Editorials: July 2008 Archives

By INVESTORS BUSINESS DAILY
July 21, 2008

Energy: Big Oil is easy to kick around -- just ask any Democrat in Congress. But China's threats to Exxon Mobil are in another league. Its bid to use Exxon Mobil as a wedge against its rival Vietnam is a case in point.

What China's doing in the South China Sea these days is not trade, but blackmail to assert regional dominance. On Sunday, the South China Morning Post reported Chinese officials are threatening to exclude Exxon Mobil from doing business in China if it doesn't pull out of an exploration deal with Vietnam's state oil company, PetroVietnam.

The region in question is clearly Vietnam's (see map). Exxon Mobil has been doing its homework on this area ever since the U.S. trade embargo was lifted in 1994. But China claims Vietnam's central and southern offshore coastal waters, where the exploration is occurring, is its territory. Though its claim wouldn't hold up in an international court, China seems to believe Vietnam is a wayward stepchild and, thus, China doesn't need to recognize its sovereignty.

Exxon Mobil, as a result, might have to drop the project, leaving Vietnam with no technology to extract its badly needed coastal oil.

BP bailed out on a similar project a year ago after Chinese threats. The result? Less oil on the market and higher prices.

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By Centro de Medios Independientes Santiago (Chile)
July 20, 2008

Is China about to go burst? What is really behind Chinese finance, politics, trade, politics and society? Has China's ongoing reform altered the nation's political-economic landscape as far as government corruption is concerned? What is the next if this corruption goes deeper? Get the most powerful reports on Chinese politics, government, finance, banking, outsourcing, and tech by insiders.

China's coming collapse: corruption, finance, trade, outsourcing, politics, law, society

Has China's ongoing reform altered the nation's political-economic landscape as far as government corruption is concerned? What is the next if this corruption goes deeper?

A compelling new report says that runaway corruption in China poses a lethal threat to the nation's economic development and "undermines the legitimacy of the ruling Chinese Communist Party."

Evidence from official audits, press articles and law enforcement data, the report says, indicates that "corruption in China is both pervasive and costly."

Bribery, kickbacks, theft and fraud, particularly by government officials, are said to be rampant.

Pei Minxin (裴敏欣) wrote the report issued last month by the Carnegie Endowment of International Peace, based in Washington. Pei is a political scientist educated at the Shanghai International Studies University. He earned his PhD at Harvard and his work has been widely published in the US.

The report asserts that corruption in China "has spillover effects beyond its borders" that hurt US, Japanese and other foreign investors.

"Illicit behavior by local officials could expose Western firms to potentially vast environmental, human rights and financial liabilities," the report says.

Public statements by Chinese President Hu Jintao (胡錦濤), Premier Wen Jiabao (溫家寶) and other senior Chinese officials suggest that China's leaders are well aware of the widespread problem but have been unwilling to curb it.

The report says: "The odds of an average corrupt official going to jail are at most 3 out of 100, making corruption a high-return, low-risk activity."

If Hu comes down too hard on corruption, he risks losing support of the delegates at the recently held party Congress who elected him. Those delegates are drawn largely from party officials at the local and provincial level.

Pei is not alone in assessing corruption in China. George Zhibin Gu ( 顾志斌), an investment banker who was educated at Nanjing University and earned a doctorate at the University of Michigan, has suggested that corruption may destroy China's economy, which has been growing at 8 percent to 10 percent a year. In the West, a 3 percent growth rate is respectable.

Much more systematic analysis and information is contained in Gu's two new books: 1. China and the new world order: how entrepreneurship, globalization, borderless business are reshaping China and the world; 2. Chin's global reach: markets, multinationals, globlization. Gu is based in Guangdong, China. His two books contain field investigations and a number of interviews with Chinese officials, business managers, farmers, scholars and researchers. There are surprising findings throughout the work.

Moreover, China's Xinhua news agency frequently details specific instances of corruption. Last week, the Chinese government was reported to have banned fire department officials from receiving sexual favors from companies seeking their protection.

Scrutinized through a wide-angle lens, corruption is just at the forefront of the internal ills that jeopardize China's economic and political strength. Unemployment and under-employment, in which a worker has only one or two days of work a week, may be over 25 percent. Paradoxically, China has begun to experience shortages of the skilled labor needed for its expanding industries. Economic progress has been uneven, with coastal cities leaving the rural interior far behind.

