News & opinion on Greater China and the even Greater Beyond: by Biff Cappuccino.

Monday, May 15, 2006

A rural crisis is forcing Beijing to reconsider the idea of private property: When Deng Xiaoping began introducing market reforms nearly three decades ago, his aides quickly broke up rural "people's communes" into family farms, triggering a dramatic rise in peasant incomes. Today, however, the small farmers who make up the majority of China's population (849 million out of 1.3 billion people) are suffering. Last year rural per capita income was about $400 while the average city dweller's income reached $1,300.
...China's rural residents are hurt by a simple fact: The country still lacks private-property rights. Chinese cannot legally own land. They can only obtain land-use rights—for 70 years in cities and 30 years in the countryside. On top of that, urban residents are allowed to sell those rights, while rural residents in practice have a much harder time doing so.
...The liberals' riposte came in the form of the March 4 conference, sponsored by the China Institute of Reform and Development. The meeting was opened by institute head Gao Shangquan, who was quoted as criticizing "a certain professor's letter" and scoffing at leftists' accusations that a conspiracy "of neoliberalism is guiding reform, planted by the American CIA." Shortly afterward, left-leaning scholars reportedly posted the meeting's minutes online—so that they could excoriate liberal views expressed at the gathering. A couple weeks ago they reportedly held their own conference, during which one participant called for reviving Cultural Revolution-style class struggle.
What China Threat? - Sinophobia was short-lived in Mexico. As the only big manufacturing exporter to the United States in Latin America, Mexico was uniquely worried about the threat posed by cheaper labor in Asia. More than 800 assembly plants known as maquiladoras closed their doors between 2001 and 2004, resulting in the loss of over 200,000 jobs. From late 2001 through 2003, the maquiladora industry shrank by 0.4 percent annually, and everyone assumed they knew the cause. The "China threat" quickly became the stuff of popular headlines—and has faded just as quickly now that Mexico is back.
...Mexico learned that lesson the hard way. Its manufacturing industry is centered in states on the U.S. border, which are reminiscent in some ways of the boom provinces of southern China. And the western state of Jalisco has emerged as the Silicon Valley of Mexico. The capital city of Guadalajara hosts giants like Hewlett-Packard and Texas Instruments, as well as subcontractors that build the printers and laptops sold under those brand names. During the slump, two such subcontractors—On Semiconductors and Multek—closed their plants. Some firms that remained began to transfer operations to China. "We lost several production lines—low-cost ink-jet printers, laptops, cell phones—that moved to China," says Federico Lepe, Jalisco's deputy secretary for foreign trade and investment. "We needed to transform ourselves from being a perspiration industry to an inspiration industry."
...Mexico's rebound is a reminder that geography still matters. As transportation costs mount, Mexico's advantages over China are particularly obvious for makers of cars and other bulky items. California-based Sanmina-SCI supplies more than 20 blue-chip corporate clients from its operations in Mexico. Its five plants in Guadalajara produce everything from MRI body scanners for Philips to auto components for Ford, GM and Chrysler. It promises to meet any U.S. order within 24 to 48 hours and stay abreast of the demands of consumer-electronics makers, which change product lineups every three to six months. Chinese firms, who lose five to six weeks shipping to the United States by sea, can't keep up. "If you were to order ice cream from China you would get five containers of vanilla," says Marco Gonzalez Hagelsieb, senior vice president of Mexico operations for Sanmina-SCI. "Whereas Mexico is Baskin-Robbins: we can mix and match flavors and deliver the ice cream the next day."
(video) In Focus: Anarchy in the PRC - They are part of China’s first generation to grow up with both prosperity and exposure to Western pop culture. Members of Reflector, a Chinese punk rock band, have adopted expressions of dissent that not long ago would have cost musicians their lives. But today, punk rock is Beijing chic.
Avian Flu Wanes in Asian Nations It First Hit Hard : Even as it crops up in the far corners of Europe and Africa, the virulent bird flu that raised fears of a human pandemic has been largely snuffed out in the parts of Southeast Asia where it claimed its first and most numerous victims. Health officials are pleased and excited. "In Thailand and Vietnam, we've had the most fabulous success stories," said Dr. David Nabarro, chief pandemic flu coordinator for the United Nations. Vietnam, which has had almost half of the human cases of A(H5N1) flu in the world, has not seen a single case in humans or a single outbreak in poultry this year. Thailand, the second-hardest-hit nation until Indonesia recently passed it, has not had a human case in nearly a year or one in poultry in six months.
Encouraging signs have also come from China, though they are harder to interpret.
These are the second positive signals that officials have seen recently in their struggle to prevent avian flu from igniting a human pandemic. Confounding expectations, birds making the spring migration north from Africa have not carried the virus into Europe. Biff- is any of this really surprising?
Fake chip storm rocks China’s science elite: The government wants to ensure that as the economy becomes enmeshed with the rest of world – and its rules governing intellectual property rights – that China develops its own commercial technologies rather than buying in from overseas.
The 21st Century Business Herald, a respected newspaper that has pursued the case, reported that Mr Chen had taken chips produced by Freescale Semiconductor, formerly a unit of Motorola, and then used low-paid migrant workers to scrub its trademarks off and replace them with that of Hanxin. Neither company was available for comment.
Mr Chen’s own project had received Rmb114m ($14.2m) for research to develop the Hanxin chips. Xinhua said he had been asked to pay back the money.
...“Jiaotong University has warned its professors and researchers to be disciplined and to comply with ethical codes in scientific research,” Xinhua said.
The university, whose famous graduates include Jiang Zemin, the former president, said it strongly supported “the severe actions taken by relevant government departments”.
“In the future, the school will strengthen its management of research and its oversight of research funds.”

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