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Archive for the ‘Businessman’ Category

About Chinese Businessman

Jurist: Ant Farmers in Shenyang Yilishen Incident Should Not Rely on China Authorities

Posted by Author on January 12, 2008


By Fang Xiao, Epoch Times Staff, Jan 10, 2008-

On November 20, 2007, tens of thousands of ant farmers held demonstrations in front of the Liaoning Provincial Government, the Shanyang Municipal Government and the Headquarters of Yilishen Tianxi Group. The authorities sent Liaoning’s entire police force to suppress the protest.

Jurist Professor Yuan Hongbing analyzed the background and cause for the Yilishen incident in an interview. He advised the victims to line up with other rights defending movements across the country, and warned them not to rely on the CCP.

Yuan pointed out that the Yilishen Company was a typical collusion between government and business enterprises, and that the growth of Yilishen had close ties with Bo Xilai, the former governor of Liaoning. Yuan said the company’s development and collapse show that the “economic reform” of the CCP has not established real free market economy based on fair competition, but rather an anti-social market economy dominated and controlled by Party bigwigs.

In the past eight years, over one million ant farmers had been misguided by the CCP’s vigorous praise of Yilishen. Many ant farmers invested everything they had into breeding ants. Just over a month ago, the government forced the Yilishen Company into bankruptcy. Yuan said, “All of these events prove that Chinese authorities are realizing their power in mafia-like ways. Whoever believes in this kind of power, said Yuan, will likely face a harsh lesson.

Yuan believes that the Yilishen incident is directly linked to corrupt officials. It’s widely believed that the growth of Yilishen was connected to Bo Xilai. During Bo’s governorship Yilishen grew rapidly because the open support from the authorities and the high exposure on official media quickly won Yilishen people’s trust.

“Bo repeatedly guaranteed Yilishen’s credibility in the name of the government, which is why so many people believed in it and invested their life savings into this company,” said Yuan.

Yuan revealed that Yilishen finally fell because the company’s chairman failed to develop a good relationship with the son of the incumbent Liaoning premier. Hence after Bo left Liaoning the company lost support from the authorities, which ultimately led to Yilishen’s collapse.

Yuan commented that the Yilishen case is a typical story in China’s unjust and corrupt system, “The fundamental cause for Yilishen’s bankruptcy is the conflict between the officials and dishonest businessmen.

The officials used their power to force Yilishen to the verge of bankruptcy. This illustrates to the Chinese people a basic fact: the so-called ‘economic reform’ led by the CCP is not a free market economy based on the principle of fair competition, but a market economy manipulated and controlled by Party bigwigs. The system is established on corrupted power and lubricated by power-money deals.”

He added, “This kind of market economy is anti-social in nature, because the main function of this system is to transfer the wealth of the society into property completely handled by corrupted officials and unscrupulous merchants.”

“Under the market economy manipulated by bigwigs, it is impossible for large corporations to develop independent from the dictatorial power center,” concluded Yuan. “Collusion between corrupt power and dirty capital is the prerequisite for the survival and development of any corporation in China, especially for large ones.”

Yuan warned people not to hold any illusions about the CCP because the regime would never help return the commission to ant farmers. “In China power abuses have caused numerous similar debt disputes like the Yilishen case and involved thousands of victims.”

Since the story of the Yilishen affair broke, Liaoning authorities have taken every measure to block all related news. Meanwhile the authorities published a series of announcements to the victims in local media, dumping all the responsibilities to Yilishen president Wang Fengyou, and threatening to investigate whether the investment of the ant farmers are from legal sources. Under such threats, some ant farmers dare not make future demands to recover the debt.

What should the ant farmers do under these circumstances? Yuan’s opinion is that the first principle of China’s current rights defending activities is to fully realize the political elements underlying people’s tribulations. in China must get on the path of “Idealized Politics (translation not sure?), organized movement

“In the Yilishen case, for example, Liaoning authorities and Bo Xilai are directly responsible for the tragedy of the ant farmers. But we must realize that the root of all these is the tyranny and dictatorship of Chinese communist regime.” Therefore, he said, only when Chinese completely refuse the tyranny of the CCP, can we make sure such a tragedy doesn’t happen again.

The second principle, said Yuan, is to get organized. He said that the Yilishen victims should organize their rights defending activities in semi-secret or secret ways to fortify and focus their forces.

Yuan also advised coordinated unification means that Yilishen victims to unite with China’s other rights defending groups like unemployed military veterans. “In this way,” said Yuan, “people will form a unified frontier against the Chinese communist regime across the entire society and the entire nation.”

– Original report from the Epochtimes: Jurist: Yilishen Ant Farmers Should Not Rely on Chinese Authorities

Posted in Bo Xilai, Businessman, China, City resident, corruption, Law, Liaoning, Life, NE China, Official, Opinion, People, Politics, Report, Shenyang, Social, World | Comments Off on Jurist: Ant Farmers in Shenyang Yilishen Incident Should Not Rely on China Authorities

Entrepreneur’s Open Letter to China Leaders Requesting Political Reform

Posted by Author on November 12, 2007


By Zheng Cunzhu, Special to The Epoch Times, Nov 07, 2007-

[Editor’s Note: After the publication of the Open Letter of Standing Committee Member of the Anhui Political Consultative Conference Wang Zhaojun to Chinese President Hu Jintao and Premier Wen Jiabao on October 22, The Epoch Times received a letter from jurist and board chairman Zheng Cunzhu of Jiahe Food Co. Ltd. in Anhui Province. With the author’s permission, we publish these excerpts. We will keep the readers informed of any further developments.]

Immediately Start Political System Reform at City and County Levels

Dear President Hu Jintao and Premier Wen Jiabao:

The 17th National Congress of the Chinese Communist Party (CCP) has concluded. You were again elected to be the main leaders of the ruling party, and will serve for another five years. As a Chinese citizen, according to relevant regulations specified in the Constitution of People’s Republic of China, I am writing an open letter to you. As a person who experienced the 1989 “June 4th Incident” personally, as a juristic person and board chairman of a foreign-funded enterprise in China, and as a participant and insider of an overseas democratic movement organization, based on my own growth process and investment experience, and based upon my knowledge of the overseas democratic movement organizations, I would like to offer my personal opinions and suggestions to you, the main leaders of the CCP and Chinese authorities.

The Tight Knots Obstructing Political Reform

1) June 4th Incident

Past leaders all emphasized that the CCP has already decided the nature of it, and that decision has remained unchanged. Although the term has evolved from “June 4th Riot” to “June 4th Turmoil” to “June 4th Incident”, the majority of the Chinese people have never been convinced of its nature by the CCP’s definition of what happened. [Editor’s Note: The “June 4th Incident” is known by the rest of the world as “The Tiananmen Massacre.”]

2) The Chinese Democratic Party

On June 25, 1998, while former U.S. President Clinton was visiting China, Wang Youcai and others in Zhejiang Province formally filed an application to the Zhejiang Department of Civil Affairs for establishing the “Chinese Democratic Party.” The aim of the Chinese Democratic Party is to implement democratic elections, to establish a constitutional democratic political system, and to establish a mechanism for division of political power.

The CCP’s General Secretary at the time decided to arrest these advocates and registrants of the Chinese Democratic Party. Not only were the local contact persons for the Chinese Democratic Party arrested and sentenced for “violating the law,” but even Wang Youcai and others in the preparatory committee, who had followed the legal procedure to apply for the registration of the Chinese Democratic Party, were arrested and sentenced.

3) Falun Gong

In 1999, the same CCP leader again unwisely staged anti-Falun Gong incidents, which created yet another unshakable heavy burden for the CCP.

Why was it unwise? Starting from July 1999, the CCP has used all political and economical national resources it can to carry out the large-scale and long-term persecution on Falun Gong. The CCP originally thought that it could quickly defeat or eliminate its self-designated “opponent” as in previous movements that were political.. However, Falun Gong not only did not give in to the high pressure, but spread across the world and blossomed in many countries. Inside China, Falun Gong members wrote various slogans on paper money and put up stickers upholding their beliefs inside residential buildings. To this “crusade” with such a great disparity in strength, the CCP has devoted eight years and yet still cannot win.

Many of my friends, though not Falun Gong practitioners, like me, draw the same conclusion: Falun Gong cannot but prove beneficial to the entire country in building a harmonious society. It was against the law to persecute Falun Gong and a wrong decision made by very few high-ranking officials in the CCP. The persecution against Falun Gong adherents, such as beating, arrest, brainwash, torture, are serious crimes committed by pubic securities and special officials completely ignoring basic human rights laws and regulations. Those criminal acts shall be prosecuted and punished in the future.

