The cover for my new book – China Inside Out: 10 Irreversible Trends Re-shaping China and Its Relationship with the World – just came out. I think it looks cool. Kudos to the Production Team at the Singapore Division of publishing company – John Wiley and Sons – and especially to the graphic designer. When I met the production team at the publisher’s Singapore office in the Spring, the production team asked me for my ideas on the cover. I hadn’t any, really; though we all agreed: NO DRAGONS!

The cover is on the John Wiley site, but hasn’t been placed on the Amazon page for the book. Certainly, the book seems way less abstract than ever before, with a “face” to it.

I do hope readers find the book presents as many surprises if not insights as the cover suggests.

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ISBN: 978-0-470-82643-0

Re-balancing Global Power One Novel at a Time

Almost two months ago to the day my son was born. My first child. Now, my first ISBN was born; or, rather, the ISBN for my upcoming book, China Inside Out: 10 Irreversible Trends Re-shaping China and its Relationship with the World.

ISBN: 978-0-470-82643-0. How cool is that? I want to memorize this number. And now, whenever I walk down the streets of Shanghai or Suzhou and someone greets me, I want to reply, “ISBN: 978-0-470-82643-0″.  Actually, it was one of my nephews back in the States who twigged me onto the fact the book just became available for pre-order on Amazon. (Yes, he pre-ordered it – he said – good nephew). Except the book still lacks a cover (come on, you graphic designer!), so the Amazon page is not very attractive. You’ll find a full description of the book on the Amazon site, and on the publisher’s site at John Wiley & Sons. The John Wiley page for the book has a little tab behind which you can read the Table of Contents. I didn’t see anything like that on the Amazon site. The Asia edition of the book should be out in October-ish; the UK/USA edition the end of December (just in time to miss Christmas).

So, should you surf over to either the Amazon or the John Wiley sites to read a summary of the book, consider pre-ordering it – just takes a click of the mouse button. And a credit card. And a line of credit. I promise you it’ll be a good read.

And if you can’t recall the name of the book. Remember: ISBN: 978-0-470-82643-0 …

Linda Jaivin, one of the most prolific writers I’ve ever met, is a bubbly, charming Australian who’s been involved with China for thirty years. During the Suzhou Bookworm Literary Festival held during the first two weeks of March she introduced her two latest books, The Monkey and the Dragon, and An Immoral Woman. The Monkey and the Dragon is about her close friend Hou Dejian, and her own life in Taiwan in the 1980s, when paranoia and intrigue were thick in the air on the island nation. Hou Dejian was a legend in his own time in the late seventies and early eighties when he penned and sang the song “Descendants of the Dragon,” which became an anthem of sorts for young Chinese in Taiwan, Hong Kong and the Mainland. Hou also created a stir in 1986 when he defected from Taiwan to Communist China, more out of curiosity and ignorance, as far as I could tell, than for any reasons of idelogy. The Taiwanese government subequently barred Linda from entering the country, believing she facilitated the high profile defection. She did not, which the Kuomintang government eventually understood and accepted when the Mainland government kicked Hou out of China just after the Tiananmen incident.

An Immoral Woman sounds even more intriguing to me: an historical novel set in the early twentieth century, built on the lives of two extraordinary personalities against one of the most dramatic backdrops in modern history: the end of the Qing dynasty and the subsequent battles between warlords for domination of the country. George Morrison was a larger-than-life journalist for the Times of London, based in Beijing, who loved two things: boasting and seducing women. The woman who turned the tables on him most successfully was Mae Perkins, a young American heiress given to nymphomania. China, revolution, sex? What more can a sinophile ask for in a book?

Paul French and Jonathon Fenby kept the evening light and contemplative during an animated debate on the history of China between World Wars I and II. French is author of Through the Looking Glass: China’s Foreign Journalists from Opium Wars to Mao; while Fenby has written ten books on China, including most recently a history of modern China and a biography of Chiang Kai Shek. They gossiped about Chiang Kai Shek and his inability to entertain interviews with foreign journalists longer than 15 minutes (he had hemmoroids) and whether Marshal Zhang Xueliang in 1936 kidnapped Chiang to unify the Chinese in the fight against the Japanese; or whether he did it so he could get Manchuria back, which the Japanese had captured when he was in Beijing having surgery.

