British waste adds to environmental crisis across China

Jonathan Watts in Mai
Saturday March 31, 2007
The Guardian

British high street waste is fouling streams and ditches in China despite promises of an environmental crackdown by both governments.

Mai village in Guangdong province, southern China, suffers from a Made-in-Britain eyesore: Tesco and Argos plastic bags choke the waterways, snag on tree branches and contribute to a rotting stench during floods and hot weather. There is even a green and white Help The Aged carrier bag printed with a slogan proclaiming the charity's fight against "poverty, isolation and neglect".

It is a side-effect of globalisation. Many of these products were manufactured in China, shipped to the UK for use and sent 5,000 miles back for disposal.

China exported £12.6bn worth of manufactured goods to the UK last year and received an estimated 1.9m tonnes of rubbish in return. Under EU regulations member countries are not allowed to dump garbage overseas, but are permitted to send sorted waste for recycling.

Environmentalists say this is irresponsible because much of the recycling is carried out in poorly-regulated communities, where health risks and pollution worries are a low priority.

Guangdong is scattered with scavenging centres. In Guiyu and Qingyuan small family-run businesses chop up and melt down toxic plastics and metals from discarded computers, printers and mobile phones. In Nanhai and Shunde factories deal with mounds of plastic bags and bottles. About 20% of the waste comes from overseas according to local sources.

A series of exposés in the domestic and foreign media prompted the government to crackdown on the business earlier this year. Guangdong's provincial government banned unlicensed businesses and individuals from importing plastic waste and suspended operations at factories that failed to meet environmental standards.

Last month factories in the most notorious district, the Lianjiao area of Nanhai, were shut down. But most firms simply relocated.

Two hours drive away a new recycling centre is under construction in Shijing village, which is now littered with scrapheaps. The dealers said they would no longer touch foreign waste.

In nearby Shenzhen and Shunde businessmen were still reprocessing carrier bags and other UK waste from the UK. "It can be done as long as the plastic is well enough packaged to get through customs," said the owner of one factory.

At "plastic street" in Mai village, dozens of small plastic recycling firms line the road. Most of the work is done by migrant workers who are paid about £50 a month.

Thousands of plastic carrier bags were being blown into ditches and waterways, creating an eyesore and a bad smell. Students at the local school said the stench came into their classrooms and got worse when the fetid stream floods.

The sanitary department of Shunde township said it was unaware of the mess in Mai village.

"We have a project to clean up villages in this area but we haven't got round to Mai yet," said a spokesman. The provincial government declined to comment.

Britain supports the recycling business. "It allows for a more sustainable use of world resources, but it should be carried out under strict environmental controls," said the UK consulate in Guangzhou. When told of the impact on Mai village it said individual companies should take more responsibility.

Greenpeace believes that wealthier countries should deal with their waste problems at home, rather than exporting them to developing countries, which have to pay the environmental costs.

"If we can stop the waste trade I am sure it will lead to more sustainable development around the world," said Kevin May, toxics campaign manager at Greenpeace's office in Beijing.***

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Waste land

China makes most of our plastic carriers - it also recycles them when we toss them away. Crazy? It's become a fashionable thing to worry about - and there's a new It bag to prove it. Jonathan Watts in Mai and Jess Cartner-Morley in London report

Jonathan Watts and Jess Cartner-Morley
Saturday March 31, 2007
The Guardian

Five thousand miles from the nearest UK high street, a blue and white Tesco carrier bag flutters like a flag in the breeze. It is snagged on a twig above a Chinese stream that's choked with rubbish from around the world. Argos and Wal-Mart logos are visible in the fetid water and along banks that are strewn with plastic bags. There is even a green and white Help The Aged carrier with a UK website address on it.

Here in Mai, a village in Guangdong Province, southern China, a community of recyclers ekes out a living from items considered so worthless in the west that they are given away free and quickly discarded. Carrier bags and bottles are shipped here from London, Rotterdam, Hong Kong and cities within China for chopping, melting and remoulding into pellets. Like many jobs outsourced to China, it's dirty, smelly, labour-intensive and poorly paid.

There is so much rubbish to be recycled that parts of the village look like a dump. "The river is foul - we can smell it from our classrooms," says Wang Yanxia, a student at a local middle school. "When it rains, the water floods on to the path and the stench is everywhere." Villagers may not have heard of Tesco, but the British high street giant has an all too visible presence. One factory has even decorated its front gates with huge plastic banners advertising a Tesco mobile phone offer.

If China is the end of the line for the plastic bag, it is also the beginning. Most of the carrier bags used in Britain are made in Chinese factories just a few hours' drive from Mai. From there, they travel halfway around the world, are dished out to British shoppers - and then at least some of them find their way back.

The 10,000-mile odyssey between manufacturing and dumping is the story of our age, part economic miracle, part environmental tragedy. In the space of just 20 years, the fishing village of Shenzhen, in the south of China close to Hong Kong, has become an industrial powerhouse with a population of more than eight million and a container port that handles more cargo than anywhere in the world other than Hong Kong, Singapore and Shanghai. This is where most of the planet's toys and shoes are made, where Apple outsources much of the production of its iPods, where Wal-Mart fills its shelves. And, naturally, it is also the place that makes billions of the plastic bags that briefly contain all these consumer goods.

Shenzhen Delux Arts Plastics is a typical manufacturer, paying its workers about £60 a month to churn out 25,000 plastic carriers every day, a fifth of which go to Europe, some to Next in the UK. It is a simple, three-part process. Bags full of plastic pellets are fed into an induction pipe, melted together at a temperature of 180C and then stretched and wound on to rolls the width of the desired bag. Next, the rolls are fed through a series of cylinder printing presses, each adding a different colour, until the logo and lettering are complete. Finally, an army of workers on the second floor carries out the more labour-intensive process of melting handles on to the bags, checking quality and packing. From start to finish, it takes just five minutes to make a bag.

The production cost for each bag is less than four pence, most of which goes on machinery maintenance, management and materials. The primary ingredient is polyfabric polypropylene or other types of plastic, all of them petroleum based and imported directly from Saudi Arabia or from refineries in Singapore and Japan. The industry has a significant carbon footprint. By one estimate, the US alone requires 12 million barrels of oil for the 100 billion bags its consumers use annually.

For factory manager Andy Lue, the main concern is that the cost of plastic is rising along with the surge in oil prices. "Our customers would complain if we tried to pass on the extra cost of the materials," he says. The factory's main competitive advantage is labour, which accounts for less than a 10th of the production costs of a plastic bag. Wages in Shenzhen are low, and more than three-quarters of the population are migrants, many of them living in huge company dormitories far from their homes and families, and working in dirty, dangerous conditions.

Over at the Delux Arts Plastics factory, pay and working conditions are above average for Shenzhen. The manager will not permit us to talk to employees, but we are introduced to "group leader" Chen Ping, a migrant from Guangxi Province, who tells us that the situation has improved enormously since she started working and living in the factory 11 years ago. "The managers realise they must let us eat and sleep better if they want us to work harder."

Chen earns more than double the average factory salary, but her life is far from easy. Because she is a migrant, her two children will have to return to their home town to go to school, which means she will see them for only a few days each year, at spring festival. But she expresses no sense of grievance, even though the consumers who use her Next bags can easily pay more for a single shirt than she earns in a month. "I don't think it is unfair. We make these bags to be used. They have their own value."

In Britain, plastic bags have long been a cause of irritation, partly due to their visibility. In gutters and branches, the useless, ugly flutter of discarded, brightly coloured plastic taunts us with human fecklessness. They pose problems for wildlife, they block drains. And 17 billion plastic bags a year are handed out to British shoppers.

What has made them, suddenly, a very hot issue is the launch of another kind of bag - an item that has already become the status bag of 2007. This is not the reissued Chanel quilt-and-chain classic, the 2.55. It is not even the YSL Downtown, with its modish zips and snap fastenings. And - here's the thing - it costs £5.

There is nothing inherently remarkable about Anya Hindmarch's I'm Not A Plastic Bag. It is a simple, rope-handled, sturdy cotton shopping bag, albeit one that's rather beautifully designed, as you would expect from the British Accessory Designer of the Year. What is significant, however, is the reaction to it at every stage, from the sketchbook to the checkout. There have already been queues at the Mayfair store Dover Street Market, when a few preview bags went on sale.

At around the same time, the British Retail Consortium has announced a voluntary initiative to reduce the environmental impact of carrier bags by 25% by the end of next year, through the use of alternative materials to make lighter-weight bags, by encouraging reuse, offering and promoting "bags for life", always asking customers whether they require a bag at all and providing bag recycling points. In other words: reduce, reuse, recycle.

Friends of the Earth are quick to point out that, in the context of the scale of the environmental issues with which we are faced, plastic bags, which account for only 0.3% of the domestic waste stream, are not their top priority. Even so, the average person in the UK accepts, on average, five plastic bags a week. The decision as to whether to take a bag is almost a daily one. The supermarket checkout has become, therefore, a frontline of the battle for the environment, even more so because, unlike recycling or composting of domestic waste, it is a decision we take in public, and so reflects not only personal beliefs but what we see to be public norms.

It is for this reason that Decline Plastic Bags Wherever Possible is the first action suggested in the book Change The World For A Fiver. "Declining plastic bags is totemic of lots of things," says Eugenie Harvey, co-founder of the global social-change movement We Are What We Do, which produced the book. "It's the most visible aspect of a whole set of behaviour around shopping: do you buy environmentally friendly washing powder; do you buy locally produced food?"

