Quotulatiousness

March 24, 2011

China’s “sexy spies” score another intelligence goal

Filed under: China, Japan, Military, Technology — Tags: , — Nicholas @ 09:52

Strategy Page says that the Chinese are “probably the most enthusiastic, and successful, users of this technique these days”:

China is widely known to use sex to obtain secrets from foreigners, inside and outside of China. Four years ago, Japan uncovered a widespread Chinese effort to use sex to steal military technology. Attractive Chinese female intelligence agents in Japan were marrying members of the Japanese armed forces, and then using that access to obtain military secrets. The situation was complicated by the military attempts to keep these “embarrassing incidents” secret. The government was particularly anxious to keep the Americans in the dark about all this, since the Chinese apparently got their hands on Aegis anti-aircraft system technology via their sexy spies.

Actually, most of the Chinese agents don’t have to marry Japanese troops. Just putting out usually does the trick. In Japan, the military doesn’t get much respect, and many of the bases are in backwaters. So the troops are pretty lonely. It’s not unusual for Chinese women to be in the country, as many come, legally or illegally, looking for jobs. The set-up is perfect for using the old “honey pot” (sexual entrapment) routine to extract military secrets.

The military geeks are the most sought after, as these guys have access to the most valuable military secrets. Geeks tend to be least experienced with women, and most vulnerable to a clever, and shapely, Chinese spy. Military commanders are not sure if they have the problem under control, but now that the situation is out in the open, there will be more efforts to tighten up security. As the Japanese expected, the Americans were not amused. And the Chinese honey pot scandal was apparently one reason for refusing to sell F-22s to Japan. To make matters worse, part of the Japanese cover-up involved prosecuting the Chinese spies on immigration, not espionage, charges.

March 23, 2011

Latest outlet for excess Chinese investment money: Bordeaux wineries

Filed under: China, Economics, Europe, France, Wine — Tags: — Nicholas @ 07:53

Running out of interesting investment opportunities? Some Chinese investors are moving into French wineries:

Walking among the ancient vines at Château de Malle, De Bournazel said many families struggled to make ends meet. “Nobody sells for pleasure, but you would struggle to find a chateau that wouldn’t sell for the right price. It’s sad, but I’d rather see families sell to the Chinese than tear themselves apart trying to keep a property.”

Rather than being viewed as conquerors, Chinese wine buyers are seen as saviours of the region — last year China overtook both Germany and the UK to become Bordeaux’s biggest customer, with exports growing by 67%. Bernard Farges, president of the Conseil Interprofessionnel du Vin de Bordeaux (CIVB), the body representing its wine growers and buyers, said Chinese investors buying vineyards would boost exports further.

“These are businessmen who believe in their investment, who are opening doors to a new market and ploughing money into properties to make great wine,” he said.

Others argue that the Chinese are simply the latest in a long line of foreign investors — including the Dutch, the English and the Danes — in Bordeaux.

That last part is certainly true: although you may not realize it, many of the wineries in the Bordeaux region have been foreign-owned for generations. The nationality of the foreign owners may change, but the principal is the same.

Of course, regardless of ownership, if the investors don’t maintain the property, they risk ruining their chances of benefitting from the purchase:

Not everyone is supportive of this new breed of Bordelais. Patrick Etineau recently sold Château de la Salle to a Chinese investor amid a storm of acrimony. “I found them very condescending,” he said. “They have the money and they think we are in penury.”

He says since the chateau was sold in January the vines have been left largely untended. “I was happy to sell, because I couldn’t maintain the property, but now I have the impression that they don’t care at all. We used to make beautiful wine, but this year I fear it will only be fit for the pigs.”

March 17, 2011

Industrial espionage, Chinese style

Filed under: China, Military, Technology, USA — Tags: , , — Nicholas @ 09:38

Another good post at Strategy Page on the recent uptick in detection of Chinese industrial spies in the United States, and how this may not be a result of more successful anti-espionage efforts by the FBI or CIA — it may just be a by-product of stepped up efforts by China’s intelligence services:

For over two decades, China has been attempting to do what the Soviet Union never accomplished; steal Western technology, then use it to move ahead of the West. The Soviets lacked the many essential supporting industries found in the West (most founded and run by entrepreneurs), and was never able to get all the many pieces needed to match Western technical accomplishments. Soviet copies of American computers, for example, were crude, less reliable and less powerful. Same with their jet fighters, tanks and warships.

