Washington risks taking China too seriously

By David Pilling
What a difference an “and” makes.

The US-China Strategic Economic Dialogue (SED), a twice-yearly bilateral encounter centred on economic issues, has morphed under President Barack Obama into the broader Strategic and Economic Dialogue (S&ED).

For those with a grammatical bent, the addition of a conjunction transforms the word “strategic” from an adjective describing the economic dialogue into a portmanteau adjective describing anything Hillary Clinton damn well wants.
The upshot of US inter-agency rivalry is that Mrs Clinton’s state department joins Tim Geithner’s Treasury at the heart of the conversation with Beijing.

That is no bad thing.

It has broadened the agenda from what Hank Paulson, Mr Geithner’s predecessor, originally conceived in 2006 as a narrowly economic forum.

Now that the state department has muscled in, climate change, North Korea and any other issue of global or bilateral import have joined US deficits, financial sector reform and the renminbi as potential subjects for discussion.
Widening the agenda of talks, the latest round of which wrapped up in Washington on Tuesday, makes sense.

The Sino-US relationship is evolving fast. Mr Obama’s China policy builds on foundations laid by his predecessor. For a president who promised change, one area of constancy with George W. Bush’s White House has been the posture towards Beijing. That was one of the few things his predecessor was judged to have got about right.

Unlike Mr Bush, or Bill Clinton before him, President Obama has not had to backpedal from initial hostility towards China towards a more accommodating stance.

In part this is because of his conviction that it is good to reach out. If he can talk to Tehran or Pyongyang, he can certainly entertain friendly dialogue with Beijing.

It is also because he had little choice.

The economic crisis has tilted the balance of power towards China. The US is feeling less confident about its economic underpinnings and less able than before to lecture Beijing on revaluation or the delights of liberalisation, particularly since so many of its own banks, insurers and carmakers have fallen under state control.
If anything, it is Beijing – some of whose officials now privately boast they have nothing at all to learn from the Great Spendthrift – that has the upper hand.

China’s seeming financial hold over the US has been brought into sharp relief. Beijing has become prone to lecture Washington on the need to safeguard its $2,000bn reserves, the bulk of which are parked in US dollars.
It is wholly appropriate that Washington accords due attention to China, the most important emerging power since America itself.

But there is also a danger of taking China too seriously. In compensating for past neglect, things could swing too far the other way. For all the euphoria about the G2 – the Sino-US axis that, according to some breathless reckoning, is the only meaningful global forum – it is worth pausing to survey the facts.
For a start, China’s financial grip over the US is not as tight as many suggest.

Far from a sign of strength, Beijing’s accumulation of vast foreign reserves is the side-effect of an economic model too reliant on exports. The enormous trade surplus is the product of an undervalued renminbi that has allowed others to consume Chinese goods at the expense of Chinese people themselves.
Beijing cannot dream of selling down its Treasury holdings without triggering the very dollar collapse it purports to dread. Nor are its shrill calls for the US to close its twin deficits – which would inevitably involve buying fewer Chinese goods – entirely convincing.

Rather than exposing the superiority of China’s state-led model, the global financial crisis has laid bare the compromising embrace in which the US and China find themselves.
Commentators also sometimes confuse China’s rapid progress and likely emergence as a superpower with present-day reality.

China is still a relatively poor country. For all its military ambitions, it is decades away from being a match for the US.

In 2005, according to the Stockholm International Peace Research Institute, China accounted for just 4 per cent of global military spending, a tad short of the UK and France, and an aircraft-carrier-length away from the US, at 46 per cent.

True, US might has been humbled in Iraq and Afghanistan. But China has not even tried to project its power on nations such as North Korea, which has tiptoed towards nuclear status under its very nose.

China is more fragile than its increasingly strident tone suggests. Its economy has been kept churning by enforced bank lending that could yet rebound in asset price bubbles or a crop of bad loans.

Communist party control is strong but brittle. Given the choice between projecting China’s authority on the world stage at this month’s G8 summit in Italy or tackling brewing ethnic conflict in Xinjiang, Hu Jintao, China’s president, chose to rush home.
None of this suggests that the US is wrong to engage China at the highest and deepest of levels. China’s emergence as a great power demands no less.

Yet the US, quiet on human rights and muted on the renminbi, may be underselling itself. China will be a huge force to be reckoned with. But it is not quite there yet.

China manufacturing hub hit by downturn

By Tom Mitchell in Dongguan
Dongguan, the south China city whose factories alone outpace those of Vietnam in exports, has recorded a 10 per cent decline in employment since the onset of the global economic downturn, its mayor said on Wednesday.
The city, about 90 kilometres north of Hong Kong, was hit by a 24 per cent year-on-year decline in exports over the first six months of 2009 as developed country consumers reined in spending. As a result, gross domestic product grew just 0.6 per cent in the first half, compared with the national figure of 7.1 per cent and a 30-year average in Dongguan of 18 per cent.
”Manufacturing is Dongguan’s pillar industry,” Li Yuquan said at a briefing. ”The global financial crisis has had a strong impact on Dongguan.”
Mr Li said registered employment has fallen to 5.7m, an implied loss of 630,000 jobs.

In January, a central government study estimated that 20m of the country’s approximately 130m migrant workers had lost their jobs and returned home for the annual Chinese new year holiday. The vast majority of Dongguan’s 10m residents are migrants from other areas of the country.
Despite the grim data, the mayor expressed confidence that Dongguan could still reach its official annual GDP growth target of 10 per cent.

”We are under great pressure to meet our GDP goal because Dongguan is an export-oriented economy,” Mr Li said. ”But we have every confidence we will achieve it.”
The Dongguan government, whose own revenues are also under pressure, has allocated Rmb1bn ($147m) in emergency financing for smaller entreprises, with another Rmb4bn earmarked to support technological upgrades, research and development and worker training.
According to Mr Li, some 1,200 companies have taken advantage of the funds.

He also said that the local government had helped entreprises secure an additional Rmb20bn in bank loans.
The crisis has primarily affected smaller factories, with 342 closing in the first six months of this year. Some 865 closed in 2008.

”I can assure you that these figures are accurate,” Mr Li said. ”The main impact of the financial crisis has not been factory closures but shrinking orders and manufacturing capacity.
Larger, more established factories appear to be benefiting from the pain at the bottom end of the manufacturing chain.

C K Choi, general manager of a large Nokia factory in Dongguan, said his facility was on track to better last year’s 5 per cent increase in export revenues.
Dongguan last year ranked behind only Shenzhen, Shanghai and Suzhou in exports among Chinese cities, with $65.54bn in shipment.

Rioting Chinese Steel Workers Kill Boss Over Layoffs

By Frederik Balfour
Some 30,000 angry Chinese workers staged a riot at a steel factory in China that resulted in its boss getting beaten to death, underscoring just how quickly economic problems can stoke social unrest.

The workers were protesting the sale of state-owned Tonghua Iron & Steel in Jilin province to a private group which they feared would lead to the loss of jobs.

The manager, Chen Guojun, who died on Friday, had been sent to the steel plant by its new owners, Jianlong Group. According to the Financial Times, the unrest has prompted the government to scrap the privatization deal.
China’s communist leaders are obsessed with keeping social unrest under control, but the frenetic pace of economic transformation in the country often sparks uprisings.

The clash between Uighurs and Han Chinese that caused nearly 200 deaths in Urumqi earlier this month was in response to labor problems at a factory thousands of miles away in Guangdong province.

However it also layed bare the dangers of a fast growing economy that creates a widening gap between the haves [the Han Chinese] and the have-nots [the minority Uigyurs and Tibetans] that causes envy and resentment.
Chances are China will be faced with more violent incidents at the factory gates in the future. The export slump has led to widespread closures [in some cases with the bosses literally sneaking over the wall to escape the wrath of workers, as my colleague Dexter Robert chronicled in this labor story] and many industries are still experiencing a shake out due to overcapacity. The government has been pushing for greater consolidation, but mergers and acquisitions can turn very nasty if labor problems aren’t properly anticipated.
Multinational companies have often resisted firing workers for fear of backlash. It’s customary to keep factories open even when they aren’t producing, rather than risk having the plant looted or the foreign managers targeted.
Although China stopped publishing figures on mass incidents [read unrest] in 2005, Geoffrey Crothall, spokesman for China Labor Bulletin, and NGO based in Hong Kong that promotes labor rights in China, there were 127,000 such incidents last year, of which at least 25% were labor related. Others would be connected to environmental problems, land use disputes and local corruption.
Crothall says the working conditions at Tonghua were already bad before Friday’s uprising. Workers complained that neither the factory floor nor their dormitories were heated in the winter. And factory union provided no assistance.

“State owned enterprises all have their official union but they are next to useless, they just represent management’s interest,” says Crothall.

“They are out of touch with the workforce and have no power. In many cases workers left with no option but to resort to drastic measures.”
However most confrontations between labor and management rarely turn as violent as the Tonghua case, though in 2007 two people, a worker and a security guard died during a miner strike in Hunan.

How China's Steel Boom Turned Deadly

A construction worker walks past steel rods at a building site in Shanghai, China, on July 27, 2009

By Austin Ramzy / Beijing
Chinese officials say they are on course to achieve GDP growth of about 8% this year, and the fall's dire predictions of massive unemployment leading to social upheaval haven't been borne out.

