《The Guardian》:Budget will cost 1.3m jobs - Treasury

Budget will cost 1.3m jobs - Treasury

Exclusive: Leaked government data concerning next five years shows hidden costs of austerity drive
Chancellor of the exchequer George Osborne holds Disraeli's original budget box
Chancellor of the exchequer George Osborne holds Disraeli's original budget box. Photograph: Peter Macdiarmid/Getty Images
George Osborne's austerity budget will result in the loss of up to 1.3m jobs across the economy over the next five years according to a private Treasury assessment of the planned spending cuts, the Guardian has learned.
Unpublished estimates of the impact of the biggest squeeze on public spending since the second world war show that the government is expecting between 500,000 and 600,000 jobs to go in the public sector and between 600,000 and 700,000 to disappear in the private sector by 2015.
The chancellor gave no hint last week about the likely effect of his emergency measures on the labour market, although he would have had access to the forecasts traditionally prepared for ministers and senior civil servants in the days leading up to a budget or pre-budget report.
A slide from the final version of a presentation for last week's budget, seen by the Guardian, says: "100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts."
The job losses in the public sector will result from the 25% inflation-adjusted reduction in Whitehall spending over the next five years, while the private sector will be affected both through the loss of government contracts and from the knock-on impact of lower public spending.
The Treasury is assuming that growth in the private sector will create 2.5m jobs in the next five years to compensate for the spending squeeze. Osborne said in last week's speech that tackling Britain's record peacetime budget deficit would help keep interest rates low and boost job creation. "Some have suggested that there is a choice between dealing with our debts and going for growth. That is a false choice." However, investors are increasingly nervous about the lack of growth in the world economy. The FTSE 100 fell more than 3% yesterday as fresh jitters hit confidence.
The opposition and trade unions said the unpublished Treasury forecasts backed up their argument that the unprecedented scale of the cuts in public spending would hamper Britain's recovery from the deepest and longest recession since the Great Depression.
Alistair Darling, the shadow chancellor, said: "Far from being open and honest, as George Osborne put it, he failed to tell the country there would be very substantial job losses as a result of his budget.
"The Tories did not have to take these measures. They chose to take them. They are not only a real risk to the recovery, but hundreds of thousands of people will pay the price for the poor judgment of the Conservatives, fully supported by the Liberal Democrats. It shows the risks they are prepared to take. If they get it wrong, those people losing their jobs will not get back to work."
Osborne said last week that his newly appointed panel of outside experts – the Office for Budget Responsibility – believed the jobless rate would soon start to improve. "The unemployment rate is forecast by the Office for Budget Responsibility to peak this year at 8.1% and then fall for each of the next four years, to reach 6.1% in 2015," he said. This forecast was fleshed out in the Treasury's Red Book, which says: "The decline in employment appears to be coming to an end and we expect a modest recovery in employment in the second half of 2010."
From next year, officials believe that stronger growth and a rising working population will lead to an acceleration in jobs growth. Over the five-year period from 2010 to 2015, the Treasury assumes that employment will rise from 28.8m this year to 30.1m in 2015, despite the loss of jobs caused by spending cuts.
The TUC general secretary, Brendan Barber, said: "With Treasury figures revealing that spending cuts will hit private sector jobs harder than those in the public sector, it is absurd to think that the private sector will create 2.5m new jobs over the next five years."
"This is not so much wishful thinking as a complete refusal to engage with reality. Much more likely are dole queues comparable to the 1980s, a new deep north-south divide and widespread poverty as the budget's benefit cuts start to bite. Many will find that a frightening prospect."John Philpott, chief economist at the Chartered Institute for Personnel and Development, said: "There is not a hope in hell's chance of this happening [the creation of 2.5m new jobs]. There would have to be extraordinarily strong private sector employment growth in a … much less conducive economic environment than it was during the boom."
The CIPD has estimated that there will be 725,000 jobs lost in the public sector alone by 2015, although Philpott said the number could be lower if the government succeeded in pushing through pay cuts.
He added that Osborne was expecting a similar rise in employment over the next five years to that seen during 13 years of the last Labour government, when around a third of the employment growth came from the public sector. "This is a slower growth environment and there will be no contribution from the public sector."
Last night David Miliband, one of the candidates for the Labour leadership, said: "This proves what we feared but the government kept secret. The budget will slash jobs not create them, and the least well-off will pay the highest price."
Andy Burnham, another of the Labour leadership candidates, said: " The human cost of Osborne's budget is now clear, despite his best efforts to hide it."


