Entries in China (57)


Obama Challenges China at WTO over Auto Tariffs

Chip Somodevilla/Getty Images(MAUMEE, Ohio) -- As he embarked on a campaign swing across northern Ohio, President Obama announced new action against China in the World Trade Organization, challenging duties imposed last year on U.S. auto exports.

“Just this morning my administration took a new action to hold China accountable for unfair trade practices that harm American automakers,” Obama said during a campaign stop in Maumee, Ohio. “We’re going to make sure that competition is fair. That’s what I believe. That’s part of our vision for America.”

The tough line toward China coincides with Obama’s appeal to blue collar workers in Ohio, home to many U.S. auto manufacturers and suppliers.  The bus tour — themed “Betting on America” — will promote the 2009 Obama-backed bailout of GM and Chrysler and portray the president as a champion of American manufacturing.

White House spokesman Jay Carney disputed that the timing of the announcement was anything other than coincidence.

“This is an action that has been in development for quite a long time. USTR [the U.S. Trade Representative] studies these issues and prepares actions with great deliberation to ensure their success at WTO. This one has been under development for many, many months,” Carney told reporters on Air Force One. “It can’t suddenly be a political action because it happens during the campaign.”

Carney noted that the new WTO complaint is the seventh the administration has filed against China and that the previous six have been “successful.”

Administration officials say the duties, which target Ohio-made cars like the Jeep Wrangler, affect $3.3 billion in exports, hampering prices and potentially imperiling jobs.

“The Chinese duties in question cover more than 80 percent of U.S. auto exports to China, including cars manufactured in Toledo and Marysville, Ohio, and Detroit and Lansing, Michigan,” said Carney. “The duties disproportionately fall on General Motors and Chrysler products because of the actions that President Obama took, as you know, to support the auto industry during the financial crisis.”

China cites Obama’s 2009 taxpayer-funded bailout of U.S. automakers GM and Chrysler to claim that the companies received an unfair advantage in the global marketplace, akin to subsidies that are forbidden by WTO rules.

Copyright 2012 ABC News Radio


Survey: China's Non-Manufacturing Industries Grow at Slower Pace 

Getty/George Doyle/Thinkstock(NEW YORK) -- An official survey indicates that China's non-manufacturing industries grew at the slowest pace in over a year, Bloomberg News reports.

The National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing that the purchasing managers' index dropped from 56.1 in April to 55.2 in May. The index is the lowest since March 2011.

Cai Jin, a vice chairman of the federation, said in a statement that the index was still relatively high and in line with the normal trend of steady growth in non-manufacturing industries, according to Bloomberg.  

Copyright 2012 ABC News Radio


Chinese Company Buys AMC Theatres

Mario Tama/Getty Images(KANSAS CITY, Mo.) -- Chinese conglomerate Dalian Wanda Group has agreed to purchase American movie theater operator AMC Entertainment Holdings for $2.6 billion – a deal being described as the largest single Chinese takeover of a U.S.-based company.

The transaction will create the world’s largest movie theater owner, the companies said in announcing the deal.

AMC operates nearly 350 multiplex theaters in North America and employs approximately 18,500 people.

“The transaction,” the company said, “is not expected to have an impact on employee levels at AMC.”

Copyright 2012 ABC News Radio


Made in America, Please? China Shells Out for US Exports

Dynamic Graphics/Thinkstock(NEW YORK) -- In China, there is a hunger for all things American -- and U.S. businesses, small and large, are taking note.

According to the U.S.-China Business Council, the Chinese spent $104 billion in U.S. exports in the last year -- up 542 percent from 10 years ago.

In China recently, Oscar Atkinson, a CEO at Silicone Arts Labs in Memphis, Tenn., visited with potential partners in Beijing and then went to a medical trade fair in Shenzhen, shopping around his company's new skin concealer product called Dermaflage.

"The Chinese consumer is just as image-conscious as the American consumer," he said. "We could have great success if we could find the right partner [and] overcome the regulatory hurdles, which are not significant. I'm looking forward to it."

Even U.S. giants like Pringles and Coca-Cola have figured out there's money to be made across the Pacific.

In Jackson, Tenn., a Pringles chip plant changes the flavors of its chips to soft-shell crab, grilled shrimp and seaweed before shipping to the Chinese middle class. Currently, one of every three Pringles cans goes overseas.

