Showing posts with label Book review. Show all posts
Showing posts with label Book review. Show all posts

Monday, May 3, 2021

One man’s view of an ‘Upside-Down World’- Review of book by Clyde Prestowitz

First posted in Asia Times. Clyde Prestowitz’ The World Turned Upside Down is the first major book on US-China relations to be published in 2021. The book, as stated by the subtitle, is about “America, China, and the Struggle for Global Leadership.” For the author’s response to this review, click here. Prestowitz’ first book was Trading Places, published in 1988, about how America ceded its future to Japan and how to reclaim it. He has written quite a few books since then, but in a sense, his latest book is Trading Places redux, except that China has taken the place of Japan. More than 30 years ago, Japan was “stealing” manufacturing jobs from America. The author proposed certain strategies for the US government to negotiate with Japan and thus rectify the trade imbalance and bring manufacturing back. Japan was a much-feared juggernaut back then. The venture capital community in Silicon Valley was so intimidated by Godzilla, they always asked, “Can Japan steal our ideas and make the widget better and cheaper?” The venture capitalists basically stopped investing in electronic hardware ideas and emphasized the software side of technology. This mindset led to the emergence of fabless giants such as Nvidia, a company that has no manufacturing capability but is worth much more than Intel, which has billions invested in semiconductor manufacturing. Before Washington could adopt some of Prestowitz’ ideas and move against Japan, Japan’s bubble economy popped. One could probably predict that this was inevitable when the Tokyo Palace grounds became more valuable than the total real estate of the entire US state of California. But manufacturing did not come back to America. Japan hung on for as long as possible, gradually losing production to South Korea and some to Taiwan and eventually to China. Prestowitz blamed China’s entry to the World Trade Organization, after which it gamed the system and took unfair advantage of favorable terms to build its manufacturing base. Before presenting my disagreements Prestowitz’ new book, I need to acknowledge that this is a valuable work, comprehensively researched, written with clarity, and full of teachable content. Reliance on mercantilism In the book, Prestowitz accuses China of rampant theft of intellectual property as an essential component of its economic rise. But he is fair-minded in that he outlines how every developing economy, including Japan, South Korea and Taiwan, “borrowed” ideas, design and technology from others to boost economic development. Most interesting, at least to me, is how the United States under the leadership of Alexander Hamilton relied on systematic theft of technology from Europe, and the practice of mercantilism to protect the infant industries at home until the domestic manufacturers could compete with its foreign competitors. Thanks in a large part to these mercantile policies, the US was to experience unprecedented economic growth. The book notes, “Between 1820 and 1870, the US GDP growth was, like China’s today, the wonder of the world.” I have not read anywhere else as thorough explanation of what mercantilism is and how such practice can benefit the practitioner. Heretofore, I thought of “mercantilism” as a swear word to sling at another country if we don’t like its trade policy. But Prestowitz makes a convincing case that mercantilist policies are important to nurture infant domestic industries. However, I have trouble with the two basic assumptions the author used to make his case against China. First of all, Prestowitz appears to echo the zero-sum view of US-China relations popular among the denizens inside the Washington Beltway. Regardless whether American politics is from the right or left, they all assume that China is out to push the US aside and take over as the global hegemon. US can’t stand being overtaken by China The prospect that China’s economy will overtake the US seems to drive these Americans to distraction. To them, size really does matter and China’s growing economy causes a deep-seated sense of insecurity and an inferiority complex. While they stew in paranoia of their own making, they find no comfort in the fact that per capita income in China will take decades to catch up, if ever. Depending on who’s counting, we Americans have around 800 to 1,000 military bases encircling the globe and we get upset and alarmed because China may have two. China’s first in Djibouti on the Horn of Africa was established to support the PLA Navy in its anti-piracy patrols. I don’t even know where the second is supposed to be, but how dare China challenge us with two international harbors? Then in recent years, China has had the temerity to militarize atolls in the South China Sea. How are we supposed to exercise the freedom of navigation in that body of “international” water and not feel threatened by the menacing missile batteries? Our naval vessels sail with the best of peaceful intentions, but the Chinese guns pointing at the ships clearly do not. Overlooked in such recriminations is that China simply does not play by the same rules as the US. China has never acted on or expressed the desire to become the world’s No 1 military power. Its most powerful diplomatic tool is the Belt and Road Initiative to help other countries build their infrastructure. To his credit, the author does not smear China by calling the BRI a debt trap or another form of colonial exploitation. While many