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Chill winds blow through China's manufacturing heartland 
The dislocated head of a baby doll stares blindly through the gate; WALL-E and Barbie Pet Doctor boxes are strewn across the yard. Two weeks ago, toymaking giant Smart Union was churning out goods for children across the United States and Europe. Now it is in liquidation and 7,000 former employees are in shock. "One day we went to work as usual, the next it was all closed," said Wei Sunying, gazing through the barred gate of the factory in Dongguan in southern China where she spent eight years painting plastic components in a fume-filled room."Thousands of us are looking for jobs now. We walk around every day till our feet ache but we can't find anything."Few in the west have heard of Dongguan, but the chances are that your shoes, your TV or your children's toys originated here. Exports have built a city of up to 14 million inhabitants ? twice the population of Greater London ? almost all migrant workers from the countryside. Its economy has grown 15% annually in recent years. Now the global financial and economic crisis is proving the final straw for exporters already punished by rising costs and a stronger currency. In the last year, chill winds have blown through the baking Pearl River Delta. Sixty-seven thousand small and medium-sized businesses in China collapsed in the first half of 2008, many in these manufacturing heartlands, says the national economic planning body. Toy firms have been particularly badly hit, thanks to safety scares and product recalls. Textile firms, with wafer-thin margins, are also reeling. Next came tighter credit for many foreign-owned firms, such as Hong Kong's Smart Union. And then, in the last two months, a sharp drop in US and European demand as consumers reined in spending. A local trade association predicts that by the end of January, Dongguan and its neighbours Shenzhen and Guangzhou will lose 9,000 of their 45,000 factories. "Many factories are looking at completely empty order books," warned Stephen Green, head of China research at Standard Chartered, who believes the export sector will be stagnant and could even shrink next year.Green predicts that China will grow 7.9% next year ? well below the double-digit figures enjoyed over the last half decade ? while others suggest it could fall closer to 7%.That sounds enviable to western countries facing recession. But with the working age population still growing, China needs at least 8% growth to maintain the current employment rate. And the fall-out will be highly concentrated in provinces such as Guangdong."The social impact of this is going to be huge. The problems are getting bigger and bigger," said Wooyeal Paik, who is researching Dongguan's industry and migrant workforce at the University of California at Los Angeles."Impromptu protests by disgruntled workers left jobless and without pay are becoming more common; they have resorted to petitioning local officials for backpay because they have few other ways to remonstrate and be compensated."They will complain more and they will go to local government offices more... You will see demonstrations and picketing. And probably there's a risk of violence against bosses ? especially foreigners."Dongguan's government stepped in to reimburse the Smart Union workers to the tune of 24,000 yuan (£2.2m) after thousands gathered at the factory gates and outside local authority offices.But two months' back pay ? 1200 yuan for most ? will not last long. There is no redundancy package and a lawsuit by workers appears to have limited prospects of success.Wei, from Guizhou, is one of many struggling to find new work. Even if she could read the job adverts, most ask for recruits under 35; she is just over 40. "I came here as a migrant worker because my children need money for schooling," she said. "Now I can't support my children. I don't even have enough money to get back home and it's expensive to stay here."Even job offers aren't always what they seem, said 26-year-old Fang Jianlin, whose friends were recently conned. "Recruiters told them the conditions and the salaries were very good, but on the way to the place they were asked for money. They got robbed; some were even beaten," he said.Smart Union was such a popular employer that Fang paid a hefty "introduction fee" to win his job there. At worst, he and his wife would earn around 600 yuan a month; at the busiest times, when production ran until 2am, they could take home 2,100 yuan each. But he and his wife will return to his village in Sichuan in a few days, where his parents are rearing their children, unless new work turns up. They are not sure how they will support the family, but cannot afford the 50 yuan a day in rent, food and transport to stay here.It's a sobering end to the dream which lures millions of workers to Dongguan each year, where they struggle and study their way towards the promise of a regular income; perhaps even a place in the burgeoning middle classes. At the city's night schools, thousands of workers end their long days with classes on everything from car maintenance to law.Bob Li is one of the area's success stories. He arrived in 1995 as a casual labourer. "Everyone in my hometown had heard Guangdong was covered in gold," he said.Now he manages a factory for Richall, which supplies durable bags to companies such as Walmart, Carlsberg and Disney. Twenty-five thousand totes for Tesco are stacked up awaiting delivery.But he is unnerved by the economic downturn."These days it is getting more and more difficult for factories like us," he said, citing the cost of wages and materials. "The exchange rate is already a huge issue here; people are losing interest. The price of our materials has risen because they're made from oil... Taken together, costs have risen by 30%-40%."To some extent, Dongguan has become a victim of its own success. The rising prosperity of the region has created inflationary pressures. Workers want higher wages; new labour laws are designed to wipe out sweatshops but bring higher costs, which squeeze many companies. Manufacturers have already fled inland to cheaper provinces, in many cases encouraged by Guangdong authorities, who hoped to move the province up the value chain ? condensing 200 years of western industrial history into fewer than 15. "We have a policy to empty the cage for the new birds," Guangdong's vice-governor, Wan Qingliang, told reporters this month. "The ultimate target is to build the Pearl River Delta into the core region of modern manufacturing."Others are unsure of the wisdom of the policy in the face of a worldwide downturn."Places like Guangdong miscalculated the development of the economy. They actually tried to push those labour intensive and small and medium sized enterprises out of the [established industrial] area because they wanted hi-tech industries there. But when something bad happens, like the economic downturn, what are they going to do?" said Paik. He acknowledges that numerous East Asian economies, such as Japan, have moved up the value chain in just the same way; and that the Chinese government deserves to be confident, given its economic record."But they haven't experienced a serious economic downturn except right after 1989 and have been overconfident in their policy of the quick transformation of industrial structure toward hi-tech in Guangdong," he cautioned.The risk is that officials push the city off the economic ladder rather than up it. Whether new subsidies, export tax rebates and other support for small businesses can save them remains to be seen.Yet China's rising living standards in the 30 years since economic reforms were launched has left most people optimistic about its long-term prospects. Migrant workers returning home think they may come back in a few years. A security guard at the shuttered Smart Union plant is plotting out his course to university. "If we compare the situation to when I first arrived, I have already found my pot of gold," said Li, the factory manager."But I can still see it's just the beginning."Additional research by Chen ShiChinaManufacturing sectorMarket turmoilguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
