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Chinese Media Ranks the Performances of Foreign-Owned Companies

[Editor’s note: On November 22, 2006, China’s Southern Weekend newspaper announced its report of "Ranking of the World’s Top 500 International Companies Invested in China" at a press release held at Beijing News Plaza Hotel following a one-year-long investigation. The report is based on how well the world’s top 500 companies in China have performed in terms of their business activities and records of fulfilling social responsibility. This is the second such report by Southern Weekend in two consecutive years. [1,2] The report said that foreign companies performed poorly in China with regards to fulfilling social responsibility and caused a number of hidden problems for China. The following two articles about the investigation report are translated from the website of The China Machinery Industry Federation, a government sponsored trade association, serving as China’s official reading of teh investigation report.]

Six Major Hidden Troubles Found in Foreign Owned Companies in China [3]

"The two-year consecutive ranking by Southern Weekend for the ‘World’s Top 500 Companies Conducting Businesses in China’ show that while direct foreign investments in China have played a major role in China’s economic development, they have also brought non-neglectable, far-reaching negative impacts to China’s economic and social development.

"The ranking covers four aspects of the business these companies do in China, including each company’s accumulated investments in China, their business performance in China, their contributions to the local economy, their social responsibility, and their brand images in China.

"Southern Weekend‘s two-year-long investigation revealed that the foreign companies have brought six major hidden problems to China:"

"1. Foreign Investments’ Monopoly Threatens China’s Economic and National Security

"The multinational companies have an advantage (over domestic companies) because they have deep pockets, advanced technologies, highly efficient management, and excellent development strategies. They can easily accumulate huge market shares in the host country, squeeze the living space of the host country’s domestic enterprises, monopolize the market, control the industries, and threaten the host country’s industrial and economic security. Lately foreign-owned multinational companies have dominated China’s film, elevator, soft drink, cell phone, computer, Internet infrastructure, and computer chips industries, etc. Domestic companies have nearly disappeared in many of these industries. The widespread invasion of the multinational companies has damaged domestic companies and hindered the formation of large Chinese enterprises that can compete internationally. In addition, because these multinational companies control the technologies critical to the development of China’s economy, they have (negatively) impacted China’s industrial and national economic security.
"2. Favoring foreign investors over domestic ones is harmful to a fair competitive environment and to national confidence. 

"In the initial stage of economic reform, in order to solve the problem of capital and foreign currency shortages, China treated foreign investors with favorable tax policies, and gave them favorable treatment in actual operations. These policies artificially caused unfair competition between domestic and foreign companies, seriously damaging the fair market competition environment.

"3. Trade transfer has made China an export-manufacturing base.

"In 2005, the exports to the United States, Hong Kong, the European Union, and Japan by foreign companies in China were 24.59, 20.37, 17.74, and 12.59 percent of the total exports of these enterprises, respectively. These foreign companies largely use China as their manufacturing base and export platforms to provide products to the United States and the European Union. They shift their own trade surpluses with Europe and the United States to China’s trade surpluses, thus amplifying the trade frictions between China and Europe and the United States. As the manufacturing and packaging bases of these foreign companies, China mainly does packaging and only makes a tiny profit in the whole manufacturing chain.

"4. ‘Favoring competition,’ vicious competition among local governments harms the national interest.

"Since the amount of foreign investments is one of the major criteria in assessing the performance of various local government officials, local governments try their best to attract foreign investments at the expense of their area’s ecosystems and their local residents’ interest. They promise excessively favorable terms to foreign investors so that the foreign investors will have the absolutely decisive edge at the negotiation table and be able to squeeze every inch from the local government’s bottom line. In the meantime, due to the lack of consideration for the local people’s interest, it also became a factor of causing an unharmonious social environment.

"5. Environmental pollution—a situation unbearable to China.

"Because they discharge large amounts of polluted water, polluted gases and hazardous materials, some multinational companies investing in China’s heavy-pollution sectors have caused the local environment to deteriorate and made sustained growth of the local economy impossible. Having an urgent desire to attract foreign investments to help the local economy develop, some local authorities blindly introduce projects that enable the developed nations to transfer their highly polluting and sun setting industries to China. Such industries have not only damaged China’s natural environment, but have also harmed the health of the Chinese people, and damaged the sustained growth of China’s economy. In terms of environmental protection, the top-500 multinational companies do a relatively better job than the small to medium foreign companies in China. The majority of the world’s top 500 companies in China have passed the ISO14000 or ISO14001 certification [international standard of environment management system].
"6. The pricing transfer accelerates China’s loss of income.

