Associated Press

Your daily roundup of the best of The Wall Street Journal’s China coverage:

Tibetan Protester Confirmed Killed in China: China confirmed one person was killed and said several others were wounded during clashes Monday with security forces in a restive Tibetan part of western Sichuan province. (Free)

Speeding Dragon, Hidden Debt Pile: China’s nominal growth was 17.5% last year, a blistering pace which makes many of the problems of debt and credit that trouble investors and hang over valuations for Chinese stocks appear more manageable. (Free)

Huawei India Expects Consumer Devices Sales to Grow: The Indian unit of China-based Huawei Technologies Co. expects its revenue from sales of consumer devices to increase 25% this fiscal year, helped by growing demand for products such as smartphones and equipment that help people connect to the Internet, a senior executive said. (Free)

Tension Over a Parade: For more than a decade, thousands of people have converged in Lower Manhattan each January to celebrate the Chinese Lunar New Year in a dazzling parade that sweeps through the streets in a swirl of colors, music, and sinuous giant dragons snaking around corners. But for the past few years one group has been noticeably absent: Falun Gong. (Subscriber Content)

Bloomberg News

Timothy Geithner, U.S. treasury secretary, is in Asia trying to win support from tougher economic sanctions on Iran over its nuclear program.

From Corruption Currents:

The U.S. sanctioned three companies Thursday for doing business with Iran’s energy sector, including China’s state-run Zhuhai Zhenrong Co., Iran’s largest supplier of refined petroleum products.

The sanctions, levied under the amended Iran Sanctions Act, come as the U.S. ratchets up the pressure on Iran in an effort to curb its nuclear aspirations. Tehran says its nuclear program is for peaceful purposes.

Secretary of State Hillary Clinton said Thursday that Zhuhai Zhenrong, Kuo Oil Pte., based in Singapore , and FAL Oil Co., based in the United Arab Emirates, are barred from receiving U.S. export licenses, U.S. Export Import Bank financing, and loans over $10 million from U.S. financial institutions

“The result of these actions has been an unprecedented international sanctions effort aimed at convincing Iran to change its behavior,” the State Department said. “The sanctions announced today are an important step toward that goal, as they target the individual companies that help Iran evade these efforts.”

The three companies all provided Iran with refined petroleum worth significantly more than the $1 million threshold allowed under U.S. law. Zhenrong brokered the delivery of over $500 million in gasoline to Iran between July 2010 and January 2011, Kuo provided over $25 million in refined petroleum to Iran between late 2010 and early 2011 and FAL provided over $70 million in refined petroleum to Iran over multiple shipments in late 2010, the State Department said.

The companies were not available for immediate comment.

Meanwhile, the U.S. is pressuring other countries to ban imports of Iranian oil. President Barack Obama recently signed into law a bill imposing sanctions on financial institutions that deal with Iran’s central bank, which brokers most of the country’s energy deals.

– C.M. Matthews, with contributions from Tennille Tracy

Agence France-Presse/Getty Images

Your daily roundup of the best of The Wall Street Journal’s China coverage:

Geithner Presses China to Curb Iran Oil Imports: U.S. Treasury Secretary Timothy Geithner urged top Chinese officials to greatly reduce China’s imports of Iranian crude oil, and explained to them details of a new U.S. sanctions policy against countries that don’t curtail their purchases. (Free)

Google Softens China Stance: Google is stepping up expansion efforts in China despite its confrontation with authorities there two years ago, in an acknowledgment by the Web-search giant that it can’t afford to miss out on the world’s biggest Internet market. (Subscriber Content)

China Inflation Slowed Again in December: Inflation in China slowed slightly in December, but was marginally above market expectations. The fifth straight month of moderating inflation gives Beijing more room to implement easing measures. (Subscriber Content)

Can You Say ‘WAH-wey’? Low-Cost Phones Find Niche: Cheap devices made by Chinese manufacturer Huawei Technologies Co.—often pronounced WAH-wey in the U.S.—which have helped propel the rapid adoption of smartphones in low-income households and introduce a tier of the U.S. population to the Internet.(Free)

Fund Managers Warm to ‘Dim Sum’: More global fund managers are venturing into the nascent market for yuan bonds sold outside mainland China, a trend that market participants hope will add liquidity to a market central to Beijing’s effort to expand the use of its currency. (Subscriber Content)

Reuters

A protester holds a placard outside the flagship store of Dolce & Gabbana in Hong Kong January 8, 2012.

