August 29, 2013, 1:00 pm Comment

Chinese Students Bolster U.S. College Budgets


Washington Monthly’s annual college issue usually has some fascinating material, and this year is no exception. One example is an article by Paul Stephens on the sharp rise in foreign students on American campuses (to more than 764,000, an increase of roughly 200,000 in less than six years, he says, citing data from the Institute of International Education and the State Department). Many are from wealthy overseas families paying full tuition — and helping to bolster college budgets.

Where are the students coming from? By this reckoning, the bulk of the net increase — more than 160,000 of the 200,000 — has come from China.

State Department statistics on F-1 student visas issued to applicants from four selected nations.Washington MonthlyState Department statistics on F-1 student visas issued to applicants from four selected nations.

Mr. Stephens writes:

While administrators promote the diversity and global perspectives these new students bring to campus, it’s clear that such high-minded goals are not the only motivation for enrolling large numbers of foreign students. With state spending on higher education declining sharply over the last five years — it’s down an average of 28 percent nationwide — out-of-state and international students who pay full tuition (and sometimes even additional tuition) have kept these institutions in the black. As state assemblies have cut back, the people of China have picked up the tab.

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European Credit Crisis Indicators


% yield Change 1 month change

Italy 10-year bond

4.38% +0.004 –0.08

Germany 10-year bond

1.86% –0.005 +0.185
Source: Reuters
The New York Times


  • Behind the Big Increase in Food Stamps 11Changes in rules and eligibility have contributed to very large increases in the cost of the food stamps program, SNAP, an economist writes.
  • India’s Economic Crisis 2Because any serious crisis causes a rush to safe havens, India’s economic difficulties will be made worse if fiscal policy disputes in the United States are not resolved, an economist writes.
  • The Charitable Deduction, Continued 45Not all charitable giving is efficient or aimed where it is needed, and Congress should think about that as it contemplates tax reform, an economist writes.
  • Wage Stagnation and Market Outcomes 30With a persistent lag in income growth for most Americans, the government should not only provide relief through tax policy and a safety net, but also do more to promote full employment, an economist writes.
  • Full Time, Part Time, Good Jobs, Bad 45Shorter hours or part-time work can be preferable for those dealing with family care and household duties, but such jobs needn’t represent second-class work, an economist writes.

The Reborn of Beichuan


The story of the Chinese dilemma of what to do if you have lost your child in the earthquakes of 2007. This film gives an insight into the Chinese mind on how they think about family and opening up.

  • Group: China Investment Emigration Forum | 投资移民论坛
  • Subject: Shanghai Free Trade Zone Formally Approved

1.Shanghai Free Trade Zone Formally Approved 

The establishment of a pilot free trade zone in Shanghai, the first of its kind on the Chinese mainland, has been formally approved by the State Council, the Ministry of Commerce said in a statement posted on its website on 22nd Aug.
The establishment of the 28.78-square-kilometer zone, which will consist of four separate zones under the special administration of customs, paves the way for China’s future economic development and will boost the country’s global competitiveness, experts said.
Full text: http://www.fdi-law.com/en/view.php?id=2684 

2.Legal Framework for Shanghai Free Trade Zone 

It’s first step to set up a new financial architecture as the country pursues a new round of reform.

An executive meeting of the State Council said that a draft plan to suspend certain laws in the Shanghai Free Trade Zone will be submitted for the approval of the National People’s Congress.The measure was expected to ease the administrative approval procedures for foreign investment. It’s also a first step in setting up a new financial architecture as the country pursues a round of economic reform.

Full text: http://www.fdi-law.com/en/view.php?id=2683 

3.Foreigners Levied Bigger Fines Under New Exit-entry Law 

Shanghai fined and punished more than 500 foreigners for illegally staying in the country after China imposed its new exit-entry law in July, according to statistics provided by the city’s immigration inspection department.

From July 1 through Aug 10, 534 foreigners had illegally entered or overstayed their visas. More than 380 of them were found by the border inspection department at Shanghai Pudong International Airport.That is an increase of 150 percent on the same period the previous year, the figures showed. 

