| Foxconn Closes Plant After Worker Brawl Posted: 24 Sep 2012 12:26 AM PDT Foxconn closed its plant in the city of Taiyuan in northern China's Shaanxi province on Monday after a brawl involving 2,000 workers broke out in a dormitory late on Sunday night, according to Reuters: The Taiyuan plant, which employs about 79,000 workers, makes automobile electronic components, consumer electronic components and precision moldings. An employee told Reuters the plant also makes parts and assembles Apple's iPhone 5. In a statement, Foxconn cited police as saying about 40 people were taken to hospital for medical attention and a number were arrested. The company said the incident escalated from what it called a personal dispute between several employees at around 11 p.m. on Sunday in a privately managed dormitory, and was brought under control by local police at around 3 a.m.
Taiwan-based Foxconn is the world's largest contract maker of electronic goods and has come under fire along with Apple for the labor conditions at its China factories, though a report released last month found that conditions were improving. The New York Times reported that unconfirmed photographs and video emerged on social media showing riot police and smashed windows at what is believed to be Foxconn's Taiyuan plant: Geoffrey Crothall, spokesman for the China Labor Bulletin, a nonprofit advocacy group in Hong Kong seeking collective bargaining and other protections for workers in mainland China, said workers in China had become increasingly emboldened. "They're more willing to stand up for their rights, to stand up to injustice," he said. The same Taiyuan factory was the site of a brief strike during a pay dispute last March, Hong Kong media reported then. Social media postings suggested that some injuries might have occurred when people were trampled in crowds of protesters.
See also "Meet China's Factory Workers" from CDT.
© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: Apple, Foxconn, labor conditions, riots, Shaanxi, Taiyuan
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| 18th Party Congress Timing Still A Mystery Posted: 23 Sep 2012 11:12 PM PDT With the CCP's 18th Party Congress and the unveiling of China's next generation of leaders just weeks away, The Telegraph's Malcolm Moore reports that the delegates who are expected to attend have yet to receive a precise date: "We have not had any official notice," said Hou Fanfan, a doctor in Guangzhou, while Li Xiaoying, a professor from Tianjin, said: "We don't know, sorry". Wang Zhixia, the Communist party committee secretary of a driving school in Jilin province, said there had been "no notice whatsoever" and that he was waiting for the provincial government to organise travel to Beijing. "It is doubly ironic that they are being so secretive about it when the Organisation department (the powerful internal Communist Party HR arm) held a press conference to tell everyone about how they have been especially transparent in selecting the delegates this year," said Dali Yang, the founding Faculty Director of the University of Chicago Centre in Beijing. Over the past three decades, the Communist party has usually given at least a month's notice for the five-yearly Congress.
Analysts have speculated that the delay in confirming the timing for the congress, the details of which are typically finalized during the August gathering of top leaders at the seaside resort of Beidaihe, indicates factional jockeying at the top of the Party. A resolution of the case against disgraced former Chongqing party boss Bo Xilai has also held up any progress on the congress. The Party's silence over the timing of the congress is deafening, according to The South China Morning Post: Alice Miller, a research fellow at Stanford University's Hoover Institution, said that going on past procedures, a Politburo meeting, probably late last month, should have set a date for the 17th Central Committee's seventh plenum and proposed a date for the 18th congress. A Politburo meeting held on September 17, 2007, made the decision to convene the pre-congress seventh plenum of the 16th Central Committee on October 9 in order for matters relating to the 17th party congress, which opened on October 15, to be finalised. … Hu Xingdou, a political commentator from the Beijing Institute of Technology, said the party should make its congress more transparent and announce its date as early as possible to prevent wild speculation. "The earlier the announcement [of the date] is made, the better for the party and the country," said Hu.