Feasibility Study on Reforms at County and City Levels

It is urgent and feasible to launch reforms of the political structure at the county and city level. Meanwhile the key benefit for the CCP is that its position as the ruling party, especially at levels above provincial, will not be threatened but only consolidated. The procedures are analyzed below:

1) Direct Election of County-Level Officials and People’s Representatives

Voting is a basic and effective democratic instrument. At present China has tried the democratic election of town and township leaders. For truly democratic elections, voters should be allowed to choose their candidates except for those candidates recommended by the CCP. Because elections need promotion, organization and planning, political organizations opposed to the Party should be allowed to exist and each candidate be permitted to set up his (her) own organization committee for lawful election.

2) Free Press and Supervision by Public Opinion

Censorship should be lifted for media at the level of county (city). Nongovernmental newspaper, radio and TV should be allowed. Thus the news media can play a positive role in exercising supervision, in addition to the supervisory function of civil representatives and opposition parties.

Radio and TV stations should arrange some regular political programs that aim to invite representatives of various political parties to make comments on the same social issues and also invite officials to announce administrative policies on people’s livelihoods and then stand for correction by the people.

With a free press, corruption scandals could not be concealed anymore; any social evils such as criminal syndicates and pornography could be revealed in time; any unjust cases could be exposed and judged by public opinion.

3) Laying Foundations for Provincial-Level Reform

Initial political reforms are only launched at county and city level. The CCP could appoint as people’s representatives, those winning the local elections and gaining support from the voters, for having both ability and political integrity, as provincial-level officials. Meanwhile, through implementing direct local elections, democratic reforms and gaining experience in how to put democracy into practice, people could be educated and trained in participating in and discussing state affairs and democratic supervision, and the overall quality of the people in China could be improved. That could lay a solid foundation for reform at the provincial level or even at the national level.
Zheng Cunzhu

Board Chairman and Juristic Person

Anhui Wuhu Jiahe Foodstuff Co., Ltd.

Wuhu Mechanical Industry Park, Anhui Province

(Nov. 1, 2007)

Click here to read the original article in Chinese

Original report from the Epochtimes

Posted in Anhui, Businessman, China, East China, Economy, Human Rights, News, People, Politics, Social, World | 2 Comments »

‘Morally you are pygmies’– Lawmaker Scolds Yahoo Over Jailed China Journalist

Posted by Author on November 8, 2007


By John Boudreau, San Jose Mercury News, U.S, 11/07/2007 –

Under scorching criticism for Yahoo’s role in handing over e-mail records to Chinese authorities that led to the imprisonment of journalist Shi Tao, Chief Executive Jerry Yang and General Counsel Michael Callahan on Tuesday rose from behind the witness table at a congressional hearing and bowed to Shi’s mother.

Gao Qinsheng, sitting directly behind them, bowed in return. Then she began to sob.

The stunning moment of apparent contrition from two powerful Silicon Valley executives punctuated a day of verbal fireworks as the House Foreign Affairs Committee berated Yahoo for giving up the identity of dissident Shi, who is now serving a 10-year prison sentence.

“While technologically and financially you are giants, morally you are pygmies,” scolded committee Chairman Tom Lantos, a San Mateo Democrat.

The Yahoo executives had again found themselves in the cross hairs of the committee after Lantos charged that Callahan provided false information to Congress in 2006. At that time, Callahan testified that in the case of dissident Shi, Yahoo did not know to whom the e-mail address belonged or why Chinese police were seeking the information.

Callahan since has acknowledged that Yahoo officials had received a subpoena-like document that made reference to suspected “illegal provision of state secrets” – a common charge against political dissidents. Last week, Callahan apologized for not telling Congress that he learned the details of the document months after his February 2006 testimony.

Yang defended the company’s commitment to human rights while describing the importance of China’s market, which has close to 200 million Internet users, an online population that could soon surpass that of the United States.

Callahan contended that Yahoo employees in China had little choice but to comply with the government’s demands. “I cannot ask our local employees to resist lawful demands and put their own freedom at risk, even if, in my personal view, the local laws are overbroad,” he said.

The two executives were subjected to a bipartisan pummeling in which committee member Rep. Chris Smith, R-N.J., compared Yahoo’s cooperation with the Chinese government to companies that cooperated with Nazi Germany during World War II.

The bruising committee hearing, during which Lantos called the Sunnyvale Internet giant “spineless and irresponsible,” underscored the ethical shoals Silicon Valley companies must navigate in the global economy.

Even as Yang and Callahan testified, the lure of overseas markets was highlighted as shares of Alibaba.com, which owns China’s largest online business-to-business Web site, nearly tripled during its first day of public trading in Hong Kong. In 2005, Yahoo invested $1 billion in Alibaba and owns about 40 percent of the company. Alibaba now runs Yahoo China.

Companies face numerous challenges in tough markets like China, where the government can be friend and foe, observers say.

Just last month, for instance, search engines operated by Google, Yahoo China and Microsoft were redirected to Baidu, a Chinese-owned search provider, at the same time Tibet’s spiritual leader the Dalai Lama, whom China accuses of being a “splitist,” met with President Bush and was awarded the highest congressional civilian award. China’s government rarely explains such actions, but some experts assume it was a form of retaliation.

“There are in the Internet filtering business all manner of coincidences,” observed John Palfrey, executive director of the Berkman Center for the Internet and Society at Harvard University, which closely monitors the Web. “It’s hard to know if they are connected, though it sure looks that way.” …… ( more details from San Jose Mercury News)

Posted in Business, Businessman, China, Company, Freedom of Speech, Human Rights, Journalist, Law, News, People, Politics, Shi Tao, USA, World, Yahoo | Comments Off on ‘Morally you are pygmies’– Lawmaker Scolds Yahoo Over Jailed China Journalist

China Shuts Down Foreign Company Over Christian Activities, Two Australian Citizens Trapped

Posted by Author on November 2, 2007


Press Release, China Aid Association, U.S, Inc. Nov 02 2007-Rev. Daniel and Mrs. Eliza Ng

Midland, Texas (Oct 31, 2007)- CAA learned that in an unprecedented move against a foreigner-owned firm in China, a large Australia company called Enoch Group (http://www.enochgroup.com/En/Main.asp) has been raided and attacked by various Chinese government agencies in Guangdong province since August of this year. The two owners of the Enoch Group, Mr. and Mrs. Daniel and Eliza Ng (photo at right), were even put under house arrest from October 12 to 25, 2007. Their cellphones were confiscated and they were not allowed to go out of their house at Panyu district, Guangzhou, Guangdong province.

After intensive investigation and interviews with both the leaders of the company and some government officials in Guangdong province, China Aid learned that the move to shut down the company and freeze the nearly 100 million Yuan ($13 million) of in assets and patents, is purely politically motivated. High level government sources told CAA that some of the central government leaders were upset that the Enoch Group has hired a large number of Chinese Christians. The Chinese leaders suspect that the Enoch Group uses its company culture, “love, peace, joy and faithfulness”, to promote Christianity. Sources said the rather harsh tactic made against Enoch Group is to send a strong warning signal to other foreign businesses in China owned by Christians.

The Enoch group is a well-established ecological company which produces environmentally related products. Mr. and Mrs. Ng are both naturalized Australian citizens, immigrated from Hong Kong. Enoch group has branches in Australia, Hong Kong and mainland China.

As a division of Enoch group, Guangzhou Enoch Biological Science and Technology Co., LTD is a bio-engineering corporation, whose research and development focuses on ecological agriculture, amendment of water quality, environmental protection and human health care.

According to the appeal letter sent by Mrs. Ng, both the office and factories of Guangzhou Enoch Biological Science and Technology Co., LTD was first raided by a large group of government agents from the Public Security Bureau, Business Management Bureau on August 21. More than three dozens employees were interrogated like criminals and some were even beaten and detained for hours in the Panyu district police station. Valuable company assets including 50 computers, check books and sensitive company product formulas were confiscated.

On September 13, the government froze both the company’s and Mr. & Mrs. Ng’s personal assets.

On September 22, the Ng’s were barred from traveling to Hong Kong from mainland China.

On October 12, they were formally put under house arrest with charges of “illegal business management and tax evasion,” 5 to 6 plainclothes PSB officers were posted on round-the-clock surveillance outside the Ng’s house.

After 13 days of having their home under siege and subsisting on food randomly provided to them by their guards, a chief PSB officer came to their home. The Ng’s protested the situation to him, requesting permission to leave their home to obtain food. On October 25, they were given permission to leave their home with restrictions of travel. Meanwhile, Mr. and Mrs. Ng filed petitions and appeals to various officials of Guangdong province and the Australia Consulate in Guangzhou, as well as Hong Kong SAR. So far, they have received no response.

Since their assets were frozen, Rev. and Mrs. Ng need to raise fund to cover legal defense and living expenses, please contact China Aid (www.chinaaid.org ) office to provide further assistance.

