Chinese consumers are turning back to things Chinese.
Starbucks in the Forbidden City has removed its familiar green sign. It has caved in to the sensitivities of being located in this epicentre of Chinese culture. A populist movement to oust Starbucks was started by Rui Chenggang (host of a nightly TV show called 'BizChina) who has drawn attention to what he sees as mindless grasping at Western influences that followed China's opening to the world. He says, 'Once we were too eager to show we were part of the world, but things are changing. We need to preserve our cultural heritage'.
Luxury retailers such as Tiffany's, Armani and Louis Vuitton arrived as did many fast food outlets e.g. KFC. Western companies and their products were viewed as offering superior quality, technology and prestige. Newly rich Chinese wanting to show off their success bought expensive Western products. But now there is a not-so-subtle shift happening in China. After more than a decade of embracing things Western, Chinese are turning to things Chinese. Mainland companies are no longer only turning out shoddy goods but producing products that are in the eyes of consumers, equal to, or even superior to those in the West.
The brand names are not well-known outside China, Haier appliances, Aigo electronics and Chery and Geely cars. Today, China has world-class fashion designers whose creations are proudly worn to parties by chic Chinese and incorporated into everyday wear by the middle class. Traditional patterns and styles are making their way into modern furniture, architecture and interior design. Confucius, traditional Chinese medicine and worship at Buddhist temples are experiencing renewed popularity-and tacit, if not outright government support.
Its Chineseness that's hot. Martin Roll, ceo of brand consulting firm 'Venture Republic' and author of 'Asian Brand Strategy' says, 'People are increasingly proud of their country and proud of the progress of the country. As society becomes more sophisticated, there comes a taste for nationalism, for what is local. We're going to see Western brands have more and more competition in China. Sinofication presents a challenge most Western countries have yet to come to terms with. Many have set up R &D centres in China but their work has resulted in minor tweaks to products developed abroad. The major innovations have yet to hit the market. At present Western brands are not suffering because an economy rising at 11% 'lifts all boats.' But increasingly, Chinese companies are benefiting from nationalistic feeling, gaining market share in sectors such as cars and electrical goods that were once exclusively foreign. The 2008 Olympics in Beijing should add to this nationalism. The Chinese government is trying to reduce the dependence on foreigners for manufacturing and technology transfer. Preferential tax rates for foreign companies, now 15% compared to 33% for Chinese companies are due to end this year. R & D spending is to be doubled. You Shang, the vice minister of science and technology says that China's future does not lie in cheap labour, but its large talent pool and innovative potential.
Beijing has set a target of 60% for domestic car brands to be sold by 2010. At present Chinese brands account for little more than 20%. Foreigners are kept from buying major stakes in industries deemed sensitive to government interests such as cement, soybeans and finance. Such moves are seen as retaliation for the US refusal to allow China to buy Unical in 2005; they have been strengthened by economic nationalism and entrenched as policy.
The origins of Chineseness lie in a belief in the validity and excellence of Chinese tradition, much of which was suppressed or forgotten after 1949. There is a growing sentiment that 5,000 years of civilisation has created better ways of doing things that only have to be revived today. History shows are popular on TV and groups dedicated to promoting Han culture have tens of thousands of supporters. They can sometimes be seen walking down streets wearing 'hanfu' dress to occasional applause. The search for Chinese tradition has resonance. (From Fortune Magazine 28/5/07)
John Prescott, the Deputy Prime Minister opened the Confucius Institute earlier this year at a ceremony attended by the Vice-Chancellor of Sheffield University, Professor Boucher, President Cui Xiliang of Beijing Language and Culture University, Vice-President Zhang Yibin of Nanjing University, Gong Jianzhong, the Chinese Consul General in Manchester and local government and business leaders and academics from across northern England.
The new Institute has set itself a number of goals which include providing a focal point for China-related activities in Sheffield, northern England and the Midlands, promoting the teaching of the Chinese language in secondary schools through the development of teachers of Chinese, contributing to activities that increase UK public awareness of China, its culture and its language, and forging strategic alliances with key stakeholders in business, industry, government and other institutions. (From EastAsia @ Sheffield (University of Sheffield) June 2007)
Zheng Xiaoyu who rose from modest beginnings to help create the Chinese equivalent of the US Food and Drug Administration (FDA) was executed last Tuesday. He was one of the highest-ranking officials ever to be given the death sentence. During his time as the agency head he accepted bribes and gifts worth over $850,000. A series of health care disasters angered both the public and government officials, as counterfeit and substandard drugs are believed to have killed and harmed patients. Last July a tainted antibiotic killed at least 14 persons; some of them children and many others were made sick by the drug.