"Employing the strategy of reporting a ‘fake loss,’ or a ‘loss on the surface but an actual profit,’ a number of multinational companies transfer their profits from their China subsidiaries to their parent companies abroad in order to evade taxes in China. In addition, some foreign companies exploit the loophole of China’s tax exemption and reduction policy for foreign investments. Once the tax exemption or reduction period expires, they close the operation and then open a new one in another region to repeatedly enjoy the tax exemption policy."

The investigation by Southern Weekend concludes that "while recognizing the positive impact of foreign investments in China, (China) must pay great attention to the problems that the foreign investments have brought to China, treat domestic companies the same as their foreign counterparts, and apply certain restrictions on foreign companies in terms of industries and sectors."

The World’s Top 500 Companies in China Ranked Poorly in Fulfilling Social Responsibility [4]

"According to Southern Weekend newspaper’s one-year-long investigation, a considerable amount of the world’ top 500 multinational companies have performed poorly; some even violated or openly opposed China’s laws and regulations."

"They performed poorly in the following five areas:

1. They have not followed China’s Trade Union Law and refuse or even oppose establishing trade unions in their companies;

2. They have major environmental violations;

3. There have been serious problems in the quality of their services;

4. China’s consumers have many and/or major complaints about the quality of their products;

5. Some bribe Chinese officials and executives or take bribes from them, directly violating Chinese law."

The article continues, "Southern Weekend selected 126 multinational companies that are top-performers based on their revenues in China, gross exports, gross income before tax, and the accumulated investments in China since 2005. Then these companies were evaluated with regard to how they handle basic social responsibilities, including ‘abiding by the law and business morality,’ ’employee rights and labor protection,’ ‘product and service quality,’ ‘environmental protection,’ ‘charitable contributions,’ etc. The companies fell far short of expectations." Following is a summary of the survey results:
— 21 (17 percent) have committed major environmental offenses as determined by the Chinese environmental authorities.

— 39 (30.95 percent ) have product quality issues,

— 40 (31.7 percent) have had Chinese consumers report multiple major complaints about their products.

— 57 (45.2 percent) refuse to establish trade (labor) unions as required by China’s Trade Union Law. This is the most serious issue of all."

Southern Weekend claims that the survey data is from China’s relevant authorities, consumer associations, labor unions, and information publicly disclosed by domestic media. In addition, they also claim to have confirmed their findings with the companies.


[2] Chinascope, issue March/April 2007, p40-42

Translated by Chinascope.

Hong Kong Universities Gain in Popularity with Chinese Students

College entrance exams in China began on June 7 this year. To many hopeful parents, this marks a great milestone in their children’s careers. According to national statistics, the number of high school students taking the exams in China is around 10.1 million, vying for 5.67 million enrollment spots in all Chinese universities—both figures record highs. Apart from Tsinghua and Beijing University though, this time Hong Kong universities have become a new hot favorite for Chinese students.

According to national surveys, 65.53 percent of applicants and parents are inclined to apply to Hong Kong universities, surpassing that of most, if not all, popular universities in China. The taunt "Hong Kong University will make Beijing University and Tsinghua University into second-class universities" was even seen on the web. In 2006, even though all the Hong Kong universities accounted for only 2,000 available spots, they received more than 30,000 "first choice" applications from China.

New Enrollment Procedure for Hong Kong Universities

In 2007, besides the eight Hong Kong universities from last year, four other universities—Hong Kong Shue Yan University, The Open University of Hong Kong, The Hong Kong Academy for Performing Arts, and Chu Hai College of Higher Education—have also joined the ranks in admitting students from China.

Chen Xiuye, Beijing high school examination top scholar with a score of 687, was admitted by Tsinghua University and Hong Kong Technological University. After careful consideration, he chose the latter. Liu Yang, top scholar from Guangdong Province, also gave up Fudan for Hong Kong Technological University. Li Yang, top scholar from Hainan City, was admitted into Hong Kong City University after moving home resulted in his being rejected by Tsinghua University. Such stories have abounded within Chinese education circles over recent years.

