No Global Governance as “Old Pain” lingers

“One World” – instead of “first, second, and third world” – used to be an unalienable piece of vocabulary in every do-gooder’s wordpool, at least from Western countries. German weekly Die Zeit, not really a bunch of treehuggers, but a paper usually giving responsible opinion and unhurried advice, is re-assessing the one-world concept in an online article. Yes, in London and Pittsburgh, the governments of the world did write new rules for the financial markets. In Geneva, they held another round of  negotiations about a new trade system. They will be back in Davos again soon, to perambulate all the global problems in their totality. They tried to save global climate in Copenhagen. But they are forgetting the financial crisis, the further we seem to leave it behind us. The more remote the memory, the smaller chances are to write global rules that would be globally effective.

And they failed in Copenhagen – “Every country has its own dirty taboo”. Bill Clinton, Tony Blair, and Gerhard Schröder liked the idea of global governance, writes Die Zeit. In the end, they hoped, negotiated agreements and international organizations – NGO’s and corporations included – would lead to some kind of substitute for a desirable, but still unachievable global government. Liberals and left-leaning people in general seemed to support the concept.

But global emergency management has proved to be the maximum of what global governance could achieve together. There is no common concept of tomorrow’s world, writes Die Zeit. Both Europeans and Asians had gained a new self-confidence vis-à-vis America. Europe’s economic and social systems had shown a remarkable resistance against the effects of the economic crisis, and India and China put economic development before climate protection. “In India, you can’t see the climate problem eye-to-eye with Europe or the USA”, the paper quotes Shyam Saran, an advisor to India’s prime minister Manmohan Singh. On a global scale, Europe’s concept of political integration appears to be a  rather singular one.

Europe should get prepared for a world with a patchwork of powers which go it alone, like China, India, Russia, Brazil, Mexico, and South Africa, and clusters of global governance like ASEAN or the EU, Die Zeit quotes a study by the Friedrich-Ebert Foundation.

Die Zeit lists liberals and left-leaning people who actually start to like the idea of such a world – and of nationalists who had always been skeptical of any kind of global governance anyway.

The article’s author actually confuses China’s party and state chairman Hu Jintao with the country’s chief councillor Wen Jiabao. And in other ways, the author also still seems to underestimate the distance between East (arguably excluding several countries such as India, Vietnam, and possibly Japan and South Korea) on the one hand, and Western countries on the other. There isn’t really much reason to believe that a common view of the world will emerge any time soon. Jonathan Spence, in a Reith Lecture in Liverpool, broadcast by the BBC on June 10th 2009 June 10th 2008,  suggested that the issue of the Opium Wars

is now no longer a real one in any important sense and to harp on it now is not something the Chinese have to do. It’s something they can do if they wish to keep an old pain alive.

You can be pretty sure that China’s government does want to keep the old pain alive. “To remember the bitter past to cherish the happy present tense” is a tradition that either came into being or was revived by the CCP during the Chinese Communists’ early days in power – and it is still an efficient way to keep the Chinese public sufficiently afraid or distrustful of foreigners to disapprove of “foreign concepts”. Even otherwise highly open-minded Chinese people often cling to these “open accounts from history”.

At hindsight, at the end of the 20th century or at the end of the 21rst century’s first decade, one may probably say that it was naive to believe that world governance could be an option. You can’t do business with a totalitarian regime, unless you are ready to do business at its terms.

The Zeit article, as flawed as I believe it to be in one or another detail, caught me by surprise. I’m left-leaning myself, and until today, I have felt that my re-orientation towards regional solutions, rather than global ones, was something not too many others of my political color would share. But there seems to be a general trend towards regional action. Elinor Ostrom, an American economist, argues that people may actually commit to the common, rather than the individual use of resources, so long as they succeed in organizing the use and maintenance of such resources. A single system of rules for rather large international fishing zones was likely to fail, she suggests. Polycentric solutions – or regional ones – might work. Experimenting with different ideas in different places could amount to a competition of different ideas., which would either convince bystanders, or leave them unenthused.