“This is clearly a case of religious persecution under the guise of trumpeted charges,” said Bob Fu, who has personally known Mr. and Mrs. Ng since 1995. “International investors should be alarmed by the blatant violation of the rule of law in the way this case is being handled.”

Media interview with Rev. Ng, please contact:

Tel: +86-15302260242 or +86-13265947777

Email: RevDanielNg@gmail.com

– Original report from China Aid Association: Large Australia Environmental Product Company in China Forced to Shutdown by Chinese Authorities over Religious Activities; Two Australian Citizens Trapped inside China 

Posted in Australia, Business, Businessman, China, Christianity, Company, Economy, Guangdong, Guangzhou, Human Rights, Law, News, People, Politics, Religion, Religious, SE China, Social, World | 1 Comment »

Son of Former Chinese Leader Involved in Major Shanghai Bribery Case

Posted by Author on October 31, 2007


By Chen Xingman, Central News Agency, via the Epochtimes, Oct 28, 2007-

Jiang Mianheng, son of former Chinese Communist Party (CCP) leader Jiang Zemin, has been suspected of taking bribes from Shanghai tycoon Zhou Zhengyi who is on trial for bribery. Although the Chinese authorities have an audio record of a conversation between Jiang and Zhou, no action has been yet taken against Jiang.

The Hong Kong-based Information Center for Human Rights and Democracy disclosed the above information on October 24. But the Information Center did not confirm whether Jiang’s business interactions with Zhou had carried criminal liabilities.

Quoting an unidentified source, the Information Center reported that on the night of May 26, 2003, Jiang met Zhou at a karaoke bar where he leaked government secrets to Zhou, including information related to Liu Jinbao, the former CEO of the Bank of China (Hong Kong).

Prior to this meeting, the authorities had already been monitoring Zhou’s cell phone. Learning about the meeting, investigators microphone the bar before they arrived, and recorded their conversation.

According to the Information Center, after Jiang left the bar that night, Zhou was immediately arrested. The recording of the conversation between Jiang and Zhou was forwarded to top CCP officials.

Zhou Zhengyi is a well-known businessman who started in Shanghai and later moved his business to Hong Kong. He was an active member of Hong Kong’s highest social circle.

Before Zhou’s current trial, he had served 3 years in prison from 2003 for charges including bribery. Zhou has long been accused by the citizens of Shanghai of illegally obtaining property.

Zhou’s case in 2003 involved many government officials. Not long after Zhou’s conviction in 2003, quite a few Shanghai government officials were arrested on charges of abusing social security funds, among which was the widely reported Chen Liangyu, former Secretary of Shanghai Municipal Party Committee.

Zhou’s case is under a new round of investigation, which many attribute to the fall of Jiang Zemin, Zhou’s old patron. It is widely believed that this time Zhou will face much heavier punishment.

– Report from the Epochtimes: Former CCP’s Leader Son Involved in Major Bribery Case

Posted in Businessman, China, corruption, East China, Economy, Law, News, Official, People, Politics, shanghai, Social, World | Comments Off on Son of Former Chinese Leader Involved in Major Shanghai Bribery Case

China’s richest person is 26-year old woman: Forbes

Posted by Author on October 8, 2007


Reuters, Mon Oct 8, 2007-

BEIJING (Reuters) – The twenty-six year-old daughter of a rags-to-riches property developer is China’s wealthiest person, with a $16 billion fortune, Forbes magazine said on Monday.

Yang Huiyan shot to the top of the China Rich List after the firm her father founded floated on the Hong Kong stock exchange in April, creating five billionaires at once.

Her low-profile father, Yeung Kwok Keung — who worked as a farmer and on construction sites before making his fortune, according to Chinese media — had transferred his stake in Country Garden Holdings Co. to his daughter in 2005.

Also Asia’s richest woman, the Ohio State University graduate this year married the son of a top Chinese official she met on a blind date, the China Daily reported……. ( more details from Reuters)

Posted in Asia, Businessman, China, Economy, Guangdong, News, People, SE China, Women, World | Comments Off on China’s richest person is 26-year old woman: Forbes

6 Representatives of Hong Kong Businessmen Detained for Appealing in Beijing

Posted by Author on October 4, 2007


On September 25, 2007, six businessmen representing a group concerned about investment rights of Hong Kong businessmen in Mainland China went to the Zhongnanhai government complex in Beijing to appeal for the protection of those rights. They asked to meet with China’s President, Hu Jintao, and Prime Minister Wen Jiabao, but were taken away by police and detained in a hotel instead. According to the Hong Kong SAR’s Liaison office in Beijing, the office can do nothing because [the arrest] is related to the “one country, two systems” policy. [1]

The Concerned Group for Investment Rights of Hong Kong Businessmen in Mainland China was founded on May 20, 2007. The group represents over 100 Hong Kong businessmen and women. The group is concerned about the unfair treatment of Hong Kong businessmen and women when investing in China under the “one country, two systems” policy. The group strives to pursue better ways to solve these problems. The group thinks that the Hong Kong government acts as a postman when it comes to complaints and lawsuits about judicial corruption and injustice in Mainland China.

According to Lu Weiping, one of two female group members, the group traveled to Beijing on June 25, 2007 to petition the government. They were told to expect an answer in July. However, they did not receive any reply. The group hopes to receive an answer from the President or the Prime Minister since all of the businessmen they represent have pending legal cases in Mainland China.

Cai Meiying, another delegate, invested 30 million Hong Kong dollars in real estate in Yantai City, Shandong Province, but the land was confiscated by the local government and construction was stopped. In 1992, She lost all of her investment. She told the reporter that she was very disappointed with the Hong Kong government which did not provide any help to them. Instead, Lin Jingfu, an official from Hong Kong SAR’s Liaison office in Beijing tried to dissuade them from petitioning.

Notes:

[1] Radio Free Asia, September 26, 2007
http://www.rfa.org/mandarin/shenrubaodao/2007/09/26/gangshang/

 

– Original report from chinascope.org :  Hong Kong Businessmen Detained for Appealing in Beijing

Posted in Asia, Beijing, Business, Businessman, China, Economy, Human Rights, Incident, Law, News, People, Politics, Protest, Social, World | Comments Off on 6 Representatives of Hong Kong Businessmen Detained for Appealing in Beijing

Wall Street Funds China Police’s Surveillance Companies

Posted by Author on September 12, 2007


By KEITH BRADSHER, New York Times, September 11, 2007-

SHENZHEN, China, Sept. 7 — Li Runsen, the powerful technology director of China’s ministry of public security, is best known for leading Project Golden Shield, China’s intensive effort to strengthen police control over the Internet.

But last month Mr. Li took an additional title: director for China Security and Surveillance Technology, a fast-growing company that installs and sometimes operates surveillance systems for Chinese police agencies, jails and banks, among other customers. The company has just been approved for a listing on the New York Stock Exchange.

The company’s listing and Mr. Li’s membership on its board are just the latest signs of ever-closer ties among Wall Street, surveillance companies and the Chinese government’s security apparatus.

Wall Street analysts now follow the growth of companies that install surveillance systems providing Chinese police stations with 24-hour video feeds from nearby Internet cafes. Hedge fund money from the United States has paid for the development of not just better video cameras, but face-recognition software and even newer behavior-recognition software designed to spot the beginnings of a street protest and notify police.

Now, the ties between China’s surveillance sector and American capital markets are starting to draw Washington’s attention.

Rep. Tom Lantos, the California Democrat who is chairman of the House Foreign Affairs Committee, said he was disturbed by a recent report in The New York Times about the development of surveillance systems in China by another company, China Public Security Technology, which, like China Security and Surveillance, incorporated itself in the United States to make it easier to sell shares to Western investors.

Mr. Lantos called American involvement in the Chinese surveillance industry “an absolutely incredible phenomenon of extreme corporate irresponsibility.”

He said he planned to broaden an existing investigation into “the cooperation of American companies in the Chinese police state.”

Executives of Chinese surveillance companies say they are helping their government reduce street crime, preserve social stability and prevent terrorism. They note that London has a more sophisticated surveillance system, although the Chinese system will soon be far more extensive.

Wall Street executives also defend the industry as necessary to keep the peace at a time of rapid change in China. They point out that New York has begun experimenting with surveillance cameras in Lower Manhattan and other areas of the city, and that corporations make broad use of surveillance cameras in places like convenience stores and automated teller machines.

“Is New York a police state?” said Peter Siris, the managing director of Guerrilla Capital and Hua-Mei 21st Century, two Manhattan hedge funds that were among the earliest investors in China Security and Surveillance.

Mr. Lantos and human rights advocates contend that surveillance in China poses different issues from surveillance in the West because China is a one-party state where government officials can exercise power with few legal restraints.

