Thursday, August 31, 2006

Hong Kong Police Raid Independent Radio

Despite without a license, a group of activists have run the Citizen's Radio for one year. Last night police and government officers suddenly raided this independent radio stations. They arrested a man and confiscated most equipment.

There are only three legal radio stations in Hong Kong, a city populated by 7 million people. There are even more radio stations in Beijing than in Hong Kong, no mention of other cities. The Hong Kong government refuses to issue more licenses to any applicant. The activists of Citizen's Radio submitted their application last year and have not received any response. Hong Kong government blocks its ears to any demand for more radio channels. Hong Kong government always boasts of its free economy but it never applies to the area of media.

A few years, some popular hosts of radio phone-in program, who criticized government severely, were suddenly fired and Hong Kong people were worried about the freedom of speech and media autonomy. Since then, some people launched underground radio and other independent media (e.g. Hong Kong People's Radio).

Hong Kong's radio broadcasting is managed by the Broadcasting Authority whose memebers are appointed by the Chief Executive Donald Tsang who is also not elected by Hong Kong people. The policy-making body is the Commerce, Industry & Technology Bureau and the Secretrary is appointed by the Beijing government. There is no democratic institution and process for Hong Kong people to discuss and change the broadcasting policies.

Hong Kong government said that illegal radio broadcasters are harmful to other legitimate users. Yet no evidence has never been provided by officials. But the police raid is already doing serious harm to the civil society. The maximum penalty for a conviction of violating the telecommunication law is a HK$100,000 fine and five years' imprisonment. Further, we lost the Citizen's Radio, the only underground radio station in Hong Kong.

Radio broadcasting is one of the most popular media in Hong Kong. Now, except the government radio station, all commercial radio licenses are owned by the commercial sector. One of them belongs to the tycoon Li Ka Shing who has good connections with Hong Kong and Beijing governments.

Photo: Leo Prieto

Thursday, August 24, 2006

The open secret of Walmart in China

In China, there are 60 Walmart outlets, mostly located in the urban centers of coastal cities. But over the past ten years, its total investment in China is only about US$57 million. How could it be possible?

The secret lies at its partner, Shenzhen International Trust & Investment Co. Ltd (SITI) and the "enclosure".

Walmart and SITI ride on the tide of the enclosure movement in Chinese cities. But Walmart did not need to buy any land or build its superstores in China. SITI did. Usually the local governments offered very favourable terms for SITI because of its partnership with Walmart. Last year, in a land auction for Hangzhou city center, the local government even required all bidders to be top 500 world corporates. It turned out that only SITI was eligible. SITI even acquired the land at a price 25% lower than market price. The local governments believe that the arrival of Walmart usually could boost the value of its surrounding land and real-estate. The annual purchase of RMB 20 billion worth of merchandise by Walmart is also extremely attractive to most governments.

SITI usually builds a commercial-residential complex in the new site and rents several stories to Walmart at a very low price. Due to the huge amount of profit from real-estate development, SITI is willing to provide most infrastructure (including air-conditioning, elevator and escalator) for Walmart. That is why the initial fund for each new outlet is only about US$3 million, less than Carrefour's outlet (US$5-6 million).

While many suppliers want to sell their products in Walmart's superstore, it keeps the first order payment as deposit. It is estimated that the amount is about RMB 30 million, which is high enough for opening another new outlet. Walmart could take advantage of its brand name to expand its retailing network persistently.

The market structres and government policies in China becomes more and more favourable to the big corporations. In the retailing markets, the small operators will find more and more difficult to survive. The local governments only pay lip service to job creation by promoting small business.

Information source

photo: Travel Geographer

tags:, ,

The rural migrants know better than us

In response to oiwan's letter, I would like to make some remarks on the situation of Chinese rural migrant workers. The China government recently collaborated with international NGO, including ILO, to produce a TV drama series about the success story of rural migrant labor in Sichuan province. During my field study of the Chinese rural migrants, I met a lot of small business owners. Many see it as the only way out of the difficult situations as a cheap labor in the "World Factory". I haven't watched that TV drama series but I doubt if it is necessary for the government and NGOs to encourage the migrants to run small business.

In China, most rural migrant workers start their own business in the retailing market. I guess this is the case in most developing countries. It is much easier for a worker to open a grocery than a factory. And the retailing market in China is highly competitive but "unorganized". It means low-profit and the economic scale of most operators is small. It requires small amount of initial fund and low skill for people to start up small business. The large-scale chain shops are not able to monopolize most of the market. I think of an interesting example.

Recently GOME, the biggest home electronic appliances retailer in China, has acquired its rival China Paradise, the third largest one. But after this deal, GOME only gets 10% market share. That is why GOME's stock price dropped quite a lot. To many people's surprise, China Paradise recently announced that its annual profit rate is as low as 0.2% of the total revenue.

