CHINA’S CONTINUING DISQUIETUDE

by Dr. Clifton W. Pannell

In the summer of 2004 and now almost two years after the 16^th Communist Party Congress of November, 2002 affirmed a succession of leadership in China with a new team drawn from the younger fourth generation of Chinese Communist Party (CCP) leaders, economic progress is rapid but political uncertainty continues. Uncertainty about who is in charge, what policies and directions prevail, and where the country is going in its foreign policy continue to create anxiety about the future. Several realities and recent events reaffirm the remarkable economic progress China has made while also demonstrating the persistence of a political process that appears incapable of transitioning in a smooth and predictable fashion. Let us consider some of the evidence and recent happenings that account for this.

China’s economy continues to advance at breakneck speed particularly in the development of its manufacturing base and the extraordinary growth of its exports. While the exact size of China’s economy remains a topic of debate among various economists owing to how it is measured (whether in dollar terms based on its gross domestic product or in purchasing power parity terms as is more common in studies of developing economies wherein purchasing power based on comparable products is evaluated), by any accounting system, China’s economy is now one of the world’s largest and certainly one of the most rapidly growing. Problems remain in the banking and fiscal systems, yet policy makers are addressing these issues. Real progress has been made in recent years to clean up the inadequacies and to create a modern economic system required to participate fully and effectively in the WTO and other world organizations that require accurate accounting and statistical systems and records.

On the political front the signs are not so clear. First, the leadership succession that is supposed to be part of the reformed system has not completed its transition. This has become increasingly evident in the signals emanating from the past party general secretary and president, Jiang Zemin, who now officially only occupies the top military position as Chairman of the Central Military Commission. As Joseph Kahn of the New York Times wrote on July 16, 2004, Mr. Jiang is reported to have told National Security Advisor Condoleezza Rice in a meeting two weeks ago that he was “handing over more and more power” to Mr. Hu. This is a clear signal that Mr. Jiang is still in power and calling the shots (continues to the next page)

* Dr. Clifton W. Pannell is Professor and Associate Dean of the Franklin College of Arts and Sciences at University of Georgia at Athens (UGA).

DEVELOPMENT CENTERS IN SOUTHWEST CHINA: STAGES OF GROWTH

by Dr. Susan Walcott

As first proclaimed in 1999, China’s policy of encouraging development in its western provinces continues to receive attention from analysts to assess the impact of central government economic incentives to balance the east coast’s economic prowess. I spent several weeks visiting Chengdu, Chongqing, and Qinghai in June for interviews, observations, and a presentation at Sichuan University’s international conference on developing the West. In brief, preliminary indications suggest that metropolitan Chengdu continues its historic role as the economic and cultural leader in this region, with its concentration of companies and expatriates from the more developed world, its leading universities, and a culture open to outside innovative influences. From the center of the city (with its trendy pedestrian shopping streets) to its southside (with innovation incubators, upscale residences and entertainment districts, and a third Sichuan University campus), Chengdu continues to expand its prospects.

Chongqing, on the eastern side of a mountain range separating the two nearby cities, benefits from its new autonomous status (since 1997 directly under the central government) and its position as a Third Front military-industrial stronghold. Dual use products in the motor vehicle and pharmaceutical fields attest to its transformation, along with massive infrastructure changes and a large new development zone on its northwest side. Red tape, brown air, and muddy waters complicate prospects for the aptly named “mountain city” at the tail end of the Yangtze’s new accessibility for deep water ships. To the west of Sichuan’s two anchor urban areas, Qinghai signals both the transition to the Tibetan highlands, and attempts of Chinese penetration. Major roads, tunnels, and bridges remain very much still under construction. Both high tech communication towers and traditional wind banner poles dot the heights; Chinese soldiers share buses with nomads and monks. Clearly, “developing the West” carries multiple meanings, and is a project continuing to play out.

* Dr. Susan Walcott is Associate Professor and the Director of the Asian Studies Center at Georgia State University.

MARKETING FURNITURE IN CHINA: THE MARKOR AND ETHAN ALLEN STORY

by Dr. Baogang Guo

While many American furniture companies are complaining bitterly about the fierce competition from Chinese imports of low-cost home and office furniture, some American companies have quietly begun their business adventure to take over some of China’s own domestic furniture retail market. One of Asia's leading furniture retailers, the Markor Group, opened its first retail store in Beijing in May this year. With 26 complete collections of 1,000 pieces of furniture as well as 4,000 accessories in every style, this 35,000-square-foot, three level store provides a one-stop shopping solution to Chinese customers. This is one of the four stores Markor, together with the largest furniture manufacturer and retailer in the United States, Ethan Allen, have opened in China since 2003. The other three stores in China are located in Urumqi, Tianjin, and Shanghai. As China is working towards the goal of fully liberalizing its retail market by the end of December this year in line with WTO commitments, it is gradually removing all restrictions on foreign operators. More foreign retailers are now entering the Chinese market than ever before to take advantage of this golden opportunity to expand their business there.

