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Labor NGOs: Growing Pains

Posted: 28 Sep 2012 01:04 AM PDT

Labor NGOs in Guangdong seem to be struggling amid the inconsistent treatment from provincial government and the lower-level executives. Charlie Vest and Shawn Shieh at China Development Brief translate a detailed report from Southern Daily:

"Are we not going to be able to continue working?" Since the beginning of August, 's Hand-in-Hand Workers' Activity Center has faced routine inspections by lower-level government bureaus, and this has its leader, Chen Yandi, worried. Chen's concern is certainly not unfounded. After inspections began, the landlord of the NGO's office terminated their lease, leaving them with the choice of either not working or having to relocate.

[…] On July 1st of this year, 's provincial government produced, "On Promoting the Development and Regulated Management of Social Organizations," in which the government ruled that except under special circumstances and in specific fields, social organizations in would no longer need a professional supervising unit to sponsor them. Instead, they could register directly with the Ministry of Civil Affairs. From the perspective of social organizations, this would remove a great burden.

[...A]fter the release of the new law, someone from the Shenzhen ' Center went to the Longgang Civil Affairs bureau to ask if they could register. Two weeks later, their reply was, "This is just something the media is cooking up."

[...] Yu Jianrong of the Chinese Academy of Social Sciences expressed that having worked with labor organizations many times in the past, he has kept close watch on the Shenzhen "routine inspection" issue. As he understands it, a great number of these labor organizations only want to help workers who find themselves disadvantaged in modern society. They provide help and services that are beneficial towards solving conflicts between labor and capital interests, and they also help the government in solving labor disputes.

[...] At the same time, he feels that that the Guangdong provincial government is putting special importance on social construction and development.  Moreover, Shenzhen is in many respects at the forefront of the country. The government should, within the framework of social construction, regulate and guide the development of labor .

See more on NGOs in China via CDT.

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China Bashing, Yet Another Reason the Republican Base Doesn’t Like Mitt Romney

Posted: 27 Sep 2012 10:54 PM PDT

Barack Obama and Mitt Romney have been doing a great deal of China bashing recently, particularly in sensitive "swing states" (key to the election) that have lost a significant number of manufacturing jobs in the last couple of decades. Both of them do it, although Romney's anti-China rhetoric has been much more aggressive.

For Obama, there's very little downside in defending his "tough on China" record or reminding everyone that Romney, when he was running Bain Capital, profited personally from U.S. companies that outsourced to China. The base of the Democratic party is firmly against the current free trade system, and many progressive voters blame China for U.S. job losses. With a populist message like this, Obama can both energize his base and appeal to independent voters in the Midwest.

For Romney, the political calculation is more difficult. He began the China bashing during the primaries as a way to distinguish his candidacy from his Republican rivals. Whether that message helped him with the base of the Republican party in securing the nomination is unclear, particularly since GOP constituencies are split about China.

You can slice and dice GOP voters in a number of ways and still not be sure which issues are truly motivating them — I tend to be skeptical about data like exit polling that oversimplify voting choices. One thing is clear, though, when it comes to Republicans: they have mixed feelings about doing business with China.

One perspective comes from what I'll call the xenophobic wing of the GOP, the folks who firmly believe that sometime in the near future, troops from the United Nations will invade the U.S. and force Americans into internment camps. Alas, I am not making this up. These folks don't even trust multilateral institutions set up and dominated by the United States, much less what they would refer to as "Red China."

Speaking of which, a GOP combination of old Cold Warriors and small government ideologues see Communist China as antithetical to free market capitalism. These Republicans are not as interested in what China actually does so much as what it represents. Any political rhetoric that adopts a contrary position to that of Beijing is a positive to these groups.

A much narrower anti-China constituency in the Republican Party doesn't care about economic issues, preferring to focus on geopolitics, territorial disputes, and military expansionism. This group includes the defense contractors and their political lackeys who benefit from U.S. government spending on big-ticket items such as naval vessels, aircraft, and anti-missile technology. Former U.N. Ambassador John Bolton, who routinely advocates for a more aggressive military stance against China, is a good representative of this category.

Unfortunately for Romney, the Republican Party also harbors constituencies that favor a closer relationship with China. These people are almost completely focused on trade and investment issues. The largest category, call them the John Huntsman or Chamber of Commerce wing of the GOP, wants to maintain, and build on, the bilateral status quo. The needs and desires of America's largest corporations, and in particular industries such as financial services, pharmaceuticals, entertainment, and high technology are represented by these folks. For this group, Romney's China bashing, in particularly his threat to impose tariffs on Chinese exports to the U.S., represents not only a problem for the bilateral relationship in general, but also to the profits of some of the largest suppliers of campaign donations to the GOP.

