Sunday, December 16, 2012

Lessons learned from Sandy Hook

Almost immediately after the massacre at Sandy Hook Elementary School took place, even before most of the horrible details became known, a spokesman from the gun lobby jumped in to declare the obvious. Namely, it's the fault of gun control advocates that caused this incident.

If the teachers were carrying firearms and fully capable of defending themselves from the armed intruder, they could have resisted and not get shot in cold blood.

Obviously from now on, part of the requirement to become qualified teachers must include training to handle firearms competently and that such training is incorporated as part of their certification process.

Every teachers' college and other universities that train teachers needs to establish a coordinating office with the National Rifle Association to ensure getting qualified instructors on campus and make sure the student teachers know how to shoot straight before they graduate.

Of course just knowing how to fire a handgun won't be sufficient against bad guys (and I am not being sexist because the shooters have been guys) using automatic assault weapons. The teachers must be comparably equipped and competent with automatic machine guns as well.

The only way to a safe American and safe schools is for teachers to wear bulletproof vests and carry assault weapons. That's the only way the bad guys will know that if they show up in our schools, we will shoot back.

The freedom to bear arms shouldn't be limited to bad guys and teachers. It's never too early to teach our young ones of the virtues of having a gun in their backpack. Child molesters will think twice if they might face a child with a gun in his/her pocket.

Just think how different it would have been if the Sandy Hook teachers and the children were properly armed and ready to defend themselves against the intruder.

While we are arming our schools, let's also stop buying all them foreign made guns and rifles. Americans tamed the West with the gun and America can do it again. Let's use America's world renown ingenuity to now design a gun just for teachers, with a sensor that instantly identifies bad guys and shoots them dead on sight.

Let's buy America and create jobs here. Let the American love for the gun renew our industry and rejuvenate the economy. Amen. God Bless America.

Friday, November 16, 2012

Xi Jinping's first press conference as leader of China

Immediately after being elected general secretary of China Communist Party's Central Committee, Xi Jinping spoke at a brief press conference. Video record of his entire address including bilingual English translation can be seen here.

Xi made virtually no reference to foreign policy in his speech. Only his concluding paragraph touched near the subject: Just as China needs to learn more about the world, so does the world need to learn more about China. I hope that you [referring to the media] will continue your efforts to deepen mutual understanding between China and the world. 

There was no mention of external threats and adversaries and reference of global instability. Instead, Xi made it very clear where the priority and responsibilities lie and best summarized by his remarks in the body of his speech:

Our people have an ardent love for life. They wish to have better education, more stable jobs, more income, greater social security, better medical and health care, improved housing conditions, and a better environment.
They want their children to have sound growth, have good jobs and lead a more enjoyable life. To meet their desire for a happy life is our mission. It is only hard work that creates all happiness in the world.

Let the world, especially the U.S., take note. Xi is not rolling up his sleeves to duke it out with the West. He is going to have his hands full on China's many domestic issues. Not least, he said,

Under the new conditions, our Party faces many severe challenges, and there are also many pressing problems within the Party that need to be resolved, particularly corruption, being divorced from the people, going through formalities and bureaucratism caused by some Party officials.

Wednesday, November 14, 2012

Obama should take a new approach to China

While there are numerous difficult hurdles facing Obamas next administration, China does not have to be one. All it takes is a fundamental change in its approach regarding China and the bilateral relationship.

The first step to resetting the bilateral relationship is to recognize the campaign rhetoric on China for what it was: nonsense. Both candidates felt obliged to savage China for our ills but the voters saw through the political ruse and did not pay any attention.

Whos the currency manipulator? We are. No one can be expected to keep up with our printing presses run by the Fed. Even so, the renminbi has appreciated by about 32%, since it was taken off the peg to the dollar.

Lets also not talk about outsourcing jobs as if companies are committing grand larceny. Private enterprises make rational decisions. They send the work to China or elsewhere because it makes economic sense. When it ceases to make sense, the work comes back as some have.

Adding an import duty on goods invariably backfire as has been the case with the much talked about 30% duty on auto tires made in China. A few hundred jobs may have been preserved but all American consumers ended up paying significantly more for their tires and most of the tires were still foreign made, just not from China.

Raising tariffs also prompts retaliation. In a tit-for-tat, China raised tariffs on American chicken which may have cost as many jobs on Tysons assembly line as the gains at the Goodyear plant. Time and again, nobody wins in trade wars.

China has an apparent huge trade surplus with the US and we hold that against China as well. But why should we object to being able to buy our iPad and stuffed animals at a much lower price than if made in the US?

Furthermore, as many economists have pointed out the trade surplus is not exactly what we say it is. For example, the added value of China labor in an iPad is about 2% of the total cost. Many of the components and assemblies are made in Japan, Korea and Taiwan and even some in the US but China gets all the credit for the import value.

