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November 23, 2005

Who's the Boss?


by Sascha Matuszak

Bush's Asia tour swept through Beijing with much fanfare, but what can really be accomplished between the two figureheads of two huge and influential nations? Naturally, it will be up to the negotiators, diplomats, and private sector to follow up on the platitudes and build upon what is in effect the most important relationship of the 21st century.

A recurring mantra of China discussions is the theory of a "peaceful rise." Excellent for China, no doubt, taking into account the meteoric rise and fall of some of the more violently disposed nations of the past, Germany and Japan being the most recent examples. But the rise is not the issue: what comes after the rise is what has the Pacific Rim and, most notably the U.S., worried.

What will China be doing in 2020? This question keeps China pundits and strategists at their desks typing away. Will China be a force for peace and global integration a global banker and manufacturer bringing prosperity to the long-suffering poor of the planet?

One could look at the individual in China and draw some harrowing conclusions: Take if you will the big boss who rose to the top peacefully through many a lazy-Susan dinner and many, many shots of baijiu. Now he owns houses and cars, runs a staggering array of connected yet disparate companies, and oversees a small army of relatives, friends, employees, and important relationships.

The majority of these bosses run red lights with impunity; cheerfully cheat peasants out of their land and competitors out of their innovations and businesses, bringing in thugs if need be; flout the nonexistent laws of this land daily; establish autocratic fiefdoms in the spirit of the warlords of old; and generally run roughshod over every and anyone in their path.

These bosses face the perpetual fear of decapitation from higher-ups, including the strike-hard bureaucrat of the day, himself bribed into action by those the big boss cheated in order to reach his current position.

Many Chinese themselves express doubts about the government's commitment to peace once China has established itself as the preeminent power in Asia. Look to the Spratlys, Japan, and Taiwan for emerging conflicts that will become full-blown once China's fears are ameliorated.

For those with experience doing anything in China, the words "peaceful rise" sound painfully synonymous with "best price for you."

But are big bosses anything to fear for the biggest boss of them all?

Platitudes vs. the Eye of the Tiger

Take, for example, intellectual property rights.

Any law prohibiting copyright infringement and outright thievery is absolutely unenforceable in China. Millions and millions of people would be out of jobs if these laws could be enforced, for one. Not just the vendors, but the guards that look the other way at Computer City, the doormen who allow the goods out of the factory, the managers who lose commission on the extra goods produced, the factory owner whose income is supplemented by the overproduction on a Nike order, and the vast web of hands and pockets involved in any single operation like the software-copying wizards, who by now run hi-tech labs staffed by high school and college kids who play games on their down time.

The problem is societal reaching deep into the neighborhood.

The problem is educational when students rely on rote memory to pass a test, can one possibly expect innovation?

The problem is related to population any new idea in China is pounced upon by an exponential number of opportunists who steal a business plan, an idea, a logo, whatever it takes. Because in a dog-eat-dog world, whatever brings home the bacon is good.

And with no legal recourse, for Chinese victims and foreign victims, the impunity of the thief becomes the brilliance of the businessman. Success is admired, period. We'll deal with the lawyers later a couple of wire transfers and they'll go away.

Qinghua University professors are cheap. For a few thousand dollars, they will take whatever product they are presented with to the lab and come back to the client with an analysis of the ingredients needed to reproduce the same product.

The problem is not going to be solved through high-level meetings and press releases.

Instead, the army of negotiators, diplomats, and private-sector representatives need to inform their clients, U.S. companies, that "Yes, you will be robbed," and "No, the Chinese government cannot help you."

So Bush's comment that "Our people should be treated fairly" is delusional. U.S. companies should use those educations the Chinese are falling over themselves to get to counter thievery in an innovative fashion.

Look to Intel in Sichuan for ideas: Building two factories is but one phase of their operations. Intel also has a program offering computer services to backward Sichuan towns like Deyang, Mianyang, and Meishan even the isolated panda reserve. Is there a market for computer services in these quasi-peasant towns? Yes. When these kids grow up and think "computers," will they associate that with the name Intel? Definitely.

The training industry is exploding in China, particularly in Shanghai, where global firms rub shoulders with mainland wannabes. The reasoning is multi-faceted: Chinese employees making twice what they would make with a Chinese company will associate success with a certain method of doing things. U.S. CEOs born and bred on the American Way will be able to control and monitor their employees much easier according to their own system than through the opaque windowpane of a joint venture.

