Monday, December 1, 1997

Harry Wu, an American Contradiction

When Harry Wu returned from captivity in China in 1995, he declared to the western news media, such as the San Jose Mercury News, that he saw nothing wrong with lying to the Chinese. Not obvious at the time is that lying comes easily with Wu.

Admiral Mike Boorda's detractors hounded him for a couple of service ribbons he may not have earned and he paid the ultimate price by committing suicide. Judge James Ware had to withdraw from consideration for a higher judicial appointment when the media uncovered the borrowing of a childhood racial incident onto his autobiography. Even Ambassador Larry Lawrence's remains were disinterred from Arlington for military service he claimed but apparently not served.

Telling the truth is sacred to the American culture. Thus the American media has been harshly critical of these men that otherwise had distinguished careers in public service. Why such standard does not apply to Wu, the most flagrant spinner of tall tales, is a puzzle that seems peculiarly American.

Last fall, Wu backed out of his speaking commitment to the Mountain View Rotary Club by claiming a sudden call to jury duty. When a World Journal reporter called his office the same day, she was told that Wu had to go to Los Angeles. That would make Wu the first northern California resident to serve in an L.A. jury.

During the holiday shopping season, Wu was seen on local television harassing Super K Mart on behalf of organized labor. If Wu can be believed, just about everything imported from China are prison made goods. Just last summer James Seymour of Columbia University, a human rights supporter and author of a recently published book on China's prison system, revealed in Washington Post that total production from Chinese prisons amounts to less than one-fifth of one percent of China's G.N.P. Hardly enough to account for even the toys imported from China much less apparel, house ware, engines and everything else Wu claims to be prison made.

In a Playboy interview (2/96 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." Why doesn't someone ask him how did he get to do the filming? And why such a clip could not be found in the BBC program?

How long will this man continue to strut on stage without having to answer to the public for his lies? Why are others condemned for their incidental indiscretions but Wu is allowed unlimited blank checks?

Last year, ABC's Nightline presented "," a program on the power of urban tales from cyberspace. One Internet story warned the unwary that visiting strange bars in New Orleans can lead to their waking up next morning with their kidneys missing. The Nightline program indicated that even though there is no shred of evidence, the Internet story has resulted in dramatic cancellation of convention bookings in New Orleans. Certainly, Wu also understands the dramatic impact of kidney harvesting.

His latest escapade was his participation in an FBI sting resulting in the arrest of two Chinese nationals in New York. They were accused of offering kidneys for transplant. The Western media immediately made Wu a hero and concluded that the Chinese government has agents trafficking organs on the streets of New York. The attorney of one of the accused claimed that his client was set up by Wu. This was overlooked by most of the media. The arrest took place late in February. The wheels of justice grind slowly and the two accused organ peddlers have yet to be tried. When they are tried, we may yet find out where the facts lie. Of course when it comes to matters related to Wu, there is always less than initially meets the eye. We may not find out what really happened if the case drags on and is eventually dismissed.

Although some people are still willing to shift for grains of truths from Wu's skillfully constructed mound of plausible lies, the tarnish on Wu's persona becomes more evident with increasing public exposure. Erosion of his credibility began in November 1996 when an article in Los Angeles Times Sunday Magazine revealed that Ramon Myers, Curator of Hoover Institution, repudiated Wu for his obvious lack of objectivity. Myers was quoted saying, "I regret, frankly, that he was ever at Hoover," and Myers was the one that gave Wu the original grant that launched his China bashing career.

Besides Wu's willingness to distort and exaggerate, he will go under cover to impersonate a Chinese policeman, pretend to be a businessman to steal documents from offices in China, pose as wealthy Chinese seeking a kidney transplant for a non-existing uncle to secretly video a hospital operating room--a patient undergoing open heart surgery became "background" for the BBC hit piece on kidney transplants.

However despite his strenuous efforts, public opinion is beginning to change because with the recent Hong Kong handover, Jiang Zemin's visit and President Clinton's return visit, the media now have real issues and events to cover. The substance they find just doesn't resonate with the stories that Wu tells.

Not to be underestimated, however, is Wu's backing. Organized labor, Christian right, knee-jerk liberals, both extreme wings of Congress are among the supporters. Many in the Chinese American community even speculate that Wu must be getting secret support from the CIA or some other undercover government agency. It is on the record (4/5/98, Yazhou Zhoukan) that Wu's laogai foundation received $73,600 from the National Endowment for Democracy in 1997. This endowment is funded by Congress.