And even steps deemed small by its actual practitioners might convince visitors from overseas.

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Related:
Mark Lynas: “How China wrecked the Copenhagen Deal”, December 24, 2009

Commodities: Chinese Custom Duties

China is going to lower import customs duties on some 600 products next year, as agreed with the WTO, reports Liechtenstein’s Volksblatt, among them naphta and coal. Currently reduced rates on gasoline and diesel, and windmill components will go back up, thus leaving public revenue basically unchanged. After completion of a number of new refineries, China is now probably a net exporter of gasoline and diesel. Export duties on natural resources such as crude oil, cellulose, ferrous alloys and some steel products, so far said to be temporary, are to remain in effect.

Meantime, China’s steel industry is reportedly calling for unified global opposition against a proposal by Rio Tinto Ltd. and BHP Billiton Ltd. to combine their iron ore operations, writes the Wall Street Journal.

Coal is to be given priority over iron ore, as a seasonal jump in heating is expected, according to The Australian.

Iron ore also remains in high demand. Being substantial iron ore exporters, BHP Billiton Ltd’s and Rio Tinto’s operation plans are subject to EU and possibly Chinese anti-trust procedures.

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Update:
China raises customs duties on American, Russian technical steel, VoR, December 21, 2009
Remark:
Technical steel (technischer Stahl) or transformer sheets are apparently used in production processes which involve high temperatures and – normally – fatigue of material, according to SSAB, a Swedish company’s website, as technical steel keeps its form and qualities during use.

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Related:
China’s Steel Industry: The Grey Area, July 18, 2009
Negotiations unfinished, July 18, 2009
Mr Premier, are you ready, December 20, 2009

Copenhagen Summit: Make it, or Fuck it Up, but Stop Bitching

The UN Climate summit in Copenhagen isn’t over yet, and it’s too early to call it a failure. Then again, it’s probably also too late to turn it into a real success. That may have to wait until next year – and why not. Even no deal at all would still be better than a lousy one. Not only the poorest and the developing countries can walk out. So can the OECD countries, and in certain situations, our negotiators should. In the end, we in the so-called developed world, won’t be those to be first and worst affected if climate change should lead to a dramatic increase in natural disasters. Never join negotiations without the preparedness to walk out again. That much for the basics of negotiations. But before walking out, one has to do ones best to contribute to a success. And above all, we – negotiators or spectators – shouldn’t bitch around.

Next to the “poor countries”, there is a block of developing countries which have come a long way during the recent years or decades: Brazil, China, and India. South Africa joined their climate faction. During a preparatory meeting in Beijing on November 28, the four governments agreed on The Four Non-Negotiables.

Refusing even to discuss legally binding emission cuts or (unsupported?) international measurement isn’t a promising approach. But then, if international measurement and arbitration is wanted, who should carry it out? I haven’t heard OECD countries spelling out their suggestions yet – and I don’t believe that international arbitration will necessarily be accurate either. The UN Human Rights Council is no encouraging sample for such arbitration anyway.

Anyway, The Atlantic has words of praise for the American delegation:

At a press conference on Wednesday, I asked China’s chief climate negotiator Su Wei if it were possible for China and the United States to reach an accommodation on the verification issue. He responded with a long—a very long—answer. He started by accusing developed nations of trying to “evade their historic responsibilities with various excuses [and] the fundamental excuse is that [China and other emerging developing countries] have not taken steps to address climate change.” Su, however, contended that China’s energy efficiency efforts “have broken their lies.” He declared that China “always followed a principle of openness and transparency.” And then he asserted: “I don’t see the necessity of others to worry about the sincerity of China’s efforts to address climate change.” In other words, get lost.

In other words: bad China!

On the other hand, there is a force for good, of course. Also from The Atlantic:

Then came Hillary. On Thursday morning, moments after the African nations complained that the negotiations were going nowhere, Secretary of State Hillary Clinton appeared in a crowded press briefing room at the summit and announced that the United States would contribute to a $100 billion international fund starting in 2020—as long as “all major nations” commit their emissions reductions to a binding agreement and submit those reductions to transparent verification. And by “all major nations,” she meant China.

