China: The rise and rise

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China : the rise and rise

History Repeating Itself

Jasper Becker
originally published on 14 August 2006 - AsiaSentinel
China’s support of nasty regimes —North Korea, Sudan—is part and parcel with its past. Engagement with China was not supposed to work out this way. In a new report, Amnesty International has added its voice to the growing condemnation of China’s blanket support for unpleasant regimes like Burma, North Korea, Sudan, Zimbabwe, Uzbekistan and Iran. Amnesty draws particular attention to arms sales, but Beijing is using all means at its disposal—economic and diplomatic—to protect a host of governments responsible for the world’s worst violations of human rights. While the Bush administration insists it is trying to persuade Beijing to become a responsible “stakeholder” in the world community, like previous administrations it is finding this far from easy. In theory it ought to be to China’s advantage, and everyone else’s, that rogue regimes are reined in by sanctions and diplomatic pressure rather than overthrown by costly and disruptive wars like those fought in Iraq, Afghanistan and the former Yugoslavia. Now a great beneficiary of the world trading system, China depends on a stable international environment to import raw materials and export the burgeoning output of its factories So why support the rogues? Beijing’s motivation in sheltering a string of client states is sometimes explained, or justified, by narrow self-interest. It supposedly wants to secure Sudan’s oil or capture Iran’s gas to offset energy shortfalls and find markets for exports. Yet its willingness to undermine Western sanctions against Burma, block UN resolutions against Sudan, and supply arms, is a symptom of a much deeper flaw in China’s relationship with the world. Chinese leaders simply don’t care about genocide in Darfur, mass starvation in North Korea or Burma’s persecution of minorities and democrats. How could they? They have hardly behaved any better themselves, at home or abroad. More than 35 years have passed since President Richard Nixon went to China, signaling a sea of change in the country’s external relations, yet although China’s economy has been transformed by the opening, the Communist Party of China (CCP) has not. The Party has yet to confront its own horrendous past or come clean about the enormous violations of human rights it committed during the relentless climb to power that began in 1921 and throughout its absolute dictatorship since 1949. The Party has shown no stomach for facing atrocities it committed at home, and Beijing has never had to apologize for occupying Tibet, attacking India, Burma and Vietnam, creating Pol Pot’s Cambodia, bankrolling Enver Hoxha’s Albania and fuelling devastating insurgencies across South-East Asia and Africa. It doesn’t feel the need to because it clings to a version of history which allows the Chinese to see themselves only as victims. At the same time, Beijing stirs up outrage at Japan’s alleged unwillingness to repent for the invasion of East Asia and for using textbooks that falsify history. The truth is that during its long Imperial past, China was a great colonial power, invading and occupying neighboring territories; it continued to do so under Chairman Mao. He sent tens of millions of people to colonize areas conquered by Qing dynasty armies and vowed to restore the empire at its greatest extent. At home the CCP murdered and starved to death millions as it fought its way to power, killed 30 million during the Great Leap Forward famine, and destroyed the lives of countless others in brutal political campaigns like that of the Cultural Revolution. What is most worrying is how even its victims often accept the official version of history. Western newspapers, which recently covered the 40th anniversary of the start of the Cultural Revolution in 1966, interviewed many who acknowledged their individual guilt but still believed that the terror was merely an unfortunate excess. Mao’s Cultural Revolution was not an aberration. It was only an episode in an unrelenting campaign to erase the memory of a nation. From the 1920s onwards, Chinese Communists began destroying every artifact of the old society in order to implant an imagined history in which every aspect of China’s backwardness was the fault of foreign imperialists and capitalists. It is still the version taught in schools and universities. This Cultural Revolution still goes on today. This is why the current leadership, many of them former Red Guards like Hu Jintao, is determined to demolish China’s historical cities, tearing down the old and paving over the past. Any totalitarian state must monopolize the past to control the future, as George Orwell so famously made clear. In the great rush to modernize Beijing for the Olympics, it is razing the entire ancient capital. Plenty of museums are being built but these simply reinforce the Party’s distortion of Chinese history. The Party’s own history is also so much fantasy. From recent research, like the stunning 2005 biography, Mao: the Untold Story by Jung Chang and Jon Halliday, we now know that Mao’s principle aim was securing his own power and, as a result, he never really fought the Japanese and indeed collaborated with them to undermine the Nationalists. In her new book about the Long March, author Sun Shuyan shows that much of accepted history was invented, such as the most famous heroic episode, the 1935 battle to cross the Luding Bridge by 22 Red Army soldiers facing an overwhelming force of Nationalist soldiers. There never was such a battle. A recent book edited by historian Yu Xiguang, Great Leap Forward, Bitter Days, includes the first official evidence of cannibalism during that awful period, with a photograph of a man condemned for eating his own child. The more we find out about China’s past, the worse it seems. Ten years ago, I wrote about the Xinyang “incident,” which took place in one corner of Henan province during the Great Leap Forward famine (1958-62). My sources claimed that over one million died from man-made starvation in a district with a population of eight to ten million. New research drawing on CPP archives reveal that in fact 2.4 million people perished, and perhaps a million more were beaten to death at the hands of local Party officials. This is the real reason that Mao launched the Cultural Revolution: to bury the memory of his misdeeds and destroy colleagues who knew the truth. The Party is still working hard at censoring everything published in the country. For example, earlier this year the Party fired the editors of the newspaper supplement Freezing Point which began running articles questioning official accounts of events like the Boxer rebellion. The government is also increasingly successful at persuading foreign publishers and media groups like Google to collaborate in its efforts in return for access to the massive China market. This is why people in China understand so little about their own past and care even less about what their government might be doing to perpetuate misery in far off places like Sudan. Until there is a real glasnost in China, we cannot expect to see China acting responsibly abroad. *Jasper Becker is the author of The Chinese* and Hungry Ghosts. His most recent book is Rogue Regime: Kim Jong Il and the Continuing Threat of North Korea.**

China's political revaluation in an Indian summer

24 July 2005

Last week's move to remove the US$ peg from the Chinese currency and allow a small revaluation, while economically important, was driven by political motives.

China's government chose to ease trade tensions with the US at this specific moment for good reasons.

