Sunday, January 31, 2010

232) China Leading Global Race to Make Clean Energy

China Leading Global Race to Make Clean Energy
Tne New York Times, January 31, 2010

TIANJIN, China — China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.

China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.

These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.

“Most of the energy equipment will carry a brass plate, ‘Made in China,’ ” said K. K. Chan, the chief executive of Nature Elements Capital, a private equity fund in Beijing that focuses on renewable energy.

President Obama, in his State of the Union speech last week, sounded an alarm that the United States was falling behind other countries, especially China, on energy. “I do not accept a future where the jobs and industries of tomorrow take root beyond our borders — and I know you don’t either,” he told Congress.

The United States and other countries are offering incentives to develop their own renewable energy industries, and Mr. Obama called for redoubling American efforts. Yet many Western and Chinese executives expect China to prevail in the energy-technology race.

Multinational corporations are responding to the rapid growth of China’s market by building big, state-of-the-art factories in China. Vestas of Denmark has just erected the world’s biggest wind turbine manufacturing complex here in northeastern China, and transferred the technology to build the latest electronic controls and generators.

“You have to move fast with the market,” said Jens Tommerup, the president of Vestas China. “Nobody has ever seen such fast development in a wind market.”

Renewable energy industries here are adding jobs rapidly, reaching 1.12 million in 2008 and climbing by 100,000 a year, according to the government-backed Chinese Renewable Energy Industries Association.

Yet renewable energy may be doing more for China’s economy than for the environment. Total power generation in China is on track to pass the United States in 2012 — and most of the added capacity will still be from coal.

China intends for wind, solar and biomass energy to represent 8 percent of its electricity generation capacity by 2020. That compares with less than 4 percent now in China and the United States. Coal will still represent two-thirds of China’s capacity in 2020, and nuclear and hydropower most of the rest.

As China seeks to dominate energy-equipment exports, it has the advantage of being the world’s largest market for power equipment. The government spends heavily to upgrade the electricity grid, committing $45 billion in 2009 alone. State-owned banks provide generous financing.

China’s top leaders are intensely focused on energy policy: on Wednesday, the government announced the creation of a National Energy Commission composed of cabinet ministers as a “superministry” led by Prime Minister Wen Jiabao himself.

Regulators have set mandates for power generation companies to use more renewable energy. Generous subsidies for consumers to install their own solar panels or solar water heaters have produced flurries of activity on rooftops across China.

China’s biggest advantage may be its domestic demand for electricity, rising 15 percent a year. To meet demand in the coming decade, according to statistics from the International Energy Agency, China will need to add nearly nine times as much electricity generation capacity as the United States will.

So while Americans are used to thinking of themselves as having the world’s largest market in many industries, China’s market for power equipment dwarfs that of the United States, even though the American market is more mature. That means Chinese producers enjoy enormous efficiencies from large-scale production.

In the United States, power companies frequently face a choice between buying renewable energy equipment or continuing to operate fossil-fuel-fired power plants that have already been built and paid for. In China, power companies have to buy lots of new equipment anyway, and alternative energy, particularly wind and nuclear, is increasingly priced competitively.

Interest rates as low as 2 percent for bank loans — the result of a savings rate of 40 percent and a government policy of steering loans to renewable energy — have also made a big difference.

As in many other industries, China’s low labor costs are an advantage in energy. Although Chinese wages have risen sharply in the last five years, Vestas still pays assembly line workers here only $4,100 a year.

China’s commitment to renewable energy is expensive. Although costs are falling steeply through mass production, wind energy is still 20 to 40 percent more expensive than coal-fired power. Solar power is still at least twice as expensive as coal.

The Chinese government charges a renewable energy fee to all electricity users. The fee increases residential electricity bills by 0.25 percent to 0.4 percent. For industrial users of electricity, the fee doubled in November to roughly 0.8 percent of the electricity bill.

The fee revenue goes to companies that operate the electricity grid, to make up the cost difference between renewable energy and coal-fired power.

Renewable energy fees are not yet high enough to affect China’s competitiveness even in energy-intensive industries, said the chairman of a Chinese industrial company, who asked not to be identified because of the political sensitivity of electricity rates in China.

Grid operators are unhappy. They are reimbursed for the extra cost of buying renewable energy instead of coal-fired power, but not for the formidable cost of building power lines to wind turbines and other renewable energy producers, many of them in remote, windswept areas. Transmission losses are high for sending power over long distances to cities, and nearly a third of China’s wind turbines are not yet connected to the national grid.

Most of these turbines were built only in the last year, however, and grid construction has not caught up. Under legislation passed by the Chinese legislature on Dec. 26, a grid operator that does not connect a renewable energy operation to the grid must pay that operation twice the value of the electricity that cannot be distributed.

With prices tumbling, China’s wind and solar industries are increasingly looking to sell equipment abroad — and facing complaints by Western companies that they have unfair advantages. When a Chinese company reached a deal in November to supply turbines for a big wind farm in Texas, there were calls in Congress to halt federal spending on imported equipment.

“Every country, including the United States and in Europe, wants a low cost of renewable energy,” said Ma Lingjuan, deputy managing director of China’s renewable energy association. “Now China has reached that level, but it gets criticized by the rest of the world.”

231) The Great Firewall of China - Business Law Advisor

The Great Firewall of China: How Lessons from the Apartheid Era Can Lift the Information Curtain
by Santiago Cueto
International Business Law Advisor
January 22, 2010

Corporate Codes of Conduct Played a Major Role in the Collapse of Apartheid in South Africa and Are a Viable Means to End Digital Censorship in China.

The remarks of U.S. Secretary of State Hillary Clinton yesterday that “we stand for a single Internet where all of humanity has equal access to knowledge and ideas” echoed the stern tone of Ronald Reagan twenty years ago when he challenged Soviet leader Mikhail Gorbachev: "Mr. Gorbachev, tear down this wall!"

Fast forward to 2010 where digital walls have replaced brick and mortar to divide repressed citizens of authoritarian regimes from the world’s free flowing current of information and ideas.

Corporate Codes of Conduct a Viable Means to Challenge Digital Censorship in China

Secretary Clinton’s remarks concerning the” information curtain” dividing the world, reminded me of the apartheid era where much greater injustice and unspeakable acts against humanity were challenged and ultimately overcome through the use of corporate codes of conduct.

These corporate codes of conduct, which came to be known as the Sullivan Principles, were pioneered by the African-American preacher Rev. Leon Sullivan, a zealous promoter of corporate social responsibility.

In 1977 Rev. Sullivan was a member of the board of General Motors. At the time, General Motors was one of the largest corporations in the United States. General Motors also happened to be the largest employer of blacks in South Africa, a country which was pursuing a harsh program of state-sanctioned racial segregation and discrimination targeted primarily at the country's indigenous black population

Corporate Codes of Conduct Originally Developed to Challenge Apartheid

Rev. Sullivan developed the codes to apply economic pressure on South Africa in protest of its system of apartheid. Before the end of South Africa's apartheid era, the principles were formally adopted by more than 125 U.S. corporations that had operations in South Africa. Of those companies that formally adopted the principles, at least 100 completely withdrew their existing operations from South Africa. The principles eventually gained wide adoption among United States-based corporations and played a significant role in the collapse of that regime.

In reflecting on the success of his anti-Apartheid efforts, Rev. Sullivan recalled:

Starting with the work place, I tightened the screws step by step and raised the bar step by step. Eventually I got to the point where I said that companies must practice corporate civil disobedience against the laws and I threatened South Africa and said in two years Mandela must be freed, apartheid must end, and blacks must vote or else I'll bring every American company I can out of South Africa.”

Given the success of the Sullivan principles in ending apartheid, we should look at applying the same principles to lift the information curtain in China.

Why Multinationals Should Adopt Corporate Codes of Conduct

Google, to its credit has pioneered this movement, albeit not under the auspices of any articulated corporate code of conduct as far as I know. Google's defiance of China's censorship mandate illustrates the power of corporate social responsibility initiatives to influence and reshape the repressive policies of authoritarian regimes.

While most major multinational companies consider a presence in China critical to their future success, Google has demonstrated that even the largest of corporations are willing to forgo short term gain in the interest of an ultimate triumph over censorship--similar to how corporations sacrificed profits to challenge apartheid in the 1970s and 1980s.

In Google's case this will come at a cost of an estimated $300 million a year in revenue. Although it will hardly make a dent in Google’s coffers, it’s a step forward in the right direction. Sure, China can thumb its nose at Google and Yahoo by pointing to Baidu and Alibaba.

But it risks the alienation of countless other multinationals who could conceivably adopt corporate codes of conduct and refuse to do business with China until the Great Firewall is torn down.

While the preferred course of action of companies concerned about censorship is to avoid repressive regimes altogether, it is likely that some companies will not choose that course. Those that do not should consider a corporate code of conduct so that they can turn their involvement in oppressive systems from a potential human rights liability to a neutral or maybe even positive act of engagement.

The challenge now will be to put these ideas practice by incorporating them into diplomacy and trade policy to apply meaningful pressure on companies to act responsibly through the adoption of corporate codes of conduct.

What do you think?

P.S. A little about my interest in this area: I’ve been an advocate for corporate codes of conduct for well over a decade and authored an extensive note on the topic for the Florida Journal of International Law to address industrial oil pollution in Latin America: Oil's Not Well In Latin America: Curing The Shortcomings Of The Current International Environmental Law Regime In Dealing With Industrial Oil Pollution In Latin America Through Codes Of Conduct.
Viewed as a cutting edge proposition, the article has since been cited by numerous textbooks and academic journals including West’s Environmental Law treatise, the New York University Journal of International Law and the Georgetown University Journal of International Environmental Law.

