Studies / Reports: August 2008 Archives

By Paul Mooney | U.S. News & World Report
August 26, 2008

China was intent on making a splash with the 2008 Olympics, which concluded on Sunday, and it did just that. The games are being described as the best ever, thanks to great organization, impressive Olympic venues, stunning opening and closing ceremonies, an army of 70,000 smiling volunteers, and the amazing performances by athletes such as swimmer Michael Phelps and sprinter Usain Bolt.

But it was not an entirely golden occasion.

The games fell far short of accomplishing what many, perhaps unrealistically, had hoped for--to see the authoritarian Communist Party of China, in the world's spotlight, move toward becoming a kinder and gentler regime. Indeed, there was a lot of commentators' talk about this marking China's full engagement with the world, a sort of coming-out party for a "new China."

Instead, the Communist rulers stayed true to form and did pretty much as they wished while the International Olympic Committee and international community played along for the most part. In the end, the Olympics were a tool for strengthening the party's tight grip on power, rather than being an agent of change.

This could be seen before the games kicked off. Determined to make this "the best games ever," the government forced some 1.5 million Chinese out of their homes--often with little or no compensation--to make way for Olympic venues and beautification projects. Countless hawkers, beggars, construction workers, prostitutes, trash collectors, and migrant laborers were removed from the streets and were sent back to their villages or to detention centers. Ten prominent human rights activists, dubbed the Olympics prisoners, were given prison sentences for criticizing the games.

This policy continued during the games. Ding Zilin, the mother of a 17-year-old son who was killed on the night of June 4, 1989, and the founder of the Mothers of Tiananmen, and Wan Yanhai, a leading AIDS activist, were among several activists taking forced holidays outside the capital. And Zeng Jinyan, the 24-year-old blogger and wife of imprisoned dissident Hu Jia, and her 8-month-old baby, disappeared altogether.

In a throwback to George Orwell's Animal Farm, the Communist authorities set up three Protest Zones in parks where legal demonstrations could be held. Of the 77 applications submitted, not one was approved. Indeed, 15 people were arrested for being foolish enough to believe the government was serious. This includes Wu Dianyuan, 79, and Wang Xiuying, 77, who have been threatened with a year in a re-education-through-labor camp. The two wished to protest against officials who evicted them from their homes in 2001.

While foreign journalists were free to cover sporting events, in many cases, they were harassed, beaten, and even arrested by the police, who prevented them from reporting on sensitive issues and even talking to Chinese citizens. According to the Foreign Correspondents' Club of China, there were more than 30 cases of reporting interference from July 25, the day of the opening of the Olympic Media Center, with the most disturbing trend the increase in the incidence of police roughing up or beating reporters and breaking their cameras. Foreign journalists also complained about restrictions on travel to places like Tibet and in Xinjiang, and the blocking of Internet websites.

Two American videobloggers were detained for covering pro-Tibetan activists and were sentenced to 10 days in prison for "disrupting public order." Dozens of foreign protesters were detained and deported.

>> Read complete report

By Andrew Jacobs | The New York Times
August 21, 2008

In the annals of people who have struggled against Communist Party rule, Wu Dianyuan and Wang Xiuying are unlikely to merit even a footnote.

The two women, both in their late 70s, have never spoken out against China's authoritarian government. Both walk with the help of a cane, and Ms. Wang is blind in one eye. Their grievance, receiving insufficient compensation when their homes were seized for redevelopment, is perhaps the most common complaint among Chinese displaced during the country's long streak of fast economic growth.

But the Beijing police still sentenced the two women to an extrajudicial term of "re-education through labor" this week for applying to hold a legal protest in a designated area in Beijing, where officials promised that Chinese could hold demonstrations during the Olympic Games.

They became the most recent examples of people punished for submitting applications to protest. A few would-be demonstrators have simply disappeared, at least for the duration of the Games, squelching already diminished hopes that the influx of foreigners and the prestige of holding the Games would push China's leaders to relax their tight grip on political expression.

"Can you imagine two old ladies in their 70s being re-educated through labor?" asked Li Xuehui, Ms. Wu's son, who said the police told the two women that their sentence might remain in suspension if they stayed at home and stopped asking for permission to protest.

"I feel very sad and angry because we're only asking for the basic right of living and it's been six years, but nobody will do anything to help," Mr. Li said.

