world growth

world growth

Wednesday, January 28, 2009

on the latest WTO ruling regarding China's intellectual property laws

An intersting commentary on the latest WTO ruling regarding China's intellectual property laws.

Why the U.S. Lost Its WTO IP Complaint Against China

By Michael Geist

The World Trade Organization yesterday released its much-anticipated decision involving a U.S. complaint against China over its protection and enforcement of intellectual property rights. The U.S. quickly proclaimed victory, with newspaper headlines trumpeting the WTO panel's requirement that China reform elements of its intellectual property laws. For its part, China was conciliatory and offered to work with the international community to resolve the concerns raised by the decision. Reuters notes that the Chinese reaction is far less combative than it has been other issues.

Why the muted response? I suspect that it is because anyone who bothers to work through the 147 page decision will find that the headlines get it wrong. The U.S. did not win this case, but rather lost badly. China is required to amend elements of its copyright law, but on the big issues of this case - border measures and IP enforcement - almost all of the contested laws were upheld as valid. Further, the ramifications of this case extend well beyond China's laws into other areas such as ACTA, since it points to the considerable flexiblity that countries have in meeting their international obligations on these issues.

The case centred on three key issues:

1. Does China's copyright law provide appropriate protection for all works in compliance with international copyright law (Berne Convention as incorporated by TRIPS)?
2. Do China's border measures, which allow customs officials to donate, auction, or sell to the rights holder confiscated goods, violate TRIPS?
3. Does China's IP enforcement system, which sets a minimum threshold for criminal prosecution, violate TRIPS?

On the first issue, the panel ruled that China's copyright laws do violate Berne by failing to provide copyright protection to all works. China maintained that it denied protection for certain works whose contents are "unconstitutional or immoral." The panel ruled that this was not good enough - international copyright requires protection for all works, though other laws may be implemented to address content restrictions (ie. as Canada noted in its third party submission - "Members can prohibit the publication and distribution of a work but . . . Members do not have a right to deny copyright protection to them."). This issue is a clear win for the U.S. (therefore the proclamation of victory), though this particular concern was certainly the least important of the three issues.

The other two more important issues were near total losses for the U.S. On border measures, the U.S. argued against the current Chinese law that provides customs officers with a range of possible methods for disposing confiscated counterfeit products. Virtually all of these measures were upheld, with the panel noting at one point that "China's border measures provide a level of protection higher than the minimum standard required by . . . the TRIPS Agreement." With the exception of one practice (removal of trademark from counterfeit trademarked goods), the panel upheld all of China's border measures including the distribution of confiscated goods to the Red Cross, the resale of the goods to rights holders (if they are interested), the auction of certain goods, or the destruction of the goods.

The Chinese IP enforcement system, which sets a minimum threshold for criminal enforcement, was a huge issue for the U.S. and it lost badly on it. The U.S. argued that the high thresholds render prosecution impossible in many cases (Canada joined the U.S. with a similar argument). The panel rejected the U.S. claims, in part due to a lack of evidence. Indeed, the U.S. submitted a series of newspaper articles as the basis for some of its claims, to which the panel responded:

"the Panel does not ascribe any weight to the evidence in the press articles and finds that, even if it did, the information that these press articles contain is inadequate to demonstrate what is typical or usual in China for the purposes of the relevant treaty obligation."

With that, the Panel found that China does not violate its TRIPS obligation that "Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale."

This represents a major loss for the United States as well as for the countries such as Canada that supported the U.S. in the case. It also holds the prospect of larger ramifications for initiatives such as te Anti-Counterfeiting Trade Agreement, which are premised on the need to address concerns around border measures and IP enforcement. Rather, the decision highlights the reality that international copyright and trade law provide considerable flexibility that do not necessitate new treaties or additional legal obligations.

Friday, January 23, 2009

Liberia signs 2.6 billion dollar mining deal with China

MONROVIA (AFP) — Liberia signed Thursday a 2.6 billion dollar agreement with Chinese conglomerate China Union to develop its main iron ore mine, the biggest ever investment in the West African nation.

