Sunday, December 31, 2017

Japan's national obsession with the denial of Japan's atrocities in WWII

Even though this review of tour of museums in Japan comes from a Chinese website, the article is written by a well known British historian and in English. It is one of the best written essay on Japan's national affliction (i.e., mass amnesia) that I have read.

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.

Friday, November 24, 2017

Exhibit of American GIs in WWII POW Camp

This piece first appeared in Asia Times.

George Koo NOVEMBER 24, 2017 4:47 PM (UTC+8)

Tuesday, November 21, 2017

“Surveillance Cameras Made in China are Hanging All Over the US”

The Memphis police use the surveillance cameras to scan the streets for crime. The U.S. Army uses them to monitor a base in Missouri. Consumer models hang in homes and businesses across the country. At one point, the cameras kept watch on the U.S. embassy in Kabul.
All the devices were manufactured by a single company, Hangzhou Hikvision Digital Technology . It is 42%-owned by the Chinese government.
Hikvision (pronounced “hike-vision”) was nurtured by Beijing to help keep watch on its 1.4 billion citizens, part of a vast expansion of its domestic-surveillance apparatus. In the process, the little-known company has become the world’s largest maker of surveillance cameras. It has sold equipment used to track French airports, an Irish port and sites in Brazil and Iran.
Hikvision’s rapid rise, its ties to the Chinese government and a cybersecurity lapse flagged by the Department of Homeland Security have fanned concerns among officials in the U.S. and Italy about the security of Hikvision’s devices.
The above was the lead of an article in WSJ. My response is below.
The Wall Street Journal article has just made the grains of sand practice of espionage obsolete!!! In case you've forgotten, during the height of Wen Ho Lee hysteria, there was a FBI expert (Paul Moore was his name) on China that proclaimed that all Chinese Americans in the US were potential spies for China. He claimed that China conducted their spying differently, relying of grains of sand to collect any tidbits of inconsequential information and send them to Beijing. By grains of sand, he was referring to the Chinese American living in America, each representing a grain of sand and each seeing something of potential value would send the intelligence to Beijing. There was this alleged supercomputer in bowls of Beijing Zhongnanhai (don't forget China was on the way of developing the world's fastest supercomputer) that processes these bits of intelligence sent from the grains of sand, voila out comes the design of the multi-head missile, just like the one in your old backyard. Now with surveillance camera made in China, Beijing sure won't need no grains of sand anymore.

Sunday, November 12, 2017

Will the warmth of the Trump-Xi summit linger?

An edited version of this blog first posted on Asia Times.

President Donald Trump’s 2-days+ visit to Beijing received state-visit+ treatment as promised and he showed a video of his granddaughter singing a popular song from China in Chinese, which President Xi Jinping applauded with a rating of A+. It was by all accounts quite a felicitous, triple plus event.

Showing his cute granddaughter singing and reciting poetry in Chinese was a masterful touch. The Chinese loved seeing foreigners adopt Chinese language and culture. Even awkward novice attempts were warmly encouraged and welcomed.

Contrary to his reputation for unpredictability, Trump had no surprises up his sleeve. His public posture was that of a statesman and diplomat. He most likely dispelled fears and exceeded expectations of many.

The twelve+ minute of the press conference that followed their private conversation was warm, positive and emphasized collaboration and cooperation. On issues where they differ, their agreeing to disagree seemed respectful and amicable.

Of course, whether such a warm and forward-looking beginning will lead to “progress for the benefit of the peoples of both countries,” to paraphrase Trump, depends on follow-up meetings between negotiating teams delegated by their respective leaders.

If the ensuing negotiations by the respective groups follow the spirit of seeking to build from common interests, progress would be made. But already, observers in Washington are already claiming that once Trump returns to the Whitehouse, advisors from the confrontational school will resume their places with the same old tired arguments in favor of treating China as an adversary. It will be business as usual; nothing changes.

