“Soft Repression” By Cynthia McKinney
Corrupt Chinese Officials?
You may have noticed that China is accused of having corrupt officials whenever one of them is prosecuted. Meanwhile, our own officials – including 100% of our elected officials who accept ‘campaign contributions’ – are presumed to be honest. Some day it would be amusing to support the proposition that China has the most honest national officials of any large country on earth. And, furthermore, that it is their honesty that accounts for China’s extraordinary progress, popular support, and trust.
Chinese Cheating on Their Statistics?
Mark Mobius: From my experience, statistics in China can be just as reliable as statistics you can get in Canada or the U.S. China is a big country and the authorities need reliable data just like any government around the world. I believe the days are gone when the government deliberately wanted to manipulate the data for propaganda purposes. But even if you don’t believe the statistics, there are many ways to confirm and double-check. For example, we recently checked the export statistics of Brazil, Australia, the U.S., Germany and other countries in relation to China. Those numbers pretty much reflected the high growth and demand that we were seeing from the Chinese statistics. It’s always important to check and double-check statistics, because, even without manipulation, there can be statistical errors which creep into data, no matter what the source. Read more…
China is run by 8 engineers with help from 80 million Party members and 1.3 billion Chinese people. If you know an engineer you know how painfully honest they are about figures. And China’s leaders have no reason to lie since they’re not worried about being elected. In the USA, on the other hand,
things are different, as this post from the excellent blog, Econospeak, makes clear:
Words to Hide the Obvious in Economics
Posted: 18 Jul 2012 07:26 AM PDT
One way to reveal the history of the changes in the economic landscape is to study how official meanings to key concepts have been altered over time. “Knowing things that ain’t so”, as Josh Billings once said, presents much more trouble for folks as their simply being “ignorant”. Here are some words that I believe present great danger to the reader in their ability to hide the ‘obvious':
- Oil (2007 and after) “… the definition of “oil” was changed in 2007 to include synthetic liquids.[*]…”  [Not to confuse ‘oil’ with ‘energy’] “…there are at least 3 factors that are ignored in the total liquids graphs …. One – NGL’s and ethanol have only 70% the energy that crude contains. Two – the EROEI of all liquids is dropping – fracking and deep water drilling, just to name two, require much greater inputs per unit of return than does conventional on-shore. Three – the population continues to grow, so per capita available net energy is what matters. And as a corollary to that, the portion of the global population that is reliant upon and has lifestyle expectations based on readily available liquid energy grows every year, so the call on the decreasing net available energy grows even more rapidly than does population itself. Only a graph that takes into account energy density, net energy and population can accurately paint a picture of the global liquid fuel situation.” 
- Retirement age: In the United States, while the normal retirement age for Social Security, or Old Age Survivors Insurance (OASI), historically has been age 65 to receive unreduced benefits, it is gradually increasing to age 67. For those turning 65 in 2008, full benefits will be payable beginning at age 66.[**] In France, the retirement age has been extended to 62 and 67 respectively, over the next eight years.[***] In Spain, the retirement age will be extended to 63 and 67 respectively, this increase will be progressively done from 2013 to 2027 at a rate of 1 month during the first 6 years and 2 months during the other 9.[****]  [**] Normal Retirement Age [NRA] http://www.ssa.gov/OACT/ProgData/nra.html [***] “Pension rallies hit French cities”. BBC News. September 7, 2010. http://www.bbc.co.uk/news/world-europe-11204528 [****] “Spain to Raise Retirement Age to 67″. The New York Times. January 27, 2011. http://www.nytimes.com/2011/01/28/world/europe/28iht-spain28.html
- Inflation: “The government used the same calculation for the CPI from 1913 to 1980. In 1980, after seeing hyperinflation in late 1970s, the government changed the calculation and dropped food and energy from the Core Inflation Index While the U.S. government repeatedly states that we currently  have about 1% inflation, by using the older pre-1980 government calculation of inflation, we find that the true inflation rate is closer to 10.7% as of May 2011 based on the SGS “Alternate CPI” calculation from shadowstats.com. 