People in Hong Kong went to the streets on Sunday, but unlike previous mass rallies in the city, this one wasn’t about politics or democracy. The cause: The right to take photos in front of luxury retailer Dolce & Gabbana.

More than 1,000 people showed up outside the Italian brand’s flagship store on Canton Road after the retailer reportedly prevented people taking pictures of its store front earlier in the week. The protest forced the store to shut at 3 p.m. as the crowds swelled.

The rally was organized on Facebook after local newspaper Apple Daily reported that Hong Kong citizens were banned from taking pictures of window displays, even if the photos were taken from the public street. Apple Daily also posted a video that showed security guards telling journalists to stop snapping pictures from the sidewalk.

According to the report, representatives of the retailer allegedly defended its policy, arguing that it was trying to protect its intellectual property even though the pictures were taken from the public street. However, the defense was undercut further when the company said foreign and mainland Chinese tourists were exceptions to the photo ban.

Why the company’s security drew the line between local Hong Kongers and mainland tourists is not exactly clear, but some have speculated it has less to do with copyright infringement and more to with placating high-rollers from China.

See more in this story at Scene Asia

Your daily roundup of the best of The Wall Street Journal’s coverage:

China Property Malaise Spreads to Furnishings: China’s property prices fell for the fourth straight month in December, adding further pressure on Chinese consumers at a time when both the domestic and global economy increasingly depend on their spending. (Subscriber content)

U.S. Lawmakers Ask for Huawei Probe: Six U.S. lawmakers have asked the State Department to investigate whether Chinese telecommunications-equipment maker Huawei Technologies Co. has violated U.S. sanctions on Iran by supplying it with sensitive communications technology that has been used for censorship. (Subscriber content)

China to Ease Yuan Clearing: China is developing a payment system that will make it more efficient for banks to clear yuan funds across its borders, in another move aimed at promoting the global use of the Chinese currency. (Subscriber content)

Audit Shows Local Financing Flaws: Chinese government auditors said they found more than 530 billion yuan (about $84.2 billion) worth of irregularities in local-government debt, in a potentially revealing but incomplete look at an increasingly important part of the nation’s financial system. (Subscriber content)

Fewer Hong Kong Property Deals: With the market volatile and mortgage rates rising, the number of property transactions in Hong Kong fell to a five-year low in 2011, the city’s largest real-estate agency said. (Free)

China Telecom to Launch U.K. Mobile Services: China Telecom plans to launch mobile services in the U.K. in the first quarter after securing a network deal with British mobile operator Everything Everywhere Ltd., as the Chinese company seeks to drive growth in its mobile business and tap overseas markets. (Subscriber content)

Apple Plans IPhone 4S Launch: Apple plans to launch its newest iPhone model in China on Jan. 13. (Bottom of article.) (Subscriber content)

Imaginechina

Visitors look at a model of the Beidou navigation system in Shanghai in May.

Your daily roundup of the best of The Wall Street Journal’s coverage:

GPS Rival Goes Live: China has begun operating a homegrown satellite navigation service that is designed to provide an alternative to the U.S. Global Positioning System and, according to defense experts, could help the Chinese military to identify, track and strike U.S. ships in the region in the event of armed conflict.

Milk Producer Reacts to Scare: China’s largest dairy company by sales vowed on Tuesday to increase oversight of its suppliers after inspectors found elevated levels of a carcinogen in a batch of its milk, a finding it blamed on spoiled cow feed.

China Cuts Rare-Earth Quota — Sort Of: China unveiled an initial cut of 27% in its quota for rare-earth exports for next year, but said its full-year 2012 limits for the key materials used to make everything from defense systems to turbines to iPhones would likely be unchanged amid weakened demand.

Huawei CEO Divulges Leadership Structure: Huawei Technologies Co. has adopted a system in which senior executives take turns acting as the company’s top administrative official for daily operations, its reclusive founder and top executive wrote in an internal message to employees.

China Experiments With Market Prices for Natural Gas: China will test natural-gas-price reforms in select locations, in the latest in a string of moves intended to help rebalance China’s economy and encourage its industries to become less energy intensive.

H&Q Plan Private-Equity Fund: Hong Kong-based H&Q Asia Pacific is planning to raise its first yuan-denominated private-equity fund in mainland China, said Chairman Ta-lin Hsu, joining a slew of foreign investment managers seeking to tap the country’s growing wealth.

