Wednesday, April 2, 2008
Article 3: Faking it: Piracy poses headache for OlympicsBy Hamish McKenzieFor CNN HONG KONG, China (CNN) --
At a stall in a crowded street market in Mong Kok, one of Hong Kong's many busy shopping districts, a vendor with a quick whip of his hands produces from behind a plywood wall a set of Beijing Olympics key rings. They are perfect rubber replicas of the five Olympics mascots: the Fuwas. "Have you been looking for this stuff for long?" he asks the buyer. He asks for good reason: fake Olympics merchandise is becoming increasingly scarce in Hong Kong. Until the end of May, there was more to be had as opportunistic salesmen targeted tourists in an area famous for cheap knock-offs. But then the police swooped in, seizing the illicit goods and effectively freezing the supply, local vendors say. The swoop came as part of a China-wide crackdown against fake Olympics goods and the people who sell them. In raids on markets in Hong Kong districts such as Wan Chai, Yau Ma Tei, and Mong Kok on May 30 and 31, customs officers seized 350 pieces of counterfeit Olympics goods, including key-rings, watches, caps, badges, and stickers, worth about HK$7,000 ($895). The vendors aren't taking it lightly. This is a central government issue. The Hong Kong customs department says it is increasing its vigilance in combating the sale of Olympics-related counterfeit products. "Apart from stepped-up monitoring of the market, Hong Kong Customs has been conducting repeated and intensive raids against such counterfeiting activities," said Edmond Cheng, head of intellectual property investigation operations, in a written statement to CNN.com. "As a result, the situation is firmly under control." Since 2004, Chinese authorities have uncovered more than 1,500 cases of violations involving Beijing Olympic slogans, logos, and other trademarks, according to the English-language newspaper China Daily. In 2004 and 2005, such cases involved fake goods worth 14.8 million yuan ($1.9 million), resulting in fines of 8.38 million yuan ($1.1 million), the newspaper reported. Figures were unavailable for 2006 and the first half of this year. It is not difficult to judge the authenticity of an official piece of Olympics merchandise. The security features on an "anti-counterfeiting label" include a 3mm-wide hologram window bearing the Games emblem; the words "Beijing 2008" visible only under certain lighting; and an embossed design. The message is clear: Olympics merchandise is a no-go zone for counterfeiters. That could be something to do with the money involved. The 2004 Athens Games generated $61.5 million in revenues from the sale of licensed Olympics merchandise, according to a report by the International Olympic Committee. Olympic host cities are entitled to between 10 percent and 15 percent of the royalties, according to a report from the China Daily. The crackdown is indicative of Beijing's "selective enforcement", says Oded Shenkar, a professor at Ohio State University and author of "The Chinese Century." "In a way, it's a reminder that when they want to they can enforce, but sometimes they don't want to," Shenkar says. Piracy benefits China's economy by providing jobs and a cheap way to quickly catch up with modern technology, Shenkar says. "Piracy provides them with a certain advantage, at least for now," he says. "They do realize that at some point they will need to crack down in order to create innovation in the system." This past April the United States filed a formal piracy complaint against China at the World Trade Organization, arguing that China's inadequate protection of intellectual property rights was costing the U.S. dearly and putting consumers around the world at risk. The U.S. Commerce Department estimates piracy and counterfeiting costs that country between $200 billion-$250 billion a year. China is a major culprit, costing the United States an estimated $24 billion through sales of pirated goods, the department says. On April 26, World Intellectual Property Day, cities across China demonstrated the country's commitment to quashing piracy by staging public exhibitions and destroying pirated goods. Yet, says Shenkar, China's government treats intellectual property issues the same as any other issue: they are subject to bargaining. So, if the United States pushes hard for China to take action and there is something to be gained by doing so, the government will make a highly visible concession. For instance, a year after China banned "naked computers" -- new computers without pre-installed operating systems -- Bill Gates announced major Microsoft investment in the country and offered $3 software packages for poor Chinese students. Expect more of the same, says Shenkar. "You're going to see some temporary, high visibility crackdowns." That being said, it would be extremely difficult to crack down on all cases of piracy, says James McGregor, CEO of China research and advisory firm JL McGregor and Company. "China's like piracy on steroids," McGregor says. Tackling the piracy industry -- which likely provides thousands of jobs in retail and manufacturing -- would take enormous political and personal effort. Instead, the government has to pick its shots, says McGregor, and Olympics merchandise is an obvious target. Meanwhile, by targeting violations of Chinese-owned trademarks, the authorities can be seen to be vigilant while protecting China's internal economy. "It's the Olympics. It's international. It's China's coming-out party. It's China's face," McGregor says. "Who wants to put on the Olympics and be looked at as the low-class pirate country that steals everyone else's trademarks?"
