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May 31, 2007
China Tells the World Its Food Exports Are Completely Safe: Guaranteed! FDA Confiscates Six Tubes of Poisonous Chinese Toothpaste in the U.S.
Denial ain't a river in Egypt. It's in China.
UPDATE (June 1, 2007): FDA cries out to American public, DON'T BRUSH WITH CHINESE TOOTHPASTE. Of course, we are now aware it is a serious problem. After all, there is $3 million worth of it in the country in any one year. In other words, it's nowhere around, except perhaps Monterey Park, California, and Flushing, NY, both large centers of Chinese immigrant populations.
To the FDA -- What about the teas, the frozen fish, the shrimp, originating in China, that Americans buy in great quantities just about anywhere in the US?
UPDATE (June 2, 2007): The results of a nationwide search: FDA officials have discovered six (6) tubes of Chinese toothpaste.
Posted by Richard at 5:17 PM | Comments (0)Why Rob When You Can Invest?
This image, sent by a friend in China, shows a banner hung across a street by local police. It reads "Why Rob When You Can Invest?"
May 30, 2007
Stock Transfer Tax Triples -- China Finance Ministry to Stock Market: We'd Like a 15-20% Correction?
After months of hints and proclamations of irrational exuberance from official and unofficial (Li Ka-shing) sources, China's Ministry of Finance yesterday announced an increase in the stamp tax on stock transactions to 0.3% from 0.1%. The Chinese markets fell steeply.
财政部突然上调股票交易印花税至3‰，股市今日天量暴跌，沪指收盘4053.09点、跌281.83点、跌幅6.5％；深成指收盘12627.15点、跌829.45点、跌幅6.16％。两市成交金额超4200亿元，近千家个股跌停。
The reaction from Morgan Stanley:
摩根士丹利发表研究报告表示，内地上调印花税要传递的讯息相当强烈，投资者应严肃对待。此外，Ｈ股中的金融类股由于与Ａ股的关联性较高，相信将会受到拖累。报告表示，内地监管者愈来愈担心资产泡沫，并试图令股市软着陆，是次调整对投资者而言影响并不是很大，但传递的讯息相当强烈。今天沪综指收市大跌6﹒5％，报告表示，Ａ股反应如此强烈，是因为市场预期政府不会采取行政干预股市的希望已经幻灭，市场也正猜测政府下一步的行动。报告表示，如果Ａ股不理会政府的讯号而迅速反弹，相信更多的调控措施，如推出资产增值税和沽空股票╱期指等产品，才能有效控制资产泡沫的膨胀。
Citibank claims investors were over-reacting.
On what basis do these pundits claim the Finance Ministry is looking for a 15-20% correction? And then state that a 40-50% correction would induce the Ministry to invoke measures to stimulate the market?
但德意志银行表示，市场可能不理会该政策，并保持快速上涨的势头，如果这样，监管层可能再度上调印花税；但另一方面，如果此举导致股市回调40-50％，将令政府采取与上调相反的举措。
This page for citizen reaction: some very nasty comments indeed.
Posted by Richard at 11:27 AM
| Comments (0)
May 29, 2007
Conference in Beijing: U.S.-China Trade: Legal and Policy Issues and Opportunities
[Editor's Note: Carol Kalinoski, who will speak at the conference, has kindly provided this overview.]
"The Fourth Annual Conference of the Asian Legal Studies Program, co-sponsored by DePaul University School of Law (Chicago, Illinois) and Beijing Foreign Studies University School of Law will be held Wednesday, May 30, 2007, at the Japanese Studies Center, Beijing Foreign Studies University, Beijing, China.
"The theme of this year's conference is "U.S.-China Trade: Legal and Policy Issues and Opportunities". The panelists will focus on a number of practical issues facing the every-growing, economically interdependent U.S.-China trade in a highly-charged political environment in Washington. Topics include developments in Chinese antitrust law, Chinese Customs and tariff issues, hot topics in U.S. export controls affecting China, managing trade risks, and trade conflicts in the textile and apparel industry.
"Speakers have been drawn from the U.S., China, and the Asia Pacific region, and include prominent Chinese government officials, American jurists, trade practitioners and experienced consultants, industry representatives and scholars.
"Additional information about the conference is available from Jerald A. Friedland, Director Asian Legal Studies Program, DePaul University College of Law, e-mail: jfriedland@depaul.edu."
May 25, 2007
Audio: Wu to Paulson - Stuff it!
Chinese Vice-Premier Tells U.S. Treasury Secretary where to get off. Click the little triangle to listen.
Wu to Paulson: Stuff It!
