Thursday, July 29, 2010

The rising power of the Chinese worker - The Economist

World economy
The rising power of the Chinese worker
The Economist, July 29th, 2010

In China’s factories, pay and protest are on the rise. That is good for China, and for the world economy

CHEAP labour has built China’s economic miracle. Its manufacturing workers toil for a small fraction of the cost of their American or German competitors. At the bottom of the heap, a “floating population” of about 130m migrants work in China’s boomtowns, taking home 1,348 yuan a month on average last year. That is a mere $197, little more than one-twentieth of the average monthly wage in America. But it is 17% more than the year before. As China’s economy has bounced back, wages have followed suit. On the coasts, where its exporting factories are clustered, bosses are short of workers, and workers short of patience. A spate of strikes has thrown a spanner into the workshop of the world.

The hands of China’s workers have been strengthened by a new labour law, introduced in 2008, and by the more fundamental laws of demand and supply (see article). Workers are becoming harder to find and to keep. The country’s villages still contain perhaps 70m potential migrants. Other rural folk might be willing to work closer to home in the growing number of factories moving inland. But the supply of strong backs and nimble fingers is not infinite, even in China. The number of 15- to 29-year-olds will fall sharply from next year. And although their wages are increasing, their aspirations are rising even faster. They seem less willing to “eat bitterness”, as the Chinese put it, without complaint.

Why the goons were called off
In truth, Chinese workers were never as docile as the popular caricature suggested. But the recent strikes have been unusual in their frequency (Guangdong province on China’s south coast suffered at least 36 strikes in the space of 48 days), their longevity and their targets: foreign multinationals.

China’s ruling Communist Party has swiftly quashed previous bouts of labour unrest. This one drew a more relaxed reaction. Goons from the government-controlled trade union roughed up some Honda strikers, but they were quickly called off. The strikes were widely, if briefly, covered in the state-supervised press. And the ringleaders have not so far heard any midnight knocks at the door.

This suggests three things. First, China is reluctant to get heavy-handed with workers in big-brand firms that attract global media attention. But, second, China is becoming more relaxed about spooking foreign investors. Indeed, if workers are upset, better that they blame foreign bosses than local ones. In the wake of the financial crisis, the party has concluded, correctly, that foreign investors need China more than it needs them. Third, and most important, the government may believe that the new bolshiness of its workers is in keeping with its professed aim of “rebalancing” the economy. And it would be right. China’s economy relies too much on investment and too little on consumer spending. That is mostly because workers get such a small slice of the national cake: 53% in 2007, down from 61% in 1990 (and compared with about two-thirds in America). Letting wages rise at the expense of profits would allow workers to enjoy more of the fruits of their labour.

Higher Chinese wages would also be good for the West. This may seem odd, given how much the rich world has come to rely on cheap Chinese labour: by one estimate, trade with China has added $1,000 a year to the pockets of every American household, thanks to cheaper goods in the country’s stores, cheaper inputs for its businesses and stiffer competition in its markets. Just as expanding the global labour force by a quarter through the addition of cheap Chinese workers helped to keep prices down in the West, so higher Chinese wages might start to export inflation. Furthermore, from the point of view of the global economy, labour is a resource, like land or oil. It would not normally benefit from the dwindling of China’s reserves of labour any more than from the drying up of Saudi wells.

Tomorrow’s global consumers
But in the wake of the financial crisis, things are different. Deflation is now a bigger threat than inflation. And with 47m workers unemployed in the OECD alone, labour is not holding back the global economy. What the world lacks is willing customers, not willing workers. Higher Chinese wages will have a similar effect to the stronger exchange rate that America has been calling for, shrinking China’s trade surplus and boosting its spending. This will help foreign companies and the workers they have idled. A 20% rise in Chinese consumption might well lead to an extra $25 billion of American exports. That could create over 200,000 American jobs.

Eventually, this extra spending will help the world economy return to full employment. At that point, foreign companies and consumers may miss China’s cheap coastal workers, who kept profits high and prices low. But there will still be cheap labour to be found inland and in places like India. And Chinese wages were anyway only half the story. The other half was Chinese productivity. Chinese labour costs tripled in the decade after 1995, but output per worker quintupled.

To repeat that feat, as it runs dry of crude labour, China will have to increase its supply of skilled workers. That will require a stable workforce, which stays with its employers long enough to be worth investing in. For that the government will need to relax further its system of internal passports, or hukou, which prevent migrant workers from settling formally in the city without losing their family plot back home. When labour was abundant, it suited the government to have a floating population that made few demands on urban authorities and drifted back to the family farm whenever hardship beckoned. But to maintain fast growth as the labour market tightens, China’s floating population will have to drop anchor.

As the late Joan Robinson, a Cambridge economist, once wrote, “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all”. Her quip, written in 1962, was inspired by underemployment in South-East Asia. Since then, capital has busily “exploited” workers in that region and its giant northern neighbour, much to their benefit. Now it is time for capital to invest in them.

Related items:
* China's labour market: The next China; Jul 29th 2010

Relacoes economico-comerciais Brasil-China - Marcos Caramuru de Paiva

Ainda desconhecido por chineses, Brasil vira oportunidade além do comércio
Marcos Caramuru
Folha de S. Paulo, 28.07.2010

O Brasil passou a ser visto na China como um país de oportunidades para investimentos, não só comércio.
Há quatro explicações. A primeira é a percepção de que, no vácuo da crise, as economias maduras passarão por um longo período de incerteza. A China precisa abrir o leque de parceiros.
A segunda vem do acrônimo Bric. Sem conhecer bem a nossa realidade, os empresários chineses nos veem como membros de um grupo que terá peso crescente. Percepção é tudo em suas decisões.
Eles não costumam valer-se de consultoria, nem se fiam em análises complexas sobre o local onde atuarão.
Em geral, têm dificuldades de entender as peculiaridades de uma economia de renda média como a nossa. Mas, se antes desanimavam, agora querem vencer obstáculos. A terceira razão é estratégica. A China precisa garantir o suprimento de bens que o Brasil tem em abundância, e considera não só comprar fazendas e minas mas investir em logística e infraestrutura.
Por fim, num país onde a taxa de poupança é da ordem de 50% do PIB, há mais recursos que projetos -ainda que as obras sejam muitas.
Os bancos e os fundos de investimentos estão sempre à caça de opções. Muitos poupadores desencantados com a poupança e as Bolsas querem alternativas.
O negócio Brasil passou a ser tão bem avaliado que grandes bancos estrangeiros estão fazendo esforço para mostrar que conhecem a nossa realidade e são os intermediários para ela. Alguns abriram mesas de operações em Xangai apenas para o Brasil.
Como até hoje só dois bancos brasileiros estão na China continental, com presença discreta, instituições estrangeiras com filiais ou subsidiárias nos mercados chinês e brasileiro simultaneamente aproveitam a deixa.
Nas próximas duas décadas, a China será uma economia industrial cada vez mais sofisticada e competitiva devido, sobretudo, ao fácil acesso a financiamento, à boa infraestrutura e ao esforço empresarial em inovação.
Os salários, ainda baixos em muitos locais, estão aumentando, e o yuan, no médio prazo, deve apreciar. As empresas brasileiras que souberem montar parcerias interessantes para operar na China, no Brasil e em terceiros mercados vão ganhar.
O mercado chinês seguirá tendo liquidez abundante.
Um país como o Brasil, que precisa de recursos externos para crescer a taxas altas, vai se beneficiar disso. O primeiro passo está dado, com acordos de cooperação como os do BB, Itaú, BNDES e Petrobras. Mas há mais adiante.
Exceto por atores grandes e politicamente fortes, as instituições chinesas autorizadas a investir no exterior ainda estão amadurecendo.
Se soubermos mostrar as oportunidades que nossas empresas oferecem, estaremos no caminho certo.

