Katherin Hille writes on the FT BeyondBrics blog about the terrible way foreign media and then American diplomatic staff were treated as American Vice President Joe Biden began to speak during a formal gathering that included Vice Premier and heir apparent to the People’s Throne, Xi Jinping. Hille writes that just as Biden started talking about the economy, “Chinese security staff and foreign ministry handlers started pushing media out of the room, drowning Biden’s voice out with calls of ‘it’s over, it’s over, let’s go’.” American White House and diplomatic staff sided with the journalists and were themselves physically shoved out the door, as well. Meanwhile, ole’ Joe soldiered on through the kerfuffle with his speech, which sagely pronounced that the world’s economic stability rested on Sino-American cooperation. Which was sadly missing during the showcase basketball game between Georgetown and the Bayi Military Rockets, a local Beijing club. The basketball game ended with time to go because of an on-court brawl between all the players and some spectators, as well (video).

Vice President Biden missed that shoving match, though, as he had attended the Georgetown game in Beijing the evening before with another local team. Most Chinese in the weibosphere seemed embarrassed by the incident, the video footage of which censors wiped from Chinese cyberspace.

And likely no Chinese outside the impatient ministers in attendance at Biden’s speech knew anything of their leaders’ impoliteness to a foreign dignitary.

Nevertheless, the Georgetown players must accept as part of their introduction to Chinese culture and society that their unfortunate experience is pretty much a way of life for the average Chinese. Typically, though, foreigners have to wait several months before moving from theory to lab in the exhausting course called “The Chinese Way 101″.

I do have a sense, though, that come the hand-over of the keys to the throne next year, relations between the two countries will become increasingly fractious as China continues to signal just how much it has to learn about the world outside its borders, and about the nuances of detente and diplomatic relations.

The tone at the top is dissonant.

Technorati Tags: biden, china, georgetown basketball china, xi jinping

Bullet in the Head (1990) is one of the best films Hong Kong director John Woo ever made.  It’s about how greed and corruption and more greed warp the relationship  between three buddies from Hong Kong during the early days of the Vietnam War. A must-see film if you’re into the genre, as I am.

A bullet in the back of the head is also often the punishment for those who abuse their power in China so egregiously that their crime may incite a riot of protests by citizens or tear a substantial swatch from the leadership’s fabric of rule. Typically, the form of execution is reserved for national level officials, or high-profile leaders, like the Communist Party boss of Shanghai who skimmed from the city’s social welfare pot to personally invest in property. When the Party was cleaning Shanghai’s house because of the scandal six years ago, I recall local government officials as far out as central Anhui  province unable to make decisions because they did not know how far into China’s interior the tremors would reverberate.

Most recently, Vice Mayors of Hangzhou and Suzhou – rich second-tier cities – had the misfortune of being caught out by authorities for corruption on infrastructure projects for which they were responsible five years ago. They met with the same misfortune as the Shanghai CPC boss. The punishments seemed unusual given how relatively low level the officials were in China’s leadership pecking order.

Paul French and I recorded a podcast a couple weeks ago for Ethical Corporation Magazine about the executions and what signals we thought the central government was sending out through such an irreversible punishment. In addition to being an analyst on China consumer market trends, an author of several books on China (and now, a published novelist), Paul is also China editor for the Magazine.

You can listen to the podcast here.

Technorati Tags: national security, policy trends

The China Daily reports the Ministry of Industry and Information Technology (MIIT) website said on July 11, 2011 that it will continue closing energy intensive manufacturing industries, with 2,255 slated for closure. MIIT has targeted 18 major industrial sectors for restructuring, including iron, steel, coke, cement, flat glasses, paper making as well as printing and dyeing. The factories are simply sucking too much power from more productive uses in the society, not to mention from foreign operations in the country.

A prime example of the amount of energy heavy industry is consuming and wasting are the glass making furnaces of Xuzhou, in northern Jiangsu Province, a four-hour drive northward over the Yangtze River from Nanjing. Western inspectors have told me of massive furnaces that operate round-the-clock. Trucks circulate through the factories to disgorge tons of materials for making glass, while others pick up delivery of vessels of every shape and size. When one of the Western inspectors asked a manager of one of the kilns about how plant staff maintain the furnaces, the manager explained they merely use the furnaces until the kilns can no longer operate, then replace them with new facilities. The furnaces are open to the air, with employees – typically in their fifties – plucking near-molten glass vessels with tongs from conveyor belts that never stop. Furnace stacks blow heat and soot into the air, unfiltered.

