Table Of Contents: China Business Review, May-june 2009

Vo l u m e 3 6 N u m b e r 3

China Foto Press

May–June 2009

China Business Review The

Focus: Economy Economic Recovery in the Works?

18

Economists Pieter Bottelier, David Dollar, Albert Keidel, Nicholas Lardy, Andy Rothman, and Tao Wang share their views on China’s economy.

Off to the City

24

Mass urbanization in China fuels long-term growth and can raise living standards further—if local governments choose the right policies. Shahid Yusuf

China Data: The Slowdown Hits

28

Online Exclusives ■ Complete Interview: Economic Recovery in the Works? With more on stimulus funding, whether rising unemployment will affect social stability, and private sector’s access to credit. ■ Corporate Responsibiliy in China: Best Practices chinabusinessreview.com May–June 2009 3

Special Report: Corporate Social Responsibility Setting Up International Nonprofit Organizations in China

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34

Companies can use international nonprofits to achieve their corporate social responsibility goals in China, but gaining official approval remains difficult. Matthew Erie, David Livdahl, Jacelyn Khoo, and Henry Li

Ethical Supply Chain Management

38

Last year’s tainted-milk scandal provides useful lessons for companies sourcing in China. Teresa DeLaurentis

Supporting Rule of Law in China

42

Funded by US businesses, Chinese and US organizations cooperate to nurture rule of law. US-China Legal Cooperation Fund staff

24

Feature TRADE

The Gathering Storm: Preparing for Trade Remedy Cases

30

Taking a few precautionary steps before a case is filed can improve the chance of success in trade remedy cases. Eric Emerson and Gary Horlick

34

Departments Letter from the Editor Short Takes USCBC Bulletin China Market Intelligence

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Electronic Waste Rules

46

China Conference Calendar Letter from Shanghai

13 16

Navigating the Downturn Godfrey Firth

Commentary

46

The Role of Foreign Lawyers in CIETAC Arbitration Proceedings Daniel Arthur Laprès

55 Cover design by Jesse Marth Cover photo: China Foto Press

PRC Government Structure China Deals Last Page Beijingers’ Views of Americans Isaac Stone Fish

The China Business Review welcomes articles from outside contributors. Manuscripts submitted for consideration should be sent to the editor at [email protected]. The US-China Business Council obtains licenses for all rights to articles and artwork published in the CBR. Articles or artwork published in the CBR may be reprinted or reproduced only with the written permission of the US-China Business Council. Articles in the CBR do not reflect US-China Business Council policy, unless indicated. The China Business Review (ISSN 0163-7169) is published bimonthly by the US-China Business Council, 1818 N Street NW, Suite 200, Washington DC 20036-2470, USA (Tel: 202-429-0340), a nonprofit organization incorporated under the laws of the District

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Letter from the Editor

T

his year, CBR celebrates its 35th anniversary, and we look back at the magazine’s first year. Delving into the May-June 1974 issue, we find that some of the major topics then—food standards and labeling, for example— still resonate today, although with a slightly different emphasis. The lead article of that issue, “Foodstuffs from the People’s Republic of China,” notes two barriers to importing food products from China: high tariffs and US Food and Drug Administration and US Department of Agriculture (USDA) requirements. Although US tariffs on goods made in China have fallen considerably since 1974, food quality and safety remain a major concern. As the CBR pointed out 35 years ago, “The onus and risk are ... firmly on the shoulders of the importer.” Though the importer still bears responsibility for products it brings into the US market, many Chinese suppliers are working more closely with US buyers to ensure their products meet US standards particularly in the wake of the food safety scandals of the last few years (see p.38). Labeling too was an issue in 1974. In some instances, imports were detained because of “inconspicuous or misleading labels.” US importers also had trouble convincing Chinese suppliers to label products in a way that would appeal to the US market. For instance, US buyers thought many Chinese food products would be quite successful if sold under US brands. But as the CBR reported, Chinese officials refused, saying they hoped their products would become famous brands in their own right—foreshadowing today’s drive to create Chinese brands with global recognition. Indeed, brands such as Hai’er, Lenovo, and Tsingtao are now fairly well recognized abroad. Few Chinese food products are well known abroad, however, and recent problems with food safety suggest that China must improve quality before its food brands will be widely accepted. The CBR’s 1974 May–June issue carried a sector overview on the fashion and textile industry. Perhaps because so many US importers were new to China trade, the article covered the basics, including how to negotiate at the Canton Fair and communicate with Chinese factories. It also covered tariffs, textile shrinkage, packaging and delivery, and of course, labels. To ensure that the labels contained all the information required by US regulations, the CBR recommended that “[l]abels ... be printed in the US and sent in sufficient quantities to China.” Again, branding was an issue: “Although the Chinese have been reluctant to sew in individual store names, some progress is being made in this area. For instance, they did offer to put in the name of an association but not the names of the department stores it represents. Another compromise made with an importer was an agreement to give his firm exclusive rights to a particular brand name. This name can be put on any article the company buys from China’s Textile Corporation.” In the 35 years since these articles were written, standards for most products have risen dramatically on both sides of the Pacific. Moreover, US and Chinese companies, associations, and governments are working together more closely than ever to ensure that products made in China and imported to the United States meet these standards—and are appropriately and correctly labeled.

Virginia Hulme 6 May–June 2009 chinabusinessreview.com

China Business Review The

Editor Virginia A. Hulme Associate Editor Paula M. Miller Assistant Editors Arie Eernisse, Daniel Strouhal Business Manager Jesse Marth Administrative Assistant Mattie Steward Art Direction & Production Jon Howard/JHDesign, Inc. Research Assistant Nicholas Chu Inquiries and Subscriptions: [email protected] Web: www.chinabusinessreview.com Reprints: For bulk custom reprints (min. 100), call 1-800-960-1195 Online store: www.uschina.org/store

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