Business and Human Rights

California businessman David Ji, who has been detained in Sichuan province since October 2004 in connection with a business dispute, faces a key date in his case on May 29. Sichuan police have been holding Mr. Ji under "residential surveillance" since November 2004, alleging that he and his U.S. company committed fraud in dealings with a Sichuan business firm. The legally prescribed period for residential surveillance will expire on May 29, and Sichuan authorities in theory should have to decide whether to charge Mr. Ji with a crime or to release him. (For details on the case, see an earlier CECC story here.)

Two recent reports from the U.S. Foreign Agricultural Service (FAS) in Beijing identify possible Chinese government export subsidization of corn, coupled with a significant decline in the value of U.S. agricultural imports into China. In the past 11 months, FAS has raised by one-third its estimate of the value of corn exports from China. In addition, the value of China’s combined imports of U.S. soybeans and cotton in the first quarter of 2005 were $1 billion lower than the first quarter of 2004. Soybeans remain the largest U.S. export to China by tariff line.

The Chinese government regulates all of China’s corn exports. In February 2005, the Chinese government issued a 3 million metric ton (mmt) corn export quota, compared to a 1.4 mmt export quota issued for the entire first half of 2004. China does not import corn from the United States. Growth in U.S. soybean and cotton exports to China has declined in the first quarter of 2005.

The Beijing First Intermediate People's Court held its first hearing at the end of March on Pfizer Inc.'s appeal of the invalidation by the Patent Reexamination Board of the pharmaceutical company’s use patent for Viagra. (The Reexamination Board is part of the State Intellectual Property Office.) A coalition of Chinese pharmaceutical firms brought the request for reexamination to the Board, which invalidated Pfizer's patent because it concluded that the information that Pfizer submitted in the late 1990s in support of its original patent application did not comply with statutory requirements. Pfizer maintains that the Board's decision holds the original application to a legal standard that was not in force at the time of the original examination.

The People's Daily reports that the General Administration of Press and Publication has approved the establishment of China's first media organization using a shareholding system. According to the People's Daily, the company, called the China Insurance Newspaper Limited Liability Company, will be co-led by a board of directors and a Communist Party committee. The report cited the company's Chairman as saying that the company would "ensure the Party's leadership of the media, and ensure correct guidance of public opinion. . . ."

The Chinese government may open the publishing industry to domestic private investment, according to an article originally published in the Beijing News and reprinted April 15 on the People's Daily Web site. The report says that the General Administration of Press and Publication is formulating a policy to allow China's state-owned book publishers to accept private investment through joint venture stock purchases. The report cited a private book store manager as saying that, in the future, 90 percent of publishers would be transformed into business enterprises. The report emphasized, however, that any participation would be limited to domestic private investors, and foreigner investors would not be allowed to enter the publishing market. The article noted that, while not technically legal, domestic investors have been investing in China's publishing industry for over two years, with some private publishers putting out over 100 books in a single year.

Sichuan provincial authorities have held American businessman David Ji under house arrest since October 2004. Ji is president of Apex Digital, a California electronics firm. Apex Digital’s lawyers say that Mr. Ji initially was detained without a warrant and was forced to sign a number of commercial agreements detrimental to the interests of Apex before he was granted access to his lawyer as provided by Chinese law. Police also apparently contravened the 1980 U.S.-China Consular Convention by failing to notify U.S. consular officials about Ji’s detention within the specified four days after first detention. Public security authorities reportedly are investigating charges that Ji wrote bad checks to Sichuan Changhong Electronics Co., a state owned company that is involved in a commercial dispute with Apex. Apex lawyers claim they can prove Ji is innocent of the charges, and have expressed concern that police are holding Ji hostage at Changhong’s behest for leverage in the commercial dispute.

The People's Bank of China (PBOC) announced that it would increase the minimum down payment for mortgages on housing from 20 percent to 30 percent of the purchase price. In the press conference announcing the measures, the PBOC spokesman also said that tightening the down payment rule is necessary because of significant lending beyond existing rules. A Reuters survey of economists said the PBOC’s move reflected fixed-asset sector growth during the first two months of 2005 that far exceeded the government’s preferred target.