China gets around this by making it profitable for Western firms to set up factories in China, where Chinese managers and workers can be taught how to make things right. At the same time. China allows thousands of their best students to go to the United States to study. While most of these students will stay in America, where there are better jobs and more opportunities, some will come back to China, and bring American business and technical skills with them. Finally, China energetically uses the “thousand grains of sand” approach to espionage. This involves China trying to get all Chinese going overseas, and those of Chinese ancestry living outside the motherland, to spy for China, if only a tiny bit.

This approach to espionage is nothing new. Other nations have used similar systems for centuries. What is unusual is the scale of the Chinese effort. Backing it all up is a Chinese intelligence bureaucracy back home that is huge, with nearly 100,000 people working just to keep track of the many Chinese overseas, and what they could, or should, be to trying to grab for the motherland. It begins when Chinese intelligence officials examining who is going overseas, and for what purpose. Chinese citizens cannot leave the country, legally, without the state security organizations being notified. The intel people are not being asked to give permission. They are being alerted in case they want to have a talk with students, tourists or business people before they leave the country. Interviews are often held when these people come back as well.

Those who might be coming in contact with useful information are asked to remember what they saw, or bring back souvenirs. Over 100,000 Chinese students go off to foreign universities each year. Even more go abroad as tourists or on business. Most of these people were not asked to actually act as spies, but simply to share, with Chinese government officials (who are not always identified as intelligence personnel) whatever information was obtained. The more ambitious of these people are getting caught and prosecuted. But the majority, who are quite casual, and, individually, bring back relatively little, are almost impossible to catch.

March 15, 2011

Shang-Jin Wei on the Chinese sex imbalance and its economic impact

Filed under: China, Economics, Government — Tags: , , — Nicholas @ 12:19

China’s one-child policy not only intruded into the personal lives of Chinese couples, but it may also have been a key contributor to the economic bubble:

Could a reproductive policy have caused the financial crisis? Could it still be wreaking havoc with the world economy? During a lively discussion at the Council on Foreign Relations yesterday, Columbia professor Shang-Jin Wei said this could be the case. He claimed that the skewed Chinese sex ratio (there are more men than women) can explain much of global trade imbalances. Mr Wei reckons the Chinese sex ratio can explain the high Chinese saving rate, and this is what’s behind China’s current-account surplus.

China adopted the one child law in the early 1980s. It resulted in a skewed sex ratio because many couples preferred a male baby and aborted female fetuses. In 1980, 106 boys were born were born for every 100 girls. By 1997, it was 122 boys for every 100 girls. This means that today one in nine Chinese men will probably never marry and the situation is expected to get worse as time goes on. It’s been suggested that the large pool of single men with no marriage prospects can lead to social unrest. What that will mean for China’s political future is uncertain and potentially troubling. But the world may already be experiencing the economic impact of this policy. Trade imbalances, specifically the Chinese current account surplus and America’s current account deficit, are often cited as a cause of the financial crisis. They provided a glut of cheap, easy capital which fed the housing bubble.

[. . .]

The lack of a social safety net is often blamed for the high Chinese saving rate. Without welfare and government pensions the Chinese must save to self-insure themselves. But Mr Wei pointed out that even as the government has extended more social welfare programmes, the saving rate has continued to rise. He believes the uneven sex ratio can explain half of the increase in private saving between 1990 and 2005. He explained that the marriage market is becoming very competitive with so few girls. Chinese parents want to accumulate as much wealth as possible to ensure that their son can attract a wife. It is also important to provide sons with the best education possible. A competitive marriage market means that members of the disadvantaged gender must raise their game, which in China means greater wealth and education.

Mr Wei also reckons the sex ratio can explain capital accumulation in the corporate sector. The desire to accumulate wealth means that boys and their parents are more likely to become entrepreneurs, work more hours and take more unpleasant jobs. He found higher rates of entrepreneurship in areas with more skewed sex ratios.

This, of course, is the optimistic view of things. The pessimistic view involves those tens of millions of men who can never find wives and projects that into social unrest, civil disorder, and military adventurism. Let’s hope the optimistic view is closer to being correct.

February 19, 2011

When “hacker army” is not an exaggeration

Filed under: Britain, China, Government, Military, Russia, Technology — Tags: , , , , , — Nicholas @ 10:07

Strategy Page counts noses of the various semi-organized hacker armies out in the wild:

Despite spending over a billion dollars a year defending their government networks, Britain recently complained openly of hackers getting into the communications network of the Foreign Office. The government also warned of increasing attacks on British companies. The recent attacks government and corporations were all targeting specific people and data. While China was not mentioned in these official announcements, British officials have often discussed how investigations of recent hacking efforts tended to lead back to China. There is also a strong suspicion, backed up by hacker chatter, that governments are offering large bounties for information from foreign governments. Not information from China, but from everyone else.