Yet Zheng started as an idealistic reformer who lobbied for the creation of the State Food and Drug Administration. However, according to friends he was corrupted by the very system he sought to change. So many companies approached him and he could not resist the temptation. Experts say that the regulators were short-staffed and found it hard to cope in a fast growing pharmaceutical industry. During Zheng's tenure more than 150,000 applications were approved, compared to about 140 approvals by the United States FDA.
N.B. US inspectors have stopped more food shipments from India and Mexico in the past year than from China. (From International Herald Tribune 13/7/07)
Steamed buns stuffed with flavoured cardboard, toothpaste laced with an antifreeze ingredient and contaminated seafood. The list of Chinese products withdrawn from US shelves is growing by the month said Oliver August in the Los Angeles Times. The situation is 'darn scary' said James Pinkerton in Newsday (New York). The Wall Street Journal said, 'The execution of one corrupt Chinese official won't fix this'. However Jeff Yang in the Washington Post said, 'There's a nasty whiff of racism about all this. China has been portrayed as a nation blind to hygiene and blissfully unconcerned about recent reports of food contamination.. Some fringe commentators have even accused the Chinese of deliberately trying to poison Americans.
But China is not even the leading source of contaminated US imports-Mexico and India have each had a larger volume of food shipments turned back. The preoccupation with the 'Chinese menace' is reminiscent of the way the ailing US car industry scapegoated Asian imports in the Seventies. (From The Week 28/7/07)
China has been invited by Dhaka to build roads and pipelines that will enable China to ship out exports and import crude oil through two ports in Bangladesh. The roads will connect Kunming with Chittagong and Lhasa with Chalna ports. This is the second time China has beaten India in its own backyard because last month Myanmar committed all gas to China from two offshore sites, despite the fact that two state-owned Indian firms have a 30% stake in the fields and have right to proportionate quantity. Bangladesh has also sought Chinese investment to develop gas reserves and set up industries for value-added products. These developments come at a time when the interim army backed government in Bangladesh has expressed a desire to forge closer links with India. (From The Times of India 26/5/07)
China has worked hard to adjust its economic structure to improve energy saving and cut emissions. From 1991 to 2005, with national energy consumption rising each year by 5.6%, China sustained an annual economic growth rate of 10% and lowered its energy consumption per unit of GDP (gross domestic produce) by 47%, saving 800 million tonnes of coal and cutting 1.8 billion tonnes of carbon dioxide emissions.
China is committed to further improvements in environmental issues. By April 2007, the central government had approved 383 projects in wind, hydro and biofuel power generation and also the use of methane gas from coal beds. These will cut carbon emissions by 1 billion tonnes. During the period 1980 to 2005, 5.1 billion tonnes of carbon emissions was absorbed through extensive reforestation and better forestry management. Without family planning and the single child policy, China's population would have increased by 138 million people since 1979, which would have produced 330 million tonnes in carbon emissions.
China has formulated an action plan, in line with UN frameworks and the Kyoto Protocol-the first for a developing country-which will lower carbon emissions, absorb emissions and increase recycling. Per capita GDP energy intensity will decrease by 20% between 2005 and 2010 with commensurate falls in carbon emission. Cleaner energy sources such as wind, solar, geothermal, tidal, biomass and other renewable technologies will be used to increase the proportion of renewable energy in power generation to 10% by the year 2010. Nuclear power generation will also be promoted.
China will continue its population control policy and will implement projects in forestation. These include returning farmland to forests and grasslands and natural forests will be preserved. The overall aim will be to increase forestry coverage to 20% of the country by 2010. China is committed to improving its policies in industry, taxation, credit and investment and to use pricing to optimise environmentally friendly methods. (From The Financial Times 4/6/07)
In a climate change meeting in Bangkok, Beijing's representatives tried to ensure the conference communiqué specifically blamed industrialised nations for global warming. In recent weeks, China has led an alliance of developing countries disputing the right of the UN security council to debate climate change. China has suggested that their one-child policy should be credited for ameliorating the situation by keeping down the world's population.
