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Freedom of expression on Internet guaranteed

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By Yan Jie and Wang Xing (China Daily)

BEIJING - The government is striving to strike a balance between ensuring the free flow of online information and protecting national security and public interest, according to China's first ever white paper on the Internet released on Tuesday.

 It "guarantees the citizens' freedom of speech on the Internet as well as the public's right to know, to participate, to be heard, and to oversee (the government) in accordance with the law", the paper says.

The Internet has an "irreplaceable role in accelerating the development of the national economy" and will continue to impact daily work, education and lifestyles, the paper says.

There were 384 million Internet users in the country at the end of 2009, about 29 percent of the population. The government aims to boost that to 45 percent in the next five years by pushing into rural areas where there is a "digital gap".

There are over 1 million BBSs and some 220 million bloggers, and more than two-thirds of netizens frequently place postings to "fully express their opinion", the paper says.

Newly-emerging online services, including blogging, microblogging, video-sharing and social networking websites, are developing rapidly, and provide greater convenience to users, it says.

The paper, however, stresses that the government cannot ignore Internet security.

"Effectively protecting Internet security is an important part of China's Internet administration, and an indispensable requirement for protecting State security and the public interest," the paper says.

The 31-page document does not give examples of what content will be banned, only saying that Chinese law prohibits the spread of "contents subverting State power, undermining national unity, infringing upon national honor and interests, inciting ethnic hatred and secession" as well as such things as pornography and terrorism.

"The white paper will help increase the transparency of China's Internet regulation," said Hu Yanping, head of Data Center of China Internet, an independent Internet data provider.

It also touches for the first time on the idea of "Internet sovereignty", to explain the government's requirement that foreign IT companies operating in the country have to abide by Chinese law.

"Within Chinese territory, the Internet is under the jurisdiction of Chinese sovereignty," the paper says. "The Internet sovereignty of China should be respected and protected."

"The emphasis on the idea of Internet sovereignty shows the government's resolve to develop the Internet industry after the retreat of Google from the mainland," said Lu Benfu, a professor at the Graduate School of the Chinese Academy of Sciences.

Google moved its search service to Hong Kong in March after it accused Chinese hackers of trying to steal its software coding and of hijacking Gmail accounts of human rights activists, and said it would stop self-censoring its search results in line with Chinese regulations.

No organization or individual can produce, duplicate, announce or disseminate information that may be against the cardinal principles set forth in the Constitution, such as endangering State security, divulging State secrets and jeopardizing national unification among others, according to the white paper.

That may explain why accesses to well-known foreign social networking sites such as Facebook and some other online services are blocked.

In addition, the white paper proposes that the global community create an international body to regulate the Internet and its fundamental resources such as domain names and IP addresses, two key elements constituting the Internet.

"China supports the establishment of an authoritative and just international Internet administration organization under the UN framework through democratic procedures on a worldwide scale," it says.

Source - China Daily (http://www.chinadaily.com.cn/china/2010-06/09/content_9951974.htm)

 

Pressure on China to increase wages

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Rising labour costs may in turn force firms out of country

 

BEIJING: Foxconn has announced a massive wage increase at its factories in the southern Chinese city of Shenzhen, a move which could trigger industry-wide pay increases.

The ripple effect of the latest 66 per cent jump, which will see workers earning 2,000 yuan (S$415) from Oct 1, may drive electronics firms out of the Chinese mainland to other Asian countries.

India, Indonesia and Vietnam are looking to profit from rising labour costs in China.

The pay rise followed a 30 per cent raise announced only last week by Foxconn, as the world's biggest electronics manufacturer grappled with a series of bizarre suicides at its Shenzhen plants.

'The wage increase will reduce overtime work as a personal necessity for some employees and make it a personal choice for many workers,' Foxconn said in a statement, a clear response to accusations of sweatshop-style conditions at its factories turning out products for household names Apple, Dell and Nokia.

Ten Foxconn workers have fallen to their deaths this year in Shenzhen, while another died at a factory in northern China. A worker also died last month, with labour activists saying that it was caused by exhaustion.

The Taiwanese company's troubles surfaced at about the same time that workers went on strike at a Honda factory in southern Foshan city. The two events turned the spotlight on China's low-wage assembly line workers, who have powered the country's phenomenal economic growth in the past two decades and fed the world's consumption binge.

Like Foxconn, Honda announced a pay increase for its workers of 24 per cent. Their actions have led to fears that this could be the beginning of the end of China's reign as the factory of the world.

According to Professor Yuan Gangming of the Chinese Academy of Social Sciences, the companies obviously had no problem absorbing the bigger wage bill.

'It shows the workers' wages have been too low. It's unreasonable,' he said.

At the same time, however, big companies have begun their search for the next cheaper option, which could provide the lax labour conditions that they had enjoyed in China since the early 1990s.