But last week's killing of a steel-company executive by striking workers in northeastern China highlights the ongoing threat of labor unrest even as the country shows signs of emerging from the economic downturn.
On Friday, July 24, thousands of workers at the state-owned Tonghua Iron and Steel Group in Jilin province protested the planned takeover of their employer by the privately held Jianlong Steel, according to reports in the Chinese press and from the Hong Kong–based Information Center for Human Rights and Democracy.

Some of the steelworkers rioted and beat to death Chen Guojun, a Jianlong representative. Jianlong had previously purchased a stake in Tonghua, and workers feared that with a takeover the company would lay off thousands of Tonghua employees.

"Chen disillusioned workers and provoked them by saying most of them would be laid off in three days," said a Tonghua police officer named Wang, according to the state-run China Daily. "Chen, saying that a total number of 30,000 employees would be cut to 5,000, infuriated the crowd."
Friday's violence occurred as prospects for China's steel industry are turning around.

The government's $586 billion stimulus package has set off a massive infrastructure-building spree, creating a huge demand for steel.

In June crude-steel production hit nearly 50 million tons — 6% higher than in the previous year, according to the World Steel Association, and close to an all-time high.

"Demand has just exploded in the first half of this year as a result of the government's stimulus package and bank lending," says Jim Lennon, a Macquarie Bank analyst. "Steel demand is massive."
But that massive demand offers only a temporary respite for Chinese policymakers.

Over the past decade, China has rapidly built new steel mills, and in 2002 it became the world's largest producer of the commodity. Now Chinese officials say the country has more production capability than markets at home and abroad can support.

In February, Luo Bingsheng, secretary general of the China Iron and Steel Association, said China's steel-production capacity exceeded the 2008 domestic demand of 500 million tons by 160 million tons. China's State Council has called for a consolidation of the industry in order to manage output better, with five major producers generating 45% of Chinese steel by 2011.
The government similarly hopes to cut the number of major automakers from 14 to 10 and to consolidate the estimated 5,000 cement producers.

Such restructuring should leave China with stronger, more stable industries.

But the process will be painful. Workers often find themselves with little say in matters and few chances to negotiate for better severance or retraining, says Geoffrey Crothall, spokesman for the Hong Kong–based China Labour Bulletin, a workers'-rights NGO.

"Downsizing and consolidation in and of itself is not the problem. It's the way in which that process is undertaken," Crothall says.

"What has been the case for many years is the privatization and restructuring of state-owned enterprises. The selling-off of state-owned assets and merger of state-owned companies has nearly always been done behind closed doors. The workers are never involved —they are simply presented with an ultimatum."

Employees are angry not just because of their lack of input, Crothall says, but often also because the process is tainted by corruption.

"Workers have no idea about the true value of the assets that are being privatized," he says. "Very often they accuse management — correctly in many cases — of embezzling assets in league with corrupt officials."
In the case of Tonghua Iron and Steel, it seems the steel industry's turnaround helped spark the riot.

Jianlong had invested in the company in 2005 but then pulled out as Tonghua lost money amid the global downturn this spring.

But as China's steel demand surged, Tonghua turned a profit of $6 million last month, renewing Jianlong's interest.

After the killing of Jianlong's representative on Friday, the local government announced the deal was canceled, China Daily reported.

'Dragon Fighter' shines the light on Uyghur grievances

• Rebiya Kadeer emerges as leader of minority Uyghur Muslims in China
• Chinese government reviles Kadeer, blames her for stoking unrest
• Kadeer mirrors the non-violent sentiment espoused by the Dalai Lama
• This is a "very dark time for the Uyghur people," Kadeer says

By Joe Sterling

Rebiya Kadeer has been dubbed "the Mother of All Uyghurs.

(CNN) -- She's been compared to the Dalai Lama, the Chinese Tibetan Buddhist leader, but the name Rebiya Kadeer doesn't ring a bell to many people outside of China.
Nevertheless, the world-famous man and the relatively obscure woman share similarities that chime with political relevance.
A diminutive northern Virginia resident, Kadeer has emerged as the voice of the restive but relatively unknown Uyghur Muslims, a Turkic-speaking ethnic minority in China, and the group's far-flung diaspora.
And like the Dalai Lama, she's revered by supporters and reviled by the Chinese government.
"Even though one is a man, and the other is a woman, they have one thing in common, and that is they engage in activities to split the motherland and damage national unity," said Qin Gang, a spokesman for the Chinese Foreign Ministry.
Kadeer, 62, emerged in the world media spotlight after China blamed her for stoking July's unrest in China's remote Xinjiang Autonomous Region, an area four times the size of California in the northwestern part of the country.
Reports vary on the number of people killed, ranging from around 200 to many more.
The problems began in late June, after two Uyghur migrant workers at a toy factory in Guangdong province were killed after a brawl between Uyghurs and ethnic Han Chinese -- the majority group in China.
Uyghurs protested in Urumqi, the Xinjiang capital, hundreds of miles from the toy factory. Uyghurs and Han reportedly attacked each other.
Nur Bekri, the Chinese government's top official in Xinjiang, accused Kadeer and the World Uyghur Congress she leads of instigating the unrest via the Internet.
"The violence is premeditated, organized violent crime," Bekri said. "It was instigated and directed from abroad and carried out by outlaws in the country."
China's constitution guarantees ethnic minorities equal rights and limited autonomy, but Kadeer says China still treats Uyghurs as second-class citizens -- and she blames China for most of the recent unrest.
Since the violence erupted, Kadeer has worked the media with a mission, drumming up support for the Uyghur cause and shining a light on what she says are China's "unjust policies" toward her people.
The estimated size of Uyghur population in China ranges from 8 million to 11 million people, making them a distinct minority in a country of 1.5 billion people. Uyghurs have long complained of being treated as a lesser class.
"Let them hear our voice and raise public awareness about our situation," Kadeer told CNN. "That's the main thing that I wish to do right now."
Dubbed "the Mother of All Uyghurs," Kadeer doesn't quite fit the profile of a political firebrand.
Born in modest circumstances, Kadeer fell into dire poverty amid the late Chinese communist leader Mao Zedong's forced relocation programs.
She worked her way up from laundry worker to become a millionaire businesswoman as China opened to free enterprise. She amassed an empire with department stores, real estate, lumber, scrap iron, factories and other enterprises.
She was also chosen as a member of a Chinese National Congress and other posts.

However, the mother of 11 children -- some of whom are in jail in China -- wasn't shy about speaking out about the conditions faced by Uyghurs, such as political imprisonment.
Her activism landed her in jail in 1999, an incarceration that attracted international attention and condemnation from rights groups and Western political officials. China released her on medical grounds in 2005 amid pressure from the U.S. government.
She was granted political asylum in the United States, reunited with her husband, and embarked on activist work.
Along with her role as president of the World Uyghur Congress, Kadeer is the president of the board of the Uyghur American Association and the full-time director of the International Uyghur Human Rights and Democracy Foundation.
Those groups receive money from U.S. taxpayers through the National Endowment for Democracy, a private, nonprofit organization created "to strengthen democratic institutions" around the world.
Hugh Pope, author of the "Sons of the Conquerors: The Rise of the Turkic World," describes Kadeer as a skillful and hard-working activist who has done a lot for the Uyghurs. He said she is well-situated in the Washington area, where she has easy access to media outlets, and is a "natural focal point" for the Uyghur rights cause.
"She has a canny sense on how to get on top of the situation. As long as she can maintain the Dalai Lama-like profile, she will persist in being a spokeswoman for the Uyghurs," Pope said.
Dru Gladney, an expert on China and its ethnic groups, described Kadeer as a significant leader who is a charismatic, determined and maternal figure who can move easily among the elites and the common people.
She has a message that can unite Uyghurs, and China's criticism of her in some ways has enhanced her stature, said Gladney, president of Pacific Basin Institute at Pomona College in California.
"She seems like somebody all Uyghurs can look up to," he said. He noted that her following is "quite remarkable" since she is a woman and both Muslim and Chinese cultures are patriarchal.
She abhors violence and favors peaceful resolution of conflicts, Gladney said.
In that respect, she mirrors the non-violent sentiment espoused by the Dalai Lama, who wrote an introduction to Kadeer's autobiography "Dragon Fighter," recently published in English.
"The Uyghur and the Tibetan people have a history of relationship and in modern times have shared somewhat similar experiences. I therefore hope that this book by Mrs. Kadeer will enable the readers to comprehend the experience of the Uyghur people," the Dalai Lama wrote.
Kadeer told CNN she has had "close communication" with the Dalai Lama. She said "our philosophy in peace is the same" and said the movements of both peoples for justice are connected.
"If the Chinese have the authority to destroy one of them, they have the authority to destroy the other," she said.
China's state-run Xinhua news agency reported Tuesday that Chinese President Hu Jintao, in a visit to Yunnan province this week, urged all people to show mutual respect and concern. He also said all ethnic minorities are important members of the Chinese family, the news agency reported in a story that did not specifically mention Uyghurs.
In a recent Wall Street Journal essay, "China's Ethnic Fault Lines," Gladney wrote that by the mid-1980s "official minorities were beginning to receive real benefits from the implementation of several affirmative action programs."
They include "permission to have more children (except in urban areas, minorities are generally not bound by the one-child policy)," paying fewer taxes, getting "greater access to public office," and better education for children -- in Mandarin Chinese rather than native tongues.
Kadeer has spent much of the last few weeks plowing through media interviews and chatting about how she juggles being the "Mother of All Uyghurs" with being a mother to her flesh-and-blood children.
"My family is very supportive of my activity," she said through a translator. Yet she has spent time apart from her husband, also a Uyghur activist, and children because of political ferment and imprisonment.
Kadeer says this is a "very dark time for the Uyghur people."
She condemned Chinese security forces for killing and injuring Uyghur demonstrators this month in Urumqi. Unrest also took place in the cities of Kashgar and Hotan, she said.
While she focuses on what she says is the Chinese crackdown against Uyghurs in "East Turkestan" -- the name Uyghurs use for the region -- she also condemned reported violence by "a number of Uyghur demonstrators."
"Uyghur demonstrators were doubtless expressing discontent over the severe and comprehensive repression they have suffered for years in East Turkestan," she said.
She cited "arbitrary detention, torture, and execution" the repression of their religion, "forced abortion and discrimination in several spheres, including health care and employment."
In her talks, Kadeer -- who sports braids and a traditional Uyghur dopa cap -- urges China to "stop the cultural genocide" and "address the legitimate grievances of the Uyghur people."
"I do believe that even our enemy would come dine at our table," she said, "because what we have been doing is in a peaceful way. So I do believe that they would come to our table and resolve this."