Beijing's central argument is that global warming is first and foremost a problem created by rich countries, which should take a lead in fixing it. This view has widespread support amongst developing nations, including India. They regard efforts to impose mandatory reductions in emissions as tantamount to interfering with their rights to develop.
China's relatively high emissions compared to the size of its economy result from the disproportionately large share of energy intensive industries in its economy such as cement, steel and aluminium. In addition, China relies on coal to generate about 70% of its power needs.
Paul Harris of Lingan University in Hong Kong said that China wants the freedom to respond to this issue based on its own needs and that China's disquiet about the pressure it faces had been fuelled by the historical resentment it feels by being lectured by the West. (From The Financial Times 5-6/5/07)
China has appointed Chen Zhu, 54, a French trained scientist and non-Communist Party member, as health minister. This is a sensitive and difficult portfolio at a time when the sector is debating reform. This is the second non-Communist Party member to be appointed to the cabinet in China. Earlier this year, Wan Gang, a German-trained engineer was made science minister. However not being party members, the two ministers will be ineligible to attend ministry party meetings. (From The Financial Times 30-6/1-7/07)
China's embryonic State Investment Company is to invest $3 billion for a stake of about 10% of Blackstone's listing on the New York stock exchange. Stephen Schwarzman, one of the founders of Blackstone said that no other government in the world could have done it more efficiently or more professionally. China has at least $1,200 billion in foreign exchange reserves and has been considering more efficient ways of investing some of this money. (From The Independent 22/5/07)
According to a report in The Economist, about 80% of the hot water in China comes from solar energy. Suntech started by Shi Zhengrong in 2001 is now the third largest manufacturer of solar cells in the world (after Sharp and Q-cells). He gave a new-year's party for his 3,500 employees in a sports stadium in Wuxi and was the richest man in China last year. In fact 90% of Suntech's produce is bought by Germany. Mr Shi's company is listed on the New York stock exchange and is worth $5.5 billion. Mr Shi, aged 44 owns 40% of it. However, according to Forbes magazine, Wong Kwong Yu, an electrical retailer, has replaced him as the richest man in China. (From The Economist 2/6/07)
A company accused of using child labour has lost its licence to make souvenirs for the Beijing 2008 Olympics. Stationery company Le Kit used eight students as packers and did not have contracts with some other workers. Licenses for three other companies were suspended until overtime issues were fixed. Labour right group Playfair Alliance had also revealed earlier that Le Pen used more than 20 children under the age of 16, issued harsh fines, forced overtime working and paid less than the minimum wage at its Guangdong factory. (From (Manchester) Metro 1/7/07).
Bao Xishun, a 56 years old herdsman married Xia Shujian, aged 29 at the tomb of Kublai Khan in northern China. The traditional Mongolian ceremony had more than 2,000 relatives and friends present and all the glitz and national attention of a royal wedding-plus lavish sponsorship, because of his official status as the world's tallest man. Bao is 7ft 9 in tall, 2.3 metres. (From The Times 13/7/07)
Some private schools are imposing unofficial limits on the numbers of Chinese pupils because of fears that British parents will be deterred from sending their children there. Some say they are adopting the policy to preserve their character whilst others are reacting to concerns among parents. The numbers of pupils from Mainland China have grown from a few hundred in 2000 to 2,345 this year. When the pupils from Hong Kong are added, the total becomes 8,652 accounting for 40% of all foreign pupils. The editor of the Good Schools Guide said that, some schools do not want to take more than 10% of their pupils from China, but the demands is such this figure could easily be exceeded. In order to keep the traditional feel of an English public school, they are setting a limit. Chinese pupils sometimes tend to keep to themselves. On the other hand, some schools have no plans to curb Chinese numbers. At Roedean girls school near Brighton, one third of the sixth form are Chinese and another third from other foreign countries.