MARCOS CARAMURU DE PAIVA é cônsul-geral do Brasil em Xangai.

Saturday, July 24, 2010

Droits de l'Homme en Chine: rapport de Human Rights Watch

La question tibétaine, "un défi politique majeur pour la Chine"
Entretien: Nicholas Bequelin, spécialiste de l'Asie à Human Rights Watch (HRW)
Le Monde, 24.07.2010

Nicholas Bequelin, basé à Hongkong et spécialiste de l'Asie à Human Rights Watch (HRW), s'exprime à la suite de la publication, jeudi 22 juillet, d'un rapport de l'organisation de défense des droits de l'homme basée à New York, sur les exactions policières chinoises au Tibet depuis 2008.

Qu'est-ce qui a guidé l'équipe de HRW dans la rédaction de ce rapport, présenté notamment comme indépendant des organisations liées au gouvernement tibétain en exil ?

Human Rights Watch a travaillé sans aucun a priori sur ce qui s'est passé au Tibet, mais avec le souci de répondre à un problème principal, à savoir, qu'est-ce que le gouvernement chinois cherchait à cacher en verrouillant complètement l'ensemble du plateau tibétain depuis les manifestations de mars 2008 jusqu'à aujourd'hui. On peut certes, depuis, s'y rendre, mais il y a des soldats partout, des policiers armés, etc.

Au moment des évènements au Tibet, quand il a fallu alerter la communauté diplomatique ou les Nations Unis, l'une de nos principales difficultés venait du fait que la majeure partie des informations fournies par le gouvernement tibétain en exil et les organisations pro-tibétaines étaient souvent de seconde main ou invérifiables. Il fallait donc faire une enquête qui s'affranchisse de ces sources et construise un rapport à neuf uniquement sur la base d'information de première main par des témoins oculaires directs.

Nous proposons un rapport difficilement réfutable, car complètement indépendant. Nous ne pouvons pas nous prononcer sur le nombre de tués mais seulement sur la nécessité absolue de faire une enquête sur cette question, maintenant qu'il est établi que les forces de sécurité ont ouvert le feu sur des manifestants à plusieurs reprises.

Quels éléments nouveaux le rapport apporte-t-il ?

Je crois qu'on établit de façon claire que les forces de l'ordre ont tiré à balles réelles, notamment à Lhassa, Ngaba, Tonghor et Gardze (province du Sichuan). Ce sont des informations qu'on a pu recouper : au total nous n'avons utilisé que 10 à 15 % des informations recueillies pour le rapport. La position du gouvernement chinois est que les troupes n'ont jamais tiré sur les manifestants, qu'il n'y a pas eu de morts par balle. Il n'a jamais admis que des manifestants sont morts à Lhassa le 14, ni le 15. Or, on a des témoignages. Officiellement, il y a bien eu à certains moments des communiqués sur des manifestants tués ou touchés par balles, mais ils ont été immédiatement retirés. On peut donc dire que les forces de l'ordre ont bien ouvert le feu, plusieurs fois, dans des régions différentes. Il faudrait maintenant répertorier tous les autres incidents sur lesquels nous n'avions pas assez de témoignages pouvant être recoupés.

Qu'est-ce qui est caractéristique dans la réaction chinoise au soulèvement tibétain de mars 2008, et la manière dont la " normalisation " de la région a été effectuée ?

Quand on voit tout l'appareil policier déployé, les abus, la férocité de la répression, les cas de ces moines ayant imprimé à la main une centaine de tracts et qui ont pris 6 ou 7 ans de prison, on constate que les forces de sécurité agissent comme s'il s'agissait d'une situation de conflit armé, de guérilla, ou de terrorisme, et non de manifestations populaires, pour la plupart spontanées, avec des manifestants non armés. Et qui n'ont pas causé de violences graves, avec l'exception de Lhassa, où il y a eu des morts il est la vrai, mais la plupart ont eu lieu au cours d'incendies de boutiques.

A l'époque Human Rights Watch a condamné sans ambiguité la violence par les manifestants. Les manifestations n'ont pas toujours été pacifiques, il y a eu des postes de police brulées, des jets de pierre, des representants des forces de l'ordre blessés et le rapport souligne que dans un certain nombre de cas il semble que les forces de sécurité aient exercé une retenue adequate… Mais dans de nombreux cas, on ne connaît jamais l'enchaînement qui a conduit à la confrontation. Le problème fondamental reste que le gouvernement chinois n'a jamais distingué entre les manifestants violents et non-violents, qui sont tous considérés comme des séparatistes.

Les procédures judiciaires ont été extrêmement sommaires, avec un appareil judiciaire très politisé. Les sources chinoises officielles ne s'en cachent même pas. Nous détaillons dans le rapport, sur la base de documents officiels chinois, de nombreux cas de Tibetains condamnés à de lourdes peines pour des actes de protestation absolument non-violents : par exemple a Kardze, deux moines d'un monastère sont sortis agiter un drapeau. Les gens prennent peur et ferment leurs boutiques. Les deux moines sont accusés d'incitation au séparatisme et ils écopent de longues années de prison.

Les informations données par la Chine sur le nombre de personnes arrêtées et condamnées sont-elles crédibles ?

La presse chinoise a par exemple titré sur le fait que " 8 % seulement des émeutiers ont été condamnés", ce qui reviendrait à 76 personnes. Mais si on commence à regarder hors de Lhassa, donc au Sichuan, au Gansu, dans les zones tibétaines, on trouve des dizaines de condamnations. Et cela a continué dans les mois qui ont suivi. Le nombre total de gens arrêtés et condamnés est beaucoup plus élevé que ce qu'ils ont donné. Tous les accusés sont qualifiés d'"incendiaires, des pilleurs et des casseurs ", mais de nombreuses personnes ont fait des actions qui ne sont absolument pas violentes. Des actions qui selon les comptes rendus chinois eux mêmes, ne sont même pas de l'ordre à troubler l'ordre public.

Les Tibétains qui tentent de témoigner et de passer des informations à l'étranger sont condamnés très lourdement…
Au cours des deux dernières années, comme l'ont d'ailleurs bien montré les organisations liées au gouvernement tibétain en exil, les gens qui passent des informations sont condamnés pour espionnage. Des gens qui téléphonent à leur cousin à Dharamsala peuvent se retrouver avec des condamnations extrêmement lourdes. Or, le gouvernement chinois sait bien que le comportement des forces de sécurité au Tibet est en contradiction avec les normes internationales, mais aussi ses propres lois.