Full text: http://www.fdi-law.com/en/view.php?id=2681

Hilton hotels
Cheering up your Chinese guests
Sep 21st 2011, 15:03 by Z.U. | SAN FRANCISCO

ANGLOPHONE business travellers are accustomed to a certain sense of familiarity wherever they go. The desk clerk in Bangkok speaks flawless English; the television in São Paulo picks up CNN and Sky News; the continental breakfast buffet in Lagos offers Earl Grey tea and Cheerios with skimmed milk.

But as Chinese businesses go ever more global, their executives would also like to feel at home even when they’re far away. In fact, the Hilton Hotel group is putting big money into this very notion. Last month it launched Hilton Huanying in an attempt to corner the market in Mandarin- and Cantonese-speaking travellers who would like to pretend they haven’t left home.

“Huanying” means “welcome”, and the programme promises Chinese hospitality at three key “touch points”, with desk clerks fluent in Chinese; slippers, tea kettles, and Chinese-language programming on the in-room television; and a breakfast menu that includes such eastern favourites as congee and dim sum. To ensure Chinese travellers a “warm, authentic welcome at Hilton” the programme’s website promises essentials such as “Chinese spoons” and a welcome letter in Chinese. Hilton launched the programme in San Francisco, which boasts a Chinese-American mayor and a population that is over 30% Asian. Fifty hotels in 12 countries are currently offering the service, and more such properties are expected to be added across Hilton’s ten brands.

Clearly, Chinese travellers are a huge market that will only increase as time goes by. Hilton is betting that adding fried-dough fritters to the room-service menu will allow these guests to enjoy the same anonymous, interchangeable hotel experience that Westerners have sampled for decades. And in other good news, Americans who want to experience the heady rush of foreign culture will now be able to order pork fried rice for breakfast in hotels rather closer to home.

Ai Weiwei

by Barbara Pollac

Ai Weiwei is back home in his gray brick studio complex in Beijing, but that hardly means he’s free. After 80 days of detention in an unknown location with no formal charges brought against him, he has been released on bail, having “confessed to tax evasion and destroying documents,” according to Chinese news agencies. His first words to reporters meeting him at his doorstep gently informed them that he cannot give interviews. For the next year, he will be carefully watched, unable to leave Beijing, most probably unable even to tweet, until his case is finally resolved.

The Chinese term for Ai Weiwei’s status is “guobao houshen,” literally meaning “obtaining a guarantee pending trial.” This is “excellent news and perhaps the very best outcome that could have been expected in the circumstances of this difficult case,” posted international human rights lawyer Jerome Cohen after the release. It allows the Chinese government to save face and retain control over the artist, while he remains free and unindicted for the next year. Ai Weiwei will have to pay back taxes and perhaps pay a fine — his family has maintained his innocence — but he will probably avoid a prison sentence.

This result is remarkable, given the widespread arrests that have taken place this year, as China has tried to insure control against a “Jasmine Revolution” like the widespread unrest in the Middle East. Four of Ai Weiwei’s colleagues that were picked up at the time of his detention are still missing, though they may soon be released. Thousands of others remain unaccounted for. “The past 18 months have set China back 20 years,” Phil Tinari, editor of LEAP magazine, said to me when we met in Hong Kong during the art fair in May.

Many are citing Ai Weiwei’s release as proof of the effectiveness of the international campaign undertaken to protest his detention. Kudos must go out to the museums — Tate, Guggenheim, Museum of Modern Art, Asia Society — that launched a massively successful petition, gathering over 140,000 signatures online. I was surprised that these institutions took a stand at all, given their widespread dealings in China and their usual cooperation with the Chinese Ministry of Culture. Anish Kapoor’s refusal to loan to a show at the Ullens Center of Contemporary Art, which earlier this year had cancelled an exhibition of Ai Weiwei’s work, was a prime example of steps an individual artist could take in protest. In turn, politicos including Hillary Clinton and New York mayor Michael Bloomberg spoke out on behalf of the artist.