When these employees eventually leave to create their own companies, in doesn't matter if they cut and paste from their former employers: they will be working according to a method understood by other foreign firms, thereby creating a business culture more agreeable to the Western palate.

Of course, this is not taking into account the brilliance of a young Chinese eager to learn the Western style just to be able to turn the tables and be armed with two swords: Chinese duplicity and U.S. efficiency.

But then again, what are the 20-something foreigners learning during their stays in China?

Take, for example, the trade deficit of $200 billion.

Does anyone truly believe making Chinese products more expensive will enable U.S. companies to compete? Is price the sole comparative advantage for us to settle on in this complex economic relationship?

Chinese companies are already realizing that doing business solely on price will never give them the brand recognition or reputation for quality and efficiency needed to compete globally. Only new technologies, a trained workforce, and a determination to succeed can bring about the results desired by the mainland kingpins longing for a bite of the global pie.

Businessmen will take whatever they can get away with the attitude of entitlement foreigners carry about will not work in China. Jack Ma, founder of Alibaba, took what he saw and created something new for the Chinese market. He will fight to the death against Google because he does not see himself as entitled to the Chinese market just because he is Chinese. And Google will learn that they are entitled to nothing in China just because the rest of the planet "Googles" instead of "Alibabas."

Alan Greenspan derided "protectionism" as a source for America's economic woes which basically means government interference in private affairs, such as the anti-China trade bill Congress is mulling over for next year. America's advantages over China are too numerous to go into here, but a short list would include: a powerful military, a better education system, established corporate giants, an overall living standard China dreams of, and restive, talented youth just itching to prove their mettle.

Instead of looking to China's dubious few advantages cheap people and the willingness to oppress and steal U.S. strategists who fear the rise of China should look closer to home and make use of the vast resources America commands and revel in the competition!

Human Rights, Religion, and Geopolitics

What has China done for the U.S. lately in terms of North Korea?

Despite the administration thanking China for bringing this joke of a nation back to the chatter table, China has little to gain from relieving the U.S. of this thorn. North Korea, ridiculous as it is, keeps the U.S. and Japan spending time, money, and effort on military technologies and fruitless diplomatic missions.

U.S. aims would be best served by removing its soldiers from South Korea, thus removing any reason for North Korea to target them. Make China deal with these freaks! If the problem becomes one China must solve, watch how quickly Kim kneels before Hu. As long as the U.S. remains involved, North Korea will wrangle concessions with their threats and China will continue to drag its feet.

If it's face everybody is worried about, imagine what a tactical retreat will do to China's face when they realize they have to deal with this thorn. North Korea is China's answer to Taiwan dramatically juxtaposed are the multilateral vs. unilateral approaches to each problem and the strength of the rhetoric. Ironically similar are the piles of cash made by weapons producers capitalizing on each problem.

Hu's comment on Taiwan? Never, ever, ever will Taiwan become independent. Ever. Got it?

Bush's comment on North Korea? Could you please talk to this guy for us?

Last but not least, take Bush's and Rice's stances on human rights and religion.

Of all the topics one could discuss in China with success, the U.S. government chooses human rights. This amid bombings all over the planet in the name of freedom, and our own black legacy during our not-so-peaceful rise from 13 squabbling colonies to a transoceanic superpower.

Taxi drivers, being a safe barometer of local opinion, talk of human rights. Chinese intellectuals, disenfranchised and almost to a man broke, talk of human rights. Hypocritical Hong Kong and Taiwanese, doing quite well in their modernity, thank you, talk of human rights.

Beijing, as expected, sees all this talk as naught more than a fifth column within the nation a tool meant to pry away any hopes of prosperity in return for freedom, which in China translates into chaos. And this, unfortunately, is how China deals with chaos, with or without approval from the West.

When the U.S. broaches the topic, Chinese platitudes are somewhere between "peaceful rise," "best price for you," and "never, ever, ever." Result? Bush's most dramatic achievement was making it to church on time, as documented by a sneaky Chinese blogger.

Side Note

Amid all the jabbering about human rights and pirates, did anyone notice Bush's next stop? That's right, Mongolia, possible site for America's newest peacekeeping presence in Asia: The Center of Excellence.

Are China's fears about encirclement really just bluster? Or is the Bush administration struggling forward in the quest for universal human rights?

 

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  • Sascha Matuszak is a freelance writer living in Chengdu.

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