Additionally, there are Republican idealists who genuinely believe in free trade and/or a laissez faire approach to all commercial matters, including cross-border transactions like trade and investment. This is a rather eclectic group of people, ranging from respected trade specialists to fringe libertarians. To them, Romney's talk of a more aggressive trade policy smacks of "Big Government" interference in the economy.

Given these competing interests within the GOP, what's the political effect of Romney's China bashing? That's a very tough call, particularly when many people, including myself, have difficulty believing that Romney would actually follow through with any of his campaign promises with respect to China. On the other hand, as the rhetoric has been ratcheted up considerably in the days following the two parties' political conventions, Romney has staked out a position on China that would be difficult to retreat from should he be elected.

But while party apparatchiks and big donors may not support Romney's China strategy, what about voters? One of the least persuasive Op/Eds I've read in some time, written by Charles Kadlec in Forbes entitled "Will China Bashing Cost Mitt Romney The Election?", attempts to answer this question. Kadlec, one of those fringe libertarians with a Ron Paulish fixation on the gold standard who overuses the word "liberty," firmly believes that Romney's current political freefall is somehow related to his anti-China talk:

Ever since the Romney campaign's China bashing initiative, the momentum has shifted to President Barack Obama.

[ . . . ]

Moreover, the shift in favor of Obama came at a time when the latest economic data point to continued slow economic growth and high unemployment, unrest roils the Middle East and anti-Americanism is on the rise throughout the Muslim world, and the Obama Administration appears ill prepared to defend its diplomats, embassies or America's interests and ideals.

Sure. Kadlec would have us believe that although Romney came off a poor showing at his party's political convention and then stepped in deep doo-doo by politicizing an attack on a U.S. consulate that left several foreign service officers, including the ambassador to Libya, dead, his precipitous drop in the polls is all about the China bashing.

If only it were true!

Kadlec's assumptions here are truly stunning:

Americans reflexively support the idea to defend American jobs, but their common sense also informs them to be suspect of policies that would reduce competition and lead to higher prices.

Now we're into self-parody territory. But none of this is too surprising. Ideologues have a tendency to assume that their beliefs are universal. To folks like Kadlec, if only Romney was more of a libertarian, the population would rally around his message and vote him into the White House.

This is absurd. Most Americans, including a good number of politicians who work on Capitol Hill, have no idea that tariffs on Chinese imports would lead to higher prices. I could trot out some survey data on how stupid the American electorate is these days, but you've heard all that before. As the late great George Carlin once put it, "Think of how stupid the average person is, and realize half of them are stupider than that."

China bashing may be hurting Mitt Romney with certain GOP constituencies, including Chamber of Commerce types and multinational corporations, which include quite a few prominent Republican donors, but when it comes to actual voters, it's difficult to see how anti-China rhetoric will result in any significant loss of support.

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Posted: 27 Sep 2012 11:22 PM PDT

“Golden Week” Still Golden For China’s Rich

Posted: 27 Sep 2012 11:10 PM PDT

The average wealth of China's super rich may be down this year, but that hasn't stopped them from going all out with their "Golden Week" travel plans. From Reuters:

Helen Shen, a travel planner in , said a private business owner had booked the whole first-class section of a Lufthansa jet to fly his family of four to Paris this month.

Shen is one of many organisers who still see the money rolling in from executives and members of the "fu er dai" – the second generation of wealthy families – despite China's economic uncertainty.

"If you look at your affluent Chinese overseas, they are your tourist, your shopper, your investor all in one," said Christine Lu, co-founder of Affinity China, a Shanghai-based luxury travel firm.

"Even though there is all the talk of a slowdown in China, the luxury sector we are dealing with is a segment that can still afford to travel," Lu said.

The luxury travel industry may still be thriving, but other sectors have not fared as well. For The Financial Times, Chris Bryant and John Reed report that China's luxury car sector may finally be catching a cold, and the Wall Street Journal's Tom Orlik explores the sharp fall in retail sales of luxury jewelry:

One reason is of course the . Another: The once-in-a-decade transition in China's top leadership – which is expected to take place at the some time in October.