With the support of the China bashing camp, Wu not only has financial support for a staff but access to media exposure that keeps him before the public. Eventually, of course, truth will outlast Wu. Preparatory to that day of reckoning, it's time to take note of all those that stand with this man, a man without scruples or veracity.

Friday, October 24, 1997

Planting an Economy in Silicon Valley

What makes an economy grow? It must create or increase value. From a bare piece of ground, one can add value by planting seeds and reap the resulting crop. Through mechanization, the farmer can till more land for the same effort. By using fertilizer, the yield is increased from the same amount of land.

How else can one increase value beside planting, that is, besides being a farmer? One can dig up the minerals from the ground. Or one can build machinery and manufacture goods out of the natural resources from earth. With technology, one can build smarter machines to make more and higher value goods with greater efficiency.

As one produces high demand goods, one can expand the operation and hire more people, i.e., create jobs. Others may seize the opportunity to build factories to make and supply intermediate materials and thus create a secondary industry. Perhaps a proliferation of tertiary markets is then created by such things as retail outlets, service and repair centers, and second hand stores.

For example, sand is the starting material for semiconductors. Intel and many other companies in the valley have done wonders making integrated circuits out of this humble and readily available material. Other companies follow suit by manufacturing production equipment needed to run the factories. The finished semiconductor chips are shipped to distributors and dealers; they in turn sell to the personal computer makers.

The PC industry grows by leaps and bounds with new products built around new generations of chips from Intel and its competitors and complementary chips from others. The industry growth include not just those assemblying computers, but all the makers of computer peripherals that attach to the PC, the software houses, the publishers of PC related books and magazines, and of course, training firms that teaches increasing number of new users. These products and services are sold in increasing number of department stores, warehouse stores, chains of computer stores, hotel meeting rooms and through the mail. More new jobs are thus created.

Since each generation of personal computers offers more performance for less money, more and more are sold. And that, in a nutshell, is how an economy can grow.

So what is the one essential element that is absolutely necessary in order for a technology-based economy to grow? Isn't it obvious that it would take people? Not any people but people trained to use the technology, develop new applications and further its advances. As the rate of change in technology accelerates, the more critical is the training of the people.

California and especially Silicon Valley revolves around technology. The irony and contradiction is that this is a state that no longer seems to believe in the value of a sound education system. This is a state that cares more about illegal immigrants taking advantage of our education system, a system, mind you, whose elementary schools rank No. 49 out of 50 states, and more about "wasting" tax money on schools and teachers.

If the voters of California do not wake up soon, we will not have the needed trained people to staff the high tech industry. The high tech companies would have to relocate to where such skilled people are available. Then Silicon Valley can go back to being fruit orchards. Jobs will be so hard to come by that we will have to pick our own fruits and vegetables. We wouldn't have to worry about the illigal immigrants because there wouldn't be any vacancies for them.

Wednesday, October 8, 1997

Hong Kong SAR after 100 Days

Before the handover of Hong Kong, the West, ranging from such prestigious publications as The Economist and Fortune to tenuous sources not qualified to make predictions but did anyway, was uniformly certain about Hong Kong's dismal future. The economy would collapse, dissidents arrested, printing press shutdown were among the dire predictions. Now that Hong Kong has reverted to China for more than 100 days, it's time to review and see if there are any changes and telltale signs of doom.

Since the handover, the new Chief Executive, C.H. Tung, has visited the heads of state of Malaysia, Singapore and the U.S. He was not accompanied by the respective ambassador from China to those countries. He acted alone. In the old days when the British appointed governor made similar calls, he was always accompanied by the respective British ambassador. This is one clearly visible change.

Li Peng, Prime Minister of China, visits Hong Kong in September to attend the World Bank/IMF conference. He is loudly booed by demonstrators whose sympathy lies with the Tiananmen protest and dissidents. The Hong Kong police makes no move to quell the protest.

Wei Yung has been invited to serve as adviser to a newly formed think tank, Hong Kong Policy Research Institute. Wei is a former member of Kuomingtang's Central Committee, former cabinet official, and former chancellor of KMT party school, Sun Yat Sen Institute. KMT, in case anybody doesn't know, is the ruling political party in Taiwan and no friend of Beijing.

