CHINA: Google incident illustrates dilemma for foreign companies in China

Friday, January 15, 2010; A14

By Steven Mufson and Peter Whoriskey
Washington Post Staff Writer

BEIJING -- Ever since the 1930s, when a Missouri-born man opened an ad agency in Shanghai and wrote a book called "400 Million Customers," the Chinese market has beckoned to American companies. And never more so than now, when the number of customers has grown to 1.3 billion and China is poised to surpass Japan to become the world's second-largest economy.

Activists in Hong Kong hold a banner supporting Google's stand on China. It reads: "Say no to Internet censorship. Well done, Google." (Jerome Favre/bloomberg News)

But Google's struggles here -- wrestling both with political compromises and with threats to its intellectual property -- raise the question: How much hassle are China's consumers worth?

While hundreds of U.S. companies have decided to seek a piece of the world's fastest-growing market, to do so they must weigh the allure of potential profits against human rights concerns, the threat of intellectual-property infringement and unpredictable treatment of their financial interests.

It hasn't always been an easy calculation. Levi Strauss & Co. stopped making clothes here in 1993, citing "the pervasive violation of human rights," but then returned in 1998, saying that the company could do more good for human rights by working from within the country. Time Warner opened about a dozen movie theaters here but decided to sell them in 2007, after new laws required Chinese control and because of limits on the number of foreign films allowed. EBay pulled out in 2006, largely because of stiff local competition.

James McGregor, senior counselor for Apco Worldwide in China and author of "One Billion Customers," believes that more and more U.S. companies doing business in China are rethinking their presence.

"Many companies came here because they believed they couldn't not be here given China's booming growth," he said. But, he added, "if trends don't change, we may see companies considering that maybe they can afford to not be here."

For now, that's not usually the case.

General Motors, for example, expects China's car market to be twice the size of the United States' by the end of the decade, Fritz Henderson said before he stepped down as chief executive. For now, foreign car companies hold 85 percent of the crowded Chinese market.

"If you don't go in with the best technology, you're going to be at a competitive disadvantage," said Kevin Smith, head of GM in China. "We have protections for all our IPR [intellectual-property rights], and we've had no issues." But he added that "it's a factor that everyone is aware of in emerging markets" and that "there are different rules in China."

Technology companies, in particular, have had to grapple with privacy and surveillance issues.

In 2005, Yahoo folded its China business into Alibaba Group, making a $1 billion investment in exchange for a 40 percent stake in the Chinese company. Earlier that year, Yahoo had provided information from the yahoo.cn account of a Chinese journalist that led to his conviction on charges of divulging state secrets.

By agreeing to Chinese regulations, Google has had to delete or block references in search results to the Falun Gong sect, the democracy movement, the Tiananmen Square demonstrations of 1989 and the exiled Tibetan leader the Dalai Lama. Doing business in China has thus cast doubt on Google's devotion to its motto to "do no evil."

A group called the Global Network Initiative, whose participants include Google, Yahoo and Microsoft, was formed to provide a way for companies and other investors to resist government efforts to enlist companies in acts of censorship and surveillance that violate international standards.

"Google's decision to reconsider its business in China is an indication of the tough choices information and communications technology companies face around the world where respect for human rights is at risk," the group said in a statement. The group's statement didn't indicate what its other members might do, however.

"There is no 'one size fits all' approach to corporate responsibility, nor a single right course of action or script for all to follow," the statement said.

Microsoft has long made anti-piracy efforts a top priority even as it has built up research-and-development and software-packaging businesses here. Tang Jun, one of China's richest businessmen and formerly head of Microsoft's China operations, said that he disagreed with Microsoft's sharp focus on piracy.

"The pirates are very serious in China even today," said Tang, who left Microsoft in 2004. "At that time Microsoft asked us to go after every single pirate. It was not a good approach to me." But Microsoft told him that it was a worldwide policy.

"In a lot of other countries, that can work. But China is a very unique country," he said.

Many people in China are confident that the size of their market will keep foreign companies from leaving. Chinese commentators in the past two days have expressed confidence that Google will not follow through on its threat to exit the country.

Tang expects that Google will "clarify" its position, and possibly shut down its China domain site and keep everything else. "Chinese netizens have grown into a huge number," Tang said. "Giving up the Chinese market is equal to giving up half of the future."

Whoriskey reported from Washington.

Link to original article in The Washington Post

JAPAN: America's security treaty with Japan: The new battle of Okinawa

Jan 14th 2010 | GINOWAN CITY, JAPAN
From The Economist print edition

Wrangling over an American base puts Japan’s new government in a bind

ON THE wall of the Sakima Art Museum in this bustling city is a work called the Battle of Okinawa. It depicts the suffering of local civilians during the American invasion of Okinawa in 1945, partly at the hands of murderous-looking Japanese troops. On the roof of the museum, there is a more mischievous—but equally effective—work of anti-war polemic, this time directed against the Americans. A platform looks out over the fenced-off Futenma Marine Corps Air Station, which stretches out to the sea over an area larger than Central Park in New York. In just a few minutes, your correspondent witnessed a transport plane taking off, three fighter jets roaring overhead and a military helicopter rumbling to life. An aircraft-carrier might be less noisy.

The base was seized by the American army in 1945, but since then Ginowan has grown to surround it with offices, homes and government buildings. Ginowan is only a small city, of 92,000 people; even so, imagine how New Yorkers living around Central Park would feel, were it an air base bristling with marines belonging to a country that once colonised them. That gives a sense of why Futenma, however much it has helped keep the peace in East Asia, has long needed to move.

That much America and Japan agree upon. Negotiations to find a replacement have dragged on since 1996, the year after three American marines gang-raped a 12-year-old Okinawan girl. But since the Democratic Party of Japan (DPJ) took power last September, the issue has opened an unusually deep wound in relations between the two countries. It still festers. On January 12th Katsuya Okada, Japan’s foreign minister, and Hillary Clinton, America’s secretary of state, agreed not to let the dispute stop them discussing other ways to bolster their military alliance. But Mrs Clinton continued to press for Futenma to be relocated in Okinawa.

The friction is partly to be expected. In opposition the DPJ repeatedly objected to an agreement to move part of the air station, including landing strips, to a pristine bay in north-eastern Okinawa, in exchange for the withdrawal of 8,000 marines and their families to American territory in Guam. Yukio Hatoyama, the new prime minister, personally promised Okinawans during the election campaign that Futenma would be shunted off the island.

That promise swiftly put his government at loggerheads with the Obama administration. As one of her first acts of diplomacy last February, Mrs Clinton signed an agreement under which Japan would contribute $6 billion to relocating Futenma. The other signatory was from the former Liberal Democratic government, which was doomed to suffer an electoral rout in August. But a deal, the Obama administration insisted to the DPJ, was a deal. Some analysts believe that may have been an overly bossy assessment. Even under the Liberal Democratic Party (LDP), which for much of its 53 years in power was a pliant American ally, the Futenma relocation was often a source of friction.

Indeed, over the decades relations with the LDP had not always been smooth. They got off to a good start. The 1960 Treaty of Mutual Co-operation and Security turned out to be a strikingly successful insurance policy. The Japanese paid the premiums by offering American troops bases and cash. The Americans promised nuclear and non-nuclear American deterrence, which helped underwrite peace in the region, while at the same time acting as a “cork in the bottle” against possible Japanese remilitarisation.

But after the cold war relations appeared to come adrift. When Junichiro Koizumi, prime minister from 2001-06, pledged strong support for the “war on terror” after September 11, 2001, America hoped Japan would take on a global security role commensurate with its economic power. But it did not. According to a recent study by Michael Finnegan of the National Bureau of Asian Research, a think-tank in Seattle, America and Japan no longer see eye-to-eye on “what constitutes a threat to their shared interests”. Both countries still refer to the alliance as a cornerstone of their security policies, but it is, says Mr Finnegan, a brittle one.

Defenders of the alliance argue that it has done more than keep the peace: it has enabled Japan to keep its military spending low, and attract global status in other ways, notably economic. Nonetheless, some in Japan feel the country has subordinated itself to America, and this has riled nationalists. And in Washington, DC, critics accuse Japan of “cheap-riding” on American security guarantees.

It is against this backdrop that the new government’s review of the Futenma accord raised hackles in Washington. Adding to the sense of drift was Tokyo’s decision to end an eight-year maritime refuelling mission for troops fighting in Afghanistan this month. It has also promised to investigate secret agreements in the 1960s and 1970s that enabled nuclear-armed American warships to enter Japan.