The timing was significant. Coming at the end of a week that saw the USA openly courting a new relationship with India.

Manmohan Singh, India's prime minister, was in Washington being treated to a 19-gun salute and the chance to make a speech to Congress. He was the guest of honour at a White House banquet, only the fifth Bush has thrown in more than four years. Bush does not entertain as the Clintons used to !

America stated openly an ambition to help India become a great power in the 21st century. The great win for India was an acceptance that India should enjoy "the same benefits and advantages" as other states with nuclear weapons. India is to be granted “full civil nuclear energy co-operation”—such as fuel supplies and the transfer of technology.

This is hugely important for India. One of the biggest constraints on the continuing success of its fast-growing economy is an electricity shortage. Nuclear energy, which at present accounts for only about 3% of total generation, is, in many eyes, an attractive alternative to coal and expensive imported oil and gas.

The American move is also a great symbolic victory. For decades India has faced sanctions because of its nuclear-weapons programme. Now, America is, in effect, offering to help it to become a respectable bomb-wielding citizen. In return India has promised to adopt the same responsibilities as other nuclear powers, including separating its civilian nuclear facilities from military ones, opening the former to international inspection and maintaining its moratorium on nuclear testing.

All of this cannot be detached from apprehensions about China's looming might. Although India is enjoying something of a second honeymoon with China, its own long-standing suspicions, which date to the war of 1962, have not entirely faded.

On the sidelines Beijing is attempting to buy two American corporations - the oil-producer Unocal and the appliance-maker Maytag. These acquisitions are in the balance.

With Chinese President Hu Jintao due to visit America in September, there was a timely need to appease the hawks in the US congress and to remind the Americans that China is Asia's economic powerhouse.

It is likely that the Chinese will allow the yuan to appreciate further, but only in "baby steps" and only over a long period of time. With $700 billion in reserves, Beijing is plenty of protection.

The ending of China's dollar "peg" was a key moment. But, to the intense frustration of the White House, the likelihood is it won't translate into a large appreciation of the yuan - and subsequent loss of Chinese competitiveness - any time soon.

The USA may delusionally think that they pressured China into a significant move. Sadly not; the move more reflects China's influence on the global economic stage than it does US influence.

China's resource buying spree

3 July 2005

China is in the early stages of a massive investment in the resources that it needs to support its booming economy and massive population. For the USA this economic threat maybe bigger than any military threat. The first step is an unsolicited $18.5 billion offer from state-owned Chinese oil firm CNOOC to buy Unocal, America's ninth largest oil firm; this has given a nation obsessed with energy security a shock.

Last Thursday Chinese executives were on Wall Street seeking to get their bid accepted by Unocal. Meanwhile Congress voted 398-15, backing a resolution that Chinese ownership of Unocal would 'threaten to impair the national security of the United States'. Furthermore, approval by Unocal's board of the bid should result in a 'thorough review' by President Bush.

The Chinese reaction to the senate vote was predictable strong. "TO spread the ‘China Threat’ and try to curb China's progress and starve its energy needs is not in the interest of world stability and development. Such attempts are doomed to fail” said Zhang Guobao, vice-chairman of China's National Development and Reform Commission

The question for Unocal's shareholders is whether they have the courage to take Chinese cash that values Unocal's shares at $67 or to accept an agreed offer from US major Chevron on the table worth $60 per share that comes without political complications.

Chinese officials argue that it is Unocal's oil and gas in Asia that the company prizes. However, the deal would also give China a 9 per cent stake in the BP-led consortium building the $6bn Baku-Tiblisi-Ceyan oil pipeline, a project aimed at easing US reliance on the Middle East for oil. In addition Unocal has the technical expertise that will allow CNOOC to compete for giant gas and oil exploration projects.e

Unocal may just be the start of a further Chinese bidding for US assets? The Chinese imperative is most obvious in the quest for resources being led by the mainland's big oil, metal and commodity producers. Baosteel's South American investment, for example, is a joint-venture with CVRD, the world's largest producer of iron ore, vital for steel production. Capturing scarce resources was also behind the still continuing attempt this year by state-owned Minmetals, China's top base-metals producer, to spend $7 billion buying Canada's Noranda, one of the world's largest zinc, nickel and copper producers.

With crude oil over US$60 a barrel and heading towards US$100, the world's two superpowers are on collision course over crude oil. It also emerged last week that China National Petroleum is poised to bid for Petro-Kazakhstan, the Canadian-based oil producer.

China's spending on oil assets has been accelerating this year with investments into Canada, Peru and Venezuela.

Apart from the Aktobe oilfields in Kazakhstan, China holds some old fields in Azerbaijan, which is otherwise dominated by BP Amoco. There are agreements or investments with a variety of African countries including Egypt, Niger, Gabon, Algeria, Chad and Libya. There are exploration deals in Mozambique, Congo, Syria, Pakistan and Saudi Arabia. Substantial deals exist with Venezuela, and Venezuelan President Hugo Chavez is anxious to reduce dependence on the US. Plans are underway to build a pipeline from Venezuela to the Pacific coast of Columbia, enabling oil to bypass the Panama Canal and be shipped across the Pacific to East Asian markets, including China.

There is also the oil sands deal in Canada, and also an agreement to build pipelines on the western coast of Canada with Enbridge. There are oilfield investments in Ecuador and Peru, exploration contracts and refinery renovation deals in Iran. There were oilfield deals with Saddam Hussein's government in Iraq, but these were cancelled. Chinese companies are now being invited to take part in the bidding for oil projects by the new Iraqi government.

Most of the promising development areas have already been taken, in Nigeria, the Caspian Sea, and most of the Middle East. China claims, therefore, to have been forced to go to less fashionable places, even - recently - being linked with concessions in the politically troubled Ferghana Valley in Uzbekistan. China has tended to go to regions that few Western companies will touch, and they blame the fact that they are not being allowed to compete on the international market. China claims that it is being squeezed out, usually for political reasons. This plays to the bid for Unocal.

CNOOC's bid will inevitably face delays and shareholders have the option of taking Chevron's money at a vote on 10 August. Chevron may need to improve their offer.