China one of many nations taking advantage of the Internet to encourage, or even organize, patriotic Internet users to obtain hacking services. This enables the government to use (often informally) these thousands of hackers to attack targets (foreign or domestic.) These government organizations arrange training and mentoring to improve the skills of group members. Turkey has over 45,000 of hackers organized this way, Saudi Arabia has over 100,000, Iraq has over 40,000, Russia over 100,000 and China, over 400,000. While many of these Cyber Warriors are rank amateurs, even the least skilled can be given simple tasks. And out of their ranks will emerge more skilled hackers, who can do some real damage. These hacker militias have also led to the use of mercenary hacker groups, who will go looking for specific secrets, for a price. Chinese companies are apparently major users of such services, judging from the pattern of recent hacking activity, and the fact that Chinese firms don’t have to fear prosecution for using such methods.

It was China that really pioneered the militia activity. It all began in the late 1990s, when the Chinese Defense Ministry established the “NET Force.” This was initially a research organization, which was to measure China’s vulnerability to attacks via the Internet. Soon this led to examining the vulnerability of other countries, especially the United States, Japan and South Korea (all nations that were heavy Internet users). NET Force has continued to grow. NET Force was soon joined by an irregular civilian militia; the “Red Hackers Union” (RHU). These are nearly half a million patriotic Chinese programmers, Internet engineers and users who wished to assist the motherland, and put the hurt, via the Internet, on those who threaten or insult China. The RHU began spontaneously in 1999 (after the U.S. accidentally bombed the Chinese embassy in Serbia), but the government has assumed some control, without turning the voluntary organization into another bureaucracy. The literal name of the group is “Red Honkers Union,” with Honker meaning “guest” in Chinese. But these were all Internet nerds out to avenge insults to the motherland.

You have to wonder how many script kiddies ever thought they’d end up being government operatives.

February 18, 2011

The internet in China: hidden powers of persuasion

Filed under: China, Government, Technology — Tags: , , , , — Nicholas @ 08:52

A look at how the internet in China has the power to (sometimes) punish corrupt officials and influence the government:

Corruption and viral marketing has provided the Chinese government with a powerful tool for controlling public opinion. It all began when Chinese companies realized that they could hurt competitors by planting damaging rumors on the Internet. This, even in China, is illegal. But the corruption in China being what it is, there was little risk of getting the police to hunt down and punish the perpetrators. This was partly because the marketing firms, hired by companies to burnish their image, or defame competitors, was careful to have other small outfits get on the Internet to actually do the work, and be careful to not be traceable. So the cops, when forced by companies to do something (often because the owner of the offended firm was well-connected politically), were stymied at first. But the police, declaring it a national security issue, eventually discovered how this was done. But this did not stop all these negative campaigns. To defend themselves, companies that were attacked by these Internet disinformation campaigns, fought back.

This use of negative tactics soon fell out of favor, as all those tarnished companies lost sales. So these Internet based opinion manipulation turned to praising your own products. About this time, the government discovered what was going on, and began to use these marketing companies, and their subcontractors, to change opinions towards government policies. There was a pressing need for this, because all this Internet opinion manipulation had started out, over the last decade, as a popular uprising against government corruption, mistreatment and media manipulation. This “online army” was not organized, except by outrage at government, or individual, wrongdoing. For example, many government officials, and their high-spirited offspring, injure or steal from ordinary citizens, and get away with it. These officials have enough political clout to make the police leave them alone. But once the online army gets onto these stories, everyone in the country knows, and is angry. There are over 400 million Internet users in China, a country of 1,400 million. When a lot of people on the Internet get angry enough, the story, and anger, explodes through the Chinese Internet community. China carefully monitors Chinese Internet use, and tries to block unwelcome information or discussions. But when the outrage on a particular item becomes too large, it’s better to just arrest and punish the guy whose misbehavior got the online army going in the first place.

Who knew that sockpuppeting would be such a valuable online tactic in China? It might not just be limited to China, however:

If the Chinese wanted to use this tool in other countries, they would require posters who are familiar with the language and culture of the target population. That’s difficult skill to acquire, especially for at least a few hundred posters required (to hit, regularly, hundreds of message boards, chat rooms and so on). Done right, you can shift opinions among millions of people in a few days. Done wrong, you fail. And if you’re operating in a foreign country, you might get found out. But the opportunity is there.