Above all, since the DPJ took power, it has been unclear how its goal of partially balancing Japan’s ties to America with closer ones to China would affect the American alliance. The 50th anniversary of the security treaty might be a good chance to update the accord to reflect China’s rise. But security analysts say the Futenma dispute threatens the mutual trust needed for such an undertaking.

Payback time

To make matters worse, most Okinawans seem determined to hold Mr Hatoyama to his word about removing the base altogether. As the painting at the Sakima gallery suggests, Okinawa nurtures an historic grudge against the mother country, piqued by the second world war massacre. Many locals feel that for too long Tokyo has outsourced American bases to the island—it houses 60% of American forces and their families in Japan—and offered only grubby fiscal handouts in return.

Critics accuse the Japanese authorities of producing a cooked-up environmental assessment, which skates over the dangers the new base would pose to the dugong, a rare sea mammal that grazes on sea grasses near the site of the proposed airstrips. Even supporters of the new base admit that it is hard to judge the full ecological impact because America has given imprecise figures about how many troops and aircraft would remain.

If the Hatoyama administration does break its promise to the Okinawans, it would be “suicidal”, says Yoichi Iha, mayor of Ginowan and a staunch opponent of the agreement. And even then, some fear that protesters could make it very difficult to start construction work. A mayoral election takes place on January 24th in Nago, the city where the new base is proposed. Relocation is the main campaign issue. If the incumbent who supports it is ousted, that will be a strong indication of the level of anger. An election for governor of Okinawa in November is likely to bring the same tensions to the fore island-wide. But with America sticking to its guns, the Hatoyama administration is bound to upset one side or other. Its battle of Okinawa has only just begun.

Link to Original Article in The Economist

CHINA: Shanghai Overtakes Tokyo as Busiest Asia Stock Market

Asia January 14, 2010, 1:59PM EST

Shares worth $5.01 trillion changed hands on the Shanghai Stock Exchange in 2009, compared with $4.07 trillion on the Tokyo Stock Exchange

By Zhang Shidong and Shiyin Chen

(Bloomberg) — Shanghai overtook Tokyo as Asia's biggest stock market by trading value last year, as an 80 percent jump in China's benchmark index boosted equities demand.

Shares worth $5.01 trillion changed hands on the Shanghai Stock Exchange in 2009, compared with $4.07 trillion on the Tokyo Stock Exchange, according to data compiled by Bloomberg. The Shanghai and Tokyo exchanges were ranked third and fourth globally, the Nikkei newspaper reported, citing the World Federation of Exchanges. Only the Nasdaq stock market and the New York Stock Exchange had higher trading volumes than Shanghai.

"As an emerging market, China has a very high ratio of stocks changing hands," said Li Jun, a strategist at Central China Securities Holdings Co. in Shanghai. "Increased new share sales are also one reason behind the high turnover. It'll probably take one year or two for China to catch up with the world's biggest."

The Securities Regulatory Commission on Jan. 8 approved short sales, stock index futures and margin trading. Morgan Stanley said the reforms may boost transaction volume by 50 percent, helping to usher China's market into a "new era."

The Shanghai Composite Index rebounded last year from a 65 percent loss in 2008 after the government introduced a 4 trillion-yuan ($585.9 billion) stimulus package, encouraged banks to advance record loans and subsidized individual purchases of cars and home appliances. Japan's Nikkei 225 Stock Average rose 19 percent.

Shanghai has the world's third largest stock market by market capitalization, briefly overtaking Tokyo in July 2009. New York is the biggest by market cap.

Mainland companies raised 207.6 billion yuan from initial public offerings in 2009, double from the previous year, according to Bloomberg data.

Link to Original BusinessWeek Article

TRAVEL: Cruising Vacations Among Top Travel Trends for 2010

By Dan Bence, Matt Calcara and Sarika Chawla for PeterGreenberg.com.

It’s no secret that 2009 was a crazy year in the world of travel.

From an attempted terrorist attack on Christmas Day to the launch of the Boeing 787 Dreamliner, the year had more than its share of big travel stories.

But what does 2010 hold for travelers? We gazed into our crystal ball to bring you the top travel stories of 2010.

AIRLINE MERGERS

This year has been a tough one for airlines. With billions in losses despite drastic cuts in personnel, routes and capacity, airlines face 2010 hopeful that it probably couldn’t be much worse than the year they’ve just survived. After all, even perennially profitable airlines like Southwest and Ryanair posted losses in 2009.

Can airlines seek salvation in additional mergers? Time will tell, but a number of airline mergers could be in the cards for 2010.

In 2009, a number of airlines went belly-up, were sold, or merged with healthier competitors. The small-ish operator Republic Airways grew rapidly as it acquired Denver-based Frontier and Milwaukee-based Midwest and began stitching them together.

The biggest recent merger, that of Delta and Northwest, officially occurred in 2008, but 2009 saw ongoing struggles as Delta began to seriously integrate the two carriers’ operations.

Get Peter’s take in his Travel Detective Blog: Airline Mergers & the World’s Biggest Cruise Ship.

Several airlines also ceased operations altogether, including Scotland’s FlyGlobespan and Slovakia’s SkyEurope. And that’s after 2008 saw the collapse of Eos, Sun Country, Aloha, MAXjet, Silverjet, Zoom and Skybus, among others.

The likeliest candidate for a bankruptcy, sale, or merger in 2010 is probably Japan Airlines, which is unprofitable and deeply in debt. Delta is trying to acquire the carrier, but American Airlines is attempting to keep its OneWorld partner afloat, partly to prevent Delta from acquiring JAL’s lucrative trans-Pacific routes.

Also in 2010, British Airways will seek to consummate its merger with Spain’s Iberia, despite competition concerns on both sides of the Atlantic. The merger is likely to go through—eventually—but BA may be forced to make concessions such as auctioning off its landing slots at Heathrow. Another potential snag is BA’s deteriorating financial position and soaring pension obligations.

Elsewhere, BA has also held informal merger talks with Australia’s Qantas, which is facing tough competition in its home market. Any merger between these airlines would have to wait until the BA-Iberia tie-up question is resolved.

Cheeky low-cost Ryanair, which has twice tried to buy home-turf competitor Aer Lingus, most recently in January 2009, may try again, although most analysts currently consider this unlikely. But with the Irish government (which owns 25 percent of Aer Lingus) bleeding more red than the airlines, a sale of its remaining shares is not entirely out of the question.

Regardless of what eventually happens in 2010, it looks almost certain that airlines are in for a bumpy ride.

For the latest air travel news, visit our Airlines & Airports section.

CRUISING VACATIONS

If 2009 was the year of cruise deals, 2010 will be the year of savvy cruising. Clued-in travelers know that cruising can offer great value for your travel dollars … if you know how to play the game.

According to the cruise industry’s trade association, Cruise Lines International Association (CLIA), the number of cruisers worldwide grew steadily from 1990, but—not surprisingly—suffered a decline in 2008, particularly in the second half of the year.

The recession left many cruise lines doing whatever it took to fill cabins, which translated to suicidal pricing and exceptional deals for travelers. The trick is to avoid onboard spending, which includes specialty dining, photographs, gambling, etc.

Those deals may not be as plentiful in 2010, but expect to find better low and shoulder seasons, as well as last-minute deals. After all, it does cruise lines no good to sail with empty cabins.

Of course, 2009 was also the year of the mega-cruise ship, with the introduction of Royal Caribbean’s Oasis of the Seas and the Carnival Dream. That trend will continue in 2010 with RCI’s Allure of the Seas and NCL’s Norwegian Epic.

Although we’re not necessarily fans of the mega-cruise ship concept—as an experience and of the inevitable impact on the ports—there’s no doubt that the novelty and sheer volume of activities and amenities will intrigue travelers.

As an alternative, however, European river cruises were on the rise in 2009 and that trend is expected to continue. They tend to be pricier than ocean cruises, but in many cases, the rate includes alcoholic beverages and shore excursions, which are usually two major sources of revenue for ocean liners.

Visit our Cruises section for more information.

THE DREAMLINER (FINALLY) TAKING OFF

While December 2009 saw the first test flight of Boeing’s much-ballyhooed new airliner, the Boeing 787 Dreamliner, it also gave rise to nagging doubts that Boeing could deliver—in more ways than one.

But barring another serious setback, Boeing is on track to deliver its first Dreamliner (to Japan’s All Nippon Airways) by the end of 2010.