So far no press in Hong Kong has been closed by authorities. That's a fact. Critics have resorted to accusing the press of "self-censorship" in order to stay on good terms with Beijing. The accusation of self censorship is rather subjective and difficult to quantify. However, one Hong Kong official recently points out to me that the Basic Law guarantees freedom of information. If the government should step in and tell the press to stop practicing self censorship, whatever that means, then in effect the government will be telling the press what to say and thus taking away thatfreedom.

Hong Kong's foreign exchange reserves reached $85.3 billion by end of August and represents the fourth largest holding in the world, after Japan, China and Taiwan, in that order. The government is sufficiently confident of its financial strength to contribute $1 billion to the loan package extended to Thailand to help bolster the strickened baht. In summary, I can find no signs of impending economic collapse.

According to the latest survey of Hong Kong people, 82% believe the situation in Hong Kong will improve or remain unchanged. This is an increase of 8% from the survey taken two months earlier, shortly after the handover.

The western media, not for lack trying, have not been able to find circumstances where Tung is acting at the behest of Beijing rather in the interest of Hong Kong. In interviews during her visit to the U.S., well known activist, Emily Lau, has had to resort to a kind of no-win logic. Namely, if Mr. Tung is not obviously doing Beijing's bidding, it is because he is getting his marching orders secretly.

One hundred days admittedly is not a long time in the context of 50 years of the one-country, two-system experiement launched by Deng Xiaoping. At least for now, critics prone to demonize China at the slightest provocation are maginalized and subdued.

Monday, July 7, 1997

Hong Kong Stories

Out of 100 billionaires in Asia, 13 of them are in Hong Kong. The poorest of the 13 billionaires, barely qualifying with networth of only $1 billion, is C.H. Tung, the incoming chief executive of the government when Hong Kong reverts to China.

The fable of Hong Kong's high density of billionaires, roughly one billionaire for every half a million population, is becoming familiar even in the West, usually not too well informed about the mysterious East. Some of the stories of wealth peculiar to Hong Kong are less well known and, I think, the West would find startling if not flabbergasting.

Take the former Hongkong Hilton for example. Once the largest hotel in all of Hong Kong, the owner had spent $14 million and nine months to remodel and rennovate into the "hotel of the next century. " Just six months after the reopening in 1995, the owner announced its permanent closure and bought Hilton International out of the remaining 20 years of management contract.

Why? Simple Hongkongnomics. It seems that due to its prime location, the land, if made suitable for an office building, is worth twice the value with a hotel standing on it! Since the land was appraised at around $130 million, it was no brainer to throw out the hotel, $14 million worth of improvements and all. Today the foundation for the new office tower has been laid, but the owner seems to be in no hurry, being swayed no doubt by some indication of supply in office space exceeding demand. No one so far has suggested that the owner might have miscalculated.

Recently comes another story that belong in the "can-only-happen-in-Hongkong" category. Parking spaces are so scarce in some areas that many office buildings are selling parking spaces at $100,000 or more a pop. That's in U.S. dollars for one very tight parking space. Don't have a car, you say? No problem. One of the parking garage developers is throwing a free car to the buyer. Some buyers who can't afford the millions to participate in the booming real estate market of Hong Kong are buying these spaces on speculation.

Just how expensive is real estate in Hong Kong? On a recent Sunday edition of the South China Morning Post, a feature article described the spacious accommodations that a young couple can buy in Vancouver, Washington D.C. and London but would have to pay at least five times more in Hong Kong for a fraction of living space.

Over dinner with the president of a trading company, he proudly described the merits of his young director of sales, not yet thirty years old. He said that he is paying Eugene, the sales director, over $100,000 a year and worth every penny. But the owner noted with regret, even at that salary, Eugene cannot as yet afford to buy his own flat in Hong Kong.

All that glitters from the Pearl of the Orient may be gold, but may still not be enough to get a decent place to live.

Thursday, June 19, 1997

Hong Kong's Future as Seen by a Native Son

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wednesday, June 11, 1997

An Evening with Beethoven in Olde Shanghai

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

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

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

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

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

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

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

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

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

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

Tuesday, June 10, 1997

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sunday, June 1, 1997

What Confucius Means to Me

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

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

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

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

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

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

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

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

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

Friday, April 11, 1997

Who's Deluded over China: American Business or just the Pundits?