Recently, I interviewed Mr. Edward Grund, the President and General Manager of Markor Home Furnishings, the Retail Division of Markor International Furniture. The following is part of the written interview:

GUO: Can you tell me a little bit about your company?

GRUND: Markor was established in Urumqi in 1990, and entered the furniture manufacturing business in 1992. Markor is one of the leading furniture exporting companies in Asia producing quality products, which enjoy high acceptance in Europe, the Middle East and the United States. Markor International Furniture became a publicly traded company on the Shanghai Securities Exchange in November 2000.

GUO: What is Markor’s business strategy in entering China’s domestic furniture retail market?

GRUND: In 2001, Markor formed a partnership with a well-known American furniture company Ethan Allen to establish a chain of furniture stores throughout China. The agreement calls for the two companies to collaborate on the development of a retail format that will market two retail concepts: the Ethan Allen retail program and the Markor retail program. The first store opened in December 2003 in Tianjin. As we speak, there are currently six stores being opened or under construction in China.

GUO: Can you describe to our readers the current business environment in China?

GRUND: The emerging middle class and upper consumer market in China represents one of the highest potentials for retailers that exist anywhere in the world in my opinion. Personally I have been well received by business and governmental individuals wherever I have gone. The country is eager to develop and embrace “western” approaches and practices to business. While certain requirements to open a location are tedious and require patience and understanding, they are not insurmountable. Business and government leaders are proud of the progress being made but anxious to move forward at an ever increasing pace. The amount of new construction and development occurring is remarkable. Private consumption, home and automobile ownership growth is seen in every city I have visited. I have been fascinated to witness and experience this remarkable period in China’s development and advancement to a world power.

GUO: What are some of the notable cultural differences in doing business with Chinese?

GRUND: Personal relationships and contacts are an important part of conducting business in China. Business Entertainment is important. The ritual of exchanging business cards is never overlooked regardless of the level of the individual. Co-operation is an often used terminology for business dealings.

China Events

CHINA SEMINAR FUNDED

by Dr. Curt Lindquist

Through a $65,000 Fulbright-Hays Group Project Grant, fifteen faculty from Reinhardt College and other collaborating institutions will participate in a seminar to China. Faculty who are in the arts, humanities, and social sciences and who are non-specialists in East Asian studies from Clark Atlanta University, Young Harris College, Dalton State College, Floyd College, Berry College as well as Cherokee and Pickens County Public School Systems will study “Examining China’s Great Western Development Program: The Social and Cultural Effects upon Ethnic Minorities and the Han Majority.” This four week seminar is scheduled during June-July 2005 and allows participants to meet Chinese scholars in Beijing, Urumqi, Chengdu, Kunming, and Shanghai. With the assistance of the China Research Center members who served on the Advisory Committee, Dr. Baogang Guo, Dr. John Garver, and Dr. Penny Prime, the proposal received funding by the U.S. Department of Education.

The seminar’s theme emerged from extensive discussions by the Advisory Committee about similarities between north Georgia and China. While North Georgia has benefited from the economic growth of the metro Atlanta area, the north Georgia region has lagged behind the metro area in job creation. In China, the recent economic transformations on the coastal regions are only slowly reaching the more inland regions. For example, the per capita GDP figures are strikingly different between Shanghai and minority inland areas. In Shanghai, the per capita GDP is approximately $3500; In Xinjiang (Urumqi) it is $850; in Yunnan it is $550; in Sichuan it is $440. Compared to coastal regions, the inland regions still have numerous economic needs. Furthermore, Reinhardt and the other partner institutions have a long history of addressing the varied population of North Georgia. For decades, these schools have responded to the surrounding cultural diversity, whether Native-American, African-American, or the recent immigration of Hispanic and Asian populations. According to China’s 2000 census, the Han population, or majority nationality, is 1.159 billion, or 91.6 % of the population. While only 8.4% of the population is other nationalities, these fifty-five non-Han minority groups comprise approximately 90 million people with the vast majority in the west and southwest areas of China. Whether it’s economic or population characteristics, there are similarities between north Georgia and regions of China.