A government statement said President Ellen Johnson Sirleaf signed a mineral development agreement with officials from the Chinese mining company to develop the Bong Mines.

Sirleaf invited other Chinese companies to come and invest in the country, which emerged from a crippling 14-year civil war in 2003.

"The Liberian leader expressed the hope that the signing of the agreement will serve as a motivation to other Chinese companies to invest in Liberia," the statement said.

The deal has been sent to the parliament for ratification.

Liberia's Investment Minister Richard Tolbert announced in December that a deal was in the making with the Chinese mining giant, greeting it as the country's biggest ever investment.

He said China Union had promised that within 12 months it will have built a one-million-tonne-a-year capacity refining factory at the Bong iron mines, about 150 kilometers (95 miles) north of Monrovia.

He said 3,000 jobs would be created by the project with up to 15,000 following indirectly.

Before Liberia's 1989-2003 civil war, mines were run by a German concern, the Bong Mining Company. But it was criticised for not carrying out development projects in the region.

Wednesday, January 21, 2009

China to spend $124 billion on health care reform

This will bring much needed relief for millions of lower income earners in China.
Money well spent !

China to spend $124 billion on health care reform

BEIJING, Jan 22 (Reuters) - China plans to spend about 850 billion yuan ($124 billion) on health-care reforms over the next three years, according to a cabinet blueprint for change in the sector.

The State Council issued the three-year reform plan during a meeting on Wednesday, according to a statement on the central government's website (

The reforms aim to improve the coverage of basic medical insurance, to set up a system of "basic medicines" covered by the medical insurance system, expand the network of local-level clinics, improve the public health system and initiate pilot reforms to the operation of public hospitals, it said.

"According to initial estimates, all levels of government will spend around 850 billion yuan over the next three years to ensure these five reforms," the State Council said.

It did not spell out how much of that would be new spending or disclose details of how the reforms would be carried out.

The health care sector is one of the weak links in the social welfare system -- together with under-funded education and social security systems -- that creates a drag on domestic consumption and increasingly serves as a source of discontent.

Faced with poor medical coverage and soaring costs, millions of households are forced to set aside savings in case a family member falls ill, rather than spend.

Friday, January 16, 2009

US and China reached dual-use trade deal

This could potentially help to balance the trade between the two countries.

US says reached dual-use trade deal with China

WASHINGTON, Jan 13 (Reuters) - The United States has reached a deal with China clearing the way for full implementation of a trade program for dual-use technology goods, the Commerce Department said on Tuesday.

"We are pleased to have reached this milestone agreement," Commerce Under Secretary Mario Mancuso said in a statement just one week before the Bush administration leaves office.

"U.S. exporters now have a more streamlined way to export to companies in China who have a record of using U.S. technology responsibly," Mancuso said.

The agreement is good news for U.S. aircraft manufacturer Boeing Co. (BA.N) and Applied Materials Inc. (AMAT.O), the world's biggest supplier of machines used to make semiconductors.

The two companies have partners in China cleared to import certain advanced technology goods that also have potential military uses.

The Commerce Department in 2007 imposed new export controls on a targeted list of high-tech goods sought by China's military, such as lasers, high-performance computers, extreme temperature telecommunications equipment and airborne communication and inertial navigation systems.

At the same time, it established a new "validated end user" program to allow pre-screened civilian companies in China to import certain controlled items without having to obtain an individual Commerce Department license.

Last month, Mancuso said the Commerce Department was considering suspending the program because it had not reached an agreement covering surprise inspection procedures for the five companies in China approved to participate.

The two countries have now reached a pact that "will maximize the security and trade-enhancing benefits of the VEU program and continue a promising chapter in civilian U.S.-China high technology trade," Mancuso said.

