Thursday, June 19, 1997

Hong Kong's Future as Seen by a Native Son

At a recent luncheon in San Francisco The Honorable Edward Chen, member of Hong Kong Executive Council, spoke on the subject of "The Future of Hong Kong." His indisputable claim to authenticity was in distinct contrast from the typical and endless stream of superficial western views on the same subject.

Professor Chen, president of Lingnan College, has degrees from Hong Kong University and Oxford and visiting appointments at Yale, Oxford, Stockholm and U.C Davis. While he is an advisor to the current London-appointed governor, he will step down after the transition on July 1 and return to an academic life. If he had an ax to grind, it was not readily apparent at the luncheon organized by the Hong Kong Economic & Trade Office.

Chen, a specialist in economics and Asian studies, began his speech by noting that he had been going around the world explaining Hong Kong to the West. He had just come from Europe and he expressed amazement at the depth of ignorance of the Europeans on the Hong Kong situation. He also recalled how The Economist had predicted in 1984, after Beijing and London had come to terms, that there would be no more new buildings in Hong Kong. In fact, he pointed out Hong Kong's longest sustained economic boom began after 1984.

He gave three reasons why the transition from British control to Chinese control has been so extremely smooth.

First, the Basic Law that will govern Hong Kong after the return is based on the joint declaration negotiated over a two year period between London and Beijing and is an international document registered with the United Nations. Under the terms of settlement, only issues relating to foreign affairs and defense will be subject to Beijing approval. According to Dr. Chen, the Beijing government has never reneged on any international treaty in which they are signatories.

Second, Hong Kong people are given 13 years of advanced notice to prepare for the transition. Those that wanted to leave have ample time to do so. In the meantime the local economy has adjusted to the prospects of a new master. The British common laws have been localized and translated into Chinese so that after the transition, the majority of Hong Kong people will, for the first time in Hong Kong's history, be governed by laws written in their own language.

Third, the attitude of the Hong Kong people towards China and China towards Hong Kong has changed during this interim period and Hong Kong has grown accustomed to the prospect of becoming part of China. Those that are not comfortable with the idea have already left. Recent survey showed that 80% of the Hong Kong population look forward to the return to the motherland. (Dr. Chen did not mention that the population of Hong Kong has been increasing during this period.)

For the next three to five years, Chen expects Beijing to keep their promises for at least four reasons: (1) As a matter of "face," essential to all Asians, Beijing would want Hong Kong to fare even better economically under their control than previously under London.

(2) A stable Hong Kong is basic to maintaining stable and positive relationship with the ASEAN countries. Contrary to the perception in the West, China views its relationship with neighboring ASEAN nations as more important than even with the U.S. or Russia.

(3) Beijing also needs a stable Hong Kong to reassure Taiwan that the principle of one country, two systems works. Even more important, China wants the U.S. to stay out of Taiwan and would not wish to provide the U.S. with any excuse to interfere.

(4) While Hong Kong will gradually lose its edge as entrépot and source of foreign exchange earnings (to Shanghai and other Chinese ports), Hong Kong people with their decades of experience will be essential in helping China build the economic institutions needed to privatize state-owned industries, to provide public housing, to establish rules for an orderly public securities market and other policies needed to further strengthen China's economy.

While Chen cannot predict what will happen to Hong Kong after the 3-5 year, near term future,--he doesn't think anybody can--he does see serious problems that Hong Kong will face and need to overcome. An average of 150 people, mostly from China, enter Hong Kong every day. The incoming government will need an education system and manpower policy to absorb this influx. (On a population equivalent basis, that's comparable to making room for 20 million immigrants every year in the U.S. vs. less than one million actual legal immigrants now.)

Hong Kong's real property market is controlled by a monopoly of seven firms and is the cause for the astronomic cost of housing. The new government will have to get rid of these anti-competitive practices.

With the massive inflow of new people, urban poverty is becoming more evident in Hong Kong. The relatively abrupt transition from a manufacturing economy to a service economy (in about 10 years) is adding as many as 1 million under employed work force to the problem. This is going to be a non-politically induced but nevertheless real social problem that the new government will face for years to come.

None of these problems have attracted the attention of western media. Hong Kong is but a stop enroute to their next assignment. The views of someone that really ought to know just might be the needed deodorizer to neutralize a highly charged atmosphere created from absymal lack of informed opinion.

Wednesday, June 11, 1997

An Evening with Beethoven in Olde Shanghai

A foreigner laying over in Shanghai for the weekend will find the new but already internationally renowned Shanghai Museum a worthwhile diversion, but what about the evenings? On just such a Saturday evening, I had a choice of attending a live concert of Irish folk music or the Shanghai Broadcasting Symphony Orchestra.