Mr. Lantos is part of a Democratic Congressional majority that is increasingly eager to confront China at a time of high Chinese trade surpluses and considerable economic insecurity in the United States. He is also a longtime ally of Nancy Pelosi, the speaker of the House and a fellow Californian, who made her reputation in Congress as a critic of China on human rights issues.

A White House spokesman, Tony Fratto said the White House would not comment on specific companies, adding, “It’s not appropriate to interfere in the private decisions of Americans to invest in legally incorporated firms.”

The New York Stock Exchange said that it had no comment except to confirm that China Security and Surveillance was expected to list on the exchange “later this year, subject to the usual conditions, including approval by the S.E.C.”

Because the company already has shares traded in the United States and is not selling any additional shares, Securities and Exchange Commission regulations say approval is automatic once the company fills out a notification form and the New York Stock Exchange confirms it has approved the listing.

Over the last year, American hedge funds have put more than $150 million into Chinese surveillance companies.

The Chinese government trade association for surveillance companies, which also regulates the industry, predicts that the surveillance market here will expand to more than $43.1 billion by 2010, compared with less than $500 million in 2003. Under the Safe Cities program adopted by the government last winter, 660 cities are starting work on high-tech surveillance systems.

Many Western experts, skeptical that China faces a terrorism threat, have suggested that the government may be using it as an excuse for tougher policies toward ethnic minorities in western China, notably Xinjiang Province, and toward Tibet.

Terence Yap, the vice chairman and chief financial officer of China Security and Surveillance Technology, said his company’s software made it possible for security cameras to count the number of people in crosswalks and alert the police if a crowd forms at an unusual hour, a possible sign of an unsanctioned protest.

Mr. Yap said terrorism concerns did exist. His company has outfitted rail stations and government buildings in Tibet with surveillance systems.

Mr. Yap and Lin Jiang Huai, the chairman and chief executive of China Public Security, said that their companies did not do business with the Chinese military and should not raise concerns in the United States. They also said their businesses used technology developed in China and were therefore not subject to United States export controls.

China Security and Surveillance has been aggressively raising money in the United States, including $110 million in convertible loans so far this year from the Citadel Group, a big hedge fund in Chicago. In the last 18 months, the company has used the money to acquire or make a deal to buy 10 of the 50 largest surveillance companies in China.

James Mulvenon, the director of the Center for Intelligence Research and Analysis, which does classified analyses of foreign military and intelligence programs for the Pentagon and other government agencies, said that Beijing clearly wanted the company to consolidate the industry.

“They’re really sort of the Ministry of Public Security’s national champion,” Mr. Mulvenon said of China Security and Surveillance. “In terms of the gear and building the surveillance society, they are the ones.”

After the company announced sharply higher sales and profit on Aug. 13, a succession of American hedge fund managers and investment bank analysts took turns on a conference call questioning and congratulating Mr. Yap.

Traded on the over-the-counter bulletin board market while waiting for the beginning of trading on the New York Stock Exchange, the company has raised almost all of its money through the Citadel loans and private placements of stock with 17 institutional investors in the United States, including the Pinnacle Fund and Pinnacle China Fund in Plano, Tex., and JLF, a hedge fund based in Del Mar, Calif.

The Pinnacle funds’ investments have risen six-fold in 17 months. The funds, which raise all their money in the United States, are also the main investors in China Public Security Technology, with a stake that has nearly tripled in value since February.

Barry Kitt, the founder and general partner of the funds, declined to comment. Citadel and JLF officials also declined to comment.

Each time China Security and Surveillance makes an acquisition, it holds an elaborate banquet, with dancers. The majority of the 500 or more people invited are municipal and provincial security officials, as well as executives of rival companies that may become acquisition targets.

“When they come, they hear central government officials endorsing us, they hear bankers endorsing us or supporting us, it gives us credibility,” Mr. Yap said. “It’s a lot of drinking, it’s like a wedding banquet.”

Lehman Brothers bankers and various Ministry of Public Security officials have spoken at such events, which have been held all over the country. One was at the Great Hall of the People in Beijing, where Mr. Li himself — of Project Golden Shield — addressed the crowd.

China Security and Surveillance has headquarters in Shenzhen, a high-tech manufacturing center in southeastern China, but two years ago it purchased a “shell” Delaware company with no operations but a listing on the American over-the-counter bulletin board market. It turned the Delaware company into its corporate parent.

China Public Security, also with headquarters in Shenzhen, incorporated in Florida in the same way to obtain a listing on the over-the-counter bulletin board.

China Security and Surveillance is involved in some of the most controversial areas of public security. Mr. Yap said on the conference call with Wall Street analysts and hedge fund managers in August that one of the company’s growth areas involved surveillance systems for Internet cafes; the government is trying to clamp down on users of the cafes in order to discourage pornography and prostitution.

Critics say the surveillance is aimed at catching democracy advocates, Falun Gong adherents and others the Communist Party regards as threatening, noting that rules for nightclubs are less rigorous, and do not require live feeds to police stations.

Mr. Yap said investment firms from Europe, the United States and Asia were so enthused about the surveillance market in China that he typically led a full-day tour each week to some of the company’s factories and installations.

At an aging Shenzhen police station, where the scuffed and peeling yellow walls look as though they have not been painted since the Cultural Revolution, a $100,000 bank of new video screens behind the duty officer’s desk shows scenes from nearby streets. In another neighborhood, the company has installed a $1 million system.

Many of the surveillance cameras are still assembled at a modest factory. But the company has used $20 million of the cash it raised in the United States to acquire a large industrial park with six just-completed factory buildings and six dormitories.

In Shenzhen, white poles resembling street lights now line the roads every block or two, ready to be fitted with cameras. In a nondescript building linked to nearby street cameras, a desktop computer displayed streaming video images from outside and drew a green square around each face to check it against a “blacklist.” Since China lacks national or even regional digitized databases of troublemakers’ photos, Mr. Yap said municipal or neighborhood officials compile their own blacklists.

To show off his systems, Mr. Yap strode across a nearby plaza flanked by apartment towers and a low-rise shopping area, pointing out tiny unobtrusive domes and tubes attached to various poles. “See, there’s a camera on the lamp pole, and another one over there and another one here,” he said. “Big Brother is watching you.”

– Original report from New York Times: An Opportunity for Wall St. in China’s Surveillance Boom

Posted in Business, Businessman, China, Company, Economy, Human Rights, Investment, Law, News, People, Police, Politics, products, Social, Technology, Trade, USA, World | 2 Comments »

China Needs To Speed Up AIDS Fight: U.N.

Posted by Author on September 10, 2007


By Jason Subler, Reuters, Sep 9, 2007-

DALIAN, China (Reuters) – China needs to speed up efforts to combat the spread of HIV/AIDS by giving freer rein to civil society organizations and enrolling the help of companies, a U.N. official said.

Peter Piot, head of the United Nations AIDS agency UNAIDS, gave Beijing high marks for opening up official policy towards AIDS, once stigmatized as a disease of the West.

But a gap between centrally-made rules and implementation by local authorities was impeding prevention efforts, threatening China with an even bigger human and financial toll, Piot said in an interview.

“It’s act now, or pay later,” Piot said. “Given the fantastic economic development and the social transformation that is going on …, delaying or being slow in terms of implementing the policies will result in the spread of HIV.”

Side-effects of economic growth, including swelling populations, have helped feed high-risk activities like the sex trade and presented authorities with new challenges, Piot said.

Armies of men have moved from their villages to the cities to help build roads, office blocks and factories that serve as the backbone of the world’s fastest-growing major economy.

That economic engine is also being greased by roving businessmen, who are widely known to be another major client source for sex workers.

SEXUAL ENTREPRENEURS

“This whole, let’s say, sexual entrepreneurship is a side-effect of rapid economic growth and new wealth,” Piot said. “(It’s about) mobile men with money or without money.”

Piot, attending a meeting of the World Economic Forum, said it was especially important that authorities gave more freedom to civil society organizations more quickly, as they are best placed to reach out to marginalized groups.

“I don’t know of any society that has dealt successfully with AIDS where civil society groups … do not have the space to do their work,” he said. “It’s hard for government to do. Just think of gay men, or men who have sex with men — how could the government do that, organize that?”

China keeps a tight grip on non-governmental organizations.

Rights groups say local officials, particularly in Henan province, have banned some activists from holding meetings and shut down other groups.

Henan was one of China’s first areas hit by AIDS, with many people contracting the virus through contaminated blood in the 1990s. An estimated 650,000 people are now living with HIV/AIDS in China……. (more details from Reuters)

Posted in AIDS, Businessman, Central China, China, Economy, Family, Health, Henan, Law, Life, News, People, Politics, Rural, Social, World | Comments Off on China Needs To Speed Up AIDS Fight: U.N.

