The old-timers in the press gallery know how to defuse an announcement like this. We dust a toolkit from the early Chrétien days off. A Canadian prime minister shows up in a fancy Beijing ballroom with a bunch of business executives wielding Montblanc pens. A big number is being tossed around — say, “$3 billion.” But if we subtract the deals that would have happened anyway, and then subtract the deals that aren’t really deals — then we can wear that number down to some innocuous nub.

But while individual elements of Stephen Harper’s signing ceremony Thursday night in a fancy Beijing ballroom may not pan out, at some point the weight of evidence starts to suggest something real is going on. The evidence at hand comes, not just from Canadian sources, but from Chinese.

The first source of the morning was the semi-official English-language China Daily, which reserves real excitement for vice-premier Xi Jingping’s upcoming trip to the United States but which has been respectful, and a little more than that, toward Stephen Harper all week.

Later in the day came Harper’s bilateral meeting with Hu Jintao. Here, no trace of scolding for time spent posturing in the early years of Harper’s term as prime minister. Now, Hu said, “Mr. Prime Minister, you put a lot of value on Canada’s relationship with China and are strongly committed to promoting the practical cooperation between our two countries. I appreciate your efforts.” Translation: You’re out of the doghouse. Come here, ya big lug.

Update: David Akin contrasts the glowing reviews Harper is getting in the Chinese press this time with his 2009 visit:

I’ve travelled to a lot of spots around the world covering Prime Minister Stephen Harper’s international travels and I cannot recall him ever generating the kind of positive press he’s getting in this morning’s China Daily, the English-language state-run daily newspaper here.

A picture of Harper chatting with Chinese chess players during a visit Wednesday to the Temple of Heaven is the front-page top-of-the-fold main art here with a generally positive article about the two countries improving trade relationship. Inside, there’s two other pieces involving Canada and Harper.

[. . .]

Read between the lines here and China’s government is approvingly showing Canada’s prime minister to be a decent, pious individual deserving of China’s friendship and support.

That’s a sharp contrast to the China Daily‘s coverage of Harper’s 2009 visit. There was front-page coverage then too — of how Premier Wen dressed down Harper for letting the China-Canada relationship languish. The narrative in 2009 was that the Canadian prime minister was a wayward supplicant coming to China to seek forgiveness for his sins. Not this time: He is being profiled in the press as the leader “of a strong delegation of five ministers and 40 business leaders” who, along with Wen, witnessd “the signing of nine deals.” The reader of the China Daily on this Harper visit is meant to be impressed.

Timber company Sino-Forest is locked in a fascinating battle for survival against Carson Block, a stock analyst with a mixed record of publicity attacks on Chinese-based enterprises. With professional analysts reluctant to say what they make of Block’s “strong sell” report on Sino-Forest, I’m in no position to endorse it as a piece of financial advice or investigative journalism. Considered strictly as entertainment, however, the report is remarkable.

Block has documented that Sino-Forest operates with extraordinary opacity for a company whose holdings are surely very widely distributed — particularly, one assumes, within Canada. Sino-Forest claims to be doing hundreds of millions of dollars’ worth of sales through mostly unidentified “authorized intermediaries” in China — traders who are apparently happy to let the company buy title to trees, hold them as they appreciate, take on the bulk of the costs and risks in the meantime, and then snap up revenues when the trees are eventually converted into wood products. Block, having poked around a bit in the literal Chinese backwoods, questions whether much if any of the reported underlying activity is happening.

[. . .]

Sino-Forest is refusing, despite intense pressure, to make a full disclosure of the identities of the “authorized intermediaries” who are making its money. The company claims that to do so would put it at a competitive disadvantage, which makes one wonder why its business model ought to depend so heavily on sheer obscurity. One possible answer is that Sino-Forest’s real, fundamental business is some sort of cryptic regulatory arbitrage; that seems like a game potentially worth playing with paper assets in places that have a strong rule of law, but it is surely a dangerous one in a nominally Communist country, where a nationalization could be arranged in the space of an afternoon. (Or where some regional Party functionary could simply be bribed to “lose” crucial paperwork.)

Today, he posted a follow-up report:

Could a curious investor look at actual maps of timber controlled by Sino-Forest agents, you ask? Well, you see, it’s not exactly kosher for foreigners to carry around maps of remote parts of China. You can borrow them from forestry officials if you really need to. Will the local forestry bureaus confirm Sino-Forest’s claims about plantations operated by its agents? Well, sometimes they’ll give you a certificate of sorts, for all the good it might do. “The confirmations are not title documents, in the Western sense of that term,” the committee report notes. (As I understand it, the Western meaning of “title document” is that it gives one an unquestioned, justiciable claim to ownership of something, whether the Party or the Army or the good Lord in heaven approve or not.)

[. . .]

The impression given is that you need influential “backers” to do business in China. The question for the Western investor, though it’s probably now moot, is whether the real role of these backers is to help exploit Chinese resources for the benefit of the Western shareholders or to help fleece Western shareholders for the benefit of Chinese suppliers and bureaucrats.

