing
Lasting Expectations
The emblem of the 16th Asian Games, to be held in south China’s Guangzhou City in
2010, was unveiled on November 26. The ascending lines of the design are modeled
after the contour of the host city’s symbolic five-goat statue and reflect the shape of a
torch.
The emblem expresses Guangzhou’s hope that the flame of the Asian Games will
remain lit forever, said organizing officials.
The Asian Games is the largest sports event in Asia. Doha, Qatar is the host of
this year’s games from December 1 to 15.
ARCHITECTURAL MY YEAR
FASHION Models Chinese
exhibit a line of jewelry
clothing by stores woo
Chinese fashion customers
designer Zhou with
Xiaodan titled pig-shaped
“Flowing gold
Forbidden City” ornaments
in Tokyo as months
part of ahead of
a monthlong the coming
Chinese culture Year of
festival the Pig
in China’s
lunar
calendar
ECONOMICS launched its reform of the Checked Growth likely to continue next year, said
exchange rate system to allow Growth of China’s gross the report.
Rules for Foreign Banks the yuan to float against the U.S. domestic product (GDP) is
dollar within a daily 0.3 percent Vibrant Online
China has granted overseas expected to slow from around Entertainment
banks a five-year grace period to band from the official central 10.5 percent this year to 9.25
comply with a requirement that parity rate. percent next year as a result of China’s Internet video audi-
their loan-to-deposit ratio be less The exchange rate was set at the government’s macroeconom- ence will nearly double this year
than 75 percent in a new imple- about 8.28 yuan per U.S. dollar ic controls, according to a report to 63 million, and its members
mentation rule released before the reform. jointly released by the Institute will pay 400 million yuan to
November 28. The yuan’s appreciation is of Economics of Renmin watch sports, TV series and
The new implementation attributed to the continuous University and China Chengxin movies online, according to an
rules take effect on December slump of the U.S. dollar and Credit Management Co. Ltd. industry report released
11, when China’s $5.2 trillion expectations for an interest rate The report said after peaking November 27.
banking sector is opened under drop in the United States, said this year, the growth of the coun- By 2010, consumer spend-
the country’s World Trade analysts. try’s GDP is expected to decline ing for online entertainment will
Organization commitment. China’s soaring foreign with implementation of more more than double to over 950
Foreign banks that incorpo- exchange reserves and the rock- stringent macro-controls next million yuan, Shanghai-based
rate locally have to meet the eting trade surplus are also con- year. consultancy firm iResearch said.
requirement by December 31, sidered important factors that According to its estimates, Even with such robust growth,
2011, the China Banking pushed the yuan’s value to new China’s GDP will grow by however, that figure will account
Regulatory Commission said on highs. 10.48 percent this year, with for only a portion of the sector’s
its website. investment in fixed assets up 27 total revenue as more companies
Later Retirement? will want to advertise through
The watchdog made the percent and the Consumer Price
new rules in line with a rule The government is consider- Index up 1.5 percent. video platforms, the report pre-
released on November 16 stipu- ing raising the mandatory retire- China’s GDP growth began dicted.
lating that overseas banks that ment age to plug the huge deficit to ease in the second half of this The total market is expected
want access to the full spectrum in the pension fund, the China year, showing that the macro- to generate 3.4 billion yuan in
of retail yuan business must Economic Weekly reported. economic control policies aimed sales by 2010, of which more
incorporate locally with a regis- The social security fund was at cooling down the economy than 70 percent will come from
tered capital of no less than 1 800 billion yuan in the red at the have taken effect and the trend is advertising.
billion yuan. end of last year, compared to a
If not, they can hold single 36 billion yuan deficit in 2000,
deposits of 1 million yuan or the Chinese-language magazine
above, shutting the door to small said, citing a Ministry of Labor
clients. and Social Security document.
The magazine quoted
New High for Renminbi unidentified ministry officials as
The value of the renminbi saying that they would put for-
against the U.S. dollar hit a new ward a proposal to raise the
high on November 29, with the retirement age to higher authori-
central parity rate at 7.8394 yuan ties within a month.
to $1, breaking the 7.84 mark. Official statistics showed
This signifies that the ren- that in 2000, the average retire-
minbi’s value has risen 5.32 per- ment age was 51.2, much earlier
cent since July 21, 2005, when than the requisite age of 60 for NATURE’S BOUNTY Farmers from Ningxia Hui Autonomous
the Chinese Government men and 55 for women. Region enjoy a good harvest of corn
VENOMOUS A WARM
REBIRTH On the FEELING
island province Animals
of Hainan, from
a 100-year-old Southeast
upas tree that Asia and
was uprooted Africa in the
in a typhoon is safari park
replanted on in northeast
November 26 China’s
with the Qinhuangdao
assistance City have
of heavy been moved
machinery to new
“apartments”
with heating
in the chill of
winter
A WORLD OF BEAUTIES Miss Chile, Hil Yesenia Hernandez Escobar (second from left), 22, who claimed the 2006 Miss Earth title,
poses with the runners-up at the 2006 Miss Earth beauty pageant in Manila, the Philippines, on November 26
“H
were released. their current bilateral trade to $15 billion
armonious” seems to have Li said economic and trade cooperation within five years and to promote coopera-
become a hot-button word in is a key component of China’s relationship tion in agriculture, transportation, energy,
the international community. with the four countries. finance and the information industry.
“We pledged to continue our He noted that China and Viet Nam In an interview with Beijing Review, Hu
work toward a dynamic and signed a number of cooperation documents of the CICIR singled out several achieve-
harmonious Asia-Pacific community by during Hu’s visit, setting out the framework ments that he believes are of special signifi-
building strong societies for the well-being of for bilateral economic cooperation in the next cance. Given the fact that political relations
our peoples,” stated the Hanoi Declaration five to 10 years. The two sides agreed to pro- between China and Pakistan have been more
adopted by the leaders of the 21-member mote cooperation on major projects, expand valued than their economic relations, the free
Asia-Pacific Economic Cooperation (APEC) bilateral trade and work together to push for- trade agreement and the ambitious trade tar-
forum at their recent summit. ward negotiations on investment and trade in get are set to upgrade the countries’ econom-
This echoed China’s current worldview services related to a free trade agreement ic ties, thus promoting across-the-board coop-
of a harmonious world developed under between China and the Association of eration between the two countries, he said.
President Hu Jintao. Addressing the APEC Southeast Asian Nations (ASEAN), he said. Hu noted that China made concession-
summit in the Vietnamese capital on Viet Nam is a member of ASEAN, ary trade arrangements with countries in a
November 18, Hu indicated that China which has agreed to set up a free trade area disadvantaged position in international
would join hands with APEC countries to with China by 2010. competition such as Viet Nam, Laos and
shape a harmonious, peaceful and Pakistan. He said with these
prosperous Asia-Pacific community. arrangements, China undertook
The APEC forum was only one greater responsibilities commensu-
of the numerous occasions on which rate with its a major power status in
Hu has emphasized the concept. the region. As it pursues common
Promoting the idea was at the top of development through expanding
the Chinese president’s agenda as he economic and trade links, China is
toured Viet Nam, Laos, India and demonstrating its policy of seeking
Pakistan from November 15-26, harmonious relations with neigh-
experts say. boring countries, the expert argued.
Powered by trade Working toward rapport
Ruan Zongze, Vice President of At a press conference after their
the China Institute of International meeting in New Delhi, Chinese
Studies (CIIS), called Hu’s four- President Hu Jintao and Indian
nation visit “a tour of good neighbor- Prime Minister Manmohan Singh
ly diplomacy.” He stressed that rela- SYMBOLIC HANDSHAKE: Indian Prime Minister hailed bilateral relations.
tions with neighboring countries are Manmohan Singh meets Chinese President Hu Jintao in Hu noted that China and India
of primary importance for China as it New Delhi. The relationship between China and India is s hare broad common interests in
believed to have global implications
seeks to build a harmonious world. bilateral, regional and international
China has more neighbors than any Li said China and Laos pledged to dimensions. “Both China and India are con-
other country in the world, he noted, adding expand bilateral trade and enhance cooper- fident of our future relationship and are will-
that establishing good ties with them is a ation in the fields of investment, communi- ing to work together to facilitate all-around
pressing strategic task. cations, transportation, infrastructure, ener- and in-depth development of a strategic and
Sharing Ruan’s views, Hu Shisheng, an gy and mining. cooperative partnership,” he said.
expert on South Asian studies at the China China and India signed a pact on invest- Singh, for his part, asserted that cooper-
Institutes of Contemporary International ment promotion and protection, agreeing to ation between India and China has global
Relations (CICIR), believes the most con- strengthen cooperation in the areas of infor- significance. He said the nature and range of
crete and notable progress made during the mation and communication technology, agreements signed during Hu’s visit pointed
trip was in economic and trade cooperation. energy, infrastructure, science and technolo- to the consolidation and diversification of
Chinese Foreign Minister Li Zhaoxing gy and agriculture, the foreign minister said. bilateral ties.
recently briefed the media about Hu’s tour. The two sides also set a target of raising the The warming up of relations between
According to Li, 54 documents were signed annual volume of bilateral trade to $40 bil- Beijing and New Delhi has caught the
on cooperation between China and other lion by 2010, he added. world’s attention in recent years, but not
countries in various fields, in addition to the Li said China and Pakistan signed a free everything is rosy, experts say.
YEAR-ENDER
A Positive Outlook
economic rise of Latin America can be attrib-
uted to the vitality that economic reforms have
brought about since the 1990s and some other
internal elements, research shows that the pos-
itive effects of the improved performance of
the world economy, especially the U.S. econ-
omy, on the Latin American economy cannot
In 2006, Latin America’s political be ignored. It means to a certain degree that if
situation generally was stable, the the world economy can maintain its good
growth, the prospects for the Latin American
economy continued to grow and foreign economy will be further brightened.
Of course, to better utilize the favorable
relations developed in diverse ways external conditions, Latin American coun-
tries need to increase the efficiency of
investment, improve their infrastructure and
By JIANG SHIXUE Ecuador, Nicaragua and Bolivia, because of strengthen government administration.
domestic political, economic and social prob- Second, a current account surplus
Political situation lems. But in 2006, through elections and polit- accompanies the high economic growth
This year, more than 10 Latin American ical dialogue, these contradictions have been rate. On one hand, Latin America’s export
countries have held presidential or parlia- alleviated to a greater or lesser extent. trade is increasing, and on the other hand,
mentary elections, or both. Thus, the media many Latin American countries, especially
have dubbed 2006 the year of elections for Economic situation Central American countries, obtain a large
the region. The Latin American economy has grown amount of remittances from emigrants. The
Except for Mexico, most elections were five percent in 2006, marking a four-year high- current account surplus in 2006 accounts for
held in a peaceful environment. After the elec- growth period. The previous such high eco- 1.5 percent of the region’s gross domestic
tions, most defeated candidates faced reality nomic growth period was from 1991 to 1994. product (GDP). The coexistence of a high
and accepted the choice of the electorate. The economic growth is closely related economic growth rate and current account
Left-wing leaders did not accomplish as to the favorable external environment. For surplus is rare in the history of Latin
much as people expected. In late 2005, some example, the rapid development of the world America, and it also provides an advantage
observers and analysts forecast that the left- economy makes Latin America able to con- for the Latin American economy to cope
wing forces of Latin America would contin- tinue to expand its exports, which will in turn with external problems. The occurrence of
ue to show their strength and dominate the help the countries further improve their trade the current account surplus is closely relat-
political arena. However, so far, their positions. The UN Economic Commission ed to the improved trade environment.
achievements have not been as outstanding for Latin America holds that Latin America Third, the increase in national income
as predicted earlier, though left-wing politi- ranks second in the world next to China in has increased domestic demand. In recent
cians successfully defeated their rivals in terms of its export growth rate. years, the growth rate of national income of
Brazil, Nicaragua and some other countries. It should also be pointed out that in Latin American countries has exceeded
Since the 1990s, many Latin American recent years the “China element” has con- the growth rate of
countries have carried out political reforms, tributed to the economic growth of Latin
with the focus on election laws. Such reforms America. As China has imported a good
have been successful in most countries. All number of primary products with high
political parties participate in elections within prices from the international market, it has
a democratic framework, and electorates are benefited Latin American countries that
able to express their political choice by voting. depend on exporting raw materials.