In response to attacks from the Chinese media of "stealing the elite," Hong Kong universities have decided to offer pre-enrollment for applicants from China, and they have also modified their admission criteria. Instead of only recruiting those that place Hong Kong universities as their first choice, they have decided to offer pre-enrollment, before mainland Chinese universities. Ten universities, including Hong Kong University, Hong Kong Technological University, and Hong Kong Institute of Technology, have also begun independent admission procedures. Students enrolled in these universities will also not be considered by Chinese universities. Analysts believe that this was arranged to prevent Hong Kong universities from being labeled as "stealing the elite" from mainland universities.

The Attraction of Hong Kong Universities

Last year, more than 10 percent of high school applicants from the renowned People’s University Affiliated High School in Beijing chose Hong Kong universities as their top choices. To them, Beijing University and Tsinghua University located right down the block are no longer much of an enticement. The greater attraction comes from Hong Kong universities due to their flexible admission criteria, hefty scholarships, new education system, and better prospects for future development.
Hong Kong Chinese University alone is offering 100 full scholarships out of the 250 positions it will fill. The scholarships include four years of tuition, a residence, and stipends totaling more than HKD$500,000(US$64,900). Hong Kong City University is also providing more than HKD$320,000(US$41,000) worth of scholarships to attract students. Xue Mingyu from Shenzhen, even though he was offered admission to Beijing University after winning the gold medal in an international chemistry competition, decided to apply to Hong Kong University. He said, "I don’t think Beijing University is not as good as Hong Kong University, but if they pay for my school fees and even give me a stipend, why would I not go there instead?"

Of course, this mostly applies to the elite. For the majority of mainland Chinese parents, decades of devoted saving is necessary to provide their children an opportunity to survive in the grueling Chinese society.

On the other hand, some students like Hong Kong for its education system. An English education and flexible credits, as well as more up-to-date education materials, are some of the reasons many students are attracted.

In reality, most people treat a Hong Kong education as a springboard for higher education or even residency in Hong Kong. According to statistics by Hong Kong City University, 67 percent of mainland Chinese students remain in Hong Kong or travel overseas for higher education after graduation. The best have traveled to Columbia, Princeton, MIT, and many other top institutions, and others have found jobs with Microsoft, Citibank, MetLife, and other major corporations.

Chinese Students in Hong Kong

To the mainland student, it is no easy task to study in Hong Kong. Besides language, a new culture and other factors, independence is another big challenge for them. Some Hong Kong professors have even proclaimed that mainland Chinese students are only good at nothing but taking examinations.

Many mainland Chinese media have reported cases of students unable to assimilate to their new life in Hong Kong: "They never participate in any social clubs or faculty events, they do not mingle with local students, and everyday after school they would rush home to play computer games. After four years, they are only comfortable within their small social circle and have made no improvement whatsoever in their Cantonese and English skills."

Some students have even been expelled. Tan Heyin, Vice-President of Hong Kong Technology University, gave the example of a student from Shanghai who was expelled after making three C minus’ in a row. "Simply getting the letter of admission is no guarantee of graduation."

The CCP Influence on Hong Kong Campuses
In general, Hong Kong media have been rather indifferent to recruiting mainland students. Hong Kong special columnist Shen Yuan once declared during an interview that "it is not a good thing" for mainland Chinese students to come to Hong Kong due to the backward education and culture in mainland China, and more importantly, how the CCP Party Culture might be exported.

Not long ago, Hong Kong media reported a 25-year-old female PhD student who inserted HKD $10,000(US$1,280) worth of cash in a professor’s mailbox in exchange for good grades. Not only did this shock the entire Hong Kong education world, it raised many doubts on the social benefits of recruiting mainland students.

Secondly, Hong Kong universities have found that many of its admitted students are also members of the Communist Youth League. Silently, they have crept into leadership positions in Hong Kong university student unions. Many university leaders are worried that these CCP youth members will try to erase memories of the Tiananmen Massacre and democracy in Hong Kong student communities.

Wang Anran, former Professor at Hong Kong Chinese University and critic, describes that it is already an open secret that CCP spies have infiltrated Hong Kong university campuses—especially graduate students dispatched years ago. He said that they all have very special backgrounds and some have been well-trained by the CCP. He gave the example of a former classmate, Wang Zhenmin, current Associate Dean at the Faculty of Law in Tsinghua University.