Gift giving, which oils the wheels of business, accounts for about 16% of China's luxury sales according to estimates by CLSA. The , which will ripple down from the top leadership to decision makers at all levels of the government, has thrown that into confusion.

One Beijing based salesman from a major importer who spoke to The Wall Street Journal summed up the problem facing the sector: "Sales are down because no-one knows who to bribe."

See also previous CDT coverage of how the global economic downturn has impacted China's ultra rich.

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Living Conditions Become New Labor Flashpoint

Posted: 27 Sep 2012 10:18 PM PDT

Following the major brawl at a Foxconn factory campus in Taiyuan, individual workers are speaking out about living conditions there which may have contributed to the unrest. From Bloomberg:

The campus used by 79,000 workers in Taiyuan in northern Shanxi province showed the damage caused by the Sunday clash among laborers that left more than 40 people hospitalized. Windows in a bathhouse, supermarket, arcade and parked cars were shattered.

Chairman Terry Gou has moved in recent years to improve conditions at his factories after a spate of suicides. The company's largest customer, Apple Inc., pressured to make the changes.

But some improvements had not reached Taiyuan, workers said. They charged that the facility has inferior food, poor sanitation and overcrowded dorms, while security guards are young, poorly trained and too aggressive.

"The guards here use gangster style to manage," said Foxconn worker Fang Zhongyang, 23, outside campus gates. "We are not against following rules, but you have to tell us why. They won't explain things, and we feel like we cannot communicate with them."

Reuters also talks to workers at the Taiyuan plant:

Wang, who did not want his full name published, is among thousands of workers housed in a vast complex where tensions aggravated by regimented and cramped living conditions boiled over on Sunday into a violent mass riot.

"The bathrooms are simply disgusting and people are constantly stealing things," Wang said as he stood outside of the factory in the northern city of Taiyuan, owned by Apple Inc's largest contract manufacturer, Taiwan firm Foxconn.

Until the riot, which turned from a personal dorm squabble into battles between police and about 2,000 workers and spilled over into Monday, the focus of labor discontent in China had been on production lines, especially those making products for Apple.

The unrest, which left about 40 people injured, metal factory gates flattened, cars overturned and windows smashed, shifted the focus on to broader living conditions, particularly for who live in thousands of factory dormitories around the country.

Hong Kong-based China Labour Bulletin reports on online discussions between workers about the incident:

Workers' sentiment on China's online forums was divided, some angry, some joyful. Workers were eager to post photos and make comments on the events. And some workers from other Foxconn plants in Henan, Shandong, and posted letters praising the Taiyuan workers for their courage to start a riot.

Amid the general exuberance, there were a few voices calling on workers to stay calm and be rational. A worker, who said he had been employed at Taiyuan Foxconn for three years, highlighted the failure of the Foxconn trade unions to properly represent workers' interests. This he said had complicated the longstanding conflict between management and workers. He hoped workers could handle the conflict in a rational manner in order to avoid unnecessary casualties.

This post was immediately challenged by another worker, who responded that workers had not meant to instigate a riot but that they had no other way to address injustice. When they called a hotline to complain about the abusive security guards, for example, they were told their complaint could not be handled.

For more on the Foxconn incident, read "Foxconn Closes Plant After Worker Brawl" and "Foxconn Plant Open, But Broader Issues Persist" via CDT.

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Politics Holding Back Economic Reforms

Posted: 27 Sep 2012 07:47 PM PDT

Heading into the National Day holiday, and on the cusp of a yet-to-be-scheduled , The New York Times' Andrew Jacobs reports that political distractions have prevented the Communist Party from making the tough decisions needed to address China's slumping :

Although the departing government has tried in recent months to address decelerating growth by easing bank loan restrictions, increasing pensions and offering tax breaks to small businesses, a lack of consensus among the top stewards of the economy has stymied a more muscular response, insiders say.

Similarly, many analysts question whether the incoming leadership has the political will to overcome the resistance of the so-called princelings and other well-connected families that have prospered under the current system.

China's standard economic formula, they say, is losing its potency: overzealous government investment and lagging consumer spending are creating serious imbalances that are expected to lead to a much more painful reckoning, perhaps not long after the new raft of younger leaders assumes power in early 2013.

"There are tough choices to make, but the central government appears to be so paralyzed they are just sitting on their hands," said Ho-Fung Hung, a political economist at Johns Hopkins University in Baltimore. "The situation is looking increasingly dire."