Labels: Beijing Olympics, Economy, intellectual property, posted by chay teng
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Article 2: Human rights questions remain for ChinaBy Niall FraserFor CNN HONG KONG,
China (CNN) -- With a year to go before the 2008 Olympics get under way, questions linger over China's efforts to improve its human rights record. Observers and pressure groups have criticized the efforts of the Chinese government and the International Olympic Committee (IOC) since Beijing won the bid in 2001, rejecting assertions by both that the Games will lead to lasting positive change in the world's most populous nation. After praising Beijing's preparations as "excellent across the board," the IOC official charged with overseeing Beijing's preparations, Hein Verbruggen, sparked further anger from advocacy groups with his recent comments that, "...the way the Games are being used as a platform for groups with political and social agendas is often regrettable.'' The International Federation for Human Rights claimed his remarks will "embolden'' hard-line elements within the Chinese Communist Party to ignore international pressure over human rights promises. But the IOC says, there is a widespread misconception that a list of "human rights promises'' was ever sought by the IOC in the first place. "There were some declarations made by senior Chinese leaders in Beijing who raised the human-rights question proactively and talked about how the Games would be part of the process to help human rights development," says IOC's director of communications Giselle Davies,. "But that was never a [piece of] criteria on which the IOC judged and assessed Beijing's bid. "The IOC decision is not made in a political or social context. It is very much based around what is a coming together at a sporting event and everything for which that can be a catalyst for," Davies adds. And that, she believes, is a force for good. "The IOC fundamentally believes that the world will look back and see the Games as a key moment along a period of change and development for good in China," she says. Meanwhile, Human Rights Watch has sharply criticized Beijing. On Thursday, the organization said China's government has failed to live up to pre-Olympics promises of greater human rights freedoms and has instead clamped down on domestic activists and journalists, according to reports from The Associated Press. "The government seems afraid that its own citizens will embarrass it by speaking out about political and social problems, but China's leaders apparently don't realize authoritarian crackdowns are even more embarrassing," Brad Adams, Asia director of New York-based Human Rights Watch, said in a statement carried by the AP On first glance it would appear Beijing is sensitive to certain international concerns. In June, Chinese officials and the IOC moved quickly to launch an investigation into allegations by the advocacy group Playfair 2008 that four official souvenir makers were using child labor. Earlier that month, Beijing took the landmark step of allowing the mother of a victim of the 1989 Tiananmen Square crackdown to mark the anniversary of his death publicly. But others believe that since 2001 there has been a tightening of controls on political dissent and freedom of speech, as Beijing has sought to contain the social and political fall-out from the country's breakneck economic development. The IOC says, for example, that the Olympic Games has led to improvements in China's labor system in which workers endure long hours in harsh conditions for less than the legal minimum wage. Han Dongfang, the Hong Kong-based labor rights activist for the China Labour Bulletin organization, which monitors workers' rights in China, insists "It's about markets and it's about cheap labor ... Labor rights have become worse over the past few years.'' He says that any real change in China can only come from the inside as a result of pressure from workers and the development of free trade unions and the right to collective bargaining -- and not from international pressure. "The Chinese leadership does not care about international pressure. It is not China who is knocking at the door of the international community looking for favors -- it is the other way around,'' Han says. The IOC says "enormous'' progress has been made in terms of the freedom the news media will have to report on the Olympics, following the 2001 pledge by the secretary general of the Beijing Olympic Bid Committee Wang Wei. "We will give the media complete freedom to report when they come to China," he said at the time. Not so, says veteran China scholar Willy Wo Lap Lam, author of the recently published "Chinese Politics in the Hu Jintao Era." "The police and secret police departments in every city have lists of dissidents and 'dangerous' people who are not supposed to talk to the western media," Lam says. "So, instead of following these Western reporters around, the police will simply post more 'guards' outside the dwellings of 'suspect' people in each city and county. They will ensure they can't talk or work with western