China: Christian Bookstore Manager Arrestted For Receiving 3 Tons of Bibles

Posted by Author on September 6, 2007


China Aid, USA, September 5, 2007-

Midland, Texas (September 5, 2007)- China Aid learned that a well-known house church leader was formally arrested on August 31 for receiving 3 tons of bibles. Mr. Zhou Heng is also the manager of a registered bookstore which is called Yayi Christian Book Room which is used to sell some Christianity related books published legally and officially inside China. His bookstore was already forced to close after his arrest by the local authority.

Mr. Zhou Heng’s formal arrest’s notice was approved by Shayibake District People’s Procuratorate of Urumqi city on August 31 and sent to his wife Chen Jihong by Urumqi Municipal Public Security Bureau. According to a copy of the notice paper (a scanned copy and its translation are attached with this release) that CAA has obtained, Zhou Heng was accused of “illegal business operation.” Zhou Heng is currently detained at Xishan Detention Center.

He was jailed on August 3. He was detained when he went to pick up three tons of Bibles at a bus station. The Bibles were reportedly donated by South Korean churches and were intended for local believers free of charge.

However, the Chinese government only allows officially sanctioned (state) churches to print and distribute a limited number of Bibles each year. If convicted of the charges, he faces a 15-year prison sentence.

CAA China investigators spoke with a recently released inmate who shared a cell with Brother Zhou. The inmate reported Brother Zhou was beaten in prison severely by other inmates and prison guards. …… ( more details from China Aid’s report: House Church Leader in Xinjiang Formally Arrested for Receiving Bibles and Abused in Jail)

Posted in Business, Businessman, China, Economy, Freedom of Belief, Human Rights, Law, News, NW China, People, Politics, Press freedom, Religious, Social, World, Xinjiang | Comments Off on China: Christian Bookstore Manager Arrestted For Receiving 3 Tons of Bibles

1,199 Taiwan Businessmans Jailed in China In 10 Years

Posted by Author on August 25, 2007


As of the end of last month, 1,199 men and women from Taiwan had been charged with tax evasion, operating illegally, fraud and other offenses, an official said.

DPA, Via Taipei Times, Saturday, Aug 25, 2007-

China has detained and jailed more than 1,000 Taiwanese in the past decade, showing it is risky to do business on the other side of the Taiwan Strait, a Taiwanese official said yesterday.

“As of the end of July, 1,199 Taiwanese businesspeople have been locked behind bars in China in the past decade after being charged with evading taxes, illegal operations, fraud and many other offenses,” Mainland Affairs Council (MAC) Vice Chairman Jonasson Liu (劉德勳) said.

Liu said that most of these businesspeople, unaware of China’s laws, had been framed or set up by Chinese nationals who ended up taking over their business investments in China.

“This shows that it is risky for Taiwanese who are not aware of the laws there to do business in China,” Liu said.

Meanwhile, 42 Taiwanese tourists have been stranded in China after the head of a travel agency they hired disappeared with more than NT$4 million (US$122,000), the Taiwan Tourism Bureau said yesterday.

– Original report from Taipei Times : China jailed thousands of Taiwanese: MAC

Posted in Asia, Business, Businessman, China, Economy, Law, News, People, Politics, Taiwan, travel, World | Comments Off on 1,199 Taiwan Businessmans Jailed in China In 10 Years

China: 100,000 pairs of used chopsticks sold without disinfection every day

Posted by Author on August 22, 2007


Reuters, Wed Aug 22, 2007-

BEIJING (Reuters) – A Beijing factory recycled used chopsticks and sold up to 100,000 pairs a day without any form of disinfection, a newspaper said on Wednesday, the latest is a string of food and product safety scares.

Counterfeit, shoddy and dangerous products are widespread in China, whose exports have been rocked in recent months by a spate of safety scandals, ranging from pet food to medicine, tires, toothpaste and toys.

Officials raided the factory and seized about half a million pairs of recycled disposable bamboo chopsticks and a packaging machine, the Beijing News said.

The owner, identified only by his surname Wu, said he had sold the recycled chopsticks for 0.04 yuan a pair and made an average of about 1,000 yuan ($130) a day.

Wu, who had no license to sell the goods, said he had sold 100,000 pairs a day when business was good.

China, on track to overtake the United States this year as the world’s second-largest exporter, lacks a basic food safety law and the manpower to enforce food and drug safety regulations at home or for export. Imports are generally carefully scrutinized.

A lack of business ethics and a spiritual vacuum after China embraced economic reforms in the late 1970s have been blamed for unscrupulous business practices and corruption.

In Guangzhou, capital of booming Guangdong province in south China, Mayor Zhang Guangning vowed to bankrupt serious violators of food and product safety.

The Hong Kong owner of a Guangdong manufacturer at the centre of a recall of Chinese-made toys by U.S. giant Mattel had committed suicide, according to Hong Kong media.

In the latest in a series of tit-for-tat measures, China has accused the United States of exporting substandard soybean shipments to China and requested “effective measures” be taken.

– Original report from Reuters : Now dirty chopsticks picked up in China scare

Posted in Beijing, Business, Businessman, China, corruption, Counterfeit, Economy, Health, Law, Life, Made in China, News, People, products, Social, Tainted Products, World | 3 Comments »

China: Trial of Pharmaceutical Company Exposes Counterfeit Medicine Production

Posted by Author on August 22, 2007


The Epoch Times, Aug 21, 2007-

On August 8 2007, Guangzhou City Intermediate People’s Court held criminal proceedings of a well-known counterfeit medicine manufacturing case. Five people from Qiqihar No.2 Pharmaceutical Co., Ltd, were criminally charged with, “causing a major liability accident.”

The well-known pharmaceutical manufacturer Qiqihar No.2 Pharmaceutical Co., Ltd. held a national GMP (Good Manufacturing Practice; drug production quality control standard) certification. Its pharmaceuticals were sold all over the country.

The five people on trial included one general manager, two deputy general managers, one laboratory director and one purchaser. The people concerned control the company’s purchasing, quality control, sales and production.

According to a Chinese report on Xkb.com.cn, dated August 9, once in court the five defendants exposed a lot of inside information detailing counterfeit medicine production:

1. Purchasing Division – “Cannot Understand Quality Control Report from Vendor”

Mr. Niu Zhongren, the only individual responsible for purchasing raw materials, was only a junior high school graduate. He cited being “unbearably busy,” and replaced the mandatory “field inspections” and “sample testing” with simple “phone calls” in the purchasing process. Mr. Niu believed that drug production quality control was a matter for the Quality Control Division, so it did not fall within his scope of responsibilities. He also claimed that he “could not understand the quality control reports from vendors.”

2. Approval Link – “GMP Certification Was Bought”

Mr. Guo Xingping was the deputy-general manager of the company. He was in charge of purchases, storage and distribution. The prosecution questioned him about why GMP certification requirements were not met. He was asked why in the absence of field investigations and sample testing was the company allowed to purchase drug supplies.

Answering the question, Mr. Xingping used an analogy, “This is like buying pork. If you go to buy two catties of pork (one catty equals 1.1 pounds) but you suspect that the pork contains clenobuterol hydrochloride (a banned substance). Would you go to a pig farm to do the field investigation?”

As for the GMP certificate, Mr. Guo claimed that the certification, that was supposed to be approved by the regulating body, the Provincial Medicine Regulation Department and registered in the National Medicine Regulation Department, was purchased by the company. “It is just a disc that contains all the documents. The company bought it for 100,000 yuan (USD$13,150)! It is completely impractical for operating in real life” said Mr. Guo.

3. Laboratory Testing Stage

“Of the eleven laboratory technicians, there are only a few who actually have the relevant industry knowledge. Most people are not trained” Ms Chen Guifen was the Laboratory Director of the company.

When she tested a batch of “propylene glycol,” she found the relative density of the batch was not acceptable. However, she did not perform more lab tests to further identify the problem. She wrote false inspection reports following the instructions of Deputy General Manager Zhu Chuahua, who was in charge of quality control.

Ms Chen said, “Of the eleven laboratory technicians, there are only a few who actually have the relevant industry knowledge. Most people are not trained. Many did not even have work permits.”

4. Production and Quality Control Division

“It is the company’s unspoken rule that if raw materials are substandard, we need to approve them (by Inspection Report)”. Deputy General Manager Zhu Chuahua was in charge of the Quality Control Division.

He knew the batch of propylene glycol was a counterfeit product, and that its relative density was not acceptable. In addition, the company’s facilities were ill equipped and the lab technicians were not technically qualified. However, he told Ms Guo to file false inspection reports.

Mr. Zhu said, “It is the company’s unspoken rule that if raw materials are substandard, we need to approve them (by way of an Inspection Report)”. He added, “This is the way it has always been done”.

