Monday, April 29, 1996

If not China, Where?

Advocates in favor of economic cooperation with China have been urging Congress and Clinton Administration not to hold American trade policy hostage to our political agenda with China. Timothy Taylor's recent opinion piece on "Investing in Beijing" (Mercury News, 4/26/96) came to a similar conclusion but from a startlingly different perspective. Basically he said that the U.S. should go ahead and bash China on human rights and other issues because U.S.-China trade is not that important and American businesses have many other markets to pursue in lieu of China.

While he grudgingly admits that China is the biggest of the emerging markets, he suggests South Korea, India and Indonesia as major fall back markets should errant U.S. policy destroys any semblance of a relationship with China. What is the reality?

Korea has a population of 45 million compared to China's 1.2 billion. Office of U.S. Trade Representative considers Korea to be one of the most tightly controlled markets, far more closed than even Japan. Combined with the vast difference in population size, Korea is not in the same league as the potential of the China market. Multinational companies are going to China in droves to form joint ventures there; they have either pulled out of Korea or have given up trying to enter. Even the Korean companies recognize the relative maturity of their domestic market and have become highly aggressive investors in China.

India has many attractive considerations but is a newly recognized emerging market. The jury is still out on the extent foreign investments will be welcomed and the degree the market will be open to outside participation. According to the World Bank, while some 11% of China's population live in absolute poverty (i.e., without even enough food) in 1990, for the same year, more than half of India's population are in that category. Obviously, India's economy will have some catching up to do before it can be as attractive as the China market.

Indonesia is branded with the same alleged offenses as China, namely, corruption, human rights violations, and political uncertainty. The only significant difference is in the market size. Indonesian population is "only" 195 million. Indonesia will attract its share of foreign investments but again its potential is not large enough to take the place of China.

The simple truth of the matter is that the rest of Asia, the part that Taylor recommends as alternative markets to replace lost opportunities in China, are themselves leading investors in China. Taiwan has been the second largest investor in China and Singapore is fourth (in recent years, U.S. has been third). Thailand and Malaysia as well as Japan and Korea are all active investors there.

Conveniently overlooked by Taylor is that China received 41% of the $227 billion total foreign direct investments (FDI) made in Asia for the recent ten year period ending 1994. Furthermore, foreign investments in China show no signs of faltering. FDI in China for 1995 reached $38 billion which was approximately 12% higher than 1994. Obviously the working stiffs looking for business deals do not share his ivory tower perspective of pooh-poohing the importance of China.

Taylor suggested "agonizing over the importance of the Chinese market" as the cause of America's diplomatic inaction and ineffectiveness with China. That's incorrect. The U.S. diplomatic failure with China is due directly to its insistence in bundling their human rights and other geopolitical concerns with bilateral economic cooperation rather than working on a genuine diplomatic rapport where differences can be discussed and resolution attempted.

The lack of diplomatic effort towards China is conspicuous if one just count the number of visits Secretary of State Christopher has been to China since the beginning of this administration: once. President Clinton has met Boris Yeltsin ten times to date; he has only met Jiang Zeming three times during the same span and all were incidental to conferences of nations, none on a one-on-one basis.

Taylor's presumption that the Chinese government should not "get away with bad behavior" is unfortunately typical of the attitude that the American government has the duty (and right) to tell China what's wrong and what to do. William Overfelt is an American banker residing in Hongkong, known as a human rights activitist, who also wrote a book on the economic rise of China. He recently expressed concern that this very attitude is pushing the two sides toward "an utterly gratuitous second cold war."

It may be easy for Taylor to suggest that American businesses look elsewhere for fast growing markets. Boeing could hardly be as blasé about the $1.5 billion of orders for jetliners that China signed with the European Airbus recently. While four international and non-American consortia are competing for billion dollar contracts for the Three Gorges Dam, Caterpillar can only stand by the sidelines wistfully lamenting over $200 million of earth moving equipment business that they won't be getting for lack of U.S. government support.

In a sense, Taylor is quite right that the U.S. government should not factor the importance of China's economy into its diplomatic effort, but not because it would give the Chinese government more leverage. The reality is that it hasn't given the American side any leverage. Taylor is also sadly mistaken if he thinks what passes between U.S. and China now is any exercise in diplomacy.

Friday, April 26, 1996

Are National Strategies in the Asia Pacific Relevant?

