Tuesday, October 8, 2019

Houston Rockets’ Faux Pas with China

Under a different title, it was first posted in Asia Times.

The latest bruhaha between the NBA and China once again proves that money rules over words and politics trumps economics. Many commentators and politicians, as usual, missed some of the finer points of a matter that should not have been enlarged into another thorn in the US China bilateral relations.

Houston Rockets general manager, Daryl Morey, is fully within his rights to tweet: “Fight for freedom. Stand with Hong Kong.” Whether it was the wise thing to do is another matter.

Although it was quickly deleted from cyberspace, the tweet did not escape the notice of the millions of Internet users in China and immediately prompted a firestorm of criticism and objections from the Chinese, many professed to be die-hard fans of the Rockets.

Basically, their message to Morey was that you don’t understand the complexity of Hong Kong and you should keep your opinion to yourself. Obviously, the Chinese are not empathetic to the American idea of freedom of speech.

The management of NBA and Rockets have seen how indiscretions by name brands can cost them business in China, in one case leading to a full withdraw from the China market. They understood that unpopular reaction of the Chinese can quickly bite into the bottom line for American pro basketball. 

Thus, they quickly made Morey’s tweet go away. So far so good. Making money overrules Morey’s freedom of speech.

Then the US politicians from both parties jumped into the fray with their two cents worth. These fine leaders of democracy can’t tell the difference between the voice of the Chinese people and the national policy of China.

Democratic presidential candidate Julian Castro’s tweet is representative of the bias in the American leadership. He said, “China is using its economic power to silence critics—even those in the U.S.” 

Note in his tweet, Castro said China not the Chinese people in China. Suddenly, the visceral reaction of the people has been become the repressive policy from Zhongnanhai. (Zhongnanhai is where the Chinese leaders go to work, Mr. Castro.)

Many Chinese businesses have begun to distance themselves from the Houston Rockets and even the NBA. The Chinese Basketball Association, led by Yao Ming, the Hall of Famer that played for the Rockets, has announced that they are suspending their relationship with the team.

The businesses in China and the CBA are responding to the freedom of speech of the millions of Chinese people. Just as NBA is trying to repair the economic damage to their presence in China, the Chinese establishment is safeguarding their relationship with their fan base by distancing from the NBA.

However, basketball is too big and important with the Chinese people and we can expect that the tempest will soon blow over and fans back to being fans.

For the US politicians to take cheap shots at China show a failure to understand China and the Chinese people, in the process making a molehill bigger and the bilateral divide wider.

It’s time to realize and accept that China will never be like America. In their own way they have their own values and own sense of personal freedom. So far as much as 90% of the populationapprove of the direction their government is moving as opposed to a mere 35% in the US.

The sooner America can accept China for what they are and not what the US would like them to be, the sooner both parties can begin to focus on where mutual ground and common interest exist and find ways to maximize benefits for both sides.

Sunday, October 6, 2019

George Galloway Talk Show from London

Billed as the Mother of all Talk Shows, see episode 16 for a two hour discussion


A special panel dedicated on the HK protest


Informative Video Presentation on Belt Road Initiative

Look for a balanced presentation on China's Belt and Road Initiative by PBS on 9/27/19


PBS also explained how China produced billionaires faster than anyone on 9/29/19 free of polemics


Thursday, October 3, 2019

An Alternative View of HK Protest

This was first posted in Asia Times.

In reporting the Hong Kong protest movement, the western media has represented hoodlums as heroes and hooliganism as a movement for democracy. The rioters beat up on innocent by-standers, attacked police with gasoline bombs and sharpened metal rods, destroyed government buildings and metro stations, and interrupted the international airport operations.

The Hong Kong economy has been grounded to a halt. Yet the media praised the rioters as freedom fighters. In fact, the ringleaders of the riots demanded that the disturbances be not called riots but as protests.

When the Hong Kong police pushed back on the protesters, the cameras always found them, much less so when the violence were perpetrated by the rioters. In fact, police brutality was frequently bandied about as the provocation for the ensuing violence.

In the months from early June to early August, the HK police had to face protesters numbered in the millions, at least that was the media report. The police with great restraint made 420 arrests.

By contrast, the New York finest arrested 700 on the one-day Occupy Wall Street protest on October 1, 2011 and the size of the crowd was in the thousands and not millions. If the mayhem that happened in Hong Kong took place in New York, rivers of blood would have covered the pavement and city jail and hospitals would have overflowed with victims.

So, what was the original cause for mass unrest?

It was precipitated by the HK government proposing to enact an amendment to the existing Fugitive Offenders Ordinance. 

The necessity of the amendment became obvious when a young man took his pregnant girlfriend from HK to Taiwan, murdered and buried her dismembered remains there and came back knowing that he couldn’t be extradited to Taiwan to face justice.

Safe haven for fugitives

I asked my friend, a long-time resident of Hong Kong and a senior advisor to both HK governments before and after handover, for an explanation. He said, “There are currently hundreds of known fugitives using Hong Kong as a safe haven because Hong Kong only has agreements with certain countries but have so far not included Macao, Taiwan and mainland China.

