Not all news media is for sale in China

Much of the media coverage in China is apparently for sale, according to an article this week in the New York Times. The practice is pervasive with PR consultants divided on how much to embrace the practice.

How pervasive? Try $20,000 per page in in the Chinese version of Esquire, $4,000 per minute on state-run China Central Television and $1 per character in Workers’ Daily, the Communist Party’s newspaper.

Pay for play is certainly not limited to China. It’s usually much more obvious in the U.S. though and tends to be clearly labeled. Also, not all press in China blends advertising and editorial content so willingly.

At Olmstead Williams Communications, our clients want to be in The Wall Street Journal and on top wires such as Reuters and the Associated Press. There are no shortcuts to penetrate the high bars for their Chinese bureaus — or any other bureau. Only a story that merits the attention will do.

Sitting Out the China Trade Battles

By Keith Bradsher
The New York Times
Click here to view the full story

No American company would seem to have more to gain than General Electric from the Obama administration’s decision on Wednesday to accuse China, in a World Trade Organization case, of providing illegal subsidies to Chinese wind turbine makers.

Like other multinationals, G.E. acquiesced a few years ago to the Chinese government’s demand that it build a large wind turbine factory in China — only to then watch its market share plummet as China’s state-owned power companies steered contracts to homegrown wind turbine manufacturers. And now G.E. faces growing competition from those Chinese upstarts in its home market, the United States — even as a crucial G.E. wind turbine patent is about to expire.

But with so much to potentially gain from the administration’s W.T.O. case, what was G.E.’s reaction? Total silence. The company said it would have no comment on the matter.

It’s Time to Make R&D Tax Credit Permanent, Assure U.S. Remains World’s Top Innovator

By Brandon Edwards
The Tax Credit Company
As posted on The Huffington Post

This year China became the world’s second-largest economy. Experts are currently arguing over when China will overtake the United States as the world’s largest. Most predictions place that event between 2020 and 2027. The good news has been that the manufacturing juggernaut our own consumer markets largely created still depends on us for the development of new products, processes and technology. According to recent studies, however, this should not be taken for granted.

We now live in a truly global economy where it is not unusual to work alongside people in other countries. Labor off-shoring has moved beyond manufacturing and customer service support, extending to value-added research and development activities. This means we are not losing jobs just for our unskilled labor force, but for our higher-paid, more-educated workforce as well.

The R&D tax credit is a highly effective targeted tax incentive that helps drive the global competitive edge that we need. President Obama is set today in Cleveland to again propose making the research credit permanent along with increasing its value, costing approximately $100 billion over the next 10 years (see fact sheet provided on the White House Web site).

Although the program has been around for 30 years and enjoys bi-partisan legislative support, it has yet to be made permanent. The R&D credit has expired numerous times before being retroactively renewed. It has even lapsed for one year. The 2010 tax credit, widely expected to be renewed, has yet to be passed by Congress. The uncertainty of the credit restricts new projects, limits opportunities and curtails high-value job growth.

The other problem is that our R&D tax incentive lags behind other countries. According to a report by the Information Technology and Innovation Foundation, a non-partisan think tank, we are now ranked number 17 out of the top 30 OECD countries. That’s right. You will find us below China, India, Canada, Mexico, Japan, Korea, Spain, France and others. (We were No. 1 as recently as the 1990s.)

Besides contributing to global competitiveness, the return on investment is substantial. The R&D credit currently costs an estimated $7 billion a year, which is very little given its impact on the economy. A permanent credit coupled with just a 25 percent increase could boost real GDP by $206.3 billion, generate 270,000 manufacturing jobs and raise total employment by 510,000 within a decade, according to a 2010 report by the Milken Institute.

One of the great things about the R&D credit is that it does not discriminate. Companies of all sizes, from small businesses to Fortune 500, qualify. A research study performed by The Tax Credit Company of IRS data shows that although large corporations claim the majority of credits, the relative impact on small to mid-size businesses as a share of their total assets is significantly greater.

Bottom line: Strengthening the R&D credit is something all sides agree on. It is a priority for our economic future at one of the most uncertain times in our history. It’s time to put questions about the future availability of the credit to rest so that companies will stop discounting its value, take full advantage of it as a key driver of innovation and assure that the U.S. remains the world’s leader in research and development.