Just as the United States government has responded to economic differences among individuals and groups, the PRC has attempted to respond. Article 122 of the PRC Constitution states: “The state gives financial, material and technical assistance to the minority nationalities to accelerate their economic and cultural development.” The latest governmental effort is the Great Western Development Program (GWDP). Former President Jiang Zemen put forward the guidelines for accelerating the development of the West in June 1999. The GWDP seeks to raise the standard of living in provinces such as Xinjiang, Shaanxi, Gansu, Sichuan, Yunnan, and Guangxi. While the GWDP does not exclusively target ethnic minorities, the PRC’s program will create more favorable economic conditions for ethnic minorities in these regions.

The seminar participants will seek to understand China’s GWDP as well as to evaluate its impact. Seminar members will ask such questions as the following: Has the economic program helped the “West?” Has the program helped the various minority groups? Have relations between the minority groups and the Han majority been strained or improved? How has the government balanced the needs of development of the West with the needs of preservation of the unique minorities? How does the economic growth of the West compare with the growth along the coastal areas?

While still being finalized, the seminar will begin in Beijing with meetings arranged by our official host, Renmin University. Lectures will be conducted by scholars from Renmin University, the Central Nationalities Institute of Beijing, and officials from various government offices. Lecture topics include GWDP itself as well as the official classification policy about nationalities and the effects of that policy (continues to the next page).

* Dr. Curt Lindquist is Associate Professor and Dean of the College of Arts and Humanities at Reinhardt College

WESTERN CHINA DEVELOPMENT STUDIES CONFERENCE A SUCCESS

The China Research Center co-sponsored the inaugural conference of the newly established Western China Development Studies Consortium in Chengdu, June 22-23, 2004. Hosted by Sichuan University, Southwest University of Finance and Economics, and the Sichuan Academy of Social Sciences, there were approximately 120 participants with a quarter traveling from abroad to attend.

Professor Susan Walcott, a Research Associate of the Center and the Director of the Asian Studies Center at Georgia State, presented a paper on high-tech zones in China, and Dr. Penelope Prime presented a paper on the role of universities in economic development co-authored with Donald Grimes at the University of Michigan.

Held on the campus of Sichuan University, the conference opened with several keynote speeches, including the Vice-Governor of Sichuan Province. Ping Du, the Director of the West China Development Office of the State Council, and Professor Wing Thye Woo of the University of California at Davis and Columbia University, gave updates on the development status of Western China. Twelve formal panels followed covering sustainable development topics from environment and health to regional migration and trade. The concluding session was highlighted by a speech by Professor Jeffrey Sachs, Dean of the Earth Institute at Columbia University and the U.S. Secretariat of the Consortium. Professor Sachs emphasized the need to understand the economic geography of the region to help establish appropriate development policy and to decide which projects would produce the highest returns for the people of China.

Along with Professor Sachs, the other U.S. secretaries of the Consortium are Professor Wing Thye Woo at University of California at Davis, Professor Shuming Bao at the University of Michigan, and Professor Penelope Prime at Kennesaw State University. The consortium is planning an annual conference in West China. The location of next year’s conference will be announced at a later date. Watch the Consortium’s website for updates and information about the Consortium generally at www.chinadatacenter.org/westchina2004.

JOHN MORGAN, PRESIDENT AND CHIEF DEVELOPMENT OFFICER OF ACUITY BRANDS, TALKS ABOUT THE COMPANY'S CHINA STRATEGIES AT KSU

Mr. John Morgan gave a dynamic presentation on Acuity Brands investment strategies in Mexico and China on April 5^th, 2004 at Kennesaw State University. The Coles College of Business hosts key business leaders several times a year for the Tetley Distinguished Leader Lecture Series held on campus for students, faculty and guests. Mr. Morgan presented an overview of the factors his company took into consideration when deciding whether or not to expand operations into Mexico and China. The company started in Mexico first, and later established a representative office in Shanghai in 2003. In a short time the company’s China operations have expanded quickly, and are expected to grow substantially. The company began its international operations in the 1980s with exports from its Conyers facility.

Acuity Brands, Inc., with fiscal year 2003 net sales of over $2.0 billion, is comprised of Acuity Brands Lighting and Acuity Specialty Products. Acuity Brands Lighting is a world leader in lighting fixtures and includes brands such as Lithonia Lighting®, Holophane®, Peerless®, Hydrel®, American Electric Lighting®, and Gotham®. Acuity Specialty Products is a leading provider of specialty chemicals and includes brands such as Zep®, Enforcer®, and Selig Industries™. Headquartered in Atlanta, Georgia, Acuity Brands employs approximately 11,000 people and has operations throughout North American, Europe and Asia.

