Opinion

George Chen

China’s toxic leaks and social unrest

George Chen
Aug 15, 2011 03:53 UTC

By George Chen
The opinions expressed are the author’s own.

What does PX mean? That’s the keyword for China from the past 24 hours.

State media reported that residents of Dalian were recently forced to flee when a storm battering the northeast Chinese coast, whipping up waves that burst through a dyke protecting a local chemical plant. The plant produces paraxylene (PX), a toxic petrochemical used in polyester.

On Sunday, some angry residents finally decided that instead of being forced to flee, the chemical plant should be relocated.

Tens of thousands of people took to the streets to demonstrate and Dalian, known as one of the most beautiful coastal cities in China, made headlines all over the world.

Dalian is not alone.

Blame bad luck or natural disasters, perhaps. Four days ago, an accident at a factory in Shandong province resulted in a deadly chemical gas leak and 125 people, mostly workers and nearby residents, were sent to the hospital, local media reported. About three months ago, poisonous chemical waste was dumped illegally, polluting water sources in Yunnan province. The case was only recently revealed to the public. You can imagine how angry local people must feel.

I had a chat with a young and well-educated fund manager, a typical middle-class Chinese, about those recent accidents and his views surprised me. The fund manager is usually very calm and polite before colleagues and clients. He told me he would take to the streets and even fight to the death to get the PX plant relocated if he were a resident in the area.

Banking on a Triple-A rating

George Chen
Aug 4, 2011 04:00 UTC

By George Chen
The opinions expressed are the author’s own.

You may think I am overly cynical today but let me first ask you a simple-yet-complicated question — what is fair?

Global ratings agency Moody’s said yesterday that the United States will retain its top AAA credit rating after President Barack Obama signed a bill to raise the federal debt ceiling. However, we heard very different opinions from China on the credit rating of the world’s No.1 economy.

A Chinese ratings agency yesterday downgraded the U.S. from A-plus to A, saying the deal to lift the debt ceiling would not solve underlying U.S. debt problems or improve its debt-paying ability over the long term.

A turning point for China?

George Chen
Jul 28, 2011 02:48 UTC

By George Chen
The opinions expressed are the author’s own.

Is the train crash tragedy becoming a turning point for China’s political and economic development?

Frustrations among the Chinese public have been growing rapidly — at least on the internet if not yet in the streets. People are particularly unhappy with the way the Ministry of Railways has dealt with the train accident, which so far has cost 39 lives.

It has now turned into a full-blown crisis. Shen Minggao, chief Greater China economist for Citigroup, said in his latest research note to clients that the train tragedy could become “a turning point in the China growth model.”

Is Beijing brewing something?

George Chen
Apr 27, 2011 04:57 UTC

By George Chen
The opinions expressed are the author’s own.

There are growing signs that something is brewing in relation to China’s foreign exchange rate regime.

When Hong Kong traders returned from the Easter break, many were surprised to be told by their mainland colleagues about growing market speculation that Beijing might be planning a one-off deal to lift the value of the yuan — some say by as much as 10 percent.

Others are more cautious. They say a one-off revaluation sounds unlikely although Beijing may relax foreign exchange controls by setting new “game rules” around the upcoming Labour Day holiday in the first week of May. The Financial Times yesterday ran a nice scoop about sovereign wealth fund China Investment Corp being set to win new funds, likely $100-200 billion, as Beijing seeks to diversify its massive foreign exchange reserves, now exceeding $3 trillion.

Chinese bankers, overconfident?

George Chen
Mar 11, 2011 04:07 UTC

By George Chen
The opinions expressed are the author’s own.

Are Chinese bankers overconfident? Or perhaps global investors are too suspicious of China?

A couple of days ago, Bank of China Chairman Xiao Gang dismissed growing market concern, in particular from the West, that a debt crisis could be brewing given the rising level of bad assets in China’s banking system.

Xiao said bad loans would be kept under control and he cited Chinese people’s “good tradition” of repaying debts to back up his argument.

My Shanghai holiday

George Chen
Mar 10, 2011 02:35 UTC

food

By George Chen
The opinions expressed are the author’s own.

While Chinese lawmakers gathered in Beijing for the annual parliamentary meeting, I returned to my hometown Shanghai for a holiday.

The  lawmakers are keen to discuss China’s macroeconomic matters these days, but I am more interested in being a microeconomic observer. For example, how much does an apple cost in Shanghai these days?