Après le Tibet, c'est le Xinjiang qui s'est embrasé en juillet 2009, et a connu une répression également brutale. Il y a des parallèles entre les situations dans lesquelles se trouvent aujourd'hui ces deux zones de minorités ethniques...

C'est un défi politique majeur pour l'équipe de Hu Jintao : dans les quatre sixièmes du pays, des troupes armées ont dû être envoyées pour maintenir l'ordre et la liberté de circulation et de communication y sont restreints. Les évènements d'Urumqi ont été beaucoup plus contenus : ils ne se sont pas propagés ailleurs. Au Tibet, ça s'est davantage étendu. L'une des raisons, c'est qu'au Xinjiang, les Chinois Hans constituent près de 50 % de la population, bien plus qu'au Tibet. Le terrain est plus facile, ce sont des oasis. Il y a des routes, des aéroports, on peut facilement amener des troupes. Peu de temps après les évènements d'Urumqi, le gouvernement chinois a changé le premier secrétaire du parti de la Région autonome, et en a nommé un autre qui, en rupture avec la tradition, n'a pas fait sa carrière au Xinjiang même. Un plan massif de développement a été lancé, qui va complètement transformer le territoire. Les autorités ont aussi admis qu'à la base du problème, les Ouigours étaient exposés à des discriminations socio économiques. Et puis, il y a moins de sympathie international, il y a le problème du terrorisme islamique, le régime est donc dans une situation plus confortable.

Au Tibet, oui, on va construire des autoroutes, mais aucun mot sur les discriminations. La réalité est que la pouvoir est bien plus dans une impasse au Tibet : il y a une proportion de Chinois Hans plus faible, il n'y a pas d'agriculture qu'on peut étendre comme au Xinjiang en apportant l'irrigation. Il y a aussi une bureaucratie tibétaine qui a complètement accentué les rancoeurs, en captant les ressources et les richesses, comme l'a montré le rapport de l'ONG chinoise Gongmeng en 2008. Pékin peut difficilement faire face à deux régions de minorités ethniques en révolte : le Tibet tout seul, ça passe. Le Xinjiang, aussi. Mais les deux en même temps, non. Il fallait donc qu'ils règlent au moins un des problèmes : au Xinjiang, ils vont faire ce qu'ils savent faire, moderniser et transformer le terrain indigène en terrain chinois. Faire des villes qu'on puisse lire, administrativement et militairement. Renforcer les Bingtuan [Corps de production et de construction du Xinjiang]. Au Tibet, il n'y a pas de solution rapide, il n'y a pas de plan de 5 ans qui puisse faire progresser les choses.

Qu'est-ce que cela implique pour la question tibétaine ?

Sur le long terme, cela pose la question de la résolution politique. Le débat entre archaïsme et modernité, qui fait souvent surface quand on parle de la politique chinoise au Tibet, est relégué à l'arrière plan par un problème plus grave : quand les forces de sécurité agissent de cette façon, quand tout le monde est suspect, quand des gens sont emmenés, torturés et " disparus ", ça aliène population. Cela accentue le processus de polarisation dans la société. L'attitude des forces de l'ordre éloigne la possibilité d'une solution politique pour le Tibet. Les [autorités chinoises] auraient besoin de faire comme ce qu'elles ont fait dans le reste de la Chine, et de parvenir à un processus d'accommodation, de négociation avec la société.

Propos recueillis par Brice Pedroletti

Sur le même sujet
Des militaires chinois patrouillent à Lhassa, au Tibet, le 6 août 2008 à quelques semaines de l'ouverture des Jeux olympiques de Pékin.

Les faits"
Human Rights Watch dénonce la férocité de la répression au Tibet

Les faits"
Tiananmen : un ex-étudiant arrêté à Tokyo

Les faits:
Le dissident chinois Liu Xiaobo fait appel de sa condamnation

Thursday, July 15, 2010

Crescimento economico na China em 2010 - ultrapassando o Japao

Economia chinesa desacelera crescimento no 2º trimestre
BBC Brasil, 15 de julho, 2010

O ritmo da recuperação da economia chinesa desacelerou no segundo trimestre deste ano em comparação com a taxa de crescimento anual dos três meses anteriores.

Ritmo da economia chinesa afetará retomada econômica global

A economia cresceu 10,3% no segundo trimestre em relação ao mesmo período do ano passado. No primeiro trimestre, o crescimento anual da economia chinesa havia sido de 11,9%.

A desaceleração foi atribuída às medidas do governo chinês para conter uma bolha de crédito e segurar a rápida valorização dos imóveis no país.

Apesar da desaceleração, o país ainda está no caminho para se tornar a segunda maior economia do planeta até o fim do ano.


As autoridades impuseram restrições no volume de empréstimos e investimentos para conter o aumento no preço das casas e o endividamento dos bancos públicos.

Ao divulgar os números da economia, o Escritório Nacional de Estatísticas chinês destacou o resultado até o meio do ano. Nos primeiros seis meses de 2010, o Produto Interno Bruto (PIB) do país chegou a US$ 2,55 trilhões, um crescimento de 11,1% em relação ao mesmo período do ano passado.

A meta do governo para o ano é de 8%, mas o Fundo Monetário Internacional (FMI) estima que o crescimento chinês alcance 10,5% em 1010. Esse nível de crescimento levaria a China a ultrapassar o Japão, atualmente a segunda maior economia do planeta após os Estados Unidos.

Em dados divulgados nesta quinta-feira, o Banco Central japonês disse esperar um crescimento de 2,6% em 2010, após quedas de 5,2% em 2009 e 1,2% em 2008. Já a China, mesmo durante a crise, nunca cresceu menos de 9% durante esse período.

Ritmo de recuperação

Analistas acompanham a evolução da economia chinesa, cujo demanda por produtos de consumo, infraestrutura e commodities afetará as vendas de empresas em todo o mundo e, por consequência, o ritmo de recuperação da economia global.

Nos primeiros seis meses do ano, o levantamento do escritório de estatísticas da China mostrou que as vendas no varejo cresceram 18,2% no país em comparação com o mesmo período no ano anterior, com destaque para as vendas de veículos (aumento de 37%) e equipamentos domésticos (29%).

No início do ano passado, o governo chinês pôs em vigor uma série de medidas para fomentar a recuperação econômica, que incluiu subsídios para equipamentos domésticos e incentivos fiscais para a compra de carros.

O porta-voz do escritório de estatísticas, Sheng Laiyun, disse que a desaceleração econômica de agora "será benéfica para a economia, porque evitará um crescimento muito rápido e o superaquecimento (econômico)".

Nos primeiros seis meses do ano, a inflação chinesa ficou em 2,6%, abaixo do teto de 3% fixado pelo governo.

Já os números da renda também demonstraram crescimento nos primeiros seis meses do ano: 7,5% entre os moradores das cidades (cerca de 9,8 mil yuans ou US$ 1.450 per capita, descontada a inflação) e 9,5% entre os moradores das áreas rurais (cerca de 3 mil yuans ou US$ 455 per capita, descontada a inflação).

Sunday, July 11, 2010

China-North Korea: an embarassing friendship

Security Council Blinks
The New York Times, July 9, 2010

“Lowest common denominator” is too often the standard at the United Nations. Even then, the Security Council’s new statement on the sinking of the South Korean warship Cheonan is absurdly, dangerously lame.