It is unclear why the police have detained people who sought permission to protest. Some political analysts say the police may be refusing to enforce the government's order, announced last month, to allow protest zones. Chinese lawyers and human rights advocates also suggested a more cynical motivation -- that the authorities were using the possibility of legal demonstrations as a ploy to lure restive citizens into declaring their intention to protest, allowing the police to take action against them.

When the International Olympic Committee awarded the Games to Beijing in 2001, ignoring critics who said China should not be rewarded for repression, its president, Jacques Rogge, offered assurances that the Games would invariably spur China toward greater openness.

But prospects dimmed even before the opening ceremony, when overseas journalists arrived to discover that China's promise to provide uncensored Internet access was riddled with caveats. The ensuing uproar did persuade the government to unblock some politically sensitive Web sites, but many others, including those that discuss Tibet and the banned spiritual group Falun Gong, remain inaccessible at the Olympic press center.

The announcement that the police had set up protest zones was first greeted as a positive if modest step that could allow Chinese a new channel to voice grievances otherwise ignored by party officials and the state media.

"In order to ensure smooth traffic flow, a nice environment and good social order, we will invite these participants to hold their demonstrations in designated places," Liu Shaowu, the security director for Beijing's Olympic organizing committee, said at a news conference. He described the creation of three so-called protest zones and suggested that a simple application process would provide Chinese citizens an avenue for free expression, a right that has long been enshrined in China's Constitution but in reality is rarely granted.

But with four days left before the closing ceremony, the authorities acknowledge that they have yet to allow a single protest. They claim that most of the people who filed applications had their grievances addressed, obviating the need for a public expression of discontent.

Chinese activists say they are not surprised that the promise proved illusory. Li Fangping, a lawyer who has been arrested and beaten for his dogged representation of rights advocates, said there was no way the government would allow protesters to expose some of China's most vexing problems, among them systemic corruption, environmental degradation and the forced relocation of hundreds of thousands of residents for projects related to the Olympics.

"For Chinese petitioners, if their protest applications were approved, it would lead to a chain reaction of others seeking to voice their problems as well," Mr. Li said.

During the past two decades, China has embraced a market economy and shed some of the more onerous restrictions that dictated where people could live, whom they could marry and whether they could leave the country. But with political dissent and religious freedom, the government has been unrelenting.

In theory, the Communist Party allows citizens to lobby the central government on matters of local corruption, the illegal seizure of land and extralegal detentions. In reality, those who arrive at Beijing's petition office are often met at the door by plainclothes officers who stop them from filing their complaints and then bundle them back to their hometowns. Intimidation, beatings and administrative detentions are often enough to prevent them from trying again.

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By BBC News
August 14, 2008

China has set aside three parks during the Olympics, to allow people to demonstrate. But, as the BBC's Michael Bristow finds out, the parks are empty and those who apply for permission to protest are even finding themselves arrested.

Just before the Olympic Games began, officials said ordinary Chinese people would be able to apply for permission to vent their feelings.

But several would-be demonstrators appear to have been detained by the authorities after trying to apply for that permission.

This is just one way in which China is attempting to restrict embarrassing protests during the Olympic Games.

"The protest application process clearly isn't about giving people greater freedom of expression, but making it easier for the police to suppress it," said Sophie Richardson, from Human Rights Watch.

One of those detained is Zhang Wei, who was held after applying to stage a protest about her family's forced eviction from their courtyard home.

Her son, Mi Yu, said she was initially supposed to be held for just three days for "disturbing social order", but that that had now been extended to 30 days.

Ms Zhang, forced to move to make way for redevelopment in Beijing's Qianmen district, made several protest applications.

"She went every two or three days after seeing a report about the parks. But the police did not give their approval," Mr Mi said.

His mother was taken away last week. The family have not heard from her since.

Many obstacles

Another activist held after making a protest application was Ji Sizun, who was detained on Monday, according to Human Rights Watch.

The 58-year-old, from Fujian province, wanted to call for greater participation by ordinary people in the political process.

Citing witnesses, the rights group said Mr Ji was taken away shortly after entering a Beijing police station to ask about his application.

This application process is a taxing one. Would-be protesters even have to tell police what posters and slogans they intend to use.

There have been reports of others who have been prevented from staging protests in the designated areas.