in the mainstream media do step over the line and without any basis accuse China of gross misconduct, at least Prestowitz refrains from doing so. Rather, he thinks it was clever of China to come up with the idea. “It broke no international rules, attacked no one, and alienated no one while attracting bevies of supporters and partners. At a stroke it made China into a major world power whose influence in some ways surpassed that of the US.” In fact, China’s frequently repeated mantra is “win-win.” The best example of its practicing of what it preaches can be seen in a documentary from Singapore on Uzbekistan as the “buckle” of the BRI. BRI offers growth prospects The excitement in Uzbekistan is palpable as China build high-speed rail to connect the double-landlocked country to the sea and to the rest of the world. Uzbek officials now talk about the prospects of an economic boom that could replicate what happened to Japan and China. China offers access to its huge market and its inbound investments create massive employment opportunities. The Chinese in Uzbekistan and the Uzbeks are open and cordial with each other. Both sides win and there is no recrimination or talk of mercantilism. The second reason that Prestowitz considers China a bad actor is that the country is run by a one-party system, and what’s worse, a Communist Party at that. This is true. China calls it a socialist party with Chinese characteristics. Apparently, the author does not like that label, preferring to call it a Leninist party. I am not sure what that means, but I am certain it’s not good. Prestowitz accuses the Communist Party of China of oppressing the people, denying them personal freedom and certainly freedom of speech. Ever since China “conned” its way into the WTO, it has made tremendous economic advances. But from the author’s point of view, all the benefits went to the CPC and very few to the people of China. When the folks in Washington call out “communist” China, it says it all. This epithet justifies all the bad things we can ascribe to that country – even when China has systematically lifted millions out of poverty every year until can now claim that no one is left behind. The author lists Hong Kong, Tibet and Uighurs in Xinjiang as evidence of human-rights abuses in China. My disagreement is too complicated – and enormous – to go into except to say that he is unduly influenced by a small handful of vocal dissidents given a huge megaphone by the mainstream media and actively supported behind the scenes by the National Endowment for Democracy. (I gave one example of deliberate distortion by the mainstream media in a recent Asia Times article.) The book is critical of China for the lack of freedom of speech, an accusation that is more off than on the mark. The Internet-savvy generations in China exercise plenty of free speech criticizing policies they do not like and posting videos of misbehavior by corrupt officials. Government officials monitor the Internet carefully because that’s a critical source of public opinion that they have to listen to. ‘Inferiority’ of China’s one-party system It’s true that China does not let free speech run wild like in the US. Not a day goes by here without some politicians spouting nonsense. The media have lost their integrity in order to survive financially and can’t help the public distinguish the real from the fake news. It’s also not clear that China’s one-party system of government is inferior to our two-party system. Party members in China on track to become officials are graded and measured every step along the way, from the local to city to provincial to national level. They have to prove themselves capable of discharging their duties before they can move up. What do we Americans use as meritocracy to select our leaders? Would-be politicians need to be rich or have access to wealthy donors. Money trumps – excuse the expression – competence, rhetoric and public persona outrank one’s track record, experience or accomplishments. Each political party is more interested in suppressing the other than getting anything done for the public good. In the case of the US competing with Japan, Prestowitz’ proposal was for a proactive federal government to take counter measures and negotiate limits for Japanese economic expansion into the US. To counter China’s rise, he proposes that the US lead the formation of a “democratic globalization organization.” Conceptually, the idea of a DGO is to replace the WTO, rewrite the rules and gang up on China. This is perhaps appealing to functionaries in Washington but is neither realistic nor practical. Thanks to the success of the BRI, many of the countries that would need to align with the US have already developed deep economic ties with China and would not want to be part of such alliances. Tom Friedman of The New York Times wrote after attending the Beijing Olympics in 2008, “When you see how much modern infrastructure has been built in China since 2001, under the banner of the Olympics, and you see how much infrastructure has been postponed in America since 2001, under the banner of the war on terrorism, it’s clear that the next seven years need to be devoted to nation-building in America.” By the title of the book, Prestowitz implies that having the US on top is the natural order while being surpassed by China is not. It has been more than a decade since Friedman made his observation and we in the US have only gone backward on rebuilding our infrastructure. Isn’t it high time we started dealing with our internal challenges rather than thinking of ways to keep China down in order to stay “up”?

