Google didn’t have to wait very long to find out if China was going to renew its license to operate in the country. On Sunday, the official Xinhua News Agency quoted a government official as confirming that the company’s application had been approved. The decision followed a high-profile spat between Google and the Chinese government over censoring of results in Google’s search engine and the company’s decision in March to automatically divert users to a website based in Hong Kong to sidestep the restrictions.

So which side has given in? According to Rebecca MacKinnon, a Schwartz Senior Fellow at the New America Foundation, it’s certainly not Google. She says that some of the commentary suggesting otherwise is misplaced, arguing that Google’s only change to make it compliant with Chinese rules has had ‘no substantive impact on what Chinese Internet users can or cannot access via google.cn.’

Writing on her blog she says:

‘(T)he only thing that has changed since March is that after typing "google.cn" into the browser's address bar and hitting "return," users have to make one extra click before reaching the uncensored google.com.hk…If you have grade school literacy in Chinese it's extremely obvious from looking at that page that if you want to search anything other than music or shopping you can simply click through to google.com.hk. I don't see how adding the extra click prevents users of Google's general search from using the service any more than the direct redirection from google.cn to google.com.hk which Google implemented in March.’

On the possible reasons for the Chinese decision, she says it appears that the pragmatists within the Chinese government won out. It’s a reasonable observation—as she notes, refusing the license would have meant shutting Google out of China completely, thus sending an extremely negative message to the international business community.

If this is the case, it comes at a good time for China, following criticism from the likes of GE Chief Executive Jeffrey Immelt,who earlier this month took a rare pubic swipe at the Chinese government by stating that the country was becoming increasingly protectionist. According to the FT, Immelt pondered out loud in his a speech whether, ‘in the end they (China) want any of us to win, or any of us to be successful.’

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This is the second in a series of guest entries on economics and life in Shanghai by Bill Dodson, director of Strategic Analysis at TrendsAsia Ltd and author of the upcoming book ‘China Inside Out: 10 Irreversible Trends Re-shaping China and Its Relationship with the World’. Bill normally blogs at This is China!

‘It’s impossible there aren’t any tickets,’ I told the ticket seller. All I wanted to do was buy a return ticket to and from Shanghai on the bullet train. The about hourly train into and out of Shanghai is a 35-minute ride from where I was travelling. But now, it seemed, the bullet train I usually took no longer existed.

That’s because on July 1, the high-speed G-train started servicing the Suzhou–Shanghai route, reaching westward through Jiangsu Province to Wuxi, Changzhou and Nanjing. However, the G-train doesn’t run to the downtown area, but only to the outskirts of Shanghai. In fact, a friend who recently travelled the G-train from Shanghai to Suzhou told me the Hongqiao stop where passengers for Shanghai alight doesn’t even reach as close to downtown as Hongqiao Airport.

Meanwhile, the subway line that’s meant to run from downtown Shanghai to the two Hongqiao stops has yet to be completed, so commuters who have been using the bullet train to get into work in Shanghai are in a bind. They have to take buses and taxis to get to their offices from Hongqiao station, and there are no lines running in parallel as they ramp up the G-line to soak up excess passenger capacity.

Well, as expected the US Treasury declined to name China as a currency manipulator in a regular report submitted to Congress yesterday. The report is issued every six months, and there has been growing pressure among Congressmen concerned (and those needing to appear concerned ahead of mid-term elections) about the possible impact China’s undervalued currency is having on the US economy by giving Chinese firms a supposedly unfair advantage.

The consensus appears to be that the yuan or renminbi really is undervalued, though estimates as to how much vary widely, with some arguing that it could be anywhere up to 40 percent. Under growing international pressure—and not just from the United States—China agreed late last month to allow its currency to trade more freely, but this hasn’t been enough to quell criticism among US lawmakers, many of whom argue that the move is too little too late.

ABC News reported:

‘Sen. Chuck Grassley, the ranking Republican on the Finance Committee, said, “As expected, the administration has again failed to identify China as a currency manipulator. China recently allowed a modest crawling peg of its currency exchange rates, but overall China’s currency is tightly controlled and mostly removed from market forces. So Treasury’s determination doesn’t match the facts.”’

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I mentioned a while back that Chinese media outlets had taken the unusual step of calling for reform of the hukuo system, which obliges citizens to register their residency in a certain location. As I noted, from 1958, the government started to use the system to control the movement of people between rural and urban areas, meaning that in recent years many of the millions of migrant workers heading to big cities have been unable to access key government services as they were still registered with their hometowns.

So I wonder what the response will be to the authorities’ (in this case Beijing’s) latest wheeze to control the migration of labourers into the city—walling them out.

According to the South China Morning Post:

‘Restricted access to some Beijing suburban villages may be extended to the whole city, the capital's party chief said after visiting a walled-off village on Saturday.
 

Last week, the New York Times ran a piece on Zhai Tiantian, a disgruntled Chinese graduate student turned martyr after the Stevens Institute of Technology in Hoboken, New Jersey, had him arrested for threatening to burn down the school. 

The news has been badly reported and hotlydiscussed in China for the past six weeks. Zhai seems a typical product of China’s education system, whose broken English, Chinese reasoning, and lack of social grace have mired him in personal and professional squabbles since arriving in the United States in 2003. He’s argued with his advisor, and in a TV interview accused his school of being racist.  The New York police had also arrested him for harassing a woman, which prompted the Stevens Institute of Technology to suspend him. 

