China Watches Burma's Censorship Reforms

Customers buy local weekly journals at a roadside shop in Rangoon, Burma

Rapidly reforming Burma's decision to ease media censorship is being met with caution in neighboring China, where government officials have been adamant in maintaining their tight control over the flow of information.

Burma announced Monday that local media will no longer be required to submit stories for review to state censors before publication, ending a key component of its long-reviled censorship policy.

The news received a mixed reaction from China's state-controlled newspapers. The People's Daily, the flagship paper of China's Communist Party, ran a fairly neutral account of the story, even quoting a Burmese journalist praising the move as historic.

But the party's Global Times paper was more negative, publishing an editorial saying China should not follow what it called the "uncertain" reform model of Burma, which is also known as Myanmar.

"China should follow the trend of the times and look at the practical situation of the nation, rather than being perplexed and even letting backwater [backwards] countries such as Myanmar and Vietnam become our idols," the editorial said.

Some have wondered whether China, which has undergone its own gradual reform process in the past three decades, would be inspired to speed up its reforms as its long-time ally Burma has done.

But independent Beijing-based China analyst Bill Bishop says Beijing likely does not feel pressured to keep up with its fast-moving neighbor, knowing its own media landscape is much more sophisticated.

"Burma is a much smaller country and a much simpler country in a lot of respects," says Bishop. "There is really not much Internet in Burma, so the information environment is extremely different and much more complex in China."

But Bishop says Beijing's current policy of blocking any online material it deems objectionable does seem unsustainable, partly because it is increasingly unpopular with the Chinese public.

"If you are a participant on Chinese social media, you know censorship is going on, and it is regularly mocked and criticized quite vociferously." says Bishop, who points out that the Chinese Internet was buzzing with conversation on the Burma issue.

"People on Weibo [social media site] were making unfavorable comparisons between China, Burma, and North Korea, and joking that North Korea would open up their media before China. I think that's a bit extreme, but it just shows that people do know what's going on and I think that kind of knowledge becomes very corrosive," said Bishop.

But even though Chinese censorship may be unpopular, observers say it is unclear whether Beijing intends to follow Burma's example and take steps to open up its own media.

VOA

Chinese Cities Plan Stimulus Spending

Chongqing in southwest China is among cities planning big investments.

BEIJING—Some of China's big cities are announcing large investment plans intended to boost slowing growth rates, but just how much of a lift they will give to the economy remains uncertain.

The city of Chongqing in China's southwest called for investment of 1.5 trillion yuan ($237 billion) in seven key industries over the next three years, the state-run Xinhua news agency reported Monday.

The investment goals include 300 billion yuan in the electronic communications sector, 200 billion yuan in the auto industry, 250 billion yuan in the manufacturing of advanced equipment and 150 billion yuan in the chemical industry, Xinhua said on Monday.

Chongqing is where disgraced Communist Party leader Bo Xilai was party chief until this year and where his combination of heavy investment and a strong role for the state became known as the Chongqing model.

Separately, Tianjin, a city next to Beijing, said it has "preliminarily" decided to move forward with a plan calling for investment of 1.5 trillion yuan over four years in 10 industrial sectors, ranging from the petroleum and chemical industry to the aviation and aerospace industry over the next four years, according to a report by the state-run Tianjin Daily posted on the Tianjin municipal government website on Tuesday.

The announcements follow a similar plan from Changsha, the capital of central China's Hunan province, which last month unveiled plans for 829.2 billion yuan in investments.

The plans signal a growing appetite in China for government spending to help boost slowing economic growth. In the second quarter, China's economy grew 7.6% from a year ago, the slowest rate since the global financial crisis, and more recent economic data suggest the slowdown will continue.

"Local governments don't want to see slowing growth, so what they can do is to push for more investment," said Nomura economist Zhang Zhiwei.

Word of the plan spurred markets in Australia, a major supplier of raw materials for the Chinese economy. The benchmark S&P/ASX 200 index rose 0.4% on Tuesday to its highest level in more than three months, while the Australian dollar was up 0.6% against the U.S. dollar in late Asian trading.