Its not as if enjoying a trade surplus when doing business with the US is some extraordinary aberration. The US has a trade deficit with 98 countries because this is the way our American economy works.

One of the first principles of the Chinese classic, Sun Zis Art of War, is to know your counterparts, be they friend or foe, before engagement. Perhaps its time that we take a look at how China regards this bilateral relationship to gain the more solid understanding of what actions to take.

The Chinese public continued to be fascinated by the presidential election. Apparent exercise of democracy in action made the people in China wishful that some would rub off in China.

The financial tsunami of 2008 and aftermath had shaken the Chinese confidence in Americas ability to manage its finances and has cause them to diversify their hard currency holdings and to make the renminbi more accepted as an international currency. The trauma however has not changed Chinas regard of the US as a vital economic partner.

It simply is not in Chinas national interest to consider the US a hostile competitor. China has its own laundry list of internal challenges and do not need the distraction of external confrontations.

For more than a decade the leaders of Beijing have been talking about the urgency of combating graft. Endemic corruption saps the economy and more importantly erodes the legitimacy of those in power. While success in overcoming corruption is problematic, it will be the foremost preoccupation of the incoming leaders.

Secondly, even though the US has a serious unemployment problem; it pales by orders of magnitude to the one Beijing has to face. Just finding jobs for the approximate 8 million college graduates every year is beyond American comprehension.

Although Obamas pivot to Asia defused accusations during the campaign for being soft on China, he needs to review the consequences of this policy.

Occupying foreign lands may have been a western tradition, but it is not for China. In early 15th century, the Chinese had the worlds mightiest navy and could have colonized the many places Admiral Zheng He and his sailors visited, but they did not.

It is not in the Chinese DNA to compete with the US for world hegemony. However, if Chinas sovereignty is being tested by US activity in Asia, China will not quietly stand by. Rather than enhancing stability, the American increase military presence has encouraged Japan, Philippines and Vietnam to be more energetic in contesting the islands off Chinas coast.

In response, China raised the stakes by establishing the Sansha City on one of the Paracel Islands in the middle of South China Seas. The city will own an enlarged runway, a desalination plant and other related infrastructure for future tourism. The city along with a military garrison will administer over 200 islets and sand bars along with two million square km of water.

Sansha, in midst of South China Seas, enjoys significant logistical advantage over the nearest US marines in Australia. Such asymmetrical arrangement is the only basis that China would counter unfriendly acts from America--in other words, relatively modest investment by China that would offset considerably more investment by the US.

China has no appetite to match US military might on a dollar for dollar basis.

Its time the US reexamine the concept of strategic ambiguity in dealing with China. It simply has not worked. Sometimes friendly, sometimes hostile, sometimes cajoling and sometimes imposing has merely led to a permanently rocky relationship. Both the US and China can better deploy their energy on other issues than managing the ups and downs of the bilateral relationship.

With the incoming new generation of leaders, Obama should try a new approach: be transparent. Lay all the cards on the table and agree on those issues the two countries can work together and put others on holdan approach Deng Xiaoping would applaud.

The US cant really afford to allocate money it doesnt have to build up a military presence that would only increase tension in Asia. With China, cooperation trumps confrontation.

An edit version has been posted on China-US Focus.

Jack Perkowski is well known investor in China. Read his careful debunking of Obama's complaint about China's alleged unfair subsidy of its auto industry.

Tuesday, November 13, 2012

About Peng Liyuan, wife of Xi Jinping

If Peng Liyuan, the next first lady of China, is a representative of what the new leadership is like, there is hope for China. South China Morning Post provided a lengthy profile on her with two interesting video clips.

The first clip of nearly 12 minutes long was produced (with English subtitles) to raise awareness of young children with HIV in China. She starred as the visiting dignitary (ambassador for children with AIDs) to a remote Anhui village with many orphans, shunned by society because they are HIV carriers and in many cases became orphans because their parents died of AIDs. This video was produced in 2006. In this documentary, Ms. Peng held the children, played with them, taught them songs and generally showed what a loving mother can be like to kids that have not experienced much joy in their young lives.

The second clip show she singing in a national day celebration and was filmed in 2011.

The videos showed a warm and selfless human being and that bodes well for China.

Friday, November 9, 2012

What's Next for America?

The US presidential election is finally over. Now comes the hard part: having to deal with reality.

Over six billion dollars had been spent by the two political parties during the long arduous campaign. Almost none of it were used to explain how each candidate propose to solve the really, really hard challenges confronting the next administration.

Both Romney and Obama seemed to lack the confidence that American voters can stomach bad news or be told the harsh reality. Instead each tried to outdo the other in bombastic platitudes, grandiose promises and deceptive innuendos. 

Now the American public will hold their collective breath (and nose) to see if Obama and the Congress can hammer out a solution that will keep the economy from going over the fiscal cliff. The campaign gave no hint on how that will be done.