When asked about any problems with electricity, local managers simply pointed to power plants that dotted the sooty landscape. The furnace and other heavy industries in the area were guaranteed power from local authorities because of the importance of the industries to the local economy and the standing of local political bosses.

I’ve edited a research note on the ramifications of ongoing power outages on foreign operations in China, titled, “Lights Off for Western Manufacturers in China“, located at TrendsAsia.

Technorati Tags: natural resources, policy trends

The Financial Times writes in its article “China’s Eye in the Sky Nears Par with U.S.” that, in the words of one American military commander, China is practicing “Access Denial” in the western Pacific. The article discusses how during the 1996 spat China had with the United States that China could not pinpoint the position of the two aircraft carriers the United States had sent into the South China Sea to support Taiwan. Since 2000, China went from being able to keep an eye from the sky on objects in its front yard from practically zero to six hours today, nearly equal that of the capability of American satellites (or so they say).

China’s greater assertiveness in the Western Pacific toward its neighbors and toward the United States is getting some teeth to it, worrying its neighbors. The Wall Street Journal writes of the meeting this week between Adm. Mike Mullen, the chairman of the U.S. Joint Chiefs of Staff and Gen. Chen Bingde, Chief of the General Staff of the Chinese People’s Liberation Army, in a meeting in Beijing to discuss China’s recent clashes in the South China Sea with the Philippines and Vietnam, and its never-ending bellicose rhetoric about territory in the Sea of Japan. China, the Admiral said, was clearly developing a strategy of “access denial” toward United States penetration of the Western Pacific, cordoning the smaller states in the region from an American security blanket.

Of course, flare ups in the region have an assortment of ramifications for businesses operating in China, sometimes depending on the country of origin of the foreign invested enterprise (FIE). Japanese FIEs are a favorite target of protest when relations get rough between China and Japan, while Western FIEs in China in joint ventures with Philipine or Vietnamese companies may find pressure applied to their joint ventures in China.

I’ve edited an analysis report on the implications for foreign companies operating in China of increased strife between China and bordering countries entitled, “Rough Neighborhood: China’s Increasing Assertiveness in Asia And Implications for International Business at TrendsAsia.asia.

Technorati Tags: national interest

I met up recently with a acquaintance from the States, a charming business professor who has traveled to China several times over the past few years. She told me a story that did surprise me a bit, simply because I know such things happen; however, not to anyone I’d ever known before.

She told me that while traveling the year before with her group of EMBA students in Beijing she returned to her hotel room after a meal to find her notebook replaced with a new writing pad and all the photos on her camera of the trip in China wiped clean from the memory (or, perhaps, the memory card had been replaced). Presumably, the notebook contained her observations and ruminations about how China is opening up to the world in business, politics and society, and how the government is embracing internationalization with a spirit of rapprochement and relaxed engagement.

Just goes to show: just because you’re paranoid, doesn’t mean they’re not out to get you.

image credit: charactertherapist.blogspot.com

Nicholas Kristof writes in his op-ed piece The Rise of the Cheneys:

My take is that China is going through a period resembling the Bush era in the United States: hawks and hard-liners have gained ground in domestic politics, and they scoff at the country’s diplomats as wimps. China’s foreign ministry seems barely a player.

I call them Neocoms, or Neo-communists, in honor of the failed United States Republican Party hard-right Neocons – or Neoconservatinves – who one by one fell on their swords after a string of policy debacles during and after the Bush-Cheney years.

The new Neocom leaders and China – after 4,ooo years of history – might find there are a few new lessons the world has to teach a country birthed into a new century.

My mama used to say, “If you don’t have anything nice to say, then don’t say anything at all.”

Shame the Confucian Analects make no mention of this homespun wisdom. A fifth of the world would look a lot wiser about now in the eyes of (most) of the international community, otherwise.

What are some other homespun homilies that would be appropriate to the moment?

The Financial Times recently printed an insightful op-ed piece entitled, “Why the west should not demonise China”.  Minxin Pei, professor of government at Claremont McKenna College and an adjunct senior associate at the Carnegie Endowment for International Peace, makes the point that China is caught in a triple-bind when it comes to world perception: it panders to nationalist sentiments at home while attempting to present itself as thoroughly modern and respectable to the international community; the international community judges its actions by the standards of a superpower, not a banana republic; and the West, in particular, always sides with the underdog when the authoritarian regime that China is engages a counterpart in a dispute.