Even with the date unknown, Jamestown Foundation fellow Willy Lam has made his prediction of who will secure seats on the revamped Politburo Standing Committee: A consensus has been reached by the outgoing Politburo Standing Committee (PBSC) that the size of this highest ruling council should be cut from nine to seven members. Barring any last minute changes, the new PBSC is expected to consist of the following (and their prospective portfolios): Xi, age 59 (General Secretary and President); Li Keqiang, age 57 (Premier); Yu Zhengsheng, age 67 (Chairman of the National People's Congress); Zhang Dejiang, age 65 (Chairman of the Chinese People's Political Consultative Conference); Li Yuanchao, age 61 (Head of the Party Secretariat and Vice President); Wang Qishan, age 64 (Executive Vice Premier); and Wang Yang, age 57 (Secretary of the Central Commission for Disciplinary Inspection [CCDI]). The seven-member configuration is an effort by the leadership to return to the norm. Since the Cultural Revolution, the PBSC had consisted of either five or seven members. It was only increased to nine members at the 16th CCP Congress a decade ago. A seven-member PBSC in theory will make decision making more efficient (Apple Daily [Hong Kong] September 10; Ming Pao [Hong Kong], September 3).
Whoever does take over the reins of China's top ruling bodies, they will face a number of social, economic and foreign policy challenges, and the Brookings Institution hosted a discussion last week to analyze the major issues. See also previous CDT coverage of the incoming generation of CCP leaders.
© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: 18th party congress, Bo Xilai, CCP 5th generation, chinese communist party, leadership transition, Li Keqiang, Li Yuanchao, Politburo Standing Committee, Wang Qishan, Wang Yang, Xi Jinping, Yu Zhengsheng, zhang dejiang
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| Is Containment an Obsolete Strategy? Posted: 23 Sep 2012 09:00 PM PDT  International relations fans and China watchers should check out Fletcher Professor William Martel's piece in The Diplomat entitled "R.I.P. Containment," a very thoughtful look at why containment is no longer a practical option for U.S. policymakers when it comes to China, Russia or Iran. Martel's thesis is obviously quite provocative as the U.S. "pivot" to Asia, America's current strategy in the region, is arguably a modified form of containment with respect to China, although the use of the formal term by members of the Obama Administration is probably a firing offense.
Here is Martel's thesis: Some would argue that the United States still follows a strategy of containment. When some policy analysts conclude America is trying to contain China with its "pivot" or "rebalance" to the Asia-Pacific, or when economic sanctions crafted to "contain" Iran's nuclear aspirations, one could see why containment is still on people's minds. Not to be the bearer of bad news, but containment died more than twenty years ago. While once an immensely successful policy, sticking with containment promises certain foreign policy failure.
Martel begins with the origins of the policy, including appropriate references to George Kennan and the Cold War. Having slogged my way through an international relations degree, I always look to Kennan, who was stationed in the U.S. Embassy in Moscow at the start of the Cold War, as an almost legendary figure who helped to shape the post-war world. Kennan's most significant influence can be traced back to the famous "Long Telegram" he wrote in 1946 (an internal government document) and a 1947 article, written under the pseudonym "X," in Foreign Affairs. The X article is the one cited as the seminal articulation of containment against the Soviet Union. As Martel explains, containment as described by Kennan and implemented by the U.S. in the decades that followed the X article was multifaceted: Bolstered by alliances and institutions, massive military establishments, and thousands of nuclear weapons, containment was the basis for American foreign policy during the Cold War. Containment rested on America's commitment to prevent the Soviet Union, its client states, and later China from expanding their sphere of influence. It was designed to "contain" these states, manage relations between Washington and Moscow, and deter "hot wars."
Containment was an ideological struggle between Communism and capitalism. It was a political struggle between two different camps and their satellite states. It was a military struggle between two nuclear-armed superpowers. The policy of containment was successful during the Cold War (a "hot war" was prevented) because, according to Martel: "the Soviet Union was an ideologically extreme, economically backward, and politically isolated state." By the 1990s, the USSR ceased to exist, and containment no longer made any sense. In his article, Martel discusses Iran, Russia and China, but let's just focus on the latter. Why is Containment 2.0 not a useful strategy for the U.S. to employ in responding to China's rise? Martel brings up two main points: politics and economics. I agree with him on both fronts. The original containment strategy pitted Communism against Capitalism, something missing from today's geopolitical struggles: States today do not face ideological foes on any scale comparable to the Cold War. Without an ideological foe, the practitioners of containment cannot persuade states to organize their foreign policies to oppose others. In effect, states lack a compelling reason or the political will to coordinate their policies and actions. They view the world, not as a dangerous struggle against an expansionist ideology, but as a relatively benign contest between democratic and authoritarian states.