G20峰會要求增安全資本 英銀行需再加1300億鎊常設資金

(本報訊)正在加拿大參加G20峰會的各國領導同意進一步提高銀行安全資本,由此英國銀行常設資金將再增加1300億鎊,平均每戶英國家庭約須承擔 5,200鎊。 世界各國領導及財長在多倫多G20峰會上通過,今後各國銀行的資產負債表上應保持足夠資本,抵擋雷曼兄弟公司2008年倒閉帶來的創傷。

英國財相歐思邦也 已為該決定背書。 根據此前國際銀行協議《巴塞爾銀行監管委員會I及II》,各銀行應持有至少8%的安全資本,其中大部分應由銀行權益資本,即銀行本身投資者所投入資本金組 成,由此銀行可在破產倒閉時有一定資金作為緩衝。是次加拿大峰會很可能要求各國銀行進一步提高安全資本率,以更好地限制各銀行為獲利而進行過度擴張。 G20峰會指出:「新條例全面實施後,銀行安全資本將顯著提高,且資本質素也將明顯改進。這將使各銀行無須政府幫助,就有能力抵禦金融危機下各方壓力。」

根據英倫銀行數據,自金融危機以來,英國銀行已不得不將他們的資產負債表的資金提高1270億鎊,但其中一半來自納稅人的現金注入。此後,英國銀行又再從 市場上融資150億鎊。多倫多協議將進一步迫使各銀行從結構上重設安全資本。 但渣打銀行首席執行官Peter Sands向英國媒體指出,我們應認識到增加安全資本水平將使可用於投資資本減少,投資成本增加。銀行每拿出1美金作為資本,就相當於少15美金用於借 貸。 G20也允許各國銀行有一定時間適應新條例,以避免引發經濟活動驟減,但具體改革內容需待下屆在南韓舉行的G20峰會決定。 屆時各國將決定將目前8%的安全資本提高多少,且新政策預計最早到2012年才會正式實施。 盡管如此,專家預計各國領袖均將同意將銀行安全資本比例提高一倍。


《The Guardian》G20 accord: you go your way, I'll go mine

G20 accord: you go your way, I'll go mine

The Toronto summit shows that now the threat of a second Great Depression has passed, it will take another crisis for the G20 to redress global economic imbalances

A protester kicks a burning police car in Toronto
A protester at the G20 summit kicks a burning police car in Toronto. Will it take another financial conflagration to force the leading economic powers to act? Photograph: Ryan Remiorz/AP
Born out of necessity in the dark days of late 2008, the cracks are beginning to show in the G20. Developed and developing nations were united when confronted with the collapse of world trade and the shrivelling of industrial output but are finding it harder to keep the show on the road now that the immediate crisis is over.
The communique from the weekend's meeting is easily summed up: do your own thing. The Americans cannot persuade the Europeans to hold off from fiscal tightening until the recovery is assured; the Germans and the British think the risks of a sovereign debt crisis are far more serious than the possibility of a double-dip recession.
That was not the only contentious issue this weekend. Canada, Australia, China, India and Japan were unhappy with the idea that their banks – which proved resilient during the financial crisis – should have to pay the levy backed by Washington, Berlin, Paris and London. Again, it was a case of go your own way.