Uighur leader says 10,000 went missing in one night

President of World Uighur Congress, Rebiya Kadeer

By Chisa Fujioka

TOKYO (Reuters) - Nearly 10,000 Uighurs involved in deadly riots in China's northwestern Xinjiang region went missing in one night, exiled Uighur activist Rebiya Kadeer said Wednesday, calling for an international investigation.
Kadeer's visit to Tokyo was condemned by China. The vice foreign minister summoned the Japanese ambassador in Beijing to express China "strong dissatisfaction" and to "demand the Japanese government take effective action to stop her anti-China, splittist activities in Japan," the Foreign Ministry said.
In Xinjiang's worst ethnic violence in decades, Uighurs on July 5 attacked Han Chinese in the regional capital of Urumqi after police tried to break up a protest against fatal attacks on Uighur workers at a factory in south China.
Han Chinese in Urumqi launched revenge attacks later that week.
"The nearly 10,000 (Uighur) people who were at the protest, they disappeared from Urumqi in one night," Kadeer told a news conference in Tokyo through an interpreter.

"If they are dead, where are their bodies? If they are detained, where are they?"
She called on the international community to send an independent investigative team to Urumqi to uncover details of what had taken place.
The official death toll from the riots stands at 197, most of whom were Han Chinese who form the majority of China's 1.3 billion population. Almost all the others were Uighurs, a Muslim people native to Xinjiang and culturally tied to Central Asia and Turkey.
More than 1,000 people were detained in the immediate aftermath of the riots, and over 200 more in recent days, state media said. None has been publicly charged.
China has accused Kadeer, who lives in exile in Washington, of triggering the riots and of spreading misinformation.
Kadeer, who rejects the Chinese accusations, said she thought the death toll was much higher after learning that there was random gunfire one night when electricity in the city was shut down.
In a measure of continued nervousness and lack of information in Urumqi, the city government was forced to deny rumors sweeping the Han population that Uighurs were kidnapping Han to exchange them for detained Uighurs, a Chinese newspaper said.
Beijing does not want to lose its grip on Xinjiang. The vast territory borders Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India, has abundant oil reserves and is China's largest natural gas-producing region.

Tearing Down Old Kashgar: Another Blow to the Uighurs

A partly demolished building in Kashgar, an ancient Silk Road trading hub whose old city is being threatened by a Chinese-government redevelopment plan

By Ishaan Tharoor
In 1072, a medieval scholar named Mahmud Kashgari — from, as his name suggests, the Silk Road outpost of Kashgar — presented a landmark text to the Caliph of Baghdad.

It was the first ever compendium of the Turkish language, the babble of tongues spoken by nomadic tribes who roamed between the shores of the Caspian Sea and the wastes of Siberia. Despite the scope of his work, Kashgari was proudest of his hometown, boasting that the Turkic dialect there was the "purest" and "most elegant" of them all.
Nearly a millennium later, that language still lingers, spoken by ethnic Uighurs, a Turkic Muslim minority who make up the majority population in the Chinese frontier province of Xinjiang. Kashgar, a city of 3.4 million surrounded by mountains and desert, is at Xinjiang's westernmost tip, closer to Baghdad than to Beijing.

And while its history is rich — most agree at least 2,000 years old — many Uighurs in Kashgar see their culture and heritage as under attack by the Chinese government.

In the latest move, authorities have started to demolish Kashgar's old town — an atmospheric, mud-brick maze of courtyard homes, winding cobblestone streets plied by donkey carts, and dozens of centuries-old mosques.

By some accounts, at least 85% of Old Kashgar will be knocked down. Many expect the ancient quarter, considered one of Central Asia's best preserved sites of Islamic architecture, to disappear almost entirely before the end of the year.

"This is the Uighurs' Jerusalem," says Henryk Szadziewski of the Washington-based Uyghur Human Rights Project. "By destroying it, you rip the soul out of a people."
The decision to raze Old Kashgar was made before anti-Chinese riots in Xinjiang's capital of Urumqi broke out earlier this month.

That violence, in which at least 197 people died, was largely perpetrated by Uighurs against local Han Chinese, according to Beijing.

Uighur-rights groups say that the Uighur death toll after a police crackdown and Chinese counterattacks has gone unreported and that the riots were an outgrowth of long-standing frustrations with Beijing's policies, which, they say, discriminate against Uighurs, depriving them of jobs in their own land while curbing the teaching of the Uighurs' language and their ability to freely practice Islam.
According to observers, the bulldozing of Old Kashgar has only accelerated in the riots' aftermath.

The old town's warrens and alleyways are home to a tightly knit Uighur community and present, in Beijing's eyes, a potential haven for antistate activities.

"Uighurs may see the area as a space of refuge," says Szadziewski. "Moving them out makes the situation much easier for China to control."

As many as 220,000 residents (almost half the urban center's population) will be relocated to "modern" housing estates almost 8 km from their original homes, which have been passed down within families over generations.

The project has been reportedly executed with little to no consultation with those to be displaced. A sliver of Old Kashgar will remain as a sanitized tourist site, with a staff of actors enacting traditional Uighur culture.
The Chinese government has justified its actions by saying the relocation will improve residents' quality of life and that the old quarter was vulnerable to potential fires and earthquakes — a dubious claim considering how long many of Old Kashgar's structures have survived.

Most conspicuously, Old Kashgar was not included on a list of Silk Road sites that Beijing recently submitted to UNESCO for World Heritage Status, though it is still a top tourist draw in the region.

Suggestions voiced in the international press by a few Chinese city planners to reinforce and refurbish the buildings of the old town — rather than reducing them to rubble — have gone unnoticed in Beijing. A coalition of international heritage organizations is petitioning UNESCO to intervene, but it's questionable how much the U.N. agency can do to circumvent China's development policies.
The mood in Kashgar, according to observers, is one of defeat and resignation.

Since the violence in Urumqi, foreign reporters in the area have been tightly controlled by government minders and often prevented from taking pictures.

Locals fear speaking out; a recent government propaganda campaign sternly warned against those "creating a negative impression."

The demolition of the city's historic core fits lockstep with what many consider a concerted effort on Beijing's part to bring Xinjiang firmly under its grasp and dilute Uighur identity.

More and more Han Chinese migrants are flooding into Xinjiang's cities, including Kashgar. It's a process that led Turkish Prime Minister Recep Erdogan to controversially brand China's policy a "kind of genocide."
In Turkey — now the home of the scholar Kashgari's original manuscript — the Uighurs' plight strikes an emotional chord. And for most outsiders, dusty, remote Kashgar still holds a powerful romantic mystique.

Enduring beside billowing sands and beneath glacial peaks, it has charmed and thrilled travelers from Marco Polo to the modern backpacker clutching a Lonely Planet guide. Its knife smiths and livestock bazaars drip with exoticism, exuding a living history at the edge of the world.

But as Chinese authorities begin to smash Kashgar's ancient heart, its fabled allure may end up as just that — a fable.

Investors In China Fuel Fast Expansion

Indicators Suggest Less Rosy Picture
By Ariana Eunjung Cha
HONG KONG -- China's first initial public offering in nearly a year rose so high, so fast on Monday that regulators were forced to halt trading twice.

The Hong Kong stock exchange's Hang Seng Index this week soared to double its low point last fall. And new lending on the mainland tripled to more than $1 trillion in the first six months of 2009.
While most other countries around the world struggle to stabilize their economies, China's appears to be rocketing back.
China's leaders say that the economy may have bottomed out in the second quarter of this year. The National Bureau of Statistics in China reported that gross domestic product, or the value of goods and services it produced, was up 7.9 percent in that period -- surprising analysts who had predicted growth rates to skid to as low as 4 percent.