February 17, 2011

Victor Shih interview on China’s economy

Filed under: China, Economics, Military, Politics — Tags: , , , , — Nicholas @ 07:35

The Browser interviews Victor Shih:

What do people get most wrong when they think of the Chinese economy?

The biggest misperception about China is that it’s a dynamic market economy — it isn’t. It’s a fast-growing, state-dominated economy with some dynamic, private-market aspects. If you look at investment, a main driver of growth, much of it is going to state-owned enterprises (SOEs) or shareholding companies dominated by state entities. Or it’s going directly to government investments carried out at a central or local level. The misperception has abated recently following Richard McGregor’s book on the Chinese Communist Party. People are realising that the party is still behind much of what happens in China.

[. . .]

Your first choice is Yasheng Huang’s Capitalism with Chinese Characteristics. I believe this book successfully demolishes the idea that China is developing a new economic model called ‘market authoritarianism’.

I think Yasheng goes a little too far with some of his claims. But the broad outline is correct. There was a period of healthy organic growth in the 80s, driven by the de facto private sector. Many township and village enterprises were collectives or owned by the local government. But in reality they were private enterprises. This changed in the mid-90s, especially with the adoption of the ‘grasping the large and letting the small go’ policy that circumvented the special interests in the state sector. When Deng Xiaoping was alive, his executive vice premier, Zhu Rongji, wanted to bankrupt or merge many of the smaller state-owned enterprises into larger ones. It was a political tactic to further reform. And it worked.

The problem was that it created these giant, state-owned enterprises. Recent statistics reveal the state sector made a profit of 2 trillion renminbi last year, of which the 122 largest SOEs made 1.35 trillion. They have combined assets of over 10 trillion dollars and have become an enormously resourceful and powerful interest group. Their CEOs have numerous ties with top political leaders and sit on the party’s central committee. Most bank loans, issued bonds and stock-listing proceeds in the system go to these conglomerates. There’s still a private sector but it has been squeezed tremendously, especially in the last two years.

[. . .]

Most investment bankers like to talk things up, but that’s not something we can accuse Carl of doing.

By the late 90s, China’s banks were technically insolvent because the non-performing loans ratio was 40 to 50 per cent. Carl’s still a big fan of Zhu Rongji, the former prime minister. One of Zhu’s greatest achievements was to ‘solve’ the problems in the banking sector by setting up asset-management companies and recapitalising the banks. Today, of course, the banks are still lending very recklessly despite a lot of reform — the formation of credit and risk-management committees, for example. The banks continue to require bailouts and recapitalisation from the Chinese government, which props them up so that they can sell these bank shares to the public in Hong Kong or Shanghai. Carl sees this process as a kind of Ponzi scheme.

February 3, 2011

Urban China: growth market for luxury goods

Filed under: China, Economics — Tags: , — Nicholas @ 07:42

The most liberalized areas of China have become a magnet for the purveyors of ostentatious luxury items:

The Chinese may have an age-old reputation as great savers, but China’s young people are now making up for generations of lost spending time.

Compared with the austere youth of China’s older generations, who went through the turmoil of the Cultural Revolution and strove to build savings in a nation without a social safety net, the young, raised in an unprecedentedly wealthy China, are spending freely.

[. . .]

As the world’s fastest growing luxury market, China’s appetite for high-end Western branded goods is fast becoming insatiable, with predictions by Boston Consulting Group suggesting that within five years, 29 percent of global luxury product consumption will come from China. And while European and US luxury sales are making a slow recovery after the global financial crisis, China—relatively untouched and still optimistic—remains the most important market for luxury retailers. Indeed, this was the theme behind last year’s 5th Annual China Luxury Summit, which was given the grandiose subtitle of ‘China Luxury Market: An Oasis of Hope and Possibility’.

China as the deus ex machina of the luxury world is a concept familiar to European retailers. Last Saturday, for example, the Italian luxury brand Prada staged its first fashion show in Beijing. Like French cosmetics and perfume brand L’Occitane, which listed in Hong Kong last year, Prada is expected to have an initial public offering in Hong Kong.

No need to reiterate that this is only a phenomenon in the urbanized areas of China: the vast majority of Chinese consumers are unable to access the fast growing markets and still live to a large extent under the direct control of the party.