Skippy peanut butter, which is made in Little Rock, Ark., now ships to 70 countries. And Coca-Cola has created a beverage -- which tastes like a sweet version of orange juice -- to cater to the Chinese. The oranges come from the groves of Florida but are sold 11,000 miles away in Shanghai in a drink named Pulpy.

It's not just food. Mack's, the world's largest manufacturer of moldable, silicone earplugs, now provides labels for the Chinese market.

And most of the makeup in China bears U.S. labels -- which is why Atkinson was there, traveling from city to city making his sales pitch for Dermaflage.

He said the Shenzhen trade show was packed with people and international companies.

"It's really something to behold," he told ABC News.

But other U.S. entrepreneurs like Lion Brand Yarn in New Jersey have found another way to reach the masses in China -- through Export Now, an business that helps small- and medium-size U.S. businesses sell to Chinese consumers.

"Much like customers in other parts of the world, Chinese customers are often skeptical about the quality of Chinese-made products," Export Now said. "U.S. products...are getting more and more welcome in the local market."

The company, which sells everything from flip-flops to T-shirts and skateboards, said that 370 million Chinese had logged in to shop for U.S products on its website so far and that last year the site had sold $60 billion in U.S products.

Copyright 2012 ABC News Radio


Apple Probe: Changes Promised for Chinese Workers

Karson Yiu/ABC News(NEW YORK) -- The Fair Labor Association (FLA) has released the results of its independent investigation of Apple's Foxconn supplier based in China, and has found "serious and pressing noncompliances" with its Workplace Code of Conduct and Chinese labor law, with forced overtime as the top concern. As a result, Foxconn is vowing to lower overtime hours without lowering pay, a move that could raise the cost not just of Apple products, but all electronics.

"Social responsibility has a cost. We are asking factories to make significant investment. We all have to be willing to share that cost," Auret van Heerden, the president and CEO of the Fair Labor Association, told ABC News’ Bill Weir in an exclusive interview.

After a month-long investigation, which included interviews with 35,000 randomly selected Foxconn workers and in-depth surveys of all of Apple's production lines, the FLA has concluded that there are excessive overtime and overtime compensation issues and health and safety risks within the Chinese factories that make popular Apple products, including iPhones, iPads, and MacBook laptops. "We found over 50 findings which represents a risk," van Heerden said.

The report focuses on four main violations: workers' health and safety, worker integration, wages, and working hours. Workers' hours and overtime payment issues are the main focus of the 13-page report. Within the last 12 months, at all three of Apple's Foxconn factories -- Guanian, Longhua, and Chengdu -- the average employee worked over 60 hours per week, the FLA found. The legal limit is 49 hours per week, including overtime.

"There were periods during which some employees worked more than seven days in a row without the required minimum 24 hours break," the report says.

It was also discovered that 14 percent of workers did not receive compensation to which they were entitled for overtime. Unscheduled overtime is only paid in 30-minute increments, meaning that if someone works 29 minutes they will not be paid.

Along with the findings are recommended remedies. Foxconn has vowed to comply with the Chinese legal limits and the FLA standards; by July 1, 2013 the factory has promised to reduce worker hours and stabilize pay.

But to do that, the report said, it will need to increase the number of workers to maintain the same level of production output. While employees will be working less, Foxconn promised it will ensure that workers do not lose income due to the reduced overtime.

Foxconn recently raised the wages of workers by 25 percent, but workers told the FLA survey that the wages still don't meet their basic needs. A cost of living audit in the locations of the factories will be conducted.

Additionally, Apple and Foxconn have agreed to pay any worker retroactively who hasn't received the correct overtime wages. Another audit is being conducted now to determine that amount.

"In the next year, tens of thousands of extra workers will need to be recruited, trained, and accommodated at the same time as hours worked are progressively reduced per worker," the report says.

Van Heerden implied this could affect either the number of products Apple can ship or the price. "We have to be ready to put our money where our mouths are," he added. Apple recently recorded record sales of its new iPad; three million were sold in their first weekend on the market.

This audit was partly prompted by two explosions at two factories in Chengdu last year, in which 77 workers were injured and four were killed. Workers reported that they are worried about their safety and health, especially after the explosions.