The Council deplored the attack and expressed “deep concern” over the findings of an international investigation that held Pyongyang responsible. But it also took “note” of North Korea’s insistence that it had nothing to do with the incident

Forty-six South Korean sailors died last March when the warship sank in disputed waters. Seoul quickly accused North Korea of torpedoing the ship but showed admirable restraint, inviting in an international team to investigate. The team did its work and agreed that a North Korean ship was responsible. South Korea produced a torpedo propeller with North Korean markings.

Afterward, Seoul and Washington both condemned Pyongyang’s actions and vowed to obtain a similarly tough Security Council statement. But all in all, South Korea continues to exercise restraint.

Which is why a clear condemnation from the Security Council was especially important. North Korea needs to know that such a brazen act of aggression will not be tolerated. And South Korea needs to know that there is diplomatic recourse in the face of such belligerence.

China, which has veto power on the Council, insisted on watering down the statement. The Obama administration could not change its mind. Beijing fears that a political collapse in North Korea would send millions of refugees streaming into China, and it has a long history of enabling Pyongyang. Even after the North exploded two nuclear devices, China continues to be its major supplier of aid, food and oil — and continues to shield it from the full effects of Security Council sanctions.

The statement “underscored the importance of preventing further such attacks or hostilities against” South Korea or in the region. But given the weasel wording about blame, it is hard to imagine that Pyongyang will listen. China has even more of a responsibility now to use its aid and its influence to curb the North’s excesses.

The United States and its partners in the long-stalled nuclear talks with North Korea — Japan, South Korea, Russia and China — must look for other ways to ease tensions on the Korean peninsula. They can start by helping the two Koreas agree on a demarcation line in the West Sea, where the Cheonan was attacked.

Thursday, July 8, 2010

Shanghai Maritime Museum -- Opening

Culture and history
Maritime museum to weigh anchor
By Chen Ye
Shanghai Daily, 2010-7-7

At the billowing sail-shaped China Maritime Museum (left), models of boats and ships and navigation equipment are on display.

THE spectacular China Maritime Museum -- shaped like a billowing sail and housing a replica of an ancient junk -- opens to all seafarers and landlubbers on Sunday in Nanhui of the Pudong New Area overlooking Hangzhou Bay.

The museum features the history and the routes of famous Chinese navigator, explorer, diplomat and admiral Zheng He (1371-1435), and commemorates his voyages around 600 years ago.

It displays around 420 models of boats and ships, valuable relics, charts, navigation equipment, and artifacts in multimedia, interactive exhibits.
The museum contains an enormous wooden replica of a ship like the ones Zheng sailed to Southeast Asia, South Asia, East Africa and -- some say -- America. The mast is 26.6 meters high. Visitors can walk around it and take photos, but no one goes aboard.
There's a surround-screen theater, a 4-D movie, interactive displays, explanations of celestial navigation, modern maritime achievements and a place where visitors can stand on the bridge and experience sailing a ship for themselves. There's also an auditorium for lectures.

The 500-million-yuan museum (US$73.8 million) covers three floors and 46,434 square meters, and has an outdoor display area. From the outside it appears like an abstract ship with a sail filled with wind, next to a sphere representing the world.
"We hope to provide the perfect place for people to learn about navigation and maritime history and culture,?says An Chenyao, director and Party secretary of the museum.
It not only includes exhibitions but also opportunities for education and academic research.

Exhibits include maps of the route of Zheng's voyages and the Da Ming Hun Yi Tu (World Map of the Ming Dynasty) drawn in 1389. It is one of the oldest, largest and best-preserved maps of the Ming Dynasty (1368-1644). There are also ancient ships?logs meticulously recording daily events.
A theater with a 270-degree surround-screen shows an eight-minute film about navigation.
For those who have always wanted to be great helmsmen, there's navigation simulator on the second level where people can experience sailing a ship, feel the wind and the rolling deck.
The Maritime and Navy Hall exhibits new technologies and achievements of China's maritime industry. It aims to create an international maritime exchange platform to enhance international shipping contact.

In the Hall of Seafarers, visitors can learn how sailors lived, ate, dressed, tattooed themselves and passed the time aboard ship.
Visitors can also learn how to tie knots.
In the Children's Center, kids put on costumes of mariners and pirates and have their pictures taken.
The museum has a cafe and restaurant.
Open: 9:30am-4:30pm (closed on Mondays)

Address: 197 Xinchengshengang Ave, Pudong
Admission: 50 yuan (30 yuan for students, 10 yuan for seniors over 70 years)
Tel: 6828-3691

How to get there:
China Maritime Museum is 75km from downtown Shanghai, 32km from Yangshan Deep-Water Port, 25km from Pudong International Airport.
Take S20 (to Pudong Airport) - S2 (to Donghai Bridge) - exit at Lingangxincheng

Read more:

Tuesday, July 6, 2010

China-Iran: nao ultrapassar as sancoes da ONU

China critica países que adotaram sanções adicionais contra o Irã
Associated Press, 06 de julho de 2010

Pequim diz que potências deveriam aplicar medidas da ONU da forma correta, não ampliá-las

PEQUIM - O governo da China disse nesta terça-feira, 6, que os EUA e outras nações não deveriam adotar sanções unilaterais contra o Irã além da resolução já adotada pela Organização das Nações Unidas (ONU) por conta do controverso programa nuclear do país persa.

"A China apoia as sanções das Nações Unidas. Mas a China também acredita que os países deveriam aplicar de maneira correta as medidas em vez em ampliá-las", disse o porta-voz da chancelaria chinesa, Qing Gang.

Ainda assim, a China afirma que seu apoio às sanções não devem ser obstáculos para os esforços pela busca de uma solução diplomática e pediu que fossem realizadas novas tentativas de retomar o diálogo com o Irã sobre o programa nuclear.

A China, um dos membros permanentes do Conselho de Segurança da ONU, não exerceu seu poder de veto em junho, quando as sanções foram aprovadas. Os chineses inicialmente eram contra a resolução por conta da proximidade econômica com o Irã, mas cedeu o apoio às medidas por conta das pressões internacionais. Pequim, porém, só concordou em respaldá-las se não comprometessem o comércio entre os dois países.

O comércio entre a China e o Irã alcançou pelo menos US$ 36,5 bilhões em 2009. O Irã supre cerca de 11% das necessidades energéticas da China e algumas empresas chinesas tem em Teerã grandes investimentos e projetos de extração de hidrocarbonetos e constroem no país persa estradas, pontes e usinas elétricas.

As sanções eram pretendidas pelas potências ocidentais pelos temores de que o programa nuclear do Irã tenha como objetivo a produção de armas nucleares. Teerã, porém, nega e diz que enriquece urânio apenas para fins pacíficos.

As novas medidas aprovadas pela ONU são direcionadas à Guarda Revolucionária Iraniana, ao programa de mísseis balísticos e aos investimentos no programa nuclear do país.