I agree. While China watchers often spend far too much time debating the "China model" or "authoritarian capitalism," often using Cold War rhetoric, China is simply not comparable to the old Soviet Union (or the Mao-era PRC) in terms of political ideology. Mobilizing nations against China on a purely ideological basis is almost laughable in 2012. Martel sums up his point quite nicely: "The West's geopolitical adversaries do not inspire awe or fear." Angst, concern, worry — perhaps. Fear and awe? I don't think so. When I think about the Soviet Union during the Cold War, images of Winston Smith in Room 101 or Rubashov in a cold, dank basement dungeon come to mind. That was the stuff of literal nightmares. What are the comparable images of modern China? Someone working overtime in a Foxconn factory? The precision drumming during the opening ceremony of the Beijing Olympic games? A street vendor selling a fake Gucci bag? Not exactly terrifying. On the economic front, Martel argues that globalization and free markets do not allow for a viable containment strategy. Certainly global containment is difficult, if not impossible, these days. All one has to do is consider the difficulty of imposing economic sanctions on "rogue" states and realize that any attempt to minimize major players on the world stage would be pure fantasy. With China of course, even limited trade actions would be fraught with danger. Think about what could happen if certain members of the U.S. Congress had their way and all exports from China were suddenly subjected to a tariff of 25%. The damage to the economies of China, the U.S. (and many other countries) would be significant. Now imagine any attempt to turn back the clock and use trade as part of an overall containment strategy. It's simply unquestionable given economic interdependence and current patterns of international trade and global production. Martel sums up his argument thusly: The inescapable conclusion is that containment no longer fits our world. Where it once worked, containment no longer aligns with how the modern world is organized politically and economically. Simply put, it is no longer practical in a highly interconnected global economy in which states do not face a singular ideological threat.
Based on politics and economics, I completely agree with Martel. However, I think he makes a mistake in deliberately avoiding the military angle. Martel might argue that during the Cold War, the military buildup on both sides was merely a tool in an ideological battle. Similarly, he might say that with the U.S. and China today, the absence of significant differences in ideology and the reality of economic interdependence obviates the need for a military struggle. I agree, but that doesn't mean that defense-based containment won't happen anyway. This is the one area where I find Martel's argument lacking. The U.S. "pivot" to Asia is all about the military. Just because the U.S. and China are economic partners and are not engaged in a political struggle does not mean that significant friction is impossible when it comes to territorial expansion and competition for natural resources. The Cold War may be over, but some of its language, such as "spheres of influences" have been making quite a comeback in the past few years. Could the U.S. use a containment strategy simply to limit the expansion of China in terms of territory and military capability? I think not only is this possible, but this is exactly what the "pivot" is all about. Has the U.S. convinced its allies in the Asia-Pacific region to increase ties to America because of ideology? Not at all. As China's military has grown and its foreign policy become more aggressive, the U.S. has found no shortage of friends here. During U.S. Defense Secretary Leon Panetta's recent trip to Asia, I suspect that the words "missiles" and "aircraft carriers" came up a lot more often than "socialism" or even "authoritarianism." For the record, I do not support containment, or the "pivot," or whatever else one wishes to call a policy that seeks to limit the rise of China. That should not be the goal of the U.S., which should focus its attention on ways to work with an ascendant China. As I've written many times, containment is an expression of a "zero-sum" mentality, the belief that as China rises, the U.S. must by definition decline. I reject that assumption. Moreover, I also believe that many of the supporters of a military build-up with China as its focus are connected in some way with the U.S. defense industry. Containing China's military will be quite profitable for some companies, and their influence on the American government is uncomfortably significant. However, just because I dislike containment, I must admit that a narrow policy consisting of a set of defense-based alliances might be with us for a number of years. A non-ideological containment strategy may not be as robust as its Cold War counterpart, but it is not yet obsolete.
© Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us
Post tags: Asia pivot, containment, George Kennan
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| Photo: The pool table maker’s wife, Shangqiu, Henan, by Mark Hobbs Posted: 23 Sep 2012 09:29 PM PDT |
| Chinese Patrol Ships Arrive in Diaoyu Waters Posted: 23 Sep 2012 09:06 PM PDT Two Chinese surveillance ships entered waters near the disputed Diaoyu Islands this morning, according to the Japanese Coast Guard, in what Chinese state media has called a "rights defense" patrol. From Reuters: "In recent days, Japan has constantly provoked incidents concerning the Diaoyu islands issue, gravely violating China's territorial sovereignty," China's Xinhua news agency said. The ship patrols were intended to exercise China's "administrative jurisdiction" over the islands, it said. "Following the relevant laws of the People's Republic of China, (the ships) again carried out a regular rights defense patrol in our territorial waters around the Diaoyu islands." The Japanese Coast Guard ordered the Chinese ships to move out of the area, but received no response, an official said.
Tensions between China and Japan over the Diaoyu Islands, known in Japan as the Senkaku Islands, spiked earlier this month when Japan's central government agreed to purchase three of the islets from their private Japanese owners. A string of anti-Japanese demonstrations ensued across China, even turning violent as angry protesters targeted Japanese-owned businesses and products. In one incident, a mob beat a Chinese man so badly for driving a Japanese car that he is now paralyzed. From The Wall Street Journal: The beating took place on the afternoon of Sept. 15 in the central Chinese city of Xi'an in Shaanxi province. Mr. Li, his wife, one of his son's and the son's fiancée, were on their way back from a shopping trip when Mr. Li's white Toyota Cor SCT.LB -10.73%olla was set upon by an agitated anti-Japanese mob brandishing sticks, bricks and steel implements, according to the Beijing Youth Daily. Mr. Li's wife urged the demonstrators not to damage the vehicle. "It was wrong of us to buy a Japanese car. We won't buy one ever again, OK?" she was reported as saying by Beijing Youth Daily. But the gang beat Mr. Li anyway, striking him on the head with a steel shackle and causing him to lose consciousness. Later, he was rushed to hospital where he was treated for open brain injury and then moved to an intensive care unit. He remained there until he regained consciousness three days later. Mr. Li can now move the left-hand side of his body but the right side continues to be partially paralyzed.
The incident has evoked reflection among Chinese netizens and was the top story on Sina Weibo on Friday, according to the Wall Street Journal report. On the Japanese side, hundreds of people rallied peacefully against China in downtown Tokyo on Saturday, and the government has continued to urge the Chinese government to keep its citizens safe. The Japan Skating Federation then warned on Sunday that its skaters would pull out of next month's Cup of China in Shanghai in the absence of safety guarantees. Meanwhile, Chinese state media has continued to convey the government's hard stance on the crisis, with the People's Daily urging Japan on Sunday to "repent" for its infringement on China's territorial sovereignty. Also on Sunday, China postponed events scheduled for later this week to celebrate the 40th anniversary of the resumption of diplomatic relations between the two sides. From The China Daily: Two associations – entrusted by the government to organize events to mark the anniversary – cited Japan's attitude over the Diaoyu Islands as the reason for the postponement. "Considering the current situation", events to commemorate the normalization of relations between the two nations will be "adjusted to an appropriate time", said a statement by the Chinese People's Association for Friendship with Foreign Countries and the China-Japan Friendship Association. Events were scheduled to take place on Thursday in Beijing to mark the signing of a joint statement between China and Japan on Sept 29, 1972. But "the atmosphere has been ruined" due to Japan's "buying" of the Diaoyu Islands in the East China Sea earlier this month, the statement said.
