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    1. A China More Just, Gao Zhisheng
    2.Officially Sanctioned Crime in China, He Qinglian
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    Losing the New China, Ethan Gutmann
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    Nine Commentaries on The Communist Party, the Epochtimes
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    Reporters Without Borders said in it’s 2005 special report titled “Xinhua: the world’s biggest propaganda agency”, that “Xinhua remains the voice of the sole party”, “particularly during the SARS epidemic, Xinhua has for last few months been putting out news reports embarrassing to the government, but they are designed to fool the international community, since they are not published in Chinese.”
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Secrets, Lies, And Sweatshops in China(5)

Posted by Author on December 6, 2006

Cover story, BusinessWeek Magazine, NOVEMBER 27, 2006- (cont’d)

SOME U.S. RETAILERS SAY this evidence isn’t representative and that their auditing efforts are working. BusinessWeek asked J.C. Penney Co. (JCP ) about audit reports included among those the magazine reviewed that appear to show falsification of records to hide overtime and pay violations at two factories serving the large retailer. Penney spokeswoman Darcie M. Brossart says the company immediately investigated the factories, and its “auditors observed no evidence of any legal compliance issues.”

In any case, the two factories are too small to be seen as typical, Penney executives argue. The chain has been consolidating its China supply base and says that 80% of its imports now come from factories with several thousand workers apiece, which are managed by large Hong Kong trading companies that employ their own auditors. Quality inspectors for Penney and other buyers are at their supplier sites constantly, so overtime violations are hard to hide, Brossart says.

Chinese factory officials say, however, that just because infractions are difficult to discern doesn’t mean they’re not occurring. “It’s a challenge for us to meet these codes of conduct,” says Ron Chang, the Taiwanese general manager of Nike supplier Shoetown Footwear Co., which employs 15,000 workers in Qingyuan, Guangdong. Given the fierce competition in China for foreign production work, “we can’t ask Nike to increase our price,” he says, so “how can we afford to pay the higher salary?” By reducing profit margins from 30% to 5% over the past 18 years, Shoetown has managed to stay in business and obey Nike’s rules, he says.

But squeezing margins doesn’t solve the larger social issue. Chang says he regularly loses skilled employees to rival factories that break the rules because many workers are eager to put in longer hours than he offers, regardless of whether they get paid overtime rates. Ultimately, the economics of global outsourcing may trump any system of oversight that Western companies attempt. And these harsh economic realities could make it exceedingly difficult to achieve both the low prices and the humane working conditions that U.S. consumers have been promised. (END)

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