Archive for China
After Economic Meltdown
Posted by: | CommentsRecovery from the worst economic crisis since the Great Depression remains incomplete, and there are numerous tough challenges ahead, but most experts concur that the worst is behind us, and growth, however slow and painful, is the path ahead.
Now, with breathing room, economists, policy makers and analysts alike are asking, how did we get here? How did financial institutions, regulatory agencies and laws fail to prevent the catastrophic crash that cost the world trillions in wealth?
More importantly, what lessons have been learned? Have the past failings been rectified? Has the new global financial landscape evolved in ways that will prevent a future reoccurrence
“China responded with huge spending in 2009,” explained Xiao-Sheng Chen, general manager of China-specialist SWS Research. “The recovery has been a surprise,” he said, noting that the speed and strength of recovery had exceeded the expectations of most economists. “We should have confidence in even greater recovery in 2010.”
“Chinese people want to consume more, and want to buy houses and cars.” This confidence helped China to pass the United States this year, as the world’s top market for automobiles.
Yet, by the last quarter of 2009, factory orders were picking up, and in fact growth surged to 10.7 percent in the fourth quarter. China passed Germany to become the world’s largest exporter. But many wondered whether this robust recovery would ever translate into the kind of consumer confidence that prompts Chinese spenders to splash out on foreign goods, boosting the gloomy global economy.
For China, more change needed
“China needs to shift its emphasis,” said Louis Kuijs, senior economist at the World Bank in China. For a long time now, China has seen rapid economic growth and development. But the growth has been particularly relying on investment and industry, and less on consumption and services. This pattern of growth has led to some imbalances that the government has also recognized. Several of the imbalances are domestic in nature, such as the impact on inequality, energy intensity, and impact on the environment. But, externally, it has shown up in a dependence on exports and a growing current account surplus. As the global crisis hit China’s exports and thus the overall economy, China’s first response was to implement a massive stimulus plan. This stimulus has been successful in keeping growth up in 2009.
“There were important lessons learned. Both in 1997, and in the current crisis, we saw the need for good macro-economic policies and also that self-insurance works,” said Genberg. “Large reserves proved good for the spending and stimulus required.”
Bottelier suggested that there would have to be a response to the huge loss of faith in the American financial system. “There is bound to be a shift. I believe there will be a huge change in the American financial system. It’s suffered a loss of a lot of prestige around the world, and people just don’t look at it as a model anymore.”
The meltdown revealed a devastating lack of financial oversight, said Mittelstaedt. “There was no question there was too much spending and credit, and people taking advantage of that. There is a need for more oversight to prevent this from happening again.”
Google cyber-complaint is the tip of a silent iceberg
Posted by: | CommentsCoordinated attacks on IT systems are common, yet companies and governments have kept largely silent. The growth of computer services that rely heavily on the Internet means the stakes are growing higher. That may explain why Google spoke up about recent attempts to steal its intellectual property — and why the US State Department has also taken China to task.
The scope of the recent attacks points to a complex operation. More than 30 companies were attacked simultaneously through an undiscovered software security hole. The incursions appear to have had the blessing of the Chinese government, if not its direct involvement. It is hard to imagine who else would be interested in the email accounts of political dissidents, which Google claims were targeted.
The concerted assault also bears similarities to one on 100 companies last year, according to security experts at iDefense. So it shouldn’t be dismissed as a one-off or rogue operation.
The amount of information and money at risk from such attacks is growing. An increasing percentage of many companies’ value comprises patents and trade secrets. The theft of physical goods is rarely life-threatening for their manufacturer. A software company, on the other hand, can be destroyed if its secret sauce is stolen.
Microsoft, for instance, has persistently complained about piracy of its software in China and elsewhere. But Google has gone a step further, squawking about a security breach that makes it look vulnerable. Other companies, and governments, have mostly kept quiet about this kind of trouble.
That may change, because Google’s problem is rapidly becoming everybody’s. The growth of cloud computing — where services such as email, spreadsheets and word processing are served online — increases the vulnerability of companies and governments to Internet-based attacks. Hillary Clinton’s State Department appears to be backing up Google’s complaint.
Western governments are heavily involved behind the scenes with tackling gaps in Internet security. But cyber-attacks that appear to be state-sponsored arguably call for a more public response as well. Clinton’s decision to point a finger openly at the Chinese government could just be the beginning
Strict visa rulings called unfair
Posted by: | CommentsAre visitors from developing countries being denied entry into Canada due to old rules?
Guillermo Duarte had a lot to prove just to take a two-week vacation to visit his brother in Canada.