Trevor Datson, spokesman for Tesco, calls the "Do you need a bag?" moment at the checkout "a constant conversation between us and the customer. I was in the Sandhurst store yesterday and my colleague on the checkout remarked to me how many more people remember to bring in their own bags these days."

Hindmarch's bag may help. She has a knack for reading the zeitgeist, as illustrated by the phenomenal success of her Be A Bag range, whereby family photos could be made into smart handbags, a concept that in the six years since it was launched has been copied all over the world. The low price of the I'm Not A Plastic Bag - a fiver - was absolutely essential to the project, Hindmarch says. "And so was the point of sale, which had to be the supermarket checkout."

Hindmarch is, however, a businesswoman, and as such knew that too many £5 Anya Hindmarch bags on the market would damage her upmarket brand. (To put the price in perspective, the Elrod, one of the key Anya Hindmarch leather handbag styles for this summer, sells for around £500.) Production therefore had to be limited, and so the bag had to be made in China if the figures were going to add up. "That was not ideal, of course," Hindmarch concedes, "but we have been careful about carbon-offsetting the project. Our aim was for the project to break even. None of the retailers involved in the project is making any money from it."

A limited number of bags are currently on sale via Hindmarch's website, and from April 11, the remaining 20,000 bags will go on sale in Sainsbury's.

The purpose of the Hindmarch bag is, says the designer, "to cast a spotlight on the issue. Just to plant an idea in people's heads that will make them think before automatically reaching for a bag."

Finding a complete solution to the plastic bag problem is extremely complicated. All the supermarkets profess commitment to the issue, but all have different policies. Tesco produces all-degradable bags and operates a clubcard scheme to reward people for reusing bags, on the principle that "incentive is better than coercion, because if people do something resentfully, they are not making such a deep-seated change".

Waitrose emphasises the "bag for life" scheme, which they were the first retailer to introduce 10 years ago. The Co-op's bags are degradable; Sainsbury's are made of one-third recycled material. The opening of the country's first organic supermarket, Whole Foods Market in Kensington, in June, may further accelerate the process of change - the store, like its Fresh & Wild predecessors, will refund customers 5p for not taking a bag.

Friends of the Earth, however, would like to see a government tax on all plastic bags. Degradable and biodegradable bags are "not an environmentally friendly option", they say, and "will lead to the public becoming increasingly confused as to what they are supposed to do with them. Degradable plastic bags usually can't be recycled with normal plastic bags, and people may think they can put degradable bags into their compost bins, which they can't." Degradable bags are still made from plastic, so placing demands on oil resources. They contain a metal additive to make them degrade and tend to require sunlight to break down. If biodegradable bags end up in landfill, they will eventually produce methane, a powerful greenhouse gas.

Paper bags are no better, say Friends of the Earth, because they have less capacity for being reused, and require more energy and resources in manufacture and transport than plastic alternatives. Bags made from recycled plastics, which are then reused or recycled, are considered by many a better option, but recycling points for bags are as yet not widely accessible.

In any case, all too often, a promise by municipal government to recycle simply means sending the rubbish to China. In trade terms, it makes an odd kind of sense. Historically, British merchants have always found it easy to fill their ships with goods on the route from China, but all too often they have been stuck with empty cargo holds in the opposite direction. This trade gap is the main reason why English gunboats forced opium on China in the 19th century. Today, however, the answer is not drugs, but garbage.

China exports almost £12.6 billion-worth of manufactured goods and other products to the UK each year. In return, the UK sends back 1.9 million tonnes of rubbish, for the simple reason that it's cheaper than dumping it at a UK landfill site. Because the ships are almost empty on their way back to China, the cargo costs are tiny - it's cheaper to send a container of waste from London to Shenzhen than it is to truck it to Manchester.

Under EU law, waste cannot be dumped abroad, but shipments for recycling are permitted. This means business for Guangdong Province, which is scattered with Steptoe and Son communities. There are the e-waste centres of Guiyu and Qingyuan, where families make a living from chopping up and melting down toxic plastics and metals from discarded computers, printers and mobile phones. Below them on the waste chain are the recyclers of plastic bags and bottles in Shunde and Heshan.

Until recently, the most notorious of these was in Nanhai, a town just outside Guangzhou, where the streets were once piled high with rubbish and the streams thick with trash and pollution. Last month, however, after a series of embarrassing reports in the British media, the government was shamed into shutting down the entire area and banning imports of foreign garbage. Today, the streets of Nanhai are swept clean and the small recycling sheds are shuttered up. For many locals, however, this sudden concern about the environment is a financial disaster. "We were ordered to close last month because some foreign rubbish contained toxins," says Ding Chunming, who used to process bottles and bags. "It's a terrible blow because we only started this business last year. We get no compensation. All we can do is wait and hope the government allows us to restart business."

But the industry has learned how to bypass laws and regulations. Many Nanhai refugees simply moved their scrapheaps to a new location. Two hours' drive away, we found a new recycling centre under construction in Shijing village. The concrete is still wet on the floor and many of the sheds are only half complete, but the task of buying, selling and sorting rubbish is already in full flow. The operation is remarkably specialised. There are sections just for discarded hotel welcome mats, the bases of revolving chairs, black buckets and the lids of shampoo bottles.

A local businesswoman, who gave her name only as Ms Liang, was terrified that another critical news report would force her to relocate again. "We have only just got here from Nanhai," she says. "I have never dealt with foreign waste. I can't do it now and I won't do it in the future."

But for others the trade in foreign waste is too lucrative to disappear quickly. We were approached by a scrap dealer who asked if we had any rubbish to sell. He was after PVC, but he put us in touch with a factory in Shenzhen that said it could deal with carrier bags despite the ban. "It can be done as long as the plastic is well enough packaged to get through customs," says the owner. "You should ship them to Hong Kong and we will deal with them from there. If the bags are sorted by colour, we can pay you as much as $100 a tonne."

Farther away from the media spotlight and the scrutiny of environment officials, many factories are still reprocessing British carrier bags and other rubbish despite the government's ban. Another hour's drive away is Shunde, where European trash is baled up on the roadside. Much of it is from the UK - Tesco milk cartons, Walkers crisp packets, Snickers wrappers and empty packets of Bisto gravy and Persil powder - but there are also bales containing the packaging for Dutch confectionery and Italian nappies.

The village of Mai is close by. Running through the community is a street of recycling firms, outside each of which stands a blackboard detailing the type, colour and quality of the plastic they deal in. Some are no bigger than a shed in which migrant workers sift by hand through hundreds of thousands of tiny plastic pellets, picking out discoloured flecks and bits of fluff.

Mai Weibo buys semi-processed bags for 9,000 yuan a tonne (around £600) and, after painstakingly cleaning up the contents, sells the plastic on for 10,500 yuan - "We don't make much of a profit." The recycled plastic is not of sufficiently high quality to be used a second time for UK bags, so instead much of it is turned into red, white and blue plastic sheets, which are used for building site coverings and holdalls.

Many locals believe the pollution is ruining their health. A local doctor says the village suffers from an unusually high incidence of respiratory diseases. "Perhaps it was the pollution or perhaps it was because everyone smokes cigarettes," he says. "This is a sensitive topic. Of course we want a garden-like environment, but people here have to make a living."

Others say they have other priorities. "I don't care about the environment," says one migrant labourer. "I only want to make money. If your stomach isn't full, how can you worry about health?"

Everyone condemns as an eyesore the ditches full of carrier bags, but nobody seems to take responsibility for clearing up the mess. In fact, the main concern of local businessmen and government officials is to avoid scrutiny. "The government has banned imported waste because of the media attention," says one local factory manager, whose warehouse includes giant baskets full of rubbish from the UK. "The Nanhai recycling business has been shut down. This area doesn't want to suffer the same fate because it would hurt the government's income."

Britain's stance is also equivocal: dumping waste overseas is forbidden, but sending it to another country for recycling is acceptable. When told of the foul conditions at Mai, an official at the UK consulate in Guangzhou says that individual companies have to take action. "It is the responsibility of producers to make sure that waste is dealt with properly at all stages of the chain."

Foreign governments have started to take action specifically on plastic carriers, some going much further than Britain's retailers and their aim for a voluntary 25% reduction in bag use by 2008. Ireland, for example, introduced a 15p "plastax" on carrier bags way back in 2002, which has subsequently led to a 90% reduction in use. Australia has launched a "Say No To Carrier Bags" campaign. In Taiwan and Hong Kong, the government has obliged supermarkets to charge for bags at least two days a week. Italy is promoting the use of biodegradable bags. In France, reusable plastic bags - which are heavier, easier to recycle and less likely to blow away - now account for more than half of the ¤770m market.

Inevitably, however, even those eco-bags are made in Shenzhen. The main producer is the Richall Group, which must be one of the world's fastest-growing companies. Launched in 2003 with starting capital of just £1,000, last year it recorded sales of more than £3m, and this year that figure is expected to triple, thanks to business from Sainsbury's, Unilever, Disney, Budweiser and Nestlé, all of whom are looking towards reusable bags. Richall's president, Liu Tianyan, says attitudes are changing but, more importantly, so are materials. "We're never going to get rid of plastic bags completely, because in some cases, such as food wrappings, there is no good substitute. But in the case of shopping bags, I believe the flimsy plastic can be completely replaced."