While the Chinese government is usually immune to such pressure — just look at the case of Nobel Peace Prize winner Liu Xiaobo, who remains in detention — it is telling that Ai Weiwei’s release came just days before Chinese premier Wen Jiabao’s trip to Europe. He was sure to be met with cries of outrage over the artist’s situation. Certainly, Chinese officials wanted to avoid such embarrassment.

But in the current situation, China is in a win-win position. On my recent trip to Beijing, I found that the official smear campaign, tainting Ai Weiwei with charges of tax evasion, had already done its damage. Many artists told me that they did not want to comment on the artist’s “troubles,” and some accepted the very Chinese belief that this artist, perceived in the west as a hero, is a maverick who deserves what he gets. Only a few would admit that probably every famous artist in China could be charged with tax evasion, with many working on schemes to shield their millions from the government’s coffers. Not one leading artist of the older generation — not Zhang Xiaogang, Zhang Huan, Cai Guo Qiang or Zeng Fanzhi — spoke out on Ai Weiwei’s behalf. Xu Bing, a MacArthur Foundation prize-winner and now vice chairman at the Central Academy of Fine Arts, who many think aspires to be China’s next minister of culture, openly said that he was not interested in politics when asked to comment on Ai Weiwei’s case.

Only among younger artists, those born after 1980, many of whom look up to Ai Weiwei, did I find support for the belief that he had been framed, with the charges trumped up to silence him and his incessant agitation on Twitter. Ai Weiwei had a huge Twitter following of over 60,000 in Chinese, though the site is not available in China. Younger artists know how to get around the Great Firewall and get access to his tweets. Though they might not have the courage to engage in social activism themselves, they certainly appreciate Ai Weiwei’s stance. In the days after his detention, hundreds of young artists changed their profiles on Weibo, China’s equivalent to Facebook, to a picture of Ai Weiwei in a gesture of solidarity. Hugo Boss Prize nominee Cao Fei, who currently has a show at Lombard Fried in Manhattan, was one of the few Chinese artists to sign the petition asking for his release.

But despite Ai Weiwei’s release, it is not the time for western institutions — many of whom are now preparing to capitalize on the artist’s fame with exhibitions, some impromptu, some years in the works — to back off from pressure on the Chinese government. American museums, anxious to secure loans or to ship shows to China, have too often worked side-by-side with the Ministry of Culture. Much of this cooperation has accompanied the belief that quiet diplomacy could liberalize the situation in China. But too often, as with the British Museum’s recent decision to eliminate nudes from a show on world culture going to the National Museum of China in 2012, western museums have exercised self-censorship to avoid conflicts with the Chinese.

I, for one, am not calling for a boycott of China, which I believe would only result in a return to the isolationism of 30 years ago. Chinese artists deserve to see exhibitions from the west and we have also benefited from loans from the PRC to the United States.

But it is time to reexamine cooperation with the Ministry of Culture, especially in light of Ai Weiwei’s current situation.

Hans Ulrich Obrist has declared that Ai Weiwei’s online activism is his form of social sculpture and his most potent form of art making. If so, now is not the time to lessen the pressure to restore his freedom to communicate with the world. While museums from Asia Society to the Hirshhorn plan Ai Weiwei exhibitions of his photographs and sculptures, we cannot ignore that his online oeuvre — the least marketable and institution-friendly aspect of his work — is being silenced. Until now, western museums have rarely demanded that the Chinese respond to calls for freedom of expression. With the case of Ai Weiwei, such a demand is unavoidable. If this aspect of Ai Weiwei’s fight is ignored, all the Western museum exhibitions amount to little more than a pile of sunflower seeds.

BARBARA POLLACK is author of The Wild, Wild East: An American Art Critic’s Adventures in China (Timezone 8 Books).

China’s future

Rising power, anxious state

Tensions between China’s prosperous middle classes and its poor will make it a harder country to govern

Jun 23rd 2011 | from the print edition

AMONG those with most to celebrate as the Chinese Communist Party marks its 90th birthday on July 1st are the country’s bourgeois reactionaries. Perhaps now the most important pillar of the party’s support, China’s middle class was virtually non-existent until it was recreated in the late 1990s. So far, the communists have amply fulfilled their side of a tacit bargain in which well-off city-dwellers have traded political choice for fast-growing prosperity. But as the economy slows over the next decade, the party will struggle to keep its word. Indeed, peace and prosperity may depend on the very sort of political reform the party has tried so hard to avoid.