Stressing the importance of maintaining Currently, the Latin American economy
consistency in government policies, most is in a rising period with the following char-
newly elected leaders said they would con- acteristics:
tinue the policies of the previous govern- First, the positive effects of external ele-
ments so as to maintain the confidence of ments are increasingly prominent.
domestic and foreign investors. Although the recent
But perhaps Bolivia is an exception. On
May 1, President Evo Morales announced
that the country’s oil and natural gas indus-
try would be nationalized. The measures GDP. In 2004,
stirred a panic among international investors the growth rates of national income
in the energy-related fields, and created ten- and GDP were 7.1 percent and 5.9 percent,
sion in Bolivia’s relations with Brazil, respectively, and those in 2005 were 5.9 per-
Argentina and other countries. cent and 4.5 percent, respectively. As a result,
The political conflicts in some “problem the domestic demand of Latin American
countries” took a positive turn this year. In countries in 2004 and 2005 increased by 4.2
2005, political turbulence occurred in some percent and 5.3 percent, respectively. The
Latin American countries, such as Haiti, Peru, fact that the growth rate of domestic demand
lags behind that of national income shows to
The author is deputy director of the Institute of
Latin American Studies, Chinese Academy of Social
some extent that the national savings rate in
Sciences Latin American countries is increasing.
But the investment rate (21.6 percent in develop in a positive direction. Many Chinese
2005) has not recovered to the level prior to leaders visited Latin America and several
the East Asian financial crisis in 1997, and Latin American heads of state visited China.
is unable to provide enough jobs. In most People-to-people contact has been increasing.
Latin American countries, creating enough It is estimated that the bilateral trade vol-
job opportunities is one of the requisites to ume between Latin American countries and
resolving social problems. China is very likely to reach or exceed $60
The negative effects of inadequate invest- billion this year (it was $50 billion in 2005).
ment have been very obvious for a long time. But, behind this, there are also some neg-
For instance, Latin America boasts the second ative elements. Some Latin American coun-
largest reserves of oil and natural gas in the tries have taken anti-dumping measures on the
world. But due to less investment in the energy pretext that products made in China have hit
sectors, some Latin American oil producers their domestic mar-
could not increase their output by a large mar-
gin against the background that world energy But some
prices have skyrocketed in recent years. Latin American countries still main-
The only exception may be Brazil. The tain good bilateral relations with the United
country’s national oil company has greatly States. On February 27, the United States and
increased its output in 2006, a result of Colombia announced that the two countries
increased investment in the previous years, reached an agreement on free trade after two
which makes the country basically able to years of negotiations. Also, on April 12, the
meet its own energy needs. United States and Peru signed the free trade
Fourth, the debts of Latin American agreement that was reached between the two
countries decreased greatly. Compared with countries in December last year.
10 years before, the propor- In any case, Latin America is the back-
tion of yard of the United States. As Latin America
has to depend on the United States economi-
cally, a move to eliminate U.S. influence
kets. Despite from the region will not appear. In other
this, more and more Latin words, relations between Latin American
Americans believe that China’s rapid econom- countries and the United States have been in
ic development provides good opportunities a state of coexistence between cooperation
for Latin America, rather than being a threat. and confrontation, and that will persist in the
From April 12-15, China and the United future. But cooperation will still dominate.
States held consultations on Latin American
affairs, the first of its kind. The two countries Relations within the region
exchanged views and opinions on their rela- In recent years, relations between some
tions with Latin American countries, their Latin American countries have not been very
policy toward Latin American countries, the good. For example, on April 22, Venezuela
situation in Latin America and Sino-U.S. said it would formally withdraw from the
d eb t cooperation in the region. It was part of the Andean Community of Nations. International
to export income has Sino-U.S. strategic dialogue started in 2005. media termed the event the gravest crisis since
been reduced by half, and the proportion of It shows in a certain sense that the develop- the trade bloc was created in 1969, and at the
short-term debt to foreign exchange ment of China-Latin America relations has same time it has had a huge negative effect on
reserves has been reduced by one third. drawn Washington’s attention. the Latin American integration process.
Fifth, the fiscal status of Latin American Relations between Latin American coun- On April 28, Chavez attacked Alan
countries has been improving. In recent years, tries and the United States showed signs of Garcia, Peru’s former president who was
a relatively high economic growth rate has dri- confrontation. Being concerned that Latin running in the second round of presidential
ven production activity, which has resulted in American countries will continue to “turn elections, in barbed words in one of his
a revenue increase. On the other hand, fiscal left,” the United States tried its best to prevent speeches to the nation, which has aggravat-
expenditures have not increased very much. Daniel Ortega from being elected Nicaragua’s ed tensions between Venezuela and Peru.
Sixth, in the eyes of many international president. When Cuban President Fidel Castro Peru announced the next day that it would
investors, the risks of investment in Latin was hospitalized, the United States said it recall its ambassador to Venezuela.
America are declining. That forecast is based hoped for a transition toward democracy in After Morales announced that Bolivia
on the following factors: the Latin American Cuba, instead of a succession by Raul Castro, would seize control of the oil and natural gas
economy has entered a new growth period, Fidel’s brother. At the same time, relations industry on May 1, relations with Brazil and
and the economic situation appears opti- between the White House and Venezuelan Argentina, two countries that have been
mistic for the foreseeable future; the balance President Hugo Chavez and Bolivian severely affected by the decision, became
of payments is improving; the macroeco- President Morales have not been good. complicated. Brazilian President Luiz Inacio
nomic situation is getting better and the mar- The United States’ construction of a bar- Lula da Silva said the Brazilian Government
gin of exchange rate fluctuation is narrowing. rier along its border with Mexico has aroused would not take any retaliatory measures
intense opposition from Mexico. Mexican against Bolivia, but he also stressed that
Relations with other countries
President Vicente Fox said on October 26 Bolivia should not have sovereignty over
In 2006, relations between Latin that the plan brings shame on the United Brazil, and maintaining Bolivia’s rights
American countries and China continued to States and is a nearsighted decision. should not damage Brazil’s interests. ■
C
lateral occasions, the leaders of the two coun- International Affairs, the joint research is
hina-Japan relations have gone tries did not hold any meaningful meetings. aimed at making a new breakthrough in the
through two stages in 2006. In the On the security front, distrust between hot-button issue of wartime history.
first nine months of this year, as the two countries deepened. Japan repeated- China and Japan will build mutual trust
Junichiro Koizumi was finishing ly touted “China threat” rhetoric. It held a in the security field through security dia-
his term as Japanese prime minis- joint military drill with the United States near logues and defense exchanges, the countries
ter, bilateral relations hit a historical low the disputed oil and gas fields in the East announced. Military exchanges, such as
point since they were normalized in 1972. China Sea in February this year, a move that dialogues between the two militaries, visits
However, as Shinzo Abe took the reins of was clearly directed at China. On August 1, by naval fleets, exchanges between military
government, a new page in relations was it published the Defense of Japan 2006 white officers and joint military drills, are expect-
opened, as evidenced by his “ice-breaking” paper, exaggerating “China’s military threat.” ed to resume soon.
tour of China 13 days after he assumed Economic cooperation between China The two countries will also hold a year
office. In a nutshell, the relationship and Japan slowed down. From January to of cultural and sports exchanges in 2007 to
between China and Japan took a turn for the September this year, China received $3.27 bil- mark the 35th anniversary of the normaliza-
better after going through twists and turns. lion worth of direct investment from Japan, tion of diplomatic relations. The program is
Plummeting relations down 30 percent from the same period of the designed to promote people-to-people and
previous year. The bilateral trade volume from youth exchanges, enhance mutual under-
China-Japan relations were chilly during standing and improve the perception of each
January to October stood at $168.5 billion, far
Koizumi’s last nine months in office. other’s country.
lower than that between China and the United
Politically, bilateral exchanges of high-level At the same time, they will strengthen
States, which was $214.5 billion, and that
visits were suspended. After Chinese Vice coordination on regional and international
between China and the EU, which was $218.9
Premier Wu Yi visited Japan in May 2005,
billion. The figures provide evidence that eco- affairs. The two countries are expected to
no other high-ranking officials stepped on the
nomic relations between China and Japan, reach a consensus on East Asian regional
The author is a researcher with the China Institute which have been close, were greatly damp- cooperation and integration, strengthen dia-
of International Studies ened in the wake of the political standoff. logue on UN reform and maintain that the
North Korean nuclear issue should be development after World War II. By the Ministry in March showed that 77.9 percent
resolved peacefully through dialogue in the 1980s, it had risen to become the world’s of the respondents agreed that Japan-China
framework of the six-party talks with the second largest economy. However, in the relations, which had worsened because of
aim of denuclearizing the peninsula. 1990s, as the economic bubble broke, Japan Koizumi’s visits to the Yasukuni Shrine,
Third, bilateral political relations have suffered a persistent economic stagnation, needed to be improved.
been brought back on track. Chinese which resulted in a decline in its interna- The U.S. factor also contributed to
Foreign Minister Li Zhaoxing exchanged tional influence. Abe’s change of course. The Committee on
views with his Japanese counterpart Taro China, however, has seen an average International Relations of the U.S. House of
Aso on implementing the common under- annual economic growth of some 10 per- Representatives held a hearing in
standing reached by President Hu and cent since it adopted the reform and open- September to discuss Asian affairs. During
Prime Minister Abe over the phone on ing-up policy 28 years ago. While becom- the hearing, experts pointed out that the
October 9, one day after Abe’s visit to ing increasingly engaged in the interna- deteriorating relations between China and
Beijing. On October 15, a delegation led by tional economy with its share of the world Japan were disastrous to U.S. interests. The
President of the Japanese House of economy and trade constantly growing, United States, which does not want to see
Councilors Chikage Oogi visited China to China has greatly bolstered its national Japan alienated in Asia, welcomes an
enhance parliamentary exchanges. On the strength. Some analysts believe that the improvement in China-Japan relations in
same day, Wang Jiarui, Minister of the Chinese economy is set to overtake that of the short term.
International Department of the Central Japan. Moreover, Japan ended its economic
Committee of the Communist Party of Finding it difficult to face up to the fact, stagnation with a notable recovery largely
China, visited Japan, where he and delega- the Koizumi Cabinet became suspicious of because of the rapid expansion of its eco-
tion members attended a five-day meeting China’s development. It worried that an nomic and trade relations with China. It is in
convened under an exchange mechanism ascendant China would pose a threat to the interest of the two nations that they con-
between the ruling parties of the two coun- Japan’s status in the Asia-Pacific region. tinue to upgrade their mutually complemen-
tries. Chinese Premier Wen Jiabao received Given these concerns, the government was tary economic ties under a sound political
the members of the New China-Japan always thinking of ways to contain China in relationship.
Friendship Committee for the 21st Century, certain areas. For China and Japan, 2006 was an
encouraging them to put forward sugges- Moreover, right wing forces gained the eventful year, during which the climate for
tions on establishing mutually beneficial upper hand in Japan, fueling the govern- their relations turned from chilly to balmy.
strategic relations between the two coun- ment’s hard-line policy toward China. The However, the road ahead is still bumpy.
tries. The foreign ministers of the two coun- negative effects of the Japan-U.S. alliance The two nations face a pressing task to
tries met in Hanoi on November 16. are also responsible for the chilly relations establish a new type of bilateral relations
Thanks to the exchanges, visits and between China and Japan. Closely follow- by sustaining the positive trend that has
meetings at various levels, China and Japan ing the footsteps of the United States, Japan just emerged. ■
have overcome the barriers formed in the tended to regard China
Koizumi era, as their relations were restored as a potential rival. The
and strengthened. alliance was strength-
Fourth, friendship is taking root in the ened during Koizumi’s
two nations. According to an opinion poll term with his frequent
of the Sankei Shimbun newspaper, 14.6 per- visits to the United
cent of the Japanese public expect the Abe States.
Cabinet to improve Japan’s relations with Abe, however,
China and South Korea and 52.2 percent reversed his predeces-
believe the prime minister should not visit sor’s policy toward
the Yasukuni Shrine. A survey conducted China when he took
by China Youth Daily showed that 76.9 per- over. As a new prime
cent of the Chinese public believes that minister, he was actually
China-Japan relations are important and expected to find a solu-
45.2 percent said Abe’s visit to China had tion to the deadlock in
positive implications. After the stalemate China-Japan relations,
during Koizumi’s tenure, the two nations as it not only jeopardizes
have once again embraced reasonable the interests of the two
views of bilateral relations. The high per- countries but also affects
centage of respondents valuing China- peace and stability in the
Japan relations in China in particular is a Asia-Pacific region at
clear indication that the friendly ties large.
between the two countries conform to the Most Japanese, offi-
will of the general public. cials and private citizens
alike, had expressed the
Toward a new relationship view that the problems
There are several reasons for the stale- caused by Koizumi’s
mate in China-Japan relations during shrine visits should be
Koizumi’s term. First and foremost, Japan cleared up as quickly as
was unable to adapt to the changes in the possible. An opinion
two countries’ respective national strengths. poll conducted by the
Japan scored steady and rapid economic Japanese Foreign
Americans’ Changing
reform, which has been widely accepted
and has made great achievements.
Time Asia explained that it chose Deng
instead of Mao Zedong, the founder of the
View of China
People’s Republic of China, because
“although the name of Mao is known
throughout the world, it is Deng who inher-
ited the mantle of a Chinese hero.”