The Irish folk song group was the Chieftains, five-time Grammy award winners according to the local news article. On the phone, the ticket office explained that tickets were going fast and only ducats selling for ¥240 and ¥400 a piece, roughly $30 and $50, were left. Yanni had just swept through China before packed stadiums at those international prices and obviously the Chieftains were in the same league.

By contrast, the all-Beethoven program featured two native sons visiting from the United States where they have made their reputation. The soloist, Zhu Daming, was the first Chinese to win the Van Cliburn competition for pianists (most recently won by a local American school teacher) and is now teaching at the prestigious Juilliard School of Music. Ye Cong, the conductor, was a graduate of the Shanghai Conservatory of Music and had also won several international prizes including being one of three best young guest conductors of the San Francisco Symphony in 1989.

The ticket office of the concert hall did not convey the impression that the tickets were hot selling items. At a range of ¥10 to ¥40 ($1.25 to $5) per ticket, the price was right and made the choice easy. I didn't even have the chance to buy from the box office. As soon as I alight from the cab, I was persuaded to take one off the hands someone with extras and at no "premium."

The concert hall itself was vintage colonial architecture and had been designated a historic structure to be protected and preserved by the order of the Shanghai government. The rather dilapidated exterior seem at ease with the surrounding rubble, caused by the construction-in-progress of the cross town elevated expressway over that section of Yanan Road.

The interior of the concert hall was another matter. The foyer led to symmetrical stair cases that started in the middle and rose to the sides similar in form to many European opera houses. The stairs consisted of pink marble balustrade and the second floor accented with soaring and ornate rococo columns with black caps on pink marble. From the orchestra section one can see that the balcony was marked with stripes of subdued shade of gold filigree on maroon background and faded pink walls. The ceiling was also ornate consistent with the rest of the interior. In its glory days, this hall must have been quite an elegant setting for the colonial elite.

By now, the seats were lumpy and with random degrees of downward droop. As the audience shift from one uncomfortable position to another, the seats' creaking complaints tended to disturb the listeners. The stage was obviously too small for a full orchestra, especially evident when the grand piano was wheeled out for the Emperor Concerto and the violin section had to wrap themselves around it. Fortunately, the acoustics was rich and clear.

The program opened with Leonore Overture followed by a moving rendition of the Emperor Piano Concerto No. 5, by far the highlight of the evening. After the intermission, the orchestra played Beethoven Fifth Symphony. To my untrained ears, I thought the wind section was a little weak. Since the pieces were all popular and familiar classical music, it was most enjoyable listening and a great (and inexpensive) way to spend an evening.

Compared to the Beijing audience (where I attended a performance of Mahler Symphony No. 2, also featuring a returning artist, in this case, Ms. Deng Yun, a mezzo-soprano from New York's Metropolitan Opera), the Shanghai audience was more sophisticated. There were fewer young kids in the audience to fidget through the performance and there were only rare indiscretion of enthusiasm by applauding between movements.

I have been told that classical music is making a come back in China since Secretary General Jiang Zemin has been seen attending and enjoying the symphony. Obviously, the returning classical musicians, having made their reputation on the international stage, were making appearances to give something back to their motherland. It was therefore disappointing to me that the concert hall was only slightly more than half full for a fine event such as this. There were only a smattering of foreigners in the audience. They must have been bigger fans of Irish folk songs.

Tuesday, June 10, 1997

In Search of Balance in U.S.-China Relationship

The West saw a China that could do no wrong from President Richard Nixon's historic visit to China in 1972 until the live telecast in 1989 of the suppression of the student protest in Tiananmen. Since those searing images hit the global airwaves, China could do no right. Ironically, a steady stream of information about China available since its reform in 1978 reveals a China as less than the utopia that professional China watchers raved about during Nixon's era. On the other hand, since 1989, China has been making progress on all fronts--social, economic and political--that are ignored by many western watchers. Instead, they rush to join in the chorus bent on criticizing China--or some would say, demonizing China.

The spectrum of criticism on China ranges from human rights violations, predatory trade practices, infringement of intellectual properties, arms dealing in ways unacceptable to the West, and alleged acts of influence buying in Washington. It's time to examine the substance behind these accusations. The relationship between a superpower and a major regional power in Asia is too important to be buffeted by the whims of politicians and pundits in a perpetual pout over China.

