Category Archives: Signposts to the Future

What Might Orwell Say About Trump’s Trip to China


Author Gary Moreau, aka Avam Hale in fiction

By sheer coincidence, while President Trump and First Lady Melania were being feted by Xi Jinping and Peng Liyuan at the Forbidden City, I was re-reading George Orwell’s dystopian classic, 1984. It was written, of course, in 1949, the very year in which Mao Zedong brought the People’s Republic of China into existence.

Orwell’s book was and is considered a fantastic fiction of foresight so eerily prescient of current events that it feels close to prophetic. And, in fact, every time I looked up from my reading I felt and saw 1984 all around me.

In the end I don’t believe that Orwell was looking forward in time so much as he was looking back. There are many powerful themes in the book, from the permanence of a three-tiered society of the powerful, the want-to-be-powerful, and the 85% of every population that struggles in drudgery to serve the first two segments, to the need for continuous war to consume the inevitable over-production inherent to the post-industrial era.

The primary theme of the book, however, is the power and potential treachery of language and its inherent propensity to be deceptively stripped of meaning in the interest of mass oppression. It was a power that both Stalin and Hitler, who had dominated the news during much of Orwell’s own life, understood and cleverly manipulated to extreme and horrific effect.

Language, of course, is a human convention. It is not natural to the world like sunshine or the animals of the Savannah. We made it up to help us communicate. In so doing, however, we created the world’s most powerful oppressive weapon, a tool that can be turned on us as creator and master. Words have meaning but are not, by themselves, inherently truthful.

The Chinese understand this quite instinctively. In part this mirrors the inductive worldview in which personal obligation trumps everything, including language, and because they converse in a language that is, by its very nature, conceptual and pictographic.

Orwell’s warning, however, is of paramount application to Americans today, both because of our deductive world view which has given us political correctness, but also because the paramount tenets of our culture are not tangibles like filial piety, but intangible concepts, like honor, freedom, and liberty, that can only be understood proximately through words.

Never before, in fact, although I can’t believe Orwell truly foresaw this given that he penned this book forty years before the Internet, has Orwell’s warning been so relevant and so urgent. American culture, politics, and the economy turn on the importance of words more than ever before. Face to face communication among family and friends has declined greatly, our social institutions have steadily lost membership, our politicians communicate in 140 character (now 280 character) Tweets, and our economy is controlled by digital platforms driven by the two-dimensional language of algorithms and analytics.

The backbone of Orwell’s dystopia is the Thought Police, the role of which is “not only complete obedience to the will of the State, but complete uniformity of opinion on all subjects…” Variations of the Thought Police have been around since the beginning of social organization. The difference in Orwell’s 1984 was the existence of the “telescreen,” a variation of television that supported 24/7 bidirectional communication controlled by the government.

Today, of course, we have the Internet. On the surface it is not as organized as Orwell’s Thought Police but it is equally powerful. It draws its strength from the collective consciousness of shamers, critics, and newsfeeds and content farms intent to achieve eyeballs and to disseminate their often virulent propaganda. It harnesses the hysteria of the crowd and the spite of the anonymous.

It is ironic that most Americans would equate Orwell’s dystopia more with China than with America itself. Western media coverage of China is inevitably pre-occupied with the lack of American style elections and the alleged suppression of political dissent, despite the reality that American political correctness suppresses more dissent than the Chinese censors could ever hope to.


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United States Senators Marco Rubio and Chris Smith, both Republicans, and the Chair and Co-chair, respectively, of the Congressional Executive Commission on China, issued a letter prior to Trump’s trip, which CNN entitled, US should hold China accountable on human rights. In it they complain that China “continues to strengthen the world’s most sophisticated system of internet control and press censorship and forges ahead with what it calls ‘internet sovereignty.'” (They seem particularly concerned about China’s decision to block the WhatsApp platform in anticipation of the Communist Party Congress in October.)

This criticism was leveled, of course, in the middle of a US news barrage concerning the mass murder of American citizens by other citizens armed with military assault weapons, the long-tolerated predatory and misogynist behavior of powerful US men, the opioid epidemic, widespread civil rights abuses, travel bans, the suppression of immigration, and a growing income and wealth divide that is both categorically immoral and threatens economic and social stability.

But Orwell, in his prescience, would not have been at all surprised that this was all happening in America were he still alive. One of the lingual weapons of the oppressors in Orwell’s dystopia is blackwhite, a powerful piece of jargon with two contradictory meanings. “Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts…But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary.”

The blackwhite of America’s attitude toward China, of course, is that China is the oppressor and America is the guardian of liberty, justice, and the equality of all men and women. And, of course, the reality is the reverse. While the Chinese government is indeed sensitive to the negative collective impact of social disruption in a large, diverse, and heavily populated country, the Chinese have far greater freedom than Americans are allowed by the American Thought Police who control, through political groupthink, the dissemination of knowledge and truth.

As Orwell so darkly prophesized, the control of knowledge does not require censorship in an era where all thought and expression is transparent to all. Crimestop, another Orwellian addition to the oppressors’ lexicon, is simple enough to teach to children and can be used by the collective mob not to eradicate distasteful thought, but to preclude it from ever occurring in the first place. “It means the faculty of stopping short, as though by instinct, at the threshold of any dangerous thought. It includes the power of not grasping analogies, or failing to perceive logical errors, of misunderstanding the simplest arguments if they are inimical to Ingsoc [the ruling doctrine of the Orwellian state], and of being bored or repelled by any train of thought which is capable of leading in a heretical direction.”

We have gone so far to promote crimestop in America, in fact, that we have created safe spaces on our campuses of higher learning so that students don’t run any risk of being forced to hear something that somehow got by the censors. Lenin himself could not have imagined such a wonderful and empowering accommodation of his ideology.

