Visa vs Union Pay: win China or win the world

We live on credit cards. Or debit cards. We hold one or more those plastic keys to deal with our daily transactions. Going overseas? No problem. The multinational credit card organisations can settle all the currency issues for you, with only 1% - 2% currency conversion fees of course. The logos on the right bottom of your card gurantee everything, no matter it's Visa or MaterCard. Easy. Quick. Safe.

While I was talking about how the major international credit organastaions deal with foreign exchange, there is a domestic credic card organisation in China called UnionPay, or 银联 in Chinese. This generous organisation does not charge a cent for foreign exchange commission. Isn't that sweet? However this organisation only issues cards in China and a limited number of international banks. This is a strategy of its global expansion, especially most of the transcation systems around the world is controlled by Visa and MasterCard. (Yeah they don't even accept American Express and JCB!)

Domestic credit card transcation with China is a different story. Foreign card organisations are not permitted to issue credit cards in China by themselves. They have to affiliate with UnionPay, which is the only legal transcation system in China. Therefore, most credit cards issued in China, if not issued by UnionPay alone, are co-branded card with two logos on.

The only exemption is the 2008 Olympics credit cards issued by Bank of China, which had only the logo of Visa on them. It was because UnionPay was not spousor of International Olympics Committee, whose logo then is not permitted to be printed on commercial products with the five circles.

(Images from the website of Bank of China. Copyright remains to BOC and other parties)
So both Visa and MasterCard, (Yes I did try to include JCB and American Express) issued a lot of those kinds of credit cards in China. Holders need to pay through UnionPay system if it is a domestic transaction in China. They could choose whether to use UnionPay or the other system when they were making an international payment.

Not anymore.

June 2010, Visa International regulated the international transcation for Chinese co-branded cards. It told the banks and merchants to use the Visa system (VisaNet) rather than UnionPay system in the transaction. Failure to do so will result a fine of $50,000 for the first violation and $25,000/ month for further violations.

The spokesperson of Visa China denied their attempt of banning UnionPay international transaction. They say every card starting with 4 is the property of Visa Inc. and they are not banning the usage of credit cards starting with 62, which are solo-branded cards from UnionPay. 'We are concerned about the safety of our customers.' They said.

Observers pointed out that the aim of Visa is to seek for a more open Chinese card market. Therefore they are threatening UnionPay and Chinese authority behind it. MasterCard and JCB will not follow on.

Nanjing: Compulsory Pay Rise

If you hava a business in Nanjing, the ex-capital city of China, you now have to increase your employees' salary by at least 6% annually. If you are not, you are faced with a fine from ￥1,000 to ￥10,000!

Let's first look at how strict the new regulation is. Wow you will be fined if you don't do so! So how much is ￥1,000?

Well, as an average indicator, 1 AUD = 6 RMB.

So, if I have a business, I will pay the fine rather pay more to my employees. Who cares!

You know, as Chinese Consitution indicates, everyone is equal, including working class and peasant farmers. Their rights do not need to be protected because it is THEIR country. Who would offend? What the Chinese law did say is, somebody is more equal than others. Every enterprise is owned by the PEOPLE. Why would we have laws against our own enterprises? We need to become rich to liberate the whole world.

So the union of workers, which is a compulsory organisation in each enterprise, stands for the interest of the PEOPLE, I mean, PEOPLE who own them. Salary negotiation? WHY? Don't be selfish comrades.

Communism comes to China?

A recent strike in China is unexpectedly reported as front page news in China's state-controlled media. Thousands of workers from Honda's factories are now on strike for higher wages. The factories, perhaps 4 of them, are then forced to halt production. Two leaders of this strike were fired by Honda, only to burn the fires among the workers.

China, as a communism country, does not really guarantee its citizens the rights of strike. Strike was considered as a very 'unharmony' component of this fragile society. They are not allowed to appear on media. The organisers of strikes were often questioned or even arrested by the police. A famous case was a proposed Taxi driver strike. The organiser was located by the police through an online IM software and then sent to jail.

