Believe it or not:
Outsourcing has hit the hub of China's Pearl River Delta, with soaring costs pushing the world's longtime workshop for low-cost goods to move its factories overseas.
Rising raw material and energy prices, the strengthening of the yuan against the dollar and new business regulations are forcing labor-intensive factories — particularly those in the footwear, toy and clothing industries — to hunt for rock-bottom production costs elsewhere.
Many are choosing to move abroad to low-cost countries such as Vietnam and Indonesia, while others are seeking cheaper places to do business in China.
Don't look for the Chinese manufacturing lock on America to fall apart anytime soon, but this is a move in the right direction.
China holds $1.33 trillion in foreign reserves and is threatening to liquidate its US treasuries if Washington follows through on plans to imposes trade sanctions to force a yuan revaluation. Estimates put China's US bond holdings at over $900bn.
"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.
"China is unlikely to follow suit as long as the yuan's exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar," [He Fan, an official at the Chinese Academy of Social Sciences] told China Daily.
Chinese state media describes this action as China's "nuclear option", which is pretty close to the truth. Liquidation of a billion dollars of bonds could possibly crash the dollar, causing a US recession and wreaking havoc on the global economy.
Threatening to execute this plan is blackmail. Actually doing it is nothing less than economic terrorism.
Favored Trade Partner wasn't enough for them -- they manipulate the value of their currency so as to come out on top in trade:
China pegs the yuan to the dollar at a fixed rate and strictly regulates imports and the allocation of foreign exchange. In order to maintain the yuan's fixed value, China must create a residual supply of yuan to counter growing demand for its currency; China achieves this by buying dollars in foreign exchange markets. Between December 2000 and July 2003, China more than doubled its foreign reserve holdings from $168 billion (16% of its GDP) to $361 billion (31% of its GDP).
Had we confronted China in the 90s we wouldn't be in this situation. We don't negotiate with terrorists, and we shouldn't let this deplorable situation continue. It's time to stop kowtowing to China. Tell your representatives and senators to grow a pair and impose strict trade sanctions on China.
If we don't, just think where we'll be in another ten years.
The Hudson Institute's Center for Religious Freedom has released the early results of their upcoming Religious Freedom in the World 2007. Some highlights:
Marshall also pointed out that some tyrannies, and their apologists in the West, prioritize "economic rights" and supposed "Asian" and "Islamic" values over religious freedom for individuals. But non-Western and historically poor countries such as Mongolia, Thailand, Mali and Senegal have achieved relative religious freedom, without sacrificing their culture or their religion. "It is a moral travesty of the highest order to maintain that because people are hungry or cold it is legitimate to repress their beliefs as well," Marshall riposted.
So who did the best? The top "free countries" were:
| Country | Religious Freedom | Political Rights (PR) | Civil Liberties (CL) |
| Estonia | 1 | 1 | 1 |
| Hungary | 1 | 1 | 1 |
| Ireland | 1 | 1 | 1 |
| United States | 1 | 1 | 1 |
And the most repressive places on Earth:
| Country | Religious Freedom | Political Rights (PR) | Civil Liberties (CL) |
| Belarus | 6 | 7 | 6 |
| China | 6 | 7 | 6 |
| Iran | 7 | 6 | 6 |
| Iraq | 7 | 6 | 6 |
| Libya | 5 | 7 | 7 |
| Cuba | 6 | 7 | 7 |
| Eritrea | 7 | 7 | 6 |
| Saudi Arabia | 7 | 7 | 6 |
| Burma | 7 | 7 | 7 |
| China-Tibet | 7 | 7 | 7 |
| North Korea | 7 | 7 | 7 |
| Sudan | 7 | 7 | 7 |
| Turkmenistan | 7 | 7 | 7 |
| Uzbekistan | 7 | 7 | 7 |
Today China executed the former head of the State Food and Drug Administration, Zheng Xiaoyu, for corruption (ht to Say Uncle). His secretary, Cao Wenzhuang, was recently sentenced to death with a two-year reprieve.
Zheng was sentenced to death in May for taking bribes to approve an antibiotic blamed for at least 10 deaths and other substandard medicines. Cao was given a death sentence last month with a two-year reprieve for accepting bribes and dereliction of duty.