And while trigger warnings may not carry the direct impact of censorship, they can be more broadly deployed since they do not require any degree of government authority. They represent, in fact, the Thought Police writ democratic, the American mainstream stomping about in Orwell’s symbolic iron-shod boots.

And what is Orwell’s prediction for our future?

“It had long been realized that the only secure basis for oligarchy is collectivism. Wealth and privilege are most easily defended when they are possessed jointly. The so-called “abolition of private property” which took place in the middle years of the century meant, in effect, the concentration of property in far fewer hands than before; but with this difference, that the new owners were a group instead of a mass of individuals.”

But is Orwell describing the future of China or the United States? The Communist Party of China or the American political, economic, and Hollywood elite?

header photo credit: iStock.com/ollo

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com

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Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here

October 18, 2017


Author Gary Moreau, aka Avam Hale in fiction

Wednesday, October 18, 2017, will be an important day for the world. Its ultimate significance is likely to be even greater than the 2016 US presidential election.

On this day, the 19th Communist Party of China National Congress will convene in Beijing to review the Party’s work over the past five years, discuss and set the future direction for the country, and to elect a new central leadership.

During this Congress, it is widely expected that Chairman Xi Jinping will both secure his legacy and tighten his grip on power. It appears an almost foregone conclusion that he will come away from the Congress with a grip on power not seen since the reign of Mao Zedong himself, although no leader will ever quite achieve the historical status that Chairman Mao has.


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Assuming that comes to pass, the world can expect Chairman Xi to double down on the major initiatives of the past five years for the next five, at least. All will be aligned with achieving the Chinese Dream at the heart of Xi’s political, social, and economic agendas. It is a redemptive legacy designed, first and foremost, to assign the Chinese Century of Humiliation (roughly 1850-1950) to the historical dustbin. This task will both influence and define everything else.

That said, here are my predictions for the next five years and beyond.

1. Energy – According to China Daily, more than 2.5 million people currently work in China’s solar power sector. That’s roughly ten times the number employed by the solar industry in the US. And in January of this year China vowed to invest 365 billion USD in renewable power generation by 2020.

Starting in 2019, China’s automotive companies will be required to begin the phase out of cars powered with internal-combustion engines. Some have predicted that by 2030 they will be outlawed completely.

China will continue to take the global lead in renewable energy and climate change. It has to and it wants to. China’s environmental degradation is not sustainable and it believes that the world will ultimately face the same challenges it does as population levels continue to rise. That spells economic opportunity for those companies at the forefront of renewable and alternative energy technology.

2. SOE Reform – Following China’s “opening up”, a process that began in 1989 and ushered in an era of unparalleled economic growth, many state-owned enterprises were privatized. Much of China’s economic growth, and a significant share of its burgeoning personal wealth, flowed from this transformation.

Some of China’s most powerful and influential industries, however, such as banking and financial services, remain under government ownership. By the end of this year, however, the Party has committed to turning all SOE’s into limited liability or joint-stock companies. This may well unleash an even more powerful surge in economic growth at a time when the Western economies continue to struggle for wage and inflation growth. China’s economy, as a result, now the second largest in the world, should equal the US in the next one or two decades.

3. South China Sea – There will be no backing down by China. China will risk World War III to protect its sovereignty. In its mind, it has no option. The West will ultimately be forced to accept this reality, with or without armed conflict.

4. North Korea – In one form or another, the rogue province will ultimately become a sovereign territory of China. China cannot and will not allow South Korea and its American ally to occupy the 880-mile (1,420 km) border it shares with North Korea.

For both environmental and competitive reasons, moreover, China needs to decompress the geographic concentration of its heavy industry (e.g. steel) and find new sources of low cost labor. North Korea will provide a convenient and geographically well-positioned opportunity to address both needs while providing a security buffer to China’s all-important southern region.

5. Regulation – Despite the ownership reforms cited above, government regulation will both federalize and increase in the future. The environment will be regulated with an iron fist. The Chinese Internet will be rigorously defended as both a Chinese asset and a tool for social and economic progress, not a medium for personal political expression. American technology companies will find limited opportunity there.

6. Hong Kong and Taiwan –  Neither will be granted the kind of political independence that Western political activists would like to see. This won’t even be considered. (On the contrary, North Korea will ultimately join them.) And any resulting social unrest, which should be quite limited, will be swiftly quelled.

7. Belt & Road –  Otherwise known as China’s Silk Road Initiative, China will continue to view this as a top foreign policy initiative. China views this as its best chance to economically develop its western provinces and release some of the cultural and political pressure it currently faces there. This will have a significant impact on all of Central and South Asia, including India, Pakistan, and many of the former members of the Soviet axis.

8. Politics –  China will exhibit no desire to export its political model except in matters of national security. Nor, however, will it move to adopt any form of the US political model. To most Chinese, the American model is not an attraction. If they are to borrow any foreign political ideals they will look to the socialism of Scandinavia, with “Chinese characteristics”, of course.

Is this good or bad news for the US and the West? In the end, it doesn’t matter. It will happen. The West, for a myriad of reasons, has lost the ability to shape world events. Phase III of Western imperialism (i.e. I. colonization, II. de-colonization, III. colonial dominance—the global dominance of the former colonies) will inevitably unfold.

As a pragmatist, I accept this reality. It is what it is. And if forced to choose, I believe, on balance, that this can be a period of positive replenishment for the US and its citizens. We will achieve far more by focusing our resources and our energy on renewing the American spirit, revitalizing American infrastructure, and revitalizing opportunity for all American citizens and immigrants, than we will on continuing to pursue inevitably ineffective attempts to reshape the world in our image.

It’s not a digital choice, however. We aren’t limited to putting America or the rest of the world first. Isolation isn’t a realistic option, as China itself has learned. By being a collaborative partner and embracing the diversity of the world, and accepting the inevitable ills of unfettered free markets and their corporate champions (e.g., polarized wealth distribution), we can help to usher in an era of unparalleled global prosperity, peace, and enlightenment.