However for some schools, Chinese pupils are a lifeline such as single-sex, especially girls' boarding schools. They are struggling because more and more British parents are opting for coeducational day schools. Chinese parents always pay full boarding fees and are willing to send their children to single-sex schools. Parents from China see an English-language school education as the gateway to an international career/ While most pupils have wealthy parents, others come from less well-off backgrounds, with members of extended families clubbing together to pay fees. The top nationalities for foreign pupils at British independent schools are as follows:-
|Africa (all countries)||1,056|
Source: Independent Schools Council census 2007 (From The Sunday Times 27/5/07)
The boom in fashion, leisure, luxury goods and upmarket consumer brands continue as the number of wealthy people around the world continues to grow. According to research based on Goldman Sachs data, there are currently about 40 million Chinese consumers of luxury goods but this is set to rise to 160 million over the next five years. This is 22 times the population of Hong Kong which is the world's second largest consumer of luxury items after Japan which is the world's largest. Japanese consumers buy 40% of all luxury goods world-wide.
A recent report by Ernst & Young forecasts that annual sales of luxury goods in China will rise 20% a year until 2008 ($2 billion in 2005) and then by 10% until 2015. (From The Business, 26 May 2007)
Is the sale of luxury goods running into political trouble? Although the gulf between the rich and poor in China is smaller in China than in many other developing countries, the 70,000-recorded cases of civil unrest were prompted in no small part by a growing sense of inequality. The nouveau riche have been upbraided in small ways for leaving too much food on their plates, but recently complaints have become more louder. In March, prime minister Wen Jiabao criticised the building of flashy houses and the use of land for golf courses. A few weeks later, Xinhua, the government's mouthpiece warned that big spenders risked becoming 'intoxicated with comfort' and sinking 'into depravity.' Last week the mayor of Beijing called for controls on outdoor advertisements that promote 'luxury' or 'ultra-distinguished' products on the grounds that they 'encourage luxury and self-indulgence which are not conducive to harmony.' The Beijing Administration for Industry and Commerce, the local market regulator has said that there is a problem with certain advertising not conforming to the demands of socialist spiritual civilisation. (From The Economist 2/6/07)
The proposals to extend the Maglev (Transrapid) train over the 100 miles between Shanghai and Hangzhou were put on ice this month after more than 5,000 residents signed a petition saying they feared health risks resulting from exposure to high electromagnetic fields created by the trains. The project was scheduled for completion by the time Shanghai hosts the Expo 2010 exhibition. In the early 1990s the plan in Germany to run the train between Hamburg and Berlin was axed after protests that the train was too noisy, used too much electricity and was potentially unsafe. (From The Independent 30/5/07)
If all the Wangs in China seceded-all 93 million-they would become the world's twelfth most populous nation. With more than a billion people sharing little more than 100 surnames, Chinese authorities have a problem differentiating between the 1.3 million people called Liu Bo. Such is the level of confusion that the Ministry of Public Security wants to change the law to allow parents to create double-barrelled surnames for their children. Currently the law only allows children to take the surname of their mother or father. A recent survey shows that nine surnames, including Wang, Zhang, Chen, Zhou and Lin are each held by more than 20 million people.
Beijing police once entered an alley to arrest a man called Zhang Jun. They did not know that two men of the same name lived there. They took away the wrong man-who was due to attend his wedding later that day, whilst the suspect escaped.
Under a new draft regulation parents will be able to combine their surnames, opening up 1.28 million new possibilities. A father called Zhou and a mother named Zhu could call their offspring either Zhouzhu or Zhuzhou.
Some 22,000 surnames have been used in China at different times, but only about 3,000 remain in use today and many of the more obscure are dying out. (From The Times 13/6/07)
At Liverpool Women's Hospital on 8 August 2008 at 8 minutes past 8.00 am, a baby girl was born after eight hours of labour. The Chinese-born midwife, Mrs Bee Fung realised the significance of the number 8, which is lucky in Chinese culture. The word eight in Chinese, sounds like the Chinese word to generate or make (money) and is considered very auspicious. To add to the good fortune, the baby was also the eighth baby delivered that day whilst Mrs Fung was on duty. Mrs Fung considers herself lucky just to have been there and she believes that the baby will bring her parents and indeed the whole family much happiness and good fortune. The Chinese authorities also recognise the auspicious number 8, because the Beijing Olympics are due to start at 8.00 pm on the 8 August 2008. (From The Daily Express 13/8/07)
According to the Chinese constitution, everyone is equal before the law. In 1994 the Chinese Government set up a legal aid system with Chinese Characteristics. In 1996 the Chinese Government recognised for the first time the legal status of the legal system in the Criminal Procedure Law and Law on Lawyers. In 2003, the State Council's regulations on Legal Aid came into effect, which defined relevant services as part of the government's responsibility and put forward the basic framework and various principles. China's legal aid system is still in its infancy and is poised for further development but a major problem is the gap between supply and demand. It is estimated that applications top 70,000 each year but only a quarter of these actually receive the service. There is serious lack of funding. Currently the government's annual financial allocations to legal aid are less than 0.06 yuan per capita-much lower than the average level of developing countries.