“The proposed amendments to the Fugitive Offenders Ordinance are designed to promote criminal justice and to redress a situation whereby certain criminals can use our city as a safe haven.”

Agitators seized the opportunity to convert a government intent to close a loophole into a cause célèbre by claiming that the added statute would give Beijing arbitrary power to arrest and extradite anyone, even those merely passing through HK, into China for incarceration or worse.

The Chief Executive, Carrie Lam, assumed that correcting the omission was straightforward and failed to anticipate the storm that followed. Even as Lam officially suspended and then subsequently withdrew the bill to amend the extradition provisions, the fury of the protests continued.

Forcing Lam to backpedal, the protesters pressed forward with more demands, including exoneration of those arrested, resignation of the Chief Executive and universal suffrage for selection of members of the Legislative Council and the Chief Executive.

By the end of August, my friend shared this observation with me: “Whatever organization is behind supportingand promoting this unrest is apparently well funded and highly organized
with weekly schedules on what and where the disturbances will take place

Bankrolled by New Endowment for Democracy 

As reported by various sources, a main source of funding support is the National Endowment of Democracy. NED is in turn funded by the US Congress to finance organizations around the world that advocate democracy and human rights. Some 18 organizations identified as active in China have received funds from NED. Six of the 18 are known to operate in Hong Kong.

Lest anyone think that NED involvement with Hong Kong is the first time, it’s not. NED also bankrolled the Occupy Central movement that took place in Hong Kong in 2014. Fomenting unrest in the name of struggling for democracy and freedom is consistent with NED’s mission.

This time the ringleaders took the protest to a new level, not only in terms of duration and level of violence of the disturbances, but also took their case to Washington. These supposed representatives of Hong Kong asked the US Congress to grant them freedom and democracy.

That the U.S. had nothing to do with the handover between Britain and China seemed immaterial to these young aspiring freedom fighters. It was also equally a no-brainer for the bipartisan members of Congress to propose “The Hong Kong Human Rights and Democracy Act of 2019,” which is likely to be enacted by the full body.

“No brainer” because it doesn’t take any brains by Congress to take this action and also no cost because any reaction to such a legislative action won’t be consequential to their constituents. But the cost to all the people of Hong Kong, not just the handful of activists, can be major.

With the Hong Kong act in hand, the US government can then feel empowered to tell the Hong Kong government how they should govern, which the HK government would reject, and Beijing would vigorously object on the grounds that the US has no right to interfere..

Then the US would feel that they have grounds to remove the recognition of Hong Kong as a special administrative region and with it, the removal of the most favored nation status. 
That’s a move the Trump administration would implement as part of their goal to decouple China and the US.

If that were to come to pass, the people of Hong Kong would be the losers. Without the special status, the city would be just one of many and not even as valuable to Beijing as the neighboring Shenzhen. Any economic advantages Hong Kong enjoys now would disappear.

About five years ago, I had the occasion to conduct a video interview of Joshua Wong, one of the young dissident leaders who testified before Congress. My impression of Wong at the time, still a high school student, was that he was articulate and energetic and had seized the mantle of being a democracy advocate as a career.

I don’t know if he had gone on to college; I suspect that he found being a dissident an easier living and facing the media limelight more rewarding than pursuing higher education. He showed appalling ignorance of Chinese history and culture.

A generation disconnected with China

Wong represents the generation born after the handover. This generation of young people have no sense of what British colonial rule was like but has somehow acquired a romantic idea that being a British subject was golden.

In reality, Chinese subjects under the colonial rule had no say in the selection of their rulers and no right to cast ballots for any official posts. Whereas the Basic Law, negotiated between China and Britain, provides for selection of the Chief Executive by universal suffrage in gradual steps leading to full vote by the populace before the end of the 50-year transition.

Mark Pinkstone, an Australian journalist with 50 years of experience in Hong Kong said, “The Basic Law, the constitutional document that supports one country, two systems, provides freedoms of expression, speech and religion. Not one of them has been eroded since the handover in 1997. The current demonstrations are living proof of that.”

Pinkstone’s point of view, of course, contradicts the protesters claim that the loss of freedom as the reason for the demonstrations. Perhaps a legitimate adjudicator of the two conflicting points of view is The Human Freedom Index monitored by Cato Institute, based in Washington.

According to the latest index, Hong Kong is ranked 3 trailing only New Zealand and Switzerland. The index ranks 162 countries and autonomous regions based on 79 measures of personal and economic freedom. The US is ranked 17 as measured by the same indicators. It would appear that the young Hong Kongers don’t appreciate how well off they are.

Failing of the Hong Kong government

Of course, the HK government must bear responsibility for the build-up leading to this summer of discontent. After the handover, the Hong Kong government did not introduce a curriculum that would teach the children what it meant to be Chinese and their affiliation with the Chinese culture. Instead of identifying and being proud of their Chinese heritage, they grew up estranged and feeling that it would have been better to be faux British.