As Jon, my former virtual landlord puts it, this is a hobby horse I like to ride now and again.

In fall 2009, I sat in a large auditorium festooned with red banners and watched as Robin Li, CEO of Baidu, China’s dominant search engine, paraded onstage with executives from 19 other companies to receive the “China Internet Self-Discipline Award.” Officials from the quasi-governmental Internet Society of China praised them for fostering “harmonious and healthy Internet development.” In the Chinese regulatory context, “healthy” is a euphemism for “porn-free” and “crime-free.” “Harmonious” implies prevention of activity that would provoke social or political disharmony.

China’s censorship system is complex and multilayered. The outer layer is generally known as the “great firewall” of China, through which hundreds of thousands of websites are blocked from view on the Chinese Internet. What this system means in practice is that when one goes online from an ordinary commercial Internet connection inside China and tries to visit a website such as hrw.org, the website belonging to Human Rights Watch, the web browser shows an error message saying, “This page cannot be found.” This blocking is easily accomplished because the global Internet connects to the Chinese Internet through only eight “gateways,” which are easily “filtered.” At each gateway, as well as among all the different Internet service providers within China, Internet routers — the devices that move the data back and forth between different computer networks — are all configured to block long lists of website addresses and politically sensitive keywords.

These blocks can be circumvented by people who know how to use anti-censorship software tools. It is impossible to conduct accurate usage surveys, but it is believed likely that hundreds of thousands of Chinese Internet users deploy these tools to access Twitter and Facebook every day. Yet researchers estimate that out of China’s 500 million Internet users, only about 1% or so (a number somewhere in the single-digit millions — still a large number of people but not enough percentage-wise to shape majority public opinion) use these tools to get around censorship, either because most do not know how or because they lack sufficient interest in, or awareness of, what exists on the other side of the “great firewall.”

In hindsight, Stephen Harper’s new fight against the world’s oil sands detractors was a long time coming. Last November in Vancouver, the Prime Minister gave a local television interview in which he warned that “significant American interests” would be “trying to line up against the Northern Gateway project,” Enbridge’s proposed $3.5-billion double pipeline from near Edmonton to a new port at Kitimat, B.C.

“They’ll funnel money through environmental groups and others in order to try to slow it down,” Harper told his hosts. “But, as I say, we’ll make sure that the best interests of Canada are protected.”

In early November, U.S. President Barack Obama announced he was putting off final approval of TransCanada’s $7-billion Keystone XL pipeline until after this November’s presidential election. Harper has long viewed Obama as an unsteady ally. Now he’d had enough. “I’m sorry, the damage has been done,” he told CTV before Christmas. “And we’re going to make sure we diversify our energy exports.”

Why has China as we know it survived? First and foremost, the Chinese central government has managed to avoid adhering to many of its obligations made when it joined the WTO in 2001 to open its economy and play by the rules, and the international community maintained a generally tolerant attitude toward this noncompliant behavior. As a result, Beijing has been able to protect much of its home market from foreign competitors while ramping up exports.

[. . .]

Don’t believe any of this. China outperformed other countries because it was in a three-decade upward supercycle, principally for three reasons. First, there were Deng Xiaoping’s transformational “reform and opening up” policies, first implemented in the late 1970s. Second, Deng’s era of change coincided with the end of the Cold War, which brought about the elimination of political barriers to international commerce. Third, all of this took place while China was benefiting from its “demographic dividend,” an extraordinary bulge in the workforce.

Yet China’s “sweet spot” is over because, in recent years, the conditions that created it either disappeared or will soon. First, the Communist Party has turned its back on Deng’s progressive policies. Hu Jintao, the current leader, is presiding over an era marked by, on balance, the reversal of reform. There has been, especially since 2008, a partial renationalization of the economy and a marked narrowing of opportunities for foreign business. For example, Beijing blocked acquisitions by foreigners, erected new barriers like the “indigenous innovation” rules, and harassed market-leading companies like Google. Strengthening “national champion” state enterprises at the expense of others, Hu has abandoned the economic paradigm that made his country successful.

Second, the global boom of the last two decades ended in 2008 when markets around the world crashed. The tumultuous events of that year brought to a close an unusually benign period during which countries attempted to integrate China into the international system and therefore tolerated its mercantilist policies. Now, however, every nation wants to export more and, in an era of protectionism or of managed trade, China will not be able to export its way to prosperity like it did during the Asian financial crisis in the late 1990s. China is more dependent on international commerce than almost any other nation, so trade friction — or even declining global demand — will hurt it more than others. The country, for instance, could be the biggest victim of the eurozone crisis.

Third, China, which during its reform era had one of the best demographic profiles of any nation, will soon have one of the worst. The Chinese workforce will level off in about 2013, perhaps 2014, according to both Chinese and foreign demographers, but the effect is already being felt as wages rise, a trend that will eventually make the country’s factories uncompetitive. China, strangely enough, is running out of people to move to cities, work in factories, and power its economy. Demography may not be destiny, but it will now create high barriers for growth.