January 27, 2011

Viewing the new plutocrats: Indian and Chinese variants

Filed under: China, Economics, Government, India — Tags: , — Nicholas @ 07:40

The Economist has a compare-and-contrast piece on how the ultra-rich are viewed in India and in China:

India’s movers and shakers all seem to know each other. The Indian elite have created their own islands, frowns a cabinet minister: “It’s a bit unhealthy.” They send their kids to private schools. They have their own water and electricity. So they barely notice how bad the government is at delivering power, water and schooling to the other 1.2 billion Indians.

Yet to many Indians the nation’s tycoons are heroes. A few made their fortunes corruptly, but the software moguls of Bangalore created a huge export industry out of nothing, and many others helped to spur India’s galloping growth. Ratan Tata, the soon-to-retire boss of a conglomerate that produces everything from tea to cars, lives modestly and treats his employees well. The brothers Anil and Mukesh Ambani are more controversial, but they have turned the family business into two global giants, with interests from chemicals to entertainment.

Some Indian gazillionaires are flashy. Mukesh Ambani’s house has 27 stories, three helipads and three floors of hanging gardens. Vijay Mallya, a beer-and-airlines magnate, constantly amuses the newspaper-reading public with his speedboats and sports teams. But for most of the country’s elite the most conspicuous item of consumption is sending their children to university in America.

India’s super-rich are very different from their Chinese counterparts, however:

The relationship between rich and poor in China is different. China’s stellar growth has lifted some 500m people out of poverty. Much of the credit belongs to Chinese entrepreneurs. Since Mao’s boot was lifted from their necks, they have built marvels, from the skyscrapers of Shanghai to the factories of Guangdong. Yet mainland Chinese business leaders operate in the shadow of a secretive and unaccountable ruling party. To get on, many join it. Some do so reluctantly, to avoid being crushed. Others do so gladly, hoping to use the power of the state to enrich themselves.

Individual party members are not entirely above the law. If a local bigwig behaves so appallingly that the resulting protests are heard in Beijing, the party may cut him down to size. In October last year the son of Li Gang, a senior police officer in Baoding, killed a pedestrian while allegedly drink-driving. He sped off, shouting, “report me if you dare; my dad is Li Gang!”

News of the incident went viral in the Chinese blogosphere. Pop songs with the refrain “My dad is Li Gang!” quickly circulated. Li Gang was forced to make a televised apology. His son was arrested. China’s leaders would like the 95% of the population who are not members to think that the party cares. But the most revealing fact is that Mr Li junior evidently thought he could get away it.

January 26, 2011

Nostalgia for the Dreadnought era?

Filed under: China, Economics, Germany, History, WW1 — Tags: — Nicholas @ 09:03

Ambrose Evans-Pritchard finds the parallels between the rise of Imperial Germany in the years leading up to the first world war and attitudes toward China today:

And we all learned how the Kaiser overplayed his hand. That much was obvious.

Yet it is difficult to pin-point exactly when the normal pattern of great power jostling began to metamorphose into something more dangerous, leading to two rival, entrenched, and heavily armed alliance structures unable or unwilling to avert the drift towards conflict. The Long Peace died by a thousand cuts, a snub here, a Dreadnought there, the race for oil.

[. . .]

Is China now where Germany was in 1900? Possibly. There are certainly hints of menace from some quarters in Beijing. Defence minister Liang Guanglie said over New Year that China’s armed forces are “pushing forward preparations for military conflict in every strategic direction”.

Professor Huang Jing from Singapore’s Lee Kwan Yew School and a former adviser to China’s Army, said Beijing is losing its grip on the colonels.

“The young officers are taking control of strategy and it is like young officers in Japan in the 1930s. This is very dangerous. They are on a collision course with a US-dominated system,” he said.

The problem with drawing parallels from history is that it’s never as neat and clean-cut as you’d expect. First, China is supposed to be like Kaiser Wilhelm’s Germany, then more like Japan after WW1. I have to say I’m not totally following this line of thought. But, getting back to today’s situation:

There is a new edge to Chinese naval policy in the South China Sea, causing Japan, Vietnam, Indonesia, and the Philippines to cleave closer to the US alliance. Has Beijing studied how German naval ambitions upset the careful diplomatic legacy of Bismarck and pushed an ambivalent Britain towards the Entente, even to the point of accepting alliance with Tsarist autocracy?

Factions in Beijing appear to think that China will win a trade war if Washington ever imposes sanctions to counter Chinese mercantilism. That is a fatal misjudgement. The lesson of Smoot-Hawley and the 1930s is that surplus states suffer crippling depressions when the guillotine comes down on free trade; while deficit states can muddle through, reviving their industries behind barriers. Demand is the most precious commodity of all in a world of excess supply.