Not everyone thinks that would be a good thing. Peter Woodall, communications manager for the Carrier Bag Consortium, says, "It's important to forget the emotion and look at the science. We are not filling our landfill with plastic bags. That is simply a myth. When real science is taken into account, the best environmental choice is plastic. Life-cycle analysis shows that if you use a conventional bag four times and then recycle it, that is better than using a 'bag for life'."

Environmental campaigners, meanwhile, believe the only solution is to make rich countries deal with their waste locally. "That's the only way to make the whole community feel the impact," says Kevin May at Greenpeace's office in Beijing. "If you can easily dump waste overseas, then there is no motive for having a waste-reduction programme at home. The argument that developing nations need recycled resources from wealthy nations is only partly true. The environmental costs are too high. Just look at the filthy water and polluted air of China. If we can stop the waste trade, I am sure it will lead to more sustainable development around the world."

The apparent intractability of the plastic bag problem is all the more remarkable considering that our dependency on them is a recent phenomenon. Polythene was not even invented until the 30s, and plastic bags did not become common in supermarkets until the 70s. The idea that we can't live without them is a very modern one.***

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China's 'fifth generation' leaders come of age

Mar 29, 2007
By Cheng Li

Just as the US political arena has begun to heat up in an off-election year, so too has Chinese politics become even more dynamic as the country's political clock winds its way toward the convening of the 17th National Congress of the Chinese Communist Party (CCP).

Since 1977, the CCP has held a party congress every five years. The congress has often been an occasion for change in China's top leadership and for new directions in domestic and foreign policies. Fervent jockeying for power among various factions on the eve of the party congress is common.

The 17th National Congress, which is scheduled to convene this autumn, will be no exception. More than 60% of the Central Committee and about half of the Politburo are expected to vacate their seats for newcomers at the congress.

An anticipated large-scale reshuffling
While the current top leaders, including President Hu Jintao and Premier Wen Jiabao, will most likely remain in power for another five-year term, the new Politburo will consist of many newcomers, especially younger members who are in their 50s.

This should come as no surprise, given that the average ages of the current members of the current Standing Committee of the Politburo, the Politburo, and the Secretariat of the 16th Central Committee are 67, 66 and 65, respectively. With no exceptions, all members of these three leadership bodies are now in their 60s or 70s. ¹

Among the nine members of the Politburo Standing Committee, at least four - Luo Gan, 72, Huang Ju, 69, Wu Guanzheng, 69, and Jia Qinglin, 67 - are expected to retire. In addition there are 16 seats in the current Politburo, including an alternative member and the vacancy left by disgraced former Shanghai party secretary Chen Liangyu.

Nine of these 15 Politburo members (Chen not counted) are also 65 or above, and they will either be promoted to the Politburo Standing Committee or retire. Some Politburo members who are under 65 may also step down. In fact, all 16 current Politburo members (including Chen) were first-timers when they were appointed to this leadership body in 2002. ² It is reasonable to anticipate that about 50% of both the 17th Politburo and its Standing Committee will be new faces.

Meanwhile, all but Liu Yunshan, 60, on the seven-member CCP Secretariat will likely vacate their seats to younger leaders. ³ Although the leadership of the State Council will not change until the 11th National People's Congress next March, the candidates for the top positions will most likely be decided at the 17th Party Congress.

Largely because of the age factor, three of four current vice premiers and all five state councilors will most likely vacate their seats through retirement or promotion. ⁴ This means that the leadership teams for the country's economic and financial administration, foreign policy and military affairs will largely consist of newcomers after this party congress.

A new team will likely replace current top economic and financial decision-makers, including Huang Ju, 69, Wu Yi, 68, Zeng Peiyan, 68, and Hua Jianmin, 67. The leading candidates are Ma Kai, minister of the National Development and Reform Commission, 61; Li Rongrong, minister of the State-owned Assets Supervision and Administration Commission, 63; Zhou Xiaochuan, governor of the People's Bank, 59; Bo Xilai, minister of commerce, 58; and Lou Jiwei, deputy secretary general of the State Council, 57.

Some current provincial leaders, such as Beijing Mayor Wang Qishan, 59, Tianjin Mayor Dai Xianglong, 63, Shanghai Mayor Han Zheng, 53, and Chongqing Party Secretary Wang Yang, 52, are also among the leading candidates for posts as vice premiers in charge of economic and financial matters.

The Central Committee (CC) will also undergo a large-scale reshuffling. At present, 68% of the 356 members (both full and alternatives) of the 16th CC are more than 60 years old, and among the 198 full members, 88% are more than 60. Most of them belong to the so-called "fourth generation" of leaders.

The turnover rate of the Central Committee has been remarkably high over the past 25 years; newcomers constituted 60% of the 12th CC in 1982, 68% of the 13th CC in 1987, 57% of the 14th CC in 1992, 63% of the 15th CC in 1997 and 61% of the 16th CC in 2002 (Asian Survey, July/August 2002). Based on the current age distribution and the turnover rates at previous party congresses, we can expect that roughly 60% of the members of the 17th congress will be first-timers.

This upcoming party congress will likely be the coming of age of the "fifth generation" of Chinese leaders, defined as those who were born in the 1950s. The fifth generation of leaders consists of many "sent-down youth", who are often referred to as members of "the lost generation" of the Cultural Revolution.

This generation differs profoundly from preceding generations in terms of their formative experiences, educational credentials, political socialization, administrative backgrounds, foreign contacts and world views. The collective characteristics and intra-generational diversity of the fifth generation of leaders will likely have a strong impact on the country's political trajectory and socio-economic policies in the years to come. ⁵
Hu's successor designated?

Rightly or wrongly, a great deal of public attention will be given to the issue of Hu Jintao's successor. This is understandable because Hu served on the Politburo Standing Committee for 10 years before taking the post of general secretary in 2002.

Hu's previous 10-year-long membership on the Standing Committee not only allowed him to gain leadership experience in the country's highest political institution, but also placed him as the first among equals in the fourth generation in line to succeed president Jiang Zemin. Based on this political precedent, it seems necessary for the Chinese political establishment to identify Hu's successor during this upcoming congress. With an adequate "reserve" period near the center of power, this heir apparent will be able to take over the top leadership when Hu completes his second term at the 18th Party Congress in 2012.

Largely because of the current Chinese obsession with age in elite recruitment, the heir apparent is unlikely to be chosen from the pool of current members of the Politburo. The youngest member of the current Standing Committee, Li Changchun, is only two years younger than Hu Jintao, and the youngest current Politburo member, Liu Yunshan, is only five years younger than Hu. The CCP's norm of promoting leaders in batches, within somewhat narrow age brackets, suggests that Hu's designated successor will most likely be a new face in the 2007 Politburo.

It is unclear, however, whether the 17th Party Congress will select a single younger leader, the "core" leader of the fifth generation, to be the successor to Hu or will choose two to four "rising stars" from that age group to wait in line for succession to the top posts in the party and the state. This largely depends on whether or not a consensus or a willingness to compromise exists among competing factions, as well as the degree of confidence that the old guards have regarding the loyalty and the ability of the newcomers.

In recent years, Chinese public opinion has been critical of the traditional method of appointing the heir apparent. Top leaders' recent rhetoric about the promotion of collective leadership and inner-party democracy seems to suggest that they may choose a few leading candidates from the fifth generation rather than simply appoint one "core" figure (Wenhuibao, March 12).

It is likely that two to four rising stars of the fifth generation will be promoted to the Politburo or the Standing Committee at the 17th Party Congress. ⁶ These potential successors will acquire more political capital, compete with one another, gain further endorsements from Hu and other top leaders, and become more familiar to the Chinese public over the next five years.

In contrast to many democratic countries, where top politicians may not have much administrative experience in their previous careers, China's political rising stars have usually been on the list of "future leaders", prepared by the CCP Organization Department, for 15-20 years. Although no one, perhaps not even Hu Jintao himself, knows which younger leader will finally be appointed as the general secretary of the party, the pool of candidates is clear.

As part of the norms of Chinese elite recruitment, the candidates for top leadership should be current members or alternatives of the Central Committee, should have substantial leadership experience in provincial-level administration, and should be more or less acceptable to all current top leaders and factions.

Among all the candidates, four leaders - Liaoning Party Secretary Li Keqiang, 52, Jiangsu Party Secretary Li Yuanchao, 57, Chongqing Party Secretary Wang Yang, 52, and newly appointed Shanghai Party Secretary Xi Jinping, 54 - are apparently the front-runners.

Their advantages over other potential candidates stem from their current administrative positions, broad leadership experiences, strong patron-client ties and educational credentials. For example, three of these four rising stars hold advanced degrees in economics, politics or law; the other holds a master's degree in economic management. None of them are entirely new to the Chinese public; all have served on the vice-provincial and ministerial levels of leadership for about two decades.

The first three leaders, known as the tuanpai faction, have advanced their careers through the vehicle of the Chinese Communist Youth League. They have been under the patronage of Hu Jintao ever since the early 1980s when Hu was in charge of the league. Many other tuanpai leaders are also poised for promotion.