"The CCP will definitely use the Hong Kong universities as a way to infiltrate Hong Kong so as to service them. I caution Hong Kong universities in admitting Chinese students to Hong Kong."

Education Problems at Home

Wu Daqi, Associate Dean at the School of Science, Hong Kong University of Science and Technology, believes that there are a whole series of problems with mainland Chinese high schools. "If you go on the Internet, you can see that over the past few years, many Chinese schools have had crazy problems with research. Some professors even skip lectures. Many people are discontented with mainland institutions of higher learning, yet they use this to attack Hong Kong universities."

Renowned Chinese mathematician Qiu Chengtong also criticizes the mainland Chinese system. "Most institutions of higher learning in China are just in it for the money. They just want the funds and never bother about real research. There are just too many incidents of bribery and corruption in Chinese institutions—whether they are well known professors, fellows, or students, they’re not ashamed of these things at all."

To this end, many Chinese students sense an entirely different atmosphere in Hong Kong. On May 4, 2007, students from 10 Hong Kong universities offered flowers for the brave Chinese students who gave their lives for the betterment of China during the May 4, 1919, and June 4, 1989, incidents.
Some analysts believe that the admission heat in Hong Kong universities is a battle between two opposing education systems. Tao Jie, social critic in Hong Kong, believes that after these mainland Chinese elite come to Hong Kong, they can freely read Apple Daily, Easy Finder, Southern Weekly, and many other papers banned in mainland China.

One PhD student, surnamed Li who came to Hong Kong to study describes that his biggest joy in coming Hong Kong is to be able to read and express himself freely. "The Tiananmen Massacre, Falun Gong, and many other issues have all been censored in mainland China." He recalls many mainland Chinese family and friends encouraging him to read banned books and papers in Hong Kong, and he has already become a window to the outside world for his entire family.

Can Sun is a correspondent for Chinascope.

China Initiates New Campaign to Control Use of Satellite Dishes

In recent months, Chinese authorities have launched another round in its campaign to hunt down and smash "the woks"—the satellite dishes that households have installed to watch TV programs that are unavailable from official TV stations.

Publicly, the campaign is billed as "cleaning out pornography" and "removing unstable elements," and it is carried out by local governments, the police, industry and commerce bureaus, radio and TV broadcasting authorities, and cultural departments.

Behind the campaign, the authorities may have other real concerns. As Huang Qiuju, the deputy mayor of Guangsui City in Hubei Province put it in the working meeting about implementing the campaign on April 19, 2007: To remove these dishes is "an urgent response to overseas hostile forces that attempt to infiltrate and divide us. It is a necessary measure to enhance the control of the ideological field." [1] The campaign is to carry out the No.79 decree by State Council to "prohibit satellite woks from entering the market place," according to a news report by the Guangsui local TV station. [2]

In a news report about removing the satellite dishes in Shaya County of Xinjiang Autonomous Region, it stated that Shaya County (authorities) come down hard on the illegal installation of commercial satellite dishes by way of monitoring oversea programs and individual satellite receiving instruments, in order to …prevent Falun Gong members and Christian groups to spread their religious activities. [3]

Many "Woks" Were Smashed

Across the country, the authorities have been seeking out those who sell or use satellite dishes to receive overseas TV programs.

Mr. Zheng from Qiaotou Village, Guangfeng County, Jiangxi Province, stated that local authorities recently visited and destroyed a number of woks in several neighboring villages.

Ms. Dou from Nanjing City, Jiangsu Province, indicated that between February and April, several local government departments held a joint action to "smash woks."

In mid February 2007 local authorities including police in Xiangfan City, Hubei Province, made unannounced visits to electronics wholesale markets to confiscate satellite dishes.

According sources in Ji County, Hebei Province, the county government recently issued a public notice banning satellite dishes.

The Industry and Commerce Bureau in Luchuan County, Guangxi, confiscated satellite dishes and other accessories between April and May in a dedicated campaign.
Guangzhou City in Guangdong Province has installed advanced equipment to monitor satellite receivers in the city: "No personal shall install satellite dishes without permission."

What Do the People Say?