H/T to Jon, my former virtual landlord, for the link.

January 23, 2011

Lawrence Solomon on the coming crash in China

Filed under: China, Economics, Government — Tags: , , — Nicholas @ 12:17

If you think I’ve been too chipper and dismissive on the medium-to-long term issues that could cause a Chinese meltdown, you’ll enjoy Lawrence Solomon’s article:

In China, the resentments are palpable. Many of the 300 million people who have risen out of poverty flaunt their new wealth, often egregiously so. This is especially so with the new class of rich, all but non-existent just a few years ago, which now includes some 500,000 millionaires and 200 billionaires. Worse, the gap between rich and poor has been increasing. Ominously, the bottom billion views as illegitimate the wealth of the top 300 million.

How did so many become so rich so quickly? For the most part, through corruption. Twenty years ago, the Communist Party decided that “getting rich is glorious,” giving the green light to lawless capitalism. The rulers in China started by awarding themselves and their families the lion’s share of the state’s resources in the guise of privatization, and by selling licences and other access to the economy to cronies in exchange for bribes. The system of corruption, and the public acceptance of corruption, is now pervasive — even minor officials in government backwaters are now able to enrich themselves handsomely.

[. . .]

The corruption extends to the enforcement of regulatory standards for health and safety, which few in China trust. In recent years China has endured a tainted milk scandal and a tainted blood scandal, each of which implicated corrupt officials in widespread death and debilitation. In a devastating 2008 earthquake, some 90,000 perished, one-third of them children buried alive in 7,000 shoddily built “tofu schools” that skimped on materials. Nearby buildings for the elites that met building standards, including a school for the children of the rich, were largely unscathed.

[. . .]

China is a powder keg that could explode at any moment. And if it does explode, chaos could ensue — as the Chinese are only too well aware, the country has a brutal history of carnage at the hands of unruly mobs. For this reason, corrupt officials inside China, likely by the tens of thousands, have made contingency plans, obtaining foreign passports, buying second homes abroad, establishing their families and businesses abroad, or otherwise planning their escapes. Also for this reason, much of the middle class supports the government’s increasingly repressive efforts.

Compared to my rather milder criticisms, this is strong stuff indeed.

H/T to my former virtual landlord for the link, who referred to this as my “hobby horse in full gallop”.

January 21, 2011

Remaking Red Dawn as a metaphor for US fear of China

Filed under: China, Economics, Media, USA — Tags: , , , , — Nicholas @ 12:59

David Harsanyi notes the remake of the 1980’s movie Red Dawn with the Chinese taking the place of the original film’s Soviet and Cuban troops:

Doubtlessly, the remake will be entertaining and offer a far more plausible plot line than the original — seeing that the Chinese, well, they have a proper army. Producers will almost certainly capitalize on a growing alarmism regarding China’s growth. Few issues, in fact, can bring right and left together in this polarized world of ours than a shared knowledge that China is bad news.

Now, the American populace can typically be divided into two categories: 1. Those who don’t care one whit about foreign policy. 2. Newspaper editors.

So before Chinese President Hu Jintao was here meeting with the president, Andrew Kohut of the Pew Research Center took to the pages of The Wall Street Journal and explained what we think about the topic.

Apparently, 47 percent of those he surveyed cited China as the world’s top economic power. (Only 31 percent properly identified it as the U.S., which has an economy nearly three times the size.) Another Pew survey from last year found that 47 percent of us consider China’s growth a “bad thing” for the United States. A new CNN poll found that 58 percent of us believe that China’s “wealth and economic power” are a threat to the U.S.

I’m certain our relationship with China is layered with international complexity and fraught with danger. But why would we fear the aspects of China’s ascendancy — its “wealth and economic power” — that pose the least threat to United States? Unlike ideological clashes, economic competition can be mutually beneficial. A country with real economic wealth is typically free and doesn’t look kindly on radical behavior. Suicide bombers rarely drive top-of-the-line BMWs.

I have a long history of doubting the stated size and growth of the Chinese economy and therefore feeling that the “threat” they pose is overstated. Overall, the economic growth in China is a good thing, both for China and for the world economy, but there’s still too much malignancy from the “bad old days” of the command economy that haven’t been properly dealt with. China is big, and getting bigger, but will face severe problems the longer these historical artifacts remain unexamined and unresolved.

