China and its Discontents

Archive for October, 2010

Economic Populism Won’t Help Liu Xiaobo

leave a comment

I was going to post this next week when it is in the Trinity Tripod, but it’s relevant right now.

UPDATE: It’s posted on the Trinity Tripod.

This month, the Nobel Committee awarded the Peace Prize to Liu Xiaobo, a Chinese democracy dissident and intellectual famous for negotiating the safe passage of the last few hundred students at Tiananmen Square on June 4th, 1989. He is currently in jail for drafting Charter 08, the most recent major call for democracy in China. The week before that in the U.S., the House of Representatives voted overwhelmingly to impose tariffs on China because the Chinese government is artificially suppressing a rise in the value of the RMB; although the bill is inflammatory, it is unlikely to pass the Senate. And across the country, midterm election advertisements have blamed China as the final link in a chain of economic misery, stealing jobs from hardworking Americans and destroying our way of life. How are these events connected? While we might want Chinese democracy activists to prevail and the Chinese economy to come into balance with the rest of the world, we are actually shooting ourselves in the foot by playing to election-cycle populism.

A common word you hear around foreign policy circles in the Obama administration and the Clinton State Department is engagement. It basically means that the U.S. has a duty to stick to its core values, but that we can advance those values not by lecturing from a bully pulpit, but practically through a combination of defending our interests and appealing to the interests of other countries. This does not mean what political opponents of this administration want you to think it means. It does not mean that we are abandoning our values. It does not mean that we can’t strongly condemn human rights violations. But it does mean that instead of cultivating our national pride and vanity in throwing bombast at China, we’re more interested in results. We should in every circumstance call China out on its politically repressive policies. But its economic policies are different.

We need to stop demonizing Chinese economic policy because it will only lead to more Chinese intransigence. No government wants to be perceived as if it is beholden to the demands of another. This is essentially the application of behavioral psychology to international relations: do we ever want to be perceived as weak and submissive, buckling to the demands of a competitor? No! Political leaders want to project independence, primarily because their constituents want to feel as if they are collectively independent. Government behavior mirrors individual behavior because governments, even non-democratic governments, are at some level accountable to the people. We can better influence Chinese policy by negotiating, and gently manipulating the tug and pull of international diplomacy.

We also need to rid ourselves of some populist notions that say that if only the value of the RMB would rise, a flood of manufacturing jobs would return to American shores and our economic misery would be healed. The artificially low value of the RMB is a problem, but inflating the RMB is not the panacea that election ads make it out to be. It will not directly result in new factories in the Rustbelt – making China wealthier will encourage more Chinese to buy more foreign products generally, not just American products, and there will always be another country to which we can outsource jobs. Even at a doubling of the value of the RMB, the average Chinese factory worker’s salary would be pitifully low, still ripe for outsourcing jobs. Raising the value of the RMB will, however, correct systemic imbalances in the global economy. In order to better understand these imbalances, we need to look at the situation on both sides of the Pacific for the past ten years.

We need to recognize that the U.S. in the last decade has complied with the policy of a cheap Chinese currency – even benefited. Although China’s economic ascent has been rapid, it has not been as rapid as it could have been. In addition to artificially lowering the value of the RMB, the Chinese government has artificially raised the national savings rate. When a Chinese factory produces goods that are shipped to the United States, that factory gets paid in dollars. The proprietors of that factory must then exchange those dollars into RMB at the local bank to pay their costs. If we were looking at the situation in foreign countries, that bank would then invest its dollar reserves in whatever it thought to be most profitable. But under Chinese law, the dollars can’t go to the Chinese bank that exchanged them, but to the central bank, the People’s Bank of China.

Billions of dollars end up in PBOC coffers every day, and every day the PBOC parks the vast majority of its holdings in Treasury bonds, and to a lesser extent, stocks and other investments. This has an affect of improving the American standard of living – our stocks rise in value, bank holdings rise, those banks lend to the average middle-class family using a credit card and sitting on a subprime-mortgaged house, and they purchase more Chinese goods – all in a virtuous circle of consumption. But this policy, which has been tacitly affirmed by both Chinese and American governments, also has a dark side. First, it allows the U.S. government to spend more than it could ever possibly spend without raising taxes; second, it suppresses the living standards of the average Chinese worker.