"The government does not want us to watch satellite channels because they are afraid that we, the people, would like a democratic system. I bet those who are banning satellite dishes all have the dishes installed at their homes. They just want to fool us, the common people," said Mr. Jin in Shenyang City, Liaoning Province.

A Mr. Wang from Ji County, Hebei Province, finds too much Party education in the domestic TV programs. "I really want to see what overseas TV programs look like."

Mr. Shen in Guoan City, Hebei Province, said "I have not watched (Chinese official) CCTV programs for a long time. With a wok, I can watch whatever I want. (Overseas) news reports are more real (than CCTV). The excuse for the ‘wok-cleaning’ campaign is ‘cleaning up pornography.’ Does it mean that satellite channels like Discovery and CNN are porn?"

In spite of the authorities’ efforts to ban satellite dishes, the retailers of satellite dishes are as busy as ever. Promotions are all over the place in cell phone text messages, Internet deals, flyers, door-to-door direct marketing, and underground trades. From households to businesses, from the remote countryside to inner-city communities, satellite dishes of different sizes and models are spreading like a prairie fire.

The upward trend, as China analysts put it, points to an increasing demand from Chinese citizens for information outside Chinese-controlled media. The authorities’ repressive censorship has driven the satellite dish market underground.

To evade confiscation by their local governments, the users install their dishes either under the window of a balcony, beside the air-conditioner, or even inside the house. Some install a reflecting plate in the house to face the window and then have the dish opposite the plate to receive the satellite signals. As a dish user puts it, "Many departments are sharing the responsibility for monitoring satellite dish use. But once there are too many parties involved, it’s very hard to control. You have your policy; I have my way (to cope with it)."

For Consumers, the Wok Saves Money

In some rural areas like Guizhou, Southwest China, TV programs are the only entertainment available. The cost for cable installation is prohibitive, and local TV signals are weak. That leaves satellite dishes as the only meaningful alternative.

In Chongqing City, Sichuan Province, the cost for digital TV is high while the cable programs are swamped with ads. With the one-time purchase of a dish, one can watch TV programs for free.
Economics drives consumption. According to local vendors, the best selling pitch is "free channels." The cost of a dish is about one or two years’ in cable fees. The lowest priced dish costs only 300 yuan, for example, in Zhengzhou, Henan Province, and over 100 TV programs are available, including almost all the Chinese domestic channels and many foreign channels. All free after the one-time initial cost of the dish. To sweeten the deal, vendors offer free delivery and free installation.



Xiao Tian is a correspondent for Chinascope.

China is Moving Up the Value Chain

Just when you think you’ve got the Chinese economy figured out, it undergoes a profound structural transition in the seeming blink of an eye. For the last several years we have come to think of China as the workshop of the world. In this view, China tends to import huge amounts of raw materials and intermediate goods from abroad, combine them with super-cheap labor and virtually free capital, and then turn around and ship an armada of assembled products out to the rest of the world—particularly to the US and the European Union.

Until very recently, Chinese imports and exports have indeed tended to move in tandem (Figure 1), bolstering the view of those who saw China as a giant assembly line. Sure China ran a substantial (and growing) trade surplus with the US and to a lesser extent the European Union, but that surplus was nearly offset by a trade deficit with China’s neighbors in Asia (which exported intermediate and capital goods to China) as well as the world’s major commodity producers.


China will always need to import a large share of its raw materials. However, we have now entered an era where China no longer needs to import huge amounts of intermediate goods. Since 2000, Chinese production of industrial boilers has doubled; its production of chemical fiber, steel, and plastics has roughly tripled; and its production of semiconductors has surged nearly seven-fold. Moreover, detailed analysis of China’s trade data show that for a number of important processing industries—such as machinery, white goods, autos, and office equipment—the ratio of final exports to imported components has surged in recent years, suggesting that China is increasingly supplying its export machine.

China has funded this breakneck industrial development by channeling a huge pool of captive domestic savings into fixed asset investment, which now exceeds 50% of GDP (compared to 20-30% in most other economies in Non-Japan Asia). China has also sucked up the lion’s share of foreign direct investment (and the technical expertise that often accompanies it) from its neighbors in Asia. Chinese FDI has increased from $4 billion in 1990, to $41 billion in 2000 to $70 billion in 2006.

