Chinese Military,Political and Social Superthread

[CougarKing]

China developing its support infrastructure for the aircraft carrier Liaoning and her planned sisters in its fleet:

Inquirer(Philippines newspaper)

China cryptic on ‘second aircraft carrier base’ near West Ph Sea

Quote
The Chinese Ministry of National Defense said on Thursday that whether a new port being built in Hainan province could host aircraft carriers, as some media have recently speculated, would be decided “in accordance with the tasks required”.

Canada-based Kanwa Asian Defense, a regional defense magazine, said in its August issue that a 700-meter dock in Sanya City, is a second aircraft carrier base for the People’s Liberation Army navy.

The South China Morning Post quoted the magazine as saying that China “has put the finishing touches to the world’s longest aircraft carrier dock,” and the facility could service carriers on both of its sides.

(...SNIPPED)

 

[Edward Campbell]

If you want to see the impact of Deng Xiaoping, especially, but also of Jiang Zemin and Hu Jintao, look at this graph from Our World in Data:

There are many reasons for the rise in people NOT living in absolute poverty, but the decline in the numbers who do live in absolute poverty coincides with the death of Mao (1976) and the rise of Deng who pursued and adapted and magnified the policies of his old friend and colleague Zhou Enlai.*

Deng set the table, Ziang and Hu exploited his reforms and put in place (sometimes contradictory) policies that (sometimes) encouraged productive growth.

_____
* Zhou was, inexplicably, a communist, of sorts, a Leninist, in reality. He believed, I think,  that Western, liberal democracy was "good," but not for China. He appears to have believed that only a Russian style autocracy could work with the vast, illiterate Chinese peasantry. His focus was on primary education and primary health care. In 25 years, a generation, he reshaped China and made it possible for Deng to pursue "socialism with Chinese characteristics," i.e. a market economy overseen by a dictatorship that is trying to reshape itself into an self perpetuating autocratic meritocracy.

 

[CougarKing]

The US may piss off Turkey if they help China crack down on Ankara's Uighur cousins...and there goes Turkish support for the air campaign against ISIS: 

Reuters

China appeals for U.S. help to fight Xinjiang militants
Tue Aug 4, 2015 10:57pm EDT
BEIJING (Reuters) - China has appealed for U.S. support in fighting Islamist militants in the far western Chinese region of Xinjiang, saying they are also a threat to the United States.

Chinese officials say the East Turkestan Islamic Movement (ETIM) recruits Uighurs, a largely Muslim ethnic minority from Xinjiang, and trains them with extremists in Syria and Iraq, with the intent of returning to China to wage holy war.

Many foreign experts, however, have questioned whether ETIM exists as the coherent group China claims it is.

The threat of terror grows "more complicated and severe by the day", China's Foreign Ministry said late on Tuesday, following a meeting between Chinese Vice Foreign Minister Cheng Guoping and Tina Kaidanow, Ambassador-At-Large for the U.S. State Department's Bureau of Counterterrorism.

(...SNIPPED)

 

[tomahawk6]

As I stated before,Erdogen is trying to get enough support to form a government after the thrashing his party took in elections.That is why they bombed the PKK.The Turks dont want to upset the Chinese and they understand terrorism and the need to defeat it.

 

[CougarKing]

From PLA Generals to China's fledgling environmental regulatory agency, no one is immune to Xi's corruption drive:

Diplomat

Guo Boxiong, Jiang Zemin, and the Corruption of the Chinese Military
If two of the most powerful military leaders in the past 16 years are corrupt, who in the Chinese military is not?

Finally, Guo Boxiong, former vice chairman of the Central Military Commission (CMC) and former Politburo member, has been dismissed from the Chinese Communist Party (CCP) and handed over for a court martial.

According to Xinhua News Agency, at its meeting on July 30, the Politburo of the CCP reviewed the report on Guo’s case and decided to expel him from the Party and turn his case over to military prosecutors because of his involvement in taking huge bribes, directly and indirectly.

