Insights & More

China ‘Shocked’ Australian Mining Companies Don’t Take Bribes

By Victoria Clarke
Epoch Times Staff

An unnamed former Australian senator has declared that China’s mining companies are “shocked” by the lack of bribery in the Australian mining industry.

According to a series of emails published by Wikileaks on Feb. 27, the former Australian senator—dubbed “source CN65″—describes China’s mining sector as deeply corrupt.

The emails were an exchange between the senator and Stratfor—an international intelligence analysis company. Stratfor provides daily intelligence, security, and financial briefings to clients, including the Australian Defense Force.

The Senator stated, “Where foreign companies do get access to tenements, they always seem to lose out because the mining sector in China is one of the most corrupt sectors of all.”

The former senator then went on to state: “They simply cannot get it in their heads that the rule of law applies to mining projects in Australia. They refuse to believe that they have a right to receive a mining lease subject only to complying with relevant environmental permitting conditions. They think you have no credibility unless you tell them that you need to bribe someone.”

Bribery, or “guanxi” as it is known in China, is a common problem. In 2010, four officials of an Australian-based mining company Rio Tinto were arrested in China and reportedly admitted taking bribes of over $10 million.

The leaked information was part of a Wikileaks release of The Global Intelligence Files. Over five million emails from the Texas headquartered Stratfor were made public. The emails date between July 2004 and late December 2011.

The emails show Stratfor’s web of informers, pay-off structure, payment laundering techniques and psychological methods, according to Wikileaks.

via China ‘Shocked’ Australian Mining Companies Don’t Take Bribes | National | Australia | Epoch Times

Charity Donations in China Mostly Go to Official Coffers

By Gao Zitan
Epoch Times Staff

Nearly 60 percent of donations to charities end up in government coffers, according to a recent study.

The “2011 China Charity Contribution Report” was published on Jan. 8 by the China Charity and Donation Information Center of the Ministry of Civil Affairs. The report relates to NGOs in 2010.

As reported by Beijing Times, 58.3 percent of donations go to government offices or organizations affiliated with the regime, such as China Red Cross, while only 1.3 percent of donations have gone to independent charity organizations and nursing homes.

Chen Shuqing, a member of China Democratic Party, was critical over the statitics. Since the Chinese Communist Party (CCP) came to power it has monopolized social activities in the name of governance, he said, including charities. Chen said that the Party treats management of donations to charities as part of the rightful functions of government.

“Among charities, the so called ‘Red Cross’ is only an extension of the Chinese government,” he said. “The donations made by the people to the Red Cross, are actually taken by government. The government manages and distributes these donations without any proper bookkeeping; it’s difficult for people to know where these donations have been used, how much [has been used], and what it has been used on,” Chen said.

He also said that there are a number of charities that appear to be independent but which are actually affiliated with the regime.

While official charities are flush, in January China’s Foundation Center www.foundationcenter.org.cn received a joint letter from seven non-profit NGOs in the Qinba Mountain area in Northwest China, saying that they faced problems of survival.

Out of these seven, six were established around 2000. In the early days of operations, they were supported by foreign funds. But in recent years, international agencies have stopped financial support to Chinese charities. At the same time, there is very little local support.

According to the China Youth Daily, there were about 381,000 NGOs registered in China by the end of 2007—most of them are affiliated with the government. The number of non-registered self-organized NGOs is estimated to be about 3 million, the article said.

Deng Guosheng, Director of Tsinghua University School of Public Management Innovation and Social Responsibility Research Center, said in an interview with Sound of Hope radio: “Chinese grassroots NGOs were established initially with help of foreign aid, and subsequently developed well. Due to the international financial crisis, European debt situation, and slowdown of the US economy, many international NGOs have gradually withdrawn support from China. Local NGOs depend on foreign help and have no other source of support.”

Deng added that he suspects funding to have been withdrawn because of perceptions of China’s economic development—but he said that development only benefits certain sectors.

Wei Zhongping, an independent candidate running for a seat in China’s lowest-level legislature, told The Epoch Times that charitable donations in China lack proper supervision. “Where the donations have gone is not known to us, and there is no way to investigate either.”