Time to reassess Mao

30 June 2005

Mao Zedong's portrait looms large over Tianenmen Square. His mausoleum is at the centre of the square. His face is on the country's bank notes. His communist ideology is still given credence by the current leaders.

Mao and his communist ideology are both out of place in modern China. And it may be that authors Jung Chang and John Halliday's new biography of Mao ("Mao; the unknwon story") is the key to a reassessment of Mao's place in modern China.

Many Chinese fled Mao and the communist threat to head for Taiwan and Hong Kong and overseas. They are proud of being ethnically Chinese. It is the party and its history that scares them. This book, after ten years of research and writing, re-writes modern history.

Mao instilled obedience through fear. During his rule modern estimates are that 27 million people died in the work camps, where they were sent to reform their bourgeois habits; some 38 million died of starvation and related sickness in the infamous and misnamed Great Leap forward from 1958 to 1961 and millions more in the Cultural Revolution of 1965 to 1976.

One of the best arguments against Mao is what has happened in China since he died. Spurred on initially by the reforms of Deng Xiao-ping, China has enjoyed a real Great Leap Forward, without tyranny and without wanton death and destruction.

As the Chinese ask Japan to reconsider its history it is time for China to do the same. Modern China exists because of the will of the people to live, to trade, to catch up and to forge ahead.

No country can be at ease with itself that does not look its own history straight in the eye. And it can only be hoped that this book will one day be read widely inside China.

Microsoft's China censorship; localisation or capitulation?

16 June 2005

Microsoft grew rapidly to be a great company because it is an American company; because market forces, education, freedom of action and opportunity all gave the company's founders the opportunity to grow unshackled by politics.

It is therefore particularly depressing to see Microsoft so readily agree to censoring the Chinese version of its blog tool, "MSN spaces". The system automatically rejecting words including "democracy" and "Dalai Lama". When a Chinese blogger attempts to post a message containing terms such as "democracy", "Dalai Lama", "Falungong", "4 June" (the date of the Tiananmen Square massacre), "China + corruption", or "human rights", a warning displays saying, "This message contains a banned expression, please delete this expression."

How far is Microsoft willing to go to collaborate with the Chinese authorities? If the authorities asked Microsoft to provide information about Chinese cyberdissidents using its services that it would agree to do so, on the basis that it is was legally obliged to do so.?

Generally "subversive" messages are displayed on Chinese-hosted forums and blogs but the banned words are automatically replaced with blank spaces.

The Chinese version of the MSN portal, along with the blog tool, were launched as a joint venture with a local state-controlled company, Shanghai Alliance Investment Ltd (SAIL).

The Chinese authorities are trying to impose self-censorship on all search engines and blog tools that that wish to operate on its territory. Microsoft is following Yahoo !, which was the first, agreed to remove all "subversive" news and information from its search results.

Microsoft's argument is that with despite the filters they are helping millions of people communicate, share stories, share photographs and build relationships. But please do not offend the non-elected authorities or question issues of history, unless the authorities have launched their own campaign, such as the recent anti-Japanese rallies.

Here is the problem: is there a workable alternative? The Chinese market is too big for Microsoft and others to close up operations in that country, or to face litigation from the government. Microsoft wishes to be a blog host in a land with billions of eyeballs—rewriting foreign public policy is not part of the business plan. Boycotting China would be a noble choice. But simply ignoring Chinese law would just stir up international friction to little positive effect.

So is this adapting to local laws bona fide and necessary localisation or is it capitulation?

Xinhua changes the focus

22 April 2005

State owned Chinese news agency, Xinhua, has realised that the best way to distract attention from the anti Japanese protests is to divert attention to other important issues.

As a state owned enterprise it clearly has a duty to report all the big domestic news stories and it does not disappoint with its substantial photograph collection from the 2005 Miss Universe China qualifying competition.

Given Xinhua's ability to borrow news stories I do not feel too guilty about using one of their pictures here. And if you want to see more (and there are many more) then you should follow this link!

With thanks to www.danwei.org.

"victory definitely belongs to us Chinese"

18 April 2005

Anti-Japanese demonstrations continued in China at the weekend; with the largest turnout in Shangai.

Running Dog's (Online reporting from China) vivid commentary on the riot is here. In his words "It was politics at its most terrifying - politics as mass mobilization, and politics reduced to the undifferentiated prejudices of the crowd."

The Chinese government continues to refuse to apologise for the damage caused to Japanese property. That said, through history a Chinese apology is as rare as a snowball in the Sahara. The Chinese argue that the demonstrations are spontaneous; the following instructions suggest otherwise: they are also quite entertaining. I guess all the hallo kitty bags and sony mobiles are all being hidden away.

“《上海地区抗议日本右翼活动的详细说明书》
A detailed instruction on the Protest Against Right Wing Japanese

时间：2005年4月16日9点整（本周六）
Time: 2005-4-16 9:00am (Sat.)

地点：1路－外滩人民英雄纪念碑集中、2路－人民广场集中
Venue: Route 1:Monument of People’s Heroes; Route 2: the People’s Square

路线：外滩人民英雄纪念碑—> 南京路—> 人民广场—> 日本大使馆
Route: Monument of People’s Heroes→Nanjing Rd. → the People’s Square → Japanese Consulate

（考虑到有行动不便的爱国者，我们建议在人民广场坐925B到虹桥开发区。）
(In consideration of those physically challenged, we suggest you to take bus 925B from the People’s Square to Hong Qiao)

人物：有消息上海各大高校学生都会自发参与，目前各校都进入了紧张状态，领导普遍
取消了一切出差会议活动，以防局面发生不可控制。不要试图去各个论坛查证，相关该
天活动的帖子都被要求立即删除。如果有兴趣请自行转发周围的人获知此事并邀请参加
，如果不愿直接参与届时去看看热闹也好的，会是难得的景观！^_^
Participants: Some sources say that college students in Shanghai will participate voluntarily. All schools in Shanghai are in a state of tension. School leaders canceled all their activities to see to it that nothing goes out of control. Don’t try to find proof from school bbs, all related posts are deleted right away. If you are interested, forward this message to people around you and invited them to join. If you dont want to get directly involved, just go and take a look. It will be quite a view!