The dislocated head of a baby doll stares blindly through the gate; WALL-E and Barbie Pet Doctor boxes are strewn across the yard. Two weeks ago, toymaking giant Smart Union was churning out goods for children across the United States and Europe. Now it is in liquidation and 7,000 former employees are in shock. "One day we went to work as usual, the next it was all closed," said Wei Sunying, gazing through the barred gate of the factory in Dongguan in southern China where she spent eight years painting plastic components in a fume-filled room."Thousands of us are looking for jobs now. We walk around every day till our feet ache but we can't find anything."Few in the west have heard of Dongguan, but the chances are that your shoes, your TV or your children's toys originated here. Exports have built a city of up to 14 million inhabitants ? twice the population of Greater London ? almost all migrant workers from the countryside. Its economy has grown 15% annually in recent years. Now the global financial and economic crisis is proving the final straw for exporters already punished by rising costs and a stronger currency. In the last year, chill winds have blown through the baking Pearl River Delta. Sixty-seven thousand small and medium-sized businesses in China collapsed in the first half of 2008, many in these manufacturing heartlands, says the national economic planning body. Toy firms have been particularly badly hit, thanks to safety scares and product recalls. Textile firms, with wafer-thin margins, are also reeling. Next came tighter credit for many foreign-owned firms, such as Hong Kong's Smart Union. And then, in the last two months, a sharp drop in US and European demand as consumers reined in spending. A local trade association predicts that by the end of January, Dongguan and its neighbours Shenzhen and Guangzhou will lose 9,000 of their 45,000 factories. "Many factories are looking at completely empty order books," warned Stephen Green, head of China research at Standard Chartered, who believes the export sector will be stagnant and could even shrink next year.Green predicts that China will grow 7.9% next year ? well below the double-digit figures enjoyed over the last half decade ? while others suggest it could fall closer to 7%.That sounds enviable to western countries facing recession. But with the working age population still growing, China needs at least 8% growth to maintain the current employment rate. And the fall-out will be highly concentrated in provinces such as Guangdong."The social impact of this is going to be huge. The problems are getting bigger and bigger," said Wooyeal Paik, who is researching Dongguan's industry and migrant workforce at the University of California at Los Angeles."Impromptu protests by disgruntled workers left jobless and without pay are becoming more common; they have resorted to petitioning local officials for backpay because they have few other ways to remonstrate and be compensated."They will complain more and they will go to local government offices more... You will see demonstrations and picketing. And probably there's a risk of violence against bosses ? especially foreigners."Dongguan's government stepped in to reimburse the Smart Union workers to the tune of 24,000 yuan (£2.2m) after thousands gathered at the factory gates and outside local authority offices.But two months' back pay ? 1200 yuan for most ? will not last long. There is no redundancy package and a lawsuit by workers appears to have limited prospects of success.Wei, from Guizhou, is one of many struggling to find new work. Even if she could read the job adverts, most ask for recruits under 35; she is just over 40. "I came here as a migrant worker because my children need money for schooling," she said. "Now I can't support my children. I don't even have enough money to get back home and it's expensive to stay here."Even job offers aren't always what they seem, said 26-year-old Fang Jianlin, whose friends were recently conned. "Recruiters told them the conditions and the salaries were very good, but on the way to the place they were asked for money. They got robbed; some were even beaten," he said.Smart Union was such a popular employer that Fang paid a hefty "introduction fee" to win his job there. At worst, he and his wife would earn around 600 yuan a month; at the busiest times, when production ran until 2am, they could take home 2,100 yuan each. But he and his wife will return to his village in Sichuan in a few days, where his parents are rearing their children, unless new work turns up. They are not sure how they will support the family, but cannot afford the 50 yuan a day in rent, food and transport to stay here.It's a sobering end to the dream which lures millions of workers to Dongguan each year, where they struggle and study their way towards the promise of a regular income; perhaps even a place in the burgeoning middle classes. At the city's night schools, thousands of workers end their long days with classes on everything from car maintenance to law.Bob Li is one of the area's success stories. He arrived in 1995 as a casual labourer. "Everyone in my hometown had heard Guangdong was covered in gold," he said.Now he manages a factory for Richall, which supplies durable bags to companies such as Walmart, Carlsberg and Disney. Twenty-five thousand totes for Tesco are stacked up awaiting delivery.But he is unnerved by the economic downturn."These days it is getting more and more difficult for factories like us," he said, citing the cost of wages and materials. "The exchange rate is already a huge issue here; people are losing interest. The price of our materials has risen because they're made from oil... Taken together, costs have risen by 30%-40%."To some extent, Dongguan has become a victim of its own success. The rising prosperity of the region has created inflationary pressures. Workers want higher wages; new labour laws are designed to wipe out sweatshops but bring higher costs, which squeeze many companies. Manufacturers have already fled inland to cheaper provinces, in many cases encouraged by Guangdong authorities, who hoped to move the province up the value chain ? condensing 200 years of western industrial history into fewer than 15. "We have a policy to empty the cage for the new birds," Guangdong's vice-governor, Wan Qingliang, told reporters this month. "The ultimate target is to build the Pearl River Delta into the core region of modern manufacturing."Others are unsure of the wisdom of the policy in the face of a worldwide downturn."Places like Guangdong miscalculated the development of the economy. They actually tried to push those labour intensive and small and medium sized enterprises out of the [established industrial] area because they wanted hi-tech industries there. But when something bad happens, like the economic downturn, what are they going to do?" said Paik. He acknowledges that numerous East Asian economies, such as Japan, have moved up the value chain in just the same way; and that the Chinese government deserves to be confident, given its economic record."But they haven't experienced a serious economic downturn except right after 1989 and have been overconfident in their policy of the quick transformation of industrial structure toward hi-tech in Guangdong," he cautioned.The risk is that officials push the city off the economic ladder rather than up it. Whether new subsidies, export tax rebates and other support for small businesses can save them remains to be seen.Yet China's rising living standards in the 30 years since economic reforms were launched has left most people optimistic about its long-term prospects. Migrant workers returning home think they may come back in a few years. A security guard at the shuttered Smart Union plant is plotting out his course to university. "If we compare the situation to when I first arrived, I have already found my pot of gold," said Li, the factory manager."But I can still see it's just the beginning."Additional research by Chen ShiChinaManufacturing sectorMarket turmoilguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Developing world set to overtake the west, PWC argues
The looming global recession will trigger a dramatic shift in the economic balance of power to the emerging world that could see the west lose the dominance it has enjoyed since the dawning of the industrial age, according to one of Britain's leading consultancy firms.Calculations by PricewaterhouseCoopers suggest that the lopsided nature of the downturn means the developed world may have only five years left before it is overtaken by developing countries led by China and India.John Hawksworth, chief economist at PWC, said emerging market economies were likely to be hit much less hard by the global recession than the west, and were on course to account for more than 50% of world GDP by 2013 once the lower cost of living in poorer countries was taken into account.After their rapid growth in the past decade, emerging economies currently account for 43.7% of global output using the purchasing power parity measure of GDP. PWC projects that this will rise to 50.2% within five years. China is expected to grow by 9% a year on average between 2009 and 2013, with India only a little way behind with 8% growth rates. By contrast, the US, the euro area and the UK are projected to grow by just over 2% a year."It is striking that such a significant shift in world GDP share from advanced economies to emerging economies could occur within as little as five years, and that from 2013 more than half of world GDP could come from these high growth countries."According to the PWC calculations, the US would remain the world's biggest economy but its share of global GDP would decline from 21.3% now to 18.8%. China is on course to overtake the euro area as the world's second biggest economy, while India would be challenging Japan for fourth place. On current trends Britain would see its slice of world output drop from 3.3% to 2.9% and be overtaken in the international league table by Russia. Between them the four so-called Brics - Brazil, Russia, India and China - would account for 26.5% of global GDP."The Russian projection based on IMF forecasts may now seem somewhat optimistic in the light of events of the last few weeks, but the same could be said of the UK growth projections given the third quarter GDP data released last week", Hawksworth said.Purchasing power parity is a way of adjusting GDP to take account of the fact that the same good varies in price between countries, with a US dollar buying four or five times as much in China or India as it does in America. PWC said the global share of GDP for emerging economies would be significantly lower using market exchange rates rather than PPPs, although their share would still be rising rapidly.Global recessionGlobal economyCredit crunchguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