The engineer, 36, had to convince Canadian visa officers that he, his engineer wife, Luz, and their younger children Fernando, 10, and Faviola, 8, had strong enough ties to Guatemala to ensure they would leave Canada after a visit to his brother, Mauricio, in Toronto.
But after paying a non-refundable fee of $300, they were denied visitor’s visas. (Even leaving two teens at home didn’t convince the officer they wouldn’t stay in Canada.)
While the denial cost the Duartes a ruined vacation, for other prospective visitors it might mean not being able to bid farewell to a dying relative, attend a loved one’s wedding, or see a newborn grandchild
“It’s a very big problem for our community,” says Gurmeet Singh of Brampton’s Nanaksar Satsang Sabha Sikh temple. “And it’s going to get worse … if our visa officials don’t change their attitude and show some compassion.”
Visas are imposed to help “facilitate the entry of bonafide visitors to Canada for such purposes as trade, commerce, tourism, international understanding, and cultural, educational and scientific activities, while also protecting the health, safety and security of Canadian society,” says Citizenship and Immigration spokesperson Karen Shadd-Evelyn.
New Democrat MP Olivia Chow (Trinity-Spadina) says her office has 65 outstanding complaints from constituents involving relatives’ failed visa applications.
“Visa officers have the discretionary power to decide who to let in. There’s no humanitarian and compassionate consideration. Their decisions are completely arbitrary and don’t get reviewed,” Chow says. “The onus should’ve been on the Canadian officials to show that these people would not leave CanadaDuarte walked into the Canadian embassy in Guatemala City last month, hands full of documents: pay stubs, an employer letter, bank statements, the deeds on his three properties and a passport to show his lengthy travel history.
When his first try failed, his brother in Canada wrote an official invitation and asked his local councillor, MP and even a senator to intervene. The visa office later called Duarte in to apply for a minister’s special permit for an extra $185. But by then, the date was too close to the family’s booked vacation time and the airfare too expensive. “We are all disappointed,” says Mauricio Duarte, who immigrated 17 years ago. “Whenever we go back home, we stay with our families and relatives. We would like to play hosts to someone when they come here.”
Lawyer Avvy Go, director of the Metro Toronto Chinese and Southeast Asian Legal Clinic, points out there’s no guarantee that visitors from visa-exempt countries would leave Canada either.
after their visits.”
Immigration reacts slowly to the global economic and political changes. Countries like China and India are becoming bigger economic powers,” says Mamann, an ex-immigration officer. “My concern is our visa officers are still using outdated standards to judge these applications, (believing) these people will come and stay in Canada.”
If nothing changes, he adds, Canada stands to lose the substantial economic benefits from delegates attending conferences, buyers going to trade shows and tourists all in a world that’s become closer and more intimate than ever before.
Feds find association between drywall, corrosion
Posted by: | CommentsThe federal government said Monday that it has found a “strong association” between problematic imported Chinese drywall and corrosion of pipes and wires, a conclusion that supports complaints by thousands of homeowners over the last year.
In its second report on the potentially defective building materials, the U.S. Consumer Product Safety Commission said its investigation also has found a “possible” link between health problems reported by homeowners and higher-than-normal levels of hydrogen sulfide gas emitted from the wallboard coupled with formaldehyde, which is commonly found in new houses.
The commission, along with the Environmental Protection Agency and the Centers for Disease Control and Prevention, continues to study the potential health effects, and the long-term implications of the corrosion.
“We can say that we believe that there’s a number of different chemicals that when brought together can be related to some of these irritant health effects that we’ve been getting reports of,” said CPSC spokesman Scott Wolfson. “But we’re still working toward that exact nexus.”
The commission said it can now move forward with additional studies to identify effective remediation of the problem and potential assistance from the federal government. However, Warren Friedman of the U.S. Department of Housing and Urban Development said it’s too soon to discuss specifics of any financial assistance homeowners could get.
During the height of the U.S. housing boom, with building materials in short supply, American construction companies imported millions of pounds of Chinese-made drywall because it was abundant and cheap. An Associated Press analysis of shipping records found that more than 500 million pounds of Chinese gypsum board was imported between 2004 and 2008 — enough to have built tens of thousands of homes.
They are heavily concentrated in the Southeast, especially Florida and areas of Louisiana and Mississippi hit hard by Hurricane Katrina.
The suspect building materials have previously been found by state and federal agencies to emit “volatile sulfur compounds” and produce a rotten-egg odor. Homeowners complain the fumes are corroding copper pipes, destroying TVs and air conditioners, blackening jewelry and silverware, and making them sick.