Some have just had their applications turned down, one was sent back to her home province and yet others have been stopped from travelling to Beijing.

Confusion

The parks designated as protest zones - Shijie, Zizhuyuan and Ritan - do not seem to have been inundated with protesters.

At Shijie ("World") Park on Wednesday one worker said there had not been a single demonstration since the Olympics began.

Potential protesters might have been put off by the police car and van parked directly outside the main entrance of the park, which houses large models of famous world sites.

No one seemed to know where a protest could be held, even if Beijing's Public Security Bureau gave its approval.

"I don't know anything about that," said a ticket collector when asked where protesters could express their opinions.

It was a similar story at Ritan Park, where there seems to have been no protests either.

Dissuading people from protesting is just one tactic being used by China's security forces to prevent demonstrations.

Beijing's streets are full of police, other security personnel and volunteers, wearing red armbands, on the lookout for trouble.

Eight pro-Tibet demonstrators from Students for a Free Tibet were quickly detained on Wednesday after staging a protest.

Some well-known Chinese activists have also been told to keep a low profile during the Olympics. The friend of one said she had decided to leave the city during the Olympics to avoid trouble.

>> Original source

By TIM SULLIVAN | Associated Press Writer via UNCENSORED Yahoo! News
Associated Press Writer Gillian Wong contributed to this report
August 13, 2008

Over at the media village, China is battering them with petty kindnesses.

There's one person to open the door to the cafeteria where breakfast is served, and two more to sort journalistic recycling from journalistic trash. There are people to guide the press onto special buses. There are flower-arranging demonstrations (mostly ignored) at the main media press center, just off the Olympic Green, and free afternoon coffee and cookies (well-attended).

Security sweeps are gauntlets of politeness, where the "good-morning's" and "please's" rain down from teams of smiling Olympic staffers in matching blue Olympic outfits.

China has a long history of difficult relations with the foreign media, and has long heavily restricted press access to sensitive stories. But the past week also makes clear that Beijing wants to keep those journalists happy while they cover the Olympic games.

Those sensitive stories, though, are still clearly out of bounds.

On Wednesday, a British television journalist was detained by police as he tried to report on a pro-Tibet protest near the green, where protesters handcuffed themselves together and hung a "Free Tibet" banner from a bridge. John Ray of London-based ITV News was grabbed by police and put into a car. He was released after proving he was a journalist.

International Olympic Committee spokeswoman Emmanuelle Moreau said the committee was checking into what happened. "The IOC's position is clear: the media must be free to report on the Olympic Games," she said in a statement.

While Beijing vowed before the Olympics to give the foreign media unrestricted access to China during the games, Ray's detention was just the latest in a string of recent confrontations between Chinese authorities and international journalists, adding to worries that Beijing has reverted to the tight controls it normally keeps over the press.

Late last month, Chinese police shoved and kicked a crowd of 30,000 people who had waited in the heat for up to two days hoping to get a chance to buy Olympic tickets. Hong Kong television showed several journalists pushing back against police, and Hong Kong Cable TV showed a policeman putting his arm around the neck of one of their reporters and pulling him to the ground.

Last week, two Japanese journalists were briefly detained and beaten by police in western China, triggering a protest by the Japanese government. Chinese officials later apologized. The journalists were working in Xinjiang province at the scene of a deadly attack on Chinese policemen when they were forcibly taken to a border police facility, said a reporter for Japanese broadcaster Nippon Television Network Corp.

While China has long been anxious to use the Olympics as a chance to show its emergence as a global superpower, such reactions also reflect Beijing's efforts to carefully script the games and how journalists cover them.

Olympic freebies and flower-arranging amount to nothing substantive, said Bob Dietz of the New York-based Committee to Protect Journalists. "The easy stuff ... is easy" he said. "This is China turning on its hospitality and welcoming people, and it isn't just journalists getting the red-carpet treatment.

"On the substantive issues, there hasn't been much movement at all," he said. "The one human rights pledge that China made was that there would be a free media for the games -- and that just hasn't materialized."

So coverage of athletes and gold medal face-offs are acceptable. But stories about pro-Tibet protests -- even on the edge of the main Olympic venues -- are off-limits.