Such suspended death sentences usually are commuted to life in prison if the convict is deemed to have reformed.
Zheng's death sentence was unusually heavy even for China, believed to carry out more court-ordered executions than all other nations combined, and likely indicates the leadership's determination to confront the country's dire product safety record.
I am pleased to hear that China is taking extreme measures to improve their product quality. Even though I try to avoid buying products made in China, sometimes I can't avoid it; more often, I just don't know.
Some would say that execution is a too-harsh sentence for merely turning out substandard products. Some would say not. I am among the latter.
Remember the poisoned pet food? The poisonous toothpaste? How about poison hog feed? Salmonella laden food seasoning? Lead paint on Thomas the Tank Engine? The flashing eyeballs filled with kerosene? The more than two dozen made in China toys recalled so far this year?
The FDA inspects less than 2% of the $5 billion a year agricultural imports, with consequences like these:
Dried apples preserved with a cancer-causing chemical. Frozen catfish laden with banned antibiotics. Scallops and sardines coated with putrefying bacteria. Mushrooms laced with illegal pesticides.
These were among the 107 food imports from China the Food and Drug Administration detained at U.S. ports just last month, agency documents reveal, along with more than 1,000 shipments of tainted Chinese dietary supplements, toxic Chinese cosmetics and counterfeit Chinese medicines.
And we are about to make matters worse by allowing the importation of chickens from China. Worse still, you won't even know which chickens are imported because the law doesn't require that particular piece of information be communicated to you. If it were up to me, everything imported that you purchase would have a warning label right there on the package, printed in big bold letters just like the Surgeon General's warning on a pack of cancer sticks.
Our children play with toys made in China. We are eating and drinking ingredients from China every day. We are putting our families in cars that travel at high speed, riding on tires made in China.
Here's what happened to my tire last Sunday, as I was driving my son, daughter-in-law and two small grandchildren to the airport in Little Rock:
This was a catastrophic failure that happened at 70 MPH on a crowded interstate with cars, trucks and semis all around us. I began braking and moving onto the shoulder as soon as the failure happened, but the outside of the tire rolled past us before I was even stopped. Was this particular Bridgestone tire made in China? Actually, I don't think so. At least I can't determine the origin through web research. [And I had to include the pic as it was the original inspiration for the post.]
But 450,000 tires recently sold by a New Jersey company that were manufactured in China are missing the gum strip that keeps the steel belts from separating from the rubber tire. When such separation occurs a catastrophic failure just like the one pictured above takes place.
The mandatory recall will bankrupt the company, which estimates that it only has enough funds to replace about ten percent of the tires that it sold. The manufacturer in China will not contribute to funding the recall, so the American consumer is left holding the bag rotten tire. How many drivers will voluntarily throw away a new set of tires? I'm guessing very few, leaving over 100,000 unsafe cars on our highways.
Poisonous foodstuffs. Unsafe products. When will it stop?
Epilogue: One final personal note before I go. Can you identify this tire-related tool?
It is the hook that goes onto a scissor jack used to change a tire. It came with my American Dodge Durango. The hook that you are look at twisted off like cheap pot metal. I can't prove it, but I'm betting that particular piece of crap was manufactured in China.
As if I would buy a Chrysler anyway with their reputation for bad transmissions, but now they are going to start importing Chinese cars for sale here.
To deal with an out-of-control population boom, China instituted its one-child policy in 1980. This resulted in millions of baby girls being left to die because young couples wanted to have boy children — for both cultural and economic reasons (children traditionally support their family elders during the "golden years").
But it has also resulted in a looming crises: there are currently six workers for every retired person in China. By 2040, this ratio is expected to reach two to one:
The proportion of elderly people is growing faster in China than in any major country, with the number of retirees set to double between 2005 and 2015, when it will reach 200 million. By midcentury, 430 million people — about a third of the population — will be retirees. That increase will place enormous demands on the country's finances and could threaten the underpinnings of the Chinese economy, which has thrived for decades on the cheap labor of hundreds of millions of young, uneducated workers from the countryside.
One possible path to ease pressure on the pension system is to raise the retirement age from 50 for women and 55 for men to 55 and 60 respectively. But that will only exacerbate yet another problem: of the 4.13 million college graduates last year, 30 percent are still unemployed.