In this year of tight monetary policy, China’s commercial banks have been kept on a tight leash, right? Not exactly. For some Chinese banks, it’s been like 2009 all over again.

That was the year Beijing’s economic stimulus really swung into gear, and new lending by the banking sector roughly doubled from the previous year.

Who got the hall pass this time around? China’s three policy banks – China Development Bank, Agricultural Development Bank of China and the Export-Import Bank of China.

We don’t actually know how much the banks have lent so far this year. They aren’t listed and so don’t file quarterly earnings reports. But they do issue bonds. Unlike normal banks, the policy banks can’t accept deposits (in most circumstances) and instead raise most of their funds by selling bonds — and that bond issuance has ballooned.

China Development Bank Corp., the biggest of China’s policy banks, has raised 959.3 billion yuan ($151 billion) by selling bonds domestically this year, up 34% from 714.4 billion last year, according to data from Chinabond.com, an official Web site for bond users.

Its smaller cousins posted even bigger percentage increases. The Export-Import Bank of China more than doubled the amount it raised, selling 378.7 billion yuan worth of bonds, up from 182.5 billion last year. Agricultural Development Bank raised 447.3 billion yuan after issuing 280.0 billion yuan’s worth last year, up 60%.

The policy banks were set up in the mid-1990s to help the major commercial banks commercialize. The commercial banks – Industrial & Commercial Bank of China, Bank of China, China Construction Bank, and Agricultural Bank of China – had been used and abused by the central and local governments alike as off-balance-sheet piggy banks. In order to give the banks a fresh start, governments were told the banks would cease to make loans based on political decisions. The policy banks were set up to fill the gap where government directed lending was deemed necessary.

The policy banks have since aligned themselves very closely with the government agenda. The swelling bond issuance and ensuing lending would suggest a greater reliance in Beijing on their in-house financiers.

CDB in particular has played a major role in supporting local government infrastructure projects – accounting for about 17% of all loans made by banks to local government investment vehicles – and could play a useful role supporting low-income housing construction, a high-priority for the government but one struggling to attract funds. The Agricultural Development Bank, meanwhile, is at the forefront of trying to further stimulate development in rural areas and bridge the income divide between urban areas and the countryside.

But the rise in policy bank borrowing also suggests that the government just doesn’t trust the commercial banks to get credit to those corners of the economy that genuinely need it. The commercial banks are certainly not short on cash – Beijing just doesn’t let them lend it. The reserve requirement ratio – the amount of cash banks need to put aside as a share of loans – has hovered around 20% for much of the year, and new lending by banks this year is likely to be largely the same as last year.

But the commercial banks lend along commercial lines. Artificially depressed deposit and lending rates might distort their decisions and result in a less than an ideal allocation of capital throughout the economy, but the commercial banks are keeping to the script. Until the next wave of meaningful financial reform comes to China, the wholly state-owned and controlled banking sector might be making a comeback.

– Dinny McMahon and Wang Ming

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Your round up of the best of The Wall Street Journal’s China coverage over the weekend:

Huawei to Scale Back Business in Iran: Chinese telecom-equipment maker Huawei Technologies will scale back its business in Iran, following reports that Iranian police were using mobile-network technology to track down and arrest dissidents. (Subscriber Content)

Commodities Lose Allure: Increased speculation that a drop off in demand from China could herald the end of the boom in commodities prices is leading investors to search out more exotic plays, the prices of which are not necessarily linked to Chinese growth. (Free)

IMF Official Cites ‘Gaps’ in China Data: Chinese regulators need to improve the data they use to assess whether their banks could withstand a sudden economic downturn, the IMF’s director of monetary and capital markets said. (Subscriber Content)

China Deploys Patrols Along Mekong River: China, Thailand, Laos and Myanmar launched armed joint patrols along the Mekong River in response to the killing of 13 Chinese sailors in attacks on two cargo ships. (Subscriber Content)

This comes as China for the first time passed the U.S. to become the world’s biggest personal-computer market in August.

“China has become a large and growing smartphone market that no hardware vendor, component maker or content developer can afford to ignore,” said Neil Mawston, an analyst with market research firm Strategy Analytics.

China shipped a record 24 million smartphones—devices that allow users to surf the Web, make phone calls and also watch videos– in the third quarter compared to 23 million in the U.S., data released Wednesday by Strategy Analytics showed.

U.S. smartphone shipments dropped by 7% in the three months ended Sept. 30 as top mobile vendors Nokia and Samsung Electronics placed their bets on China and India, unveiling low-cost smartphones geared toward emerging markets last August.