Links to blogs that reference this article

Cueto Law Group LLC
4000 Ponce de Leon Boulevard, Suite 470 |
Coral Gables, FL 33146
Tel (305) 777.0377
Fax (305) 777.0397

230) The future of EU-China relations

Embracing the Dragon: The EU's Partnership with China

The future of EU-China relations
Center for European Reform

At a time when China's role in the world has never been more important, the CER is focusing on a number of key priorities in its foreign and domestic policy.

EU-China relations: EU-China relations are dominated by trade. The EU is China’s largest trading partner and a huge market for Chinese manufacturing goods. Unfortunately, the relationship lacks political substance and suffers from a lack of focus. The EU will not be an effective partner for China unless it can develop a more coherent and strategic approach. The dividends are potentially enormous: the more substantively the EU engages with China, the more likely China will become an active and responsible stakeholder in the international community. The CER through its high-level seminars and publications aims to facilitate that engagement.

Chinese foreign policy: China is becoming increasingly prominent in world affairs. Although Beijing remains reluctant to assume a leadership role, international circumstances have forced it to take on greater responsibilities. At a time of global recession, China finds itself at the epicentre of international efforts to reform financial mechanisms and structures through the G-20 process. The new US administration of Barack Obama has also raised the ante on a number of global issues in which China has a major stake – strategic arms control, non-proliferation, and climate change.

China and the global recession: The global financial crisis has highlighted fundamental tensions in Chinese policy-making: dependence on the globalised economy versus protectionist and autarkic tendencies; the instinct for control versus the benefits of greater transparency and accountability. In its reports and seminars, the CER will focus on these key themes in China’s modernisation process.

Climate change: China is now the world’s biggest emitter of greenhouse gases, and any international effort to limit carbon emissions will be ineffective without its active participation. Beijing is averse to accepting quantitative limits on greenhouse gas emissions; its priority at a time of global recession is to maintain economic growth. Nevertheless, there are signs that senior figures are starting to take climate change seriously, not merely to placate nagging Europeans and stave off the threat of import tariffs, but because it matters for China’s future.

Regime stability: Since the 17th Party Congress in October 2007, the tandem of President Hu Jintao and Premier Wen Jiabao has faced numerous domestic challenges. Until now, the Party has managed to consolidate its legitimacy by delivering substantial economic benefits to the population. But global recession has put these achievements in doubt. Economic growth has fallen dramatically, while unemployment and social unrest are rising sharply. Although China’s leadership has taken urgent action to reinforce political and social stability, the Party faces a constant challenge of renewal. One of the central questions the CER will be examining is the extent to which the leadership is able to manage the tension between an authoritarian political system and economic liberalisation.

See also:
Can Europe and China Shape a New World Order?

229) China's strident tone and Western governments

China's strident tone raises concerns among Western governments, analysts say
By John Pomfret
Washington Post Staff Writer
Sunday, January 31, 2010; A01

China's indignant reaction to the announcement of U.S. plans to sell weapons to Taiwan appears to be in keeping with a new triumphalist attitude from Beijing that is worrying governments and analysts across the globe.

From the Copenhagen climate change conference to Internet freedom to China's border with India, China observers have noticed a tough tone emanating from its government, its representatives and influential analysts from its state-funded think tanks.

Calling in U.S. Ambassador Jon Huntsman on Saturday, Chinese Vice Foreign Minister He Yafei said the United States would be responsible for "serious repercussions" if it did not reverse the decision to sell Taiwan $6.4 billion worth of helicopters, Patriot Advanced Capability-3 missiles, minesweepers and communications gear. The reaction came even though China has known for months about the planned deal, U.S. officials said.

"There has been a change in China's attitude," said Kenneth G. Lieberthal, a former senior National Security Council official who is currently at the Brookings Institution. "The Chinese find with startling speed that people have come to view them as a major global player. And that has fed a sense of confidence."

Lieberthal said another factor in China's new tone is a sense that after two centuries of exploitation by the West, China is resuming its role as one of the great nations of the world.

This new posture has befuddled Western officials and analysts: Is it just China's tone that is changing or are its policies changing as well?

In a case in point, one senior U.S. official termed as unusual China's behavior at the December climate conference, during which China publicly reprimanded White House envoy Todd Stern, dispatched a Foreign Ministry functionary to an event for state leaders and fought strenuously against fixed targets for emission cuts in the developed world.

Another issue is Internet freedom and cybersecurity, highlighted by Google's recent threat to leave China unless the country stops its Web censorship. At China's request, that topic was left off the table at this year's World Economic Forum in Davos, Switzerland, Josef Ackermann, chief executive of Deutsche Bank and co-chairman of the event, told Bloomberg News. The forum ends Sunday.

China dismisses concerns
Analysts say a combination of hubris and insecurity appears to be driving China's mood. On one hand, Beijing thinks that the relative ease with which it skated over the global financial crisis underscores the superiority of its system and that China is not only rising but has arrived on the global stage -- much faster than anyone could have predicted. On the other, recent uprisings in the western regions of Tibet and Xinjiang have fed Chinese leaders' insecurity about their one-party state. As such, any perceived threat to their power is met with a backlash.

A spokesman for the Chinese Embassy in Washington said China's tone had not changed.

"China's positions on issues like arms sales to Taiwan and Tibet have been consistent and clear," Wang Baodong said, "as these issues bear on sovereignty and territorial integrity, which are closely related to Chinese core national interests."

The unease over China's new tone is shared by Europeans as well. "How Should Europe Respond to China's Strident Rise?" is the title of a new paper from the Center for European Reform. Just two years earlier, its author, institute director Charles Grant, had predicted that China and the European Union would shape the new world order.

"There is a real rethink going on about China in Europe," Grant said in an interview from Davos. "I don't think governments know what to do, but they know that their policies aren't working."

U.S. officials first began noticing the new Chinese attitude last year. Anecdotes range from the political to the personal.

At the World Economic Forum last year, Premier Wen Jiabao lambasted the United States for its economic mismanagement. A few weeks later, China's central bank questioned whether the dollar could continue to play its role as the international reserve currency.

And in another vignette, confirmed by several sources, a senior U.S. official involved in the economy hosted his Chinese counterpart, who then made a series of disparaging remarks about the bureau that the American ran. Later that night, the two were to dine at the American's house. The Chinese representatives called ahead, asking what was for dinner. They were informed that it was fish. "The director doesn't eat fish," one of them told his American interlocutor. "He wants steak. He says fish makes you weak."

The menu was changed.
Tone with Europe, India
With Europe and India, China's strident tone has been even more apparent. In autumn 2008, China canceled a summit with the European Union after French President Nicolas Sarkozy met with the exiled Tibetan leader, the Dalai Lama. Before that, it had denounced German Chancellor Angela Merkel over her contacts with the Tibetan spiritual leader. And in recent weeks, it has engaged in a heated exchange with British officials over its moves to block a broader agreement at the climate conference.

At the Chinese Embassy, Wang differed on the climate issue. "China is strongly behind the idea of meeting the issue of climate change," he said, "but at the same time we think that there are some people who want to confuse the situation, and we feel the need to try to let the rest of the world know our position clearly."

China also suspended ties with Denmark after its prime minister met the Dalai Lama and resumed them only after the Danish government issued a statement in December saying it would oppose Tibetan independence and consider Beijing's reaction before inviting him again.

"The Europeans have competed to be China's favored friend," Grant said, "but then they get put in the doghouse one by one."

China's newfound toughness also played out in a renewed dispute with India over Beijing's claims to the Indian state of Arunachal Pradesh, which borders Tibet. Last summer, China blocked the Asian Development Bank from making a $60 million loan for infrastructure improvements in the state. India then moved to fund the projects itself, prompting China to send more troops to the border.

David Finkelstein, a former U.S. Army officer at the Defense Intelligence Agency who now runs the China program at the Center for Naval Analyses, said the new tone underscores a shift in China. "On the external front," he said, "we will likely see a China that is more willing than in the past to proactively shape the external environment and international order rather than passively react to it."

An example would be events that unfolded in December when 22 Chinese Muslims showed up in Cambodia and requested political asylum. China wanted to hold seven of them on suspicion of participating in anti-Chinese riots in the Xinjiang region in July.

Under intense pressure from Beijing, Cambodia sent the group home, despite protests from the United States. Two days after the group was repatriated, China signed 14 deals with Cambodia worth about $1 billion.

What the future holds
Whether this new bluster from Beijing presages tougher policies and actions in areas of direct concern to the United States is a key question, Lieberthal said. What China does after the United States sells Taiwan the weapons may provide some clues.

Even before the United States announced its plans Friday, at least six senior Chinese officials, including officers from the People's Liberation Army, had warned Washington against the sale.

Once the deal was announced, China's Defense Ministry said it was suspending a portion of the recently resumed military relations with the United States. China also announced that it would sanction the U.S. companies involved in the sale.

What happens next will be crucial. China quietly sanctioned several U.S. companies for participating in such weapons sales in the past. However, it would mark a major change if China makes the list public and includes, for example, Boeing, which sells billions of dollars worth of airplanes to China each year.

He, the vice foreign minister, warned that the sales would also affect China's cooperation with the United States on regional issues. Does that mean China will continue to block Western efforts to tighten sanctions on Iran? Bonnie S. Glaser, a China security analyst at the Center for Strategic and International Studies, said the answer will probably come soon.