The looming global recession will trigger a dramatic shift in the economic balance of power to the emerging world that could see the west lose the dominance it has enjoyed since the dawning of the industrial age, according to one of Britain's leading consultancy firms.Calculations by PricewaterhouseCoopers suggest that the lopsided nature of the downturn means the developed world may have only five years left before it is overtaken by developing countries led by China and India.John Hawksworth, chief economist at PWC, said emerging market economies were likely to be hit much less hard by the global recession than the west, and were on course to account for more than 50% of world GDP by 2013 once the lower cost of living in poorer countries was taken into account.After their rapid growth in the past decade, emerging economies currently account for 43.7% of global output using the purchasing power parity measure of GDP. PWC projects that this will rise to 50.2% within five years. China is expected to grow by 9% a year on average between 2009 and 2013, with India only a little way behind with 8% growth rates. By contrast, the US, the euro area and the UK are projected to grow by just over 2% a year."It is striking that such a significant shift in world GDP share from advanced economies to emerging economies could occur within as little as five years, and that from 2013 more than half of world GDP could come from these high growth countries."According to the PWC calculations, the US would remain the world's biggest economy but its share of global GDP would decline from 21.3% now to 18.8%. China is on course to overtake the euro area as the world's second biggest economy, while India would be challenging Japan for fourth place. On current trends Britain would see its slice of world output drop from 3.3% to 2.9% and be overtaken in the international league table by Russia. Between them the four so-called Brics - Brazil, Russia, India and China - would account for 26.5% of global GDP."The Russian projection based on IMF forecasts may now seem somewhat optimistic in the light of events of the last few weeks, but the same could be said of the UK growth projections given the third quarter GDP data released last week", Hawksworth said.Purchasing power parity is a way of adjusting GDP to take account of the fact that the same good varies in price between countries, with a US dollar buying four or five times as much in China or India as it does in America. PWC said the global share of GDP for emerging economies would be significantly lower using market exchange rates rather than PPPs, although their share would still be rising rapidly.Global recessionGlobal economyCredit crunchguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Seumas Milne: The truth about South Ossetia
So now they tell us. Two months after the brief but bloody war in the Caucasus which was overwhelmingly blamed on Russia by western politicians and media at the time, a serious investigation by the BBC has uncovered a very different story. Not only does the report by Tim Whewell ? aired this week on Newsnight and on Radio 4's File on Four - find strong evidence confirming western-backed Georgia as the aggressor on the night of August 7. It also assembles powerful testimony of wide-ranging war crimes carried out by the Georgian army in its attack on the contested region of South Ossetia.They include the targeting of apartment block basements ? where civilians were taking refuge ? with tank shells and Grad rockets, the indiscriminate bombardment of residential districts and the deliberate killing of civilians, including those fleeing the South Ossetian capital of Tskinvali. The carefully balanced report ? which also details evidence of ethnic cleansing by South Ossetian paramilitaries ? cuts the ground from beneath later Georgian claims that its attack on South Ossetia followed the start of a Russian invasion the previous night. At the time, the Georgian government said its assault on Tskinvali was intended to "restore constitutional order" in an area it has never ruled, as well as to counter South Ossetian paramilitary provocations. Georgian intelligence subsequently claimed to have found the tape of an intercepted phone call backing up its Russian invasion story ? but even Georgia's allies balk at a claim transparently intended to bolster its shaky international legal position .Naturally the man who ordered the Georgian invasion of South Ossetia, president Mikheil Saakashvili, denies the war crimes accusations. But what of his Anglo-American sponsors, who insisted at the time that "Russian aggression must not go unanswered"? British foreign secretary David Miliband now accepts Georgia was "reckless" and says he treats the war crimes allegations "extremely seriously". US assistant secretary of state, Daniel Fried, meanwhile concedes Georgia's attack on Tskhinvali was "wrong on several levels", but feels that discussion of its war crimes is "not terribly useful".In the wake of the Georgian attack, Russian troops moved into Georgia proper, destroying Georgian military facilities used to mount the original assault ? and inflicting their own civilian casualties in the process, notably in Gori. Earlier this month they pulled back from their Georgian buffer zone into now nominally-independent South Ossetia. At the start of the August conflict, western media reporting was relatively even-handed, but rapidly switched into full-blown cold war revival mode as Russia turned the tables on the US's Georgian client regime and Nato expansion in the region. Clear initial evidence of who started the war and Georgian troops' killing spree in Tskhinvali was buried or even denied in a highly effective PR operation from Tbilisi.Within a week, the former Foreign Office special adviser David Clark was for example accusing me on Comment is free of making an "important error of fact" by stating that "several hundreds civilians" had been killed by Georgian forces in Tskhinvali. I based that on several reports, including in the Observer. Clark insisted there was "no independent support for this claim". But, as reported by the BBC this week, Human Rights Watch now regards the figure of 300-400 civilian dead in Tskhinvali as a "useful starting point". Meanwhile, with the exception of a small item in the Independent, Whewell's significant new evidence about what actually took place in a conflict likely to have far-reaching strategic consequences has been simply ignored by the rest of the mainstream media.RussiaGeorgiaguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
So now they tell us. Two months after the brief but bloody war in the Caucasus which was overwhelmingly blamed on Russia by western politicians and media at the time, a serious investigation by the BBC has uncovered a very different story. Not only does the report by Tim Whewell ? aired this week on Newsnight and on Radio 4's File on Four - find strong evidence confirming western-backed Georgia as the aggressor on the night of August 7. It also assembles powerful testimony of wide-ranging war crimes carried out by the Georgian army in its attack on the contested region of South Ossetia.They include the targeting of apartment block basements ? where civilians were taking refuge ? with tank shells and Grad rockets, the indiscriminate bombardment of residential districts and the deliberate killing of civilians, including those fleeing the South Ossetian capital of Tskinvali. The carefully balanced report ? which also details evidence of ethnic cleansing by South Ossetian paramilitaries ? cuts the ground from beneath later Georgian claims that its attack on South Ossetia followed the start of a Russian invasion the previous night. At the time, the Georgian government said its assault on Tskinvali was intended to "restore constitutional order" in an area it has never ruled, as well as to counter South Ossetian paramilitary provocations. Georgian intelligence subsequently claimed to have found the tape of an intercepted phone call backing up its Russian invasion story ? but even Georgia's allies balk at a claim transparently intended to bolster its shaky international legal position .Naturally the man who ordered the Georgian invasion of South Ossetia, president Mikheil Saakashvili, denies the war crimes accusations. But what of his Anglo-American sponsors, who insisted at the time that "Russian aggression must not go unanswered"? British foreign secretary David Miliband now accepts Georgia was "reckless" and says he treats the war crimes allegations "extremely seriously". US assistant secretary of state, Daniel Fried, meanwhile concedes Georgia's attack on Tskhinvali was "wrong on several levels", but feels that discussion of its war crimes is "not terribly useful".In the wake of the Georgian attack, Russian troops moved into Georgia proper, destroying Georgian military facilities used to mount the original assault ? and inflicting their own civilian casualties in the process, notably in Gori. Earlier this month they pulled back from their Georgian buffer zone into now nominally-independent South Ossetia. At the start of the August conflict, western media reporting was relatively even-handed, but rapidly switched into full-blown cold war revival mode as Russia turned the tables on the US's Georgian client regime and Nato expansion in the region. Clear initial evidence of who started the war and Georgian troops' killing spree in Tskhinvali was buried or even denied in a highly effective PR operation from Tbilisi.Within a week, the former Foreign Office special adviser David Clark was for example accusing me on Comment is free of making an "important error of fact" by stating that "several hundreds civilians" had been killed by Georgian forces in Tskhinvali. I based that on several reports, including in the Observer. Clark insisted there was "no independent support for this claim". But, as reported by the BBC this week, Human Rights Watch now regards the figure of 300-400 civilian dead in Tskhinvali as a "useful starting point". Meanwhile, with the exception of a small item in the Independent, Whewell's significant new evidence about what actually took place in a conflict likely to have far-reaching strategic consequences has been simply ignored by the rest of the mainstream media.RussiaGeorgiaguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Japan's air force chief faces sack over second world war comments