journalists.'' Professor Joseph Cheng of Hong Kong's City University agrees with Lam. "China's only concern as far as the Olympics is concerned is to showcase itself to the international community. To this end it will treat foreign journalists and visitors very well - but all the troublemakers will 'disappear'," he says. "Twenty years ago they put trouble-makers under harsh house arrest or worse. Today, they give them a holiday. Either way, they won't be speaking to foreign journalists.'' Lam adds that any pledges Beijing did actually make does not necessarily mean human rights will improve. "The main pledges made by Beijing are clearing up the environment and curbing traffic jams. Both of these are achievable through draconian methods," Lam says. Furthermore, while the world-at-large may be expecting an Olympics-led metamorphosis, the reality is very different, he says. "Beijing will not relax controls over dissidents, NGOs as well as 'agitators' for Tibet or Xinjiang. There will be tighter surveillance of potential troublemakers," Lam says. "The South Korean Olympics in 1988 marked the beginning of genuine political liberalization. For China, it is a very different story. The Chinese Communist Party sees the Games as an opportunity to show the world China's great achievements in the economy and infrastructure and to demonstrate their diplomatic clout. Internally, the Games will help the Party foster 'internal cohesiveness' using national pride to justify the Party's ruling status. "No Chinese Communist Party leader wants to use the Games as a juncture to push forward reforms.''
Labels: Beijing Olympics, Economy, intellectual property, posted by chay teng, Social
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Tuesday, April 1, 2008
Economist Intelligence Unit ViewsWire: China's food safety
A new plan to improve standards of food and drugsWhen pet cats and dogs in the US started dying in April, few would have thought that the deaths would have much relevance for the Chinese export juggernaut. But the issue looks like spiralling into a major problem for international traders, and in an effort to cool the controversy China was forced to release on June 6th its first five-year plan to improve food-and-drug safety standards. The plan has a political as well as practical motive, as the government is keen to undo the reputational damage from scandals ranging from food contamination to the sale of fake antibiotics. However, implementation of the plan is likely to be difficult.
China is no stranger to quality problems, be it in food, drugs or toys. The US pet deaths—stemming from the contamination by melamine, a chemical toxin, of a vegetable protein used in animal foods—were not all that different from many other past cases in China. However, the massive scale of the pet-food recall, involving thousands of retail products, was unprecedented. The issue also touched on an unusually emotive subject at a time of rising Sino-US trade tensions. That was not all. The story was followed by a plethora of articles in the foreign media highlighting similar cases, ranging from a series of alleged deaths in Panama last year caused by the use of industrial toxins in cough medicine exported from China to the US Food and Drug Administration's warnings over chemicals in Chinese-made toothpaste. China was on the verge of a global PR disaster.
Investigations into such cases have thrown light on the tangled morass of the Chinese regulatory system. The State Food and Drug Administration (SFDA), the General Administration of Quality Supervision, Inspection and Quarantine and other agencies have a tendency to pass the buck between each other, denying responsibility for mistakes. That allows producers and traders to get on with business as usual. In many cases a lack of regulatory clarity and co-ordination prevents the authorities from tackling abuses. In others, businesses simply buy the required documentation.
Deadly consequences
It has been an ironic coincidence that the latest furore has come as the former head of the SFDA, Zheng Xiaoyu, was on trial for accepting bribes in return for granting government approval for various medicines in 2005. Amid the international uproar over tainted Chinese products, there was little surprise when the court imposed the death sentence when he was found guilty. But for regulators still trying to save their necks, they now have the unenviable task of sifting through all the drugs and pharmaceutical firms approved for licences under Mr Zheng in an attempt to make sure they did not breach standards.
As Mr Zheng's case—which did not involve exports—showed, this is not purely a problem for foreigners who buy Chinese products. It is a safe to say that many more Chinese people than foreigners are harmed by ingesting toxic or substandard foods and drugs each year. In one particularly tragic case in Anhui in 2004, for example, several babies died of malnutrition after consuming fake baby-milk powder. Investigative programmes exposing factories, farms and restaurants engaged in various nefarious practices with food are a stomach-churning staple of Chinese television.