Unaccountability erodes public trust and deters contributions, he said. Chinese media reports indicate that charitable donations fell by 80 percent from June to August of 2011, after scandals about charities came to light.

“Unlike in other countries, pop stars and entrepreneurs in China do not come forth to make donations,” Wei said. “One of the main reasons is misuse of the funds. Those who donate on goodwill get totally disappointed because they’re actually feeding some greedy ‘worms.’”

He pointed to the siphoning off of funds donated after the earthquake in Wenchuan, Sichuan Province in 2008. “An ample sum came by way of donations to alleviate the suffering of the people. But the first thing the government officials did with the earthquake donations was to buy a bunch of luxury cars.”

The Beijing Times reported a study by Deng Guosheng on that topic. He and a team of 10 conducted a four month survey of earthquake donations, and using only official figures found that 80 percent of the 76 billion yuan donated went into government accounts.

“Who would care to donate anymore?” Wei said. “The donors are all bitterly disappointed.”

Read original article in Chinese

via Charity Donations in China Mostly Go to Official Coffers | Society | China | Epoch Times

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What Looms Behind China’s Growing Urbanization

Epoch Times Staff

China’s urban population has passed the 50 percent mark, according to China’s Bureau of Statistics. This is the first time in Chinese history that the urban population exceeds the number of people living in the countryside. And while the regime touts urbanization as the engine behind China’s future economic development, analysts say there are problems with the statistics.

China’s urban population has passed the 50 percent mark, according to China’s Bureau of Statistics. This is the first time in Chinese history that the urban population exceeds the number of people living in the countryside. And while the regime touts urbanization as the engine behind China’s future economic development, analysts say there are problems with the statistics.

“Urbanization exceeding 50 percent means China’s thousands of years of history as an agricultural society is about to begin a new era,” a Jan. 17 China News Network article quoted from a report by Li Peilin, Director of the Institute of Sociology at China’s Academy of Social Sciences.

Li also said that after industrialization, urbanization will become the engine behind mainland China’s future development.

Statistical Manipulation

Urbanization in mainland China is not a natural growth process, but a forced one, and some of the statistics are fabricated and give a distorted picture of the new city dwellers and their future prospects, according to some analysts.

Cheng Xiaonong, a China affairs researcher at Princeton University, questions the validity of the official statistics. He says the so-called urbanization is just a statistical trick, whereby in many places, towns have been upgraded into cities, and villages renamed as districts, suddenly turning the countryside into an urban area.

“Looking at China’s map, many county seat towns have been renamed as cities. After changing the name, lots of rural populations suddenly become city populations,” Cheng told Voice of America (VOA) in a Jan. 17 report.

Migrant Workers

According to a Tianjin.net report on Jan. 18, some mainland scholars say it would be more accurate to calculate China’s urban population by counting only those who are registered city household, rather than counting the total city population.

The [huge numbers of] migrant workers who are in a city but don’t enjoy the benefits of a city, can’t be considered part of a city’s population, the report said.

Therefore, when the urban population was said to have reached 47 percent, some scholars estimate the actual number should have been 40 percent, with the rest being fabricated.

Forcing Farmers off their Land

In a Nov. 23, 2011 report, Beijing Times—one of the country’s most outspoken newspapers–quoted Gan Zangchun, deputy inspector at China’s National Land Bureau, saying that government land acquisition has created “fake urbanization.”

Princeton University’s Cheng Xiaonong also remarked on this in his VOA interview. He said in lots of places in China farmers are forced to live in towns.

Citing Chongqing as a typical example, Cheng said, “[Party chief] Bo Xilai has been promoting a policy of moving farmers into towns–building apartments and moving farmers into them–and treating this as urbanization.”

Cheng said urbanization isn’t about calculating statistics, but about farmers being able to move into the city and gaining the same level of treatment that city residents get.

“If farmers can never obtain the same benefits city folks have, then the 160 million migrant workers in China will never become [real] urban residents,” Cheng said.

Cheng added that urbanization is generally accompanied by economic growth. In other countries, urbanization happens naturally, but in mainland China, urbanization is the result of the Chinese regime forcefully pushing farmers off of their land.