China's economy is expected to grow 7.7 percent in the first three quarters of 2012, according to a Tsinghua University think tank, and Reuters reports that a vice governor of the People's Bank of China reiterated the desire of policymakers to steer growth lower. Still, the slowdown has impacted all levels of the economy — China's largest steelmaker announced Thursday that it had shut down a mill in Shanghai, and the China Daily reports that confidence among small and medium-sized enterprises has slid amid declining trade volumes. While the regime has relied on blistering economic growth to bring about and preserve its own legitimacy, data collected by Richard A. Easterlin of the University of Southern California shows that growth may be outpacing happiness. Also from The New York Times:

As the recent riots at a factory in northern China demonstrate, growth alone, even at sustained, spectacular rates, has not produced the kind of life satisfaction crucial to a stable society — an experience that shows how critically important good jobs and a strong social safety net are to people's happiness.

Starting in 1990, as China moved to a free-market economy, real per-capita consumption and gross domestic product doubled, then doubled again. Most households now have at least one color TV. Refrigerators and washing machines — rare before 1990 — are common in cities.

Yet there is no evidence that the Chinese people are, on average, any happier, according to an analysis of survey data that colleagues and I conducted. If anything, they are less satisfied than in 1990, and the burden of decreasing satisfaction has fallen hardest on the bottom third of the population in wealth. Satisfaction among Chinese in even the upper third has risen only moderately.

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Censorship Vault: Shanghai Metro Crash

Posted: 27 Sep 2012 04:06 PM PDT

Editor's Note: From the Vault features previously untranslated instructions from the archives of the CDT series Directives from the (真理部指令). These instructions, issued to the media and/or Internet companies by various central (and sometimes local) government authorities, have been leaked and distributed online. CDT has collected the selections we translate here from a variety of sources and has checked them against official Chinese media reports to confirm their implementation.

A victim of the Metro crash is helped to safety.

Two trains collided on Line 10 of the Shanghai Metro on this day last year, injuring almost 300 passengers. The accident was initially blamed on a signal failure but was later traced to human error. This accident followed the deadly high-speed train crash in Wenzhou just months before. Lax enforcement of safety protocol and shoddy construction both contributed to the accident.

State Council Information Office: Please close all news discussion boards related to the Shanghai Metro tailgating incident. Promptly clean up and delete messages which seize the opportunity to attack the Party, the government, Party leaders and the social system. Promptly remove discussions seeking to mobilize or incite action. (September 27, 2011)

国新办：上海地铁追尾事件请关闭新闻跟帖，及时清理删除借机攻击党和政府、攻击党的领导人、攻击社会制度的信息，及时删除行动性、煽动性的言论。

Since directives are sometimes communicated orally to journalists and editors, who then leak them online, the wording published here may not be exact. The original publication date is noted after the directives; the date given may indicate when the directive was leaked, rather than when it was issued. CDT does its utmost to verify dates and wording, but also takes precautions to protect the source.

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After Wang, Bo Xilai Awaits his Fate

Posted: 27 Sep 2012 02:57 AM PDT

Wang Lijun's sentencing to 15 years in prison once again raises questions over the fate of his former boss, , whose whereabouts remain unknown. Keith B. Richburg at The Washington Post tries to unscramble Bo's current plight:

Bo's only known communication with his family since his ouster was an emotional letter sent in April to his mother-in-law, Fan Chengxiu, written with a traditional Chinese brush. Bo said he hoped to quietly read books while waiting for his case to be resolved, according to a family associate who saw the letter.

[…T]he separate trials of Gu, Wang and four other police officers charged in the coverup left unanswered the crucial question of what Bo knew about the and when he knew it. Bo in April was stripped of his positions in the Politburo and the Party Central Committee, but he has not been charged with any crime.

He is thought to have been moved several times among government residences in Hebei province, Inner Mongolia and the outer suburbs of Beijing. Those reports could not be independently confirmed.

Choi Chi-yuk at South China Morning Post gives a detailed account of how Wang and Bo's closely linked careers:

Wang probably came to Bo's attention some time in 2003, when he was the secretary in the public security department of the Communist Party in Jinzhou City, in Liaoning, of which Bo had been appointed governor in 2001. Bo was appointed party secretary of , a megacity of 33 million people in 2007.

[...] After his apparent success against organised crime in Chongqing on Bo's behalf, Wang was fêted as a gangbuster by the common people, and took centre stage in public life. This celebrity came despite accusations by lawyers that he extracted confessions through torture and sacrificed due process in the pursuit of the so-called triad groups.