Not only is Boeing more than two years behind schedule in terms of delivering planes to its airline customers, it may not be delivering exactly what it promised.

The Dreamliner was supposed to revolutionize the industry with its largely outsourced supply chain. Boeing let individual companies build various parts of the plane, and suffered when certain suppliers failed to deliver, or delivered parts that didn’t work quite the way they were supposed. Design and engineering flaws led Boeing to add additional supports and fasteners, weighing down what was supposed to be a featherweight of an aircraft.

Boeing has since purchased a number of its suppliers to establish firmer control over the production process, though it remains to be seen if it can fix the myriad problems.

AMERICA’S NATIONAL PARKS

Even before Ken Burn’s acclaimed series hit the airwaves, America began rediscovering its love affair with our national park system. Affordable, accessible and absolutely breathtaking, a national park offers an easy travel experience in our own backyard.

Although 2009 statistics are not yet available, 2008 showed that the top five most-visited units in the system were the Blue Ridge Parkway, Golden Gate National Recreational Area, Gateway National Recreation Area, Great Smoky Mountains National Park, and Lake Mead. Excluding non-park sites, the top five most-visited parks were perennial favorites: Great Smoky Mountains, Grand Canyon, Yosemite, Olympic, and Yellowstone National Parks.

But remember there are 391 units in the National Park System, including seashores, battlefields and cultural sites, many of which are free or low-cost and devoid of crowds.

The annual National Park Pass and the $10 Lifetime Senior Pass make it even easier for travelers to explore sites around the country on a budget.

For more information, visit our National Parks Travel section.

GOING WIRELESS, IN THE AIR AND ON THE GROUND

Travelers have already begun charging up in preparation for going wireless in 2010. Just in time for the holiday travel rush, several airlines offered free Wi-Fi promotions at the end of 2009. Some carriers have already installed in-flight wireless throughout their fleets, while others are rushing to catch up. Passengers seem to love in-flight wireless—as long as it’s a free perk. Early experiments show that travelers are quick to lose that enthusiasm when they have to pay for the service.

On the ground, some of the hottest gifts of the year were devices that allow you to charge several gadgets wirelessly. The Powermat and the WildCharge allow you to charge your BlackBerrys, iPhones, headsets, and more in one place, whether in a hotel, office or at home—ideal if you travel with multiple gadgets.

For more, visit our Travel Gadgets & Gear section.

HIGH-SPEED AMERICAN TRAIN TRAVEL

Train travel in 2010 is, if you’ll excuse the obvious metaphor, taking two very different tracks in the USA and abroad.

China, Japan and Europe are busily building ever-more-sophisticated high-speed rail networks. Here in the U.S., Amtrak continues to struggle to provide even a remotely viable method of transportation outside of a few corridors.

Amtrak’s fastest route—the Acela Express between Boston and Washington, DC—would not even rate as “high-speed” compared to Japan’s Shinkansen bullet trains or France’s TGV.

The effects of the economic stimulus plan will begin to become apparent as more trains hit the tracks to ease bottlenecks on congested routes, and new bridges and renovated stretches of track begin to open. Most importantly for train fans, 2010 will see the announcement of the Obama administration’s selections for the creation of several high- speed rail corridors. With $8 billion in starter funds, these new high-speed rail corridors could even begin construction in 2010, depending on which routes are selected.

But elsewhere, true high-speed rail lines will be opening or beginning construction all over the world. Britain is in the planning stages for a nationwide high-speed line between London and the Scottish city of Edinburgh. Spain’s highly successful new high-speed line between Madrid and Barcelona will continue to grab an increasing share of the passengers between those two cities as the Spanish high-speed trains expand their range. Germany and Italy are also hard at work expanding their high-speed networks.

In China, that government’s economic stimulus is even more heavily focused on the rail system, with a whopping 35 high-speed lines (13,000 km of track) set for completion by the end of 2012. Even India, which has long had a relatively decrepit rail system, is exploring bullet trains, which could begin construction in 2010.

So while Amtrak struggles to get its trains to even approach high-speed status, the rest of the world is rolling ahead.

Get the latest news in our Train Travel section.

MILITARY-THEMED TRAVEL

Military themed travel will likely get a lot of attention with 2010 marking the 65th anniversary of the end of World War II and the 60th anniversary of the start of the Korean War. Tours involving revisiting battlegrounds can be powerful experiences for veterans and non-veterans alike.

Hard-core enthusiasts can benefit from a military-oriented travel organization since trips are generally tailored to each traveler, with visits to specific battle sites and meetings with veterans from the other side.

A company called Military Historical Tours offers tours to South Korea that’s being subsidized by the South Korean government. The same company also hosts trips to the South Pacific and Europe for World War II veterans, and several trips a year to Vietnam for vets and their family members. MilSpec Tours leads groups of veterans and military enthusiasts to sites like Normandy and Vietnam

Even domestic sites are offering more opportunities for military-themed travel. The newly expanded National World War II museum in New Orleans, formerly known as the D-Day Museum, opened its new wing to great fanfare.

If you’re looking to find more great historic sites that are not necessarily in the brochures, check out resources like Military.com, which has a comprehensive guide to museums and memorials all around the country.

VOLUNTEER VACATIONS

Volunteer vacations aren’t exactly a new trend, but April 22, 2010 will mark the 40th anniversary of Earth Day, so this is the year to indulge your inner do-gooder.

In honor of Earth Day, expect to see hotel packages galore that offer volunteer experiences with your overnight stay (look for the Ritz-Carlton’s Give Back Getaways, and Marriott and Renaissance hotels in New Orleans which work with Habitat for Humanity, among others).

Opportunities also abound in national and state parks, and check out the American Hiking Society’s volunteer vacations and alternative spring breaks. Learn how to find and plan a volunteer vacation here.

Click here to check out Earth Day activities and events around the country.

Visit our Voluntourism section for more ideas and tips.

Related links on PeterGreenberg.com:

• Travel Gadgets & Gear section
• Train Travel section
• National Parks Travel section
• Airlines & Airports section
• Cruises section

Link to Original Article on PeterGreenberg.com

JAPAN: Major Alliances Vie for Control of Struggling Japan Airlines

 

With Japan Airlines on the brink of bankruptcy, speculation abounds as to which major airline alliance will gain control of the carrier.

Japan Airlines (JAL) is currently a member of the Oneworld alliance, which is made up of 10 other carriers including American Airlines, British Airways and Qantas. But with its future up in the air, JAL could defect to the rival SkyTeam alliance, comprised of nine members including Delta, Air France, and Korean Air.

As Asia’s largest carrier, JAL represents a coveted prize to whichever alliance can gain control. Keep reading to find out how each side is vying for the upper-hand.
The SkyTeam alliance members have made an offer worth $1 billion to lure the struggling carrier away from Oneworld.

In response, the Oneworld alliance said last month that it would invest $1.1 billion to keep JAL on board. As a last ditch effort, Oneworld recently upped the ante to $1.4 billion.

Industry insiders say that all signs point to JAL switching camps to the SkyTeam alliance, but it will likely be a while before a final decision is reached.

Regardless of which alliance the carrier ends up with, it appears likely that the airline will declare bankruptcy and enter into a restructuring phase that would include cutting 16,000 jobs. JAL would continue flying while under court bankruptcy protection.

The carrier has chalked its struggles up to the global financial crisis, citing a steep decline in business passengers on international flights.

By Dan Bence for PeterGreenberg.com.

Related Links: Reuters, The Times (UK), BusinessWeek

Link to Original Article on PeterGreenberg.com

JAPAN: Tsutomu Yamaguchi

Jan 14th 2010
From The Economist print edition

Tsutomu Yamaguchi, a double nuclear survivor, died on January 6th, aged 93

Jeremy SuttonHibbert

WHEN he had stopped crying, Tsutomu Yamaguchi would tell you why he called his book of poems “The Human Raft”. It had to do with the day he forgot to take his personal name-stamp to work, and had to get off the bus. Much was on his mind that morning. He had to pack his bags to leave Hiroshima after a three-month assignment as an engineer in the Mitsubishi shipyard; there were goodbyes to say at the office, then a 200-mile train journey back to Nagasaki to his wife Hisako and Katsutoshi, his baby son. He was slightly stressed when he got to his stop, still with half-an-hour’s walk ahead of him on a track that led through featureless potato fields. But it was a beautiful August day; the sky was clear, his spirits high. And then—readers will feel a tremor, but he felt none—he noticed an aircraft circling, and two parachutes dropping down.