Taiwan Electronics and Electrical Appliances Association chairman Arthur Chiao told the island's Economic Daily News yesterday that his group was helping China-based Taiwanese companies to move out.

They are looking for new factories in countries such as Vietnam, India and Indonesia as labour costs climb on the mainland.

Even China's vast inland, with lower costs of living and lower wages, may not be a sustainable solution to the manufacturers, he said.

'Taiwanese manufacturers have gradually moved their bases from coastal areas (in China) towards the interior, but may face limitations there in the next three to five years' as wages catch up, said Mr Chiao.

Analysts are already projecting that profits will be 10 per cent to 20 per cent lower next year for Foxconn, which is the largest employer in China with 800,000 on its payroll.

News of the huge wage hike hurt the share price of Hon Hai Precision Industry, Foxconn's Taiwan- based parent company. It went down by as much as 6.8 per cent, the maximum amount permitted, before ending down 5.6 per cent at a near 10-month closing low in Taiwan.

In Hong Kong, Foxconn shares were suspended from trading. They had opened down 5 per cent.

But analysts here cautioned against pressing the panic button prematurely, saying that the heavily export-reliant China is still a long way from losing its edge.

'The Foxconn story is one of extremes and rarely seen since China started its reform and opening up policy,' said observer Liu Erduo from Renmin University. 'Since it is a standout, I can't see it having that big an impact on foreign companies.'

He added: 'Our findings in Jiangsu and Guangdong show that foreign firms are not looking to leave China yet.

'And once the government steps in, the whole brouhaha would be over. The government does not want to see labour conflicts worsen because that would create a lot of social problems.'

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Source - The Straits Times (http://www.straitstimes.com/PrimeNews/Story/STIStory_536884.html)

 

Foxconn announces another pay hike

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SHENZHEN - The Foxconn Technology Group announced on Sunday night it would give its workers in Shenzhen a second pay raise in October this year in a bid to ease the tension triggered by a spate of recent suicides.

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Workers on a Foxconn production line pose for a photograph last Thursday, June 3, 2010. The Taiwan-funded company announced a salary increase in response to a series of recent worker suicide cases. [China Daily]  

The world's largest contract electronics manufacturer, which makes the iPhone, iPad and other electronic gadgets for international brands, said it would raise the salaries of the assembly line workers at its plants in the southern city of Shenzhen to 2,000 yuan ($292) beginning Oct 1.

 The announcement comes close on the heels of the group's latest pay raise scheme that adjusts the basic salaries of its workers across China by 30 percent from June 1.

As a result, the salary of front-line operators has jumped from 900 yuan, the minimum required by the local government, to 1,200 yuan in Shenzhen.

The wage increase, according to the company statement, aims to boost the morale of front-line workers and reinforce the company's long-term operational strength.

It is estimated that at least 80 percent of the 400,000 employees of Foxconn in Shenzhen could benefit from the new program, according to company insiders.

However, the workers must pass a performance evaluation that lasts three months, or a three-month probation for new employees, to qualify for the wage increase.

Workers elsewhere in China will get raises in July, which have been adjusted for local conditions, the statement said.

Stock trading in the listing arm of the suicide-plagued company was halted right after the opening on Monday morning in Hong Kong pending the release of price sensitive information, a company spokesperson said.

"At the request of Foxconn International Holdings Limited, trading in the shares of the company on the Stock Exchange of Hong Kong Limited has been suspended with effect from 10:02 am on June 7 pending the release of price sensitive information," said the company in a statement filed to the HK stock exchange.

Shares of Foxconn, the only constituent stock from Taiwan, closed at 5.66 HK dollars before trading suspension, down 5.5 percent from the previous closing.

Ten workers have killed themselves and three have attempted suicide at Foxconn's operations in Shenzhen this year, mainly workers who jumped from buildings, which raised wide concerns across the country.

Apart from pay raise, the trade union of the company also launched a series of arrangements, including a 24-hour reporting system for any abnormal behaviors and psychological instability.

A survey conducted by the city's human resources and social security department found that 72.5 percent of a sampling of Foxconn workers worked overtime and the monthly overtime amounted to an average of 28 hours, Xinhua News Agency reported.

A Taiwan industry leader, however, warned on Monday that the recent wage hikes in the mainland could force Taiwan electronics firms operating there to relocate to other Asian countries.

Chairman Arthur Chiao of the Taiwan Electronics and Electrical Appliances Association said his group is assisting mainland-based Taiwan companies to seek out new manufacturing sites in India, Indonesia and Vietnam in the wake of steadily rising labor costs on the mainland.