However China's central government and local governments at various levels attach great importance and are giving greater support to the establishment and implementation of the legal aid system. (From Beijing Review 19/4/07)
The Chinese State Council, on 3 June, started to solicit public opinion on a draft regulation aimed at reducing energy consumption in residential and public buildings. The temperature of air-conditioned public rooms should be no lower than 26 degrees centigrade in summer and no higher than 20 degrees centigrade, in winter. These measures are expected to form part of a regulation to promote energy efficiency. The new regulation will also promote the use of renewable energy and will ban the use and import of energy-inefficient materials, techniques and facilities. (From Beijing Review 12/7/07)
China's State Council recently approved a new regulation designed to make it easier for the public to lodge complaints against what they deem to be unjust government decisions. The Regulation on Implementing Administrative Review Law gives the public the right to ask the government to review actions and decisions that people believe has infringed upon their rights.
An official of the State Council's legal department said that the new regulation sets up an important platform for China's administrative organs to solve disputes, ease social tensions and strengthen inner monitoring. To ensure that officials do not pass the buck, the regulation stipulates that government bodies at all levels must take petitions seriously or their chief officials may be sacked. (From Beijing Review 21/6/07)
A new X-ray technology is being studied that will produce clear pictures of veins and soft tissues which are invisible to ordinary X-ray scans. This third-generation synchrotron radiation technology is being studied at the Shanghai Applied Physics Institute of the China Academy of Sciences. It should play a very important role in detecting the early stages of breast and lung cancer. The new technology, known as Shanghai Light Source should be ready for use in 2009.
The new light source can distinguish objects as small as micrometres, whilst existing techniques only allows visibility down to millimetres and the resolution can be increased by a factor of over a million. This new technology is being developed independently by Chinese scientists and should improve science research in cancer prevention and there is likely to be a big demand for this technology.
Mammography is a widely used technique in the diagnosis of breast cancer but the patient is exposed to high levels of radiation. With the help of synchrotron radiation, three-dimensional pictures can be produced with a single light wave-thus significantly reducing radiation. At present doctors rely heavily on experience when reading X-rays; three-dimensional ones will show up abnormalities even to the untrained eye. A scientist involved in the work, Xiao Tiqiao believes this is the best in the world and it can be used for both diagnosis and treatment. It is similar to the gamma knife and can reach affected parts of the body without damaging healthy tissue.
Synchrotron radiation can be used in other industries as it can record chemical or biological changes at extremely high speed. For example it could produce a three-dimensional image of what is inside, say a dinosaur's egg. (From People's Daily 14/7/07)
About 60% of the fibre used to make paper and cardboard is derived from waste paper. In the last decade, the mainland's waste paper imports have grown by more than 500%, from 3.1 million tonnes in 1996 to 19.6 million tonnes last year. The waste paper industry includes one of China's richest persons, Cheung Yan, the founder of Nine Dragons Paper. She made her fortune from recycling American waste paper into packaging products. Last year alone, China's use of waste paper probably saved 54 million tonnes of wood from being cut down for pulp and also prevented 65 million tonnes of waste paper going to landfill in the USA, Japan and Europe.