活动注意事项：
Instructions:
1、记得自带干粮和饮水，不要选择日本的品牌；
1. Bring food and drinking water, don’t choose Japanese brands;
2、尽量不要带贵重物品，尽量穿运动鞋，便于跑动；
2. Don’t bring valuables, wear sports shoes in case you need move fast
3、不要携带日产相机、摄像机、手机、录音机等电子产品，以防不测；
3. Don’t bring Japanese made cameras, video cameras, cell phones, recorders, etc, just in case
4、带好记号笔，届时签名用；
4. Bring markers for signature
5、到了使馆门口不要投掷石块、金属等硬物，建议携带番茄和鸡蛋、小泉头像、打火
机、日本国旗等；
5. Don’t throw stones, metal or any hard stuff to the Japanese consulate. We suggest you to bring tomatoes and eggs, lighters, Japanese national flags, and portrait of the Japanese Prime Minister.
6、参考口号和标语：“抵制日货、抗议日本篡改历史教科书！”、“抵制日货、支持
国货”、“反对日本进入常任理事国”、“反对日本进入联合国常任理事国！拒绝日货
！还我钓鱼岛！抗议日本篡改历史教科书！”等。
Reference slogans and banners: “Boycotting Japanese products! No whitewashing the school history textbook!”; “Boycotting Japanese products! Support domestic products!”; “No permanent UN Security Council seat for Japan! No Japanese products! Give us back Diaoyu Island! No glossing over school history text books!”

活动目的：
Purpose:
对日本政府长期拒不承认二战期间所犯下的滔天罪行、篡改历史教科书、强占钓鱼岛、
妄想加入常任理事国的卑鄙行径表示最最强烈的抗议！！！
To protest against the Japanese government for not admitting the war crimes they committed in the 2nd World War, whitewashing school history textbooks, illegal occupation of Diaoyu Island, and attempts to obtain permanent seat in the UN Security Council!

最重要提示：
Important:
1、此次活动不针对任何在华日本友人、仅仅针对日本右翼势力和其支持者，所以在活
动中请不要过激地针对友人；
1.The protest is not aimed at friendly Japanese, but again Japanese right wings.
2、警察是人民的公仆，在游行过程中，他们和我们一样也是爱国的，只是因为他们有
他们的任务——保证活动的安全性，所以大家配合警察叔叔，特别是在使馆门口，如果
警察叔叔看着你，就不要乱丢东西，如果没有人看着你，就丢一个鸡蛋或者一个番茄，
万一丢完了被警察叔叔发现，就朝他笑笑；
2. The police are public servants, they are just as patriotic as us, but they have their duties — to ensure security during the protest. Therefore, please cooperate with them, especially in front of the Japanese consulate. If a policeman looks at you, don’t throw anything, if not, throw an egg or a tomato. If you are spotted throwing stuff at the consulate, smile at the policeman.
3、沿途经过日本人投资的商店、公司等，不要给予破坏性打击，因为破坏了以后，日
本人会向中国政府索要赔偿的，所以大家届时理智一点；
3. Don’t attack Japanese shops, companies en route the protest, for the Japanese government will claim losses with the Chinese government. Please stay calm!
4、在焚烧日本国旗和小泉头像的时候，请注意安全，不要烧到衣服变成自焚了！
4. Be careful when burning the Japanese flag and the Prime Minister’s portrait! Don’t end up burning yourself!
5、控制好整个活动的度是最关键的，所以请各部分（学校、公司、社会团体）负责人掌控好，上海是国际性大都市，是国家的经济命脉，请大家在整个活动中理性参与！！！
5. It’s very important to control the degree of the protest. People in charge of the protest from all companies schools and social groups need to control your own group. Shanghai is an international city, and the economic heart of China, so, please participate with caution!!!
6、以上几点是我们能想到的，也希望大家补充，并提醒到时候参加活动的朋友们。
6. The above mentioned are things we can think of, you can add to it and bring it up to friends who join our protest.

如果你爱国，如果你周六有空，那就请参与到这个活动中来！
If you are patriotic and you are free on Saturday, please join the protest!
也许你的力量是渺小的，但是千万个我们就能汇聚成强大的力量！！！希望上海的活动
能象广州和北京一样成功！也希望我们简单的活动能让日本政府认清目前的形势！
Perhaps you think you are nothing, but thousands of us can be a tremendous force!!! We hope the protest in Shanghai will be as successful as the ones in Beijing and Guangzhou! We also hope that the Japanese government will recognize the situation because of our protest!
抗日的道路很漫长，但是只要我们齐心协力，胜利一定属于我们中国人！！！
The road of fighting the Japanese right wing is long. But if we bear ourselves to our duties, victory definitely belongs to us Chinese!”

Try this for double standards

12 April 2005

Blistering irony from China as they keep the pressure up on Japan; the executive vice-mayor of Shenzen (there is plenty of vice in Shenzen!) gave his support to the anti-Japanese protests saying that they were a reflection of people's emotions. Asked if the city government would approve any future anti-Japan demonstrations Mr Xu said that the constitution gave people the right to protest adding that "our government cannot deprive people of that right"

Meanwhile in Dongyang, Zheijiang province two protesters were reported dead as police used batons and shields to break up a demonstration by elderly women against heavy chemical pollution.

From SCMP to China Daily

12 April 2005

The SCMP was once a strong independent opinionated and critical newspaper. It is now a poor imitation of its former self and reads more like China Daily.

This has a lot to do with its pro China ownership and its China editor. Hilariously, Wang Xiangwei (China Editor, SCMP) in yesterday's opinion peace on the anti-Japanese demonstrations wrote yesterday that:

"The anti-Japanese protests have been largely peaceful and controlled, compared to demonstrations of a similar scale in western countries".

Preposterous. Up to 500,00 marched in Hong Kong on a pro-democracy protest two years ago; not one brick was thrown. One million people march in London to protest the Iraq war; beyond a few scuffles, there are no problems.

Meanwhile a few thousand people protest in Chinese cities and sovereign property (the Japanese embassy) is attacked.

And the SCMP allows this stuff to be printed ??

No one was hurt or arrested reports Mr. Wang. Well of course no one was arrested; the authorities were conveniently looking the other way !