"I can give you a general principle: That is, the Chinese government adopts a positive and open attitude and welcomes foreign journalists coming to China and report on the Beijing Olympics," Qin Gang, a Chinese Foreign Ministry spokesman, said at a regular briefing Wednesday. He said Chinese officials were "very concerned" about reports of what had happened to the Japanese journalists, but added that: "Local officials have the right to take some measures."

Chinese authorities have been particularly sensitive about Tibet since bloody anti-government protests in March in the region's capital and surrounding provinces.

While foreign journalists regularly face troubles reporting in China, the situation is far worse for Chinese reporters who aggressive cover sensitive topics ranging from official corruption to human rights.

At least 26 Chinese journalists are in prison in China for their work, the New York-based Committee to Protect Journalists said in a statement earlier this year. According to a February report by the Paris-based Reporters Without Borders, China jails the largest number of journalists, cyber dissidents, Internet users and activists for freedom of expression.

>> Original source

By Christine Brennan - USA TODAY
August 07, 2008

The popular notion is that the story of the Beijing Olympic Games begins this Friday night, 8.8.08, as the saying goes, with the opening ceremony in the glowing-red Bird's Nest.

But that's not entirely true. The history of China's efforts to host the Games is already being written -- some chapters, in fact, are already completed -- and, so far, the plot line looks terrible for the Chinese.

If it weren't so sad, it would be almost comical, how China's leaders are trying to sabotage their own Olympic legacy. They were supposed to free dissidents. Instead, they jailed more. They said their air would be clean. But it looks like pea soup.

Things didn't get better in Tibet. They didn't get better in Sudan's Darfur. They didn't get better for the workers in China.

Journalists were promised they could carry out their work unfettered. Then the government blocked troublesome Internet sites in the press center.

Finally, in what might be their most outrageous act yet (there's still plenty of time for more), Chinese officials revoked the visa of Joey Cheek, one of the world's most charitable Olympians, banning him from the country because of his humanitarian work as co-founder of Team Darfur.

The problem with China is not its people, but its leaders. It's not one country, but two. There's the deferential, white-glove-wearing, efficient nation of 1.3 billion that just might put on the most awe-inspiring Olympics in memory.

There's also heavy-handed official China, the one doing all that damage to its people's good name. The government might as well be the smog that rolls in each day, obscuring the stunning venues, the first-class organization and the simple acts of kindness of tens of thousands of volunteers. You get the feeling it can't help itself. At a time when it so wants to join the rest of the world, when it craves being discovered and admired, it reverts to its Mao default setting.

After decades of Games held in the most agreeable places -- Calgary, Barcelona, Sydney -- we're in uncharted territory here. But it's already clear that the worst thing national Olympic committees and their athletes can do over the next 2½ weeks is to acquiesce to the Chinese leadership's outrageous positions rather than hold true to the values of their homeland because they want to be good guests.

The U.S. Olympic Committee took a few dangerous steps in that direction Wednesday when, in a previously scheduled news conference, its leaders failed to strongly stand up for Cheek, who not only was one of their own just 2½ years ago, he was so beloved he was selected to carry the U.S. flag in the 2006 closing ceremony.

Choosing his words as if he thought Chinese President Hu Jintao had sneaked into the back row to eavesdrop, USOC CEO Jim Scherr gave a lukewarm defense of Cheek: "It is unfortunate, but it's between this government and Joey as a private citizen."

No "We stand with Joey." Not a hint of "He's ours, and he's to be lauded for his efforts." No, just Citizen Cheek.

The USOC is not a political organization, but it does represent a country of many freedoms, and it must do better than that in the next 2½ weeks.

Its leaders would do well to follow the example of the U.S. athletes, who picked as their flag bearer a 1,500-meter runner who fled Sudan at 6 and lived in a refugee camp in Kenya for 10 years before settling in the United States.

Lopez Lomong also happens to be an outspoken member of Cheek's Team Darfur, saying if he won a medal in China, he would "hold an American flag and a Sudan flag" on the medal stand. That would be a perfect political statement, the kind the Chinese government and its accomplices in the International Olympic Committee have railed against for years.

That didn't bother the U.S. team captains who voted for the flag bearer. They could have hidden Lomong. Instead, they asked him to lead them into the stadium.

>> Original source

CBS NEWS / ASSOCIATED PRESS
August 06, 2008

Foreign activists unfurled pro-Tibet banners at a key Olympics venue Wednesday and spoke out against China's rights record in Tiananmen Square, in the first attempts to use the white-hot spotlight of the games to raise other issues.