Tuanpai leaders currently occupy one-third of the top provincial positions (party secretaries and governors) and about one-fourth of the ministerial posts of the State Council and directorships of the CCP central departments. Some of them could potentially be dark-horse candidates in the race for power at the 17th Party Congress. ⁷

With so many of his tuanpai proteges in line for promotion, Hu Jintao will, for the first time since he assumed the post of CCP general secretary in 2002, have his own team in the national leadership. Consequently, Hu should be able to move more aggressively to reshape China's economic and socio-political development in line with his own vision and perceived mandate.
The next phase

It has widely been recognized that in the 16th Politburo, Hu Jintao has been surrounded by Jiang Zemin's proteges, known as the "Shanghai Gang". Six of the nine members of the Politburo Standing Committee have pledged their loyalty to Jiang rather than to Hu. This gravity of power, however, will shift in Hu's favor after the 17th National Congress. The recent removal of Chen Liangyu, a Politburo member and former Shanghai party secretary, reflects Hu's growing power. The main challenge for the factional balance of power in China now is how best to constrain Hu's power.

This challenge has become even more acute because Vice President Zeng Qinghong, 68, a political heavyweight in Chinese politics and a prominent figure of the Shanghai Gang, may retire after the 17th Party Congress (China Brief, December 6, 2006). Zeng's relationship with Hu is both competitive and cooperative.

Zeng is currently in charge of personnel affairs in the CCP and he may decide to use his own retirement to set a good example and urge other senior officials to vacate their seats in favor of younger leaders. Yet at the same time, Zeng may promote several of his longtime friends to the new Politburo and its Standing Committee. Three of Zeng's confidants, Hubei Party Secretary Yu Zhengsheng, 62, Minister of Public Security Zhou Yongkang, 65, and Guangdong Party Secretary Zhang Dejiang, 61, are already in the current Politburo, and one or two of them may be promoted to the Standing Committee.

Because of his own background as the son of a revolutionary veteran, Zeng has long been seen as a patron of the "princelings" (children of the high-ranking officials). Zeng may promote princelings such as Xi Jinping, Ma Kai, Wang Qishan, Bo Xilai, Zhou Xiaochuan and Hebei Party Secretary Bai Keming, 64, to the next Politburo.

Some of Zeng's proteges from Shanghai who are not princelings, such as Director of the Central Policy Research Center of the Central Committee Wang Huning, 52, Jiangxi Party Secretary Meng Jianzhu, 60, and Han Zheng are also candidates for membership in the next Politburo or Secretariat.

All of the leaders who are close to Zeng will likely seek to prevent the possibility that Hu-linked tuanpai leaders will dominate the membership of the next Politburo. Many of Zeng's proteges have expertise and experience in economic administration, especially in finance, banking and foreign trade - areas in which tuanpai faction leaders are characteristically weak.

The upcoming 17th Party Congress will test the political wisdom and the abilities of top Chinese leaders, such as Hu and Zeng. But in a far more important sense, it will serve as a litmus test to determine whether China is capable of taking further steps toward institutionalizing norms of leadership transition and power-sharing.***
Notes
¹. The youngest member of the current Politburo, Liu Yunshan, director of the CCP Publicity Department, was born in July 1947 and thus will be in his early 60s when the 17th National Congress of the party convenes this autumn.

². Wu Yi was promoted from alternative to full member status at the previous Politburo.

³. The other six members are Zeng Qinghong, 68, Zhou Yongkang, 65, He Guoqiang, 64, Wang Gang, 65, Xu Caihou, 64, and He Yong, 67.

⁴. Among the four vice premiers, Huang Ju, 69, Wu Yi, 68, and Zeng Peiyan, 68, will likely retire, while Hui Liangyu, 63, is more likely to stay. Among the five state councilors, Zhou Yongkang, 65, Cao Gangchuan, 72, Tang Jiaxuan, 69, Hua Jianmin, 67, and Chen Zhili, 65, will probably step down and be replaced. Zhou Yongkang may be promoted to the Standing Committee to replace Luo Gan.

⁵. The upcoming two-day conference "Changes in China's Political Landscape: The 17th Party Congress and Beyond", to be held by the John L Thornton China Center at the Brookings Institution on April 12-13, will examine various aspects of China's political developments, including the implications of the coming of age of the "fifth generation" of Chinese leaders.

⁶. This largely depends on the total number of full-member seats on the Politburo and its Standing Committee. There is no rule regarding these numbers and they have fluctuated over time.

⁷. A mong other tuanpai leaders in the provincial leadership, Shanxi Party Secretary Zhang Baoshun, 57, Guangxi Party Secretary Liu Qibao, 54, Shaanxi Governor Yuan Chunqing, 55, Inner Mongolia Governor Yang Jing, 54, and Tibet Party Secretary Zhang Qingli, 56, are also candidates for Politburo membership.

Dr Cheng Li is the William R Kenan professor of government at Hamilton College in New York and a visiting fellow at the John L Thornton China Center of the Brookings Institution in Washington, DC. Li is conducting research on the fifth generation of leaders, who are expected to emerge during the 17th Party Congress.

(This article first appeared in The Jamestown Foundation. Used with permission.)

(Copyright 2007 The Jamestown Foundation.)

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On the tide of culture shock

Studying abroad is encouraging Chinese women to challenge male domination
Greg Philo Thursday March 29, 2007
The Guardian

We are in the middle of the biggest educational movement in history. Hundreds of thousands of young people are travelling to be educated abroad. They are led by the Chinese, for whom a foreign education is highly prized. There now are over 50,000 Chinese students in Britain - mostly the children of the elite and the rich - and the numbers studying abroad are predicted to double.

So what happens to the beliefs and values of these young people when confronted by a culture so different from their own? Staying in Britain produces extensive reflection about both British and Chinese society, as a new study of recent graduates by the British Council has found. Our approach to politics, sexuality, equality and rights look very different from back home. They are amazed to see cartoons that are rude about Tony Blair.

Students' knowledge before they arrive is often limited. Many are expecting a country of gentlemen, walking sticks and top hats. As one respondent put it, her image of Britain was "posh garden parties, traditional English afternoon tea and the royal family".

What they actually encounter can leave them shocked. They see young people drunk and out of control. One student commented: "There is an emptiness in nightlife - party, party and nothing else. I thought there would be something special in culture - people would speak about plays or stories. I thought it would be a garden of thinking."

Not all young people were seen in this way, and older generations were thought to have good manners. The students noted that the British also had the ability to have a good time and relax, while in China people worried incessantly about their children or their parents. Part of the reason for this difference was the success of the British system of welfare and social care, said the students. There were many comments along the lines of "you can feel confident when you are old". These statements hinted at a deeper truth, in that they were all made by women.

In China the position of women is less secure than in Britain, and many feel great pressure to be married before the age of 30. One pointed to a Chinese saying: "A man of 30 is like a blossoming branch, a woman of 30 is like old bean shells." Some female participants were intensely aware of how their job opportunities would be affected by their age and attractiveness - what is referred to in China as "the beauty economy". There was approval of the idea that women in Britain could go to university at the age of 40 or 50 to retrain.

But such relationships are likely to change, partly as a result of pressure from highly educated women. The number of these who study abroad is being expanded because of the intense focus on education in Chinese society, but also as an unintended consequence of the one-child policy. In male-dominated societies, the resources of the family for education tend to be focused on boys. But in China, where the one-child policy works, each family has a 50% chance of the only child being female - and because this is an only child, there is a concentration of resources.

There are large numbers of young Chinese women now in universities in Britain and other countries. This is creating a constituency to demand more equal rights in careers, interpersonal relations and individual development.

Chinese students come to Britain for the quality of its education system. The experience of living in Britain also means that they can explore how their conditions might change, for themselves and for the future of their own country.***

Greg Philo is the research director of Glasgow University Media Unit: the British Council report, Cultural Transfer, will be published in May.

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ADB: China economy to slow slightly

By Zhu Qiwen (China Daily)
Updated: 2007-03-28 07:17

China's economic growth will moderate slightly in the next two years because of tight macroeconomic controls and government efforts to alter the growth pattern, the Asian Development Bank (ADB) said yesterday in its flagship annual publication.

The Asian Development Outlook 2007 predicts that the economy will grow 10 percent this year and 9.8 percent the next.

"The performance of the Chinese economy was exceptional in 2006 and will remain strong in 2007 and 2008," said Zhuang Jian, an economist at the multilateral development bank.

The country's efforts to rein in galloping fixed asset growth are expected to gain more traction this year, the report forecasts.

The authorities have taken many steps to cool down the economy. For instance, the People's Bank of China, the central bank, has raised the base lending rate thrice from 5.58 percent to 6.39 percent and the reserve requirement five times from 7.5 percent to 10 percent in the past year to curb credit growth and investment expansion.

The National Development and Reform Commission and the State Environmental Protection Administration have raised energy efficiency and environmental requirements for investment.

However, recent monthly data are yet to show clear trends for industrial production and fixed asset investment, the ADB report points out.

Figures from the National Bureau of Statistics show that factory output in January and February combined grew 18.5 percent from a year earlier, compared to 14.7 percent in December and 16.2 percent for the first two months of 2006.

Meanwhile, growth in urban fixed-asset investment rebounded from about 20 percent in the fourth quarter last year to 23.6 percent for the first two months of this year.

"Progress was limited on most fronts," said Zhuang, "but difficulties in shifting the growth pattern will not be addressed overnight."

