Doing business in China: November 2009 Archives

By SHARON LaFRANIERE | The New York Times
November 24, 2009

A lengthy prison sentence for a rights activist shows the determination of Chinese officials to suppress any vestige of dissent related to shoddy construction and unnecessary deaths in last year's devastating earthquake in Sichuan Province, fellow activists said.

Huang Qi, 46, who helped parents press their grievances against the local government after their children died when their schools collapsed, was given a three-year prison term on Monday. He was convicted of illegal possession of state secrets, a common charge used to punish people who defy the authorities.

Mr. Huang's wife, Zeng Li, said in a telephone interview that her husband was found guilty of possession of "certain documents from a certain city." The documents and the city were not identified during a 10-minute court hearing in Chengdu, the capital of Sichuan Province, she said.

According to Ms. Zeng, the judge said that her husband must be severely punished because he had a prior conviction for inciting subversive activity. A prosecutor privately told her that her husband "has stepped on a lot of toes," she said.

She said her husband hoped to appeal the verdict. Mr. Huang is part of a loosely linked network of bereaved parents and activists who partly blame substandard shcool construction for the high toll from China's biggest natural disaster in decades.

By the government's estimate, about 90,000 people died in the earthquake, including 5,335 schoolchildren.

Ai Weiwei, a prominent artist in Beijing who has documented and publicized the deaths of schoolchildren, said Mr. Huang's punishment "is absolutely outrageous."

"They just want to put down any opposition," said the artist, who helped design Beijing's Olympic National Stadium, known as the Bird's Nest.

Although he has not faced as much pressure as Mr. Huang or other activists, Mr. Ai said he was also being harassed by government authorities. Last week, he said, government security officers visited his bank and told officials there that he had committed a serious crime, he said.

"I have asked myself many times, 'Should I do this?' " he said in a telephone interview. "The answer is clear. I have to act on my feelings."

Mr. Ai has tried to press the government to release a list of the dead children. Only in May, a year after the earthquake, did the authorities made public an estimate of how many died or were missing and presumed dead.

One 43-year-old mother lost her 14-year-old son when his high school in the city of Beichuan collapsed. "This is beyond my words," she said when asked about Mr. Huang's sentence. She gave her last name as Liu and requested that her first name not be used, for fear of repercussions.

>> Original report

By Paul Krugman - Op-Ed Columnist | The New York Times
November 16, 2009

International travel by world leaders is mainly about making symbolic gestures. Nobody expects President Obama to come back from China with major new agreements, on economic policy or anything else.

But let's hope that when the cameras aren't rolling Mr. Obama and his hosts engage in some frank talk about currency policy. For the problem of international trade imbalances is about to get substantially worse. And there's a potentially ugly confrontation looming unless China mends its ways.

Some background: Most of the world's major currencies "float" against one another. That is, their relative values move up or down depending on market forces. That doesn't necessarily mean that governments pursue pure hands-off policies: countries sometimes limit capital outflows when there's a run on their currency (as Iceland did last year) or take steps to discourage hot-money inflows when they fear that speculators love their economies not wisely but too well (which is what Brazil is doing right now). But these days most nations try to keep the value of their currency in line with long-term economic fundamentals.

China is the great exception. Despite huge trade surpluses and the desire of many investors to buy into this fast-growing economy -- forces that should have strengthened the renminbi, China's currency -- Chinese authorities have kept that currency persistently weak. They've done this mainly by trading renminbi for dollars, which they have accumulated in vast quantities.

And in recent months China has carried out what amounts to a beggar-thy-neighbor devaluation, keeping the yuan-dollar exchange rate fixed even as the dollar has fallen sharply against other major currencies. This has given Chinese exporters a growing competitive advantage over their rivals, especially producers in other developing countries.

What makes China's currency policy especially problematic is the depressed state of the world economy. Cheap money and fiscal stimulus seem to have averted a second Great Depression. But policy makers haven't been able to generate enough spending, public or private, to make progress against mass unemployment. And China's weak-currency policy exacerbates the problem, in effect siphoning much-needed demand away from the rest of the world into the pockets of artificially competitive Chinese exporters.

But why do I say that this problem is about to get much worse? Because for the past year the true scale of the China problem has been masked by temporary factors. Looking forward, we can expect to see both China's trade surplus and America's trade deficit surge.

