Doing business in China: September 2007 Archives

By Radio Free Asia
September 14, 2007 

Chinese authorities in the Tibetan capital of Lhasa have detained six Tibetans after they lodged an appeal against the relocation of their trading stalls to make way for a new pedestrian walkway.

"The Lhasa municipal government detained six Tibetans on Sept. 13 for appealing against the official order of relocation of their shops near the Tibetan Medical Center in Lhasa," a caller from Lhasa told RFA's Tibetan service.

"All the traders selling their merchandise on stalls in front of the Tibetan Medicine Center...in the Central Cathedral area were ordered to move their shops to the third level of a new business complex in the Bakhor area."

A group of traders had staged a sit-in at the Lhasa municipal government offices in protest, saying that business wouldn't be nearly as good in the new location.

Petition to government

The traders had originally been given carts by the government and had gradually bought them as part of a poverty alleviation scheme.

"We want to request that the Lhasa municipal government allow us to continue in the same place," one Tibetan trader said.

"If we move to the other building on the third floor of the new complex, there will be no business. We rely on these small businesses for our livelihood. and if we are relocated, our business will suffer," he said.

"China's Communist Party is all--powerful, and many dare not raise their voice. We are actually bringing our concerns about our daily livelihood to the authorities and we are not talking of politics. But many Tibetans dare not speak up for fear of reprisals."

"The fact is that all good business locations in Lhasa area are going to Chinese and the Tibetans are losing them," he added.

An official who answered the phone at the Lhasa municipal government confirmed the dispute had taken place, but declined to give further details.

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By Peter Ford - The Christian Science Monitor | via (uncensored) Yahoo! News
September 12, 2007

As China prepares to celebrate its emergence as a global power at next year's Olympic Games, a rash of recent American and international opinion polls suggest that the Asian giant faces an uphill battle to convince the world it is worthy of its new status.

And it is more than just a question of food or toys.

Beijing's task is made harder, say Chinese and foreign analysts, because the ruling Communist Party has so far failed to learn the new ropes of international public diplomacy.

Chinese officials are accustomed to traditional links with their diplomatic counterparts abroad. They have little experience coping with the single-issue advocacy groups that have sprung from civil society in the West to shape the international agenda and influence public opinion on questions ranging from climate change to Darfur.

"It is a great problem," says Shi Yinhong, a prominent foreign-affairs expert at Beijing's Renmin University. "China has no experience with this. We are weak at dealing with diverse nongovernmental entities. The government machine is not capable of dealing with such groups."

Nor has it proved very successful in dealing with the sort of novel challenge that this summer's food and toy safety scandals have posed to China's international image, according to the polls.

An NBC News/Wall Street Journal survey in July found that 65 percent of Americans had very little or no confidence in Chinese food products. Zogby International reported last month that 72 percent of Americans did not believe Chinese claims that the US is exaggerating the risks.

But China's image problem is deeper than the issue of product safety. Even before the recent scandals broke, the Pew Global Attitudes Project found that a downturn in Americans' attitudes toward China was mirrored in Europe and elsewhere.

Only 42 percent of Americans had a favorable attitude to China in May 2007, Pew found, down sharply from 52 percent at the same time last year. 49 percent of the British public was favorable, against 65 percent in 2006, while favorable French and German majorities in 2006 had shrunk to minorities this year.

Indeed, mistrust of China is one of the few international issues on which Europeans and Americans concur, according to a German Marshall Fund poll released last week: 54 percent of Americans and 48 percent of Europeans said they saw China as more of a threat to their jobs and economic security than an opportunity for new markets and investment.

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By Bruce Einhorn and Xiang Ji | Business Week
September 10, 2007

Chinese search engines make it easy to steal Net tunes

Eric Zhu is just the sort of customer that Western music labels want to reach in China. The 28-year-old Beijing resident is a sales director for a local company and enjoys listening to Western pop, from the Backstreet Boys to the Spice Girls, on his MP3 player. Zhu doesn't pay for his tunes, though. Like millions of other young Chinese, he downloads them for free using Baidu.com (BIDU), the country's biggest search engine. Baidu makes it so easy--just hit the MP3 tab on the home page, type in the name of the song, and click. What's more, Zhu doesn't believe he and his friends are doing anything wrong. "I think it's a problem with the law, not with us users," he says.

China, home to a thriving commerce in counterfeit software and bootlegged films, has also become the world capital of pirated music. Almost 100% of music downloaded from the Net is stolen, according to Leong May See, Asia director for the International Federation of the Phonographic Industry, an umbrella group that includes Sony BMG Music, Universal Music, and Warner Music. It doesn't help that two of the country's most popular search engines, Baidu.com and Yahoo China (YHOO), help users find and download songs quickly, and, Leong alleges, illegally. The two provide "deep search" services that allow listeners to download free MP3s from the databases of other sites without ever having to go to those sites themselves. "We have huge problems in China," says Leong.

It's not just the international music in- dustry that has a beef with China's search engines. Google China (GOOG) is struggling to compete against Baidu, which has an edge thanks to its music downloads. Local startups trying to build businesses around selling music online also gripe about Baidu and Yahoo China. "Baidu is at the root of the problem of illegal music downloading," says Wu Duanping, chief executive of online music seller Zhejiang Flyasia Electronics Business Co., based in Hangzhou. Baidu and Yahoo China declined to comment.

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By Agence France-Presse
September 02, 2007

The head of the Taiwan-based Shin Kong Mitsukoshi department store chain's Beijing operation has been barred from leaving China over a management dispute, a report here said Saturday.

Steven Wu, general manager of Shin Kong Mitsukoshi's Beijing New Life Square, was escorted by Chinese police out off an airplane when he was planning to return to Taiwan last Sunday, the United Daily News said.

The paper said Wu has been barred by Chinese authorities from leaving Beijing.

It said Shin Kong Mitsukoshi, which invested 12 billion Taiwan dollars (363 million US) in the store, is trying to resolve a dispute over management issues with its mainland partner, Beijing Hualian Group.

The report cited sources as saying that the dispute erupted when Beijing Hualian Group suspected problems involving construction payments and doubted the Taiwanese company's management rights during a board meeting last week.

Beijing Hualian Group, which hopes that Shin Kong Mitsukoshi will "only be an investor," assigned some 200 security guards to "take over" the store launched in April and verbally fired all Taiwanese executives, it said.

Shin Kong Mitsukoshi, Taiwan's largest retailer, is appealing to relevant Chinese authorities over the dispute.