The U.S. still remains the world’s largest smartphone market by revenue.

Competition continues in the smartphone space, as the market rose to an estimated 110 million units in the second quarter, up from 62.4 million a year earlier, according to Strategy Analytics. Finnish handset maker Nokia led China’s smartphone market with 28% of the market in the third quarter, followed by Samsung’s 18%.

China’s smartphone shipments grew by 57% in the third quarter. This spike is traced to Chinese companies like Huawei Technology and ZTE which manufacture hundreds of millions of cheap phones a year, many low-cost Android models. Operators in the region also subsidize high-end phones like Apple’s iPhone for customers in exchange for one to two year long contracts, making smartphones an enticing choice.

– Linda Blake

The telecommunications equipment maker has had trouble making inroads in the U.S., where Huawei has been growing but has also hit road blocks. U.S. authorities have challenged the Chinese company’s efforts to buy American companies as well as its bid on contracts to provide network equipment to major carrier Sprint Nextel on so-called security concerns, despite the company’s protests that such concerns are baseless.

“None of the concerns are legitimate,” Mr. Roese said, speaking at AsiaD, a conference hosted by All Things Digital, a publishing partner of The Wall Street Journal. “But perception is sometimes reality in people’s minds.”

Huawei was a sponsor of the conference.

Huawei plans to fight such negative perceptions — including persistent rumors that it is tied to the Chinese government — through innovation, Mr. Roese said.

“You can prevent or avoid certain companies until the technology they develop is so far superior to what you have at your disposal currently that” continuing to avoid those companies becomes “a competitive disadvantage.”

The executive said Huawei “almost at that point. We are clearly able to out-innovate our competitors,” he said, alluding to the company’s fast rise to become the world’s second-biggest telecom equipment provider after Sweden’s Ericsson. He added that Huawei has a “highly globalized” workforce and a large presence in the U.S., which works to its advantage.

Huawei has been working to expand its business to include enterprise solutions and to raise its profile by making a push to sell smartphones under its own brand. The company, which is privately held, has also taken steps to appear more transparent to its critics, including disclosing more information about its corporate structure in its annual reports, devising ways to have third-party security checks on its products, and inviting U.S. authorities to conduct an investigation of its operations. But the efforts have not yet been successful.

Ultimately, Mr. Roese says “there’s a big educational process to convince people the company is legitimate.”

Reuters

China’s top private company, according to the All-China Federation of Industry and Commerce.

China Inc. boasts some of the biggest corporate names in the world today: China Mobile Ltd., PetroChina, Industrial & Commercial Bank of China Ltd, just to name a few. But while the commanding heights of the world’s second-largest economy are still firmly in the hands of China’s state-owned enterprises, who are the overachievers in the private sector?

Two recent surveys try to answer that question. On Wednesday the China Europe International Business School released its eighth annual list of China’s top 100 private listed companies, after surveying the 2010 operating revenue of 1502 firms listed in Hong Kong, the U.S. and mainland China. And in late August the All-China Federation of Industry and Commerce issued its 2011 edition of China’s top 500 private enterprises, also ranked by operating revenue (pdf in Chinese).

The definitive word on who is the greatest of them all probably goes to the ACFIC, a quasi-government industry group. With the private sector’s great and good – many of whom are closely held – among its members, it can get the inside word on how much private firms are actually making. Still, some firms are notably absent from the list such as banks and financial institutions.

Ping An Insurance (Group) Company of China Ltd., which tops the CEIBS survey, doesn’t make an appearance on the ACFIC list. Instead ACFIC ranks telecommunications-equipment maker Huawei Technologies Co. as top dog, although its private status has been questioned by governments in the West wary of its seemingly close relationship with Beijing. Steelmaker Jiangsu Shagang Co. Ltd. comes in at number two on the ACFIC list, and electronics and home appliance retailer Suning Corp. comes in third.

CEIBS ranks Suning’s listed unit, Suning Appliance Co. Ltd, second.

The CEIBS survey is limited in that it only looks at listed firms, but its value comes in comparisons it makes with listed state-owned firms. According to CEIBS, China has 8.4 million private enterprises accounting for 74% of the country’s total number of firms. But if the earnings of publicly traded firms are anything to go by, state-owned firms still dwarf the private sector in size with the average listed private company generating only about 25% the total net profit of an average listed state-owned firm. However, private firms saw faster revenue growth as a group — 21.46% against 18.88% for state owned firms.