The Monterey conference on National Strategies in the Asia-Pacific sponsored by The National Bureau of Asian Research was the first of its kind that I had ever attended. I found the program informative, stimulating and entertaining and the speakers knowledgeable, articulate, opinionated and persuasive. That was my first reaction. My second reaction was: What a shame and what a waste that so little of this will trickle down to the level that can really have an impact on public opinion. In a private conversation, Rich Ellings, Executive Director of NBR, assured me that NBR publications are widely distributed and well received among the policymakers in Washington. Unfortunately, that was not my point.

Policymakers, whether they are in Congress or in the executive branch, are subject to political pressures exerted by the public. A poorly informed public is easily manipulated by special interest groups for the purpose of supporting (or withholding support for) certain causes. A better informed public would be more resistant to crass and willful manipulations. Rational policies can then be formulated free from unwarranted pressure. A challenge before NBR is to find the means of gaining maximum leverage from the work being done under its sponsorship and conclusions being reported at conferences, such as the recent one in Monterey. Just reaching the policymakers and political leaders is not enough. NBR needs to find ways of reaching the public directly and help shape the public opinion so as to be more consistent with the real world.

Inviting members of the media to attend was just one step in the right direction. However, a large number of them in attendance is needed in order to openly examine and debate the ideas being presented and reach some consensus. From the reassurance of a consensus, some individuals of the media may then be suitably emboldened to break new ground and introduce the real Asia to their audience.

Harry Wu is a case in point. Since his return from his arrest in China, he has testified before Congress, appeared before the United Nations and made a keynote speech before the national convention of the AFL-CIO. No one can deny that abetted by the media shower of publicity, his public clout "normalized" against his real and imagined credentials far surpasses that of such esteemed scholars as Dwight Perkins or national policy makers as Douglas Paal. Comparing Wu with persons of such illustrious academic record or distinguished government service would be ludicrous were it not so tragic. Tragic because Wu and his handlers are pushing U.S. towards what William Overfelt* called "an utterly gratuitous second cold war." Wu's success in getting his views conveyed to the general public should be a constant and embarrassing reminder that the voices of real China experts are rarely heard above Wu's din. The media picks up Wu's skewed but sensational charges about China with the greatest of ease, but rarely ever asks the China experts to explain their queasy assessments of Wu's exaggerations and distortions.

The China expert's reluctance to publicly confront the likes of Wu seems only partly due to the fear of soiling one's credentials. The rules of academia also work against such participation. Apparently academicians are graded by their symposium presentations and publication in prestigious proceedings --such as the NBR. Some quarters apparently even look askance at Foreign Affairs as not being sufficiently esoteric. Yet it is the informed op-eds in local newspapers and national magazines that will do more to influence public opinion than profound expositions in journals that the public does not see. More not fewer Michel Oksenbergs are needed to write for Newsweeks and compete for the minds of the uninformed.

China is not the only country the American public peers through warped lenses. All of Asia is poorly understood by essentially an Eurocentric public easily exploited with bits of partial truths and distorted views. Few Americans appreciate that Asia now has as much or more impact on U.S. national policies as Europe, be it trade, export related jobs, security, environment, human rights, or nuclear non-proliferation. Even many members of Congress are poorly informed having never ventured to that part of the world.

If the rules of the profession do not allow the authentic experts to get down on the mat and engage the likes of Harry Wu in open debate, --and, there's no doubt in my mind, blowing him away-- then NBR has an invaluable role to play. NBR can and must spread the message beyond the exclusive --and comfortable-- circle of policymakers and get to the public directly. By taking on the role of educating the public, NBR will enhance its relevance and greatly expand its support base. The point of the facetious title of this piece is that national strategies do not become policies if the public does not understand and support them. Even if the political leaders understand the stakes, they need easily digestible and readily available factual ammunition, sound bites if necessary, to give them the courage to explain the issues to their constituents. The American public needs to understand that the United States is as much a Pacific Rim nation as it is an Atlantic one. NBR has much to contribute to that endeavor.

Wednesday, April 17, 1996

Open Letter to Harry Wu

April 17, 1996

Mr. Harry Wu, guest speaker
Stanford University, School of Law
Stanford, California

Dear Mr. Wu:

Now that you have become a person of international renown, isn't it time for you to clarify some confusions in the public mind that were direct results of your remarks and activities? All of the questions I would like to ask you are based on information in the American media, not Xin Hua News Agency or other sources from China.