Yet Chinese officials' reflexive response to more serious cases remains the cover-up. The pet-food case saw a classic hash of a government PR job. First came denial: "The poisoning of American pets has nothing to do with China," claimed a report in the People's Daily. This was followed by a blustering counter-attack noting that food contamination occurred both within the US and with US exports to China. "No food-inspection system is foolproof," pointed out Li Yuanping, director general of the Import and Export Food Safety Bureau. "It's like an airplane. Flying is said to be the safest way to travel, but sometimes you have plane crashes".
Only later did officials start revealing more substantive measures to address the problem, including the release of the five-year food-and-drug safety plan. The plan calls for more inspections of food exports, improved procedures for recalling faulty or tainted products, more pollution monitoring in food-producing areas, as well as an improved structure for monitoring--and blacklisting--food trading companies. According to the Chinese state media, the plan also aims to implement a system of special inspections for 90% of food producers. It also calls for more stringent controls on the use of additives and pesticides, and for nationwide monitoring of the ill effects of medication. However, despite the plan's laudable aims, corruption and inefficiency will continue to leave doors wide open for companies wanting to cut corners.
Legal fallout?
For foreign businesses, the lack of quality control in China is not someone else's problem. Several lawyers have argued that, since Chinese regulatory bodies are demonstrably unfit for purpose, any company accepting Chinese exports with official quality or safety certificates could theoretically be held liable for problems that subsequently emerge. Once again, this dilemma highlights the importance for companies of detailed knowledge of their supply chains in China, and of not taking documentary or verbal assurances at face value. To help deal with such challenges, bigger companies should establish their own internal quality-control mechanisms. But for smaller traders, the costs of such systems could undermine their profitability. For many importers then, the best acid test may well be that if a product's price looks too good to be true, it probably is.
Posted by: sarah quek
Labels: Economy, Food safety, Political, Sarah 07A201
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Monday, March 31, 2008
extracted from:
http://www.chinadaily.com.cn/china/2008-02/04/content_6441527.htmBy Dong Zhixin and Li Hong (chinadaily.com.cn)
Updated: 2008-02-04 15:55
China's policy makers are finding themselves slipping into a difficult alley as the Chinese New Year of the Mouse begins amid a likely global economic slowdown, and unexpected havoc caused by an enveloping snowstorm in the country's southern powerhouse, and rising domestic inflationary pressure, which the recent blizzards could make worse.
Against this backdrop, even the best central bankers would scratch their heads hard. To fight inflation, People's Bank of China, the central bank, needs to phase in a tightened monetary policy. But in order to prevent the economy from following the heels of an imminent American slump, or to stand up as a global significant economic engine or star, as widely hoped for, Beijing needs to keep the major world developing machine well-oiled and going up, and up.
Some have advocated that a relatively loose monetary policy be maintained to avert a possible slowdown, which won't bode well for China's nascent property and stock market, and may bring real trouble to China's banks and a fragile financial system, and even endanger job security and social stability.
However, the rising cost of living as a matter of fact, also calls for more reining-in of credit. Back in December, regulators decided to shift the country's decade-old "prudent" monetary policy to a "tight" one to address two of the biggest threats: economic overheating and rising inflation. Last year, China's gross domestic product expanded 11.4 percent year-on-year, while the consumer price index, a major gauge of inflation, jumped to the highest level in more than a decade.
However, sometimes things do change in a glimpse.
The first negative news came from the other side of the Pacific. The economy of the United States started sliding into a possible recession. A recent survey among top American economists puts the likelihood of an American recession at 50-50, up from 30 percent four months ago. The American housing debacle has deteriorated, eating away billions of dollars in mortgage investments and leading to a slew of American heavyweight banks reporting big write-downs and crying for cash. Wall Street is in jitters. Though Bush and Congress rushed up to help with a hastened economic stimulus plan, no one can now be sure to see the ray of light at the end of tunnel.
Merrill Lynch forecasts the world's largest economy, growing a tiny 0.6 percent in the last quarter of 2007, this could contract by 0.5 percent during the first three months of 2008. A slump in the American economy will create big challenges to China's economic well-being, as the two economies are closely intertwined. Any economic woes will spread worldwide, eroding the market of consumption for Chinese goods. Citigroup research estimates that for each one percent slowdown in the US economy will shave 1.3 percent off China's growth.
The other bad news comes from the home turf: a blizzard at a scale not seen since 1951 pummeled the southern economic powerhouse of China, paralyzing transportation, crippling power supply and making millions of people suffer in extreme cold. The result was a halt of production in many factories -- an unwelcome way of cooling-off in the economy.
