Inside China Today

Inside China Today – Saturday 26th June

- Chinese wage hikes cause headaches in Hong Kong

- Greedy companies send pharmaceutical costs soaring

- Mudslides in southern China kill hundreds

- Renowned doctor pursues justice at Supreme Court along with petitioners

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Chinese wage hikes cause headaches in Hong Kong

Unease sweeps through mainland China as Hong Kong businesses along the Pearl River Delta are impacted by workers strikes over pay rise issues at Foxconn and Honda.

According to the Hong Kong Small and Medium Enterprises Association (HKSME), it’s estimated that between 1,000 and 2,000 Hong Kong businesses will go bust by the end of 2010. The global financial crisis of 2008, has seen close to 10,000 Hong Kong firms declare bankruptcy, leaving 40 to 50,000 businesses to bunker down and ride out the pay rise storms; more closures may indeed occur.

President of HKSME, Mr Liu Dabang, said that since May this year, Guangzhou increased the minimum wage by 20% to 920 Yuan. Foxconn’s increase raised the minimum wage to 2,000 Yuan. Hong Kong businesses around the district will be greatly affected.

Mr Liu said (recording):
“If we had 5% net profit and increased salaries by 100%, we would have no profit, leaving a 5% loss. The impact is huge. I estimate between 1,000 to 2,000 companies will be out of business by the end of the year. Even though the Chinese Communist regime banned reports on these strikes for fear of withdrawal of foreign investments; it is inevitable that Hong Kong and other overseas investors will leave the mainland.”

Mr Liu also said (recording):
“As salaries increase, so do the land prices. Comparatively speaking, the benefits become smaller and smaller. When it gets to a point where there is no profit left, factories will return to their hometown or seek out other affordable premises.”

Liang Zhen in Hong Kong of the SOH Radio Network.

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Greedy companies send pharmaceutical costs soaring

The release last year of China’s National Health Insurance catalogue revealed an increase in the price and number of new Chinese drugs. Some prices have reached exorbitant levels. Many medical professionals believe China’s pharmaceutical industry has been monopolized by interest groups, officials and businessmen. Collusion and price-fixing have caused major headaches for those struggling to afford medical expenses.

In 2009, China’s Ministry of Human Resources and Social Security issued the latest edition of its ‘National Health Catalogue of Medical, Workplace and Birth Insurance’. Comparisons between the current and 2004 edition reveal a startling increase of 260 drugs on the market. There was a sharp jump in the price of many drugs.

In Dalian, Mr Liu from the sales department of Jingang Medical Pty told reporters about one of the company’s products, an olive alkene product used to treat tumours. Five days before the release of the insurance catalogue, the price rose from 93.50 Yuan to 140 Yuan. Currently it costs 170 Yuan ($25 US Dollars) doubling in price in just six months.

Mr Liu told SOH (recording):
“The price set by the National Development and Reform Commission hasn’t changed for four years. The price set by the commission is 93.50 Yuan. Early in 2007, we proposed to raise the prices in line with the provinces. Afterwards raw material costs kept going up, operations and wages also went up. In October 2009, the product was included in the National Health Insurance catalogue so it was changed to 140 Yuan.”

The report highlights the problems with the pricing mechanism for drugs. Suppose the sale price of a single drug at a hospital is 115 Yuan ($17 US Dollars). Then the wholesale price from an agent would be close to 90 Yuan. The agent however, may have purchased the drugs from the manufacturer at just 18 Yuan ($2.60 US Dollars). The extra 72 Yuan ($10 US dollars) is supposed to cover clinical costs, taxes, packaging, postage, and percentages for medical and public relations representatives. Mr Liu said the pricing regulations in China were overly complicated.

He told SOH (recording):
“The price of drugs is set by the government, enterprises or the National Development and Reform Commission. These three contribute to high prices. Manufacturers do not sell medicine directly to patients. Instead prices rely on tenders from distribution companies, the State in turn, regulates the price which they sell to hospitals.

Mr Zhu, a medical professional believes China’s pharmaceuticals have been monopolized by interest groups who can fix prices at will.

He told SOH (recording):
“The cost of medicine has doubled; I feel there must be manipulation on a national scale. Honestly, it may be collusion between officials and businessmen. The merchants sell at an expensive price and make more profits. It’s not so expensive from the manufacturer, however between the medical and marketing companies, then into hospitals and again into pharmacies, after this the price is doubled. All sectors in between make a profit.”

Mr Zhang from Changzhou in Jiangsu Province said health insurance policies often cheat people, some medical expenses can’t be claimed.

He spoke to SOH (recording):
“Health insurance cheats people. Even if we want insurance, they won’t insure us. We do have insurance for farmers, but it is limited. It only covers visits to county level hospitals, we can only go there. They only give you medicine and don’t end up getting better. They won’t treat your illnesses. Last time we spent over ten thousand Yuan and that would only delay small illnesses. The Communist Party’s health insurance is a scam.

In May this year, there was extensive media coverage in Sichuan of the ‘asparagus’ drug, a kind of supplement to treat cancer. The manufacturer sold the ‘asparagus’ drug at 15.5 Yuan. But hospitals sold the drug at 213 Yuan, a 1300% price jump.

Lin Li and Yi Fan of the SOH Radio Network.

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Mudslides in southern China kill hundreds

180,000 people have been trapped by flood waters in China’s Jiangxi Province since Sunday, June 20th. Heavy rainfall has caused severe floods, and deadly mudslides have killed several people in China’s southern regions. Jiangxi, Hunan and Fujian Provinces have been hit the hardest.