“While Mao is now mainly associated
with the idea of revolutionary excess and peri-
Time Asia magazine has again released its November ods of colossal suffering, Deng has come to
appraisal issue of “Asian heroes” who have helped shape the be linked to China’s astonishing economic
continent’s future over the past 60 years. The Chinese on the development, and to the steering of China
list, most of whom are very familiar to their countrymen, have away from its organizational straitjacket into a
wider world of technological growth and
sparked a great sensation in the whole nation. Wen Dao, a international trade,” the magazine said.
Beijing-based observer, looks at the profound changes in One of the most influential weekly publi-
Westerners’ comprehension of China over the past decades cations in the world, Time was first launched in
1923. In 1927, it started celebrity lists, which
and shares his expectations for the future. gained the magazine even more fame. In the
past years, nearly a
The globe is a home village where people magazine’s list of its top Asian Through Time’s dozen Chinese people
from different races and with different beliefs heroes, including 56 people have been selected by the
and ideologies coexist. As time goes by, and as who have helped Asia rise
coverage of China, magazine as cover faces.
exchanges intensify and technology develops, “from poverty to powerhouse, we are inspired by Among them are
the world population is getting closer, sharing from imitator to being imitat- the changing way Communist leaders
similar views and perspectives. ed” in the past six decades. The that the American Mao, Zhou Enlai, Liu
Recently, intensive media reviews have late Chinese leader Deng Shaoqi and Deng,
focused on Time Xiaoping, Hong Kong billion- people look at the Kuomintang chief
A s i a aire Li Ka-shing, Victor and Chinese people, Chiang Kai-shek and
William Fung from Hong and we are even Puyi, the last emperor of
Kong’s Li & Fung China. In recent years,
Group, Taiwan Acer more encouraged to the ranking of Chinese
Group’s founder quicken our steps President Hu Jintao,
Stan Shih and in the process of Premier Wen Jiabao,
Yahoo’s co-cre- Vice Premier Wu Yi,
ator Jerry Yang
emerging into the basketball star Yao Ming
are on the list. world family and actress Zhang Ziyi
Also named have demonstrated the
are the mainland’s Olympic converging taste of the Chinese and the
gold medallist-turned-busi- Americans, assured by growing exchanges and
nessman Li Ning, legendary mutual understanding resulting from a closer
action star Bruce Lee and economic and diplomatic relationship. Last
popular actress Gong Li. year, Li Yuchun, top winner of China’s most
They are separately listed in popular talent show, the Super Girl singing
the categories of nation contest, also made the cover of the magazine.
builders, artists and Prior to the 1980s, Chinese Communists
thinkers, business leaders, were usually demonized and bluntly attacked
athletes and explorers. in Time’s reports. But now, Deng wins much
Being the only hon- more applause than criticism.
ored nation builder from Soon after China’s reform and opening
China, Deng is hailed for up to the outside world in the late 1970s and,
his contributions to set- in particular, after its entry into the World
ting off China’s economic Trade Organization in 2001, its growing par-
ticipation in world affairs and the responsible
CHANGE PUSHER: image it has built up have dramatically
The late Chinese leader reduced the ideological segregation set up by
Deng Xiaoping is the only Western powers. We are getting closer and
honored nation builder from closer by sharing ideas through dialogue.
China on Time Asia magazine’s Through Time’s coverage of China, we
“Asian heroes” list, who is are inspired by the changing way that the
hailed for playing a key
American people look at the Chinese peo-
role in leading the
country’s p le, and we are even more encouraged to
astonishing quicken our steps in the process of emerg-
development ing into the world family. ■
Of Global Inflation
of some commodities in the international
market. On the other hand, a large number
of Chinese exports are included in the CPI
baskets in destination countries. Foreign
consumers are therefore sensitive to price
International inflation is increasing. Some overseas research fluctuations of China-made commodities.
institutes argue that the cause is an increase in the prices of What is the main cause of interna-
China-produced commodities. Zhang Anyuan, from China’s tional inflation? What kind of role does
National Development and Reform Commission, shares his China play?
The formation and spread of interna-
analysis in an interview with People’s Daily. tional inflation is the result of economic
growth in every country and the spread of
People’s Daily: Are international an upstream workshop, which does not set globalization. Although the worldwide
inflationary pressures increasing? Is it the end-user prices. China does influence economic boom has continued for several
true that the cause of the inflation is an prices of some primary products like energy years, the growth cycle will eventually play
increase in the prices of Chinese exports? in the international market, but inflation its role in the market economy. So inflation
Zhang Anyuan: Inflation has become a indexes are not directly related to energy and ensuing anti-inflation measures are
big concern since the beginning of this year, prices in all countries around the world. unavoidable. Furthermore, high oil prices
forcing governments throughout the world push up the prices of other goods as well.
to put curbing inflation atop their economic Where has the idea that China is to China is becoming a major driving force
agendas. The U.S. core consumer price blame for international inflation come of global economic growth. It is cautious
index (CPI) was 206.7 in August, compared from? about its role and hopes to make a greater
with 202.6 in January. The rate of inflation The “China threat” theory continues to contribution to the world economy. However,
in Europe has exceeded the 2 percent mark haunt some countries. A few years ago, the power of one country alone is not enough
set by the European Central Bank. Some some people argued that international to reverse a trend in the international econo-
predict it is impossible for the figure to fall deflation was caused by cheap exports my. All countries should recognize this and
back below 2 percent. Japan’s CPI began to from China. Later, the rising prices of pri- cooperate with each other. Complaining and
rise in April after a period of decline, which mary products made many opportunities shifting blame make no sense.
meant the end of deflation. In July, Japan available to developing countries, which
ended its longstanding zero-interest policy. China supported. However, people critical How should we forecast the relation-
The price of crude oil has fallen recently, of China turned a blind eye to this. On the ship between China and international
but its impacts on the CPI are still unclear. contrary, they said China was scrambling prices in the next phase?
Some overseas research institutes are for international resources. Now, they are An increase in the rate of inflation will
suggesting that the cause of inflation is an blaming international inflation on regular not occur in China in the near term, but
increase in the prices of China-made com- price fluctuations in China’s export prices. international inflation will maintain a slow
modities, but I don’t think they have reason I think the conclusion that the rise in uptrend. With the constant rise of China’s
to draw that conclusion. Customs statistics the prices of Chinese exports drives up proportion in the global economic aggre-
show that not all commodities exported from international inflation may come from the gate and the import and export trade, its
China have seen price hikes, while some following two factors. One is the Chinese domestic prices will play a bigger role in
have even become cheaper. Moreover, an economy’s high dependence on foreign international market prices. ■
increase in foreign consumer costs in the sec-
ond half of this year should take into account
fluctuations in the prices of China’s export
commodities in the first half of this year.
W
erally rich especially considering my efforts to market legitimate DVDs in
hile cultural shock is com- age.” Ji still doesn’t get the logic of the China, Ji will soon face a choice between
mon among first-time over- clerk, who later told him he didn’t own buying a cheap counterfeit and a slightly
seas travelers, Ji Bing, a 27- all rental DVDs in his store. more expensive legal copy of higher
year-old client manager in a Ji cannot see his DVD collection as a quality. Ji’s choice, together with tens of
bank, still thinks he got a par- fortune. “Every disc costs me 6 or 7 yuan, millions of home video lovers in the
ticularly electrifying one on a recent which all add up to around 7,000 yuan, country, will finally decide the success or
European package tour. The young man, which is around my monthly wage and failure of Hollywood movie studios’ new
who saved half a year for this trip, was baf- less than half of the clerk’s own wage. round of efforts to battle piracy through
fled when he was admired as a very rich Then how can he call me a rich man?” nurturing a market for genuine copies.
man at a DVD rental store in a Munich said a confused Ji.
suburb during an after-dinner walk. The best explanation for Ji’s bewil- A business solution
“To practice my English, I told the derment is that all his DVDs are counter- As China’s trade surplus with the
clerk in the store who is in his 40s that I feits, which are so readily available in United States has repeatedly broken
have a private collection of over 1,000 China. In fact, in most cases of new the- records in recent months, it is no wonder
such DVDs,” recalled Ji, a huge fan of atrical releases it’s the only version avail- a protectionist tone found a way into the
Hollywood movies. able. rhetoric of visiting U.S. Commerce
ment to releasing the titles more quickly Relations Manager of Zoke, the compa-
HEAVY CRACKDOWN: In a market on DVD, Zoke has started its first wave of ny was the first audio and video publish-
cleansing campaign in northeast DVD and VCD titles in November, led by er in China to set up an anti-piracy
China’s Liaoning Province last
February, more than 500,000 pirated
blockbuster Garfield: A Tale of Two department, in 1999, which has expand-
copies of audio and video products Kitties (out November 20), Ice Age: The ed to a team of over 100 people or about
were destroyed in public. Better Meltdown (December 1) and X-Men: The one seventh of the company’s total staff.
marketing of legal DVDs still may Last Stand (by the end of this year). Fox The company has set up permanent
prove more effective in destroying announced at the signing ceremony that at supervision offices in 15 cities across
their illegal counterparts least 100 movies on DVD will be export- China, which closely monitor the market
ed to China in 2007. and help with local government agen-
“The distribution agreement between cies’ crackdown on piracy through
Secretary Carlos Gutierrez. “Another
Fox and Zoke is an important symbol of reporting the production or sale of coun-
victim of widespread intellectual proper-
the stake both China and the United terfeits, raiding warehouses and bringing
ty theft in China is American support for
States have in seeing intellectual proper- to court those involved in IPR infringe-
expanding our trade relations,” said the
ty rights vigorously enforced in China,” ments.
visiting secretary.
said the visiting commerce secretary. In an interview with Xinhua, Guo
However, the highlight of the U.S.
At the signing ceremony, Fox Home Zilong, President of Zoke, said his com-
secretary’s visit, the signing of an exclu-
Entertainment Worldwide President pany promised to respond to every priva-
sive agreement between Twentieth
Mike Dunn pointed out two reasons for cy complaint from its wholesale clients.
Century Fox Home Entertainment and
choosing Zoke. The first is its distribu- He said his company has the ability to
China’s largest video distributor, Zoke
tion capacity: Zoke has a distribution net- cooperate with governments at different
Cultural Group, on November 13, offset
work of over 20,000 retail outlets levels to eradicate piracy against Zoke
the subtle hint of protectionism by send-
throughout China. The other is its solid products at stake; if Zoke failed to do so
ing a positive message.
reputation in fighting intellectual proper- within a certain period, Zoke promises to
Marking a milestone for the studio,
ty right infringements. recall their copies from wholesalers on
Fox has launched an in-country business
According to Wang Yu, Public request. In October alone, Zoke cooper-
with Zoke as its exclusive partner to sup-
ated in 20 raids with the government,
ply the Chinese market with legitimate
which confiscated over 250,000 pirated
copies of recent theatri-
copies.
cal releases and cele-
Huang Zhenbin, the director of the
brated titles from the
company’s anti-privacy department, told
studio’s library.
Beijing Review that after the debut of every
With Fox’s
big-budget movie that sells its copy-
c o m m i t-
right for publishing video prod-
ucts to Zoke, the president
and vice presidents will
meticulously travel to
cities with
the most rampant piracy to lobby local gov- promotion—say a DVD extra of Garfield on DVD in China only two days after the
ernments to take action against the targeted in China—Fox probably will listen to our theatrical release in the United States. In
piracy so as to protect Zoke’s profits and the advice and make it for us,” said Deng. September, the Superman Returns DVD,
profits of its partner. Huang said such a rep- However, Deng singled out the competitively priced at 14 yuan and 22
utation helped Zoke win the favor of Fox. shortening of release timeframes and yuan for two versions, was released in
“Counterfeit manufacturers just don’t dare synchronized worldwide DVD publica- China two months earlier than its world-
to copy DVDs of Zoke since they know we tion as the key to winning the battle with wide bow elsewhere. The success was
could come after them,” said Huang. pirated DVDs in China. In China, the phenomenal as the authentic DVDs were
most rigorous competition for authentic sold in more than 8,000 retail outlets,
Fox not the precedent DVDs of foreign movies is the replicated many of which had previously stocked
Yet Fox is not the first top Hollywood copy of the legitimate DVDs published only counterfeit movies, according to a
studio to promote affordable authentic in other countries a bit earlier, which is of company release.