And it could all start on October 18.

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com


Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here

Paris, Beijing & Global Leadership

Author Gary Moreau

In the aftermath of President Trump’s announcement that the US would withdraw from the Paris Climate Agreement, The New York Times ran an article entitled, “Trump Hands the Chinese a Gift: The Chance for Global Leadership.” The article stated, in part, “In pulling out of the Paris climate accord, Mr. Trump has created a vacuum of global leadership that presents ripe opportunities to allies and adversaries alike to reorder the world’s power structure.”

A recent US Defense Department annual report, moreover, noted that China was likely to develop foreign military bases in the future. It already has an outpost in the small African nation of Djibouti (The US also has a base there.), but there is rumor of a major Chinese military presence in Pakistan to support the Belt and Road regional infrastructure initiative that is a cornerstone of President Xi Jinping’s development agenda.

Beijing dismissed the Defense Department report as “irresponsible”, reinforcing the general perception that both stories are essentially negative in perspective. The narrative seems to be that President Trump is both crippling the US and enabling an enemy.

Why? Not why did President Trump do it, but why is China as an emerging power a threatening narrative?

Many people are deeply critical of Trump’s perceived attempts to redefine and constrict the doctrine of globalism that has defined US foreign policy since World War II. The opening line of the Times article noted above reads, “President Trump has managed to turn America First into America Isolated.”

But what is globalism? Does globalism require the US to be the world’s sole superpower? And what about Adam Smith’s “invisible hand”? Isn’t competition supposed to be a good thing to free market advocates?

The irony, of course, is plentiful. The US currently has approximately 800 foreign military bases, or base sites, in approximately 80 different countries. According to The Nation, “The United States probably has more foreign military bases than any other people, nation, or empire in history.”

Many people believe that’s okay because, the argument goes, the US will use its military power responsibly. Wherever you come down on that belief as an American, however, I can tell you from firsthand experience that few outside of the United States share that conviction. And if the objective is global leadership rather than global arm-twisting, shouldn’t we care about what the rest of the world thinks?

If we put the issue in its larger context, I do think that the US, with exceptions, uses its military might with discretion. And our political system and our culture are part of that restraining context.

China, however, offers a similarly restraining context. This is not the Soviet Union, which attempted to put missiles 90 miles from our shores. And it’s not the Third Reich. Virtually all of their disputed territorial claims, including the South China Sea, have arguably been in the interest of defense of China’s sovereignty or to reinstate some perceived historical reality.

Part of that context, of course, is the simple fact that China has been repeatedly invaded by foreign powers. The Century of Humiliation I have talked about before is vivid in the collective Chinese consciousness. Even the youngest Chinese have heard of the Nanking Massacre.

China is attempting to assert global leadership in the arena of climate change. And I believe it is sincere. Having said that, it is also clearly in China’s best interests to do so. They have a huge environmental problem that must be corrected if the Communist Party is to remain in power. And there is a lot of money to be made.

Understanding China is available at Amazon in paper and electronic formats.

Climate change will ultimately be conquered with technology. That’s not to say we shouldn’t do everything we can in the meantime. But climate technology will be the next big technological revolution. That seems almost certain.

And climate technology will provide a much more sustainable and robust economic opportunity than sneakers and toys. I believe that the Chinese are absolutely correct in pursuing it.

Without supporting the decision, I do think President Trump, in a way, is attempting to take a page from the Chinese handbook of promoting their self-interests. The United Nations Green Climate Fund, set up by the Paris agreement to help poor and developing nations deal with the consequences of climate change, has been, to date, funded solely by the United States. The US has given $1 billion to the fund as of May of this year. Russia, China, and India, for their part, have collectively given nothing.

The argument in support of that disparity is that the US also has the largest GDP in the world. And that’s true. But when you consider that much of our government spending is supported by debt that will have to be paid off by future generations, and the fact that income and wealth have become indefensibly polarized in America, that argument doesn’t carry the same weight that it did thirty years ago. In total, we can clearly afford it. That’s not to say, however, that the average American can.

But I think it’s a specious argument anyway. As is the question of whether or not humankind is causing global warming. The more legitimate question, in my mind, is whether or not we are living as environmentally responsibly as we can without materially sacrificing our quality of life? And the answer, I believe, is a resounding “no.”

And in this regard, I think, China offers some valuable lessons. Whether it’s public transportation, high-speed rail, powering buses and taxis with natural gas, recycling, or simply using cloth bags when you go to the grocery store, China does many environmentally responsible things quite well. And while all of these things came to be within a larger context of poverty, development, culture, and the Chinese political system, they are what they are. We can still learn from their example.

I am thrilled to be back in the American Midwest where I can go for a walk without a breath mask and I can drink the water straight from the tap. I know from experience what that is worth in terms of the quality of life. Too many people, I think, take it for granted.

I am not in any way afraid of China’s emergence as a global leader, however. I think it’s a good thing. I may change my mind in the future, but it has demonstrated no intent to expand its influence militarily beyond its own geographic theater to date.

And, yes, “socialism with Chinese characteristics” is built on a one-party political system. The Communists fully recognize, however, that if they are ever driven from power that will be it for them. In the US, by contrast, a losing political party has only to wait until the next election cycle. And that’s even if you accept that we still have a legitimate two party system.

History is not a post card. It is a motion picture. Look at a political map of Europe in time-lapse over the last one thousand years and it will surely make you dizzy.

That observation is not meant in any way to endorse territorial aggression. It is to say, however, that change is inevitable and everything has to be viewed in context. I believe in globalism. It is the reality of the world we live in. But I also believe that if we can convince more responsible governments to assert their leadership and share in the responsibility of moving the world forward, the better off we’ll all be.