That, at any rate, is the argument made in a new paper by Richard Baldwin and Daria Taglioni of the Graduate Institute, Geneva. As they note, trade imbalances, both China's surplus and America's deficit, have recently been much smaller than they were a few years ago. But, they argue, "these global imbalance improvements are mostly illusory -- the transitory side effect of the greatest trade collapse the world has ever seen."

Indeed, the 2008-9 plunge in world trade was one for the record books. What it mainly reflected was the fact that modern trade is dominated by sales of durable manufactured goods -- and in the face of severe financial crisis and its attendant uncertainty, both consumers and corporations postponed purchases of anything that wasn't needed immediately. How did this reduce the U.S. trade deficit? Imports of goods like automobiles collapsed; so did some U.S. exports; but because we came into the crisis importing much more than we exported, the net effect was a smaller trade gap.

But with the financial crisis abating, this process is going into reverse. Last week's U.S. trade report showed a sharp increase in the trade deficit between August and September. And there will be many more reports along those lines.

So picture this: month after month of headlines juxtaposing soaring U.S. trade deficits and Chinese trade surpluses with the suffering of unemployed American workers. If I were the Chinese government, I'd be really worried about that prospect.

Unfortunately, the Chinese don't seem to get it: rather than face up to the need to change their currency policy, they've taken to lecturing the United States, telling us to raise interest rates and curb fiscal deficits -- that is, to make our unemployment problem even worse.

And I'm not sure the Obama administration gets it, either. The administration's statements on Chinese currency policy seem pro forma, lacking any sense of urgency.

That needs to change. I don't begrudge Mr. Obama the banquets and the photo ops; they're part of his job. But behind the scenes he better be warning the Chinese that they're playing a dangerous game.

>> Original source

By NBS News' Ed Flanagan | via MSNBC
09 November 2009

Twenty years after the toppling of the Berlin Wall, another "wall" is facing intense public scrutiny in China.

The so-called Great Firewall of China, the online filtering and surveillance program run by the communist government's Ministry of Public Security, is alive and well and censoring freedom of expression for millions of Chinese.  

But over the past few months, Chinese discontent with the Great Firewall has bubbled over with increasing frequency and fervor.

Chinese netizen's ire was recently sparked by the Green Dam censoring software that was proposed last summer and the blocking of popular social media pages like Facebook and Twitter during the Uighur riots in Xinjiang in July. 

The censorship during the Uighur riots caused such consternation online, it sparked one bitter Chinese Twitter user to mournfully tweet that day, "Today, two '140s' were killed in China - 140 people in Xinjiang and 140 character micro-blogging service Twitter."

It is perhaps fitting then that the Great Firewall should find its opposition in another online medium: Twitter.

The Berlin Twitter wallThe most recent incident occurred late in October when organizers for the Culture Project Berlin, a non-profit organization in Germany that promotes art and culture, created an online "Berlin Twitter Wall" where German tweeters were encouraged to share their memories of the tumultuous times surrounding the fall of wall 20 years ago.  

However, when organizers also asked tweeters to write about, "which walls still have to come down to make our world a better place," the global response was sudden and overwhelming.

The site was soon flooded by over a thousand comments from China complaining about the infamous Great Firewall. Chinese netizens, who circumvented the government's usual blocking of Twitter by using proxy servers, had suddenly transformed the online memorial site into a protest against 21st century forms of censorship.

Chinese censors were relatively slow to respond to the swift outpouring of anger, taking a couple days before finally blocking the website hosting the Berlin Twitter Wall. By then though, the damage had been done. Prior to the blocking, Carsten Hein, a director of the project estimated around 1,500 of the around 3,300 comments posted on the page were in Chinese.

Showing the resourcefulness and the doggedness of China's netizens, even after the site was blocked, posters in China were still visiting the website and leaving messages on the Twitter wall.

One user wrote, "Mr. Hu Jintao, Tear Down the Great Firewall!" putting a twist on President Ronald Reagan's famous words to his Soviet counterpart Mikhail Gorbachev in 1987 imploring him to "Tear down this wall!"

Another poster, appealed to President Barack Obama to take action during his visit to China later this month writing: "Mr. Obama please ask Mr. Hu to tear down the GFW, insure Chinese people use Internet free."

>> Original source