The federal government says China is assisting with the investigation.
Fears for Chinese detained in illegal jails
Posted by: | CommentsTHOUSANDS of Chinese people are abducted and detained in illegal ”black jails” each year for trying to lodge complaints against officials, a report says.
The complainants, known as ”petitioners” in China, are typically detained while trying to submit grievances to government offices that are legally established to hear their complaints, says the Human Rights Watch report, An Alleyway in Hell.
Conditions in the black jails are ”invariably harsh”, with detainees subjected to food and sleep deprivation, appalling sanitary conditions, beatings and worse.
”They threatened that if I escaped, they’d take me to the male prison and let [the inmates] take turns raping [me],” said a woman, 42, in Sichuan province, who was one of 38 illegally detained petitioners interviewed by Human Rights Watch.
Officials at various tiers of government have created this network of extra-judicial abductions and detentions as a way of improving their own work performance appraisals, as merit points are deducted when complaints are made against them.
Security forces at all tiers of government are complicit in the system, refusing to assist victims and frequently assisting their captors, says the report, to be released today. It says a series of recent central government regulations and edicts that require local officials to resolve problems locally are likely to make the problems worse.
”Chinese legal scholars and academics who have researched black jails say their emergence since 2003 constitutes one of the most serious and widespread uses of extra-legal detention in China’s recent history,” says the report.
Despite dozens of cases closely documented by reporters and Chinese lawyers, in June the Chinese Government told the United Nations Human Rights Council: ”There are no black jails in the country.”
Local judicial systems are usually impotent to deal with complaints made against local officials, as they are run by those same officials.
Complainants typically try to petition higher tiers of government so they can deal with officials who are not involved with their immediate problems.
But Professor Yu Jianrong, at the Chinese Academy of Social Sciences, says that only one out of 632 petitioners that he surveyed in Beijing had their complaints successfully resolved.
Chinese drywall complaints mount ahead of investigation reports
Posted by: | CommentsTAMPA – The inside of Michele Carrone’s Riverview town home has been torn down to the studs. Crews are busy removing any remnants of toxic drywall imported from China.
Carrone is one of dozens in the River Walk community who found out they have tainted drywall. She’s expected to move back in January and is thrilled with the way her builder, Columbus, Ohio-based MI Homes, has handled the situation.
“They’ve been amazing,” Carrone said as she checked on the progress at her home Monday. “I’m living in a big, nice house while I wait, and I’ll have a brand new home when I come back.”
The state has received nearly 600 complaints from homeowners who fear they have the tainted drywall.
Meanwhile, The U.S. Consumer Product Safety Commission is moving forward with plans to visit several sites in China where the imported drywall was manufactured. The agency has received 800 complaints about the product and is also conducting indoor air samples of homes in Florida and other states.
The toxic drywall emits a corrosive gas that damages appliances, gives off a rotten-egg stench. It was used in an estimated 100,000 houses nationwide built during the housing boom. The health effects of the drywall are still under investigation, but homeowners have complained of headaches, dry eyes, rashes and respiratory problems.
Agencies, including the U.S. Consumer Product Safety Commission, the Environmental Protection Agency, and the Centers for Disease Control and Prevention, and state health departments are investigating.
The consumer product safety commission is expected to announce results soon of testing for radioactive phosphogypsum by the Florida health department and the U.S. Environmental Protection Agency.
The toxic drywall has been found in 23 states, but the majority of complaints are from Florida. That’s partly because humidity brings out the corrosive gas faster, experts say.
The drywall was used because of a shortage during the aftermath of hurricanes. Builders typically use domestic drywall but turned to the imported drywall during the housing boom, mainly from 2004 through 2007.
Builders say they didn’t know about the bad drywall because subcontractors ordered it from distributors.
How China and the U.S. Handle WTO Complaints
Posted by: | CommentsThe way China and the United States handle WTO complaints differs. We allow the complaints to drag through adjudication for years. We in the U.S. will even win a WTO decision, but then simply wait while China does nothing, as in the case of China’s excessive tariffs on foreign auto parts.
China has a different method for handling WTO complaints. At the same time that she files the complaint, she takes an action against American products that is way out of proportion, forcing America to cave.
Last week, at the same time that China filed a WTO complaint against an American ban on her cooked-chicken products, she completely cut off further issuance of licenses to import American chicken (13% of all of our exported chicken). Here is the story from Kim Souza in The Morning News:
SPRINGDALE — Despite news reports from China that U.S. chicken imports will continue as normal, the country has put a de facto import ban in place, said Farha Aslam, industry analyst with Stephens Inc….