Contact: You may reach the author at gary@glassmakerinchina.com

The Law of Unintended Consequence

The author giving a lecture to international business and Chinese culture students at North Central College in Naperville, Illinois..

Be careful what you wish for. It may come true. That’s a sage bit of conventional wisdom that is a variant of the Law of Unintended Consequence. You may get what you want, but it may come with baggage.

Americans have long debated whether or not a businessperson or a career politician would make the best president. However you come down on that question we are in the process of finding out.

Even beyond his flamboyant style, his hyper rhetoric, and his proclivity to Tweet whatever he is thinking at the moment, it would be hard to find a past American president with less political experience than Donald Trump. Even retired military generals who have gone on to the highest political office in America had to negotiate the ladder of ascension in a large and politically competitive institution.

As have most CEOs of most large public companies. Donald Trump, however, spent most of his career at the top of a family business with his name over the door. He had to negotiate some pretty big deals, and that always involves a little bit of political maneuvering, but he has never had to compete for the corner office with his political enemies.

While many Americans have already made up their mind, only time will tell if President Trump makes a good president or goes down in the annals of infamy. I offer no predictions here. This is a blog about China.

One thing we should have learned in the nascent days of Trump’s presidency, however, is that negotiating a business deal and negotiating a diplomatic deal are not one and the same. And it has to do with the Law of Unintended Consequence.

In negotiating a business deal the negotiators often posture to the same extent politicians do. But the language is often different. The volume is different. And the trade-offs are different. The desired objective is generally obvious in the business deal and there are often trade-offs negotiated under the umbrella of the overall agreement.

Understanding China is available at Amazon in paper and electronic formats.

And that appears to be how President Trump and his team plan to negotiate with China. Taiwan, trade, and the South China Sea are just components of one big overall deal defining the relationship of the world’s two largest economies. As Trump would say, “Everything is in play,” just as it would be if he were negotiating the merger of two corporations.

But that is not how diplomacy works much of the time. And the result is that President Trump’s very public negotiation is working very much in favor of the Chinese. They are, I suspect, in no way disappointed by the current state of affairs although, given the extensive political experience that the current Chinese administration has, they will never acknowledge that publicly.

President Trump’s harsh rhetoric on China, of course, has not gone unnoticed in the rest of Southeast Asia. Contrary to pushing China’s neighbors into the protective skirt of the US, however, that rhetoric, and the geo-political risk it suggests, may be pushing China’s neighbors further away from both China and the US, a result that will ultimately favor China and its desire to assume greater leadership in the region.

Dr. Samir Tata, a former intelligence analyst and founder of the International Political Risk Analytics, recently wrote an insightful piece for Forbes Opinion. In it he argued that President Trump’s current rhetoric, along with the US’ unilateral withdrawal from the Trans-Pacific Partnership (TPP), as well as the Obama administration’s lack of interest in supporting the Asian Infrastructure Investment Bank (AIIB) sponsored by Beijing, will likely push key member countries of the Association of South East Nations (ASEAN) toward an official policy of neutrality along the lines of Finland, Sweden, or Switzerland.

In the event of armed conflict between the two superpowers, were such neutrality come to pass, the US could be seriously thwarted in its ability to exert military strength in the region. (Nations which are officially neutral would presumably not allow any foreign military presence on their soil.)

According to Dr. Tata, China is pursuing a much more holistic strategy of trade and investment throughout the region, “having displaced both the United States and Japan as the most important trading partners of the ASEAN countries.” To what extent this strategy will undermine existing security agreements in the region is unknown.

In business, however, while risk is to be avoided, uncertainty can often be employed to your benefit, particularly in a business negotiation. In the world of diplomacy, however, uncertainty is risk. And the harsh rhetoric of the “America First” doctrine is sure to put doubts in the minds of many foreign leaders considering who to dance with.

And that may ultimately prove to be the Achilles Heel of treating diplomacy like a business.

Contact: You may reach the author at understandingchina@yahoo.com. Mr. Moreau is also available for public speaking and the provision of third-party written content on a wide variety of topics for your website or other communications material.

 

 

The Communist Party of China is the big winner in this election

Author Gary Moreau
Author Gary Moreau

Who is the big winner of the 2016 presidential election? The Communist Party of China (CPC). The current American political process – perhaps carnival would be more apt – has provided China with greater future political stability than the CPC could possibly achieve on its own.

In the end, it really won’t matter who wins Tuesday’s election. Half of the electorate will be angry that their candidate lost. And eventually everyone will be angry because the winning half will ultimately realize that their candidate has not delivered anything close to what he or she promised.

As far back as Ronald Reagan, newly elected American presidents have taken a series of politically popular positions with China that were ultimately rescinded or ineffective. President Reagan wanted to re-invigorate Taiwan’s independence. President Clinton vowed to get tough on human rights although there is no evidence that this pledge had any real impact. Numerous politicians have accused China of currency manipulation, but little has come of it.

Secretary Clinton, for her part, appears to favor continuation of the Obama pivot-to-Asia. It simply won’t work. China will eventually have uncontested control over the South China Sea and will use its economic might in the region to enhance its regional power, largely at the expense of the US.

Understanding China is now available at Amazon in paper and electronic formats.
Understanding China is now available at Amazon in paper and electronic formats.

Mr. Trump, for his part, has threatened to slap steep tariffs on imports from China and re-negotiate world trade deals with more favorable terms to the US. And, of course, he is no fan of the Trans-Pacific Partnership (TPP), which Secretary Clinton now opposes after initially supporting it. It doesn’t matter, because the reality is that China is not a party to the TPP and you can hardly have an effective trade agreement in the Pacific Rim without its participation. The US needs to engage China, not isolate it.