- Unemployment…estimated long-term discouraged workers… were defined out of official existence in 1994 [in the US]. Short term discouraged workers are not included in the US ‘monthly headline number’ (U3) but only in the government’s broadest measure of UE at the Bureau of Labor Statistics (U6).  “Employed Person” US term for an individual 16 years old or older who, in a given week, (a) works minimum one hour for an emolument or minimum 15 hours of unpaid work in a family business, or (b) who is not working but has a job or business from which he or she is temporarily absent, whether or not being paid for the time off. 
- Capitalism (1955) capitalism, n. …. the concentration of capital in the hands of a few, or the resulting power or influence…… a system favoring such concentration of wealth. “Capitalism” (1941) “…An economic system in which capital and capitalists play the principal part; specif., the system of modern countries in which the ownership of land and natural wealth, the operation of the system itself, are effected by private enterprise and control under competitive conditions.”  READ MORE, AND SEE REFERENCES for this article
More on Chinese Statistics:
China Cheating on US Trade Deficit?
According to figures released by the US Census, the overwhelming majority of the U.S. $727 billion trade deficit in goods for 2011 is due to “intra-firm” or “related party” trade: trade between two units of the same corporation.
This suggests that China is innocent of the many accusations of unfair trade and currency manipulation made against it.
Moreover, most companies manipulate the prices between their subsidiaries to minimize tax liabilities, (known as “abusive transfer pricing”) which is why America’s Fortune 500 companies pay an average of 9% on their incomes.
Country Exports from US Imports to US Balance
World $1480.4 $2707.8 – $727.4
Canada $ 280.9 $ 315.3 – 34.5
Ireland $ 7.6 $ 39.4 – $ 31.7
Mexico $ 196.4 $ 262.9 – $ 64.5
“Related party trade” is 27.6% of goods trade, but 95.0% of the trade deficit. And in countries where the U.S. has heavy foreign direct investment, like Canada, Ireland, and Mexico, the trade deficit for intra-firm trade is actually higher than the country’s overall trade deficit!
Overall, this suggests that most of the U.S. trade deficit is due to U.S. corporations offshoring production and exporting the products back home. And, of course, tax-dodging at the same time. For a serious discussion of this issue, look at the excellent blog, Middle-Class Political Economist.
As always, your comments are welcome and encouraged. Issues like this need more than just one opinion. And do feel free to add links to useful sources and stories!
After the American Revolution Americans copied British intellectual property–including copyrighted materials–shamelessly, much to the indignation of the Brits. After World War II Japan copied American goods and we complained bitterly about Japanese patent infringement. For many years it was said that the Japanese were good at copying things but not inventing them.
Recently, we’ve heard similar complaints about the Chinese–for whom the whole idea of “intellectual property” is a completely new idea. Considering that China invented most of the basic devices that we use today, we should have waited a little longer before complaining. What a difference a few years have made, as the stories below demonstrate.
By Dan Harris on May 8th, 2012
Finally getting around to reading AmCham’s 2012 China Business Climate Survey Report and the news/numbers are actually pretty good. The numbers are not as good as last year’s, but considering the overall global economic situation, they are still quite good. Some highlights: 92% of respondents forecast that their China 2012 revenues will either stay the same or surpass their 2011 revenues. 76% forecast they will increase.
And this one?
PARTS FOR GERMANY
Big high-speed train parts wait for shipment at a port in Tianjin yesterday. This was the first batch of big high-speed train parts China CNR Corp made for Siemens. It is China’s first export of such components to Europe. The combined value of components China CNR will supply to Siemens this year will total 11.55 million euros (US$14.35 million).
And this (amazing) one?
A Chinese is employed by Bosch to spy on a British technology company?!!!
