Our friend Lyle Morris has a well-reported piece at YaleGlobal on China’s new labor law, which went to effect at the beginning of this year.

Under the law, which affects both domestic and foreign companies operating in China, workers will see increased protection from labor unions and significant overhauls in policy ranging from contract formation to severance packages and job training. Arguably the most influential — and controversial — change centers on an open-term clause for long-term employees. The clause states that workers with 10 consecutive years, or having signed two consecutive fixed-term contracts with a company, are entitled to a contract without a fixed end date – essentially giving them lifetime employment. …

Many foreign enterprises voiced discontent with the law. Among them was Serge Janssens de Varebeke, then-president of the European Union Chamber of Commerce in China, who warned in a 2006 letter to the National People’s Congress that the “strict regulations” could raise production costs and “force foreign companies to reconsider new investments or continuing their activities in China.” …

Karen Lin, a senior fund manager at Paradigm Asset Management Co. in Taipei, predicts the law will add roughly 25 percent to the cost of labor in China, which typically accounts for 10 percent of total manufacturing costs. Companies that fail to adjust will start to feel major pressure on their profits within “five to six years,” Lin said.

It strikes me as a little bit duplicitous on the part of some foreigners to have their governments and citizens’ groups insisting on new regulations to improve human rights in China while business groups complain that such regulations cost too much money.

No matter which side of the debate you may stand on, it’s hard not to be a consumer of products created under these regulatory conditions. As Lyle writes, however, better laws on the books doesn’t necessarily mean better work conditions.

In the long run, whether or not the law is successful in curbing worker abuse is another matter. Critics point out that the while the law will add much needed rights for workers, its goal of reducing worker-abuse cases might be difficult.

“The impact it will have on migrant workers’ working conditions will be limited,” says Lauffs. “Simply passing a new law will not guarantee that the local labor bureaus will become more active in enforcing employees’ rights or companies will be more accommodating in coming into compliance.”

A fundamental question is whether Chinese workers will actually make use of their newfound power. “I think many workers will be hesitant to use their full rights under the law” says Zhangjian, secretary at a small electronics manufacturing company in Beijing. “Bringing too much attention to yourself could cost you your job.”

Lest a week go by without new evidence of strengthening ties between China and Venezuela, a massive trade show featuring Chinese companies and products opens tomorrow in Caracas. The fair includes more than seventy Chinese firms from numerous industries, ranging from porcelain to automobiles.

The fair, organized by the Chinese Ministry of Commerce, is an especially visible sign of the exponential growth in trade between China and Venezuela, which has surged from about $100 million in 1998 to $6 billion last year, according to the Chinese Embassy in Caracas.

The trade show comes on the heels of the government’s announcement that it has begun to spend some of the resources committed to the “China-Venezuela Investment Fund” earlier this year. Venezuela tagged $2 billion for the fund; China promised $4 billion, “the largest credit China has offered to any one country,” according to Zhang Xiaoqiang, a vice chairman of China’s National Development and Reform Commission (NDRC).

One of George H. W. Bush’s less discussed jobs, lost among president of the United States, ambassador to the United Nations, and CIA director, was head of the U.S. Liaison Office in Beijing during the Nixon administration. Bush’s China journal has recently been published, and it reveals frustration at being made irrelevant by direct contacts between Henry Kissinger and Deng Xiaoping.

James Mann, author most recently of The China Fantasy, has an article on the book in The New Republic. A couple of choice paragraphs.

When Bush landed in Beijing on October 21, 1974, its wind and dust reminded him of places he had encountered in the oil business. “It reminded me very much of West Texas and also of a trip to Kuwait,” he observed. He soon tried to establish high-level contact with Chinese leaders. He paid a call on Deng Xiaoping, then a vice premier under Mao Zedong. Bush’s initial impression of Deng, eventually the father of China’s economic reforms: “He was a very short man.” (For American one-liners about China, this ranks right up there with Richard Nixon’s verdict on the Great Wall: “It really is a great wall.”)