Critics of China's human rights record usually evoke the images from Tiananmen. Yet revelations from such sources as the documentary film, Gate of Heavenly Peace, point out that the issues surrounding the confrontation between the Beijing government and the students are considerably more complex than can be explained by the image of tanks running over innocent bystanders. While the images remain frozen in the minds of the western observers, China has moved on, steadily improving the living standard of its population. Today, visitors see a population living and moving about under an increasingly relaxed atmosphere, free of the pervasive big brother scrutiny that existed when Nixon visited China.

However, many in the U.S. government insist on dwelling on the treatment of a few prominent dissidents, to the exclusion of objectivity. These critics seem to share the sentiment expressed by Martin Lee, the Hong Kong activist on his recent fund raising visit to the U.S. Lee dismissed the Beijing government's efforts in building a stable environment to feed and cloth 1.2 billion people as "animal rights not human rights." Maybe so, but many allies of the U.S. do not agree.

The most recent attempt to censure China through the UN Human Rights Commission in Geneva ended in dismal failure when countries such as Australia, Canada, France, Germany and Japan declined to go along with the U.S. backed resolution fronted by Denmark. Perhaps this desertion of ranks is the final message the U.S. needs in order to stop taking this futile and counter-productive approach.

The China bashers are making increasing use of the trade deficit with China as another convenient source of grievance, overlooking that the U.S. has an overall net trade deficit with the world, not just with China. Some of the deficit has shifted from Hong Kong and Taiwan to China as those labor intensive operations seek lower costs of labor. In the future, as China's labor costs become too high, the manufacturing of toys, footwear, household items will go elsewhere, Vietnam or Bangladesh, or wherever the most competitive labor costs can be found.

China did not somehow and suddenly wrestle these manufacturing operations from here; the U.S. hasn't had these labor intensive jobs for decades. What the trade deficit really means is that the American consumer can buy goods at a lower price than if the U.S. economy is protected from imports and the same items have to be made in USA. The American standard of living is being subsidized by the lower wages of developing countries.

Rampant piracy of intellectual property rights is also frequently cited for the purpose of bashing. This is, unfortunately, a problem that all developing economies go through and China is no exception. However, no nation dedicated towards economic development can ignore the need to protect intellectual property, because the growth of domestic industries is also dependent on such protection. Indeed, international attorneys working on prosecuting infringements can confirm recent U.S. government findings that China is cracking down harder on piracy than virtually any other country in Asia. In a large territory with increasing local autonomy, there are also more culprits to track down and illegal operations to padlock.

Export of illegally reproduced goods out of China requires the instigation of knowledgeable intermediaries that are familiar with the outside market and recognize the opportunity for illicit sales. They are the ones that make the windfall ill-gotten gains. To halt this trade, it would be more effective if the U.S. enforcement agencies can work closely with their counterparts in China. Such cooperation is difficult to achieve when every other message is larded in acrimony.

The claim that piracy costs as much as $3 billion to the U.S. economy presumes that the purchase of every bogus product at a deep discount equates to the loss of a bona fide sale at market price, a highly problematic assumption. What is real is that U.S. exports to China have reached $10 billion a year (not including re-export of U.S. goods from Hong Kong) and has been increasing at roughly 20% per year. Everybody understands that export creates jobs.

One of the comparative advantages China enjoys is its huge market potential. China is using this lure to attract foreign direct investments and encourage a local presence. Companies such as Motorola and Matsushita have found the economic advantages of a local presence to be the key to capturing major market shares. Even though revenues from their offshore plants do not directly benefit their home base workers, profits from any source finance the development of the next generation of products, maintain their worldwide position and enhance the payroll throughout the organization.

The accusation that China is a purveyor of weapons of mass destruction to "rogue countries" typifies the kind of hypocrisy that afflicts many politicians with conveniently selective memories. China's arms business is but a tiny fraction compared to the U.S., the world's leading arms supplier with about 60% market share. Apparently, it is acceptable only for the U.S. to sell to the likes of yesterday's Saddam Hussein, Noriega and Mobutu and unknown numbers of today's clients that may become pariahs of tomorrow.

Double standards also rule the way we look at influence buying by foreign sources. A lot of energy has been devoted to alleging and speculating on the possibility of China as the origin of $2 million contributed to the election campaigns last year. The media keeps recycling the FBI claim of strong evidences of wrongdoing without ever asking to see the beef. In the meantime, Martin Lee comes to the U.S. to raise funds for the sole purpose of financing his political activities in Hong Kong and not a murmur on the propriety of U.S. interference has been raised.