One athlete, U.S. swim star Amanda Beard, also made a public political gesture, on behalf of animal rights.

All of the groups had problems with Chinese authorities, who are determined to make sure the communist government's plan for the Beijing Games to be an international showcase for the country goes off without a hitch.

Meanwhile, U.S. President George W. Bush plans to pointedly express "deep concerns" about the state of human rights in China and urge the communist nation to allow political freedoms for its citizens.

"America stands in firm opposition to China's detention of political dissidents, human rights advocates and religious activists," Mr. Bush is to say in the marquee speech of his three-nation Asia trip. "We speak out for a free press, freedom of assembly and labor rights - not to antagonize China's leaders, but because trusting its people with greater freedom is the only way for China to develop its full potential."

Mr. Bush is to deliver the address in a Bangkok, Thailand, convention center on Thursday morning to a crowd of foreign diplomats, Thai government leaders and business officials, before flying to China later that day. The White House released the text of the president's speech on Wednesday, nearly 18 hours in advance, as Mr. Bush traveled to Thailand from South Korea.

No arrests were reported despite the rare displays of dissent in the capital, where normally stringent controls over criticism of the government have been tightened even further for the 17-day Olympic competition.

Four foreign activists were led away by police after they hung pro-Tibet banners outside the Beijing National Stadium, where Friday's opening ceremony will be held.

Two men from Students for a Free Tibet each climbed a light pole in front of the so-called Bird's Nest and put up the banners at dawn, said Lhadon Tethong, the New York-based group's executive director. The other two - a man and a woman - provided support from the base of the poles, she said.

It was the first demonstration at a games venue. Beijing organizers condemned the protest.

"We express our strong opposition," said Sun Weide, spokesman for the Beijing Olympics organizing committee. "In terms of assembly and demonstrations, China has related laws and regulations. We hope that foreigners will respect the related Chinese laws and regulations."

Sun said the demonstrators were "persuaded to leave" by police, who received tips from local residents about the protest. The four have not been arrested or taken to a police station, he said.

International Olympic Committee spokeswoman Emmanuelle Moreau said organizers should expect people to "use the platform of the Olympic Games to draw attention to their causes."

"The IOC are confident Beijing city authorities will assess the situation reasonably and act with tact and understanding," she said.

Later Wednesday, three Americans spent almost an hour in the iconic Tiananmen Square criticizing Beijing's handling of issues ranging from forced abortions to the banned Falun Gong spiritual movement to pro-democracy demonstrations in 1989.

"It was important for us that there be a clear voice speaking out against the Chinese government's abuse of human rights," Rev. Patrick Mahoney, director of the Christian Defense Coalition in Washington, said in a telephone interview.

The trio also set up a banner in the square that said "Christ is King" and knelt and prayed. Brandi Swindell, national director of the activist group Generation Life, also put out seven roses in memory of those who died in the military crackdown on pro-democracy protests on and near the square in 1989.

They said plainclothes security agents and police officers tried to block the banner with umbrellas and started shoving the group when they tried to walk around the square. The agents eventually pushed them out of the area and made them sit nearby for almost an hour, checking their passports, before letting them go, Mahoney and Swindell said.

"It's so shocking being an American ... to see the blatant oppression," Swindell said.

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By RADIO FREE ASIA
August 1st, 2008

Key rights advocates and social activists across China will spend the Olympics confined to their homes under round the clock surveillance. Some have been warned off talking to the media, while others cannot be reached by phone.

Pro-democracy activist Jiang Qisheng served a four-year jail term in 1999 for "incitement to subversion" after he wrote an open letter calling for a commemoration of the victims of the 1989 armed crackdown on the Tiananmen democracy movement. Jiang frequently publishes articles in the overseas Chinese magazine Beijing Spring. He was approached by police and told to leave Beijing, Jiang's wife said:

"Police called my husband and wanted to talk to him, probably about the Olympics. Last time when police came to our home, they told us to leave the city during the Games. We turned down their request and insisted on staying. Then the police said they would put us under house arrest."  -- July 31, 2008

Constitutional scholar Zhang Zuhua was advised by police to make a trip outside Beijing during the Games:

"They want me to avoid being interviewed by foreign journalists. I told them that what they are doing has violated China's constitution and wasted taxpayers' money. I also told them that I am neither a criminal suspect, nor a terrorist and that what they are doing has no legal basis. The Games haven't started yet, but all kinds of security is now being put in place, and it doesn't feel like the friendly atmosphere you would expect at a sporting event."  -- July 31, 2008

Qi Zhiyong, a Beijing-based rights activist who lost a leg during the armed crackdown in the capital in 1989, said he had been ordered to leave the city for the duration of the Olympic Games.