Nor does Mr. Trump ever mention that China is the third largest export market for US goods and services. And with the US economy growing at anemic rates, and Europe all but stalled, the reality is that the world cannot afford to de-stabilize China’s economy at the moment. By some estimates, the global economy is already in recession if you factor out the favorable impact of China’s strong, albeit diminished, economic growth.

Ironically, the American Democratic and Republican parties have amply demonstrated that their agendas are no different than the CPC’s. More than anything else they all want to maintain political stability with their leadership in charge. Yes, power.

And while the Democrats and Republicans have virtually assured themselves of mutually assured destruction, to use an old Cold War term, both have handed the CPC the greatest gift of all. They have laid bare all of the scandals, the failures, and the propaganda of the modern American political process. The CPC’s media surrogates now have more than enough fodder to denigrate and disparage the US political process for years to come.

A well-educated Chinese friend of mine once observed that if you use the American democratic model as a template, democracy cannot possibly work in China. “Elections would be an absolute mess. In a country of 1.4 billion people they would take years to conduct and the cost would bankrupt the country.”

Most Chinese would agree. The Chinese system of socialism with Chinese characteristics works for China. As my friend went on to say, “We must have a strong government. Otherwise we will just fight and the country will not move forward.” Like the US, in other words.

My own Chinese wife is witnessing her first US election. She can’t vote, of course, although I hasten to add that she is here legally. Her perspective of the US political process is not refreshing. She thinks it’s a joke and can’t begin to understand why we put ourselves through it. (Many Americans would now agree with her, I suspect.)

In the end, while I know most Americans are anxious for this charade to come to an end, I believe we will look back, long after the votes are counted, and wistfully long for the days before there was a winner and a loser. In the end, there will be neither.

Except for the CPC and other political entities like it that have long been chastised by American politicians for not being “more like us.” Is there anyone who would sincerely wish American style politics upon the people of the developing world now?

It would be inhumane.

Contact: You may reach the author at understandingchina@yahoo.com

 

 

 

 

A Look in the Mirror

Gary Moreau
Gary Moreau

On Wednesday, October 5, 2016, the Pew Research Foundation released the results of a new poll gauging the Chinese perception of global threats and the US and its political process. And what do a majority of Chinese consider a greater threat to China than ISIS, Russia, climate change, cyber security, or the global economy?

You got it – the United States of America.

Fully 45% of respondents cited US power as a major threat to the interests of China, while an additional 38% labeled it a minor threat. And just over half of those surveyed view the US threat as an attempt to limit China’s rise to power, with nearly 60% citing territorial disputes, such as those involving the South China Sea (SCS), as likely or potential military flash points.

None of which is all that surprising. President Obama has staked much of his foreign policy legacy on the American ‘pivot to Asia’ and publicly warned Chinese President Xi Jinping about development of the Scarborough Shoals, which sit approximately 140 miles (230 km) from US forces stationed in the Philippines.

It was the Philippines, of course, an ally of the US, which received the favorable ruling from an international tribunal in The Hague that fueled much of the recent furor over China’s island-building in disputed waters of the SCS. While China does not recognize the tribunal’s authority on the matter, and did not make any attempt to defend itself in the deliberations, the US has publicly insisted that China must recognize and accept the ruling, even though the US has no territorial interest in the dispute.

The 2016 US presidential election, of course, hasn’t helped the US’s reputation among Chinese citizens. China has long been a whipping post for American politicians looking for a scapegoat for US economic woes.

The Chinese, however, generally understand that perspective. Well schooled and sensitive to all things financial, almost all Chinese dissent is economic in nature. Just as members of the Chinese military displaced by the current upgrade and re-purposing of the People’s Liberation Army, the largest military organization in the world, are currently protesting in Beijing, the Chinese take to the streets when they perceive their wallets have been slighted.

Part of the reason for that is that when you impact someone’s livelihood you’re impacting their family (something many American political and business leaders don’t seem to fully appreciate), and it’s difficult to overstate the Chinese commitment to family. It is the ultimate Confucian obligation.

And, of course, no one wants to be left behind. Living in the world’s second largest economy, its largest automotive market, and ground zero of the international luxury market, there is substantial face in keeping up with the Zhangs.

The trepidation toward the US exposed by the Pew poll, however, isn’t economic. I have yet to hear a single Chinese voice concern over China’s ability to compete with the US economically. Most Chinese appear confident that they can continue the economic miracle of the last 30 years so long as their efforts aren’t impeded by politics.

The projection of military and political strength, however, is a different animal than trade. What is one person’s noble enforcer can be another person’s bully. And whether fair or not, my experience is that many people in the international community view US involvement in things like the SCS dispute through the lens of the latter, not the former.

“Who asked you to be the world’s policeman?” To many Americans, of course, the answer to that question is a matter of destiny, responsibility, and/or belief in a digital and linear moral code. We can; therefore we must.

In places where the concept of right and wrong are more relative and less linear, however, that can be a specious argument. All too often, protection of international ‘rights’ looks a lot like meddling.

The current state of US politics, of course, isn’t helping America’s image abroad. Nor at home, for that matter. Most people are just hoping it ends soon. Our children are watching, after all.

The Chinese hold similar views. When asked to rate the presidential nominees of the two major American political parties, no more than 37% of those polled had even ‘some’ confidence in either candidate. More than a third voiced little or no confidence in the Democratic or Republican candidates individually.

Thankfully, the relative and inductively minded Chinese have no problem with duality. Despite concerns over the American ‘threat’, and their low opinion of our political candidates, 50% of the Chinese polled voiced a very or somewhat favorable opinion of the United States as a country. Go figure.

Americans used to be able to hold a duality of opinions. We could be wary of another country’s intent or political process but not hold it against the country or the people. Our political process, however, fueled by the incendiary nature of social media, seems to have eliminated our ability to hold impersonal opinions within a defined context.

