Category: International Commerce

Surprise, Big Companies Discover that Chinese Corruption Might Endanger Customers

Actually, it’s not the deaths that they are worrying aobut, it’s the poor PR.

This has been a concern for decades.

Companies in U.S. Increase Testing of Chinese Goods
By NELSON D. SCHWARTZ

General Mills, Kellogg, Toys “R” Us and other big American companies are increasing their scrutiny of thousands of everyday products they receive from Chinese suppliers, as widening recalls of items like toys and toothpaste force them to focus on potential hazards that were overlooked in the past.

These corporations are stepping up their analysis of imported goods that they sell, making more unannounced visits to Chinese factories for inspections and, in one case, pulling merchandise from American shelves at the first hint of a problem.

General Mills, which makes food products like Pillsbury dough and Chex cereals, is testing for potential contaminants that it did not look for previously, although it would not name the substances. Kellogg has increased its use of outside services that scrutinize Chinese suppliers and has identified alternative suppliers if vital ingredients become unavailable. And Toys “R” Us recently hired two senior executives in new positions to oversee procurement and product safety, mainly for goods made in China.

Rampant Speculation Points to Crash

Another sign of the oncoming crash. Vast quantities of capital racing hither and yon looking for the next big “15 minutes of fame” thing.

It’s a sign that the market is over capitalized and over priced, and due for a major correction.

It’s a game of musical chairs, and it gets most frantic towards the end.

Here comes China 2.0

By Paul R. La Monica, CNNMoney.com editor at large
June 28 2007: 1:41 PM EDT

NEW YORK (CNNMoney.com) — As Google’s stock slouches toward $600 a share and Wall Street debates the future of Yahoo following the ouster of Terry Semel, it’s easy to forget that there are other Internet stocks out there competing for investor attention.

But for those who prefer to take a more worldly view of the World Wide Web, paying attention to areas outside of the U.S. has been incredibly rewarding, particularly for investors that have discovered the booming Internet sector in China.

Several Chinese Internet stocks trade in the U.S. on Nasdaq so investing in these companies is as easy as buying shares of Google (Charts, Fortune 500) and Yahoo (Charts, Fortune 500). And many Chinese Internet stocks have far outperformed America’s big two Net giants this year.

Shares of search engine Baidu, portals Sina and Sohu, online gaming companies The 9 Limited and Shanda Interactive and online travel site Ctrip.com are each up at least 20 percent this year, compared to gains of 8 percent and 14 percent for Yahoo and Google respectively.

…..

Google: This is Enlightened Self Interest

Not a return to their policy of “don’t be evil”.

They will still keep your data for as they possibly can. Thankfully, the European Union is putting some limits on this.

Google seeks U.S. government support in fighting Internet censorship abroad

Associated Press
Article Launched: 06/22/2007 11:27:09 AM PDT

WASHINGTON – Once relatively indifferent to government affairs, Google Inc. is seeking help inside the Beltway to fight the rise of Web censorship worldwide.

The online search giant is taking a novel approach to the problem by asking U.S. trade officials to treat Internet restrictions as international trade barriers, similar to other hurdles to global commerce, such as tariffs.

Google sees the dramatic increase in government Net censorship, particularly in Asia and the Middle East, as a potential threat to its advertising-driven business model, and wants government officials to consider the issue in economic, rather than just political, terms.

“It’s fair to say that censorship is the No. 1 barrier to trade that we face,” said Andrew McLaughlin, Google’s director of public policy and government affairs. A Google spokesman said Monday that McLaughlin has met with officials from the U.S. Trade Representative’s office several times this year to discuss the issue.

Made in America????

Same thing with your cars. Toyotas have more US content than GM cars.

Feds Investigate Patch Flap
Thursday, June 21, 10:17 a.m.
By Jim Hamill

U.S. troops are wearing patches made overseas and the patch flap apparently started right here in the Poconos.

Federal prosecutors said Moritz Embroidery Works in Coolbaugh Township, near Mount Pocono, contracted with the U.S. military to make more than three million American flag patches, but prosecutors say that didn’t happen.

They’ve charged Brian Moritz with conspiracy to defraud the United States by sending some of the work overseas.

Good News: WTO Talks Fail

A bit late, but….

This is a good thing.

The rules are about making bankers rich, depressing wages, and imposing neo-colonial regimes on less developed countries.

Until we redefine what free trade should be, and it shouldn’t be denying drugs to babies in Guatemala, progress should stop.

