Well done to Shanghaiist for taking the initiative to post about how to support the aid effort. The post (h/t China Law Blog) is reproduced below, and can be linked to from here.

“Red Cross Society of China now calling for donations for Sichuan earthquake
By Sue Anne Tay

For those who are looking to contribute to current aid efforts underway, you can now donate money to the Red Cross Society of China which has formed a disaster relief working group to be dispatched to the earthquake-stricken Wenchuan County in Sichuan.

They have also published an emergency relief hotline, along with bank account information to receive donations to assist their cause:

Account name: Red Cross Society of China
开户单位：中国红十字会总会

For those who want to donate in RMB: you can send money to the RMB account at the Industrial and Commercial Bank of China branch below:
人民币开户行: 中国工商银行 北京分行东四南支行
人民币账号: 0200001009014413252

For those who want to donate in foreign currency, you can send money to the foreign currency account at the CITIC Bank branch below:
外币开户行：中信银行酒仙桥支行
外币账号: 7112111482600000209

Hotline: (8610) 65139999
Online donations: Red Cross Society of China website: www.redcross.org.cn
Click the tab for online donations

ALL “EARTHQUAKE 2008″ RELATED POSTS”

Update: Mother Bridge of Love, a charity we support is also raising money for the victims. Donations can be made online at: http://www.justgiving.com/rbsjames. Updates can be found at http://sichuanearthquake.org.uk.

We have noted problems with Chinese statistics before – restated GDP numbers , different figures from different sources, and misleading definitions. More questions are now being asked about GDP figures - The Economist reports:

“Amazingly, most economists reckon that China has understated its growth in recent years. The country’s National Bureau of Statistics (NBS) has recently revised China’s GDP growth up by half a percentage point for both 2006 and 2007, to 11.6% and 11.9% respectively, thanks to stronger growth in services, which government statisticians find harder to count than industry. Yet even these revised numbers may be conservative.

Chinese provinces independently report GDP, and a weighted average of their figures consistently gives higher rates of output and growth than those reported by the central government…For instance, the figures first published for 2004 showed that the sum of the provincial GDPs was 19% bigger than the reported national figure. Lo and behold, in 2005, after a national economic census picked up more services, the NBS revised its GDP up by 17%; it also lifted the annual growth rate over the previous decade.

Stephen Green, an economist at Standard Chartered, calculates that in 2007 the combined output of the provinces was 10% more than that reported by Beijing. Their average growth rate of 13.1% was also still 1.2 percentage points higher than the revised national growth rate, although the gap has narrowed from almost three points in 2005.”

The Economist also provides a guide (developed by Goldman Sachs) to the reliability of official Chinese numbers. It gives a score to different sets of stats, 5 being the most reliable, and 0 the least:

• Foreign Trade: 5
• Money Supply: 5
• Industrial production: 4
• Consumer Prices: 4
• GDP: 3
• Retail Sales: 3
• Fixed Investment: 2
• Employment: 2
• Average Earnings: 1
• Unemployment: 1

The Economist article ends with a warning, that makes for a great quote:

“Now that China is such an engine of global growth, it urgently needs to improve its economic data. Only a madman would drive a juggernaut at full speed with a faulty speedometer, a cracked rear-view mirror and a misty windscreen.”

Quite! It is important to remember not to take all the numbers coming out of China at face value. When doing research and analysis it is also a good idea to know the source, understand the definitions and methodologies used, cross-reference different sources, do a reality check against related measures, get input from people locally (a specialist consultant, ideally) – and be aware that the numbers, even if they are correct, are likely to change quickly.

See news source:

An aberrant abacus
1 May 2008 … Coming to terms with China’s untrustworthy economic numbers. … An aberrant abacus. May 1st 2008 From The Economist print edition …

Environmental Law
The environment in China has become a key policy focus, and presents real challenges. China Daily reports on legal developments:

“In order to protect its environment and support economic development, China passed its first draft of Environmental Protection Law in 1979, as the fundamental legislation for the country’s green drive. The official version of the law was published 10 years later.

It is the cardinal law for environmental protection in China. The law established the basic principle for coordinated development between economic development, social progress and environmental protection, and defined the rights and duties of governments at all levels, all units and individuals with regards to environmental protection.

…To implement the State’s environmental protection laws and regulations, people’s congresses and governments at local levels, have enacted and promulgated more than 600 local laws on environmental protection according to the conditions in their own areas.

…In 2005, the country adopted a renewable energy law, amended the energy conservation law, and water pollution control and prevention law.

