Causes must be de­ter­mined, in­for­ma­tion dis­closed

The China Post - - COMMENTARY -

The main­land Chi­nese gov­ern­ment needs to quickly as­cer­tain the causes of re­cent mas­sive ex­plo­sions while also dis­clos­ing per­ti­nent in­for­ma­tion.

There were huge ex­plo­sions at store­houses for chem­i­cal ma­te­ri­als in the port city of Tian­jin. The vol­ume of cargo han­dled there is one of the largest in the world.

The ex­plo­sions sent up a blaz­ing col­umn higher than a tower build­ing that tore through the area around the blasts. The crater left by the ex­plo­sions is 100 me­ters across, il­lus­trat­ing the sever­ity of the dis­as­ter. The ex­plo­sions killed more than 100 peo­ple, the blast waves de­stroy­ing the ex­te­ri­ors and win­dow­panes of build­ings lo­cated more than two kilo­me­ters away from the site.

A large num­ber of Ja­panese and other for­eign-owned cor­po­ra­tions op­er­ate in Tian­jin. The im­pact of the latest dis­as­ter is se­ri­ous, as il­lus­trated by the fact that Toy­ota Mo­tor Corp. has been forced to shut down oper­a­tions there. All ten­ants of a lo­cal Aeon Mall shop­ping cen­ter have also sus­pended busi­ness. Swift restora­tion work is re­quired.

Although the causes of the ex­plo­sions are still un­known, one the­ory is that the mas­sive blasts were trig­gered when fire­fight­ing teams sent to the site sprayed wa­ter on the chem­i­cal ma­te­ri­als stored there.

It has also been dis­cov­ered that a mas­sive amount of toxic sub­stances were kept near the dis­as­ter site. There are fears that the health of the peo­ple liv­ing around the site may be harmed.

Ques­tions can be raised about the steps taken by the main­land Chi­nese author­i­ties to heighten their con­trol of in­for­ma­tion. Alarmed by pos­si­ble un­rest, they are re­strict­ing in­de­pen­dent news­re­port­ing ac­tiv­i­ties by the media while also strictly reg­u­lat­ing the in­for­ma­tion re­leased on the In­ter­net. Even nearly one week af­ter the dis­as­ter, no in­for­ma­tion has been dis­closed about the de­vel­op­ments lead­ing up to the ac­ci­dent or the full ex­tent of the dam­age caused.

For­eign Money Could Flee

Un­der these cir­cum­stances, it is dif­fi­cult for Ja­panese-owned and other com­pa­nies to make im­por­tant de­ci­sions about their busi­ness man­age­ment, in­clud­ing when to re­sume oper­a­tions and which new sup­pli­ers to buy parts from. They will likely have dif­fi­culty bring­ing their eco­nomic ac­tiv­i­ties back to nor­mal, in­clud­ing the dis­tri­bu­tion of goods.

For­eign in­vest­ment is in­dis­pens­able for China’s eco­nomic growth and progress. If China is judged in­ca­pable of re­spond­ing to ac­ci­dents in line with in­ter­na­tion­ally ac­cepted stan­dards, for­eign cap­i­tal is bound to re­cede from the coun­try.

The same is also true of main­land China’s pol­icy man­age­ment re­gard­ing its fi­nan­cial mar­kets and other ar­eas. Last week, the Peo­ple’s Bank of China greatly re­duced the value of the yuan against the U.S. dol­lar. Ad­mit­tedly, there is no deny­ing China’s as­ser­tion that the yuan’s de­val­u­a­tion was in­tended to bring its value more in line with its pre­vail­ing mar­ket strength. How­ever, China’s abrupt and sharp de­val­u­a­tion is fun­da­men­tally dif­fer­ent from the prac­tices of de­vel­oped na­tions, which place an em­pha­sis on dia- logue with the mar­ket.

Con­se­quently, China’s latest ac­tion has shaken in­ter­na­tional mar­kets due to spec­u­la­tion that its econ­omy may have de­te­ri­o­rated so se­ri­ously that the coun­try must shore up ex­port ac­tiv­i­ties through a des­per­ate cur­rency de­val­u­a­tion.

In July, main­land China adopted strong-arm tac­tics for main­tain­ing stock prices when prices dropped sharply in the Shang­hai mar­ket and else­where at home. For in­stance, se­cu­ri­ties firms were urged to sup­port buy­ing of in­vest­ment trusts.

This can­not be said to be in line with the in­ter­na­tional fi­nan­cial or­der built on the trans­parency of poli­cies.

If it con­tin­ues to im­ple­ment self­serv­ing mon­e­tary poli­cies and in­for­ma­tion con­trol, main­land China will not be able to win the in­ter­na­tional trust be­fit­ting the world’s sec­ond-largest econ­omy. It is im­por­tant for China to keep im­ple­ment­ing mea­sures that fol­low in­ter­na­tional rules. This is an ed­i­to­rial pub­lished by The Yomi­uri Shim­bun on Thurs­day, Aug. 20.

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