With over 43 percent of workers reporting that they have experienced or seen an accident, Foxconn said it is now committing to more closely monitoring health and safety issues. A number of health and safety violations, including blocked exits and protective equipment, have already been remedied.

Foxconn said it is also taking steps to bring workers into the conversation. It has agreed to "enhance workers' participation in committees and other union structures," says the report.

In line with what ABC News' Nightline exclusively reported in February, the FLA report says that no issues of child labor, forced labor or payment of the legal minimum wage were discovered at the factories. The FLA said it had "unfettered access" within the factories.

Apple's promises are not detailed directly in the report, but in a statement the company states that it will comply with the FLA's recommendations. "Our team has been working for years to educate workers, improve conditions and make Apple's supply chain a model for the industry, which is why we asked the FLA to conduct these audits. We share the FLA's goal of improving lives and raising the bar for manufacturing companies everywhere," an Apple spokesperson told ABC News.

Apple CEO Tim Cook has been in China all week, meeting with local business as well as visiting Foxconn. Former Apple CEO Steve Jobs never visited China or Foxconn when he was CEO of the company.

Van Heerden said he is confident that Foxconn will make the changes recommended in the report. "I know they will do this because we will monitor it. And they have made this commitment publicly now. It is such a high profile and major commitment, there is no way they wouldn't do it."

The full text of the report can be found on the Fair Labor Association's website.

Full disclosure: Apple and the Walt Disney Company, the parent company of ABC News, have strong ties. Disney CEO Bob Iger serves on the Apple Board of Directors.

Copyright 2012 ABC News Radio


Companies Move Manufacturing Jobs Back to America

Dynamic Graphics/Thinkstock(NEW YORK) -- A factory sits empty. It’s not in the Rust Belt, nor is it part of a manufacturing exodus that has cost the U.S. thousands of jobs. It is a factory in Shenzhen, China, and the American company that once employed Chinese workers is now packing up, coming home and bringing the jobs with them.

John Higgins, CEO of Neutex, an LED lighting company, said it will be cheaper to manufacture in Houston.

“I’ve gotten in fights, I’ve gotten in arguments with CEOs on planes telling me what an idiot I am for coming back,” Higgins told ABC News.

A decade ago, a factory worker in China made 58 cents an hour. Today, wages are more than $3.00 and there are predictions of $6.00 an hour by the year 2015. It may sound cheap, but some economists argue when you factor in productivity those wages add up.  The Boston Consulting Group argues the American worker combined with technology in the U.S. makes the American worker more than three times as productive as the Chinese worker.

“When you factor in that the American worker is nearly four times as productive, that math quickly adds ups,” said Hal Sirkin, senior partner at the Boston Consulting Group.

Master Lock in Milwaukee, Wis., sent as many as 1,000 jobs overseas in the 1990s and just brought back the first 100. Nat Labs is doing the same; it’s now making dental molds in Florida instead of China and hopes to hire 300 people.

The story is true in Detroit too, where GalaxE.Solutions, a custom software development company, decided to move in, taking over an office building that had been vacant for nearly a decade.

Detroit, of course, is much closer to the company’s American clients than are the workers in Bangalore, India.

Even though a worker in Bangalore makes $20,000 a year and an American worker doing the same job makes between $40,000 and $60,000, CEO Tim Bryan said once other costs are factored in, the economics balance out.

“This work is coming back to the U.S. There’s no stopping it,” he said.

Copyright 2012 ABC News Radio


A Rare Look into Where Apple Products are Made

David Paul Morris/Bloomberg via Getty Images(SHENZHEN, China) -- Ever wondered where your Apple products are made? Nightline anchor Bill Weir visited a Apple factories in China.

In recent months, the fond memorials for Steve Jobs and the company's record-breaking profits have been tarnished by some of the worst press in Apple's history, most of it related to its top Chinese supplier, Foxconn.

Just after a horrific rash of worker suicides at the Foxconn factory complex outside of Hong Kong in 2010, a monologist named Mike Daisey launched a one-man show called The Agony and The Ecstasy of Steve Jobs. He described travelling to the gates of Foxconn and meeting people coming off 13-15 hour shifts on the Apple lines. He described a 13-year-old who spent her days cleaning iPhone screens.