The succession of post-handover governments also saw the need to generate affordable housing but did nothing about it; or, could not because the real estate tycoons that control the Hong Kong property market opposed it. The frustration of wages not keeping up with rising cost of cramp housing led to the boil over in 2014 and again five years later.

The World Economic Forum published a surveyof the people from 25 nations asking them if they thought their own government was heading in the right direction or not. The survey was conducted between October and November of 2016.

China emerged leading the pack with 90% of their citizens thought their government was on the right track and only 10% thought not. The US was squarely in the middle, ranked at 13 with 35% of their citizens thought their government was going in the right direction and 65% thought not.

Too bad, Hong Kong was not separately polled, but if I have to guess, I would suspect that the sentiment of Hong Kongers toward their government would be closer to the US than to China. 

Sadly, if the young people of Hong Kong decide to cast their lot with the US, they will become disillusioned by a dysfunctional democracy that they’ll get to see up close. And they will miss the opportunity of hitching their future to a China going in the right direction.

Friday, September 6, 2019

Trump can't afford to win any trade war with China

This was first posted on Asia Times.

The response to last week’s grand opening of Costco’s first warehouse store in China was quite a surprise. As reported in the popular media, including Asia Times, throngs waited three hours to get in and two more hours just to get through the check out line. The company had to close the doors by 1:30 PM on the first day and quickly regulated the numbers on the second day.

This customer response from ordinary, everyday folks certainly belied Trump’s assertion that China’s economy is failing and is a sad commentary of the ignorance and misjudgment of his China team.

Give Costco credit for doing their homework on the China market and hit the sweet spot for shoppers in Shanghai. The sweet spot is huge, representing the purchasing power of middle-income households of China at about three times that of the US.

How can Trump’s China team be so far off in misreading the strength of China’s economy? Because they are lulled by the complacent feeling that America remains exceptional, that China only knows how to steal and copy and further that China will grovel when faced with the threat of tariffs. They are wrong on all counts.

Trump being misled by his advisers

Trade negotiator Lighthizer, a trained lawyer, doesn’t know much about economics and believes that the only way to reduce trade deficit with China is to levy tariff on imports from China. Trump’s China advisor Navarro never knew much about China and quite willingly pretended that he doesn’t know much about economics either—just like his boss. That way he can stroke Trump’s ego with the line of nonsense that trade war with China is easy to win.

The Trump China team never bothered to find out what’s going on in China. If they had, they would realize total foreign direct investments into China in the first half of 2019 actually increased by 1.5% from previous year. In other words, companies are not backing out but continue to invest in China because, unlike Trump, they believe in China as an attractive place to do business.

China’s GDP increased by 6.5% last year, only 1.5% was due to export—and obviously export to America contributed only a fraction of that. In other words, exporting to the US wasn’t as important to China’s economy as Trump had imagined. In recent years, China’s policy was to encourage domestic consumption and Chinese consumer spending now accounts for more than 50% of its GDP.

The Trump White House simply didn’t appreciate that China’s consumer economy is already much bigger than the US. More recently Beijing has promulgated 20 new policy-related regulations designed to stimulate more consumer spending. The new regulations include such things as encouraging the opening more 24/7 convenience stores, and promoting auto sales and shopping, taking more vacations and entertainment options and the like.

Clearly, China has a plan to deal with the adverse impact of the trade war. They are counting on domestic consumption to keep China’s economy vibrant and resilient.

Trump’s only response is tariff

Trump’s only strategy to counter China is to levy more tariff and threaten to levy more. He has publicly asserted repeatedly that tariff collected is “free” money being paid by China. Someone needs to tell him that the free money is hurting the American consumer by raising the cost of goods and draining the American pocketbook. The money isn’t free and not coming from China.

Ahead of Trump imposing a new round of tariff on a range of consumer goods on September 1, American retailers such as Best Buy are already wailing in anguish. They know the import duties on Chinese made goods will cut down their margin, raise the price tag for their customer and reduce traffic to their stores. 

Costco in China does not have this problem; they carry made-in-China goods to serve their customers in China. American retail stores, on the other hand, depend on low priced, Chinese made products to stock their shelves. By lowering the tariff on imports from other countries, China can more than offset the increased tariff on American imports. Thus, the Chinese consumer is untouched by the trade war. 

In the meantime, the American farmer is hurting badly. Bankruptcy has increased by 13% in the first six months of this year. Trump’s offer to subsidize farmers out of the tariff collected is a band-aid over a gaping wound. Who from the White House can advise them on what to plant next year as bankruptcy looms for more households?

American leaders also don’t respect China’s technology

American political leaders from both sides of the aisle subscribe to the notion that China’s technology prowess comes from theft. Even Huawei’s 5G technology must be illicit and stolen from somewhere, despite the fact that nobody else has the technology for Huawei to steal from. Washington may find solace in dismissing China’s technological prowess, but America is sadly being deluded.

For example, according to the latest statistics, Samsung has kept their leading worldwide market share for smart phones. But Huawei has move into the second place with 15.8% while Apple slipped into third place with 10.5%. Significantly, in changing positions, Huawei sales increased by 16.5% while Apple sales dropped by 13.8%. No amount of badmouthing can change the actual sales results.