The ADB suggests that China strengthen the social security system, spend more on education, healthcare and rural development, and take more effective measures on energy efficiency and environmental protection.***

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A US-China arms race on the final frontier

Mar 28, 2007
By Malou Innocent

While some have pooh-poohed Putin's admonition, claiming high oil profits must have gone to his head, the United States may want to heed this "arms race" warning, for if a new arms race does not transpire today between Washington and Moscow, it may transpire tomorrow between Washington and Beijing.

Reacting to Putin's charge, US Secretary of Defense Robert M Gates assured the world that "one Cold War is enough". But Russia is not the only great power the US must worry about. China opposes all theater and national missile defense (NMD) programs. As far back as 2001, China's United Nations envoy for disarmament affairs, Hu Xiaodi, argued that NMD "is, in essence, a disguised form of unilateral nuclear-arms expansion, which will severely hinder the international arms-control and disarmament process and even trigger off a new round of arms race".

And former Chinese president Jiang Zemin affirmed, "Any attempt to break the existing international strategic balance by developing sophisticated weapons systems cannot but spark new rounds of an arms race and jeopardize world peace." China's disapproval was justified, since an ability to intercept ballistic missiles would deprive it of its nuclear retaliatory capability.

Chinese officials have openly voiced opposition to US machinations in the past. But recently, they have grown noticeably more restrained. In fact, not one high-level Chinese official has spoken out against America's recent plan to use Eastern Europe as an anti-ballistic-missile base. Is China simply allowing Russia to speak on its behalf? Why have the Chinese shifted from strident opposition to muted acquiescence? One reason may be their desire to dodge US criticism of their own expanding military.

On January 11, China successfully destroyed one of its orbiting weather satellites using ground-based medium-range ballistic missiles. While the launch drew sharp criticism from various nations that wished they had simply been consulted prior to the test, US opposition was based on the principle of its own primacy. Gordon Johndroe, spokesman for the National Security Council, argued that China's test was "inconsistent with the spirit of cooperation".

This statement was inspired by the White House's own National Space Policy, which declared that the US should have unimpeded supremacy in space, and will undermine other great powers from usurping this freedom. Not surprisingly, Chinese Major-General Peng Guangqian said the US was making too big a deal out of the test.

But a "big deal" may be warranted. China's defense industry has developed in large part thanks to the country's space program. With regards to military technology, space programs go beyond simple aeronautics and computer-simulation models. They enable countries to develop wind-tunnel and jet-propulsion test facilities that are crucial to weapons development, including destroyers, other ships, and fighter aircraft.

In fact, many of America's own military and engineering innovations were born out of its space industry. Because China's aerospace program has military applications, and the US already has numerous reconnaissance satellites, a future US-China arms race in the final frontier could be more plausible than not.

But just as tensions from the missile test were dissipating, a spokesman for the National People's Congress announced this month that China will boost its defense spending by 17.8%, bringing total spending to US$44.94 billion for fiscal 2007. While the real spending figure is in dispute, because of inadequate accounting measures and intentional obfuscation, US military experts agree that China's double-digit increases over the past decade support the likelihood of a future arms race between great powers.

US government officials, preoccupied with conflicts and force requirements in other theaters, are finally growing more concerned about China's strategic ambitions and whether or not those ambitions will depreciate America's global power. The United States may want to use its Cold War history as a frame of reference, drawing useful lessons for its encounter with the rise of the next up-and-coming superpower.

Summing up, the way in which the United States chooses to respond to China's rise will have profound implications on the path China takes: whether it decides to be a strategic competitor or a stable strategic partner.

While Defense Secretary Gates is correct in stating that "one Cold War is enough", America's actions, not its words, will matter more to the Chinese. Consequently, if a missile-defense system in Eastern Europe continues as planned, the US may be stepping toward the threshold of a new cold war with a brand-new enemy.***

Malou Innocent is a defense and foreign policy research assistant based in Washington, DC.

(Copyright 2007 Malou Innocent.)

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Mao's forgotten son dies

Mao Anqing lived through the most tumultuous era in the history of modern China. But he spent his last years as an unknown recluse

Jonathan Fenby
Sunday March 25, 2007
The Observer

He was the reclusive, mentally ill son of one of the most powerful and feared figures of the 20th century, and his 84-year life echoed one of the deepest traumas of modern history.

Yesterday a brief notice in the China News Service recorded the death of Mao Anqing, who survived his father to live on into a new China that the dictator would not have recognised.

Mao Zedong's second child, who died on Friday, lived through civil war, the execution of his mother, street life in Shanghai, and a journey to Paris and to Moscow, where he studied under Stalin's surveillance. Eventually he returned to China, where he was largely ignored by his father.

Anqing was born in 1923, during a rare settled period in his father's life, one of three sons from the second of Mao's four marriages. Having left his first arranged marriage to a girl in his native village, the young librarian fell for Yang Kaihui, the daughter of an ethics professor. Though Mao's record as a womaniser was already established, his bride wrote that she was 'living for him' and, if he died, would die with him.

They set up house just outside the East Gate of Changsha, capital of their home province of Hunan. Three sons were born in the next seven years - Anqing was the second.

Mao was frequently away, working for the Communist Party, touring the countryside and participating in the United Front with Sun Yat-sen's Nationalists in Canton. His biographer, Philip Short, writes that 'perhaps for the only time in Mao's life, he had a truly happy family to come home to'.

Hunan was an unsettled place in which to grow up as warlords vied for power. In 1927 the Nationalist leader, Chiang Kai-shek, allied with one of the province's militarists and led a motley force north to the Yangzi. On their way, they took Changsha without trouble, workers' militias helping to chase out the warlord troops.

Chiang then launched a 'White Terror' against the Communists, first in Shanghai and then across the country. Abandoning his wife and sons for good, Mao began his long career as a guerrilla leader, sheltering with bandits in the rough mountain country on the eastern border of Hunan, and then setting up a bigger base in Jiangxi province, where he lived with the daughter of a local scholar.

Depressed by his faithlessness, Yang Kaihui considered suicide, but decided she could not do this to the sons. Poems that she wrote, which she hid in cracks in the walls of her house and which were seen by the author Jung Chang when she was researching her biography of Mao, vividly express her solitude and fears.

'You are now the beloved sweetheart,' one ran. 'Return, return...'

She appears to have had doubts about her Communist belief, and wrote in another poem: 'I want to flee. But I have these children. How can I?'

In 1930 tragedy struck the family that Mao had left behind. The Communist leadership ordered frontal attacks on cities the Nationalists held. The campaign was a disaster. In Changsha the attackers held ground in the city for nine days, but were then beaten off. Two months later the victorious Nationalist general ordered an anti-Communist purge.

Yang Kaihui was arrested, with her elder son, on his eighth birthday. Given a chance to save her life if she denounced her husband, she refused. She was taken to the execution ground and killed.

Learning of her death, Mao wrote that 'the death of Kaihui cannot be redeemed by a hundred deaths of mine!' Despite his infidelity, he always called her his true love. But that had not led him to try to rescue her and their sons during the battle for Changsha.

Later he would show similar lack of scruples in abandoning his third wife, who was badly wounded in the head on the Long March, for his best-known partner, the one-time Shanghai actress, Jiang Qing. She became one of the Gang of Four in the Cultural Revolution, and was imprisoned after Deng Xiaoping took power, dying in 1991, apparently having hanged herself in her bathroom.

After his mother's execution, Anying, the eldest son, was released and the three children were smuggled to Shanghai, where the youngest died of dysentery aged four. The two surviving brothers spent at least part of their time on the streets, scavenging for food and sleeping on pavements.

In 1936, after the Red Army had staged the Long March from Jiangxi to northern China, Stalin invited Mao to send his sons to Moscow, following a pattern of getting the children of prominent Chinese under Soviet control. After a delay in Paris waiting for visas, the Mao boys arrived in the Soviet Union and stayed until the 1940s. In a rare letter, their father advised them to study science and 'talk less politics'.

By this time Anqing's health was evidently poor. When his elder brother headed back to the Communist base area in China in 1943, he asked the head of the Communist School in Moscow to look after his younger brother. 'He is an honest person, only he has hearing ailments and his nerves are wrecked,' he added.

After his second son returned to China in 1947, Mao saw little of him, and he was reported to have spent much of his life in mental institutions. Mao met Anying more often, but he was killed in the Korean War in 1950.

Mao's other known offspring, two daughters Li Na and Li Min, have passed quiet lives, living in apartment buildings in Beijing, venerating their father but keeping out of the limelight. Other children born on the Long March were abandoned along the way; a woman turned up a few years ago along the route who claims to be one of the infants left behind by the Chairman.***

Jonathan Fenby is author of Generalissimo: Chiang Kai-shek and the China He Lost (Free Press).

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We will not be moved: one family against the developers

Jonathan Watts in Beijing
Saturday March 24, 2007
The Guardian

Property-owning China has a new hero. Yang Wu, now better known as The Nail, has become the talk of the country for his refusal to abandon his home to property developers.

Despite an eviction order, offers of compensation and the chasm that has opened up around his home, the 51-year-old restaurateur is holding his ground in an increasingly high-profile challenge to the authorities.

Newspapers and websites have published spectacular images of the siege-like situation in Chongqing, where Mr Yang's home has been turned into an island, surrounded by a moat of mud and tractors.