Along with Xu Caihou, another former vice chairman of the CMC and Politburo member who was expelled from the Party for corruption, Guo practically controlled the People’s Liberation Army for 13 years on behalf of Jiang Zemin, former president and chairman of the CMC as well as former general secretary of the Party.

During his first decade as chairman of the CMC from 1989 to 1999, Jiang did not have any actual power over the military. In September 1999, Jiang began to assert his authority by appointing two of his confidants to the CMC. One was Xu Caihou, the then-executive deputy director of the General Political Department. The other was Guo Boxiong, the then-executive deputy chief of staff of the General Staff Department.

(...SNIPPED)

Diplomat

Aide to China's Former President Expelled From Party, to Face Trial
It’s official: Ling Jihua has been expelled from the Party for “serious discipline violations.”

A former aide to Chinese President Hu Jintao has been officially expelled from the Communist Party, Xinhua reported on Monday. Ling Jihua, who served as head of the Central Committee’s General Office during Hu’s tenure, was announced to be under an internal Party graft investigation last December. Now his case will be turned over to the courts for prosecution.

“Ling Jihua’s actions completely deviated from the characteristics and goals of the Party,” Xinhua said, citing an official report from the Politburo. “He seriously violated Party discipline, did enormous damage to the Party’s image, and had an extremely negative influence on society.”

That announcement followed two years of rumors that Ling was in the Party’s cross-hairs. In March 2012, Ling’s son was killed in a car crash, the lurid details of which (Ling was driving a Ferrari whose passengers included two half-naked women) served to embarrass the Party as it prepared for its delicate, once-in-a-decade leadership transition. In addition to that incident, which led to Ling being suspected of corruption, the Chinese rumor mill has since linked Ling with former high-ranking officials Bo Xilai, Xu Caihou, and Zhou Yongkang as part of a plot to at best undermine – and at worst overthrow – current President Xi Jinping.


(...SNIPPED)

Diplomat

China's Anti-Corruption Fight Turns Toward Environmental Agency
With the investigation of a vice minister, China gets serious about holding environmental officials accountable.

By chinadialogue

Retired Ministry of Environmental Protection (MEP) vice minister Zhang Lijun has fallen foul of China’s ongoing corruption crackdown, becoming the highest-ranking environmental official yet to be investigated.

China’s anti-corruption watchdog, the Central Commission for Discipline Inspection (CCDI), announced details of the probe on July 30.

“Zhang Lijun, former vice minister for environmental protection and member of the ministry’s Party group, is under investigation for serious breaches of discipline and law,” the CCDI said on its website.

Zhang, 63, retired from the MEP two years ago. He previously served as deputy director of the State Environmental Protection Agency in 2004, and four years later was promoted to vice-minister with the granting of ministerial status to SEPA (now known as the MEP) in 2008. He held that post until his retirement in 2013.

(...SNIPPED)

 

[Edward Campbell]

Xi Jinping's sword is swinging very, very close to dangerous territory.

My sense has been that both Hu Jintao and Jiang Zemin were to be left "clean" in any investigations, but some of their closest associates are now accused and one guesses that rumours are rife in China about Xi's predecessors.

The danger is a backlash from within the broader party: I think that Xi's eforms are popular, but not if they taint the idea that the "party knows best."

 

[CougarKing]

It seems a little early to tell who will replace Xi Jinping at this point, but often the party elders seem to always have an eye on those potential political stars who rise through the ranks. But they can sometimes be wrong, as in the case former Chongqing party secretary Bo Xilai.

While tiny Guizhou province may seem like a backwater which will hardly be a proving ground for a potential Chinese leader like Chen Min Er
(陈敏尔), take note that Hu Jintao once was assigned to Tibet (called Xizang in Chinese), which had and continues to have its own set of problems. This was before Hu later rose to become Jiang Zhemin's VP before succeeding him.

Diplomat

Is This Man China's Next Leader?
The rise of a Zhejiang clique is good news for Chen Min’er, the new party secretary of Guizhou Province.