Well worth the read, the article proffers advice to both China and the West in the ongoing wrestling match to figure out the next world order.

Related posts:

New Prescription Needed: Blurring a Bi-polar World

Ostpolitik, China-style

China should go to its room

When Will China Lead?

image credit: sufiansteve.blogspot.com (Note: China-watching should be so interesting, huh, guys?)

North Korea’s shelling of an island ostensibly off the shore of South Korea (and subsequently killing and wounding residents) has caught China flat-footed. The Chinese leadership is caught in a bind by a dictator who is both “mad” and “bad” – to paraphrase former Secretary of State Madeleine Albright when asked her thoughts about Saddam Hussein just before he was toppled (she had said Saddam was “bad but not mad)”. It seems no amount of Chinese banquets, red packets of diplomatic support and abstentions at United Nations Security Council meetings to censure the rogue regime have been able to straight jacket its cantankerous neighbor.

North Korea’s  latest provocation is as unsettling for the Chinese leadership as it is for the South Koreans themselves. (The Chinese I’ve asked about it seem oblivious to the event. )Should the inflated paper tiger that North Korea is suddenly pop – and try to take its southern cousin with it – the implications for China are enormous: the sort of Black Swan that could decelerate its economic development somewhat and limit its sphere of influence in its own neighborhood.

The evaporation of the North Korean regime would imply that the trickle of refugees escaping from North Korea into China would become a flood, weighing down local economies; provincial economies.The quickest way for China to re-inflate North Korea might be to invest in the hollowed out shell of a region, along with South Korea.

In addition, South Korea’s influence in the region would increase with American backing, which would put the United States back at the Yalu River all over again – which is how this whole mess got kicked off nearly sixty years ago when the Chinese entered the civil war.

As a senior Chinese commentator told the New York Times in reference to North Korea’s unbridled aggression, “… strategically, China’s kidnapped by it.”

Let’s hope history comes nowhere near rhyming this time.

image credit: debateitout.com

Japan is not a happy neighbor. While extending a hand to China to bolster trade links and advantages with its out-sized neighbor, it is watching out one eye as the Chinese People’s Liberation Army Navy runs frigates and submarines ever closer to Okinawa. The latest episode happened just a couple days ago with ten Chinese warships and subs passing through international waters near Okinawa. Just a week before, according to the Financial Times, a ship-based Chinese helicopter came within 90 meters (!) of a Japanese destroyer. One can almost see the Chinese pilot thumbing his nose at apoplexic Japanese sailors, just itching to take out the mosquito of a craft.

The United States Navy’s “Sputnik”moment” came in November 2007 when a Chinese Song-class nuclear attack submarine surfaced 160 feet from the U.S. aircraft carrier U.S.S. Kittyhawk. Sputnik was the Soviet Union’s satellite program in the late 1950s that crystallized American fears of losing the race for outer space. The 1000-foot Kittyhawk, with 4,500 personnel on-board, was being escorted by at least a dozen other naval vessels and two submarines when the Chinese sub had apparently been tracking the carrier group for some time, running on super-quiet electric motors. The Chinese crew revealed its presence to the Americans in waterways near Okinawa. American naval leaders were apoplectic at the Cold War tactic, while the diplomatic corp lodged angry complaints with the Chinese government. Beijing offered it had been ignorant of the submarine maneuvers and suggested the encounter was a coincidence. American military leaders had not considered that any of the 13 Song class subs at the time were as advanced as they apparently were.  The surprise served as a rude awakening to American policy makers that the Pacific Ocean was no longer the pre-eminent domain of its navy.

Ultimately, what’s at stake here for Japan and China are untapped sources of energy and national pride. China’s central government, in other words, has a full mandate from its citizenry to force its collective will onto islands off China’s and Japan’s coast that both countries contend are their territory. At the center of contention are the Diaoyu (Senkaku, for the Japanese) islands, Tianwaitian (Kashi) and Chunxiao (Shirakaba), the latter two of which are characterized more as rock outcroppings than as masses of land that come anywhere close to becoming islands. Nonetheless, all lie nearly equidistant from the shores of both economic powers, which are willing to go the military distance to protect their territorial claims as well as potential oil resource riches.

Though in 2008 the two countries agreed to jointly develop gas fields in the disputed seas, China has signaled through military exercises around the outcroppings that it’s not much interested in detente. A dangerous trend indeed.

Further reading: Globe and Mail

A Bogey Man That Will Never Die

Warlords in Suzhou

New Prescription Needed: Blurring a Bi-polar World