"There are people watching me now. They arrived on July 22. They came to have a chat with me in mid-July, and they came again yesterday. The national security bureau told me that they were going to 'organize' me, so I asked them what they meant by 'organizing.' They didn't give the exact details of what they had in mind. But then it became clear that they wanted me to go away, to leave Beijing and go to a place far away from the Olympics venues. I said really that they should be ashamed of themselves, to say such a thing. I asked them on what basis they were saying this. They said that because I was connected to the June 4, 1989 incident, and because I was very active, and that I was implicated in Hu Jia's case, and so on, and so on. That I had never cooperated with the authorities to find a harmonious path."

"They said if I didn't go that they didn't have enough manpower, and therefore would have to take me to a detention center or prison, where they could keep an eye on me. It would be a lot easier for everyone if I just agreed to leave Beijing. I would get three meals a day whatever I chose to do, but that I absolutely must leave Beijing."--July 24, 2008

Shanghai civil rights lawyer Zheng Enchong, who acted as adviser to hundreds of evicted families from the city's urban redevelopment projects, said there were teams of 12 security personnel outside his apartment, watching him around the clock in shifts. His telephone had been cut off, and he was unable to leave his apartment. Zheng served a three-year jail term after he was accused of sending information on workers' protests to an overseas rights group. 

"The Olympics isn't supposed to be a political event. But the measures the authorities are taking right now are stricter than after June 4, 1989. They are using a lot of the same measures they employed at that time, and even more tightly enforced than before...The news of a big meeting following the killing of six Shanghai police officers had been broadcast overseas, and I think they were afraid that a lot of the newly arrived foreign journalists would approach me...for interviews...and that I would continue to give interviews."--July 24, 2008

Zha Jianguo, a former member of the banned China Democracy Party, was jailed nine years ago for "incitement to subvert state power." He has rejected attempts by police to keep tabs on him after his release and vows to continue to appeal his sentence.

"They were already watching me and following me 24 hours a day. Recently, they have had anyone coming to my home sign a register. Anyone who comes to visit me has to leave their name, address, telephone number and have their ID checked."--July 24, 2008

Bao Tong, former political secretary to late former premier Zhao Ziyang, has been under house arrest at his Beijing home since returning home from prison in the wake of the 1989 crackdown on the Tiananmen Square protests.

"I hope that we will get a full report at the National People's Congress after the Olympics are over into exactly how much money, manpower, and resources were devoted to preventing foreign journalists from reporting on China, and from blocking off the voices of ordinary Chinese people from being heard either by the Chinese government or by the international community."--July 24, 2008

Jia Jianying is the wife of jailed pro-democracy activist He Depu, who was jailed for trying to set up the banned opposition China Democracy Party (CDP). She said that from July 24 she has been unable to leave her Beijing home. 

"I can't go out any more. They called me today to inform me...There are four people [watching me]--a public security officer, two security guards, and a person from the neighborhood committee. They told me that if I needed to go out, they would take me in their car. My work unit told me that this will take effect from July 20 to Sept. 20."--July 24, 2008

Yuan Weijing is the wife of Chen Guangcheng, who was jailed for four years last year after his meticulous documentation of abuses by family planning officials in the eastern province of Shandong. She has herself been under house arrest with the couple's young daughter for three years.

"There are more people [on surveillance duty] than before. Now there are a total of about 40 people working two shifts. They are all people I haven't seen before. There are also a bunch of strangers who have been sent to watch the main street in the village. I think they have sent more people here now because it's something to do with the Olympics...The Olympic torch relay will make its way across Shandong province from July 20-31. It is going through Yantai, Qingdao, Linyi, Qufu, Tai'an, and Jinan. I think there is increased security in our village because of the torch relay."--July 9, 2008

>> Original source

By SPIEGEL ONLINE (Germany)
04 August 2008

China lost its status as the world's cheapest country for manufacturing some time ago. The momentum now seems to be shifting away from outsourcing to the Far East, with one in five Germany companies pulling production out of the country. Chinese workers, they say, are getting too expensive.