The floods have caused disruption in many cities who are without transportation, communication or fresh water supplies. In Jiangxi Provine, the counties of Fuzhou and Yintan have suffered the worst of the flood.

Roads, communication and the water supply have been cut off in Zixi and Yujiang counties. A resident of Zixi county, Mr. Fu Zhifeng, told SOH reporters of the severity of the situation.

He said (recording):
“There are [building] collapses over there. In our county and in the village, there are 4-6 deaths reported. The bridges are broken down, and many of the villages are flooded.”

In Yunnan Province thunderstorms have caused major damages in Guixi, Yujiang, Yuehu, and Dragon and Tiger counties. On Saturday morning, locals reported seeing leeks in the wall of the Yuehu county reservoir, as well as mudslides going on for several hundred meters.
Mr. Wu of Dragon and Tiger County says the flood damage to the province is enormous.

He tells SOH (recording):
“There are floods in many parts of the province; the situation is very terrible. With the flooding, there are many places with mudslides and broken bridges. Many [people] died, but the numbers have not yet been confirmed. Crops are underwater and there is no [drinking] water or electricity. It’s terrible. The flood wave is almost 10 meters high and even the reservoir is damaged. There are villages where the water level reaches the third floor. Some of the roofs are submerged and some have shifted.”

Two residents of Yujiang County told reporters of their situation.

Mrs. Zhu says (recording):
“The rain was heavy in our village, quite heavy; over 100 millimeters a day. The whole county seat is submerged. There’s no electricity and no water; it’s really bad.”

Mr. Feng says (recording):
“There was very heavy rain. Our county seat and roads are flooded and no vehicles can run. Schools are closed these last two days. There is still no electricity and water, and the crops and roads are all submerged. We went to the countryside to help. Dozens of houses may collapse.”

According to online sources, the entire Liaojiadi village of Sanming county in Fujian province is submerged, with 4-5 deaths reported by locals. The villagers evacuated to the neighboring Changjia village.

Mr. Chen of Sanming County told reporters his county sits in low terrain and often floods. He said (recording):
“The rain is heavy and there are also mudslides, of which about 12 people died. We suffer from this every year. We are at the lower end of the reservoir and when the gate is opened, we will have a flood as high as the second floor [of a house]. I heard the floods in other places are as high as 3 meters.”

A resident of Zhaowu city tells SOH of the flooding in Fujian province. He says (recording):
“Mudslides caused a couple of deaths, as those who lived in the countryside could not evacuate. Houses are down and schools are closed. Crops and many old bridges are certainly damaged.”

It is the 14th time Fujian, Jiangxi, and Henan province has been hit by heavy thunderstorms. As of 8pm on Sunday June 20th, 10 million people have been affected.

Damaged crops account for a total of 5.3 million square metres, while the official death toll is at 132, with 86 people missing. 68,000 houses have collapsed, resulting in an economic loss of 14.5 billion Yuan (approximately 2.5 billion Australian dollars).

Lu Fang and Yu Xing of the SOH Radio Network.

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Renowned doctor pursues justice at Supreme Court along with petitioners

The Supreme People’s Court of China has begun a review of several past cases, some involving petitioners. In response, renowned doctor Jiao Donghai and over 80 petitioners hurried to Beijing to raise awareness of their cases. On June 18th they visited Peking University to get advice from legal scholars on civil procedure. The scholars voiced their support saying their actions were legally sound.

Dr Jiao Donghai is an expert in traditional Chinese medicine and is famous for his remarkable dietary treatments. He once helped a patient lose over 50 kilograms in 11 months. Dr Jiao worked at Shanghai’s Xiangshan Hospital. Rampant corruption and unsafe medical practices prompted him to file a lawsuit against the hospital chief, Kang Zhengxiang. Kang was initially found guilty and sentenced by a court, but the medical chief was shielded from punishment by officials.

Dr Jiao spoke to SOH about their visit to Peking University (recording):
“They support us suing the officials. One of them said when civilians sue officials; the chances of winning are small. Because I have the court judgements, I have the evidence. I want to sue the officials of the District Department of Health, who helped cover up the crimes committed by the Chief of Xiangshan Hospital.”

Dr Jiao spoke of the problems at Xiangshan Hospital (recording):
“The hospital chief was selling fake drugs and caused the death of several employees. He is still the hospital chief. He still bullies civilians. He even created fake documents to cover up the death of the son of the Deputy General Secretary of the Disciplinary Committee. He also caused the death of a farmer, Zhang Yongcai. He hasn’t been punished. The court handed a judgement and sentence against him, but the Secretary General of the Luwan District Committee is protecting him.”

Another petitioner who made her way to Beijing was Mao Hengfeng. She was sentenced to a yearlong forced labour camp term because of the World Expo. Mao and her husband Wu Xuewei also came to Beijing seeking legal help.

Wu Xuewei said (recording):
“As long as labour camp systems exist, there is little hope of achieving justice. In reality, the camp system restricts people’s personal freedom, and forces detainees to perform labour without compensation. Mao Hengfeng told me of a saying in the camps: “Start work at the crack of dawn, non-stop, until the ghosts come out at night.” Detainees are forced to do labour-intensive, manual production work. The labour camp system not only violates the constitution, it is notorious for its cruelty and viciousness. The fact is guards in the camp are crueller and harsher to detainees than regulations permit.”

Mao Hengfeng had been arrested, detained and sentenced by Shanghai authorities numerous times for her protests against the ‘one-child policy.’ On February 24th, 2010, police arrested Mao. Ten days later, she was sentenced to one and half years of forced labour.

Tian Xi of the SOH Radio Network.

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