China: relacoes de trabalho sob stress

Salários e competitividade na China
José Pastore
Terça feira, 06 de julho de 2010

As pressões trabalhistas estão apertando. A China, campeã de acidentes do trabalho, acaba de aprovar uma lei que permite aos empregados levar os casos à Justiça. Estava na hora. A reforma trabalhista de 2008 definiu a arbitragem para resolver impasses, o que instigou 700 mil ações no primeiro ano, muitas a favor dos trabalhadores. A entrada recente de 40 mil empresas estrangeiras por ano transformou a oferta abundante de mão de obra qualificada em séria escassez. Tudo isso gerou muita pressão. Nos últimos cinco anos, os salários aumentaram 100% (!) em vários setores.
E a pressão continua. Passeatas, greves e até suicídios de trabalhadores forçaram inúmeras empresas multinacionais a aumentar os salários de 15% a 20% entre maio e junho de 2010. Há casos de 25% e até de 30%. São aumentos colossais, pois a estimativa de inflação para este ano é de apenas 3%.
Ao contrário do que ocorria no passado, o governo atual fechou os olhos às manifestações operárias por estar interessado em estimular o consumo doméstico e reduzir a dependência chinesa das exportações de baixo preço. As autoridades das províncias concedem nestes dias seguidos aumentos no salário mínimo. Os municípios industrializados (Shenzhen) elevaram o valor da hora extra para 300%.
Até que ponto essa disparada afetará a competitividade da China?
Os produtores industriais dizem que, nos últimos cinco anos, o peso dos salários na produção industrial passou de 2% para 12%, enquanto o lucro líquido caiu de 15% para 8%. Muitas empresas estão planejando se mudar, ou já se mudaram, para o interior do país e também para a Índia, Vietnã, Malásia, Filipinas, Indonésia e Bangladesh, onde os salários são mais baixos.
Alguns analistas não veem razões para tanto pânico, porque as vantagens comparativas da China em infraestrutura, impostos baixos, crédito fácil e cadeias de distribuição eficientes continuam enormes; e os salários chineses continuam baixos. Os operários industriais trabalham jornadas esticadas e ganham o equivalente a US$ 400 ou US$ 500 mensais (e até menos), enquanto no Japão, EUA e União Europeia ganham mais de US$ 3 mil. Gerentes e técnicos de alta especialização - raros e bem pagos - recebem cerca de US$ 2.500 por mês (média), quando no mundo desenvolvido ganham acima de US$ 5 mil mensais.
Tais comparações não acalmam as multinacionais. Elas estão de olho na Tailândia, onde o salário médio de um operário industrial é de US$ 280 mensais (média); na Índia, de US$ 200; e no Vietnã, de US$ 100.
Há que se reconhecer que a falta de mão de obra qualificada é preocupante. As empresas de maior conteúdo tecnológico não estão conseguindo reter os empregados qualificados, mesmo com os grandes aumentos salariais. Para corrigir o desequilíbrio e atender à demanda, as escolas estão modificando currículos e intensificando o trabalho.
E no Brasil, vai acabar a pressão dos preços baixos dos produtos chineses?
Essa mudança, se ocorrer, vai demorar muito tempo. As diferenças de preços entre China e Brasil são brutais. No campo de máquinas e ferramentas, por exemplo, as empresas brasileiras têm de pagar o ferro fundido na base de US$ 3 o quilo. É quanto custa "1 kg de máquina pronta" feito na China e transportado por 18 mil km. Isso ocorre com tornos, guindastes, moinhos, equipamentos médicos e também com instrumentos musicais, tecido, material gráfico e outros. Os calçados chineses - que foram sobretaxados recentemente pelo Brasil - entram pela via de Taiwan, Vietnã e Malásia, custando a metade do preço dos brasileiros (em média).
Em suma, apesar das mudanças no campo do trabalho, as vantagens comparativas da China devem perdurar por vários anos. Ademais, a alta velocidade dos avanços em infraestrutura, logística, inovações e educação ali registrada - o que não ocorre no Brasil - deverá mitigar a elevação do custo do fator trabalho naquele país. Nossa luta será dura e prolongada.


Sunday, July 4, 2010

China-Taiwan: Acordo Comercial - O Globo

Oposição critica presidente por não fazer plebiscito
Da Redação - O Globo, 30.06.2010

O acordo foi alvo de protestos da oposição em Taiwan, temerosa de que os chineses comecem a buscar a unificação com a ilha, que é independente. Mais de 30 mil pessoas fizeram protestos na capital do país, Taipei, no fim de semana. O presidente Ma Ying-Jeou foi criticado pelo Partido Democrático Progressista, de oposição, por não convocar um plebiscito sobre o acordo.

Mas as pesquisas de opinião mostram um amplo apoio da população taiwanesa para o acordo, por causa do impulso econômico que deve trazer.

Esse panorama pode mudar se o Acordo de Cooperação Econômica não criar os 260 mil empregos previstos em Taiwan. Além disso, a maioria da população quer manter sua independência da China.

— Nos últimos tempos, os chineses montaram uma agenda política por trás do acordo que não é compartilhada pelo governo Ma — disse especialista em relações China-Taiwan da Universidade de Oxford. — Faz parte de uma estratégia de longo prazo o processo de trazer Taiwan mais perto da órbita da China e, com isso, reduzir o escopo de movimentos pró-independência na ilha.

O acordo elimina tarifas para 539 produtos de exportação taiwaneses, no valor de US$ 13,84 bilhões, contra 267 itens vendidos pela China, no montante de US$ 2,86 bilhões. De acordo com projeções de economistas, isso poderia levar o crescimento da economia de Taiwan para 6% este ano. A meta oficial é de 4,72%.

Exportações de Taiwan concorrem com chinesas Os 800 itens contemplados no acordo, no entanto, são os mais básicos de milhares já programados para sofrerem redução de tarifa dentro de alguns anos. A euforia inicial pode esfriar à medida que os dois países avançarem para negociações mais árduas.

Além disso, as exportações das principais indústrias de Taiwan, como plásticos de PVC e produtos de alta tecnologia, concorrem com setores que a China quer desenvolver.

Um segundo acordo poderia aumentar a proteção à propriedade intelectual. Segundo Chiang Pin-Kung, presidente da Straits Exchange Foundation, isso é essencial para que Taiwan faça investimentos de alta tecnologia na China.

A aproximação dos dois países será uma grande conquista para o presidente chinês, Hu Jintao. Ele deixou de lado a retórica ameaçadora com que Pequim tratava a ilha.

— Para Taiwan, esse é um acordo puramente econômico, enquanto para a China é um movimento político — disse Kao Huei, do Instituto Nacional de Tecnologia Kinmen, em Taiwan.

— A longo prazo, o que a China quer obter com desenvolvimento pacífico é uma unificação pacífica com Taiwan.

Friday, July 2, 2010

Pearl Buck Biography -

Book Review
China’s Daughter

The New York Times Book Review, July 4, 2010

Pearl Buck in China
Journey to “The Good Earth”

By Hilary Spurling
Illustrated. 304 pp. Simon & Schuster. $27

In 1929, an American woman traveled from her home in China to settle her severely impaired daughter in a New Jersey institution. She did so with borrowed money, as she could not afford the fees. The parting was excruciating; she was, she recalled, “nearly destroyed by grief and fear.” The house felt empty on her return to Nanjing, but she knew precisely what to do: “This I decided was the time to begin really to write.”