Cool. The U.S. Defense Department’s base budget for 2009 alone was at US-$ 515.4 billion this year. And, mind you, Hillary Clinton’s pledge didn’t stem from funding the U.S. would contribute on its own: America would only contribute to the amount.

In my books, the Obama administration has taken a constructive approach. I don’t expect it to play Papa Christmas in Copenhagen. But I’m not exactly in awe of the U.S. negotiating line yet either. And when looking at the constraints on the American federal government – not from the global community, but from home -, it doesn’t make America look better either. It only explains why even a pretty good-willed U.S. administration can’t do better than it is doing.

But that doesn’t really disturb or anger me. Lobbying – from either side – is tough business, and to make the right arguments win takes time. What pisses me off is some of the coverage here in Europe, in the United States, or by a number of Westerners around the globe who are singling China out as the usual suspect when something is going wrong. I’m not panda-hugger. That’s exactly why I find it disturbing when some mainstream media (and blogs)  from the West become as predictable in their findings and comments as the China Global Times or other CCP mouthpieces – only from the opposite direction.

Take this piece from the Christian Science Monitor (quoted by Stuart on his blog  Found in China here):

The world will hardly know if global warming is being curbed if the largest emitter of carbon – China – isn’t releasing accurate data about its pollution.
That’s why it was correct for the United States to insist Thursday at the climate-change talks in Copenhagen, Denmark, that Beijing must be transparent about any claims of success in reducing greenhouse gases.
Without outside verification of carbon cuts in big polluting nations such as China and India, the US Senate is unlikely to pass a tough bill that would force Americans to reduce their consumption of fossil fuels.
And any international pact that sets hard targets for emissions reduction will mean nothing if there are suspicions of cheating or if some countries don’t pull their own weight.
The problem in China is that the ruling Communist Party has a long history of issuing false or at least unreliable data about its economy – as do many one-party regimes driven by ideology and that are often rife with corruption. Lower-level officials often cook official reports – or “add water,” as the Chinese say – to meet quotas set by Beijing or to protect their turf.

Stupid me! It’s China’s dictatorship! And I thought it was lobbyism which kept the U.S. Senate from moving!

I have no clear-cut opinion as to how far we should wait for China or India to commit themselves before becoming more dedicated ourselves. And I don’t need to. After all, I’m only a spectator. I can form my opinion once the stuff is completed either way, and in substance, I can understand misgivings like the ones voiced by the Christian Science Monitor. But my opinion is clear on one matter: it’s too early to single China out as a saboteur. And it is too early to act like if our countries, the OECD members, were saints in this matter.

But that’s how a number of op-eds, comments, and posts, are coming across. If I were a Chinese national, I would find the case they are making about as attractive as a post-religious sunday school, which is to say, as uncool as athlete’s foot.  If we want to make a case, we should stop preaching. Dogmas are the opposites good points. Yes, China or India may add water to meet quotas set by Beijing or to protect their turf. China or India may also simply refuse to commit themselves to any goals if we insist on whatever kind of international control. And in that case we will have to think about the best strategies that would remain: continuing to negotiate closer to their terms, or walking out ourselves.

The latter doesn’t necessarily look like the worst choice to me – it would open the door for other choices: going it alone – developing technologies to do our share in carbon dioxide reduction and becoming global market leaders in that technology, for example. It will be badly needed very soon.

We may, in such a case, have to rethink not only our individual ways of life (that’s inevitable anyway), but also where we should buy from. It would make no sense to have our daily needs produced where they cause the most carbon dioxide. In many ways, the ball will simply be in our court, not in China’s or India’s.

Many of our countries can also use controlled immigration – OECD countries, as a rule, are greying societies. Many people around the globe will need a new home if the United Nations work for climate control fails, and it’s OK to be choosy in choosing the right migrants, if we should be in that position.

And if our governments then  succeed in convincing the world that China and India could have done much better than they have (or will have), so much the better. As far as that’s concerned, Mrs Clinton has shown great – and perfectly legitimate – skills in Copenhagen already.

