Doing business in China: December 2007 Archives

By William Foreman - Associated Press - via Yahoo Malaysia! News
December 26, 2007

DONGZHOU, China - Trucks with loudspeakers drove through a fishing village in southern China on Wednesday, warning residents against protesting over a power plant they claim was built on unfairly seized land. Police briefly detained a foreign reporter before escorting him away from the village.

Scores of security forces, including military police riding on trucks, were guarding the road to the power station in Dongzhou, where three men were shot dead two years ago when police cracked down on a protest against the facility. Residents say the government gave them little or no compensation for the land used by the plant.

The long-simmering dispute began boiling again early this month when protesters blocked an electricity pylon that wasn't fully operational. Last week, Radio Free Asia _ a private broadcaster funded by the U.S. Congress _ reported that about 1,000 riot police fired tear gas at protesters in Dongzhou.

One resident, who declined to give his name fearing arrest, confirmed the details of the Radio Free Asia report.

"They're telling us not to march in the streets anymore," the man whispered as one of the loudspeaker trucks cruised by in the center of the village. "It's still tense. There are about 1,000 security officers here. They've arrested some of the protest leaders in the past few days."

Other residents said the same thing, but they were reluctant to chat much about the protests in Dongzhou, on the southeastern coast of Guangdong _ one of China's most prosperous provinces.

The grievance is just one in a series of increasingly frequent confrontations across China between police and villagers angry over land seizures for construction of factories, shopping malls and other projects.

>> Read the complete report

By David Barboza | The New York Times
December 15, 2007

Here in southern China, beneath the looming mountains of Fujian Province, lie dozens of enormous ponds filled with murky brown water and teeming with eels, shrimp and tilapia, much of it destined for markets in Japan and the West.

Fuqing is one of the centers of a booming industry that over two decades has transformed this country into the biggest producer and exporter of seafood in the world, and the fastest-growing supplier to the United States.

But that growth is threatened by the two most glaring environmental weaknesses in China: acute water shortages and water supplies contaminated by sewage, industrial waste and agricultural runoff that includes pesticides. The fish farms, in turn, are discharging wastewater that further pollutes the water supply.

"Our waters here are filthy," said Ye Chao, an eel and shrimp farmer who has 20 giant ponds in western Fuqing. "There are simply too many aquaculture farms in this area. They're all discharging water here, fouling up other farms."

Farmers have coped with the toxic waters by mixing illegal veterinary drugs and pesticides into fish feed, which helps keep their stocks alive yet leaves poisonous and carcinogenic residues in seafood, posing health threats to consumers.

Environmental degradation, in other words, has become a food safety problem, and scientists say the long-term risks of consuming contaminated seafood could lead to higher rates of cancer and liver disease and other afflictions.

No one is more vulnerable to these health risks than the Chinese, because most of the seafood in China stays at home. But foreign importers are also worried. In recent years, the European Union and Japan have imposed temporary bans on Chinese seafood because of illegal drug residues. The United States blocked imports of several types of fish this year after inspectors detected traces of illegal drugs linked to cancer.

This week, officials from the United States and China signed an agreement in Beijing to improve oversight of Chinese fish farms as part of a larger deal on food and drug safety.

Yet regulators in both countries are struggling to keep contaminated seafood out of the market. China has shut down seafood companies accused of violating the law and blacklisted others, while United States regulators are concentrating on Chinese seafood for special inspections.

Fuqing (pronounced foo-CHING) is at the top of the list this year for refused shipments of seafood from China, with 43 rejections through November, according to records kept by the United States Food and Drug Administration. All of those rejections involved the use of illegal veterinary drugs.

By comparison, Thailand, also a major exporter of seafood to the United States, had only two refusals related to illegal veterinary drugs. China as a whole had 210 refusals for illegal drugs.

"For 50 years," said Wang Wu, a professor at Shanghai Fisheries University, "we've blindly emphasized economic growth. The only pursuit has been G.D.P., and now we can see that the water turns dirty and the seafood gets dangerous. Every year, there are food safety and environmental pollution accidents."

Environmental problems plaguing seafood would appear to be a bad omen for the industry. But with fish stocks in the oceans steadily declining and global demand for seafood soaring, farmed seafood, or aquaculture, is the future. And no country does more of it than China, which produced about 115 billion pounds of seafood last year.