However, China continued to depend on virgin forest for high quality paper and sourced nearly 40% of wood and wood pulp from counties where good management cannot be assured. The biggest environmental challenge to China's paper industry is to prevent its growing demand for fibre from places such as Indonesia and Russia where forest destruction is a problem. Environmental groups accuse the mainland of importing illegally felled timber for flooring and furniture. Greenpeace in April reported import of timber from Papua New Guinea and Indonesia to make furniture for overseas markets. (From South China Morning Post 14/7/07 via AP)
Chinese authorities have cut through almost half of the red tape restrictions faced by entrepreneurs in establishing and operating businesses. This is part of the government's attempts to fight corruption and improve transparency. The State Council's administrative examination and approval reform group announced on 19 June that since 2002, the 68 government departments had rescinded or amended 1,806 of their 3,605 administrative approved items. Provincial-level governments had also cancelled more than half of their items. Zhejiang province had in fact slashed the number of approval items from 3,251 to 630 in five years. Chongqing cancelled 312 items last year alone. (From Beijing Review 28/6/07)
China is to update food safety standards and strengthen enforcement to improve food safety. This was announced recently by Liu Pingjun, chief of the National Standardisation Management Commission. According to Liu, China had 1,965 national food safety standards at the end of 2006, of which 634 were mandatory. China will speed up revisions to national and industry standards on farm produce and processed food products-some of which were on average 12 years old. Liu said that China will strive to keep its standards up to date. None will be more than four and a half years old by the end of 2010. Also it will ensure that domestic food standards comply with international ones. (From Beijing Review 28/6/07)
The single child policy in fact only applies to 35.9% of the population of China. According to a senior official of the National Population and Family Planning Commission said on 10 July, that China does not want the current birth rate of 1.8 children per couple to fall any lower. Apart from Henan province, couples who themselves are both 'only children', can have two children. In many rural areas, where 52.9% of the population live, couples are allowed to have two children if the first one is a girl. A further 11% of the population, mainly from minority groups such as the Mongolians, Manchus and Tibetans, can have two or more children. For further info see www.gov.cn (From Beijing Revue 19/7.07)
According to the National Bureau of Statistics during the four-year period from 2002 to 2006, Chinese people averaged annual earnings increases of 12%. Despite this most people complained that their earnings had remained almost unchanged. The Chinese Ministry of Labour and Social Security believes that this is because people's salaries are not all growing at the same pace and there are regional variations and differences between different industries. There are even differences in different enterprises within the same sector. Also rises in housing, health care and education have eaten into salary increases. People compare their salary with others who may have other sources of income or benefits. Ordinary worker seem to have less opportunity to earn additional income compared to white-collar workers and officials. The report comments that the income distribution should be made fairer as an urgent task. (From Beijing Review 26/7/07 via Beijing Youth Daily)
The launch of China's first lunar probe, Chang'e 1 is expected during the latter half of 2007. If successful, it could be followed by two other unmanned probes and possibly a Chinese manned lunar landing within the next 15 years. This is an estimate by Huang Chunping, the leader of the advisory group of China's manned rocket plan. (From China Today August 2007)
From People's Daily/China Daily/Xinhua (14 July 2007)
The central government has punished 1,488 officials involved in illegal land development, the Ministry of Supervision said yesterday. Inspectors found 24,900 sq km of land had been illegally allocated to various industrial parks which amounted to almost 67% of the total land given to them.
A senior Ministry of Education official has said that universities have no right to withhold graduation certificates from students who fail to pay back their bank loans before they leave college.
In Liaoning, authorities have stopped work on the tallest building in the northeast on Monday. They cited paperwork and safety problems, according to the Northeast Evening News. The department of construction said that work on the 260 metres high Northeast World Trade Plaza in Shenyang had started without a permit and problems included workers not wearing helmets.
In Guangdong, about 200 construction workers from Chongqing who were beaten by hired thugs in Heyuan for demanding unpaid wages for their work on a hydroelectric power station have now been paid. One worker was killed and 10 wounded in the incident last month, but nobody was arrested for the attack.
The worst floods in decades have killed at least 112 people in central areas of China this week. They have forced local governments to step up efforts to prevent outbreaks of infectious diseases and food shortages. Xinhua said 34 more people were missing in Sichuan, Chongqing and Anhui and nearly 36 million people had been evacuated over the past week.
About 6.7 million hectares of farmland in the three areas have been inundated costing about 11.8 billion yuan. The Anhui health department has set up five teams to deal with the aftermath of the floods and to prevent epidemics in the summer heat. More than 1,000 medical teams have been despatched to the disaster areas and a further 18 other teams are on standby around the clock.
Sino File is compiled by Walter Fung with some input for From the Chinese Press by Teresa Ray.
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