Cause of friction

Meanwhile, the summit danced around a long-standing cause of friction; China's unwillingness to allow its currency – the yuan – to appreciate to a level that might help reduce its trade surplus with the US.In one sense, the public manifestation of these differences should come as no surprise. They were buried during the period of maximum danger – September 2008 to April 2009 – but the G20 no longer believes that the world economy is about to descend into a second Great Depression. For the super-optimists, the return of diplomatic "business as usual" might even be seen as a good thing to the extent that it means normality has returned.
That, though, is a perverse way of looking at things. The G20 was meant to be rather more than a crisis-resolution body; it was meant to be an institution that, through the inclusion of China, India and Saudi Arabia, could better deal with the chronic imbalances in the global economy that caused the crisis in the first place. On the evidence of Toronto, it will take a second, perhaps even bigger, crisis to lead to such an outcome. Barack Obama thinks that remains a possibility despite his emollient words to David Cameron at their bilateral meeting on Saturday.
Before explaining how a second crisis could already be brewing, it's worth sketching out a couple of alternative scenarios. One is that the full effects of the colossal stimulus administered 18 months ago have yet to be felt. Growth will surprise on the upside over the coming months, so policymakers should be fretting about the risks of inflation. Andrew Sentance, the Bank of England monetary policy committee member who voted for an increase in interest rates this month, is from this camp.
Unless the recovery is far stronger and broader than it appears, it is unlikely that the global economy could withstand a synchronised rise in interest rates prompted by an inflation shock. Even if it could, there would only be a short sweet spot before old problems resurfaced: ever bigger surpluses in the export-dependent countries and ever bigger deficits in the US.
A second scenario is the one George Osborne envisages for Britain: a long and relatively joyless period of cold turkey after the excesses of the early and mid-noughties. The Treasury view of the world envisages consumer spending growing only modestly, with investment and exports the main engines of growth. The Germans, the Greeks, the Irish, and the Spanish – not to mention Japan, the US and the fast-growing emerging nations of China – all see their economic future in much the same way. Just how every country in the world can enjoy export-led growth has not yet been explained.
The risks of a period of sub-par growth are acknowledged, but deemed as a price worth paying to keep the financial markets happy. Governments are terrified that they will be punished severely if they fail to take deficit reduction seriously; investors will demand a higher price for buying the bonds that have to be sold to finance the deficit, which in turn drives up long-term interest rates for those home-buyers with fixed-rate mortgages and businesses with bank loans. Better to slash spending and raise taxes so that monetary policy can remain loose. That is the advice Osborne has been getting from Mervyn King, governor of the Bank of England. Jean-Claude Trichet at the European Central Bank thinks the same way.
There are two points to mention here. The first is that King and Trichet, eminent though they may be, are not infallible. King voted to keep interest rates above 5% in summer 2008 even though the economy was already in recession and the strains in the financial system that culminated in the collapse of Lehman Brothers were already in evidence. Trichet seemed oblivious to the threat posed to the whole of the eurozone by the crisis in Greece.
As for the markets, it is certainly true that sovereign debt is their concern this month. But next month they may be getting in a lather about the slow growth caused by the austerity programmes they themselves have necessitated.
The risk is that satisfying the capricious whims of the financial markets leads to policy error and the doomsday scenario. It goes something like this: even before the sovereign debt crisis erupted this spring, there were some tentative signs that the recovery that began in the spring of 2009 was losing momentum. The US has just revised down its growth for the first quarter and has yet to see the pick-up in the labour market that it enjoyed in previous recoveries. Europe's expansion over the winter was barely perceptible. China has been pounding along but Beijing has been seeking to tighten credit conditions after 2009's monetary laxity.

Spare capacity

The sluggish recovery has meant that core inflation in the US and eurozone is already below 1%. They are one recession away from deflation, and perhaps not even that. There is so much spare capacity – particularly in European and North American labour markets – that a marked slowdown in activity rather than falling output would do the trick.Central banks are terrified by the prospect of deflation, not least because none of them – outside of the Bank of Japan – have any experience of coping with it. They would have every right to be worried. Deflation raises the real level of debt; it would hurt consumers, businesses and – crucially – banks.
Having barely survived the near-death of the global financial system in October 2008, central banks have no desire for a repeat performance. They would feel the need to act decisively to prevent a deflationary spiral, but with interest rates already hovering just above zero could only do so through quantitative easing (QE) – creating electronic money through the banking system. To have an impact this would need to be aggressive.
The trouble is that central banks know very little about the effects of QE and the chances of getting it wrong would be high. Attempts to cure deflation could easily turn into the opposite problem: hyperinflation. In terms of chronology, it would pan out like this: sharp slowdown in US and European growth in the second half of 2010. Pressure on heavily indebted banks intensifies as deflation becomes a reality in the first half of 2011. Second leg of the financial and economic crisis in the second half of 2011. G20 get serious in early 2012.