Atlanta Area China Related Program

CHINESE LANGUAGE PROGRAM AT CLARK ATLANTA UNIVERSITY

by Gao Yan

The Chinese Program at Clark Atlanta University offers Chinese language courses at beginning, intermediate, and upper level (based on students’ needs). It also offers a Chinese minor (eighteen hours) to students who wish to accelerate their understanding of a particular area of foreign language study. Students can take courses such as Chinese Culture and Civilization, and Modern China Through Film and Literature. In addition, the program helps students choose different study abroad programs in China to enhance their language proficiency and enrich their cultural experience. All students enrolled in elementary and intermediate languages Chinese courses are required to spend a minimum of one (1) hour per week in the language laboratory.

* Gao Yan is Associate Professor of Chinese in the Department of Foreign Languages at Clark Atlanta University

Up-Coming China Events

CHINESE ECONOMISTS SOCIETY SPONSORED CHINA CONFERENCE NOW OPEN TO PUBLIC

The CES China conference “Technology, Human Capital, and Economic Development” is to be held July 30 and 31, 2004 at the Global Learning and Conference Center, Technology Square at Georgia Institute of Technology, 800 Spring Street, NW, Atlanta, GA 30308. Map & Directions can be found at: www.gatech.edu/technology-square/map.php. Conference details, updates and registration can be found at the official website of the Chinese Economist Society at http://china-ces.org/ces2004/. For other questions, please contact Penelope Prime, Director of the China Research Center (www.chinacenter.net) at pprime@coles2.kennesaw.edu.

Scholars, officials and business leaders will focus on key development issues for China’s economy today. The program includes keynote speeches by Gongcheng Zheng, a member of the Standing Committee of China’s National People’s Congress; James Heckman, the 2000 Nobel Prize winner in economics; Gregory Chow, a prominent economist specializing in China, and a luncheon address by Georgia Senator Sam Zamarripa, initiator of the State of Georgia’s China Future Project.

Program Schedule:

July 29^th	6:30-8:30 p.m.	Reception
July 30^th	8:00-12:00 a.m.	Plenary Session with Keynote Speeches
	12:00-2:00 p.m.	Formal Luncheon
	2:00-6:00 p.m.	Parallel paper sessions
	6:30-9:00 p.m.	Banquet
July 31^st	8:00-12:00 a.m.	Parallel paper sessions
	12:00-1:30 p.m.	Lunch & closing ceremony

Local Participants Registration Options and Fees: Entire conference: $150


Plenary Session & lunch only: $45	Plenary Session & lunch (students): $25
Parallel paper sessions only: $30	Parallel paper sessions only (students): no charge

Please send reservations and payment (check or money order) payable to CES to the following address: Yan & Associates, Inc., 1969 Sugar Springs Drive, Lawrenceville, GA 30043. Local registration from can be found at http://www.china-ces.org/ces2004/.

CHINESE PROFESSOR SHIXIONG NI TO GIVE TALK ON AUGUST 16TH, 2004

Dr. Shixiong Ni, Professor and Dean of the School of International Relations and Public Affairs, and Director of the Center for American Studies at Fudan University, China, will give a presentation on "China's Peaceful Rise and Its Implications for the World" at Georgia Institute of Technology, (room to be announced), on August 26th at 4:00 pm. Dr. Ni is one of the top Chinese scholars of international studies. He did postdoctoral research at Harvard University (1980-1981); made many lecture visits to the USA as a visiting professor at different universities, such as Columbia University, Georgetown University,,George Washington University, Harvard University, UC Berkeley, the University of Pittsburgh, Georgia-Tech, the National Defense University, Washington and Lee University, University of Washington and Colorado College.

Dr. Ni’s publications include Selected Readings on American School of Thought in International Relations; Conflict and Cooperation: An Introduction to Western Strategies; Reflection of the Century’s Winds: Contemporary International Relations; International Human Rights; War and Morality ---- the Rise of Nuclear Ethics; From Normalization to Renormalization: 20 Years of Sino-US Relations; and Contemporary Western Theories in International Relations. He has also translated some distinguished works from English into Chinese: Man, the State and War (Kenneth Waltz) and Contemporary Theories in International Relations (Stanley Hoffman). In addition, he has published over 100 papers and articles on international relations.

For more information contact Professor Fei-ling Wang, The Sam Nunn School of International Affairs, Georgia Institute of Technology, 404-894-1904, fei-ling.wang@inta.gatech.edu.