Daisey's show was featured on NPR's This American Life in January and a listener named Mark Shields was so moved, he launched a petition drive online. Over 250,000 Apple users called on the company to build the first "ethical" iPhone, and protests were planned at Apple stores around the world.

In a three-golf-cart convoy, both Apple and Foxconn reps took Weir around to a half dozen production lines in Shenzhen and Chengdu, and there were always five to six people with them as they toured the factories and dorms. But aside from suggesting a visit to the counseling center or canteen, they never steered them to interviews and never interrupted.

This is some of what they saw.

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See it yourself on Tuesday's Nightline.

Adam Lashinsky of Fortune magazine and author of the new book Inside Apple, spoke with ABC New Radio's Richard Davies about Apple's image problem. He said the company operated in secrecy before Job's death but now they face several challenges including resurrecting its image.

Copyright 2012 ABC News Radio


Apple CEO Promises Monthly Updates on Working Conditions

Kevork Djansezian/Getty Images(SAN FRANCISCO) -- Apple has faced severe criticism over working conditions in its China factories over the past number of months, but it’s taking concrete steps to improve, according to Apple CEO Tim Cook.

Speaking at the Goldman Sachs Technology and Internet conference on Tuesday, Cook detailed a number of the changes he’s spearheading, which will include eliminating underage workers, educating workers on skills and safety, improving safety conditions and managing working hours on a “micro level.”

Some of these changes have been under way for a number of months, but Cook said he’s taking an even bigger step in company transparency: Apple will publish monthly updates on its website that will detail its progress.

“In January, we collected weekly data on over a half million workers in our supply chain.  We had 84 percent compliance.  This is significantly improved from the past, but we can do better.  We’re taking the unprecedented step of reporting this monthly on our website, so it’s transparent to everyone what we’re doing,” he said.

While Cook emphasized working conditions, he also tackled such other topics such as Apple’s TV and Cloud strategy.  You can listen to the full keynote HERE.

Copyright 2012 ABC News Radio


Apple to Inspect Working Conditions in China

Chris Ratcliffe/Bloomberg via Getty Images(CUPERTINO, Calif.) -- After years of complaints about poor working conditions at its supplier factories in China, Apple has announced an outside organization will be coming in to investigate the plants at the company's request.

In a statement Monday, Apple said the Fair Labor Association (FLA) will be conducting audits of its final assembly suppliers, interviewing employees about working and living conditions, and inspecting manufacturing areas, dormitories and other facilities.

“We believe that workers everywhere have the right to a safe and fair work environment, which is why we’ve asked the FLA to independently assess the performance of our largest suppliers,” said Apple CEO Tim Cook.  “The inspections now underway are unprecedented in the electronics industry, both in scale and scope, and we appreciate the FLA agreeing to take the unusual step of identifying the factories in their reports.”

Apple said the first inspections began Monday morning at a factory in Shenzhen.

The first report of the investigation will be released early next month.  Audits are expected to continue through the spring.

Copyright 2012 ABC News Radio


Does Apple Own ‘iPad’? Maybe Not in China

Apple, Inc. / ABC News(WASHINGTON) -- Apple’s iPad has been a runaway success by almost any measure…except for the name “iPad.” A Chinese company, Proview Technology, that says it registered the iPad name there in 2001, and has sued Apple to stop it from using “iPad” in the giant Chinese market.

“We have to admit that Apple’s iPad is a great product, and Apple creates great value out of that,” said Yang Rongshan, chairman of Proview’s subsidiary in the southern Chinese city of Shenzhen, in an interview with The Wall Street Journal. “But this is not the reason to support their irregular practice here.”

Apple has argued that it bought the iPad trademark from Proview’s Taiwanese subsidiary in 2006. Proview answered that the deal only covered the use of the name in Taiwan.

Apple has lost in court there, and Proview Technology is asking for compensation between $38 million and $1.6 billion. Apple may not have to pay -- but if Proview can actually stop Apple in China, it could be big. Apple has not commented on the case, and has not replied thus far to messages from ABC News.

“We ask the court to stop selling and marketing for Apple’s iPad in China,” Xie Xianghui, a lawyer for Proview Technology, said in China Daily. “We also demand an apology.”

Copyright 2012 ABC News Radio

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