The developers, who want to build a six-storey shopping mall, have reportedly offered compensation of 3.5m yuan (£233,000), a staggering sum in a country where the average income is about £1,000 a year. But Mr Yang and his family insist they are not concerned about money.

"I promise we will fight to the end," his wife, Wu Ping, told reporters outside the building site. "Even if we have to give up our lives, we will not move. This property is ours."

On Wednesday, Mr Yang placed a banner across the roof of his house declaring: "Citizens' legal property cannot be invaded."

According to local media reports, the former Kung Fu champion took a set of wooden clubs with him to fend off potential attackers, and shouted to the construction site guards: "If you dare to come up, I will beat you down."

The water and electricity have been cut off, but supporters give him food and drink, which he pulls up by rope.

Hold-outs, known as "nails" in China because they stick up despite attempts to beat them down, are becoming increasingly common in China.

Mr Yang's protest has been strengthened by its timing. Earlier this month, the National People's Congress, China's parliament, passed the country's first law to protect private property. Earlier this week, the government reported a surge in illegal land seizures by developers and local governments.

Mr Yang's case has sparked an online debate, which has been promoted even by the state-run China Daily. And the Nanfeng Metropolitan newspaper declared: "This couple are fighting for their own rights. But they are also fighting for the rights of all property owners in China and for the dignity of the property law that has just been passed."

The development companies, Chongqing Zhirun and Nanlong, said they were no longer in negotiations with Mr Yang.

"We haven't arranged negotiations with the hold-out. We talked to him before for a long time without achieving any agreement so now we are just waiting for the government to settle this issue," the manager, Wang Wei, told local reporters.***

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China: More rights for millionaires

Mar 22, 2007
By Pallavi Aiyar

BEIJING - After years of galloping economic growth in China, the ruling Chinese Communist Party (CCP) has much to celebrate. However, the growth has come at a cost, and rather than strengthening the party's hand to press ahead with further economic reforms, growing inequalities, rampant corruption and vanishing provisions for health care and education have put China's leadership in somewhat of a tight spot.

Increasingly squeezed between the demands of the right and the criticisms of the left, the CCP is engaged in an ever more delicate juggling act, balancing the interests of the urban middle class, who have emerged as a key constituency of support, and a restive peasantry, once the party's mainstay but progressively disaffected at being left behind by the economic boom in the cities.

China's unique form of "socialism with Chinese characteristics" is rent with contradictions, and many of these are forcibly coming to the fore. The recently concluded annual session of China's parliament, the National People's Congress (NPC), usually a sedate piece of set political theater, was thus the site of some unusually feisty debate this year.

The main bone of contention was a landmark bill providing the legal basis for the protection of private property for the first time since the CCP came to power in 1949. The NPC has never voted against a bill proposed by the government and, as expected, the close to 3,000 delegates approved the property-rights bill. However, its passage was atypically rocky, requiring the government to answer some fierce criticisms from an increasingly vocal cohort of new-left thinkers.

The bill took 14 years in the drafting and was subject to a record seven readings by legislators since being tabled in 2002 (most bills in China are passed after three readings). It was in fact scheduled to be passed a year ago, but widespread objections amplified by heated Internet-circulated commentaries forced its last-minute withdrawal from the parliament's agenda. One of the bill's most vocal critics, a law professor at Peking University, Gong Xiantian, condemned it as "copying capitalist law like slaves" and offering equal protection to "a rich man's car and a beggar man's stick".

For the left, the bill represented a final sellout by the state to capitalist interests. China has already embraced several other free-market mechanisms such as stock markets, but the idea that socialist property is inviolable has long been an almost scared legal principle in China. The debate about property rights thus goes to the core of China's modern identity.

"Socialism is based on public ownership. This won't be a glorious page in the history of Chinese legislation," Gong Xiantian said of the property bill at the start of this year's parliamentary session.

The fact that the government threw its support behind the bill despite the sharp and often public critiques the draft law provoked reflects awareness of the increasing weight of the private sector in the country's economy as well as the importance of the support of a property-owning urban middle class to the party's continuing reign.

Until 1998, state-owned firms were the mainstay of the economy, but today private businesses account for more than 65% of gross domestic product and more than 80% of economic growth, according to a recent report by the All-China Federation of Industry and Commerce (ACFIC).

This buoyancy of the private sector followed policies instituted first by Deng Xiaoping, the architect of China's economic reforms, and carried on by Jiang Zemin, his successor as China's ultimate leader. Both had decided that real and rapid growth could only come about by unfettering the private sector.

Deng called economic development "hard truth", and under Jiang the restructuring of state-owned enterprises was accelerated, leading to more than 20 million workers being laid off in a huge wave of closures, mergers and privatizations that halved their number since the mid-1990s.

It was also because of Jiang's efforts that in 2002 the party threw open its doors to private entrepreneurs. According to ACFIC, almost a third of entrepreneurs who registered their businesses after 2001 are now CCP members.

For President Hu Jintao and Premier Wen Jiabao, who inherited the country's leadership in late 2002, the contradictions of China's special brand of state-led capitalism are, however, becoming ever more apparent.

In the span of some 25 years, China has gone from being one of the world's most equal, albeit poor, societies to becoming the fourth-largest economy in the world, with one of the worst rich-poor imbalances. China's Gini Index - a commonly used statistical measure of inequality where 0 represents perfect equality and 1 perfect inequality - of 0.447 is worse even than India's 0.325, according to the United Nations' 2005 Human Development Report.

Property that used to be taken away from the rich for redistribution to the poor is today routinely taken away from poor farmers and given to real-estate developers. According to the Ministry of Public Security, in 2005 there were 87,000 mass protests across the country expressing public anger. Some were directed against official corruption and unpaid wages and pensions, but most were against illegal land grabs. The number of such protests has seen a more than 400% increase over the past decade.

Given this situation, both the policies and rhetoric of the Hu-Wen duo have taken a swing leftward. The leadership has thus made tackling the income inequalities between China's rich urban and poor rural areas the centerpiece of their new five-year plan, borrowing language from the past in promising to build a "new socialist countryside". Both at the NPC and in speeches elsewhere, Wen has repeatedly stressed that "social justice" is as important a goal for China as economic growth.

The government has raised spending for rural health care and education sharply for two successive years. At this year's NPC session, Wen said in his opening address that tuition and other fees for all rural students would be eliminated, helping some 150 million families. He added that the government would step up spending on rural primary and middle schools by 21%, to the equivalent of US$29 billion.

The premier also promised greater central-government support for health care in rural areas, where 90% of the population has no health insurance. He said a trial cooperative medical-care system would be extended to cover 80% of China's territory, with the government more than doubling subsidies to $1.31 billion.

Crucially, however, Wen made no reference at all in his address to the most controversial item on the NPC's agenda: the property law.

The property bill was introduced to the NPC two days after the opening session of the parliament. In his explanation of the CCP's support of the bill, an NPC vice chairman, Wang Zhaoguo, told gathered parliamentarians that given China's current economic circumstances, the people "urgently require effective protection of their own lawful property accumulated through hard work".

The final shape that the draft law took was patently the result of an attempt to stitch up a compromise between the bill's detractors and supporters and aimed at striking a balance between state and private interests. The bill clearly laid out definitions of both and also defined private wealth, including income, houses, investments and other personal assets.

However, it stopped far short of moving toward privatizing collectively owned rural land. Instead, it maintained the concept that property is owned publicly, and individuals are merely given a right to use that property. It's that right of use that the law protects, not private ownership of land.

In a further accommodation to new-left criticisms, the bill affirmed the state-owned sector as the "leading force". "The nation is in the first stage of socialism and should stick to the basic economic system in which public ownership predominates, co-existing with other kinds of ownership," it read.

But this watered-down version may have fallen short of satisfying either side of the debate.

"Private property is the foundation of civilization. It must be protected," said Dean Peng, a Beijing-based free-market advocate and commentator. "Public ownership results in poverty, as China has already experienced."

Peng was skeptical, however, that the new law will substantially help push forward the economic-reform process. The actual impact of the law is likely to be minimal, he said, because it merely restates what was already the status quo. In rural areas, farmers have the right to lease collectively owned land for 30-odd years but cannot buy or sell it. In urban areas, residents have been able to buy and sell 50-to-70-year leases on property for well over a decade.

Peng pointed out that several laws governing the leasing of land in both rural and urban areas were already in place. The new law does not alter these but rather brings them together under a single overarching law. This might be argued to give them additional weight, but Peng was nonetheless dismissive. "We already have enough laws on paper to protect property rights. What we need is rule of law, so that these laws can really be implemented," he said.

Beyond the statement of general principles and reiteration of already existent regulations, there are some new clarifications in the law, but these primarily spell out the legal position on certain points of dispute between the property-owning middle classes and real-estate developers. For example, the law has a clause that stipulates that parking spaces around highrises belong to apartment owners and not to the property developers, previously a gray area that led to numerous disputes.

Wang Zhaoguo's explanation of the bill before the NPC, however, made scant reference to the middle classes and their interests, focusing instead on those parts of the draft law that addressed concerns regarding asset stripping of state-owned factories, illegal transfers of farmland to real-estate developers by local governments, and adequate compensation for those whose lands are expropriated legally.

The law contains provisions aimed at ameliorating all of these concerns. For example, it states that if any person "causes loss of state-owned property by transferring it at a low price, illegally sharing it in conspiracy with another person, placing a charge over it without authorization, or by other means in the course of restructuring the enterprise", he or she will bear legal liability.