Which poses a question: will China try to avoid a war with the West at all cost because it cannot afford to lose any of their youthful resources, or will they push a nuclear confrontation because WMD isn't age discriminatory?
One of every seven Brazilian legislators are being investigated on charges ranging from corruption, embezzlement and bodily harm to manslaughter -- and that's only taking the federal courts into account.
Claudio Abramo, of the non-governmental organization Transparencia Brazil, said the numbers also were a worrying indication of corruption at local and regional levels of government.
Gee, ya think?
Villagers are puzzled by the Chinese government's decision to paint a mountain green. Theories range from improving the area's feng shui to the government wishing to appear more "green" -- the barren mountain used to be a rock quarry.
Another Hollywood myth explodes: the recent discovery of an ancient coin reveals that Cleopatra wasn't all that good looking.
Hey ladies, we just can't help it:
When a man fails to help out around the house, his poor performance might be related to a subconscious tendency to resist doing anything his wife wants, a new study suggests.
We've known for a while that our desks and computer keyboards are little germ factories. But now we find that women's work spaces have four times the bacteria than their male counterparts. My childhood best friend was right -- women are gross!
Microsoft released the first security fix for Vista on patch Tuesday. This one is especially ironic for the OS billed as the "most secure ever": the hole allows someone to take complete control of your computer.
Brussels Journal notes that while Islam is sweeping across Europe, Christianity is claiming converts in China — proving "that if God exists He must have a sense of humor."
Buddhism and Taoism still claim most worshippers in China but the state-sanctioned churches count up to 35 million followers. The underground churches are estimated to have 80 million members or more, about 12 million of them Catholics, the rest Protestants.
The author quotes Han Dong-fang:
I think human beings need something at a spiritual level. We don’t want to believe we are coming from nowhere; going nowhere. In China we have traditionally followed Buddhism. We had quite a deep religion. But communism destroyed everything. When communism became this corrupted thing which failed everybody, people still needed a belief. I think that’s the reason for Christianity in China.
I have a Chinese colleague who says very much the same thing. Communism became the religion of the people, but over time the culture became "get it while you can" because, after all, without a belief in a higher power, there is no reason not to.
While I didn't believe that religion is necessary for moral behavior, my colleague believes differently. Which leads me to question my thoughts on the matter. After all, my view is purely philosophical. His is based on experience.
In the country that executes more prisoners per year than any other (over 1,700 in 2005 alone!), the organ market is booming.
According to the BBC, a liver can be purchased for £50,000 ($126,326). [Watch the video report.]
And this is a nation that our elected servants decided to reward with favored trade nation status.
To most Western observers, China's economic success obscures the predatory characteristics of its neo-Leninist state. But Beijing's brand of authoritarian politics is spawning a dangerous mix of crony capitalism, rampant corruption, and widening inequality. Dreams that the country's economic liberalization will someday lead to political reform remain distant. Indeed, if current trends continue, China's political system is more likely to experience decay than democracy. It's true that China's recent economic achievements have given the party a new vibrancy. Yet the very policies that the party adopted to generate high economic growth are compounding the political and social ills that threaten its long-term survival. ...HT to non-blogging Advised by Wolves.State enterprises are also miserably unprofitable. In 2003, a boom year, their median rate of return on assets was a measly 1.5 percent. More than 35 percent of state enterprises lose money and 1 in 6 has more debts than assets. China is the only country in history to have simultaneously achieved record economic growth and a record number of nonperforming bank loans.
Technorati Tags: China, Chinese Economy.
The two 50,000-metric-ton conventionally powered carriers now under development for Britain's Royal Navy are expected to cost a minimum of $2.5 billion each. To outfit them with aircraft could cost that much again.Which is why I do my absolute best to boycott goods made in China, even when shopping atAnd, aircraft carriers do not operate alone. They need a fleet of warships, submarines and supply vessels along with advanced electronic surveillance for support and protection.
For these reasons, most experts assumed a Chinese carrier was decades away.
But after double-digit increases in defense spending over much of the past 15 years, evidence is now emerging that China has a more ambitious timetable.
Technorati Tags: China, Chinese Military, Aircraft Carrier.