WORKSHOP ON "INDIA-CHINA RELATIONS: PROSPECTS FOR EXPANDED COOPERATION” TO BE HELD ON SEPT. 23RD, 2004.

A one day workshop on India-China relations will be convened at Georgia Institute of Technology, 9 a.m. to 5 p.m., 23 September 2004, in the MARC Auditorium, Room 114, on the Georgia Tech Campus.

Prominent specialists on China-India relations will discuss and debate current and future patterns of cooperation and conflict between Asia's two giants. Panelists include Dr. Jasjit Mansingh of Jawahrahl Nehru University; Dr. Ying-dong Yuan of the Monterey Institute of International Studies; Dr. Anupam Srivastava, Co-Director, South Asia Program, Center for International Trade & Security, University of Georgia, Athens, Georgia; Dr. Michael T. Clark, Executive Director, U.S.-India Business Council, Washington, DC; and John Garver of Georgia Tech.

The morning session will discuss economic cooperation and rivalry between the two countries. The afternoon session will focus on political dynamics. There will also be a for-fee luncheon. Lunch-time speakers will include former U.S. Ambassador John Kelly, and a high-ranking representative from the Indian Embassy (possibly the Ambassador).

The event will be sponsored by: the Georgia Indian American Chamber of Commerce; the ICA Institute; the Center for Strategy, Technology and Policy and the Sam Nunn School of International Affairs, both of Georgia Tech; and the China Research Center.

The sessions are free and open to the public, but reservations are requested beforehand. There will be a modest charge for lunch. For further information contact Angela Levin at 404-895-3199.

CHINA BUSINESS FORUM PLANNED FOR OCTOBER 8TH, 2004

A China Business Forum will be held at Kennesaw State University Friday morning, 8-11:00 am, on Oct. 8^th. Topics will include the evolving asset market in China, navigating logistic challenges, and an update on China’s economic performance and policy. The forum will be held in room 300 at the KSU Center. More information about registration and directions will be available soon on the Center’s website homepage at www.chinacenter.net.

Associate News

Dr. Penny Prime presented a paper co-authored with Donald Grimes at the University of Michigan to the Western China Development Studies Conference held in Chengdu in June.
Dr. John Garver has received a grant permitting him to spend the 2004-05 academic year writing a book on China-Iran relations. Research for this project will take place in Sweden, Austria, Israel, Iran, India, and China.

Dr. Baogang Guo presented a paper to the International Symposium on "Political Civilization and Modernization of Chinese Politics" held at Renmin University in Beijing in June. He also made a guest appearance on Voice of America's live radio/TV program "Strait Talk" on July 19, 2005 in Washington D.C. In addition, his paper on "Utopias of Reconstruction: Chinese Modern Utopianism from Hong Xiuquan to Mao Zedong" was recently published by the Journal of Comparative Asian Development.

Dr. Haizheng Li has been recently promoted to Associate Professor and granted tenure at Georgia Institute of Technology.

Dr. Susan Walcott presented a paper to the Western China Development Studies Conference held in Chengdu in June. She was the lead author in a recently published co-authored article entitled “Assessing Environmental Impacts of Urbanization Using Multi-sensor Data: Shanghai, 1970-2000” in an Asian Geographer special issue on “Land Use and Land Cover Change in China under the Reform”. Her article on “Xi’an as an Inner China Development Model” was published in the Eurasian Journal of Geography and Economics

Dr. Feiling Wang and Dr. Lu Hanchao led two separate student groups to study in China this summer. Dr. Yawei Liu has also been teaching in China since Spring 2004. Dr. Liu and Dr. Wang also attended the International Symposium on "Political Civilization and Modernization of Chinese Politics" held in Beijing in June. The Carter Center was one of the sponsors of the conference.

The China Research Center (http://www.chinacenter.net ) links China experts to the larger community interested in developments in greater China in business, media, academia and government. The Center promotes original research on greater China’s contemporary political and economic situation. The Center also strives to disseminate research results, policy options, and business and study opportunities for China, Taiwan and Hong Kong. The Center serves as a bridge between the Southeast United States and greater China, and a base for collaboration between academia, business and government. Please send all correspondences to Dr. Penelope B. Prime, China Research Center, c/o Department of Economics and Finance, Coles College of Business Kennesaw State University, 1000 Chastain Road, Kennesaw, Georgia 30144, Tel: (770) 423-6579 Fax: (770) 499-3209; Newsletter Editor: Dr. Baogang Guo, Dalton State College.