(Reporting by Doug Palmer)

Sunday, January 11, 2009

China's Huawei wins 235 million dollar Costa Rica 3G phone deal

Huawei still has a healthy growth despite the global economic downturn.

China's Huawei wins 235-mln-dollar Costa Rica 3G phone deal

SAN JOSE (AFP) – The Costa Rican Electricity Institute (ICE) gave China's Huawei Technologies a 235-million-dollar contract to install a third-generation mobile phone network for 935,000 customers in the country, local media said Saturday.

ICE deputy manager Claudio Bermudez said the 3G network should be operational throughout the Central American nation by the end of 2009.

The contract, which Huawei won in a bidding war against Sweden's Ericcson and China rival ZTE Corporation, will be submitted for approval to Costa Rica's General Accounting Office.

An initial bid in August was won by Huawei with a 583-million-dollar price tag against no opposition as other companies rejected ICE demands for the contract.

President Oscar Arias intervened, asking ICE to withhold adjudication of the contract until another auction could be held.

The 3G move will give mobile users access to high-end data applications on their phones, including high-speed interactive gaming and Internet access, video conferencing, video streaming and other multimedia features.

Tuesday, January 6, 2009

China's 2008 trade surplus about $290 billion, total trade $2.55 trillion

BEIJING, Jan 4 (Reuters) - China's trade surplus was about $290 billion in 2008 as total foreign trade reached $2.55 trillion, rising 18 percent from 2007, Xinhua said on Sunday, citing a report by the General Administration of Customs.

That would make the December trade surplus about $34 billion as Xinhua said China had a surplus of $255.95 billion in the first 11 months of the year.

In the first 11 months of 2008, external trade was $2.38 trillion, rising 20.9 percent from a year earlier, but the growth rate fell from 2007, said Xinhua.

The report predicted that as the financial crisis affects the economy and external demand shrinks, China's exports would decline further, said Xinhua. (Reporting by Kirby Chien; Editing by David Holmes) ($=6.84 yuan)

Saturday, January 3, 2009

Chinese farmers move to and settle in Africa

China's new export: farmers
China has a shortage of land, Africa a shortage of food. So one entrepreneur had the bright idea of persuading Chinese farmers to emigrate.
Clifford Coonan reports from Hebei province

Liu Jianjun: "Africans are a bit lazy, happier to pick fruits off trees than grow it themselves"
Liu Jianjun is wearing a brightly coloured African tunic, the tall hat of a tribal leader, a string of red beads round his neck and carrying a stick with a secret knife in the handle. Beside him sits a portrait of Chairman Mao Zedong. It is a slightly incongruous scene but one that mirrors the ever-closer relationship between Asia's economic giant China and the world's poorest continent.

"The African people yell, 'Mao Zedong is all right' and they are very warm-hearted when I'm there," says one of China's most prominent private sector ambassadors. "The minute Chinese people get off the plane, the Africans are friendly. Chinese do not bring rifles and weapons; they bring seeds and technology."

China's Ministry of Commerce triumphantly announced this month that its bilateral trade with the continent is set to hit $100bn (£67.8bn) by the end of 2008, two years ahead of schedule. Africa's plentiful oilfields and rich mineral deposits are top of China's imports, and in return the world's most populous nation is exporting tens of thousands of its countrymen.

By some estimates, 750,000 Chinese people have spent time on the continent or have moved to Africa permanently to do business and take advantage of the natural resources. And Hebei, the province from where the middle-aged Mr Liu hails, is no exception. He reckons 10,000 farmers from Hebei alone have gone to 18 African countries in the past few years.

They work in "Baoding villages", named after the dusty township where Mr Liu lives; he likes to point out that Baoding means "Protection and peace". The villages, ranging in size from 400 to 2,000 Chinese, have been set up across the continent, from Nigeria to Kenya, from Sudan to Zambia.

Mr Liu started the Baoding villages when he was head of Hebei province's foreign trade bureau in 1998 and was seeking ways to boost the local economy, which had been dampened by the Asian financial crisis. He discovered Africa.