What are the implications of this new phase of Chinese development? We can think of a few possibilities. First, we would expect the prices of intermediate goods worldwide to face downward pressure in the coming years just as prices of assembled goods have been squeezed over the last decade. A bit further down the road, we will start to see substantial disinflation or even deflation in the price of capital goods as well.

While China has clearly reduced its reliance on important components, its economic policies remain much too heavily focused on the supply side of the economy. Ironically, the development of its supplier base makes it even more imperative that China wean itself from export-led growth. Export-dependent industries now account for an increasingly high proportion of China’s economic growth, thus making the economy more vulnerable to shock in external demand or the exchange rate. We would strongly advise individuals not to base their China strategy on the presumption of a strong RMB. Moreover, absent a substantial expansion of domestic demand in the next few years, a Chinese growth recession will morph from a possibility into a probability.

Edward Klaff is a Boston-based economist.

Chinese Communist Party Keeps Falun Gong a Top but Secret Issue

The Chinese Communist Party has kept the Falun Gong issue at the top of its agenda and accused the United States and other Western countries of supporting Falun Gong for purpose of political penetration and the peaceful transformation of China. The Communist Party acknowledges that there are a lot more Falun Gong practitioners in China than what the Chinese media have previously reported. The Communist Party has directed the Chinese media not to report this specific Party directive.

The following is the translation of an excerpt of the meeting minutes of a December 2006 Party meeting of the Zaozhuang City Communist Party Committee, Shandong Province. [1]

At the December 2006 meeting, the Party Secretary of the Zaozhuang City Communist Party Committee, Liu Yuxian, briefed the attendees about an earlier Shandong Provincial Party session that senior Party leaders of Shandong Province attended. Liu was appointed Party Secretary in September, 2006. [2]

"Today I will discuss six issues. The first issue is related to our struggle against Falun Gong. The provincial Party leaders have relayed the document from Central Committee’s Office to Handle the Issues of Falun Gong. When our media report about today’s meeting, please do not report this issue. Just keep it among those who are present here." [3]

"About Our Struggle against Falun Gong

"At the meeting of leading cadres at the Provincial Party Committee, we were briefed about the directive on the struggle against Falun Gong issued by Central Committee’s Office for Handling the Issues of Falun Gong. That document is circulated down to the Party Committees at prefectural city levels only. But I thought it is not enough just for few of us to hear about it. Although we are not allowed to read the confidential document here, I want to talk to you all about the main spirits of the document. After all, this plan will depend on comrades at the grass root level to implement it. Our struggle against Falun Gong is a serious political struggle. The reason that it has been brought up again is that western hostile forces led by the United States are using Falun Gong as a political instrument to implement their ideological and political penetration and peaceful transformation of China. The Western hostile forces led by the United States believe that Falun Gong can truly be considered as a political force, not those secret elements overseas from the past, which gradually became untenable. Recently, Falun Gong in foreign countries has issued the Nine Commentaries on the Communist Party. I saw the Nine Commentaries when I was in Thailand and Singapore. In fact they just want to oust the Communist Party—they criticize the Communist Party this and that—all are rumors. Western hostile forces have used Falun Gong as a political tool. Why do they use Falun Gong and Taiwan’s Independence? To change the nature of our state power, change the color of our country or Party, and to drive the Party out of power. Our struggle against Falun Gong will be a long-term, complicated and arduous battle. Why is it long-term, complicated, and arduous? It is because the United States is behind Falun Gong, funding, supporting, and using it. The United States is not going to give up its ambitions to subvert China. Meanwhile, you look around. Wherever there is unrest in the world, you will find the United States meddling there.{mospagebreak}(Regarding) the Taiwan issue. Chen Shui-bian in Taiwan has engaged in corruption. He is on the defensive. There are a lot of people trying to bring Chen down. Former leader of the Democratic Progressive Party, Shih Ming-teh, has led a group to bring Chen down. Chen had no alternative but to go overseas. Chen wanted to go to the United States but could not. So he went to Guam, which is under United States occupation—with the plan to create some publicity stunts showing that the United States supports him. The United States thought it might lose Chen, so it did not allow him to make public speeches or to accept media interviews. So you see, but for the United States’ meddling, we would have resolved the Taiwan problem long time ago. You look at the issues of Iraq, Afghanistan, the Korean Peninsula—the United States is meddling with them all. For the Falun Gong issue, the United States is also meddling from behind the scenes. Therefore, we should speed up our efforts to expand and at the same time, keep cool and do an outstanding job in this fight against Falun Gong. We should prevent the U.S.-led Western hostile forces from using Falun Gong and Taiwan Independence in their effort to subvert our political power to accomplish their goal of toppling the Communist Party. Today, I mentioned this situation mainly to brief you about the spirit of the document issued by Central Committee’s Office for Handling the Issues of Falun Gong. Please keep it to yourselves. News media should not report it. We Zaozhuang have done pretty well in handling Falun Gong. There are about 310,000 true Falun Gong members in Shandong Province. The number the media reported to the public [with our permission] is over 170,000. Weifang has 68,000, Yantai 36,000, and our Zaozhuang has 25,000." [4]

