Entries in China (57)


China’s Economy Has Underwhelming Start, Slowest Since 2009

Getty/George Doyle/Thinkstock(BEIJING, China) -- The growth of China’s economy may be showing signs of slowing down, as the nation’s industrial output started the year weaker than it has any year since 2009 and lending and retail growth slowed, though the economy is still growing on the whole.

Bloomberg is reporting that government economic data released on March 9 shows growth that falls short of economists’ estimates, who were underwhelmed by the 9.9 percent production increase in January-February and the 12.3 percent retail sales growth.

Economists had predicted a 10.6 increase in production, and a 13.8 percent increase in retail sales. Retail sales have not increased by so little since 2004, and the lack of retail sales may partially be a result of a crackdown by Communist Party chief Xi Jinping on lavish spending by government officials and state-owned companies.

The government should also be mindful of rising inflation in China, which rose by four percent this year, a half-percent over the government’s target.

“From a monetary policy perspective, by mid-2013, the inflation issue should begin to move up policy makers’ list of things to worry about,” Li Wei, a Shanghai-based economist with Standard Chartered, said in a note.

There is some good news for the Chinese, as exports jumped 23.6 percent, the most they have in the first two months of the year since 2010.

The slower than expected growth isn’t dire news, but it does merit some concern.

“Policy makers face a dilemma as growth is weakening yet inflationary pressure keeps building,” Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong told Bloomberg.

“The government will eventually have to tighten policy to contain inflation but in the short term, the next several months, the government may put policy on hold to observe how growth and inflation move and fine-tune accordingly.”

Copyright 2013 ABC News Radio


US Software Developer Caught Outsourcing His Job to China

Ciaran Griffin/Thinkstock(NEW YORK) -- A software developer was busted for outsourcing his job to a programmer in China while he surfed the Web at work.

The case was described by Andrew Valentine, a principal with Verizon Enterprise Solutions, who published a blog post about the incident.

"We've seen plenty of employee misconduct cases, but not typically like this," Valentine told ABC News.

Valentine's team was contacted by another company based in the U.S. for assistance over "anomalous activity" it noticed in records of employees logging remotely into the company's IT system.  Verizon Enterprise Solutions is not releasing the name of the company or the employee.

The company's security team eventually found that someone was logging in from Shenyang, China, with the American employee's credentials -- while that employee was staring at a computer monitor in his U.S. office.

In his blog, Valentine described the employee as being in his mid-40s with a "relatively long tenure with the company, family man, inoffensive and quiet. Someone you wouldn't look at twice in an elevator."

A search of the employee's computer found hundreds of PDF invoices from a third party contractor/developer from Shenyang.

Eventually, it was discovered that the employee had outsourced his own job to a Chinese consulting firm, paying about $50,000 to the firm out of his salary of several hundred thousand dollars.

Once on-site, Valentine said it took about two days for investigators to collect relevant evidence and put all the pieces together.

The employee had sent his company log-in key through FedEx to China so that the third-party contractor could log in under his credentials during his workday.

The "best part" of the story is that "for the last several years in a row he received excellent remarks" in his performance review, Valentine wrote in the blog.  "His code was clean, well written, and submitted in a timely fashion.  Quarter after quarter, his performance review noted him as the best developer in the building."

Valentine said the employee was terminated for violating internal company policy.

"The employee denied everything at first, but then changed his story once we produced the invoices that were recovered from deleted disk space," Valentine told ABC News.

Copyright 2013 ABC News Radio


Apple CEO Expects China to Overtake US as Company's Top Market

Justin Sullivan/Getty Images(BEIJING) -- Apple's CEO says he expects China to trump the U.S. and become the company's number-one market in the future.

"China is currently our second largest market.  I believe it will become our first.  I believe strongly that it will," Tim Cook told China's Xinhua News Agency on Thursday during a visit to Beijing.

Apple currently has 11 stores located throughout mainland China and Hong Kong.