While her younger daughter was at nursery school, she chained herself every morning — another madwoman in the attic — to a battered typewriter. (The 9-year-old she left in America had made a sport of flinging porridge and dirt at the keys.) She felt her story already formed, at the tips of her fingers, and so it must have been: Five months later, a completed manuscript sailed to America. Published in 1931, “The Good Earth” spent two years at the top of the best-seller list and won its author a Pulitzer Prize. Pearl Buck later became the first American woman to win a Nobel for literature.

Buck lived in interesting times, and in interesting places. The child of a Presbyterian missionary to China, she grew up amid bandits, beggars, lepers, typhoons, floods, rebellions, famine, sinister mobs, marauding soldiers, opium clouds. Hers was a fairy-tale childhood of the bleak and semi-tragic variety. Before her birth, her mother had lost a child each to dysentery, cholera, malaria. As Pearl explored the backyard, she stumbled upon tiny limbs and mutilated hands, the remains of infant daughters left to die. “Where other little girls constructed mud pies,” Hilary Spurling writes evenly, “Pearl made miniature grave mounds.” She was 8 years old before she saw running water.

Buck’s father, Absalom Sydenstricker, was a fanatical man with a healthy martyr complex, “proud of his ability to whip up quarrels with himself at the center.” Daily he ventured out to save souls. Daily he was spit upon, cursed, stoned in the street. He produced few converts but plenty of frustration. While he devoted himself to God, Buck’s mother gave herself over to grief and rage. It did not help that her husband never really believed that women had souls, or that the Chinese were people. Money was tight, the more so as Sydenstricker refused to spend any on his wife or daughters. There was every reason why young Pearl should throw herself into the pages of Dickens, her narcotic of choice and her sole link to the Anglo-­Saxon world. Well before she was 10 she determined to be a novelist, as enchanted by ancient Chinese epics as by the Western canon, of which she made quick work. For a period of her childhood she reread all of Dickens annually.

A blond-haired, blue-eyed Chinese girl, Pearl grew up an oddity and remained one. She had no place in the colonial caste system of her adopted country. English was her second language; even as an adult she thought in Chinese. In 1910, she enrolled as a freshman at Randolph-Macon Woman’s College in Virginia. Everything about her was wrong, from the cut of her jacket to the braids down her back. “Girls came in groups to stare at me,” she remembered a half-century later. As alien as she seemed to it, Randolph-Macon must have felt like a cloister to her; she was fresh from a volunteer job teaching ex-brothel workers and sex slaves.

She drew crowds again after her marriage in 1917 to John Lossing Buck, an American agricultural economist stationed in China. With him she ventured into the interior of the country, the first white woman the villagers had seen. They mobbed around her, peeped under her doors, tore at the sides of her sedan chair. Much from those trips would, Spurling notes in “Pearl Buck in China,” “be absorbed and distilled a decade later in the magical opening sequence of ‘The Good Earth.’ ” For Lossing, Buck cooked without running water or heat or light. And with Lossing, she went to seed. As the marriage dissolved, the Bucks endured several exiles, including a hair-raising one in 1927 when Nationalist soldiers drove them as refugees to Japan. The house to which they would return was in shambles; its kitchen had served as a stable. Buck set about restoring it to order. Throughout these pages she does an astonishing amount of housework.

Her wrenching trip to America with her daughter, and its improbable aftermath, occur more than three-quarters of the way through this sparkling biography. ­Spurling’s is very much the story of what turned an American missionary’s daughter into a writer; of how literature is extracted from life; of what a woman (and a mother) must do to perform that operation; of what fueled Buck’s astonishing output (39 novels, 25 works of nonfiction, short stories, children’s books, translations and countless magazine articles). The American years and the fate of “The Good Earth” mostly fall outside Spurling’s purview, which is just as well: the end is not a pretty one, as opulent and disillusioning as the early years were indigent and fantastical. (You really don’t want to hear about the white mink or the limo with the silver-monogrammed door.) A revelation to America, “The Good Earth” would be an embarrassment to China, which banned it. Like many political innocents, Buck caused her share of dust-ups. Accused in the United States of being a Communist, she was denounced by the Communist Chinese as an imperialist. Time magazine banned her from its pages. China forbade her return, with Nixon, in 1972.

From her evangelical childhood Buck emerged with an abiding faith in the power of fiction. She also subscribed to a selective amnesia: “I have the habit of forgetting what I do not care to remember,” she conceded. (Nor did she believe in reading over what she had written. That was what husbands were for.) There was plenty to obliterate, from the Boxer Rebellion to the years Buck lived in the same house with her feuding father and husband, as well as two small children, one of them compromised. The amnesia also came in handy on the page: her portrait of her mother reads, Spurling notes, “more like a biography of the Statue of Liberty than an actual human being.”

The author of widely praised biographies of Henri Matisse and Sonia Orwell, Spurling is left to contend not only with a great body of Buck’s unreliable autobiographical works, but also with a dearth of documentary evidence and an absence of intimates. Working within those confines, she has fashioned an extraordinary portrait, rich in detail, ambitious in scope, with a vast historical backdrop that informs but never overwhelms its remarkable subject. Precisely and vividly she restores the ordeals Buck preferred to forget. There were a great number of them, both before and after the seismic publication of “The Good Earth.” Unsurprisingly, Buck’s marriage would fall apart. More surprisingly, she would fall in love with and marry her publisher. The girl who collected mutilated body parts would, late in life, adopt four additional children, then three more.

Spurling makes no outsize claims for Buck, who was prescient about China’s ascent as early as 1925. Nor does she make great claims for Buck’s work, with the exception of “Fighting Angel,” a life of her father, which Spurling believes “has the makings of a 20th-century classic.” Throughout her gripping account, ­Spurling’s touch is sure, light and nuanced. Generally she acknowledges the “heavy, cumbersome, potentially toxic baggage” Buck carried with her but leaves us to unpack it. We are to connect the dots between the boorish husband and the fictional scenes of marital rape; the doctrinaire father and Buck’s fierce aversion to racism, sexism and, for that matter, missionaries. Vested early on in the power of narrative, Buck waged her own battle against ignorance and superstition, powerfully bridging two cultures that seemed mutually incomprehensible. In effect, she turned her father’s mission on its head.

Stacy Schiff’s new book, “Cleopatra: A Life,” will be published in November.
A version of this review appeared in print on July 4, 2010, on page BR13 of the Sunday Book Review.

Excerpt: ‘Pearl Buck in China’ (June 9, 2010)
Books of The Times: ‘Pearl Buck in China’ by Hilary Spurling (June 9, 2010)

China-Taiwan: Accord Comercial - Le Monde

Point de vue
Taiwan sous influence: les risques du rapprochement Pékin-Taipei

Le Monde, 02.07.2010

Jean-Pierre Cabestan, professeur de sciences politique, Tanguy Le Pesant, maître de conférences

La signature, mardi 29 juin 2010, d'un accord-cadre de coopération économique (Economic Cooperation Framework Agreement ou ECFA) entre Pékin et Taipei marque une nouvelle étape dans la libéralisation des échanges économiques mais aussi du rapprochement politique entre les deux rives du détroit de Formose.