2010-06-28 中國時報 【本報訊】

 一九四四年成立的聯合國,曾被理想主義者譽為二十世紀人類的救星,如今已變成會而不議、議而不決的演講比賽場所。任何爭議,到紐約東河(East River)岸邊那座卅八層大樓附屬的聯大會議廳裏,總是一拖再拖,無法解決。

 經過六十幾年後,各國心知肚明,聯合國尤其是所屬的安全理事會,早已無法反映今日世界的現實局勢。當年安理會常任理事國的五強,除中、美、俄三國外, 英、法的國力已經衰退。另一方面,比它們強大的新興國家,卻須競選剩餘十席的非常任理事國席次;選上後不能連任,以便別的國家也有機會參與。

 聯合國憲章授予安理會對特定國家實施國際制裁(如二○○二年對伊拉克海珊政權),採取維安行動(如二○○九年派軍入駐厄里垂亞Eritrea),甚至出 兵平亂(如一九五二年對北韓)的大權。但整體而言,世人都感覺安理會乃至聯合國本身,正逐漸與現實脫節,需要由一個能反映世界現況的新組織取代。

 十一年前開始的G-20恰好填補了這個空隙。G-20其實只有十九個國家,第二十名成員是歐盟(European Union)。因緣際會,一九九○年代後期,亞洲金融困難引起的經濟問題,促使G-20不得不挺身而出,幫助平息。二○○七年由華爾街開始的真正金融風 暴,因聯合國安理會和經社理事會束手無策,儘管G-20不情不願,也不得不出面收拾這個爛攤子。


 G-20的成員包括:阿根廷、澳洲、巴西、加拿大、中國、法國、德國、印度、印尼、義大利、日本、墨西哥、南韓、俄國、沙烏地、南非、土耳其、英國、美 國、和歐盟。前、昨兩天(六月廿六、廿七日)在加拿大安太略省多倫多舉行高峰會。已經被人淡忘的G-8也擠進來,趁機開個高峰會,希望世人別忘記它而已。

 所謂高峰會者,只是做給各國人民看的把戲,表示他們的國王或主席也好,總理或首相也好,時刻關懷人民福祉。實際上埋頭工作的,是各國財政部長和中央銀行 總裁。去年十月,這十九國財長和央行總裁,外加國際金融機構如世界銀行、國際貨幣基金等,已經在華盛頓開過一次會議,在「加強鞏固、可延續、及平衡成長的 架構(Framework for Strong, Sustainable and Balanced Growth)」的標題下、激烈辯論左列幾項議題:




 國際金融複雜萬分,不是開一兩天會議商討就能解決的。本月四、五兩天,各國財長與央行總裁為準備這次峰會,在南韓釜山又開會。四個月後即今年十月廿二到 廿三日,他們還將在南韓慶州(Gyeongju)繼續討論。然後把結論提交十一月由南韓政府在首爾召集的G-20高峰會,繼續討論,希望做出大家都能接受 的決定。


 預備會並決議設立四個專家組,分別研討財政安全網(Financial Safety Nets)、財政範圍界說(Financial Inclusion)、如何應付氣候變化所需經費(Climate Change Financing)、和不肯合作單位的問題(Non-Cooperative Organizations)。

 這麼引人注目的會議,各國少不得趁機自我吹噓一番,地主國加拿大做得有些過份。加國財政部長Jim Flaherty月初特別為此到紐約舉行記者會,發表談話說:世界各國經濟復甦的過程,以加拿大最快也最成功,可說是「世界經濟復甦的前驅 (leading the world in global economic recovery)」。在此同時,加政府派移民部長Jason Kenney到倫敦,資源部長Christian Paradis到北京,同時舉行招待會,談話內容相同。



G20峰會輸贏大比拼      2010-6-29








He spent £21m on a penthouse - but turns lights off to save money: Inside the amazing world of secret billionaire Terry Gou