Since the anti-China hysteria in the U.S. has not been able to deter the recent high profile visits to China by Vice President Gore and House Speaker Gingrich, the China-bashing devotees have shifted their focus. They now question whether doing business with China makes economic sense.

One tactic is to make the outright claim that there is no possibility of doing business with China profitably, even though such question flies in the face of many American companies who have been there for many years. Given the quarterly bottom line focus that dominates Wall Street, it does not seem plausible that companies such as 3M, Hewlett-Packard, Johnson & Johnson, Coca-Cola, Procter & Gamble, S.C. Johnson, Motorola, IBM, Kentucky Fried Chicken and McDonald's among many others who have been there for up to a decade or more could delude themselves for long merely waiting for the pursuit of profit to solidify into reality. If their China operations have not been profitable, they wouldn't be there. In fact, two surveys of multinational companies already in China by the Economist Intelligence Unit and Andersen Consulting found that most turned a profit sooner than expected (Wall Street Journal, 9/15/95).

Some even pooh-poohed the Boeing sales in China concluded during Vice President Gore's visit as not having a dime's worth of profit. In recent years, sales to China represents anywhere from one in ten to one in seven planes rolling out of Boeing's manufacturing hangar. No arguement based on economies of scale in aircraft production or some other rational basis could justify selling planes to China at a loss. In response to the announcement of the latest deal in Beijing, the stock market promptly sent Boeing's stock up by more than a couple of dollars. Obviously, at least Wall Street believes that there are more than a few dimes to be made by the company from the sale.

Even companies that have yet to notch up significant sales, such as Applied Materials and other semiconductor equipment companies, are building their bases in China now. These companies are convinced that the development of the semiconductor industry driven by its growing economic strength is inevitable in China just as it had in Japan, South Korea, Taiwan and elsewhere in Asia. However emotionally satisfying it might be to stay home in a snit, doing so risks losing out in the world's next dynamic market for high technology equipment.

Others scream about ballooning trade deficits between the United States and China and claim unfair Chinese trade policy as the cudgel to keep anti-China sentiments at fever pitch. In the process, some bookkeeping inconsistencies are conveniently overlooked. While the trade deficit has been increasing every year, the deficit that the United States used to have with Taiwan and Hong Kong has been rapidly decreasing. Why? Because much of the labor intensive operations have been shifted into mainland China by the Taiwan and Hong Kong businesses. By looking at the total trade deficit with greater China, as Nicholas Lardy of Brookings Institution has done, the year-to-year increase has been much less dramatic.

As Lardy pointed out (Wall Street Journal, 2/7/96), part of the trade gap is exaggerated by the way the U.S. government looks at the trade statistics. Exports from China via Hong Kong are counted as from China including any value added by the Hong Kong entity. On the other hand, U.S. exports to Hong Kong are not credited to China for the significant portion that are transhipped into China. The trade deficit claimed by the U.S. government for 1995 was $35 billion. A more realistic gap, adjusting for Hong Kong's intermediary role, would have been $23 billion.

Furthermore, China derives the trade surplus by selling toys, clothing, footwear, common household items and other labor intensive but low cost goods. If we do not buy from China, we would have to (and we do) buy from other developing countries that can offer such goods at a reasonable price. There is nothing insidious about China's success; it's just simple economics. Unlike the military, American consumers can't afford to indulge in feel good, buy America if it means paying for $500 hammers.

While we have a legitimate complaint that China is not buying enough from the U.S., the detractors' claim that China's market is closed to American goods is a rather extreme conclusion. U.S. exports to China exceed $10 billion a year and, even though on a jagged trend line, have been averaging over 20% per year increase since 1978. In recent years, China has been a major customer of telecommunication equipment from the U.S. and other western nations. Just from the U.S. along, China's annual purchase will soon exceed $1 billion.

Certainly no one will claim that doing business in China is easy. However, just because the U.S. has the two largest trade deficits with Japan and China is not sufficient reason to tar both with the same brush. The two are vastly different not only in economic development but also in their government policy towards trade. Japan has been correctly criticized in their past for their deliberate mercantile policy that accumulates a total world trade surplus every year. Since its economic reform led by the late Deng Xiaoping in 1978, China enjoyed about as many years with overall trade deficit as trade surplus and no apparent pattern emerges from the ups and downs.