Professor Bo Zhiyue
By Bo Zhiyue
August 03, 2015


(...SNIPPED)

The real winner of this round of reshuffles, though, is Chen Min’er, governor of Guizhou. He was promoted to party secretary of Guizhou on the same day as Zhao. Chen’s political credentials don’t compare to those of Zhang but he enjoys a huge advantage as one of Xi Jinping’s confidants.

Chen worked closely with Xi in Zhejiang for four years and four months. During Xi’s stint in Zhejiang, Chen was a standing member and the director of the Propaganda Department of the Zhejiang Provincial Party Committee. Under his charge, Zhejiang Daily, the newspaper of the Zhejiang Provincial Party Committee, carried a series of articles from February 25, 2003 to March 25, 2007 by an author named “Zhexin,” the pen name of Xi Jinping.

Chen was transferred to Guizhou in January 2012 and was promoted to governor of Guizhou one year later. He is a full member of the 18th Central Committee and has only been governor of Guizhou for two and a half years. With this promotion, he would be qualified to compete for a seat on the Politburo in two years.

A native of Zhejiang who has spent most of his political career in his home province, Chen is a good representative of a Zhejiang clique in Chinese politics. Born in September 1960, Chen is the first member of the Zhejiang clique to emerge as a sixth generation leader. It is likely that he could become a front-runner as Xi’s successor in another five years.

(...SNIPPED)

 

[CougarKing]

The ripples of China's economic slowdown continue:

Agence-France-Presse via Inquirer

China losing luster for foreign investors

Agence France-Presse
12:45 PM August 9th, 2015

BEIJING, China – The once irresistible allure of the Chinese market to foreign multinationals is losing some of its luster as slowing growth in the world’s second-largest economy hits their sales.

The latest figures from firms reporting during the current results season in Europe, the United States and Japan paint a picture of overseas firms facing a worsening of operating conditions in China.

Volkswagen, which has invested heavily in China and has just displaced Toyota as the world’s leading car manufacturer, saw sales in the country — which it describes as its “second home market” — fall 3.9 percent in the first half, its first drop in a decade.

(...SNIPPED)

Worse than expected’
Such challenges have been compounded by the country’s slowing economy.

Japan’s second-biggest steelmaker JFE Holdings lowered its annual profit forecast in late July because of “the economic slowdown in China and the overproduction of steel” in the country, the world’s largest consumer of the metal.

In the United States, industrial giant UTC, the maker of Otis lifts, revised down its earnings forecast for 2015 partly on the back of what it described as “a slowing China”.

(...SNIPPED)

Reuters

China under mounting pressure to ease policy as economy stumbles
Reuters
By By Koh Gui Qing – 8 hours ago

By Koh Gui Qing
BEIJING (Reuters) - China is under growing pressure to further stimulate its economy after disappointing data over the weekend showed another heavy fall in factory-gate prices and a surprise slump in exports.
Producer prices in July hit their lowest point since late 2009, during the aftermath of the global financial crisis, and have been sliding continuously for more than three years.
Exports tumbled 8.3 percent in the same month, their biggest fall in four months, as weaker global demand for Chinese goods and a strong yuan policy hurt manufacturers.
"Policy focus is definitely the (producer) deflation at this stage," said Zhou Hao, economist at Commerzbank AG in Singapore.

(...SNIPPED)

 

[CougarKing]

Don't they already have jungle experience not only by using the tropical environment of Hainan Island and the jungle parts of Yunnan provice as training areas, but from China's 1979 abortive invasion of Vietnam?

Take note that the Chinese also sought Brazilian help with training for the crew of their aircraft carrier Liaoning.

Defense News

Chinese Seek Brazilian Assistance With Jungle Training
By Tim Mahon 1:02 p.m. EDT August 9, 2015

MANAUS, Brazil — Chinese military officials have requested the Brazilian Army's assistance in developing their own jungle warfare training capabilities, officials here said.

