Entries in China (57)


Biden to Chinese: ‘You Have Nothing to Worry About’ Regarding US Debt

Official White House Photo by Pete Souza(SHANGHAI) -- Vice President Joe Biden offered bold reassurances on the strength of the economy and safety of U.S. Treasuries in his first direct meetings with Chinese leaders since the debt ceiling crisis and U.S. credit downgrade.

Biden said China, the U.S.’s largest foreign creditor, has “nothing to worry about” with respect to its holdings of U.S. debt, despite recent concerns aired by some Chinese that American politicians are “dangerously irresponsible” and “addicted to debt.”

“No one has ever won betting against the U.S. economy,” Biden said during a joint statement with Chinese Premier Wen Jiabao.  “I point out U.S. treasuries, we’re going to -- we’re going to take care of very closely not merely because China owns 8 percent of them, but because the Americans own 85 percent,” Biden said.

“Very sincerely, I want to make clear that you have nothing to worry about in terms of their -- their viability,” he added.  

Wen directly acknowledged the U.S. debt crisis and recent brinkmanship over an effort to raise the debt ceiling, but expressed confidence the U.S. would overcome the “difficulties.”

“It’s particularly important that you sent a very clear message to the Chinese public that the United States will keep its word or -- and its obligations with regard to its government debt,” Wen said. “It will preserve the safety, liquidity and value of U.S. treasuries.”

Earlier this month China’s state-run Xinhua News Agency issued a scathing response to the S&P credit downgrade, chastising the U.S. and further rattling investors’ nerves.

“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” the wire service said. “China…has every right now to demand the United States to address its structural debt problems and ensure the safety of China’s dollar assets.”

Biden is visiting China as part of a week-long mission to East Asia. He heads next to Mongolia and Japan.  

Copyright 2011 ABC News Radio


China Rating Agency Cuts US Credit Rating

ChinaFotoPress/Getty Images(BEIJING, China) -- China’s Dagong Global Crediting Co. has cut the U.S.’s credit rating one level from A+ to AA, the same as South Africa and Russia, blaming political wrangling between Republicans and Democrats for creating "worldwide panic."

Dagong cited “the negative role of the U.S. political system on the [global] economy,” adding that “this incident is a turning point in the further decline of the U.S. solvency.”

Dagong does not have the sort of clout as other ratings companies like Moody’s and Fitch, so the move is largely symbolic, but certainly it highlights China’s fear that all the slashing in spending -- and political wrangling -- in D.C. could slow the U.S. recovery, which in turn could negatively impact China’s dollar denominated investments.

Meanwhile, state-run news agency Xinhua ran another blistering editorial criticizing, “the madcap farce of brinkmanship [that] has disclosed yet another ticking bomb in the heartland of the sole superpower in the world -- the crippling tendency to politicize the economics while trivializing the politics.”

Separately, the governor of China’s central bank has also voiced concern about the state of the U.S. economy.

In a statement on the People’s Bank of China website, Zhou Xiaochuan wrote, "Big fluctuations and uncertainty in the U.S. treasury market will influence the stability of international monetary and financial systems, thus hurting the global economic recovery. We hope that the U.S. government and the Congress will take concrete and responsible policy properly deal with its debt issues, so as to ensure smooth operation of the Treasury market and investor safety."

Copyright 2011 ABC News Radio


China's Logo Ripoffs: KFG, Pizza Huh and McDnoalds

PRNewsFoto/Apple(BEIJING) -- They say that imitation is the sincerest form of flattery. But for many international companies in China, protecting themselves from counterfeiters is a constant and costly battle. Hop on the Beijing subway and you may notice ads for "" It's the same name as the American daily deals web giant, even the same logo. But "" has nothing to do with the real "Groupon," which actually calls itself "Gaopeng" in China.

The real Groupon launched its Chinese website earlier this year with much fanfare but it has been lagging in sales, in part because of websites like "" and the thousands of other Groupon imposters. An employee of told ABC News that the company has nothing to do with "," despite having the same name, and that she did not know why they had chosen the "" domain name.

The problem is not limited to Groupon. This week an American living in Kunming, in Southwest China, ignited a media furor when she posted pictures on her blog of an entirely fake Apple store. From the hardwood floors to the minimalist staircase and sleek Apple posters on the walls, it is almost impossible to distinguish the store from a real Apple store. Shop attendants wear blue T-shirts bearing the Apple logo, and many of the employees reportedly believe that they worked in a legitimate Apple store.

The one major giveaway, the blogger wrote, the sign in front of the store: "Apple never writes 'Apple Store' on its signs -- it just puts up the glowing, iconic fruit."