About ten years ago, China purchased highspeed rail technology from Siemens. At the time, some of the German experts privately thought it would take China decades to digest and absorbed all aspects of the technology. Yet in a decade, China has surpassed the German technology to become the world leader. China’s highspeed rail run faster and come cheaper than the Japanese or the Europeans. This is just one indicator of how quickly China can develop excellence in technology when they put their minds to it.

As part of China’s highspeed rail consortium, CRRC has won bids to make metro coaches for American cities. They proposed assembling the railcars in new plants in the US, that would create employment for American workers and present a state-of-the art design at a lower price than any competitive bids. By manufacturing interior components of the car in the US, the finished product would have more than 60% local, i.e., made in America, content. Needless to say, this is an all-around winning arrangement.

Yet, when CRRC delivered its first car to Boston, NY Senator Chuck Schumer’s only comment was that he’s worried about the Chinese using the cars to spy on America. More recently, Congressman Harley Rouda, D-CA, has taken a step further and sponsored legislation that would ban the use of federal money to buy rail cars from CRRC.

Rouda said that “American taxpayers’ hard-earned money (should) not support Chinese companies bent on undermining industries that are important to our national security.” He must be confused or is just being xenophobic because Americans have not made subway cars for decades. If indeed it’s an industry important to American national security, he better hurry and resuscitate the companies from the graveyard.

Or, perish the thought, Rouda knows better but he’s just grandstanding for some easy political brownie points. Everybody in Washington knows that taking cheap shots at China is the easiest way to get media attention.

We can see that China has a plan to deal with the trade war in the near term while the Trump White House is clueless. But the long-term implications are even more damaging.

Long term the trade war will hurt the US even more

Whether it’s soybean from Iowa or lobster from Maine or wine from California, once the Chinese stop buying from the American sellers, the markets won’t come back in a snap. China has found replacement sources. The longer the trade war goes on, the more entrenched it will be for the new suppliers and harder it will be for the US exporters to displace them and recover their market share. That is, if and when the trade war ever comes to an end.

On the technology sector, the situation is just as bad. Trump thought he had the upper hand when he ordered US semiconductor companies to stop selling key electronic components to China’s high-end smart phone makers such as ZTE and Huawei. But China is such a huge market that American semiconductor devices companies can’t afford to walk away.

The American companies pleaded with Trump and he has grudgingly relented and continue to allow the US companies to sell to China for a limited period, albeit the deadline keeps get extended. But the Chinese companies that depend on critical chipsets from the US can see the handwriting on the wall. Huawei, for example, has already announced their own OS for the smartphone to replace the Android OS from Google and is frantically developing their own telecommunication chip sets to replace Qualcomm and Nvidia. 

If the past performance is any indication of the future outcome, Huawei will cut loose their dependence on American technology faster than Washington expects. Then, American high-tech companies will soon lose market share and witness the erosion of their presence and influence in China. 

If the Trump White House does indeed succeed in decoupling the two economies, both countries will be losers. Neither will be able to leverage from the advances made by the other and enjoy the multiplier effect of the interconnection of the world’s two largest economies. Historians may well lament the zero-sum conflict the feckless Trump has brought about and rue the mutual gains that could have been realized had the two largest economies worked together and avoided the lose-lose confrontation.

Thursday, August 29, 2019

Trump is finding the trade war not so easy to win after all

Edited version was first posted on Asia Times.

American President Donald Trump is getting discombobulated over the trade war he started with China over a year ago. He continues to claim that the US economy remains “incredibly” strong, that “we will eventually make a very good deal with China, but we are not in a hurry.”

But Wall Street is not buying. Recent stock indices have roiled violently, dropping when Trump threatens to add tariff on billions of imports from China and recovering when Trump finds excuses to delay levying the tariffs.

Trump, of course, would never blame himself as the cause of bad news on the stock market. He is blaming the Federal Reserve for unwilling to lower the interest rate as the cause for the downward volatility of the equity market. Thus, he already has a designated scape goat in place for when the stock market tanks.

As for his easy to win trade war with China, Trump is getting visibly frustrated that China is no longer acting like the patsy he has been expecting. It’s probably not his fault that he thought negotiating with China was going to be a piece of cake.

In the beginning, advisers of President Xin Jinping suggested an approach to Trump based on the assumption that China was dealing with an American leader who was rational and has the interests of the American people, if not the world, at heart. Thus, Xi flew to Mar-a-Lago to make nice with Trump and even gave Trump a way over the top state reception in Beijing.

Alas for Trump and his team, they erroneously concluded that these gestures meant that China’s negotiators will be soft and can be intimidated by harsh demands and manipulated by bait and switch tactics. Lighthizer and Pompeo began by making outlandish demands that China renounce their national plan, “Made in China, 2025” and change the way their state-owned enterprises are managed.

China revised their negotiating strategy

Gradually the Chinese negotiators began to realize that being open minded and willing to compromise was no way to deal with the American team set on negotiating in bad faith. While they continued to meet with the American team with courtesy, China offered no new concessions and began to prepare for a long standoff by adjusting their strategy.