From the press conference, Trump did state that China and the U.S. would join together to fight global terrorism. This could be a significant shift in attitude. In past administrations, the American position fell more along the lines that “my terrorists are your terrorists but your terrorists might not be mine, subject to case by case review.”

Mindful of the opioid overdose epidemic in the U.S., both leaders also agreed to cooperate in the effort to stop trafficking of fentanyl. Fentanyl is a potent form of synthetic opioid and a leading cause of death by overdose in the U.S. China agreed to broaden the control of precursors to fentanyl and to halt the illegal manufacturing of the drug inside China.

China in turn had asked for American cooperation to facilitate the repatriation of fugitives now residing in the U.S. Some exchange of information and joint investigation had already taken place. Lacking is a bilateral agreement that would facilitate extradition and act as deterrent for other fugitives. Trump offered his support for closer collaboration.

These are positive, relatively easy undertakings that both countries can agree to work together for desired outcomes. Other issues were not as easy and showed by the difference in which the two leaders addressed them.

Neither directly talked about the South China Sea but Xi merely said that the Pacific was big enough for both countries. Both leaders agreed to increase more military meetings and exchanges as a way of lessening tension. To my knowledge, Xi did not offer to initiate exercise of freedom of navigation (FON) in the Caribbean as quid pro quo for American warships in SCS.

Trump’s public comments at the press conference in regard to North Korea was tactful and did not insist, as he had in many other occasions, that China take care of the denuclearization of North Korea for America. This time, he simply allowed every nation must apply tougher sanction against North Korea in order to bring North Korea to heel. Xi simply remarked that yes, China will impose sanctions consistent with the UN guidelines; he also believed that negotiations must accompany sanctions.

As I have written previously, the Clinton Administration has shown that negotiations could work to resolve the crisis. Sanctions and threats had simply raised tensions and had been nothing but a dead end street. Xi of course was too diplomatic to publicly point this out to Trump.

Unfair or uneven trade was another knotty issue that has not seen any daylight. China taking unfair advantage of the U.S. open market has been Trump’s position, as had been that of his predecessors. At the press conference, Trump’s diplomatic position was that “it’s not China fault for taking advantage our open market.”

Xi promised to do more to open China’s market but he also pointed out that China could buy a lot more from the U.S. if the U.S. weren’t so restrictive on export of technology based products. The idea that high tech product for civilian use could potentially have military applications have throttled export sales to China.

It is disappointing that the debate on trade with China has not changed much for at least the last three administrations. Many of the assumptions underlying this debate had been invalid or erroneous or politically motivated by domestic politics in the U.S.

Here is a summary of arguments relevant to the trade issue.

(1)        Low cost imports from China are not harmful to American interests. On the contrary, it’s beneficial because American consumers enjoy lower prices. Jobs are not lost because this kind of manufacturing could no longer be done competitively in the U.S.

(2)        Nothing in the principles of economics demand balance in the calculation of bilateral trade. So long as trade is not based on predatory practices such as hidden subsidies, then trade is fair and market based.

(3)        Bilateral trade statistics have been biased by the way import value is calculated. Popular example used to illustrate the distorting is the iPhone. Value added by the assembly work done in China represents less than 10% of the value of the final product. Yet the entire value of phone is attributed to China as the country of origin.

(4)        Around 60% of China’s exports to America are made by American subsidiaries and joint ventures in China. China gets the blame for the trade surplus but it’s the American companies that pocket the revenue.

(5)        Trade in services is overwhelmingly in favor of the U.S., around 4 times greater that China’s export of services to the U.S. and is the sector that is fastest growing.

Taken all into consideration, the so-called trade imbalance is much less than has been portrayed.

Encouraging inbound investments from China would be another remedy to achieving balance of payments, but the potential is strangely and ironically is under realized. With rising labor cost and land acquisition cost in China, Chinese companies are increasingly looking to locate manufacturing plants in the U.S. Closer proximity to the market and lower energy cost can make locating in the U.S. economically appealing.