…

And then there was the question of human rights. “China is very vulnerable on human rights, just as the Soviet Union was,” Bush thought. “Some day sure as can be Congress will turn its attention to these aspects of the Chinese policy. … [T]his euphoric analysis of this society as an open society, as a free society, a soft or gentle society, is simply wrong.” All in all, Bush concluded, China was getting more out of its relationship with the United States than the United States was getting from China. “They need us, actually more than we need them in my judgment,” he decided. “This is the consensus of the international community incidentally.”

The New York Review of Books ran a review June 12 of two books on climate change. It contains the following assessment of the Stern Review on the Economics of Climate Change.

Not having read up on the Stern Review, the work of Lord Stern of Brentford for the U.K. government, I don’t know if this description is perfectly accurate, but it is interesting, at least.

The practical consequence of the Stern policy would be to slow down the economic growth of China now in order to reduce damage from climate change a hundred years later. Several generations of Chinese citizens would be impoverished to make their descendants only slightly richer. According to Nordhaus, the slowing-down of growth would in the end be far more costly to China than the climatic damage. About the much-discussed possibility of catastrophic effects before the end of the century from rising sea levels, he says only that “climate change is unlikely to be catastrophic in the near term, but it has the potential for serious damages in the long run.” The Chinese government firmly rejects the Stern philosophy, while the British government enthusiastically embraces it. The Stern Review, according to Nordhaus, “takes the lofty vantage point of the world social planner, perhaps stoking the dying embers of the British Empire.”

Read the full review if you have a chance. It takes on several interesting questions among the two books. It also throws in this insight:

This means that the average lifetime of a molecule of carbon dioxide in the atmosphere, before it is captured by vegetation and afterward released, is about twelve years. This fact, that the exchange of carbon between atmosphere and vegetation is rapid, is of fundamental importance to the long-range future of global warming

My personal favorite transpacific investment tie-up is one that made a frustrating and expensive process free, if not easy. Bank of America has an 8.2 percent stake in China Construction Bank (jiàn háng), a major institution that went public in 2005. I don’t claim to understand the implications of this investment between huge banks, but I know one thing: It lets me move USD into RMB with no ATM fees, no exchange rate adjuncts, and generally few headaches.

By way of news, The Financial Times reports that BoA is increasing its stake to more than 10 percent, but I thought it might be useful for readers coming from the United States to China to know about this trick.

Many international travelers are familiar with the pain of double-barrel ATM fees — one from the machine that gives you money, and one from a U.S. bank penalizing you for using someone else’s terminal. Worse yet is the percentage of the withdrawl charged as an “exchange rate adjunct.” Before I discovered the BoA-CCB deal I was losing almost 7 percent on my USD withdrawls in China.

Now, I withdraw money from a BoA checking account with the debit card I received in the United States with no fees whatsoever: It transfers at market rate from USD to RMB and gives me cash.

There was one hurdle, however. Money in my life this year is deposited in Colorado. People in the U.S. needing to pay me send a check to my family, who generously go to the bank to make the deposit. But there are no BoA branches in Colorado.

BoA has one more service that completes my money circuit. Once you associate a U.S. account with a BoA account, incoming transfers from the other bank can be done on a one- or three-day basis with no fees. So if you think I need to be richer in China, I’ll send you the address in Colorado, my family will make a deposit into a locally available bank, I’ll transfer it free to BoA, and CCB ATMs throughout China (and Hong Kong) will allow me to withdraw that money with no charges.

From Reuters:

But even as Hu spoke, about 200 protesters waved signs outside the university gate saying “Free Tibet” and “No Pandas, No Poison Dumplings,” the latter referring to Hu’s offer to lend two pandas to a Tokyo zoo and a row over Chinese-made dumplings laced with pesticide that made several Japanese people ill.

When I was in Japan recently, the contaminated jiaozi/gyoza scandal was one of the first things most Japanese friends asked me about on learning I now live in Beijing. It seems like a bit of progress if anti-China demonstrators (who weren’t particularly numerous) are complaining about human rights and food safety rather than history-related issues. Anti-U.S. slogans were not as substantial when I happened upon a much larger demonstration on Sept. 11, 2004, at Tokyo’s Omotesando.