France takes over the presidency of the U.N. Security Council on Monday and is expected to push for a rapid move in that direction.

228)How should Europe respond to China's rise

How should Europe respond to China's strident rise?
by Charles Grant
Centre for European Reform Bullettin, February/March 2010, Issue 70

Until very recently, many western politicians, bankers and business people were broadly optimistic about the rise of China. They assumed that as China became more developed it would become more western. As it integrated into the global economy it would play a constructive role in multilateral institutions, help western governments sort out key foreign policy challenges and permit a more open society. China's leaders seemed to understand that the economic development of their country required friendly relations with the US and other major powers.

The EU's leaders shared this optimism. But over the past year China's behaviour has changed. Relatively hard-line and nationalist elements in the leadership appear to have sidelined those with liberal and internationalist instincts. This shift is spurring the EU's governments and institutions to reappraise their China strategies.

China's foreign policy has become more assertive. Its vocal claims to the Indian state of Arunachal Pradesh have upset India's leaders. It has become less helpful to the West on the Iranian nuclear problem. It threatens the commercial interests of EU countries whose leaders meet the Dalai Lama in an official setting. Western governments have suffered increasingly powerful cyber-attacks that have been traced to mainland China. And at the Copenhagen climate change conference, China worked hard behind the scenes to scupper the kind of deal that many western countries (and poor nations) wanted.

China's political system has become more repressive. Internet censorship is tighter (prompting Google to say that it may leave China). In December Liu Xiaobo was sentenced to 11 years in prison for organising a pro-democracy petition. Moves to introduce greater democracy into local government and the Communist Party have faltered.

China's economic policies have become more nationalist. Many foreign investors in China complain about being excluded from key markets and suffering from all sorts of discrimination. China's intervention to prevent its currency rising, designed to boost exports, is fuelling protectionist pressure in many continents.

Three factors may explain this increasingly hard line:

★ China has come through the global recession better than any other large country, growing by 9 per cent in 2009. Its leaders view the western economic model as discredited. They are cocky about their success, and given that the West seems weaker they think they can assert China's interests more forcefully.

★ Yet China's leaders feel insecure. The recent unrest in Tibet and Xinjiang caught them by surprise. Rapid economic growth and urbanisation are creating huge social tensions. Endemic corruption makes local party bureaucrats unpopular. The booming housing market – fuelled by the government selling land to property speculators – means that many young middle class people cannot afford to buy flats. Few Chinese people want western-style democracy, but the leaders know their legitimacy rests on thin foundations. Hence their reluctance to allow a more open society.

★ The current leadership, led by Hu Jintao and Wen Xiabao, is due to hand over to the 'fifth generation' of leaders in 2012. There is much manoeuvring for position. Some key figures seem to be pushing a nationalist line in order to boost their support among party cadres. In China, as in most countries, nationalist policies can be popular.

American attitudes to China are palpably hardening. At some point this year the US may declare China to be a 'currency manipulator' and then apply protectionist measures. And even in the EU – which finds it so hard to get tough with anyone – governments are rethinking their China policies. What line should the EU adopt?

First, European leaders need to remind themselves of the obvious point that if they stand together they will have more clout. As an ultra-realist power, China respects strength. Too often, European states – and especially Britain, France and Germany – have sought to cultivate their own special relationships with Beijing, viewing each other as competitors. The Europeans need to agree on a single set of messages for China, so that it cannot play a game of divide and rule. And sometimes the Europeans should work with the Americans, who agree with them on issues like market access and human rights, in order to increase their leverage.

Second, the Europeans should be more willing to criticise China for reneging on commitments it has signed up to. China is in breach of some World Trade Organisation (WTO) rules and the EU should be prepared to take China before WTO disciplinary panels more often. It should also scold China for failing to ratify the International Convention on Civil and Political Rights. And rather than merely lecturing the Chinese government on human rights, the Europeans should point out that it often breaches its own constitution and laws when acting against Chinese citizens. The Europeans have learned that when they treat China deferentially they achieve very little.

Third, the Europeans should continue to engage China. But they should abandon the fiction of a 'strategic partnership', which cannot be meaningful when the values of the two sides are so different. The number of summits, 'executive to executive' meetings and 'high-level mechanisms' between the EU and China should be cut. Future summits should focus on a small number of issues on which China and the EU have mutual interests but conflicting views: the preservation of an open global trading system, China's mercantilist currency policy and climate change. If China ignores European views on these issues, the EU is less likely to keep its markets open and more likely to discourage some of the technology transfers that China wants (China's leaders say the Europeans currently transfer more useful technology than the Americans).

China's leaders may have miscalculated by underestimating the impact of their harder line on Washington and European capitals. Undoubtedly, some of them stand by the premise of the 'peaceful rise' slogan – that China's economic development requires a degree of modesty in foreign policy and good relations with the West. When the most senior leaders see the negative impact of their tougher approach, they may choose to change course. But if they maintain the hard line for a prolonged period, protectionism will flourish and some powerful countries will start working together to contain China. Those outcomes would be bad for China.

Charles Grant is director of the Centre for European Reform.

Saturday, January 30, 2010

227) Taïwan : Pékin annonce des sanctions contre Washington

Taïwan : Pékin annonce des sanctions contre Washington
LEMONDE.FR avec AFP, 30.01.2010

La Chine a suspendu samedi 30 janvier ses échanges militaires avec les Etats-Unis pour protester contre la vente d'armes américaines à Taïwan, un dossier ultra-sensible de nature à tendre des relations déjà éprouvées par l'affaire Google.

Dans un communiqué, le ministère chinois des affaires étrangères précise également avoir gelé des discussions à haut niveau sur la sécurité et annonce des sanctions commerciales à l'encontre des sociétés d'armement américaines impliquées dans la livraison d'armes américaines à Taïwan. "La coopération entre la Chine et les Etats-Unis sur des problèmes-clés internationaux et régionaux sera aussi inévitablement affectée", souligne le vice-ministre chinois des affaires étrangères He Yafei.

Le Pentagone a annoncé vendredi la vente à Taïwan de missiles antimissile Patriot, de navires chasseurs de mines sous-marines et d'hélicoptères Black Hawk pour un montant de 6,4 milliards de dollars. Ulcérée par cette livraison à un pays qu'elle considère comme l'une de ses provinces, la Chine a laissé planer la menace de "répercussions graves".

"Le projet américain détériorera sans aucun doute les relations sino-américaines et aura un impact négatif grave sur les échanges et la coopération entre les deux pays dans des domaines majeurs", avait averti plus tôt un communiqué du vice-ministre chinois des affaires étrangères, He Yafai. Pékin avait déjà interrompu ses relations militaires avec les Etats-Unis pendant plus d'un an après la précédente livraison d'armes américaines à Taïwan en octobre 2008.

"Nous regrettons que la partie chinoise ait réduit les échanges militaires", a commenté samedi le porte-parole du ministère américain de la défense, Geoff Morrell. "Nous regrettons aussi les mesures prises par la Chine contre les entreprises américaines qui transfèrent des équipements défensifs à Taïwan", a-t-il ajouté. "La décision de vendre des armes à Taïwan [...] contribue à maintenir la sécurité et la stabilité entre les deux rives du détroit de Formose", a pour sa part jugé une porte-parole de la diplomatie américaine.

Les fournitures d'armes à Taïwan par les Etats-Unis sont un dossier épineux qui provoque régulièrement la colère de Pékin. Taipei objecte que 1 500 missiles chinois sont pointés sur Taïwan et que le renforcement de l'arsenal chinois ne ralentit pas. Les Etats-Unis ont reconnu la Chine communiste en 1979, cessant du même coup de reconnaître Taïwan, mais une loi votée par le Congrès américain la même année a autorisé les Etats-Unis à vendre à Taïwan des armes défensives.

Les relations diplomatiques sino-américaines sont entrées en zone de turbulences depuis l'affaire Google. Les relations bilatérales ont en effet été mises à rude épreuve après la dénonciation par le géant américain de l'internet de cyberattaques massives venant de Chine et de la censure dans ce pays, qui ont poussé Washington à demander des explications à Pékin.

226) China vs Google: Empire strikes again

A chinese view on the conflict between Google and China, and spilling into the political realm, too. Published in a very official newspaper in China.

“Information Imperialism” and “New Berlin Wall”
By Lin Hongyu (
China Daily, January 29, 2010

The Google incident has aroused a war of words between the US and China. Hillary Clinton, US secretary of state criticized China’s cyber policies , calling them the “New Berlin Wall” that she accused of contravening international commitments to free expression. China reacted by denouncing the criticism as “information imperialism” and urged the US to respect the facts and cease using “Internet freedom” to point fingers at China.

In my opinion, three factors triggered the Google incident. Firstly, it is an ideological conflict again.
As the most important and influential countries in the world, China and US have a different ideology concept and value system. Ideological conflict was not unusual over the past years. With a different historical background and development level, China has different views on the Internet information freedom.

Unlike advanced Western countries, the Chinese society is still vulnerable to multifarious information flowing in, especially those intended to create disorder. As we know, today the west world holds the speech hegemony, flooding those countries that won’t follow their lead with aggressive rhetoric.

With their own historical experience, some western countries worry about China’s rise and still hold a Cold War mentality. Under such conditions, China has to pay more attention to Internet security than the so-called Internet freedom. According to the statistics of the State Council Information Office, China’s government had received more than 80,000 Internet complaints in recent years and a great majority of them came from western countries.