The next thing he knew was a blaze of white magnesium light, and a huge ball of fire. He dived to the ground. The fireball, roaring upwards, sucked him up again and threw him, blinded, face-down into the mud of the potato field. He was two miles from the epicentre of the blast, in a rain of flaming scraps of paper and clothes. His upper body and half his face were badly burned, his hair gone and his eardrums ruptured. In this state, he made his way back to the devastated city to try to do what he had meant to do that day: catch the train. The river bridges were down. But one river was full of carbonised naked bodies of men, women, children, floating face-down “like blocks of wood”, and on these—part treading, part paddling—he got to the other side. His human raft.

At this point in his story he would weep uncontrollably. It was by no means the end of it. When he reached Nagasaki, barely pausing to get his burns dressed, he reported for work. His boss was sceptical: how could a single bomb have destroyed Hiroshima? Then the same white magnesium light blazed in the window, and Mr Yamaguchi was tossed to the ground again. A reinforced-steel stairwell saved him. His bandages were blown off, and he spent the next weeks curled round his raw wounds in a shelter, close to death. His house was destroyed, his wife and son saved for no reason he could see. But when schoolchildren later asked him, in awed respect, “What was the most terrible thing?”, his answer was not the dangling tongues and eyeballs, not the skin that hung off the bodies of the living “like giant gloves”—but the bridge of bodies on which he had crossed the river.

He talked about all this to Charles Pellegrino, an American writer, and Richard Lloyd Parry of the London Times. He told them that he hated the atom bomb because of “what it does to the dignity of human beings”. Walking into Hiroshima, he noticed that the bewildered crowds on the streets were mostly naked, limping children. They made no sound; indeed, no one made a sound. They were reduced—like him, as he was flung into the furrows of the potato field—to the level of mute sticks or leaves, tossed in the wind and burned, or used as floats.

Painting the Buddhas

Some argued that he was lucky. A deaf left ear and weak legs were the only after-effects until, late on, stomach cancer appeared. He worked as a translator, then a teacher, and eventually returned to Mitsubishi. But, as he wrote in 1969, he was not so sanguine inside.

Thinking of myself as a phoenix,

I cling on until now.

But how painful they have been,

those twenty-four years past.

His emotions mostly emerged in these tanka, or 31-syllable poems. He wrote hundreds, each one an ordeal. When he composed them, he would dream of the dead lying on the ground. One by one, they would get up and walk past him.

Carbonised bodies face-down in the nuclear wasteland

all the Buddhas died,

and never heard what killed them.

He published these poems himself in 2002, and they might have been his only testimony. But in 2005 his son Katsutoshi died of cancer at 59, killed by the radiation he had received as a baby. Mr Yamaguchi began to feel that fate had spared him to speak out against the horrors of nuclear weapons: in schools, in a documentary, in a letter to Barack Obama and even, at 90, on his first trip abroad, in front of a committee of the United Nations in New York.

If there exists a GOD who protects

nuclear-free eternal peace

the blue earth won't perish

At his insistence, his status was recognised by the Japanese government: he became officially (though there had been more than 100 others) the only nijyuu hibakusha, or twice-victim of the atom bomb.

He began to be comforted by three things. One was a set of drawings of the 88 Buddhas of the Shikoku pilgrimage, whose outlines—robes, haloes, calm hands—he devoutly painted in. The carbonised, face-down Buddhas of his tanka found peace again. The second comfort was in “simple acts of kindness”. And the third was an image of his life as a baton, passed on every time anyone heard or read his testimony. All these batons might form, together, another human raft.

Link to Original Article in The Economist

RUSSIA: Looking to expand oil markets in East

Friday, Jan. 15, 2010

By MICHAEL RICHARDSON

SINGAPORE — For a long time, energy-hungry Asia has watched in frustration as Russia, currently the world's biggest producer of both oil and natural gas, sent nearly all its exports to former Soviet bloc partners and Europe, leaving Asian consumers increasingly dependent on imports from the Middle East.

However, this will change over the next few years as a growing volume of Russian oil heads for Asia via a newly opened terminal at Kozmino on the Pacific Ocean. A pipeline, due to be completed by 2014, will link the port to oil-rich East Siberia, nearly 5,000 kilometers inland, eventually raising the export flow to 1.6 million barrels per day (bpd).

Indeed, with Russian shipments to Asia already starting to rise to significant levels, Middle East suppliers face a growing challenge in a market where in coming decades most of the growth in global oil demand is expected to occur, led by China and India.

Russia's strategy is clear. As the top non-OPEC supplier, it wants to grab a larger share of the Asian market from the Organization of Petroleum Exporting Countries, while easing Russian reliance on sales to Europe.

Money, power and economic leverage in Asia are at stake. The U.S. Department of Energy calculates that even in 2009, a relatively depressed year, OPEC earned $575 billion in net oil export revenues, a figure expected to rise to $759 billion this year. Much of this oil is sold to Asia.

So far, Russia — despite holding the world's largest gas reserves and the eighth-biggest oil deposits, and with two-thirds of its land territory in Asia — has been a small-time player in the booming Asian market for both oil and gas.

In opening Kozmino port Dec. 28 to the first tanker-load of oil bound for Hong Kong, Russian Prime Minister Vladimir Putin did not mince words.

"Russia is so poorly represented in the Asia-Pacific hydrocarbon market that it's an embarrassment to mention it," he said. "Arab countries account for 69 percent of the oil in this market, while Russia's share is a meager 5 or 6 percent."

Much of Russia's current oil exporting is by rail to China, although some is also shipped to Asia from Sakhalin Island in the Russian Far East. Much more oil and gas from Sakhalin will go to Japan and other Asian buyers if energy projects on the island proceed as planned.

In the future, however, delivery of Russian oil and gas to Asian consumers will be mostly done by pipeline. Over half of the East Siberia-Pacific Ocean (ESPO) oil pipeline has been built, at a cost of $12 billion. It carries oil from Russia's newest and most promising oil fields in East Siberia to Skovorodino, close to the Chinese border. From there, a spur line is being built into China. When finished next year, it will carry 300,000 bpd under a $25 billion Chinese loan-for-Russian oil deal sealed in 2009. The contract is for 20 years.

Last month, Russia and China edged closer to a large-scale gas supply agreement under which two separate pipelines from Russia will carry gas into the western and eastern regions of China.

Gazprom, Russia's state-owned gas monopoly, says Russia's future gas exports to China will be equivalent to around one-third of its Europe-bound gas supplies.

Europe depends on Russia for more than a quarter of its gas supplies and almost 30 percent of its crude oil imports. But the relationship has been fractious in recent years, with Europe complaining that Russia has been an unreliable supplier, demanding ever-higher prices, and Russia chafing at measures blocking access to the European energy market.

Russia wants to be in a position where it can send oil and gas through its pipelines either east or west, so it can drive a harder bargain with customers.

Russia will spend another $10 billion to extend the ESPO oil pipeline from Skovorodino to Kozmino, a distance of 2,100 km. By 2016, two years after ESPO is completed, the pipeline is expected to be exporting 1 million bpd to Asia, rising to 1.6 million bpd by 2025. Meanwhile, an existing railway from Skovorodino will carry 250,000 bpd to Kozmino in the first quarter of 2010, increasing to 300,000 bpd until ESPO becomes operational.

How quickly Russia will be able to capture market share in Asia from Middle East exporters remains to be seen. First it must establish a reputation for reliability and quality for its new ESPO blend of East Siberian oil. Russia's Deputy Prime Minister Igor Sechin said last month the blend "meets the needs of every refinery in the region. It is very competitive."

Long dominant Mideast suppliers of oil to Asia now face competition not just from Russia but also from other non-OPEC countries, including Australia and emerging export giant Brazil.

Russia's oil output grew by around 1.5 percent in 2009 to nearly 10 million bpd. It has become the world's leading oil producer because Saudi Arabia, which previously held the top spot, has had to observe OPEC-led supply curbs.

The International Energy Agency says it expects average global oil demand to climb this year to just over 86 million bpd, driven mostly by Asia.

Non-OPEC supply is expected to rise in 2010 by 310,000 bpd to an average of around 51.3 million bpd, further raising its share of the world market at the expense of OPEC. In Asia, the immediate worry for Middle East members of OPEC is that growing competition with Russia and other non-OPEC exporters will result in price cuts. That would be welcomed by Asian refiners.