DVDs in China. Warner Home Video has considerably good quality. Deng said the Mike Ellis is Senior Vice President
been trying a similar approach by form- rule in the home entertainment publica- and Regional Director of Asia-Pacific for
ing a joint venture with the Shanghai- tion industry is that first round publica- the American Motion Picture Association
based Chinese Audio and Video tion rakes in profits and second round (MPA), the lobby group for Hollywood
Publishing House last February. reaps practically nothing. “We have told and the global interests of the U.S. movie
According to both Warner and Fox, the our Fox partners that they can only industry. He told Beijing Review that the
winning chips in the Chinese market are choose between synchronized publica- prices of legitimate home video products
world-class quality, reduced pricing, tion of DVD in China and minimal are extremely competitive in China and
Mandarin dubbing, subtitles and short- sales,” said Deng. He told Beijing Review Chinese people can afford it. “When I see
ened release windows. that Fox has agreed in principle to pub- Chinese people paying $3 for a Starbucks
Deng Jianguo is the Zoke manager in lish DVDs in China the same time as cappuccino, I know we can convince them
charge of the cooperation project with other countries, which is about three that legitimate versions of movies are
Fox. He explained that the cooperation months after the theatrical debut. worth paying for,” said Ellis.
between the two companies is strategic In experimental cases, Warner is
and profound, which will cover all pro- exploring a new model of letting the Difficult mission
cedures of production, marketing and Chinese market take the lead. Warner’s Meanwhile, a nationwide campaign of
IPR protection. “If we need enhanced joint venture in China last June released intensive crackdown on piracy, which was
content on DVD for the purpose of sales the The Sisterhood of the Traveling Pants unprecedented in terms of its duration and
number of government departments A study undertaken by the Chinese Zoke’s Deng said the whole video
involved, started July 15 and lasted 100 Academy of Social Sciences on behalf of publication industry has been in a slug-
days. Jointly launched by 10 ministries the MPA, released this July, paints an gish mood since last year due to the intro-
and national departments, the campaign even starker reality. In the first survey duction of the devastating piracy technol-
revoked 368 business licenses for audiovi- examining the impact of piracy from the ogy of compact discs. Every compact
sual products. Nearly 13 million pirated perspective of industry insiders, 61 per- disc, available at 7 yuan, can easily store
CDs, DVDs and computer software items cent of the 100 respondents believe 80 hours of content, which equals 40
confiscated in the first half of the 100-day movie piracy will continue to increase in movies or 30 episodes of the latest TV
campaign were destroyed in different the short term. The same report con- soaps.
cities on September 16. cludes, “Pirated movies have fundamen- Deng also said Zoke’s anti-privacy
Meeting with his American counter- tally undermined the production capaci- tasks are anything but easy. He said now
part, Chinese Minister of Commerce Bo ties of China’s movie industry, with the it has to deal with the wider availability
Xilai said the Chinese Government private sector hit most severely.” of fake DVDs, spread by outdoor ven-
regards IPR protection as a national strat- Another study commissioned by the dors squatting on stacks of the latest
egy. “We will show no mercy in the fight MPA and conducted by independent releases in popular areas like pedestrian
against IPR infringement,” said Bo. research firm LEK Consulting found that bridges and outdoor vegetable markets.
The Chinese Government also is try- piracy cost the movie industry in China On the other hand, Deng said whereas
ing to relieve the situation by nurturing the $2.7 billion of potential revenue in 2005, of most local governments vigorously sup-
retailing channels for legitimate DVDs. which just $244 million was lost for MPA port and engage in Zoke’s anti-piracy
New rules were released in November to member companies and most of the rest efforts, some try to shelter piracy as
make entering the audio and video chain lost by the Chinese industry itself. local tax revenues are collected from
business in China easier, with the mini- “The Chinese industry is affected far companies involved in illegal produc-
mum registration fee reduced from 5 mil- more than MPA member companies,” said tion.
lion yuan to 1 million yuan. In a Xinhua Ellis from the MPA. “At the moment it is “This year we have intensified efforts
report, a spokesman from the Ministry of virtually impossible for Chinese filmmak- to hire lawyers and launch judicial action
Culture said the market for audio-video ers to make money domestically from the against piracy for economic compensa-
chain stores is “shrinking” because their productions; they must hope to sell over- tion, and it works well,” said Zoke’s
high operating costs render them at a dis- seas distribution rights and as a result Huang. “The situation is at least turning
advantage in competing with street ven- make money in markets where piracy is around in key markets—big cities like
dors hawking pirated discs. less widespread.” Beijing and Shanghai.” ■
THE INTERNET
globally,” said Long Xinmin, head of the
National Copyright Administration.
The intellectual property rights watch-
dog has vowed to clamp down on major
websites that offer unauthorized downloads.
While it has no authority to deal with for-
eign websites offering illegal material, it is
File sharing software is creating an targeting local sites that offer links outside
the country or unauthorized downloads.
Internet world where virtually everything The administration collaborated with
major IPR protection associations in the
can be obtained for free, but intellectual country to collect evidence for 302 Internet
IPR infringement cases during a one-month
property rights clash with that approach investigation, according to Wang Ziqiang,
head of the NCA’s copyright management
department.
By JING XIAOLEI from the Internet can make a small movie
T
”The number is double that of last year,
database,” Zhang’s friend said. This enthu- which means that Internet copyright
o Zhang Jie, a programmer at a siasm on the part of Zhang and many others infringement is still rampant,” Wang said.
Beijing-based information technol-clashes with the intellectual property rights Officials have tracked down the website
ogy company, the greatest invention
(IPR) of the owners of copyrights to operators and their details will be passed on
of the 21st century is the P2P down-
movies, music and other artistic content to to local copyright bureaus for action, said
load system provided by BitTorrentreceive royalties and recognition for their Wang.
(BT). P2P refers to peer-to-peer, an Internet
work. The Chinese Government, however, Of the 302 cases, 123 are about soft-
file sharing application. recently launched a new campaign to pro- ware IPR infringement, followed by films
Zhang’s computer desk is piled high tect IPR. and music. Most are in developed areas
with clusters of CDs that he has burned over “The government again has begun to such as Beijing, Shanghai and Zhejiang
the past five years. One of Zhang’s friends crack down on Internet piracy recently, but Province.
introduced BitTorrent to him and he loved itI don’t think the three-month storm will “This year’s campaign involves autho-
the moment he successfully downloaded a have any big success,” said Zhang. rized file uploaders but leave out the down-
600-megabyte movie in two hours. The “storm” he mentioned refers to the loaders. But sooner or later, the big free
“It is really exciting to find such a great
100-day anti-piracy campaign that was joint- meal on the Internet will be gone with the
Internet file sharing system: fast, convenient
ly launched by 10 ministries and national rising concern over IPR protection and
and rich in all kinds of content,” said Zhang.
departments, including the Ministry of enhancement of anti-piracy law enforce-
The first movie he downloaded via BT is a Public Security, State Administration of ment,” said Zhang.
collection of New York underground short Press and Publication, National Copyright
films. “You can never get this alternative and
Administration (NCA) and Ministry of Troublesome technology
rare movie from a regular audio and video Culture, at the end of September. Bram Cohen, the American creator of
store, but BT has brought the resources on the revolutionary piece of software called
The crackdown is aimed at the illegal
the Internet across the world to your door- BitTorrent, is considered a hero in Zhang’s
downloading of films, music, software and
way; what’s better, they are eyes, but to the IPR holders,
all for free!” the inventor is just like a
Over the past five years, nightmare.
Zhang has downloaded “I think we Internet file
numerous movies, music, downloaders all owe thanks
e-books, software, digital to Bram Cohen. This guy
games, cartoons, TV has broadened our eyes and
shows, documentaries and provided everyone with
other material. “BT can much easier access to share
download almost every- human knowledge and civ-
thing that can be trans- ilization,” said Zhang.
formed into digital form,” Since the release of this
he noted. Because of the technology in the summer
limited storage capacity of of 2001, BitTorrent has
his computer, he has to quickly grown into one of
store what he has down- the most preeminent file
loaded on CDs. distribution methods. It lets
“We borrow quite a lot users quickly upload and
of stuff from Zhang Jie, as A PUZZLING CONTROVERSY: The Internet promotes a “sharing spirit,” download enormous
the movies he collected but IPR holders do not want to see their rights infringed amounts of data, files that
I
different periods displayed at the exhibition
and Political Rights and the International ranged from antique telephones, bicycles
n the first half of this year, the news- Covenant on Economic, Social and Cultural and sewing machines to color TV sets and
room at Beijing Youth Daily was bom- Rights. cell phones, capturing the rapid changes in
barded with readers’ calls complaining Dong Yunhu is the deputy director of Chinese society in its recent past. There
about lavatory sanitation in big hospi- the China Society for Human Rights were also exhibits showing the abolishment
tals in Beijing. “These hospitals have Studies, one of the sponsors of the exhibi- of the 2,600-year-old agricultural tax at the
the most cutting-edge medical equipment in tion. He said this was the first time an exhi- beginning of 2006 and the shrinkage of the
Beijing or even in China. But the sanitation bition was held to showcase China’s population mired in poverty at an annual
of their lavatories is unbearable,’’ said one progress in the human rights area. “For a rate of 10 million, in the past 20 years.
complainant. It was not long before several long time, we refused to use the term Dong said Chinese civilization, dating
journalists from the newspaper conducted a ‘human rights’ and rarely reflected on back thousands of years, has always
secret investigation into 20 big hospitals in China’s history from the perspective of ensured the protection of the rights of
Beijing and put together a front-page story human rights. This posed practical difficul- minority groups, women, children and the
on the deplorable lavatory conditions in ties for the planning of this exhibition,” disabled. “This is a feature of Chinese
most top hospitals in Beijing on August 24. Dong said. human rights,” he said.
A copy of this page was on display at the He said “human rights” used to be a To prove this, he points to China’s eth-
first-ever exhibition on human rights in taboo subject in the country, even as mid- nic regional autonomy system, which is
China held from November 17 to 26. The 19th century imperialism and feudalism had stipulated as a basic political system in
caption for this exhibit read, “This is a reflec- led to many violations of human rights for China’s Constitution. The system serves as
tion of the public’s right to know even when the Chinese for almost a century. For a guarantee to the ethnic minorities of their
it might harm the interests of some institu- decades after the founding of the People’s special rights according to law and an equal
tions and some powerful people.” Republic of China in October 1949, China access to the fruits of the country’s develop-
The recent exhibition was held to com- refused to include human rights in the ment and modernization.
memorate the 40th anniversary of two mile- Constitution or laws and also regarded it as China’s founding father, late Chairman
stone international pacts on human rights, a taboo subject in academia. During the Mao Zedong, famously said, “Women hold
up half the sky.” Chinese women can work increasing the budgetary provisions for it. “China has achieved great progress and
in any vocation as men and are not discrim- Special funds have been allocated since accumulated rich experience in protecting
inated against for getting married or starting 2003 to support the rehabilitation, education and developing human rights,” said
a family. It is clearly stated in China’s and poverty alleviation of the disabled. In Ukrainian Parliament Commissioner for
Constitution that women enjoy the same drafting policies, government departments Human Rights Nina Karpachova, who was
rights as men in political, economic, cultur- in health care, education and labor have speaking at a three-day symposium in
al, social and family life. been taking into consideration the special Beijing between November 22 and 24 on
“China has set up a legal system of needs of the disabled and giving them pref- respecting and promoting human rights and
safeguarding women’s interests, with the erential treatment. constructing a harmonious world. She said
Constitution as the basis and the Law on the On December 10, 2003, CDPF people from many countries were preju-
Protection of Rights and Interests of Chairman Deng Pufang was granted the UN diced against China as they were unaware
Women as a main pillar along with other Human Rights Award, which is given out of the real situation in Chinese human
related laws and regulations,” said Zhang every five years. As the eldest son of the chief rights. Since 1995, she said, she had paid
Xiaoling, Director of the Human Research architect of China’s reform, Deng Xiaoping, several visits to different provinces in China
Center of the Party School of the CPC he was tortured at the beginning of the and had witnessed first hand the huge
Central Committee. Cultural Revolution for his family back- changes in these places. She believes
In 1995, the Chinese Government ground and ended up with paralyzed legs. China’s substantial progress in protecting
detailed its first active initiative on promot- “Human rights are mankind’s pure and human rights is closely linked to its eco-
ing gender equality, and followed it with noble pursuit. I have personally suffered nomic development. “China’s rich experi-
another in 2001. In the same year, the from a loss of dignity and freedom, which ence in protecting human rights could serve
amended Law on Marriage for the first time has made me value dignity and freedom as a good reference for developing countries
introduced provisions banning domestic even more,” said the man who is confined to at the same development stage as China,”
violence and compensation for women after a wheelchair. He also said he was grateful said Karpachova.
divorce. The Law on Rural Land Contracts that he could personally experience the dif- Yet many Chinese people realize that
passed in 2003 stressed the equal rights to ficulties of the disabled and work relentless- there are problems and conflicts in the
land of married, divorced and widowed ly to safeguard their rights and improve progress of the cause of human rights in the
women. The amended Law on the their situation. country. Several experts at the symposium
Protection of Rights and Interests of In line with its commitment to interna- said public education, communication and
Women stipulates that gender equality is tional cooperation on human rights, the discussion on human rights as well as a
China’s basic national policy, opposes gen- Chinese Government has endorsed 22 UN strong legal system were needed to guaran-
der discrimination in the labor market and treaties on human rights, including the tee the realization of citizens’ rights. They
domestic violence and, for the first time, International Covenant on Economic, agreed that on the one hand legislative, judi-
defines sexual harassment. Social and Cultural Rights (1966). cial and administrative authorities must do
Zhang points out that a new trend in the At the 16th National Congress of the their duty but on the other, a popular culture
development of women’s rights in China is CPC, the General Secretary of the CPC Hu of respecting and guaranteeing human
the increasingly important role being played Jintao and the new central leadership put rights must be nurtured and
by nongovernmental organizations (NGOs). forward their people-oriented concepts rooted in peo-
She said China now has more than 10,000 of development and the idea of ple’s hearts. ■
NGOs for women’s rights, among which building a harmonious socialist
the All-China Women’s Federation is the society, placing unprecedented
biggest. Last year, local branches of this importance on respecting and
federation in 31 provinces, municipalities guaranteeing human rights.
and autonomous regions began hotlines for Such moves mark a milestone
women in distress and subject to domestic in the progress of China’s
violence. human rights theories and
Since the founding of practices.
the China Disabled
Persons’ Federation
(CDPF) in 1988,
the Central
Government has
developed five-year
development plans for
the cause of dis-
abled people and
has been con-
tinuously
RIGHT TOUCH: Disabled and orphaned children at a Datong Social Welfare Institute in Shanxi Province enjoy their reading in the
inviting interiors of a newly opened library
Equal Education
will sooner or later cease to exist, given
the increasing educational opportuni-
ties for rural children provided by pub-
lic schools. But Zhang still thinks the
clampdown is going a bit too far and
the best way is to gradually transfer
some of the rural children to public
schools while rectifying the substan-
China’s educational reform is aimed at dard migrant schools.