On the other side, the US holds double standards on Internet management. In the Republic of Korea, the US ally, its government requires users of YouTube and blog commentators to register their identities. The US is also not without its own free speech controversies. Just after Hillary’s speech, it was reported that FBI has illegally gained the phone records of thousands of account holders on the excuse of terrorism emergencies.

Secondly, the need of election politics fueled the case.
Periodical election politics also plays a special role in the Google incident. As we know, 2010 is US Congressional election year. The ruling Democratic Party wants to maintain its advantage in Congress. To occupy the moral high ground is a traditional tactic for the Democratic Party to win the election. Fighting for Internet freedom and making more opportunity for cyber expression is a good alternative for the Democratic Party. For instance, Democratic Sen. Joe Lieberman, chairman of the Senate Homeland Security and Governmental Affairs Committee, said he was drafting legislation to strengthen US cyber security. "Google's experience should be a lesson to us all to confront this ever growing problem aggressively and with all available means," he said in a statement.

Third, is it a smart politicized commercial advertisement?

Google, the world's top search engine, set up in 2005,. Since then, it has been struggling to compete with local market leader Baidu in China's $1 billion a year search market. Benefiting from the fast-growing Chinese economy, has grown faster than many analyst expected since 2005. However, Google are not satisfied with its about one third market share. It deems China’s internet policy as its growing bottle-neck and seeks to break it through in 2010. It is Google’s plan, to play a moral card and seek US government help. In my view, Google’s pulling-out strategy is just a politicized commercial advertisement and it has achieved its tactical target in some extents, but would lose its long-term strategic goal in the future. China has the world's biggest Internet market, with more than 384 million netizens,.and if Google quit, others will get in quickly.

In fact, Google's announcement to quit from China has shocked investors and analysts, who worry the web search leader's strategic plans, may be threatened. “For investors this is clearly a negative,” Broadpoint AmTech analyst Benjamin Schachter said in a research note. “The obvious concern is that China's growth has been solid and its market potential is enormous.” Such concerns pushed investors toward Chinese indigenous Baidu Inc, which shares more than 60 percent in China's search market. Shares of Baidu jumped almost 14 percent on January 20, while Google shares slipped 1.5 percent.

What’s the case’s impact on current Sino-US relations?
The Internet freedom will become a new quarreling issue between China and US. We are going to see some turbulence in China-US relations in the next few months. We may see some tactical concessions from China, but the general trend isn't toward compromise.

However, Sino-US economic ties will not be affected by Google’s decision to withdraw from China. In my opinion, keeping relations stable is still the main mission of both governments. In Washington, US officials tried to avoid fueling the public spat even though they said they stood by Clinton's remarks. In Beijing, China's foreign spokesman also indicated that China’s government does not want to see the dispute overwhelm cooperation with the Obama administration, which needs China’s help in reviving the world economy and diplomatic standoffs, such as the nuclear ambitions of Iran and North Korea. With the two nations joined at the hip economically, Sino-US tensions are unlikely to escalate into outright confrontation, but could make cooperating on global economic and security issues all more difficult.

Lin Hongyu is the Professor of University of International Relations in Beijing, P.R.China.The opinions expressed are his own.

Related readings:
Will Google issue affect China-US relationship?
Google case 'will not derail ties'
Google incident and US Internet strategy
Without Google? It is fine

225) China-Embraer: relacoes prometedoras

Entrevista com Guan Dong Yuan: 'Não temos medo da China. É preciso tradição'
Gilberto Scofield Jr. - Correspondente
O Globo, 6 de julho de 2008

PEQUIM. O diretor-gerente da Embraer na China, Guan Dong Yuan, não se abalou quando, há cerca de dois anos, a estatal China Aviation Industry Corp. 1 (AVIC 1) anunciou a conclusão do primeiro jato regional chinês, o ARJ21-700, lançado em dezembro de 2007. A Embraer é sócia da AVIC 2, a empresa aeronáutica que também tem o governo chinês como controlador.
Em outras palavras: o Estado que participa da construção da família de aviões brasileiros ERJ passou a fabricar, sozinho, um jato regional bastante parecido.
Guan tampouco se incomodou com o anúncio, há duas semanas, da fusão das duas empresas chinesas criando a superempresa China Aviation Industry Group. Para ele, é preciso “tradição, qualidade e trabalho? para ganhar espaço no mercado de aviação. “Isso não se constrói da noite para o dia. Por isso, não temos medo da China?, diz ele.

O GLOBO: A China anunciou a fusão de suas empresas de aviação, a AVIC 1 e a AVIC 2. A Embraer será sócia e concorrente da mesma empresa? GUAN DONG YUAN: Antes da fusão, o governo criou a China Commercial Aircraft Co. (CCAC), que vai responder pela produção dos jatos acima de 150 passageiros, uma futura concorrente da Boeing e da Airbus.
Ela pretende ter sócios estrangeiros, e para que ficasse mais atrativa, o projeto do jato regional chinês, o ARJ21-700, de 90 lugares, foi transferido para a empresa. O governo será o principal acionista, ao lado do governo de Xangai. As duas AVICs também terão participação porque vão transferir alguns de seus projetos para lá.

O senhor não tem medo de que, com o mesmo controlador, as duas empresas troquem informações? GUAN: Não. O setor de aviação já é extremamente interligado, com empresas concorrentes num país sendo sócias ou fornecedoras em outro.

Setor de aviação chinês cresce 15% ao ano O GLOBO: Em que pé está o projeto chinês? GUAN: Está em fase de testes e atrasado, mas no setor de aviação é assim mesmo. Eles deve fazer o primeiro teste ainda este ano, mas o mercado acredita que, se tudo der certo, a comercialização começa em 2010.

O jato chinês ARJ21-700 é parecido com o ERJ.

GUAN: Não é. Uma diferença grande, por exemplo, é que o motor do jato chinês fica atrás, enquanto nosso motor está embaixo da asa. É preciso deixar uma coisa clara: a Embraer tem uma carteira de clientes conquistada ao longo dos anos com a qualidade de seus produtos a preços competitivos, além de um serviço impecável no pós-venda. Tudo isso não se constrói da noite para o dia.
Por isso, digo que não temos medo da movimentação da China no setor de aviação. É preciso tradição, qualidade e trabalho para ganhar espaço neste mercado.

O que está acontecendo no setor de aviação da China? GUAN: Em 1999, o governo chinês decidiu criar duas estatais para competir entre si, a AVIC 1 e 2. A AVIC 1 ganhou destaque em aviões militares, um pouco em aviação civil e outros negócios, como autopeças e equipamentos de transporte. A AVIC 2 ficou com o setor civil e helicópteros. Hoje, assim como ocorre no setor de telecomunicações, a hora é de consolidação e ganho de escala em recursos, tecnologia, fornecedores e mão-de-obra.
Faz muito sentido.

A Embraer foi informada dos planos do governo chinês? GUAN: Eles informaram a todos, não apenas a Embraer mas também a Boeing e Airbus.

A Embraer teve um início lento na China, mas parece ter deslanchado com os 100 aviões encomendados pela Hainan Airlines. A empresa finalmente deslanchou? GUAN: O setor de aviação chinês acena com excelentes oportunidades. A China já é o segundo maior mercado de aviação do mundo em transporte de passageiros: 180 milhões em 2007. Nos últimos 20 anos, o crescimento anual do setor tem sido de 15%, em média. Eles têm uma projeção de compra de 735 aviões de até 120 lugares nos próximos 20 anos. É 10% do mercado mundial.
A frota de aviões da China hoje é de 1.200 unidades, das quais só 90 de até 120 lugares, ou seja, 7% do total. No mundo, esta fatia é de 35% do total.
Veja como podemos crescer.

Como é a participação da Embraer no mercado de aviação executiva na China hoje? GUAN: Temos 100% do mercado de aviões regionais novos e 60% do total de aviões regionais de até 120 lugares operando no país. O governo começa a mudar o perfil da infraestrutura aérea com o fim da era das construções de grandes aeroportos.
O momento é de descentralizar, dando prioridade a rotas regionais para desafogar os grandes centros.

224) China's economy: investors start to be worried

Both investors and countries whose economies are dependent on China start February increasingly worried about the direction of the Chinese economy. Monetary tightening and misallocation of resources mean that present growth expectations are unsustainable.
See the Stratfor video discussion:

223) China's economy: ready to implode?

China: Ready to implode?
Few Little Words
25 October 2009

If debt financed consumption has shown us one of the worst economic downturns of our times then what debt financed production can have for us in the pack, another major downturn for the economy which has just begun to recover?

Chinese economy is heavily dependent upon exports as they form a big chunk of its GDP. Just before financial meltdown the ratio of exports to GDP for China was as high as 40%. After the meltdown last September the exports as a percentage of GDP fell down considerably by around 30%. This means that the Chinese GDP must have suffered big time. But still we come to know that Chinese economy has grown by 8.9% in real terms. How did this happen?

China is presently continuing with its fiscal stimulus plan which if seen as a percentage of GDP is much higher than the one which is the US has provided for its economy. However, till now only a small part of that plan is actually executed in China. Then from where the Chinese miracle growth came?

One argument could be that fall in exports is more than made up by the increase in the domestic consumption. However, this is not the case. To understand the Chinese growth really will have to dig deeper to understand how the numbers are calculated in China. In China, unlike other countries, GDP numbers are measured in terms of production and not in terms of consumption, i.e. manufacturing of goods is counted in GDP but not the sales.