It also explicitly gives farmers the right to renew their land-use leases after they expire.

However, Professor Wen Tiejun, dean of the School of Agriculture and Rural Development at Renmin University and a leading new-left scholar, remained unconvinced by these claims. "The law is dressed up to show that it will protect rural people and public-owned property, but in fact its main aim is to give more rights to China's new millionaires and urban middle class," he said.

Putting private property on an equal legal footing with that of state-owned and collective property, Wen Tiejun argued, was a dangerous first step toward the eventual privatization of all property in China, an outcome he said would be a disaster for the 700 million Chinese who continue to live in rural areas.

Rural residents have no state-provided social security, Wen explained, so that their communally owned plot of land is often virtually all that remains between them and destitution. Were they allowed to sell this land, it would expose them to exploitation and impoverishment on an altogether more alarming scale than at present, he concluded.

His solution for preventing illegal sale of farmland is to slow down the rate of urbanization. The only point where he agreed with free-market advocate Dean Peng was that laws in China had only a limited impact given the shortcomings of the legal system. "Merely formulating new laws will not change the situation on the ground," he said.

What is evident is that while the property bill may have been passed into law, the tensions within Chinese society it exposed continue to simmer.

China's current leadership has come in for criticism for what some analysts see as its weakness and ensuing inability to take a firm stand. Unlike Jiang, it is indeed hard to classify Hu and Wen as either decidedly pro-left or pro-reform. Their strategy has instead been to develop a more left-oriented rhetoric while simultaneously but quietly pushing along the reform agenda.

On the other hand, their penchant for compromise could also be interpreted as a maturing of the political system in China in which the leadership must take into account and attempt to reconcile opposing interests and views. Moving ahead through consensus rather than heavy-handed, untrammeled diktats from the top is more the style of a democracy. China's one-party system remains far from democratic in the Western liberal sense, but it is showing some signs of greater internal debate.

The course of China's development is thus likely to remain the subject of contention, but in the short term at least the country looks set to continue its embrace of pragmatism over ideology. The voices from the left might be getting louder, but so far there are scant indications that China will take a major swerve off the path of economic reform.***

Pallavi Aiyar is the China correspondent for The Hindu.

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Asia's river systems face collapse

Mar 24, 2007
By Alan Boyd

Water in the Indus River is so clouded that the native dolphin has in effect lost its eyesight and has to detect prey and other objects through sound waves.

More than half of all the industrial waste and sewage in China flows into a single waterway, the Yangtze. And tributaries of the Ganges, one of Asia's greatest cultural and religious treasures, are running dry because of the crippling burden of irrigation.

Such has been the legacy of the frantic Third World rush to industrialize at any cost, according to a landmark study by the World Wide Fund for Nature (WWF) that was released as part of World Water Day on Thursday.

It found that 21 of the world's greatest rivers, including the Yangtze, Mekong, Salween, Ganges, Indus and Tigris-Euphrates in Asia, were struggling to survive against the tide of man-made pollution and the diversion of water through dams, pipes and irrigation.

"We're talking about a complete collapse of the system - they're so polluted, so over-extracted or so cut up by dams that it's really not functioning as a river anymore," said Tom Le Quesne, freshwater-policy officer at WWF. "It's a challenge that humanity faces not far off the scale of climate change."

So many lives depend on these river systems that the economies of emerging Asia could be ravaged and there could be immense social upheaval, including the loss of food security and employment. About 450 million people draw water, food and electricity supplies from the Yangtze alone, while many more use it for transportation.

The Mekong River basin supports 60 million people, including parts of China, Myanmar and Vietnam, nearly one-third of Thailand and most of Cambodia and Laos. It supplies two of the world's most important rice bowls, central Thailand and the delta region of southern Vietnam.

In India, the Ganges Plain comprises one-third of the country's land area and 120 million people rely on its waters for fishing and farming. Tens of millions live on tributaries of the Ganges in Bangladesh.

Then there are the displacements forced by development, often involuntary. The World Commission on Dams (WCD) has estimated that between 40 million and 80 million people have been resettled, including at least 10 million in China.

As habitats are progressively destroyed, the ecological toll is mounting and may be irreversible. About 20% of the world's 10,000 freshwater fish and plant species are either extinct or endangered.

In the Yangtze, the freshwater dolphin was declared officially extinct last year and the Chinese alligator, baiji (river dolphin) and freshwater finless porpoise are critically endangered. Other dolphins are at risk in the Salween basin, Ganges and Indus.

Hundreds of fish species have vanished, especially species that have found their annual migration patterns blocked by dams. Giant catfish, one of the world's largest freshwater fish, have not been caught in the Mekong in northern Thailand since 2001.

As the species decline, so do livelihoods. Annual fish catches from the middle and lower Yangtze averaged around 240,000 tonnes in the early 1950s, but were down to 110,000 tonnes when the last checks were taken, in the period 1983-2000.

The WWF puts the blame for the deterioration of river systems on overdevelopment, noting that at least 60% of the world's 227 largest rivers have been fragmented by dams, leading to the destruction of wetlands.

On a global scale, more than 45,000 large dams - those that are more than 60 meters high - are operational in more than 150 countries, while another 1,500 or so are under construction.

"Unabated development is jeopardizing nature's ability to meet our growing demands," said Jamie Pittock, who heads the WWF's freshwater program.

The report is a follow-up to a study by the WCD in 2000 that recommended more stringent controls on the blocking of water flows so that the environmental impact of man-made barriers could be contained. The WFF concludes that governments are not acting on these recommendations.

Most at risk is the Yangtze, which also has the largest number of large dams either planned or under construction - 46, including the mammoth Three Gorges.

Communities along river systems add to the problem. Pollution in the main stem of the Yangtze has increased by more than 70% during the past 50 years, with heaps of garbage, pig waste and discharge from factories, hospitals and mines, possibly including radioactive waste, accumulating on the riverbed.

Leather-processing industries that use large quantities of chromium and other metals are feeding toxic waste into the Ganges, especially near Kanpour, while about a billion liters of mostly untreated raw sewage spills in daily.

The extraction of water for irrigation and runoff of chemicals from factories and farms threaten the Indus, which snakes through Pakistan and western India. Meanwhile logging, poor farming practices and the destruction of mangroves are putting the Mekong at risk.

Governments are waking up to the threat to their river systems, but there are inevitable economic and political trade-offs. India's localized Ganga Action Plan for the Ganges, which is building a chain of waste-treatment plants, has had little backing from the leading political parties because of the perceived threat to industry, and it barely registers with religious authorities.

Chinese officials have promised their neighbors on the Mekong that Beijing will "fully consider" the environmental consequences of tapping water from the river, which is known in China as the Lancang. Yet China refuses to join monitoring efforts by the Mekong River Commission.

The WWF and other environment agencies have acknowledged that policymakers face a difficult choice between development goals and ecosystems as they battle to raise living standards. Under the Millennium Accord brokered by the United Nations in 2000, the countries of the world agreed to halve the proportion of those without access to affordable and safe drinking water and basic sanitation by 2015.

Poor countries pledged to govern with greater effectiveness and to invest their resources more wisely. Rich countries committed to support them through increased aid and debt relief, among other things.

Much of this aid has been channeled into big-money water-infrastructure projects with the backing of the World Bank, the Asian Development Bank and other lending institutions, usually with multinational conglomerates from the richer nations as project partners.

Small countries such as Laos and Myanmar stand to make a financial windfall. For Laos, one of the most backward countries in Asia, the planned investment of more than US$1 billion in the contentious Nam Theun II Dam will be equivalent to three times its national budget.

But the WWF report contends that the benefits are often overstated, as most returns go to the offshore partners, while local communities face dislocation and the potential loss of livelihoods.

"Dams are both a blessing and a curse - the benefits they provide often come at high environmental and social costs," said Dr Ute Collier, head of the WWF's Dams Initiative. "Those most affected by dams rarely benefit from them or gain access to power and clean water."

According to studies by the WCD and the UN, the dams contribute water to only 12-16% of world food production, even though half were built specifically for the irrigation of crops and an estimated 30-40% of the 271 million hectares of irrigated land worldwide relies on dams.

This is because irrigation is notoriously inefficient: on average, it utilizes only 38% of water discharges and up to 1,500 trillion liters of water is wasted annually, enough to supply the whole of the African continent.

Likewise, there are arguments against the capital investment needed for the 19% of dam capacity that is used to supply power to electricity grids, even though it offers relatively low greenhouse emissions.

UN studies have found that every megawatt of installed capacity for hydropower costs about $1 million, while the bulk of output is often exported for hard currency rather than being offered to local populations.

Nevertheless, the WWF concedes that "there is little doubt that dams have improved agricultural output by making more land suitable for cropping through irrigation", while also piping drinking water and providing valuable benefits for flood mitigation. The central argument, the agency says, is how to build dams in a less intrusive manner that will sustain water systems and their habitats. So far the message is getting through only in developed countries: the United States is actually dismantling some of its dams.

But as water resources dwindle, it is likely that the potential for conflict between neighbors who share rivers will force a change of attitude, as the impact of dams and other flow diversions is selective. Communities living downstream from large dams, particularly those that rely on natural floodplains for agricultural, herding and fishery production, suffer the most when structures are built upriver.