Source : China's Daily (http://www.chinadaily.com.cn/china/2010-06/08/content_9945902.htm)

 

China's oversized state monopolies threaten its economy

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When the Financial Times released its list of the 500 largest companies in terms of market value with, it exposed serious problems in the structure of China's economy and China's enterprises. Among the top 500 enterprises, 21 of them are listed on the Chinese mainland and all of them are large state-owned or state-controlled enterprises, covering areas from finance, chemical, construction, to transport and so on. PetroChina Co., China's largest oil producer, took the top spot.

The list caused concern among Chinese netizens and many of them believe it was nothing to be proud about.

Is it good or not that all the Chinese enterprises on the top 500 enterprises are state-owned or state-controlled? With the high concentration of social resources and funds, they are getting larger and larger and increasingly monopolized. PetroChina and Sinopec, for example, have no competitors and are becoming less and less energetic due to a long-term monopoly operation. They run a business without loss and even rob from consumers.

China's large state-owned banks, led by Industrial and Commercial Bank of China (ICBC), have the major share of domestic financial markets and it is very difficult for private enterprises to enter into financial sectors. So if a kind of resource can not be distributed by fair competition, it will inevitably lead to the dominance of some enterprises, and for others, there is no chance to survive.

A country's economic vitality lies in the development environment and speed of private enterprises. It also requires dynamic and internal power of private capital investment

After the worldwide financial crisis, U.S. President Barack Obama said many times during his speeches that the country must address the issue of financial enterprises and other industries that are "too large to fail," which shows the U.S. government felt concerned about the full marketization and privatization of enterprises.

If problems occurring within an enterprise or an industry can lead to problems for the economy as a whole, such as employment, economic growth and state revenue, it spells trouble for the nation. The whole country can be "kidnapped" by these enterprises and industries.

The problems of U.S. financial enterprises triggered the global financial crisis, leading the U.S. economy into a freefall and thousands of people lost jobs ever day. So, these businesses are not so much an asset as they are a threat. However, China still should learn from U.S. anti-monopoly moves. Antitrust investigations against Microsoft and Apple are both good examples.

In the United States, enterprises are making continual innovation and the government is implementing constant oversight, which helps the U.S. economy maintain vitality, competitiveness and order. China should learn from this.

Chinese private firms, growing in an environment of market competition, are more comparable with their counterparts in Europe and the United States. Only when those enterprises with no privileges, monopoly and state holdings are among the global 500 list, can China feel proud.

Source:People's Daily 

http://en.ce.cn/Business/Macro-economic/201006/06/t20100606_21486805.shtml

 

Price hikes in basic goods fuel inflation fears

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Price hikes in certain basic goods fuel inflation fears

Prices of daily necessities including milk powder, tissue paper and tea have risen nationwide in recent months, following previous price hikes in a number of farm products.

The price of a number of high-end milk powder products increased by up to three times this year, while the price of tea from the spring harvest has risen by 20 percent year-on-year, media reported. Most tissue paper products also rose by 20 percent year-on-year.

 

Citing the latest round of price hikes, a number of analysts have warned again of the heightened risks of inflation, though food prices have started to ease due to central government efforts to curb speculation.

Ha Jiming, chief economist at China International Capital Corp, forecast that the country's consumer price index (CPI), a major gauge of inflation, will increase by 3.2 percent in May from a year earlier, Xinhua News Agency reported.

CPI annual growth rate could peak at 4 percent in June and July, Ha told an investor conference in Beijing.

The government also reiterated an inflation target of 3 percent for the year.

Price hikes in certain basic goods fuel inflation fears

But a surge in prices of certain products like garlic or mung beans will have a limited impact on overall inflation, authorities said.

Recent price hikes in non-staple products like garlic, vegetables and mung beans were reportedly due to factors like regional drought, speculation and hoarding.

Food prices account for one-third of China's CPI basket, official statistics showed.

The recent price hikes will not affect the CPI significantly because the consumption of the affected non-staple agricultural products is relatively low and their demand is flexible, said Peng Sen, vice-minister of the National Development and Reform Commission, the country's top economic planner.

Zhang Lin, a Beijing-based white-collar worker, thought otherwise.

"Inflation will definitely pick up in China as the price of almost every thing is on the rise," she said.

Speculative funds looking for new investment channels as stock prices fell and tightening measures hit the property markets are partly responsible for expectations of inflation, Peng said.

Mung beans cost 9 yuan (US$1.32) a kilogram in October 2009 but soared to 20 yuan for the same amount by May, figures from the National Bureau of Statistics showed.

Prices for black soybeans and glutinous rice have also increased significantly.

The government has rolled out anti-speculation measures, including monitoring prices, punishing irregular trading activities and increasing supply, to help cool the price hikes.

Source:China Daily 

http://en.ce.cn/Business/Macro-economic/201006/05/t20100605_21485280.shtml

 


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