Society

Chinese movie star and his Indian partner

I’ve got a piece in today’s Christian Science Monitor on India, China and the battle for South Asia.

The votes are cast. The results are in. Republicans rode a populist tidal wave to seize control of the House. Democrats held on to a (fragile) majority in the Senate. So what does it all mean for U.S.-China relations? That’s the question I was asked today on BBC radio.

As many of you know from reading my bio, I worked as an aide to John Boehner, now expected to become Speaker of the House, during the last Republican takeover of Congress in 1994. And, of course, I’ve been living here in Beijing for several years, teaching U.S.-China business relations at one of China’s top universities. So here’s my “American perspective from China” in the wake of the 2010 midterm elections:

The city is engulfed in a divisive debate as it prepares to set its first-ever minimum wage.

Lawmakers passed the minimum-wage bill after a 41-hour session in July in response to growing public calls to tackle the widening wealth gap. Some of Hong Kong's lowest-paid workers, such as toilet cleaners or security guards, earn as little as HK$20, or about US$2.60, an hour.

Hong Kong Chief Executive Donald Tsang, in a luncheon address to business groups last week, said the government was forced to legislate a minimum wage after a "tepid" response from the business community to a voluntary plan for a minimum wage proposed in 2006.

China's government will next year start extracting more money in dividends from the companies it controls, in a long-awaited step that could help level the playing field between private firms and the nation's massive state-owned enterprises.

In a decision made with little fanfare, China's State Council, the country's equivalent of a cabinet, said hundreds more state-owned companies will have to pay a higher level of dividends from 2011.

The move strengthens an existing trial program, widely criticized as ineffective, under which about 130 large companies—including China National Petroleum Corp., State Grid Corp. and China Mobile Communications Corp.—pay 5% or 10% of their annual profits to their government shareholder.

Behind that decision lies a long-running and increasingly intense debate over the role of state-owned companies in today's market-driven China. Some Chinese see a strong state sector as key to the nation's economic resilience during the financial crisis and its rising global prominence. Others see powerful state companies, flush with cash from the government's stimulus program, as a growing threat to the smaller private businesses that create most new jobs.