At this pace, China is on track to overtake Japan as the world's second-largest economy as soon as year's end.
But some secondary indicators contradict the picture of a miraculous comeback for China, economic analysts say.
Income tax revenue is plummeting, for instance. Profits of state-controlled companies are down nearly a quarter for the first half of the year. Wages are dropping in some areas. And credit card balances are rising.
In Hong Kong, the unemployment rate has remained high even as real estate prices have soared to the point where buying a home has become unaffordable for some middle-class earners. Approved loans jumped nearly 37 percent in June to $4.95 billion, a level higher than just before the Asian financial crisis in 1997.
There's a growing worry that the weaknesses in China's economy and Hong Kong's, which has become increasingly entwined with the mainland's, are similar to the problems the United States faced as its own crisis began: Consumers are overleveraged and banks are taking on too much risk, creating the potential for bubbles in stock and property markets.
"It is true the Chinese economy is recovering faster than in other parts of the world. But soaring capital prices are bringing unstable factors," said Dong Tao, chief regional economist for Credit Suisse.
China's central bank on Tuesday warned that inflation might rebound in the second half of the year. An increase in the price of food and consumer goods at this time could pose political challenges for the Communist Party, which has struggled to contain outbreaks of unrest driven by unemployment in its urban centers over the past year.
A cornerstone of China's $586 billion stimulus package that was rolled out last fall was pumping an eye-popping amount of government money into the economy. The value of loans China gave out in the first half of this year was similar to its gross domestic product during the same period. This type of "credit expansion hasn't been seen in the past 20 years," said Wendy M. Liu, head of China Research for ABN Amro.
Tao, a Hong Kong-based analyst for Credit Suisse, said that there's so much money that "enterprises and companies have no other places to invest it in the real economy.
"So they invest the money in buying lands and capital price soared. The credit is out of control now," he said.
The frenzy could be seen in Monday's initial public offering of Sichuan Expressway, a toll-road company, on the Shanghai Stock Exchange. It was offered at 3.6 yuan, opened at about 7.6 yuan, hit 15.25 yuan before closing at 10.9 yuan -- analysts had estimated shares to be worth no more than 6 yuan.
China's domestic stock markets are driven by individuals rather than the institutional investors who dominate other larger stock exchanges around the world and speculation has created a dangerous boom-and-bust cycle in the past.
Stock analysts will be watching the Wednesday debut of China State Construction Engineering closely to see whether it duplicates Sichuan Expressway's performance. China State Construction, China's largest housing contractor, is the world's biggest initial public offering this year. It has raised $7.35 billion.
"The massive fiscal stimulus package has shown some early signs of success, and this is why investors are now returning to the stock market... The recent momentum is certainly unsustainable," said Sherman Chan, an economist at Moody's Economy.com.
Vincent Chan, head of China research for Credit Suisse, was more blunt.

Chan said that right now he thinks most stocks are only slightly overvalued in the mainland and in Hong Kong, but that "if this boom continues for some time it will reach 'crazy' status.' "

China's Harassed Lawyers

By DICK THORNBURGH
At some point in the next 12 months, China will reach a key milestone: For the first time in its long history, the number of lawyers will surpass the number of judges.

In a country where Confucian culture has always frowned upon litigation, and where lawyers were long considered as “legal tricksters” undermining social harmony, the importance of this event cannot be underestimated.
For sure, 190,000 lawyers in a country of 1.3 billion people might still seem modest. But given that the legal profession was only reinstated after the end of the Cultural Revolution in 1976, and that prior to 1996 there were almost no private law firms, this can only be seen as a major achievement, matching China’s economic renaissance.
Yet if lawyers now enjoy increasing independence, those who defend human rights are increasingly under attack, with legal restrictions impeding their ability to provide an effective defense, to champion causes that challenge local power, or to form independent bar associations.
This month alone has seen several devastating setbacks.

On July 9, the Beijing Justice Bureau announced that it had canceled the licenses of 53 lawyers for allegedly failing to apply for re-registration.

The disbarred lawyers were all involved in high-profile cases challenging local or central authorities: the Sanlu contaminated milk scandal; allegations of corruption in the construction of schools that collapsed in the 2008 Sichuan earthquake; a challenge over government control of the official Beijing Bar Association; and an alphabet soup of human rights cases ranging from forced evictions of tenants and farmers to politically motivated prosecutions of dissidents and religious dissenters.
On July 13, the Beijing Bureau for Legal Affairs instructed lawyers considering the representation of Uighurs involved in the recent Xinjiang protests to “positively accept monitoring and guidance from legal authorities and lawyers’ associations.” Both associations are government-controlled.
On July 17, the authorities effectively shut down the Open Constitution Initiative, a nongovernmental legal aid organization that has worked on cases such as last year’s Tibet protests and the melamine-poisoned milk which sickened thousands of children. Claiming that the Open Constitution Initiative was improperly registered, officials of the Beijing Civil Affairs Bureau raided the group’s offices and confiscated computers and documents.
These setbacks are part of a new, negative trend.

Lawyers who take on sensitive cases or who seek redress for abuses committed by Communist Party officials are suffering a consistent pattern of abuse, including arrest and prosecution, harassment, suspension of their licenses or disbarment, and violent attacks.
The activism of these lawyers is an irritant to the Communist Party, which seeks to project an image of “social harmony” and an aspiration to develop the rule of law, while trying to maintain its ability to control legal and judicial decision-making.

This seeming contradiction can be explained in part by the party’s desire to channel the grievances of an increasingly rights-aware citizenry toward the courts as a pressure release valve. In this way lawyers play an important role in maintaining social stability.
But abuses against lawyers can only exacerbate social unrest.

Last year, according to official statistics released by the Ministry of Public Security, more than 90,000 protests took place in China. The Communist Party should realize that the overall benefits of a functioning legal system far outweigh the embarrassment caused by holding officials and institutions accountable.
Indeed, the backhanded way the government engineered the disbarment of the 53 rights-defending lawyers can be read as an admission that nothing they had engaged in was wrong. Instead of directly ordering the suspension of the targeted lawyers and law firms, the authorities instructed the government-controlled Bar Association to refuse to renew their licenses. Since licenses must be renewed annually, these lawyers have been effectively disbarred.
As Li Fangping, a lawyer with a distinguished record of taking challenging cases (most recently winning the release of a Tibetan monk tortured in detention) said on June 11, “Since my license was taken away by a body [the Bar Association] that has no standing to do so, I can’t even appeal the decision!”
But there are also more grave concerns.

Having lost their licenses, these lawyers are far more vulnerable to retaliation from the powerful institutions they have challenged, such as the Public Security Bureau. Some have already been placed under surveillance. Others have been taken away by state security agents. Yet others have been assaulted by unidentified aggressors.
Lawyers in China are now thinking about the chilling precedent of Gao Zhisheng, once China’s most famous human rights lawyer — voted one of “the 10 best lawyers in the country” by an official publication from the Ministry of Justice.

First Mr. Gao was disbarred. Then he received a suspended sentence for subversion. A year later, he was detained again. On Jan. 19, he was taken away by security personnel from his home. He has not been heard from since.
Over the past 30 years many lawyers and legal academics have contributed to the formidable effort by the Chinese government to build a modern legal system.

It is now time to turn our attention to those who want to use it. China’s lawyers need our support.

Beijing has thing for Puccini opera set in China

Workers prepare the stage for a production of Puccini's opera "Turandot" in May during the 2009 Beijing Opera festival at the National Center for the Performing Arts.

A singer prepares to perform in Puccini's "Turandot" in May during the 2009 Beijing Opera festival at the National Center for the Performing Arts. In the 1960s and ’70s, when opera was deemed a capitalist indulgence, Puccini’s “Turandot” was the most despised. Many Chinese thought the opera insulting, with its depiction of a despotic Chinese princess who has her suitors beheaded if they can't answer three riddles.

Singers perform an aria from "Turandot" at a news conference in Beijing in May. In recent years, there have been at least six Chinese productions of “Turandot.” Filmmaker Zhang Yimou, who is staging a version for China's 60th anniversary at the National Stadium, known as the Bird’s Nest, also directed a $15-million spectacle in 1998 inside Beijing’s Forbidden City.

A musician rehearses in the orchestra before a performance of "Turandot" in May during the 2009 Beijing Opera festival, China's first, held at the new performing arts center from mid-April to early July. Four out of nine full-length operas in the festival were Puccini works, with "Tosca" opening the event. They were were interspersed with revolutionary classics such as “Daughter of the Communist Party.”

Puccini's 'Turandot,' set amid a bloody royal court, was once reviled as insulting. But as economic powerhouse China seeks to create an audience for Western opera, the work has seemed a natural.

By Barbara Demick
Reporting from Beijing — Gli enigmi sono tre, una e la vita!li enigmi sono tre, una e la vita! What does the above mean? ("The riddles are three; life is one!")
Where is it from? (The opera "Turandot.")
Who is the latest musical sensation in China? (A dead Italian once scorned for his Orientalist fantasies about Asian women.)
Back in the 1960s and '70s, when Italian opera was deemed a capitalist indulgence in China, no work was more despised than Giacomo Puccini's "Turandot."

Many Chinese thought the opera insulting, with its depiction of a despotic Chinese princess who has her suitors beheaded unless they can answer three riddles.
They're singing a different tune these days.
For the 60th anniversary of China's communist revolution in October, a new production of "Turandot" has been commissioned for the 100,000-seat Bird's Nest stadium built for last summer's Olympic Games.

