What China must learn from America

 The prominent Chinese general Liu Yazhou, possibly at great risk to himself, is calling upon his country to adopt American-style democracy and rule of law:

A Chinese general has warned his conservative Communist Party masters and People’s Liberation Army colleagues that China can either embrace American-style democracy or accept Soviet-style collapse.

While officers of similar rank have been rattling their sabres against US aircraft carriers in the Yellow and South China seas, General Liu Yazhou says China’s rise depends on adopting America’s system of government rather than challenging its presence off China’s eastern coast.

”If a system fails to let its citizens breathe freely and release their creativity to the maximum extent, and fails to place those who best represent the system and its people into leadership positions, it is certain to perish,” writes General Liu in the Hong Kong magazine, Phoenix, which is widely available on news stands and on the internet throughout China.

His article suggests China’s political and ideological struggles are more lively than commonly thought, and comes before a rotation of leaders in the Central Military Commission and then the Politburo in 2012.

”The secret of US success is neither Wall Street nor Silicon Valley, but its long-surviving rule of law and the system behind it,” he says. ”The American system is said to be ‘designed by genius and for the operation of the stupid’. A bad system makes a good person behave badly, while a good system makes a bad person behave well. Democracy is the most urgent; without it there is no sustainable rise.”

General Liu was recently promoted from deputy Political Commissar of the PLA Airforce to Political Commissar of the National Defence University. His father was a senior PLA officer and his father-in-law was Li Xiannian, one of China’s ”Eight Immortals” and one time president of China.

While many of China’s ”princelings” have exploited their revolutionary names to amass wealth and family power, General Liu has exploited his pedigree to provide political protection to push his contrarian and reformist views.

But his article is extraordinary by any standards. It urges China to shift its strategic focus from the country’s developed coastal areas including Hong Kong and Taiwan – ”the renminbi belt” – and towards the resource-rich central Asia. But he argues that China will never have strategic reach by relying on wealth alone.

”A nation that is mindful only of the power of money is a backward and stupid nation,” he writes. ”What we could believe in is the power of the truth. The truth is knowledge and knowledge is power.”

But such national power can only come with political transformation. ”In the coming 10 years, a transformation from power politics to democracy will inevitably take place,” he writes.

”China will see great changes. Political reform is our mission endowed by history. We have no leeway. So far, China has reformed all the easy parts and everything that is left is the most difficult; there is a landmine at every step.”

General Liu inverts the lesson that Chinese politicians have traditionally drawn from the collapse of the Soviet Union – that it was caused by too much political reform – by arguing reform arrived too late.

”Stability weighed above everything and money pacified everything, but eventually the conflict intensified and everything else overwhelmed stability,” he writes.

This is extraordinary by any standards, and it contains lessons for us Americans who have possibly taken for granted what we have.   “A bad system makes a good person behave badly, while a good system makes a bad person behave well.”  What a brilliant observation!   Our constitutional system of checks and balances minimizes the harm that a particular office holder or citizen can do, and our economic system channels even self-interest into a force for the greater good.  Conversely, corrupt systems–defined in part as lacking the rule of law–create corrupt people.

HT:  Adam Hensley (from one of the leading Australian newspapers)

How China will bury us

China is thinking way beyond making money by trade and overseas investment.  James McGregor tells about still-Communist China’s latest economic plans:

How do we overcome the fundamental disconnect between our system of scattered bureaucratic responsibilities and almost no national economic planning vs. China’s top-down, disciplined and aggressive national economic development planning machine?

At issue is an array of Chinese policies and initiatives aimed at building “national champion” companies through subsidies and preferential policies while using China’s market power to appropriate foreign technology, tweak it and create Chinese “indigenous innovations” that will come back at us globally.

China has long been a “pay-to-play” market for foreigners, with mandated joint ventures in key industries, local manufacturing requirements and forced technology transfers as the price of market admission. Its entry into the World Trade Organization in 2001 was supposed to do away with the bulk of those barriers — and many were eliminated on paper.

But long gone are the days of China acting as a supplicant to gain access to foreign markets or obtain foreign investment. China now funds the U.S. budget deficit. Its rapidly developing domestic markets are expected to lead global growth for decades. The quarterly earnings of the world’s biggest multinational companies increasingly depend on their China business.

Chinese leaders — shrewd students of political and economic leverage — are shifting their focus from global trade and investment principles to the creation of their own rules and a “China model” of economic development that is difficult to challenge in international courts. Chinese policymakers are masters of creative initiatives that slide through the loopholes of WTO and other international trade rules. Facing off against this are 30 lawyers in the U.S. trade representative’s office of general counsel — only one of whom can read Chinese. This small cadre handles all WTO cases and supports all our trade negotiations globally. Only a half-dozen people in the office focus on China.