Nearly every governor and many city mayors in America understand the value of Chinese investments in creating jobs and increasing the tax base. Many make regular visits to China to entice Chinese companies to locating in their neighborhood. Yet the federal government and the U.S. Congress seems intent on raising the barrier to Chinese investments by strengthening the mandate of the Committee on Foreign Investment in the U.S. (CFIUS).

Even without the anticipated revision by Congress that would expand the jurisdiction and expand the types of investments that would be subject to review, investments from China are already more likely to be scrutinized by CFIUS than from any other country and also are more likely to be disapproved. It seems that Chinese investments are more dangerous to national security than from any other country. And the amorphous danger outweighs the economic benefits.

China’s economy will soon surpass the U.S. To discourage Chinese companies from the largest source of capital to invest in the U.S. is truly against America’s national interests. Xenophobia and China bashing has real costs.

When Trump returns from his long journey to Asia, it will be interesting to see if the upbeat feelings generated in the private meeting of the two leaders in Forbidden City will lead to a new direction for the bilateral relations--one that represents a win for the peoples of both countries. Or, we can check off another opportunity lost as Washington goes back to China bashing as usual.

Tuesday, October 24, 2017

How Xi can make Trump's visit a success

An edited version appeared in Asia Times

It has been widely reported that the Whitehouse staff has been busy preparing a comprehensive approach to China for Trump’s widely anticipated trip to China in November. In fact, two different approaches have been formulated based on the idea of confrontation or cooperation.

Most prominent advocate in favor of confrontation has come from the Steve Bannon school of international thinking, wherein Gordon (the Collapse of China) Chang salutes Bannon as the Paul Revere warning America of the coming economic war with China.

A whole generation of China watchers has been waiting for Chang’s prophecy to find some shred of reality but can only conclude that he is a blindfolded seer muttering gibberish in the wilderness. Yet, Bannon’s Breitbart has seen fit to elevate Chang to the position as “renowned expert on Asia.” This mutual admiration speaks volumes on the callow superficiality of these novitiates in international relations.

Any student of Econ 101 knows that the notion of an economic war between the U.S. and China is preposterous. Much of Bannon’s argument, as is those from Commerce Secretary Ross, rests on the charge that China has gained unfair possession of corporate America’s intellectual property.

We owe it to helping ensure the success of Trump’s China trip by examining this question of China’s alleged hijacking American IP in some detail.

It’s true in the 1980’s and 1990’s, China’s economy was tiny compared to the U.S. and its quality of technology far behind. Therefore as a matter of national policy, China insisted that for certain critical industries, foreign companies wishing to invest in China must form joint ventures with foreign ownership not to exceed 50%. Passenger cars belong to one of these critical or so-called pillar industries.

However, it would be inaccurate to accuse China of coercing the foreign company into handing over its know how and trade secrets. To paraphrase Bill Gates when he entered China, “You want to play in the China market, you go by their rules. If you can’t abide by their rules, don’t enter.” (Google elected to withdraw from China but Baidu came up with their version of search technology anyway.)

GM was one of the first car companies to invest in China and had to form a 50/50 JV with Shanghai Auto Industries Corp. No doubt SAIC learned a lot from their JV partner, but look at what GM got.

GM introduced their Buick into China just as China’s market for passenger cars was taking off and Buick became the established “luxury” car for the Chinese consumer. At one point, GM’s take of profits from all the Buicks sold in China, even at 50%, exceeded the total of the paper-thin profits GM earned from all the sales in the US. GM’s profit from China delayed the inevitable bankruptcy of the parent for some years.

Getting into the China market in exchange for sharing their technology was a deliberate business decision, no coercion involved. Few companies that made the decision to get into China regretted doing so, only the politicians back home like to cry foul.

Autodesk in the San Francisco Bay Area faced a different problem. They had a computer aided design program for the PC that was extremely popular in China. Except, practically every copy in China at the time was a bootleg copy; very few if any were paid for. For years, software piracy was a popular bone of contention between the American embassy staff and the Chinese officials.