``China will continue to reform its exchange rate on its own initiative, gradually,'' Wu said at a dinner in Washington after two days of talks with U.S. Treasury Secretary Henry Paulson that yielded only minor agreements and failed to quell calls in Congress for sanctions against China.
Over the past six years, we have often written that China will hold fast on her rate of exchange with the U.S. dollar. No benefit accrues to China were she to do otherwise. And here Ms. Wu has told Mr. Paulson so to his face in public on American soil. [American pols must be jumping up and down in choler extremis.] You can't go much higher than Wu Yi. Is another indication necessary?
And yet the exchange rate is neither the problem, nor the solution. The effect of a revaluation? Alan Greenspan testified the following to Congress on June 23, 2005:
Some observers mistakenly believe that a marked increase in the exchange value of the Chinese renminbi (RMB) relative to the U.S. dollar would significantly increase manufacturing activity and jobs in the United States. I am aware of no credible evidence that supports such a conclusion.
Americans must recognize that making money in China is a rough business -- historically so and we must not expect change. It proceeds according to invisible rules. There are no maps and many dead-ends. The weather changes constantly and without notice.
Americans who wish to export more must adapt to the Chinese business environment with the same alacrity, resourcefulness and self-reliance with which their Chinese counterparts often astonish them. They will have to work a lot harder and take less of a profit doing so. Some have been able to do this. Few do it well. Most spend more time complaining. But we see the value of complaint -- a terrific banquet, followed by the exclamation, "Stuff it!"
Posted by Richard at 11:34 AM | Comments (1)May 24, 2007
Hold the Presses! FDA Stops Imports of Chinese Toothpaste
This suffices for an entire weekend's hilarity.
The government is stopping all imports of Chinese toothpaste to test for a deadly chemical reportedly found in tubes sold elsewhere in the world.
"There is absolutely no evidence of this toothpaste in the U.S. but it is what we believe a prudent and cautionary measure to protect the health of the American public," Arbesfeld said.
Just how much Chinese toothpaste is imported into the U.S.? About $3.3 million. Enough fluoride, tartar agent and humectant for Flushing, NY, perhaps. The American toothpaste market has been estimated at $1.5 billion annually.
An FDA ban -- taken the day after the Chinese negotiating team has left Washington, DC -- of a product stated by the FDA to be "absolutely" harmless is not the kind of symbolic action to impress the Chinese. It certainly doesn't impress the American public.
UPDATE (May 25, 2007): This podcast is really worth listening to. Sorry to spoil your dinners. (Click through to the webpage and then click the LISTEN button under the title, "As Imports Increase, a Tense Dependence on China."
UPDATE (May 30, 2007): Yumm... Honey, that monkfish from China is delicious. ARRGH! GAK! Oh, no, it's actually poisonous puffer fish!
Posted by Richard at 9:09 PM | Comments (0)May 22, 2007
US Treasury Secretary Critical of the Home Crowd, the new Trade Winds and more...
WSJ's article on Treasury Secretary Hank Paulson notes his frustration, not in dealing with Chinese officials, but with Americans. With respect to Social Security:
Mr. Paulson says it's "frustrating to be in an environment where well-meaning people on both sides of the aisle see there's a problem" but don't have the political will to act. "I've been asking people to come to the table, saying all options are on the table, and I'm getting a little tired of playing solitaire."
As to China, he appears to think that patience will, over time, result in the gains he is looking to achieve.
Under pressure to take a tougher stance, the administration has unilaterally imposed sanctions on China for alleged improper pricing of exports, and in a World Trade Organization complaint, has accused China of lax enforcement of copyright violations. Mr. Paulson didn't oppose the moves, although he knew it would be an obstacle to discussions, Treasury officials say. The Chinese reacted angrily, and Mr. Paulson spent about four hours on the phone with Ms. Wu to smooth over tensions, people familiar with the conversation say.
A quote verbatim would have been more revealing than this paraphrase. Did Mr. Paulson really say that the WTO IP complaint was an obstacle to his discussions with China? Isn't it, instead, a valuable tool of negotiation with China? The article thus leaves the reader wondering about his priorities and methods.
UPDATE (May 24, 2007): Chinese authorities have proven as incapable of restraining its prolific counterfeiting as American federal departments were of providing humanitarian assistance during hurricane Katrina.
On Tuesday, Ms. Wu said that efforts by some to “politicize” the Chinese-American relationship were “absolutely unacceptable.” This was taken as a reference to the American challenges to Chinese subsidies of exports and piracy of DVDs.
IP is precisely the kind of issue that the U.S. can not let go of. US representatives in China have been banging away on IP -- with words alone -- for at least 4 years, but it is chopping a redwood with an invisible axe.
