Working in China

October 1, 2013

The China Law Blog compared China’s employment laws to those of the United States. Reading this post was a revelation, because I did not know that Chinese workers had more job protection—if not higher pay—than most U.S. workers, and I was curious how this came about.

I discovered the reason was due to the transition from state controlled to private owned businesses.  Since 1978—when China implemented its open-door policy—the country went from no privately owned small businesses to more than 10 million small to medium-sized private enterprises that represent about 90 percent of all businesses.

In addition, The Diplomat.com reports, “China’s private sector now comprises some 70% or more of China’s economy …”

And before anyone criticizes China for paying low wages to migrant factory workers who moved to the cities from rural China, Bloomberg says, “Rural spending power has been lifted by wages earned by peasants working in cities. “

“Wage levels in China [while low compared to the United States] have increased continually over the last two decades as the economy has developed and the private sector has created new employment opportunities. … In 2012, a total of 25 provinces increased their minimum wage by an average of 20.2 percent.”  Source: China Labour Bulletin

Prior to this transition, state workers didn’t have to worry about a job. Once the transition began, significant numbers of workers started losing jobs. Since China’s constitution says the government’s role is to serve the people, the government changed the laws to make it more difficult to fire a worker offering better job protection.

In fact, the Library of Economics and Liberty says, “China appears to have come through the world economic crises better than many countries. … As Europe and the United States slump, the CPC can speedily launch infrastructure projects or shift millions of migrant workers from one locality to another.”

“China’s employment law system is quite different from the U.S. The main difference is that the U.S. is an employment at will system, which means you can terminate employees at any time for pretty much any reason. China’s system is the opposite. The Chinese system is a contract employment system. … An employee can only be terminated for cause and cause must be clearly proved. … This whole situation makes the employment relationship and the employment documents much more adversarial than is customary in the U.S.” Source: China Law Blog

Discover China’s Holistic Historical Timeline

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Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

His latest novel is the multiple-award winning Running with the Enemy.

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China’s Holistic Historical Timeline

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Scapegoating China and Manipulating the Opinions of Americans – Part 2/4

November 6, 2012

Once we discover how many times the United States has had one financial disaster after another, we start to understand why China must be used as a scapegoat to distract many Americans and give them a victim to blame for lost jobs and low pay.

In another example, Business Pundit.com mentions the 10 Most Bizarre Economic Bubbles in History.  One example was US Dot-com Bubble that burst on March 10, 2000 resulting in a mild but long-felt recession, and the stock market crash of 2000-2002 caused the loss of $5 trillion in the market value of US companies from March 2000 to October 2002.

I’ve left out many other global financial disasters such as those taking place in Israel (1983), Sweden (1990s), Japan (1990), Mexico (1994), Russia (1998), Turkey (2001), Argentina (2001), Iceland (2008), etc.

Then there is the global financial disaster of 2007 – 2008. Total losses are estimated in trillions of U.S. dollars globally. Between January and October of 2008, owners of stocks in U.S. corporations suffered about $8 trillion in losses while losses in other countries averaged about 40%.


Financial Crisis History Lesson – Part 2

Global Issues.org says, “While the Western mainstream media has often hyped up a threat posed by a growing China, the World Bank’s chief economist, (Lin Yifu, a well respected Chinese academic) notes ‘Relatively speaking, China is a country with scarce capital funds and it is hardly the time for us to export these funds and pour them into a country profuse with capital like the U.S.'”

I think what Lin Yifu is talking about is not the US National Federal Debt but the fact that US corporate profits just hit an all-time high … Source: Business Insider.com

During the second 2012 Presidential Debate, Romney mentioned China seven times. He blamed China’s currency manipulation for the loss of manufacturing jobs in the US, and promised to “crack down on China when they cheat.” Source: The New Republic.com

However, what Mitt Romney did not say is the number of jobs lost in China due to the 2007 US financial crisis that swept the globe. “After August 2008, the number of orders filled by many export oriented enterprises dropped precipitously, and thousands of factories in the coastal region, especially in the Pearl River Delta, were closed. The impact was most serious on the rural migrant labor force. … In absolute terms, it corresponds to a loss of 23 million jobs. Rural migrant labor dropped from 140 million to 117 million with an unemployment rate of 16.4% in early 2009.” Source: The Global Economic Crisis and Unemployment in China

Continued on October 31, 2012 in Scapegoating China … Part 3 or return to Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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In healthcare, what comes first: the chicken or the egg? – Part 2/3

October 29, 2012

To compare universal health care in China to private sector health care, I’m going to use Wal-Mart as an example to explain why we cannot rely on the private sector when it comes to the importance of health care and the quality of life.