T
Zhang had the idea of starting a school for the cent of the education funds have been flowing
he private school for rural migrant children of migrant workers like him. The next to the countryside.
workers’ children that was established year he started the preparatory work and in Qi Tao, head of the Shandong Department
by Zhang Gezhen in Beijing has bitter- 1997 his school was founded. In its first year the of Education, would never have believed the
ly survived the many clampdowns on school had only 53 students but the number miserable situation in rural education if he had-
such schools over the past nine years. rocketed to 500 in the second year. In 1999, n’t seen it with his own eyes.
Zhang’s motive is quite simple: to enable Zhang opened branch schools in Fengtai, “Why do rural teachers prepare their
migrant children to afford education in urban Daxing and Chaoyang districts. At the peak, lessons on the ground? Why is the classroom
areas. Zhang had seven schools. Following Zhang’s empty with nothing left when a class is over?
“Migrant schools are what the disadvan- footsteps, migrant schools in Beijing sprang up Because the teachers don’t have their own
taged groups use to save themselves in terms of like mushrooms. desks, and the emptiness is because the desks
education during the transition period when the But many of these schools are too small, and benches are brought to the class by the stu-
planned economy is giving way to a market too poorly equipped and don’t have the license dents themselves,” the educational officer said
economy and the rural population is flocking to granted by the government. By April 2004, the in describing what he had witnessed when he
cities,” said Zhang. Fengtai District closed down 79 schools, inspected a rural school in the province.
He came to Beijing for work in 1995. The including Zhang’s schools there. To dodge the “The conditions are so tough there for the
first thing he did was to find a school for his cleansing, some migrant schools were fre- children, it almost made me cry,” said Qi.
child. He contacted dozens of public schools, all quently relocated. One of the schools moved Such poorly equipped schools are not rare
of which required him to hand over a consider- eight times in just three years. in rural China. The terrible rural education situ-
able sum of money called a “patronage fee” The turning point came in September 2003 ation is related to China’s unbalanced educa-
because his child did not have a Beijing hukou when the Beijing Municipal Government ruled tional policy, which favors urban education.
(registered residence). The least expensive that rural children could enjoy the same educa- During the period just after the founding of the
“patronage fee” was two color television sets. tion treatment as urban children when they go People’s Republic in 1949, when the country
Zhang finally bought two TV sets for 8,500 to public schools. After this policy was initiated, was in desperate need of talent to rebuild the
yuan to give to the school and then his child was the Daxing District promised that public country, the Central Government had to put its
enrolled. schools there would receive an 80 yuan bonus limited education funds into the key universities
in cities to cultivate talent as fast and as much as possible. But 50 years have passed
and this policy has not undergone any changes. Instead, it has become more unbal-
anced in some places.
China’s education expenditures make up only 3 percent of its gross domestic
product, equal to the level in the 1980s in Western countries. The insufficient input
has long been the bottleneck restricting the country’s education development.
Other statistics from the Ministry of Education show that the average education
received by rural people above 15 years of age is seven years, three years less than
that of urban residents. Among the rural labor force between the ages of 15 and 65,
only 1 percent have had education above the junior college level, 13 percentage
points lower than urban residents.
For quite a long time, China’s compulsory education has been handled by local
governments. Due to the imbalance in economic development in different regions,
education levels differ from region to region and such an imbalance has been
enlarged.
The Ministry of Education says three fourths of the illiterate or semi-literate
population lives in the countryside in China’s west and in regions populated by
minority groups.
Reducing the inequality
Even within the same region, educational resources are distributed unequally.
Under the examination-oriented education system, most of the educational
resources are allocated to so-called “key schools” and “key classes.”
To control the enrollment in these key schools, a high entry threshold has been
set up. If a student fails to reach the cut-off score on the examinations, he has to pay
a large sum of money called a “school-choosing fee” in order to enroll. In
Chongqing, for example, the fee for the city’s No. 8 Middle School stands at 35,000
yuan, equivalent to the annual income for a working class family. Under such cir-
cumstances, some parents have to make use of all their personal connections to send
their children to these key schools.
A survey of the equality of a high middle school education in 10 cities showed
that the 10 percent of children from families of Party cadres or government officials
and middle- or high-level managers account for 42 percent of the student enroll-
ment in key schools. In Beijing, the proportion stands at 57 percent.
The Chinese Government is now working on narrowing the inequality. A series
of government documents released in 2006 ruled that the increased educational
budget is to be mainly used in rural education. Rural students receiving compulso-
ry education have been exempted from tuition and miscellaneous school fees, and
schools are not allowed to be split into “key schools” and “non-key schools.”
In addition, many local governments have launched teacher exchange pro-
grams. In October, 52 schools in Shenyang welcomed 1,000 rural teachers, who
shared teaching experiences with their urban counterparts and received training
from the veteran urban teachers.
In September the Zhengzhou educational bureau in central China began a one-
year teacher exchange program in which 646 rural and urban teachers shifted posi-
tions. In five years, the city will allow all urban teachers to teach in rural areas for
one year, said Si Futing, the city’s education bureau chief. ■
(This is the second of the year-ender series.)
resume@chinajob.com
Professional Vacancies:
3. Knowledge of Chinese is highly preferred;
4. Customer oriented and good business sense;
Micro Model Technology & Development 5. Quick problem solver with good communication and strong leadership
Co. Ltd., founded in 1994, is one of the world’s skills, and being independent with a strong sense of responsibility;
leading architectural model makers. To date, more than 2,000 mod- 6. Good understanding of room allocation and rate control.
els have been submitted to our clients worldwide. The models help archi- Contact: Shelley Lu
tects, planners and owners to refine their work and achieve their expected Tel: 86-10-65258855 ext. 6201 Fax: 86-10-65266151 (manual)
goals. Address: 18 Jinyu Hutong, Dongcheng District, Beijing 100006
Quality service is one of our company’s principles. It has been guiding Website: www.lgapartment.com
the company to win most of the major facility projects for the 2008
Olympic Games, Chinese airport projects, and international project compe- Teaching Vacancies:
titions in recent years. Furthermore, prompt delivery is another principle of
Shanghai High School is a municipal key high school in Shanghai.
the company. Micro has never delayed any project model since it was
With a history of 140 years, it is one of the most famous high schools in
founded. Quality service and schedule control bring more and more clients
China for its fully equipped facilities, rigorous study schedule, high morale
to Micro.
and advanced education standard.
Position: Mechanical Designer/Market Manager
The International Division of Shanghai High School was established in
Description:
1993. The school is the first international school founded as a result of a
We need candidates who can work in the branch office of our company
joint effort between China and international partners in Shanghai. With the
in Dubai in the United Arab Emirates and are responsible for the market
division’s parent school, Shanghai High School, providing administrative
development and business negotiation. Candidates who come from
and academic backing, and with support from the Shanghai Municipal
European countries and have related experience in architectural design are
Education Committee, the school is a well equipped and administered edu-
preferred. Also, candidates should be excellent in English and speak a little
cational institute.
Chinese.
The International Division now has around 1,400 international stu-
Contact: John Chen or Sapphire
dents, starting from grade four to 12, from all over the world, mainly
Tel: 86-10-63898076, 63898077
from Asia. The Shanghai High School is a member school of the
E-mail: micro@china.com
International Baccalaureate Organization and offers IB courses in
Website: www.micromodel.com.cn
Grade 11 and 12. We need teachers to teach English, History,
Lee Garden Service Apartments, Beijing, distinguished for its fashion-
Geography, Science, Music, Economics and Art (Painting) with at least
able design, excellent service, European style management and 199 com-
two years’ teaching experience.
fortable and elegant suites, offers safe, private and personal service. It is
The full-time teacher’s salary starts at $1,600-2,000 per month according
only 45 minutes from the airport and is located right in the center of
to qualifications and teaching experience. A full-time teacher has fixed
Beijing within walking distance to Tiananmen Square and the Forbidden
office hours: from 8:10 a.m. to 4:10 p.m. and will teach about 20 periods
City. It also neighbors Wangfujing Avenue, the best dining and shopping
per week. An annual bonus of $2,600 will be given according to perfor-
area in Beijing.
mance. The following benefits will also be given to full-time teachers: paid
Position: Managers for Reservation and Front Office
leave during holidays according to the school’s rules; free accommodation
Responsibilities:
and a comprehensive reimbursement system for medical expenses.
1. In charge of the entire front desk, which includes handling guest
The school term usually begins in September and expires in next July, or
enquiries and complaints, staff management, etc.;
begins in February and continues to the next January. If you are interested
2. Responsible for daily reservations, client liaisons and rate negotiation
in joining us, please feel free to send an e-mail to resume@chinajob.com.
with clients;
Tianjin University of Commerce is seeking qualified ESL teachers
3. Take enquiries and liaise closely with other departments to manage
from native English speaking countries, and Russian and Japanese teachers
room availability;
are also needed. The contract begins next February and expires in July
4. Support and train staff according to Lee Garden’s standards.
2008. The salary is 4,000 yuan per month. Candidates should have teach-
Requirements:
ing experience, a college degree, and a teaching certificate. The school
1. University degree;
offers free accommodation and roundtrip airfare. Contact Eric
2. Two years’ experience in management work in a four- or five-star
at contact@chinajob.com.
hotel;
Park Plaza Beijing Wangfujing The Great Wall Sheraton Hotel Beijing
Christmas Eve Buffet at Bloo
Dining Venue: Grand Ball Room
Time: 18:30-22:30, December 24 Date: December 24
Rates: 488 yuan per adult/228 An exciting evening with the Corleone
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Children under 3 years old are free rable yesteryear atmosphere. Don a
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BUSINESS
D
Statistics show that from January to October At present, major telecommunications,
avid Dollar, the World Bank’s this year, all state-owned industrial enter- petrochemical, automobile and mechanical
Country Director for China and prises as well as non-state enterprises with equipment manufacturers worldwide have
Mongolia, stated at the Fourth annual sales exceeding 5 million yuan extended their production networks to
China Investment Climate Forum reported total profits of 1.47 trillion yuan, China. More and more multinational com-
held in Hangzhou, capital of increasing by 30.1 percent compared with panies have placed China as their bases for
Zhejiang Province, on November 11 that the same period last year. The total profits of manufacturing, marketing, raw material
foreign companies’ return on investment in foreign-funded and Hong Kong-, Macao- purchasing, research and development and
China reached as high as 22 percent. and Taiwan-invested companies hit 410.5 human resources development.
Dollar noted that this figure was from a billion yuan, up 27.7 percent year on year.