The blogger added that there are two other fake Apple stores in Kunming. No one from those stores could be reached Friday, but one employee told a reporter from Xinhua that staff had been instructed to remain silent and that a press release from the company's headquarters would be forthcoming.

A representative from the real Apple told ABC News that the company is declining to comment on the issue. The three stores are not listed as official resellers on Apple's website.

The fake Apple is just the latest example of brazen counterfeiting in China. In 2003 Starbucks sued a Chinese coffee shop chain that called itself Xingbake, Mandarin for Starbucks. Disney clamped down hard on the "Lovely Rat" Mickey Mouse lookalikes that appeared in Beijing during the Olympics. And it has battled for years to shut down the Shijingshan Amusement Park in Beijing, whose central structure bears more than a passing resemblance to the Disney World's Magic Kingdom.

Often companies are smart, changing their name just a tiny bit. Hence the birth of eateries such as "KFG", "Pizza Huh" and "McDnoald's."

Copyright 2011 ABC News Radio


Chinese Inflation Rises Past Six Percent

ChinaFotoPress/Getty Images(BEIJING) -- China's inflation rate is the fastest it's been in three years, according to the National Bureau of Statistics.

The consumer price index increased to 6.4 percent in June, the report said.

The increase is being attributed to a 14 percent rise in food prices.

Pork, a Chinese food staple, reportedly rose 57 percent in June.

Copyright 2011 ABC News Radio


China Raises Interest Rate to Combat Inflation

Getty/George Doyle/Thinkstock(BEIJING) -- China raised key interest rates for a fifth time in nine months on Wednesday, in an attempt to alleviate surging inflation.

Inflation hit a 34 month high of 5.5 percent in May and is expected to go higher than 6 percent in June.

The central bank announced key lending and deposit rates would rise by a quarter of a percent. 

The rate for one-year loans was raised to 6.56 percent, from 6.31 percent.

The one year deposit rate was increased to 3.5 percent, from 3.25. The deposit rate increase will be effective Thursday.

Copyright 2011 ABC News Radio


Home Depot Accused of Violating 'Buy American Act'

TIM SLOAN/AFP/Getty Images(WASHINGTON) -- Home Depot is the target of a lawsuit for allegedly selling goods manufactured in China and other prohibited countries to U.S. government agencies in violation of the Buy American Act, according to court documents.

The suit was filed in 2008 by two employees of another government contractor and alleges that "Home Depot had major sourcing operations in China for many years," as well as India, and that the company knew that certain brands and products were to be excluded from sale to U.S. government agencies because they were not compliant with the Trade Agreements Act.

The suit also says, "Home Depot affirmatively misrepresented to federal government customers that its GSA-scheduled contract 'covered everything in our store.'"

GSA is the federal General Services Administration, which supplies products for U.S. government offices.

The Buy American Act and Trade Agreements Act work together to promote the purchase of U.S. goods or goods manufactured in countries when it serves the nation's economic interest.

The Atlanta-based home improvement retailer, with more than 2,200 locations in four countries (including China), denies the allegations.

"We would never knowingly sell prohibited goods under any circumstances, and we have been cooperating with the government to provide requested information," Home Depot spokesman Ron wrote in a statement.  "We believe the plaintiffs have an inaccurate view of the facts, so we look forward to presenting our side of this case as the process moves forward."

The plaintiffs' attorney, Paul D. Scott, said, "We're looking forward to having our day in court and having a jury of American citizens decide what they think of this case."

The U.S. Department of Justice had no comment about the allegations.

Copyright 2011 ABC News Radio


Google Says Chinese Hackers Compromised Email Accounts

ABC News(SAN FRANCISCO) -- The personal email accounts of hundreds of Google users -- including senior U.S. government officials, Chinese political activists, officials in several Asian countries, military personnel and journalists -- have been compromised by Chinese hackers, the search engine giant said Wednesday.

Writing in a blog post, Google announced that the attack appeared to have originated from Jinan, China.  The company did not specify what information may have been obtained nor how long the alleged attack took place.

Google wrote that "the goal of this effort seems to have been to monitor the contents of these users' emails, with the perpetrators apparently using stolen passwords to change peoples' forwarding and delegation settings."

The company said those affected by the hack have been notified and their accounts have been secured.  Google was able to disrupt the attack and has notified government authorities.

Secretary of State Hillary Clinton said Thursday that the U.S. is “very concerned” with the issue and that the "allegations are very serious. We take them seriously. We are looking into them.”

Clinton said the FBI would be investigating the matter and declined to comment further.