Now you can only be for us or against us. Now it’s personal – always. That can be a very blunt instrument, indeed, when it comes to shaping the country’s foreign policy. Or, to quote my own father, “Be careful what you wish for.”

If the rest of the world starts thinking in the same digital way we may find ourselves more isolated than revered.

The commitment to family is the ultimate Confucian obligation.
The commitment to family is the ultimate Confucian obligation.

Contact: You  may reach the author at understandingchina@yahoo.com

The Top Brands in the AP (and the implications)

Annual research conducted by Nielsen and presented by Campaign Asia-Pacific on the most popular brands in the Asia-Pacific region was recently released to the public. The survey encompasses 14 major categories and 13 major markets: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

The top 10 brands for 2016 are:

  1. Samsung
  1. Apple
  1. Sony
  1. Nestle
  1. Panasonic
  1. Nike
  1. LG
  1. Canon
  1. Chanel
  1. Adidas

So, what do the tea leaves say in all of this? Overall, of course, they’re just tea leaves. But we might draw a few interesting tidbits from the results.

First of all, of the top 10 brands only two, Apple and Nike, are American. Three are European. And the rest are Japanese or Korean.

One might argue, moreover, that the Apple and Nike brands have transcended their national identity. Neither relies on its American roots to define its brand image in the same way that, say, Coca-Cola or Budweiser, do.

A few of my personal take-aways, although I again caution about reading too much into any annual survey.

The first is the question of who will really benefit from the disproportionate growth expected in AP economies relative to those of Europe and North America? This is an inherent key to the debate over global trade that has dominated much of national politics in the US and Europe of late.

Nearly every major American company has some presence in China. Few, however, have been successful there. It is, perhaps, the most competitive market in the world, and Western companies, in my experience, struggle to navigate its waters.

And if you look at what drives the American economy, financial services, media, and telecom companies dominate the list of influencers. These are the sectors that remain the most highly regulated in China and dominated by state-owned companies. And under any circumstances, I submit, are the sectors structurally inclined to provide the most home field advantage in any of the major economies. General Motors has seen a lot of success in China. But will Wells Fargo see the same success, even if the markets are de-regulated?

And although trade is a critical component of everyone’s politics, there is a political element to trade beyond the trade itself. It’s called leverage.

At the moment, China is relatively hesitant to tweak the US in the nose due to the enormous trade ties that the two countries share. As China pivots to a services economy, however, and as the natural dilution of American influence in the global economy implied by disproportionate growth in the AP economies occurs, will the US enjoy the same political leverage in the global economy of the future?

Will the US, in other words, be capable of controlling the South China Sea debate? The human rights debate? The debate over geo-political influence and independence in Asia?

Speculation, of course. But that’s where every meaningful insight starts.

It is likewise interesting to look at the survey results from 2006; 10 years ago. Again, the top ten brands, ranked from most popular down:

  1. Nokia
  1. Sony
  1. Nestle
  1. Colgate
  1. Panasonic
  1. Honda
  1. Coca-Cola
  1. Samsung
  1. Canon
  1. 7-Eleven

Of the top 10, obviously, 3 were American, 2 were European, and the rest were Japanese or Korean. And, of course, some of the change is a simple reflection of the development of the Asian-Pacific economies. Few could afford Chanel 10 years ago. Many could afford 7-11 or an occasional bottle of Coke.

Having said that, however, it would appear that after a decade of investment the West has not made any obvious progress in its penetration of the Asia Pacific economy. Japan and Korea are the only truly consistent players.

One last observation.

Whether or not the US economy became the engine of the global economy on the back of the US political system, the political system gained global leverage, in part, on the back of the US economy. Can the US pivot-to-Asia, therefore, succeed in the long-term if the US loses that economic leverage? As China pivots to services, and Asia continues to develop at above average rates, is the pivot realistic, or even desirable?

Food for thought.

Contact: You may reach the author at understandingchina@yahoo.com

The Hague II

Last week the Permanent Court of Arbitration (PCOA), a panel of five legal scholars established by The Hague Peace Conference, ruled in favor of the Philippines in a challenge it filed in 2013 against China’s claim to sovereignty over much of the South China Sea. The ruling was immediately hailed by many Western countries, including the US, as a total repudiation of China’s Nine Dash Line (NDL), which China regards as demarcating its sovereign territory.

The Philippines’ claim was based on the United Nations’ Convention on the Law of the Sea (UNCLOS), to which China is a signatory. UNCLOS grants all countries territorial borders of 12 nautical miles extending from their shoreline to the open ocean. It further grants Exclusive Economic Zones for an additional 200 miles.

The Western media has largely reported on the challenge and the ruling as if it were so cut and dry as to deny any room for interpretation and condemning China for refusing to recognize or accept the result. The European Union threw its support behind this position at a summit over the weekend.

Very few Western media outlets, however, have even attempted to explain the logic behind China’s position. It’s actually pretty simple. China argues that the PCOA has authority over maritime economic disputes, but the issue of the NDL is an issue of sovereignty, not maritime commerce. The PCOA, as a result, has no authority in the matter and any dispute between the parties should be resolved through good faith negotiations between the two countries.

I am certainly no expert in maritime disputes or questions of national sovereignty. As a writer, however, I do know that words are imprecise at best. They are a tool for improving the efficiency of communication but always open to interpretation.

Does China have a valid point? Well, its argument seems to make some sense but I’m not the one to say who is right and who is wrong in this dispute.

I do think that the PCOA did not help establish its legitimacy by criticizing the environmental impact of China’s island building. Environmental oversight is clearly not within its charter and China is surely not the only country to reclaim shoals and reefs. (Virtually all of Holland and much of New Orleans should, if left to nature, be underwater.)