The chief of staff of Japan's air force is to be sacked after he claimed the country had been drawn into the second world war by the US and denied it had been an aggressor during its occupations of the Asian mainland.In an essay entitled "Was Japan an Aggressor Nation?" General Toshio Tamogami claimed that Japan had been provoked by the then US president, Franklin D Roosevelt, and that many of Japan's wartime victims took "a positive view" of its actions.The claims, made today in an online essay, drew a swift rebuke from senior politicians.The defence minister, Yasukazu Hamada, said he would dismiss the general immediately. "I think it is improper of the air force chief of staff to publicly state a view that clearly differs from the that of the government," he told reporters."It is inappropriate for him to remain in this position and I will swiftly dismiss him."The prime minister, Taro Aso, a nationalist who has upset Japan's neighbours with ill-judged comments about the war, described Tamogami's views as "inappropriate, even if they were made in a personal capacity".In the essay, which is likely to spark outrage in China and South Korea, Tamogami wrote: "Even now there are many people who think that out country's aggression caused unbearable suffering to the country's of Asia during the Great East Asia War," he said.Japanese nationalists use the term the Great East Asia War to support their view that Japan entered the conflict to free Asian countries from western colonialism."But we need to realise that many Asian countries take a positive view of the [war]. It is certainly a false accusation to say that our country was an aggressor."Tamogami, who took up the post in March 2007, called for Japan to reclaim its "glorious history". He said: "A nation that denies its own history is destined to pursue a path of decline."He said the Korean peninsula had been "prosperous and safe" under Japan's 1910-1945 occupation and that Roosevelt had "trapped" Japan into attacking Pearl Harbour in December 1941. He went on to accuse the then US leader of being a puppet of the Comintern, the international communist movement founded in Moscow in 1919.Tamogami, who did not seek the defence ministry's permission to submit the essay, also shares the view of many neo-nationalists that the Allied war crimes tribunals - which sent several Japanese leaders to the gallows for war crimes - were a farce. But it was his description of Japan as victim, rather than aggressor, that made his position untenable.Japanese leaders, regardless of their personal views, have repeated an official apology to the country's wartime victims issued by the then prime minister, Tomiichi Murayama, in 1995. Aso, too, has said he will stand by Murayama's apology.Though an outspoken critic of China's military spending, Aso has attempted to continue the thaw in relations between Tokyo and Beijing since taking office in September.JapanSecond world warguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
The chief of staff of Japan's air force is to be sacked after he claimed the country had been drawn into the second world war by the US and denied it had been an aggressor during its occupations of the Asian mainland.In an essay entitled "Was Japan an Aggressor Nation?" General Toshio Tamogami claimed that Japan had been provoked by the then US president, Franklin D Roosevelt, and that many of Japan's wartime victims took "a positive view" of its actions.The claims, made today in an online essay, drew a swift rebuke from senior politicians.The defence minister, Yasukazu Hamada, said he would dismiss the general immediately. "I think it is improper of the air force chief of staff to publicly state a view that clearly differs from the that of the government," he told reporters."It is inappropriate for him to remain in this position and I will swiftly dismiss him."The prime minister, Taro Aso, a nationalist who has upset Japan's neighbours with ill-judged comments about the war, described Tamogami's views as "inappropriate, even if they were made in a personal capacity".In the essay, which is likely to spark outrage in China and South Korea, Tamogami wrote: "Even now there are many people who think that out country's aggression caused unbearable suffering to the country's of Asia during the Great East Asia War," he said.Japanese nationalists use the term the Great East Asia War to support their view that Japan entered the conflict to free Asian countries from western colonialism."But we need to realise that many Asian countries take a positive view of the [war]. It is certainly a false accusation to say that our country was an aggressor."Tamogami, who took up the post in March 2007, called for Japan to reclaim its "glorious history". He said: "A nation that denies its own history is destined to pursue a path of decline."He said the Korean peninsula had been "prosperous and safe" under Japan's 1910-1945 occupation and that Roosevelt had "trapped" Japan into attacking Pearl Harbour in December 1941. He went on to accuse the then US leader of being a puppet of the Comintern, the international communist movement founded in Moscow in 1919.Tamogami, who did not seek the defence ministry's permission to submit the essay, also shares the view of many neo-nationalists that the Allied war crimes tribunals - which sent several Japanese leaders to the gallows for war crimes - were a farce. But it was his description of Japan as victim, rather than aggressor, that made his position untenable.Japanese leaders, regardless of their personal views, have repeated an official apology to the country's wartime victims issued by the then prime minister, Tomiichi Murayama, in 1995. Aso, too, has said he will stand by Murayama's apology.Though an outspoken critic of China's military spending, Aso has attempted to continue the thaw in relations between Tokyo and Beijing since taking office in September.JapanSecond world warguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Congo: Britain joins international diplomatic effort to end conflict
Britain is joining a growing international diplomatic effort to end the interminable conflict in eastern Congo with the foreign secretary, David Miliband, expected to fly to Goma tomorrow amid increasing questions about the effectiveness of the United Nations peacekeeping mission there.Miliband is travelling with his French counterpart, Bernard Kouchner, to the beleaguered east Congolese town as well as Congo's capital, Kinshasa, and neighbouring Rwanda. They are following in the footsteps of the top US envoy for Africa, Jendayi Frazer, as the EU considers sending forces to the area and the UN appeals for more troops for what is already the largest peacekeeping force in the world.But the visits come amid concern that UN peacekeepers in eastern Congo are effectively fighting a war that government forces are fleeing and in doing so are siding with extremist Hutus responsible for the genocide in neighbouring Rwanda.Critics of the UN operation - and some of its own staff - say the mission is complicating efforts to reach a peace settlement because, instead of pressing the disarmament of all major rebel groups, the UN has effectively taken sides against the Tutsi rebel leader, Laurent Nkunda, on behalf of a government whose own forces are deeply implicated in human rights abuses and more interested in making money from gold smuggling than fighting. The government's army is also allied with exiled Rwandan Hutu rebels.But UN officials in Congo privately say they have been left by the major powers to do an impossible job because of lack of international political will to confront the causes of more than a decade of conflict that has claimed about 5m lives, mostly from disease, and left more than one million as refugees.As tens of thousands fled the latest upsurge in fighting this week, people vented their anger at the UN's inability or failure to fulfil its basic mandate of protecting civilian lives.Residents of Goma stoned UN compounds in the town as Nkunda's forces marched toward the town and government forces fled. Refugees pelted UN convoys with rocks, critically injuring an Indian army officer.In response, the UN secretary general, Ban Ki-moon said peacekeepers in Congo are "doing everything possible to protect civilians and fulfil their mandate in untenable circumstances". One UN official said untenable meant that peacekeepers were expected to fight when the government's own army will not.Alan Doss, the UN envoy to Congo, said the peacekeepers have served with "really great distinction" but that there are not enough of them to fulfil the mandate of protecting the civilian population.The UN has 17,000 troops