Tuesday, October 21, 2008

The China crisis

The Shanghai Composite has lost 3000 points in 2008

China's economic growth rate has fallen for the third quarter in succession, and there are fears that the economy could be heading for a severe downturn. The National Bureau of Statistics said the economy had grown at a rate of 9% in the three months to September, down from 10.1% over the previous quarter [BBC]. Many workers are concerned for there jobs across the continent and thousands have already been made unemployed. More than 50% of toy factories have closed in the last year, partly brought about by a lack of demand, but also due to concerns over safety issues. This has itself brought protests outside factories by disgruntled workers [BBC]. Effects of the credit crunch, which has mainly affected Western banks and financial institutions, is now being felt across many parts of Asia [BBC].

And with China having stretched itself well beyond its borders, there are likely to be many difficulties ahead. The country has invested heavily in many African countries and draws heavily from the continent in natural resources such as copper and oil. But it doesn’t come without risks. In Sudan, 9 oil workers abducted along with their Sudanese drivers. A note was later passed to authorities by the kidnappers demanding that Sudan’s people received a greater share of the country’s oil wealth [BBC]. Dozens of Chinese oil workers have been targeted in the past few years as revolutionary groups call on governments to share the profits amongst the indigenous population. Oil workers in Nigeria have been targeted many times. In 2007 more than 100 foreigners were kidnapped by radical groups amongst them several Chinese nationals [BBC].
Despite the risks and the criticism directed at China by environmental and human rights groups, the Chinese government has not been dissuaded from setting up foreign deals.

In fact this week it was announced that China would help Pakistan build two nuclear power stations. With the continuing political instability in the country, the decision will raise safety concerns especially in Washington [BBC]. Over the last few months Pakistan has gradually drifted away as an ally in the War on Terror. US air strikes near to the Pakistan-Afghan border have not helped matters, and there have been strong words exchanged from both sides. In September there were reports that Pakistani troops had opened fire to prevent US forces from operating inside Pakistan. And after a US drone crashed there were suggestions that Pakistan’s military were responsible, though this was officially denied by both sides [BBC].

Back in China, and the fall out from the milk scandal continues. Thousands of parents are demanding answers and compensation from the Chinese government, and there is anger that authorities failed to act quickly enough to prevent the crisis spiralling out of control [BBC]. Even statements by Premier Wen, who said this week that the government was “partly responsible” for the milk scandal, have failed to placate the parents of sick children [BBC]. Melamine, the substance responsible for killing 4 babies and sickening thousands has previously been found in pet food exported to America. Hundreds of animals fell sick and dozens died. But melamine contamination continues even now. Today it was revealed that 1,500 dogs being bred at a fur farm in Liaoning province had been poisoned with melamine contaminated food [BBC].
Health concerns have prompted new measures aimed at improving medical care across the country. Many critics say that health care in China fails to address the needs of China’s sick. Health reforms were announced by authorities earlier this year [BBC], but the Lancet magazine has suggested the proposals are too little and are not being implemented fast enough. Many cannot gain access to proper health care and those that can are often unable to pay for treatment. Bill Summerskill, the Lancet's executive editor, told the BBC that the current system was not working.
"More than half the money comes out of pocket. And if people end up in hospital, the average hospitalisation is greater than an average person's wage. China is facing a real problem with this new phenomenon of health poverty. Where people either can't afford to get the care or else, having received the care, are then bankrupted by it," Summerskill said [BBC].

Many problems in China are often brought about by corruption and this week saw the latest conviction in China’s attempt to clean up such activity. Liu Zhihua was convicted by a court in Hebei province of taking $1,020,000 (£589,000) in bribes while in charge of building venues for the Olympic Games. The ex-Beijing vice-mayor received a suspended death sentence. A suspended death penalty in China is normally commuted to life imprisonment on condition of good behaviour [BBC]. Reporting on Liu's prosecution was restricted in the months leading up to the Olympics in order to avoid tarnishing the state's image. This despite a relaxation on rules governing the actions of journalists. Last week China announced it was to make permanent the rules governing foreign media. But reporting in China is still difficult despite the relaxed rules [BBC].

But there was one report which was widely reported in China this week. A court in Shanghai rejected the appeal by police killer Yang Jia. He was accused of going on a killing spree, apparently in revenge for maltreatment by police who arrested him on suspicion of stealing a bicycle. Yang Jia launched an attacked on a Shanghai police station throwing a petrol bomb and stabbing several police officers, killing six and injuring four others. Bizarrely the case prompted some to declare Yang Jia a ‘hero’ on some internet forums. Outside court, one member of the public told a Western reporter, "He represents the people's power. And we don't have it" [BBC].

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