World Bank survey of 12,400 enterprises in The Ministry of Commerce once pub- Retailing industry
120 Chinese cities. About 8 percent of the lished a list of China’s top 500 foreign-fund- Statistics from the Ministry of
respondents are state-owned, 28 percent ed companies in terms of sales from 2004 to Commerce show that the average profit rate
have foreign investment, and the remaining 2005. They included 405 manufacturing of foreign-funded retailing enterprises was
64 percent are private businesses. The return companies, accounting for 81 percent, and around 3.7 percent in 2005.
on investment of foreign-funded companies nine of the top 10 belonged to the manufac- Since the Chinese retailing industry was
is 22 percent, while that for private enter- turing sector. fully opened to foreign capital on December
prises is 19 percent. In the five years from 2001 to 2005, the 11, 2004, transnational companies have
“Judging from the worldwide situation, annual increase of industrial added-value of made great strides in penetrating into the
the return on investment of both foreign- foreign-funded companies was around 30 Chinese retailing market. Statistics from the
funded and private companies in China is percent, contributing to one third of the National Bureau of Statistics show that from
very high,” Dollar said. country’s gross industrial output value. The January 2005 to September 2006, another
The white paper of the American tax paid by foreign-funded companies dur- 1,580 foreign retailing enterprises opened up
Chamber of Commerce in China shows that ing the five years increased by 22 percent shops in China, five times that before the
among the 450 U.S. companies surveyed in annually, accounting for over one fifth of opening of the market. After China opened
2005, some 68 percent were profitable or
prosperous.
Foreign investment has entered hot indus-
tries like banking, insurance, telecommunica-
tions, automobiles, logistics, retailing, manu-
facturing, energy, iron and steel, IT, websites
and real estate. According to a report from
Xinhua News Agency, among industries that
are open to foreign capital, the top five com-
panies in each industry are controlled by for-
eign capital. Foreign capital has control over
the majority of assets of 21 industries among
China’s 28 major industries.
The tempting returns from the Chinese
market inspire foreign-funded enterprises to
constantly expand investment in China.
Most profitable industries
According to statistics from the Ministry
of Commerce, National Development and
Reform Commission (NDRC) and the
National Bureau of Statistics, foreign-funded
enterprises in manufacturing, retailing and
pharmaceutical industries are making the
largest profits.
The manufacturing industry in China
has always been the first choice for foreign
investors, and foreign-funded enterprises
now take the largest share in the market of MAKE IT IN CHINA: Manufacturing is one of the most profitable industries in China.
this sector. This picture shows technicians at ChangAn Auto Co. Ltd. testing a new Ford Mondeo car
invest in the Chinese pharmaceutical indus- $1.4 billion in stock of the Construction
try, they first set up a production base in Bank of China. In August 2005, the Royal
China, and then transferred the whole oper- Bank of Scotland held $3.1 billion in the
ational body, including research and devel- Bank of China.
opment, production, sales and purchasing With its full opening on December 11
into China. In recent years, they have been this year, the financial sector is expected to
devouring the Chinese traditional medicine become a focus of foreign investment.
market and entering the market of the coun- According to statistics from the China
try’s medical treatment system. The world’s Banking Regulatory Commission, by the
top 20 multinational pharmaceutical com- end of December 2005, foreign banks had
panies have already established joint ven- set up 254 offices in China. Standard
tures in China. Among the list of the top 500 Chartered plans to extend its network to
foreign-funded companies in China cited by over 20 branches before 2008 and aims at
the Ministry of Commerce for 2004 and grabbing 5 percent of China’s retail banking
2005, there were 14 involved in the phar- market by 2015.
maceutical industry, with 13 of them con- The Chinese securities market is a new
trolled by foreign capital. hot area for foreign investment. Currently,
China has opened the B-share market to for-
New investment trend eign investors, and begun to open the A-
The past two years have witnessed new share market to qualified foreign institution-
changes in foreign investment in China al investors, which means China has opened
owing to China’s commitments to the its domestic stock market to foreign capital.
World Trade Organization to fully open the In terms of securities firms, China is begin-
country’s market. ning to widen market access to foreign cap-
“Foreign capital is now being invested ital. In 2005, UBS paid 1.7 billion yuan to
in the financial sector,” noted Xin Houyuan, acquire 20 percent of the shares of Beijing
researcher with the Chinese Academy of Securities to become the largest shareholder
International Trade and Economic Coope- of the latter.
ALL FOREIGN: Passing by Lujiazui
ration under the Ministry of Commerce. Energy-related fields have also attracted
financial district in Shanghai, Following the listing of the Bank of significant attention from foreign investors.
pedestrians see a great many foreign China, the Construction Bank of China and In September 2005, Peabody Energy, the
companies operating in the city the Industrial and Commercial Bank of biggest private coal company in the United
China, foreign companies have been invest- States, launched a representative office in
its business sector in 1992, and until the end ing in China’s financial sector through the Beijing. Currently, Peabody Energy has had
of 2004, only 314 foreign-funded retailing securities market. For instance, since June contacts with China Huaneng Group, the
companies opened shops in China. 2005, Bank of America has bought $2.5 bil- Shenhua Group Co. Ltd. and some large
The substantial increase in the sales of lion and Singapore’s Temasek Holdings iron and steel companies in China, and will
foreign-funded retailing companies as well
as the huge potential of the Chinese con- Share of Foreign-Funded Industrial Enterprises in China’s Market
sumption market have tempted foreign Year Sales of Total Sales of Market Share of
retailing companies to open more stores in Foreign Industrial Industrial Enterprises Foreign-funded
the country. Currently, the number of stores Enterprises in China Enterprises
of Lotus Super Center, Wal-Mart and the (100 million yuan) (100 million yuan) (%)
British furniture retailer B&Q has all dou- 1993 3,290.77 38,084.13 8.64
bled from the year 2004. 1994 5,528.81 42,398.57 13.04
In big metropolises like Beijing, Shanghai 1995 9,022.61 52,936.21 17.04
and Guangzhou, the retailing market is in the 1996 10,815.20 57,969.98 18.66
main controlled by foreign retailers.
1997 13,019.55 63,451.48 20.52
Pharmaceutical industry 1998 15,604.60 64,148.86 24.33
According to statistics from the National 1999 17,966.55 69,851.73 25.72
Development and Reform Commission, in 2000 22,545.74 84,151.75 26.79
the first half of this year, the aggregate indus- 2001 26,022.08 93,733.34 27.76
trial output value of the pharmaceutical sec- 2002 31,189.27 109,485.77 28.49
tor was 251.09 billion yuan, a rise of 19.47
2003 43,607.63 143,171.53 30.46
percent compared with the same period last
year. The total profit of the pharmaceutical 2004 57,831.51 187,814.77 30.79
industry reached 18.09 billion yuan, up 7.65 Major Industries of 2005 FDI in China
percent. Among the sales of the pharmaceu-
tical industry, that of Hong Kong-, Macao-, Industry Paid-in Proportion of Contractual Proportion Number Proportion
Capital Total Investment of Total of of Total
Taiwan- and foreign-invested companies
($100m) (%) ($100m) (%) Projects (%)
accounted for 75 percent, and their combined
profit made up 80 percent of the sector’s total Manufacturing 424.53 58.63 1273.57 67.36 28,928 65.72
nationwide. Finance 123.01 16.99 5.51 0.29 58 0.13
When foreign companies began to Real Estate 54.18 7.48 194.01 10.26 2,120 4.82
provide raw materials for and carry out opening up, foreign investors chose to set up tifying the use of foreign capital. On
technological exchange with Chinese elec- joint ventures or cooperate with Chinese November 10, the National Development
tric and iron and steel companies. enterprises. In 2005, however, exclusive for- and Reform Commission made public the
Energy companies based in Australia, eign-funded enterprises accounted for 73.4 plan to use foreign capital from 2006 to
South Korea and Japan are also seeking percent of the total number of newly estab- 2010. Li Pumin, Director of the NDRP
opportunities to develop coal mines in lished companies. Meanwhile, acquisition Policy Research Department, stated that a
Shanxi, Shaanxi and Inner Mongolia has become another important method for major task in the future is to lead foreign
through shareholding. foreign capital to enter China. From 2005 to investment to the country’s central and
In addition, foreign capital will sweep 2006, acquisition with foreign companies western regions.
into the petrochemical industry. On acquiring Chinese ones became a common As a matter of fact, due to the shortage
December 11 this year, China opens its practice. For instance, Wal-Mart acquired of land resources and labor in the eastern
refined oil wholesaling market to foreign Trust-Mart, which ranked 11th in the coastal area—and the saturated market—
capital, marking the end of the transitional Chinese retailing market. After acquiring 40 foreign businesses have already switched
period following China’s WTO accession percent of Shandong SEM Machinery Co. their attention to the central and western
and the full opening of the domestic oil and Ltd.’s stocks this year, Caterpillar is seeking part of China, where more favorable poli-
petrochemical market. stock in China’s leading engineering and cies are offered. The NDRC’s plan con-
Currently, BP, Oman Oil, ExxonMobil mechanical enterprises like Xiamen forms to this trend.
and Shell have all been involved in the Machinery and Shanghai Diesel Engine Co. Li noted that in the next five years, pri-
Chinese petrochemical industry. Ltd. The number of acquisition cases involv- ority will be given to the introduction of
It is foreseeable that in the next few ing more than 100 million yuan each has advanced technology, management exper-
years, more foreign capital will pour into exceeded a dozen between 2005 and 2006. tise and high-quality professionals.
China’s petrochemical sector. “Management over foreign capital uti-
“In terms of the investment strategy, for- Foreign investment policy lization should be more rational and effec-
eign investors give priority to acquisition or For the Chinese Government, attracting tive and strike a balance between the use of
exclusive investment,” noted Xin. foreign investment is an unswerving policy, foreign capital and domestic economic and
In the early years of China’s reform and but focus will be laid on optimizing and rec- social development,” said Li. ■
price pressure and direct competition from said they now avoid arranging meetings in AmCham alleged that the technology can be
domestic companies. “Those two factors the United States because of concerns about purchased from non-U.S. sources, which
are taking a toll on the bottom line of obtaining a visa for their customers. diverts business to U.S. competitors.
AmCham companies,” Laurie Underwood, Further, although 75 percent of compa- “All branches of the U.S. government
Communications Director of AmCham in nies that increased their exports to China need to recognize that our failure to take full
Shanghai, told China Radio International. were profitable, U.S. exporters seem to be advantage of the opportunity that China pre-
But AmCham doesn’t see the source of less competitive in capturing China market sents is contributing to our bilateral trade
all its companies’ problems in China. It puts share. AmCham blamed this on insufficient deficit,” the AmCham report said. In 2005,
a lot of stress on policies that need to be government trade support, noting that Japan the U.S. trade deficit with China stood at
changed in the United States. and Germany each have substantial govern- $201.6 billion, and that of EU was 106.0
AmCham noted that the United States’ ment offices and industry organizations to billion euros.
lengthy and uncertain visa process and promote trade. But strikingly different from
sometimes embarrassing entry require- The chamber also
ments due to security remain a distinct attacked U.S. export poli-
deterrent to “buying American.” cy. For safety concerns, the
Indeed, 44 percent of survey respon- United States strictly con- Opportunities for American
dents said they had lost significant sales as a trols the exportation of mil- Businesses to Compete in China
result of U.S. visa issues. Almost 70 percent itary technology. But
As China modernizes and its buying power
increases, we expect export opportunities to increase
as many higher-end products made in the United
Opportunities for EU Businesses States will be increasingly attractive to the Chinese.
to Compete in China The Chinese economy is increasingly requiring
services in which the United States has a strong com-
The evolution of EU-China trade reflects the evolution in overall petitive advantage. The 20 percent growth for 2004 is
EU trade with emerging economies. While the latter, and China in the highest rate for U.S. cross-border service exports
particular, are making significant gains in some segments of high to China since 2000.
technology products (such as laptop computers, mobile phones and Imports of travel, passenger fares, and other
DVD players), the EU is strengthening its specialization in high-qual- transportation services totaled roughly $5 billion and
ity products in preference to low- and middle-quality goods. made up the vast majority of U.S. cross-border
Commission studies indicate that the expansion of the Chinese imports from China.
market will continue to bring important benefits to EU business Source: White Paper 2006 of AmCham China
operators. Although Chinese companies will become competitive in
more market segments (for example in basic chemicals or some
types of vehicles), other segments will expand rapidly (for example, AmCham’s inward national criticism, the
specialty chemicals or demand for capital-intensive car components), offering European Union Chamber of Commerce
new opportunities to EU operators. policy paper tended to pressure the Chinese
The EU is particularly strong in exports of machinery and vehicles, which
side rather than seek internal solutions.
account for two thirds of all EU goods exports and one third of all Chinese
imports of machiner y. EU exports to China of chemicals have doubled in the last
For instance, while American compa-
five years, making China the EU’s second largest export market. There is poten- nies are calling for loosened U.S. govern-
tial to increase EU mar ket share in line with EU performance in other markets. As ment control on certain technologies, espe-
China develops, its demand for high-end branded European consumer products cially military technologies, the European
will increase. Union complained that transferring propri-
In order to succeed, EU operators will need to develop a more thorough etary technology to China was often made a
knowledge of the Chinese mar ket and play on their comparative advantage. precondition of bidding on Chinese govern-
Europe’s chief assets in its trade relationship with China are innovation, special- ment projects. The EU chamber added that
ization, quality, related services and brand identity. High unit labor costs are not China imposes local content requirements,
necessarily an impediment to export success. The strongest performing which limits EU exports and unfairly aids
European exporters to China have some of the highest labor costs in Europe. the local industry.