Some in China and elsewhere anticipate that the blizzards may drag down China's GDP in January by one percent. As the snow and icy rain continue till after the Spring Festival weekly holidays, as predicted by the weather forecasters, economic growth in February and the first quarter will feel the impact.
Consequentially, it seems improper for Beijing to stick to a "tight" monetary policy, by announcing more interest rate rises, in contrast to US Federal Reserve's incessant rate cuts during the past two months. In fact, the People's Bank of China issued a directive late January, asking commercial banks to give more credit to firms in the southern affected regions to help arrest the disaster. That was interpreted as a policy revision.
Another sign of possible credit ease came from President Hu Jintao. Policy makers should have a clear understanding of current global economic trends, their influences on the home economy especially, and prepare for a fast-changing and complicated situation in 2008, Hu was quoted as saying at a meeting of top Chinese leaders on January 27.
"We have to have a good control over the pace and strength of macro-control, so as to prolong steady, relatively fast economic growth as long as possible," President Hu said. Many analysts saw that as an indication of a prompt policy readjustment in keeping to changes at home and abroad.
However, any ease in monetary policy will be a tough call, as the country is facing the wrath of a climbing inflation not seen in more than a decade. Some newspaper commentators in China have asked for more interest rate hikes. As a matter of fact, to curb the prices of food from rising is the key to fight inflation. Chinese officials have said that the supply of grain, meat, eggs, fruits and edible oil will improve after the spring season, which may keep CPI at bay.
At times like this, there is always criticism of the central bank and other top regulators -- for moving too fast or too slowly, for doing too much or too little. The Chinese economy is so big and complex, and the data so contradictory at turbulent times such as this that even the best economists would disagree sharply.
The side effects of further monetary tightening are obvious. It will make small and medium-sized businesses -- key employers of newly added workers -- hard to get loans, endangering their survival. Any more tightening measures will not be instrumental in generating productivity, which is needed after a terrible storm.
Tightening in the form of rising interest rates, will also force Chinese homeowners to pay higher mortgages, increasing the risk of default. Property developers -- a heavy borrower from banks -- might also fail to make their payment to the lenders. Both scenarios will spell trouble for Chinese banks.
Starve the economy of credit, and it withers. Overfeed it, and it overheats with inflation. Giving the uncertainties surrounding the economy after domestic and global factors are taken into account, it now seems better for the central bank to keep its position, leave the interest rate intact, and the bank reserve requirement on hold for a couple of months, and monitor the latest developments closely before deciding what to do next.
Labels: amanda (07A102), Economy, problems faced and policies
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Sunday, March 30, 2008
extracted from: http://www.time.com/time/magazine/article/0,9171,1724024,00.html Thursday, Mar. 20, 2008
By Bill PowellChina's near-miraculous economic rise has been built on the smarts of men like Cheng Wei-lun and the sweat of the 800 workers he employs as chief executive of the Tianji Wooden Products Co. Based in Guangdong province in southern China, the company, which exports $10 million worth of toys and children's furniture annually, is like thousands of other small manufacturers that help form the backbone of the country's formidable export-manufacturing machine. But that frame is showing cracks, and all the brains and brawn in the world might not be enough rescue Tianji Wooden Products. Cheng's costs have gone up 30% in each of the past two years, but competition is so fierce he can't raise prices. "Our profits are gone," Cheng says. "If something doesn't change in the next few months, I will have to shut the factory."
Something is about to change — but almost certainly for the worse. Higher labor costs, a strengthening Chinese currency and soaring raw-materials prices are bad enough. Now, a slowdown in global growth and a likely full-blown recession in the U.S. are about to stress-test China's manufacturing sector like never before — and could result in the shuttering of thousands of factories and cost hundreds of thousands of workers their jobs. Makers of low-end goods are already suffering. The Guangdong city of Huidong was home to 3,000 shoe factories at the beginning of 2007, but as many as 500 of them have closed over the past 15 months, says Li Peng, secretary of the Asia Footwear Association in Hong Kong. One-sixth of 44,200 textile firms tracked by the China National Textile and Apparel Council lost money last year and two-thirds are just breaking even. "Manufacturers' profits are so low that when they hit the slightest snag, they have to close," says Li.