It isn't clear where the governments will get the money. None of the announcements specified whether the funds were in place or whether they would come from local, national or private-sector sources. Local governments, which depend on land sales for much of their revenue, are facing budget constraints across the country due to the weak property market.

During the massive stimulus campaign of 2009 to 2010, local governments borrowed heavilyfrom state-owned banksto fund investments, but this led to growing concerns over the quality of loans, and the practice has been reined in by regulators.

It also isn't clear whether the plans are new or previously announced. Chongqing's five-year plan from 2011 to 2015, unveiled by the city early last year, also called for 1.5 trillion yuan of new investment. The propaganda chief at the Chongqing agency that oversees investment and industry said she couldn't immediately comment.

Still, the growing eagerness of local governments to spend on projects is likely to give a boost to the economy, analysts say. "Even if only 50% of the plan is realized, that'll still be a substantial amount," Mr. Zhang said of the Chongqing plan.

"We continue to expect these city-level initiatives to help the economy to rebound in [the second half of the year]," he said.

The investment push by local governments raises concerns among some analysts that some of the mistakes of the 2009 to 2010 stimulus may be repeated, including exacerbating overcapacity and the Chinese economy's overreliance on investment to power growth.

Mr. Zhang said the investment may push up inflation next year, which could constrain the ability of the central bank to loosen monetary policy.

Liyan Qi

Businesses Focus on Region's Aging Population

Pedestrians in Tokyo where one-third of the population is forecast to be over 65 by 2030.

As the rapid aging of Asia's population creates challenges for governments and societies, new opportunities are emerging for businesses serving the needs of the elderly and their caretakers.

While population aging is a global phenomenon, the Asian-Pacific region is expected to see a particularly drastic demographic change over the next few decades. The number of elderly persons in the region—already home to more than half of the world's population aged 60 and over—is expected to triple to more than 1.2 billion by 2050, when one in four people in the region will be over 60 years old, according to the United Nations Economic and Social Commission for Asia and the Pacific.

Across Asia, large corporations and entrepreneurs in various industries are racing to come up with new products and services for the elderly, while health-care-related businesses are seeing soaring demand. Among various fields of health care for the elderly, nursing homes represent one of the fastest-growing sectors.

In Japan, companies that previously had little to do with the issue of aging have jumped on the bandwagon. In 2005, Watami Co., which operates Japanese-style izakaya pubs serving food and drinks, entered a new business of running nursing homes. In the most recent fiscal year, the nursing business was more profitable than its izakaya business. Demand for Watami's new business is robust because Japan's population is the world's grayest, according to a 2009 United Nation report, with nearly 30% aged 60 or older.

Other parts of Asia, such as China, Taiwan, Hong Kong, South Korea and Singapore, are also anticipating a surge in the percentage of elderly citizens. In China, people over the age of 60 now account for 13.3% of the country's population of 1.34 billion, up from 10.3% in 2000, according to the National Bureau of Statistics, and the aging trend is expected to accelerate.

In January, China's state-run Xinhua news agency wrote about challenges facing nursing homes, saying "there are simply not enough nurses or beds to accommodate the country's elderly population."

In March, Christine Lagarde, the managing director of the International Monetary Fund, said at a forum in Beijing that the country needs to take more steps to cope with a rapidly aging population in the years ahead.

Despite varying levels of infrastructure and support from governments, the global market for nursing and health-care services continues to expand, and expectations are rising for businesses that might meet the growing demand.

Last month, IHH Healthcare Bhd., Asia's largest hospital operator by market value, staged a strong trading debut in Malaysia and Singapore, after raising US$2 billion in its initial public offering, the world's third-largest IPO this year.

Analysts said that population aging in Asia and the rest of the world makes IHH a good long-term investment.

Given the opportunities in the market for hospitals and nursing homes, some technology entrepreneurs are focusing on products and services they could sell to health-care institutions.