For one, she wasn’t bitching.

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Related:

Climate Change Control: Who should Foot the Bill, December 15, 2009

Climate Change Control: Who should Foot the Bill?

The worst thing that can happen to the Copenhagen summit would be a blame game, based on different ideological concepts. I thought I wouldn’t start a discussion about it yet, but I joined one on another blog. So if you want to know JR’s temporary unconsolidated findings and those of others on who should or might foot which share of the bill for climate change control, you might take a look at the commenter thread there.

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Related
China and one of its biggest threats team up for Copenhagen, Dec 12, 2009

Steiff Stuffed Animals: Closer to Home

Steiff GmbH is reportedly phasing out production in China after six years. Back then, the dapper company had created a cheap brand, Cosy Friends.

One reason to cease the China engagement was quality. The Financial Times Deutschland quotes the company’s executive director as saying that the company had underestimated their own strength: producing a stuffed animal isn’t that easy after all. A strong fluctuation of employees at Steiff’s Chinese contractual partner didn’t help either. It took a seamstress eight to twelve months to meet the standards – but hardly any of them stayed that long. Which made the executive director worry that they might join competing companies.

This doesn’t mean that much of the production that went away years ago will be relocated to Germany. Steiff is expanding its production in Portugal, but particularly in Tunisia. It takes people no shorter there to meet the quality requirements. But the Tunisian employees are unlikely to move to a competitor overnight. Sidi Bouzid, the production site, is far away from the rest of the world, in Tunisia’s hinterland.

Implementing new projects across the Mediterranean is also easier, than communicating across most of Asia. And new products, once they have been made in Portugal or Tunesia, reach their markets much more quickly.

It’s for similar reasons that athletic shoes for the United States’ markets in the 1990s were – or maybe still are – made in Mexico to quite an extent. That said, the really functional (and often more expensive) shoes mostly came from the Far East. As they weren’t subject to frequent, even minor, fashion changes, production processes could go on unchanged for long periods – long enough to produce quantities which would justify the time it took to meet the quality standards of American headquarters. Contrary to stuffed animals, runners are usually no collector’s items.

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Related:
Every Fifth German Company Leaving China, August 4, 2008

Update/Related:
“China is increasingly losing attraction”, The Telegraph, July 3, 2008

Weekender: What’s Wrong with Overcapacity?

The European Union Chamber of Commerce in China (EUCCC) has warned that Beijing’s stimulus spending had fuelled massive overexpansion in steel and other industries that could force companies to boost exports, thus igniting protectionist backlashes abroad. China’s leaders themselves also appear to be worried, and the EUCCC’s findings were reported by China’s overseas radio service CRI in November.

just as if it wanted to satisfy the hunger of the whole world...

But not everyone is that worried.

In an article for Phoenix Television’s website, Hu Yuexiao (胡月晓), an analyst with Shanghai Securities (上海证券研究所), reasons that worries about China’s production overcapacities are going too far. Alan Wheatley, China Economics editor for Reuters, said pretty much the same, with similar arguments, in English some time earlier. Both Hu and Wheatley take the trouble of reminding us of what we once learned from our economic schoolbooks: that only some overcapacity will enable competition. Neither of them denies that there are structural challenges that need to be addressed, but they seem to find the current debate out of proportions.

Up to here, it all looks more or less familiar to me. A collection of articles on the other hand which puzzles me is several years older than the news above.

Henry C. K. Liu published a long series of articles on The Coming Trade War with the Asia Times in 2005. It’s an opulent lot of food for thought online, which I’d rather have expected to come as a book. In part 4 of his series, he dismisses the economic law of scarcity as a baseless myth, and blames man-made maldistribution rather than natural laws for scarcity. Apparently, his statement can only be true if peoples’ desire for material possessions is limited, rather than endless. Liu basically blames Western concepts for creating the idea of scarcity, but he also blames China for adopting the concept.