Or this one?:
Jan 27 (Reuters) – Huawei Technologies [HWT.UL], China’s largest telecoms equipment maker, was the world’s top international patent seeker last year, a United Nations agency said on Tuesday. It was the first time a Chinese company topped the list of applicants for World Intellectual Property Organisation (WIPO) patent protection, which the Netherlands’ Philips Electronics (PHG.AS) had dominated for about a decade.
(Friday, Oct 22, 2010) 46% of Huawei’s 95,000 staff are engaged in R&D activities. Huawei is respected for the quality and innovation of its products: it topped the World Intellectual Property Organisation’s 2008 rankings for international patent applications, and was placed second in the 2009 rankings. Commenting on the award decision, Tom Standage, Digital Editor at The Economist said, “Huawei is the firm that is overturning the widely held preconception that Chinese companies are merely imitators rather than innovators.”
My point being that China has only just begun to stir. We can expect much, much more from the old dragon who, like Rip van Winkle, has been asleep for two centuries…
Deconstructing Japan’s Claim of Sovereignty over the Diaoyu/Senkaku Islands
The Asia-Pacific Journal, Vol 10, Issue 53, No. 1, December 31, 2012.
Ivy Lee and Fang Ming
“The near universal conviction in Japan with which the islands today are declared an ’integral part of Japan’s territory‘ is remarkable for its disingenuousness. These are islands unknown in Japan till the late 19th century (when they were identified from British naval references), not declared Japanese till 1895, not named till 1900, and that name not revealed publicly until 1950.” Gavan McCormack (2011)1
In this recent flare-up of the island dispute after Japan “purchased” three of the Diaoyu/Senkaku Islands, Japan reiterates its position that “the Senkaku Islands are an inherent part of the territory of Japan, in light of historical facts and based upon international law.” This article evaluates Japan’s claims as expressed in the “Basic View on the Sovereignty over the Senkaku Islands” published on the website of the Ministry of Foreign Affairs, Japan. These claims are: the Senkaku/Diaoyu island group was terra nullius which Japan occupied by Cabinet Decision in 1895; China did not, per China’s contention, cede the islands in the Shimonoseki Treaty; Japan was not required to renounce them as war booty by the San Francisco Peace Treaty; and accordingly Japan’s sovereignty over these islands is affirmed under said Treaty. Yet a careful dissection of Japan’s claims shows them to have dubious legal standing. Pertinent cases of adjudicated international territorial disputes are examined next to determine whether Japan’s claims have stronger support from case law. Although the International Court of Justice has shown effective control to be determinative in a number of its rulings, a close scrutiny of Japan’s effective possession/control reveals it to have little resemblance to the effective possession/control in other adjudicated cases. As international law on territorial disputes, in theory and in practice, does not provide a sound basis for its claim of sovereignty over the Diaoyu/Senkaku Islands, Japan will hopefully set aside its putative legal rights and, for the sake of peace and security in the region, start working with China toward a negotiated and mutually acceptable settlement.
A cluster of five uninhabited islets and three rocky outcroppings lies on the edge of the East China Sea’s continental shelf bordering the Okinawa Trough, extending from 25̊ 40’ to 26̊ 00’ of the North latitude and 123̊ 25’ to 123̊ 45’ of the East longitude,2 roughly equidistant from Taiwan and the Yaeyama Retto. Both Japan and China lay claim to this island group. Known as the Senkakus, or Senkaku Retto, Japan claims the islands are “clearly an inherent territory of Japan, in light of historical facts and based upon international law.”3 Rich in fishing stock and the traditional fishing grounds of Chinese fishermen, China has called the islands Diaoyutai,4 meaning “fishing platform,” or Diaoyu Dao, meaning fishing islands, since their discovery in the 14th century. Read more…
China And Japan in the South Seas
Take a look at the map on the right. The red dot is the Diayoyu or Senkaku Islands. The yellow area is the Shirakaba/Chunxiao gas field, of which Japan claims half.
Without knowing any history, doesn’t it look like those are China’s?
Once you know the history, you’ll see that there’s really no serious argument, historically or legally, about ownership.