As I have noted before, most importantly, I don’t see how China’s leadership can possibly back down at this point. By insisting that this is a black and white dispute, therefore, the West is not helping to settle the dispute; it is only backing China into a corner. It’s hard for me to see how that will contribute to peace and stability in the region.

Over the weekend, in fact, China announced that it will conduct military exercises off the coast of Hainan Island, which no one disputes China’s sovereignty over, and that the area will be closed to all naval and aviation traffic from Tuesday until Thursday.

The US response is yet to be known. If the US sails warships through the area, or spy planes over it, all in the name of maintaining free navigation for the little guys who can’t stand up to China, things could escalate fast. China is no longer afraid of the US.

And nothing would change.

Of one thing I am sure. If the West believes that this ruling will cause the Chinese people to pressure their government to back down, that’s simply not going to happen. If anything the ruling may cause people to pressure the government to act more decisively in defending its claim, as it has now begun to do.

That can’t be good for global relations at a time when the world is already a mess. The West needs to bring China into the global fold, not isolate it or alienate its people.

China has already signaled its willingness to open a dialogue with the Philippines. Why not let them try?

Contact: You may contact the author at understandingchina@yahoo.com

Photo Copyright: VanderWolf-Images

China’s Great Strength – Time

China’s National Development and Reform Commission, the agency primarily responsible for controlling China’s economy, released a report this past Monday that brings into sharp focus the major challenge facing the United States in its attempts to manage U.S. – Sino relations.

The report, oddly enough, had nothing to do with the South China Sea, North Korea, cyber-security, or any of the long list of hot button political issues currently pitting the two sides in political contention.

The issue was soccer. The Chinese, like most of the world, refer to it as football, and it is said to be one of the favorite sports of China’s President Xi Jinping.

What’s remarkable about the report is that it is essentially a blueprint for China to become an international powerhouse in football by the year 2050. That’s right – 2050. That’s not a typo. (If you do the math, of course, that’s 34 years away, a time span during which the U.S. will hold roughly 8 presidential elections.)

The first phase will develop the foundation needed for the sport – i.e., pitches, schools, funding, development programs, etc. Most notable is the objective to develop 20,000 schools with a specialty in the sport to support an objective of having 30 million primary and secondary school children who are actively playing the sport.

Like everything in China, time is a duality. Every Chinese will push the 'close door' button as soon as they step on an elevator. But they have a national plan to be football powerhouse by 2050.
Like everything in China, time is a duality. Every Chinese will push the ‘close door’ button as soon as they step on an elevator. But they have a national plan to be a football powerhouse by 2050.

The second and third phases build on that infrastructure, first at the national team level and subsequently at all levels of the sport.

This is no one’s idea of a joke. This is how China works. Once again, the country’s duality. It can replace a 10-lane bridge in Beijing in 43 hours and build highways, airports, and rail lines in a fraction of the time most countries can. And it already has the world’s largest network of high-speed rail lines despite still being fairly early in its economic development.

It builds its progress, however, on a very long horizon. And, for the most part, they stick to their plans because their plans are national plans, not the plans of personal politicians vying for election.

China’s football plan is conceptually identical to the economic plan that propelled it to become the world’s second largest economy and lift 300 million people out of poverty in a single generation. It’s all about infrastructure. They didn’t start with tax breaks and other economic incentives. They built highways, shipping ports, airports; places for the factories to go that had the electrical, energy, and water infrastructure already in place. They even built compounds for the foreigners to live in and created Western environments that would allow them to feel at home.

By contrast, India, the world’s largest democracy, did none of these things and has shown far less economic progress as a result, despite the benefits of a highly educated workforce, a large Middle Class, and administrative skills learned from one of the best – the British.

Why the difference? Everyone knew what the Chinese were doing. It wasn’t a secret. They made no attempt to keep it one.

The difference, to my mind, comes down to one word – consistency. What the Chinese did took three decades but they remained resolute throughout. No major democracy has been able to sustain that continuity.

Change and progress are not the same thing. The latter requires continuity.
Change and progress are not the same thing. The latter requires continuity.

The U.S., of course, is holding a presidential election this year. And what is the one thing virtually every candidate agrees on? The need for change. Not one single candidate has a platform of ‘steady as she goes.’ Not one candidate is arguing for continuity.

China, of course, doesn’t democratically elect its president. There is, however, a process for determining who will be president and the public’s interest is taken very much into account. In the last presidential cycle, however, you heard almost nothing about change. What you heard, to the exclusion of all else, was about progress. Change and progress are two very different things. Change is about new directions; progress is about moving ahead.

This is also why the U.S. stands little chance of accomplishing its goals in the South China Sea and other political arenas. They are playing a different game. The U.S. is debating whether or not to hold more free navigation exercises next week or next month. The Chinese, I’m sure, already have a plan for the year 2050 and are busy building the infrastructure – islands, airports, radar and missile installations, etc. – to support it. It would be comical if there weren’t so much at stake.

Here, I believe, is the most important lesson of all: The world is changing more rapidly than ever. The world’s challenges, however, are getting longer term in nature. It’s the ultimate duality. A terrorist can set off a bomb tomorrow. A tsunami can wipe out an entire city in one day. The housing market can collapse overnight. But issues like climate change, fixing the U.S. Social Security system, addressing income inequity, and banking reform are very long term issues that are not going to get resolved in one four-year (really two-year) election cycle.

We need continuity more than ever before. With advancements in modern media, however, and the political frenzy that has unleashed, the continuity cycle is actually getting shorter and shorter.

Time, or, more specifically, how we manage it, is against us.

The impact of events is becoming shorter. The resolution of problems is becoming longer. Like the Chinese we must learn to rush along a long term path.
The unfolding of world events is becoming shorter. But the resolution of world problems is taking longer. Like the Chinese we must learn to rush along a long term path.