(1) In the Playboy interview appearing in the February 1996 issue, you said: "I videotaped a prisoner whose kidneys were surgically removed while he was alive, and then the prisoner was taken out the next day and shot. The organs remain fresher that way. The tape was broadcast by BBC." The BBC broadcast in fact has no such footage. What was the reason for you to lie to the interviewer?

(2) Your Laogai Foundation now claims that BBC's use of the open heart surgery scene clandestinely taken by Sue Lloyd Roberts in Chengdu was not intended to deceive the viewing public. If the intention was not deception, what was the reason for taking the video and then presenting it in the broadcast?

(3) At the AFL-CIO National Convention last year, didn't you say, "The strike by Boeing members is really a strike against the Chinese government. It is a strike which the American labor movement must win." Isn't your Laogai Foundation based in the AFL-CIO headquarter building in Washington D.C.? Aren't you being paid by organized labor to help stop imports from China?

(4) When you were arrested upon entering from Kazakstan last summer, there was a young woman with you. ABC Nightline reported that she was employed by the AFL-CIO. What was the reason for her being on the trip?

(5) You have entered China under at least three different names. How were you able to get three different U.S. Passports when the rest of us are entitled to only one?

(6) Recently you were at Columbia University to receive another of many awards you have coming to you. Did you not have a private conversation with a law student there by the name of Li Qiang in Shanghainese? Did you not admit to Li that human rights conditions in China are better now than ever in 50 years but the "Americans don't know anything"?

(7) In your speech at Cal State Hayward this February, you seem to imply to the audience that in 1994, you real wife as well as Sue Roberts, the free lance reporter who posed as your wife, went to Chengdu with you for the BBC assignment. How many "wives" did you actually take to Chengdu?

(8) You like to claim that you first got in trouble for protesting the Russian invasion of Hungary in 1956. You were only 19 years old then, so did the Chinese authorities kindly allow you to complete your college education before throwing you in jail?

(9) You claim to be in Chinese prison for 19 years, which is most of your adult life before coming to the U.S. If this is the case, how did you come to know some of the most obscure places in China like the back of your hand?

(10) Can you tell the public as to what credentials and circumstances were used initially to become a Hoover scholar?

I believe most Americans prefer truth and reality to hyprocrisy and phony causes. If you are able to respond to above question with truthful answers, I am sure the public would enjoy seeing it. In the meantime I will continue to collect inconsistencies and dubious statements from your public appearances and do my best to call them to the public's attention if not to your attention.

George Koo
A concerned U.S. citizen

Friday, April 12, 1996

Is Harry Wu Capable of Telling the Truth?

The publicity attendant upon his arrest in China last summer endowed Harry Wu with far more influence than he possessed before his attempted clandestine entry. He is now running amuck appearing everywhere to disrupt and disturb American foreign policy towards China. He has challenged the World Bank on their investment policy in China and told Boeing how they should not do business with China and is telling how Congress should vote on China's MFN status and even predicting a subsequent overriding veto from the President. With constant media attention, there is no stopping this fellow now.

Unfortunately overlooked by the media is Harry Wu's web of deceit built on grains of half truths elaborated with outright lies. One only has to review Harry Wu's own words already in the public domain to come to this conclusion. Normally the veracity of any one person is not worth fussing about. In Wu's case, he is capable of doing considerable damage to public interest, especially in the coming months as the national policy towards China come to forefront of debate. Thus, the public has the right to know the dubious pulpit from which Wu is bullying governments, corporations and other legitimate organizations.

One simple example of his propensity to lie is to look at his own statement in the Playboy interview appearing in the February 1996 issue. He said, "I videotaped a prisoner whose kidneys were surgically removed while he was alive, and then the prisoner was taken out the next day and shot. The organs remain fresher that way. The tape was broadcast by BBC." One has to wonder about the professional qualifications of the interviewer to record such an outrageous statement unchallenged. Organ transplant from prisoners has been one of Wu's most dramatic accusations about China and pivots on the evidence presented by the BBC broadcast.

Recently I had the opportunity to review a videotape of that infamous BBC telecast and can find nothing that comes close to depicting any organ removal. It did include a snippet taken by the Sue Lloyd-Roberts, the freelance reporter pretending to be Wu's wife, of an open heart surgery taking place in a Chengdu hospital. Publicly, Wu has admitted that the scene from the civilian hospital had nothing to with organ removal from prisoners and attributed the use of the footage to error in editing by BBC.