5. The Final Comment

“When raw materials are first received, employees are each responsible for their specific task. I don’t necessarily know what that might be .”As the general manager of the company, Mr. Yin Jiade denied his responsibility; even though he knew most of his staff were not technically qualified. Mr. Yin said, “When raw materials are first received employees are each responsible for their specific task. I don’t necessarily know what that might be.”

According to the report, 13 people in Guangzhou have died because of the medicine and dozens of victims want to file claims for more than 20 million yuan (US$2,630,129) in damages.

Original report from the Epochtimes

Posted in Business, Businessman, China, Company, Counterfeit, Guangdong, Guangzhou, Health, Law, Life, Made in China, medical, medicine, News, People, products, SE China, Social, Tainted Products, World | 2 Comments »

The Most Dangerous Thing Being Produced in China

Posted by Author on August 18, 2007


by Rick Wartzman, Via Business Week, August 17, 2007-

Amid the Chinese-made product recall, entrepreneurs consider Peter Drucker’s management teachings—namely, slow down on the way to profit

The most dangerous thing being produced in China is neither lead paint-laden toy cars nor magnet-spewing Polly Pocket dolls and Batman action figures. Rather, it is a booming capitalist culture that, far too often, places value over values.

This reality was brought home again this week, as Mattel (MAT) announced its second big recall of Chinese-made merchandise in a fortnight. The news, coming on the heels of Chinese food, drugs, and other items being recalled or fingered as potentially hazardous, resulted in a renewed round of pleas in Washington for heightened vigilance by the Consumer Product Safety Commission. Watchdogs, meanwhile, advocated independent, third-party testing of toys being imported into the U.S.

All of this is reasonable. But it won’t get at the real issue: the need to instill in China’s burgeoning population of factory owners and managers the fundamental idea that the only way to sustain a business— indeed, the only way to sustain Chinese capitalism— is to make sure that they cultivate a sense of social responsibility……. ( more details from businessweek.com article : Drucker’s Lessons for China)

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(Photos) Man-made Fake Eggs Sold on China Night Market

Posted by Author on August 15, 2007


Zhengzhou city’s local newspaper Zhengzhou Daily (Zhengzhou is the capital city of Henan province, in Central China) reported on Aug 13, 2007 that resident Mr. Wang, who’s selling food additive for many years, found that the chicken eggs he bought on night market didn’t look nature- his experience in food told him the “eggs” were made by additive!

So he caught the boss of the restaurant and asked him to tell he the truth, otherwise he will sue to the authority. The boss then reluctantly told Ms. Wang that the eggs were totally man-made, he actually didn’t make it himself but bought from a producer, and had finally told him the process of how to make fake “eggs”.

Mr. Wang then bought some materials – chemical food additive- and exposed to the reporter how to make fake eggs.

egg yolk

Above: additive liquor, for making egg yolk

egg yolk (2)

Above: egg yolk is ready after concreting

egg white

Above: put “egg white” – also additive- on egg yolk

After put the “egg” inside a calcium carbonate eggshell, a complete egg is ready – it only take less than 5 minutes.

Why make fake eggs ?

Because of money.

The cost of fake egg is only 0.55 Yuan/kg, while the true eggs’ market price is 5.6 Yuan/kg.

Read the Chinese report of this story Via Watching China website.

Posted in Asia, Business, Businessman, Central China, China, Counterfeit, Economy, Food, Health, Henan, Law, Life, Made in China, News, People, Photo, products, World, Zhengzhou | 20 Comments »

China Toy Boss Kills Self After U.S Recall

Posted by Author on August 13, 2007


By Edward Cody, Washington Post Staff Writer, August 13, 2007-

BEIJING, Aug. 13 — When Mattel Inc. recalled nearly a million toys manufactured by Zhang Shuhong’s company, he fought hard to find a way to resume sales to America. They were the lifeblood of his firm, Lee Der Industrial Co., Ltd., and its lucrative share of the export boom driving China’s economic growth.

But as Zhang’s factories in the southern city of Foshan lay idle, workers started drifting off, fearing they would never start up again. Then Chinese authorities sealed Zhang’s ruin by announcing Thursday that he was prohibited from exporting toys until further notice because of the defects denounced by Mattel.

Zhang was found dead in a company warehouse two days later, colleagues said Monday, apparently having hanged himself in despair. His death dramatized the high stakes in an international scare over unsafe Chinese products and an increasingly vigorous government crackdown designed to restore confidence in the vital export industry. ( …… more details report from Washington Post)

Posted in Business, Businessman, China, Company, Economy, Guangdong, Life, Made in China, News, People, products, SE China, Social, Toy, Trade, USA, World | 1 Comment »

Israel Arrests Men Who Mediated China Organ Transplants

Posted by Author on August 7, 2007


Epoch Times Israel Staff, Aug 05, 2007-

Four men accused of pocketing millions of dollars that patients had paid for organ transplants in Asia were arrested in Israel this week. The arrests followed months of investigation after the main suspect admitted to an Israeli newspaper that the organs were coming from Chinese death row inmates and prisoners of conscience, including Falun Gong practitioners.

Yaron Izhak Yodukin, CEO of Medikt Ltd. and its Israeli counterpart, was arrested Tuesday for not reporting millions of dollars in income earned by mediating organ transplants for Israelis in China and the Philippines. In recent years, hundreds of Israelis are reported to have traveled to Asia for transplants.

According to Yediot Achronot, Israel’s largest newspaper, the country’s authorities began investigating Yodukin’s activities after he said in an undercover interview nine months ago that the organs his company was helping to provide in China came from political prisoners, death row inmates and people arrested for practicing Falun Gong.

During the investigation, the authorities reportedly discovered that Yodukin’s company had been turning in fraudulent receipts to a national healthcare provider and thereby avoiding tax payments on millions of dollars in earnings.

According to Yediot, the receipts reported costs of organ transplants that were much higher than in reality. By charging Israelis more than what was necessary, Yodukin and his colleagues then pocketed the difference, amounting to as much as six million dollars.

Suspected of aiding Yodukin in his tax fraud scheme are his assistant Peleg Matan, Medikt manager Ilan Perry, and a company lawyer whose name has yet to be made public. All three were also arrested this week.

Adding to the seriousness of the episode have been reports that senior administrators in one of the country’s main healthcare providers— Kupat Cholim Klalit— were somehow involved or aware of what Yodukin and his associates were doing. Yediot reported this week that some of them are also expected to be questioned.

Original report from the Epochtimes

Posted in all Hot Topic, Asia, Businessman, China, Economy, Falun Gong, Health, Law, News, Organ harvesting, Organ transplant, People, Social, Trade, World | Comments Off on Israel Arrests Men Who Mediated China Organ Transplants

Dealing With China’s ‘Quality Fade’

Posted by Author on July 26, 2007


Paul Midler, Forbes.com, 07.26.2007-

Recent media reports detailing a series of quality problems with Chinese-made exports–pet food tainted with prohibited chemicals, toys covered with lead paint and tires that fall apart at high speed–have understandably alarmed the American public and resulted in a number of international product recalls.

But supply chain professionals not directly affected by these recalls remain unusually calm. “Everything will be all right,” said one U.S. importer on a buying mission to China. “As the country continues to develop, the quality of its products will naturally rise.”

It’s the sort of comment that sounds logical, but is not necessarily true. Quality does not always rise over time, as China’s own history shows.

At the end of the 19th century, the West rushed to buy China’s beautiful silk products. Demand quickly expanded, and new players moved into the market. As competition intensified, manufacturers began to cut corners on quality, and silk products out of China soon gained a reputation as inferior goods.

By the beginning of the 20th century, traders were already looking elsewhere, and Japan, which had been building a reputation for delivering a more consistently high-quality product, became an attractive alternative. By 1930, Japan was exporting twice as much silk as China.

One of the problems facing China is that manufacturers continue to engage in a practice I call “quality fade.” This is the deliberate and secret habit of widening profit margins through a reduction in the quality of materials. Importers usually never notice what’s happening; downward changes are subtle but progressive. The initial production sample is fine, but with each successive production run, a bit more of the necessary inputs are missing.

What is maddening to importers is that quality fade often occurs in the last place an importer thinks to check. One American company had been importing a line of health and beauty care products for over a year when the cardboard boxes that held its product suddenly started collapsing under their own weight. There was no logical explanation for the collapse except quality fade, and the supplier in this case blamed subsuppliers for replacing an acceptable cardboard box with ones that were inferior.

The Case Of The Missing Aluminum

Some quality issues are not all that serious, but others are downright frightening. One of the most disturbing examples I have encountered while working in China involved the manufacture and importation of aluminum systems used to construct high-rise commercial buildings. These are the systems that support tons of concrete as it is being poured, and their general stability is critical.

