JR’s Blog Review: Unyielding Principles

Stuart (Found in China) is angry – at John Lee, or Lee’s article at Forbes. Lee quotes a faint suspicion – that there’s a growing suspicion – that, in turn, there could be the remote possibility that China is increasingly taking a zero-sum rather than ‘win-win’ approach to open markets and free trade.

The issue here is China’s curb on the export of rare earths, and the suspicion would be that Beijing is attempting to force foreign companies who want access to large quantities of rare earth metals to form joint-ventures with local firms and base their manufacturing operations within China.

But it’s Lee’s conclusion which makes Stuart hit the roof:

The suspicion is that illegitimately optimising imported technology has become one primary strategy for many of China’s domestic champions – an approach that is condoned by the Chinese Communist Party. If so, this goes to the heart of whether China is emerging as a responsible stakeholder in the global economic system.

Whether?! Lee still hasn’t drawn any conclusions, concludes Stuart.

JR, the China Expert, mostly agrees with Stuart’s conclusions. With one exception, that is. Stuart, it seems to him, keeps calling for China to become a responsible stakeholder. But why should they, as long as they’ll get what they want, anyway? It takes two to tango, and western business people are breaking each others’ noses to get their turn with the CCP.

Less frequently angry than either of the a/m bloggers, Adam Cathcart wonders all the same why Chinese diplomacy – apparently haplessly stirring up security concerns among its East and South-East Asian neighbors -,  is in fact in disarray, and why it doesn’t seem to matter to Beijing. Cathcart quotes from the Economist:

Maybe China has decided that, contrary to its own protestations, it does not really need smooth foreign relations. Or maybe its diplomacy is a mess. The Chinese scholar offers three possible explanations. One is the confusing proliferation of “non-diplomatic” bodies and special-interest groups in foreign policy, from oil firms to the army to, in the case of Japan, the marine affairs and fisheries bureaus. But the other two may be more telling: the increasing importance of Chinese public opinion and the absence of any senior political figure in charge of foreign policy. The foreign minister, Yang Jiechi, is not a member of the Communist Party’s 25-member Politburo, let alone its nine-member, decision-making Standing Committee. There is nobody to thump the table for foreign relations. Abroad does not matter very much.

Neither the middle kingdom’s near abroad, nor the middle of nowhere, i. e. America. Not even Africa or Latin America, places longing for being liberated from the imperialist world order. What counts, for now, is business.

Development is the Unyielding Principle (发展才是硬道理).

That helped and helps to solidify the CCP’s rule over China. Besides, if the outside world, near and far, begins to scheme against China, the resulting siege mentality inside the country will help to solidify the party’s rule, too. After all, not even an “East Asian NATO” would endanger China’s development – but it would look beautifully dangerous, and help to rally all patriotic forces behind their correct leadership.

In this game, diplomats are about as relevant as Chinese experts who attend “Global Times” workshops, or as Han Han. Or as a individual foreign joint-venture stakeholder, once the wanted technology has been successfuly dumped transferred.

That the CCP is no longer a totalitarian party, but only authoritarian, is a narrative which is told among foreigners without reservations.

The problem is that Marxists are considered crackpots these days. Especially by business people, of course.

But JR believes that most Marxists have studied the CCP much better – and understand its ways much better – than those who keep repeating the business-friendly CCP mantra.


ECFA: China’s Primacy of Politics, July 3, 2010

13 Responses to “JR’s Blog Review: Unyielding Principles”

  1. “But why should they, as long as they’ll get what they want, anyway?”

    Indeed, JR. Which doesn’t help me sleep at night. Thanks for the link, btw.


  2. Which doesn’t help me sleep at night.
    I think there are many different ways to handle unpleasant situations, Stuart, and everyone has his own way, I guess. Raising awareness of a situation is one of them. Many of the problems we have with China are in fact home-made, and there’s where we need to address them. What our societies are lacking in their interactions with China is a primacy of politics – it’s more practicable in a dictatorship than in a comparatively free society, but it is what we need if we want to maintain contact with China, to create a more level playing-field. Business can’t correct itself; it follows its own, often short-term, rules.

    In certain times of economic and social development in our own countries, even greed contributed to progress, once in a while. Today, commercial greed within our industries rather helps China’s, and harms us. As you quoted on your blog, it is turning into a zero-sum formula (and has for a long time, in fact).
    But it’s our vulnerability, not China’s. It’s our business to take care of this problem in our places, and to fix it. If it wasn’t China, sooner or later, some other place would challenge the values which most people worldwide subscribe to, at least formally.

    So let’s do our bit to fix it. Let’s do our bit to push our countries’ policies into the right direction. The only thing to avoid is to become sectarian, or too acrimonious, because that wouldn’t be convincing. I think it’s more important to point out what matters to most of us, and the need to defend these things against becoming corrupted. Our values are, in the long run, much more attractive than what the CCP has to offer. They can be promoted with a smile.