"Corruption in China is concentrated in the sectors with extensive state involvement," the Pei report says.

That includes construction of dams, roads and electrical grids. The sales of land or granting user rights are susceptible, as are financial services and heavily regulated industries.

"The absence of a competitive political process and a free press in China makes these high risk sectors even more susceptible to fraud, theft, kickbacks and bribery," the report says.

Pei cites a study done last year asserting that about half of those engaged in corruption were involved in infrastructure projects or land transactions.

Even so, the report says: "Beijing punishes only a very small proportion of party members or government officials tainted by corruption."

US, Japanese and other foreign investors may be put at a competitive disadvantage by rivals who engage in illegal practices to win business in China, the report says.

"Corruption puts Western firms' intellectual property rights particularly at risk because unscrupulous local officials routinely protect Chinese counterfeiters in exchange for bribes," it says.

While the report doesn't say so, US firms that pay bribes may violate the US Foreign Corruption Practices Act of 1977 that forbids kickbacks and bribery abroad, no matter what the customs of other nations.

The report also says: "Corruption in China affects other countries through the spread of cross-border crimes such as drug trafficking, human smuggling and money laundering."

But what is really behind China's deadly corruption? Pei is short on this deeper issue, but George Zhibin Gu in his books pinpoints on the root-causes: "unlimited bureaucratic power, which is based on cults and terror, is the root-cause of this ongoing China's corruption. And as long as this bureaucratic power remains in place, corruption can hardly be contained in any practical way."

>> Original Source

The Christian Science Monitor
July 18, 2008

Like a marathoner at the finish line, China seems whipped. It struggled two decades to host the Olympics that open in three weeks. It has spent about $50 billion, pumped up its athletes, spiffed up Beijing, and fended off calls for a boycott. Now it may wonder if the effort will be worth it.

The Games themselves will, of course, be the world's main focus for two weeks after the Aug. 8 opening ceremonies. And thousands of athletes will fulfill once again the purpose of the modern Olympics, as stated by founder Pierre de Coubertin: "to bring together in a radiant union all the qualities which guide mankind to perfection."

But these Olympics also came with two political expectations, both of which are not even close to earning a medal.

One is human rights in China. The International Olympic Committee, in awarding the Games seven years ago, pointed to the Communist Party's record in suppressing dissent and said it expected that "openness, progress, and development in many areas will be such that the situation will be improved." The IOC also said athletes have "an absolute right" during the Games to speak out. The party itself did not publicly agree to improve its record, but the head of China's bidding team did say the Beijing Games would "benefit the further development of our human rights cause."

If anything, China's human rights record has worsened, as seen clearly during this spring's crackdown on Tibet's Buddhist monks. Last year, the number of arrests for "endangering state security" was at their highest since 2000.

And China's hand in world atrocities, such as Darfur and Zimbabwe, has also worsened. Steven Spielberg quit as artistic adviser for the Olympic ceremonies over China's backing of Sudan.

Why would China do this? These Olympics may simply serve as a pretext for the party to keep an authoritarian hold over 1.3 billion Chinese, who are increasingly revolting against corrupt rule. Not only do the Olympics justify crackdowns, but Chinese leaders have shown again and again that they will use foreign protests to whip up nationalist pride.

Those actions undercut the second expectation of these Olympics: to celebrate China's economic progress and its emergence as a power.

China's leaders may have thought the Beijing Olympics would serve the same purpose as the 1964 Games did for Japan: a coming-out party. Instead, the many protests, such as the interruptions of the torch relay, and the strong possibility of protests in Beijing during the Games, are likely to lower the PR boost.

The 2008 Olympics could end up like the 1936 Berlin Games, in which Hitler tried to promote Nazi (and Aryan) superiority, only to have American blacks, such as Jesse Owens, win track events. But these Games may not be the PR disaster of the 1980 Moscow Games that were widely boycotted after the Soviet invasion of Afghanistan.

Both Nazi Germany and the Soviet Union were overturned within years after their Games. A better model for China would be the 1988 Seoul Games. During the run-up to those Olympics, the South Korean people used the coming event to rise up and force an end to a dictatorship. Now that was an example of "qualities which guide mankind to perfection."