January 20, 2011

In case you weren’t worried enough about the rise of China

Filed under: China, Economics, Government, Media, USA — Tags: , , , — Nicholas @ 16:23

The Wall Street Journal rounds up the leading indicators of the current “USA sliding down the ladder” worries:

Of all the differences between dictatorship and democracy, probably none is so overlooked as the ability of the former to project strength, and the penchant of the latter to obsess about its own weakness.

In 1957 the Soviets launched Sputnik and the U.S. went into a paroxysm of nerves about our supposed backwardness in matters ballistic. Throughout the 1980s Americans lived with “Japan as Number One” (the title of a book by Harvard professor Ezra Vogel, though the literature was extensive) and wondered whether Mitsubishi’s purchase of Rockefeller Center qualified as a threat to American sovereignty.

Now there’s China, whose President is visiting the U.S. this week amid a new bout of American hypochondria. In an op-ed last week in these pages, Andrew Kohut of the Pew Research Center noted that a plurality of Americans, 47%, are under the erroneous impression that China is the world’s leading economy. News reports regarding Chinese military strides, or the academic prowess of Shanghai high school students, contribute to Western perceptions of Chinese ascendancy. So does the false notion that Beijing’s holdings of U.S. debt amounts to a sword of Damocles over Washington’s head.

Oh, we nearly forgot: Tough-as-nails Chinese mothers are raising child prodigies (a billion of them!) while their Western counterparts indulge their kids with lessons in finger-painting.

There you go, more than enough to keep you up late tonight worrying about the inevitability of China’s rise to top economic dog in the pack. Of course, most of it is misinterpretation of the facts, but you can worry about it if you want.

H/T to Jon, my former virtual landlord, for the link.

January 18, 2011

Singapore diplomats caught speaking very undiplomatically

Filed under: Asia, China, India, Japan — Tags: , , , , — Nicholas @ 08:15

Sometimes, the information in the various WikiLeaks releases shocks and surprises. Other times, it merely confirms common beliefs:

Singaporean officials are putting up a brave face after highly embarrassing Wikileaks’ disclosures. They have rubbished the leaked cables as “cocktail talk” and accused the media of blowing the casual remarks out of context. Singapore-specific cables have shown that diplomats and officials of this tiny but prosperous city state have scant regard for leaders of neighboring countries and have insulted their neighbors with disparaging remarks.

[. . .]

Tommy Koh, a senior diplomat of Singapore, took pot shots at Japan and said that Japan was “the big fat loser” in the larger strategic matrix as China’s relations with ASEAN nations continued to improve. This is not insulting had Koh stopped at that only. However, the Singaporean diplomat blabbed on and blamed Japan’s “stupidity, bad leadership, and lack of vision.” Koh dragged in the Indians as well and called India “stupid” for being “half-in, half-out” of ASEAN.

Another leaked cable quotes Peter Ho, Singapore’s former Minister of Foreign Affairs and Permanent Secretary, telling a U.S. official in March 2008 that Malaysian Prime Minister Najib Razak was an “opportunist”. Another Singapore diplomat remarked senior colleague in Singapore’s foreign ministry, Bilahari Kausikan, told US Deputy Secretary of Defence for South that ousted Thailand leader Thaksin Shinawatra was ‘corrupt’, along with “everyone else, including the opposition.”

The art of diplomacy is saying in public what your government wants everyone to believe, while saying to your government what is really happening.

January 12, 2011

“Tiger mother”: Chinese-style parenting

Filed under: China, USA — Tags: , , — Nicholas @ 12:38

If you think typical western parenting styles have not served children well, you might be interested in Amy Chua’s new book:

The Tiger, Chua explains, is “the living symbol of strength and power”, inspiring fear and respect. And as a “Tiger mother” herself, she assumed the absolute right to dictate her children’s activities and demand rigorous academic standards of them at all times, ridiculing them if necessary to spur them on to greater efforts.

Her children were never allowed to attend a sleepover, have a playdate, watch TV or choose their own extracurricular activities. They were also expected to be top in every subject (except gym and drama) and never get anything other than A-grades — because, Chua explains, Chinese parents believe it is their responsibility to ensure their children’s academic achievement above everything else.