French was of the mind that Chinese leadership of the fragmented territories of the nation at that time was nuanced than modern commentators give the so-called warlords. Some of them built schools, converted citizens to Christianity, even put in place social welfare systems. Though Fenby (and this author) disagreed the country was close to a federal form of government as one finds in the United States, both speakers agreed the greatest warlords were Chiang and Mao himself; the two absolutely hated what the other stood for, and would stop at nothing to destroy their mortal enemy. Even if it meant eternal conflict for their own country.

Related posts:

When Journalism Made a Difference

After the Love is Gone: The Life of Joseph Needham

Book Review: A China Hand’s Story: – Something to Crow About

I stammered like a 16-year old girl meeting her favorite rock star. Amitav Ghosh’s The Glass Palace is easily one of the greatest novels by a modern writer I’ve ever read. His latest work is The Sea of Poppies. Ghosh along with a score other writers was participating at the Literary Festival at Suzhou’s Bookworm. The line-up at the Suzhou Festival I’ve found to be more engaging than the one at the M on the Bund, in Shanghai, happening near concurrently. Ghosh spoke to an audience of nearly fifty, discussing his evolution as a writer, his experiences in Indian boarding school and at Oxford, and his creative approach to writing. One of the more interesting statements he made during the evening, in response to a question from the audience, was that he welcomed the shift of wealth and power back from West to East: the last two or three hundred years of history, he considered, were “not natural” in world history.

Afterward, when all the other’s had had their books signed and had left for home, with only one woman after me, I told Mr Ghosh how wonderful The Glass Palace was: I had even invited three friends who were unfamiliar with his work to attend the session with me. I told him I was having my first book published this year – China Inside Out (John Wiley & Sons) – and how reading The Glass Palace had urged me to continue writing and exploring other cultures. When he patiently asked me what my book was about, I forgot. Complete blank. I blushed, stuttered something incomprehensible, thanked him for his time, then scampered away.

Such is the power of gentle genius.

The Dragonbeat blog posted a contentious article about why a brand of mediocre tea is beating the beejeezus out of local producers in China, which introduced the world to the joys of tea; a case study, really, about other Chinese industries:

Both at home and abroad, Chinese tea brands struggle to compete with foreign competitors. In China, Unilever’s Lipton brand has a market-leading share three times that of its closest local rival.

I remember years ago going to government and company offices throughout China and being served up a crappy cup of Lipton green tea at nearly every meeting. I would always think to myself afterward, “I travel all the way to the Home of Tea for a lousy paper cup of Lipton? Pull-eeze!” Occassionally, I’d get some leaves pulled from a box of local stuff (popular in the Yangtze Delta: Longjing from the West Lake District; and Biluochun, especially from around Changshu and Suzhou fields). Offices in Fujian are always nice to visit, because the officials and businessmen often go through the abbreviated ritual of serving up a pot of local Wulong tea. Admittedly, some of the nicest gifts I’ve received from government and business representatives in China have been boxes of lovely tea. Never the really good stuff, though, like Da Hong Pao. They keep that for themselves.

The challenges facing China’s tea industry are the same as those facing a host of Chinese industries: product quality issues; excessive competition in the domestic market; low prices and meagre earnings abroad; and weak branding.

China was once at the axis of world trade with its monopoly on tea (cf. my review of the book, For All the Tea in China).  A combination of corporate espionage on the part of the East India Company and the revelation that Chinese growers had been poisoning British consumers for a couple hundred years in pursuit of profit ended the British taste for Chinese tea in the mid-1800s. The British proclivity for rationalizing production and creating and then adhering to quality standards was Britain’s own  Boston Tea Party, serving notice of the end of Chinese hegemony of the tea trade.