Briefing reporters in July, Col. Alcimar Marques de Araújo Martins, commander of the Centro de Instruçao de Guerra na Selva (CIGS – Jungle Warfare Training Center,) indicated that China had recently arranged to send a group of officers and NCOs to be trained at the CIGS, but they canceled their attendance in favor of an alternative approach.

“They have now asked us to provide a number of trainers and our jungle warfare training expertise to assist them in developing their own program in China,” he said. There was no indication as to the immediacy of such cooperation or the number of trainers likely to be sent.

(...SNIPPED)

 

[CougarKing]

Canadian exporters will be hurt by this as well:

Reuters

China's move to cut currency's value could hurt exporters across US and global economies
The Canadian Press
By Joe McDonald, The Associated Press

BEIJING, China - China's bold move Tuesday to sharply devalue its currency threatens to squeeze exporters around the world whose goods will likely become comparatively costlier than many Chinese products.

The action has also intensified fears about the weakening of the world's second-largest economy, whose growth rate has reached a six-year low as exports have steadily dwindled.

A cheaper yuan will benefit China's exports by making them less expensive overseas. Yet those gains would come at the expense of manufacturers in other countries, including the United States and Europe. U.S.
exporters have long complained that China manipulates its currency to gain a trade advantage. Some members of Congress have backed legislation to impose retaliatory tariffs.

As China's once-breakneck growth has slowed, its reduced demand for foreign raw materials — from oil to coal to copper — has, in turn, slowed growth in countries like Australia and Brazil.

(...SNIPPED)

Plus more on the ripple effects of the stock market crisis:

Reuters

Automakers feel China heat as buyers burnt by stocks rout desert showrooms
By By Jake Spring | Reuters – 16 hours ago

By Jake Spring
BEIJING (Reuters) - The great Chinese stock slump that first whacked luxury car sales is spreading to mass-market brands as wannabe customers like Zhang Jiabin count the cost of soured investments.
The 37-year-old food company executive lost nearly $6,500 when shares tumbled in June and July, and can't now afford the new Volkswagen Tiguan sport-utility vehicle he had his eye on. "I can't draw money," Zhang said, "I'll wait until (the market) goes up."
Auto sales in China fell 7.1 percent in July from a year earlier as many more who lost out in a trillion-dollar share slump joined Zhang in delaying purchases. The monthly drop, the biggest in two and a half years, was the fourth in a row and marked China's longest streak of sales declines since at least the 2008 global financial crisis.

(...SNIPPED)

 

[a_majoor]

More on the Chinese economy. The markets and the currency are starting to decline, and in the embedded videos there was interesting commentary about Chinese exports declinging 8% as well. The question is not will whne this market correction play out but rather what steps the Chinese government will use to "stabilize" the market, and what second and third order effects the "stabilization" will create in the wider global economy:

http://www.bloomberg.com/news/articles/2015-08-11/asian-futures-tip-another-down-day-as-yuan-move-rattles-markets

China Roils Markets for Second Day as Yuan Tumbles With Stocks
by Stephen Kirkland and Jeremy Herron
August 11, 2015 — 7:26 PM EDT Updated on August 12, 2015 — 1:34 PM EDT

Concerns China’s economy is faltering torpedoed stocks around the world for a second day and fueled demand for the safety of gold and Treasuries.

American equities attempted a comeback in afternoon trading, as the Standard & Poor’s 500 Index trimmed its decline to 0.5 percent as of 1:25 p.m., paring a 1.5 percent slide. The rebound came too late for European stocks, which plunged 2.7 percent for the biggest one-day rout since October. China’s yuan led a slide in Asian currencies, and emerging-market shares plunged.

The dollar retreated, while Treasuries got a boost as investors speculated that the yuan’s devaluation will slow inflation globally. That led to bets that the Federal Reserve may delay raising interest rates, while a weaker U.S. currency boosted the appeal of some commodities.

“China is a big growth driver around the world, so there’s a certain risk to global growth,” said Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich. “If the world economy turns out to be weaker, the Fed will keep an eye on the dollar.”

The S&P 500’s drop sent it careening through its 200-day moving average, a level that has halted previous selloffs this year. The gauge’s comeback has stalled at that mark.