An affair to remember

In the past 15 years the middle classes have supported the party because of what it has done for them. Its rule has produced incredible economic progress, asserted China’s rightful role as a global power and, crucially, kept the country from falling back into the chaos that plagued it during so much of the 20th century. The post-Communist travails of the former Soviet Union have been valuable as what the party used to call “teaching by negative example”.

Related topics

However, the love affair between a party that calls itself the vanguard of the proletariat and its actual, middle-class supporters is now under threat. At the root of this is an inevitable slowing in economic growth. As our special report on China in this issue explains, the first decade of the century, with its relentless double-digit growth, may well have seen the peak of China’s economic exuberance. A sudden crash is not impossible: there could be a botched attempt to tackle either the property bubble or what the prime minister calls the “uncaged tiger” of inflation (now at 5.5%, its highest level in nearly three years). But an immediate upset is still unlikely: inflation is not yet out of control, still far below the 27.7% it reached in 1994. The danger is more in the medium term: growth will inevitably slow over the next decade, as China settles into its status as a middle-income country, and the burden of caring for an ever larger number of elderly people in a slower economy may make middle-class life far more uncomfortable.

To compensate, the party will have to usher in wrenching change. It is struggling to shift China away from the current unsustainable model, where growth is propelled by vast investment and export-led manufacturing, towards one where domestic consumption plays a bigger role. The country still has a long journey ahead in its efforts to build health-care, pension and social-security systems to reassure citizens: all of these are necessary to persuade the middle class to save less.

In addition, China’s state-owned businesses have an insatiable appetite for capital, which many of them waste. Curbing state companies means taking on all of the well-connected people who ride on their coat-tails, including parts of the middle class. The party’s creed (“Marxism-Leninism-Mao Zedong thought”) means nothing to most such people. The party is secretive about recruitment to its 80m-strong ranks. But an official report in 2008 said that, of new applicants for membership, by far the biggest category comprised university students over the age of 18. Although the decision by these young careerists to sign up shows the party’s clout, they have very different ambitions from those of the old ideologues.

The party will also have to work harder to sustain the urbanisation that has fuelled the economy. China has done the easy part: attracting underemployed young rural residents to urban jobs. But the supply is beginning to slow. It would help if farmers could sell or mortgage their rural land and use the money to help gain a stronger foothold in the cities. But the party remains overly fearful of privatising farmland, partly for atavistic fears of a destitute peasantry, and partly for ideological reasons.

Worse still, the system of household registration, or hukou, defines even long-staying urban migrants as rural residents, cutting them out of housing, education and other benefits. No wonder that the migrants are increasingly restive. Of the tens of thousands of protests each year, most are still rural, typically by farmers enraged by inadequate compensation for land appropriated for development. However, urban unrest, such as recent riots by factory workers in the southern province of Guangdong, is now more common. If the party is to keep the peace in cities and if it is to continue to attract migrants in sufficient numbers, it needs to find ways to turn them into full-fledged city-dwellers, with the consumer power to match.

Of taxation and representation

Here it runs up against the middle class most directly. To give migrants the same housing and other benefits as urban hukou holders, and to build a proper social safety-net will be expensive. And if more tax is the solution, then the middle class could well begin demanding a greater political say.

That is a day the party dreads. Since the nationwide student-led protests of 1989, the educated urban elite has mostly been politically quiescent. But the party fears them far more than it does unruly farmers or migrants. Beijing’s centre was flooded with police earlier this year when calls for an Arab-style “jasmine revolution” circulated on the internet.

The middle class’s anxieties have not yet fermented into a broader anti-government rage. But then the inevitable erosion of some of their privileges has barely begun. If the bourgeoisie does start to protest, the party will be faced with an old dilemma: liberalise or step up repression. All the evidence of the past—and of the recent crackdown—is that it will choose repression. But that in itself may help politicise the middle class. In other Asian countries a taste for democracy has risen with income; and repression would mean withdrawing freedoms from people used to their liberty gradually increasing.