Monitoring quality across millions of scattered tea gardens is an impossible task, and Chinese tea exporters have consistently had trouble meeting foreign safety standards. Chinese tea sells for an average of just US$2 per kg on international markets, compared with US$2.70 for Indian tea or US$3.40 for highly regarded Sri Lankan leaves.

Interestingly, most of the comments on the post were from Chinese esthetes, who accuse the writer of missing the point: Chinese tea in all its perfection was never meant to be debased through such crass commercial activities as branding and mass marketing, they argue.

Tell that to your ancestors.

The world was shocked last year after the Olympics when it was revealed that China’s largest producers of milk and milk-products had laced their offerings with a plastic derivative, melamine. Fast-backward to the year 1851, when the British public learned during London’s Great Exhibition that the green tea they had been drinking for nearly two hundred years had been laced with cyanide and gypsum (calcium sulphate dehydrate). The blue color of cyanide and the yellow color of the gypsum combined to make a green dye that satisfied the British tea drinker’s eye for uniformity of color. The Chinese had known for generations such consistency in picking was near-impossible, especially since they had for decades been selling the British the third- and fourth-flushes of their country’s most strategic asset – Tea.

Such is one of the revelations found in the most fun and exciting new book I’ve read this year. For All the Tea in in China: Espionage, empire and the secret formula for the world’s favourite drink, by Sarah Rose, tells the story of how Robert Fortune, a Scottish gardener and botanist, infiltrated the interior of China disguised as a Mandarin “from north of the Great Wall” to steal tea plants, tea seeds and the secrets for making green and black teas. Mind you, he did this during the mid-1800s, when it was highly illegal and certainly inadvisable to be caught, drawn and quartered as a Westerner traveling beyond the permissible foreign concessions on the east coast. As an avid tea drinker and collector of Chinese teas and paraphernalia, and having been taught the dark art of preparing Wulong tea, I just couldn’t put the book down.

Aside from Fortune’s personal adventure, which Rose tells compellingly, she explains the geopolitics and macroeconomics involved in tea’s being at the center of world trade for nearly two hundred years. The book also discusses the genesis, triumph and demise of the East India Company, the first true multinational in the world and arguably the most enduring until Parliament “revoked its charter at the stroke of a pen” in 1857.

With Fortune’s successful transfer of Chinese tea plants and processing techniques to the Himalayas, to what is now commonly known as Assam and Darjeeling, and with the British quite queasy over the thought of drinking more green-colored tea, no matter how authentic, the way was open by 1852 for Britons to entertain drinking black tea. Until Fortune’s successful run of corporate espionage, the West actually thought black tea grew from plants different from those of the green tea they had become accustomed to. Fortune illustrated that the color and taste of black tea came from certain varieties of green-leaf tea that underwent a more stressful process of refinement than is found in making green tea. The surplus of sugar poured into Britain from the British Caribbean colonies made drinking the more-bitter black tea a pleasure for all classes in the newly industrialized society.

Of course, in all this, the poppy and its addictive syrup cannot be ignored, a history Rose writes about frankly and unashamedly. Another interesting historical point was that after the Second Opium War, in 1857, when China figured “if you can’t beat ‘em, join ‘em”, China sent its own spies to India to cop the poppy seeds and the secret for processing opium to undercut British prices to customers.

So get out your Brown Betty teapot. Get the book. Read it. Learn and enjoy.

And remember: take the tea to the water – not the water to the tea.

I always enjoy attending book readings delivered by Paul French. Paul last year had published his excellent historical biography, “Carl Crow: A Tough Old China Hand.” This year his book on China, “Through the Looking Glass: China’s Foreign Journalists from Opium Wars to Mao,” looks just a detailed and engaging as his Crow Book. Earlier this week French visited us here in the boondocks of Suzhou from Shanghai (at least, that’s what folks who can’t work up the gumption to take the 35-minute bullet train ride out here from Shanghai believe) to regale us with stories of how journalists of yore had little intention of being the dispassionate observers today’s newswriters cum entertainers claim to be. Back then, journalists all had an ideological bent that their editors back in their home Western countries either amplified (as in the case of many of the reporters for the Times of London), or simply ignored (as did the editorial gestapo of Henry Luce’s publishing empire, state-side).

