Jang Sung Taek May Prevail in North Korean Succession Struggle

This is fascinating.

At Los Angeles Times, "Powerful uncle may overshadow anointed son":

North Korean media extolled Kim Jong Eun on Monday as the “great successor” and the “outstanding leader of our party, army and people.”

But it’s not so simple. The young man is likely to be overshadowed by a powerful uncle, Jang Sung Taek.

Jang, 65, is married to Kim Jong Il’s younger sister and has spent three decades in the ruling Workers’ Party, holding key positions in the military and secret police and running North Korea’s special economic zones. His family members also hold powerful jobs with the military.

In contrast, the chosen successor has a thin resume. He attended a German-language public high school in Bern, Switzerland, where he was registered as the son of a North Korean diplomat. His classmates described him as crazy about basketball and computer games.

Until September 2010, when the overweight young man with a dimpled face was named a four-star general, he was almost entirely unknown to the North Korean public. Even the exact spelling of his name was a state secret.

More at the link.

And see New York Times, "Young Heir Faces Uncertain Transition in North Korea." (Via Memeorandum.)

Made In USA: Chopsticks Destined for China

Chinese Double-Standards and the U.N. Conference on Climate Change, Durban 2011

This was a New York Times the other day, "Outrage Grows Over Air Pollution and China’s Response."

BEIJING — The statement posted online along with a photograph of central Beijing muffled in a miasma of brown haze did not mince words: “The end of the world is imminent.”

The ceaseless churning of factories and automobile engines in and around Beijing has led to this: hundreds of flights canceled since Sunday because of smog, stores sold out of face masks, and many Chinese complaining on the Internet that officials are failing to level with them about air quality or make any improvements to the environment.

Chronic pollution in Beijing, temporarily scrubbed clean for the 2008 Summer Olympics, has made people angry for a long time, but the disruptions it causes to daily life are now raising questions about the economic cost, and the government’s ability to ensure the safety of the population.

“As a Chinese citizen, we have been kept in the dark on this issue for too long,” said Yu Ping, the father of a 7-year-old boy, who has started a public campaign to demand that officials report more accurately about Beijing’s air quality. “The government is just so bureaucratic that they don’t seem to care whether we common people live or die. And it’s up to us, the common people, to prod them and to put pressure on them so that they can reflect on their actions and realize that they really just have to do something.”

When the frustration of parents boils over, Communist Party leaders start worrying about their legitimacy in the eyes of the people. That was the case in 2008 when parents vented anger over deadly school collapses in the Sichuan earthquake and over adulterated milk.

The motionless cloud of pollution that has smothered the capital and its surroundings in recent days has frayed tempers. Long stretches of highway have been shut down because of low visibility, hobbling transportation of people and goods. Workers at Capital International Airport have faced crowds of irate travelers whose flights have been grounded. From Sunday to 11 a.m. Tuesday, more than 700 outbound and inbound flights were canceled, one airport official said. A tour guide, Wang Lanhuizi, 23, clutched dozens of passports from a stranded group. “I’m really worried, but there’s nothing we can do,” she said.

An announcement at the airport made no mention of pollution, attributing the cancellations and delays to “the weather condition.” That has long been the government line: the haze is fog, not fumes. But increasingly, Chinese know better. People like Mr. Yu, a newspaper editor, are lobbying officials to stop whitewashing their air quality reports.

And here's this from yesterday's Times, "At Climate Talks, a Familiar Standoff Between U.S. and China":

DURBAN, South Africa — China, the world’s biggest greenhouse gas emitter, has once again emerged as the biggest puzzle at international climate change talks, sending ambiguous signals about the role it intends to play in future negotiations. This week, the nation’s top climate envoy said that China would be open to signing a formal treaty limiting emissions after 2020 — but laid down conditions for doing so that are unlikely ever to be met.

China’s lead negotiator at the United Nations climate change talks here, Xie Zhenhua, said that China was prepared to enter into a legally binding agreement after current voluntary programs expire at the end of the decade, seemingly a major step. China has always contended that because of its rapid economic growth and the persistent poverty of millions of its citizens, it cannot be bound by the same emissions standards as advanced industrialized nations.

Mr. Xie outlined five conditions under which China would consider joining such a treaty as a full partner, the major one being that China and other rapidly growing economies must be treated differently from the so-called rich countries. But that has been a deal-breaker for the United States for years and is the central reason that the Senate refused to even consider ratifying the Kyoto Protocol, a 1997 agreement whose goal, still unmet, is to limit global greenhouse gas emissions...

But no word about China's epic pollution-fueled hypocrisy from communist Amy Goodman, at The Guardian, "Derailing Durban's climate change conference."