Mr. Wang describes these as "popular protests". Maybe encouraged or supported would be better choices of wording !

Going too far in China

11 April 2005

The Chinese authorities may find that once the tap has been turned on it is hard to turn off...the sheer venom of the anti-Japanese demonstrations in Beijing and southern China over the weekend have surprised many observors.

But now that the anti-Japanese protests have started they may prove hard to stop. Once you give people a voice it is hard to take it away from them.

In Beijing it was clear that the march and demonstration at the Japanese embassy had official sanction. Roads had been cleared for the march; barriers erected and an areas set aside from where the demonstrators could launch eggs, stones and bottles at the embassy. But popular anger against Japan is so raw that it takes little effort to spark.

Some of the posters were vitriolic: in one, a Chinese swordsman was slicing through a Japanese rising sun symbol. Another read, "Take a big knife and chop off head of Japanese devil."

People are being urged to boycott Japanese products; Japanese cars have been attacked. All this is bad economic news to Japanese companies who have been massive investors into China.

So what is happening; at a base level the Chinese are protesting Tokyo's whitewashing of World War II atrocities and its bid for a permanent seat on the U.N. Security Council (where China does have a seat). Additionally the Communist Party is playing a nationalist card to win backing at home. The economic advantage to Chinese companies is that in this hostile atmosphere they may blunt Japanese competition. But reaction from Japan could be strong. The demonstrations were also timed to coincide with discussions on the ongoing territorial dispute over gas fields to the south of Japan or to the East of China depending on your point of view.

How far can this go and what will the Japanese reaction be. The Japanese themselves are speaking with a stronger voice. Aid to China has ended, Prime Minister Koizumi under pressure from the political right is in no hurry to visit Beijing. But to avoid further turmoil and significant economic problems Mr Koizumi must finding less inflammatory ways to honour the nation’s war dead and do something to balance the historical textbooks.

China has exploited and exacerbated historic bitterness for political purposes: first, to divert attention from domestic tensions over economic disparities, unemployment, corruption and political restrictions; and secondly, to limit Japan’s influence in Asia at a time of growing political and economic competition with China.

Anyone over 40 will know what a mob can do in China. There are well over 10,000 Japanese companies operating factories and trading operations in China; even if just a few of them were to be targeted in a spontaneous wave of violence, memories of the cultural revolution are still fresh enough that fear alone would stop the other businesses from operating.China will be the ultimate loser if the government encourages a marauding mob mentality.

Dripping in irony

6 April 2005

The big news in China is the same as the big news most days here. It is the continuing battle for influence with Japan. The diplomatic war of words is not abating.

the latest war of words is over re-written Japanese textbooks that are less than truthful in their depiction of the Japanese actions in the second world war. One history book submitted by the right-wing History Textbook Reform Society re-asserts the wartime ideology that Japan's invasions of China, the Korean Peninsula and Southeast Asia were justified acts of self-defence. Apparently, it assisted Asia's liberation from European and American domination.

There is no overt mention of the appalling Japanese atrocities committed in China and elsewhere.

The trouble is that Xinhua, through its editorial comment in China Daily then observes that "a country's prestige is not built on subterfuge, but its acknowledgment of the past". Well I have news for the Chinese, Mao Tse-Tung's cultural revolution was abhorrent and brutal and is there a Chinese text book that acknowledges the massacre in Tianenmen Square in June 1989.

The failure of the Japanese to acknowledge past atrocities is shameful; but China could try leading by example.

Counterfeit China

3 March 2005

As I left the conference cocktail reception this evening I was given a leaving gift. In the bag was a black Alfred Dunhill document bag courtesy of one of the sponsors.

I was impressed. The bag has a nice Dunhill label. The bag has Dunhill tags and lining.

It is the Certificate Card that gives it away ! The card reads as follows:

"Italian ALFREFDDUNHILL" Leather collection ate designed by Italian man, famous for its meticulous made and strict checktion. Free repaired with the native chapman if dam aged in product expect by man and welcome for question of customer.

Nice bag; shame about the English !

China's changing demographics

2 March 2005

Last month I commented on Donald Tsang's old fashioned plea to the people of Hong Kong to have more children. But Hong Kong's numbers pale when compared to the changing demographics of China.

China's one child policy has been very effective. Maybe too effective. Some figures to consider; taken from this week's Economist: China's total population is now 1.3 billion. This is expected to stay flat over the next 15 years and to then fall rapidly. The number of people aged under 40 has already peaked at 800 million. In the next twenty years this number will fall by one third. By 2024 the 40 plus age group will make up nearly 60% of the Chinese population. Estimates suggest that by then some three quarters of Chinese households may be childless.

The implications are significant. There will be a huge market of 40-60 year olds, whose one little emperor or empress has left home and who are the first generation to benefit from China's new wealth. They will own their own homes, they will travel, they will eat out, they will invest, they will buy life and health insurance. Contrast this with the current generation of 60 year olds who grew up in the hardships of the Cultural Revolution and who have never enjoyed the money or time to enjoy the new consumer revolution in China.

For corporate planners, investors and marketeers China's changing demographics needs careful consideration. For Sinologists the China of today will look very different in twenty years time.

A divide China must conquer

The New York Times
Tuesday, January 11, 2005

To understand today's China, it is necessary to look beyond the unfathomable ebb and flow of 1.3 billion people. It is only by studying the few that it is possible to grasp what is happening to the overwhelming many - like Yu Jikui, a porter whose slight by a passer-by set off riots in Wanzhou; or the young Yang Shan, whose parents both work in distant cities; or the developer Zhang Yuchen, who built a castle fit for Marie-Antoinette where 800 farmers once grew wheat.

The human story behind the data about how China is blossoming economically lies in the writings of an 18-year-old that explain why he would commit suicide after he could not afford to take a college entrance exam. Wang Lincheng counts the cancer deaths near a viscous black stream filled with industrial toxins. These individuals, whose lives were described in articles by Joseph Kahn and Jim Yardley of The New York Times, provide telling clues about the gap between rich and poor, between the fortunate urbanites and the rural have-nots. This is the other, darker side of China's boom.