The U.S. financial-services industry was among the worst-performing sectors as U.S. government debt rallied. Bank shares had surged in recent months amid expectations that a Federal Reserve rate increase will expand lending margins and boost profits.

Traders pushed down the odds on a September rate increase by the Fed to about 40 percent on Wednesday, from 54 percent as recently as Aug. 7, according to data compiled by Bloomberg.

The yield on 10-year Treasury notes slid two basis points to 2.12 percent. The Bloomberg Dollar Spot Index slipped 0.8 percent to a three-week low, as European currencies led developed-market gains in foreign-exchange markets.

China’s decision on Tuesday to devalue the yuan and shift to a more market-determined rate sparked concern that any slowdown in the world’s second-largest economy will spill over to the European and American markets.

Data Wednesday showed fixed-asset investment in China grew at the slowest pace since December 2000 in July, while the rate of expansion for retail sales and industrial production also weakened.

“In an emotional environment like this fundamentals don’t necessary play entirely into it,” Gene Peroni, a fund manager at Advisors Asset Management Inc. in Conshohocken, Pennsylvania, said in a phone interview. His firm oversees $14.7 billion. “You have reactive behavior and investors scrambling trying to reorient their portfolios and play the guessing game of what the ramifications are here.”

The devaluation is designed to cushion the yuan from strengthening along with the dollar after a projected interest-rate increase in the U.S., according to Goldman Sachs Group Inc.

“This is about Fed liftoff most obviously and further dollar strength,” Robin Brooks, chief currency strategist at Goldman Sachs in New York, wrote in a note to clients. “It certainly makes sense for China’s policy makers to buy some flexibility ahead of Fed liftoff.”

Emerging-market currencies bore the brunt of selling in reaction. Vietnam widened the trading band on its currency Wednesday, underscoring the risk of competitive devaluations that’s dragging down exchange rates from Brazil to South Korea.

Developing-nation stocks extended declines in a bear market, with the MSCI Emerging Markets Index losing 1.2 percent.

Gold rose for a fifth day, the longest stretch since May, as China’s devaluation spurred demand for haven assets. Bullion advanced 0.9 percent to $1,118.25 an ounce.

 

[CougarKing]

The markets rallying in anticipation of an economic stimulus from Beijing?

Canadian Press

World stock markets rise, led by surge in Chinese shares on stimulus hopes
The Canadian Press

By Yuri Kageyama, The Associated Press

TOKYO - Global stock markets were moderately higher Monday led by a surge on the Shanghai index on hopes for stimulus measures following weak Chinese economic data.

KEEPING SCORE: France's CAC 40 added 0.5 per cent to 5,179.07 and Germany's DAX gained 0.4 per cent to 11,541.35. Britain's FTSE 100 inched up 0.1 per cent to 6,724.04. U.S. shares were set to recover from recent losses. S&P 500 futures were up 0.3 per cent at 2,078.80.
CHINA TRADE: China's July trade shrank by unexpectedly wide margins, showing the world's second-largest economy faces weak demand both at home and abroad. Exports contracted by 8.3 per cent over a year earlier and imports were off by 8.1 per cent. For the year to date, exports are off 14.6 per cent and imports down by 0.8 per cent. That increases pressure on Beijing to stimulate domestic growth and to avert politically sensitive job losses in export industries.


(...SNIPPED)

Plus more on the breaking news of that huge explosion in the city of Tianjiin, which is southeast of Beijing.

The result of poor safety practices by some Chinese companies to cut costs?

Reuters

Huge explosions in China's Tianjin port area kill 13, hurt 250: media
Wed Aug 12, 2015 6:22pm EDT

SHANGHAI (Reuters) - Two massive explosions caused by flammable goods rocked an industrial area in the northeast Chinese port city of Tianjin late on Wednesday, killing 13 people and injuring around 250, the official China Daily newspaper reported.

Pictures posted on Chinese media websites showed fire shooting into the air, nearly twice the height of nearby apartment buildings. Residents and workers, some bleeding, could be seen fleeing the scene.