The American company that designed and patented the system engineered all key components. It knew exactly how much each part was supposed to weigh, and yet the level of engineering sophistication did not stop the supplier from making a unilateral decision to reduce the specifications. When the “production error” was caught, one aluminum part was found to be weighing less than 90% of its intended weight.

Where did the missing aluminum go? Into the factory owner’s pocket as a cost saving. The only thing passed on to the customer was an increase in product risk. Quality fade is like the straw that broke the camel’s back–only in reverse. Suppliers push the limit by taking more and more out of the equation until they are caught, or until disaster strikes. (…… more details from Forbes)

Paul Midler is the founder and president of China Advantage, a services firm that provides outsourcing and supply chain management to U.S. and European companies. He has been involved with China for more than 15 years, and in the course of his manufacturing career, has had dealings with thousands of Chinese factories.

Posted in Asia, Businessman, China, Commentary, Economy, Food, housing, Law, Life, Made in China, News, People, products, Social, USA, World | 1 Comment »

Pro-china Newsletter Closed, British founder fears deportation

Posted by Author on July 12, 2007


Jonathan Watts in Beijing, The Guardian, Thursday July 12, 2007-

Chinese authorities have closed an influential publication at the heart of the country’s budding civic society movement, raising concerns about media freedoms in the run-up to the Olympic games.

China Development Brief has been ordered to cease publication pending the results of an investigation into its activities. Beijing officials told Nick Young, the British founder of the organisation, that he was suspected of conducting “unauthorised surveys”.

He has been interrogated by police and there are fears that he may be deported and barred from re-entering the country.

Although a final decision has not been announced, any move to permanently close China Development Brief is likely to stir international concern. The publication is the only newsletter specialising in the work of foreign and domestic non-governmental organisations. Subscribers and funders include the Asia Development Bank, the UN’s Development Programme, the British Council, Save the Children and many foreign universities and media organisations.

The publication’s role as a bridge between NGOs in China and the outside world may have raised the suspicions of the Communist government, which clamps down hard on any group that is in a position to link independent voices. China’s leadership is known to have been alarmed at the role that civic society movements played in the “colour revolutions” in former Soviet states in recent years.

Mr Young has a reputation as a supporter of the Communist party and a critic of western media coverage of China, but he has been under investigation for more than a year. He believes his phone is monitored and his emails intercepted.

The timing of the clampdown appears to be linked to the rising profile of China Development Brief – which recently organised a conference on China’s role in Africa and a party attended by several hundred NGO members and friends.

“I have bent over backwards to be the Communist party’s best friend,” said Mr Young, “but presumably, they realised we have influence. You can do anything in China to a certain level. It is only when you have influence that you get in trouble”.

Another factor was the planned switch of management of China Development Brief and the forthcoming Communist party congress. Mr Young was due to leave Beijing on August 8 and hand over the running of the group to local staff. “They knew my plan and thought this is a good time to close us down and make it impossible for us to make the transition,” he said.

On July 4, he said, his Beijing office was visited by officials from groups including the Beijing Municipality Statistical Bureau. He was accused of violating the 1983 statistics law, which requires advance permission for any survey not conducted by the government.

None of the Beijing government agencies he named said they knew anything about the case.

– Report from The Guardian: Briton fears deportation after Chinese media clampdown

Posted in Beijing, Businessman, censorship, China, Economy, Europe, Internet, Law, Magazine, Media, News, People, Politics, Social, Speech, website, World | Comments Off on Pro-china Newsletter Closed, British founder fears deportation

Surprise Shakeup of Chairman of China’s Biggest Oil Company

Posted by Author on June 26, 2007


by Dexter Roberts, Business Week, June 25, 2007-

In a surprise move, the head of China Petroleum & Chemical (SNP), Asia’s biggest oil and gas refiner, is being replaced, fanning rumors in the Chinese press of possible corruption.

On June 22, longtime petroleum industry veteran Chen Tonghai, chairman and president of the Beijing-based company also known as Sinopec, abruptly stepped down for “personal reasons” according to a statement on the Web site of the State Assets Supervision & Administration Commission, the governmental body which is the major shareholder in the company.

“SASAC has no further information to release as of now,” said a SASAC official when reached by phone. A Sinopec spokesman referred BusinessWeek to another office in the company which did not return several phone calls.

The 58-year-old Chen’s abrupt departure following four years as chairman may be related to “severe violation of discipline,” and “economic problems” said a June 25 report in the Beijing Business Today, a newspaper that belongs to the Beijing Daily Group.

And a report in the Hong Kong-based English-language South China Morning Post has connected the news to a corruption investigation in Shanghai that has already seen the arrest of that city’s former Party Secretary, China’s chief statistician, and the head of its Formula One auto race, an event that Sinopec sponsors. Chen’s departure was due to “economic irregularities” the SCMP reported on June 23.

Shares Fall on News

The news has investors worried. The company’s Chinese-listed A shares fell 5.7% in Monday trading in Shanghai. Sinopec’s Hong Kong-listed H shares dropped 2.87%. (…… more details from Business Week)

Posted in Asia, Beijing, Businessman, China, Company, Economy, News, Official, People, Politics | Comments Off on Surprise Shakeup of Chairman of China’s Biggest Oil Company

Global Drink Giant Danone Under Pressure to Quit China Venture

Posted by Author on June 26, 2007


Rowan Callick, The Australian, Australia, 24 Jun 2007- logo Danone

THE first big question facing businesses that want to operate in China is whether they are brave enough or deep-pocketed enough to go it alone, or whether they will seek a local partner to help steer them through the many rapids they are bound to face.

There are myriad anecdotes and metaphors about the uneven history of joint ventures in China. “Same bed, different dreams” is maybe the most apposite with its presumption that such partnerships are like marriages, they work only when the partners share goals and talk to each other openly and often.

Private equity adviser Tim Clissold’s book Mr China, which became a business best-seller three years ago, chronicles some colourful encounters between hope, greed, experience and ignorance. The quotation at the start of his book is one of the most famous, from Mao Zedong: “Everything under heaven is in utter chaos; the situation is excellent.”

The biggest business story in the past few weeks in China has been about another chairman, who admires Mao enormously: Zong Qinghou.

His falling out with his Parisian partner Danone – the global drink and food giant that makes Danone yoghurt and Evian water – will become a prime case study for business schools.

Zong, a chain-smoking 62-year-old, suffered like most of his generation from a decade of youth and studies lost to drudgery, on a tea plantation and then a factory, during the Cultural Revolution that ended in 1976.

But when Deng Xiaoping opened China’s doors to economic reform and international capital, he didn’t need any tutoring to rush through. Twenty years ago, he began selling soft drinks and icepops in his native Hangzhou, a famously beautiful lakeside city in Zhejiang province just south of Shanghai.

Zong branded his products “Wahaha” – the sound intended to reflect its meaning, “laughing baby”.

In 1996, he ceded control of 51per cent of the firm to Danone, looking to use its expertise and its capital to shift the business up a gear – it was already turning over $120 million a year.

From Danone’s perspective, the deal leveraged off proven local knowledge, enabling it to hit the ground in China running, and to do so without a huge outlay. Zong became chairman and appointed almost all the executive team. He was given a free hand.

By 2006, Wahaha had become the biggest drink producer in China by volume, including its popular teas, claiming 23 per cent of the bottled water market, beating Coca-Cola.

Overall, Wahaha and Danone operate 39 joint ventures.

Zong has become seriously well off, named as 23rd wealthiest person in China on the most recent Forbes rich list.

Like many of China’s multi-millionaires, he has acquired en route a foreign passport – one from Canada. His wife and daughter live in San Marino, California.

And Danone today relies on China for 10 per cent of its global revenues. But the temptations of China’s fast-growing consumer market lured both partners into extra-marital affairs.

Danone last year entered a deal for 49 per cent of a project with the country’s biggest milk producer, China Nengniu Dairy Co, and has developed businesses with other firms in China and Hong Kong.

Meanwhile, Zong established a parallel world for Wahaha, making and selling the same or similar products as the joint venture but wholly owned by him and/or his family, mostly via a structure registered for tax reasons in the British Virgin Islands.

The growth of revenue in the Wahaha joint venture was steadily sinking below the 15 per cent rise of the general beverage market, and Danone eventually twigged that its Wahaha was being eclipsed by the fully Zong-owned Wahaha.

It offered to buy out 51 per cent of these parallel production facilities so that Wahaha would again become a single entity. Zong signed a deal to do so in December, but this year changed his mind.

This is when Chairman Zong’s cultural revolution began to rage through the soft drinks giant.