Once the flagship of the USSR Navy, the aircraft carrier Minsk was sold to a Chinese firm in 1998 to be turned into a theme park:A Chinese travel agency describes the theme park as "a harmonious combination of carrier appreciation, military recreation, typical seaside lifestyle in south China and military atmosphere."But a Shenzhen court declared the company bankrupt last year and so the Minsk will go on the auction block on March 22nd.The ship's attractions included torpedoes and a Russian dance troupe that performed folk dances, the agency says.
Save your pennies. Bidding is expected to start at $16 million.
Technorati Tags: China, Chinese+Military, Minsk.
I believe that the Chinese banking sector's dire straits constitute the gravest threat to global stability in the coming years.He goes on to explore some rather dire possible outcomes; I recommend reading the entire thing.
One commenter had an interesting observation:
The US will be reluctant to let China collapse because, as much as China needs Western investment, the US needs Chinese support to bring about a controlled devaluation of the dollar to inflate away US debt. A Chinese collapse would precipitate a US$, and Wall St. crash.That's a valid point. And I'm going to be really pissed if my tax dollars go to help keep a foreign nation afloat. Especially one that I have been boycotting for six years.Thus, whilst I expect a crisis of some sort in the coming years, mutual interest might delay the inevitable more than might be expected. We have two great nations who hate each other, but need each others co-operation for future stability.
I have been following this topic for some time and also recommend China's time bombs: the banking system from The Glittering Eye (April 2005) and Casting A Cold Eye On China's GDP Numbers from Forbes (from way back in November 2003).
Technorati Tags: China, Chinese Banking.
The warning came ahead of US President George W. Bush's visit to China on November 19.Of course, the Chinese foreign ministry was unable to confirm or deny the truth of this report.A host of other US government officials are due in China next week, including Californian governor Arnold Schwarzenegger, who is due to arrive in Beijing for a four-day trip on Monday.
George Bush Snr, the former US president, is also due in Beijing for a China-US relations forum, while US Trade Representative Rob Portman is scheduled to arrive in the capital for trade talks.
The economy of the single-currency eurozone is five times larger than China's and per capita income is more than 20 times higher. U.S. exports to the larger European Union (EU) region, at $193 billion in 2004, were more than five times greater than to China but have grown a measly 3 percent since 2000. Imports from the European Union last year, $321 billion, were more than 60 percent higher than from China. U.S. foreign direct investment into Europe last year was $97 billion compared to just $4.2 billion into China. By virtually any measure, Western Europe is the most important trading partner, investment partner and strategic partner in the world for the United States. And the European economy is floundering.I boycott China to the greatest extent possible because of human rights violations and their military threat. And I will continue to boycott France and Germany because of their leader's and media anti-American rhetoric. However, I will continue to buy U.K., Italian, Polish and "new Europe" goods whenever possible — they are good allies.
BTW, Donald Rumsfeld has boycotted China for the last four years as well.
Update: American Thinker outlines Bill Clinton's abetting of the Chinese military program:
China is fighting a new Cold War, borne up by trade surplus dollars, which it fully intends to win. This time however, the administration of President Bill Clinton played the same role as did the Rosenbergs in the last one. Just as the infamous couple delivered critical nuclear technology to the Soviets in the late 1940’s, the Clintons allowed the sale of critical missile technology to the Communist Chinese in return for campaign contributions, the dubious nature of which vastly eclipses any accusation against Delay from even his most wild-eyed critics.Counting on the technical ignorance of the X-Box generation, Clinton dismissed the strategic technology transfers as merely benefiting “commercial satellite technology.” But as any marginally savvy space enthusiast knows, the technology required to orbit a satellite is identical to that necessary to hurl a Chinese nuclear warhead into the American heartland.
"We . . . will prepare ourselves for the destruction of all of the cities east of Xian. Of course the Americans will have to be prepared that hundreds . . . of cities will be destroyed by the Chinese."Clayton Cramer notes that this isn't the first time we've heard this kind of rhetoric out of China and warns:
Remember that, when you buy Chinese-made goods. If the labor unions that are so hot to destroy Wal-Mart would recast their objections to it as, "You are arming a country that we are likely to go to war against," it would probably get more traction than the excuses that they use now. The problem is that the DNC (a wholly-owned subsidiary of the PRC) would probably not allow the labor unions to do so.This rhetoric becomes particularly troublesome when one considers this prediction by Vodka Pundit [HT to Les Jones], driven by the fact that China's economy appears to be stalling:
But what happens if China's economy tanks? Well, they'd probably do what most dictatorships do: Send in the tanks. ...One other thing: consider this insane recommendation from a government panel:And when Beijing runs out of Japanese to run out of town? If history is any guide, then Taiwan will be the next target.