The candidates always conclude their speeches with "God bless America." Whether God will or not, it seems to me, will depend on attributes heretofore rarely sighted in Washington: statesmanship and bipartisanship. 

Wednesday, October 24, 2012

There is a more to Huawei’s trouble with Congress than meets the eye.

Huawei’s debacle with US Congress raises troubling questions at many levels. Huawei will be paying a heavy price for a colossal failure to communicate across the two cultures, but this story is more than about just one company.

Huawei initiated the dialogue by inviting a Congressional investigation of its company operations. The House Select Committee on Intelligence responded but did not give Huawei officials the desired endorsement. Instead, the House Committee specifically recommends that the US government and private sector entities do no business with Huawei on the ground that their equipment constitutes a national security risk--a devastating hit on Huawei’s reputation that could hurt Huawei’s business around the world.

Based on the company’s past engagements in the US market, Huawei should have anticipated a hostile reception. Its past attempts to make a minority investment in a floundering 3Com and an acquisition of a relative start-up were stymied by the US government as a perceived threat to the US national security.

The company is said to have spent hundreds of thousands of dollars on consultants and Washington lobbyists to help Huawei deal with the Congressional committee. Apparently these advisors did not appreciate the rather formidable built-in bias Huawei needed to overcome. Drawing from their investigative report, it is clear that the Committee began on the presumption that Huawei represents a real threat to national security. Nothing in the eleven-month investigation changed their minds.

Just the mere possibility that cyber espionage can take place via Huawei equipment was enough to brand Huawei a risk to national security. To overcome the bias, Huawei would have had to prove that Huawei equipment could never host cyber attack against the US, obviously not a stand Huawei could take credibly.

By way of mitigating the Committee’s concern, Huawei offered to have all their equipment thoroughly tested and certified by an independent laboratory before the equipment could be introduced into the US market similar to the arrangement accepted by the government of Great Britain. The Congressional Committee rejected Huawei’s proposal for the following reasons: (1) The US market is too large for any testing to be sufficiently comprehensive. (2) The testing only applies to the configuration being tested but the configuration could be altered subsequently during installation or later upgrades. (3) Such a certification can even encourage a false sense of security and reduced vigilance. In other words, there was no way for Huawei.

The Committee asked Huawei to provide information on their contracts, pricing practice for their products and services and scope of their operations and, recognizing the sensitive nature of the information being sought, offered to receive such information under a confidentiality agreement. Apparently, Huawei did not have the confidence that Congress could keep information confidential and refused to comply. Thus the Committee concluded that Huawei might be selling “at least some of its products in the United States below the costs of production,”--a huge leap indeed based on information the Committee did not get.

The Huawei officials also failed to established empathy with the House Committee—to put it mildly.  Given a Congressional body with no understanding of China or at least none that they would admit to, empathy may have been too much to aspire. The Committee could not even make a distinction between state owned enterprises (SOEs) and privately owned ones. Somehow in their minds, a large successful private enterprise must be connected to the Chinese government, and a sinister connection at that.

They insisted on wanting to know about how Ren Zhengfei, Huawei’s founder, was able to leave his SOE employer to start his own company, as if that was unheard of, while actually in the late ‘80s and early ‘90s, people in China were leaving SOEs in droves. How was Ren invited to attend the 12th National Congress, the Committee asked? Huawei’s answer should have been: Jiang Zemin began to recognize the important role of entrepreneurs in China’s economy and selectively honored them by inviting some to the national confab.

The House Committee’s conclusion on Huawei, as its report readily admitted, was based on hypotheticals and not on specific illegal acts committed by the company. The hypotheticals are easy to conjure. However, the only known successful cyber attack the world knows for certain is the deployment of American made Stuxnet worm on the Iranian centrifuges. Certainly Americans have the bona fides to imagine how cyber attacks can be done.

The Internet is populated with screaming accusations from network security consultants—undoubtedly looking for work—pointing to China as the source of rampant cyber attacks, thus providing cover for Congressional paranoia. The Committee does claim to have smoking guns describing Huawei wrongdoings but these are classified and not available to the public.  

In a way, this is reminiscent of the Cox Committee’s investigation in the late 1990’s on the alleged espionage activities of Chinese in America. The unclassified part of the Cox Committee report painted a lurid picture of Chinese espionage running amuck in America. Tens of thousand storefronts in America registered to Chinese entities were cells and every ethnic Chinese was a potential spy for China. The Cox Committee also assured the public that they had smoking guns though consigned to the classified section of the report and not available to the public.

By now the smoke from the Cox Report has largely dissipated and the only concrete result was the arrest of Los Alamos scientist, Dr. Wen Ho Lee. He spent nine months in solitary confinement before the presiding judge apologized to Lee and threw out the case. The legacy of the hysteria created by the Cox Committee investigation is a lingering suspicion of the loyalty of Chinese Americans and the erosion of the idea that US Congress behaves honorably.