When Hu Jintao took over China's leadership two years ago, he promised a more socially minded version of economic growth, in which ordinary people, their land and the environmental future would no longer be trampled in a heedless rush for higher output and exports. But the disparities between booming cities and the impoverished countryside, and between thriving export platforms and a hulking, hopeless rust belt, are growing even more brutal. Hu seems more interested in silencing the messengers than in dealing with these problems.

Instead of beginning to institute a workable rule of law, a freer press and a better system for allowing the underdog to be heard, Hu has busied himself consolidating his own power and trying to restore discipline within the Communist Party. In keeping with his chilling comment that Western democracy is a "blind alley," Hu has already made it clear that the government is ready to crack down on journalists, scholars and protesters who cross his unmarked line.

Silencing these critics brings no relief for those millions who are enduring the real abuses in the countryside. Chinese farmers and factory workers routinely talk about corrupt local officials who siphon off relief money from Beijing or steal funds allocated to farmers who give up their land for other uses. Simmering anger and even street protests occurring in some rural areas become all the more understandable after local officials freely seize farmland or village property, then reinforce actions with police goons. What adds to this unfairness is a system that allows city dwellers to buy and sell apartments while farmers may not own their own fields.

A leadership that treats this unrest as a threat to its authority instead of a desperate cry for help threatens to negate much of the good that has come from China's economic upheaval - the opening to tourism, student exchanges and scientific cooperation; the ability for people to migrate; the creation of some independent farming; and a growing middle class whose cell phones can dial abroad. The test for Hu is not whether he can steer the new China into an ever-more-powerful position in the world marketplace. It is to deal wisely with the deepening chasm between rich and poor in his own country.

China is hot

30 November 2004

Continuing the China theme for this month this is a Canadian report on Chinese efforts to secure the natural resources that it needs to support her rapid economic growth. I will put all the China articles into a separate section on this web site. The story of China's economic growth and potential dominance of world trade will be one of the stories of this decade. By 2010 China will be a juggernaut; the issues will be whether she is under control or not; and if she is a friend or a foe not just of Asian nations but globally.

China frantic for energy supplies : Beijing looking to Canada and beyond for sources of oil, gas, electricity and coal

By GEOFFREY YORK - Globe and Mail

Monday, November 29, 2004

BEIJING - At first glance, the events are unconnected. A possible Chinese takeover of a leading Canadian oil company. A secret submarine in Japanese waters. A border deal in Siberia. Trade pacts with obscure African nations. Diplomatic efforts to protect rogue states in the Middle East.

These seemingly random incidents around the world, however, are united by one crucial phenomenon: China's growing obsession with its energy security.

Fearful of its mounting vulnerability to any threat to its oil and gas imports, Beijing has become frantically active in its quest for new energy supplies. The latest example -- its effort to acquire Husky Energy Inc. of Calgary -- is just the most recent of a long series of initiatives to gain fresh energy sources for its booming economy.

China's oil imports leaped by 40 per cent in the first half of this year. It recently surpassed Japan to become the world's second-biggest oil importer. Its own oil production, once large enough to supply its needs, has fallen into steady decline. By the year 2020, China expects to depend on imported oil for 60 per cent of its oil supply, up from 36 per cent today, leaving it increasingly vulnerable to an oil embargo or an unexpected cutoff of supply.

Beijing sees the risk of an energy shortage as one of the biggest potential threats to its national security and social stability. It has become fixated with the goal of diversifying its sources of oil, gas, electricity and coal.

The Chinese government has reportedly drafted a plan to build a 90-day strategic reserve of crude oil -- much bigger than its previous plan for a 30-day stockpile. It is already building 52 massive tanks near the East China Sea, south of Shanghai, to stockpile a month's worth of oil. Each tank would hold more than 25 million gallons.

But this might not be enough. China's economy -- with its emphasis on voracious energy-gobbling industries such as steel, cement, and manufacturing -- is increasingly dependent on heavy energy consumption.

For every dollar of GDP, it consumes three times as much energy as the global average, and almost five times as much as the U.S. average. By 2020, China is projected to have 130 million private cars -- five times as many as today -- and its cars are already consuming far more gasoline per car than the average car in the United States or Japan.

As a result, China is aggressively negotiating trade and investment deals with almost any country that boasts a supply of oil or natural gas, regardless of the cost. It is already co-operating with 27 countries on oil exploration.

In Africa alone, it has reached agreement to buy oil from Cameroon, Nigeria, Gabon and Angola. In Latin America, it has signed a trade deal with Brazil to finance a drilling and pipeline program that would provide oil and gas to China, even though the Brazilian deal is estimated to be three times more expensive than simply buying supplies on the open market.

To secure Russian oil, Beijing gave favourable terms to Moscow to settle a long-standing border dispute on a Siberian river. Russia reciprocated last week by promising to deliver as much as 420 million barrels of oil by train to China annually by 2010, up from the present level of 140 million barrels.

China and Japan have been jousting for the right to receive an oil pipeline from Russia, although the latest indications suggest that Japan might win the battle.

China's obsession with energy security has put it on a collision course with the United States, which disapproves of Beijing's eagerness to cut deals with "pariah states" such as Iran and Sudan.

Last month, China signed a $70-billion deal to help develop an Iranian oil field and purchase natural gas from Iran. Within a few days, Beijing signalled that it would oppose any effort to seek UN sanctions against Iran over its nuclear program.

In a similar move, China has supported Sudan against allegations of human rights abuses. China has invested hundreds of millions of dollars in developing oil fields and pipelines in Sudan, its biggest single African energy supplier.

And in another far-reaching consequence of China's energy appetite, China and Japan are jostling for control of the vast natural-gas deposits below the East China Sea. Both countries have laid claim to much of the sea, and China has begun the construction of drilling platforms to tap the gas deposits in disputed waters, provoking sharp protests from Tokyo. When a Chinese nuclear submarine was discovered in Japanese waters this month, a three-day chase by Japanese warships ensued. The incident was widely believed to be linked to China's challenge of the Japanese gas deposit claims.

In this global context, the possible takeover of Husky Energy fits neatly into Beijing's energy strategy. China is interested in importing up to one million barrels of oil a day from Alberta's oil sands projects, including those on the drawing board at Husky. Beijing is also seeking Husky's expertise in offshore oil drilling, primarily because of Chinese drilling plans in the East China Sea.