"We are growing very fast.  We are continuing to invest in retail stores here and will open many more over the next several years.  We have some great sites selected, our manufacturing base is here, and we have incredible partners here.  So it's a very very important country to us," Cook said.

Copyright 2013 ABC News Radio


Nestle Purina, Del Monte Pull Chinese Dog Treats

File photo. iStockphoto/Thinkstock(NEW YORK) -- Both Del Monte and Nestle Purina announced this week that they are voluntarily pulling popular chicken jerky dog treats made in China off the market after the New York State Department of Agriculture found possible contamination by an antibiotic that is illegal in the U.S.

Angry U.S. pet owners have alleged that chicken jerky treats made in China have caused kidney failure, illness and death in hundreds of dogs, and the FDA has issued three different warnings to pet owners in the past five years about possible risks associated with the treats.

FDA tests for toxins and heavy metals have never found an explanation for the alleged illnesses, but Nestle Purina and Del Monte decided to pull their products after New York officials said Monday that they had found trace amounts of a banned antibiotic in Del Monte's Milo's Kitchen products and in Nestle Purina's Waggin' Train and Canyon Creek Ranch treats.

"Pet safety and consumer confidence in our products are our top priorities," said Rob Leibowitz, Del Monte's general manager for Pet Products. "While there is no known health risk, the presence of even trace amounts of these antibiotics does not meet our high quality standards. Therefore, today we decided to recall both products and asked retailers to remove the products from their shelves."

In a statement, Nestle Purina emphasized that there was no health risk to pets, and that "there is no indication that the trace amounts of antibiotic residue are linked to the FDA's ongoing investigation of chicken jerky products."

"All of us at Waggin' Train care deeply about pets and their owners, and the quality of our products is of the utmost importance," said Nina Leigh Krueger, president of Nestle Purina's Waggin' Train LLC. "In the final analysis, our company and our loyal customers must have total confidence in the products we sell and feed our pets. Once we understand and determine how to comply with the technicalities of different regulatory frameworks, we will work with all appropriate parties to define the best way to supply the market."

The company said its nationwide voluntary recall was a response to "differences in U.S. and Chinese regulations."

Holly McCutcheon, a pet owner and activist who had demanded the products be recalled, said she "jumped for joy" and cried when she heard the news. "I do not believe [Nestle Purina] and Del Monte are actually admitting this is related to the ongoing investigation of the thousands of reported illness and deaths attributed to their treats," she said, "but the important thing is that these items are taken off the shelves immediately."

"I truly hope that consumer pressure has pushed Nestle Purina and Del Monte to make this decision," she added. "It is unfortunate that we had to go for so long before they reacted."

Copyright 2013 ABC News Radio


US Intelligence: China Economy to Surpass US by 2030

iStockphoto/Thinkstock(WASHINGTON) -- A report on global trends prepared by the U.S. intelligence community notes that by 2030 China is likely to have surpassed the United States as the world’s largest economy. The report suggests the United States would likely serve as, “the first among equals” in a multi-polar world.

“China alone will probably have the largest economy, surpassing that of the United States a few years before 2030,” The report “Alternative Worlds” prepared by the National Intelligence Council notes in their findings released Monday at the National Press Club.

“In terms of the indices of overall power in gross domestic product, population size, military spending and technological investment, Asia will surpass North America and Europe combined,” said Christopher Kojm, Chairman of the National Intelligence Council at the press conference.

But a lot could happen in the next seventeen years. And there is uncertainty about how China will evolve.

“China is…the wild card. I mean, its actions itself can be its worst enemy, particularly if it becomes, as we’ve seen in a couple -- starting a couple of years back, a lot more aggressive in the neighborhood, then actually is sowing a lot more support for continued U.S. -- a continued U.S. role in the region,” said Dr. Matthew Burrows, counselor to the National Intelligence Council at a press conference Monday morning.

