Doing business in China: April 2009 Archives

By Andrew Jacobs | THE NEW YORK TIMES
April 28, 2009

In the decade since the Chinese government began repressing Falun Gong, a crusade that human rights groups say has led to the imprisonment of tens of thousands of practitioners and claimed at least 2,000 lives, the world's attention has shifted elsewhere.

The drive against the spiritual group has eliminated its leadership, decimated the ranks of faithful and convinced many Chinese that the group is an "evil cult," as the government contends. But 10 years on, the war on Falun Gong remains unfinished.

In the past year, as many as 8,000 practitioners have been detained, according to experts on human rights, and at least 100 have died in custody. Among them were Yu Zhou, 42, a popular Beijing musician, and Cao Changling, the 77-year-old vice director of a paper plant in Wuhan, whose bruised body was returned to his family by the police last summer just as China was reveling in the glory of the Olympic Games.

In recent months, scores of practitioners have been given long prison terms, including Zhang Xingwu, a retired physics professor from Shandong Province who last week was sentenced to seven years after the police found Falun Gong literature in his apartment, according to family members.

The continued crackdown highlights the difficulty of eradicating a movement whose adherents stubbornly cling to their beliefs, but it also provides a window into the psyche of an authoritarian government that, despite its far-reaching power, remains deeply insecure.

From the outset, the group, which at its peak claimed to have millions of followers around China, insisted that it wanted only legal recognition, not political power. But the country's top leaders were alarmed by the group's ability to attract a devoted following from so many citizens -- from retired functionaries to pimple-faced college students.

The decision to ban the group entirely was made after 10,000 Falun Gong adherents staged a silent protest outside the gates of Zhongnanhai, the Communist Party's leadership compound in Beijing, to complain about reports in the state-run media that the group said were defamatory. Security forces apparently had no advance knowledge of the demonstration, which took place on April 25, 1999, and they began treating the group as a threat to national security.

"Even a soccer team with an organization like Falun Gong might have produced the same reaction," said T. Kumar, the Asia advocacy director for Amnesty International.

Although the propaganda juggernaut has eased in recent years, Falun Gong remains a toxic subject in China. Few academics will speak about it on the record, and the Internet is scoured clean of information that might be construed as sympathetic to Falun Gong, an amalgam of Buddhism, mysticism and qigong, the traditional exercise regimen that remains broadly popular here.

For the Falun Gong devotees who practice in secret, the only glimmer of hope has come from a small but growing number of lawyers who have dared to take on their cases. Even if the legal efforts have mostly come to naught, until recently Falun Gong detainees were denied even the right to a lawyer.

Last week, Jiang Yu, a spokesman for the Foreign Ministry, reiterated the government's long-held stance that Falun Gong warrants suppression because it emphasizes meditation and the paranormal over modern medicine. "The Falun Gong cult violates human rights by controlling people's minds," he said in response to a reporter's query.

Among experts based outside the country, there is broad consensus that the government's efforts have not done much to advance its own interests, at least internationally, where it has been dogged by allegations that it uses torture to crush believers into submission.

'The excesses and the savagery have really lowered the quality of the government and harmed its reputation abroad," said Jerome Cohen, a member of the Council on Foreign Relations and an expert on Chinese law. "They're paying a high price for the cruelty to these people."

According to Falun Gong followers and Chinese lawyers who take on their cases, that cruelty continues unabated.

Among those swept up in the purge were Yu Zhou, the musician, and his wife, Xu Na. They were stopped for speeding in January 2008, according to their lawyer. After the police found Falun Gong materials in their car, both were detained. Ten days later, Mr. Yu's sister was told that he was gravely ill, the result, she was told, of a hunger strike complicated by diabetes. His sister, Yu Qun, says her brother did not have diabetes. She contends that he died at the hands of his captors.

The family's efforts to investigate Mr. Yu's death have been thwarted by the police and prosecutors, who refuse to allow an autopsy or even issue a death certificate.

Ms. Xu, who is a well-known poet and painter, was given a three-year term.

"I don't understand why this happened to them because they didn't do anything to break the law and they weren't promoting the group," Ms. Yu said.

According to former detainees and human rights organizations, Falun Gong detainees are frequently subjected to harrowing abuse, particularly those who refuse to swear off their faith. Bu Dongwei, 41, a longtime adherent who spent three years in a labor camp, said he was forced to share a room with about 30 people, most of them petty thieves and drug addicts who were encouraged to abuse the Falun Gong detainees.

Mr. Bu, a trained geneticist, left China in December and now lives in Los Angeles.

While the group's initial goals were official legitimacy and an end to persecution, the ceaseless campaign against them has radicalized many adherents, especially those living outside China. In cities around the world, Falun Gong devotees -- and their offbeat re-enactments of torture and gory visual aids -- have become a common sight. The group has dedicated itself to the demise of the Communist Party, which has complicated the lives of adherents inside China.

Falun Dafa, the organization that oversees the movement from its headquarters in New York, is led by Li Hongzhi, a former grain clerk who began spreading his mystical brand of qigong in 1992 but fled China before the crackdown began. Once known for charismatic preaching, he has spent much of the past decade living a reclusive life in Queens.

David Ownby, the author of "Falun Gong and the Future of China," said that Mr. Li and his followers may have made a tactical mistake by massing in Beijing, but that the Communist Party erred by interpreting their actions as a threat to its rule.