As part of their “China model,” that country’s leaders have decided that key sectors of the economy will remain “state dominated,” including automotive, chemical, construction, electronic information, equipment manufacturing, iron and steel, non-ferrous metals, and science and technology. Others will stay “largely in state hands,” including aviation, coal, defense, electric power and grid, oil and petrochemicals, shipping and telecommunications. State-owned companies in these industries are thriving in their protected home market. They have buckets of cash and easy access to state bank loans to carry out government directives to pursue overseas acquisitions and “go global.”

Most worrisome is the Chinese government mandate to replace core foreign technology in critical infrastructure — such as chips, software and communications hardware — with Chinese technology within a decade. The tools to accomplish this include a foreign-focused anti-monopoly law, mandatory technology transfers, compulsory technology licensing, rigged Chinese standards and testing rules, local content requirements, mandates to reveal encryption codes, excessive disclosure for scientific permits and technology patents, discriminatory government procurement policies, and the continued failure to adequately protect intellectual property rights. The poster child is the evolving “indigenous innovation” policy, which appears aimed at using China’s market power to coerce foreign companies to transfer and license their latest technology for “co-innovation” and “re-innovation” by Chinese companies.

via James McGregor – Time to rethink U.S.-China trade relations.

Notice that this is NOT free market economics but state-run and state-directed economics that takes advantage of capitalist economies by means of state monopolies, coercive government power, and economic clout.

The Voice of China

During the Cold War, the USA started media ventures such as Radio Free Europe and Voice of America to broadcast an American view of the world to countries behind the Iron Curtain.  Now still-communist China is doing the same thing,  Already China has a huge TV and radio presence in Third World countries.  And now the burgeoning superpower is broadcasting English-language programming here in America.

Cruise southeast out of Houston, past the NASA exits and toward the Gulf of Mexico, and you pick up something a little incongruous on the radio, amid country crooners, Rush Limbaugh, hip-hop and all the freewheeling clamor of the American airwaves.

“China Radio International,” a voice intones. “This is Beyond Beijing.”

Way, way beyond Beijing.

Sandwiched between a Spanish Christian network and a local sports station, broadcasting at 1540 on your AM dial, is KGBC of Galveston, wholly American-owned and -operated, but with content provided exclusively by a mammoth, state-owned broadcaster from the People’s Republic of China.

Call it KPRC. Or as the locals quip: Keep Galveston Broadcasting Chinese.

The little Texas station may be modest, but it is part of a multibillion-dollar effort by the Chinese government to expand its influence around the world. As China rises as a global force, its leaders think that their country is routinely mischaracterized and misunderstood and that China needs to spread its point of view on everything from economics to art to counter the influence of the West.

Beijing’s new response is typically massive and ambitious: a $6.6 billion global strategy to create media giants that will challenge agenda-setting Western behemoths such as Rupert Murdoch’s News Corp., the BBC and CNN.

At a time when the Western media are contracting, China is pushing its government-run news services to expand from America to Zimbabwe. The Chinese are creating TV networks, pouring millions into English-language newspapers, leasing radio stations on all continents and broadcasting TV news to a worldwide audience in six languages.

The stations don’t broadcast outright propaganda, but rather programming with a Chinese focus and flavor, tailored for local audiences. In Galveston, the format mixes China-centric international news, talk shows about the status of China’s women and a healthy dose of gangsta rap — all in English.

Behind the push is a Communist Party hierarchy that has seized upon the idea of “soft power” as China’s new Holy Grail in its search for superpower status. President Hu Jintao has publicly stressed the strategy. And in 2008, Li Changchun, the party leader responsible for propaganda, summed up China’s rationale: “In the modern age, whichever nation’s communication methods are most advanced, whichever nation’s communication capacity is strongest . . . has the most power to influence the world.”

via From China’s mouth to Texans’ ears: Outreach includes small station in Galveston.

China’s decree to journalists & bloggers

We have posted about the conflict between still-communist China and Google.  The “Washington Post” has obtained a translation of the instructions from the Chinese government to its web journalists and bloggers, explaining what they will not be allowed to talk about. From China’s instructions on reporting on Google:

All chief editors and managers:

Google has officially announced its withdrawal from the China market. This is a high-impact incident. It has triggered netizens' discussions which are not limited to a commercial level. Therefore please pay strict attention to the following content requirements during this period:

A. News section:

1. Only use Central Government main media (website) content; do not use content from other sources.

2. Reposting must not change title.

3. News recommendations should refer to Central government main media websites.

4. Do not produce relevant topic pages; do not set discussion sessions; do not conduct related investigative reporting.

5. Online programs with experts and scholars on this matter must apply for permission ahead of time. This type of self-initiated program production is strictly forbidden.

6. Carefully manage the commentary posts under news items.

B. Forums, blogs and other interactive media sections:

1. It is not permitted to hold discussions or investigations on the Google topic.

2. Interactive sections do not recommend this topic, do not place this topic and related comments at the top.

3. All websites please clean up text, images and sound and videos which attack the Party, State, government agencies, Internet policies with the excuse of this event.