Last year, another production of the work had the distinction of being the first opera performed at Beijing's new National Center for the Performing Arts.
In recent years, there have been at least six Chinese productions of "Turandot."

Filmmaker Zhang Yimou, who is staging the anniversary version at the Bird's Nest, also directed a $15-million spectacle in 1998 inside Beijing's Forbidden City. A 2007 version of the opera was set in modern-day Shanghai with the successful suitor, Calaf, solving the riddles by -- how else are riddles solved in the 21st century? -- surfing the Internet.
Other Puccini operas are at the top of the hit parade in China.

His "Tosca" opened China's first bona fide opera festival, held at the new performing arts center from mid-April to early July. In fact, four out of nine full-length operas in the festival were Puccini works, which were interspersed with revolutionary classics such as "Daughter of the Communist Party."
Then there was the all-Chinese production of "La Boheme" -- in which the original setting of an artist's garret in Paris was transported to the warehouse art district of present-day Beijing.
The creative anachronisms are all part of China's effort to develop a popular audience for opera, figuring that if the country is going to import Western culture, it might as well be high culture. Next to traditional Beijing opera, with its discordant tones and stilted pageantry, Puccini is sensuously modern.
"The Chinese have made a major commitment and investment in the performing arts. With such a large country with so many people crazy about classical music, we see a huge potential market here," said Elena Park, assistant marketing manager for New York's Metropolitan Opera.
China's newfound passion for Italian opera has a touch of the nouveau riche about it, as if the production of high culture were a rite of passage in the ascent onto the world stage. (Want to be a superpower? Need opera house. Check!)
Chinese like to boast that their new arts center, with its soaring titanium dome and $360-million price tag, is bigger than New York's Lincoln Center and Washington's Kennedy Center combined.
"The building and the facilities it provides are definitely first class. That's one of the reasons the opera festival attracted so many people -- the audiences wanted to see the building," said Deng Yijiang, vice president of the Beijing center.
But at times the artistry lags behind the infrastructure, as was evident from some of Puccini's recent misadventures in Beijing.
The modernized production of "La Boheme" opened with a two-minute video clip in which someone got off a Grand China Air flight in Beijing and rode in a Mercedes to the opera performance. Not coincidentally, Grand China Air and Mercedes-Benz were sponsors of the opera festival.
"It was terrifying what they did to Puccini. It gave pain to my aesthetic sensibilities," complained Tomasz Sajewicz, an opera buff who has lived in Beijing for four years as a reporter for Polish radio.
During some performances, people sitting in the front row were conspicuously texting on their cellphones.
"It makes me angry to see people in the best seats who don't appreciate the music," said a Chinese music student, an aspiring soprano who had paid $30 for a ticket.
Deng, the vice president of the arts center, concedes that Chinese audiences need some training. "Italian opera has only existed in China for 80 years, compared with 400 years in Italy," he said. "Our audiences have a limited understanding of opera, and we are only now trying to educate them."
It is only fair to point out: If the Chinese don't always grasp the fine points of Italian opera, Puccini didn't know much about China.
The composer, who died in 1924, never set foot in Asia, but he wrote two Asian-themed operas: "Turandot" and "Madame Butterfly," which is set in Japan. A Chinese melody that is incorporated into "Turandot" came from a music box owned by an Italian nobleman, according to a 1991 study of the opera by William Ashbrook and Harold Powers. The music scholars described the opera as "an unconscious manifestation of racial arrogance."
The plot is pure fiction. There never was a Chinese princess who beheaded her suitors, and the story on which the libretto was based was set in Persia.
The libretto is full of historical errors. Turandot, in her famous aria "In questa reggia In questa reggia" ("In this palace"), refers to events that took place in the palace thousands of years earlier, but the Forbidden City, where the opera is set, was completed less than 600 years ago.
Even after Western music was rehabilitated here, "Turandot" remained problematic because of its depiction of a repressive Chinese regime.

In the aftermath of the Tiananmen Square crackdown of 1989, with China under fire for human rights abuses, performances of the opera in Shanghai and Beijing were canceled.
"This is not a convenient opera since it might arouse people to bloodthirsty acts," wrote an editor of the official New China News Agency.
A 1995 production changed the location from China to a mythical kingdom in Central Asia.
Last year's arts center "Turandot" was a more faithful, if slightly gentler, version of the original.
It dispensed with the customary props of severed heads on poles and toned down some of the more explicit lines in the libretto. (Such as when Turandot's ministers Ping, Pang and Pong warn, "They strangle you in this place, impale you, cut your throat, skin you, tear you to pieces and decapitate you, saw you and disembowel you.")
Instead of an empress with long fingernails, the usual portrayal of the title character, this "Turandot" was a frightened young girl.
The production had an authentically Chinese finale. Puccini died with the opera unfinished, and an ending composed by his Italian contemporary Franco Alfano is most often performed. The arts center used a new, 18-minute ending by Chinese composer Hao Weiya celebrating the triumph of love.
"I think previous versions of 'Turandot' were too scary," said Chen Xinyi, who directed the arts center production. "They misinterpreted Chinese culture."
The trickiest thing was to adapt the opera for an audience well educated in Chinese history.
Unsure what time period to set the opera in, designer Gao Guangjian took elements from six Chinese dynasties.
"I deliberately scrambled the dynasties so that it would be less obvious that this is a phony story," said Gao, who has worked on six productions of "Turandot" -- and is starting his seventh, the Bird's Nest production for October.

"I wanted to make it feel authentic."
But people don't go to the opera to learn about history, he said.

To Gao, it's no riddle why the Chinese love "Turandot": "The music is wonderful."

Should India kowtow to China ?

Controversy over Rebiya Kadeer's reported plans to visit India raises questions over the country's relationship with China
Kanishk Tharoor
Last weekend, it was reported that India had denied a visa to Rebiya Kadeer, the ostensible leader in exile of China's minority Uighur community, who China accuses of masterminding recent unrest in its western province of Xinjiang.

Many Indian strategists applauded the decision – only for the Uighur Human Rights Project to later deny the reports.

New Delhi, the strategists argued, had little to gain from riling Beijing and even less to gain from adding to Kadeer's travel itinerary, a global junket aimed at building sympathy for the plight of the Uighurs.

The Turkic, predominantly Muslim Uighurs made headlines this summer after riots and state repression shook Xinjiang. India's interests, some say, would be best served by staying out of the mess altogether.
After all, a visit from Kadeer would, it seems, only cause grief for her would-be hosts. Her impending attendance at the Melbourne International Film Festival in Australia prompted Chinese directors to withdraw their films and Chinese hackers to attack the festival's website.

In a furious diplomatic spat, Beijing slammed Japan's decision to grant her a visa. And Chinese officials threatened Ankara over the Turkish prime minister's promise to allow Kadeer into Turkey.
This certainly isn't the first (nor will it be the last) time a state has put pressure on other countries to curtail the movement of controversial individuals.

But what we should find distressing is the extent to which countries have allowed their own affairs to be dictated by China's propaganda campaign.

Kadeer is supported by American money, but she is not a "terrorist" (as China insists on dubbing her and her allies), nor is she capable of orchestrating the unrest in Xinjiang (as China claims she did).

Instead, China has turned this woman – who I had the pleasure of meeting briefly when she visited openDemocracy's offices a few years ago – into a straw-man, directing domestic outrage against her while distracting attention from the real anger, real frustration and real grievances of the Uighurs.
Indians should feel disappointed by the idea that their country would placate China's officials and legions of "netizens".

In so many ways, India is strikingly different from its fellow Asian giant. India is a democracy, bubbling with debate and dissent. It is a truly plural country, uniting dozens of languages, thousands of dialects, numerous religions and ethnicities.

It is no stranger to ethnic violence and secessionism, but it has managed to accommodate most of these outbreaks through the democratic process and under the wide roof of Indian identity. No Indian leader could now speak as Chinese president Hu Jintao did yesterday when, in archaic terms, he called for the "revival of the great Chinese race".
But like China, India has settled upon a more functional vision of foreign policy in the 21st century. In the wake of the cold war and the stumbles of American power, both New Delhi and Beijing believe in building a "multipolar world order", in which many more countries can be stakeholders in an international system defined by negotiation and respect of national sovereignty.

Such a system may be more global and representative, but it provides little scope for any kind of judgment and policy beyond the strategic.

Fifty years ago, India welcomed the Dalai Lama and the Tibetan leadership as they fled the guns and tanks of the Chinese army.

Up to the 1990s, India supported Aung San Suu Kyi's democratic movement in Chinese-backed Burma, when western governments had little interest in her struggle (let's not forget that the west also had – and continues to have – a great predilection for expedient, morally blind foreign policy).

Indian policymakers remember that these decisions had real strategic consequences, including a disastrous war with China in 1962 and the loss of influence on its eastern border.

For India to deny Kadeer a visa would stem from a more cautious political calculus.

But would also suggests that India accepts the rules of Chinese geopolitics: power – never ideals – is the ultimate arbiter of action and compromise.

Turkey No Longer a Safe Haven for Chinese Uighurs

Protesters chant slogans and hold up flags in solidarity with Turkic-speaking Muslim Uighurs in Istanbul on July 12

By Pelin Turgut / Istanbul
On a humid afternoon in a quiet Istanbul suburb, Abdullah, a pint-sized, bright-eyed octogenarian, presides over a chaotic household.