Overcapacity is not merely a temporary under-utilization of capacity; it is the systemic inability to achieve full or at least optimum utilization. Yet overcapacity is a structural condition in the world of scarcity economics, because excess capacity is the condition needed to prevent the emergence of shortages, which is another name for scarcity. But scarcity is needed to maintain economic value as expressed in market prices. Thus the market model of neo-classical economics must constantly be plagued with the curse of scarcity while simultaneously preventing scarcity with the more fatal disease of overcapacity. This contradiction is the internal paradox of neo-classical economics that traps the market economy in an arrangement of never being able to enjoy the full capacity of its productivity.

The insecurity generated by looming scarcity drives savings, which as investment add to overcapacity. And savings reduce current consumption, meaning lowering demand, which adds to overcapacity. The challenge of a market economy in an age of structural overcapacity then shifts from how to produce more to how to sell more. Marketing becomes the critical task of management. The answer for decades has been to use planned obsolescence to ensure recurring demand. Another answer was to lower prices to broaden the market. Advertising stimulates the desire for goods, but only rising income increases demand for goods.

The idolization of scarcity, Liu’s article suggests, is wanted both by the U.S.  – or OECD countries in general -, and China^*). But the illogical – or  outrageously preposterous -  thing, he writes, is that the U.S. in particular and the West in general keep blaming China for having maintained its overcapacity:

“It is not possible, let alone moral, for 4% of the world’s population to consume the full productive capacity of the world. For the global economy to grow to its full potential, the whole population of the world needs to be allowed to participate with its fair share of consumption.”

It’s an interesting read, and it’s probably no coincidence that I see myself in no position to actually assess the validity of Liu’s points. College and university taught me the basics of economics as written by the establishment, and the curriculum ended long before alternative models might have come into play.

But Liu’s idealism doesn’t really look trustworthy to me either. The main aim of his criticism is the West:

The small nations of the world, unlike Brazil, China, India and Russia, are too weak to resist oppressive policies foisted on them in the name of free trade by international trade and finance organizations controlled by the rich nations.

Yes, the small nations of the world are too weak. They will also be too weak to resist oppressive policies which will soon be foisted on them by a coalition of the West and Brazil, China, India, and Russia.

And another of Liu’s statements could come right from the desk of a tradititional Confucian scholar two-hundred years ago, living on the backs of miserable peasants (who were fortunate enough to have no jobs either, and only a bit of slave-work to do):

The job is the creation of the industrial revolution. Prior to that, under agricultural feudalism, people had livelihoods, doing what they excelled in and enjoyed. The job is a venue through which impersonal labor and time are sold for money at a rate that prevents the worker from buying and consuming all of what he or she produces so that the excessive production can be turned into profit, what Marx called surplus value.

Oh, innocent China!

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Footnote
^*) Liu differentiates between nations and elites, both in the West and in China. He believes if current terms of trade continue, much of the GDP in the newly rich nations would be owned and controlled by the currently rich nations:
… if current terms of trade continue, much of the GDP in the newly rich nations would be owned and controlled by the currently rich nations.
Yet there are signs that the rich economies are determined to resist this equalizing prospect by trying to co-opt the elite in these developing economies as a new comprador class to help perpetuate the historical dominance of the rich nations.

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Related:
Weekender – Politics and Science, August 15, 2009
Is AGOA good enough, August 5, 2009

Kadeer: Addressing Xinjiang Issue Serves Stability

Rebiya Kadeer, chairwoman of the World Uyghur Congress (WUC), is currently in Austria.

Die Presse, Vienna, Austria, published an interview with Rebiya Kadeer yesterday. The following are excerpts from the interview (own translation).

Q: Early in July 2009, heavy riots broke out between Han Chinese and Muslim Uyghurs. What is the situation like now, five months later?

A: Many young men are still missing. Their parents can’t ask the authorities what happened to them. International phonecalls to Urumqi are not possible, and the internet is still blocked. The Chinese have assigned 3,000 special security troops who patrol the city.

Q: You once said that in the July riots, 10,000 people vanished and 400 Uyghurs were killed. Officially, “only” 200 people, mostly Han Chinese, were killed.