[...] In May last year, Bo promoted Wang to vice-mayor with responsibility for overseeing security while retaining his role as chief of police. As a result, Wang became seen as a rising political star who some day might play a key role in the national Public Security Ministry, when his mentor Bo assumed the high office to which he had seemed destined. The apparent improvement in law and order under Wang's iron-fisted crackdown had, in turn, boosted Bo's chances of winning a place on the party's all-powerful Politburo Standing Committee, to be decided at the 18th national congress later this year.

Although Wang's sentencing was relatively lenient, some observers feel that he has become Bo's human shield. From Shi Jingtao and Choi Chi-yuk at South China Morning Post:

A source close to Wang's family told the South China Morning Post they believed Wang had been made a scapegoat for Bo.

The source commented: "Wang has apparently become a political victim because the government wants to protect the guy above him and avoid further humiliation."

[...] Wang's lawyer Wang Yuncai – not related to her client – confirmed to the Post that Bo was explicitly named during Wang's trial when the court heard how Bo slapped Wang. But the fact Bo's name was not mentioned at all by state media throughout the trials of Wang and Gu was seen by many, including Hong Kong analyst Johnny Lau Yui-siu, as a sure sign Bo will be treated leniently to avoid any repercussions on the imminent .

Others link Bo's case to the behind-the-scenes political jockeying between the factions of Hu Jintao and former leader Jiang Zemin. From Mark Mackinnon at The Globe and Mail:

Mr. Bo – a "princeling" whose father was a hero of the 1949 Communist Revolution – was once seen as a near-certainty to join the Standing Committee, and his downfall has exposed deep rifts in a party that normally excels at presenting at least a façade of unity. Mr. Bo's fellow princelings, and their chief patron, former president Jiang Zemin, are battling to limit damage from the scandal and to check the gains made by a rival faction of Communist Youth League alumni, a grouping headed by President Hu Jintao.

The Youth League faction is broadly considered more reform-minded, while the princelings are seen as more conservative about further opening the economy or any changes to China's one-party political system.

"It would show that Jiang Zemin and the conservatives still have substantial clout, if they can spare Bo Xilai," Prof. Lam said.

Yet amid the public debate over the leniency of Wang's sentencing, his family sees the conviction itself as showing a lack of justice in China. From Edward Wong at The New York Times:

"I feel desperate," his younger sister, Wang Fengying, said in a telephone interview. "It's too unfair."

Mr. Wang's lawyer, Wang Yuncai, who is not related to him, said in a telephone interview that the 15-year sentence was about what she expected. She said that Mr. Wang's wife, though, was stunned. "She was utterly shocked and unwilling to accept such a result," she said.

See more about Wang Lijun and Bo Xilai via CDT, and a chronicle of censorship of the case at Fei Chang Dao.

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Official Expert Questions Heywood Cause of Death

Posted: 27 Sep 2012 02:34 AM PDT

One of China's most senior forensic scientists has challenged the official explanation for Neil Heywood's death in a now deleted blog post. , wife of former party chief , confessed to poisoning the British businessman with cyanide, but Wang argues that her account and the evidence as a whole fail to support this. From John Kennedy at the South China Morning Post:

"A serious lack of evidence exists," Wang writes, "to conclude that died of cyanide poisoning, as well as any supporting scientific basis."

"What I find extremely terrifying," she continues, is that missing in both the secret recording of Gu's confession to the and the court testimony provided by Gu and Zhang themselves, she claims, is any indication that Gu and Zhang witnessed a death that involved the characteristics of cyanide poisoning: the scream reflex that occurs during "lightning-fast" asphyxia, body spasms which would have been apparent as the cyanide reached Heywood's central nervous system, stupour that would have followed, or eventual cardiopulmonary arrest just prior to his death.

[…] Wang spends the second half of her post analysing Gu's mental condition, but strongly implies that Gu had been manipulated by for quite some time. The point comes at the very end of her post with a standalone question:

Who had the most to gain from Neil Heywood's death?

From Tania Branigan at The Guardian:

Wang has had an unusually high media profile in the past, lauded in the Chinese media as the first female forensic scientist to work for the country's highest level prosecution body.

[… I]t is extremely surprising that an official in her position would publicly question the verdict in such a politically sensitive case.

[…] She told the Guardian: "I don't care how long the blog is up there. I just want to tell people I feel humiliated.

"I think Chinese criminal doctors are not such idiots. I have done my duty and fulfilled my historical responsibility."

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