We already know about the U.S. debt crisis. We’ve spent more and more on wars of folly, unpaid expansions of entitlements (in the form of Medicare Part D), and in addition to a sudden drop in tax revenue, a massive dose of counter-cyclical stimulus in response to the recession. This is compromising our ability to invest in the future and provide a stable platform for future economic growth. What we don’t know is that we’re also stymieing the average Chinese family’s advance in economic prosperity. Every day that the PBOC shuttles a billion dollars back into the U.S. economy is one more day that well-off Americans are borrowing a billion dollars from substantially poorer and worse-off Chinese. The money that has enabled an exploding deficit and a diseased consumer culture is also money that is not being spent in China on schools, infrastructure, and credit extended to Chinese families in the same way it has been extended to us. This is what the “trade imbalance” really means. The end of the imbalance won’t mean an instant economic stimulus in the U.S.; it will however make both countries substantially better off for the future. Why does all this matter for the Chinese democracy movement? China will be much more receptive to political reform when it is integrated into the world economy, not isolated; attuned to movements of global culture, not cut-off; and when individual citizens prosper, not mired in a low standard of living.

Fang Lizhi, a major Chinese democracy activist who fled to the U.S. after Tiananmen, recently wrote a New York Times op-ed claiming that Liu Xiaobo’s Peace Prize should disabuse us of the “dangerous notion” that “the autocratic rulers of China will alter their disregard of human rights just because the country is richer.” This, I believe, is not a fair representation of this view; subscribers to that view don’t believe that the Communist Party will change as a result of economic prosperity, but that individual Chinese will.

A higher standard of living for Chinese citizens will do several things: it will bring more Chinese out of poverty, and into education. This, in turn, will expose them to ideas not sanctioned by the government. Consider this: every major democracy movement in China has been instigated by Chinese students and intellectuals. The 1979 Democracy Wall movement was student-led; the 1989 Tiananmen protests were student-initiated, followed by the support of broad swaths of the Beijing population and people in cities across the country; Charter 08 was written and signed by intellectuals and prominent professionals. This pattern repeats itself over and again.

Rural farmers too, have engaged in protest, not generally for democracy, but against local corruption. When taxes in these rural areas are raised exorbitantly high (nearly wiping out their yearly income), farmers have organized opposition, and in some cases, made minimal reform. But this is not addressing the issue: an unaccountable bureaucracy and an illegitimate authoritarian government. At Tiananmen 21 years ago, the students found support in factory workers, doctors, teachers, and even employees of the Communist Party newspaper, but not rural farmers. Tiananmen was a minimal blip in the minds of most Chinese (if they knew about it at all). The voices for a democratic China must link arm in arm with the poor, rural farmers. Only when more farmers are lifted out of extreme poverty can they truly wipe out corruption. When this happens, the Communist Party will not be able to stop the transition to multi-party democracy.

The Communist Party no longer has a coherent value system upon which policy is based. When capitalism was slowly introduced in the 1980’s, the then party chairman Zhao Ziyang said that China was still in the first stage of socialism, and had to build up its productive forces for 100 years for socialism to be sustained. This was and is a façade. The party currently exists to preserve its own power.

Under Mao, China did have a value system, however violent and repressive. Because the Chinese people are now grasping for something to believe in, they ask – what does it mean to be Chinese? Is it just the pursuit of wealth and the technocratic application of utilitarian economic policy? Millions are turning to religion: Christianity, Buddhism, and traditional Confucian practices. But Chinese democracy activists have for thirty years offered something different. To be sure, the vast majority of Chinese know little of the movement and will have been blocked from hearing about Liu Xiaobo and the Nobel Peace Prize. But it is influential enough that the Communist Party feels threatened. As more and more Chinese rise out of poverty and into the halls of academia and professional life, more and more will desire a real, national set of values. The democracy movement must stand ready to offer that alternative to the newly well-off.