High import duty and the confusion during China's transition from a planned economy to a market driven economy as well as infrastructure bottlenecks have hampered foreign sales into China. But these conditions are changing. In their own interest, China needs to reduce duty and thus become world competitive, to protect intellectual properties and thus promote domestic industries based on patents and trade secrets, and to streamline bureaucracy and eliminate corruption so as not stifle continued economic growth. These changes are taking place and they will benefit western companies that are there.

The American public may be surprised to know that China also enjoys a trade surplus with Japan. Asia is now Japan's largest market, exceeding the combined total of North American and Europe--a little known fact in the U.S.-- and Japan sells $4 to Asia for every $3 it buys from Asia. Yet with China, Japan only sells $2 to every $3 it imports. How come? Japan's electronic firms such as Matsushita, Sanyo, Sony et al. have been moving their low end manufacturing into China. Today Japan imports more color televisions from their satellite plants in Asia than they manufacture domestically. Some of the color TVs and much of the low end audio equipment come from China. It may not be perfect and it may not be totally free, but laws of economics do seem to be working and unlike some members of Congress, the Japanese government has yet to make a fuss.

Monday, February 24, 1997

One Chinese American's View of Deng Xiaoping

The death of Deng Xiaoping, at 92 or 93 depending on who's counting, came as no surprise, since he had been known to be in poor health for sometime. The U.S. media's reaction to the news though was surprising.

On the evening following the announcement of his death, ABC's Nightline devoted its entire program to reviewing Deng's accomplishments and mentioned but did not dwell on Deng's role in quelling the student protest at Tiananmen in 1989. The same evening, Charlie Rose on PBS interviewed well respected journalists from New York Times and U.S. News and World Report along with a spokeswoman from the Council of Foreign Affairs. The next evening, Rose interviewed former Secretaries of State Henry Kissinger and George Schultz. In the Bay Area, KCBS, the all news radio station, interviewed Michel Oksenberg, a highly respected China scholar at Stanford.

The reactions from these sources shared a common thread. They lauded Deng for his courage and vision. They gave him credit for changing China's direction from a closed society ruled by ideology that brooked no challenge to one open to the world and receptive to outside ideas, money and participation. While they didn't overlook his blemishes, Deng's mistakes were put in the proper context and balanced against his policies which were crucial in turning China into the vibrant country that it is today.

The mainstream newspapers also showed balance and fairness in their coverage of the man and his accomplishments. The extraordinary amount of space devoted to this man's life beginning with the prominent front page and extending to inside pages was in itself a reflection of media's recognition and respect for the crucial role Deng played on the world's stage. Considering the demonizing of China that has been flowing endlessly from the media, the treatment of Deng is a refreshing surprise.

Of course, old habits never die completely. Some Bay Area media also made obligatory calls to the politician famous for her anti-Beijing rhetoric and the Chinese ex-convict whose expertise is based on his sporadic clandestine forays into China. Compared to the informed remarks from authoritative sources such as former President George Bush, who lived in Beijing as the first official U.S. representative, and Senator Dianne Feinstein, who began frequent contact with the Chinese leadership when she was mayor of San Francisco, along with others already mentioned, the naysayers' comments were all the more pathetic in their obvious lack of objectivity.

Perhaps the generally even-handed reaction is partly because Deng's personal style does not provoke extreme reactions. He was not a flamboyant man with an oversized ego. He was free of the Napoleonic complex that afflicted many men of short stature. He was known as a stay-at-home grandfather that loved to play bridge and never levered his position of power to womenize. He and his family lived simply and he left explicit instructions specifying that his funeral be low key and nothing special.

From 1979 to the early '80s, Deng Rong, one of his daughters, served as an attaché at the Chinese Embassy in Washington using her husband's surname. The Chinese American community in Washington that frequently socialize with the Embassy staff never knew that she was a daughter of the most powerful person in China.

Even though Deng retained power after his official retirement in 1989, he forbade any attempts to create a personality cult around him. He actively discouraged the publication of such little red books as "Quotations according to Deng Xiaoping." It was enough that no head of state visiting China would consider the trip complete without a side audience with the senior leader.