Chua argues that western parents. with their emphasis on nurturing their children’s self-esteem and allowing free expression, have set their children up to accept mediocrity. “Western parents are concerned about their children’s psyches. Chinese parents aren’t. They assume strength, not fragility, and as a result they behave very differently,” she says. If their child doesn’t achieve perfect exam results, the Chinese parent assumes it’s because he or she didn’t work hard enough. “That’s why the solution to substandard performance is always to excoriate, punish and shame the child,” Chua says. And it is crucial for a mother to have the “fortitude” to override her children’s preferences, because to enjoy anything you have to be good at it, to be good at it you have to work, and children on their own never wish to work, she adds.

Update: Barbara Kay disagrees with Chua about the need to oppress your children to get them to excel:

This article and the book will spark furious discussion in the media. Coincidentally, in today’s Post, Dan Gardner’s column, “From Haiti to Harvard, culture matters,” bolsters the idea that culture is the single greatest predictor for academic success, and it is well worth reading in tandem with “Why Chinese mothers are superior.” He is right, of course, even though political correctness forbids us to say so, and even though Ms Chua’s extreme methods are unnecessary, as the Jewish experience — high expectations, high sensitivity to children’s psychic needs — proves.

It’s too bad Ms Chua’s extremism will become the focus of interest. The larger issue is worthy of respectful attention. As Gardner notes, the reason Asian students are so wildly disproportionately represented in universities (3% of the population, about 25% on campus) is because they came from homes in which “Chinese mothers” ruled the roost. It isn’t racism to say so.

Update, 23 January: Lawrence Solomon thinks the threat of “Tiger Mothers” is overstated:

The statistics seem to bear her out — Asians disproportionately make it to elite schools in the West — they represent 5% of the U.S. population but 20% of the student body at Ivy League schools, for example. No one can but marvel at the uniformly successful students turned out by the “tenacious practice, practice, practice” and “rote repetition” that she considers “crucial for excellence.”

But such statistics don’t tell the whole story. In truth, Chinese Mothers fare poorly in achieving excellence compared with western mothers, even western mothers burdened by political correctness.

[. . .]

Practice and rote learning have their limits. While imposing single-minded discipline on children will dramatically raise test scores and technical proficiency, and for most children may represent the best strategy for accomplishment and satisfaction, it can come at the cost of curbing the creativity necessary for true excellence. Chinese Mothers make great moms, as evidenced by the unusual cohesiveness of the Chinese family: Chinese kids clearly understand whatever berating they absorb as the tough love intended. Chua is justified in saying western parents are doing their underperforming kids no favours in failing to confront them.

But Western parents retain the edge in producing the next generation of creators — those whose breakthroughs will cure cancer or supplant the Internet. Here, too, Chua may be pointing to the right balance in her personal life, by choosing as her husband and father of her children someone who is anything but single-minded. Jed Rubenfeld, an American Jew determined to avoid a career in academia, waffled as a student, starting with philosophy and psychology at Princeton, switching to acting at Julliard, then moving to law at Harvard before accepting an academic position at Yale, where he is now professor and assistant dean of law.

Update, 2 February: Bryan Caplan (who has an upcoming book, Selfish Reasons to Have More Kids) addresses the downside of the Tiger Mother approach:

No wonder Chua confesses that, “For the first few weeks after Lulu’s decision [to radically reduce her musical practice time], I wandered around the house like person who’d lost their mission, their reason for living.” If I’d lived through thousands of hours of drudgery and cruelty for nothing, I’d be despondent, too.

But hasn’t all the musical practice indelibly shaped Chua’s children’s characters? Highly unlikely. Behavioral genetics finds roughly zero effect of parents on personality. And contrary to teachers’ fantasies about changing their students’ lives, learning is highly specific. Practicing X makes you better at X — and little else. Furthermore, the effects of environmental intervention erode over time — that’s fade-out for you. Chua seems to know this on some level: She favorably quotes a music teacher who says that, “Every day you don’t practice is a day that you’re getting worse.”

But all social science aside, Chua’s own life history raises severe doubts about the character-shaping power of mastering an instrument. Yes, she practiced piano as a child, but not to excellence. And what became of her? She became a Yale professor and best-selling author anyway!

In the most insightful passage in Battle Hymn of the Tiger Mother, cost-benefit analysis finally makes an appearance:

Why torture yourself and your child? What’s the point? If your child doesn’t like something — hates it — what good is forcing her to do it?

But Chua immediately represses her thought crime: “As a Chinese mother I could never give in to that way of thinking.” My response: You can and should give in, because this way of thinking is true. Cost-benefit analysis is not a Western prejudice. “Give up when the costs exceed the benefits” is one of the universally-valid maxims that allows millions of Chinese businesses to survive and thrive. Why shouldn’t Chinese mothers use it too?

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