Kevin Wong, an engineer from Guangzhou, China, has developed a new product that he thinks will appeal to nursing homes and hospitals. His Hong-Kong based start-up, Ckicom Technology Ltd., sells a disposable adult diaper equipped with a moisture sensor and a wireless system that sends wetness alerts to nursing-home workers via personal computers and mobile phones.

A small clip-on sensor device attached to the diaper detects moisture through special carbon ink prints on the diaper's inner surface and sends the information wirelessly to PCs and mobile phones. The clip-on device isn't disposable.

Each disposable diaper costs US$1.20 or less, and nursing homes also need to purchase or lease the wireless system including the clip-on devices. For a nursing home with 100 beds, for example, the system would likely cost US$5,000 to US$10,000, the company said.

Ckicom's CAREase diaper, one of the 12 finalists competing for The Wall Street Journal's Asian Innovation Awards, can detect wetness at three different levels, eliminating the need for workers to repeatedly check residents' diapers just to see whether they need to be replaced. "It helps nursing homes upgrade their services," Mr. Wong said.

Mr. Wong, 50 years old, came up with the idea of a wetness-sensing diaper for babies more than 30 years ago, during a classroom discussion at the South China Institute of Technology. He never pursued that idea and instead worked for much of the past three decades at a company that develops consumer-electronics products.

Five years ago, one of his college classmates, who lived in the U.S., called Mr. Wong and reminded him of the moisture-sensing diaper idea, which Mr. Wong himself had forgotten about. The friend said that nursing homes for the elderly would want such a diaper.

After conducting research for almost a year, Mr. Wong quit his job and started Ckicom in 2008 to develop the diaper in a project partially funded by the Hong Kong government.

The challenge was to create a comfortable diaper that can accurately determine wetness levels, while keeping the cost reasonable, Mr. Wong said.

The potential market is growing, as Hong Kong expects the percentage of its population aged 65 and over to increase to 26% in 2036 from 12% in 2006, according to the Census and Statistics Department.

Five nursing homes in Hong Kong are now testing the CAREase diaper, while the company's Taiwanese distribution agent has recently received orders for 100,000 diapers.

Ckicom also has set up an office in Tokyo.

The closely held company forecasts revenue of about US$1 million in the current fiscal year through March.

While Hong Kong, Taiwan and Japan are its main markets for now, the company wants eventually to expand into the U.S. and Europe as well as mainland China, Mr. Wong said.

Juro Osawa

Japan-China dispute: little islands, big problem

The governor of Tokyo wants to buy them, Taiwan says it would like them back and China has made their return a national priority. But for the Kurihara family, the islands Japan knows as Senkaku are just a bit of land they would really rather sell.

Hiroyuki Kurihara,  speaks to the media in Tokyo, on July 20, 2012

"The conflict is escalating more and more," Hiroyuki Kurihara told AFP in an interview about the islands, known in China as Diaoyu, where Japanese nationalists landed Sunday after a similar venture by pro-Beijing activists.

All 14 involved in that action were deported Friday in an apparent bid by Tokyo to head off a potentially destabilising row with Beijing.

"We are worried that the government cannot cope with the situation over the islands," said Kurihara.

His powerful merchant family are the legal owners of four of the five islands in the Senkakus, an archipelago some 2,000 kilometres (1,250 miles) from Tokyo but less than 200 kilometres from Taiwan.

China, Taiwan and Japan all say they are part of their territory. They are administered by Tokyo, which holds title to the fifth island and bans development on them all, not allowing anyone to land.

While Beijing claims more than five centuries of control, Tokyo says a Kyushu businessman landed on the uninhabited -- and unclaimed -- outcrops at the end of the 19th century.

That businessman was Tatsuhiro Koga, who set up factories there processing bonito fish and albatross feathers.

The tumult of war led to the islands being abandoned, and along with Okinawa they were put under US military control following Tokyo's surrender at the end of World War II.

When Okinawa was handed back to Japan in 1972, the Senkakus were returned to Koga's son Zenji.