Copyright 2011 ABC News Radio


Walmart Replaces Top China Executives

Justin Sullivan/Getty Images(BEIJING) -- Walmart has replaced two of its top executives in China after their resignations earlier this month.  

Walmart on Friday said that Mario-Jose Medina, former chief financial officer of Walmart Puerto Rico and Walmart Chile, will replace Roland Lawrence as chief financial officer in China, while Del Sloneker, a former senior vice president, will succeed Rob Cissel as chief operating officer in that country.

"Both executives bring with them years of experience and a solid understanding of the retail market in China," Ed Chan, chief executive of Walmart's China operations, said of the new appointments.

Wal-Mart, based in Bentonville, Ark., is planning for an expansion to take place in smaller cities within China, according to a Wall Street Journal report.  The retail giant is hoping to see growth in emerging markets in countries like China, Brazil and Mexico due to falling U.S. sales, WSJ reports.

The former CFO Roland Lawrence and COO Rob Cissell resigned abruptly in Mid-May for personal reasons and to pursue other opportunities, according to a statement from Walmart.

Copyright 2011 ABC News Radio


Yahoo!-Alibaba Feud Over Spinoff of Alipay

ChinaFotoPress/Getty Images(NEW YORK) -- Yahoo! and Alibaba, China's largest e-commerce website, are at odds after Alibaba announced it had spun off Alipay, the company's online payment service. Yahoo! holds a 43 percent stake in Alibaba, and news of the spinoff caused its stock to fall, as investors fear it could weaken Yahoo!'s stake in Alibaba.

Spining off Alipay allowed Alibaba Group's CEO Jack Ma to transfer ownership of Alipay to one of his other companies.

The two companies disagree about when Alibaba notified Yahoo! of the spinoff. Alibaba said it told the company in July 2009, while Yahoo! reps insist the change in Alipay's ownership took place last August, and Alibaba did not alert Yahoo until March 31.

Ma has had a rocky relationship with Yahoo! ever since Carol Bartz became CEO in January 2009. Analysts believe the Alipay move could allow Ma to have more negotiating power if Yahoo! attempts to sell its share of the company.

The tech giants issued a joint statement Sunday reaffirming their commitment to work through the issue.

Copyright 2011 ABC News Radio


Manufacturing in America: US Set for a 'Manufacturing Renaissance'

Dynamic Graphics/Thinkstock(BOSTON) -- In the next five years, the U.S. will experience a "manufacturing renaissance," according to a new analysis.

As wages in China increase, flexible work rules and government incentives in the U.S. will make America one of the cheapest places to manufacture goods in the developed world, the Boston Consulting Group (BCG) analysis suggests.

"If the trend plays out, I think you'll see manufacturing growing and expanding in the U.S.," said Michael Zinser, one of the authors of BCG's analysis on manufacturing. "What we're expecting is that companies will step back and rethink their networks, rethink their supply chains."

Chinese wage rates likely will continue to grow by 15 to 20 percent year over year, Zinser said. When the increase in wages is combined with the increasing value of the yuan, the wage gap between the U.S. and China is narrowing rapidly.

"China is no longer expected to be the default low-cost manufacturing location for those companies who are looking to supply the U.S. market," Zinser told ABC News. "What we would expect to see is a convergence in terms of the wage rates to what we're seeing in the U.S. today."

Harold Sirkin, lead author of the analysis on manufacturing, expects the convergence to occur "by around 2015."

While some companies will decide to manufacture in the U.S., others will look for lower wages in other countries, Zinser said.

But one of the advantages U.S. manufacturers have, according to BCG, is that the work force is becoming more flexible.

Kevin Sauder, president and CEO of Sauder Furniture, recently started sourcing component parts regionally, a process his purchasing team called "insourcing."

"Supporting local and American jobs is one factor that gets considered," Sauder told ABC News. "It's not the main factor, but it's one thing that gets considered. All things being equal, we would always prefer to go with a regional manufacturer. ... Using regional components improved our ability to be flexible in new product development."

The change allowed the company to get more contracts, Sauder said, because it was able to build prototypes more quickly for stores such as Walmart and Ikea because the component pieces arrived weeks earlier.

Even though the U.S. manufacturing sector maybe be poised for a comeback, Zinser cautioned that it did not mean China is on the decline.

"China is going to continue to be a major global player," said Zinser. "China is still a large market and many companies are going to want to continue supplying that market."

U.S. consumers should expect industries such as construction equipment and appliances to be impacted first, he said, while industries such as textiles and consumer electronics may never be affected.

Copyright 2011 ABC News Radio

ABC News Radio