A: I stick to the numbers. Some sources even mention 5,000 killed Uyghurs! Unfortunately, we can’t check these numbers. But if Beijing speaks the truth, why then is there a gagging order? I demand an international investigation of the events.

[.....]

Q: Vis-a-vis the West, China seems to be less and less ready to make concessions concerning human rights. Why is that?

A: China’s attitude stems from the West’s silence. In the global economic crisis, Beijing tries to stabilize its own power by oppressing the minorities. At the same time, it would be in the West’s interest to address the issue – also for the sake of stability in the region.

Q: Some Uyghurs – such as the Turkestan Islamic Party (TIP) – demand a radical struggle against Beijing. Can you understand that?

A: Groups like the TIP don’t speak for the majority among the Uyghurs. We, the World Uyghur Congress, are seeking a peaceful solution to the conflict. We demand self-determination, because the “autonomy” of our region Xinjiang is only a word, but not real.

Mrs Kadeer is scheduled to visit the secretariat of Amnesty International France on Thursday.

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Update / Related:
Internet Services which are / are not available in Xinjiang, Far West China, December 7, 2009

Interpreting Taiwan’s Local Elections

If the numbers of elected or reelected local officials was all that counted, the KMT could claim to have added another victory to their success in the presidential elections of 2008. Seventeen mayor and commissioner posts were up for grabs on Saturday. The KMT won twelve of them, four went to the DPP (the oppositional Democratic Progressive Party), and one to an independent candidate – details here ».

But when comparing the actual percentage each of Taiwan’s main political parties carried, the gap between their scores is much smaller. In the presidential elections of 2008, the KMT’s candidate Ma Ying-jeou (马英九) had carried 59 percent of the vote, while Frank Hsieh (Hsieh Chang-ting, 谢长廷) who ran for the DPP obtained only 41 percent. The gap has now narrowed to about 2.5 percent only: KMT 47.86 : 45.39 DPP.  Voter turnout was 66.32 percent according to the Taipei Times – that said, the cities and counties where elections really took place only covered some seven million eligible voters. In the presidential elections of 2008, the number of Taiwaners eligible to vote was 17,321,622, and 76 percent of them actually went to the polls.

Michael Turton, a blogger in Taichung, Taiwan, computed the DPP’s showing compared to the presidential elections 2008, in all counties and cities where local elections were held.

a safe pair of hands?

Now the tealeaves are being read. Did the DPP recover because of president Ma’s policies of economic integration with China? Or did the voters disapprove of the travesty justice has been turned into with the arrest and conviction of Ma Ying-jeou’s predecessor, president Chen Shui-bian? Are the voters unhappy with the economy, and would happily accept further economic integration with China, if it helps Taiwan’s economy? Zhang Duncai (张敦财), deputy director of Xiamen University’s Taiwan Research Institute in southeastern China’s Fujian Province, doesn’t sound sanguine. The local election results could be characterized as a setback for the KMT and a gain for the pro-independence opposition Democratic Progressive Party DPP, the Chinese scientist is quoted by Taiwan News. Taiwan’s government would become more reluctant to promote cross-strait programs that might eclipse or undermine President Ma’s administrative achievements or the KMT’s power base: “Political issues, in particular, will be least likely to be brought to the negotiating table in the foreseeable future.”

The local elections may not be more than a hint at unease over closer ties with China. They didn’t cover all of Taiwan, and the BBC lists yet some more issues which may have helped the DPP, and hurt the KMT, such as the global recession and the KMT government’s slow reaction to Typhoon Morakot in August this year.

But Taiwan is a country threatened by China indeed – something not even the KMT would deny. In October, the defense ministry published a paper which said that China had “continued its arms build-up to the point that it has tipped the military balance in the Taiwan Strait”.

The really good news from these elections – just as from all free elections – is that Taiwan is a democratic country, and that a government of any color needs to take the people’s concerns into account.

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Footnote / Update: Chen Chen-hui (KMT) certainly didn’t lose his seat as head of Huwei Township due to a lack of passion. After the results had been announced, he arrived with a loaded gun at the campaign headquarters of Lin Wen-bin (DPP). Lin’s sister was reportedly slightly injured.