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.

Saturday, September 1, 2018

Leapfrog for Cchina to catch Silicon Valley in AI

Edited version first appeared in Asia Times.

Kai-fu Lee’s book on artificialIntelligence will be published by Houghton Mifflin Harcourt in September and Dr. Lee is already scheduled to make several appearances in the Bay Area to talk about his book around the last week of September.

The full title of his book is “AI Superpowers: China, Silicon Valley, and the New World Order.” In his book, Lee makes the startling contention that within the last three years, China has caught up to Silicon Valley in AI. And, no, Mr. Trump, it’s not because the Chinese has stolen the algorithm from Google. Rather, China leapfrogged the US in mobile computing, which enabled China to take a different path to AI nirvana.

Dr. Lee is one of the pioneer creators and thinkers of artificial intelligence. After he obtained his doctorate degree in AI from Carnegie Mellon, he joined Apple in Cupertino to develop the voice recognition system and then left for China to build research centers of excellence for Microsoft and Google. Now he is the premier venture capitalist investing in AI startups in China.

Nowadays, artificial intelligence has become part of daily conversation, even if not everyone understands what AI is all about. Wall Street considers AI to be the latest winning investment in technology following the Internet and the smart phone. Lee believes development of AI is even more profound than that, equating the future impact of AI on the human civilization to be as fundamentally revolutionary as the invention of the steam engine that ignited the first industrial revolution and electricity for the second.

Deep learning raised the power of artificial intelligence

AI became a real emerging technology when researchers moved machine learning to the next level called “deep learning.” Properly designed algorithm, called neural network, can learn to fine tune its algorithm by repetitive trial and error calculations, at lightening speed, until the best solution is derived based on the data set fed to the algorithm. The bigger the data set that’s fed to the algorithm, the better is the resulting optimization and solution.

The importance of big data, explains Lee, has allowed China to close the gap with Silicon Valley in AI because China generates much more useful and higher quality data than in the US. Lee credits Steve Job and the introduction of the smart phone as the event that pushed China into AI development.

Observers in the West may not have noticed that as China’s economy grew at dizzying rates in the 40 years since reform began, the country leapfrogs certain crucial development along the way. Telecommunication is one such example. When China began its economic reform, its telecommunication network was woefully inadequate. The country was so under invested in copper wire lines overland that it was easier for the consumer to adopt the mobile phone rather than waiting for the allocation of a landline.

The smartphone facilitated China’s entry into AI

When Apple introduced the iPhone in 2007, China already had the largest number of mobile phones users in the world, and the users were primed to upgrade to a smartphone, albeit not always an iPhone but a lower priced, domestically made alternate. At the time most Chinese did not own a computer at home and the smartphone gave the Chinese user Internet access bypassing the need to buy a computer.

Chinese entrepreneurs quickly learn to develop apps specifically for the smartphone. For example, being decades behind the West, the use of credit card never really took off in China. Now with WeChat, considered a “superapp” by Lee, the smartphone can be linked to the owner’s bank account and the phone becomes a digital billfold able to make and receive payments.

The American AI monitors the user preferences such as what website the user visits. In China, Tencent, the owner of WeChat, can gather data not only on what the user looked at, but what he/she bought, from whom, where and when. The data collected is much higher quality and multi-faceted. In addition, China has at least 3 times more users generating data for feeding into AI optimization than in the US.

The author argues that while China remains behind the US on the creative side of writing AI algorithm, China has been closing the gap and in some aspects surpassing Silicon Valley for certain uses of AI. This has occurred within the most recent three years because China has been gushing high quality data derived from the smartphone.

Data drive the AI virtuous cycle

The vast quantity of quality date is helping China refine their AI, which helps to improve the product offering, which increases customer acceptance, which generates even more data to optimize the AI program. Lee calls this the virtuous cycle of AI whereby the availability of date would allow an inferior AI algorithm to surpass the performance of a superior AI that do not have access to as much data.

One example would suffice to illustrate the difference between China and the US. A program in China called Smart Finance has used AI and access to the user’s smartphone to determine the creditworthiness of the individual and grant the user a personal loan. No collateral, no credit report, no personal references, and no banking information are needed. And the single digit loan default rate is the envy of commercial banks.

Apparently AI correlation of hundreds of data points residing in the smartphone (Lee calls them weak features) can more accurately evaluate the reliability of the borrower, even if no human banker can fathom why. The iteration of AI over millions of smartphones have established predictive rules and the accuracy will only improve with use—and default becomes even more uncommon.

While ground breaking AI research will continue in the US, China is graduating upwards of a million AI engineers every year. They are motivated and will work long hours to find new products and services based on AI solutions. And the access to huge amount of data will more than offset their not being as good in designing the algorithm.

China’s leadership recognizes the importance of AI and has allocated financial support to encourage and further AI research. The US? Not so much federal support and America will continue to depend on private sector efforts. Private sector AI will remain proprietary and be kept behind closed doors.

The author does not express much anxiety over the possible rivalry between the US and China. He is much more concerned with eventual advances in AI that could lead to wide spread displacement of human by machines. Owners of the powerful AI could become members of a small elite class that enjoy all the wealth and status while an “useless” class of masses can no longer generate enough economic value to support themselves.

This is where Lee becomes very personal drawing from his own dramatic experience as a cancer survivor. He suggests that no matter how advanced AI becomes, it can never replace human interaction that offer love and compassion. He proposes that we begin to prepare for the day by placing higher priority and monetary value for socially beneficial activities. In other words a drastic and basic reordering of our value system based on humanity.

His book is a thoughtful treatise on the possible benefits and destructive damages AI poses to the world. Anyone wanting to understand the downside of unbridled AI advances on the humankind will find relevant questions and answers in this book.
The Committee of 100 is the cosponsor with the Commonwealth Club of Dr. Kai-fu Lee’s speaking engagement in Santa Clara on September 26. Go to here for more information. Dr. George Koo is a retired China business consultant and a regular contributor to online Asia Times.

Monday, December 18, 2017

A Tong Village in China

Book review: A Village with My Name by Scott Tong, University of Chicago Press, 2017

Scott Tong writes about his journey in search of his roots in China. Readers will find his descriptions full of whimsical humor and be charmed by his understated style as he tells of his search in the far-flung corners of China.