Judging from the results of the trade data one year after the trade war, China appears to have weathered the storm far more successfully than the US.

For the year ending July 31, US export to China fell by 38%, worth $23 billion equivalent to 15% of annual US export to China. China’s export to the US dropped by 14%, worth $18 billion which was only 3% of China’s annual export to the US. The US trade deficit with China, the alleged reason for Trump to wage the trade war, has widened rather than narrowed since the trade war.

While China raised the tariff on imports from the US as a tit-for-tat measure, China lowered tariff on goods from other countries at the same time. Before the trade war, China’s average tariff on all imports was around 8%. After the trade war begin, tariff on US imports averaged 20.7 % compared to 6.7% on all the other countries selling to China.

Gaining market share in China at the expense of the US

Thus, all the exporting countries in the world except the US are enjoying increased sales to the second largest economy in the world. Canada is such a beneficiary. China’s import of agricultural products from Canada has increased by 63% while the US suffered a drop of 70%. A joke going around is that all the Maine lobsters are migrating north and to be sold as Canadian lobsters for the Chinese dinner table at a lower price than ever.

More than half of China’s export to the US are either made by American corporations in China or by contract manufacturers for the American companies. The import duty being collected (Trump’s so-called free money) by the treasury is paid by the American consumer and/or show up as additional cost by the US company.

On the one hand, Trump can’t get enough of the free money. On the other, he’s holding off on the next levy of tariffs because it would be too close to the Christmas season and would hurt the American consumer. Another clear example of contradiction emanating from an economic ignoramus.

A way to avoid the tariff is to make it elsewhere. A popular destination is to move to Vietnam from China. True, China would lose the jobs to Vietnam, but the ownership of the business would remain in the Chinese hands. This change in manufacturing location has been very popular, to the point that Vietnam is now enjoying the kind of trade surplus that is raising Trump’s ire. 

Navarro was wrong

Contrary to the original thinking by such people as Navarro, only about 3% of American manufacturing has actually returned to the US as a consequence of the tariff on imports from China. The trade war has led to an expected lose-lose outcome, but it would appear that China has managed to contain the damage far better than the US.

Somebody needs to teach Trump the economic principle of comparative advantage and the benefit of world trade. Unfortunately, it would not be Navarro, Kudlow, Bolton or anyone else in his inner circle. None care to tell the boss what the boss doesn’t want to hear.

In fact, the foreign ministers of China, Japan and South Korea would be able to give Trump the tutorial in economics that he badly needs. They are currently meeting in Beijing to promote economic cooperation and safeguard free trade. Specifically mentioned in the agenda is to strengthen cooperation on big data, artificial intelligence and 5G. The very same areas that the Trump administration fears competition from China. 

That the three Asia powers with quite disparate domestic and global agendas can meet to discuss cooperation on matters of common interest would suggest that the foreign ministers can also give Trump lessons on international relations and diplomacy.

The Wall Street Journal on August 20, 2019 ran an opinion piece entitled, “Trump is Losing the Trade War with China.” The author suggested that the US can more effectively deal with China by forming coalitions with other countries. (The author neglected to point out that such coalitions are virtually impossible given Trump’s go-it-alone approach.) For the Journal to declare Trump losing the trade war has to be disconcerting for the Trump administration.

American economists expect recession

On top of that, according to a widely reported survey just released by the National Association for Business Economics, 75% of their members surveyed expected a recession before the end of 2021 while the other 25% expected to see signs of the recession as early as 2020. No one expected no recession. The main source for their pessimism is coming from the negative fallout of the trade war.

Trump believes that the prospects of his re-election are tied to the stock market. Since stock market declines generally lead actual recession by about 6-9 months, the timing of the market drop associated with a looming recession could be quite damaging to Trump’s re-election. Despite his bravado, members of his team such as Kudlow and Navarro have been scurrying around the media circuit talking up the economy and denying any signs of economic slowdown.

When things go wrong, somebody in the White House gets fired. When it becomes obvious that the trade war is not turning out as expected, and the stock market does tumble, someone will have to walk the plank. Most likely that would be Navarro. He sold Trump on taking on China and convinced him that a trade war was easy to win.

Friday, August 23, 2019

Nathan Rich lambasts NYT coverage of Hong Kong

See https://www.youtube.com/watch?v=zMm_7jb3Cds for his critique of the NYT slanted and bias coverage of the HK protest.

In contrast, see how CGTN's review of timeline of incidents leading to the protests,
https://www.youtube.com/watch?v=TrZvlhizKb0 The program has also carefully document the work of National Endowment for Democracy.

Monday, August 19, 2019

Book review: The China Mirage

As the US China relations worsen steadily, it's more critical than ever that the American public pick up a copy of James Bradley's "The China Mirage," lest America's tragic history in Asia is repeated by the present White House, unguided by facts and cultural understanding.

Armed with comprehensively thorough research and meticulous documentation, the author described a history, beginning from the Japan's Meiji era to present day, that the American leadership has never understood Asia and repeatedly made erroneous assumptions about the Asian countries and Asian culture.