Despite the findings about China’s economy, the report notes that the United States will remain a dominant power militarily with a strong economy as the boom in domestic natural gas production possibly helps lower costs for manufacturing and reduces unemployment.

“When you broaden your definition of power beyond just the basic ones of GDP [Gross Domestic Product], military spending, R&D [Research and Development] and GDP, and you look broader at what a lot of the other -- what a lot of people would call more softer powers, the U.S. still in 2030 stands head and shoulders above China, India and actually all other powers in the world,” Burrows said.

“The U.S. most likely will remain ‘first among equals’ among the other great powers in 2030 because of its preeminence across a range of power dimensions and legacies of its leadership role. More important than just its economic weight, the United States’ dominant role in international politics has derived from its preponderance across the board in both hard and soft power. Nevertheless, with the rapid rise of other countries, the ‘unipolar moment’ is over and Pax Americana -- the era of American ascendancy in international politics that began in 1945 -- is fast winding down,” The assessment noted.

Noting the abundant shale gas reserves in the United States the NIC report notes, “With shale gas, the US will have sufficient natural gas to meet domestic needs and generate potential global exports for decades to come. Increased oil production from difficult-to-access oil deposits would result in a substantial reduction in the US net trade balance and faster economic expansion.”

Among the reports other major trends and concerns noted are the growing demand for food and water with climate change exacerbating the need for these resources as the world’s population is expected to approach 8.3 billion people in 2030. The report also notes that the Middle East and South Asia could face increased instability as 2030 approaches.

“The Middle East’s trajectory will depend on its political landscape. On the one hand, if the Islamic Republic maintains power in Iran and is able to develop nuclear weapons, the Middle East will face a highly unstable future. On the other hand, the emergence of moderate, democratic governments or a breakthrough agreement to resolve the Israeli-Palestinian conflict could have enormously positive consequences,” the report noted.

While terrorism has been the main national security concern for the United States for over a decade the NIC report notes that Islamist terrorism is likely to decline but not completely disappear.

“The current Islamist phase of terrorism might end by 2030, but terrorism is unlikely to die completely. Many states might continue to use terrorist group out of a strong sense of insecurity, although the costs to a regime of directly supporting terrorists looks set to become even greater as international cooperation increases. With more widespread access to lethal and disruptive technologies, individuals who are experts in such niche areas as cyber systems might sell their services to the highest bidder, including terrorists who would focus less on causing mass casualties and more on creating widespread economic and financial disruptions.”

The report also notes that technology will help shape global-security, social and economic developments with increased productivity, automated technologies, precision agriculture and advancements in health care.

Noting the potential for major crisis the report notes the possibility of a severe pandemic as well as weapons of mass destruction and cyber attacks being carried out by non-state actors.

“Our work is invaluable to the administrations past and present. It helps to inform the Pentagon’s Quadrennial Defense Review. It has helped to inform the State Department’s Quadrennial Diplomacy and Development Review. And the policy planning staffs across the national security agencies are keenly interested in our work, and we know that senior policymakers are as well,” NIC Chairman Kojm said at the press conference.

Copyright 2012 ABC News Radio


Wrench Inventor Claims Sears Stole His Idea, Took It to China

ABC News(CABOT, Pa.) -- In the small town of Cabot, Pa., Dan Brown is the proud inventor of the Bionic Wrench, a product made solely in Pennsylvania.

His goal from day one was to make his invention in America.

This time last year, Brown's factory was buzzing, with his employees working overtime to fulfill holiday orders. With the help of Sears, Brown's company sold more than 200,000 wrenches at Christmas alone.

"Last year was a great year," Brown said. "We got ourselves on a commercial and Sears had us in stores. We were going crazy."

Brown says he agreed with Sears not to sell his bionic wrench to any other national chain such as Lowe's or Home Depot. Brown's company continued business this year but suddenly there was no deal from Sears for Christmas.