China's military ambitions

23 November 2004

The dispatch of a Chinese nuclear submarine into Japanese waters raised the political temperature in East Asia and has set many people thinking where China's military ambitions may start and end.

Clearly they can win hearts and minds through economic strength; relations with Zimbabwe, see below, are testament to that.

But China's vast consumption of natural resources from oil to gas to water to steel to potash may mean that China has to obtain access to resources deep in the heart of other nations. China can but those resources and he held ransom to foreigners controlling the supply and pricing. Or China can acquire those resources, preferably through business and economic acquisition. But there are other means.

China's borders include N Korea, Vietnam, Laos, Myanmar, Bhutan, India, Nepal, and the 'Stans (Pakistan, Tajikistan, Kyrgyzstan and Kazakstan. The latter have significant undeveloped resources.

One provocative article, published today in the Washington Times, follows. The global balance of power is changing. It is a new reality, a new industrial revolution. While the 20th century witnessed the rise of America. The 21st century will witness the ris and dominance of China. Be prepared. And if you choose, embrace the new reality. Being a part of this change may just give people the opportunity to ensure that the checks and balances are in place to safeguard lives and freedoms.

China's bold displays

By William Hawkins

23 November 2004

The scariest ride I ever had was not at an amusement park. It was the ride I took two weeks ago through Shanghai, China, from Hongqiao International Airport to the Bund area along the Huangpu riverfront. It was just after dark, and this mammoth city was lit up in an awe-inspiring display the likes of which I had not seen even in Beijing.

Shanghai has a skyline that puts New York or Chicago to shame, but it also has a larger population than New York and Chicago combined. Mile after mile of new high-rise office buildings, many boosting the names of the world's major corporations, make a stunning proclamation of wealth and power. Unlike the boxy concrete and steel designs I had seen in Tokyo, the Shanghai skyline looks like a "city of the future" as envisioned by science-fiction artists. With these grandiose designs, China is sending a clear message to the world that it is playing for real. That is something to stir nightmares.

American security concerns have focused on terrorism and the Middle East. This is understandable, as Muslim terrorists plot more American deaths. Yet, terrorism is the weapon of the weak. It cannot change the global balance of power. And Islamic fundamentalism is a backward-looking doctrine of social and economic stagnation.

The rise of China challenges the global balance, and is already transforming how the world works. Endowing an empire of 1.3 billion people with modern industry, technology and capital gives the strong Beijing central government immense resources with which to support its ambitions.

China is driven by impassioned nationalism and the limitless energy of capitalism, a combination that will rock the world.

Military threats always loom largest in the public mind, and China is creating such a danger. My visits to Beijing and Shanghai were preludes to the real reason for my trip, which was to attend the fifth Aviation and Aerospace Exhibition in Zhuhai. This event is held every two years. It has two purposes: to showcase China's advancements and attract U.S. and other Western companies who want to sell technology and systems to Beijing.

China's space program was highlighted, from the capsule astronaut Yang Liwei used to orbit the Earth in 2003 to animated videos of Chinese plans to land on the moon and exploit its resources. Most of the displays, however, were devoted to Chinese fighters, remotely piloted (unmanned) military aircraft, helicopter gunships and missiles of all types.

The displays clearly showed there is no segregation of civilian and military aviation activities. The Chinese aerospace industry is run by the state. Its largest agency is Aviation Industries of China I (AVIC I). Its displays featured, side by side, a variety of civilian airliners and its numerous military projects for fighters, bombers, military transports and reconnaissance aircraft. Its sister organization, AVIC II, which was split off in 1999 to create competition and improve management, concentrates more on business jets, helicopters and missiles. One display featured a row of cruise and air-to-air missiles under a large poster of a corporate jet, again showing the guiding Chinese principle of "Jun-min jiehe" — combine the military and the civil.

This principle was very evident in the two halls devoted to American and Western firms trying to sell high-tech products to China. These firms are only supposed to be civilian development firms. But that line cannot be drawn, and it is doubtful those marketing their wares in this booming market care.

Italian Deputy Minister of Defense Salvator Cicu was on hand for the signing of a co-production agreement between Agusta Westland and AVIC II for a new helicopter design. Italy, along with France and Germany, have pressed the European Union to lift its arms embargo on China. But the embargo has long been undermined by sale of dual-use equipment and technology to Beijing. Helicopters are a prime example. Why else would a defense official celebrate a putatively civilian project?

Two identical remotely piloted helicopters were displayed — one configured for crop dusting, the other for military reconnaissance. It takes little imagination to see how the crop duster might be used with chemical or biological weapons.

American companies have been just as guilty as European firms in helping China improve its capabilities. Boeing had a large mural at its booth touting not only how many airliners it had sold to China but also how much production work it had outsourced to Chinese industry, how many Chinese engineers and technical workers it had trained, and how much it was investing in Chinese research facilities.

    U.S. officials have lobbied against any lifting of the EU weapons embargo on China. Yet, how can the Europeans take American arguments seriously when the Bush administration (and the Clinton administration before it) have not only turned a blind eye to the role of U.S. firms in advancing Beijing's development, but have encouraged it under the rubric of "commercial engagement?" Which is worse: Europeans selling weapons to China, or Americans teaching the Chinese how to build their own weapons?

    William Hawkins is senior fellow for national security studies at the U.S. Business and Industry Council.

For China economics comes first

23 November 2004

It is rather depressing to witness the cosy relationship that has developed between China and the despotic regime in Zimbabwe. Indeed it may well be that it is only access to Chinese money that preserves the Mugabe government. Neither country has a proud record on human rights and clearly this is of little concern to all consuming China.

The latest trade news between the two countries sees Air Zimbabwe announcing twice weekly flights to Beijing supporting Chinese investment in that country which tops US$600 million.

Chinese advisors trained Zimbabwe's nationalist troops in the liberation struggle of the 1970s. After independence in 1980 China retained an economic interest extending its support as other nations stopped providing aid. Confronted by 700% inflation, 70% unemployment, food shortages, Aids epidemics and world isolation Zimbabwe has increasingly looked to China for support.