Longer term, the Middle East may face a significant loss of market share, and therefore influence, in Asia. This, too, may work to Asia's advantage if it results in a better balance between supply of OPEC and non-OPEC oil to the region.

Michael Richardson is a visiting senior research fellow at the Institute of South East Asian Studies in Singapore.

Link to Original Japan Times Article

JAPAN: Futenma row may trigger 'Japan passing': experts

Friday, Jan. 15, 2010

Kyodo News

Experts on Japan-U.S. relations are concerned that prolonging the bilateral row over the U.S. Futenma airfield in Okinawa may lead to a situation akin to "Japan passing."

"I think there is a serious danger the current situation will contribute to Japan passing," Kent Calder, director of the Edwin O. Reischauer Center for East Asian Studies at the School of Advanced International Studies at Johns Hopkins University, said at a symposium Tuesday sponsored by Kyodo News and SAIS. The theme of the symposium was "Japan-U.S.: New Governments and New Relations."

Another panelist, Michael Auslin, director of Japan studies at the American Enterprise Institute for Public Policy Research, said he feels there is a "strong sense of frustration" among the many U.S. officials dealing with the issue.

But Auslin said such frustration is "good" in a sense, because he thinks it is a reflection of the "continuing importance that is placed on the alliance and on the relationship."

"My concern is that the longer the base issue drags on unresolved . . . it is a natural tendency for the diplomats in Washington to devote less time to it. If they are not getting a return on the time that they are investing, they will simply start putting their energies and their focus elsewhere. That may be elsewhere in Asia, it may be elsewhere around the world," he said.

Apparently to allay concerns over strained bilateral ties, State Secretary for Foreign Affairs Koichi Takemasa stressed in a keynote speech at the beginning of the event: "The cornerstone of Japan's foreign policy is the Japan-U.S. alliance. That will not change even after a change of government."

Parliamentary Defense Secretary Akihisa Nagashima, meanwhile, said Prime Minister Yukio Hatoyama's promise to settle the issue of where to relocate U.S. Marine Corps Air Station Futenma by May is "firm" and he will work hard to resolve it.

The Futenma issue has emerged as a major sticking point ever since Hatoyama's Democratic Party of Japan ousted the long-ruling Liberal Democratic Party from power last year with a pledge to seek what it calls "more equal" ties with the United States.

Link to Original Japan Times Article

HONG KONG: Police catch acid-throwing suspect

Created: 2010-1-15

Author:Min Lee

HONG Kong police said yesterday they have solved one of the recent string of acid attacks in the city, as they sought to reassure jittery citizens and tourists in the densely populated southern Chinese financial hub.

Since December 2008, more than 100 pedestrians have been injured by people dumping bottles of acid into crowded streets from buildings.

In the two most recent cases, suspects dropped acid onto pedestrians in the Causeway Bay shopping district on December 12, and on Temple Street last Saturday night.

The Temple Street attack was especially worrying to Hong Kong officials because it's a popular tourist spot known for its outdoor market and snack stalls.

On Wednesday, Hong Kong police arrested two suspects allegedly linked to the Causeway Bay attack, aged 18 and 23 respectively. They later freed the 18-year-old.

Yesterday morning, they canvassed the scene of the crime with the other suspect. Handcuffed and wearing a black hood, he was led along a narrow street behind a popular department store crammed with shops.

Police said they believe the 23-year-old tossed the acid and will charge him. "We have grounds to believe he is responsible for the offense," Senior superintendent Yu Tat-chung said.

Yu suggested a possible charge will be tossing corrosive liquid with an intent to injure - an offense that carries a maximum penalty of life imprisonment.

Link to Original article in Shanghai Daily

Chinese Internet Users Praise Google's Stand

January 14, 2010

By David Pierson and Barbara Demick

Reporting from Beijing

Word spreads quickly after the company threatens to leave the country over censorship restrictions following a wave of cyber attacks that it says targeted activists' e-mail accounts.

Bouquets were laid in front of Google Inc.'s headquarters in China on Wednesday, a show of support for a company whose threat to exit the country rather than be party to more censorship is a dramatic shot across the bow of the Chinese Communist Party.
But while Chinese cyberspace was awash with chatter about Google's gambit, state-controlled media downplayed the story, reporting that Google had been a victim of cyber attacks in China but making no mention of the company's allegations that human rights activists' e-mail accounts had been hacked.

Among China's savvier Internet users, however, word spread quickly that the Mountain View, Calif., company was no longer willing to censor its Chinese-language search engine. Some noted that Google searches for the 1989 Tiananmen Square crackdown turned up the iconic but banned photograph of a lone protester blocking the path of a column of tanks.

"It is the first time a company this size has made a stand like this. People are cheering Google," said Jeremy Goldkorn, whose influential website, Danwei, has been blocked since last summer by China's Internet filtering technology, popularly known as the Great Firewall.

Bei Feng, a blogger who has led a campaign to abolish the firewall, said losing Google would be a big blow. However, he and many others like him probably would use proxy servers to continue accessing the company's products.

"I admire Google's decision," said Bei Feng, whose e-mail account has been hacked into in the past. "Obviously it is a huge loss for Chinese Internet users. Sometimes such a price has to be paid for the long term. It's a huge slap in the face for the Chinese Communist Party. I think they will try to retaliate."

On Wednesday, Google said it would improve security for users of its Gmail Web-based e-mail service by encrypting data to its servers.

Beijing has yet to respond specifically to the company's announcement. The government's New China News Agency reported Wednesday that an unnamed lower official in China's Cabinet was seeking more information on Google's new stance.
"It is still hard to say whether Google will quit China or not," the official said.

The prospect of a pullback was good news for Google's biggest Chinese rival, Baidu Inc., whose shares surged nearly $60, or 14%, on Wednesday. Google shares slipped $3.39, less than 1%, to $587.09.

Secretary of State Hillary Rodham Clinton said Google's allegations raised concerns.

"We look to the Chinese government for an explanation," she said in Honolulu. "The ability to operate with confidence in cyberspace is critical in a modern society and economy."

China stepped up its Internet policing efforts in 2009, launching a campaign against pornography and illegal downloading that critics say was a ruse to restrict the movement of information.
Chinese bloggers are increasingly clamoring for the government to tear down the firewall, and President Obama made Internet censorship a central theme of his maiden visit to China in November, inviting bloggers to submit questions at a town hall-style meeting in Shanghai.

Human rights groups viewed Google's decision to make its allegations public as a step in the right direction -- reasoning that it placed pressure on Beijing to reconsider its approach to the Internet because of the purported cyber attacks carried out against Google as well as various other foreign companies.
"The ball is now in the Chinese government's court," said Sharon Hom of Human Rights in China. "They have to prove that doing business in China is safe, fair and predictable."

Google has always played second fiddle to Baidu, China's most popular search engine. It has struggled to resonate with China's more than 300 million Internet users, many of whom favor easy access to pirated songs and chat forums.

Where the search engine succeeded was in appealing to many of China's young and progressive voices -- bloggers, activists and proponents of information freedom.

The company invested deeply in research and development by hiring university graduates. After a protracted legal battle with Microsoft Corp., it lured away executive Kai-Fu Lee, a hero to China's tech-savvy urbanites with his top-selling motivational books.

An online survey of more than 13,000 people on the news site Huanqiu.com asked whether the Chinese government should accommodate Google. About three-quarters said "yes" by late Wednesday.

But not all were sympathetic to Google's stand. Fang Xingdong, an IT blogger, said he felt betrayed by the company.

"I think it's a stupid decision for Google," Fang said. "They didn't consult Chinese Internet users. It is extremely irresponsible. . . . In terms of innovation, Google is a world leader. If they pull out, it is going to be a huge blow to the Internet industry in China."

david.pierson@latimes.com
barbara.demick@latimes.com
Tommy Yang in The Times' Beijing bureau and Jessica Guynn in The Times' San Francisco bureau contributed to this report.

Copyright © 2010, The Los Angeles Times

Original Article from the Los Angeles Times

CHINA: Google Is Not Alone in Discontent, but Its Threat to Leave Stands Out

A woman examined bouquets and messages left by Google users on Wednesday outside the Internet search company's headquarters in Beijing. Jason Lee/Reuters

January 14, 2010

By KEITH BRADSHER and DAVID BARBOZA

HONG KONG — Google is far from alone among Western companies in its growing unhappiness with Chinese government policies, although it is highly unusual in threatening to pull out of the country entirely in protest.