In 2006, when the country’s economic development entered its 11th Five-Year (2006-10) Plan, China mapped out an ambitious blueprint on energy conservation and environmental protection.

The country plans to cut energy consumption per unit of gross domestic products (GDP) by 20 percent, and reduce sulphur dioxide emissions and chemical oxygen demands by 10 percent from 2006 to 2010.”

A list of environmental laws can be seen in the article, via the link below. As ever, it is enforcement that holds the key…at least, as reported recentlyhttp://www.chinabusinessservices.com/blog/?p=635, The State Environmental Protection Agency (SEPA) is being upgraded into a Ministry – the Ministry of Environmental Protection. Hopefully they will also get more (much needed) resources.

Labour Law
The launch of the labour law was noted in an earlier post. An article from the Washington Post gives an update on its impact:

“Armed with a landmark new labor contract law that went into effect Jan. 1, employees…are turning the tables on employers in China.

The law — designed to combat forced labor, withholding of pay, unwarranted dismissals and other abuses — represents a major victory for Chinese workers who for decades have complained of companies that would stop at nothing to wring out profits. It has prompted legions of workers in recent months to become bolder about quitting and about staging strikes to demand improvements in work conditions and wages.

For companies already struggling with inflation, high energy costs, the falling dollar and an environmental crackdown, however, the new law has been devastating.

It has added to the rising cost of doing business in China — contributing to an exodus of what is estimated to be thousands of factories from places like the Pearl River Delta in southern China, for 20 years synonymous with cheap and abundant labor and the engine behind China’s rapid growth.

…The new law, which company owners and industry associations said can add 10 to 25 percent to manufacturing budgets, has been so painful that some foreign factory owners have snuck away in the middle of the night to avoid confronting — and paying — angry workers.

…A survey released in March by the American Chamber of Commerce in Shanghai and Booz Allen Hamilton found that a fifth of companies with foreign ownership or investment have concrete plans to move some or all operations out of China. In the Pearl River Delta, which produces about a third of the country’s exports, an estimated 10,000 companies are planning to scale back or shut down, according to a survey by the Federation of Hong Kong Industries.

Not all of these companies are leaving the country, however. Many say they are moving to less developed parts of China that offer tax breaks and other incentives to offset the increasing costs associated with the new labor law.

The law requires firms to provide contracts that include pension and insurance contributions. It also requires companies to pay workers who are fired a month’s wages for every year worked.

Another costly component of the new law regards overtime. For extra hours on a weekday, companies need to pay workers 1.5 times the normal rate. On weekends, it’s double time. On official holidays, it’s triple time.”

Next up is likely to be the food safety law, a draft of which has already been produced.

The introduction of new laws and regulations such as these will raise the costs of doing business, and of the “China Price”. Of course there are good reasons for this, and it is all part of China’s grand development plan (and of the drive towards a “harmonious society”). But businesses that rely on low cost production will increasingly have to look to new areas, such as those in central and western China (or even further afield), where costs can be significantly lower than in the developed southern and eastern provinces.

See news sources:

A legal leap forward
By SUN XIAOHUA (China Daily)

New Law Gives Chinese Workers Power, Gives Businesses Nightmares
Liu Qin, left, was laid off by a shoe factory that didn’t pay her for months of work. “This time I want to find a new company with a good environment,” she says. “Now it’s not the factories choosing me. It’s me choosing the factory.” (By Ariana Eunjung Cha — The Washington Post)
By Ariana Eunjung Cha
Washington Post Foreign Service

Food safety system put in draft law
By Zhu Zhe (China Daily)
Updated: 2008-04-09 09:13

“The main gist of the article is that the Chinese government should be worried about the rising tide of Chinese nationalism because a great deal of the anger now directed at western policies and interests are in fact, anger at Chinese government policy. Handled the wrong way, this tide of Chinese nationalism could very well turn against the Chinese government, leading to unpredictable consequences.

…This is a classic “bait-and-switch” argument. The anger directed at the west is in fact domestic Chinese anger at Chinese government policies, according to this thesis. This is a dismissal of any anger at the west as an argument completely without merit, and an attempt to shift all of the blame onto the Chinese government.

…The real reason many Chinese are angry is not redirected anger at Chinese government policies, it is a genuine anger at a very biased and one-sided view about China which casts it as irresponsible, selfish, oppressive and wrong, and then throwing all Chinese citizens into the same basket.”

More balance and insight in (some of) the western media’s reporting of China would certainly be helpful. Chinese people, in China and abroad, take real offence at the way China is so often being portrayed (and their anger is sometimes barely concealed). China is a big and complex place, the issues are rarely black and white, and it is not wise to ignore the perspective (or feelings) of so many of the Chinese people.