Source: EU-China Trade and Investment: Competition and Partnership
Which region has it better?
Parent Company Net Profit Financial Performance Estimate U.S. Companies’ Profitability
Margin (2005) (2006) in China
1%
Break even 4%
Negative 6% Large loss
14%
10% 17% Small loss
23%
26% 0-5% Break even,
32%
or Small loss
Profitable
5-10% Very profitable
29% Very profitable
22% 66% 50%
Profitable
>10%
Large loss
Source: European Union Chamber of Commerce in China European Business Confidence Survey 2006 Source: 2006 AmCham-China Business Climate Survey
O
In the next eight years, Liu expanded want to know since the company’s downfall
n October 23, nine of the former PriceSmart by starting membership stores is this: What were the company’s funda-
senior management staff of nationwide, and in 2001, he also developed mental problems?
PriceSmart Membership Shopping N-Mart to attract non-membership cus- “The root of the PriceSmart crisis is in
were summoned for interrogation tomers. By the end of 2004, he had opened its dangerous business pattern,” said Yang
at the First Intermediate People’s altogether 48 stores in China and the nation- Qian, a professor of management at Beijing
Court of Beijing. wide sales once hit 4 billion yuan a year in Commercial Management Cadre College.
The case, understandably, attracted atten- its heyday. Liu was doing a good job target- Yang stated that PriceSmart manipulated
tion from a large number of people. Zhao ing the wealthy demographic. money from banks and suppliers in order to
Kun, an alias due to his request for anonymi- “Cars parked outside of PriceSmart get more market share while its own capital
ty, from northeast China’s Harbin City, was were all imported, and those who drove was very limited. Once one link was in trou-
among them. Zhao was one of the suppliers homemade cars to a PriceSmart would be ble, all the dominoes fell.
of PriceSmart, which had defaulted on a pay- mocked at,” said Cheng Keneng, once a Yang said that the daily revenue of a
ment of goods for over 300,000 yuan. But member himself. 20,000-square-meter PriceSmart or N-Mart
this trial didn’t bring him any good news. “In the beginning, PriceSmart followed store was about 1 million yuan, and Liu
The court held a three-day trial involv- the rules and regulations docilely and was could get 60 million in two months. But
ing alleged contract fraud and illegal capital welcomed in local areas,” said Zhao. PriceSmart used to settle accounts with its
withdrawal at PriceSmart, and looked into “When Liu Wuyi found it so easy to tap suppliers only once in a period of more than
the criminal responsibility of its nine senior money by opening more stores, he became three months. Then Liu could take the 60
managers. But the court didn’t make a rul- crazy about opening new stores and once million yuan in accounts payable and open
ing on how to handle the large amount of ordered to open 70 more in three years. a new store. In this manner, more and more
money the company owed to suppliers. However, due to the lack of capital, talent stores were opened. Understandably, the
Zhao’s woe is just the tip of the iceberg and proper management, PriceSmart’s capital chain built on suppliers’ money and
of PriceSmart’s failure to pay for goods. expansion was totally out of control.” bank loans was extremely fragile.
PriceSmart was in default on payments to In 2004, banks tightened credit for Beginning in 2002, PriceSmart was fre-
suppliers of nearly 2 billion yuan, excluding PriceSmart, which put pressure on the com- quently accused of delaying payment. In the
its loans from banks—it owed more than 1 pany’s capital chain. In July 2004, the middle of 2004, suppliers united to boycott
billion yuan to banks. Changsha PriceSmart was accused by PriceSmart, causing a complete break in its
Meanwhile, the absent company Nanfang Construction Material of owing its chain.
founder, controller and chief suspect in the company a total of 28.09 million yuan in rent, “From then on, the capital black hole
PriceSmart case, Liu Wuyi, had left the water and electricity fees. As a result of the had been revealed,” Yang said.
country, leaving behind a fragmented and lawsuit, the Changsha PriceSmart was forced As a matter of fact, it was not just
heavily indebted PriceSmart. to close, creating a domino effect. Local PriceSmart that was running this dangerous
The company’s case study serves as a
lesson for the business community and gov-
ernment alike. Essentially, the moral of the
story isn’t good, and neither is ill-consid-
ered growth.
Becoming notorious
In 1995, Liu registered a company called
PriceSmart Membership Superstore Enterprise
Group (PM Group), which claimed to be
derived from the trademark “PriceSmart”
under U.S. Price Enterprises Inc.
It is notable that although the
PriceSmart set up by Liu was the first mem-
bership-only supermarket in China and
based on the U.S. model, the Chinese PM
Group is actually a private company with-
out any foreign capital. It adopted a kind of
franchise store operation. Whenever a new
PriceSmart supermarket opened in China, it
would pay a sum of money to the U.S. side. BLUE MAN GROUP: PriceSmart’s senior management suffered the consequences of
Apart from the money, the PM Group China being too eager to expand
The Pie-Carving
The effect is less noticeable in Atlanta, but ties in this market.
post-Olympics market prices in Barcelona,
Sydney and Athens are all up more than 50 Tourist souvenirs: a massive market
Begun
experiencing a relatively moderate rise in was valued at $500 million; sales of the
valuations. From January to August, the Athens 2004 Olympic mascots—Athena
prices of newly built commercial properties and Phevos—totaled around $840 million.
increased by 8.2 percent, while residential The sales outlook for the five Fuwa dolls
T
By JUMBO ZHANG
rates were up 10.7 percent. But Li Minyi, a that are the mascots of the Beijing Olympic
ime is ticking by with less than two professor at the Beijing Technology and Games is projected to be no less rosy than
years remaining before the opening Business University, warns against impulse that of Athens.
ceremony of the Beijing Olympic buying in the midst of the Olympics run-up Getting into the Olympic mascot and
Games. Pre-games business activi- and advises buyers of the possible post- franchised souvenir business may be diffi-
ties, however, are already in full Olympic trough effect that may see proper- cult for small businesses. But Du Wei, Vice
swing. ty values slide. Director of the OERA, advises companies
The Beijing 2008 Olympic Games bud- Other sectors that are expecting to to have a broader vision. In 2008, China will
get is 290 billion yuan, and is primarily cash in on the Olympic boom range from welcome an influx of over 100,000 athletes,
being spent on infrastructure. But the hotels and serviced apartments to catering officials and tourists, many of whom are
Olympic economy means much more than and many other tourism-related ventures. likely to journey to the many tourist spots
this. The extra demand created by the By 2008, it is estimated that Beijing will across China and buy local souvenirs along
Beijing Olympic Games across all sectors is have 15,000 hotels, of which 800 will be the way.
expected to total around 600 billion yuan. star-rated, with 130,000 available rooms.
Budget and theme hotels, as well as Cashing in on the Olympic Village
Real estate and construction home-style hotels located near the and surroundings
The real estate industry is o ne of the big Olympic venues, will find extra favor The Beijing Olympic Games will also
direct beneficiaries of the Olympic econo- with travelers. trigger demand worth 43.2 billion yuan in
my. Massive public construction projects The construction sector is prospering. the logistics sector. Delivery of goods
such as stadiums, transport networks and By 2008, Beijing will have up to seven directly linked to the Games will account
environmental construction and improve- metro lines plus another line directly ser- for 491 million yuan, of which tourism as
ment act as catalysts for the real estate mar- vicing the Olympic Park. Businesses deal- well as retail and catering will represent 141
ket. The four most recent hosting cities have ing in cement, glass and new building million yuan and 350 million yuan respec-
all seen price hikes in the property sector. materials are set to benefit greatly. tively.
Five Sectors
Ru Yihong, professor at Beijing Hospitality
Jiaotong University, advises all Beijing
Now is the time to prepare for this sec-
businesses in the logistics sector to expand
That Need
tor. Opportunities abound. Service quality
their services to cover all areas, hotels
and branding can be improved to prepare
accommodating delegates and officials, the
Olympic Help
for full-house occupancy that will send rev-
press center and the Olympic Village.
enues soaring; and there is still a shortage of
Meanwhile, Vice Secretary General of
cheaper budget hotels.
Beijing Leasing Association Yu Xiaomei
believes that leasing services is an ideal sec- Handicrafts
S
By JUMBO ZHANG
tor for small businesses to help address the Experience from past Olympic Games
short- to medium-term need for use of mall and medium-sized businesses proves that finely crafted souvenirs with
goods during the Games period. The leasing need to learn to seek out a niche mar- strong local character are snapped up by
market is valued at more than 20 billion ket. Where there is demand, there is tourists like hotcakes. There is likely to be a
yuan, half the size of logistics market but always a market. But competition is big market for items such as Hangzhou
still substantial. tough and businesses must position silks, Yunnan tapestries and miniature stadi-
Specialized leasing opportunities themselves correctly to sniff out the right um models.
include engineering equipment, broadcast- opportunities during the critical pre-Olympic “It’s not necessary to get the qualifica-
ing facilities, vehicle chartering, transporta- run-up period. Five areas are particularly tion to produce Olympic souvenirs,” Du
tion, sports facilities and parking garages. compelling: technology, food and beverage, said. “As long as your products are of good
construction, hospitality and handicrafts. aesthetic quality, embody an essence of tra-
Insuring the athletes
Technology ditional folk art, and are finely crafted and
The IOC, for the first time, took out
reasonably priced, you stand to have a good
“Olympics Cancellation Insurance” worth Du Wei of the OERA sees the Olympics market.”
$170 million for the Athens 2004 Olympic as a platform of huge potential for technolo- Wang Huamin, Deputy Director of the
Games, which covered the risk of games gy companies. Small and medium-sized Beijing Industrial Olympic Economic
being postponed due to war, terrorism, businesses are advised to pay particular atten- Action Steering Committee, urges investors
earthquake or flood. An even greater oppor- tion to networking, security check technolo- to widen their vision. “Articles carrying any
tunity, however, lies in personal accident gy and anti-forgery technology in terms of connection to the Olympics and Olympic
insurance for athletes and visitors. The latter tickets and credentials of various kinds. venues will be recognized as Olympic sou-
carries a higher chance of profitability. “Quite a number of technological appli- venirs,” he said. “Businesses may by all
National regulations rule that the mini- cations have found practical uses, such as means play the Olympic card.” ■
mum amount of personal accident insur- solar-powered vehicles, face recognition (Xinhua Finance)
ance per traveler, payable by the travel technology, environmentally friendly sani-
agency, is as follows: 300,000 yuan per tary products and energy-saving air-condi- DISCLAIMER: The information contained herein
overseas traveler; 100,000 per domestic tioning, many of which were contributed by is based on sources we believe to be reliable, but is
traveler. Travelers from developed countries high-tech small businesses,” Du said. provided for informational purposes only, and no
tend to have a better grasp on the concept of representation is made that it is accur ate or
personal insurance, usually choosing per- Food & Beverage complete. This briefing should not be construed as
legal, tax, investment, financial or other advice, and
sonal accident insurance with high compen- This is certainly a huge market, but a is not a recommendation, offer or solicitation to buy
sation. ■ wide variety of tastes need to be taken into or sell any securities whatsoever.
Chris Devonshire-Ellis is the Senior Partner of Dezan Shira & Associates - www.dezshira.com
9.8
40 6
0 0
Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct.