State broadcaster China Central Television (CCTV) said the blasts erupted in a shipment of explosives at around 11:30 p.m. local time, triggering a blast wave that was felt kilometers (miles) away.

(...SNIPPED)

 

[tomahawk6]

A variety of images at the link.The shipping company CO looks like the scape goat as he is in custody.

http://www.dailymail.co.uk/news/article-3195477/Fifty-people-injured-enormous-blast-explosives-shipment-hits-Chinese-city.html

 

[jollyjacktar]

Put me in mind of Halifax 1917.

 

[tomahawk6]

Or Port Chicago,Ca. circa 1944.

http://www.history.navy.mil/browse-by-topic/disasters-and-phenomena/port-chicago-ca-explosion.html

 

[CougarKing]

Xi Jinping sends a veiled message to Jiang Zhemin and Hu Jintao, etc. Perhaps Xi's wary of Jiang or Hu exercising more influence the same way Deng Xiaoping continued to do so in the 1990s right up to his death.


If I can recall correctly, before the 1989 Tiananmen Square massacre, Deng Xiaoping was semi-retired despite being party chairman, but he used his influence on the Politburo standing commitee to override then-Premier Zhao Ziyang and purge him for sympathizing with the protesters. Then Deng ordered the crackdown.

Diplomat

China's State Media Tells Retired Officials to Stay Retired
The article from People’s Daily seems to be a veiled reference to former leader Jiang Zemin

The August 10 edition of People’s Daily, an official newspaper of the Chinese Communist Party, carried a short commentary discussing the phenomenon of supposedly retired officials continuing to exert their influence on Party and government decisions.  The piece notes that “most” leading cadres gracefully leave the political stage upon their retirement – but “some leading cadres not only plant ‘trusted aides’ [in key positions] during their time in office to create circumstances in which they can exercise their power in the future, but are still unwilling to give up control of important affairs in their old departments many years after their retirement.”

According to the commentary, these meddling officials create difficulties for new leadership, making it hard for them to complete their work. Interference from retired officials also creates a “debased mood” in departments where it occurs, as officials are unwilling to act.

That retired officials should be retired in both name and deed is a “social rule,” People’s Daily argues. After leaving their original positions, officials “naturally will no longer possess their original authority or status.”  The piece called on retired cadres to “promptly adjust their attitude and adapt to life changes, so as to avoid sinking into endless troubles.”

(...SNIPPED)

 

[a_majoor]

Photo essay on the explosions that rocked Tianjin. Still no word on the actual origin of the explosions for now:

http://www.theatlantic.com/photo/2015/08/photos-of-the-aftermath-of-the-massive-explosions-in-tianjin-china/401228/

 

[CougarKing]

China's censors working overtime to deflect blame on officials involved:

Shanghaiist

CCTV telecast of Tianjin presser cut short after question on safety distance to hazardous materials

So far, Wednesday night's massive explosions in Tianjin have brought up many questions and few answers. A live press conference earlier this morning wasn't terribly helpful in shedding light on the tragic disaster that has claimed at least 50 lives either, after it was abruptly cut short following some uncomfortable questions from reporters.
After reassuring reporters that the potentially hazardous air was being blown away from the city, a government spokesperson tried to leave the conference but was bombarded with questions. Eventually, he gets one he isn't prepared at all to answer, leading to some extremely awkward silences.

(...SNIPPED)

Shanghaiist

China's censors crack down on online chatter about the Tianjin explosions

Aside from some wind-related misinformation leaking through, China's censors have managed to maintain that tight control of the Chinese internet we have come to expect following disasters like the Tianjin explosions, liberally expunging thousands upon thousands of "dangerous" tweets.
Many Weibo posters have claimed that their posts on the disaster have "disappeared". With just two days gone by since the blast and so little reliable information available, it is hard to discern if China's PR team are simply deleting inaccurate and potentially harmful rumors—like that pollutants from the explosions will be blown to Beijing—or are harmonizing potentially inconvenient truths.
The top 10 most censored terms on Free Weibo, which captures all messages censored or deleted on the social media platform, are almost entirely made up of some combination of "Tianjin" and "explosion."