Theodore Roosevelt admired Japan because the emissary from Japan was one of the unusually rare (at the time) individuals that graduated from Harvard. From his friendship with Baron Kaneko, Roosevelt became convinced that Japan as the most westernized country in Asia will lead an enlightened Asia to join the western world. He acted on his impression by secretly agreeing with Japan that the US would not stand in the way of Japan's invasion and occupation of the Korean Peninsula. Thus the fate of millions of Koreans was sealed by a US president who never set foot in Japan.

Franklin Roosevelt was similarly influenced by the Soong sisters and their brother T.V. Soong. This family was also educated in the US, spoke flawless American English and furthermore were apparently devout Christians. They convinced Franklin that Chiang Kai-shek, who married the youngest of the Soong sisters, and the Kuomintang would lead and transform China into a western democracy.

State Department officials based in China during WWII reported that Chiang enjoyed virtually no popular support, contrary to Mao Tse-tung and the Communist Party that had become a viable fighting force against the Japanese. These were officials that spoke fluent Chinese and kept in frequent contact with both sides. Their reports were ignored.

The book described a litany of mistakes made by Washington that also led to the Korean War and later the Vietnam War. The common root of all these mistakes was decisions made based on total absence of any knowledge of Asian culture and history and the presumption that Asian countries all desperately want to become democracies just like America.

Author Bradley not only relied on usual published sources but he also dug deep from obscure references and personal papers rarely visited by others. That he has assembled his findings into an entertaining narrative should not diminish the importance of his findings and the lesson from history that we must not ignore.

Sunday, July 21, 2019

BBC called HK bomb makers "pro Democracy" protesters

Nathan Rich, an American living in China, regularly post his comments on YouTube. He just commented on BBC's report on the HK protesters.

BBC reported that HK protesters were found to possess a cache of Molotov cocktails. BBC continue to call the protesters as "pro Democracy." Shouldn't they be called terrorists, Rich asked?

See Nathan Rich at https://youtu.be/vWHZf3F-R8k

Saturday, July 13, 2019

Nathan Rich Tore New York Times Apart

Nathan Rich, an American living in China, takes a strong exception to the video presentation produced by New York Times. The NYT "exposè" is supposed to be on China's health care systems.

His issues with this piece include not understanding China, deliberate distortions by calculated omissions and failure to provide balance by comparing health care in China with the US.


Please go on the YouTube link and see what Rich is saying. Please circulate this until we get a response from the New York Times. This is the kind of nonsense that gives verification to Trump's accusation of fake news.

Tuesday, July 9, 2019

Gordon G. Chang, America's Saddest Clown

Nathan Rich aka 火锅大王 never fails to entertain and amuse. Here is his commentary on Gordon Chang, 

Give him a listen and pass this YouTube link around. Nathan Rich is an American, who just love living in China. He has a lot to say about a lot of subjects and has taken great joy to dissect major media's (such as CNN and NYT) coverage on China and Hong Kong.


Monday, June 10, 2019

U.S. will regret persecuting Chinese American scientists

This was first posted in Asia Times.

In February 2018, Senator Marco Rubio asked FBI Director Christopher Wray to comment on the counterintelligence risk posed by Chinese students in the US. Wray basically said China’s threat is not just a whole-of-government threat but a whole-of-society threat. 

In other words, every Chinese, foreign or American, is a potential spy. Since then Wray has consistently hewed to that point of view in his public speeches and testimony.

What Wray said was nothing new but merely a reflection of institutional racial bias that has characterized the FBI since inception. J. Edgar Hoover, the first director and known for his homophobic bias, saw a commie under every bed and every minority person a security threat.

But it could be said that the exchange at the Congressional hearing with the smirking Rubio marked the beginning of turning on the surveillance screws on Chinese in America be they visitors from China or permanent residents in the US.

The consequent collateral damage from the clampdown has been on prominent Chinese American scientists and on the long-term interest of America. For certain, these developments won’t make America great again.

Emory dismissals latest in a series against Chinese Americans

The most recent victims of apparent xenophobia were a husband and wife team doing work at the medical school of Emory University. Professor Li Xiaojiang has been a tenured professor since 2005. He and his co-director wife, Li Shihua, contributed breakthrough research on Huntington’s disease through genetic engineering, as one of their notable contributions.

Their abrupt dismissal and shutdown of their laboratory was a shock and surprise. The explanation points to White House pressure on National Institutes of Health to crackdown on the possibility of sharing of research results with China. 

Last August, NIH director Francis Collins sent a letter to more than 10,000 American institutes warning about “foreign entities interfering in funding, research and peer review of NIH projects.”

Even though Li’s laboratory received $1.7 million from NIH as recently as fiscal 2018, it would appear that holding dual academic appointments in China and Emory has suddenly became unacceptable and qualified as interference defined by Collins. 

The Li’s have been visiting and teaching in China since 2007 and they claimed that they have always reported their activities in China to Emory. Under the traditions of normal international academic exchange, it was not a problem but is now a problem because of xenophobic policies instituted by the Trump administration.