in Congo. About one-third of them are in North Kivu, the most conflict-riven province, mostly from India.But critics say that more troops are not the answer because the UN has been given a role it cannot fulfil and has become deeply compromised as a result.Neil Campbell, a researcher for the International Crisis Group who recently visited Goma, said it was never feasible to expect the UN to protect civilians outside of a few urban areas given the vastness of eastern Congo and the array of armed groups preying on people."The UN has been projected as the body that's going to bring democracy and stabilisation to the north east of Congo which is completely unrealistic," he said."The problem is the UN has been forced in to fighting by the disintegration of the (government's) army. When I was in Goma, the sense of a lack of discipline and any kind of military cohesion within the armed forces is incredible. This is what you can see has happened in the last few days. It's really been the armed forces that have been running away from the rebels, so the UN has been forced into a role that it wasn't supposed to be taking."After the failure of UN peacekeeping during the Rwandan genocide, the mission to Congo was given a strong mandate to use as much force as deemed necessary to protect civilians. But that has done little to prevent staggering human rights abuses.Human Rights Watch has criticised the UN not only for failing to prevent systematic rape across eastern Congo, where it is effectively a weapon of war and terror, but also for remaining virtually silent about such crimes against humanity.Instead, the UN has concentrated on trying to prevent the various rebel groups from taking over major towns. But in doing so it has been drawn in on one side of the conflict on the grounds that it was defending a democratic government in Kinshasa.But that role was compromised because government forces were often responsible for their own human rights abuses, including murder and rape, and are heavily involved in making money from illegal mining operations.Global Witness recently accused sections of the Congolese army of mining gold and tin in league with the Rwandan Hutu rebel group, the Democratic Front for the Liberation of Rwanda (FDLR), whose leaders are heavily implicated in the 1994 genocide.Some UN peacekeepers have also been accused of involvement in the illegal mining trade and gold smuggling.Congo's president, Laurent Kabila, has also been protecting the FDLR, which controls large parts of eastern Congo, because its forces have proven more willing to fight than his own troops and have gone into combat against Nkunda who has had the backing of Rwanda, at least in the past.All that has left UN forces fighting with, and effectively protecting, not only the illegal mining trade but forces responsible for mass murder in neighbouring Rwanda.UN officials also privately accuse the Congolese army of forcing peacekeepers into action by attacking Nkunda's men forces and then retreating, leaving the UN to defend positions.Campbell says the scramble for control of lucrative mines remains a driving force behind the conflict."Everyone is gaining something from the North Kivu crisis, political or economic interests. There's active collaboration between the army and the FDLR. At the moment the army appears to be doing more of this business activities with the FDLR than actually functioning as the army itself," he said."Nkunda presents himself as being the protector of the Tutsis in North Kivu. He's nothing of the sort. He's not a freedom fighter, his primary goal is economic and political interests. He's supported by Tutsi businessmen in Goma that are using him for their ends. The areas he controls contain mining concessions they receive funds from.""At this stage it's not additional troops that's going to protect civilians. It's international political pressure on Rwanda and Kinshasa to pull Nkunda and the FDLR back and to get the peace agreements underway," he said.CongoUnited NationsDavid MilibandRwandaForeign policyguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Britain is joining a growing international diplomatic effort to end the interminable conflict in eastern Congo with the foreign secretary, David Miliband, expected to fly to Goma tomorrow amid increasing questions about the effectiveness of the United Nations peacekeeping mission there.Miliband is travelling with his French counterpart, Bernard Kouchner, to the beleaguered east Congolese town as well as Congo's capital, Kinshasa, and neighbouring Rwanda. They are following in the footsteps of the top US envoy for Africa, Jendayi Frazer, as the EU considers sending forces to the area and the UN appeals for more troops for what is already the largest peacekeeping force in the world.But the visits come amid concern that UN peacekeepers in eastern Congo are effectively fighting a war that government forces are fleeing and in doing so are siding with extremist Hutus responsible for the genocide in neighbouring Rwanda.Critics of the UN operation - and some of its own staff - say the mission is complicating efforts to reach a peace settlement because, instead of pressing the disarmament of all major rebel groups, the UN has effectively taken sides against the Tutsi rebel leader, Laurent Nkunda, on behalf of a government whose own forces are deeply implicated in human rights abuses and more interested in making money from gold smuggling than fighting. The government's army is also allied with exiled Rwandan Hutu rebels.But UN officials in Congo privately say they have been left by the major powers to do an impossible job because of lack of international political will to confront the causes of more than a decade of conflict that has claimed about 5m lives, mostly from disease, and left more than one million as refugees.As tens of thousands fled the latest upsurge in fighting this week, people vented their anger at the UN's inability or failure to fulfil its basic mandate of protecting civilian lives.Residents of Goma stoned UN compounds in the town as Nkunda's forces marched toward the town and government forces fled. Refugees pelted UN convoys with rocks, critically injuring an Indian army officer.In response, the UN secretary general, Ban Ki-moon said peacekeepers in Congo are "doing everything possible to protect civilians and fulfil their mandate in untenable circumstances". One UN official said untenable meant that peacekeepers were expected to fight when the government's own army will not.Alan Doss, the UN envoy to Congo, said the peacekeepers have served with "really great distinction" but that there are not enough of them to fulfil the mandate of protecting the civilian population.The UN has 17,000 troops in Congo. About one-third of them are in North Kivu, the most conflict-riven province, mostly from India.But critics say that more troops are not the answer because the UN has been given a role it cannot fulfil and has become deeply compromised as a result.Neil Campbell, a researcher for the International Crisis Group who recently visited Goma, said it was never feasible to expect the UN to protect civilians outside of a few urban areas given the vastness of eastern Congo and the array of armed groups preying on people."The UN has been projected as the body that's going to bring democracy and stabilisation to the north east of Congo which is completely unrealistic," he said."The problem is the UN has been forced in to fighting by the disintegration of the (government's) army. When I was in Goma, the sense of a lack of discipline and any kind of military cohesion within the armed forces is incredible. This is what you can see has happened in the last few days. It's really been the armed forces that have been running away from the rebels, so the UN has been forced into a role that it wasn't supposed to be taking."After the failure of UN peacekeeping during the Rwandan genocide, the mission to Congo was given a strong mandate to use as much force as deemed necessary to protect civilians. But that has done little to prevent staggering human rights abuses.Human Rights Watch has criticised the UN not only for failing to prevent systematic rape across eastern Congo, where it is effectively a weapon of war and terror, but also for remaining virtually silent about such crimes against humanity.Instead, the UN has concentrated on trying to prevent the various rebel groups from taking over major towns. But in doing so it has been drawn in on one side of the conflict on the grounds that it was defending a democratic government in Kinshasa.But that role was compromised because government forces were often responsible for their own human rights abuses, including murder and rape, and are heavily involved in making money from illegal mining operations.Global Witness recently accused sections of the Congolese army of mining gold and tin in league with the Rwandan Hutu rebel group, the Democratic Front for the Liberation of Rwanda (FDLR), whose leaders are heavily implicated in the 1994 genocide.Some UN peacekeepers have also been accused of involvement in the illegal mining trade and gold smuggling.Congo's president, Laurent Kabila, has also been protecting the FDLR, which controls large parts of eastern Congo, because its forces have proven more willing to fight than his own troops and have gone into combat against Nkunda who has had the backing of Rwanda, at least in the past.All that has left UN forces fighting with, and effectively protecting, not only the illegal mining trade but forces responsible for mass murder in neighbouring Rwanda.UN officials also privately accuse the Congolese army of forcing peacekeepers into action by attacking Nkunda's men forces and then retreating, leaving the UN to defend positions.Campbell says the scramble for control of lucrative mines remains a driving force behind the conflict."Everyone is gaining something from the North Kivu crisis, political or economic interests. There's active collaboration between the army and the FDLR. At the moment the army appears to be doing more of this business activities with the FDLR than actually functioning as the army itself," he said."Nkunda presents himself as being the protector of the Tutsis in North Kivu. He's nothing of the sort. He's not a freedom fighter, his primary goal is economic and political interests. He's supported by Tutsi businessmen in Goma that are using him for their ends. The areas he controls contain mining concessions they receive funds from.""At this stage it's not additional troops that's going to protect civilians. It's international political pressure on Rwanda and Kinshasa to pull Nkunda and the FDLR back and to get the peace agreements underway," he said.CongoUnited NationsDavid MilibandRwandaForeign policyguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Financial crisis wipes billions off wealth of China's super-rich