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Copyright © 2016 Gary Moreau

Gary Moreau Beijing, China
Gary Moreau
Beijing, China

Note: The views expressed in this post are strictly those of the writer acting in a personal capacity.

You may contact the author at glassmakerinchina@gmail.com

China’s Two Sessions & U.S. Presidential Politics

This past week China wrapped up its annual 10-day plenary sessions of the National People’s Congress (NPC), and the Chinese People’s Political Consultative Conference (CPPCC). Given the complicated acronyms, much less the names, however, most Chinese simply refer to them as the ‘two sessions.’

These two bodies are the country’s top legislative and political advisory forums, respectively, and are attended by more than 5,000 deputies and members from all walks of life, including artists, movie stars, and sports stars. (Yao Ming attended again this year – he’s hard to miss in a crowd.) All 56 ethnic groups are represented as well and many wear the elaborate traditional clothing and headwear of their ethnic group, giving the meetings an air of traditional Chinese formality and visual richness.

Much of the time is devoted to working reports by the government’s various bureaus and department heads. The delegates do, however, have the opportunity to submit their own ideas for consideration and many do.

One of the benefits of the Chinese legislative process is that the president and premier are appointed for one ten-year term and the legislature and government departments work with five-year plans. This year the two sessions focused on the 13th Five-Year Plan, highlighted by seven key issues:

  1. Poverty alleviation
  2. Supply-side reform
  3. One Belt, One Road Initiative
  4. Charity Law
  5. Reform of the judicial system
  6. Green development
  7. Anti-corruption

A couple of notes in passing. There was no mention of the South China Sea. There was no mention of the Diaoyu Islands. And, thank goodness, there was no mention whatsoever of the U.S. presidential elections. In fact, when asked at the closing press conference what impact the U.S. presidential elections might have on China, Premier Li Keqiang effectively said, ‘none.’

And, I believe, that was more of a practical observation than a personal or ideological one. With the advent of the 24/7/365 media cycle, and no corresponding adjustment to the U.S. political calendar, the practical effect is non-stop electioneering. And that, of course, results in a non-stop stalemate. If Americans are frustrated, and Bernie Sanders and Donald Trump are certainly proving that they are, their angst can be summed up in one word – nothing.

It’s not that people don’t like what’s happening. It’s not even that they have a strong preference for doing something else. It’s their frustration with the fact that in the world of politics the new normal is – well, do nothing.

That’s particularly unfortunate because as the activity cycle has shortened, the necessary action cycle has elongated. Nobody expects we are going to fix climate change overnight. Nobody expects we are going to eliminate poverty in one election cycle. No one thinks for a minute that one administration is going to have the kind of impact on the world that might have been the case in the era of Lincoln or Roosevelt.

I personally believe that #3 above, the One Belt, One Road Initiative may be the most brilliant idea yet. If you’re not familiar with it the basic idea is to revive the old Silk Road, bringing economic prosperity to the western provinces of China and the western countries of the old Soviet Union and the eastern countries of Europe.

This bloc could easily, over time, rival NAFTA in terms of economic power and, not coincidentally, is home to a lot of people who don’t particularly like the West. That’s not to suggest, for a minute, that is why China is pursuing this very long-term strategy. It is merely to say that the Chinese are pragmatists. Whatever else you hear on the nightly news, they stand less on ideology than the West does.

For me the most overriding aspect of the Two Sessions this year was the degree to which the agendas were inwardly focused. They talked about China and the Chinese people. There was no grandstanding about this despot and that tyrant and their backroom deal to end life as we Westerners know it. There was only talk about how do we improve people’s lives – economically, environmentally, and in terms of social and judicial justice.

Not bad.

The point really hit home for me the other day when I was Face Timing with my daughter, now 15, and living in the U.S. She has never voted in a presidential election. She has no memory of the Clintons or the Bushs or even the Trumps. But her unsolicited opinion was that America has lost its mind and that the best vote this time around would be the person who will do the least harm to the world.

Me? I don’t do politics. But I do like Bernie. He gets it and he has heart and that still counts for something in my book.

But, in the end, I agree with Premier Li – it really doesn’t matter. We’re arguing over building big walls to keep out the immigrants and China is laying plans for a new Silk Road. We’re wondering what the going rate for a 20-minute speech to Goldman Sachs should be (nothing, in my opinion) for a former government official who was paid by the taxpayers while building her speaking resume, and the Chinese have put poverty alleviation at the top of their latest five-year agenda.

Go figure.

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Some early praise for the author’s latest book, “Understanding China – There is reason for the difference”

“An insightful, compelling introduction to the intricacies of Chinese business and life.” – Kirkus Review

To see the full review from this prestigious literary company, please click on this direct link:

https://www.kirkusreviews.com/book-reviews/gary-moreau/understanding-china-fYhXZndj/

“Understanding China is a “must-read” for anyone interested in culture, working with Asian businesses, visiting China or simply if you enjoy a well-written book! I worked in China in the 90’s and while I eventually understood the differences, I never understood “why” until now. Moreau does a great job explaining the “why”. Well done!!”

(Not a relative!)

“Having done business and gone on personal journeys through the Asia Pacific region, I wish I’d read a book like this first. The premise is that being happy and effective in China requires more than just learning how things operate and working within the established system. This will bring frustration and leave you ineffective because you, the Westerner, will still be looking at these cultural differences as irrational. Mr. Moreau contends that only by understanding why things are the way they are in China and in the West can a Westerner actually influence outcome in China.

The author proceeds to explain the differences with very engaging writing that made me say, “Of, of course! It all makes sense now.”

(Also not a relative!)

Copyright © 2016 Gary Moreau

Gary Moreau Beijing, China
Gary Moreau
Beijing, China

Note: The views expressed in this post are strictly those of the writer acting in a personal capacity.

You may contact the author at glassmakerinchina@gmail.com