With the professional diligence of a journalist, he went to some obscure places and met with many everyday folks and wrote down the trials and travails of the Chinese people as they lived through some of the most tumultuous times in China.

Scott’s paternal grandfather left Shanghai on virtually one of the last leaky boats for Taiwan before the city fell to the People’s Liberation Army. He took Scott’s father, then a young boy, with him but left his then wife and younger son behind. This decision meant that Scott grew up with an all American life experience while his cousins in China suffered from deprivation and castigation as a direct consequence of their grandfather’s decision.

Scott’s maternal grandmother left for Hong Kong shortly after the Chinese Communist took over Shanghai. She had three young children with her; the youngest was Scott’s mother. Scott’s mother was seven at the time and she remembered her father seeing them off at the train station; neither side realized that they would not see each other again. Scott’s parents met in America and raised their family in America.

Between the post WWII period and the early years of Chinese Communist Party’s liberation of China, some of the Chinese with means departed from China. These were scholars that found academic appointment overseas, professionals that followed Chiang Kai-shek to Taiwan or wealthy families that resettled in Hong Kong and neighboring parts of Southeast Asia.

To varying degrees, when this group of emigres read Scott’s stories, they will see reflections of the histories of their own families and the challenges, the hurt and tragedies their relatives faced; all during the era when China transformed from a state in disarray to a modern global power. Some of Scott’s stories are also their stories.

The author was born and raised in America and did not show early interest in his Chinese background. It was after he and his family lived in Shanghai for four years and had already returned to the U.S. that he began to research and search for his family roots in China. He was the founding China bureau chief for NPR Marketplace from 2006 to 2010. 

The book opens with Scott and his father in a van bouncing around a dirt road looking for a place named Fumaying, literally the military camp of the Emperor’s son-in-law. It was an obscure name in a brief moment of Ming dynasty history, named for a son-in-law of the founding Ming emperor (Fu Ma is the title of someone who married a princess). After the founding Ming emperor died, the throne was to pass to his grandson of his first-born son, but the martial fourth son and uncle of the newly anointed emperor swept down from Beijing to usurp the throne and the Fu Ma apparently perished in the cross fire. Soon after, the place faded into obscurity.

Miraculously, the author found some locals that passed him from one source to another to another until they found the village of Tongs near the site of the former Fumaying. From his distant relatives, he extracted the story of his great grandfather who studied in Japan and brought back a Japanese wife and that fact may or may not have saved the village from Japanese atrocities when the conflict began.

His maternal grandfather that his mother barely knew was an important part of Scott’s quest. He was arrested among the first wave of anti-rightest movement in the early ‘50s and sent to a remote and barren region of Qinghai. There he perished without leaving so much as a trace. Yet Scott flew to Xining, the capital of Qinghai and boarded daylong bus ride westward to where the long abandoned camp was supposed to be. He found people he could talk to that could help him frame a likely fate and as an act of closure, brought back handfuls of dirt to honor his grandfather’s memory.

The narrative of his travel and interviews are interwoven with the historical background and color that could only have been obtained from long hours in the library and visits to archives, both in China and in the U.S. Reading his book is to learn a lot about China’s recent history dating from the beginning of the republic era to the war with Japan to the civil war between the KMT and the CCP and then the early years of PRC.

He didn’t try to impress the reader with how hard he worked to tell his story and he didn’t tug at the reader’s heartstrings with some truly sad personal stories of his relatives. He just let them tell their stories. For example, his maternal grandfather put his wife and three children on the train to Hong Kong and said goodbye. Afterwards, he wrote to his children about his lonely feelings going back to an empty house. He fully expected to rejoin them soon.

Scott spent many hours talking to his uncle living in Shanghai. This uncle was the younger son Scott’s grandfather did not take to Taiwan. He grew up during the Cultural Revolution and suffered abusive treatment for having relatives living in Taiwan but he never expressed bitterness about his fate to Scott. Perhaps it is enough that he adopted his mother’s family name and is not a Tong. Yet despite whatever his feelings for the father that abandoned him, he was most hospitable to Scott and met with him frequently and did much to help him understand the China undergoing a revolutionary transformation.

As a U.S. trained journalist, the author could have followed the customary western preoccupation of looking under every carpet for dirt on China.  With the possible exception of James Fallows and Evan Osnos, most western media reports on China show compulsory bias to accentuate the negative, including some of Scott Tong’s own Marketplace reports from China. He himself said, “My time as a reporter in China led me to assume public offices were xenophobic, corrupt, or useless—or all three.”

Fortunately for this book, Scott encountered many willing to tell what it was like to live under the Japanese, Chiang’s Nationalist and Mao’s Communist regimes. By telling their stories simply without embellishments, his portrayals come across as genuine and authentic.

Parts of his book resonated with me. My father, the oldest of three brothers left for the U.S. shortly after WWII to continue his graduate studies. His youngest brother was a member of the KMT party and followed Chiang to Taiwan—also leaving a wife and children behind.