In the last year, there was a significant increase in bank credit in China. In fact, it increased by as much as 28%. There is also significant evidence about increase in purchase of raw materials by China. This means that the credit liquidated by the banking system is used to increase production. In normal conditions, this cannot sustain for long as soon the producer would run out of money. However, if bank is willing to lend to the producer he can produce goods for inventory.

In a situation when demand for the goods produced by these manufacturers has decreased, increasing production would essentially mean that the finished goods are rotting in the warehouses. Ultimately this cannot continue for long as one of the bank, manufacturer or channel partner would have to book losses. No economy can sustain for long if it produces goods for which there is no market. This would also have serious repercussions for the Chinese as well as the world economy which is still suffering with the pain of sub-prime crisis led financial meltdown.

Year 2008 has shown us that economic model based on debt financed consumption is not so good then Chinese idea of debt financed production looks more absurd. China, however, can continue this conundrum for a little loner than the expected owing to huge reserves, of the order of $2 trillion, but ultimately this will have to come to an end. “When” is the question and what will be the impact of that? The answer depends on the way of ending. Let’s wait and see.

Words ought to be a little wild for they are the assault of thoughts on the unthinking. -Keynes

222) Tintin na China

Reproduzo do excelente blog do Embaixador Francisco Seixas da Costa, Duas ou Três Coisas...

Tintin na China

As aventuras de Tintin vão passar a ser publicadas na China, depois de largas décadas de proibição. Com a óbvia excepção do "Tintin no país dos sovietes", porque há demónios que não convém, por ora, chamar à vida. E estou curioso com a edição do "Tintin no Tibete".

No que nos toca, os chineses terão agora oportunidade de apreciar as astúcias mercantis de Oliveira da Figueira, a sabedoria académica do professor coimbrão Pedro João dos Santos e as movimentações africanas do jornalista sem nome do "Diário de Lisboa" - as três únicas personagens portuguesas criadas por Hergé, com o primeiro apenas com alguma relevância.

Pergunto-me também de que forma as imprecações do capitão Haddock vão ser vistas pela China e nem posso a imaginar o que pensarão do já clássico insulto "bachi-bouzouk". Contudo, com o seu volume demográfico, talvez os impressionem menos os "mille milliards de mille sabords de tonnerre de Brest"..

Quanto a eventuais censuras nos álbuns, a ocorrerem, elas estariam longe de ser as primeiras: até por cá já tivemos intervenções "à Estaline", no tempo do saudoso "Cavaleiro Andante" e da nada saudosa ditadura, como em tempos lembrei aqui.

221) Carne de cachorro: acabou a festa na China...

Se é que se pode chamar de "festa" um hábito alimentar arraigado nas tradições de certas regiões da China (não em todas).
Transcrevo o post abaixo do post da correspondente do Estadão em Beijing.

Amigo ou comida?
por Cláudia Trevisan
Seção: A catástrofe, 28.01.2010 - 11:28:28

O governo chinês acaba de divulgar proposta de lei que pune com prisão de até 15 dias e multa de R$ 1.270 os que forem pegos comendo carne de cachorro, hábito amplamente difundido no país. O texto está em fase de consultas e, se receber o sinal verde, poderá ser adotado a partir de abril. De acordo com o esboço, os restaurantes que desrespeitaram a proibição serão punidos com a astronômica quantida de R$ 25 mil a R$ 127 mil.

Com o enriquecimento das últimas três décadas, os chineses passaram a ter dinheiro suficiente para adotar animais de estimação, entre os quais os cachorros são os mais populares. “Amigos ou comida?” passou a ser o slogan das entidades de defesa dos animais que combatem a prática de transformar os cães em pratos de restaurantes. Na estimativa dessas instituições, os chineses comem a cada ano cerca de 10 milhões de cachorros, muitos dos quais são mortos de maneira cruel, porque existe a crença de que a adrenalina melhora o gosto da carne. A proposta também veta o consumo de carne de gato, que também é comum, mas não tão difundido quanto a de cachorro.

Pequisa online com 100 mil internautas realizada pelo portal indicou que 52% dos votantes são favoráveis à proibição e 33% se opõem a ela. Mas a pergunta sobre a aplicação da punição teve resultados mais equilibrados: 48% disseram sim às penas de prisão e multa, enquanto 45% responderam não. A questão é como acabar com um hábito tão arraigado sem a adoção de penas rigorosas.

O fato é que meus amigos chineses acham muito difícil a proibição ser adotada. Minha professora de chinês riu quando eu falei da proposta e falou que era impossível a proibição. Outro amigo perguntou “por que podemos comer vacas e ovelhas e não cachorros?”. Respondi que não temos _pelo menos não a maioria de nós_ vacas e ovelhas como bichos de estimação. Ele não pareceu impressionado com o argumento.

PS-PRA: os comentários a esse post nem sempre são muito agradáveis...

220) China: politica cambial, sem mudancas em vista

Um leitor, E. Baldi, de meu blog principal, Diplomatizzando, fez, a propósito de um post meu,

1878) O debate sobre a "primarizacao" da economia ...:

este comentário-pergunta:
Caso possa responder, com base no texto apresentado, quais as limitações de um país vinculado ao atual esquema institucional do comércio mundial para mexer em seu câmbio? Pode-se desvalorizar à vontade, como faz a China? A pressão é unicamente política? Não há nada de direito internacional sobre isso?
Ah, e tudo se resumiria ao câmbio? Não haveriam outras medidas tão ou mais importantes?"

Não disponho, sinceramente, de tempo para elaborar a respeito, mas diria simplesmente o seguinte"
1) Não existe NENHUMA vinculação "institucional" de qualquer país pertencence ao sistema multilateral de comércio com qualquer tipo de perfil exportador ou importador. Cada um faz o que quer ou o que pode, com base na sua dotação de recursos, suas competências intrínsecas, seu dinamismo competitivo e o tino produtivo de seus empresários, de acordo com algumas regras simples desse sistema de comércio -- cláusulas de nação-mais-favorecida, reciprocidade, tratamento nacional, não-discriminação, etc. -- e com a teoria e a prática do comércio internacional, cujas bases foram lançadas duas décadas atrás por Adam Smith e David Ricardo.
2) Todo e qualquer país pode fazer o que desejar com o seu câmbio, pois nem o FMI, nem a OMC tem mandato para determinar o valor da moeda ou o regime cambial desse país, que lhe cabe decidir soberanamente.
3) O GATT-OMC pode apenas exigir respeito às suas regras COMERCIAIS, que não alcançam o câmbio, todavia. Pode haver alguma acusação de "dumping" por razões cambiais, mas isso não se sustenta numa análise stricto sensu das disposições em vigor, pois o dumping é sempre uma prática microeconômica, ao passo que câmbio é uma disposição soberana de caráter macroeconômico.
4) Não existe nenhuma "maldição" em exportar produtos primários, pois EUA, Austrália, Canadá e outros países desenvolvidos também o fazem, mas o ideal, obviamente, é acrescentar valor aos produtos, e sempre introduzir tecnologia, via pesquisa de sementes, processos de extração mais elaborados e competitivos, etc. Ser dependente de um único produto primário -- como certos países com o petróleo -- representa, de todo modo, um perigo a ser evitado, sobretudo no caso do rentismo improdutivo que tende a se estabelecer nesses casos. Não por acaso vários desses países são petro-ditaduras, totalmente corruptas e ineficientes, mas o Brasil não corre mais esse risco com o pré-sal. O único risco é o uso político dos benefícios da exploração.
5) Sobre o caso da China, remeto ao post abaixo da correspondente do Estadão em Beijing, Cláudia Trevisan, que mantém um excelente blog no site do jornal.

A China e o câmbio
por Cláudia Trevisan
Seção: Economia, 09.11.09 - 07:51:31.

Por mais que o ministro Guido Mantega queira, a adoção do câmbio flutuante não faz parte dos planos de médio prazo da China, o que na noção de tempo do antigo Império do Meio pode significar muitos anos. O país é pressionado desde o início desta década por norte-americanos e europeus a valorizar sua moeda e adotar uma política cambial mais flexível e resiste bravamente.

A estabilidade do yuan e seu baixo valor em relação ao dólar são um dos principais ingredientes da receita de sucesso do modelo de desenvolvimento da China, que em 30 anos conseguiu sair de uma posição irrelevante no comércio internacional para o posto de segundo maior exportador do mundo _a liderança deverá ser obtida até 2010.

Como disse o Nobel de Economia Michel Spence em entrevista concedida a Fernando Dantas e publicada hoje no Estadão, “todos os países em desenvolvimento que tiveram alto crescimento, sustentado por um longo período, administraram suas moedas em alguma medida”. E nenhum deles seguiu a receita de maneira mais estrita que a China. Oficialmente, Pequim possui um câmbio “flutuante administrado”, mas na prática o modelo é muito mais “administrado” do que “flutuante” e está totalmente sujeito aos interesses econômicos do país.

Desde que a crise mundial começou a se insinuar, em meados do ano passado, a cotação da moeda chinesa se mantém inalterada em relação à norte-americana, na casa dos 6,80 yuans por US$ 1,00. Como o dólar se desvalorizou no mercado internacional, isso significa que o yuan também perdeu valor em termos reais em relação às demais moedas, incluindo o real brasileiro, o que ampliou ainda mais a competividade das exportações chinesas.

A maioria dos analistas acredita que o Banco do Povo da China deverá retomar a política de apreciação do yuan em algum momento do próximo ano, depois que as exportações se recuperarem um pouco em relação à profunda queda de 2009. Mas como tudo que diz respeito à moeda, o movimento será extremamente gradual e estará longe de qualquer coisa que lembre o câmbio flutuante. O banco UBS, por exemplo, prevê que no fim de 2010 a relação entre yuan/dólar está entre 6,50 e 6,40.