Who wants to be a billionaire? More than 40 impoverished Chinese tycoons who have lost their platinum status thanks to the world's financial turmoil.Louis Vuitton, Cartier and Bentley should perhaps be bracing themselves for leaner times. The combined worth of the country's 400 richest people has plummeted by 40%to a mere $173bn (£107bn) since last year, new research has shown.That has slashed the number of Chinese billionaires from 66 in 2007 to just 24. It would have been even lower without the Yuan's rise against the dollar.A 60% plunge in the Chinese stock market and 50% drop in Hong Kong shares has wiped hundreds of millions of dollars off the biggest fortunes.The top 40 lost an even larger proportion of their wealth - $68bn, or 57% - according to Forbes magazine, which compiles the rich list annually.Yang Huiyuan, the real estate heiress who topped last year's list, is the biggest loser. Her net worth dropped a staggering $14bn, leaving her with $2.2bn - enough still to scrape in at third place.Property magnates dominated 2007's list, but the sales have slumped this year, wiping out 98% of Cheung Chung Kiu's fortune. Last year, the boss of developer CC Land, stood at number 26. Now he is outside the top 400."You can't really believe it," said Zhang Xin, who runs another well-known property firm, Soho China. She lost two-thirds of her fortune but clung on to billionaire status with her remaining $1.2bn.Like many she was optimistic about the future, though. "We'll ride with the next wave," she told Forbes.Manufacturing businesses have also suffered, cutting the fortune of Yan Cheung to only $265m. The head of Nine Dragons Paper, China's largest packaging maker, was previously one of only 10 self-made female billionaires in the world.And Larry Yung of Citic Pacific lost more than $500m in a single day.But Zhou Chengjian bucked the trend by climbing 351 places to fifth spot after the listing of his fashion firm boosted his wealth to $2bn.More bad news may be on its way for the newly impecunious. Yesterday the benchmark Shanghai Composite Index slid again on further fears about the economic outlook.But they should put things in perspective by checking their asset sheets from two years ago - when the list boasted only 15 billionaires.ChinaMarket turmoilguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Who wants to be a billionaire? More than 40 impoverished Chinese tycoons who have lost their platinum status thanks to the world's financial turmoil.Louis Vuitton, Cartier and Bentley should perhaps be bracing themselves for leaner times. The combined worth of the country's 400 richest people has plummeted by 40%to a mere $173bn (£107bn) since last year, new research has shown.That has slashed the number of Chinese billionaires from 66 in 2007 to just 24. It would have been even lower without the Yuan's rise against the dollar.A 60% plunge in the Chinese stock market and 50% drop in Hong Kong shares has wiped hundreds of millions of dollars off the biggest fortunes.The top 40 lost an even larger proportion of their wealth - $68bn, or 57% - according to Forbes magazine, which compiles the rich list annually.Yang Huiyuan, the real estate heiress who topped last year's list, is the biggest loser. Her net worth dropped a staggering $14bn, leaving her with $2.2bn - enough still to scrape in at third place.Property magnates dominated 2007's list, but the sales have slumped this year, wiping out 98% of Cheung Chung Kiu's fortune. Last year, the boss of developer CC Land, stood at number 26. Now he is outside the top 400."You can't really believe it," said Zhang Xin, who runs another well-known property firm, Soho China. She lost two-thirds of her fortune but clung on to billionaire status with her remaining $1.2bn.Like many she was optimistic about the future, though. "We'll ride with the next wave," she told Forbes.Manufacturing businesses have also suffered, cutting the fortune of Yan Cheung to only $265m. The head of Nine Dragons Paper, China's largest packaging maker, was previously one of only 10 self-made female billionaires in the world.And Larry Yung of Citic Pacific lost more than $500m in a single day.But Zhou Chengjian bucked the trend by climbing 351 places to fifth spot after the listing of his fashion firm boosted his wealth to $2bn.More bad news may be on its way for the newly impecunious. Yesterday the benchmark Shanghai Composite Index slid again on further fears about the economic outlook.But they should put things in perspective by checking their asset sheets from two years ago - when the list boasted only 15 billionaires.ChinaMarket turmoilguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Ian Williams: Ted Stevens' taste for gifts is emblematic of the state he represents
Ian Williams: While Alaskan officials preach low taxes and fiscal restraint, they continue to dip the till filled by taxpayers of other statesWorld news | guardian.co.uk, 2008-10-31 22:05:05
Ian Williams: While Alaskan officials preach low taxes and fiscal restraint, they continue to dip the till filled by taxpayers of other statesWorld news | guardian.co.uk, 2008-10-31 22:05:05
Pakistan says 27 dead in suspected US missile strikes
At least 27 killed in two suspected US missile strikes, say Pakistani officialsWorld news | guardian.co.uk, 2008-10-31 22:05:05
At least 27 killed in two suspected US missile strikes, say Pakistani officialsWorld news | guardian.co.uk, 2008-10-31 22:05:05
Chill winds blow through China's manufacturing heartland
The dislocated head of a baby doll stares blindly through the gate; WALL-E and Barbie Pet Doctor boxes are strewn across the yard. Two weeks ago, toymaking giant Smart Union was churning out goods for children across the United States and Europe. Now it is in liquidation and 7,000 former employees are in shock. "One day we went to work as usual, the next it was all closed," said Wei Sunying, gazing through the barred gate of the factory in Dongguan in southern China where she spent eight years painting plastic components in a fume-filled room."Thousands of us are looking for jobs now. We walk around every day till our feet ache but we can't find anything."Few in the west have heard of Dongguan, but the chances are that your shoes, your TV or your children's toys originated here. Exports have built a city of up to 14 million inhabitants ? twice the population of Greater London ? almost all migrant workers from the countryside. Its economy has grown 15% annually in recent years. Now the global financial and economic crisis is proving the final straw for exporters already punished by rising costs and a stronger currency. In the last year, chill winds have blown through the baking Pearl River Delta. Sixty-seven thousand small and medium-sized businesses in China collapsed in the first half of 2008, many in these manufacturing heartlands, says the national economic planning body. Toy firms have been particularly badly hit, thanks to safety scares and product recalls. Textile firms, with wafer-thin margins, are also reeling. Next came tighter credit for many foreign-owned firms, such as Hong Kong's Smart Union. And then, in the last two months, a sharp drop in US and European demand as consumers reined in spending. A local trade association predicts that by the end of January, Dongguan and its neighbours Shenzhen and Guangzhou will lose 9,000 of their 45,000 factories. "Many factories are looking at completely empty order books," warned Stephen Green, head of China research at Standard Chartered, who believes the export sector will be stagnant and could even shrink next year.Green predicts that China will grow 7.9% next year ? well below the double-digit figures enjoyed over the last half decade ? while others suggest it could fall closer to 7%.That sounds enviable to western countries facing recession. But with the working age population still growing, China needs at least 8% growth to maintain the current employment rate. And the fall-out will be highly concentrated in provinces such as Guangdong."The social impact of this is going to be huge. The problems are getting bigger and bigger," said Wooyeal Paik, who is researching Dongguan's industry and migrant workforce at the University of California at Los Angeles."Impromptu protests by disgruntled workers left jobless and without pay are becoming more common; they have resorted to petitioning local officials for backpay because they have few other ways to remonstrate and be compensated."They will complain more and they will go to local government offices more... You will see demonstrations and picketing. And probably there's a risk of violence against bosses ? especially foreigners."Dongguan's government stepped in to reimburse the Smart Union workers to the tune of 24,000 yuan (£2.2m) after thousands gathered at the factory gates and outside local authority offices.But two months' back pay ? 