The middle brother was arrested by the CCP and sent to laogai camp in Qinghai around the time of Scott’s grandfather—even perhaps to the same camp. During the Great Famine, the oldest daughter took the youngest son to Hong Kong and met up with the third uncle who took them to Taiwan. The three siblings in the middle stayed in Shanghai with their mother and kept a low profile so as to avoid the verbal and physical abuse for having relatives in Taiwan and U.S.

Scott Tong’s book is a wonderful read and one can learn a lot about China from his multi-generational sagas. However, the reader should keep in mind that what happened to Scott’s family and relatives represent only a tiny fraction of the Chinese population. In the days of his grandparents, far less than one percent of the Chinese population went to college and even fewer went overseas for further education. These, along with the wealthy class, were the people that were persecuted by Mao, not the masses consisting of farmers and laborers.

Thursday, December 1, 2016

The Yin and Yang of Management Practices

A book review: "From the Great Wall to Wall Street" by Wei Yen.

The author has made a valiant attempt to explain why the business executive from China thinks and acts differently from his/her counterparts in the U.S. or the West. He does so by comparing the legacy of Confucius, Laotzu and other sages from the Chinese culture to Socrates and other western philosophers. He calls the Chinese approach wholistic and the American approach direct and rational. Each has its strengths and weaknesses and the author suggests that some combined methodology to management may be the optimum.

Author Yen also attributes the Chinese concept of yin and yang as a cause of misunderstanding and mistrust between the Chinese executives and the American. Readers might find some of his discussion of the contrasting philosophies esoteric and not grasp the relevance to modern practices. I find his comparison of Clausewitz and Sun Tzu particularly relevant and insightful.

Von Clausewitz promoted the idea of striking where the enemy was most concentrated in order to annihilate the enemy forces and achieve total victory. Whereas Sun Tzu's Art of War stressed winning the war without having to fight even one battle as the best of all possible outcome. He considered not just the physical conflict but also the psychological aspects of warfare. If deception, psychology and persuasion can convince the enemy to surrender, so much the better. Clausewitz's idea is direct, logical and analytical. Sun Tzu's is nuanced and looks at the whole picture.

The author used taichi, a form of martial arts also known as Chinese shadow boxing, and weiqi, a subtle Chinese board game, as metaphors for the Chinese style of management. Thus while the American manager takes a direct and rational approach to solving problems and does not consider consequences of human emotions, the Chinese manager looks for solutions that preserve harmony and minimize hurt feelings. He also explained the importance of quanxi and face in the Chinese way of doing things.

This is a book that I wish I could have written to promote the mutual understanding of East and West. I deduct a star from this review because the book could have benefitted from professional editing to tighten some of the prose and reorganize the chapters to make them more uniformly even. A simple spell check would have eliminated some annoying typos, which I am surprised that the publisher apparently did not do.

Saturday, July 25, 2015

Book Review: Empress Dowager Cixi By Jung Chang

This book review is on Amazon.

The author takes advantage of archival material only available in recent decades to write a remarkable and revisionist history of China's last Dowager Empress. Some the narrative will surprise the reader by the plethora of minutia the author uses in her portrayal of Cixi. She is unequivocal in presenting Cixi as a progressive, intelligent and reform minded leader, every bit as worthy to sit on dragon throne as Wu Zetian of the Tang dynasty, the only woman in China's long history who did reign in her own name.

At other times, perhaps lacking supporting reference material in her research, the author resorts to broad sweeping statements and generalizations that leave the reader to decipher between that which is based in historical fact and that's merely her conjecture and opinion. Indeed, just as Ms. Chang effectively raised the image of Cixi in her book, she has diminished the reputation and integrity of many of the ranking officials in the Qing court. For example Li Hongzhang, the most senior Han Chinese in court, widely regarded as a brilliant statesman and lead negotiator with the western powers is depicted as a less than competent person of doubtful integrity. Kang Youwei was nothing more than a scheming, conniving person in cahoots with Japan, who plotted to assassinate Cixi, restore Guangxu to the throne so that he can become the power behind the throne. Until this book, Kang enjoyed that reputation as the initiator of the famous hundred days of reform while Guangxu was in power.

The author has the irritating habit of bestowing handles to people as a way of denigrating them. For example, throughout her book Kang was consistently referred to as "Wild Fox" Kang. Zeng Guofan was "Marquis" Zeng and earlier mentioned Li Hongzhang was "Earl" Li. Presumably honorific titles relevant to the British peerage and merely dissonant in the context of the Chinese imperial court.

Perhaps because the author lives in U.K. and is married to a Brit, she goes easy on, much less squarely blame, the British empire for forcibly crammed opium into China and was responsible for the destruction of China's society and economy. The strongest condemnation I found in her book was, “Foreign opium imported into China was chiefly produced in British India and shipped solely from British ports.” Oh my goodness sake.