By Simon Parry In Taiwan and Richard Jones In China
Last updated at 12:37 AM on 27th June 2010
Squatting beside a road in a backward northern China village where, once a year, a wealthy benefactor sweeps past in a motorcade on his way to dispense money, the peasant farmer whispers: 'To us, he is like an emperor.'
It is a comparison that would probably bring a smile to the usually stern features of Terry Gou.
A self-made billionaire who rose from poverty to become one of the world's richest men, the 59-year-old's hero is an emperor  -  Genghis Khan.
Terry Gou
Dancing king: Terry Gou performs with Chiling Lin in 2007, who was then rumoured to be one of his girlfriends
Pick up an iPod, an iPhone, an iPad, a Nintendo game, a Dell or Hewlett Packard computer, a Nokia or a Motorola phone in Britain, and the chances are that it will have been made by poor young migrant workers in one of Gou's massive, fortress-like factories.
Gou's personal fortune is estimated at £3.7 billion, ranking him number 136 on the Forbes rich list, alongside Apple boss Steve Jobs.
And his factories possess so many technical and production secrets that some see him, rather than Jobs, as the most important player in Apple's rise to success.
Gou describes his own massively influential business as a 'righteous dictatorship'.
And like the empire of the bloodthirsty Mongolian ruler he so admires, it began inconspicuously in the Far East before spreading its influence across the world with lightning speed.
While Genghis Khan triumphed through terror and attrition, the founder and head of electronics giant Foxconn has conquered by stealth and a ruthless approach to business.
His notoriously tough factories in China employ an astonishing 800,000 workers and make a substantial proportion of the world's consumer electronics.
They have made Gou a king of the British High Street and royalty in the world of retailing.
It is due, in no small part, to Foxconn's phenomenal output that China is poised to become the world's biggest manufacturer.
Last week a group of economists predicted that by 2011, China will overtake the United States as the leading producer of goods, responsible for a fifth of all goods manufactured worldwide.
Terry Gou
Former playboy: With second wife Delia on their wedding day in Taipei
This year, however, alarming cracks have begun to show in Gou's empire. Ten workers at Foxconn's factories in southern China have thrown themselves to their deaths in the past six months.
It seems their actions were driven at least partly by the harsh working conditions  -  allegations that Gou denies.
The deaths have exposed uncomfortable truths about the way the electronic gadgets are made. They have sparked concern from high-ranking officials in China and triggered strikes at other factories, including a Honda plant.
Gou, whose intense secrecy about his factories' working conditions has been a trademark of his close working relationship with companies such as Apple, has found himself thrust into the spotlight.
And that spotlight has been uncomfortably revealing.
A Mail on Sunday investigation into the background of the tycoon reveals a complex and highly-driven individual who considers his life a mission and holds extreme views on how workers should be treated.
He is a man who works 16-hour days and whose company made £41billion last year, yet he refuses to buy designer clothes and scrimps on office furniture to save money.
He recently spent £21 million on a penthouse suite occupying the top three floors of The Palace, the most luxurious housing development in the Taiwanese capital, Taipei.
Gou plans to live on the top floor with his wife and children and let friends and business associates stay in the two floors below.
Terry Gou