Depois de 11 anos de câmbio fixo, nos quais o yuan foi cotado em torno de 8,30 por US$ 1,00, a China anunciou no dia 21 de julho de 2005 a reforma de seu sistema cambial. A mudança previa a flutuação administrada do yuan em relação a uma cesta de moedas, dentro de uma banda fixada diariamente pelo Banco do Povo da China (o banco central local).

Desde o início, as autoridades de Pequim deixaram claro que o gradualismo daria o tom de sua reforma cambial. Em mais de quatro anos de reforma, o yuan ganhou cerca de 20% em relação ao dólar. Diante da persistente apreciação do real em relação ao dólar, o ministro Mantega defendeu que todos os países do G20 adotem o câmbio flutuante. Mas nada indica que os chineses tenham intenção de mudar sua estratégia agora.

Friday, January 29, 2010

219) Brics: relações Brasil-China

Hu Jintao prepara visita ao Brasil
Cláudia Trevisan
O Estado de S. Paulo, 29.01.2010

O presidente da China, Hu Jintao, poderá fazer sua segunda visita oficial ao Brasil em abril, no momento em que o comércio bilateral aumenta e os chineses elevam seus investimentos no País. A viagem, ainda não confirmada, deverá coincidir com a segunda cúpula dos países que formam o Bric (Brasil, Rússia, Índia e China), da qual o presidente Luiz Inácio Lula da Silva será o anfitrião. Na segunda-feira, o subsecretário para Assuntos Políticos do Itamaraty, Roberto Jaguaribe, chegará a Pequim para negociar com as autoridades locais a realização da cúpula. O diplomata terá encontros semelhantes na Índia e na Rússia.

Hu Jintao esteve no Brasil em novembro de 2004, em retribuição à visita que Lula havia feito à China seis meses antes. Em maio do ano passado, Lula esteve novamente na China. Se confirmada, a visita de Hu Jintao ocorrerá no momento em que a China se consolida como maior parceiro comercial do Brasil e aumenta os investimentos e linhas de crédito ao País. O Banco de Desenvolvimento da China (BDC) concedeu em 2008 financiamento de US$ 10 bilhões à Petrobrás, em um contrato que tem como garantia a exportação de petróleo à própria China.

No ano passado houve um crescimento espetacular do comércio, a intensificação do diálogo político em todos os níveis e nova geração de investimentos e financiamentos da China no Brasil, disse ao Estado o embaixador brasileiro em Pequim, Clodoaldo Hugueney. Para ele, a relação ficou mais abrangente e com conteúdo muito mais rico.

Reflexo disso é a elaboração do Plano de Ação Conjunta 2010-2015, no qual são definidas as prioridades em todas as áreas do relacionamento bilateral, incluindo comércio, investimentos, educação e tecnologia. O texto deveria ter sido aprovado em 4 de novembro, em reunião da Comissão Sino-Brasileira de Alto Nível de Concertação e Cooperação (Cosban), a principal instituição de negociação de temas que interessam aos dois países. O encontro foi cancelado duas semanas antes, e Brasília e Pequim buscam nova data, ainda no primeiro trimestre de 2010.

A Cosban é dirigida pelo vice-presidente, José Alencar, e por um dos vice-primeiros-ministros da China, Wang Qishan. O grupo deveria se reunir a cada dois anos. O primeiro encontro foi em 2006, na China, e o segundo estava previsto para 2008, no Brasil, mas foi adiado duas vezes. É essa reunião que os dois lados tentam realizar agora.

A definição da nova data foi dificultada pelo fato de Wang Qishan ter sido designado para coordenar os trabalhos relativos à Expo 2010, que ocorrerá em Xangai a partir de maio.

A primeira cúpula do Bric ocorreu em junho de 2009 em Ecaterimburgo, na Rússia, e terminou com uma declaração favorável à maior cooperação entre os integrantes e à ampliação da participação dos emergentes nos organismos multilaterais.

A segunda cúpula é vista como um avanço na institucionalização do Bric, sigla criada em 2001 pelo economista Jim ONeill, do banco de investimentos Goldman Sachs. ONeill previu que os quatro países emergentes terão na metade do século um peso econômico maior que os seis países mais industrializados (EUA, Japão, Alemanha, Inglaterra, França e Itália).

217) China's quality of GDP

China’s Quality of GDP
by prchovanec
Blog An American Perspective from China, 26 October 2009

Last week was full of good news for the Chinese economy, at least according to official statistics. On Thursday, the government reported that China’s GDP grew at an annualized rate of 8.9% in the 3rd Quarter, putting it on track to top the “magic” 8% figure for the year as a whole. Another report, that same day, said that industrial production had expanded 13.9% in September, compared to the year before, while retail sales had grown 15.5% — both on an upward track from previous months. Profits at State-Owned Enterprises (SOEs) jumped 13% in September from a year earlier, the first increase in 13 months. Prominent articles in the New York Times and Wall Street Journal trumpeted the strength of China’s recovery.

So am I convinced? Not entirely. I’m not really a pessimist by nature, and I’d be only too happy to learn that things are looking up. But my main concern lies in a concept I’d like to introduce called “quality of GDP.”

If you Google the phrase “quality of GDP” on the Internet, you’ll find a variety of articles relating to the reliability of the way GDP statistics are gathered in different countries. Several insightful commentators have raised concerns in recent months about how reliable and accurate China’s official GDP numbers actually are, but that’s not the argument I’m making here. My concern is how even true-blue GDP figures can sometimes paint a misleading picture of the real health of an economy.

When smart analysts look at companies, they don’t just look at the announced profit figure and accept it at face value. Even if they have no reason to doubt the accounting, they try to apply a concept called “quality of earnings” to get a better sense of how the company is really doing. Frequently, reported earnings include gains or losses on one-time events like the sale of business unit or a change in accounting methods. Other times, the value of a company’s foreign-denominated assets may rise or fall with a temporary fluctuation in exchange rates. These factors may obscure the company’s underlying performance, and give a misleading impression of how it may continue to perform in the future. In some instances, a company may even adopt policies – such as special rebates on durables goods — that boost revenue today at the cost of future sales. A good analyst will figure out how to separate the wheat from the chaff, and produce an adjusted earnings figure that better captures how the business is performing on an ongoing basis. There’s no tried-and-true method, however; for arriving at the right answer; it’s all a question of applying experience and judgment to evaluate what’s really going on.

Back in March, I was asked on Chinese TV whether I thought China could achieve its target of 8% GDP growth for 2008. I said I didn’t see any reason why it couldn’t. All the government had to do was take all the laid off migrant workers and hire them to dig a hole in the ground one day and fill it up the next. Since the total would be added to National Income, the government could simply pay them enough to hit whatever GDP target it had in mind. The more important question, I said, is whether China is preparing itself for the next phase of economic growth. Focusing exclusively on GDP, as a number, is a distraction.

The example I gave may have been a little bit extreme, but it gets at an interesting and important point. GDP tells you how much the economy is producing; it doesn’t tell you whether that production is actually creating real value or not. In a free market, where people are making voluntary exchanges based on supply and demand, presumably it is, otherwise they would behave differently (unless, of course, there are major externalities that market prices aren’t taking into account, see Stiglitz, below). But when the State is either directing economic activity without regard to prices, or when it is artificially influencing the conditions of supply and demand in a way that distorts prices, the conclusion doesn’t necessarily follow. Production may actually consume more value than it creates, destroying wealth, or divert resources from more productive pursuits, yet in the short term, still count positively towards GDP.

This notion actually struck me back in high school, when we were studying Keynes. We learned, as every economics student does, that GDP = Consumption (C) + Investment (I) + Government Spending (G) + Net Exports. Keynes noted that, in times of economic recession, the government could spend, and if it taxed or borrowed from people with a higher propensity to save than consume, the increase in G would outweigh the decrease in C. But what, I asked, if the government simply went out and bought 10 trillion paper clips that nobody needed at $10 a piece? The funds would have to come from people who otherwise would have bought products they actually wanted and/or saved to invest in businesses that produce goods that meet real needs. True, the increase in G might exceed the decrease in C, raising GDP. In fact, the more the government paid for each paper clip, the better. But we’d all be left with a ton of useful paper clips instead of the things we really wanted to improve our lives. GDP would rise, but our quality of life would fall. The same reasoning can be applied to a war economy that produces tanks, planes, and ships that blow each other up. U.S. GDP surged during World War II, but don’t kid yourself: real wealth was being destroyed and/or supplanted.

Nobel Prize-winning economist Joseph Stiglitz recently published an article called “GDP Fetishism” which also discussed the shortcomings of GDP, although he approaches the issue from the opposite point of view that I do. Stiglitz emphasizes that in cases like environmental pollution, where the true costs are not reflected by the market, GDP understates the benefits of government action. Curbing production, he argues, in pursuit of some less tangible benefit (like cleaner air, or greater social equality) might actually improve quality of life. What I’m more concerned about — particularly in regards to China — is something Stiglitz mentions only in passing, the fact that GDP may overstate the real benefit of government spending or policies designed to artificially stimulate economic growth.