According to the university, “Emory also takes very seriously its obligation to be a good steward of federal research dollars and to ensure compliance with all funding disclosures and other requirements.” Apparently to the Emory leadership, the threat of agencies withholding federal funding outweighs the importance of academic freedom and human decency.

Prior to Emory’s dismissal of the Li’s, MD Anderson Cancer Center also responded to the NIH letter and began to take action against three Chinese American scientists, two of whom elected to resign rather than endure the review process. 

These are medical research projects whose objectives are to benefit the human race, for heaven’s sake.

Climate change scientist was another

Perhaps one of the most sensational cases recently was Wang Chunzai, another naturalized American citizen. A one-time much published and decorated climate scientist and long-time employee of National Oceanic and Atmospheric Administration, he was arrested and charged with accepting payment from China, apparently for about $2000 expense reimbursement that he failed or forgot to report.

By the time, his case came to trial, Wang told his attorney that he wanted to cop a plea to one felony charge and move on with his life. His defense counsel and the prosecuting attorney settled on dismissing all other charges in exchange for guilty plea to one count for time already served, which amounted to the one night when he was arrested. 

The presiding judge was reluctant to make Wang a convicted felon, but Wang explained that once he was arrested, he knew his future in the US was cooked, and he had already lined up a job in China. He couldn’t risk losing his appointment in China because of a lengthy trial. 

Wang is now a member of China’s Academy of Sciences and leading a group doing climate research. This is the kind of work he loves and will be doing it in a country that believes in the need to understand climate change. This is far more important to him than being labeled a convicted felon in the US.

Before Trump’s administration, it was accepted practice that Chinese American scientists—and non-ethnic Chinese as well--can collaborate with counterparts in China, consistent with the tradition of open academic exchange. Many prominent professors from the US held dual appointments. To encourage more visiting scientists, Beijing even instituted a “thousand talents” program. 

Thousand talents program a lightning rod for persecution

The Trump China team considers the thousand talents program as a means for China to gain access to US technology and knowledge. Thus, known participants in the program are targeted for investigation and subsequent prosecution. Ironically, profiling those on the talents program actually facilitates China’s recruitment.

For example, no sooner than when the Li’s were dismissed by Emory, the university in southern China, where Li’s regularly visited, immediately extended employment offer for the two of them to continue their work. The offer came with fully equipped laboratory and even employment for every member of their research team left stranded by Emory.

It would appear that history is repeating itself all over again. In the 1950’s during the hysteria of McCarthyism, the American government hounded the brilliant rocket scientist, Qian Xuesen, a Chinese American and founder of Jet Propulsion Lab in Pasadena, California. His plan was always to stay in the US but the federal government basically gift wrapped him and sent him to Beijing where he led China’s missile and rocket development.

If America now considers China a military threat, the US has the late Senator Joe McCarthy to thank.

Seeing that the US continue to push the best and brightest out of the US, the next generation of best and brightest from China are losing interest in coming to the US to study. This trend hurts America in at least two ways. 

Discouraging Chinese students from coming will hurt the US more

China has been the source of around one-third of all the international students entering the US, and more Chinese students major in science, technology, engineering or math, so called STEM, than any other country. If they stop coming, many research labs will dry up for lack of graduate students to do the work. Lower tiered schools will also face budget constraint as they are deprived of the full tuition fees that foreign students pay.

China with the four times the population of the US generates more than ten times of university graduates in STEM than the US. Rather than discouraging Chinese students from coming, the US should be devising ways to skim off the best and brightest and entice them to come. 

It’s possible the Luddites in the Trump administration do not understand that students do not come to steal but to work on furthering the knowledge of STEM. They probably also assume that America continue to hold the keys to all scientific advances, even those developed by immigrants from all over. 

In reality, the work by graduates and post-doctoral fellows benefits the school they attend and the country they reside in. 

Consistent with their ignorance, the Trump administration is making it more difficult for students from China to obtain their visas in a timely manner and perhaps not at all after unexplained delay. 

Cao Yuan is the latest victim. He is a prodigy from China now pursuing a doctorate at MIT. He was voted by the prestigious Nature as the first of the ten people who mattered (in science) in 2018. 

Cao discovered that he can achieve superconductivity at room temperature with twisted graphene sheets. In China for a home visit, the visa office at the American consulate is apparently holding up his visa that would enable his return to the US.

It’s not as if Chinese graduate students have to study in the US as a necessary precondition to success. Pan Jianwei did his graduate work in physics in Vienna. He helped China launched the world’s first quantum science satellite to established hack-proof communication between China and Europe. 

His advisor in Vienna was his collaborator. They named the satellite Micius after a 5thcentury BC scientist, a subtle reminder that China was doing science long before there was a United States of America.

What matters is that having to deal with the capricious nature of the American visa offices, Chinese students are increasingly favoring elsewhere over the US. Someday the US may come to realize that they needed the students from China more than the students needed to study in the US.

Liu Yuanli is the Dean of Peking Union Medical College, School of Public Health and one time first dean of Harvard’s School of Public Health. He said, “The restriction on Chinese scholars and students are irrational and go against the very core value that makes US a great nation.” 