In the private sector in the US, Wal-Mart did not achieve success because a sorcerer waved a magic wand and “POOF” suddenly Wal-Mart is everywhere as if a light switch were turned on.  The first Wal-Mart store opened in July 1962. By 1967, there were 24 stores. Today, forty-five years later, Wal-Mart has 2.2 million employees/associates worldwide and serves 200 million customers each week at more than 10,000 stores in 27 countries.

But China’s challenge is to serve 1.3 billion Chinese compared to Wal-Mart providing health care for 2.2 million of its workers. There is a HUGE difference in the numbers and China  hasn’t had forty-five years to build the infrastructure of this new universal health care plan.

Of course, a China critic may point out Wal-Mart’s success because it was a private sector business but that same critic, out of ignorance or by design, will not mention what Christian Science Monitor.com says about Wal-Mart’s health care for its employees:

“In addition to stopping the retaliations and respecting workers’ right to free speech and assembly, OUR Wal-Mart members would like to see the retailer offer more dependable work schedules, affordable healthcare for full-time workers, and a living wage ($13 per hour minimum).

“Wal-Mart has been advertising that they are a family-oriented company. And if this is how family is treated, then I would rather not have a family at all,” says Ms. Cruz.”

In the private sector, the way corporations/businesses treat employees varies from company to company. There is no universal standard of treatment, and there never will be unless the private sector eventually is owned by one global corporation.

Business Insider.com shows how Wal-Mart treats its employees: “Wal-Mart Guts Its Employee Health Care Plan and Raises Premiums—Rates are expected to climb by more than 40 percent for some employees. Combined with high deductibles, employees are complaining that their health care will now eat up to 20 percent of their annual pay.”

Continued on October 30, 2012, In healthcare, what comes first: the chicken or the egg? – Part 3 or return to Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Bobbleheads Still Predicting Bursting Bubbles in China

June 17, 2011

It wasn’t that long ago (May 17) that I wrote about a Chicken Little-Henny Penny predicting a real estate bubble bursting in China and wrecking its economy as it did in the US in 2008.

Then a friend recently sent me another link to another “sky is falling” piece.  This time, the “want-to-happen” bad news came from Jeff Cox, a staff writer for CNBC.

Cox wrote, “China’s economy is showing real signs of weakening, particularly in real estate, and even could tip into a recession, hedge fund manager Jim Chanos told CNBC.”

I’m surprised that Cox looked under a Hedge Fund rock to find a quote predicting a bad economic future for China.

Basically, Hedge Fund managers do two things: they use small amounts of money, or leverage, to promise large amounts of stocks or commodities. Secondly, they all say they will deliver this stock or commodity at a particular point in time. In that sense, hedge fund managers are trying to time the market, which some would say is very difficult if not impossible to do unless they manage to manipulate the market in some way or have a crystal ball.

Using other sources, we discover a few facts that tell us Cox should have left that quote under the Hedge Fund rock where he found it and called someone else.


Discover how many Chinese buy real estate.

First on May 5, Jason Simpkins writing for Seeking
Alpha says,
 “Yes there are probably pockets of bubbles in China and in the real estate market, but against that backdrop you have 500 million people expected to move into Chinese cities by 2020. That means the number of people expected to move into cities is almost double the population of the United States,” said Money Morning Chief Investment Strategest Keith Fitz-Gerald. “So in the context of China’s explosive growth, what we’re looking at are some moderate setbacks over an extended period of high growth.”

Second, on May 9, James Kostohryz writing for Minyanville says, “China’s Housing Bubble: Mainly Hot Air… Studies by the World Bank, The Economist Intelligence Unit, and UBS have noted that average home prices in China as a whole have risen by roughly 6%-7% per annum in the past decade.

Third, China’s real estate investment accounts for roughly 11% of its GDP, and from Chris Oliver writing for Marketwatch on May 18, we discovered that “New home prices rose across leading Chinese cities in April, even as many key cities saw the pace of appreciation and sales volume cool, according to official data Wednesday.… Of 70 cities tracked in the survey, 56 reported gains in new home prices.”

“So, I think that it should be clear by now, that there is no generalized price or quantity bubble in the Chinese residential real estate market,” Kostohryz wrote, “Home prices have actually been getting substantially more affordable in China in the past decade relative to income levels.”

To learn more, I recommend reading what Simpkins, Kostohyrz and Oliver wrote on this topic. The links have been provided.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.


Natural Gas, Biogas – Let’s all have Gas “Naturally!”

June 4, 2011

Recently, a friend sent me a link to news that warned of new US government regulations on hydraulic fracturing that could stop shale exploration.  If this happened, what the consumer would lose is access to the natural gas produced from shale. Source: Natural Gas for America

Earlier this week, the White House said the natural gas industry should support “common sense” regulation to ease public worry about potential water contamination from fracturing, a drilling practice vital to the U.S. shale gas boom.