News that Chinese importers of U.S. chicken were not able to get permits for importing American poultry products Thursday was a reversal of prior actions, as China’s Ministry of Commerce refuted the ban claims just two days ago…
The Chinese government filed a complaint against the U.S. with the World Trade Organization saying that U.S. congressional actions to limit Chinese poultry from coming into the U.S. were unfair, malicious and violate global trade rules.
China is practicing protectionism through a variety of means including tariffs, a dollar-yuan peg to keep American products expensive and Chinese products inexpensive, and various non-tariff barriers including import licenses. In 2008, China imported just 25¢ from the United States for every $1 we imported from her.
She is so effective with non-tariff barriers to foreign products that, according to the World Bank, her imports are expected to decrease this year even while her economy grows at a 7.2% clip.
Throughout this Great Recession, she has been steadily hiking her export subsidies, just raising subsidies on textiles, for example, from 15% to 16%. She is insuring that Chinese businesses can produce below cost so that they can steal market share by driving their foreign competitors bankrupt.
In response, the only thing that President Obama has done is file a WTO complaint that China will ignore. If we had a competent government, it would do what we suggest in Trading Away Our Future:
We would announce to all the countries that have been accumulating dollar reserves in order to run a trade deficit with the United States, that effective the following year their deficit on goods and services would have to be reduced twenty percent. They may respond to this challenge by planning to increase their imports from us, reduce their exports to us, or some combination of both. Failure to meet this annual goal would result in our imposition of a requirement that all imports from the offending country would require an Import Certificate (IC) purchased from the US Treasury Department or other designated agency of the federal government. (The US Treasury Department has experience in auctioning off its own obligations; much the same process would be involved in auctioning off import certificates.)
Prospective importers from countries that fail to reduce their deficits in timely fashion would have to apply for an IC and follow the Treasury’s instructions. Over a period of five years, the US Treasury Department would steadily reduce the amount of available import certificates so that the targeted country’s trade exports to the United States would be no higher than 5% above their imports from the United States. The Treasury would publish the amount of ICs issued and available and the date of each auction. Each certificate would have to be utilized within a specified period.
The Richman plan would force China to take down her barriers to American products and stop dumping her products below cost in American markets. President Obama’s WTO complaints will drag on for years through the WTO adjudication process while China steals our remaining industries.
Rein in Wall Street Fat Cats – Improve Banking Regulation Today?
Posted by: | CommentsThe financial industry cut spending on lobbying and campaign contributions this year, even as the Obama administration drafted a sweeping plan to tighten federal control over its players.
* In a major break with most other large companies, Wal-Mart Stores Inc (WMT.N) Tuesday told the White House that it supports requiring employers to provide health insurance to workers, a centerpiece of U.S. President Barack Obama’s effort to provide near-universal coverage to Americans.
* The Federal Deposit Insurance Corp on Thursday is expected to propose new guidelines for private-equity investors seeking to buy failed banks, people familiar with the matter said.
* Freddie Mac’s (FRE.N) board has made Charles “Ed” Haldeman Jr. its prime candidate for chief executive officer of the government-backed mortgage company, according to people familiar with the situation.
* China’s government delayed its controversial requirement that manufacturers include Web-filtering software in all new personal computers sold in the country — an 11th-hour move that shows the challenges Beijing faces in its wide-ranging efforts to rein in the Internet.
* A regulator fined a unit of ICAP Plc (IAP.L) and one of its former brokers for “numerous improper communications” with rival firms over fees on credit-default-swap trades, in an ongoing probe that could widen to include other brokerage firms.
* Sales of Michael Jackson’s music have skyrocketed since he died suddenly last Thursday, returning the late pop star to the top-selling spot he held more than once during his career.
* The Obama administration’s tough new fuel-efficiency standards could pose problems for some car makers, but Toyota Motor Corp (7203.T) is hoping to benefit. The Japanese company is betting the rules will give an advantage to its expanding lineup of hybrid vehicles, and it also aims to boost revenue by licensing to other car makers the patents that protect its fuel-saving technologies.
* U.S. home prices eased their slide in April, but rising unemployment and shaky consumer confidence are weighing on prospects for a recovery in the housing market and broader economy.
* Financier Allen Stanford is a serious flight risk and must remain in jail until he is tried on charges of masterminding a Ponzi scheme, a federal judge ruled Tuesday.
* Gannett Co (GCI.N), the largest U.S. newspaper publisher by daily circulation, will cut between 1,000 and 2,000 jobs out of its 41,500-person work force in response to continuing revenue declines, according to a person familiar with the company’s thinking.