Over a dozen Turkish Uighurs have gathered to welcome his distant cousin and family who have fled China's Xinjiang province after the recent communal violence.

Fearing retribution from the Chinese authorities, he insists on using only his first name.

The dining room's table is laden with Uighur specialities — steamed dumplings, sesame-encrusted flatbreads, pastries stuffed with cheese and dates.

"This isn't our homeland," Abdullah says, leaning on a mahogany cane, "but Turkey is our home. We are comfortable here."

He fumbles for the Turkish ID card he carries in his shirt pocket and points to his place of birth: Xinjiang. Abdullah received Turkish citizenship almost instantly when he first arrived, via Afghanistan, in 1981.
Turkey once had an open-door policy toward its Uighur brethren, the Turkic ethnic minority who began arriving in waves from China from the late 1930s.

In 1952, for instance, when several thousand Uighurs fled China's communist regime into Pakistan, the Turkish government stepped in and brought 1,850 people overland to Turkey.

The new arrivals were settled in purpose-built housing — called the New Quarter — in the city of Kayseri in central Anatolia, and were given jobs and citizenship.
Such a welcome, however, is unimaginable today.
Even though public sympathy still runs strong for the long-suffering Uighur population of what many Turks refer to as East Turkestan, Ankara has become increasingly wary of antagonizing Beijing.

Just last month, President Abdullah Gul visited China and oversaw the signing of $1.5 billion in Turkey-China business contracts.

After the recent violence in Urumqi, one minister called for a boycott of Chinese goods, but that was quickly retracted; Prime Minister Recep Tayyip Erdogan labeled events there "tantamount to genocide," but his outburst was soon smoothed over by apologetic Foreign Ministry officials.
"It's a dilemma for Turkey," says Hugh Pope, author of Sons of the Conquerors: The Rise of the Turkic World.

"On one hand, there is a bond. [Uighurs] are Turks. You can fly east from Istanbul, get off the plane and make conversation to some degree. On the other hand, most of the official reaction was domestic political grandstanding. You don't get the impression that the Prime Minister cares as much about Xinjiang as he does, say, about Gaza." (Erdogan had a high-profile clash with Israel's President Shimon Peres at the World Economic Forum in Davos last February when he sharply condemned Israel's military offensive in the Palestinian enclave.)
Turkey's ability to strike a balance between its ties with the Uighurs and with Beijing may soon be further tested if Rebiya Kadeer, the fiery Washington-based Uighur leader, decides to take up Erdogan's offer of a visa to visit Turkey.

Her previous requests to visit were denied under pressure from Beijing, which accuses her of fomenting the current outbreak of violence. Chinese officials have warned Turkey against allowing Kadeer to visit.
For Uighur refugees like Abdullah's newly arrived relative Mahmut, a 39-year-old construction worker, and his preschool teacher wife and daughters, the reluctance of Turkey and the Central Asian countries that border Xinjiang to jeopardize their relations with China could make for a difficult and lonely future.
Today, a few hundred Uighurs trickle into Turkey each year, and they can apply to the local office of the United Nations High Commissioner for Refugees (UNHCR) for refugee status, but are treated no differently than an Iraqi or a Sudanese.

They wait months to be processed and, if approved, are given temporary travel papers and sent on to receptive third countries such as Canada or the Netherlands.

"Turkey used to have a law which allowed Turkic people like the Uighurs to be treated like migrants, instead of immigrants, but that has changed," says the UNHCR's Metin Corabatir.
Individuals with relatives living in Turkey can sometimes win residency status, but there are no guarantees.

Mahmut was trying to get there years before the latest outbreak of violence in Xinjiang. He waited two years to be issued a Chinese passport, he says, because he is Uighur. He was also required to provide two guarantors to vouch that his family would return to China.

"If you don't come back, you know those two people will get in trouble," he says.

"But it's a risk we had to take. The pressure keeps increasing on us Uighurs and I didn't want the girls brought up living in fear."

Getting a Turkish visa took several more months. After the riots, Mahmut paid people to get his family past security checkpoints to the airport.
He hopes to eventually end up in Europe, even though he has family in Istanbul.

"It is hard for us to get permission to stay here. It's not like it used to be," he says. "But there is no going back now."

He mimics a knife slitting his throat and says "Han Chinese."

There is silence in the room, then the children — dressed in brightly colored batik print dresses — burst out laughing and begin imitating his motion.

Mahmut smiles slowly. For a brief moment, this is just another family reunion.

Files Vanished, Young Chinese Lose the Future

Xue Longlong, on the street where he lives in Xian, China. When his academic records vanished in Wubu, he lost out on a high-paying job, and the woman he hoped to marry abandoned him.

Wubu is a struggling town of 80,000 banked by steep hills and coal mines.

Wang Jindong, who had a shot at a job at a state chemical firm, is a construction day laborer, earning less than $10 a day.

By SHARON LaFRANIERE

WUBU, China — For much of his education, Xue Longlong was silently accompanied from grade to grade, school to school, by a sealed Manila envelope stamped top secret.

Stuffed inside were grades, test results, evaluations by fellow students and teachers, his Communist Party application and — most important for his job prospects — proof of his 2006 college degree.
Everyone in China who has been to high school has such a file. The files are irreplaceable histories of achievement and failure, the starting point for potential employers, government officials and others judging an individual’s worth.

Often keys to the future, they are locked tight in government, school or workplace cabinets to eliminate any chance they might vanish.
But two years ago, Mr. Xue’s file did vanish. So did the files of at least 10 others, all 2006 college graduates with exemplary records, all from poor families living near this gritty north-central town on the wide banks of the Yellow River.
With the Manila folders went their futures, they say.
Local officials said the files were lost when state workers moved them from the first to the second floor of a government building. But the graduates say they believe officials stole the files and sold them to underachievers seeking new identities and better job prospects — a claim bolstered by a string of similar cases across China.
Today, Mr. Xue, who had hoped to work at a state-owned oil company, sells real estate door to door, a step up from past jobs passing out leaflets and serving drinks at an Internet cafe.

Wang Yong, who aspired to be a teacher or a bank officer, works odd jobs.

Wang Jindong, who had a shot at a job at a state chemical firm, is a construction day laborer, earning less than $10 a day.
“If you don’t have it, just forget it!” Wang Jindong, now 27, said of his file. “No matter how capable you are, they will not hire you. Their first reaction is that you are a crook.”
Perhaps no group here is more vilified and mistrusted than China’s local officials, who shoulder much of the blame for corruption within the Communist Party. The party constantly vows to rein them in; in October, President Hu Jintao said a clean party was “a matter of life and death.”
Critics contend that China’s one-party system breeds graft that only democratic reforms can check. But China’s leaders say the solution is not grass-roots checks on power, but smarter oversight and crime-fighting.
Public policy specialists say China is shifting its emphasis from headline-grabbing corruption cases to more systematic ways to hold officials accountable. The government opened an anticorruption hot line last month to encourage whistle-blowers. A few localities require that officials disclose their family assets to the party.
But in Wubu, a struggling town of 80,000 banked by steep hills and coal mines, citizens say that local officials answer to no one, and that anyone who dares challenge them is punished.
“When the central government talks about the economy and development, it sounds so great,” said Mr. Wang, the day laborer. “But at the local level, corrupt officials make all their money off of local people.”
Student files are a proven moneymaker for corrupt state workers. Four years ago, teachers in Jilin Province were caught selling two students’ files for $2,500 and $3,600; the police suspected that they intended to sell a dozen more.

In May, the former head of a township government in Hunan Province admitted that he had paid more than $7,000 to steal the identity of a classmate of his daughter, so his daughter could attend college using the classmate’s records.
While not quite as important as in Communist China’s early days, when it was a powerful tool of social control, the file, called a dang'an, is an absolute requirement for state employment and a means to bolster a candidate’s chances for some private-sector jobs, labor experts say. Because documents are collected over several years and signed by many people, they are virtually impossible to replicate.
So in September 2007, when one Wubu graduate sought work at a local bank and discovered that his file was gone, word spread fast. For the next two years, his parents and a group of other parents in similar straits said, they sought help at every level of the bureaucracy.
The government’s answer, they said, was to reject any inquiry, place the graduates’ parents under police surveillance and repeatedly detain them.

Last February, they said, five parents trying to petition the national government were locked in an unofficial jail in Beijing for nine days.
“We are so exhausted,” said one tearful mother, Song Heping. “Our nerves are about to snap from this torture. The officials who were responsible not only have not been punished, they have been promoted.”
Wubu officials did not respond to repeated inquiries.

One Chinese television journalist said they told him they had resolved the matter simply by creating new folders. But families say the folders held nothing but brief, error-riddled résumés that employers reflexively reject as fake.
The parents are uniformly poor: one father drives a three-wheel taxi, earning just 15 cents per passenger.
Mr. Xue’s parents sacrificed even more than most, in the belief that education would lead their children out of poverty. They earn just $450 a year growing dates, and live near a dirt mountain path, drinking well water and cooking over a wood fire.
Mr Xue, the oldest child, wore secondhand clothes and skipped meals throughout high school. When he won admission to a university in Xi'an, 400 miles away, his parents borrowed to cover the $1,500 in annual expenses. Initially, it seemed the bet would pay off: he said he had had a chance to work at an oil company with a monthly salary of $735.
But the job evaporated with his dang'an.