The country's nuclear weapons plants and sensitive material such as plutonium should be consolidated at a single site to increase security and reduce targets for terrorists, a federal advisory task force says.Sure, let's put all our eggs in one basket so General Zhu can wipe out our entire future nuclear weapons capability with a single missile. Smart.
China's emerging role is often compared to that of imperial Germany at the beginning of the last century, the implication being that a strategic confrontation is inevitable and the US had best prepare for it. That assumption is as dangerous as it is wrong. ...There is much more. Read it all.Military imperialism is not the Chinese style. Carl von Clausewitz, the leading Western strategic theoretician, addresses the preparation and conduct of a central battle. Sun Tzu, his Chinese counterpart, focuses on the psychological weakening of the adversary. China seeks its objectives by careful study, patience and the accumulation of nuances – only rarely does China risk a winner-take-all showdown.
It is unwise to substitute China for the Soviet Union in our thinking and to apply to it the policy of military containment of the Cold War. The Soviet Union was heir of an imperialist tradition, which, between Peter the Great and the end of World War II, had projected Russia from the region around Moscow to the centre of Europe.
The Chinese state in its present dimensions has existed substantially for 2000 years. The Russian empire was governed by force; the Chinese empire by cultural conformity with substantial force in the background.
Kissinger must be on to something, because QandO agrees:
As I noted at the Neolibertarian.net blog, China is building economic hegemony, not a military empire. Sure, they're increasing the size of their military, but their oil-related economic reach is extending far more quickly. And much of their military build-up seems focused on maintaining their access to oil and oil sea-routes. What's more, China is "building its first strategic oil reserve storage tanks", which indicates some clarity on the importance, and uncertainty, of access to oil in the relatively near-future.
All this underscores how the Internet is beginning to play the watchdog role in China that the press plays in the West. The Internet is also eroding the leadership's monopoly on information and is complicating the traditional policy of "nei jin wai song" - cracking down at home while pretending to foreigners to be wide open. ...The authorities have arrested a growing number of Web dissidents. But there just aren't enough police to control the Internet, and when sites are banned, Chinese get around them with proxy servers.
One of the leaders of the Tiananmen democracy movement, Chen Ziming, is now out of prison and regularly posts essays on an Internet site. Jiao Guobiao, a scholar, is officially blacklisted but writes scathing essays that circulate by e-mail all around China. One senior government official told me that he doesn't bother to read Communist Party documents any more, but he never misses a Jiao Guobiao essay.
The world's most populous nation, which has powered its stunning economic rise with a cheap and supposedly bottomless pool of labor, is experiencing shortages of about two million workers in Guangdong and Fujian, the two provinces at the heart of China's export-driven economy. ...And I'm still boycotting Chinese goods.March is one of the most important hiring months for China's factories, yet some analysts said that the current shortfalls were the beginning of a long-term trend that is already bringing wage pressures and could eventually erode China's position as the world's dominant low-cost producer.
"It's not the end of the great China manufacturing story," said Jonathan Anderson, the chief Asia-Pacific economist for the Swiss bank UBS. "But you're no longer going to be talking about China having labor so radically cheap that it will capture all the investment flows. This is an opening for Vietnam, it's an opening for India and Cambodia."
The shift, which experts say will happen gradually, began last year and is a result of two decades of strict family planning, which has made China one of the most rapidly aging countries in the world.
The Chinese police on Monday detained three leading intellectuals who have been critical of the government, apparently stepping up a campaign to silence public dissent.Remember this when you go Christmas shopping and pick up something that says "Made in China" on it. Hopefully you'll do what I do -- put it back and find something else.Yu Jie and Liu Xiaobo, leading literary activists, and Zhang Zuhua, a political theorist, were detained in afternoon raids at their homes, relatives and friends said. Yu's relatives were handed a warrant that said he was suspected of "participating in activities harmful to the state," his wife said.