The merit of this book lies in filling the blanks in the history of the end of the Qing era. For example, not remembered was Robert Hart, an Englishman who came to China while young and stayed. He set up the customs collection system for China and by managing the duty collection, he became the de facto treasurer of China and responsible for a major source of revenue for China, without which China would not have been able to continue to enter unequal treaties and pay indemnity to the western powers. Towards the end of her life, Cixi conferred a title to Hart that ranked him third in the hierarchy of the imperial court, a rare honor for someone not related to the imperial family much less a big nosed foreigner.

For the history buff wanting to know about the last years of the Qing Dynasty, this book is a welcome and valuable addition--especially for the discerning reader with the care and willingness to separate the gems from the author's rant.

Thursday, June 25, 2015

Book Review: The Dragon and the Crown

This review is posted on Amazon.

In telling the story of his life with understated modesty, the author, with the help of his niece, successfully subsumed his ego into a broad epic, a narrative of the transformation of Hong Kong. From the time Stanley Kwan was born to when he emigrated to Toronto, the population in Hong Kong grew roughly ten fold. The transformation from being a British colony to a modern megapolis was fascinating as seen from his eyes. It’s safe to say that most of the people in today’s Hong Kong do not know much of the story of the city, much less the rest of us that are mere third party witnesses.

I am now in my 70s and the friends and classmates from Hong Kong that I knew from my college days remind me of Kwan. Their father or grandfather had multiple wives and thus were members of huge families. Dominated by Confucian values, only the first born of the first wife enjoyed privileged lives. The rest had to fight for their share of patriarchal attention and an opportunity to a better education and career. Those that succeed, like Kwan’s daughters, found their way to schools in the West and established their careers outside of Hong Kong.

Even though the invasion by Japan interrupted his higher education, the schooling under the loose controls of the British administration had already taught the author Chinese and English in addition to his native speaking Cantonese. His language proficiency gave him opportunities to work with the Nationalist Chinese government during the war years and the American Consulate in Hong Kong in post war years. Step by step as he moved from one post to another, we saw how Hong Kong was also evolving and changing.

By telling the stories of his brothers, two of whom left Hong Kong to live and work in the mainland shortly after the Communist takeover, we also learn how the tumult inside China affected his family and made his feelings of patriotism and identification with China more ambivalent. His book helped me understand the origin of the Hong Kong mindset: “Make as much money as you can, while you can.” After WWII, the feeling of uncertainty on the fate of Hong Kong hung heavily on the people of Hong Kong.

This book is a wonderful read on the history of Hong Kong. Too bad the author left for Canada in 1984. While negotiations had already begun between London and Beijing, it was quite some time before the handover on July 1, 1997. The book does not explain why or how the city has been transformed to the state it is in today.

Perhaps the story he told on the near fatal run on the Hang Seng Bank is symptomatic of the Hong Kong Chinese inherent lack of self-confidence and a western worship mindset. In April 1965 a run was made on the bank, heretofore the strongest among the Chinese owned banks in Hong Kong. Facing insolvency, the owners had to sell a controlling interest to the British owned Hong Kong Shanghai Bank. As soon as the deal was announced, the panic went away. As one of my chat buddies often likes to point out: In the minds of many Chinese, the western f*rt smells more fragrant than their own. 

Sunday, June 21, 2015

Book Review: The Real China by Dr. Hong Yee Chiu

This review was first posted on Amazon.

This is a remarkable book on a number of levels. Written by a retired space scientist, ostensibly without the "right" academic training in Chinese history or any other related social sciences, Dr. Chiu writes with the passion and zeal of someone driven to explain China, his country of birth, to America, where he resides and pays taxes. Many of us Chinese Americans are sympathetic to his objective but most of us lack his depth of understanding and knowledge of China's history, culture and attitudes, especially toward religion to pull off such a book.

He obviously did a lot of research and collation of Chinese myths, religious beliefs, traditions, political systems in a context that helps the reader understand where and why China is different from America. One simple example will suffice. He points out that in America, we believe "In God We Trust." In China, the Chinese might blame god (lower case) for whatever personal misfortunes but understand that the person is in control of his/her own destiny. Instead of trusting God, in China the trust is placed in "Self Reliance." As Dr. Chiu took pains to explain, 自立更生 (usually translated into self reliance) was not just a slogan from Mao's China but had thousands of years of history behind the notion.

I found the first half of the book particularly fascinating and educational. A lot of stories he described from Chinese history were new and fresh to me. He obviously also knew his stuff about the foundation of the western civilization and he expertly interwoven Chinese thoughts and traditions with that of the West and showed where they were similar but more frequently where they were so different.

In the second half of the book, where the author made the contrast between the meritocracy based government in China versus the popularly elected leaders in America, was less interesting to me, not for lack of trying on his part but probably because I was on more familiar ground. I agreed with him and I see the same rot of western democracy that he wrote about.

There is way too much loose talk about the inevitable conflict between a rising power and a reigning one. Reading this book by the policy makers in Washington can help them understand China better and perhaps help them conclude that a conflict is not an ordained outcome.