However this time, the state media put the strike of Honda factories workers on the front pages, on the top of Korean crisis and chain-subsiding in Foxconn. The report said Chinese workers earn only 1/50 of their Japanese colleagues in Honda's factories, only are able to live on basic standards.

The salary discrimination in China has been a long unwritten rule among foreign-owned companies. Employees holding foreign passports or residencies generally earn more than Chinese local employees and enjoy more privileges. One explanation of this phenomenon is those foreign employees having higher basic salary rates in their home countries. This may not be a reason, but states the truth. Legal minimum wage in China is so low that it can barely cover basic living expenses. The high inflation rate in China brings a tougher life for those living on basic wages.

And the workers union in China is only a department distributing free condoms (implementing one child policy) and movie tickets (propaganda). They are usually controlled by either government or even employers. It does not stand for the interest of workers, not to mention in salary bargaining. The workers have no position in negotiating their pay. Because they are always find people willing to do the same work with less wage demand.

That's the secret of China's export-leading economy. That's why people in western countries can buy cheap Made in China goods.

However the era of cheap labour in China is about to come to an end, at least in South China. Governments are more strict about regulations of minimal wages, which is increasing more frequently than before. People are more aware their rights and know how to ask for it. So today, they are on strike. Perhaps this is how communism comes to China, for real, this time.

Volunteer Teacher Forced to Leave China

Eckart Loewe, or better known as his Chinese name, 卢安克, is a German volunteer teacher in remote South China country village. Having been teaching in China for almost 10 years, he was interviewed by the Chinese state-owned CCTV and became known to the public. The people in China admired his contributions to the education of kids in villages and described him as a hero of the nation. He can speak fluent Mandarin, which is described ‘like poem’ by some people. He operated a blog in Chinese focusing the Education in China and problems of ‘left behind children’, rural kids whose parents migrate to city to make money.


However Mr Loewe is forced to leave China due to his visa expiry soon. China has very strict immigration laws. It issues visa with short stay length and renew times limitation. Mr Loewe obtained his visa four years ago. Now he is not able to renew or obtain a new visa onshore, which means he has to arrange his visa offshore, perhaps in Germany. He also tried to apply for a Chinese citizenship but failed. China only allows naturalization when a person makes ‘special contribution’ to China or has close relatives as Chinese citizens. Apparently the government was not convinced that what Mr Loewe did was a ‘special contribution’ to the whole nation. Mr Loewe was forced to remove all the entries from his blog and leave a message stating that he is neither a credentialed teacher nor a volunteer.

The Chinese Internet community has a very strong reaction toward this news. The story was interpreted as; Mr Loewe’s blog touched a sensitive issue in China (left behind children) and annoyed the authority so he was forced to leave. People blame the government for this decision and wrote hundreds of articles online to criticise the government. Then these articles were shared on SNS websites so more people believed it was the government which to blame. (Click here)

I admire what Mr Loewe did to the Chinese kids and his contribution to local community. However I believe this time it is not the government which should be blamed. The immigration law is very clear about visas and citizenships. The government has no position to change or break the law just to appeal some interest of some people. (However I believe the law should be modified under proper procedures.) Moreover, the government should regulate the education system by issuing credentials to qualified teachers. Kids in primary school should not be taught by teachers without credentials. In this case, Mr Loewe is not holding any form of credential which allows him to teach in China. His teaching activities have breached the law and regulations.

Can you image a Chinese citizen coming to Australia, volunteer for the community for four years without any kind of certificates, and then asked for a citizenship? Go home. Out of question. Then why should people blame Chinese government for doing same things?

It should be pointed out, that Chinese government should put more money into education system. Moreover, the whole exam-directed system should be changed. I think they are why people are so angry in Mr Loewe’s case. Only by achieving those, kids in rural communities can enjoy the same rights with kids in the city.