Brown had three production lines working to fill orders last year. But this year, there's only one running and he has had to lay off 30 workers.

"We were building at a forecast that Sears had given us, then they just cancelled it," Brown said. "We built so much ahead trying to avoid the overtime that we were going through in previous years that we got caught now."

When Sears suddenly went quiet, Brown wondered what was going on.

"We had an arrangement. Last year was our first test on TV and it went extremely well," Brown said. "They [Sears] kept delaying it and delaying it and we didn't know what was going on. They really wanted to get the Father's Day orders in but they didn't want to commit to Christmas, which is much larger than Father's Day. It just didn't make sense."

Brown heard from a customer that there was now another wrench on the shelves at Sears with what appeared to be a similar mechanism. But this one, made in China, is sold under the Sears brand, Craftsman.

Brown wasn't surprised by the new wrench, he said.

"It's a knockoff. There's no question," he said. "If you take them apart and look at the plates, they're virtually the same. ... It's our patent. We've got it covered."

Brown has now filed a lawsuit, claiming Sears stole his idea. He is being represented by the Grossman Law Offices.

But Sears argues it didn't steal anything.

"The allegations made by Mr. Brown simply are untrue and we will vigorously defend against all of the allegations raised in his lawsuit," Sears Holdings Corp. said in a statement to ABC News. "Despite some visual similarities to other tools on the market, the Craftsman Max Axess locking wrench operates in a different way, using a mechanism designed in the 1950s that Mr. Brown expressly argued to the patent office was different from his own design."

Brown stands by his claim, however.

"They're lying. That's what I say, they're lying," he said. "There's no other way. And I don't call other people liars easily, but there's no question in my mind."

Brown argues that small-town American inventors like him rarely have the means to fight back against big businesses. It can cost up to $50,000 just to get that original patent and then most inventors can't afford a court fight against a corporate giant.

"I think they [Sears] thought they're really big and we're too small to fight them effectively to bring them to a position where they couldn't get away with it," Brown said. "They're not going to get away with it. I'm not crazy enough to go against the tide to let this just go away now. This is fundamentally why we don't have jobs in the states."

As for Sears, the company says that it has 264,000 U.S. workers and that "Sears believes in America."

Copyright 2012 ABC News Radio


Underage Workers Found at Foxconn Factory in China

Karson Yiu/ABC News(BEIJING) -- Foxconn Technology Group, the company that manufactures Apple’s iPhone, has confirmed reports that underage employees as young as 14 years old have been found working as interns at a factory site in China.

The company says the discovery was made during an internal investigation at its factory in Yantai.

"Our investigation has shown that the interns in question, who ranged in age from 14 to 16, had worked in that campus for approximately three weeks," Foxconn said in a statement.  The company did not mention how many underage interns were found.

The workers were part of a government-sponsored internship program for students who are at least 16 years old -- the minimum age for employment in China.  They have since been sent back to their schools.

Foxconn, which is owned by Hon Hai Precision Industry Co., says it has launched a full investigation into the matter.

"We recognize that full responsibility for these violations rests with our company and we have apologized to each of the students for our role in this action.   Furthermore, any Foxconn employee found, through our investigation, to be responsible for these violations will have their employment immediately terminated," the company said.

Foxconn is a major supplier of electronic components to large U.S. companies, including Apple and Microsoft.  While it did not specify which products were produced in the Yantai factory, the company said the "facility has no association with any work we carry out on behalf of Apple."

Copyright 2012 ABC News Radio


Foxconn Closes Factory After Massive Brawl

Karson Yiu/ABC News(BEIJING) -- Foxconn Technology Group, owned by Hon Hai Precision Industry Co., suspended production at one of its largest factories in northern China on Monday following a violent incident involving 2,000 workers.