Superconductivity that does not require near absolute zero cooling would be a breakthrough on the level of cold fusion and the magic bullet for tumor cells. Just think, whether commercial application of room temperature superconductivity would be first introduced in China or in the US could depend on the whim of some American visa granting clerk. 

That visa clerk may not understand the significance of Cao’s discovery any better than the White House. Sad.

Saturday, June 1, 2019

Help. the American imbeciles are coming!

First posted in Asia Times.

Xenophobia coupling with paranoia breeds imbeciles that are capable of only silly and petty actions. Senator Chuck Schumer of New York is the latest case in point.

China Railway Rolling Stock Corporation (CRRC) has offered to put up $50 million to help New York City develop and design state-of-the-art subway cars to replace dilapidated rolling stock in America’s largest subway system, a system that’s more than a century old. 

Schumer immediately demanded that the US Federal government fully vet this proposal based on the fear that China could use the cars to spy on America.

Horrors to Betsy, imagine millions employed in Beijing to listen in on daily commuter conversation on the IRT (Interborough Rapid Transit) and IND (Independent Subway System) lines. “Hi Joe, how’s the family? Think the Yankees will win the pennant this year?” Blah, blah, blah.

The next thing you know, by piecing the tidbits together, the Chinese would have stolen the top-secret design of the multi-headed missile! Ludicrous? Yes, but there is precedent for this line of illogic.

Twenty years ago, during the height of hysteria around Los Alamos scientist, Dr. Wen Ho Lee, an in-house FBI expert on China publicly claimed that China conducted espionage differently by relying on “grains of sand” approach.

At the time, Paul Moore, one-time head of counter intelligence claimed that Beijing rely on random bits of information collected by ethnic Chinese living in America (each a grain of sand), which when assembled in Beijing became America’s top-secret weapon designs.

Schumer may have been influenced by Moore’s idea of Chinese way of spying, when he asked Department of Commerce to check out CRRC. He probably didn’t know that Moore used to car pool with Robert Hanssen and did not have a clue that he was sitting next to the deadliest Soviet double agent inside the FBI.

Moore could see three Chinese talking to each other at a party to be in the process of passing secrets to China but never saw his buddy, Hanssen, as a spy for the Soviet Union. His racial bias against ethnic Chinese was not that of an isolated individual but reflected an institutional bias of the FBI as an organization.

Last year, FBI Director Christopher Wray testified in Congress saying that Chinese spies are everywhere, that China uses non-traditional collectors of intelligence and poses a whole-of-society threat. Words that slightly differ from Moore but rooted in the same racial prejudice unchanged for at least two decades.

In case you’re wondering, CRRC is the world’s largest manufacturer of railroad cars. As one measure of the advanced technology they owns, CRRC recently announced that they have developed a magnetic levitation train that will go as fast as 600 km/hour.

In the US, CRRC has already won contracts to build replacement subway cars for Boston, Chicago, Los Angeles and Philadelphia. The business arrangement is basically similar for the four cities.

CRRC would ship the outer shells of the cars to the US for assembly, in Springfield Mass for Boston and outside of Chicago for the other three cities. All the components that go inside the car would either be manufactured or sourced from within the US. Thus, the local content would exceed 60%. Each of the two assembly plants would employ 150 or more workers.

The tangible outcome out of the two deals is that the four cities would get state-of-the-art subway cars that are lighter, quieter, safer and at least 20% cheaper than competing bids. The savings for each of the cities would be worth well north of $100 million when the orders are finished.

Since Pullman went out of business decades ago, the US hasn’t had any manufacturers capable of making the rolling stock for passengers. Now with the cooperation of CRRC, the US will have two operations in different parts of the US.

The CRRC deals in the US involve technology transfer from China to the US—none stolen from the US since the US didn’t have any. Even so, there remains parties that object to a Chinese presence in the US rail system. 

One of these is the Rail Security Alliance, self-described as a coalition of rail freight car manufacturers. Ostensibly this organization fear for the safety and security of passengers that ride on cars made by CRRC. Their real agenda is the fear that CRRC will move on to their turf next and take over box car manufacturing as well.

Can’t blame the freight car makers for wanting to protect their livelihood but what about New York, Washington and other metropolitan transit systems that run on annual deficits. If they can’t buy from CRRC, the next largest rail rolling stock manufacturers in the world are Siemens and Alstom. Unfortunately, the American cities can’t afford the prices these “Caucasian” companies charge. 

Easy for Washington politicians to say don’t buy from China but where are the supplemental funds to give to the transit authorities so that they could afford to buy “white” subway cars?

Senator Schumer as Senate’s minority leader is very much part of the dysfunctional establishment in Washington. This group of people knows how to snipe, bicker and even lie as the occasion demands but they do not know how to get anything done.

Schumer among them understands that repairing and rebuilding America’s infrastructure is the highest national priority. But they don’t have a clue on how to get started; they just know that they don’t want Chinese companies such as CRRC to lend a helping hand.

How idiotic is that?