“It was a catastrophe,” he said. Now he earns a base salary of $90 a month as a door-to-door salesman and lives in a tiny, dingy room in a Xi'an slum.
The woman he hoped to marry left him because her parents said he would never have a stable job.

His mother suffered a nervous breakdown, and the family debt ballooned. His father, Xue Ruzhan, said he owed more than $10,000 — more than twice what his property is worth.
“What is the point of continuing to live?” the father said.

“Sometimes I want to commit suicide. These corrupt officials destroyed all our hopes.”
Including, it seems, the hopes of Longlong’s younger sister, Xiaomei, an 11th grader who once thought she would follow him to a university degree.
No more. “I want to quit,” she said during a school lunch break. “My brother graduated from college. What good did it do him?”

Foreign execs head east for jobs as China expands

By Kirby Chien
BEIJING (Reuters) - He calls himself a Silicon Valley refugee who has worked for giants IBM and Siemens as well as software startups.
Now Ronald Raffensperger, a marketing director at fast-growing Huawei Technologies, numbers among the increasing numbers of foreign expatriates China is counting on to steer its push overseas.
China wants state and private companies to expand globally and skilled expatriates like Raffensperger are increasingly finding key roles in that campaign.
"Chinese high-tech companies are just beginning to understand the need for marketing, brand-building and globalisation," said Raffensperger, who has worked at Huawei, the world's No. 3 wireless telecoms gear maker, for two years after 30 years in Silicon Valley.
"I bring that global experience to Huawei," he said.
That expertise is becoming more valuable as foreign direct investment into China fell 17.9 percent in the first half and the country's acquisitions overseas face stiff political headwinds as spotlighted by Chinalco's failed tie-up with Rio Tinto.
China's dynamism has long attracted overseas ethnic Chinese executives but rising unemployment in developed countries is drawing non-Chinese foreigners into the country's industries, from automobiles to financial services.
"Foreign expat executives have fewer options today," said Michael Norman, a vice-president for Sibson Consulting, a human resources firm based in North America.
"But for those with unique skills or knowledge there are growing opportunities working for Chinese companies," he said.
China's economy grew a stronger-than-expected 7.9 percent in the second quarter, one reason Sibson -- which is looking for local partners -- sees high demand from Chinese firms for executives with specific technical or marketing skills.
China International Intellectech (Shanghai) Corp, an executive search and consultancy, said that last year, it recommended over 1,000 foreign executives -- mostly ethnic Chinese -- for positions in multinationals doing business in the mainland.
So far this year, CIIC has recommended about the same number of expatriate executives to clients.
The list of Chinese companies taking advantage of recruiting foreign executives is growing as they expand globally.
The Haier group, China's largest appliance maker -- including Qingdao Haier and Haier Electronics -- bought a 20 percent stake in New Zealand's Fisher & Paykel Appliances in May, just months after hiring American Philip Carmichael as its Asia Pacific chief.
Tencent Holdings Ltd hired U.S. game producer Steve Gray as research and development consultant to develop and distribute Take-Two Interactive Software Inc's popular NBA 2K basketball video game in China.

STATE FIRMS JUMP IN
Private firms, especially those in the fast-paced electronics industry, have been the most aggressive in recruiting foreign talent, but state-owned giants such as Aviation Industry Corp of China (AVIC) are also beginning to appreciate the benefits.
"The global financial crisis comes just as we are opening to the world, offering a great opportunity to attract international expertise," said Zhang, whose company aims to one day challenge the global dominance of Boeing and Airbus.
AVIC earlier this year announced plans to recruit 13 executives from around the world in key areas such as research, asset management, business development and marketing.
The aviation giant, like many Chinese firms, has the ambition -- and the backing of Beijing -- to be a global champion, but when it comes to execution, the lack of international experience is a glaring hole in many domestic executives' resumes.
Lenovo Group, China's top personal computer maker, appointed a former Dell executive, William Amelio, as its chief executive to help integrate IBM's PC business after buying the unit in 2005 for $1.25 billion.
"We decided to bring in a foreigner to learn and study from," said Liu Chuanzhi, the company's founder and chairman.
Liu said putting current chief executive Yang Yuanqing -- the heir apparent who eventually took over from Amelio earlier this year -- in as CEO at the time would have been disastrous.
"He would almost certainly have failed," said Liu.

PROBLEMS
But going east is not without its problems.
China's highly efficient manufacturing base seems to be a natural fit for executives with specialized skills honed in global markets, but the cultural gulf can be formidable.
Recruitment companies and firms such as Sibson reckon the tenure for the majority of foreign executives at Chinese firms is less than a year, including ethnic Chinese expats.
"As an American, I first came here and said, 'Where are my people? What is my budget? Give me a general direction and I'll go for it,'" said Huawei's Raffensperger, a U.S. citizen.
"It doesn't work that way. You have to spend a lot of time listening, asking questions and understanding how decisions are made," he said.

Uighur premiere a sell-out in Australia

MELBOURNE — The premiere of a documentary about a Uighur activist that Chinese officials tried to have pulled from Australia's biggest film festival was a sell-out success, organisers said Monday.
The Melbourne International Film Festival called in security guards for Sunday night's premiere of "Ten Conditions of Love" fearing trouble amid Chinese anger over the film about exiled Uighur leader Rebiya Kadeer.
Festival director Richard Moore has accused Chinese officials of trying to bully him into pulling the documentary, while Chinese directors have withdrawn their films in protest and hackers have attacked the festival website.
Event spokeswoman Louise Heseltine said the website remained partially disabled Monday because of the cyber-attacks, in which hackers replaced information with the Chinese flag and left anti-Kadeer slogans.
But she said the screening at a city centre cinema was peaceful and the audience response was positive.
"No one came to protest or demonstrate against it," she said, adding that efforts to stop the film had only enhanced its profile.
China accuses Kadeer, the US-based head of the World Uighur Congress, of masterminding violent unrest in China's northwestern Xinjiang region on July 5 that left more than 190 people dead. She denies the charges.
Foreign ministry officials in Beijing have said they oppose countries providing Kadeer with a platform "to engage in anti-China separatist activities".
The Australian film-maker behind the documentary, Jeff Daniels, said he was surprised at the strength of the campaign against his film.
"I understood that the Chinese government certainly didn't want the film to be screened but I never thought people would put that much pressure on the festival," he told Sky News.
Daniels, who will host Kadeer when the film next screens in Melbourne on August 8, said he was pleased Sunday's premiere was peaceful.
"I know emotions are running high at the moment. It's a very dark time for the Uighurs in China and there are a lot of angry people from China on both sides, he said.
"So I'm very happy that it went peacefully, as a documentary should, and people were able to see different sides of the story."
The Uighurs, a Muslim ethnic minority group who mainly live in western Xinjiang province, complain of political and religious repression under Chinese rule

Australian Film Festival Hacked, Japan Next?

By Sky Canaves
The drama over the Melbourne International Film Festival took another turn over the weekend.
After protests from the Chinese government and the withdrawal of the bulk of its Chinese films by directors who said they were upset about the festival’s planned inclusion of a film about exiled Uighur activist Rebiya Kadeer, hackers and Internet users have gotten in on the action.
Over the weekend, computer hackers broke into the festival Web site and planted an image of a Chinese flag on its home page along with anti-Kadeer slogans, the Age reports.

Meanwhile, festival director Richard Moore told the Age that the festival’s email inboxes were being bombarded with angry missives. He added that the attacks appeared to be coming from Chinese IP addresses.
China blames Kadeer for fomenting ethnic tensions among China’s Uighurs and for orchestrating the July 5 protests in Urumqi that turned violent, leaving nearly 200 dead.

Earlier this month, China’s Foreign Ministry spokesman, Qin Gang, said that China is “firmly opposed to any foreign country providing her with a stage for her anti-China separatist activities.” Kadeer has denied any involvement in the protests and riots.
Kadeer is scheduled to appear at a festival screening of the documentary about her, titled “10 Conditions of Love,” in Melbourne on Aug. 8, and organizers have been stepping up security preparations as a result.
The next target of hackers, angry youth and government protestations may well be Japan. According to the AFP, Kadeer is planning to visit the country later this week, where she will meet with members of the ruling Liberal Democratic Party and promote the Uighur cause.

China often takes offense at trips by its declared enemies of the state.

Last year, after French president Nicolas Sarkozy announced plans to meet with the Dalai Lama, China abruptly postponed a scheduled EU summit (It was eventually held in May).
India recently denied a visa to Kadeer, a U.S. citizen, to avoid offending Beijing, the Indian Telegraph reports.

Mining Executive Held by China Is Seen as an Unlikely Pawn

Stern Hu, a naturalized Australian citizen and Rio Tinto executive, was taken into custody by Chinese authorities on July 5.