Danone pushed for transparency and for a cohesive structure for Wahaha, and Zong forgot all about laughing babies and instead spat the dummy and quit as chairman. Sort of quit, anyway.

Danone’s Asia president, Emmanuel Faber, 43, took over as chairman, but the Chinese board members refused to sign off on his elevation.

Inevitably, lawyers are now all over the case. There are actions under way in California, in Sweden and, initiated by the Zong faction, in Hangzhou. At least Chairman Zong, a loyal Communist Party member like many of China’s most successful entrepreneurs, can be assured of winning that one.

Pressure is now coming on Danone simply to quit the firm and, presumably, the country. Liu Hong, general manager of Wahaha, vowed: “We must expel Danone from Wahaha or the fight will never end.”

A Chinese consultancy, H&J Vanguard, which owns a small stake in Bright Dairy, one of Danone’s non-Wahaha involvements in China, claimed it would take Danone to court for “causing hostile competition” in the country.

A spokesman for H&J said: “Danone’s bid on Wahaha jeopardises a national brand and threatens the nation’s economic security.”

Since the row with Zong heated up, a consignment of 118 tonnes of imported Evian water has been seized in Shanghai by Chinese Customs for failing to reach national consumer safety standards.

Wahaha’s spokesman said Danone must drop “unfair clauses” in its joint venture contracts and issue a public apology. This carries strong echoes of the complaints rife in China since the mid-19th century, when the country lamented being forced to concede “unequal treaties” with the British over Hong Kong and then with a succession of countries over other treaty ports.

The implication is that, if a deal becomes inconvenient, it is denounced as “unfair”, and soon enough the position of the foreign investor becomes simply untenable.

The Wahaha staff have been enlisted against the filthy French. Whenever Zong enters the Wahaha HQ, the national flag is raised.

A red banner behind Zong at a recent press conference at the HQ in Hangzhou read, in Cultural Revolution style:

“Steadfastly resist Danone’s hostile takeover and resolutely protect the brand name of Wahaha” – a brand name whose transfer to the joint venture has still not been completed, handily for Zong, underlining the usual role of the regulator as servant of the local champion.

Zong is clearly not, in business terms, the marrying kind. “Absolute authority” doesn’t fit into a joint venture framework.

A Wahaha worker, praising him, said last week: “All sales strategies, pricing and policies came out of Zong’s head. Until recently, reimbursement of expenses of more than 50 kuai (about $8) needed his signature.”

Zong himself said in a talk to MBA students at Shanghai’s prestigious Fudan University a year ago: “Nothing can be done without a powerful leader. In my company there’s only one general manager, that’s me, there’s no deputy. To manage a company is like being on a battlefield. When opportunity comes, it must be seized at once.”

He said that “we had to accept some conditions” such as ceding (theoretically) control, “in order to speed up our development” by linking with Danone. (…… more details from The Australian)

Related:
Battle Between France’s Dannon and its China Partner Wahaha, AFP

Posted in Businessman, China, Commentary, Company, Economy, Europe, Investment, Law, News, People, Trade, World | Comments Off on Global Drink Giant Danone Under Pressure to Quit China Venture

Battle Between France’s Dannon and its China Partner Wahaha

Posted by Author on June 26, 2007


AFP, Wed Jun 20, 2007-

BEIJING (AFP) – China’s largest drink maker Wahaha will soon start selling a new drink,Logo Wahaha with none of the profits to go to estranged French joint venture partner Danone, state press reported Wednesday.

The tea drink will be made by a Wahaha subsidiary not linked to Danone and hit thelogo Dannone market at the beginning of July, Wahaha Beijing’s general manager Liu Hong told Chinese reporters in the Chinese capital.

The launch of the new drink comes as Wahaha continues to distance itself from the French food giant, following a spectacular break-up in their relationship that has seen both companies take legal action against each other.

“We must expel Danone from Wahaha or the fight will never end,” the Beijing News quoted Liu as saying as he briefed reporters on the new drink.

The new drink may ring further alarm bells for Danone, as it appeared to echo the same strategies taken by Wahaha that has so angered the French company.

Danone, which owns 51-percent stakes in 39 joint ventures with Wahaha, has accused the Chinese drinks giants of setting up 20 independent companies and selling products identical to those sold by the joint ventures.

The French food giant is demanding a 51-percent stake in the non-joint venture companies, which Wahaha Group’s chairman Zong Qinghou has rejected.

The matter is the subject of a US lawsuit as well as arbitration in Sweden and China.

Meanwhile, Danone is facing an ever-deepening legal imbroglio, with a another report saying Wednesday that a shareholder in China’s Bright Dairy Food, which is aligned with Wahaha, may sue the French firm.

HJ Vanguard Research and Consulting, which holds an unspecified stake in Bright Dairy, claimed in a statement that Danone’s multiple holdings in Chinese food companies – including Bright Dairy – run counter to the interests of shareholders.

“Danone’s bid on Wahaha jeopardises a national brand and threatens the nation’s economic security,” the China Daily quoted an HJ Vanguard spokesman as saying.

“We demand an immediate halt of such behaviour by Danone.”

The firm has called upon the other shareholders of firms in which Danone has stakes to file collective lawsuits.

original report from AFP

Posted in Businessman, China, Company, Economy, Europe, Investment, Law, News, People, World | Comments Off on Battle Between France’s Dannon and its China Partner Wahaha

1000 Unlicensed “black” Mines in 1 Province: China Shanxi

Posted by Author on June 13, 2007


Jin Ying, reporter from Democracy and Legal Times (Minzhu yu Fazhi Shibao), translated and edited by China Labour Bulletin, Hong Kong-

THE northern province of Shanxi is the centre of China’s ever expanding coal industry, and deep in the very heart of Shanxi are the mountainous rural county of Fenxi and the smoke enveloped city of Linfen, officially the most polluted place in China.

Air, land and water pollution are so bad in Fenxi and Linfen that local clinics have seen a dramatic rise in cases of bronchitis, pneumonia and lung cancer over the last decade. And with the privatisation of China’s health system, this has placed an intolerable financial as well as medical burden on the region’s already impoverished population. Very often the only way the people of Fenxi and Linfen can pay their family medical bills is by working in the very industry responsible for the environmental degradation and pollution all around them. With an ample supply of labour, the county has seen a rapid growth in the coal mining industry, especially small unlicensed mines producing poor quality, highly polluting coal in hazardous and all too often life-threatening conditions. There are nearly a thousand unlicensed mines in Fenxi, which, despite numerous clampdowns, continue to operate covertly with the connivance of local officials.

In April, 2007, Jin Ying, a reporter from Democracy and Legal Times (Minzhu yu Fazhi Shibao), investigated the operation of illegal mines in Fenxi, known locally as “black mines,” and exposed an elaborate network of official corruption and collusion that creates lethal working conditions for miners.

His report, translated and edited here, is important not only because of the story about the mining industry it tells but because it demonstrates the determination of many journalists in China today to report the ugly truth, even at considerable risk to their own safety.

Shanxi Province’s 1,000 unlicensed mines:
Owners collude with officials over “black” pits

There are nearly a thousand unlicensed coal mines operating in Fenxi County. These “black” pits are the result of years of unbridled expansion, defying repeated banning orders, with new mines opening after every batch of closures.

One of the many local labourers attracted to this illegal industry was named Liu Wei. In mid-March this year, Liu was working in a “black” pit in Fenxi County‘s Dianping village. He was crushed to death when the underground roof of the mineshaft he was working in collapsed.

Because he was working in a “black” pit, Liu’s death was completely ignored by officialdom until Liu’s brother, in desperation, turned to the legal support centre of the Judicial Bureau of Ziyang County. From late March to early April, Yang Pei of the legal support centre repeatedly took members of Liu’s family to Dianping village to seek a settlement.

Finally, with three mine accidents in Linfen this March alone, and a province-wide campaign underway to clean up local mining and end unsafe and uncontrolled extraction, local officials and police launched an investigation. After many setbacks and delays, on April 10, Liu’s family were paid RMB 250,000 in compensation.

In Fenxi County, the local view is that Liu was lucky: his death generated a hefty compensation payment. With nearly 1,000 “black” mines in the area, they say there is no way of knowing who might have died underground, adding that many accident victims get no compensation at all.

In the town of Heping, a former “black” mine boss, who we shall call Yiming (One Light) told Democracy and Legal Times; “Believe it or not, we have over a hundred black mines in this one town here, and the whole county has a thousand. I heard personally from Deputy Mayor Ma, that Heping has altogether 167 unauthorised mines. In fact, it’s a lot more than that. My understanding is that the real number is at least 200.” ( …… for more details click here)

Posted in air, Businessman, Central China, China, Company, corruption, Economy, Environment, Law, Life, mine accident, News, Official, People, Report, Rural, Social, water, Worker | 1 Comment »