He has been universally praised for being a thoroughly pragmatic person. One indication is the inevitable association of Deng's philosophy with one of his most famous quotations: "It doesn't matter if it's a white cat or a black cat as long as it catches mouse." Another of his famous quotation is "To get rich is glorious." Consistent with his personality, his quotes tend to be simple and catchy to the point of being apocryphal.

Deng Xiaoping recognized the importance of the U.S.-China relationship and actively supported the building of it. To announce that the two countries had agreed to normalize their relationship on January 1, 1979, the People's Daily ran an extra edition printed in red ink. This doesn't happen very often. The previous momentus event that warranted the extra edition treatment was when China sent up her first satellite.

To celebrate the new relationship, Deng made his first and only trip to the U.S. It was a whirlwind tour that included a state reception in Washington and a Texas barbeque. President Jimmy Carter took the initiative to discuss human rights issues with Deng--thus starting a long tradition between the two nations. In particular, Carter asked Deng about China's restrictive policy in not allowing their citizens to freely leave China. Deng's reply was to ask how many immigrants the U.S. was ready to accept. He could send 100 million the next day, he added. End of discussion.

In style and in substance, Deng was as different from Mao Zedong, his predecessor, as day is to night. He was a doer and implementer that Mao depended on, even when Mao objected to Deng's preference to pragmatism over ideology. Even though Mao personally removed him from power, Mao also restored him later to his former position. Deng's superb administrative skills were needed to straighten out the mess created whenever Mao's rule by dogma went awry.

It was Deng's good fortune that he never rose high enough in the hierarchy to be an heir apparent to Mao. All the annointed number twos to Mao did not survive Mao's suspicious nature and preceded Mao in death and in disgrace. Deng, in contrast, left a functioning orderly government behind him. His designated heir apparents that did not work out were allowed to step down and live in quiet seclusion.

The West tends to judge a person and his deeds in the immediacy of current events. The Chinese are more prone to look at the same package in a historical context. If the present government can successfully carry out Deng's legacy and raise the standard the living of China to the level of its neighbors, namely Hong Kong, South Korea and Taiwan, Deng's place in history will likely exceed that of Mao.

With time as a unrelenting filter, the hazy lens of history will focus on just the major accomplishments. The impact of such Western flies as drugs and pornography that came in the open door and the brutal images of Tiananmen will fade. Deng will be remembered as the man that unleashed China allowing the people to realize their full potential.

As a group of Chinese living in the Bay Area went into the San Francisco consulate to pay their respects to Deng, they said to me, "If it hadn't been for Deng Xiaoping, we wouldn't be here. We owe him much."

Sunday, February 23, 1997

A comment on Tibet

The media's description of the Tibet issue is like matching up the color on only one side of a Rubik's cube, i.e., easy to do, but no guarantee that the other sides of the cube are also falling neatly into place.

The one-sided nature of today's coverage of Tibet is because we are only hearing the views of the Dalai Lama and his followers. They have been most effective in their public relations campaign, but there are other points of view that the American public needs to know about and ponder.

For example, Mike Dorgan's article on Tibet (Mercury News, 2/23/97) contains this statement: "Tibet enjoyed independence for several decades before China's invasion in 1949." This is clearly the view from the Dalai Lama's camp but is contrary to the official U.S. government position at the time. In a film made in 1944 by Frank Capra for the U.S. government, "The Battle of China," Tibet was clearly shown to be part of China. Only after the Chinese communists took control of China did the U.S. position shift.

There are many sects of Tibetan Buddhism. The Dalai Lama is the leader of only one, albeit a major sect. To assume that the Dalai Lama speaks for all Tibetan Buddhists is the same as assuming that the Pope speaks for all Christians.

Hollywood is reputed to be a liberal establishment. Liberals traditionally insist on the separation of church and state. Yet in the case of the Dalai Lama, Hollywood is quite willing to see His Holiness as the secular ruler of Tibet. The same people would be deeply offended if anyone were to accuse them of idolizing a spiritual leader, say Billy Graham, as the leader of America. Since Hollywood's view of the Dalai Lama is identical to that of Senator Jesse Helms, they need to either reexamine their alleged liberalism or their fixation of Tibet.

The problem is, of course, that there hasn't been enough impartial eye witnesses to report from Tibet. While not exactly impartial, Andrew Cockburn, whose sympathies lie obviously with the Dalai Lama, reported on a rather extensive recent visit he made to Tibet in the March 1997 issue of Condé Nast Traveler.