Zhai’s appeals were in vain, and when he threatened the school the police came to arrest him, and he now faces deportation. Zhai’s fate hinges on how an American court of law interprets his words ‘I’m going to burn that building down.’  Zhai’s US advocates insist that he was speaking metaphorically, and the Chinese people are baffled by how a nation which protects freedom of speech could take such words so seriously.

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So, what was the fate of the Special Curriculum I’ve talked so much about this past month?

By February this year, it was considered a success. All the drama and the instability of the first semester had finally gone, and teachers could focus on teaching, and students on learning.　Students, parents, and teachers said they were all happy with the direction of the programme, which now had three components—oral and reading English classes, a fitness programme, and activities. I felt that overall these were making the students open and curious, healthy and confident.　　　

Local media reported on us, and students tried to transfer into the programme. This success also put pressure on other elite public high schools to start study abroad programmes, and two actually did. All Shenzhen students interested in studying abroad had now heard of the Special Curriculum.
 

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Today we have our first guest entry from Shanghai-based Bill Dodson, director of Strategic Analysis at TrendsAsia Ltd and author of the upcoming book ‘China Inside Out: 10 Irreversible Trends Re-shaping China and Its Relationship with the World’. Bill, who normally blogs at This is China!, will be contributing regularly for us and we’re happy to have him on board.

 
The last time I’d been in Beijing was in 2008, just a week before the much-hyped Olympics. And although last month I was back to attend a conference and trade show on clean energy, I made sure to make time to visit an area I’ve enjoyed taking in since 1999: Hou Hai.

Hou Hai was once a collection of traditional Beijing homes characterized by slate-gray facades and black-slate tile roofs. The Chinese call the neighborhoods of single story buildings hutong. The larger structures in the hutong are siheyuan, which have courtyards and were originally built to house the extended families of men that served the Emperor in one capacity or another. I fondly remember during the Communist Party’s 50th birthday in 1999 ambling with a Chinese friend through the close-knit neighborhoods, taking in the pungent smells, the raucous gatherings and the relaxed atmosphere of the winding alleyways. Now, the hutong at the lakefront have been turned into cheery pubs and restaurants with languorous outdoor seating for tourists and locals alike.

In 1949, the Communist Party divided the siheyuan into four or five apartments each to house as many families. An American who lives in the hutong near Hou Hai told me he receives electricity bills with four or five family names on it. He once asked one of his neighbors who one of the people was that was cited on the bill. ‘Oh, that guy died back in 1970-something,’ the neighbor answered matter-of-factly. 
 

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The Google-China spat has been out of the headlines for a while, but Google is now faced with the possibility that it could lose its Internet operating license for China. In response, the company has said it will cease the automatic redirect of mainland users to its site in Hong Kong.

Instead, according to reports, users in China will have to click a tab on Google’s China site if they decide they want to go to the Hong Kong page, where they can receive unfiltered search results.

The decision to redirect users to the Hong Kong site came in January after the company said that it would no longer follow the Chinese government’s censorship rules, a dispute that was brought to a head after the company said it had been at the receiving end of a number of sophisticated cyber attacks originating in China (the Chinese government has denied it had anything to do with the attacks).

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When Shenzhen Middle School’s students returned from summer vacation last year they found the school completely transformed. In less than a year, I’d annexed a considerable part of the school, and built myself an empire.I now had an English library, a cafeteria, two study halls, a coffeehouse, a media center (with three publications), a reading room, as well as offices and classrooms. In the self-delusion and overconfidence that came with my lightning success, I thought students would be impressed and applaud my achievement.　
 
Instead, students complained I hadn’t sought their approval before building the Special Curriculum. Online they wrote that Shenzhen Middle School was a democracy that was threatened by my tyranny. They complained that I’d monopolized public funding for the benefit of an elite minority (about ten percent of the school’s students planned to study abroad), and that the mission of a public school was to prepare students for the national examination, not for study abroad. They also demanded that I share Special Curriculum resources with all of the school: all Shenzhen Middle School students had the right to use the English library and take English classes taught by the American faculty, they wrote on-line.　

In this tempest of protest, I would make a series of decisions that ignited a firestorm. I implemented a selection process to ensure that students adhered to the programme’s philosophy, and students who were rejected considered the process arbitrary. (It was: a selection committee admitted students based on a five-minute interview.) The senior three study abroad students complained that I refused to help them. (This was also true: I didn’t like their attitude, and resented their criticisms; they thought my job was to secure them a place at a US university, and they believed scoring high on standardized examinations was enough.) And finally I had thrown out of the coffeehouse and threatened a study abroad student who was organizing an on-line petition against me. (This really was inexcusable, and the students demanded police action against me.)　
 

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OK, so when I said I’d follow up on the teaser article by Ray Tsuchiyama in Forbes earlier this month about what’s wrong with football in China, I admit that part of me hoped there’d be a quick and easy (and easy to write about) explanation for why North Korea managed to make it to the World Cup finals this year, but China couldn’t.

Of course there never was going to be a magic bullet for improving Chinese fortunes, but Tsuchiyama has come up with an interesting scenario under which the country’s soccer problem gets the full Communist Party treatment. For a start he ‘suggests’ the appointment of a soccer czar as part of a 10-year plan.

The second step is engaging young people. As Tsuchiyama notes: ‘According to a 2006 FIFA survey, China had 708,754 amateur and youth players from a population of 1.3 billion compared to 738,800 in England.  Obviously, there is room for youth soccer to grow in China. Wen (Jiabao) orders a “Great Leap Forward” soccer field construction program in every town and major city district throughout China.’
 

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