    Thanks for the link, btw.
    And thanks for yours!


  3. Sort of tangential to this discussion, but explains why the rush to China and similar economies. The mindset of the new global plutocrats who move money, technologies and production units around the globe.

    The good news—and the bad news—for America is that the nation’s own super-elite is rapidly adjusting to this more global perspective. The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

    I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

    At last summer’s Aspen Ideas Festival, Michael Splinter, CEO of the Silicon Valley green-tech firm Applied Materials, said that if he were starting from scratch, only 20 percent of his workforce would be domestic. “This year, almost 90 percent of our sales will be outside the U.S.,” he explained. “The pull to be close to the customers—most of them in Asia—is enormous.” Speaking at the same conference, Thomas Wilson, CEO of Allstate, also lamented this global reality: “I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business … American businesses will adapt.”


    It is just business.

    It is simply too late to call China out on HR, WTO/trade and yuan valuation matters. They are quietly smirking.

    PRC military challenges. Best to keep my views to myself on this one.


  4. I’m aware that full-blown protectionism can’t be the answer, King Tubby. That the middle class has to accept incomes that are in line with their actual productivity is logical, too. But China’s approach to global trade is political, and if we act as if it was mere business, we’d act irresponsibly to ourselves. Of course a business doesn’t necessarily care about human rights – it doesn’t necessarily care about workers’ rights either. In fact, I believe, many CEOs and business owners find the Chinese model quite charming.

    But is their business my business? Are the interests of big business my interests? Are they in the interest of my country? I don’t think so.

    I’m not advocating big global plans. Awareness alone can help to avoid the more stupid moves we have made in the past decades. It doesn’t make sense to provide tax deductions on foreign investment, for example. If other stakeholders only favor what suits their locations, we must act likewise. That’s where politics, not business, must make decisions.
    When China promotes the development of domestic industries by withholding minerals which are essential for competitors abroad, or by increasing the prices of such minerals, the development of such mineral industries outside China must be encouraged, subsidized, and maintained, even if Chinese prices for such minerals go down again as a reaction to such developments. A general policy needs to be that full inter-dependence with China doesn’t work for fully industrialized countries, because free societies can’t control the direction of their businesses as comprehensively as China’s leaders control theirs – and after all, we don’t want to control our businesses that way. Politics, not business, needs to define which goods and trade relations are of a strategic nature, and which are not.

    And of course, a lot more responsibility won’t hurt. We had a similar discussion before. I don’t want to lavish too much praise on my country’s industry – that there’s still a comparatively lot of manufacturing around here has a lot to do with its domination by SMEs, rather than corporations, and the somewhat corporate way it organizes itself has had its downsides in history, and still has its downsides.

    But when people say that we “can’t compete with China”, it’s usually those people who have no reason to compete with China anyway, because their only competitors are other corporations, not countries. Even a country where the unions and staff have a say in how business is conducted (Germany, for example), can compete. It’s a matter of what a society wants to do. A business perspective is only one perspective among many – I believe it’s wildly overrated, and too frequently used to explain the whole world.

    The US administration is at the beginning of defining an industrial policy. I wish them success. There are compelling arguments for becoming politically aware again of how wealth and competitiveness need to be created. Ralph Gomory explains some of these arguments.

    Thanks for the link!


  5. Yeah yeah yeah….China is acting in its own interests apparently…why fucking not.

    What about the fact that the West sucked China dry for well over a century, as well as of course India, Africa, and the Americas, and a billion white people still live lives of luxury supported by billions of poor third worlders??

    The fact is China is a force for good in the world, and interestingly Africa has seen the most sustained and impressive economic growth ever over the past few years – -coinciding with a time of increasing Chinese investment.


  6. Its payback time for a century of plunder by the West of China.

    Fuck it would be awesome if there was a little red button somewhere, which if pushed would immediately obliterate the United States and kill every single living breathing white American.

    Would that not be great.

    Or….maybe keep a few of their bitches, and prize sows for a bit of fun…..hahahahahhaaa


  7. Any white Brit, Frenchman or American, everytime he sees a chinese should fall on his knees and beg for forgiveness for the horrible crimes of his ancestors against my people.

    That they do not means that they, and their children, their babes in arms, should be taken out and clubbed to death, or run through with bayonets, have their fucking skulls smashed with rifle butts.


  8. I’m quite glad that appearances of commenters like “Mongol Warrior” on this blog are a rather rare occurrence. Some of what MW wrote in the three comments above is in conflict with these commenting rules.
    I’ve decided not to delete the lines in question this time, but nobody should think of that as an encouragement to join in and call for the annihilation of countries or people on these pages.


  9. I doubt “Mongol Warrior” is Chinese, probably just some troll trying to make Chinese look bad.


  10. I agree. Chinese people would never say such things. MW must be a bad American person.



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