Flock — The web browser for you and your friends
I’m experimenting with yet another browser. This one is called Flock. It claims to be a “social browser” and looks extremely promising. As you’re surfing, a right-click (apparently on anything, like this graphic from their home page) brings up an option to “Blog This.”Blogged with Flock
The AFL-CIO, the American labor union federation, has filed a complaint against Chinese labor practices.
The full petition is here in a PDF format. An AFL-CIO web page with links to sections of the petition and additional material about the union’s efforts to save “US jobs” and help “our Chinese brothers and sisters” is here.
The complaint is submitted under Section 301 of the Trade Act of 1974. The Bush Administration has 45 days to respond to the petition. It rejected a similar one two years ago. It will do so again.
I am going to read the AFL-CIO petition, but I already know I agree with the AFL-CIO that Chinese workers need stronger rights. Chinese workers cannot organize independent labor unions. This in a so-called communist country. That ain’t right.
No doubt many Chinese workers are abused and exploited.
NGO and consumer pressure can be enormously helpful in boosting good labor practices, so it is great that the AFL-CIO wants to help its “Chinese brothers and sisters.”
But will improving workers’ rights in China overcome the economic logic that causes some types of jobs to move to China?
No.
The “Chinese brothers and sisters” most in need of help (and brothers and sisters in Africa and other poor parts of the world) are often the ones still down on the farms, where there’s little cash income and, even in ostensibly socialist China, no social security system or substantial government help for the teeming masses.
China (and India) will have vast amounts of cheap labor even with vastly improved worker’s rights. Cheap Chinese-made stuff will continue to find willing buyers.
In my experience multi-national corporations run some of the safest, cleanest factories in China (and many try to police their suppliers, too).
Many foreign investors (direct and otherwise) profit enormously from the differences between China’s low costs and high prices in the rich countries.
Is the overall process yielding improved living standards in the world (in both richer and poorer countries), or is it going to drag us all down to an abysmal Chinese per capita income level? I expect and obviously hope for the former, but I’ll admit my optimism is somewhat predicated on faith. But I am sure I trust markets more than I trust government planners and vested interests (capital or labor) to deliver a better world.
Clearly, as this transformation continues to move forward, the externalities, as the economists like to say, are going to cause all kinds of frictions. James Kynge, former head of the Financial Times‘ bureau in Beijing, has a worthwhile book out that contemplates just this subject—China Shakes the World: The Rise of a Hungry Nation).
A New York Times report on the AFL-CIO petition is here.
The Times story quotes someone who notes that the petition appears timed to affect upcoming mid-term Congressional elections.
The China Labor Watch blog (blocked, of course, in China), is a wealth of information on the struggle of PRC workers.
This article from the China Business Review also contains helpful information and links.
China’s intake of foreign direct investment (FDI) last year was even larger than first thought, once you take account of the nearly US$ 12 billion in investment in the financial sector (banking, securities and insurance), according to Vice Minister of Commerce Ma Xiuhong.
A China Daily story in English on revision of the FDI stats is here; a Chinese version is here.
Beijing-based China CAMC Engineering (中工国际 Zhong Gong Guoji), the first IPO out of the gate since the PRC mainland ended it’s year-long ban on IPOs, has been warmly welcomed by investors—it’s 576 times oversubscribed.
Historically shares in China do initially “pop” above their issuance prices. Those issuance prices are set, some would say artificially depressed, with “guidance” from the CSRC. Thus, investing in any mainland IPO usually guarantees a good return (hence the enthusiasm for subscribing to them). In fact, when China’s markets “violently fell” (暴跌, baodie) on Wednesday of this week, some blamed the fall on the announcement that the Bank of China was applying for an A-share listing or blamed other rumored IPOs. There idea is that everybody will sell shares (depressing prices) to raise capital to enter these IPO lotteries (you have to deposit cash in advance to have a shot at getting shares in an IPO).
China Daily reports on CAMC’s success here, and Mark O’Neil reports here on this and other recent market developments for the South China Morning Post (sub. required).
Last week I noted reports that CAMC and two other firms that will be among the first to list now that mainland China’s IPO drought is over.
Jamil Adnerlini reports in the South China Morning Post that China may liquidate or convert closed-end investment funds (which have set maturity dates but are publicly traded) to open-ended funds (which, like mutual funds, can take in new capital anytime and could go on forever). If true, this presents an arbitrage opportunity since most closed-end funds, as Adnerlini notes, “trade at an average discount of about 34 per cent to their net asset value.”
Any more questions about why they call China’s stock markets policy markets?
Fan Fuchun, a vice-chairman of the CSRC, says that looting of listed companies will become a crime when China’s Criminal Law is amended in the second half of this year.
Fan made the comments in a speech reported in the Chinese press here. The occasion was a training session for CEOs and board chairmen of listed companies.
As I’ve previously noted, the CSRC is campaigning to have misappropriated funds returned to listed companies.
The PRC Company Law as revised in 2005 allows for shareholder derivative suits. That might provide a civil remedy to augment the promised criminal remedy for looting by controlling shareholders, but the combination of 1) local government control of local courts and 2) local government ownership of listed firms may mitigate the efficacy of all these efforts.