Around that time geologists said the seabed nearby could contain large reserves of oil and gas, while Beijing and Taipei began asserting their claims.

With no heir of his own, Koga decided to sell the islands to the Kuriharas, long-time friends from the suburbs of Tokyo who ran a trading house and owned land throughout Japan.

The eldest brother Kunioki, now 70, holds the legal rights to Uotsurijima, Kitakojima and Minamikojima, which the national government leases for 25 million yen ($300,000) a year. A fourth island is owned by his sister and rented to the defence ministry for an undisclosed sum.

Koga made only one demand when he sold the islands to the family.

"My brother promised Mr Koga that he will never do anything to sever history," said Hiroyuki Kurihara. "That means he won't sell them to private entities."

But with a potentially huge inheritance tax bill if the islands are passed on to the next generation, the Kurihara family want to sell up.

Conveniently for them, the nationalist governor of Tokyo, Shintaro Ishihara, earlier this year announced that his administration wanted to buy them, catching the governments of Japan and China off-guard.

He has since collected more than 1.4 billion yen ($18 million) in donations towards a reported purchase price of up to 2 billion yen.

Prime Minister Yoshihiko Noda stepped into the row in June, saying the national government was also thinking about putting in a bid, provoking a frosty response from Beijing.

The Kuriharas insist their ownership of the islands is not political and they do not want to be involved in the dispute.

"It is not about guarding the islands," Kurihara said. "All that matters to my brother is that he retains his honour as the 17th heir of the Kurihara family."

Yahoo

‘Cooking the Books’? China’s Data Dilemma

Chinese universities and research institutes have been busy of late, churning out data on China’s economic and social development. Some of their claims, however, appear to be quite divorced from the realities of ordinary Chinese.

Take the Southwestern University of Finance and Economics in China. Several months ago it published the China Household Finance Survey, which suggested that the average urban household in China had assets worth 2.47 million yuan, and that 89.68% of Chinese households owned their own homes. The data prompted a furious debate, with many critics pointing out that 2.47 million yuan in household assets seems hard to believe given that China’s per capita GDP last year was just over RMB 30,000 yuan. The claim of almost 90% home ownership was also widely disputed.

Even as that debate raged, Peking University released the 2012 Chinese People's Livelihood Development Report, which suggested that the average Chinese home was 116.4 m2 per family, a veritable mansion for many ordinary Chinese.

China’s netizens are even more disgruntled by China’s National Rejuvenation Index Research. According to this research, China had accomplished 62% of its rejuvenation tasks by 2010, and will enter “The First World” by 2049. The quantification has prompted chuckles among many Chinese, especially after it was reported that the lead researcher had originally reported a figure of 46% to his superiors in 2007, but raised it to 62% after they complained that it was too low. It was also noted that the 2049 target date just happens to be the centenary of the founding of the People’s Republic of China, and echoes repeated government pronouncements that China will have modernized and become a great power—rich, strong, democratic, civilized, and socialist—by that year.

It is clear from online comments that many ordinary Chinese see these research results as fudged, simply endorsing a government blueprint.

But there is also another, more disturbing possibility: The data might be correct.

Some Chinese have indeed been doing very well, with large houses and substantial wealth. For them, national rejuvenation may well feel at hand. This subset of the population could well be driving up the mean in these surveys, if not the median. The vast majority of people, however, live far below these impressive-sounding averages, and don’t fit the national rejuvenation story. The reports only serve to drive home just how far China’s wealth gap has yawned.

So perhaps we shouldn’t laugh at the surveys. In exposing the unequal distribution of China’s newfound wealth, they could even encourage policymakers to rethink China’s development path.

Mu Chunshan

Prudential pulls ahead in Southeast Asia "sweet spot"

Prudential Plc, after jostling with AIA Group for nearly a century for prominence in Asia, is closing the gap with the region's t o p foreign insurer, propelled by its advantage in fast-growing Southeast Asia.