The thing that jumps out from both lists is the number of names from the consumer and retail sectors, areas in which state firms play less of a role. Home appliance makers Qingdao Haier Co. and Gd Midea Holding Co., and dairy producer China Mengniu Dairy Co. made the top 20 of the CEIBS list, and car company Zhejiang Geely Holding Group Co., food processor Yurun Group and beverage maker Hangzhou Wahaha Group Co. were in the ACFIC’s top 20.

Few are household names outside of China yet. But as a primer on the Chinese brands that could one day be advertising on television screens and magazine in Europe and the U.S., the lists offer an interesting snapshot.

– Dinny McMahon

Agence France-Presse/Getty Images

Inter Milan’s Macedonian forward Goran Pandev (Back) is tackled by AC Milan’s defender Gianluca Zambrotta during a serie A football match in April.

Huawei Technologies, the enigmatic Chinese telecom-hardware maker that has grown into a top rival for the likes of Sweden’s Telefon AB L.M. Ericsson, also aims to expand the consumer side of its business by selling more mobile devices like phones and tablets.

To boost that effort, Huawei on Wednesday announced a new marketing move: The company will be the sole sponsor of a soccer match in Beijing between two top Italian teams next month, to be held in the iconic “Bird’s Nest” stadium that was built for the 2008 Olympics.

The 2011 Italian Supercoppa, which pits A.C. Milan against Inter Milan, will have “a potential viewership of hundreds of millions around the world,” Huawei gushed in a statement.

The move, Huawei’s first international sports sponsorship deal, reflects the company’s effort to build its brand recognition among consumers, instead of just among network operators.

The sponsorship “is the start of Huawei’s diversified marketing in the future,” Victor Xu, Chief Marketing Officer for Huawei’s device business, said at a news briefing in a room inside the Bird’s Nest. Huawei will run a related marketing campaign for at least 6 months, he said.

Separately, Huawei may budget millions of dollars for marketing in the U.S. next year, Mr. Xu said. He didn’t elaborate, but the remark shows Huawei’s ambition to become a major handset vendor worldwide.

That goal so far remains distant. Huawei occupies a small corner of the mobile phone market, though it has expanded its product line to include tablets and smartphones using Google’s Android operating system. The company is also increasingly selling devices stamped with the Huawei brand, instead of just the brand of the mobile carrier selling the phone.

End-users bought about 7 million Huawei mobile devices in the first quarter, giving the company a 10th-place global market share of 1.6%, according to market-research firm Gartner. Finland’s Nokia ranked first with a 25.1% share of the total 427.8 million global unit sales, Gartner said.

Huawei has lately joined other companies such as Samsung Electronics and BlackBerry-maker Research In Motion in offering tablets to compete with Apple’s popular iPad, announcing in June a new 7-inch tablet device called the MediaPad that runs Android and will go on sale in the third quarter.

Mr. Xu on Wednesday said Huawei is likely to ship about 20 million Android smartphones this year, above its initial target of up to 15 million units. Mr. Xu early this year said Huawei shipped more than 3 million Android smartphones in 2010.

Huawei is likely to ship over 60 million mobile phones this year and about 170 million units including all devices, he said. Huawei last year shipped over 120 million devices.

While it remains to be seen whether Huawei can win over consumers with its sponsorship of the August 6 soccer match, it’s safe to say Inter Milan has its work cut out for it in winning over the Beijing crowd. A.C. Milan is widely regarded as the most popular soccer team in China.

– Owen Fletcher. Follow him on Twitter @owenfletcher

Mike Clarke/Agence France-Presse/Getty Images

A group of protestors from SACOM (Students and Scholars Against Corporate Misbehaviour) demonstrate outside the Foxconn annual general meeting (AGM) in Hong Kong on May 18, 2011. Foxconn is the trade name for Taiwan’s Hon Hai Precision Industries, one of Apple’s primary suppliers in China.

A workers rights group that accused Hon Hai Precision Industry of neglecting a ventilation problem in its factories that may have contributed to the Chengdu explosion last week released video footage Tuesday of workers covered in silver-gray dust that the group says illustrates their earlier allegations against the giant electronics manufacturer.

Students & Scholars Against Corporate Misbehavior, or Sacom, a Hong Kong-based group, asserts that the Hon Hai explosion could have been prevented if the company heeded earlier warnings about dust inhalation at its factories. It posted a video on YouTube filmed before the accident that showed a group of men who Sacom said work at Hon Hai’s Chengdu facilities with silver-colored dust on their face, hands and clothes.