For people who are doing business in China, it is important to be aware of how seriously Chinese people take these issues – and to read beyond the headlines.

See news source:

Angry China
The recent glimpses of a snarling China should scare the country’s government as much as the … Angry China. May 1st 2008 From The Economist print edition …
The Economist

“China is probably the top carbon dioxide and green house gas producer in the world ahead of the United States…research results by a University of California team will show that the mainland’s greenhouse gas emissions have been underestimated, warning Beijing that unchecked future growth will dwarf any emissions cuts made by rich nations under the Kyoto Protocol.

The team admits there is some uncertainty over the date when China may have become the biggest emitter of CO2 since their analysis is based on 2004 data, but it indicates that previous studies underestimated the problem, thus re-launching the issue of environmental degradation in developing countries.

…Beijing for instance has pointed out that US emissions are five to six times greater than those of China on a per capita basis.”

There can be no doubt that environmental issues will become increasingly important in China – for business and government (let alone the people) - presenting interesting opportunities as well as difficult challenges.

See news sources

China ‘world’s worst polluter’
BBC News - UK
China is now the world’s biggest carbon emitter ahead of the US, a soon-to-be-published report says. The BBC is not responsible for the content of external …

China pollutes more than the United States but the air will be …
AsiaNews.it - Italy
A study by the University of California suggests that pollution levels in mainland China has been underestimated and that it might be undermining emission …

“With the recent media attention on China being largely hostile (or viewed as such from China), how do Chinese feel the Games will affect China’s business environment and relations with other countries?
In a wider perspective, what benefits, challenges and opportunities do the Olympic Games bring to China?”

(Note: Now scheduled for Tuesday, May 27 at 6:00pm - 50% of profits go to Western China’s earthquake relief)
Program
18:15 Arrival and drinks
18:30 Presentation of Great Eastern Studio ‘China Insider’ training for Westerners about Chinese culture and for Chinese about Western culture.
18:45 Talk: Beijing 2008 Olympic Games - the hype and the reality
19:30 Introduction of the 2008 Executive ‘Hidden China’ tour to Sichuan and Yunnan provinces in Autumn 2008
20:00 networking and drinks
20:30 Conclusion

Presented by:

Roy Graff: Roy Graff, MD of ChinaContact and Director at China Business Services will reflect on his recent visit to Shanghai and Beijing and observations on the build up to the Olympics.

Yu SUN: A cross-cultural consultant with a particular focus on Anglo-Chinese communications in Business. Previously working with Shanghai government as a project manager, Yu Sun has worked on many international projects between China and Britain.

For further information, and to register, visit: http://www.eventbrite.com/event/111375126

Updated 13 May, 2008

MBL has registered as an affiliated member of the Edinburgh Marathon 2008 which takes place on Sunday 25th May. We need runners to join the MBL team.

This is a great opportunity to raise funds and awareness to support Chinese orphans and disabled children and children in rural areas who do not have access to education. In the past the money raised by our marathon runners has helped us to sponsor a primary school in Qinghai by paying for tuition fees, a rural school library, food and transport for children whose families were unable to do so. We have also provided medical care for disabled children and sponsored life-skills programmes in various orphanages in China. Past funds have also been donated to Tongjiang in the Sichuan province to help families affected by the summer flooding to rebuild their homes and schools. To learn more about our projects please visit our website www.motherbridge.org.

Your participation in (or donation for!) the 2008 Edinburgh Marathon can make a big difference to the lives of disadvantaged children in China. If you are interested in joining our team, or may know of someone who would be, please contact us.

If you are not able to run in the marathon but would like to support our work please consider giving financial support at: www.justgiving.com/mbl or to support an existing runner teams: www.justgiving.com/rbsjames or http://www.justgiving.com/brianskinner1

If you are interested to join our photography team please contact headofficeATmotherbridge.org

Yours sincerely,

Wendy Wu
Chief Executive

* Jeremy Gordon, Director of China Business Services, is a Trustee of MBL.

• “China’s economy grew 10.6 percent, faster than estimated… from 11.2 percent in the previous three months”.

• “Consumer prices climbed 8.3 percent in March, the statistics bureau said”.

• “The yuan closed at 6.9918 versus the dollar in Shanghai from 6.9973 before the economic data was released. The currency has gained more than 4 percent this year, compared with a 7 percent increase in 2007, reducing import costs and aiding efforts to reduce the trade surplus.”

• “China’s foreign-exchange reserves, the world’s largest, rose to $1.68 trillion at the “end of March.