Sadly, politicians have continued to find profit in taking pot shots at China. The incumbent President Obama, a Nobel Peace laureate no less, proclaimed a military pivot to Asia, and thus encouraging conflict in the waters around China, to show that he is not soft on China. His opponent, Romney, promises to declare a trade war against China on the day he takes office—if elected. Members of Congress regularly take the floor to blame China for all the economic woes in America. None of the American leaders of any stature have spoken about the importance of getting along with China.

Bashing China has no apparent down side for American politicians unless and until the bilateral relations between the two most powerful nations spiral out of control leading to tragic consequences. The challenge for the incoming leaders of Beijing is to strike a balance between being more transparent to ameliorate American feelings and reassuring its own constituents that China’s sovereignty is not being compromised by American demands. It will be up to the American people to punish mindless China bashing by voting the offenders out of the office and encourage leaders that recognize the importance of promoting mutual trust between the two nations.

What’s at stake is the future peace and prosperity of the world depending on China and the US getting along without rancor.

A shorter version appeared in China-US Focus.

Sunday, October 21, 2012

American Cover Up of Japan's WWII Atrocities by Unit 731

Those accused of committing war crimes in World War II were tried in Nuremberg and Tokyo. Sometime after the conclusion of those war crime trials, in December 1949, 12 Japanese physicians and military officers were tried for their crimes against humanity. The trial was held in Khabarovsk, Russia and the testimony described acts of horror and brutality beyond imagination. Americans are unaware of these crimes because General Douglas MacArthur, at the time in charge of occupation of Japan, suppressed the findings.

I was recently reminded of this part of WWII history when I came across an 8-page article published on June 5, 2001 in The Japan Times about the trial of Unit 731. This biological research unit was established in Harbin by Japan's military hidden behind a wall and a veil of secrecy. No outsiders knew what was going inside the camp. 

Most of the information in this blog is derived from the article in Japan Times, generally recognized as the equivalent New York Times of Japan. The following passages taken verbatim from the article give some "color" to the accusation of war crimes:

The crowds (at the trial) heard about doctors who subjected their victims--termed "logs"--to all kinds of experiments: injection with animals' blood, exposure to syphilis, hanging upside down until death, surgical removal of their stomachs with the esophagus then attached to the intestines, amputation of arms and reattachment on the opposite side. Some 10,000 people were reported to have died in Japan's 26 known killing laboratories in China, Japan and other occupied countries.

Unit 731's physicians, preparing to fight in the Soviet Union or Alaska, would experiment on victims in the bitter Harbin weather, where winter temperatures can fall into the minus 40s Celsius. Guards would strip a victim, tie him to a post outdoors and freeze his arm to the elbow by dousing him with water, researchers say. Once the lower limb was frozen solid, doctors would test their frostbite treatment, then amputate the damaged part of the arm. The the guards would repeat the process on the victim's upper arm to the shoulder. Another test, another amputation. After the victim's arms were gone, the doctors moved on to the legs.

When the prisoner was reduced to a head and torso, orderlies would lug him elsewhere in the compound and use him for experiments involving bubonic plague or other pathogens. Virtually no one survived. Unit 731 found a ready supply of human guinea pigs: members of resistance movements, children who strayed too closed to the outer perimeter, a teenage girl found carrying a pistol, Mongolians, Koreans, Russians. Any non-Japanese, really, was a potential victim.

While Soviet officials deliberated on what to do with them (after the war), Gen. Douglas MacArthur secretly granted immunity to the physicians of Unit 731 in exchange for providing America with their research on biological weapons. Presented with evidence that downed US airmen had been victims of grotesque experiments, MacArthur suppressed the information.

MacArthur's action outraged Stalin and he ordered a trial of Unit 731 doctors then in Russian hands. The trial ended in 5 days and the accused were found guilty and sent to prison, none were executed. In 1956, except for one that committed suicide behind bars, rest were quietly sent back to Japan and released. Lt.-Col. Naito Ryoichi, one of the military doctors, founded Japan Blood Bank that later became Green Cross. General Ishii Shiro, leader of Unit 731, was never caught and tried; he died of throat cancer in his own bed in 1959.

As the Japan Times article pointed out,
the Khabarovsk trial casts light on a wound that still festers in Asian international relations. Anger at Japan runs deep in both Koreas, China, the Philippines and other nations occupied in World War II to whom Japan has never paid reparations or issued a satisfactory apology.

The trial revealed that the Japanese military was planning to attack San Diego with kamikaze piloted planes loaded with fleas infected with bubonic plague. Hiroshima and Nagasaki intervened and the plan was never carried out. Had it been otherwise, American might think differently about the pains of WWII.