China produces about 70 percent of the farmed fish in the world, harvested at thousands of giant factory-style farms that extend along the entire eastern seaboard of the country. Farmers mass-produce seafood just offshore, but mostly on land, and in lakes, ponds, rivers and reservoirs, or in huge rectangular fish ponds dug into the earth.

"They'll be a major supplier not just to the U.S., but to the world," said Richard Stavis, the chairman of Stavis Seafoods, an American company that imports Chinese catfish, tilapia and frog legs.

China began emerging as a seafood power in the 1990s as rapid economic growth became the top priority in the country. But environmental experts say that headlong pursuit of higher gross domestic product has devastated Chinese water quality and endangered the country's food supply. In Guangdong Province in southern China, fish contaminated with toxic chemicals like DDT are already creating health problems.

"There are heavy metals, mercury and flame retardants in fish samples we've tested," said Ming Hung Wong, a professor of biology at Hong Kong Baptist University. "We've got to stop the pollutants entering the food system."

More than half of the rivers in China are too polluted to serve as a source of drinking water. The biggest lakes in the country regularly succumb to harmful algal blooms. Seafood producers are part of the problem, environmental experts say. Enormous aquaculture farms concentrate fish waste, pesticides and veterinary drugs in their ponds and discharge the contaminated water into rivers, streams and coastal areas, often with no treatment.

"Water is the biggest problem in China," said Peter Leedham, the business manager at Sino Analytica, an independent food safety testing firm that works with companies that buy from China. "But my feeling is China will deal with it, because it has to. It just won't be a quick process."

>> Read the complete report

Agence France-Presse - Hong Kong
December 13, 2007

A leading Chinese anti-pollution campaigner Thursday launched a new website that names more than 4,000 companies, including 40 multi-national firms, belching out dangerous emissions across China.

Ma Jun, the author of "China's Water Crisis" and head of an environmental think tank, launched the China Air Pollution Map which pinpoints the worst polluters in factories and power plants south of the Yangtze River.

He hopes the map will help China tackle its worsening pollution problem.

"Access to information is a pre-condition for meaningful public participation," Ma said.

He added he hoped the site will shame companies into "providing the public with an open explanation and taking corrective action."

The new map, which has taken 10 months to pull together, uses data already publicly available from government departments and official media on factories that are breaking emission standards.

Out of the 4,000 violations, more than half are in southern China.

Visitors to the site (air.ipe.org.cn) will be able to view rankings of various air pollutant levels, and compare them to other cities.

The project aims to follow the success of a similar map run by Ma's Beijing-based Institute of Public and Environmental Affairs, which has focused on polluters of China's waterways.

The scheme has sparked numerous media reports on the worst offenders and, in some cases, convinced companies to improve their treatment facilities.

The new scheme is backed by global environmental organisation WWF and ADM Capital Foundation.

"We believe there is a strong correspondence beteeen transparency and improved environmental regulation," Liam Slater, head of WWF's Hong Kong climate programme, told reporters.

At a press conference to launch the site, Ma said China has set tough environmental standards nationally, but they are often ignored on a local level.

Pollution has become a major problem in China as the economy booms and is second only to the United States in greenhouse gas emissions, which are blamed for global warming.

By Keith Bradsher | The New York Times
December 08, 2007

Every night, columns of hulking blue and red freight trucks invade China's major cities with a reverberating roar of engines and dark clouds of diesel exhaust so thick it dims headlights.

By daybreak in this sprawling metropolis in southeastern China, residents near thoroughfares who leave their windows open overnight find their faces stiff with a dark layer of diesel soot.

After Mary Leung opens her tiny open-air shop along a major road soon after dawn, she must wipe the soot off her countertops and tables; the tiny yellow-and-olive bird that has kept her company is harder to clean.

Trucks are the mules of this country's spectacularly expanding economy -- ubiquitous and essential, yet highly noxious.

Trucks here burn diesel fuel contaminated with more than 130 times the pollution-causing sulfur that the United States allows in most diesel. While car sales in China are now growing even faster than truck sales, trucks are by far the largest source of street-level pollution.

Tiny particles of sulfur-laden soot penetrate deep into residents' lungs, interfering with the absorption of oxygen. Nitrogen oxides from truck exhaust, which build all night because cities limit truck traffic by day, bind each morning with gasoline fumes from China's growing car fleet to form dense smog that inflames lungs and can cause severe coughing and asthma.