The “resilience” of the Chinese economy right now is based, at least in part, on several factors that I find cause for concern:

* acceleration of a 20-year pipeline of infrastructure projects into a 5-year time horizon, including many seemingly redundant projects or vanity projects, or ones where the returns are far from clear (such as the construction of entirely new cities to replace perfectly good old ones);
* reconstruction in the aftermath of the Sichuan earthquake (which needs to be done, but is actually the replacement of destroyed value, not — as growth figures imply — a form of genuine economic expansion; otherwise you could tear down the whole country just to rebuilt it and call it “growth”);
* construction of large-scale luxury condo developments that go entirely unoccupied and serve merely as investment vehicles, on the expectation of future appreciation;
* easy state-provided credit that has kept businesses — many of them poorly run and financed — from exiting sectors (such as steel) that have chronic excess capacity;
* a massive shift in resources towards the State Owned sector and away from private enterprise (including the acquisition by the State of controlling stakes in successful private companies);
* misdirection of business loans into stock market and real estate speculation, fueling bubbles in both markets;
* direct investment by government ministries in order to speculate in — and thereby prop up – the real estate market, on the misconception that a rising real estate market is a “driver” of growth (rather than a result of real demand for more and better usable space driven by business expansion and rising living standards);
* the possibility of “channel stuffing,” where wholesalers and retailers are forced to build up unsold inventories to keep factories (particularly state-owned factories) running. Ironically, this shows up in China’s official statistics as “retail sales” because in China, retail sales are counted when the manufacturer ships, not when the products is sold to a consumer.

I’m not saying everything about the Chinese economy is bad, although it might sound like that. There’s actually plenty that’s good. My main concern is that by pretending everything is wonderful, and brushing the real problems under the rug, China is missing a critical opportunity. Unlike India, which is struggling to revitalize its infrastructure, China already has the whole “building for the future” thing down pat. Bigger airports, taller skyscrapers, and more highways might be good, but they’re not the challenge China faces. Developing a vibrant service sector, improving quality and safety in manufacturing, building recognized and well-respected brands, developing more efficient and transparent capital markets, providing a social safety net that lubricates labor markets and liberates savings, moving towards full convertibility of the Renminbi, learning how to manage and grow businesses in political and social environments beyond China’s borders — these are the challenges China must master to take its economy to the next level. But I don’t see anything in the “8% growth” story that is moving China in that direction. It’s more (a lot more) of the same, and more of the same just won’t do. Count me as someone who still needs to be convinced on the “quality” of China’s current GDP figures.

The point here isn’t to pick apart China. It would be silly to say that all construction or infrastructure development in China is wasteful; it’s not. And the same (or similar) criticisms could just as easily apply to the U.S., Europe, or any other country. The real point is that — whatever economy we’re talking about — all GDP is not created equal, and we need to be asking deeper questions about whether an economy is creating wealth, not just maximizing output. To speak of “quality of earnings” (for a company) or “quality of GDP” (for an economy) is simply a reminder that numbers never speak for themselves. We need to understand the reality behind the numbers.

Possibly related posts: (automatically generated)
* China: Ready to implode?

216) Opinion: Passing the buck to China

A very interesting description of a future, when no longer the United States, but China delivers peace and security. Well, just raw futurism, with no reflections about human rights or democracy. PRA.

Op-Ed Columnist
Exit America
The New York Times, January 28, 2010

NEW YORK — I see that Gore Vidal, in an interview with the British daily The Independent, has been predicting America’s demise with scurrilous relish, awaiting the day when it takes its place “somewhere between Brazil and Argentina, where it belongs” and China reigns supreme.
The United States, he suggests, can then bow from the stage, war-drained, broken by “madhouse” politics, to become “the Yellow Man’s burden.”

I think Vidal’s lost it, as the irrepressible Christopher Hitchens points out in a recent Vanity Fair piece entitled “Vidal Loco,” but I have to say the words of the grand old man of letters echoed in my head during a recent visit to China, especially as I watched footage of the coffins of eight Chinese peacekeepers killed in Haiti being returned to Beijing.

This was a big event in China to which national television devoted many hours. The flag-draped coffins of the Chinese United Nations personnel, greeted at Beijing airport by sobbing family members and solemn Politburo members, put me in mind of numberless flag-draped American coffins returning to Dover Air Force Base from far-flung wars.

President Obama wants out of those wars. Indeed, to judge by the nine paltry minutes devoted to international affairs in a State of the Union address of more than one hour, he’s weary of America policing the globe.

When Israel-Palestine merits not a word from a president, you know the United States is turning inward.

The coffins have weighed on all Americans, however deeply repressed the pain. A fractured, draft-free America no longer has a Main Street. But somewhere out there the feeling has coalesced that some of the billions spent in Kabul could be used to create jobs at home.

China, in its “peaceful rise,” has had no such distractions. Commentators on Chinese TV made much of how the Haiti sacrifice of the eight “heroes” was part of being “good global citizens.”

But I found my mind wandering, fast-forwarding to 2040. I tried to imagine a time when such images would be frequent, when China could no longer freeload on a declining America and was obliged to step up to great power status with the attendant cost and sacrifice.

(I believe the rise of China is unstoppable. As Obama noted, Beijing is not “playing for second place.” After my last column about bulldozing Chinese development, a reader wrote describing how a new semiconductor plant in Albany, New York, only got the go-ahead after “almost two years and two million dollars to prepare the environmental impact statements” to present to “more than 100 local public meetings.” Extrapolate from that to grasp how diktat outraces democracy.)

So, jump ahead to 2040. The United States has long since withdrawn its troops from Okinawa — “If the Japanese don’t want us, we can no longer justify staying” said Democratic President Mary Martinez in 2032 — and Japan has predictably gone nuclear in the absence of a U.S. security guarantee.

Now tensions between nuclear-armed China and nuclear-armed Japan have flared in an Asia where the United States no longer serves as the offsetting power. A naval clash over disputed, gas-rich islands in the East China Sea has revived century-old World War II grievances.

Asked about the escalating conflict, a State Department spokesman in Washington says: “We believe in good global citizenship, but frankly we don’t have a dog in that fight. You’ll have to ask Beijing.”

But Beijing is busy. U.S. troops have also long since withdrawn from South Korea — “the 38th parallel will just have to take care of itself,” a departing U.S. general was heard to mutter in 2034 — and China finds itself having to deploy its own troops to restrain the increasingly wayward North Korean leader, Kim Jong-un, from his threats to reduce Seoul “to an ashtray.” A drunk-driving incident involving a Chinese general in Pyongyang and the death of three schoolchildren has prompted Kim to accuse China of acting “with imperial disdain.”

“Beijing seeks the wellbeing of all people on the Korean peninsula, regrets the Pyongyang incident, and calls for dialogue,” a Chinese foreign ministry spokesman says. The U.S. State Department has no comment but officials privately confess to a certain “schadenfreude” at Chinese difficulties.

These difficulties are not confined to Asia. A shadowy terrorist group called ARFAP (African Resources for African People) has just claimed responsibility for the kidnapping of 12 Chinese executives attending a Lusaka conference on copper extraction. Video has gone global showing the execution of two executives and threatening the murder of two more if China does not withdraw “from all predatory exploitation on the African continent.”

The United Nations Security Council (now down to four permanent veto-bearing members since the United States chose in 2037 to resign a position serving only for “sterile institutional haggling over faraway nations that do not need our counsel”) has been locked in discussion of the African crisis, but China is complaining of “paralysis.”

A State Department spokesman says, “We hope China finds a way to negotiate with ARFAP. War is never a good option. We also hope the Chinese brokered Israeli-Palestinian cease-fire in Gaza, which is unraveling, can be saved by Beijing.”

216) Cooperacao Brasil-China em satelites

Chineses e brasileiros revisam projeto do satélite Cbers
Assessoria de Comunicação do Inpe, 28.01.2010

Equipe da Academia Chinesa de Tecnologia Espacial (Cast, na sigla em inglês) está no Instituto Nacional de Pesquisas Espaciais (Inpe), em São José dos Campos (SP)
Especialistas dos dois países estão reunidas para a Revisão Crítica do Projeto (CDR) dos satélites Cbers-3 e 4. As atividades serão realizadas nos dias 2 e 3 de fevereiro, na semana que vem.

O Inpe é o responsável no Brasil pelo Programa Cbers (sigla para China-Brazil Earth Resources Satellite; em português, Satélite Sino-Brasileiro de Recursos Terrestres), parceria iniciada com a China em 1988 e que garantiu a ambos os países o domínio da tecnologia do sensoriamento remoto para observação da Terra.

Segunda geração de satélites desenvolvidos pela parceria sino-brasileira, os Cbers-3 e 4 representam uma evolução dos satélites Cbers-1, 2 e 2B, este último lançado em setembro de 2007.

O Programa Cbers possui quatro principais segmentos, denominados Segmento Espacial - Satélite, Segmento de Controle, Segmento de Aplicações e Segmento do Veículo Lançador. A CDR tratará do primeiro, que consiste no satélite propriamente dito e suas interfaces com os outros Segmentos.

O objetivo da CDR é verificar se o projeto cumpre com os requisitos estabelecidos para o satélite e seus subsistemas, com as devidas margens de projeto, para atestar que a alternativa escolhida pelos engenheiros é correta. É também objetivo da CDR verificar as interfaces do satélite com os demais segmentos.