What gives? With neither side indicating any willingness to negotiate a resolution of the dispute, and with Taiwan also laying claim to the islets, Mark McDonald of the International Herald Tribune takes a stab at a settlement proposal: In the face of deep emotions and official intransigence, it seems unlikely that Beijing, Tokyo and Taipei might agree to a radically simple notion: All three nations would stand down and renounce their claims, thereby settling things. Nobody would win, so nobody would lose. It would require a bold new kind of diplomacy, but the Senkaku/Diaoyu rocks could be established as a kind of "international zone" surrounded, say, by a 12-mile cordon sanitaire. The islets would belong to no specific nation, much like the legal status of the Moon. No fishing or tourist boats would be allowed to encroach. No military drilling, no oil drilling. And in the spirit of a negotiated settlement, the currently unmanned lighthouse on Uotsuri, the principal islet, could be occupied by a trilateral rotation of keepers.
© Scott Greene for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: anti-Japan protests, anti-japan protests 2012, diaoyu islands, maritime security, senkaku islands, Sino-Japanese relations, territorial disputes
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| Myanmar President Says China Friendship Won’t Change Posted: 23 Sep 2012 10:14 AM PDT CDT previously reported Myanmar's parliament would reassess the country's relationship with China. But as Myanmar transitions to democracy, President Thein Sein told Chinese Vice President, Xi Jinping, Myanmar's friendship with China would not change. From Reuters: Chinese officials and media have expressed concern Washington's renewed interest in slowly democratizing Myanmar, formerly known as Burma, could be part of U.S. designs to dilute China's influence there and encircle China with pro-U.S. states. But during a meeting on the sidelines of a trade fair in southern China, Thein Sein said Beijing should not worry. "Myanmar is at present in a transitional phase, but Myanmar pays great attention to developing relations with China, and its policy of seeing China has a true friend has not changed," China's foreign ministry cited Thein Sein as telling Xi. "China has for a long time provided a large amount of sincere support and help, and stood at Myanmar's side at the most difficult of times. Myanmar's people will never forget this," Thein Sein added, in the statement released late Friday.
China has worried about its relationship with Myanmar due to a halt in the controversial dam project in the Irrawaddy River, and Chinese media has had mixed reactions over the ending of censorship in Myanmar. The Asian Correspondent reports China has persuaded Myanmar to maintain the status quo: President of Burma Thein Sein will have a trip to the United States after concluding his China trip. He has been visiting China for a trade fair since 18 September. It is Thein Sein's second trip to China from the time when he became head of state in March 2011. President Thein Sein has planned to attend the 9th China-Asean Expo and the China-Asean Investment Summit. The 9th Expo in Nanning aims to promote economic cooperation between China and ASEAN. Burma was rewarded the trade fair's "Country of Honor" this year and President spoke at the opening ceremony on behalf of the ASEAN-member states launch the event which runs from September 19 to 24. It looks as if China has been trying to keep Burma within its influential sphere since the ASEAN-member country has also been seeking to join in the US-led Cobra Gold military exercise in the Pacific. A senior Thai army officer was quoted by Japan's Kyodo News saying that Burma expressed an interest in joining the Cobra Gold annual military exercises in the future. China may be concerned about military relations between Burma and the US to some extent.
According to CRIEnglish, Xi is urging Myanmar to ensure smooth implementation of projects between the two countries: Xi said the two countries should continue to strengthen communication and coordination to accelerate the formulation of mid-term and long-term goals of bilateral exchanges in politics, economy, trade, culture, security and other areas to steadily push forward comprehensive cooperation. The current development of China-Myanmar relations is generally good, Xi said, noting that China is ready to work with Myanmar to promote the healthy and stable development of the bilateral comprehensive strategic cooperative partnership. The vice president said that China will continue to encourage Chinese enterprises to make investment in the livelihoods of Myanmar's people and other areas. China is also ready to work with Myanmar in agricultural cooperation.