French made the point that at the turn of the 20th century China was a far more important story than it is today. At that time, the lives of individuals and even of entire cities were at stake as the colonial powers tried to balance the chaos of the times that could bring a wealth of opportunity against the kind of chaos that literally meant the death of entire societies at the time. “In 1937 alone,” French said, “there were more than 40 books published about China.” As well, French elaborated, ALL the major newspapers of the world had teams of reporters and stringers throughout China: the New York Times alone had eight reporters in China, while The Guardian and the Times of London – the voice of the British Empire – had large China bureaus as well.

The media at the time had a front seat to the axis around which world history was being spun at the time: the Opium Wars; the Taiping Rebellion; the Boxer Rebellion; the Russo-Japanese War; the fall of the Qing Dynasty; and the Asian theater of War from 1937 through 1945; not to forget the civil war between the Communists and the Nationalists that led to the establishment of the People’s Republic of China.

By searching through on-site as well as online newspaper archives and talks with countless journalists who have been covering the China story off and on for the past thirty years, French uncovers such gems as the true impact of the Times of London’s coverage of the Opium wars and the Boxer Rebellion; and of the blind spot American foreign policy had because of the infatuation Henry Luce had with the Kuomintang and – as did so many others, including Carl Crow – with Madam Chiang Kai Shek. French asserts that if the American administration before, during and after World War II had understood the true depth of corruption and malfeasance of the KMT’s stewardship of China at that time, they would have approached the civil war that broke out after the surrender of the Japanese in a wholly different way.

Perhaps the Americans wouldn’t have supported the KMT at all. Perhaps Harry Truman and not Richard Nixon would have been the first to open the door to direct relations with Mao.

Now that’s history in the re-making.

Read more about French’s book on Carl Crow’s life here.

Check out Paul’s blog China Rhyming, chock full of interesting bits about China now and China then.

One of the things that drew me to studying Chinese history and culture was the sheer scale of death and destruction that would every now and then convulse the country: great floods, great earthquakes, great revolutions, great wars, great leaps forward and great stumblings backward. Nassim Nicholas Taleb in his books “Fooled by Randomness” and “The Black Swan” would call these highly improbable events that have major consequences Black Swans.

Since I’ve finished reading the books, I’ve wondered what makes a Black Swan with Chinese characteristics – what I’d call a Black Dragon. What makes a revolution in China different from, say, a revolution in Europe? Or what makes an economic miracle in China different from one in Japan or South Korea (societies and individuals can have positive Black Swans as well)?

Of course, there are two kinds of Black Dragons in China: man-made and natural. It’s the natural Black Dragons that can kill thousands in a matter of seconds, like the earthquakes of Sichuan in 2008 and Tianjin in 1976. In such instances, man-made efforts more often than not magnify the consequences of the Black Dragons. In the case of Sichuan, substandard construction of school buildings apparently killed thousands of children, while bunker-style government administration buildings next door held up strongly.

The Great Blizzard of ’08 is another case in point: the heaviest snows in a century in Central China moved down south to Guangdong trapping hundreds of thousands of travelers in railway stations, on trains, and in airports during the busiest travel season in the world: Chinese Spring Festival. A lack of government planning and coordination and price-caps on coal exacerbated the effects of a snow that had devastating consequences for the credibility of the leadership.

SARS was likely the most memorable bite from an international Black Dragon China has had. The threat of disease (after all, the Chinese like to say, only a few score people died; that’s nothing compared to the numbers that die in really important Chinese events, Chinese offered) completely shut down Chinese business, commerce and society for two months. The Chinese governments’ cover-up and reluctance to share information about the outbreaks with its populace and with international agencies slowed the country’s return to normalcy and, again, the government’s credibility.