4. All websites please clean up text, images and sound and videos which support Google, dedicate flowers to Google, ask Google to stay, cheer for Google and others have a different tune from government policy.

5. On topics related to Google, carefully manage the information in exchanges, comments and other interactive sessions.

6. Chief managers in different regions please assign specific manpower to monitor Google-related information; if there is information about mass incidents, please report it in a timely manner.

We ask the Monitoring and Control Group to immediately follow up monitoring and control actions along the above directions; once any problems are discovered, please communicate with respected sessions in a timely manner.

This is what it means to live in a totalitarian country, one that recognizes none of the rights that we take for granted here.

Google stops censoring itself for China

Google may have stopped being evil, deciding to stop kow-towing to  still-Communist China’s demands that it block searches on forbidden topics, such as “Tiananminh Square” and “Tibet.”  Why?  Google is responding to what appears to be a Chinese attempt to hack into its operations and steal its technology:

Google Inc., following through on a pledge to stop censoring search results in China, began serving mainland Chinese users via its unfiltered Hong Kong site, a move that could prompt the government to block the service.

The company began redirecting traffic from its Google.cn site to Hong Kong, a part of the country that isn’t subject to censorship laws. The move, which escalates a two- month dispute with the government over censorship, was “totally wrong,” the official Xinhua news agency said.

By relying on Hong Kong, Google is trying to find a way to fight censorship laws while still keeping a presence in mainland China. The approach may not work for long because the government will probably block the site, called Google.com.hk, just as it has before with the main Google.com page, said Ben Schachter, an analyst at Broadpoint AmTech Inc. in San Francisco.

“It’s very likely that Google.com.hk will be blocked at least as aggressively as Google.com was and, more likely, probably more aggressively,” he said.

The company challenged the government of the world’s most populous country in January by threatening to allow all search results to be shown on its China Web site, including references to Tibet and the Tiananmen Square crackdown. Google has about 600 employees in the country. Google.cn included the search engine, Google News and Google Images.

“The Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement,” Google said in a blog post. “We believe this new approach of providing uncensored search in simplified Chinese from Google.com.hk is a sensible solution to the challenges we’ve faced — it’s entirely legal and will meaningfully increase access to information for people in China.”

Google fell $2.50 to $557.50 in Nasdaq Stock Market trading. The shares have declined 10 percent this year. . . .

Google, the world’s top search engine, threatened to stop censoring content after reporting that its computers had been hacked from within China. The company said its systems were targeted by “highly sophisticated” attacks aimed at obtaining proprietary information, as well as personal data belonging to human-rights activists who use the company’s Gmail e-mail service.

The Chinese government denied that it was involved in the attacks, Xinhua reported.

At least 20 other international companies in technology, finance and chemicals were similarly targeted, Google said at the time.

“We also made clear that these attacks and the surveillance they uncovered — combined with attempts over the last year to further limit free speech on the Web in China including the persistent blocking of Web sites such as Facebook, Twitter, YouTube, Google Docs and Blogger — had led us to conclude that we could no longer continue censoring our results on google.cn,” Google said on the blog.

via Google Stops Censorship, Making Block by China Likely (Update1) – BusinessWeek.

China throws its weight around

Still-communist China, which has emerged from the global financial meltdown stronger than ever as the USA and other countries depend on its money, is asserting itself and feeling its power:

China’s government has embraced an increasingly anti-Western tone in recent months and is adopting policies across a wide spectrum that reflect a heightened fear of foreign influence.

The shift has accelerated as China has emerged stronger from the global financial meltdown, with a world-beating economic expansion rate and a growing nationalist movement. China has long felt bullied by the West, and its stronger stance is challenging the long-held assumption shared among Western and Chinese businessmen, academics and government officials that a more powerful and prosperous China would be more positively inclined toward Western values and systems.

China’s shift is occurring throughout society, and is reflected in government policy and in a new attitude toward the West. Over the past year, the government of President Hu Jintao has rolled back market-oriented reforms by encouraging China’s state-owned enterprises to forcibly buy private firms. In the past weeks, China announced plans to force Western companies to turn over their most sensitive technology and patents to Chinese competitors in exchange for access to the country’s markets.

Internally, it has carried out more arrests and indictments for endangering state security over the past two years than in the five-year period from 2003 to 2007, according to a report released Friday by the Dui Hua Foundation, a San Francisco-based human rights organization.

China has also reined in the news media and attempted to control the Internet more vigorously than in the past. This month, it announced regulations designed to make it harder for China’s fledgling community of nongovernmental organizations to get financial support from overseas. In foreign affairs, after years of playing down differences, it has reverted to a tone not heard in more than a decade, condemning recent U.S. decisions to sell weapons to Taiwan and to have President Obama meet the exiled Tibetan leader, the Dalai Lama.

“This is a fundamental shift, and I’ve been here a long time,” said James L. McGregor, a senior counselor with the public affairs firm Apco China. “It’s a change in national attitude.”

via Newly powerful China defies Western nations with remarks, policies – washingtonpost.com.