The hot air -- the new Trade Winds? -- that has blown forth and back between these two Great Nations has accomplished scant little over these many years.
Action -- even if it is only symbolic -- will speak far louder. [Symbolic acts are typical of Chinese political tradition, e.g. to disarm an enemy by executing the leaders of the group and not the entire group itself.]
Susan C. Schwab, the United States trade representative, speaking at the conclusion of the talks Wednesday, made it clear that her own session with Chinese leaders had done little to narrow differences on these issues. “Suffice it to say we had a healthy exchange of views,” she said.
Meaning that the banquet was terrific.
But this quote gives us serious gastric distress:
Mr. Paulson said he was impatient for more concrete results himself and hoped there would be further progress before the third session of the dialogue, in Beijing in December.
“I have no doubt that we’re getting more results than we would have without this dialogue,” he said.Everyone expects results. And therein lies the problem. Posted by Richard at 2:03 PM | Comments (0)
May 18, 2007
US Treasury Dept. Efforts Move Exchange Rate by 67%! Melamine in the Pet Food, Trade Talks and More
All the news that fits, we print:
"The People’s Bank of China said in a statement posted on its Web site that it would allow the currency, known as the yuan or renminbi, to rise or fall up to 0.5 percent in each day’s trading. The current daily limit is 0.3 percent."
WOW!
***
UPDATE (May 19, 2007): Here we go again!
"There was hope that broader cooperation was on the way, but a lot has changed in a few months. On the American side, with Democrats in control of Congress and a presidential campaign gearing up, there's a growing impatience with the pace of economic reform in China and a slew of anti-Chinese trade bills pending."
Does Miss Cha mean that under the Republicans progress could have been made?
"In recent months, official rhetoric on U.S.-China trade has grown increasingly hostile."
Rhetoric is an empty tide that ebbs and flows between China and the U.S. For all the hot air, the Americans have been entirely unwilling or incapable of acting. As I have written for years, empty American threats prove worthless in the face of Chinese political administrators who are just as canny and talented (or stupid incompetent, as the case may be). The money continues to roll in. How can the Chinese be expected to step in and stop it?
Now, however, ammunition has passed up to the front lines. The melamine-in-the-pet-food scandal (see my post and podcast) has already galvanized the American consumer to avoid Chinese food products, and the FDA's response appears to be earnest. Will an American negotiator in a position of substantial authority make the link between the food impurities case and the trade war at large?
UPDATE (May 20, 2007): This morning's Washington Post picks up on this thread. The strong language of this front-page piece made me stutter for a second - I thought it was an editorial!
For years, U.S. inspection records show, China has flooded the United States with foods unfit for human consumption. And for years, FDA inspectors have simply returned to Chinese importers the small portion of those products they caught -- many of which turned up at U.S. borders again, making a second or third attempt at entry.
Now the confluence of two events -- the highly publicized contamination of U.S. chicken, pork and fish with tainted Chinese pet food ingredients and this week's resumption of high-level economic and trade talks with China -- has activists and members of Congress demanding that the United States tell China it is fed up.
Chinese food imports are a serious public health concern. Some have begun to see the extraordinary value of the pet food scandal in the context of trade negotiations. Let us hope the American negotiators are hammering away at it with the clobberingest mallet they can find.
UPDATE (May 21, 2007): Bloomberg:
``Paulson, as somebody who understood China, was trying to reach a conciliatory approach,'' says Nobel laureate Joseph Stiglitz, an economics professor at Columbia University in New York. ``The question is, has the political pressure taken away his freedom to move?''
With respect to Mr. Stiglitz, that is not the question. Rather, it is the validity of conciliation in negotiation. Conciliation is ineffective with Chinese, unless paired with its subtle black sheep twin brother, Threat.
And neither can be made of straw -- they will both go up in flame. As we've written in the past, one hand must caress while the other is held ready to strike.
Posted by Richard at 8:13 PM | Comments (3)May 15, 2007
Chinese National Anthem to Reflect Revolutionary Fervor? No, Investment Fever!
[Editor's Note: A little humor this morning.]