By DAVID BARBOZA
SHANGHAI — Stern Hu always looked dapper at steel industry forums, where he mingled easily and liked to talk about soaring demand for his company’s product, iron ore, a key ingredient in steel.
Mr. Hu, a high-flying executive working for the British-Australian mining giant Rio Tinto, seemed to be well liked by his industry colleagues, including those who fought with him over the price of iron ore.
“He was quite impressive, elegant and calm,” said Hu Kai, an analyst at UMetal.com who met Mr. Hu at industry conferences.
But on July 5, Mr. Hu, a naturalized Australian citizen, and three Chinese colleagues were taken into custody by the authorities here on suspicion of stealing state secrets and harming China’s economic interests.
The high-profile arrests have already strained relations between Australia and China, touched off an investigation into corruption in the world’s biggest steel industry and turned Mr. Hu, now in his 50s, into an unlikely pawn in a power struggle over who controls the price of one of the world’s most valuable commodities. The arrests have also struck fear into foreign businesses doing deals in China.
Prime Minister Kevin Rudd of Australia has warned China that the world is watching what happens to Mr. Hu and his colleagues. Also, some Australians view the detentions as retaliation because Rio Tinto played hardball this year in iron ore negotiations with China and recently scrapped a deal that would have given a Chinese company, Chinalco, a sizable stake in its operations.
Rio Tinto insists its employees did nothing wrong. And many legal experts say they doubt Mr. Hu will get a fair trial under China’s vague state-secrets law.
But China, which considers its steel industry a vital national interest, says Mr. Hu and his colleagues bribed steel officials for access to confidential documents that may have given them an edge on Chinese steel mills during this year’s annual iron ore negotiations.
Now there is a diplomatic standoff over the fate of Mr. Hu, who friends say always avoided the spotlight, particularly after a photograph of him taking part in demonstrations in Tiananmen Square in 1989 threatened his first job, at a large state-owned company in China.
“It was easy to recognize his face,” one friend recalled of the 1989 photograph. “After that he had a bitter time.”
Mr. Hu and his three colleagues have not yet been formally charged with a crime. But two weeks ago they were essentially denounced as traitors by a spokesman for China’s Foreign Ministry and condemned in China’s state-run news media, which published allegations that Rio Tinto bribed executives from 16 large Chinese steel mills.
Until charges are filed, Mr. Hu may be prevented from seeing a lawyer, legal experts say. He has been visited only by an Australian consular official, the Australian government has said.
In a brief telephone interview on July 18, Mr. Hu’s wife, Julie, also a naturalized Australian citizen, said, “We are doing fine,” referring to her and her two children. She declined to say much more.

“This is not the time for me to talk,” she said.
Rio Tinto has declined to release even the most basic biographical material about Mr. Hu, like his age.
But in interviews over the past two weeks, friends and former colleagues described Mr. Hu as a hard-working executive who they doubted was capable of espionage or bribery.
“He was as honest as the day is long,” said Ron Gosbee, who has known Mr. Hu for nearly 20 years. “Everything he did was legitimate.”
Mr. Hu was born Hu Shitai in the northern Chinese city of Tianjin (he later adopted the English name Stern), and he grew up during the tumultuous Cultural Revolution. During that period, a friend said, his parents were forced to work in the countryside as peasants.
But in 1979, after China began opening up its economy, Mr. Hu won admission to the country’s top school, Peking University, where he studied history and met his future wife. In 1986, he earned a master’s degree from the Chinese Academy of Social Sciences.
After college, Mr. Hu found work at the China International Trust and Investment Company, a large state-owned corporation known as Citic. But friends say he was pressed to leave in 1990, after his bosses discovered that he was pictured in a Western publication taking part in the 1989 pro-democracy demonstrations in Tiananmen Square.
Two friends, both Chinese citizens, said he joined the demonstrations, but they declined to say more about his activities. They spoke on the condition of anonymity because they feared government retribution.
After Citic, he joined AWA, an Australian company, helping it sell traffic-management systems in China. During that time, he lived briefly in Australia and gained citizenship there, Mr. Gosbee said.
In 1996, Mr. Hu found work at Hamersley, the iron ore division of what later became Rio Tinto, helping feed China’s growing appetite for iron ore. As a star salesman, Mr. Hu was often invited to conferences hosted by the China Iron and Steel Association and grew increasingly popular with steel mill executives.
At a 2007 conference, Mr. Hu made a presentation highlighting Rio Tinto’s power in China by pointing out that President Hu Jintao and Prime Minister Wen Jiabao made visits to Rio Tinto’s Australian facilities. He also had charts showing the profits Chinese steel mills made by doing business with Rio Tinto.
But by then, analysts say, Rio Tinto’s relations with China’s state-controlled steel mills were already beginning to sour. Rising iron ore prices meant huge profits for Rio Tinto but were a threat to big Chinese mills, particularly after an 85 percent price jump in 2008.
This year, when the world’s big-three iron ore producers, led by Rio Tinto, balked at a sharp price cut demanded by China’s steel association, things turned ugly. Talks ended in a deadlock in late June.
“Rio believed there was no imperative for them to do the Chinese any great favors,” said Peter Phillips, an industry consultant based in Australia. “And the Chinese side took that as an ultimatum. So they decided to show who’s in charge. And there’s no doubt who’s in charge in China.”
Less than a week after talks broke off, officers from China’s state security bureau detained four Rio Tinto employees in Shanghai, including Mr. Hu, on suspicion they used confidential documents to get an unfair advantage in those negotiations.

China hacks Melbourne film festival site to protest at Uighur documentary

Beijing unhappy at decision to screen film about exiled Uighur leader Rebiya Kadeer
Mark Tran

Rebiya Kadeer is the subject of the documentary The 10 Conditions of Love.

Chinese hackers have attacked the website of Australia's biggest film festival over its decision to screen a documentary about the exiled Uighur leader, Rebiya Kadeer.
Yesterday, two days after the Melbourne international festival opened, hackers replaced programme information with the Chinese flag and anti-Kadeer slogans and sent spam emails in an attempt to crash the site, according to reports in the Australian press.
"We like film but we hate Rebiya Kadeer," one message said, demanding an apology to the Chinese people.
The festival director, Richard Moore, said staff had been bombarded with abusive emails after he rebuffed demands from the Chinese government to drop the film about Kadeer, The 10 Conditions of Love, and cancel her invitation to the festival.
"The language has been vile," Moore told the Melbourne Age. "It is obviously a concerted campaign to get us because we've refused to comply with the Chinese government's demands."
He said the festival had reported the attacks, which appear to be coming from a Chinese internet protocol address, and was discussing security concerns with Victoria's state police.

Private security guards are being hired to protect Kadeer and other patrons at the film's screening on August 8.
Kadeer denies Beijing's claim that she masterminded this month's riots in Xinjiang's capital, Urumqi, in which almost 200 people died.

The 10 Conditions of Love, directed by the Australian filmmaker Jeff Daniels, describes Kadeer's relationship with her activist husband Sidik Rouzi and reveals the impact of her campaign for more autonomy for China's 10 million mainly Muslim Uighurs on her 11 children, three of whom have received jail sentences.
Once one of the richest women in Xinjiang and held up as an exemplar of China's purported multi-ethnic harmony, Rebiya Kadeer now heads two prominent Uighur exile groups, speaking out against Beijing's oppression of the Turkic-speaking minority.
Kadeer's persecution by the Chinese and her stature as a public face of the Uighur people have earned her comparisons to the Dalai Lama, the exiled Tibetan spiritual leader. Like him, she has been an unrelenting target for Chinese opprobrium.
Her appearance at the Melbourne film festival means the event has also come into Chinese sights.

Last week, three Chinese directors withdrew films, with two denying they were forced to do so by Chinese authorities.

Director Tang Xiaobai withdrews her film Perfect Life after being phoned by the Chinese foreign ministry and the state administration of radio, film and television.
The row over the Kadeer documentrary is not the only row to hit the festival. The British film director, Ken Loach, last week withdrew his film, Looking for Eric, in protest at its decision to accept sponsorship from Israel.
The slogan of the Melbourne film festival is "Everyone's a critic".

30,000 China steelworkers in deadly clash

BEIJING — Some 30,000 Chinese steelworkers clashed with police in a protest over plans to merge their mill with another company and beat the company's general manager to death, a human rights monitor said Saturday.
Several hundred people were injured in the clash Friday in the northeastern city of Tonghua, the Hong Kong-based Information Center for Human Rights and Democracy said in a faxed statement.
Employees of Tonghua Iron and Steel Group object to plans for Jianlong Steel take control of the company, the center said. It said Beijing-based Jianlong controlled the company temporarily last year, and employees blame Jianlong for financial problems suffered at the time.
Angry Tonghua employees attacked Jianlong general manager Chen Guojun during the protest and beat him to death, the center said. It said friends of Chen confirmed he was dead.
Workers were angry that Chen was paid some 3 million yuan ($438,000) last year while some retirees received as little as 200 yuan ($29) a month, the center said.
Beijing is trying to streamline China's sprawling steel industry, the world's largest, by orchestrating a series of mergers aimed at creating globally competitive producers. The mergers often are accompanied by layoffs that sometimes spark complaints that workers receive too little severance pay.
A woman who answered the phone Saturday at the government office for the Tonghua district where the steel company is located confirmed a protest occurred Friday but said she had no details of deaths or arrests. She refused to give her name.
A man who answered the phone at the Tonghua city hall said provincial government and Communist Party leaders had taken charge of handling complaints by Tonghua employees. He would give only his surname, Xu.
Phone calls to the Tonghua company headquarters and local party offices were not answered.
Jianlong took over Tonghua last year but suffered losses after steel prices dropped and jettisoned the company, the human rights monitor said. It said Jianlong revived the takeover plan this year after steel prices rebounded, making the business profitable again.