“If you pull on a plant to make it grow faster and pull the roots out of the ground, can the plant still grow?” Cheng asked.

Professor Patrick Chovanec at Tsinghua University School of Economics and Management also warned of this issue. “Mainland China’s policy makers have used urbanization as an excuse to build many buildings, but didn’t think about how to turn all that into an economic advantage for sustainable development,” he told VOA on Jan. 17.

In the U.S., the urban population exceeded rural population in 1920.

Renowned online commentator Yu Fenghui said on a Sina blog: “China is only at the 1920 U.S. level. It’s not really something worth getting excited about.”

Yu went on to say that as China’s urban population grows, it will bring along lots of resource shortages related to employment, education, retirement, and housing. Low-income growth, lack of social benefits, and inflation will add additional hardships.

Throughout China’s major cities, many impressive looking high-rise apartment buildings are nearly empty. Housing in Beijing and Shanghai is priced at 20 times the average city dweller’s annual income, and throughout China 85 percent of city residents who need a new house cannot afford one, according to a Dec. 29 Epoch Times report.

Read the original Chinese article.

via What Looms Behind China’s Growing Urbanization | Society | China | Epoch Times

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China’s Uncompetitive Trade Policies

By Heide B. Malhotra
Epoch Times Staff

China is aggressively pursuing the control of world trade, becoming more and more transparent in its effort to steamroll anything that threatens its ambitions.

The race for control is already well on its way. At this time, China already controls almost all of the world’s trade of rare earth metals.

“China controls about 95 percent of the global trade for the 17 minerals that collectively make up the rare earth metals market,” according to a 2011 article on the Fellowship of the Minds website.

It is not that China acquired the world’s rare earth metal mines, as they are on Chinese land, but it makes every effort to acquire mines in other countries. Then again, rare earth metals are found in the United States, in Canada, and according to the Pentagon, in Afghanistan. But only China is willing to mine these metals, while the others are not. The exorbitant production cost is claimed as the main reason.

Financial gurus suggest that China’s control of the rare earth metal trade “is mostly a result of low Chinese wages and lax environmental controls having made it unprofitable to mine the elements in other countries,” according to The Local, Germany’s English language local newspaper.

Read more: China’s Uncompetitive Trade Policies | China | Epoch Times

Wealthy Chinese Want to Fly the Coop

By Matthew Robertson
Epoch Times Staff

Over half of China’s millionaires want out. An unstable political and investment environment, alongside myriad social problems, means that 60 percent of the wealthy have either completed business emigration or are making plans to move funds overseas, according to a recent report.

The 2011 China Private Wealth Study, jointly released by China Merchants Bank and Bain & Company, reveals the number of rich Chinese emigrating has gone up rapidly in recent years.

There are two reasons for it, opines an article in the Economic Observer, a Chinese publication: safeguarding their wealth, and salutary living conditions abroad. Countries like the United States and Canada have lower taxes, better education, clean air, a stable investment environment, and healthy food.

Meanwhile, the wealthy have a “knot in their hearts” about China, the article says. “Many rich people are in a vile environment, where if they do not do evil they cannot survive, so they have to do evil. As they continue to do evil, they fear that one day they will be caught and lose everything,” the report said.

There is also a generalized lack of confidence in China’s future, especially among those who gained their wealth legitimately, according to Li Ding, deputy editor-in-chief of Chinascope, a Chinese media analysis group.

“China is still a one-party regime, so private wealth is not really protected,” he said to New Tang Dynasty Television. “The Communist Party can take away your personal assets, your personal wealth overnight—easily. And of course there is no rule of law. The law cannot protect your personal wealth. So they are afraid.”

Getting on the wrong side of the wrong Chinese official in some cases could be enough to become a target for expropriation, Li says. “Maybe they anger some official and their wealth is gone and they can be thrown in jail. And we have seen quite a few of these kind of cases happen before.”

The capital flight bodes ill for China’s future as a productive economy, Li says. “Think about it: the rich people make money from the country, and then they move the money out of the country. So what is left in the country?”

He added: “If people are making their choice with their feet—they make money and they’re gone—then how can [China] sustain its growth? It’s impossible.”

via Wealthy Chinese Want to Fly the Coop | China | Epoch Times