With professional editing to improve the organization, composition and layout, this could have been a 5 star review.

Friday, April 17, 2015

Book Review: Fateful Ties by Gordon H. Chang

This book is a comprehensive review and valiant attempt to explain the unusual love-hate relationship between China and the United States. Given the funny season that is about to descend on us, as candidates race for the U.S. presidency, this book could not come at a better time. Readers will find the book an antidote to the inevitable anti-China polemic venom to come from candidates looking for slightest edge.

Written by a Stanford history professor—no, not the other Gordon Chang that runs around cackling that the sky is falling in China—this is the scholarly one that writes with elegance and eloquence about the ups and downs of a relationship between the most powerful nation and the most populous one.

The author points out that China’s relationship began with America even before there was an America. All the tea dumped in the Boston Harbor came from China—the Brits have not yet smuggled the tea saplings to India—and it was the desire to buy tea direct from China and save on the taxes being imposed by the British crown that led to the American Revolution. (My “aha” moment: All of a sudden I realized where the expression came from, “I wouldn’t do such and such for all the tea in China.”)

The author goes on to suggest that visions of trading for the wealth that was China led Jefferson to the Louisiana Purchase and sending Lewis and Clark west to find the passage to China, as Columbus attempted centuries before.

Such notable historical characters as Anson Burlingame, John and Alice Dewey, Pearl Buck and Henry Luce furthered America’s fascination with China. Burlingame went to China as the American ambassador and came back as the envoy from China. The Deweys went to Japan for a vacation, decided to visit China on a whim and stayed for two years. Buck and Luce wrote and published bountifully about China.

These people spent a significant part of their lives in China and were all enthralled by the Chinese people and culture. They became positive influences in America’s perception of China. On the other hand, xenophobes such as Denis Kearney that spewed racist hatred across the American society had never been to China and know nothing about China. Sounds familiar in today’s context?

China suffered from the ravages of the Opium War and the unequal treaties imposed on the country by the western imperialists. Burlingame attempted to help China rectify the injustices. The Treaty of 1868 named after him entered between China and the U.S. actually paved the way for the first batch of Chinese boys to be educated in New England.

While the U.S. participated in the quelling of the Boxer Rebellion, it was the only western power to return most of the indemnity fund back to China in the form of scholarships for advance studies in America. Studying in the United States became the gold standard for every aspiring student in China and continues to this day.

The writings of many others such as John Dewey and Pearl Buck created a level of understanding about China that formed the foundation of popular American sympathy and support for China and sentiment against Japan during the eve of World War II.

This book is a pleasure to read for entertainment and for those wishing to become better informed individuals. It should be required reading for all current and aspiring politicians. Given all the loose talk about the impending conflict between a rising power and reigning power, it is crucial that our leaders understand China and get the relationship right.

Tuesday, December 2, 2014

Book Review: Can China Lead?

This book is published by Harvard Business Review and my review first appeared in Amazon.

If the authors had posited the rhetorical question from the geopolitical point of view, the short answer would be: "Yes, China can lead though not in the confrontational style favored by the Americans." When applied to doing business in China or by Chinese companies on the global stage as the authors intended, the answer is more nuanced and complex. The authors tried hard and deserve a "B" for their effort but they missed the bullseye. 

This thought provoking book loaded with information and case histories (in the tradition of Harvard Business School) is highly instructional for those wishing to understand today’s China, especially the business environment of China. While the authors provided a balanced discussion of the complexity of a society undergoing breathtaking rate of change, the analysis that accompanied the discussion was often too light and not fully satisfying.

The book began with a historical review demonstrating that much of China’s centrally planned policies had the roots in the early republic days as proposed by Sun Yat-sen, the founding father of modern China. Contrary to Western perception, many of China’s policies were not invented by China’s Communist Party but preceded CCP’s coming to power.

The authors then described the rapid development of China’s economy alongside intensive investment in infrastructure that has been unprecedented in human history. They attributed the success to China’s leaders being trained in engineering, as opposed to emphasis in law as is the case with western political leaders.

The book presented many successful business cases as well as failures. Both categories included state-owned enterprises as well private ones founded by entrepreneurs. Reasons for their success or failure were useful and instructional. The book also talked about China’s rapid expansion of the capacity to train college graduates and China as emerging source of outbound foreign direct investments. 

While the description of China’s impressive economic progress was positive and fair in giving the policymakers their due, there was an undertone of nagging concern that China’s miraculous development won’t last. Because of China being a single party rule, they expect the nation to eventually hit the wall. As I read the book, I kept waiting the other shoe to drop. That is, I waited for an analysis and explanation of why China will ultimately fail but that conclusion while hinted was never articulated.

It is somewhat unfortunate that the book went to press just after the sentence of Bo Xilai. To the authors’ credit, they did not simply dismiss Bo’s downfall as political infighting between his losing faction and Xi Jinping’s winning faction—as some western pundits have suggested. Had they waited a bit to see the full implication of the anti-corruption drive, still on going today, they might have a more hopeful prognosis on China’s future.