H/T to Chris Myrick for the link.

The Philippines is asking the U.S. for some used F-16 jet fighters. The Philippines is broke, so the proposed deal is for free F-16s, with the Philippines paying for any upgrades or modifications needed for service in the Philippines Air Force. Normally, the Philippines has no practical need for a jet fighter force. But this has changed because of possible clashes with China, the Filipinos are being practical. China is claiming Filipino territorial waters, including places where the Philippines authorized drilling for oil and gas. The Philippines could never afford to buy, or even just maintain warplanes sufficient to deal with a Chinese air threat. The Philippines depends on its friendship with the United States for protection. American warplanes provide better protection than any jet fighters the Philippines could put in the air. But the Philippines would like a dozen or so F-16s just so they can chase away Chinese warplanes that increasingly fly into Filipino air space.

Six years ago, the Philippines removed from service its eight F-5 fighters. These 1960s era aircraft were not much of a match for more recent warplanes, and were expensive to maintain. In the meantime, the Philippines has been using armed trainer aircraft for strikes against Moslem and communist rebels.

A US satellite company says it has taken a photograph of China’s first aircraft carrier during trials in the Yellow Sea.

It is believed to be the first time the 300-metre ship, a refitted former Soviet carrier, has been photographed at sea since it was launched in August.

DigitalGlobe said one of its satellites took the picture on 8 December and an analyst at the firm spotted the ship this week while searching through images.

Stephen Wood, director of DigitalGlobe’s analysis centre, said he was confident the ship was the Chinese carrier because of the location and date of the image. The carrier has generated intense international interest because of what it might portend about China’s intentions as a military power.

The former Soviet Union started building the carrier, which it called the Varyag, but never finished it. When the USSR collapsed, the ship ended up in Ukraine.

For the first time on record, the Chinese Communist party has lost all control, with the population of 20,000 in this southern fishing village now in open revolt.

The last of Wukan’s dozen party officials fled on Monday after thousands of people blocked armed police from retaking the village, standing firm against tear gas and water cannons.

Since then, the police have retreated to a roadblock, some three miles away, in order to prevent food and water from entering, and villagers from leaving. Wukan’s fishing fleet, its main source of income, has also been stopped from leaving harbour.

The plan appears to be to lay siege to Wukan and choke a rebellion which began three months ago when an angry mob, incensed at having the village’s land sold off, rampaged through the streets and overturned cars.

Of course, one of the reasons we rarely hear about protests of this nature is that the Chinese government actively suppresses media coverage. This is only coming to our attention because western journalists are there and able to communicate with their employers.

H/T to Jon, my former virtual landlord, who commented “You have to admire these 20,000 future organ donors for their intestinal fortitude”.

It was a contest over smog that was being fought across two social networks in two completely different languages between two contenders separated by the world’s biggest firewall. At stake was the authority to define “unhealthy air” and, as a result, to shape public perceptions and expectations.

On one side was an automated air quality monitoring station set up by the US embassy in Beijing that issues hourly updates via Twitter on the @beijingair account. It states the date, time, pollutions readings for ozone and PM2.5 and a terse English summary of the health implications. At 8am, it read “very unhealthy” — an improvement on the “hazardous” level of the previous day and the alarming “beyond index” of last Friday.

On the other side was the personal microblog of Du Shaozhong, the deputy director of the Beijing Municipal Environmental Protection Administration, who has taken his passionate defence of the city’s policies onto China’s most influential website, Sina Weibo. One of his most recent posts read: “It is understandable if people hate bad weather, but venting your emotions is not helpful.”

To be clear, Andy Stern believes that the United States needs a Chinese-style central plan to flourish, one that will be executed by a streamlined government.

To really learn from the Chinese, and to enjoy such staggering growth rates, we should go about things differently: let’s have a Maoist insurrection followed by a civil war that lasts for several years. Then let’s destroy most of the wealth in the country, and drive out millions of our most enterprising and educated citizens by launching systematic terror campaigns during which millions of others will die in violence or of starvation. Next, let’s have a modest economic opening in coastal regions: impoverished citizens will be allowed to launch small-scale township and village enterprises and components will be assembled in a handful of cities by our stunted descendants. Then let’s severely curb those township and village enterprises because they represent a potential political threat and invite large foreign multinationals and state-owned enterprises [let's not forget those!] to work our population to the bone at artificially suppressed wage rates, threatening those who complain with serious reprisals up to and including death. Let us also initiate a population control policy designed to improve our dependency ratio for a few decades. As large numbers of workers shift from low-value agricultural work to manufacturing, we will experience . . . rapid growth! Mind you, getting from here to there will involve destroying an enormous swathe of our present-day GDP. And that sectoral shift from rural to urban work will run out of gas pretty fast, as will the population control policy that will guarantee rapid aging.

Reihan Salam, “Andy Stern’s Peculiar Idea”, National Review Online, 2011-12-03