Il est clair que, sur le plan commercial, cet accord est globalement favorable à Taiwan. La plupart des secteurs économiques de l'île vont profiter des suppressions des droits de douanes introduites (pétrochimie, informatique, fret, etc.).

En outre, les banques et les compagnies d'assurance taiwanaises vont pouvoir accéder plus facilement au marché chinois. L'on estime que cet accord apportera près de 6% de croissance supplémentaire d'ici 2020. Par ailleurs, l'ECFA devrait aussi favoriser la négociation d'accords de libre-échange entre Taiwan et ses principaux partenaires asiatiques. Plus généralement, depuis l'élection du président Ma Ying-jeou et le retour du Kuomintang (KMT) au pouvoir en 2008, la mise en place des liaisons aériennes directes, la multiplication des accords entre Pékin et Taipei et l'arrivée en masse de touristes chinois à Taiwan ont apporté un supplément d'activité qui a été bien accueilli par la société insulaire.

Cependant, l'ECFA doit aussi être perçu comme un accord politique qui, à défaut de la négociation d'un traité de paix ou de mécanismes de construction de la confiance, symbolise un rapprochement sans précédent entre Pékin et Taipei. Présenté de part et d'autre comme une grande victoire, il accélère une intégration économique entre les deux rives du détroit qui n'est pas sans risques pour Taiwan.

Tout d'abord, certaines industries en déclin vont souffrir et probablement voir leur disparition s'accélérer. Certes, l'agriculture restera protégée mais son coût risque d'apparaître de plus en plus prohibitif. Ensuite la dépendance de Taiwan, déjà forte (41% de ses exportations) à l'égard du marché chinois va s'accroître plus encore (62% d'ici 2020) et ceci au moment où les coûts de production y augmentent rapidement, faisant peser de nouvelles incertitudes sur les immenses investissements taiwanais déjà réalisés (estimés à 150 milliards de dollars et représentant environ les deux tiers de l'ensemble des investissements extérieurs de l'île). L'appréciation prévisible du yuan va aussi contribuer à rendre les délocalisations en Chine moins intéressantes que celles à destination de l'Asie du Sud-Est voire de l'Asie du Sud.

Or le KMT semble avoir tout misé sur la Chine, sur les plans à la fois économique et politique, se plaçant dès lors dans une position de faiblesse par rapport à Pékin. Au lieu de chercher à trouver un terrain d'entente avec l'opposition indépendantiste afin de renforcer la main de Taipei, le gouvernement de Ma a négocié en grande opacité cet accord. Dominé par les continentaux, c'est-à-dire les Chinois qui sont arrivés à Taiwan dans les malles de Chiang Kai-shek en 1949, le KMT a rétabli des relations étroites avec le Parti communiste chinois. Il a aussi renoué avec un nationalisme chinois d'un autre âge - délaissant l'identité et le parcours historique spécifiques de Taiwan - pour privilégier une idéologie "Grande Chine" des enfants de "l'Empereur Jaune" assez proche de celle des dirigeants de Pékin, eux-mêmes aujourd'hui réconciliés avec Confucius. Ma estime qu'il est plus utile d'apaiser la Chine populaire que de continuer de jouer la carte de la démocratie, refusant de serrer la main au Dalaï Lama ou d'accorder un visa à Rebiya Kader, la présidente du Congrès ouïgour mondial, le mouvement en faveur d'une autonomie politique véritable au Xinjiang.

En outre, la rapide libéralisation des échanges et le développement du tourisme ont donné les moyens à la Chine d'exercer une influence plus directe sur la société taiwanaise. Les secteurs de l'économie insulaire et les milieux d'affaire tributaires de bonnes relations avec Pékin ne cessent d'augmenter. Ainsi, la prise de contrôle, fin 2008, du groupe China Times, qui possède l'un des trois grands quotidiens de l'île et plusieurs chaînes de télévision, par la société taiwanaise Want Want dont 90 % de l'activité est basée en Chine a provoqué l'inquiétude de nombreux observateurs tant ce groupe affiche aujourd'hui des positions favorables à Pékin.

Cette évolution a aussi placé le Parti démocrate progressiste (PDP), la principale formation d'opposition, de tendance indépendantiste, dans une position plus délicate. Dénonçant l'ECFA, il en conteste plus la forme que le fond tant il lui sera difficile, s'il revient au pouvoir de remettre en question la plupart des accords passés. C'est dire si Taiwan est désormais sous l'influence de Pékin, évolution à l'égard de laquelle le protecteur américain ne peut rester indifférent.

A première vue généreux, bienveillant et flexible, le grand frère chinois n'a en réalité rien cédé sur le fond au benjamin taiwanais. Le statut international de la République de Chine, le nom officiel de l'île, ne s'est que très marginalement amélioré. Son existence et sa souveraineté restent contestées par Pékin. Et surtout sa sécurité n'est pas mieux garantie. Depuis 2008, le nombre de missiles de l'Armée populaire de libération braqués contre Taiwan n'a pas diminué mais augmenté (1 500 en 2010), de même que ses capacités aériennes et navales à imposer un blocus de l'île. Dans sa campagne électorale, Ma avait déclaré vouloir renforcer l'effort de défense mais il n'a pu tenir ses engagements : le budget de l'Armée reste très en deça des 3% du PIB promis. Certes, il a poursuivi la modernisation des matériels mais la Chine dénonce aujourd'hui avec de plus en plus de virulence et de menaces de rétorsions les livraisons d'armements accordées par les Etats-Unis.

De fait, les objectifs du PC chinois restent non seulement, grâce à la mise en œuvre d'une habile politique de front uni, l' "hongkongisation" économique et politique de Taiwan mais aussi le désarmement, la neutralisation progressifs de l'île. Pékin espère que de plus en plus sous influence, Taiwan aura perdu l'esprit de défense dont elle aurait besoin pour maintenir son indépendance de fait et donc pour choisir librement son avenir. Affichant un soutien officiel à la détente entre Pékin et Taipei, Washington est inquiet de la tournure que prend le rapprochement actuel. En effet, alors que l'ensemble de l'Asie - du Japon à l'Inde en passant par Corée du Sud et l'ASEAN - se prémunit contre le risque de sécurité nouveau que présente la montée en puissance de la Chine et de son outil militaire, Taiwan, quoique protégé par les Etats-Unis, donne l'impression d'avoir perdu tout esprit de résistance face au plus puissant pays autoritaire du monde. Combien de temps pourra continuer ce jeu d'équilibrisme ? Quoique le PDP ne soit pas encore en mesure de l'emporter sur le KMT dans un avenir prévisible, les élections taiwanaises locales de la fin de l'année nous donnerons sans doute des éléments de réponse.