There are estimated to be 9,000 Chinese working in Zimbabwe on power, infrastructure and telecoms projects. Zimbabwe also acquire military equipment from China.

In return China gets access to Zimbabwe's mineral wealth, including platinum, gold and diamonds. This is just a part of China's acquisition of Africa; China-Africa trade is expected to exceed US$20 billion in 2004.

Henry Olonga used to play cricket for Zimbabwe. Yes, he is black. He is also in exile after wearing a black armband in a cricket match as a symbol of the death of democracy.

In an interview in London yesterday he said of his homeland "There are human rights abuses, the lack of an impartial judiciary, the collapse of the health system in the face of the HIV Aids epidemic, the collapse of law and order, the targeting of political opponents."

As China acquires what it needs to sustain domestic growth economics takes priority over right and wrong.

The coming war over Taiwan

19 November 2004

It is hard to see where an acceptable compromise can be found in relations between Taiwan and China.

The vitriolic war of words continues and the stakes get higher with the passage of time. It is a simple matter of Chinese nationalism; of Chinese pride, and of a deep seated sense of what right. Taiwan will never be allowed to exist as a separate nation; the best that she can hope for is a certain amount of self determination along the lines of a Hong Kong or Macau. But Taiwan's independent, free-thinking, self-determining and democratic world will not be allowed to continue.

The mainland communists and the remnants of the KMT form unlikely bed fellows but they share the goal of a united China. It is a mess. President Chen in Taiwan is pushing for a referendum and a new constitution by 2008 that would embrace the principles of an independent Taiwanese nation. China will never let this happen.

Do not rule out a Chinese invasion. This depressing scenario was outlined over lunch a few days ago and is a worryingly plausible scenario. Consider the following:

1) China needs air superiority over Taiwan; it is close.

2) Air superiority would allow a massive sea borne invasion (Germany's plan for Britain in 1940). China has the troops and the landing craft.

3) The gamble is that the US would not intervene. It is a fair gamble. The US has two basic problems. Defense spending cuts and Iraq. Both mean that the US has limited force to fight another war in a far off land that frankly most of her people have little interest in.

4) The world's economic dependence on China is such that normal relations would be quickly re-established. Sad; but it is the reality. An invasion of Taiwan would be considered a domestic issue allowing, as soon as it is safe to do so, normal trade and investment to quickly continue, probably led by the perfidious French.

5) China's nuclear submarine did not suddenly get lost in Japanese waters last week. GPS solves that. The consensus is that the sub had a mission to test Japanese and US response times and reaction to an incursion into their territorial waters.

6) The UN will not intervene. A censure or two. Easily managed.

7) The threat of losing or of a major boycott of the 2008 Olympics is far less important that the recovery of Taiwan.

It would be a short and sharp campaign. This would probably lead to Taiwan suing for a peace that allows them to maintain some part of their livelihood and economy.

It is hard to see what the alternative might be. China wants a solution before too many years pass by. The longer Taiwan remains independent the more the people grow accustomed to that independence. It will never happen.

China on the WWW:

CIA - World Fact Book

China Internet Information Centre - a multiligunal government controlled gateway

China - includes a country profile and extensive sections on history, geography, society, economy, and government. From the U.S. Library of Congress.

China Daily - patriotic news reporting

PRC government hard going

China Facts:

For centuries China stood as a leading civilization, outpacing the rest of the world in the arts and sciences. But in the 19th and early 20th centuries, China was beset by civil unrest, major famines, military defeats, and foreign occupation. After World War II, the Communists under MAO Zedong established a dictatorship that, while ensuring China's sovereignty, imposed strict controls over everyday life and cost the lives of tens of millions of people. After 1978, his successor DENG Xiaoping gradually introduced market-oriented reforms and decentralized economic decision making. Output quadrupled by 2000. Political controls remain tight while economic controls continue to be relaxed.

Border countries:

Afghanistan 76 km, Bhutan 470 km, Burma 2,185 km, India 3,380 km, Kazakhstan 1,533 km, North Korea 1,416 km, Kyrgyzstan 858 km, Laos 423 km, Mongolia 4,677 km, Nepal 1,236 km, Pakistan 523 km, Russia (northeast) 3,605 km, Russia (northwest) 40 km, Tajikistan 414 km, Vietnam 1,281 km

1,298,847,624 (July 2004 est.)

Executive

chief of state: President HU Jintao (since 15 March 2003) and Vice President ZENG Qinghong (since 15 March 2003)
head of government: Premier WEN Jiabao (since 16 March 2003); Vice Premiers HUANG Ju (since 17 March 2003), WU Yi (17 March 2003), ZENG Peiyan (since 17 March 2003), and HUI Liangyu (since 17 March 2003)
cabinet: State Council appointed by the National People's Congress (NPC)
elections: president and vice president elected by the National People's Congress for five-year terms; elections last held 15-17 March 2003 (next to be held mid-March 2008); premier nominated by the president, confirmed by the National People's Congress
election results: HU Jintao elected president by the Tenth National People's Congress with a total of 2,937 votes (4 delegates voted against him, 4 abstained, and 38 did not vote); ZENG Qinghong elected vice president by the Tenth National People's Congress with a total of 2,578 votes (177 delegates voted against him, 190 abstained, and 38 did not vote); 2 seats were vacant

Economic Overview

In late 1978 the Chinese leadership began moving the economy from a sluggish, inefficient, Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprises in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2003 stood as the second-largest economy in the world after the US, although in per capita terms the country is still poor. Agriculture and industry have posted major gains especially in coastal areas near Hong Kong, opposite Taiwan, and in Shanghai, where foreign investment has helped spur output of both domestic and export goods. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (growing income disparities and rising unemployment). China thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) sustain adequate jobs growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, many of which had been shielded from competition by subsidies and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. Another long-term threat to growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Beijing says it will intensify efforts to stimulate growth through spending on infrastructure - such as water supply and power grids - and poverty relief and through rural tax reform. Accession to the World Trade Organization helps strengthen its ability to maintain strong growth rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. China has benefited from a huge expansion in computer internet use. Foreign investment remains a strong element in China's remarkable economic growth. Growing shortages of electric power and raw materials will hold back the expansion of industrial output in 2004.