"We found Africa was not affected by the crisis, and we went there, and found that local people were short of food, even though there was lots of land not in use for farming and plenty of animals," he says. "So I decided to switch from exporting goods to exporting agricultural expertise."

It is a winning formula for China, which has more than 20 per cent of the world's population but only 7 per cent of its arable land. "China has too many people and too little land," Mr Liu ponts out. "In Africa, they have plenty of land and too few farmers. Places such as Ivory Coast are short of 400,000 tonnes of food a year, and the local people cannot farm enough to feed the population. Local farming skills are not developed."

In the kind of comment you do not hear in public in the politically correct West any more, Mr Liu describes African farmers as "a little bit lazy, happier to pick the fruits off the trees than grow it themselves". But he obviously loves the place.

One of the Baoding villagers who went to work in an African namesake is farmer Zhang Xuedong, who spent about a year in Abidjan, the Ivory Coast capital. "I'm fond of African culture and I find the people there quite lively," the farmer says.

Although China has witnessed astounding economic growth, albeit slowing in recent months, there is a yawning gap between the city and the countryside, and the largely rural hinterland remains poor. So for Chinese farmers in places such as Hebei, the prospect of earning up to £7,000 a year in Africa is remarkably attractive, allowing them to send home vital remittances. "My family stayed in Baoding while I went to Africa on my own to teach the Africans how to plant vegetables," Mr Zhang adds.

Li Zhu, chairman of Dafei International Investment, first heard about the opportunities in Africa through the internet and the papers. "Before going there, I was very worried," says Mr Li, who bought 2,000 acres in Mbale in Uganda and is running a Chinese club there. "My family also felt worried. We all heard there were wars, conflicts and diseases. But finally I went there in August last year." A friend of Mr Liu, he hopes to set up a farm and a tractor factory, and is teaching Africans planting techniques using machinery.

"I don't like the food – it's always Western cuisine – but I do love Africa," Mr Li says. "The weather is nice, comfortable and warm. The people are kind and they live in a harmonious society, and are full of passion. I visited Kenya and Uganda. I ultimately chose Uganda, because the country is steady. The local government is very eager to develop the country, but they don't know how to do that. So they want to learn from us. We provide ideas such as development zones. I also heard that there are some good mines, gold mines and quarries, in Uganda. The downside is that we don't know the countries and their local customs; corruption is a problem."

It is not just individuals who are capitalising on an abundance of workers to send over to Africa. The head of China's Export-Import Bank, Li Ruogu, pledged to help finance emigration to Africa as part of a rapid urbanisation scheme in the western Chinese city of Chongqing, already reckoned the world's biggest metropolitan area with 32 million people. "With the establishment of the rapid urbanisation project, several million farmers will have to move," Mr Li told the People's Daily.

But critics of Chinese expansion into Africa see plenty of downsides. Beijing is willing to turn a blind eye to human rights abuses, and is widely accused of helping prop up unpopular leaders, including Zimbabwe's Robert Mugabe, with arms shipments. China has also been widely condemned in the West for not doing more to pressure the government of Sudan – from whom it buys two-thirds of the national oil output – to end the conflict in stricken Darfur.

Now two Chinese destroyers and a supply vessel are to set sail to Somali waters to help international efforts to fight piracy. Somali pirates off east Africa have taken an array of shipping vessels hostage, including at least seven ships flying the Chinese flag or carrying Chinese crew, in the past 12 months. Now Chinese warships will be deployed to Africa for the first time in 600 years.

Mr Liu largely skirts these broader geo-political concerns, focusing more on the positive impact of Sino-African relations. He notes that the cultural exchange can even extend to marriage. "Some Chinese men marry African women; they like African girls because they are very slim."

With that, he stands up beside the portrait of Mao, and gathering his chiefly African robes, he quotes a Chinese proverb. "People are scared before they go, they are surprised when they arrive, and they miss it when they leave."