I suppose it’s unrealistic for a less than 200 page book to fully cover the many facets of China, some contradictory and conflicting, and some too complex to lend to straightforward analysis. For example, the authors devoted one paragraph on the likelihood of military conflict with the U.S. and their concluding sentence was: To the extent there is a Chinese-American competition, we believe it will be primarily economic, not military, in nature. Wow, there were a lot of whys and why-not’s that they didn’t talk about.

In discussing the rise of China, especially in the early years after Deng Xiaoping return to power, the authors did not discuss the critical (in my view) roles of Hong Kong businesses relocating into Shenzhen and Taiwan manufacturing companies into Dongguan and Kunshan. They were in China well ahead of significant western presence and their factories began the knowledge transfer of good manufacturing practices to the indigenous factories, heretofore indoctrinated by the “iron rice bowl” mentality wherein quality and productivity did not matter.

While the book drew linkages to early republic days just after the fall of the Manch  dynasty, it barely mentioned the early signs of privatized venture led by the so-called township enterprises (乡镇企业) in the early days of economic reform. To my knowledge no one has really gone to the trouble of figuring out why the TVEs had such meteoric rise and why they flamed out.

The book also did not talk about how failing SOEs were “rescued” by some energetic entrepreneurs, usually an insider, taking the small efficient part of the operation with greatly reduced payroll and restart as a stock holding company. In exchange for a minority equity in the new company, the local government was left to deal with closing and laying off the greater part of enterprise beyond economic salvage. Some newly formed company raised capital by agreeing to relocate to the outskirts and giving up the dilapidated facility located in the heart of town to the local government for cash, whereupon the government would raze the old factory and build new shopping mall or office building or high rise apartments. Everybody won.

The round-trip funding of the newly formed privately held company also played a critical role in the early days of economic reform. “Round trip” refers to the secret transfer of funds from inside China to Hong Kong and then remitted back to China as qualified foreign direct investment, sometimes accompanied by addition of fresh funds from Hong Kong. The motivation for the round tripping was that any enterprise with 25% or more equity belonging to the foreign investor qualified as foreign invested enterprise and FIEs were eligible for favorable tax treatment and other concessions.

“Above are rules, below are ways around the rules (上有政策,下有对策)” is one saying everybody in China is familiar with. It is very much ingrained in the Chinese business culture and something every western business in China needs to keep in mind. The authors emphasized the importance of western companies understanding and getting along with the national and local governments in China. Very true. The challenge is that nothing in China is black or white but in shades of grey--nothing to do with sexual bondage but everything to do with staying out of FCPA related indictments back home. Knowing where the line is and not stepping over the line is the daily challenge for the expat manager.

While there was an impressive collection of cases presented in this book, there were some gaps I could nit pick. For example in discussing China’s rising trend to consumerism, they talked about the competition of Ford and GM to win the hearts and minds of the Chinese consumer. Actually VW, who was in China years before GM or Ford, has been much more a competitor to GM than Ford.  Breathing down their collective necks are the local privately held entities as well as the big state-owned auto companies that are in bed with the western automakers.

Also as part of the discussion on China’s rising consumerism, the authors studied the use of credit card companies as a “growing appetite for consumer debt.” Missing in the discussion is a much needed, more expansive study of the Chinese consumer (or is it the government) that resisted the use of outside credit cards such as Amex, Visa and MasterCard until the introduction of UnionPay, a Chinese version of a universal credit card. What made UnionPay successful? What was the government’s role?

In fact, an entire new chapter could be devoted on how Chinese companies emulated a successful western business and localize the model in order to succeed in China. Examples would include Baidu over Google and Alibaba over eBay and Amazon. The authors suggested that the government tilt the field in favor of the Chinese companies but I believe there was more to it. The Chinese entrepreneurs understood the local culture and practices and made sure theirs was an approach that took advantage of their understanding. An interesting case to watch for possible inclusion in their next edition of this book will be the rise (and more rise or fall) of Xiaomi in the highly competitive mobile phone market.

The authors devoted only one sentence to the turbine maker: Sinovel was also accused of stealing proprietary wind turbine technology from its American main supplier. This was somewhat misleading because the dispute was over alleged theft of software, and as the authors rightly pointed out, software was not a strength of Chinese companies. Actually the authors missed an opportunity to develop a case study on how to develop a strategic partner and avoid a nightmare. (The damaged American company was located in Massachusetts and should have been easy to interview.) Instead of same bed, different dream, based on the Bloomberg report, I suggested that the American executive missed the opportunity to form a classic win-win relationship, a virtue the Chinese love to extoll.

The authors are using this book for one of their China related courses. It is a worthy first effort but I would expect future revisions and editions, if for no other reason because China is still very much a moving target. As I suggested in this review, to do justice to this subject, the book needs to be much bigger, at least twice the number of pages accompanied by more in-depth analysis.