“I just want to say ‘Free Tibet’. I want to say ‘No’ to China’s oppression of human rights,” said 29-year-old Atsushi Hanazawa, who carried a guitar along with a Tibetan flag.

Again, this makes Japanese protesters in a similar position as many around the world. No comment on who’s well informed.

Some Waseda students were more concerned about getting to class. “I can’t get through the gate. It’s a pain,” said 18-year-old Takuhiro Waki of the protest.

About two dozen right-wing activists yelled anti-Chinese slogans such as “Hu Jintao, Go Back to China.” Earlier, some right-wing Waseda alumni protested against Hu’s speech in a blog.

There’s the nationalism. But two dozen? Pretty weak from people who get crowds twice that size in front of sound trucks on anonymous Tuesdays near busy train stations and somewhat regularly clog the streets near the Chinese embassy.

Nearby around 50 Chinese students held their own rally, yelling “Go, China” in Chinese, “Sino-Japanese Friendship” in Japanese, and “Yes, We Can” in English.

“When I hear the anti-Chinese slogans, I feel that the Chinese people’s character has been maligned,” said 28-year-old Chinese graduate student Cao Shunrui.

There’s a little more nationalism, perhaps, from the other side. I’m not sure what to make of that, but the “Sino-Japanese friendship” message is considerably more helpful than some of the vitriol on both sides in U.S. campuses, from Grace Wang’s experience at Duke to a few dozen other reported rallies.

Hu later shed his suit jacket to play ping-pong at Waseda with popular players from both countries, but Fukuda, 71, declined to pick up a paddle.

“I’m glad I didn’t play ping-pong with him,” Fukuda told reporters. “He’s very strategic. I thought you can’t be too careful.”

I wouldn’t play him either. If he’s playing with popular players, he’d kick my ass. Unless Prime Minister Fukuda has been training, it’s probably wise to save the embarrassment and watch a friendly match.

At Foreign Policy, former Amnesty International Executive Director William F. Schultz considers how to “pressure Beijing.” Aside from taking a little too literally Chinese government statements about “the Chinese” and their supposed hurt feelings, Schultz, who is now a senior fellow at the Center for American Progress (disclosure: my former employer), makes an interesting suggestion:

What is the appropriate tack to take? The most successful human rights engagement with China—such as that of John Kamm, a former head of the American Chamber of Commerce in Hong Kong who has intervened on behalf of hundreds of political prisoners—is characterized by what one might call respectful tenaciousness. Trying to crack Chinese Internet censorship or highlighting the cases of those mistreated for seeking to advance the rule of law or exercise free speech, for instance, is always appropriate. But so is applauding China’s attempts to control corruption or experiment with local elections.

Effective human rights work requires two things. First, it requires a tragic sense of history—a recognition that, no matter what we do, we will never be able to save everyone from misery or suffering. Sometimes, for example, despite its immense power and resources, the U. S. government’s own ability to influence human rights is limited, and its willingness to do so in a bold way is compromised by competing interests. We who care about human rights would do well to recognize that and shape our recommendations to the U.S. government accordingly. Otherwise, we risk even greater marginalization than we already experience.

But secondly, good human rights work requires persistence and a long view, the recognition that human rights have become the lingua franca for much of the world and a ticket of admission to widely honored membership in the international community. The United States with its plummeting approval ratings around the globe has learned that the hard way. China too will learn eventually that the best way to avert hurt feelings is to avoid prompting criticism in the first place.

The whole construct of “pressure” feels problematic, but I think what Schultz proposes is a significantly more sensitive tack for advocacy and diplomacy. It’s an open question, though, whether a government that stakes much of its domestic persona on a national sense of pride will really change behaviour for the sake of avoiding criticism.

The internet is unusually sluggish today. I wrote a bit about some possible reasons why at Sinobyte.

Blogspot has re-disappeared, MSN Messenger is inaccessible from an artsy Beijing cafe, searches for Carrefour are just back from going unanswered, and the spring sky is clear. It’s the 89th anniversary of China’s May Fourth Movement.