Under fire: Gou is besieged by media after a spate of suicides at his factories, blamed on harsh working conditions by some commentators
He bought 35 parking spaces to make sure there is room for everyone's limousine.
As well as the property at The Palace, he owns a castle in the Czech Republic, where he has two factories, and a private jet worth £40million.
Gou has had a string of beautiful young girlfriends, including one who allegedly tried to blackmail him with a video of them having sex. He is also set to become a father again with his second wife, according to reports.
Gou's extraordinary lifestyle would have been unimaginable to his parents. His father served in the Chinese army in the 1931-45 war with Japan before returning to work as a policeman.
As an official and small landowner, Gou's father would almost certainly have been a supporter of the ruling Kuomintang nationalists and, as such, a target for Mao's brutal army as they seized control of China.
In 1949, he and his wife fled their simple home in Gewan, in Shanxi province, for the island of Taiwan.
Sitting high on the Taihang mountain range, the once prosperous village of Gewan saw decades of decline and decay under communist rule.
Its mountainous backdrop is said to resemble a phoenix, a creature second only to the dragon in importance in Chinese mythology, and one of Gou's driving ambitions is to reverse his ancestral home's decline and see it reborn.
He has spent tens of millions of pounds building a school, a pig farm and a Foxconn factory in a nearby town that employs 20,000 people, despite being warned by advisers that his projects make no business sense.
He has also restored his family's 300-year-old traditional courtyard home.
While Gou may be scrupulously careful with his wealth elsewhere, that hard-nosed business attitude evaporates when it comes to his home province.
Gou has said: 'I can walk away from anywhere if my investment fails  -  but not Shanxi.'
In his more grandiose moments, he has spoken of his intention to restore the poor province to its late 19th Century glory when it was known in China as the Empire of Silver (in pre-revolutionary China, silver had a higher value than gold).
Indeed, he spent millions funding a lavish costume drama set in the glamorous banking world of the old Shanxi.
In feudal China, Shanxi merchants were famous for their business acumen and appetite for commerce. The province became the country's centre of banking and controlled much of the nation's cashflow.
But after the communist revolution, China's banking industry was deconstructed as the country entered grim decades of collective farms, famine and one-party rule.
Shanxi went from money to minerals  -  it is now China's main coal-producing region.
The class system of the feudal era is gone. Today, of course, every citizen is equal, though some are more equal than others.
Terry Gou
Humble beginnings: The house in Gewan, Shanxi Province, China, where Gou's family lived before they moved to Taiwan
Gou's enormous wealth has brought him tremendous influence among Chinese leaders  -  despite the irony of him being the most successful capitalist ' merchant' ever connected to Shanxi, and one whose humble parents were once driven into exile.
Villagers in Gewan, who all share Gou's family name, idolise him. 'This road used to be a dirt track,' says peasant farmer Gou Quan Shan.
'He built the road, the bridge, the school, you name it. Without Gou, the quality of our lives would be nothing.'
Another villager, Gou She, says: 'When he comes here, he's treated like a king. There are lots of police and security all around him and they clear the road for him and protect him as he comes by. He is a good man. He has helped us so much.
'He visits the temple, his home, and family graves and then leaves to make more money.'
A plaque on the wall of the temple in Gewan describes how Gou gave the equivalent of £1 million to restore the temple and other parts of his village in 2006.
Many young people from the village now work in the Foxconn factory rather than the coal mines.
'He is a role model to me,' says 18-yearold Chan Yan Pei, who spends his days cleaning video camera lenses rather than working down a mine.
Gou first visited Gewan in 1989, a year after he opened his first Foxconn factory in southern China as the country opened up to foreign investment. His determination to leave a legacy in Shanxi appears to have become an obsession.
'Terry's biggest wish is to invest in enterprise here and develop the economy of his home town,' says his cousin Gou Xiaoping. 'He has been told it is not feasible to invest in this area but he has gone ahead all the same.'
If a sense of divine mission is driving Gou, it may have its roots in his childhood in Taipei, where he grew up in a room in an annexe of a temple to Mazu, the Chinese goddess of the sea.
After his family moved on, and long before Gou began to amass his fortune, the room where they lived was converted into a shrine to the Tao religion's five Gods of Fortune  -  a move Gou must have seen as appropriate when he returned later as a benefactor.
Gou still visits the temple that was his childhood home, paying for lavish pillars to be built and walls to be restored in the 300-year-old building.
Terry Gou
Castle: The tycoon's Roztez Chateau in the Czech Republic was bought for a reported £20m in 2001 and includes 10,000 acres of land
He returns every Chinese New Year to pray, in the traditional manner, for good health and fortune.
'Many people who come here know of the temple's connection with Mr Gou and they pray to the Gods of Fortune that they might be as clever and as wealthy as he has been,' the temple keeper says.