Jean-Pierre Cabestan est professeur de science politique à l'Université Baptiste de Hong Kong et chercheur associé à Asia Centre at Sciences Po. Tanguy Le Pesant est maître de conférences à l'Université nationale centrale de Taiwan. Ils ont récemment publié L'esprit de défense de Taiwan face à la Chine : la jeunesse taiwanaise face à la tentation de la Chine, L'Harmattan, 2009.
Jean-Pierre Cabestan, professeur de sciences politique, Tanguy Le Pesant, maître de conférences

China's Financial Power - Foreign Affairs magazine

Coping With China's Financial Power
Beijing's Financial Foreign Policy

Ken Miller
Foreign Affairs, July/August 2010

KEN MILLER is CEO and President of the merchant banking firm Ken Miller Capital LLC, Director of the USA Pavilion at the 2010 Shanghai World Expo, and a member of the U.S. State Department's Advisory Committee on International Economic Policy.

China's approach to economic development has turned the country into a lopsided giant, an export juggernaut with one huge financial arm. Following the reforms launched by Deng Xiaoping in 1979, Chinese businesses began using cheap labor and cheap capital to compete on the world market, with ever-increasing effectiveness. Today, Beijing continues to subsidize exports heavily. It does so directly, through favorable loans to businesses and favorable exchange rates to foreign buyers of Chinese goods. And it does so indirectly, through what economists call "financial repression," whereby the government imposes controls on the investment of Chinese citizens that allow it to funnel capital into Chinese businesses. The People's Bank of China has gathered a good portion of the enormous trade profits and cash inflows that have resulted. At the end of 2009, it held $2.4 trillion worth of foreign exchange. This is the largest amount of foreign exchange owned by any central bank in the world -- and it does not even reflect the reserves held by China's major commercial banks. What is more, the figure is likely to grow by another $300 billion in 2010.

Never before has China had this much financial might, and it is now experimenting with how best to use it in its relations with other states. Reintegrating Taiwan is an essential goal of China's foreign policy overall, but the principal aim of China's financial foreign policy is to stimulate economic growth and job creation at home. In pursuing this goal, the government enjoys considerable legitimacy: it is supported by the pride of a nation that is finally moving to a central place in the world order. Corruption, rising inequality, restricted freedoms, and environmental damage are challenges to the Chinese Communist Party, but the CCP's hold on power is likely to remain secure so long as it can continue to develop China's economy and create jobs.

Copyright © 2002-2010 by the Council on Foreign Relations, Inc.
All rights reserved.

Return to Article: Coping With China's Financial Power
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China-Taiwan: Trade Agreement - The Economist

China and Taiwan - The ties that bind?
The Economist, July 1st, 2010

Worries in Taiwan that economic interdependence will succeed for China where sabre-rattling failed

Taipei - CHANTING opposition to unification with China, tens of thousands of protesters massed on June 26th outside the office in Taipei of Taiwan’s president, Ma Ying-jeou of the Nationalist party, or Kuomintang (KMT). Their target was the Economic Co-operation Framework Agreement (ECFA), one of the most significant agreements between China and Taiwan since 1949, when the Communists routed the KMT in the civil war. One placard, with a doctored image of Mr Ma kissing the cheek of China’s president, Hu Jintao, scolded: “Don’t embrace the enemy.”

The main opposition Democratic Progressive Party (DPP) said 100,000 demonstrators took part; the police estimated just 32,000. The DPP denounces the agreement as a threat to jobs on Taiwan. Worse, the independence-leaning party complains, it could be a step on the way to Taiwan’s eventual incorporation into China.

Both warnings are overblown. But Taiwan is entering a lengthy season of frantic politics in which a nuanced debate about trade will be an early casualty. In November mayoral elections will be held in Taiwan’s five key municipalities. The DPP is hoping for a boost as it prepares for parliamentary and presidential polls in 2012.

Taiwan’s government says the ECFA, signed on June 29th in Chongqing, the KMT’s old civil-war headquarters, will prevent Taiwan’s economic marginalisation. Because of Chinese pressure, Taiwan has been excluded from a recent spate of free-trade agreements (FTAs). This has worried the government, especially since an FTA between China and the ten-member Association of South-East Asian Nations (ASEAN) came into effect this year.

China’s prime minister, Wen Jiabao, has promised that Taiwan, which enjoys a big trade surplus with China (see chart), will “benefit more” from the ECFA than the mainland. Indeed, over the next two years China will lower tariffs for 539 categories of imports, worth $13.8 billion a year, and open 11 service categories, including banking (see article). To appease an important lobby, the deal includes 18 farming and fishery categories, with no reciprocal liberalisation in Taiwan. Overall, Taiwan will lift tariffs for only 267 categories of imports from China, worth $2.9 billion.

Mr Ma hopes the pact will demonstrate the benefits of his pragmatism in dealings with China. Unlike his predecessor, the DPP’s Chen Shui-bian (now in jail for corruption), he has not trumpeted Taiwan’s separate identity. Rather, the KMT has reached agreements allowing scheduled flights across the strait and Chinese tourists to visit Taiwan.

The DPP portrays the pact as a Trojan horse. Its leader, Tsai Ing-wen, has rejected the government’s assertion that there will be a net employment gain of 260,000. In a rare televised debate with Mr Ma, she said 5m jobs in Taiwan would be adversely “affected” by the pact. A DPP spokeswoman, Hsieh Huai-hui, says her party fears the ECFA will “strengthen interdependence”. China, she says, will use it as a stepping stone toward political integration.

The DPP gained some ammunition in early June when a Chinese spokesman gave a seemingly negative response to Mr Ma’s oft-stated hope that the ECFA might encourage other countries to sign FTAs with Taiwan. They have hitherto held back so as not to upset China. The Chinese spokesman’s remarks, though not explicitly ruling out such FTAs, drew a rare rebuke from Mr Ma’s government.

A government committee’s rejection of proposals for a referendum on the ECFA has also galvanised opposition. China recoils at any hint of a plebiscite in Taiwan, fearing one might one day be used to justify a formal declaration of independence or to block reunification. Mr Ma has denied opposing an ECFA referendum, but the DPP suggests the committee’s decision reflected Chinese pressure on the KMT.

The DPP can still get thousands of people onto the streets, but it has struggled to expand its support beyond 30-40% of the electorate. It also lacks a convincing challenger to Mr Ma in the 2012 elections. Many analysts believe that Su Tseng-chang, its candidate in the Taipei mayoral election later this year, would do better than Ms Tsai. Mr Su is unlikely to win in Taipei, a KMT stronghold. But an honourable defeat might boost his presidential hopes.

Devising a strategy for dealing with China will be hard for the DPP. Harping on about the ECFA may not go down well with voters if the risks the DPP stresses do not materialise. The government predicts GDP will grow by more than 6% this year after contracting by nearly 2% in 2009. Merchandise exports to China, which account for almost 30% of Taiwan’s total, have been helping to power this recovery.

China’s backing for Mr Ma is clear. It studiously avoided any criticism of Taiwan itself when America approved $6.4 billion-worth of arms sales to the island in January. But for all its efforts to show goodwill, it has made no attempt to scale down its military deployments on the coast facing the island, where its missile build-up continues. A defence-ministry official in Taipei points to a map of the island and sweeps his arm around to its east to show where, in the past year or so, Chinese naval forces have begun to extend their war-gaming reach. China is still, he says, a “clear and present danger”. Greed for China’s market is good for the KMT’s electoral prospects; but fear of its long-term intentions can still boost the DPP.