Foxconn, a major supplier of electronic components to large U.S. companies including Apple and Microsoft, made a statement on the closing Sunday night:

“A personal dispute between several employees escalated into an incident involving 2,000 workers at approximately 11 p.m. last night in a privately managed dormitory near our manufacturing facility in Taiyuan in Shanxi province.”

Unconfirmed video online shows crowds, several hundred strong, in the streets, overturned cars and smashed windows.  China’s Xinhua News Agency reported that 5,000 police were dispatched to control the crowd. The video also shows large buses broadcasting via loudspeaker what appear to be messages to control the rioters.

Foxconn reported that at least 40 employees were sent to the hospital and a “number” of individuals were arrested after police arrived on the scene.  Social media postings suggest some members of the crowd may have inadvertently been critically injured when the crowd got out of control.

The Taiyuan factory employs approximately 79,000 workers.  It was recently the subject of an undercover report by the Chinese publication China Story.  According to the article, the facility produces a part of the casing for the iPhone 5 and employees are told they should feel “honor” for doing so.

But the same factory has come under criticism for poor labor practices, low wages and compulsory overtime.  Hong Kong media reported a similar incident of protest during a strike over a pay dispute last March.

After a string of suicides by Foxconn employees last year, the company has made an effort to improve working conditions.  Apple has been working in conjunction with Foxconn to achieve that.

Copyright 2012 ABC News Radio


Apple and Foxconn Make Progress on Working Conditions at Factories

Kevork Djansezian/Getty Images(NEW YORK) -- The Fair Labor Association (FLA) says conditions are improving for the Chinese workers who assemble iPad and iPhones for Apple. Back in March, the FLA released a report on the poor conditions at Apple’s Foxconn supplier. The organization gave a long list of recommendations to Apple and Foxconn, and both Apple and Foxconn agreed to follow them.

Now, five months later, the FLA says that Foxconn has completed 280 action items on time or ahead of schedule.

“Our verification shows that the necessary changes, including immediate health and safety measures, have been made,” Auret van Heerden, president and CEO of the Fair Labor Association, said in a statement. “We are satisfied that Apple has done its due diligence thus far to hold Foxconn accountable for complying with the action plan, including the commitment to reform its internship program.”

Apple and Foxconn made a number of physical changes in the last few months to improve worker safety, including more testing of equipment and changes to prevent repetitive stress injuries. A detailed report of the improvements is posted on the FLA website.

Foxconn also took steps to improve working hours, but it still has not reached the final goal. By July 1, 2013, Foxconn has promised to reduce worker hours to the legal limit of 49 hours per week and stabilize pay. Foxconn has already reduced the workload to under 60 hours per week.

“The next phase of improvements will be challenging for Foxconn because they involve major changes in the working environment that will inevitably cause uncertainty and anxiety among workers,” van Heerden said. Making changes to the working hours are among the 76 remaining action items that Foxconn has to accomplish before next July.

Apple was reported to have become history’s most valuable company Monday, though the numbers did not account for inflation.  It has sold approximately 37 million iPhones and 15.4 million iPads in the last three months of last year.

Copyright 2012 ABC News Radio


Fears Mount as China Reports Weak Trading Data in July

iStockphoto/Thinkstock(BEIJING) -- Worries are mounting over the strength of the global economy after China, the world’s second largest economy, reported worse than expected trade data on Friday.

In July, China's exports rose by 1 percent from a year earlier, falling short of the 11.3 percent gain made in June.  Analysts had expected to see a growth of about 8 percent.

Imports, meanwhile, faired slight better, climbing by 4.7 percent last month.  But that still was below expectations -- analysts had predicted a 7 percent gain -- and the figures are down from the 6.3 percent growth in June.

The news sent Asian, European and U.S. stocks down on Friday.

Sluggish trade growth is problematic for the Chinese government as it readies to undergo a once-a-decade transition to new leadership. Since June, the country has cut interest rates twice, but it may need more aggressive action to reverse the downturn.

Copyright 2012 ABC News Radio

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