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On Foreign Corporations

First investigation report of Fortune 500 companies in China by a major Chinese media group.

China’s State Media Comments on World Fortune 500 Companies: Avoid Taxes, Pinch Pennies, and Abuse China’s Natural Resources

[Note: Below is a commentary from China’s state media on the world’s Fortune 500 corporations that are doing business in China. The article was initially published in Beijing Times after an investigative report on the "2005 Ranking of the World Fortune 500 Companies with Investments in China" organized by Southern Weekend was released on December 6, 2005, and posted on Xinhuanet on December 7, 2005. The article, titled "World Fortune 500 Companies Avoid Taxes in China; Some are Penny-Pinching and Abuse China’s Natural Resources," is translated below.]

"Among World Fortune 500 companies, which ones are the best investors in China? What kind of impacts do their investment activities make on China? The "2005 Ranking of the World Fortune 500 Companies with Investments in China" published by Southern Weekend on December 6 answered these questions. However, this list also revealed some of the dark secrets of these international corporations’ operations in China: Some corporations are extremely stingy, avoid taxes in China, and abuse China’s resources."

The List Focuses on the Corporations’ Responsibilities and Contributions; the World Fortune 500 Companies’ Scores Are Consistently Low

"According to Southern Weekend‘s evaluation criteria, Samsung won first place as the best investor on the list with a score of 70.409 points, followed by General Motors (57,206 points) and Philips Electronics (53.783 points.) Nearly 400 corporations participated in the evaluation. Because many corporations had a very low score, Southern Weekend decided to publicize only the top 70 best investors in China. The 70th on the list was Astra Zeneca, a U.K. pharmaceutical company, scoring 13.783 points.

"In terms of the evaluation criteria, Mr. Cao Xing, a chief supervisor at Southern Weekend, explained that there were five categories of evaluation criteria, including the amount of investment in China, the business operations in China, the social responsibilities, the local contributions, and the brand image in China. The amount of investment in China constitutes 20 percent of the score; the business operations, 25 percent; the social responsibilities, 20 percent; the local contributions, 25 percent; and the brand image in China, 10 percent. ‘This ranking emphasizes responsibility, development, and harmony with the environment,’ Cao explained.

"In addition, Southern Weekend also published four related rankings. Samsung in China won first place for its best business operations in China. Nissan Investment Company, Ltd., in China is ranked first as the best employer. General Motors in China is ranked first for its local contribution. And Proctor & Gamble in China wins first place for its best public image in China.{mospagebreak}

"To emphasize the objectivity and fairness, Cao said this evaluation project does not accept any corporation’s sponsorship or advertisement. ‘We have an allocated budget for this project,’ said Cao. The data used for the evaluation came from the Chinese government and public sources. For example, they looked at the top 500 corporations published by the Chinese government every year, the public information of all the corporations with stocks, etc. In addition, Southern Weekend conducted an investigation of these companies. They also verified all the data used for the evaluation."

Decoding the List

1. Most corporations are not good taxpayers in China

"One surprising data is that the majority of the world’s fortune 500 companies score low on paying taxes [in China]. The result has once again proven the common knowledge that not all international corporations are model taxpayers.

"Samsung, which ranked top on the list, scores 1.203 points on paying taxes, and General Motors has a full score of 10 points. Of the top 70 international corporations on the list, only 21 of them score above one point while the rest score lower than one point.

"Even though international corporations score extremely low on paying taxes in China, some people question whether some companies are given too high a score in this category. Some reporters say that some international corporations are very good at taking advantage of China’s tax policies to get tax returns, to get tax exemptions, to avoid taxes, and to use some regions’ favorable tax policies to reduce taxes."

2. No Corporation Stands Out for Charity Donations

"Besides taxes, international corporations in China are not generous in giving charity donations. Many corporations are penny-pinching. Samsung in China scores 0.877 point in charitable giving. IBM ranks number one in charitable giving with a score of 4.653 points. Twenty-seven corporations score zero."

3. Exploiting Workers

"Some international corporations in China are shameful in using the labor resources. Mr. Xi Guoming, chairman of International Corporation Research Center at Nankai University, said that larger international corporations in China are better in that they pay their employees better than domestic companies. They also provide medical insurance, employee training, and educational reimbursements, and so on. Some smaller international companies are not good to their human resources. In some regions in southern China, the average salary was about 500 yuan (US$63) [per month] during the late 1980s. According to research in the past few years, the average salary in these regions remains the same. This means that employees did not obtain benefits proportionate to the value they have created. The benefits went to the international corporations."{mospagebreak}

4. Leave Environment Problems to the Chinese Government

"This list also indirectly exposes the truth about another problem: The demand in China has created the acceleration of consumption of the world’s energy resources. Actually, the large quantity of energy and resources consumed by international corporations are calculated as China’s consumption. In addition, when these corporations use China’s resources, they fail to pay the costs.