Prudential zeroed in on what have become the most promising growth markets such as Indonesia and Malaysia, while its rival had bet heavily on more developed markets and a Chinese market less hospitable to foreign firms. Prudential also expanded aggressively via distribution deals with banks.

"The demography is positive, the GDP growth is strong, the savings rates are high," said Prudential Chief Executive Tidjane Thiam, who has called Southeast Asia the company's "sweet spot".

"Those are business-friendly environments where we can generate a profit and remit it," Thiam told a conference call with reporters last week.

Prudential, Britain's largest insurer, still has less than half as much business in Asia as Hong Kong-based AIA but is earning fatter margins and capturing more new business there on an annualised basis -- half of it from Southeast Asia.

And while Southeast Asia's market is relatively small, life insurance premiums in six key countries -- Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- are forecast to average nearly 8 percent growth next year, more than twice the global average, Swiss Re estimates, as their booming middle classes seek to protect and nurture their personal savings.

GROWTH MOMENTUM

Prudential's success in Asia helped to lift its shares this week to their highest in more than a decade at 826 pence, up nearly 30 percent this year compared with AIA's 12 percent rise.

AIA has a relatively small presence in Indonesia, Southeast Asia's largest economy. It ran two insurance businesses in the country with former parent American International Group until 2009, but sold its 60 percent stake in a joint venture there after AIG was bailed out in the financial crisis. AIA was later spun off from AIG through a Hong Kong IPO in 2010.

In China, where AIA opened its first Asia office in 1919 and is the only foreign insurer to own 100 percent of its local operation, global insurers face giant domestic rivals and strict curbs on foreign ownership and expansion.

In India, foreign insurers are limited to a 26 percent stake in joint ventures.

Prudential focused on Southeast Asian markets where it can own 100 percent of its operations, and is rapidly expanding its geographic footprint via alliances with banks to sell its products at their branches. Bank sales accounted for nearly a third of Prudential's annualised new business volumes in 2011, compared with 8 percent for AIA, according to Credit Suisse.

Prudential is also eyeing new markets in the region to keep its growth momentum going, announcing last month that it had won in-principle approval from the Cambodian government to open a wholly owned life insurance operation, while CEO Thiam said last week that the company was considering a move into Myanmar.

The insurer could also get a lift if it splits off its Asian unit, which analysts say would trade at higher multiples, thus facilitating acquisitions. Prudential has been mulling such a move but said its cash and profit generation in Asia will not be enough to sustain a standalone business for at least a year.

Its rivals are not standing still in the region, however. AIA and ManuLife Financial Corp are bidding for ING Groep's Asia assets, which include operations in Malaysia and Thailand.

Reuters

The South China Sea's Gathering Storm

Since World War II, despite the costly flare-ups in Korea and Vietnam, the United States has proved to be the essential guarantor of stability in the Asian-Pacific region, even as the power cycle shifted from Japan to the Soviet Union and most recently to China. The benefits of our involvement are one of the great success stories of American and Asian history, providing the so-called second tier countries in the region the opportunity to grow economically and to mature politically.

As the region has grown more prosperous, the sovereignty issues have become more fierce. Over the past two years Japan and China have openly clashed in the Senkaku Islands, east of Taiwan and west of Okinawa, whose administration is internationally recognized to be under Japanese control. Russia and South Korea have reasserted sovereignty claims against Japan in northern waters. China and Vietnam both claim sovereignty over the Paracel Islands. China, Vietnam, the Philippines, Brunei and Malaysia all claim sovereignty over the Spratly Islands, the site of continuing confrontations between China and the Philippines.

Such disputes involve not only historical pride but also such vital matters as commercial transit, fishing rights, and potentially lucrative mineral leases in the seas that surround the thousands of miles of archipelagos. Nowhere is this growing tension clearer than in the increasingly hostile disputes in the South China Sea.

On June 21, China's State Council approved the establishment of a new national prefecture which it named Sansha, with its headquarters on Woody Island in the Paracel Islands. Called Yongxing by the Chinese, Woody Island has no indigenous population and no natural water supply, but it does sport a military-capable runway, a post office, a bank, a grocery store and a hospital.

