Archive for July 30th, 2009

Thursday, July 30, 2009

Nuctech Graft Probe: Statement by Mrs Lameck, no Statement by Finance Minister

A shortage of money prevented a bail application by Teckla Lameck, her business partner and fellow member of Teko Trading CC, Kongo Mokaxwa, and Chinese national Yang Fan, reports The Namibian, quoted by The Zimbabwean today. According to the same report, defence lawyer Sisa Namandje, who is representing all three detained suspects, told Magistrate Gerrit van Pletzen yesterday that whereas his clients’ bail application was supposed to start yesterday, one of them does not have funds to pay for his legal representation at this stage. Teckla Lameck is quoted as commenting on conditions in the female section of Windhook Central Prison that “the winter is bitterly cold and the cells have no hot water or electricity.” She stated in an affidavit that there had been “no contractual duty on Nuctech to inform the Finance Ministry that any sub-contractor had been appointed by Nuctech as an agent”. In an agreement of May 19 2008, Nuctech agreed to pay her company Teko Trading US$12,828 million – the exact same amount that the Finance Ministry had agreed five days earlier to pay Nuctech as a first payment under its agreement with the Chinese company – as a commission on the contract Nuctech and the Finance Ministry had signed.

Another Namibian paper, Informanté, by their own account tried to interview finance minister Saara Kuugongelwa-Amadhila by phone, but were told that she was “not a subject of Informanté. I am quite busy now”.

Thursday, July 30, 2009

Chinese Spying Cases: Unease is no Policy

An author at Frog in a Well feels disturbed about the way PRC policy .. sees overseas Chinese as intelligence and lobbying agents. There are good reasons for such feelings. Walter Opfermann, at the office for counter-intelligence for the state of Baden-Wuerttemberg, is apparently uneasy, too. “We’ve dealt with several cases of Chinese citizens on work experience in German companies who stole highly sensitive information from them,” Opfermann was quoted by the Sydney Morning Herald (via The Guardian) this month.

To a large extent, flows of know-how from advanced competitors to developing ones are inevitable, if not natural. The internet, data carriers, the benchmarking of exported products after arrival in their sales markets all account for a lot of it, and cooperation of Western with Chinese companies often involves legal technology transfer, in accordance with legal contracts. And both data and job losses should be seen in a wider context, where by far not every  such technology flows are illegal or even objectionable.

Also, intelligence reports per se need to be taken with a pinch of salt. Intelligence agencies are tax-funded and need to justify their costs – they must prove that they are needed. America’s intelligence reports on “weapons of mass destructions” in Iraq were a spectacular example, but there will be many less notable ones, too. Also, the numbers given are naturally not precise. But I have no doubt that Opfermann has it basically right when it comes to China. As for Russia, I have no experience of my own.

A Chinese volunteer in Baden-Württemberg quoted by the “Global Times” has never heard complaints from German business people. Of course not. If you complain, you hurt other peoples’ feelings and might lose business. The German reluctance to make complaints for such reasons may explain the term “panda-huggers”, which we have earned ourselves in the Middle Kingdom. And it may partly explain why rather unfavorable – and yes, sometimes biased – media coverage on China is now finding such a ready readership here in Germany, pretty much of a sudden. I’m sure that some of it is anger suppressed in connection with business, and only breaking out on in connection with different, mostly not business-related topics. No anger is as dynamic as previously suppressed anger – any fenqing may serve as evidence, and some Germans are making great fenqings of themselves. Unease is no policy. And without a policy, a lot of otherwise mature people can look surprisingly helpless.

Writing and consuming unfavorable press articles on how China’s government suppresses people at home, as relevant as such information can be, won’t solve our problem. And our core problem in this context is that a big share of education, professional training, R&D, and the resulting know-how is tax-funded here, paid for by people like you and me, and gets into Chinese hands both illegally, and far too easily. So here comes JR’s some-billion-euros-question: is it wise to offer Chinese nationals working experience in a rather small-sized German company whose competitiveness stands and falls with their technological edge, unless they have reliable security procedures in place?

Yes, I can feel the cold creeping in even before the first accusations of discrimination and racism even arrive here on my hitherto beautiful blog. But before you accuse me, think of this: The Eastern Bloc’s capacity to adopt new technologies was probably much less developed than China’s today. But who in his or her right mind in the West would have employed a Soviet or East German citizen in a technologically sensitive area – be it in the 1960s, 1970s, or 1980s, without making sure that there would be no data theft?
The answer seems to be that when it comes to China in this globalized economy, the country is economically more attractive than the COMECON members ever were.

To be clear: legislation that would bar working contracts between German companies and Chinese nationals are not the answer. That would be unpractical, and most probably unconstitutional. There are some weaknesses an open society will have to live with, if it doesn’t want to betray its own standards. Our authorities can’t define state secrets the way it suits them. But I’m grateful for some recent open words here. Any boss who owns his or her company should bear them in mind when making decisions. Such decisions should also include an awareness that too much dependence on the Chinese market can make a company very vulnerable for coercion by Chinese authorities. An understanding of the way the Chinese Communist Party is ruling China, and the means it may apply to recruit both willing and reluctant spies, is important.  The damage would be much smaller if there were only willing victims of data theft here. However, naivety (and possibly some ill-advised political correctness) can be fatal.

I may lose some friends for posting this. But I’m advocating a clearer understanding of China. Ignoring the problem “because companies don’t want to admit their weaknesses and lose customers and [because] they don’t want to ruin business opportunities with China” will leave us with little to offer on the world markets in the future – Chinese markets included.

Civilized representations to the contrary are welcome.

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