But since we’ve never even seen a map amidst all the press coverage, most folks will think what they’re supposed to thing: that China is “sabre-rattling” and being “aggressive”.
There’s a good article from a very good website, The Oil Drum, about why the two countries are squabbling. Here’s a taste:
“The recent post on Chinese claims to territory in the China Sea mentioned the rush to plant flags on different islands in the South China Sea portion as a sign of the ongoing nature of the disputes that continue to develop in the region. That status has continued with protests this last weekend in China over Japanese flag-wavingover an island in the East China Sea. The islands are called Diaoyu or Senkaku, depending on whether the report is Chinese or Japanese.
CNOOC, the China National Offshore Oil Corporation, and the company designated to handle their offshore deals, has been producing oil and natural gas from the field since at least March of 2011. Back then:
“China has complete sovereignty over the Chunxiao oil and gas field and administrative authority,” Chinese Foreign Ministry spokeswoman Jiang Yu told reporters at a regular news briefing.
The gas field is 7 minutes flying time for the new Chinese air base at Shuimen.
CNOOC has just released their Mid-year Review noting that they are on track to produce between 330 and 340 million barrels of oil equivalent (mboe) this year. They have 10 new discoveries and 18 successful appraisal wells, and have signed an agreement to co-operatively develop coalbed methane onshore in China. (Their realized gas price is $5.90/kcf, up from $4.92 over the same period last year.) However, they are running about 4.6% down in production y-o-y, which they blame partly on the production outage at the Penglai 19-3 oilfield, in Bohai Bay, due to the oil spill last year. The shut-down reduced overall company production by 40,000 bd, from a field which has been producing atsome 160 kbd.
The field, the largest offshore discovery in China is run in partnership with ConocoPhillips, came on line in 2002 and was the site of another small spill this June. Production at Penglai 19-3 was restarted in March, with the intention of ramping up to close to the original flow volumes.
According to an Economist Intelligence Unit survey, which incorporates data from the National Bureau of Statistics, growth in Beijing last year was just 8.1 percent, Shanghai 8.2 percent and in Guangzhou, a key center for China’s exports, although holding up at 11 percent, was down from the 2010 level of 13.2 percent.
By contrast, the inner and western regions are motoring ahead. Growth in Chongqing, the huge metropolis in the west of China, was 16.4 percent, Sichuan 15 percent, Yunnan province in Southwest China 13.7 percent and Changsha, the capital of the central province of Hunan, 14.5 percent.
Liu Qian, deputy director of the China Forecasting Service at the Economist Intelligence Unit in Beijing, says the faster growth in part reflects that many companies are relocating there.
“With wages increasing in many of the coastal provinces, manufacturing companies have been looking for alternative locations and have been particularly attracted to some of the inland provinces. Not only are wages cheaper there but also many of them have pretty good universities,” she says.
“An additional advantage for provinces like Hunan, Henan and Anhui, for example, is that they are not very far away from the coast. So with improving infrastructure, it is relatively easier to ship goods out.”
A report by Boston Consulting Group, Big Prizes in Small Places, China’s Rapidly Multiplying Pockets of Growth, highlights the business potential of China’s inner regions.
It forecasts the number of middle class and affluent consumers in China that will come from third-tier cities, which predominate in these areas, will more than treble from 27 million households in 2010 to 92 million in 2020.
Waldemar Jap, partner and managing director of BCG, based in Hong Kong, says there is a tendency to see people from inner China as peasants with little spending power.
“Many of them are, in fact, relatively rich since these areas have relatively high per capita incomes. It has to be remembered that many of these inner provinces are not that far from the coastal provinces,” he says.
“What we are telling our clients is that they are going to be a battlefield and a very significant growth driver over the next five years. In some ways they hold the key to the billion consumer market that everyone has been talking about for years.”
A major question is for how long the marked disparity in growth between the coastal and developing inland regions will continue.
“I think it is quite likely to continue for 10 years or so,” says Liu at the EIU.
Feeding China: Some Very Good News