Para chegar a esta etapa do projeto foram projetados, construídos e testados quatro modelos de satélites: Modelo Radioelétrico (RM); Modelo Estrutural (SM), Modelo Térmico (TM) e Modelo Elétrico (EM). Os trabalhos dos modelos RM, SM e TM foram realizados no Inpe e o do EM na Cast, na China. Mais informações sobre o Programa Cbers no site

Thursday, January 28, 2010

215) China, The Race to Market - Jonathan Story

Outro livro que estou lendo, simultaneamente, é este de um professor de economia política internacional (aliás, a minha matéria, no Uniceub de Brasília) do Insead, na França, e autor de um livro anterior, The Frontiers of Fortune (1999):

Jonathan Story:
China, A Corrida para o Mercado
(São Paulo: Futura, 2004, 447 p.; ISBN: 85-7413-193-8)

1. A maldição da China: viver em tempos turbulentos, 31
2. A China e os EUA: parceiros ou rivais inelutáveis, 65
3. A terra do dragão emergente: o crescimento econômico da China, 107
4. Montando o tigre: a reforma da política econômica da China, 153
5. Tateando as pedras enquanto se cruza o rio: a postura política da China, 189
6. Aplicando o princípio de Drácula: a China associa-se à OMC, 237
7. Mantendo as coisas em família: a reforma corporativa na China, 291
8. Compreendendo bem a China: a experiência multinacional, 343
9. A China no século XXI, 395

Story analisa com grande profundidade histórica e no contexto internacional a evolução politica e econômica da China, e começa reproduzindo os dados do conhecido economista historiador Angus Maddison, que comprova como a China já foi uma grande economia, tendo decaído constantemente desde então.

A China como porcentagem dos totais mundiais:
Categorias: - - - - 1820 - - - 1900 - - - 1950 - - - 2000
População - - - - - 35 - - - 25,6 - - - 21,7 - - - 21
Renda - - - - - - - 28 - - - 13,2 - - - 6,2 - - - 3,35
Renda pc Europa - - 41 - - - 16,2 - - - 6,6 - - - 3,1

Fonte: FMI e Angus Maddison, Chinese Economic Performance in the Long Term (Paris: OCDE, 1998)

214) A China e o sudeste asiatico - Paulo A. Pereira Pinto

Estou relendo com maior atenção, embora já o conhecesse desde o início da década passada, este livro de meu colega e amigo fraterno, grande estudioso das "coisas" asiáticas, em especial da China:

Paulo Antônio Pereira Pinto:
A China e o Sudeste Asiático
(Porto Alegre: Ed. Universidade UFRGS, 2000, 154 p.; ISBN: 85-7025-571-3)

O autor, diplomata de carreira, serviu muitos anos na região asiática, em especial na Ásia-Pacífico, sucessivamente em Pequim, Kuala Lumpur, Cingapura e, provisoriamente, em Xangai e Jakarta. Quando este livro foi publicado, ele se encontrava servindo como diretor do Escritório Comercial do Brasil em Taipé, Taiwan. No período recente ele foi Cônsul Geral do Brasil em Mumbai e, atualmente, é o Embaixador do Brasil em Baku, no Azerbaijão. Em 1994, Paulo A. P. Pinto coordenou a primeira missão de prospecão acadêmica à China

O livro foi prefaciado pelo conhecido especialista brasileiro na região asiática Severino Cabral, direitor do programa China, Ásia-Pacífico, da Universidade Cândido Mendes, a quem tive a oportunidade de receber em Paris, em 1994, e juntos fomos visitar alguns especialistas franceses no mundo chinês, como François Godement, no IFRI (Institut Français des Relations Internationales). Ele lembra um dos primeiros diplomatas brasileiros a ter analisado a China, com um livro publicado em 1943: Labienne Salgado dos Santos, além do próprio sociólogo Gilberto Freyre, que desde sua estada na Columbia University, nos anos 1920, entrevia um itinerário comum entre a China e o Brasil.

O sumário do livro é o seguinte:

Introdução, 15
1. Aspectos políticos e culturais das relações da China com o Sudeste Asiático, 29
2. A força motora dos vínculos econômicos do Sudeste Asiático com a China, 39
3. Da Dinastia Ming à formação da República Popular. A China como fator de estabilidade no Sudeste Asiático, 53
4. A fundação da República Popular da China e o efeito desestabilizador no Sudeste Asiático, 65
5. Vietnã - caso excepcional de intervenção da China, 79
6. As relações preferenciais da China com Malásia e Cingapura, 91
7. As forças modernas de agregação e desagregação entre a China e o Sudeste Asiático, 103
Conclusão, 123
Anexo: Relações da China com a Indonésia, Filipinas e Tailândia, 137
Referências bibliográficas, 149

Trata-se, provavelmente, do primeiro, provavelmente único livro brasileiro sobre a região, escrito de uma perspectiva brasileira e por alguém que não apenas leu, visitou e se informou sobre a região, mas que viveu lá, conviveu com os nacionais e tratou das relações entre esses países e entre eles e o Brasil no plano real, diplomático, econômico e político, não apenas de um ponto de vista teórico.

Um grande obra, uma excelente leitura, que recomendo a todos.

213) Two books on North Korea

Nothing to Envy
By Barbara Demick
Spiegel & Grau, 314 pages, $26

The Cleanest Race
By B.R. Myers
Melville House, 200 pages, $24.95

Looking North: In North Korea, an ideology of racial superiority and a grim daily existence.
The Wall Street Journal, January 28, 2010

A South Korean professor of my acquaintance recently told me about a conference he attended in Beijing last year at which he met a North Korean scholar. The man from the North approached him to follow up on a statistic that the South Korean professor had cited about the growing number of South Koreans who marry foreigners. The North Korean was aghast. "They are diluting the purity of our race," he wailed.

The North Korean's comment would not have surprised B.R. Myers, the author of "The Cleanest Race: How North Koreans See Themselves—and Why It Matters." Mr. Myers is a professor at Dongseo University in South Korea, a contributing editor of The Atlantic and an occasional contributor to the editorial pages of this newspaper's Asian edition.

In attempting to understand North Korea, Mr. Myers argues, outsiders almost invariably get it wrong. The country's dominant ideology is not Communism or Stalinism or Marxist-Leninism. Nor is it Confucianism or even the regime's governing doctrine, called Juche Thought, usually translated as "self-reliance."

The real North Korean worldview, Mr. Myers notes, is based on a belief in the unique moral superiority of the Korean race. The closest analogy is the fervent nationalist ideology that governed prewar Japan and influenced North Korea's founding fathers. Having grown up in colonial Korea, they embraced Japan's propaganda methods after coming to power in 1948. Kim Il Sung, the founder of the Democratic People's Republic of Korea—the North's full name—even had himself photographed, Hirohito-like, astride a white stallion.

Mr. Myers's reading of the North's domestic propaganda takes a scary turn when he examines attitudes toward foreigners, especially Americans. Yankees are depicted as "an inherently evil race with which Koreans must forever be on hostile terms," he says. The prevailing view of Americans is as "jackals," a reference to a short story from 1951, in which U.S. missionaries murder a Korean child by injecting him with germs. Today, North Korean textbooks refer to Americans as animals with "paws" and "snouts." A popular saying teaches that, "just as a jackal cannot become a lamb, U.S. imperialists cannot change their rapacious nature."

Humanitarian aid, from Americans or others, is explained away as tribute from an inferior state or as reparations for past misdeeds. The 2008 visit of the New York Philharmonic to North Korea was depicted there as a gesture of respect for the regime. When former President Clinton went to the capital, Pyongyang, last summer to win the release of two detained American journalists, the official media made much of the deference and contrition that he supposedly showed to dictator Kim Jong Il.

As for nuclear talks between North Korea, the U.S. and other interested parties—negotiations now in their 15th year—Mr. Myers believes that Pyongyang keeps bargaining "not to defuse tensions, but to manage them." The country has no intention of giving up its nuclear program, he says, nor does it have any intention of making peace with the U.S. To do so would be political suicide: Reaching an accord with America would raise public expectations of an improvement in living standards, the reunification of the peninsula and everything else that Washington is now accused of preventing. Any sign of internal unrest, Mr. Myers predicts, will be met with a ratcheting up of friction with Washington and Seoul.

Might that include military action? The North couldn't win a war with the U.S. and South Korea, he says, but that doesn't mean it would not be foolish enough to try. The North's propaganda machine continues to call for a "blood reckoning" with its "eternal enemy."

Mr. Myers bases his analysis on a close reading of domestic propaganda (which is different from that distributed to and aimed at foreigners) and popular culture. The worldview he describes goes a long way toward explaining the erratic behavior and seemingly bizarre thought processes of Dear Leader Kim Jong Il. His outlook may well extend more broadly, to North Korea's leadership and other elites.

But what about the vast rest of the population? A reading of Barbara Demick's "Nothing to Envy," about the lives of "ordinary" North Koreans, indicates that many of them no longer buy into the regime's propaganda. The author, a reporter for the Los Angeles Times, profiles six North Koreans who are now living in the South. All survived the "Arduous March," the propaganda machine's name for the famine of the mid-1990s that killed perhaps as many as two million, or one-tenth of the North's population. All made the dangerous decision to flee their country and build new lives in South Korea.

Ms. Demick has written a deeply moving book. The personal stories are related with novelistic detail: a woman who watches her mother-in-law, husband and son die of starvation; a boy who ends up in a prison camp for the "crime" of having crossed the border to China to look for food; a university student who gains access to forbidden Western literature and learns that most of what he had been taught about the outside world is false.

"Nothing to Envy" depicts a society in chaos, where people have lost confidence in their government but don't yet have the will or the tools to rebel. Ms. Demick doesn't offer a view of what the future holds for the totalitarian regime that has oppressed North Koreans for six decades. But the growing discontent can't bode well for the regime's long-term health.

Ms. Kirkpatrick is a former deputy editor of the Journal's editorial page.