Partiality aside, Cockburn makes some observations that are not generally known by just reading from the popular media. He points out that the exiled Tibetans are not above exaggeration when they allege conditions inside today's Tibet. He observes that the secular life of ordinary Tibetans has improved considerably thanks to sizeable infrastructure investments made by the Beijing government in Tibet. He also mentions that life for the common people were quite brutal under the old ruling class, now largely the Tibetan exiles.

Most interesting is the revelation by Cockburn that negotiations between the Dalai Lama and the Beijing government under Deng Xiaoping in 1980 broke down because of a fundamental difference. The parties could not agree on the territory that constitutes Tibet. The Dalai Lama demanded jurisdiction over all parts of China where Tibetans reside. This would have included significant Tibetan populations living in neighboring Qinghai province. The Chinese, of course, would not agree.

I respectfully suggest that we need to see all sides of the complex Tibetan question and not use Tibet as another reason to demonize China.

Wednesday, January 15, 1997

The New Shanghai Art Museum

It doesn't take a museum buff to appreciate the visual, educational and psychological impact of the new Shanghai Art Museum. A recently built and imposing city hall with tall white columns is badly upstaged by the museum building with a dark beige, marble facade, a dominating circular band that renders a roundness to the entire structure and two pairs of arches on the roof. The two structures face each other on Shanghai's People's Park.

The architecture of the museum suggests a synthesis of Egyptian, Southwest American Indian, and neo-European influence. The bare hint of Chinese influence seems to be derived more from the ethnic minorities in China than from traditional mainstream Han culture. The arches on the roof seem to suggest that they are two pairs of handles to a modern rendition of the rich array of ancient bronze ritual vessels on display inside. Whether the visitor immediate takes to the building, the visual impact is similar to the Frank Lloyd Wright's Guggenheim Museum on New York. It is striking and unlike any other structure in China.

Rainer Thomm, an Australian author now residing in Beijing, was awe-struck by the building at first sight. "This museum structure symbolizes Shanghai, a city striving to regain the cosmopolitan stature of a great international city that it once had," he exclaimed and insisted on having his picture taken in front of the building for his next book on China.

Inside the visitor faces a huge rotunda in the middle of the building bathed by light from the glass dome on the roof four floors up. On one side of the rotunda is a cascade of latticed stair cases that are capped by a pair of bright brass lions at the base. On the other side of the rotunda is a series of escalators to convey the visitors the modern way. All the display halls are on four sides of the building surrounding the open foyer that looks down at a multi-colored marble insignia in the center of the rotunda.

All the objects are displayed in cases that are generously spaced apart so that each viewer can set his/her own pace and not feel jostled. Major pieces are displayed in free standing cases with plenty of room to stroll around. The ample lighting is designed to highlight the object d'art to their respective best advantage. Vertical wall cases containing rare Chinese paintings are kept dimmed but light up when viewers approach.

While bronze, porcelain and Chinese calligraphy and paintings represent the strength of the collection, sections are also dedicated to displays of ancient sculptures, jade and ivory objects, chops and seals, coins from antiquity, fan collection, Ming and Qing dynasty furniture and a special hall on the art and handicraft of China's ethnic minorities.

Presented with the displays are overview introductions and explanatory notes that are informative and easy to understand. Absent are references about nobilities exploiting artisans from the enslaved peasantry that used to be commonplace. From the overview statements that head each major period of China's history, a viewer can trace the continuum of the Chinese culture dating back to 2100 B.C. The museum even offers a multi-media, touch screen terminals that answers questions about the museum and those relating to the displays.

Open daily from 9 AM to 5 PM, the admission price is ¥20 (or about $2.40) per person, which is affordable to most of the local population, and is free to student groups on Saturdays between 5PM and 7PM. One of the concerns when the museum opened in mid-October was whether it would gain the support of the local citizens. Judging from the many local Chinese that were there on a Friday in December, this should no longer be a concern. From their obvious enthusiasm, I could tell that the Shanghainese have taken great pride on the inside and outside of this edifice.

Shanghai can not compare to Beijing and Xian or even nearby cities such as Suzhou and Hangzhou in the variety of attractions available to the tourists. Now, at least, the city can offer a first rate attraction in the museum that rates an extra day of stay and justify more frequent lay-overs for the business travelers that used to not find enough to do.