Since the beginning of this year, there has been an increase in the exchange of visits between the leaders of China and the U.S. This could lead to the building of a more constructive relationship between the two countries based on mutual understanding grounded in reality. Certainly there are now many more members of the Congress that have visited China and can see that the popular but misinformed American perception of China bears no resemblance to actual conditions there.

Even so, only 20% of members of Congress have visited China to date, arguably one of the most important bi-lateral relationships the U.S. will face for the next century. The few that do know the real China are outnumbered by the strident voices from the China-bashing camp of Senator Jesse Helms, Rep. Richard Gephardt, and Rep. Nancy Pelosi et al. This group either speaks from ignorance or preys on the ignorance of the American public to get away with wholly irresponsible statements that cannot stand up to scrutiny. They can get away with this because they can count on media to gorge on their public pronouncements without demanding the substance that would justify their position.

Unbalanced media reporting deters the formation of a balanced relationship with China. Continued use of China as a political issue to slam the oponents makes it difficult for any policy maker to look at the situation rationally. If we find ourselves in a gratuitous cold war with China, there would be no winners.

Sunday, June 1, 1997

What Confucius Means to Me

Growing up in America, it's easy to be confused about Confucius. First encounter with Confucius could easily be a one liner that starts with Confucius says.... Some of these gems of wisdom attributed to the sage are quite humorous and others are naughty but humorous. My favorite that has stuck with me to this day is: Confucius says, "He who slings mud at neighbor is losing ground." Others that stuck are not for polite company.

Funny, pithy and with a grain of truth, but is that really Confucius? Sounds more like what Charlie Chan would say. Charlie Chan, we might recall, is that squinty-eyed detective with a Fu Manchu beard, shown on the silver screen on Saturday afternoons in the days of old. Speaking broken English, the role is played by a white guy. In a similar vein, these one liners are American humor cast in what Americans think will pass as sayings from the great Chinese philosopher.

I don't think any harm is done to invoke the Master in this way. After all, George Washington is the source of many "father of the country" jokes and no disrespect is ever intended. I do think the West is frequently confused about Confucianism in lumping it with other religions of the world such as Buddhism, Christianity, Islam and Judaism. All the aforementioned religions are concerned about my existence in the next world. Confucius worries about my conduct while in this world.

By the time I went to college, I realized that somehow Confucianism plays a major role in defining the behavior of a civilized Chinese man. (Let's face it, Confucius was a real chauvinist and did not regard women as equal to men, so it would be inaccurate to be gender neutral in this discussion.) The Chinese sense of decorum, modesty, kindness, courtesy, studiousness, lay-backness and all other qualities that seem to render a Chinese man into an All-American wimp, is in my mind tied to the teachings of Confucius. No one likes to be the last guy to get a date, and thus I have had my problems with the Master.

In 1974, I went back to visit China for the first time since leaving at the age of 11. Mao Zedong was still alive and the country was in the midst of a Pi Lin Pi Kong movement, i.e., an orchestrated mass movement to criticize Lin Biao and Confucius. I never quite understood the connection between Lin Biao and Confucius but I did become more acutely aware of Confucius and started to think about the Master. While I could hardly qualify as a Confucian scholar, I have arrived at a comfortable accommodation of what Confucius is to a Chinese American.

I believe Confucius and his disciples had a tremendous impact on the Chinese civilization. Their teachings relating to ethics, honor, social responsibility, familial obligations, ancestor worship, and observation of rites and historical precedence provide the glue that gives the Chinese civilization continuity and durability. Other civilizations may have had earlier beginnings but they did not last. This is a heritage that all Chinese, wherever they may live, can be justly proud of.

However Confucianism has also been an anchor that kept China from modernizing in pace with the West. The Confucian emphasis on rank and station keeps feudalism embedded in the Chinese consciousness and prevents true egalitarianism from taking place. Even today, there is no egalitarianism in the democratic Taiwan nor in the socialist mainland. There is a much higher sense of egalitarianism in America, and with it, is the prevailing feeling that anyone can achieve their goals in life by dint of his/her own effort, regardless of pedigree and birthright.

Even more damaging is the Confucian insistence of looking into the past as a guide for future conduct. China lost its world leadership in science and technology hundreds of years ago because of this backward fixation. In today's fast moving Age of Information when product obsolescence takes place in months instead of years, there is no room to be hung up with the past.

So to Chinese Americans interested in knowing more about their heritage, studying the teachings of Confucius is a must. Just remember that not all the wisdom of the Great Sage is still relevant today. If I were to meet the Master some day, I might well ask, "Doesn't always looking backwards for guidance give a person more than a pain in the neck?"