China Reform Monitor: No. 1052

August 4:

An increasing number of Chinese are working in Russia under poor conditions because “the urbanization process at home deprived them of their farmland,” according to an expose in the official Xinhua news agency. It documents two labor disputes between Chinese workers and Russian contractors: the first case concerned 25 workers from Hubei and the second 61 from Heilongjiang. After arriving in Russia the Hubei group soon found themselves working over 13 hours a day in “conditions far below their expectations.” They called back to China and their local public security bureau contacted the Chinese consulate in Russia, which intervened on their behalf and got them a raise. The Heilongjiang workers were not as fortunate. After they went on strike the Russian contractor chased them from the site into the mountains then sent them back to China.

August 6:

A Tibetan monk set himself on fire in Katmandu, Nepal near the Boudhanath shrine to protest China’s rule over Tibet. The monk was rushed to the hospital where he is in critical condition. Thousands of Tibetan refugees live in Nepal, many near Boudhanath, which is surrounded by Buddhist monasteries. This was the second self-immolation of a Tibetan in Nepal this year. More than 100 Tibetans have self-immolated in their ancestral homeland or nearby Chinese regions since 2009 to protest Chinese rule or call for the Dalai Lama’s return, the Associated Press reports.

August 9:

Authorities are seeking to further enlist public support “in the people’s war against corruption” according to an editorial in the official Global Times. “Protecting whistleblowers is the best way to encourage real-name tip-offs, so that the public could contribute to anti-corruption efforts without fear.” The article called for “legal and regulatory mechanisms under which revenge against whistleblowers is severely punished, whistleblowers who have been victims of retaliation meet with immediate assistance and those whose tip-offs prove true should be rewarded.” It also called on authorities to immediately investigate cases that include tip-offs and ensure the confidentiality of whistleblowers’ personal information.

August 14:

Taiwan’s President Ma Ying-jeou has finished his New York visit and is headed for Paraguay and the Caribbean all without triggering a protest from Beijing. During his 40-hour “transit visit” Ma had breakfast with Mayor Michael Bloomberg who said the U.S. was lucky to have an ally like Taiwan. Next Ma met with chairman of the U.S. House of Representatives Foreign Affairs Committee Ed Royce and ranking committee member Eliot Engel. He also visited the site of the September 11 attacks, toured his alma mater New York University, and met with business executives and Chinese-American communities. Afterward Ma touted the “continued success” of his flexible diplomacy on Facebook. In Paraguay Ma attended the presidential inauguration of Horacio Cortes before visiting Taiwan’s four Caribbean allies Haiti, St Lucia, St Vincent and the Grenadines and St Christopher and Nevis, the SCMP reports.

August 15:

As economic growth has slowed, China has seen “rising defaults on loans made outside the conventional banking system, chronic overcapacity in many industries like coal mining and steel production and a sharp decline in previously debt-fueled prices for real estate and other assets,” the New York Times reports. In Shenmu, Shaanxi, previously a coal boomtown, “thousands of businesses have closed, fleets of BMWs and Audis have been repossessed and street protests have erupted.” Although Beijing and Shanghai seem less affected, similar troubles are afflicting the entire economy, particularly in areas linked to commodities like coal with falling prices. When defaults began early this year, informal sector lenders raised interest rates for small businesses, previously 25-40 percent a year, to as much as 125 percent. That move precipitated a larger wave of defaults as borrowers failed to repay billions in bad debts, many hard to enforce in court. In turn credit has quickly dried up. “Almost no one will give you a loan,” said a construction executive outside one halted project in Shenmu.

[Editor’s Note: State-owned banks lend only at low, regulated rates barely above inflation, overwhelmingly to large state-owned businesses, government officials and politically connected individuals, who then relend the money at much higher interest rates to small and medium-size businesses in the private sector that need money to grow.]