"If either side had played their cards more intelligently, Falun Gong could have been co-opted by the government," said Mr. Ownby, who is a professor of East Asian studies at the University of Montreal. He added, "This horrific loss of life could have been avoided."

Jonathan Ansfield contributed reporting.

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By David Barboza | THE NEW YORK TIMES
April 28, 2009

The phone's sleek lines and touch-screen keyboard are unmistakably familiar. So is the logo on the back. But a sales clerk at a sprawling electronic goods market in this Chinese coastal city admits what is clear upon closer inspection: this is not the Apple iPhone; this is the Hi-Phone.

"But it's just as good," the clerk says.

Nearby, dozens of other vendors are selling counterfeit Nokida, Motorla and Samsung phones -- as well as cheap look-alikes that make no bones about being knockoffs.

"Five years ago, there were no counterfeit phones," says Xiong Ting, a sales manager at Triquint Semiconductor, a maker of mobile phone parts, while visiting Shenzhen. "You needed a design house. You needed software guys. You needed hardware design. But now, a company with five guys can do it. Within 100 miles of here, you can find all your suppliers."

Technological advances have allowed hundreds of small Chinese companies, some with as few as 10 employees, to churn out what are known here as shanzhai, or black market, cellphones, often for as little as $20 apiece.

And just as Chinese companies are trying to move up the value chain of manufacturing, from producing toys and garments to making computers and electric cars, so too are counterfeiters. After years of making fake luxury bags and cheap DVDs, they are capturing market share from the world's biggest mobile phone makers.

Although shanzhai phones have only been around a few years, they already account for more than 20 percent of sales in China, which is the world's biggest mobile phone market, according to the research firm Gartner.

They are also being illegally exported to Russia, India, the Middle East, Europe, even the United States. "The shanzhai phone market is expanding crazily," says Wang Jiping, a senior analyst at IDC, which tracks technology trends. "They copy Apple, Nokia, whatever they like, and they respond to the market swiftly."

Alarmed by the rapid growth of counterfeits and no-name knockoffs, global brands are pressing the Chinese government to crack down on their proliferation, and are warning consumers about potential health hazards, like cheap batteries that can explode.

Nokia, the world's biggest cellphone maker, says it is working with Beijing to fight counterfeiting. Motorola says much the same. Applre Inc. declined to comment.

Even Chinese mobile phone producers are losing market share to underground companies, which have a built-in cost advantage because they evade taxes, regulatory fees and safety checks.

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AP IMPACT - via UNCENSORED Yahoo! News
By Brian Skoloff and Cain Burdeau, Associated Press Writers
with contribution by Joe McDonald, AP Writer in Beijing

April 11, 2009

At the height of the U.S. housing boom, when building materials were in short supply, American construction companies used millions of pounds of Chinese-made drywall because it was abundant and cheap.

Now that decision is haunting hundreds of homeowners and apartment dwellers who are concerned that the wallboard gives off fumes that can corrode copper pipes, blacken jewelry and silverware, and possibly sicken people.

Shipping records reviewed by The Associated Press indicate that imports of potentially tainted Chinese building materials exceeded 500 million pounds during a four-year period of soaring home prices. The drywall may have been used in more than 100,000 homes, according to some estimates, including houses rebuilt after Hurricane Katrina.

"This is a traumatic problem of extraordinary proportions," said U.S. Rep. Robert Wexler, a Florida Democrat who introduced a bill in the House calling for a temporary ban on the Chinese-made imports until more is known about their chemical makeup. Similar legislation has been proposed in the Senate.

The drywall apparently causes a chemical reaction that gives off a rotten-egg stench, which grows worse with heat and humidity.

Researchers do not know yet what causes the reaction, but possible culprits include fumigants sprayed on the drywall and material inside it. The Chinese drywall is also made with a coal byproduct called fly ash that is less refined than the form used by U.S. drywall makers.

Dozens of homeowners in the Southeast have sued builders, suppliers and manufacturers, claiming the very walls around them are emitting smelly sulfur compounds that are poisoning their families and rendering their homes uninhabitable.

"It's like your hopes and dreams are just gone," said Mary Ann Schultheis, who has suffered burning eyes, sinus headaches, and a general heaviness in her chest since moving into her brand-new, 4,000-square foot house in this tidy South Florida suburb a few years ago.

She has few options. Her builder is in bankruptcy, the government is not helping and her lender will not give her a break.

"I'm just going to cry," she said. "We don't know what we're going to do."

Builders have filed their own lawsuits against suppliers and manufacturers, claiming they unknowingly used the bad building materials.

The Consumer Product Safety Commission is investigating, as are health departments in Virginia, Louisiana, North Carolina, Florida and Washington state.

Companies that produced some of the wallboard said they are looking into the complaints, but downplayed the possibility of health risks.

"What we're trying to do is get to the bottom of what is precisely going on," said Ken Haldin, a spokesman for Knauf Plasterboard Tianjin, a Chinese company named in many of the lawsuits.

The Chinese ministries of commerce, construction and industry and the Administration of Quality Supervision Inspection and Quarantine did not respond to repeated requests for comment. Chinese news reports have said AQSIQ, which enforces product quality standards, was investigating the complaints but people in the agency's press office said they could not confirm that.

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