However, it was a shrewd matrimonial match rather than a stroke of business genius that saw Gou's career take off.
Aged 24 and working as a lowly office clerk in Taipei, Gou wooed and married Serena Lin, a girl from a relatively wealthy Taiwanese family.
In 1974, his mother-in-law loaned him a few thousand pounds to start his first business in Taipei  -  and the Hon Hai empire, parent company of Foxconn, was born.
Hon Hai began by making channel-changing knobs for TV sets and put Gou on his way with a business career that would flourish globally on the cheap, obedient labour of communist China from the late Eighties onwards.
He was quick to see the country's potential. He learned English, travelled to the United States regularly to drum up business and courted visiting businessmen to try to persuade them to use his factory.
His biggest break came in 1996, when Michael Dell, of Dell Computers, visited southern China.
Gou, who a colleague says 'knew Michael Dell was a star of tomorrow', offered to drive him to the airport.
Instead of taking him there directly, Gou made an unscheduled stop at his factory and talked Dell into working with him.
With Dell, and later with Apple and other global brands, a mutually profitable relationship flourished.
Here was a man capable of producing the electronic gadgets the world was switching on to, and doing it efficiently, on a vast scale and under the high-security conditions vital to protect commercial interests.
That secrecy persists today. When we tried to visit Gou at Hon Hai's headquarters on the outskirts of Taipei, security guards ordered us to leave and Gou's aides refused to meet us.
'Mr Gou is in China and will not do any interviews,' his spokesman, Arthur Huang, told us.
The regime within Gou's factories is focused on iron discipline  -  workers perform military-style drills and are penalised for talking on production lines or for taking too many lavatory breaks.
A joke directed at employees is: 'You work at Foxconn? Are you wearing a nappy?'
Gou's rule within his empire is absolute. Executives carry copies of his book, The Sayings Of Terry Gou, which outlines his somewhat alarming personal philosophy.
It reads more like Chairman Mao's Little Red Book than a business manual. The long-winded addresses to executives provide a fascinating insight into the tough-mindedness and the uncompromisingly disciplinarian nature of the man.
Apple i-Phone
Apple products: Terry Gou's Chinese factories are responsible for the production of i-Phones
He writes: 'A leader must have the decisive courage to be a dictator for the common good.'
He assures employees: 'Behind every accomplished disciple, there is a stern mentor.'
Elsewhere he tells his ' disciples': 'You can't go wrong trying to stick with the strictest and most demanding boss.'
According to former employees, when Gou addresses his executives, usually by jabbing impatiently at a blackboard with a marker pen, he orders them to stand to attention if they say anything to displease him, telling them: 'I'm not punishing you because I'm standing too.'
Geoff Crothall, of China Labour Bulletin, a group that monitors factory conditions in China, says Foxconn is 'an extreme example' of the approach of Taiwanese-managed companies in mainland China.
'In the Seventies and Eighties in Taiwan, the Taiwanese workers were treated the same way,' says Crothall.
'They were very badly treated but it is a successful production model, and that model has simply been exported from Taiwan to mainland China.'
Outside his factories, Gou leads a playboy lifestyle. He has at times made as many headlines in Taiwan's gossip pages as in the business sections of newspapers.
Gou's first wife Serena, with whom he had two children, died from cancer in 2005. He married his current wife, dancer Delia Tseng, 36, in 2008.
He performed 30 push-ups to applause from guests after the master of ceremonies cracked coarse jokes about his age.
The honorary chairman of Taiwan's ruling Kuomintang party was chief witness, though this was probably a sign more of Gou's strong political connections rather than of his forebears' political allegiances.
Prior to the wedding, Gou was linked to a string of glamorous women. He dated Hong Kong movie star Carina Lau, 45, telling reporters in 2007 that his feelings for her were 'genuine and serious'.
At the same time, he was close to Taiwanese model Lin Chi-ling, 35, whom he flew around in his private jet to help him host business parties.
At one Foxconn function, they wowed guests with a particularly exotic and energetic dancefloor routine.
In the same year, allegations surfaced that Gou had cheated on Serena during their marriage and was blackmailed by a girlfriend who was said to have secretly shot a video of them having sex.
Gou, who denied all this, was said to have called in police after being blackmailed for £100,000 by the woman, former stock dealer Chen Chung-mei, when he allegedly ended a four-year affair with her. According to unproven claims, Chen Chung-mei was jailed for four months for blackmail.
Cheap labour: Gou's Foxconn produces products for computer giant Dell using poverty-struck workers
The claims circulated as Gou was embroiled in a separate court case in which journalist Tsang Chia-yi and her boyfriend were jailed for blackmailing Gou for $1 million (£680,000) over a book Tsang was writing about Hon Hai.
She sent Gou an outline of the book, Burned By The Scorching Sun  -  What You Didn't Know About Terry Gou, which, a court heard, contained details of alleged tax evasion and other illegal activities by Hon Hai.