APP reports that GDP growth might slow further:

“The World Bank on Tuesday trimmed its 2008 growth forecast for China to 9.4 percent from 9.6 percent but said it should be robust enough to help drive the global economy as the United States and other industrialized countries slow.

…Beijing has set a growth target this year of 8 percent following last year’s 11.4 percent expansion. The government often sets a low target for budget purposes and raises it as the year progresses.”

So, rather than being the bête noir of the global trading community (or at least much of their media) China might yet find a few new friends on the back of its relative economic strength.

See news sources:

World Bank Trims China Growth Outlook
The Associated Press -
BEIJING (AP) — The World Bank on Tuesday trimmed its 2008 growth forecast for China to 9.4 percent from 9.6 percent but said it should be robust enough to …

China tries to tackle inflation as growth exceeds 10% for 5th year
Guardian - UK
China’s economy grew by 10.6% in the first quarter of the year despite the global downturn, severe winter weather and tighter lending, the National Bureau …

China’s Currency Reserves Climb 40% to $1.68 Trillion (Update2)
Bloomberg - USA
By Nipa Piboontanasawat April 11 (Bloomberg) — China’s foreign-exchange reserves, the world’s largest, surged to $1.68 trillion at the end of March, …

Right now Carrefour (perhaps unfairly, and mainly because they are French with a slow PR machine - see background here on the ESWN blog) are getting a taste of economic nationalism, as part of a backlash against anti-Chinese protests around the now infamous Olympic torch relay. CNN (itself a target) reports:

“Demonstrators also expressed their anger about what they see as biased reporting of the Tibet story by Western media organizations including CNN.

Protesters gathered outside the French supermarket Carrefour in several Chinese cities including the northwestern city Xi’an, and the northeastern city Harbin and eastern city Jinan, the agency reported.

…Protesters were also heard shouting anti-CNN slogans. This criticism comes after remarks recently made by CNN commentator Jack Cafferty.

Thousands of Chinese also demonstrated outside Carrefour on Saturday in east-central city of Wuhan. And on Saturday about 1,500 pro-Chinese demonstrators gathered outside of CNN’s bureau in Los Angeles demanding that a Cafferty apologize and be fired from the network over comments critical of China and the U.S. government’s relationship with it.

…In the comments, Cafferty referenced what he called billions of dollars in U.S. debt and trade deficits with China.

“So I think our relationship with China has certainly changed,” he said. “I think they’re basically the same bunch of goons and thugs they’ve been for the last 50 years.”

In addition to Cafferty’s clarification, the network also issued a statement saying the commentator was referring to China’s government, not its people.

“It was not Mr. Cafferty’s, nor CNN’s intent to cause offense to the Chinese people, and (CNN) would apologize to anyone who has interpreted the comments in this way,” the statement said.

That is an apology unlikely to get much traction in China!

The message for businesses is to beware, the activist Chinese consumer / netizen, who will not settle down quietly. This sort of thing could happen to any company that lacks clear communications policies and PR skills (especially if they have very vocal – informed or otherwise - countrymen). But the point is a serious one that should inform risk management and PR planning.

See news sources:

China protests target CNN, French store
CNN International - USA

“The former Communist Party boss of Shanghai, Chen Liangyu, was sentenced Friday to 18 years in prison for taking bribes and abusing power.

Mr. Chen, who before his arrest in late 2006 was also a member of China’s ruling Politburo, is the highest-ranking government official to be stripped of power here in more than a decade.

His downfall, after China’s top leaders decided to challenge his lock on power in his prosperous and politically powerful coastal city, is the fallout of an elite political struggle. It also exposed the prevalence of corrupt activities among Communist Party bosses.

His sentence was handed down at the No. 2 Intermediate People’s Court in the northern city of Tianjin, where he was tried.”

Prosecutors accused Mr. Chen, 61, of helping to siphon hundreds of millions of dollars from the city’s pension fund, and also of enriching himself, friends and relatives through shady financial and real estate deals beginning as early as 1988. Government auditors said they discovered that about $4.8 billion had been illegally taken out of the city’s social security fund while Mr. Chen was serving in various government posts in Shanghai.”

Guilty as charged? Quite probably. But if, as the report goes on to say, “he was guilty of accepting about $340,000 in bribes” one (everyone, that is) suspects there is more to the story than the money on the table. And, as is often said, politics is never far from business in China…

See news source:

Former Party Boss in China Gets 18 Years
New York Times - United States
Mr. Chen, who before his arrest in late 2006 was also a member of China’s ruling Politburo, is the highest-ranking government official to be stripped of …