China's sweatshops have every reason to sweat. America buys about 19% of China's $90 billion in monthly exports. As the U.S. economy began to falter in late 2007, China's torrid export growth rate — for the last several years running at an annual rate of 20% or higher — was showing unmistakable signs of a slowdown. In February, it plummeted to just 6.5%, compared with nearly 20% growth expected by economists. Exporters suffered major disruptions from power outages and transportation delays caused by that month's heavy snowstorms, but sluggish U.S. demand was also to blame. In February, the value of U.S.-bound goods showed a rare year-over-year decline of 5.3%.
Although China is the world's second largest exporter, the country is not as dependant upon overseas trade as some. Exports accounted for 36.8% of China's GDP in 2006, compared with 43.2% in South Korea. But China may be unusually vulnerable to weaker international demand because the country has in recent years built too many new factories. With investment capital readily available and China's economy roaring ahead at double-digit growth rates, heavy industry expanded massively. The value of China's steel exports, for example, jumped tenfold between 2003 and 2007, from $5 billion to $50 billion.
China's central government recognized early on that an investment bubble was likely forming. In 2004, for both economic and environmental reasons, authorities in Beijing began pressuring provincial and local officials to curb spending on aluminum, steel and cement factories; state-owned banks were periodically told to stop lending for industrial projects. But local officials often ignored the stop signs. More factories meant more local jobs and more growth, which made them look good in the eyes of their political superiors. Not only that, local officials, who can seize land and issue permits for new projects, were often silent partners in new manufacturing ventures. Too many factories got built as a result.
This overabundance of production capacity means China's export machine is like a race car with no brakes. As long as the road remains smooth and straight, the car roars ahead. But throw in some potholes and a tight turn, and the wheels come off. Factories have been able to increase output in recent years because the global economy has been on a tear. The 2004-07 period saw the second strongest bout of global growth on record — which translated into strong demand for cheap Chinese-made products. But this era may be ending. Most economists are predicting a significant slowdown in worldwide GDP growth in 2008. This slowdown, predicts Lehman Brothers economist Sun Ming-chun, will prove to be the "unmasking of [manufacturing] overcapacity in China." Says Li of the Asia Footwear Association: "The cake is only so big, and when you have too many people trying to eat it, you will definitely have some go hungry."
Some are already starving. China's competitive advantage has been its armies of cheap workers, but that edge is getting dull. Labor costs have increased 50% in the past four years across southeastern provinces — an area of China sometimes called the "workshop of the world" — and a new labor law passed by Beijing will only add to the burden. Jonathan Anderson, an economist at UBS in Hong Kong, says that factory owners in southern China believe the new law will drive labor costs another 10-25% higher. Among other provisions, the new law entitles laid-off workers to one month of severance pay for every year of employment. "In a case where an export market is going down, if you want to reduce your number of workers, then you face a lot of problems," says Stanley Lau, vice chairman of the Federation of Hong Kong Industries. To lay people off, "you need to pay a huge amount in compensation." Nor is there any relief from surging raw-materials costs. And, slowly but surely, the renminbi, China's currency, continues to strengthen — it's now 12% higher versus the U.S. dollar than it was 18 months ago — making China's exports more expensive worldwide.
A major retrenchment could have serious consequences for China's economy and society. The specter of legions of laid-off migrant workers roaming the streets in search of jobs is bound to keep Beijing's economic policymakers, who fear the political consequences of widespread social unrest, up at night. Sun, the Lehman Brothers economist, says as manufacturers are pushed to the brink, China's stock markets could see sharp declines. Given that many large, listed Chinese companies pad their profits by investing in stocks themselves, "a big correction could bring [corporate earnings] even lower, and a vicious cycle could result," says Sun.
Then there are China's fragile banks, which could be hit by waves of defaulting loans as factories fold. Although Chinese banks during the current boom have been able to reduce their unusually high proportion of nonperforming loans carried on their books, declining corporate earnings will diminish borrowers' ability to repay their debts. While it's difficult to assess the overall exposure of banks to the manufacturing sector, it's easy to imagine lenders getting caught in a Chinese-style credit crisis if manufacturing contracts sharply.