When Gou  -  who has always denied the allegations  -  objected, Tsang and her boyfriend demanded $1 million not to write the book.
She was arrested in a sting after going to a meeting with Gou's representatives where she took the money from a safety deposit box in a bank's VIP room.
Tsang was jailed for 22 months and her boyfriend for two years. Another journalist who helped their scheme was jailed for six months.
Whatever the truth of Gou's liaisons, they have done little to damage his image in Asia's largely sexist and money-worshipping business environment.
If anything, his relationships with lovers sometimes half his age seem to have enhanced his reputation among his supporters in Taiwan.
And while associates in China undoubtedly regard communism as the highest form of society, the egalitarian ideal towards which the river of human history inexorably flows, they also have a sneaking admiration for ageing billionaires who bed pretty young women.
'The old bull seeks fresh grass,' as the Chinese saying goes.
However Gou's domain is not limited to Asia. Foxconn also has factories in the Czech Republic and Hungary  -  perhaps not coincidentally the last country the Mongol empire conquered before retreating east.
More than anything else, Gou's castle in the Czech Republic  -  a chateau with nearly 10,000 acres of parkland bought for a reported £20 million in 2001  -  represents the high-water mark of his quest to become a world leader in manufacturing.
Roztez Chateau was built in the 17th Century as a fabulous and lavish hunting lodge.
After buying it as a dilapidated ruin, Gou completely refurbished it and named it Casa Serena after his first wife. In the surrounding countryside, he built a championship golf course.
Just 30 miles outside Prague and close to two Foxconn factories Gou has built in Kutna Hora and Pardubice, the chateau is now Gou's fortress in the West.
It is used exclusively by his family, his executives and business clients. Its purchase was a potent signal that he had arrived.
Its opulence is sharply at odds with the austerity of his factories in China and his own personal spending in Asia, where he is said to keep lights switched off to save money and replaced his own rusty office chair only when his doctor ordered him to.
Now, as the scandal of the suicides in Foxconn's China factories raises searching questions, Gou has been forced to turn his attentions back east to try to restore his company's reputation as Apple and other clients fret.
In a highly unusual move, Gou visited his factories and took reporters and photographers on tightly controlled tours.
'It was completely out of character and a desperate attempt at damage-limitation,' Geoff Crothall says.
Gou's subsequent decision to double workers' pay, hire psychological counsellors and put up safety nets to stop people jumping might smack of expediency to outsiders, but not to his adoring public in Taiwan.
Without a hint of irony, the island's biggest-selling business magazine praised him for looking after his troubled workers and said his compassion showed he was not only a great entrepreneur, but also a great humanitarian.
Gou himself could not help saying in a candid, self-pitying moment: 'If a worker in Taiwan commits suicide because of emotional problems, his employer won't be held responsible, but we are taken to task in China because they are living and sleeping in our dormitories.'
The deeper worry for Gou, whose business has thrived on good relations with Chinese officials, is that the political tide may also be turning against him.
Until now he has enjoyed such an intimate relationship with China's communist leadership that he is the only person allowed to fly a private jet across the politically sensitive Taiwan Straits separating the island from mainland China.
However, Chinese premier Wen Jiabao recently declared that workers' conditions must improve and factory bosses should treat poor migrant workers 'as they would treat their own children'.
In these troubling times, Gou may well reflect that 'the most skilled sailor is forged by the strongest headwinds'. Confucius? No, one of The Sayings Of Terry Gou.
But like any great tactician, Gou has taken steps to safeguard against possible future difficulties in the Chinese factories that earned him his fortune.
Last year Foxconn opened a huge new plant just outside Vietnam's capital, Hanoi, where wages are a third lower than in China.
The company is also rumoured to be preparing to switch at least part of its operations to less developed provinces of China.
'Many inland provinces in China are still very investor-friendly,' Crothall says. 'They would welcome Foxconn with open arms despite the suicide profile. A Foxconn plant would be such a big deal for a town in a province such as Hubei.
'So even if Foxconn can't carry on the way it has been in southern China, there are plenty of provinces elsewhere in China, and in places such as Vietnam, where they can run their factories in the same way as before.'
While Gou mulls his next move, he has also been seen returning to the temple of his childhood in Taipei and  -  for the first time anyone can remember  -  praying to the gods at a time outside his annual New Year visit.
The months ahead will determine whether the tycoon's prayers are answered or whether his all-conquering empire, like Shanxi's Empire of Silver, is ultimately heading for a long and painful decline.


冰島女總理西古達朵提(Johanna Sigurdardottir)27日根據冰島的新法律,與她多年的同性伴侶─女作家兼記者雷歐斯多特(Jonina Leosdottir)正式結婚。

今年68歲的西古達朵提,於2009年2月執政,成為第一個公開同性戀身份的冰島政府首長;她與50多歲的雷歐斯多特共同生活多年,2人已於2002年民事結合(civil union)。




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