The above minutes were posted at Wenmi Jiayuan (Home for Party Assistants) which is a popular website for Party assistants. The website contains a variety of writing samples. Writing samples posted are claimed to be most recent and original. [5]


[1] Shandong Province is the second largest province in China with a population of 91.8 million. Zaozhuang City is one of the 17 prefecture capital cities in Shandong Province and has a population of 3.6 million people.
[2] Xinhua News Agency, September 25, 2007
[3] Wenmi Jiayuan, December 20, 2006
[4] Same as above
[5] Wenmi Jiayuan

Xiao Tian is a correspondent for Chinascope. 

Annual Report Reveals a Hidden Front: Chinese Police Tasked with Suppressing Faith-Based Groups

The 2006 annual report [1] from the Hangzhou City Public Security Bureau shows that the suppression of faith-based groups has gone underground—it has become the "hidden front." Internet censorship and control of social unrest continue to be the focus of Chinese law enforcement.

On December 30, 2006, the Hangzhou City Public Security Bureau posted its last quarter report on the Hangzhou government website, thus completing its 2006 annual report.

Four work and progress requirements were set at the beginning of 2006. The second one was to "further improve the quality and performance level in the fight against hostile forces on the "hidden front," to take strict precautions and resolutely crack down on infiltration by various hostile forces, to crush in a timely manner any activity that threatens our national security and social stability, and to proactively work with the relevant departments to enhance administration of religious places."

In the first quarter, while the "Two Conferences" [2] were being held at the national, provincial and city levels, the Public Security Bureau "increased the depth of surveillance and investigation efforts targeting hostile forces and Falun Gong and proactively conducted intelligence and information analysis." It "closely monitored and controlled the movements of hostile elements." Particularly, the Public Security Bureau identified 178 persons as key targets that may potentially pose threats. It successfully implemented control measures to keep Falun Gong and "pro-democratic elements" from staging protests in Beijing. Moreover, it "actively cooperated with relevant departments to further strengthen the city’s management of religious sites." It "closely monitored the Internet traffic of various hostile organizations and removed 5,032 pieces of sensitive and harmful web postings." It also "successfully handled 7 group incidents [3] involving 1, 330 persons."

In the second quarter, the first Buddhism Forum was held from April 13 to 16 in Hangzhou. The City Public Security Bureau "formed seven special task forces that pulled together all the intelligence through a comprehensive investigation of religious groups." The special task forces identified and filtered out unstable elements and applied tight surveillance." They "closely monitored Internet traffic of various hostile organizations and removed 5,534 pieces of sensitive and harmful web postings." They also "successfully handled eight group incidents involving 972 persons."

In the third quarter, the Public Security Bureau "closely monitored Internet traffic of various hostile organizations and removed 11,700 pieces of sensitive and harmful web postings," doubling the number from the second quarter. It "successfully handled 19 group incidents involving 2,233 persons."

In the fourth quarter, the public Security Bureau "removed 170,000 pieces of sensitive and harmful web postings." The 10-fold increase in the number of censored postings was achieved through implementation of three Internet censorship software programs. It "successfully handled 20 group incidents."{mospagebreak}


1. Hangzhou Government
2. "Two Conferences" refer to the Fourth Plenary Session of the 10th Chinese National People’s Congress and Chinese People’s Political Consultative Conference that were held in March 2006.
3 "Group incident" is Chinese official term for social unrest.

Joshua Lee is a correspondent for Chinascope.

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