"At the press release, Mr. Xi Guoming pointed out directly, ‘It’s undeniable that some foreign corporations are abusing China’s resources.’ For example, China transferred land or rented out land to international corporations at a very low price, causing an imbalanced price for using the land, which is unfavorable to the use of China’s resource.

"Xi said that foreign corporations intentionally move their factories with pollutant products or pollutant manufacturing environments to China. On the other hand, some local Chinese governments neglect the environmental protection regulations when inviting foreign investments. Hence, some corporations … moved the pollution problem to China and the Chinese government."

Translated  by CHINASCOPE from

China’s State Media Identifies "Anti-China" Scholars

[Note: The article below, titled "Who is Viciously Attacking China?" was original published in Global People (the magazine under Chinese Communist Party media People’s Daily group). The article was reposted on Xinhuanet on December 18, 2006. The article identified seven Western scholars from the United States, Japan, and Russia as "vicious attackers (against China)."]

"For several years, absurd theories like ‘China Threat,’ ‘China Collapse,’ ‘China Split,’ and ‘Yellow Peril’ have continually attacked China from the West. These arguments and rhetoric are not worth refuting, since they have never been real and will not become reality in the future. However, they have harmed China’s international image and have disrupted China’s efforts at development and engaging the world, and for this reason they should be taken seriously by Chinese people.

"So who are the people planning and disseminating these irresponsible opinions? How have they maligned China, and what is their goal in doing so? For the answer, you must look to ‘China’s vicious attackers.’ Only by gaining a deep understanding of their words can you truly uncover the means and motives of those attacking China, and by doing so lay bare their sinister machinations. Therefore, Global People has selected several ‘attackers’ from the United States, Japan, and Russia:{mospagebreak}

"Bill Gertz, The Washington Times: For 20 years he has been spinning the ‘China Military Threat Theory.’ Bogus news stories like ‘Chinese submarine tracks American carrier’ and ‘China paid millions to steal B-2 bomber stealth technology’ were entirely his creation. Most galling, this forger has won the support of the Pentagon and some members of Congress.

"Larry Wortzel, former assistant army attache at the U.S. Embassy in China [1988-1990]: This is a man who detests China to his very bones. He worked within the military intelligence system monitoring China for 25 years. In his eyes, China’s planes and guided missiles come from Chinese exchange students and computers, and pose a ‘serious threat’ to the United States. In the first half of this year, the U.S. State Department’s purchase of Lenovo computers was scuttled by him at the last minute.

"Michael Pillsbury, Pentagon consultant: His greatest trait is that when he is in China, he speaks of ‘friendship,’ but when he returns to the United States, he talks of ‘threat.’ He claims to have ‘a good deal of understanding of Sunzi’s The Art of War,’ but the strange thing is that he ‘discovered’ from The Art of War a ‘threat’ coming from China. He was the main author of the Pentagon’s 2005 Report on the Military Power of the P.R.C. that trumpeted the ‘China threat.’

"Gordon G. Chang, Chinese-American opportunist: ‘China’s economy is in decline and has begun to collapse; the time will be prior to the 2008 Beijing Olympic games and not after….’ His ‘China collapse theory’ is so much sensationalism. Though he is ‘besieged’ at every turn because of the utter nonsense that issues from his mouth, his wacky theories still find purchase across the globe.

"Shintaro Ishihara, Governor of Tokyo: Chief among the anti-Chinese in Japan, he started on the anti-China road 40 years ago. By cursing China to ‘split apart’ and calling for a re-invasion of China, he has become a classic representative of vicious attacks on China. Worth being aware of is that his anti-China ideas run deep in the fringes of Japanese culture and have extremely negative effects.

"Mineo Nakajima, ‘anti-China hero’ of Japanese academia: The earliest person in Japan to put forth the ‘China collapse theory,’ and an advocate of the ‘China split theory,’ he goes traveling every month for exchanges with anti-Chinese elements in other countries and to spread his anti-China fallacies. However, nothing that he has predicted has come to pass, so he had no recourse but to return to the ‘China threat theory.’

"Evgeniy Nazdratenko, Russian official: He is one of the leading modern drum-beaters for the ‘Yellow-Peril Theory.’ ‘China has plans to expand its population across the Russian border,’ ‘Russia will inevitably fall to become a raw-material tribute-state for China’— during his tenure as governor of Russia’s Maritime Region, he not only made noise about this sort of twisted theory but also instituted discriminatory policies toward Chinese people and gave orders to expel tens of thousands."

Translated by CHINASCOPE from