© Melissa M. Chan for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: ASEAN, bilateral ties, democracy, Myanmar, Xi Jinping
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| Made in US, But Sold in China Posted: 23 Sep 2012 10:05 AM PDT As analysts claim "Made in China" products actually profit American producers, the New York Times reports a manufacturing shift now has certain products made in the United States but sold in China. This shift comes amid a slowdown of manufacturing in China due to the decrease in demand from the US and the European Union: Standing over a small tank of water in a Brooklyn factory, Zbigniew Solecki plunged a gleaming faucet into the water, then shot air at 60 pounds per square inch into it. He watched for rising bubbles, a sign that an unseen fissure had, unacceptably, let the air stream out. It is a rite of passage that Mr. Solecki performs dozens of times a day. "Every last piece is pressure-tested before it goes out the door to China," said Jack Abel, the engineer who built the factory. "Or anywhere else." After generations of manufacturers in New York and across the United States folded because they were unable to compete with imports, Watermark, with its only factory in the East New York section of Brooklyn, has managed to crack the code. Instead of trying to make Watermark's products cheaper, Mr. Abel has prospered by first making them more expensive — offering custom-made fixtures unique to each building — and then figuring out how to do that at lower cost. The company has supplied thousands of fixtures to six new luxury hotels and condominiums being built in Shanghai, Macau and Hong Kong. Manufacturing jobs in New York have declined by about 80 percent from a high of 1.1 million jobs in 1947, all but shutting down what had been a heavily trod avenue into the middle class for immigrants and people without advanced educations.
Aside from custom-made water faucets, US manufacturers are producing other high-end products to meet Chinese demand, from Jing Daily: Going against the decades-long trend of lower-priced Chinese imports flooding the US market, a growing number of American manufacturers, fashion brands, leathergoods makers, and family-run wineries are looking to China's luxury consumer as a new and important target market. Over the past few years, smaller companies — rather than just high-end giants like Tiffany & Co. and Coach — have found that undertaking a higher pricing strategy, rather than targeting the mid- or low-end mass market, is a plus in China. Demand from high-end property developers in search of top-quality faucets and construction materials isn't the only trend leading American companies to China. For some apparel, accessories and footwear brands, the growing number of wealthy mainland Chinese now moving away from "bling" and towards low-key high-end consumption is providing a whole new demographic. This November, the Wisconsin-based shoemaker Allen Edmonds – for decades, the go-to footwear brand for US presidents and business leaders — plans to open its first location in Shanghai, with an ambitious expansion plan to follow. As Paul Grangaard, president and CEO of Allen Edmonds, said this summer, "We are scheduled to have at least six to 12 flagship stores and over time, 40 or 50 stores in China in the next five years." While most smaller-scale, US-made heritage brands generally don't have the production capacity (or, for some, the desire) to expand into the China market in any major way, a niche is clearly forming. With the likes of Patrik Ervell on the more adventurous side, and Allen Edmonds on the more traditional side, making inroads in China despite virtually nonexistent advertising budgets or huge online campaigns, we can safely assume that demand will only continue to rise for American brands besides Tiffany and Coach. Given the number of well-curated, small multi-brand retailers grows in China as well, the trend may really take hold in a measurable way sooner than we'd expect.
Despite the slowdown in manufacturing and increase in imports, the Financial Times reports the appeal of China as a manufacturing base has not yet disappeared: Well-known stresses in the current model are becoming more apparent, including a downturn in total factor productivity, which is the vital, unmeasurable part of economic growth resulting from technological change and institutional efficiency. The transition will require difficult political reforms and an effective response to the competitive threat posed by advanced manufacturing, which is slowly tilting advantage back to the US in particular. China's attraction as a global manufacturing base has not worn off yet, but several developments are chipping it away. At home, these include rising labour costs and skills shortages, as well as discriminatory application of the policy of indigenous innovation, insecure intellectual property rights, weak rule of law and the stifling impact of state-owned entities on enterprise. By contrast, the US is a clear leader in top-end manufacturing, the creation of "smart" companies and in intricate touchscreen technologies. Even more important will be its competitive advantage in new shale oil and gas extraction technologies, and in the development of so-called additive manufacturing, or 3D printing, which is set to change the way we think about manufacturing. These problems will not retard Chinese innovation and technological competitiveness forever. But to adapt, China requires extensive political reform, more robust institutions and a tilt in the role of the state towards supporting enterprise. It will not be helped by the uncertainty over the nature of its downturn and the consequences of the leadership change.
© Melissa M. Chan for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: luxury goods, made in China, made in the U.S., manufacturing
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