The 10 million trucks on Chinese roads, more than a quarter of all vehicles in this country, are a major reason that China accounts for half the world's annual increase in oil consumption. Sating their thirst helped push the price of oil to nearly $100 a barrel this year, before a recent decline, and has propelled China past the United States as the world's largest emitter of global-warming gases.

Yet cleaning up truck pollution presents complex problems for China's leaders.

For instance, regulators have begun raising emissions standards for new trucks, but have left millions of older ones belching black smoke. Forcing businesses and farmers to buy more expensive vehicles could put a drag on the economy, which already faces inflationary pressure from rising food prices and other costs.

That fear of inflation -- not to mention political and social unrest -- has led Beijing to prevent the country's mostly state-owned oil companies from increasing diesel prices at the pump in pace with global oil prices. Raising fuel prices for farmers, whose incomes have lagged behind those of city dwellers and who need diesel for their tractors, is one concern. Lower diesel prices also essentially subsidize every manufacturer in China's elaborate export machine.

But price controls create a vicious circle. Oil giants like Sinopec, losing money on every gallon of diesel they refine because of the low sales prices, upgrade refineries slowly, if at all. And they seek out cheap crude, which has high levels of sulfur, to make diesel, negating the effects of higher emissions standards for new vehicles.

"Sinopec is trying our best to purchase low-quality crudes -- much heavier and more sulfur content," said Evan Jia, a Sinopec spokesman. "We buy those kinds of crudes to lower the purchasing cost."

Low diesel prices frequently make trucks more cost-effective than trains, which pollute less. Sales of large freight trucks in China outpace those in the United States by a wide margin. Demand for diesel at service stations is so great, and supplies are so tight, that rationing and shortages have become common. Truck drivers idle for hours only to be allowed to buy as little as five gallons of fuel.

Since 2000, sales of heavy-duty trucks have risen sixfold while car sales have risen eightfold. This has created myriad problems, from gridlock that chokes China's cities to pollution that chokes its citizens, contributing each year to hundreds of thousands of premature deaths from heart and lung problems, according to the World Bank.

Working in the Fumes

Ms. Leung, the shopkeeper, is a slender, tidy, 44-year-old woman with a cheery disposition. She used to keep her little bird in a wooden cage over the entrance to the two battered plastic tables where she serves soft drinks and fresh waffles for less than 40 cents each.

All day, trucks, buses and cars grind past. While large trucks are banned in Guangzhou from 7 a.m. to 9 p.m., some obtain special permits for daytime access. And many medium-size trucks with diesel engines are allowed in the city during the day if they carry local license plates.

"We had to put out bowls of water in the cage," Ms. Leung said, so the bird could constantly wash itself. She finally moved the bird, a Pekin robin, to her home on a quieter street.

She tries not to think about what the exhaust fumes are doing to her own health.

"My throat hurts all the time," she said. "I suck on throat lozenges for it. It's unbearable."

International experts say that hundreds of millions of Chinese are exposed every day to the potentially lethal mix of soot particles and smog.

American regulators have labeled diesel soot a likely carcinogen. A growing body of academic literature blames tiny airborne particles from diesel exhaust, coal-fired power plants and other sources for up to 90 percent of all deaths from outdoor air pollution, because the particles penetrate so deeply into lungs. Diesel engines also emit large quantities of nitrogen oxides, which react with gasoline fumes to produce photochemical smog when hit by sunlight.

Mainland Chinese atmospheric scientists concluded in an analysis this year in The Journal of Environmental Sciences that, here in Guangzhou, particles were the pollutant farthest out of line with air-quality norms 226 days a year. Sulfur dioxide, which comes mainly from burning coal, was the pollutant that exceeded norms by the widest margin 45 days a year, while nitrogen oxides were the most prominent pollutant 23 days a year.

The air was relatively clean on the remaining 71 days a year.

New tests by Chinese and American researchers in Tianjin, in northeastern China, found that diesel engines in trucks and buses accounted for 93 percent of all nitrogen oxides from vehicles in China and 97 percent of particles.

A separate academic study of diesel exhaust here in Guangzhou found that Chinese trucks put out particles in unusually large quantities and sizes, as engines with often inadequate or damaged emissions equipment were forced to pull overweight loads.