The Paracels are more than 200 miles southeast of Hainan, mainland China's southernmost territory, and due east of Vietnam's central coast. Vietnam adamantly claims sovereignty over the island group, the site of a battle in 1974 when China attacked the Paracels in order to oust soldiers of the former South Vietnamese regime.

The potential conflicts stemming from the creation of this new Chinese prefecture extend well beyond the Paracels. Over the last six weeks the Chinese have further proclaimed that the jurisdiction of Sansha includes not just the Paracel Islands but virtually the entire South China Sea, connecting a series of Chinese territorial claims under one administrative rubric. According to China's official news agency Xinhua, the new prefecture "administers over 200 islets" and "2 million square kilometers of water." To buttress this annexation, 45 legislators have been appointed to govern the roughly 1,000 people on these islands, along with a 15-member Standing Committee, plus a mayor and a vice mayor.

These political acts have been matched by military and economic expansion. On July 22, China's Central Military Commission announced that it would deploy a garrison of soldiers to guard the islands in the area. On July 31, it announced a new policy of "regular combat-readiness patrols" in the South China Sea. And China has now begun offering oil exploration rights in locations recognized by the international community as within Vietnam's exclusive economic zone.

For all practical purposes China has unilaterally decided to annex an area that extends eastward from the East Asian mainland as far as the Philippines, and nearly as far south as the Strait of Malacca. China's new "prefecture" is nearly twice as large as the combined land masses of Vietnam, South Korea, Japan and the Philippines. Its "legislators" will directly report to the central government.

American reaction has been muted. The State Department waited until Aug. 3 before expressing official concern over China's "upgrading of its administrative level . . . and establishment of a new military garrison" in the disputed areas. The statement was carefully couched within the context of long-standing policies calling for the resolution of sovereignty issues in accordance with international law and without the use of military force.

Even so, the Chinese government responded angrily, warning that State Department officials had "confounded right and wrong, and sent a seriously wrong message." The People's Daily, a quasi-official publication, accused the U.S. of "fanning the flames and provoking division, deliberately creating antagonism with China." Its overseas edition said it was time for the U.S. to "shut up."

In truth, American vacillations have for years emboldened China. U.S. policy with respect to sovereignty issues in Asian-Pacific waters has been that we take no sides, that such matters must be settled peacefully among the parties involved. Smaller, weaker countries have repeatedly called for greater international involvement.

China, meanwhile, has insisted that all such issues be resolved bilaterally, which means either never or only under its own terms. Due to China's growing power in the region, by taking no position Washington has by default become an enabler of China's ever more aggressive acts.

The U.S., China and all of East Asia have now reached an unavoidable moment of truth. Sovereignty disputes in which parties seek peaceful resolution are one thing; flagrant, belligerent acts are quite another. How this challenge is addressed will have implications not only for the South China Sea, but also for the stability of East Asia and for the future of U.S.-China relations.

History teaches us that when unilateral acts of aggression go unanswered, the bad news never gets better with age. Nowhere is this cycle more apparent than in the alternating power shifts in East Asia. As historian Barbara Tuchman noted in her biography of U.S. Army Gen. Joseph Stillwell, it was China's plea for U.S. and League of Nations support that went unanswered following Japan's 1931 invasion of Manchuria, a neglect that "brewed the acid of appeasement that . . . opened the decade of descent to war" in Asia and beyond.

While America's attention is distracted by the presidential campaign, all of East Asia is watching what the U.S. will do about Chinese actions in the South China Sea. They know a test when they see one. They are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia, or whether the region will again be dominated by belligerence and intimidation.

The Chinese of 1931 understood this threat and lived through the consequences of an international community's failure to address it. The question is whether the China of 2012 truly wishes to resolve issues through acceptable international standards, and whether the America of 2012 has the will and the capacity to insist that this approach is the only path toward stability.

James Webb