Western companies contend that they face a lengthening list of obstacles to doing business in China, including “buy Chinese” government procurement policies, widespread counterfeiting and growing restrictions on foreign investments.

Some of these obstacles are a result of China’s desire to maintain control over internal dissent. Others stem from China’s efforts to become internationally competitive in as many industries as possible.

Google’s difficulties and its strong response are indicative of a broader shift in sentiment among multinational executives in China.

“I have never seen the foreign business sentiment as pessimistic as it is right now,” said James McGregor, a consultant in Beijing. “There’s a sense China is saying, ‘We have your technology and your capital — and now we have control of the market.’ ”

Google complained on Tuesday about attacks on its computers that it said originated in China and said it was no longer willing to censor its Chinese site’s search results. It is not the first company to run afoul of the Chinese Communist Party’s fears of social instability and strong desire to keep tabs on dissidents and limit freedom of expression.

China has long restricted the sale of foreign movies, books, music and other media and continues to do so while appealing a World Trade Organization ruling in August that these policies violate China’s legally binding commitments to the international free trade system. More recently, China has sought to strengthen its domestic encryption industry — for which the government has easy access to all the decryption codes — while withholding the government certification that foreign-owned encryption companies in China need to sell their products to many users.

Jörg Wuttke, the president of the European Union Chamber of Commerce in China, said that no European Union companies had pulled out of China yet. But he said the encryption dispute would be the most likely cause if any European company withdrew in the near future.

Duncan Clark, the chairman of BDA, a consulting firm in Beijing that advises major telecom and technology companies, said that Google’s difficulties were indicative of broader troubles for foreign companies in China.

“There has been a raft of decisions and unpredictability, a kind of unpleasantness about what’s happening here,” Mr. Clark said. “There has been this received wisdom that no one can afford not to be in China, but that is being questioned now — there’s kind of an arrogance that’s characterizing government policy toward multinationals.”

To be sure, doing business in China has never been easy. Foreign companies have long complained of being cheated by joint venture partners who set up parallel businesses on the side or abscond with assets. Many other countries also have policies that favor homegrown companies, although the opportunity for industrialized countries to do so is limited because they operate under tighter World Trade Organization rules than China.

Chinese officials and academics dispute whether government policies are discriminatory toward foreign companies. Hu Yong, an associate professor of journalism and communication at Peking University, said that the government was leery of the rapid expansion of the Internet and mistrustful of private Chinese companies as well as foreign businesses.

“I think in the information technology sector, not only foreign companies are under very heavy pressure, but also private domestic companies,” he said. “The general trend is that the government wants state-owned companies to occupy major positions in this field.”

Other strains between China and the West over business matters have grown out of government policies that shield Chinese companies from international competition. These policies allow companies to grow in a large home market and prepare to export to less-protected markets abroad.

The newest frictions, particularly in the last year, have been over government procurement policy. When China joined the W.T.O. in November 2001, it promised to negotiate as quickly as possible to join the organization’s side agreement requiring free trade in government buying. But it has never actually done so, leaving the Chinese government free to use its enormous buying power to steer contracts to Chinese-owned companies.

The National Development and Reform Commission, China’s top economic planning agency, ordered national, provincial and local government agencies on June 4 to buy only Chinese-made products as part of the country’s nearly $600 billion economic stimulus program; imports were allowed only when no suitable Chinese products were available.

China has also restricted exports of a long list of minerals for which it mines much of the world’s supply, like zinc for making galvanized steel and so-called rare earth elements for manufacturing hybrid gasoline-electric cars.

Those restrictions, ranging from steep export tariffs to tonnage quotas and even export bans, have made it cheaper for many manufacturers to locate their factories in China to make sure that they have a plentiful supply of raw materials free from export taxes. In June, the United States and the European Union filed a W.T.O. case challenging China’s restrictions on zinc and bauxite exports. The Chinese government has denied wrongdoing.

China’s weak protections for patents and trademarks — and widespread counterfeiting as a result — have produced large industries that make goods in direct competition with Western competitors, but without comparable spending on research or marketing. Many Western companies have tried to respond by limiting the intellectual property that they transfer to China.

Oded Shenkar, a professor of business management at Ohio State University and author of “The Chinese Century,” said very few companies would be willing to leave a market as big as China’s, and that it might make sense only for a company like Google whose primacy rested almost entirely on intellectual property.

“The U.S. is the world’s greatest innovator and China is the world’s greatest imitator,” Mr. Shenkar said. “Google? What do they have other than intellectual property? If by being in China you’re at risk of losing it, maybe you don’t want to be there.”

But the Chinese market is so large and competitive that many multinationals choose to offer their latest technology for fear of losing market share if they don’t.

Volkswagen used dated technology in the cars that it sold here in the 1980s and 1990s, so the Chinese government asked multinational automakers in the mid-1990s which of them would offer the most advanced technology in exchange for the right to enter the market and build a factory in Shanghai. General Motors won the contest and brought its latest robots and automotive designs to China in a joint venture with Shanghai Automotive.

China has become the world’s largest auto market, yet it still limits foreign automakers to 50 percent stakes in auto assembly plants in China and assesses steep tariffs on imported cars. Chinese automakers that formed joint ventures with multinationals, like First Auto Works and Shanghai Automotive, have grown into giants that are now beginning to produce their own models, designed and built almost entirely in China.

The Chinese government has been introducing similar policies to force international companies to transfer their best technology in a long list of industries, like railroad locomotive manufacturing and aircraft assembly. It has also tried to give market preferences to domestic companies that invest in developing their own technology, even if the home-grown technology is initially inferior to foreign technology.

In November, the Chinese government notified domestic and foreign companies alike that the government would give preference in its purchases to products that used technology developed in China and had trademarks that were registered first in China. That led to a strong letter of protest by 34 industry associations to China’s Ministry of Commerce.

Mr. McGregor suggested that Google’s decision might prove to be a turning point.

“This may be seen as a real watershed,” he said. “There is a lot of feeling that the U.S. is on a downward spiral and China is on the rise.”

Keith Bradsher reported from Hong Kong and David Barboza from Shanghai. Michael Wines contributed reporting from Beijing.

View Article in The New York Times

CHINA: The Google news: China enters its Bush-Cheney era

12 Jan 2010 11:47 pm

By James Fallows

I have not yet been able to reach my friends in China to discuss this story, and for now I am judging the Google response strictly by what the company has posted on its "Official Blog," here, and my observations from dealing with Google-China officials while overseas. Therefore this will epitomize the Web-age reaction to a breaking news story, in that it will be a first imperfect assessment, subject to revision as new facts come in. With that caveat, here is what I think as I hear this news:

- It is a significant development. Significant for Google; and while only marginally significant for developments inside China potentially very significant for China's relations with the rest of the world.

- The significance for Google is of the "last straw" variety. For years, the company has struggled to maintain the right path in China. Its policy around the world is that it will obey the law of whatever country it operates in. You might object to that -- until you think about it: in a world of sovereign states, how could a company possibly say, "We'll operate within your borders but won't obey your laws?" (Similarly, Google's national sites in certain parts of Europe obey laws banning neo-Nazi sites and other material that would be permissible in the U.S.) Chinese laws require search engine companies and other Internet operators to censor certain material. Searches conducted by Google.CN -- in Chinese language, mainly for users inside China -- have obeyed those Chinese laws. Meanwhile searches on the main Google.COM have been uncensored for material like "Tiananmen Square" or "Dalai Lama." Anyone who could find a way to get to Google.com - about which more in a moment -- could find whatever he or she wanted.

Dealing with those requirements has been part of a non-stop set of difficulties for Google in China. More details about this later on. Like most other Western companies, Google has consistently decided to cope with the difficulties and stay in China. Part of the reason was the obvious commercial potential that the Chinese market has for almost any company in any industry. Another part was Google's argument -- which I basically believe -- that the Chinese public was better off with another source of information, even if constrained, than it would be without that option. But, as reported on Google's site, a latest wave of provocations and intrusions was simply too much.

- In terms of information flow into China, this decision probably makes no real difference at all. Why? Anybody inside China who really wants to get to Google.com -- or BBC or whatever site may be blocked for the moment -- can still do so easily, by using a proxy server or buying (for under $1 per week) a VPN service. Details here. For the vast majority of Chinese users, it's not worth going to that cost or bother, since so much material is still available in Chinese from authorized sites. That has been the genius, so far, of the Chinese "Great Firewall" censorship system: it allows easy loopholes for anyone who might get really upset, but it effectively keeps most Chinese Internet users away from unauthorized material.