China's State-Led Model Showing Signs of Trouble

ICYMI, you might want to skim former SIEU chief Andy Stern's op-ed at the Wall Street Journal from earlier this week, "China's Superior Economic Model." I don't begrudge China's economic success, but I've never been one to fall head over heels for China's model, especially as a replacement for the American free-enterprise ideal. Stern's piece reminded me of the "Japan as Number One" school from the late-1980s and early-1990s. Back then I thought more reliance on industrial policy and governmental intervention might be a good thing. Then Japan collapse and by the end of the Clinton years the American economy was booming. Hardly anyone was championing the Japanese "developmental state" by that time. And thus, I mostly yawned when reading Andy Stern, and that was after a little chuckle, considering the former union boss was throwing his lot in with one the most murderous regimes in modern times.

In any case, the editors at Wall Street Journal throw some cold water on the Chinese economic system. See, "China's Hard Landing":

China is a poster child for the Austrian school of economics' theory of the business cycle. After undertaking the biggest stimulus program the world has ever seen in response to the global financial crisis, the country is drowning in unproductive investments financed with credit.

The government spent 15% of GDP largely on public works projects in inland regions, financed with loans from the state-owned banks. Investment as a share of GDP soared to 48.5% in 2010, and the M2 measure of money supply ballooned to 140% that of the U.S.

Now comes the hangover. The public works projects are winding down, unleashing a wave of unemployment and an uptick in social unrest. The banks' nonperforming loans are rising, and local governments are insolvent. The country is littered with luxurious county government offices, ghost cities of empty apartment blocks, unsafe high-speed rail lines and crumbling highways to nowhere.

One effect of negative real interest rates was a nationwide bubble in private housing, with the average price of an urban apartment reaching eight times the average annual income. Real estate is the most popular investment for the wealthy, according to a central bank survey in September. Millions of luxury apartments are vacant, even as there is a shortage of affordable housing for the poor....

There is no easy way to avoid the bust that is coming. The silver lining is that China's increasingly state-led growth model will be discredited, and a debate will begin on restarting the reforms that stalled in the mid-2000s. A financial sector that allocates credit based on politics rather than price signals led China into this mess. Popular pressure to dismantle crony capitalism is building, and the Communist Party would be wise to get in front of it while it can.

Giant Pandas Prepare For New Life In Scotland

At Sky News:

Edinburgh Zoo is about to take delivery of two of the rarest animals on the planet - a pair of giant pandas on loan from the Chinese government.

Sunshine and Sweetie - Yangguang and Tian Tian in Chinese - are both seven-years-old.
They have grown up together in the misty mountains of southwest China.

On Sunday they will embark on a 5,000 mile journey to Scotland, where they will become star exhibits at the Edinburgh Zoo.

Continue reading.

How China's Market Is Changing Fast

Find out how China is changing and leaving the companies who wish to do business there  - breathless.

You must register to access this article.

China's confident consumers

Posted by:  The Global Small Business Blog

Do Americans Still Know How to Make Stuff?

Paul Fichter, who founded Taphandles in 1999, anticipates $11 million in revenue this year, employing 33 people at its Seattle headquarters and roughly 450 at the Chinese factory that produces the beer-marketing products it sells to breweries.

Mr. Fichter discusses the factors that led him to bring some of his manufacturing back to the United States with The New York Times.

Here's the last question posed by the interviewer:

Q. Do you think Americans still know how to make stuff?

A. Absolutely. My baby’s crib was made here, and that was important to me. I didn’t have to worry about the safety of, for example, the paint used. The key to success for the United States will be using machines instead of brawn. When we surveyed other countries, including Vietnam, the Philippines and Indonesia, we didn’t find the skilled labor base we needed. While I’m really proud of creating jobs here in America, it’s not just an emotional decision. It makes sense. 

Read the entire interview here.

Do you see this as a trend to bring manufacturing back to the United States?  We welcome your comments and insights.

Illustration credit:  Taphandles

No. 2 Most Difficult Market to Enter in the World?

China is considered the No. 1 most difficult market to enter and the United States is No. 2 despite attractive growth opportunities.  That's according to a new global report by international legal practice Allen & Overy.

The United States ranks third globally for growth opportunities behind China and India, but second behind China for perceived barriers to entry.

 Read the entire report here.

Results run counter to the World Bank's Ease of Doing Business Rankings which shows the United States No. 4.  Once you break into the market, one could say it's easy to do business in USA?

Photo courtesy:  USA at Night (NASA)

Are You Short On Core Competitiveness?

According to People's Daily Online, Chinese businesses ought to do better in the overseas market.

It is true that Chinese enterprises should improve themselves when going global. Compared with large European and American transnational enterprises, most of Chinese enterprises going global are low and middle-end industries. Most of them are traditional contractors. Their primary businesses do not involve science and technology as well as high added value, which make them short of core competitiveness.

Read the entire article here.