The detentions were the latest in a string of arrests and official harassment of journalists, writers and scholars who have spoken out against government policies or written articles or essays that officials have deemed damaging.
A local newspaper printed a picture of a kettle-shaped capsule which appeared to be about two metres long, lying amid broken bricks, beams and roof tiles.Smashed house = good luck. I don't think that will be the case in China.The satellite was part of a space probe to carry out land surveys and other research, Xinhua news agency said.
"The satellite landed in our home. Maybe this means we'll have good luck this year," the tenant of the wrecked apartment was quoted as saying by the newspaper.
In America, yes -- there would be a line of high-powered attorneys lined up for the chance to sue the government, quasi-governmental agencies, and even the private contractors that made the crostostinators that went inside the beveled chromium flagilators that may just have contributed to whole thing spinning out of control! (or at least that's what they would convince the jury of).
But in China, I'm thinking no.
Taiwan doctors have warned liver patients of the dangers of receiving liver transplants in China because the success rate is only 50%, two Taiwan newspapers said on Sunday.Let's see . . . China -- that would be the country that we approved for full membership in the WTO because we thought we could use that to "change" them. Much like a woman marries a man because she knows she can make him better. Does that ever really work?The warning was made by two chief surgeons at a symposium Saturday on liver disease, the China Times and Liberty Times reported....
"Since the livers were hastily harvested from executed prisoners and the quality of surgery varies from hospital to hospital, the survival rate of Taiwan recipients is only 50%, compared to the 85% survival rate in Taiwan," Lee and Cheng said.
"We heard that most of the livers were harvested from executed prisoners. From execution to cremation, there are only 20 minutes, so the livers were hastily harvested in dimly-lit ambulances. By the time the livers were transplanted, the livers have been without blood circulation for a long time and their quality has been affected," China Times quoted Dr Cheng as saying....
International human rights groups have condemned the underground organ trade in China, especially harvested organs from prisoners even before they have stopped breathing. But Beijing has turned a blind eye to the practice because it brings in foreign currency for Chinese hospitals.
Earlier this year, for example, Goldman Sachs began its own calculations of China's GDP, and endorsed Rawski's take that the Chinese economy was caught in a downdraft in the late 1990s, estimating a 3.5% GDP growth rate for 1998 versus the 7.8% rate officially reported. (Goldman equally believes that China's vibrant but underreported service sector means its GDP can also be understated in some aspects.)Banking in China is under a severe strain, with a large number of bad loans. The official number is 30%, but Rawski says it is larger.But the government's handling of the SARS epidemic earlier this year has also strengthened Rawski's case. "Now everybody knows the Chinese government suppressed health statistics until a Beijing physician pulled the plug on them," he says. "The only question now is whether [the government's suppression of bad news] spreads into the economics area as well as health. There is no question that falsification of economic data at the local and provincial level is widespread. We know this because in 1999 the National Bureau of Statistics, on the front page of a national daily, said the provincial statistics were 'cooked' [by local officials]. That was the term they used."
But Rawski says a banking crisis, if it were to happen, would only be a symptom of a deeper malaise in the "bowels of the Chinese economy." Investment accounts for 40% of China's GDP but it is to a large extent controlled by the state, politically driven and inefficient. One trade article he came across suggested "50% or 60%" of the funds in some government projects were consumed before construction even began. Such investments, he says, "muck up the financial system, create losses, result in nonperforming loans, no product, no employment and the empty buildings which are a common feature of the Chinese landscape."Any company that is heavily invested in China that needs a vibrant, growing economy to recoup their investment may be in trouble.Research that Rawski conducted for the International Labor Office in Geneva led him to the conclusion that China has been experiencing a "jobless recovery" since the late 1990s, with a spike in urban unemployment aggravated by 100 million to 200 million farmers migrating towards the urban centers in search of work. That's why it is paramount that Beijing loosen its state-controlled stranglehold on investments. Such crowding-out prevents the dynamic private sector from accessing funds and creating jobs, and places unbearable pressures on the productive investments to create the 7% or 8% GDP growth Beijing needs to keep moving ahead.