After his return last summer, the Laogai Research Foundation, of which he is the executive director, issued the claim that no attempt to mislead was intended, since BBC never claimed the incision in the middle of the chest cavity to be related to kidney removal or implantation. ("Laogai" is an abbreviated Chinese term for "reform through labor.") According to the statement released by the Foundation: "The operating room video was used as a background shot." The disclaimer did not explain why Wu and his "wife" took the trouble of surreptitiously filming such a non-relevant and innocuous scene. They certainly didn't need to go all the way to China for a "background shot."

Wu frequently made the claim, including in the Playboy interview, that it was his protest of the Russian invasion of Hungary in 1956 that got him in trouble with the Chinese authorities. It took a reporter from San Francisco State University to point out to Wu that he was 19 and in college at the time. (In the context of the 1956 environment in China, he would have been exceptionally precocious--at least politically, predating Wei Jingsheng by about a quarter of a century.) When Mike Mattis questioned him about the accuracy of attributing his political problems to the purported protest, Wu's response was to deny ever making such a protest and shift the blame to "a mistake in translation" of his statements. This interview was published in November, 1995 issue of Prism, a monthly publication of SFSU.

Inconsistencies and shifting statements abound from Wu's public utterances and activities. The issue isn't that they exist and is pointless to analyze every one of the inaccuracies. The real puzzle is why and how the media have so willingly swallowed Wu's utterances. I believe there is more to this behavior than simply that today's media are overcome by the tabloid mentality and are too lazy to conduct the necessary due diligence. I believe Wu has sponsors and supporters with vested interests in containing China through public opinion, irrespective of truth and facts. One of Wu's more obvious sponsors is the AFL-CIO.

Shortly after Wu's arrest in China became known, an ABC Nightline program revealed that his clandestine trip into China via Kazakstan was financed by the AFL-CIO, and the attorney who accompanied Wu was on the AFL-CIO payroll. After the two were detained, she was promptly released and that was how the world first heard about Wu's arrest. In retrospect, she was an essential part of Wu's cover and protection.

An article covering Wu's participation in the picket line at Boeing, in the November 30, 1995 issue of the Seattle Post-Intelligencer, quoted Wu as saying, "The strike by Boeing members is really a strike against the Chinese government. It is a strike which the American labor movement must win." Matt Bates, a spokesman for the International Association of Machinists and Aerospace Workers, on whose behalf Wu was appearing, said, "Clearly, a major part of the fight here is over the loss of jobs to overseas producers." With a 15-year suspended sentence awaiting him, Wu is unlikely to return to China, not even under cover. Consequently, Wu is now more useful to the AFL-CIO by becoming a public anti-China spokesperson on behalf of American labor.

When I tried to find out more about the Laogai Research Foundation, I found out that the Foundation is in the AFL-CIO's Washington D.C. headquarter building. Directory assistance for area code 202 (Washington area) cannot provide a listing for the Foundation. I then tried to reach the Foundation via the AFL-CIO. The headquarter switchboard transferred my call to their Food and Allied Services Trade who then switched the call over to a line with a recorded message representing the Foundation.

The AFL-CIO's motivation is naive but transparent. The AFL-CIO seems to believe that by stopping imports from China, they can preserve American jobs. For example, organized labor accused Boeing of exporting jobs to China. Actually, as Boeing's spokesman rebutted, by subcontracting certain sections of the 737 to the Chinese, Boeing is assured of continued future sales. Keeping all the manufacturing at home won't do any good, if China's orders for planes all go to European Airbus. Conversely continued sales to one of the largest markets in the world would allow Boeing and the Machinist Union to keep more jobs. It is not very complicated logic or economics, but has so far eluded the American labor leadership.

According to data presented to the House Ways and Means Trade Subcommittee in May 1995 by Robert Kapp, president of the Washington-based US-China Business Council, America exported $9.3 billion worth of goods to China in 1994, equivalent to the support of approximately 187,000 jobs. According to Department of Commerce data presented at the same testimony, China will be buying $90 billion worth of power generation equipment, $65 billion worth of commercial jets, $40 billion of telecommunication equipment, $18.2 billion of oil field and gas machinery and $4.3 billion of computers in the coming years. Getting a fraction of that business will create many more jobs than the low cost goods imported from China that AFL-CIO objects to but America can no longer produce competitively.

