Monthly Archives: July 2009

Not Your Parent’s Wedding Snaps

Call us old-fashioned, but there isn’t much to say about this wedding photograph published in the China Daily, which notes the popularity of specially-themed wedding portraits.

Wedding Portrait, Nanjing July 29th, 2009

Wedding Portrait, Nanjing July 29th, 2009


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China and U.S. Sit On Opposite Ends Of Global Economic See-Saw

The latest round of the Strategic and Economic Dialogue with the U.S. is done. Goodwill and common purpose expressed in public: China will boost domestic demand and the U.S. will toughen its financial reform. Whatever.

In private, Beijing was forthright in expressing well-rehearsed concerns about the dollar’s value and America’s deficits. And there remains deep differences on climate change, where the China-India axis is the developing fault line of global geopolitics. But there is more to unite two pragmatic administrations in Beijing and Washington than to divide them. They are the two powers on the opposite ends of the global imbalances see-saw.

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The Battle For China’s Steel

The Economic Observer says the investigation into the leaking of China’s negotiating position at the iron-ore price negotiations earlier this year that has resulted in the detention without charge of four Rio Tinto employers has widened to include Baosteel, the largest steel company. (China Daily has reported that all 16 of the leading steel mills are implicated, though this remains unconfirmed.)

The Economic Observer also lays out the way the government stepped in to take control of this year’s annual price negotiations, dissatisfied that the individual companies were consistently getting the worse of each year’s deal, with the consequent impact on the economy of higher steel prices. By having the China Iron and Steel Association handle a collective negotiation, the government thought it could hold a tougher line on prices and stop the negotiating tactics leaking out by cutting the steel companies out of the picture. But what the Economic Observer suggests is that it was not price but quota size that mattered most to the larger steel mills. So secret side deals that have always taken place between the mills and the miners continued, and with them the mutually back-scratching relationships necessary to facilitate them. So in what has become a political power battle between government and the state-owned steel mills, officials are cracking down in the only way they know how, hard.

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Industrial Relations In China Turn More Violent and Deadly

Industrial relations in China are taking on some of the violent aspects of labour disputes in the West in the 1920s and 1930s. Following our earlier note about foreign staff being held hostage by suppliers, comes news of a deadly incident involving 30,000 steelworkers in Tonghua, a dusty industrial town in Jilin better known for its wine and traditional medicines than steelmaking.

Protests against a takeover of Tonghua Iron and Steel by Beijing-based Jianlong Steel, turned ugly with the steelworkers clashing violently with police. The Hong Kong based Information Center for Human Rights and Democracy, which first reported the incident, says that Jianlong’s general manager, Chen Gojun was beaten to death, and that several hundred people were injured in the affray, which took place on Friday. As far as we can make out,  Jianlong took over Tonghua last year as part of the state-brokered consolidation of the the steel industry, but reneged on the deal after the collapse in steel prices; with the revival of prices, Jianlong is attempting to reassert ownership.

Outbreaks of social unrest prompted by local grievances are commonplace, if not commonly on this scale. The slowdown in the economy has prompted more work-centric protests, just as it did when the economy stumbled in 2002. Last month, in Tongxiang City in Zhejiang, 10 people were injured when 500 owners of businesses in a shopping center clashed with police during a protest at a government office over the alleged sub-standard building of the shopping center. And, as the authorities are only too aware, the trigger for the Urumqi riot was the beatings of migrant Uighur workers in the factorylands of Guangdong.

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Doing Business In China: The Hostage Issue

Dan Harris over at China Law Blog has a horrifying tale from the rep. office in China of what we assume is a U.S. company. The company was declaring bankruptcy and sent an executive to China to inform suppliers that they wouldn’t be getting paid. The suppliers didn’t just take umbrage; they took hostages, forcibly holding the U.S.-passport holding citizens in the rep. office against their will for some days. (The situation, as of the post, remains unresolved.) From Dan’s recounting of the tale and the comments to his post, this is not a unique event, all of which puts the espionage accusations against the four Rio Tinto executives being held without charge by the authorities into a new perspective.

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A Clue To When The Rio Four Will Be Charged Or Released?

Conspiracy theorists start here: Xinhua has a report on the growing dispute with Australia over the detention without charge of four Rio Tinto executives, one an Australian citizen, on allegations of stealing state secrets. It is titled, China Striving To Create Fair Trading Environment, so you get its drift. But it concludes with the following tantalizing final paragraph:

But the spying case has cost the mining giant 100 billion yuan ($16 billion), with its market share dwindling by as much as 30 percent, according to a report by the China Times.

That is only $3 billion shy of the $19 billion that Chinalco was going to invest in Rio, before the mining company pulled the plug on the deal at the last minute, much to the chagrin of Chinalco and Beijing.

Could it be there is a measure there for how much longer the Rio Four will be held without charge?

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Canberra Getting Antsy Over Rio 4

Australia trade minister Simon Crean has called on Beijing to lay charges or release detained Rio Tinto sales executive Stern Hu, an Australian citizen, and three Chinese colleagues. The four men are accused of stealing state secrets in connection with the iron-ore price negotiations earlier this year. Rio had denied the allegations. The quartet has been in detention since July 5th without charge as Chinese law allows.

Trade relations between the two countries increasingly risk being harmed, Crean says, without the case being settled one way or the other. The Australian met his Chinese counterpart, Chen Deming, at the APEC trade ministers’ meeting in Singapore, where the issue came up and we understand Crean made his government’s position crystal clear.

China is Australia’s biggest trade partner, with iron ore exports to China accounting for $14 billion of $53 billion in bilateral trade, so the case is more likely to proceed at China’s pace than Canberra’s. And with the iron-ore price negotiations dragging past their June 30 deadline, no bargaining chips are going to be given away cheaply.

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