In 2012 the party’s leadership—and the task of managing these tensions—is to pass to a new generation. The most recent leadership transition, in 2002, went smoothly. But every previous generational shift in the party’s 90 years has been chaotic, and, a decade on, the tasks faced by the leaders who took over in 2002 look almost easy by comparison with today’s.

Business and management


Chinese mass transit

On the right track

Jun 22nd 2011, 10:45 by T.E. | HONG KONG

ALTHOUGH it may not be front-of-mind-news for five-sixths of the world’s population, 2011 is the year of the XXVI Universiade Games, with the southern Chinese city of Shenzhen having the summer portion (and Ezurum in Turkey the winter). For China there is nothing like hosting a international event to serve as a catalyst for yet another mass transport project.

So, on June 16th, with the games less than a month away, Shenzhen cut the ribbon on a much-needed $HK7 billion ($900m) extension of its metro system. The new stretch spans 16 kilometres and 10 stations, and knits together the other main Shenzhen lines. But its real importance has less to do with what was created than how.

The builder is MTR Corporation of Hong Kong, the part-privatised company that runs the territory’s remarkably efficient and clean metro system (pictured). That MTR also owns a huge property portfolio is almost certainly a core issue in its involvement with Shenzhen.

Back in 2004, as part of a strategic effort to expand beyond Hong Kong, MTR commissioned a report from a local university on transit systems in many of the world’s largest cities, which observed that “railway investment is not financial viable on its own.” Not long after MTR’s founding in 1975, the parsimonious colonial administration which then ran the territory came to a similar conclusion, and decided to finance the construction of a subway system through simultaneous grants of adjacent property. It was, in essence, a trade of movement below for land above, a model that has been used successfully in Japan and, a century ago, in America as well.

The results have not been entirely successful. Some of the MTR projects reflect the worst of bleak government architecture but over time its portfolio has become a bit smarter; and these property holdings, along with the lease of advertising space, now account for more than 60% of MTR’s revenues and presumably all of its very healthy profits, as well as providing the financial strength to support its spotless metro service.

Metro mania
China has taken an alternative road. Having for decades largely neglected the need for efficient light-rail systems as its cities grew, it is now in the midst of metro-mania. Last year the number of subway carriages in service across the country grew by 50%, with more than 30 cities in the process of building new metro lines. In almost every case, the financial model has been to provide direct government subsidies.

Fares are low, from 2 yuan ($0.31) in Beijing to as much as 14 yuan for extended trips in Guangzhou. Losses are not publicised but there have been hints. The Beijing system reportedly received 14 billion yuan in subsidies last year, not including contributions towards its construction expenses. Part of the Shanghai system comes under a public company, Shentong, but it too does not disclose the cost of its construction debt; it may in practice be largely forgiven. Shenzhen’s system, according to the South China Morning Post, faces a deficit of 22 billion yuan over five years. None of the Chinese metro systems is considered remotely profitable.

MTR has said it will operate the Shenzhen line under a concession agreement, implying that its operating costs will be covered by government subsidy if not fares. The China Daily says the initial intention was that there would have been a Hong Kong-style property transfer, but that this was dropped. However, the South China Morning Post says it is very much on the table. MTR itself is a bit vague on the matter: it says there are ongoing discussions and both sides have always been aware of the tie between operating costs and property development.

There is, apparently, an eight-hectare plot, alongside a depot, reserved for MTR to develop. But transfers of property are so sensitive in China it may not be possible to discuss such a thing publicly. Of course if the terms of the property transfer are kept hidden, Shenzhen’s citizens will not know whether they are getting a fair deal, or indeed whether any profits from the property development are being applied in the way the deal specifies.

How Shenzhen ends up financing its metro extension—direct subsidy or property transfer—may also give a clue as to the broader direction of China’s political development. The city is famous for its experiments in market-oriented government; it would be a bad sign if, even there, China can no longer tolerate such experimentation.