There are of course Black Dragons that are purely of a man-made nature: in recent Chinese economic history, the bursting of the real estate bubble that has left thousands of construction sites idle is a case in point. Over-building, over-lending and over-investment by institutions and families alike led to an over-valuation that is unsustainable in the medium-term. The gamble has paid off well for those dispossessed from their land who were given flats that eventually ballooned in value far above their original value. But families that have pooled funds to buy empty concrete husks as investments have seen the values of their speculations tumble, especially in Beijing, Shanghai and Shenzhen.

One could say that the troubles west of Sichuan are of a man-made, highly political nature. The protests, looting and deaths all came at a time when China was trying to get its makeup right for its debut as Olympics host. The dairy scandal that came on the heels of the Olympics was a completely man-made Black Dragon: take an unregulated industry, mix in greed and corruption in business and government, add a pinch of melamine, leave in a political pressure cooker for several months and – voila! – the publicized deaths and injuries of infants that wiped away any credibility China had as an up-and-coming world power that took its caretaker role seriously.

Several Chinese cultural traits combine to create Black Dragons – Black Swans with Chinese characteristics: the Chinese penchant for reducing costs by cutting corners; the overwhelming quest for Face; the lack of transparency with which Chinese work in business and in government; a penchant for risk taking that would make even the most X-treme sportsman break out in sweat; collusion through guanxi; and an addiction to urgency.

Cutting Corners
From the time the avatar Marco Polo returned to Europe to tell of the riches of China nearly every Western businessman has considered the metaphor that to add an inch to the sleeve of every Chinese would make any businessman rich indeed. The Chinese operate on the flip-side of the aphorism: instead of adding an inch to every sleeve, wouldn’t it be glorious to subtract an inch, instead? Imagine all the savings one can pocket with such sales! the average Chinese businessman imagines. I realized this way of thinking after having a suit made by a Suzhou tailor to whom I had given the original to copy. Though I’d tried the suit on in the shop before leaving, I hadn’t thought to shove my hands in the trouser pockets to test their depth. It was when I wore the suit to a meeting for the first time I realized I didn’t have room enough in the abbreviated pockets for the customary keys and mobile phone and change and used kleenex, etc. The tailor had likely saved about 5 RMB in shorting my pockets (and the crotch, I might add), which doesn’t seem very much until one adds up all the suits he’s made that he’s short-sheeted. He is likely able to squeeze several more suits and pockets out of all that scrimping.

Chinese companies as China comes of age operate very much the same way. Unfortunately, they may scrimp on the really important stuff: like proper foundations and reinforcements and supports for the buildings that are supposed to house and protect residents and other end-users. Or they may short bridges … or super-dams.

Face It
Unfortunately, the overwhelming need for the individual Chinese to save Face only exacerbates the effects of Black Dragons like earthquakes and floods and food contaminations, and all but eliminates any impetus toward improving the system that spawned the improbably destructive event. As long as no one admits culpability and/or accepts responsibility for the unintended consequences of Black Dragons, cycles of destruction will continue to plague Chinese society for centuries more to come. Note there has been no visible, national-level drive to check the quality of workmanship of other schools in earthquake zones.

Under the Rocks
The Chinese have a saying: “If the water is too clean there can be few fish.” In other words, how can anyone in Chinese society possibly profit in the glare of a truly transparent system? The Chinese proclivity toward opaqueness in government and business dealings is also another major contributor to the creation and re-birth of Black Dragos. Without the checks and balances that allow regulatory and commercial transactions to be seen and reviewed and commented on, stakeholders cannot readily trust the institutions that are meant to support and champion their interests. Hence, mistrust is rife in today’s China, especially amongst the Red Guard generation that had pilfered China’s past without remorse. Black Dragons – like so many of the creatures that thrive in dark, damp places – love the opaque. The frequency – and perhaps even the devastating effects – of Black Dragons could be severely curtailed if only stakeholders could see them in the making. However, Chinese have a deep aversion to exposing the roots and ruts of their creative deal-making and power broking, no matter how petty the transaction. They seem after thousands of years of such gerrymandering not to have understood that Black Dragons breed in the shadows.