Citing fast-climbing labor costs and pesky production quality problems, a growing number of German companies are doing an about face and pulling their manufacturing operations out of China. Some are searching for countries with lower wages while others are returning production to Germany.

The Association of German Engineers (VDI) estimates that one in five of the approximately 1,600 German companies with presences in China is planning to pull out of the market, the Tagesspiegel am Sonntag newspaper reported. "Many, many firms are naïve when they enter into the Chinese market and don't even think about the fact that wages are increasing there," VDI spokesman Sven Renkel told the newspaper.

Rising energy costs, stricter environmental rules, the elimination of many tax incentives, a dearth of skilled workers and the increasing strength of the yuan against the dollar have all pushed production costs up in China. In addition, the country's 8-percent inflation rate has also driven up wages in the past year by as much as 20 percent, Harald Kayer, a partner at the consulting firm PricewaterhouseCoopers (PWC), told the paper. For some companies and industries, China is already getting to be too expensive. They're now looking to other lower-wage countries, like Bangladesh, India or Kazakhstan, where production is cheaper, or they're bringing manufacturing back to Germany, he said.

Chinese companies, too, are increasingly outsourcing production abroad, Eddy Henning, the head of corporate banking at Deutsche Bank in Beijing, told the newspaper. "Someone who just wants to produce T-shirts is more likely to go to Vietnam or Africa," he said. For investors from Europe, Romania and Bulgaria are also competitive with China when it comes to production.

According to Hans Röhm of the consulting firm Deloitte, the companies that are most likely to return to Germany are those that outsourced production out of cost considerations -- including the consumer goods industry and textiles, which both produce in mass quantities.

But manufacturers of high-quality goods are also looking at China with a more critical eye -- at least in the longterm. A dip in quality for these companies could damage their reputation. "That's why we're advising a lot of our customers to consider production in Germany," Röhm told the paper.

Four years ago, Steiff, a world-famous German company that makes high-quality teddy bears, moved part of its production to China. In early July, though, the company announced it would return all manufacturing to Germany.

"For premium products, China is just incalculable," Steiff CEO Martin Frenchen told the Stuttgarter Nachrichten newspaper in July. He said it took six months to train workers to produce the teddy bears' complicated stitching and to meet the company's standards for quality. "By then you might have already lost them to an automobile factory next door that pays more," he added. Despite the company's arduous efforts to produce high quality products in China, Steiff executives weren't satisfied with the end result, Frechen said.

The company also complained of the length of delivery times. Sometimes the ships carrying the company's stuffed animals would take up to three months to get to Germany. For sales successes like the company's stuffed Knut polar bear, of which 80,000 were sold, that waiting period was just too long.

Following a major scandal last year in which researchers discovered that some toys made in China were coated in toxic lead paint, the public's faith in production in the country was shaken, and Steiff decided to end its production in Asia.

>> Original Source

By Jill Drew - The Washington Post | The Seattle Times
August 02, 2008

Ryan Horne loves living in China. He arrived in March from Los Angeles to manage the opening of a club in the heart of the city's night-life district. Drawn by the promise of wealthy investors and an ultra-creative founder, Horne set about trying to shape the "it" factor in Beijing, that quality of sophisticated culture that defines such places as Paris, Tokyo and Manhattan.

"Every aspect is history in the making," said Horne, 25, sinking back onto one of his club's black leather couches, dotted with delicate silk pillows. A chandelier lamp and modern sculpture sat to his left. "Some people here always had money, but money without curiosity means nothing. Now there's more willingness to explore."

But not everyone savors the adventure.

With the Olympic Games just six days away, Beijing is winding tighter each day, and visitors need wander no farther than the city's bar district to experience the preparatory fervor. Police are out in force, carrying out orders to increase security and clean up the district, called Sanlitun, with zeal.

Horne has been summoned to the local police station three times in as many months for somewhat bewildering and intimidating interrogations that last for hours and probe his views on topics from Tibetan separatism to whether Jackie Chan or Jet Li has the best kung fu moves.

The last time the police wanted to see him, an officer came to the club and told an employee to send "the black guy" over.

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