During my holiday, I brought my girlfriend, a Hong Kongner, to Shanghai No.1 Food Store on the historic Nanjing Road. The store is a favorite place from my childhood as I felt I could buy food items from all over the world under one roof.

Winning Hu’s heart

George Chen
Jan 19, 2011 05:34 UTC
From working lunch to “private dinner”, Texas ranch to the White House, and George Bush to Barack Obama, you can clearly see the differences in the approaches of the two U.S. presidents to welcoming Chinese President Hu Jintao. The aim is almost the same, to win the heart and mind of Hu before the United States tries to convince him and his country to increase cooperation with the U.S. on a range of tough issues – for example, North Korea. Influential Chinese newspaper The 21st Century Business Herald reported that First Lady Michelle Obama would “supervise White House chefs” over the food to be served during the state visit. Earlier, Obama said he would treat Hu to a “private dinner”, a very rare arrangement for visiting heads of state to the U.S., affording the two gentlemen private space for a more frank conversation at the White House. The Chinese-language report highlighting Michelle Obama’s supervisory role at the private dinner was an attention-grabber and one of the most-read articles on many leading Chinese news portals so far this week. Many Chinese netizens praised Mrs. Obama’s kind offer to treat China’s “top boss”. It would seem that before Obama has even had a chance to win the heart and mind of Hu, his wife has already scored brownie points among the Chinese public. Things were very different just five years ago.  In 2006, when George Bush was president and invited Hu to visit, he initially suggested that Hu visit his private ranch in Texas. When the news went public, the reaction in China must have surprised Bush. Many traditional, middle-aged Chinese people didn’t really like the idea of Hu being received at Bush’s personal ranch instead of the White House. Some Chinese scholars also publicly criticized the idea, which they believed failed to reflect the seriousness and importance of Sino-U.S. ties. In the end, Hu didn’t go to the ranch, but had to settle for lunch at the White House. No dinner? Chinese people generally prefer dinner to lunch. Lunch is a more specific, purpose-focused meal, for example the business lunches that bankers in Hong Kong so often attend. Lunch is about the talk more than food. It’s not really about winning the heart and mind of the guest, but a more pragmatic approach to make him help you solve certain problems. The Chinese way of dealing with friendships is that you’d better bring your Chinese friend to a formal dinner – the more formal, the better it demonstrates how serious you are about the relationship.  This time, Obama scored the point. A private dinner at the White House, the counterpart of Zhongnanhai, where Chinese leaders live in Beijing, sounds like a sufficiently friendly and serious approach to please Hu and improve the Sino-U.S. ties. For various reasons, Hu’s last visit to the United States was not considered a successful trip by many political analysts and scholars. Remember the story about the Chinese national anthem played at the White House on Bush’s official reception for Hu? Thank God. The anthem was correct – the one for the People’s Republic of China. But it was announced by the U.S. solider responsible for hospitality at the ceremony as the anthem of the Republic of China, in other words Taiwan! Imagine how Hu may must have felt when he heard the words: “Now, the national anthem for the Republic of China”. Many things have taken place in the five years since, and the rise of China is something no one can ignore, although whether the rise is peaceful or an emerging threat to the region or even the world is a subject of debate for many. It seems Obama understands China better than his predecessor, or he has to understand China better given its bigger impact on world affairs. The more prudent rather than self-important, and a more personal rather than state-arrogant approach by Obama towards Hu and China may reflect new attitude toward Sino-U.S. relations for both sides. However, that doesn’t mean the international community should hold up their hopes too high for the outcome of the meeting. A private dinner may help win Hu’s heart, but you can’t expect him to immediately get tough on North Korea after he returns home. The same goes for Sino-U.S. trade, yuan appreciation and so on. Chinese leaders prefer to “proceed step by step” or  循序渐进 as they say in Chinese. So, how should we measure the success of Hu’s trip to the United States? My personal view is that the top priority for Obama and the U.S. government is to win Hu’s heart and mine first. Once you make him happy, improve mutual trust and create some sort of chemistry, then you just need a spark to start addressing the other issues.

HuBy George Chen
The opinions expressed are the author’s own.

From working lunch to “private dinner”, Texas ranch to the White House, and George Bush to Barack Obama, you can clearly see the differences in the approaches of the two U.S. presidents to welcoming Chinese President Hu Jintao.

The aim is almost the same, to win the heart and mind of Hu before the United States tries to convince him and his country to increase cooperation with the U.S. on a range of tough issues – for example, North Korea.

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