股民搞創意！ 大陸國歌變股歌 遭批評有損國歌莊嚴
2007/05/11 16:31
記者牟宗珮、潘郁文／綜合報導
大陸股市紅不讓，炒股票更是成了全民運動，腦袋動得快的投資人於是把中國國歌「義勇軍進行曲」改編成「炒股進行曲」，歌詞內容改編成「快漲、快漲、前進！」，因為頗能反映實情，在民間廣為流傳；雖然有專家認為改編歌曲很有創意，但卻覺得調侃之作「有損國歌莊嚴」。
聽起來頗雄壯威武的大陸國歌「義勇軍進行曲」，如今在炒股成為大陸全民運動下，被改成了「炒股進行曲」，原因就是大陸股市紅通通，投資人前仆後繼奮不顧身地把錢投入股市，光是4月份就超過500萬人開戶，也超過前2年開戶的總和。
國歌原詞如下：「起來！不願做奴隸的人們！把我們的血肉，築成我們新的長城！中華民族到了最危險的時候，每個人被迫著發出最後的吼聲。起來！起來！起來！我們萬眾一心，冒著敵人的炮火，前進！前進！前進！進！進！」
歌詞被改成：「起來！還沒開戶的人們！把你們的資金全部投入誘人的股市！中華民族到了最瘋狂的時刻，每個人都激情地發出買入的吼聲！快漲、快漲、快漲！我們萬眾一心，懷暴富的夢想，前進！前進！前進！進！進！」
改編大陸國歌的「炒股進行曲」內容相當有趣又貼近股民心聲，因此很快就在股民中傳唱開來，不少股民還稱讚改編者有創意；不過就是因為這首股歌實在太紅了，也惹來不少人士批評有損國歌莊嚴，也有律師建議，應該制定大陸國歌法，防止大陸國歌又被濫用了。
Posted by Richard at 7:25 PM | Comments (0)May 11, 2007
China To Allow Bank QDII Investment in Foreign Stock Markets - with Conditions
Apologies: no time today to discuss ramifications, if any, of this new measure.
In Chinese: brief article. Somewhat longer article.
The regulation itself, entitled 关于调整商业银行代客境外理财业务境外投资范围通知.
An article in English with quotes from fund managers and economists.
Posted by Richard at 1:03 PM | Comments (0)May 9, 2007
Say What? Unintelligible Chinese from American Companies
Few American companies target the American home with Chinese language mass mailings. Comcast, a major cable TV and internet provider in the U.S., is one of them, but its flyer is a disaster.
What exactly does 立省多達 $400 mean? A contraction of "immediately save more, up to $400," perhaps? But it ain't colloquial Chinese. No Chinese I showed this to could understand it without reference to the original English, thankfuly located on the reverse. And 貸記 as "credit to your bill?" 首選套餐 as "preferred package?" Simply execrable. The rest of the flyer is similarly unintelligible.
Vendors need to understand the first rule of marketing -- if they can't figure out what you're selling, they're not going to buy. Hire someone who knows the language and the culture before attempting to delve into an ethnic market. Cheap and easy translation of existing English-language copy, such as we see on this flyer, is a dead giveaway you haven't a clue what you're doing. And your potential customers will just walk away from you.
Posted by Richard at 1:47 PM | Comments (2)May 7, 2007
Two China IPR Webinars This Month
Webinar News From the Commerce Department:
You are invited to join our May discussions on the China IPR Webinar program. The program is free. No special software or computer configuration is needed to participate; only a phone line and a computer with an Internet connection are necessary. To register for the May programs, please send your contact information here. A registration confirmation, and dial-in/log-in instructions will be sent to you a week before the program. To learn more about the webinar series, please go to this page.
USTR Reports on Local Enforcement of Intellectual Property in China: Special Provincial Review and Special 301 Report of 2007
May 10 2pm-3pm EST
In April of 2006, United States Trade Representative announced it would conduct a review of the adequacy and effectiveness of IPR protection and enforcement at the provincial level in China. Over the past year, USTR led numerous teams of U.S. government officials to many provinces across China meeting with local Chinese government officials, conducted site visits to hot spots of pirating and counterfeiting activity and solicited two rounds of public comments. The results are in! Please join USTR Chief Negotiator for IP Enforcement Stanford McCoy, and Senior Director for China Amy Celico for an in-depth discussion of this year-long fact finding mission and the results of this year’s Special 301 Report on China. The Special Provincial Review and Special 301 report can be found on the USTR website - release date April 30. This webinar is a closed-press event.
China's 2007 IPR Action Plan
May 17 2pm-3:30pm EST
In April, China released its 2007 IPR Action plan which documents initiative planned in 2007 by a number of China's IP related agencies. This year's plan has over 276 measure. Please join China's Counselor for IP Dr. Yang, Guohua as he discusses China's 2007 IPR Action plan, outlines the major projects to be completed in this plan and points out areas of interest to foreign rightholders. For your information, the English version of the IPR Action Plan is available here. This webinar is a closed-press event.
Posted by Richard at 12:28 PM | Comments (0)