WTO talks stumble, raising doubts over future of Doha pact

U.S. blames Brazil and India for asking for impossible concessions; future of World Trade Organization’s Doha pact in question.
June 21 2007: 1:23 PM EDT

POTSDAM, Germany (Reuters) — The future of World Trade Organization’s Doha pact is under doubt, EU Trade Commissioner Peter Mandelson said Thursday, as talks between the United States, European Union, India and Brazil broke down.

“It places a very major question mark on the ability of the wider membership of the WTO to complete this round,” Mandelson told a press conference in Potsdam. “It does not in itself mean that the negotiations cannot be put back on track.”

Chinese Gold Farming

The fact that this underground meatspace economy exists in parallel to the cyber economy of World of Warcraft indicates that the “money” of this game is not properly valued.

What’s an economist’s take on what is going on here?

The Life of the Chinese Gold Farmer

By JULIAN DIBBELL
Published: June 17, 2007

It was an hour before midnight, three hours into the night shift with nine more to go. At his workstation in a small, fluorescent-lighted office space in Nanjing, China, Li Qiwen sat shirtless and chain-smoking, gazing purposefully at the online computer game in front of him. The screen showed a lightly wooded mountain terrain, studded with castle ruins and grazing deer, in which warrior monks milled about. Li, or rather his staff-wielding wizard character, had been slaying the enemy monks since 8 p.m., mouse-clicking on one corpse after another, each time gathering a few dozen virtual coins — and maybe a magic weapon or two — into an increasingly laden backpack.

Twelve hours a night, seven nights a week, with only two or three nights off per month, this is what Li does — for a living. On this summer night in 2006, the game on his screen was, as always, World of Warcraft, an online fantasy title in which players, in the guise of self-created avatars — night-elf wizards, warrior orcs and other Tolkienesque characters — battle their way through the mythical realm of Azeroth, earning points for every monster slain and rising, over many months, from the game’s lowest level of death-dealing power (1) to the highest (70). More than eight million people around the world play World of Warcraft — approximately one in every thousand on the planet — and whenever Li is logged on, thousands of other players are, too. They share the game’s vast, virtual world with him, converging in its towns to trade their loot or turning up from time to time in Li’s own wooded corner of it, looking for enemies to kill and coins to gather. Every World of Warcraft player needs those coins, and mostly for one reason: to pay for the virtual gear to fight the monsters to earn the points to reach the next level. And there are only two ways players can get as much of this virtual money as the game requires: they can spend hours collecting it or they can pay someone real money to do it for them.

At the end of each shift, Li reports the night’s haul to his supervisor, and at the end of the week, he, like his nine co-workers, will be paid in full. For every 100 gold coins he gathers, Li makes 10 yuan, or about $1.25, earning an effective wage of 30 cents an hour, more or less. The boss, in turn, receives $3 or more when he sells those same coins to an online retailer, who will sell them to the final customer (an American or European player) for as much as $20. The small commercial space Li and his colleagues work in — two rooms, one for the workers and another for the supervisor — along with a rudimentary workers’ dorm, a half-hour’s bus ride away, are the entire physical plant of this modest $80,000-a-year business. It is estimated that there are thousands of businesses like it all over China, neither owned nor operated by the game companies from which they make their money. Collectively they employ an estimated 100,000 workers, who produce the bulk of all the goods in what has become a $1.8 billion worldwide trade in virtual items. The polite name for these operations is youxi gongzuoshi, or gaming workshops, but to gamers throughout the world, they are better known as gold farms. While the Internet has produced some strange new job descriptions over the years, it is hard to think of any more surreal than that of the Chinese gold farmer.

Boeing Gives Future Away on 787

Look at the line about “with Boeing 787-based carbon-fiber construction”. The MBA suits at Boeing thought that it was a great idea to outsource critical technologies to “risk sharing partners”.

It has funded competitors in its own market.

This is stupider than when Coke decided not to buy Pepsi in 1933.

State Subsidy Plan Lifts Mitsubishi’s RJ Hopes(Subscription Required)
Aviation Week & Space Technology
06/11/2007, page 43

Bradley Perrett
Beijing

Plan for state aid buoys Mitsubishi’s aspirations for a regional jet

Printed headline: RJ Funding

A key Japanese government department plans to allocate ¥40 billion ($330 million) in subsidies for a Mitsubishi Heavy Industries project for a large regional jet, greatly increasing the likelihood of the country finally establishing itself as a supplier of commercial aircraft.

With Boeing 787-based carbon-fiber construction and new engines, the proposed Mitsubishi aircraft could present a serious challenge to Embraer, Bombardier and two other companies developing such jets, Sukhoi and China’s Avic I.”