Not exactly sure what core competitiveness is?  I am aware of core competencies so I did some checking on core competitiveness ... a lot of Chinese reference this theory:

Identification, Formation and Maintaining of Core Competitiveness of an Enterprise

Discussions on the Core Competitiveness of Tourism Industry

How to Build the Core Competitiveness of Enterprises

Dolce & Gabbana Sees New Era of Glamour For Youth in China

With your business, how will you capitalize on it?

Like other designers, such as American Diane Von Furstenberg and Italian Miuccia Prada, Messrs. Dolce and Gabbana have made multiple expeditions to China to understand what is driving China's shoppers. What they've found in their tours across Beijing, Shanghai, and Hong Kong, is that Chinese consumers are far flashier than their American counterparts, said Mr. Dolce.

"Chinese are eccentric, and they will wear the flowers and the lace," said Mr. Dolce, explaining that the industry as a whole has largely catered to consumers who wanted plain and frill-less fashion. "Chinese aren't afraid to be more," he said.

Read the entire article published in The Wall Street Journal:
Dolce and Gabbana to Expand in China
by Laurie Burkitt

Photo credit here (both dresses are Dolce and Gabbana design)

Trouble Ahead: China's eBay, Alibaba

Alibaba announced two of its most senior representatives, David Wei, the chief executive, and Elvis Lee, the chief operating officer, would resign to accept responsibility for the company having granted "golden status" to 2,236 dealers who it says had subsequently defrauded buyers.

Although the two executives were not personally implicated, the company had little choice than to accept their resignations and make a public disclosure about what happened.

Read all about it:

An online-fraud scandal in China:  Alibaba and the 2,236 thieves
The Economist (check out this December 2010 article as well)

Why Alibaba's CEO had to go
Fortune Tech

Alibaba.com CEO Resigns in Wake of Fraud by Sellers
WSJ.com

David Wei and Elvis Lee Quit Alibaba Amid Fraud Inquiry
NYTimes.com

I think this is only the tip of an iceberg ... watch it closely.

China's Climate Policy Shames the US

The chief US complaint about international climate regimes - the main reason George W. Bush gave for withdrawing US support from the Kyoto Protocol - was that developing countries, including China, were not required to commit to reductions in emissions of greenhouse gases (GHGs), despite the fact that China is now the world's leading emitter of GHGs (though not per capita).

China, which had already self-imposed a carbon-intensity reduction target (that is, a target to reduce GHG emissions per unit of production, which does not necessarily entail a reduction in total annual emissions), today announced that it will impose binding emission-reduction targets on each of its regions as part of that effort. Scientific American has the story here.

This is a small but important step in the Chinese government's development of a domestic climate policy. As always, the proof will be in the pudding. (Will China actually enforce and verify emissions reductions?) But at least China is taking action, which is something the US government has yet to do since President Bush denounced the Kyoto Protocol, despite the fact that per capita income in the US is nearly 8 times that of China (based on purchasing power parity). At least 130 million Chinese citizens still live on $1/day or less. Given this, China's climate commitment puts the US government to shame.

Immigration Act of 1924

In researching how immigration quotas work I've discovered more racist history of the United States. Here are a couple quotes from the Wiki article on the Immigration Act of 1924

"The Act halted 'undesirable' immigration by quotas. The Act barred specific origins from the Asia-Pacific Triangle, which included Japan, China, the Philippines (then under U.S. control), Siam (Thailand), French Indochina (Laos, Vietnam, and Cambodia), Singapore (then a British colony), Korea, Dutch East Indies (Indonesia), Burma (Myanmar), India, Ceylon (Sri Lanka) and Malaysia.[4] Based on the Naturalization Act of 1790, these immigrants, being non-white, were not eligible for naturalization, and the Act forbade further immigration of any persons ineligible to be naturalized.[4]

The Act set no limits on immigration from the Latin American countries."

(This no limits on immigration from Latin American countries may have to do with the fact that Mexican's were given the "benefit" of being "white" after the purchase of northern Mexico)

Welcome to the Great International Education Race

There is a well-thought out scramble for students, professors, prestige and prosperity that is changing the face of university education around the world.

For decades the United States attracted more than a quarter of all foreign students in college or graduate education. Recently that has begun to change. While the continuing boom in study overseas — an explosion largely unaffected by the economic downturn — means that the number of foreign students going to the United States has continued to grow, the U.S. share of the foreign student market has fallen to just 18.7 percent, according to the most recent report by the Organization for Economic Co-operation and Development. Meanwhile countries like Australia, Russia and New Zealand have all seen their share of the market rise sharply.

Read all about the rapidly changing international education landscape here.

Photo credit here.

The Great Call of China Ends For Vodafone

Dashed hopes but loads of cash later -- Vodafone sells its stake in China Mobile for U.S. $6.6 billion.

Read more here. About Vodafone.

Graphic illustration (Vodafone's global footprint) source here.

Posted by: The Global Small Business Blog