Of course, worst-case scenarios don't always come true. Anderson, the UBS economist, isn't overly pessimistic. But he sees China's export growth rate falling from about 25% a year to single-digits by mid-2008. "2008 will likely be the year manufacturers [are] finally forced to take a general hit on profitability," he says. A soft landing for factories might even be beneficial for the country in the long term, because it would weed out inefficient operators and boost China's productivity. A period of "creative destruction" is an inevitable part of any business cycle. China's economic policymakers can only hope that the creative aspects of the coming shakeout outweigh the destruction.
Amanda's commentary:
This article sums up the lecture notes on the State-Owned enterprises that we have covered just a few months ago. It is intriguing to see that once in the history of China, she thought herself to be self-sufficient, closing her doors on the outsiders and deeeming them as barbarians and now in the 21st century, with her economy opened up for imports and exports hitting 36.8% of her GDP in 2006. This article covers the social, political and economic aspect of China's economy. It shows how the closure of SOEs has caused people to be retrenched, taking away the basic social cradle that they use to have. Other than the workers themselves that are affected, the employers,themselves have to pay much compensation to them although most could not afford to do so. The article has also shown how local officials driven by profits and trying to please their higher officials disregard orders to curb pollution and to stop producing, causing environmental degradtion and trade surpluses in China. All in all, I feel that this article adequately summarise that effects of China opening up her economy to the rest of the world, especially with her accession of into the WTO in 2001. Amanda (07A102)Labels: amanda (07A102), Economy, SOEs
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Straits Times Report: Laptop sent for repair loaded with bootleg XPLink:
http://www.straitstimes.com/Singapore/Story/STIStory_220534.htmlA BRITON who has lived here for 11 years got a rude shock when he turned on his Hewlett-Packard (HP) laptop, only to be flashed a message saying that its copy of Windows XP was a bootleg one.
Mr Anthony Jeff, 56, had just picked up the machine from an HP-authorised service centre in Guangzhou, China, where he was on a business trip.
His bought-in-Singapore laptop kept crashing during the trip, so the globe-trotting businessman sent it to an HP-authorised service centre there, since the machine had a limited international warranty.
The service centre told him that it did not have any more stock of the English version of Windows XP software, and that the default version used in China was the one in Chinese, but Mr Jeff insisted on having an English version installed.
An HP spokesman said: 'The engineer was under pressure and downloaded an English version from the Web without obtaining a licence from Microsoft.'
Mr Jeff, who was not told this, discovered it only when he turned on the machine.
'Fortunately for me, I did not turn on the laptop in front of my clients that day. It would have been utterly embarrassing for me,' he said.
He runs day2daytrading, a maker of decorative furniture and licensed toys like Buck Rogers, and is married to a Singaporean.
Mr Jeff returned to confront the service centre staff the next day, only to be taken aback by their nonchalance. He was told it was 'normal' in China because 'everyone uses copies'.
HP has since clarified that it gives strict guidelines to its authorised service centres against installing illegal copies of operating systems.
Its spokesman added that the company took the matter seriously, and that it would discipline the engineer and 'reiterate the importance of our service policy to all our partners'.
China has been in the spotlight for its rampant software piracy over the years, but industry observers say the incident was not about piracy but a failure in HP's support service.
Mr Tarun Sawney, anti-piracy director for the software piracy watchdog Business Software Alliance Asia, said: 'Using an unlicensed product key to download software is definitely illegal, but this is the first time I've heard of a service centre doing something like this.'
Technology lawyer Bryan Tan said: 'The attitude of the service centre reflects the general lackadaisical attitude in China towards using genuine software.'
Meanwhile, HP Singapore has settled the matter with Mr Jeff: It has paid for his return air ticket to China on business class, repaired his old laptop, given him a new one and also an HP iPaq smartphone.
Mr Jeff is happy with the way the company has resolved his problem. He remains an HP fan - and not because of its compensatory moves. When he had to buy a new laptop in China after the one with the illegal Windows XP could not work, he chose an HP.
Article selected by: Shi Rong (07A102)
Shi Rong's Analysis (Or Whatever you call it)Anyway, I am showing you all this article as it shows how serious the piracy problem is, since even non-perpetuators can be affected by it. This article can also show the large scope of this issue in China considering the comment made in the article and that it affects large corporations like HP in this case. This certainly gives piracy hunters another thing to do in their checklists: Ensuring that pirated software is not transmitted to customers.
Labels: Economy, Piracy, Shi Rong (07A102)
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