Though Sacom’s warnings to Hon Hai, which also goes by the trade name Foxconn, didn’t mention dangers of deadly explosions, the group’s accusations did point to dust and ventilation issues that raise questions over whether the accident could have been prevented, and whether factory conditions in its other facilities may need to be corrected.

A Hon Hai spokesman on Monday accused Sacom of “seeking to capitalize on the tragic accident” misrepresenting the company’s “commitment to the health and safety of our employees.” In a statement Tuesday after the Sacom video was made public Hon Hai said that “while workers are provided with the necessary safety equipment,” the company “is always working to make improvements.” The company said that its polishing workshops have the highest concentration of aluminum dust, but the actual polishing work in those facilities is done by “high tech robots,” so employees only come into contact with product parts “after the polishing work has been carried out.”

“We are addressing this challenge through improvements in workshop ventilation and the air-conditioning system and further enhancements to policies and practices,” the statement said. “Should the ongoing investigation identify any specific areas where enhancements could be made, we will not hesitate to immediately implement those measures.”

Experts agree that as far as explosion concerns go, industrial combustible dust is a common problem in China. Zhong Shengjun, associate professor at the Industrial Explosion Protection Institute of Northeastern University in Shenyang said that in theory, dust problems can be avoided, but that “current technology” hasn’t “fully resolved the problem” and it would take a considerable investment by manufacturers to try to  do so, potentially costing more than production equipment. Mr. Zhong said there were five polishing explosion accidents in China last year that resulted in several deaths.

China and the U.S. are near equals when it comes to their contribution to global manufacturing. But the U.S. appears far more forthcoming in its documentation of industrial accidents attributed to combustible dust, and active about reducing the incidents.

A search of combustible dust accidents recorded by the U.S. Occupational Safety and Health Administration lists more than 100 accidents since 2002, including more than 10 deaths. That tally doesn’t pick up every incident. Notably not included: a 2008 explosion at an Imperial Sugar Co. plant in Georgia killed 14 people.  And over a longer period, far more have died.

China’s State Administration of Work Safety has warned about combustible dust. In fact, its most recent warning was posted to the administration’s website on May 5, not long before the Foxconn explosion.

China doesn’t ignore the fact that the dust has caused deaths but the work safety administration’s website appears to list only three incidents: Five people were killed and 22 injured in a Zhejiang province metallurgical works early in 2011; a February 2010 explosion of corn dust at Qinhuangdao Lihua Starch Co. killed 20 and injured 48; and, in 2007 another five people were killed in a Shanghai facility.

Language in the Chinese government statements, including an almost identically worded one in March 2010, reads like a political campaign. They note which bureaus are involved in efforts to reduce the risk and say improvement needs to be made in educating manufacturers. The statements offer scant detail manufacturers might use to minimize the risks.

In English, various government and private websites around the world, including Osha’s, provide in-depth detail about how to reduce the likelihood of an accident, explaining how sparks can cause dust to ignite and offering pointers about what to do in the case of an explosion. Sacom said its video was taken in March, two months prior to the explosion, but at a different polishing plant in Chengdu than the site of the accident. The group, which hasn’t been inside of Hon Hai’s workshops, said the workers in the video were responsible for polishing iPad cases, and that the dust on their bodies “affirms Sacom’s criticisms that workers are working under adverse environment with poor ventilation and inadequate protective equipment for workers.”

“The tragedy can be averted if Foxconn and Apple have strictly complied with the local laws on work safety and implemented correction action plan afterwards,” Sacom said in a written statement. The video was later removed pending an edit that the group said would better protect the workers’ identities.

Geoffrey Crothall, communications director at another labor rights group, China Labour Bulletin, said the conditions shown in Sacom’s video appear to be “similar to those faced in gemstone processing and jewelry factories in southern China where workers have to cut and polish raw materials all day and are often covered in mineral dust.”

Mr. Crothall agreed with Sacom’s concerns about the workers’ health, adding that poor ventilation standards in factories throughout China have led to high rates of lung disease. “Lung disease is by far the most prevalent occupational disease in China, with more than 10,000 cases officially diagnosed each year, and there is obviously a danger that these Foxconn workers could be armed by breathing in aluminum dust over a prolonged period of time,” he said.

–Loretta Chao and James T. Areddy, with contributions from Kersten Zhang