Risky Business
Anyone who’s visited a Chinese city for more than a day has seen the family of four on a single electric motorbike zipping down the side of a busy street, dodging oncoming bicycles and other electric motorbikes (that are careening down the wrong side of the street), speeding up to make the light at the chaotic intersection just AFTER the light has turned red. For those of us Westerners that live and work in China not a day goes by when we step out the door to see some of the most death-defying feats of derry-do any human being might subject his self or his fellow man to.

In some cases, one does not even have to step out one’s door. Just two days before writing this article I watched out the window of my eighth-floor apartment as a middle-aged Chinese woman was on the OUTSIDE of her eighth-floor window without a spotter, without a tether, and without a big-ass inflatable cushion on the hard asphalt sidewalk below to catch her should she … oops .. slip and splatter. Never mind, the window was dirty (on the outside) and she was the one at that moment to clean it.

Now, aggregate all the incautious activities of millions of individuals each day for days, weeks, years and eventually, in Mandelbrotian manner, you’re going to have one hell of a catastrophic fractal tearing through the fabric of your society.

For instance, let’s add up all the small risks of the individual dairy farmers with their handful of leveraged cows in feeding the cows whatever was digestible (to cows); the managers of the central milk stations into which the dairy farmers would pour their ablutions would daily add just a bit of melamine to boost the protein readings of the watery soup; the corporate managers who figured on a daily basis that small amounts of pollutants and melamine could never harm let alone melt down their company; the local government officials who took the risk of accepting bribes to allow the adulterated product to pass inspection and find its way into cartons of milk, vacuum packets of yogurt, and trays of cookies bound for Japan and chocolates molded for European palates. In the end, all these small, acceptable micro-risks crystallized into a super-structure of improbability that no single company, local government or national institution could moderate. The Chinese created a mother of Black Dragon.

Addiction to Urgency
It only takes a day for the average tourist in any city in China to see that Chinese ARE NOT patient people. They will push and shove their way to the head of any assemblage that begins to hint at a line; they will honk their cars through any yellow-to-red intersection; they will dive into a business with nary a thought to planning, funding or close-out. The up-side of such behaviour is that Chinese people get things done: witness the creation of what I’d guess would be at least a score new cities in China in the last three years, while the USA is still trying to figure out how to put the uniquely humpty-dumpty New Orleans back together again. The down-side of CHinese urgency addiction is that they tend to do a lot of things half-assed. A Westerner who has lived in China for years and who owns a home here advised me, “If you think you’ll ever be able to buy a home you can live in for twenty or more years and raise a family in China, think again. The average residence in China is built to last five years – seven years tops.” Just how Built to Last is the Three Gorges Damn?

Collusion
The citizens of every society must collude to some extent in order for the society to have some semblance of cohesion. The American television show The Wire delves deeply into the strata of a society and the degree to which black and white (morally speaking) mix to create a plenitude of grays. China’s collusions begin and end with its citizens’ distrust of its own institutions. Chinese are born into and cultivate guanxi nets – networks of reciprocal obligation – that begin with family, extend to classmates and coworkers, and perhaps even to people from the same hometown. The cliques are tight, mobile and highly adaptable. Guanxi has saved millions of lives throughout China’s history when her institutions have failed her. The transactions within the guanxi networks tend to run counter to the interests of the State, creating cross-currents and rip-tides of intersts that ultimately undermine society itself. Witness last year’s dairy scandal. Enough said.

Black Dragons are very difficult to predict; after all, they are amongst the most improbable of events. And yet, such events have etched as much of the character of Chinese culture and society as any extended period of peace and harmony.

And with China potentially spawning more Black Dragons at an increasing frequency as the complexities of its moderninzing society mount, how can Western companies predict – or at least prepare for – the inevitably improbable?

Read the first in the Black Dragon series: The Black Swans of China

Read the next installment in the Black Dragon Series: Managing for Black Dragons