(...SNIPPED)

 

[CougarKing]

As the death toll rises, the blast area is evacuated after a deadly chemical is found in the air:

Vancity Buzz

3 km radius of China blast evacuated, deadly sodium cyanide found
BY
VANCITY BUZZ STAFF
3:26 PM PDT, SAT AUGUST 15, 2015

According to BBC News, local authorities have confirmed that high concentrations of sodium cyanide, an extremely toxic chemical, was stored at the site. Inhalation exposure with the chemical results in rapid death, sometimes within minutes.

A tweet by the People’s Daily China newspaper also said the military’s anti-chemical warfare soldiers had been deployed to the site.

(...SNIPPED)

Reuters

China blasts death toll 112 and likely to rise as scores of fire fighters missing
Sun Aug 16, 2015 1:46am EDT

By Megha Rajagopalan

TIANJIN, China (Reuters) - The death toll from massive explosions in China's port of Tianjin has risen to 112 and 95 people, most of them fire fighters, are missing, state media said on Sunday, suggesting the toll will rise significantly.

More than 720 people remained in hospital four days after Wednesday's disaster, which sent massive yellow and orange fireballs into the sky, rained burning debris on to a vast industrial zone, crumpled cars and shipping containers, burnt out buildings and shattered windows of nearby apartments.

President Xi Jinping on Saturday urged authorities to improve safety and learn lessons paid for with blood.

(...SNIPPED)

 

[cupper]

Chinese companies face culture shock in countries that aren’t like China

https://www.washingtonpost.com/world/chinese-companies-face-culture-shock-in-countries-that-arent-like-china/2015/08/14/a048eb64-3bbd-11e5-88d3-e62130acc975_story.html

PHNOM PENH, Cambodia — Faced with slower growth at home and rising labor costs, Chinese entrepreneurs are seeking foreign markets as never before. But as they rush abroad, they are grappling for the first time with unruly trade unions, independent courts and meddlesome journalists. And for many, navigating the unfamiliar waters of multiparty politics and confronting the power of public opinion makes for heavy going.

As they venture into foreign democracies, many Chinese companies experience culture shock. Having made their money in a one-party state, where political connections are the key to a successful business and the rule of law is easy to sidestep, they are finding things just aren’t as simple abroad.

From the United States to Asia, Chinese entrepreneurs have a litany of complaints and have made a succession of costly mistakes. Even in tiny Cambodia, where China has become a major investor in the garment industry, they can sound bitter.

“Trade unions are all the same: They are black-hearted,” complained He Enjia, president of the Textile Enterprise Association of the Chinese Chamber of Commerce in Cambodia.

“In the last two years, things changed in Cambodia,” he added, explaining that factory owners used to be able to hire police to suppress striking workers. “Now it’s impossible. The influence of the opposition party is growing, with the help of the Western media.”

By some measures, outward investment from China outpaced foreign investment into the country for the first time last year. But abroad, where the public often demands greater transparency and courts enforce stricter environmental and labor laws, it is a steep learning curve for many Chinese companies, experts say, that mirrors the challenges foreign companies faced when they first entered China more than two decades ago.

“If you look at foreign companies going into China, it was extremely difficult for them to adjust,” said Thilo Hanemann, who tracks global investment flows at the Rhodium Group, a New York-based economic advisory firm. “Chinese companies are now going through the same thing, but it is even more complicated for them. The regulatory environment they grew up in is so vastly different than in markets overseas.”

The flow of capital out of China had begun to make it expensive for the country’s central bank to maintain the yuan’s value against the dollar. Last week’s surprise devaluation will push up the price of foreign investment for Chinese companies, but — if investors think the currency will weaken further over time — could encourage some to invest abroad now before the exchange rate falls further.