The country manager of Autodesk saw the problem differently. He saw all the pirated copies as his installed base, already trained and familiar with the basic program. He then introduced a high-rise building design application to run on top of the CAD program, which he then sold like hot cakes. At the time China was undergoing a building boom and the users were far more interested in paying for the package and getting trained to use the building design program than spend the time trying to find a bootleg version.

Today, China’s economy has narrowed the gap with the US and has been developing its own IP that might benefit the US; in other words a reversal of roles is underway.

Take the example of China Railway Rolling Stock Corp (CRRC) in the US. This company has won contracts to supply subway cars for new lines and replace old cars in Boston, Chicago and Los Angeles. The contract for each city was worth well north of $500 million and each car delivered will qualify as “Buy America,” which means with a local content exceeding 60%.

CRRC will accomplish the local content requirement by shipping the outer shells from Changchun to the US and make all the other components of the car in the US. The final assembly would also be done in the US. CRRC’s proprietary design has reduced the weight of the car, thus reducing cost while enhancing rider safety. They will use their manufacturing methodology in America and supervise local (American) labor to make a superior product.

The CRRC bid was at least 20% lower than competing bids from Canada and South Korea. There were no US bidders. In other words, the use of Chinese know how will provide American cities with state of the art rail cars, at affordable prices, made with American labor, and resulting in the infrastructure improvements to make America great again.

The point about IP is that it’s a dynamic, ever changing asset and not static like a piece of gold that could be locked up in the vault. The owner can profit by sharing its know how via joint venture or license. The IP can also leak away, as employees leave the company, for example. Competitors can copy and reverse engineer to achieve the same end. Even carefully written patents are not foolproof but serves as the beginning of disputes giving litigation attorneys countless billable hours.

The issue of intellectual property ownership is simply too complicated for the Bannons or Bannon-lites to use effectively for the purpose of stoking friction between China and the U.S.

There are other companies from China that would like to invest in America, share their expertise in low cost production for the benefit of local employment and economy. GM for example invited Fu Yao to invest in a plant in Ohio to make windshields for the auto industry. The governor of Ohio was ecstatic. So long as xenophobia does not intrude, good things happen.

Judging from the rapport China’s Xi established with Trump in his visit to Mar-a-Lago earlier this year, we could surmise that Xi has figured out how to make Donald Trump feel good about himself. Xi can use the goodwill to point out to Trump that the flow of technology is now bi-directional and sharing can only help both countries achieve greatness.

In a private conversation, Xi might want to explain to Trump that North Korea won’t feel that they have reached mutual threat parity with the US until their intercontinental missiles can reach Trump’s properties on the East Coast and hurt him in the pocketbook. The only way to calm down the situation is to talk.

Xi can’t tell Pyongyang what to do, but certainly can try to broker a session at the conference table. The operative words are step-by-step, confidence building conversation that hopefully can lead to serious negotiations. Since Trump does not have the patience for this painstaking process, Xi could hint that someone else should take the lead.

Trump in turn can shower praise on Xi’s vision in creating the Belt and Road Initiative and make the observation that trains already run from China straight to London, an economic lifeline increasingly vital to U.K. as Brexit moves forward. Given that governor Jerry Brown has already declared California to be part of the initiative, Trump may also want to ask Xi how the US can participate in the BRI.

A surprising offer would be for Xi to propose sharing China’s quantum encryption technology with America! The idea would be to initially develop hack proof communication between the governments in Beijing and Washington and gradually expand to cyber communications between two countries and put the network out of the reach of the criminal elements. The implications would be huge and Trump can look exceptionally statesman-like as he emerges from his visit to China.

The key to making Trump’s China visit an unqualified success, in addition to having positive cooperative developments to talk about, is to keep the two leaders’ exposure and engagement with the western medial to a minimum.  Minimize the opportunity for Trump to strut or tweet and for the western media to create real or fake news. Let the discussions and frank exchanges proceed behind closed doors.