- In terms of the next stage of China's emergence as a power and dealings with the United States, this event has the potential to make a great deal of difference -- in a negative way, for China. I think of this as the beginning of China's Bush-Cheney era. To put it in perspective:

I have long argued that China's relations with the U.S. are overall positive for both sides (here and here); that the Chinese government is doing more than outsiders think to deal with vexing problems like the environment (here); and more generally that China is a still-poor, highly-diverse and individualistic country whose development need not "threaten" anyone else and should be encouraged. I still believe all of that.

But there are also reasons to think that a difficult and unpleasant stage of China-U.S. and China-world relations lies ahead. This is so on the economic front, as warned about here nearly a year ago with later evidence here. It may prove to be so on the environmental front -- that is what the argument over China's role in Copenhagen is about. It is increasingly so on the political-liberties front, as witness Vaclav Havel's denunciation of the recent 11-year prison sentence for the man who is in many ways his Chinese counterpart, Liu Xiaobo. And if a major U.S. company -- indeed, Google has been ranked the #1 brand in the world -- has concluded that, in effect, it must break diplomatic relations with China because its policies are too repressive and intrusive to make peace with, that is a significant judgment.

-- Everything in the paragraph above has the similarity of being based directly or indirectly on recent Chinese government decisions. The government could decide (and probably will) to allow the value of the RMB to float again. The government could decide to throw its weight behind an effective climate agreement -- we'll know by January 31 about its post-Copenhagen proposals. The government could have decided not to prosecute Liu Xiaobo. And -- the indirect part -- presumably it could have worked with Google to address the complaints alleged in the Google statement.
In a strange and striking way there is an inversion of recent Chinese and U.S. roles. In the switch from George W. Bush to Barack Obama, the U.S. went from a president much of the world saw as deliberately antagonizing them to a president whose Nobel Prize reflected (perhaps desperate) gratitude at his efforts at conciliation. China, by contrast, seems to be entering its Bush-Cheney era. For Chinese readers, let me emphasize again my argument that China is not a "threat" and that its development is good news for mankind. But its government is on a path at the moment that courts resistance around the world. To me, that is what Google's decision signifies.

Original Article from The Atlantic

CHINA & THE WORLD: Public Opinion and Foreign Policy

 

The Lowy Institute has just released its first China Poll, a wide-ranging survey of Chinese public opinion towards a number of important international policy issues. By what do the Chinese people feel threatened? How do they feel about foreign investment from Australia, Canada and the United States? Which country do the Chinese people regard as the best place to be educated and what do they think of Australia - is it a good place to visit, a country with attractive values or is it suspicious of China?
The 2009 Lowy Institute China Poll asked a broad sample of the Chinese population these questions and others. The Poll was partly funded with the generous assistance of the MacArthur Foundation as part of the Lowy Institute’s MacArthur Foundation Asia Security Project.
Download item (244KB)

CHINA: Foreign Companies Resent China’s Rules

January 14, 2010

By KEITH BRADSHER and DAVID BARBOZA

HONG KONG — Google is far from alone among Western companies in its growing unhappiness with Chinese government policies, although it is highly unusual in threatening to pull out of the country entirely in protest.

Western companies contend that they face a lengthening list of obstacles to doing business in China, from “buy Chinese” government procurement policies and growing restrictions on foreign investments to widespread counterfeiting.

These barriers generally fall into two broad categories. Some relate to China’s desire to maintain control over internal dissent. Others involve its efforts to become internationally competitive in as many industries as possible.

Google, which complained Tuesday about attacks on its computers from China and called for an end to censorship of search results, is not the first company to run afoul of the Communist Party’s fears of social instability and strong desire to keep tabs on dissidents and limit freedom of expression.

China has long restricted the sale of foreign movies, books, songs and other media, and it continues to do so while appealing a World Trade Organization ruling in August that these policies violate China’s legally binding commitments to the international free trade system. More recently, China has sought to strengthen its domestic encryption industry — for which the government has easy access to all the decryption codes — while withholding the government certification that foreign-owned encryption companies in China need to sell their products to many users.

Jörg Wuttke, president of the European Chamber of Commerce, said that no E.U. companies had pulled out of China yet. But the encryption dispute would be the most likely cause if any did in the near future, he said.

Duncan Clark, the chairman of BDA, a Beijing consulting firm that advises major telecommunications and technology companies, said that Google’s difficulties were indicative of broader troubles for foreign companies in China.

“There has been a raft of decisions and unpredictability, a kind of unpleasantness about what’s happening here,” Mr. Clark said. “There has been this received wisdom that no one can afford not to be in China, but that is being questioned now — there’s kind of an arrogance that’s characterizing government policy toward multinationals.”

To be sure, doing business in China has never been easy. Foreign companies have long complained of being cheated by joint venture partners who set up parallel businesses on the side or abscond with assets. Many other countries also have policies that favor home-grown companies, although the opportunity for industrialized countries to do so is limited because they operate under tighter W.T.O. rules than China.

Chinese officials and academics dispute whether government policies are discriminatory toward foreign companies. Hu Yong, an associate professor of journalism and communication at Peking University, said that the government was leery of the rapid expansion of the Internet and mistrustful of private Chinese companies as well as foreign businesses.

“I think, in the information technology sector, not only foreign companies are under very heavy pressure, but also private domestic companies,” he said. “The general trend is that the government wants state-owned companies to occupy major positions in this field.”

Other strains between China and the West over commercial policies have been over government policies that shield Chinese companies from international competition. These policies allow companies to grow in a large home market and prepare to export to less-protected markets abroad.

The newest frictions, particularly in the past year, have been over government procurement policy. When China joined the W.T.O. in November 2001, it promised to negotiate as quickly as possible to join the W.T.O.’s side agreement requiring free trade in procurement. But it has never actually done so, leaving the Chinese government free to use its enormous buying power to steer contracts to Chinese-owned companies.

The National Development and Reform Commission, country’s top economic planning agency, ordered national, provincial and local government agencies on June 4 to buy only Chinese-made products as part of the country’s nearly $600 billion economic stimulus program; imports were only allowed when no suitable Chinese products were available.

China has also restricted exports of a long list of minerals for which it mines much of the world’s supply, like zinc for making galvanized steel and so-called rare earth elements for manufacturing hybrid gasoline-electric cars.

Those restrictions, from steep export tariffs to tonnage quotas and even export bans, have made it cheaper for many manufacturers to locate their factories in China so as to make sure they have a plentiful supply of raw materials free from export taxes. On June 23, the United States and the European Union filed a W.T.O. case challenging Chinese restrictions on zinc and bauxite exports. The Chinese government has denied any wrongdoing.

China’s weak protections for patents and trademarks — and the resulting widespread counterfeiting — have produced large industries making goods in direct competition with Western competitors, but without comparable spending on research and marketing. Many Western companies have tried to respond by limiting the intellectual property they transfer to China.

Oded Shenkar, a professor of business management at Ohio State University and the author of “The Chinese Century,” said that very few companies would be willing to leave a market as big as China’s and that it might make sense only for a company like Google whose primacy rests almost entirely on intellectual property.

“The U.S. is the world’s greatest innovator, and China is the world’s greatest imitator,” Mr. Shenkar said. “Google? What do they have other than intellectual property? If by being in China you’re at risk of losing it, maybe you don’t want to be there.”

But the Chinese market is so large and so competitive that many multinationals choose to offer their latest technology for fear of losing market share if they do not.

Volkswagen used dated technology in the cars that it sold here in the 1980s and 1990s, so the Chinese government asked multinational automakers in the mid-1990s which would offer the most advanced technology in exchange for the right to enter the market and build a factory in Shanghai. General Motors won the contest and brought its latest robots and automotive designs to a joint venture with Shanghai Automotive.

China has become the world’s largest auto market, yet it still limits foreign automakers to 50 percent stakes in assembly plants in China and assesses very steep tariffs on imported cars. Chinese automakers that formed joint ventures with multinationals, like First Auto Works and Shanghai Automotive, have grown into giants that are now beginning to produce their own models, designed and built almost entirely in China.

When the European Chamber of Commerce issued a report last September warning that China was starting to become less open for foreign investors, the Chinese Ministry of Commerce responded by declaring that “China has been making efforts to create a sound and fair environment for foreign businesses.”