We’ve now come full-circle: we must stop demonizing Chinese economic policy because doing so will not change the situation, which will not solve our debt crisis nor raise the Chinese standard of living; the lack of such an increase in prosperity will ultimately further the repression of political reform in China and inhibit the advance of our interests and human rights globally. We can further our economic desires and the cause of democracy and human rights by taking a reasoned, practical course, and engaging with the Chinese, not cutting them off.

No, the Chinese aren’t this Sinister

leave a comment

James Fallows calls this ad “the first spot from this campaign season you can imagine people actually remembering a decade from now.” Besides its glaring economic inaccuracies, the Chinese in 2030 come off looking rather evil. They’re really, really, really not!

Written by Will

October 22nd, 2010 at 3:14 am

Posted in China,Politics

Tagged with ,

Liu Xiaobo Copied from the Chinese Constitution

leave a comment

Have you heard the joke lately? (from China Geeks)

Hu Jintao: Has Liu Xiaobo confessed yet?

Prosecutors: He’s confessed everything and we’ve corroborated his statements.

Hu Jintao: So [in Charter ‘08] where does he get the phrase “federated republic?”

Prosecutors: This comes from the report of the second congress of the Chinese Communist Party. The original wording was, “establish a free federated republic.” Only, the word “free” is not in the Charter.

Hu Jintao: Then… then, what about the military being made answerable to the national government and not to a political party?

Prosecutors: We’ve looked into it! This comes from The Selected Works of Zhou Enlai. The original wording was, “We must make the military answerable to the national government.” Only, the word “must” is not in the Charter.

Hu Jintao: Then… then … then, where does all that stuff praising Western style democracy come from?

Prosecutors: The Xinhua Daily ran an editorial that read, “America represents a democratic society.” Only, the Charter doesn’t say “America represents.”

Hu Jintao: Then… then… then, what about an end to one party rule?

Prosecutors: This is a slogan from great grandfather Mao when he opposed the Guomindang [the Nationalists]! The original wording of the slogan was, “Topple the one party dictatorship!” [When the Nationalists were vying for power with the Communists, Mao strongly advocated a multi-party government. Failure to create a multi-party state led to civil war.]

Hu Jintao: Then… then… then… then, what about freedom of association, freedom of speech, and a free press?

Prosecutors: These are all part of the Constitution!

Written by Will

October 22nd, 2010 at 3:03 am

No, David Brooks, Do Follow the Money

leave a comment

David Brooks, whom it can be so easy to be disappointed with, answered the wrong question in his column several days ago (at this point – I’m a little late to the party). He starts with the factual that a) there’s been a lot of commentary on the role of money in politics recently, and then pivots to b) this commentary assumes campaign spending influences elections. He then proceeds to explain using numbers how campaign advertisements do little to elect candidates.

This is wrong. Why are journalists and activists complaining about money? The influence that money exerts on legislators! It’s besides the point whether or not the money is actually useful to campaigns. The reality is that regardless of whether it is effective, incumbent legislators spend way too much time on fundraising vs. legislating, and are enmeshed in a system that institutionalizes corruption. “Personal corruption,” as Lawrence Lessig has argued, is not as big a problem anymore (despite the highly-publicized instances of it). Rather, money rears its head in politics in subtler ways.

When representatives spend 70% of their time on the phone with fundraisers (I don’t have the energy to look up the citation, sorry), their attention is not where it should be. Their attention is with the people giving them money. Money buys attention, which subsequently influences legislation. Other patterns of influence surface in the bureaucracy, where drugs are tested for safety using industry-sponsored studies, and the coal industry is left to its own devices, destroying the environment mountain by mountain.

David Brooks, please don’t try to refute a position by misdirection next time.

Written by Will

October 22nd, 2010 at 3:00 am

Posted in Politics

Tagged with ,

Student Protests in Tiananmen Yesterday?

leave a comment

This hasn’t been reported by any foreign media as far as I can see, but yesterday a small (indeterminate number) of protesting students were arrested in Tiananmen Square. I know very little about the nature of the protest and the number arrested – any information that I’ve come upon is incidental and not published.