China's activities on the upper Mekong are disrupting the navigation of Laotian fishing vessels, disrupting flood patterns for Thai river communities, drying up Tonle Sap lake in Cambodia and aggravating salination problems in Vietnam's delta region.

Management of the glacier belt in the Himalayas affects a whole range of river systems, providing 40% of the water in the Ganges and much of the flow for the Indus, Brahmaputra and Padma and feeding the Red Sea. Pakistan, India and Bangladesh put their trust in Nepal and Tibet.

Internal diversions of water have a similar impact on domestic populations. China plans to pipe water from the Yangtze basin to the Yellow, Huaihe and Haihe river systems more than 1,000km to the north to revive the Yellow River, which is now only a trickle in places.

India is considering 30 separate projects that will link rivers, including the Mahanadi, Godavari, Krishna and Cauvery, as a way of transferring flows, mostly from the north and west to the south.

Le Quesne said attitudes of governments will have to change if the world's river systems are to be saved.

"We've all been used to taking water for granted. We've assumed that water is a limitless resource. It's not anymore," he said.

"It's a question of using water wisely and managing it. It's a question of political will."***

Alan Boyd, now based in Sydney, has reported on Asia for more than two decades.

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China cracks down on rioters!

Mar 23, 2007
By Muhammad Cohen

HONG KONG - Last week's coverage of rioting in Hunan province was another example of how much has changed in China since it became the world's fastest-growing major economy and a key financial player in the world. It provided another snapshot of the often difficult transition from iron-rice-bowl socialism to the invisible hand of the market. But perhaps the biggest change on display, and the most obvious one, went unnoticed.

Domestic and international media differ about what happened in Zhushan, a rural village near Yongzhou in Hunan province - most notably whether there was a death among the more than four dozen injured - but the basic outline is pretty clear. It all began on the buses.

Villagers were angered about bus fares rising after Chinese New Year just in time to hit students and migrant workers leaving the region after their holiday visits. According to some reports, the bus company tried to impose extra charges for large bags. Others said the flash point was doubling fares for secondary-school students traveling around town.

The fare increases produced allegations of corruption, since the bus operator is a private franchise, recently awarded a government monopoly for service to the provincial capital from Zhushan and other rural towns. If there wasn't corruption, collusion or nepotism involved in the award of such a franchise, then Hunan province would be unique in China, indeed the world.

The price hikes struck an especially sour note coming during the annual two-week meeting of the National People's Congress. China's nominal legislative body remains a toothless, impotent tool of the executive branch, which legislates on its behalf during the 50 weeks a year when the full NPC is not in session.

Under President Hu Jintao, the government has played up the NPC's role as a representative body of the people to lend the regime a patina of democratic legitimacy, or at least democratic aspirations. Even when the Shanghai stock market's decline triggered a global panic - which had to swell some sense of national pride - and it was the top story on every international news broadcast, Chinese domestic and international news shows led with the NPC session.
Bridging the gap

In current propaganda, the NPC is portrayed as a key cog in the central government's drive to narrow the gap between rich and poor that has grown even faster than the economy at large.

"We need to make justice the most important value of the socialist system," Premier Wen Jiabao declared on March 9 as the NPC approved new programs for health care, education and social security.

This rhetoric and any action that follows has particular appeal in rural communities, where gains lag those in the large urban centers. And some villagers in Zhushan apparently took Premier Wen seriously.

That same day, March 9, villagers reportedly blocked a bus to protest the fare hikes. Over the next three days, confrontations escalated and expanded. At the peak, 20,000 people were involved in demonstrations that included occupation of local-government buildings and burning buses.

By mid-March, 2,000 riot police were deployed under a declaration of martial law. It's unclear whether residents began stoning the police station, burning police cars and chanting "Death to government dogs" before or after officers beat residents with batons and steel rods. Whoever started it, by mid-week order had been restored. Buses were even running again, with fares reportedly rolled back to re-New Year levels.

Details about the incidents in Zhushan are available thanks to the Pan-Blue Coalition, an Internet-based human-rights group. Villagers alerted a Pan-Blue member in Yongzhou, who traveled to Zhushan, compiled accounts of the rioting, and shared the information with the international media.

Most Western media were content to report the story from the comfort of their Beijing bureaus, sometimes supplementing information from Pan-Blue with their own local sources. But by Wednesday a British Broadcasting Corp (BBC) reporter was on the scene, broadcasting accounts of the rioting and pictures of burned buses and police vehicles as well as columns of police in full riot gear marching through the streets. Given the history of China and media coverage of unrest, it was incredible to see an international reporter allowed in Zhushan to show China's mechanisms of repression in action.

Imagine how much easier it would be for Beijing to get the world to forget the Tiananmen Square unrest of 1989 without that image

of the lone demonstrator confronting the tanks. Shutting down Western media facilities left no visual record of the final assault on the square, giving the official version that the occupiers were dispersed with minimal force and casualties whatever credibility it has.

The Hu Jintao regime is the most media-savvy in China's history. For example, it has encouraged local media to act as watchdogs against corruption. That's part of the regime's attempt to portray the central government as the good cop, whose lofty intentions are thwarted by less sophisticated, perhaps dishonest officials further down the chain of command. But the government has also seen that the uncontrolled press can snoop where it's not welcome, and has clamped down on publications it thinks have gone too far.

Whatever has changed in China, there's no doubt that the BBC cameras wouldn't have been in Zhushan if the central government didn't want them there. The story was lightly reported by domestic media, just another of an estimated 200 demonstrations a day around the country. So why let the foreign media make it into a big deal? After all, showing riot police in the streets suppressing protest is bound to anger the Western lobby for human rights in China.

But human rights in China is yesterday's news, and the current leadership knows it. Western concerns about democracy and freedom in China have been trumped by the mainland's economic integration with the world economy. From filling the maw of American consumers to financing Uncle Sam's trade deficit, the world's only global superpower and its pals need China as a supplier as much as China needs them as buyers.

It now seems hopelessly quaint to recall that less than a decade ago, the US Congress conducted an annual review of China's human-rights policy to determine its eligibility for normal trading terms (with the misleading name "most favored nation status"). Today the greatest concern in Congress isn't about China putting its citizens in jail, but putting Americans out of work.
Rights veer to the religious right
The administration of US President George W Bush has done its part to make human rights in China irrelevant by adopting the religious right's framework. These fanatics count not political prisoners but Christian church services available on any given Sunday. They care not about freedom of dissent but alleged forced abortions. With that agenda, it's no wonder human rights in China are no longer a mainstream concern.

What used to be a political story is now a business story. The political story was: Can China's government change enough to meet the political aspirations of its increasingly affluent citizens? If you accepted the basic premise that political change was inevitable in the face of economic progress, there was room for optimism whichever way particular events ran in a given week. Either China's government reduced repression, or it sowed the seeds of its eventual destruction.

The business story the West now favors centers on the Chinese government successfully managing its citizens to keep producing economic growth. In this story, there's only one outcome that works for the West: to keep China buying its bonds and filling its shelves. The West needs China's government to keep the factories working, or it will have to take its order books and billions of dollars or euros in investment to a place where the government can.

So when news gets out about villagers rioting, Beijing's policy response is far less important than showing that when things do get out of hand - as they can in any country from time to time - the government has the muscle and the will to fix things quickly. It's not about moving China closer to freedom, it's about keeping it producing for Wal-Mart.

Despite all the rhetoric about justice and fairness, Beijing is not afraid to send in a couple thousand troops and declare martial law to restore order. How convenient for Hu Jintao and company to have the BBC to broadcast that message for them.***

Former broadcast news producer Muhammad Cohen is special correspondent for Macau Business and author of Hong Kong on Air (Blacksmith Books), a novel set during the 1997 handover and Asian economic meltdown about television news, love, betrayal, high finance and cheap lingerie.

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Hu reassures foreign investors of more opportunities

BEIJING, March 25 (Xinhua) -- Foreign investors will enjoy more opportunities in China as the country's investment environment improves, said Chinese President Hu Jintao on Tuesday.

"I emphasize here that China will further deepen its reform and open its door wider," said President Hu when meeting with Russian journalists ahead of his Russian visit from March 26-28.

China put into effect a revised regulation standardizing mergers and acquisitions of Chinese companies by foreign investors in September, 2006, sparking off concern over the country's tightening control over foreign investment.

"The new regulation makes merger and acquisition operations more open and transparent," said Hu.

China, the biggest receiver of foreign investment among all developing economies for years, has seen a sharp rise of merger and acquisition bids by foreign companies targeting Chinese firms in recent years.

The trend has triggered off an outcry for protection of critical Chinese firms for national economic security, hence the promulgation of the new rules.

"With the continued growth of the Chinese economy and improvement of China's investment environment, foreign investors would have more opportunities for investment and development in China," said Hu.

The president noted that China has approved 590,000 foreign-invested enterprises and actually used 700 billion U.S. dollars in foreign investment since it started the reform and opening-up drive 29 years ago.

"China has always adhered to its pledges and has kept opening up its market since it joined the World Trade Organization (WTO),"Hu said.

China has already opened up every section of its manufacturing sector. It has also opened up more than 100 categories of trade of services, among the 160 categories listed by the WTO, he said.

"China will unswervingly implement the opening up policy, which is a fundamental national policy," said President Hu.***

Editor: Luan Shanglin

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