In fact, according the Natural Gas.org, the US has about 100 years of supply (if developed) at current rates of consumption, while Reason.com reports that the IEA says world natural gas supplies could last more than 250 years.

While development of natural gas from shale may come to a stop in the US due to environmental concerns, China is looking at the production and resources of shale gas in the United States and is learning from America.

China’s technically recoverable resources of shale gas are estimated to be about 50 percent higher than those in the United States.

EIA.DOE.gov says, “The outlook for unconventional natural gas production is more positive in China than in OECD Europe first and foremost because China’s geology suggests a greater unconventional resource potential than in Europe. Further, although natural gas production from conventional resources in China, as in Europe, cannot keep up with domestic demand, China’s government strongly supports unconventional gas development, and public resistance is likely to be less of an impediment in China than in OECD Europe and the US.”

While developing natural gas resources in China, there is also Biogas development in rural China, which the two embedded videos talk about. China is taking advantage of waste to produce energy, which results in higher standards of living for those involved.

Imagine the biogas from 1.3 billion people and the animals raised to feed those people.

Discover The One Party Advantage, Water – Two Countries Tell a Tale, Volting China into the 21st Century or Greenpeace China

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.


Hitting Endless Home Runs

March 15, 2010

First home run—China is becoming the world leader in green energy. You may read about it in China Going Green.

Second home run—Although America has ample supplies of rare earth elements (in the ground) needed for high-tech products, China is the only country processing these elements. The cost to build a processing plant in the United States runs between 500 million and one billion. Source: Holding a Vital Key to Humanity’s Future

“U.S. Rare Earths’ Chief Executive Officer Edward Cowle explained that rare earth elements have become increasingly common in high technology equipment including:

  • computer hard drives and cellular phones
  • MRI machines
  • environmental products such as electric cars, wind turbines and solar panels
  • military weapons, including the electronic controls and electric motors used in missiles

“U.S.-based production for these important manufacturing and military applications may be in jeopardy because China currently supplies the majority of rare earth elements that are used in these applications.” Source: Technology Metals Research

High speed rail in China

Third home run—Now, using French, German and Japanese technology, China plans to bid for contracts to build high-speed rail for the U.S. market and is already exporting this technology to Europe and Latin America. The White House recently announced $8 billion in grants for rail projects including the high-speed systems in California, Florida and Illinois. Source: The Huffington Post

See China’s Fast Track Growth

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions

 


Not All Factories in China are Sweat Shops

March 5, 2010

Originally Published at Speak Without Interruption on February 15, 2010 by Bob Grant — publisher/editor for Speak Without Interruption. Posted on iLook China, 3/5/10 at 08:00

As I write about my personal experiences in China, I again want to note that they are strictly that—my “personal” experiences.  I am certain there are people, who have visited China who could contradict everything that I have, or will write.  The products I imported perhaps did not lend themselves to the typical “Sweat Shop” stereotype in terms of the factories that produced them.

However, I never saw or visited any factory that, in my mind, would fit that definition.

If the factories were not what I would call “modern”—they were certainly clean.  The employees (factory workers) wore uniforms at most places I visited.  They seemed proficient in their work and the products produced, and for the most part, were without quality problems—certainly no different from products produced in other countries.

There are more photos at Speak Without Interruption

Most of the factories tended to be in Industrial Parks that were quite large.  Usually, the factories were a “small city” into themselves.  There was housing provided for the employees on the factory grounds along with areas for recreation.  I don’t suppose there was another way of doing it, but I saw a lot of laundry hanging from outside the housing units plus commercial apartments buildings I saw throughout China.

Most factories had certifications that were either the same or similar to those held by US factories.  I saw elaborate R&D sections in most of the factories I visited.  The office space was usually as modern and pleasant as any I had visited in the US.

A ritual that I truly enjoyed was at every meeting when hot tea was served. Sometimes the owner or general manager had tea to make in their office and other times it was brought in.  However, I can’t recall a meeting where tea was not offered.

Being a non-smoker, another ritual I did not enjoy was in almost every meeting I attending most of the parties present smoked.  I heard a figure once that 85% of Chinese men smoked. I can attest that this is probably a good estimate.  Once inside the office or meeting room, the smoke became quite thick and uncomfortable for me; however, I was their guest and felt I could put up with the discomfort in the course of conducting my business affairs.

I have fond memories of my factory visits and discussions. I think the fact that I came to China, and met with the factory personnel aided my business immensely versus doing business in name only.

If you enjoy this piece by Bob Grant, you may want to read “A Contradiction of Times” at http://wp.me/pN4pY-bT