Some of the first major movers were state-owned companies, extracting the raw materials, such as oil and iron ore, that China needed to fuel its booming economy. Construction companies have also followed government money abroad, as China builds roads, dams and other infrastructure from Asia to Africa.

But, as rules governing outward investment have been liberalized, private companies, from garment manufacturers chasing lower wages in Southeast Asia to IT companies chasing new markets, are also moving abroad.

Official figures show outbound direct investment from the country rose 14 percent last year to $103 billion, and the government says that if outbound investment through third parties is included, it would exceed foreign direct investment for the first time.

That would be a major milestone for China, even if the figures are not exactly reliable. In any case, Rhodium’s Hanemann said the hasty expansion abroad should not be seen as a sign that China is about to take on the world.

“It’s not a sign of strength; it’s a sign of weakness,” he said. In the past, Chinese companies could reap such handsome profit growth at home that “they neglected global value chains” and did not develop overseas expertise, he said.

But as China’s economy slows, as it confronts huge overcapacity in its steel and cement industries, and as labor and land costs rise, companies are being forced to diversify abroad, to “play catch-up” and learn new skills in order to survive.

It has not been smooth sailing. Indeed, there are countless examples of costly miscalculations.

In the United States, Chinese companies are facing hundreds of millions of dollars in damage claims over drywall imported to rebuild thousands of homes in the wake of Hurricane Katrina; it is alleged to have emitted toxic gas, caused respiratory problems and corroded electrical appliances.

In Texas, state-owned Aviation Industry Corporation of China (AVIC) is being sued for $7.5 billion by a former joint venture partner, Tang Energy, which claims it cheated on their deal to develop wind power — partly by creating competing businesses in the same field. It is something AVIC might have gotten away with at home but not in the West.

“In China, the state owns the enterprises, and it owns the court. So if you’re a state-owned company, you never have to worry about having a fair fight. And here they have a fair fight on their hands,” E. Patrick Jenevein III, Tang’s chief executive, said last year, according to the Dallas Morning News.

In Poland, China Overseas Engineering Group had its contract to build a highway in the run-up to the 2012 European soccer championships canceled after costs ballooned: The company had failed to allow, among many other things, for the cost of compliance with local environmental laws, including the need to build tunnels under the road for frogs to cross.

All over the world, Chinese companies have faced a political backlash for bringing in their own workers rather than employing locals — and for mistreating the locals they do employ.

There are, of course, very different problems in different places. Strict laws against pollution and corruption might pose problems in the West, but they are less of a concern in countries such as Cambodia, entrepreneurs say.

But Li Yi, secretary general of the Guangxi province branch of the Chinese Chamber of Commerce in Cambodia, says Cambodia’s many nongovernmental organizations are a nuisance.

“To grab Western funds, they do everything they can to pick holes and deliberately target big projects,” he said.

There are cultural differences, too. Chinese managers complain that Cambodians are not as hardworking as Chinese, but their heavy-handed efforts to increase productivity are not always successful.

In June, a Chinese construction site manager was reported to have screamed at his workers once too often for being lazy, according to the Phnom Penh Post. After their shift was over, a group of workers returned to the site at night and hacked the manager to death with an ax, police told the newspaper.

Li said that at least the business culture here is similar when it comes to bribing officials — Cambodians, he said, usually keep their word, unlike their counterparts in certain other countries. “They take money, and they keep their promise,” he said. “If they can’t do something, they say so directly. Not like some officials, who take money but then say they can’t help.”

In Burma, the transition from military rule to military-controlled democracy brought problems for Chinese mining and dam-building companies not used to a world where public opinion suddenly mattered.

Li Guanghua, general manager of the China Power Investment Corp., said his company learned painful lessons from the suspension of the Myitsone dam project in 2011, after questions about its environmental impact, and whether Burma would see much of the benefits of the dam, turned public opinion strongly against the project.

Now the company is being more careful to talk to local communities, opposition politicians and the news media as it tries to get the project restarted.

“We think transparency is very important now,” he said in an interview.

But have other Chinese companies learned that lesson?

“I can’t guarantee that,” he answered, with a smile.