1200 yuan for most ? will not last long. There is no redundancy package and a lawsuit by workers appears to have limited prospects of success.Wei, from Guizhou, is one of many struggling to find new work. Even if she could read the job adverts, most ask for recruits under 35; she is just over 40. "I came here as a migrant worker because my children need money for schooling," she said. "Now I can't support my children. I don't even have enough money to get back home and it's expensive to stay here."Even job offers aren't always what they seem, said 26-year-old Fang Jianlin, whose friends were recently conned. "Recruiters told them the conditions and the salaries were very good, but on the way to the place they were asked for money. They got robbed; some were even beaten," he said.Smart Union was such a popular employer that Fang paid a hefty "introduction fee" to win his job there. At worst, he and his wife would earn around 600 yuan a month; at the busiest times, when production ran until 2am, they could take home 2,100 yuan each. But he and his wife will return to his village in Sichuan in a few days, where his parents are rearing their children, unless new work turns up. They are not sure how they will support the family, but cannot afford the 50 yuan a day in rent, food and transport to stay here.It's a sobering end to the dream which lures millions of workers to Dongguan each year, where they struggle and study their way towards the promise of a regular income; perhaps even a place in the burgeoning middle classes. At the city's night schools, thousands of workers end their long days with classes on everything from car maintenance to law.Bob Li is one of the area's success stories. He arrived in 1995 as a casual labourer. "Everyone in my hometown had heard Guangdong was covered in gold," he said.Now he manages a factory for Richall, which supplies durable bags to companies such as Walmart, Carlsberg and Disney. Twenty-five thousand totes for Tesco are stacked up awaiting delivery.But he is unnerved by the economic downturn."These days it is getting more and more difficult for factories like us," he said, citing the cost of wages and materials. "The exchange rate is already a huge issue here; people are losing interest. The price of our materials has risen because they're made from oil... Taken together, costs have risen by 30%-40%."To some extent, Dongguan has become a victim of its own success. The rising prosperity of the region has created inflationary pressures. Workers want higher wages; new labour laws are designed to wipe out sweatshops but bring higher costs, which squeeze many companies. Manufacturers have already fled inland to cheaper provinces, in many cases encouraged by Guangdong authorities, who hoped to move the province up the value chain ? condensing 200 years of western industrial history into fewer than 15. "We have a policy to empty the cage for the new birds," Guangdong's vice-governor, Wan Qingliang, told reporters this month. "The ultimate target is to build the Pearl River Delta into the core region of modern manufacturing."Others are unsure of the wisdom of the policy in the face of a worldwide downturn."Places like Guangdong miscalculated the development of the economy. They actually tried to push those labour intensive and small and medium sized enterprises out of the [established industrial] area because they wanted hi-tech industries there. But when something bad happens, like the economic downturn, what are they going to do?" said Paik. He acknowledges that numerous East Asian economies, such as Japan, have moved up the value chain in just the same way; and that the Chinese government deserves to be confident, given its economic record."But they haven't experienced a serious economic downturn except right after 1989 and have been overconfident in their policy of the quick transformation of industrial structure toward hi-tech in Guangdong," he cautioned.The risk is that officials push the city off the economic ladder rather than up it. Whether new subsidies, export tax rebates and other support for small businesses can save them remains to be seen.Yet China's rising living standards in the 30 years since economic reforms were launched has left most people optimistic about its long-term prospects. Migrant workers returning home think they may come back in a few years. A security guard at the shuttered Smart Union plant is plotting out his course to university. "If we compare the situation to when I first arrived, I have already found my pot of gold," said Li, the factory manager."But I can still see it's just the beginning."Additional research by Chen ShiChinaManufacturing sectorMarket turmoilguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 21:05:04
The dislocated head of a baby doll stares blindly through the gate; WALL-E and Barbie Pet Doctor boxes are strewn across the yard. Two weeks ago, toymaking giant Smart Union was churning out goods for children across the United States and Europe. Now it is in liquidation and 7,000 former employees are in shock. "One day we went to work as usual, the next it was all closed," said Wei Sunying, gazing through the barred gate of the factory in Dongguan in southern China where she spent eight years painting plastic components in a fume-filled room."Thousands of us are looking for jobs now. We walk around every day till our feet ache but we can't find anything."Few in the west have heard of Dongguan, but the chances are that your shoes, your TV or your children's toys originated here. Exports have built a city of up to 14 million inhabitants ? twice the population of Greater London ? almost all migrant workers from the countryside. Its economy has grown 15% annually in recent years. Now the global financial and economic crisis is proving the final straw for exporters already punished by rising costs and a stronger currency. In the last year, chill winds have blown through the baking Pearl River Delta. Sixty-seven thousand small and medium-sized businesses in China collapsed in the first half of 2008, many in these manufacturing heartlands, says the national economic planning body. Toy firms have been particularly badly hit, thanks to safety scares and product recalls. Textile firms, with wafer-thin margins, are also reeling. Next came tighter credit for many foreign-owned firms, such as Hong Kong's Smart Union. And then, in the last two months, a sharp drop in US and European demand as consumers reined in spending. A local trade association predicts that by the end of January, Dongguan and its neighbours Shenzhen and Guangzhou will lose 9,000 of their 45,000 factories. "Many factories are looking at completely empty order books," warned Stephen Green, head of China research at Standard Chartered, who believes the export sector will be stagnant and could even shrink next year.Green predicts that China will grow 7.9% next year ? well below the double-digit figures enjoyed over the last half decade ? while others suggest it could fall closer to 7%.That sounds enviable to western countries facing recession. But with the working age population still growing, China needs at least 8% growth to maintain the current employment rate. And the fall-out will be highly concentrated in provinces such as Guangdong."The social impact of this is going to be huge. The problems are getting bigger and bigger," said Wooyeal Paik, who is researching Dongguan's industry and migrant workforce at the University of California at Los Angeles."Impromptu protests by disgruntled workers left jobless and without pay are becoming more common; they have resorted to petitioning local officials for backpay because they have few other ways to remonstrate and be compensated."They will complain more and they will go to local government offices more... You will see demonstrations and picketing. And probably there's a risk of violence against bosses ? especially foreigners."Dongguan's government stepped in to reimburse the Smart Union workers to the tune of 24,000 yuan (£2.2m) after thousands gathered at the factory gates and outside local authority offices.But two months' back pay ? 