Written by Will

October 16th, 2010 at 11:38 pm

Posted in China

Tagged with , ,

The Sound of… Bicycling through Austrian Vineyards

leave a comment

But as we wandered past rooster pens and over loamy soil at the Konrad Family farm, I began to believe him. Sure enough, by 11 that morning, as the thermometer was breeching 90 degrees, we were tucked into the Konrad Family’s cool, intimate grotto, drinking a savory gelber muskateller 2009 served by Gabriella, a quiet Austrian whose English was limited to ‘yes,” “no” and “more?”.

Uh… more?


Written by Will

October 16th, 2010 at 11:08 pm

Posted in Travel

Tagged with , ,

“There Is Only So Much I Will Do for the Atlantic”

leave a comment

“I watched the O’Donnell-Coons Delaware “debate” last night. I started watching the Harry Reid – Sharron Angle Nevada version tonight. After the opening statements, I realize: I am not that brave. Where is my beer? Someone tell me how this turns out.” – James Fallows

From China, all of this seems so small. Seconding: where’s my Tsingtao? James Fallows is great.

Posted via email from williamyale’s posterous

Written by Will

October 14th, 2010 at 7:13 pm

“The Poverty of Experience”

leave a comment

Published in the Trinity Tripod.

Martin Peretz, of Harvard University and editor of the magazine The New Republic, recently wrote, “Frankly, Muslim life is cheap, most notably to Muslims.” He added, “I wonder whether I need honor these people and pretend that they are worthy of the privileges of the First Amendment, which I have in my gut the sense that they will abuse.”

A month ago protests sparked over the construction of a Muslim community center, the Cordoba House, several blocks away from the site of the World Trade Center. For two years, a vocal minority of Americans have posted on internet forums and passed on viral emails written loudly in all caps: “BARACK HUSSEIN OBAMA IS A MUSLIM!”

Each of these controversies stem from a stereotypical representation of Islam and its adherents – stereotypes that are bigoted because they aren’t true. From my travels in Xinjiang, China and living amongst Uyghur and Kazakh Muslims, I’ve found that bigoted beliefs can only arise out of a profound “poverty of experience.”

Last week I stayed for a few days in Hemu, a tiny village on the Kazakh, Russian, and Mongol borders. The natural scenery was beautiful, but more important to me were opportunities to speak with local Tuvans (a Mongolian tribe), Uyghurs, and Kazakhs. After spending an afternoon at a school cultural exchange, I learned that Kazakh teenagers are surprisingly good basketball players and admire Kobe Bryant. It’s probably because the basketball courts are the only fun thing in town.

After dinner with the family of the head schoolteacher, they taught us how to dance to the ethno-pop of Shahrizoda (three Uyghur girls who are all the rage in Xinjiang – their music is incessant). The dance was a traditional Kazakh line dance, and very similar to line dances in Texas. We were also served horse milk wine – think sake with a tinge of milk flavor.

The next night, we got to practice our newly-learned line-dancing skills at a dance party. In Hemu. Population: less than 2000.

After all that, how can I ever stereotype a population of one billion people – it’s futile!

I am an avid reader of James Fallows, correspondent for the Atlantic Monthly, who in response to Mr. Peretz wrote, “The real secret of American inclusion through the generations is that when you grow up with, work with, live next to, intermarry with, and in all other ways get to know people from different categories, you have less patience for generalizations about ‘the blacks’ or ‘the Irish’ or ‘the Jews’ or ‘the gays’ or ‘trailer trash’ etc.”

When you come into contact with those unlike yourself and expose yourself to the alien, “poverty of experience” is erased; you cannot be bigoted, because what was once alien you now recognize as familiar.

Not everyone can make the trek to one of the most remote places on earth to learn this lesson – but Americans need not to. My “wealth of experience” includes not just getting to know Kazakh teenagers in Xinjiang, but also growing up and going to school in a racially and socio-economically diverse community. I am sure the Tuvans, Kazakhs, and Uyghurs I’ve met are well-represented by others in the states (not to mention Muslim and Arab cultural groups on this campus). If you have the opportunity to study abroad, it is the best choice you can make, but it is certainly not the only path out of bigotry in this country.