A Ministry of Commerce spokeswoman would not elaborate on this policy over the phone Wednesday afternoon, requesting that questions be faxed instead. There was no immediate reply to the fax.

David Barboza reported from Shanghai. Michael Wines contributed reporting from Beijing.

Link to Original New York Times Article

RUSSIA: Nation to mourn Perm victims on 40th day since tragedy

 

Russia on Wednesday marked 40 days since the fire in a nightclub in the Urals city of Perm that killed 155 people, holding mourning and requiem ceremonies for the victims.

Relatives and friends of those dead are still bringing flowers, toys, portraits and letters to the Lame Horse bar, where the tragedy occurred in the early hours of December 5, 2009.

Russian Orthodox Christians observe a 40-day mourning period, which ends with special services, and all Perm churches were to hold requiem ceremonies on Wednesday.

"We all mourn for the victims of the tragedy, deeply empathize and share the pain of the relatives. Orthodox Church is praying about health and quick recovery of the injured and hospitalized, whose condition is still critical," Perm bishop Irinarkh said.

In the days immediately after the accident, more than 20 million rubles ($670,000) were donated to different funds to support those affected by the tragedy.

Many of the partygoers had extensive burns and severe respiratory injuries, and 55 people are still undergoing treatment in hospitals, mostly in Moscow and St. Petersburg.

Nine children were orphaned by the fire, and a further 100 lost one of their parents.

The blaze, Russia's deadliest in at least half a century, engulfed the Lame Horse night club after an indoor firework display went wrong, setting fire to the wicker-decorated ceiling.

Russia's Emergencies Minister Sergei Shoigu said inspectors had for years turned a blind eye to breaches of fire safety in the Perm nightclub.

Charges were brought against Lame Horse executive director Svetlana Yefremova, acting art director Oleg Fetkulov and co-owner of the club Anatoly Zak, as well as director of the Pirotsvet fireworks supplier Sergei Derbenev

The government of the Perm region and the Perm city mayor resigned over the tragedy.

Russia has an appalling fire-safety record. According to the country's emergency services, 15,165 people died in fires across the country in 2008, including 584 children. In the United States, with more than twice the population, the figure is around 3,400 deaths a year.

A total of 67 people died in about 600 fires that broke out in Russia on New Year's Eve and during New Year's celebrations on January 1 this year.

Original RIA Novosti Article

JAPAN: For $5.50, your own geisha tea ceremony

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January 12, 2010

By Takehiko Kambayashi Correspondent 

Kyoto started a campaign to attract tourists with a special rate to take a picture with a geisha and have a tea ceremony with an apprentice.

Maiko (apprentice geisha) perform at the Kyoto Museum of Traditional Crafts.

• A local, slice-of-life story from a Monitor correspondent.

This former imperial capital with national treasures and cultural assets now seeks help from young women with white painted faces to reinvigorate tourism.

Maiko (apprentice geisha) and geisha in elaborate kimono perform traditional dance, sing a song, and serve sake at a place called ochaya, or a tea house, where the average customer spends around $500. First-timers are usually turned away as an introduction is needed to get in.

Kyoto, however, started a campaign last month in which tourists pay 500 yen ($5.50) for a tea ceremony with maiko and geisha and a chance to pose for pictures with them.

In June, a similar program was started at the Kyoto Museum of Traditional Crafts, where a couple of maiko perform traditional dance three times every Sunday free of charge.

Is this commercialization of geisha tradition?

“Absolutely not,” says Osamu Ito, an official at the Ookini Foundation (ookini means “thank you” in Kyoto dialect). The foundation was established to preserve and promote geisha tradition. “It’s only 500 yen. We just want to help promote tourism.”

Between 2003 and 2007 the number of overseas visitors who stayed overnight in Kyoto doubled to 926,805. City officials attribute the surge mainly to a national campaign of increasing Japanese tourism, which started in 2003. The 2005 film “Memoirs of a Geisha” also helped draw more foreign tourists, especially from the United States, they add.

“We hope this opportunity could help overseas visitors have a deeper interest in Japanese culture,” says Hiroaki Kakinuma, a city official in charge of tourism promotion.

Christian Science Monitor Article Link

TRAVEL: Subversive Non-Fiction Travel Books on Asia

Thomas Kohnstamm celebrates nine books that have really rocked the boat in his latest article on World Hum.  Several of these are focused on Asia:

‘Across Asia on the Cheap’ by Tony Wheeler and Maureen Wheeler

Asia’s overland Hippie Trail was already a well-worn counterculture experience by the time recent business school grad Tony Wheeler and his wife Maureen published Across Asia on the Cheap in 1973. However, the guidebook broke ground by mainstreaming the globalized backpacker counterculture at the polarized height of the Cold War. Moreover, it brought a DIY aesthetic and strong opinions to the travel guidebook genre. The lasting effect was that the book (and its subsequent series) constituted an easy entrée to alternative, independent travel that could be devoured by the masses.

[This book is now out of print with limited availability.]

‘The Travels of Marco Polo’ by Marco Polo and Rustichello da Pisa

OK, so maybe Marco Polo didn’t actually become the right-hand-man of Kublai Khan. Maybe he never met Kublai Khan at all. And, yes, the most famous Venetian of all time didn’t write the book—that was left to a ghostwriter and cellmate, Rustichello da Pisa, who probably interjected additional fictional elements (after all, da Pisa was a romance writer who had already knocked out a King Arthur book). Fact checking was piss poor in the 13th Century, so we’ll never really know the truth. All of that aside, few books inspired so many Europeans to seek fortune and adventure outside of Europe and, thereby, alter the world. One person known to have been heavily influenced by The Travels of Marco Polo was a Genoese guy named Columbus.

[Kindle Version Available for Free Here]

‘Nobody Said Not to Go—The Life, Loves, and Adventures of Emily Hahn’ by Ken Cuthbertson

Unaccompanied female travelers were still a rarity in America by the 1920s—and so Emily Hahn dressed as a boy on a cross-country car trip. By 1948, Hahn had moved to the Belgian Congo, crossed Central Africa on foot, entered into a turbulent affair with a Chinese poet in Shanghai, and had two children with Britain’s chief spy in Hong Kong. Top that in 2010, Bear Grylls. This biography is an engaging introduction to a complicated and strikingly progressive woman. Follow it up with some of Hahn’s own work: 52 books and more than 180 New Yorker articles.

JAPAN: Political Power Broker’s Tokyo Office Raided

January 14, 2010

By MARTIN FACKLER

TOKYO — Prosecutors in Tokyo raided the office of one of the most powerful figures in Japan’s governing party on Wednesday, expanding the latest in a series of finance scandals that have sapped support for the new government.

Prosecutors searched the office of Ichiro Ozawa, the secretary general of the Democratic Party, as part of an investigation into what Japanese news reports said was more than $4 million in improperly reported political funds linked to one of Japan’s largest construction companies.

The investigation comes as polls show falling public approval ratings for Prime Minister Yukio Hatoyama, who has also faced a scandal of his own over millions of dollars in improperly reported political funds. The scandals have appeared to undermine Mr. Hatoyama’s promises to end the insider-driven politics of his predecessors, the Liberal Democratic Party, whose half-century in power his Democrats ended in August.

The inquiry has also focused public attention on the growing influence of Mr. Ozawa, a veteran political strategist and dealmaker who is widely seen here as the power behind the throne in the new government. Political experts describe Mr. Ozawa’s control of the party’s purse strings, and its campaign to win crucial parliamentary elections this summer, as giving him power rivaling that of Mr. Hatoyama.

News reports have been critical of Mr. Ozawa for apparently brushing off requests from prosecutors to answer questions about his role in the financing irregularities. While Mr. Ozawa has told prosecutors that he is too busy to talk with them, news reports have showed him greeting supporters and even sitting down to play go, an ancient game of strategy.

On Tuesday, Mr. Ozawa held a news conference to apologize.

“As I have said many times, there may have been miscalculations by myself or those in my office, but I believe that there was no intentional violation of the law,” Mr. Ozawa told reporters.

Prosecutors also searched the company the Kajima Corporation, as well as the offices of Tomohiro Ishikawa, a former aide of Mr. Ozawa who is now a Democratic lawmaker.

This is the second time in less than a year that prosecutors have investigated Mr. Ozawa, who resigned as Democratic Party leader last spring after a similar financing scandal involving another construction company.

View Article in The New York Times