1200 yuan for most ? will not last long. There is no redundancy package and a lawsuit by workers appears to have limited prospects of success.Wei, from Guizhou, is one of many struggling to find new work. Even if she could read the job adverts, most ask for recruits under 35; she is just over 40. "I came here as a migrant worker because my children need money for schooling," she said. "Now I can't support my children. I don't even have enough money to get back home and it's expensive to stay here."Even job offers aren't always what they seem, said 26-year-old Fang Jianlin, whose friends were recently conned. "Recruiters told them the conditions and the salaries were very good, but on the way to the place they were asked for money. They got robbed; some were even beaten," he said.Smart Union was such a popular employer that Fang paid a hefty "introduction fee" to win his job there. At worst, he and his wife would earn around 600 yuan a month; at the busiest times, when production ran until 2am, they could take home 2,100 yuan each. But he and his wife will return to his village in Sichuan in a few days, where his parents are rearing their children, unless new work turns up. They are not sure how they will support the family, but cannot afford the 50 yuan a day in rent, food and transport to stay here.It's a sobering end to the dream which lures millions of workers to Dongguan each year, where they struggle and study their way towards the promise of a regular income; perhaps even a place in the burgeoning middle classes. At the city's night schools, thousands of workers end their long days with classes on everything from car maintenance to law.Bob Li is one of the area's success stories. He arrived in 1995 as a casual labourer. "Everyone in my hometown had heard Guangdong was covered in gold," he said.Now he manages a factory for Richall, which supplies durable bags to companies such as Walmart, Carlsberg and Disney. Twenty-five thousand totes for Tesco are stacked up awaiting delivery.But he is unnerved by the economic downturn."These days it is getting more and more difficult for factories like us," he said, citing the cost of wages and materials. "The exchange rate is already a huge issue here; people are losing interest. The price of our materials has risen because they're made from oil... Taken together, costs have risen by 30%-40%."To some extent, Dongguan has become a victim of its own success. The rising prosperity of the region has created inflationary pressures. Workers want higher wages; new labour laws are designed to wipe out sweatshops but bring higher costs, which squeeze many companies. Manufacturers have already fled inland to cheaper provinces, in many cases encouraged by Guangdong authorities, who hoped to move the province up the value chain ? condensing 200 years of western industrial history into fewer than 15. "We have a policy to empty the cage for the new birds," Guangdong's vice-governor, Wan Qingliang, told reporters this month. "The ultimate target is to build the Pearl River Delta into the core region of modern manufacturing."Others are unsure of the wisdom of the policy in the face of a worldwide downturn."Places like Guangdong miscalculated the development of the economy. They actually tried to push those labour intensive and small and medium sized enterprises out of the [established industrial] area because they wanted hi-tech industries there. But when something bad happens, like the economic downturn, what are they going to do?" said Paik. He acknowledges that numerous East Asian economies, such as Japan, have moved up the value chain in just the same way; and that the Chinese government deserves to be confident, given its economic record."But they haven't experienced a serious economic downturn except right after 1989 and have been overconfident in their policy of the quick transformation of industrial structure toward hi-tech in Guangdong," he cautioned.The risk is that officials push the city off the economic ladder rather than up it. Whether new subsidies, export tax rebates and other support for small businesses can save them remains to be seen.Yet China's rising living standards in the 30 years since economic reforms were launched has left most people optimistic about its long-term prospects. Migrant workers returning home think they may come back in a few years. A security guard at the shuttered Smart Union plant is plotting out his course to university. "If we compare the situation to when I first arrived, I have already found my pot of gold," said Li, the factory manager."But I can still see it's just the beginning."Additional research by Chen ShiChinaManufacturing sectorMarket turmoilguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 21:05:04
Developing world set to overtake the west, PWC argues
The looming global recession will trigger a dramatic shift in the economic balance of power to the emerging world that could see the west lose the dominance it has enjoyed since the dawning of the industrial age, according to one of Britain's leading consultancy firms.Calculations by PricewaterhouseCoopers suggest that the lopsided nature of the downturn means the developed world may have only five years left before it is overtaken by developing countries led by China and India.John Hawksworth, chief economist at PWC, said emerging market economies were likely to be hit much less hard by the global recession than the west, and were on course to account for more than 50% of world GDP by 2013 once the lower cost of living in poorer countries was taken into account.After their rapid growth in the past decade, emerging economies currently account for 43.7% of global output using the purchasing power parity measure of GDP. PWC projects that this will rise to 50.2% within five years. China is expected to grow by 9% a year on average between 2009 and 2013, with India only a little way behind with 8% growth rates. By contrast, the US, the euro area and the UK are projected to grow by just over 2% a year."It is striking that such a significant shift in world GDP share from advanced economies to emerging economies could occur within as little as five years, and that from 2013 more than half of world GDP could come from these high growth countries."According to the PWC calculations, the US would remain the world's biggest economy but its share of global GDP would decline from 21.3% now to 18.8%. China is on course to overtake the euro area as the world's second biggest economy, while India would be challenging Japan for fourth place. On current trends Britain would see its slice of world output drop from 3.3% to 2.9% and be overtaken in the international league table by Russia. Between them the four so-called Brics - Brazil, Russia, India and China - would account for 26.5% of global GDP."The Russian projection based on IMF forecasts may now seem somewhat optimistic in the light of events of the last few weeks, but the same could be said of the UK growth projections given the third quarter GDP data released last week", Hawksworth said.Purchasing power parity is a way of adjusting GDP to take account of the fact that the same good varies in price between countries, with a US dollar buying four or five times as much in China or India as it does in America. PWC said the global share of GDP for emerging economies would be significantly lower using market exchange rates rather than PPPs, although their share would still be rising rapidly.Global recessionGlobal economyCredit crunchguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 21:05:04
The looming global recession will trigger a dramatic shift in the economic balance of power to the emerging world that could see the west lose the dominance it has enjoyed since the dawning of the industrial age, according to one of Britain's leading consultancy firms.Calculations by PricewaterhouseCoopers suggest that the lopsided nature of the downturn means the developed world may have only five years left before it is overtaken by developing countries led by China and India.John Hawksworth, chief economist at PWC, said emerging market economies were likely to be hit much less hard by the global recession than the west, and were on course to account for more than 50% of world GDP by 2013 once the lower cost of living in poorer countries was taken into account.After their rapid growth in the past decade, emerging economies currently account for 43.7% of global output using the purchasing power parity measure of GDP. PWC projects that this will rise to 50.2% within five years. China is expected to grow by 9% a year on average between 2009 and 2013, with India only a little way behind with 8% growth rates. By contrast, the US, the euro area and the UK are projected to grow by just over 2% a year."It is striking that such a significant shift in world GDP share from advanced economies to emerging economies could occur within as little as five years, and that from 2013 more than half of world GDP could come from these high growth countries."According to the PWC calculations, the US would remain the world's biggest economy but its share of global GDP would decline from 21.3% now to 18.8%. China is on course to overtake the euro area as the world's second biggest economy, while India would be challenging Japan for fourth place. On current trends Britain would see its slice of world output drop from 3.3% to 2.9% and be overtaken in the international league table by Russia. Between them the four so-called Brics - Brazil, Russia, India and China - would account for 26.5% of global GDP."The Russian projection based on IMF forecasts may now seem somewhat optimistic in the light of events of the last few weeks, but the same could be said of the UK growth projections given the third quarter GDP data released last week", Hawksworth said.Purchasing power parity is a way of adjusting GDP to take account of the fact that the same good varies in price between countries, with a US dollar buying four or five times as much in China or India as it does in America. PWC said the global share of GDP for emerging economies would be significantly lower using market exchange rates rather than PPPs, although their share would still be rising rapidly.Global recessionGlobal economyCredit crunchguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More FeedsWorld news | guardian.co.uk, 2008-10-31 21:05:04