Ms. Leung said she had little choice but to stick it out.

She and her husband had a shop on a less-busy street, but the building was torn down and the local government gave her the current lease as a substitute. They are not allowed to sell the lease or apply for a different one, and the shop is their sole means of support for two daughters, the elder one the first in the family to go to college.

The only option, Ms. Leung said, is to hope that her building will be condemned so the city will issue her a lease in a more healthful location. "I'm dreaming of it," she said.

>> Read the complete report

By Human Rights Watch
December 03, 2007

'Work and Study' Programs Put Hundreds of Thousands of Children at Risk

The Chinese government should abolish the use of income-generating child labor schemes in middle and junior high schools because of their chronic abuses, Human Rights Watch said today. Many programs interfere with children's education, lack basic health and safety guarantees, and involve long hours and dangerous work."China claims that it is fighting child labor, and repeatedly cites its legal prohibition against the practice as proof," said Sophie Richardson, Asia advocacy director at Human Rights Watch. "But the government actively violates its own prohibitions by running large programs through the school system that use child labor, lack sufficient health and safety guarantees, and exploit loopholes in domestic labor laws."  
 
Under "Work and Study" programs regulated by the Ministry of Education, schools in impoverished areas are encouraged to set up income-generating activities to make up for budgetary shortfalls. According to official statistical material from the Ministry of Education seen by Human Rights Watch, more than 400,000 middle and junior high schools, which are for children ages 12 to 16, nationwide are running agricultural and manufacturing schemes. In 2004, proceeds from Work and Study programs generated over 10 billion yuan (US$1.25 billion), the statistics show.  
 
Chinese law prohibits the use of child of labor under age 16 but stipulates that children may be employed under special circumstances, such as in sports or in the arts, or if their "occupational training" and "educational labor" does not adversely affect their personal health and safety. Regulations that govern Work and Study programs in middle and junior high schools prohibit hazardous work and stress that "education must come first," but fail to provide a clear definition of the acceptable kind, intensity, and overall time duration of this special category of work.  
 
The majority of schools limit these schemes to seasonal agricultural work (such as growing and harvesting crops), improving school facilities, or producing small handicrafts over summer breaks, either independently or through contract with outside employers.  
 
But overly vague Work and Study regulations and poor supervision have led to widespread abuse of the system by schools and employers alike. Children as young as 12 have been employed in heavy agricultural and hazardous construction work. Others have been dispatched to local factories for weeks or months of "summer employment." Some schools have turned into full-fledged workshops to produce local handiwork or foodstuff while relegating teaching to a few hours a week. 

 
>> Read the complete report

The New York Times | Editorial
December 2nd, 2007

For a company that ostensibly believes in the Internet's liberating power, Yahoo has a gallingly backward understanding of the value of free expression.

The company helped Beijing's state police uncover the Internet identities of two Chinese journalists, who were handed 10 years in prison for disseminating pro-democracy writings. Testifying before Congress last year about one case, Yahoo's legal counsel said the company was unaware of the nature of the investigation. Did he miss the language about providing "state secrets to foreign entities" -- a red flag for a political prosecution?

Last month, Yahoo settled a suit by the families of the jailed journalists but it did not admit doing wrong and is refusing to change its procedures to avoid becoming a stool pigeon for China's police state again.

Yahoo's collaboration is appalling, and Yahoo is not the only American company helping the Chinese government repress its people. Microsoft shut down a blogger at Beijing's request. Google, Yahoo and Microsoft censor searches in China. Cisco Systems provided hardware used by Beijing to censor and monitor the Internet.

These companies argue that it is better for the Chinese people to have a censored Internet than no Internet. They say that they must abide by the laws of the countries they operate in. But the Chinese Constitution guarantees freedom of speech, the press, association and assembly. Those guarantees may be purely symbolic, but these companies -- which loudly protest Chinese piracy of their intellectual property -- have not tried to resist. What they are resisting are efforts in Congress that could help them stand against repressive governments.

Last January, Representative Christopher Smith of New Jersey reintroduced the Global Online Freedom Act in the House. It would fine American companies that hand over information about their customers to foreign governments that suppress online dissent. The bill would at least give American companies a solid reason to decline requests for data, but the big Internet companies do not support it. That shows how much they care about the power of information to liberate the world.