AFL-CIO'S agenda on China and its dependence on Wu is no secret; the media simply have not seen fit to report the matter. In a testimony before the House of Representatives in July, 1995, Peggy Taylor, Director of Department of Legislation of AFL-CIO, made specific mention of "this lucrative trade" in organ transplants from prisoners as reason to deny Most Favored Nation (MFN) trading status to China. There is no need to speculate as to where her "data" came from.

At the airport interviews immediately upon his release and return to the United States, Wu freely admitted to the San Francisco Bay area reporters that lying, stealing, impersonating a police officer and adopting other underhanded means were perfectly acceptable while undercover in China. He has never responded on whether it is also acceptable to lie to the American public. However, he was at Columbia University recently to receive another of many awards. He was delighted to discover a fellow native of Shanghai in Li Qiang, a law student. He spoke to Li in Shanghai dialect and according to Li, Wu admitted that human rights conditions in China now has been the best in recent 50 years, but, he added, the Americans don't know anything.

While the Clinton Administration is working to open foreign markets and promote trade as the surest means of creating jobs, the AFL-CIO is working to undermine such efforts by sneaking Wu across the Chinese border. The public has the right to know the truth. Cut through all the hypocrisy about defending human rights, and one sees Wu performing dubious activities to support AFL-CIO in their efforts to stopping the flow of low cost goods from China. It's lucrative work for Wu and that's all there is to it.

AFL-CIO needs to review its policy towards China. The issue before the leadership is whether such a broad brush smearing of one of the America's major trading partners would not simply erode its credibility and neutralize the potency of the organization on those occasions when they actually need to intervene in specific trade issues.

Responsible journalism requires a willingness to look at all sides of the issues. Being a gullible pushover for easy to digest sensationalism is hardly discharging its duty to the public. Too much is at stake for someone not to take up the challenge and set the record straight.

Thursday, April 11, 1996

Tensions Across the Formosa Strait

At the end of March, I attended a conference on "National Strategies in the Asia-Pacific" held in Monterey. It was jointly sponsored by the Seattle-based National Bureau of Asian Research and The Monterey Institute of International Studies. This took place shortly after the presidential election was held in Taiwan and the military exercises on the mainland had ended. Thus appropriate to the event just passed, one of the panel discussions was on a post mortem analysis of the repercussions and aftermath.

The distinguished panel consisted of: Michel Oksenberg, a Senior Fellow at Stanford's Asia/Pacific Research Center and former President of the East-West Center; Douglas Pall, President of Asia-Pacific Policy Center in Washington, D.C. and former Special Assistant to President Bush; and Dwight Perkins, Professor of Economics at Harvard University. All have published widely on China and are well known authorities on U.S.-China relations, China politics and economics, and related subjects.

The rules of the conference were that the substance of the discussion may be reported but not for attribution. Therefore I will report on some of the more interesting points raised without identifying who said what.

• Based on rudimentary analysis of the parties involved, we can expect a military exercise from the mainland, everytime an election is held in Taiwan. The latest exercise was no different in scale than the previous ones. Only 15,000 troops were involved, same as before, and not enough to overrun even one island within the shouting distance of the mainland. Only the media coverage was greatly expanded.

• The report on human rights conditions in China from the office of John Shuttack, the Assistant Secretary of State on Human Rights, was issued without any concensus or approval from within the Clinton Administration.

• All three parties lost in this exercise. Taiwan had to spend tens of billions of foreign exchange to support the stock market to keep it from collapsing. China has lost credibility in the forum of world opinion. The U.S. showed its absence of any consistent foreign policy in having to call in gun boat diplomacy.

• A positive spin of the hereafter is that Taiwan has already taken a significant positive step in recognizing Beijing as the legitimate government on the mainland. Both sides having participated in high theater for months will now get down to the serious business of negotiating direct mail, shipping visits across the straits and other issues of mutual interests.

• A contrary view is that the positive spin presupposes that all parties are rational actors. Unfortunately the actions of all three parties, including the U.S., are driven by domestic politics and not by what is necessarily rational and in the best self-interest. For example, having to put China's MFN status back on the table again is against everybody's self interest.

• As one indication of the current Administration's skewed foreign policy is to point out that Warren Christopher, Secretary of State, has been to China only once but Syria 17 times. Another from the audience pointed out that in view of the lack of progress with Syria, perhaps it is just well that the Secretary hasn't been to China 17 times.