In 1919, student activism took a powerful and still-honored turn for the patriotic in China. On May 4, thousands of students gathered at Tiananmen to protest the Treaty of Versailles and its treatment of previously German-held territory in Shandong Province, which was given to Japan rather than back to China.

Today, students have been at the forefront of recent demonstrations of national pride in the face of demonstrations against the Olympic flame as it toured the world. After a French demonstrator went after a woman carrying the torch in a wheelchair, anti-French sentiment was converted to demonstrations and boycotts directed against the French megamart Carrefour.

Go read the full post here.

If a product is consumed in one country, and it is manufactured in another, which country is responsible for the carbon emissions from manufacture? And if one country outsources manufacturing to a country with more lax environmental regulation, who’s responsible for the extra carbon? These will be part of the discussion in Bali when representatives of the world’s countries gather next month to negotiate a successor to the Kyoto Protocol.

In 2006, the idea that outsourcing industry meant outsourcing pollution was already well developed. A think tank report at the time suggested that “when trade between China and its partners exerts an environmental impact, the responsibility should be borne by all parties, including manufacturers, traders and consumers in the product chain,” according to the China Daily.

In The Wall Street Journal, Jane Spencer reports that this concept is back, and may play a role in Bali.

Past accords like Kyoto have looked at emissions on a country-by-country basis, requiring participating nations to reduce greenhouse gases released within their borders. In other words, the manufacturing nation pays for the pollution. But in a twist that could put more pressure on industrialized nations like the U.S., academics, environmentalists and some policy makers argue the next global climate treaty should take into account a nation’s emissions “consumption.” They argue the emissions are embedded in goods that move around the world through trade — so if the U.S. imports iPods from China, Americans should share some responsibility for the pollution produced in making them.

“As China’s emissions rise, everyone is pointing the finger of blame at China,” says Andrew Simms, policy director of the New Economics Foundation, a think tank and environmental-advocacy organization based in London. “The real responsibility for rising emissions should lie with the final consumers in Europe, North America and the rest of the world.”

The article notes that some in the U.S. dispute this idea, but I find it pretty persuasive. If U.S. or other consumers didn’t buy products, they wouldn’t be made. The essential cause of emissions is the consumer. It doesn’t make sense to blame the venue of the proximate cause: coal burning in China.

This shouldn’t let China off the hook, though. China’s manufacturing is indispensible in the world economy, but we could do without the inefficient energy practices. The rub is that, without proper government intervention and assistance, more efficient practices could make products more expensive in the short term.

In the United States, the government has used a variety of means to encourage efficiency. Once efficient practices are mandated, manufacture actually gets cheaper: Factories buy less energy. But the innovation costs money at first. That’s why governments develop rebate programs to offset higher consumer prices or other incentives to offset higher costs of manufacture.

What this question raises, in my view, is whether it’s the exclusive responsibility of the Chinese government to back efficiency in China. If foreigners consume the products, shouldn’t they pay to reform the industries? Imagine China charged a carbon tax on all products and put the money into efficiency programs. Would the WTO allow China to charge a carbon export tax? Maybe Bali will help solve all this.

The China Brief from the Jamestown Foundation examines ties between China and the United Arab Emirates.

Since establishing diplomatic ties on November 1, 1984, the political, economic and trade relations between the UAE and China have evolved significantly in both scale and substance. In recent years, UAE-Sino ties have strengthened with burgeoning trade and investment cooperation. Bilateral trade between the UAE and China recorded an impressive growth of 33 percent in the last eight years reaching $20 billion in 2007. In 2007, China exported goods and services worth nearly $17 billion dollars to the UAE, of which nearly 70 percent were re-exported to other countries in the Middle East, Africa and even Europe (Gulf News, March 30). Per the latest data released by the Dubai Port Authority, trade between Dubai and China increased by 47 percent during 2002 and 2007. In fact, non-oil trade increased by 42 percent ($6.2 billion) in the year 2007.