Retail Sales
Growth
stood at $4.24 billion and $3.77 billion facturing amounted to $3.7 billion and
respectively, accounting for 22.7 percent $1.6 billion respectively, accounting for
and 20.1 percent of the total value of 19.8 percent and 8.5 percent of the
technology introduction contracts. country’s total value of technology
The European Union (EU) was the introduction.
biggest source of China’s technology
imports in the first 10 months. China Corn
and the EU signed 2,124 contracts of China’s corn exports stood at 2.27
technology introduction valued at $7.78 million tons in the first three quarters of
billion, 25.4 percent higher than the fig- this year, down 68.3 percent year on
ure in the same period last year and year, while imports hit 60,000 tons, 43
accounting for 41.5 percent of the total times the figure a year ago, according to
contractual value of technology intro- statistics from MOFCOM.
duction. Japan and the United States Boosted by rising oil prices, many
ranked second and third, with respective grain enterprises have built processing
contractual values with China arriving at facilities in China’s major corn produc-
$4.57 billion and $3.12 billion and ing provinces to reduce production costs.
accounting for 24.4 percent and 16.6 The growing processing capability will
percent of China’s total technology drive domestic demand even higher and
introduction. is likely to turn China into a net corn
Through January and October, the importer in the coming years, industrial
total value of technology introduction by insiders said.
state-owned enterprises amounted to “We believe that China will become
$8.19 billion, surging 39.6 percent com- a net importer of corn in a few years,”
pared with the same period last year and said an anonymous MOFCOM official.
accounting for 43.7 percent of the coun- But he did not expect the change to hap-
try’s total. At the same time, foreign- pen in 2007 because China’s corn supply
invested enterprises introduced $9.2 bil- still exceeds demand.
lion worth of technologies, accounting Over 25 million tons of corn was
for 49.1 percent of the total value of used in deep processing last year in
technology introduction. China, compared with 13.8 million tons
The railway transportation sector in 2004. The figure jumped to 15.6 mil-
saw the biggest increase in technology lion tons in the first half of this year.
introduction. In the first 10 months, the China is now the third largest fuel
sector imported $3.98 billion worth of ethanol producer after Brazil and the
technology, 3.6 times the figure a year United States. Production of fuel ethanol
ago. During this period, technology and corn alcohol consumed 8.9 million
introduction in electronic and telecom- tons of corn in China last year, account-
munications equipment manufacturing ing for 44.5 percent of industrial con-
as well as transport equipment manu- sumption of corn. ■
I
in high consumption when using cellphones
n October, the Civil Affairs many misunderstandings about this policy. and computers, we must compare these
Administration of Jinan, capital of Therefore, good policies must be explained people with those who are seeking basic liv-
east China’s Shandong Province, explicitly to the public in order for them to ing security, rather than those living above
issued certain measures related to be better accepted and implemented in the the average level or even leading a rich life.
the subsistence allowance for urban whole of society. The nature of the subsistence allowance is
poor, with a provision saying that the finan- Ye Zhuyi (www.xinhuanet.com): to help create the most basic living security,
cial help would be halted once recipients Nowadays, when the overall living standard is and its function is to provide those in need
were found to be purchasing items like cell- going up, computers and cellphones seem to with basic living materials like food and
phones, computers and digital cameras. be commodities that every family can afford, clothing.
This announcement stirred heated including low-income families, so the restric- It’s true that China is now home to a
debates, with opponents arguing that the tions attached to Jinan’s new policy seem real- large number of cellphone and computer
purchase of computers and cellphones is a ly tough. Nevertheless, we must admit the fact users, but the possession of these commodi-
personal right, especially when these com- that cellphones and, even more particularly, ties is still based on people’s revenues. In
modities are no longer treated as luxuries computers, demand certain economic founda- rich families, maybe children have several
nowadays, and it’s a governmental obliga- tions. Not only subsistence allowance cellphones, but for low-income families,
tion to help the poor as society is partly receivers cannot afford them, but average fam- cellphones and computers are still a dream.
responsible for people’s poverty. ilies often find these commodities expensive. Some may argue that subsistence
Actually, around China, many local Take computers for example. Apart from the allowance applicants may need computers
governments have already implemented several thousand yuan expense on a regular and cellphones to make money or look for
similar measures. The Longtan Subdistrict one, fees for Internet access are considerable. jobs, so restrictions deprive them of opportu-
in Beijing, for example, began to carry out But, the subsis- nities to struggle for a richer life. However, in
strict procedures to assess people’s eligibil- tence allowance real life, cellphone users are
ity for government relief. According to rel- is only 200 either the “elites” or
evant regulations, families that purchase and yuan every “ fa s h i o n - ch a s e rs .”
use cars, motorbikes, large screen color TV month in Jinan. How many of them
sets, cellphones and computers have no Hence, families are from low-
right to any allowance. really in desper- income fami-
The rationale is to prevent ineligible ate need of sub- lies?
families from getting access to the limited s i s t e n c e Limited
allotment, as families really dependent on allowance can financial
the allowance could never afford cellphones hardly afford r e s o u rc e s
and computers, local officials said. these “luxuries.”
Thus, the restric-
Not discrimination tive conditions
Ye Lei (Beijing Youth Daily): As we all attached to the
know, no right is given without some new policy are
restrictions attached. In the case of the urban not groundless.
subsistence allowance, it’s the government’s A s
obligation to help the poor out of poverty, China’s social
but the subsistence allowance is designed security sys-
for those really in need of help, so that they tem is in the
can avoid the fate of becoming homeless or initial stage,
starving. When issuing the new policy, the with quite limit-
Jinan Civil Affairs Administration ed financial sup-
announced that special working teams port, so the focus
would visit communities where applicant should be on
families are located to check whether they people’s basic living
are eligible. Any suspicious circumstances demands, such as
will be carefully checked. In the meantime, food and clothing, and
there is also flexibility regarding specific expensive non-essen-
conditions. If the measure is strictly imple- tials should not be
mented, the subsistence allowance will covered. At the same
surely work in the most effective way. time, as for eligibility to
It’s wrong to point a finger at Jinan’s the subsistence allowance,
new policy. Also it seems that there remain there are rigid require-
46
FORUM
should be used where they are most needed allowance and some even turn up to claim people of the right to relief.
and those who can afford top-grade com- the money in their cars. As a result, not only Na Xiaofang (www.southcn.com): As
modities have no right to the subsistence is the special fund working ineffectively for basic tools in modern society, cellphones and
allowance. There is nothing wrong in this those who really need help, but the govern- computers should be accessible to everyone,
logic. ment’s credibility is also including the poor who
Yuan Lei (Shenzhen Economic Daily): impaired and the coun- live on the subsistence
One of the reasons why it’s so difficult to try’s wealth wasted. allowance. The govern-
Dear Readers,
decide the eligibility for the subsistence However, restric- ment should never
“Forum” is a column that
allowance is that China has so far failed to tions on the eligibility for provides a space for varying impose restrictions in
establish a well-developed wealth-reporting the subsistence perspectives on contempo- this regard. Otherwise,
system and taxation system. As a result, the allowance should not go rary Chinese society. In each it’s quite possible that
government is unable to have an overall, too far. Indeed, it’s issue, “Forum” will announce when the poor have
clear knowledge of citizens’ financial status. improper to offer finan- the topic for an upcoming shaken off poverty,
It is in this condition that cellphones, com- cial help to those who issue. We invite you to submit they’ll have to learn
puters and similar measurable things are used can afford a car; but it personal viewpoints (in either how to catch up with the
as criteria to decide whether a family is eligi- seems to be going too far English or Chinese). pace of modern civi-
ble for government relief, with a view to pre- to cut off relief to fami- Upcoming Topic: What is l ization. When they are
venting ineligible applicants from sharing the lies that have second- behind university graduates’ denied the right to enjoy
limited financial resources. In this sense, the hand cellphones and enthusiasm for jobs with low modern civilization,
government has no other choice. used computers. In fact, academic requirements? they have to live outside
A subsistence allowance system can be if we take this line of E-mail us at xqpan@cipg. it. In Europe, a piano is
seen in almost every country, but there exist argument to its logical org.cn considered a necessity
differences in what commodities recipients conclusion, then those in many families. If this
can enjoy and what they are supposed not to Please provide your name,
who possess homes are also applied to China,
telephone number, zip code
seek or possess. In some Western countries, ineligible for the subsis- families would no
and address along with your
maybe it’s common for allowance recipi- tence allowance either, comments. longer be able to keep a
ents to have a car. However, despite all as they could seek to piano in case they need-
kinds of differences in material conditions, escape from poverty by Editor: Pan Xiaoqiao ed to apply for the sub-
restrictions on the eligibility for state relief selling the houses or sistence allowance. The
are a conventional practice. renting them out. most important thing is
At its initial stage, China’s subsistence In my opinion, cellphones, computers to ensure a certain group can keep up with
allowance system still has many defi- and digital cameras are currently necessities the pace of modern life, and not focus on
ciencies, and so applicants are expected to for the poor to shake off poverty and improve how much the government should pay for
apply for the allowance only when they can- their lives rather than top grade commodities. this purpose. It should also be pointed out
not manage to survive by While information technology is developing that, if people fall behind the pace of modern
themselves. When fast with each passing day, these items are civilization, the society has to pay more for
they receive actually tools for survival, as they may help the efforts to bring them up to scratch.
t h e people to improve their living standards. The subsistence allowance should
In fact, the Jinan policy seems to be ensure people the basic right of survival and
telling people that, since you have chosen also the right to keep pace with social
to apply for the subsistence allowance, progress. Currently, the focus is on the right
you have to live a poor life! to survival while other rights are sometimes
Zhang Ruidong (www.nen. overlooked. When the state is actually able
com.cn): The subsistence allowance to offer relief, it must try to ensure the poor
is part of social relief offered to those receive all their rights. No one wants to see
who live below the basic living standard. the poor feeling puzzled when they one day
Once people’s living conditions are recog- face computers and cellphones. If the sub-
nized as in need of relief, it’s the government’s sistence allowance can’t prevent them from
obligation to provide aid. How recipients use being abandoned by society, what’s its
the money is their own business in which the value?
government has no right to interfere despite its Liu Yu (www.jschina.com.cn):
role as the provider of the relief. Nowadays, cellphones are no longer expen-
Since receiving subsistence sive commodities. In addition, they are very
allowance is the poor people’s right, helpful to reduce communication costs,
and to use computers is a personal free- which are of great significance to people on
allowance, there must be dom, there is nothing wrong for relief a tight budget. While the rich make long-
some adjustment in their lifestyle or even recipients to buy cellphones and comput- distance calls lasting hours, the poor can use
sacrifice of some possible enjoyments. ers, and this right should not be restricted on text messages that are much cheaper.
any excuse. Once civil affairs departments rec- Actually, as long as there is some limi-
Recipients’ interests outweighing ognize a certain family deserves help, it should tation on usage, it does not matter whether
Xu Guangmu (www.gmw.cn): The provide allowance for this family. If any the allowance recipients use cellphones or
original intention of adopting the new poli- doubts exist about eligibility, a double check fixed-line telephones. This is the same with
cy by the Jinan Civil Affairs Administration should be carried out in accordance with state computers. If they are cheap used ones or
is understandable, as it often happens that criteria. But, “computers and cellphones” given by friends, why can’t these things be
claimants fake evidence in order to get the should not be used as an excuse for depriving used? ■
W
Chinese clinic: He sent me upstairs for
hen I entered the acupunc- Western-style X-rays. But first, he sent me to directly into the most painful spot on the
ture clinic at the Jintai the cashier. inside of my knee. I gasped and said in
Traditional Chinese This is China, pay as you go, cash in Chinese “Very painful!” and he just nodded.
Medicine Hospital in advance, no medical insurance or credit Why should I be surprised? They think stick-
Beijing, the doorway was partially blocked cards. As I limped down the hall, past the ing needles into an injury is a good idea. Why
by a woman sitting with her chin in a sling. I not pummel it further?
pungent smells emanating from the herbal
stepped over her legs, then squeezed past He used his hands like hatchets, chop-
pharmacy, I hoped I had enough money.
another woman with needles sticking out of ping all around. You know that place where
The cashier said “40.” Not believing this,
her chin and cheeks. She looked bored. This the doctor hits you with a little hammer to
was a good sign; at least she wasn’t in any I asked, “400?” She shook her head and I test reflexes? He hit that again and again with
pain. said “4,000?” She wrote “40” and passed it to his fist. You don’t think that hurts? Get some-
Pain, that’s the key word. I was already in me. It wasn’t a joke; X-rays of my knee cost one to pound yours two dozen times.
pain; my knee was swollen the size of a 40 yuan. I limped out; certain this had been no
medium cantaloupe. I had twisted it doing a After the doctor read the films, he sent miracle cure. I could still feel mice partying
spinning kick combination in kungfu class. me back to the cashier (back over that around my knee, which felt like it weighed
In the morning, when I could not bend my woman’s legs!) to pay for five acupuncture 15 pounds. Was it my imagination, or was it
knee enough to walk downstairs, acupunc- treatments for less than I would spend on a feeling… better? How could I test it? The
ture sounded like a good idea. good haircut. The cashier apologized for the stairs! I walked up, turned around, and
Acupuncture is based on the 4,000-year- high price, but explained that my doctor is walked down. Whereas that morning I could
old theory that there are channels of energy famous. not walk down stairs, now I could. My knee
running through our bodies. If a channel is When I returned, the woman in the sling bent freely.
blocked, pain or disease ensues. Unblock the was gone, but this time I slid past a man on a I’ve been back three times, and each
channel and the body can heal itself. It stool with needles sticking out of his chest. I time, the needles did not hurt but the massage
sounded less painful than knee surgery. hopped up on a table and rolled up my pant was brutal. I have to admit it, each time my
Fifty-ish, slightly graying, distinguished, leg. Earlier I noticed they did not change the knee got a little better. Let’s see, will I get
Dr. Zhao’s air of professionalism and his linens between patients, so I relaxed when surgery and a six-month recovery process, or
white coat would mark him as a medical man Dr.Zhao pulled the needles from sterile pack- put up with the mice for a few more weeks?
in any culture. He didn’t speak English, but aging. The needles, around four inches long, It’s a no-brainer. I’m sold on traditional
he didn’t need it to poke, prod and nod. He looked like thin silver filaments with a slight- Chinese medicine. ■