I don't have more statistics about China's retailing market at hand. But I have read something interesting about India. Her economic growth rate is so high that many people are expecting a bright future of India's economy, particularly her retailing sector. India's individual consumption accounts for 64% of GNP, much higher than that of China (42%). Yet few people notice that the retailing market is also highly decentralized in India. There are more than 15 million retailing units, among which only 4% are shops bigger than 500 square feet. Most of them are small shops. In the United States, there are only 0.9 million retailing units, mostly owned by big corporations such as Walmart.

Desipte the influential corporate agenda of neoliberalism promoted by WTO and many developed countries, many parts of people's economy, particularly in the developing countries, are still characterized by a large number of small operators and their lively markets. The highly competitive market is both good and bad for Chinese rural migrants. It is not that difficult for them to wave farewell to their identity of "Dagong" (worker) and expect upward mobility in the future. Some of them make money. That is one of the reasons for the weak class solidarity among rural migrant workers. Furthermore, the profit rate is so low for small business that many shopowners could hardly survive.

Even though you buy the idea of ILO that small business is a good way for the poor people in the developing countries and job creation, your first priority should not be to encourage them to run small business. I also doubt if training could really help. They might know about it better than us. Instead, the government should try to identify and solve the key problems the small shopowners come across. For example, the big companies keep making use of their money and their connections to governments to get rid of the small operators and change the market structure.

That is what happened and is happening in Hong Kong. Now there is less and less room for small business to survive. People should be worried about the implications of the corporate moves for the retailing market, such as the acquisiton of China Paradise by GOME. As far as I know, many global retailing companies, such as ESPRIT and GIORDANO, are about to expand their outlets in India.

In other words, the future is not a dream but it is not so bright.

Photo: Wuerzi

Light Out Hong Kong and One Million People's Candle Night

The term "NGO" becomes popular in Hong Kong. While more attention is paid to it, more different voices about it are heard. Recently, Greenpeace China was criticized by mainland media as exaggerating the problems of "polluted vegetable" and "genetically modified food". The corporates and governments released research findings and information to refute Greenpeace's accusation. A member of Greenpeace said it was defeated in the media battle. A critic, Tang Hao, said in his article published in Southern City Daily, "Greenpeace is following a radical tradition, showing the style of extravagance and calculating cost and effect. I find them questionable." Fang Zhouzhi criticized Greenpeace China as "anti-scientific" repeatedly. Some Greenpeace supporters argued that this wave of criticism is the collaborative strategy of governments and corporate groups. Indeed, an engaged NGO is usually controversial. It is inevitable. But I really expect responses to these criticism from Greenpeace.

While some people found Greenpeace China too radical, some criticized it as not radical enough.

The "Light Out Hong Kong" campaign on August 8 co-organized by Greenpeace with other environmental groups, targeted power plants. The columnist of Hong Kong Economic Journal, Chan Yim, disagreed with its stance. He argued that the biggest source of pollution is the factory owners and governments in the Pearl River Delta. Although Greenpeace was viewed as "radical", it didn't dare to set them as campaign targets. He saw Greenpeace's campaign as a political show without real commitment.

According to Lee Yuk Shing, some Japanese launched the campaign of "One Million People's Candle Night" to encourage people to save energy and reduce exhaust emission. And it also inspires people to reoganize their life, memorializing their deceased friends and families, and rethinking the meaning of life.

They not only won support from people all over the country, but Japan's environmental protection department. They receive positive responses from Korea and other countries. This year, people in Taipei, Keynes (Australia), Pittsberg (US) and Seoul joined their campaign. It becomes more and more influential. Compared to it, "Light Out Hong Kong" is far from successful and fails to gain support from government and the society at large.

Photo: t-mix

Transaction fee is fair?

yahoo! copyYahoo! auction site is a very popular portal in Taiwan. With 3.7 million items and the annual transaction value of NT$22 billion (2005), it owns most of the local market. It recently announced that all users will be charged 3% of transaction fees on most of the items. It aroused users' severe complaints and they accused Yahoo! of violating the Fair Trade Act.

The Fair Trade Commission began to investigate this case. According to Taiwan's antitrust law, a company, with annual revenue over 1 billion New Taiwan dollars and one third of a specific market, will qualify as a monopoly.

A user said that he/she already paid about NT$15,000 for listing his items on the site and other functions each month. Now he would be charged NT$15,000 more for transaction. This amount is enough for renting a small apartment in Taiwan! He/she decided to take away his items from Yahoo! auction site immediately. He criticized this new policy as a nasty tactic to capitalize on Yahoo!'s monopolized market.

Yet Roach Chen argued that Yahoo!'s new price policy might offer an opportunity for competitors to enter the market. An auction site could survive without transaction fees because this service is cross-subsidized by the profit from other services such as advertising. Most competitors could not replicate Yahoo!'s model. That is why other competitors lost the battle with Yahoo! in Taiwan. He added that internet business usually requires low skill and low initial fund. So "monopoly" is less serious than "cross-subsidy" in the market on internet. This is also the issue in the case of Microsoft Windows and IE.