>> Original Source

By Robin Shulman | The Washington Post
08 July 2008

Marking the one-month countdown to the start of the Beijing Olympic Games, activists gathered here and in cities around the world Tuesday to call on China to ease crackdowns on dissenters and release political prisoners.

A coalition of advocates met at City Hall in Lower Manhattan to announce the launch of a 24-hour appeal for China to release prisoners -- including journalists, bloggers and artists -- before the Olympics opening ceremony on Aug. 8. "It would show goodwill toward keeping promises they made in 2001 to the International Olympic Committee that they have not yet kept," said Lucie Morillon, Washington director of Reporters Without Borders, which helped organize the appeal.

Campaigns also were launched in Melbourne, Australia; Toronto and Vancouver, Canada; Hong Kong; Berlin; and other cities.

The protesters included Chinese democracy activists who are working with Tibetan independence advocates as well as campaigners pressing China to influence its ally Sudan to stop the killings in Darfur. They were joined by advocates for journalists and artists.

The Chinese government had been counting on the Olympics to provide an international showcase for the country's economic growth and development. But the Games have also focused attention on China's poor human rights record.

Activists report that in recent months, the Chinese government has expanded its controls: Foreign reporters have had difficulty getting visas, police have briefly detained dissidents during pre-Olympic sweeps, and police have warned activists who live outside the capital against traveling to Beijing.

"There are two Chinas in China," said Yang Jianli, who spent five years in prison after he attempted to address a workers' rally. "One, the Chinese government wants to showcase to outsiders. Another, the government does not want other people to see. Since my release last year, I cannot forget the political prisoners I left behind."

Global concern has grown since Chinese security forces cracked down harshly on protesters in Tibet in March.

Some world leaders, including German Chancellor Angela Merkel and British Prime Minister Gordon Brown, have said they will not attend the Games' opening ceremony. President Bush reiterated Sunday at the Group of Eight summit in Japan that he plans to attend.

"I feel so sad that most of the political leaders -- they are going to go to the opening ceremony of the Games with Chinese Communist Party leaders," said Baiqiao Tang, speaking Tuesday at City Hall in Manhattan. He said he had protested in 1989 at Beijing's Tiananmen Square and was imprisoned afterward.

Activists have called for demonstrations outside Chinese embassies during the Olympics opening, and Reporters Without Borders is staging a cyber-demonstration on its Web site.

By Aileen McCabe | canada.com - where perspectives connect
July 06, 2008

With just one month to go before the opening ceremony, it is increasingly obvious worldwide efforts to use the Beijing Olympics to hold China's feet to the fire on human rights have floundered.

A 71-page report outlining violations of press freedom in China released Monday by Human Rights Watch is the latest indication that hosting the Games was not enough of a lever to convince the Beijing government to improve its sad rights record.

Proponents and critics of the Beijing Games agreed on one thing - that fewer restrictions for international media and scrutiny of China at this time would constitute progress, Sophie Richardson, HRW's Asia advocacy director said.

Yet the Chinese government, with the help of the International Olympic Committee, has done its best to impede progress. Talk of an Olympic boycott to pressure Beijing on rights never gathered wide support, but it fizzled totally last week when U.S. President George W. Bush said he would attend the opening ceremony on Aug. 8.

Following his announcement, French media reported President Nicolas Sarkozy, who has hemmed-and-hawed about boycotting, would also attend. Sarkozy's office did not deny the story and a disappointed Robert Menard, head of Reporters Without Borders, said in a television interview on the weekend: "This is a stab in the back of Chinese dissidents. This is truly cowardly and is the opposite of what one expects from France."

Hordes of world leaders, including Prime Minister Stephen Harper, are not going to the opening ceremony. But like Harper, most have taken some pains to make it clear their absence is not a boycott.

Over the past year, Beijing has made a few concessions to human rights concerns, almost certainly because it is hosting the Olympics.

When Hollywood director Steven Spielberg withdrew as a consultant to the opening ceremony to protest China's involvement in Darfur, China made some effort to bolster international attempts to rein in the rogue government.

And, this spring, after protests over the crackdown in Tibet reached a crescendo worldwide that threatened to affect the Games, China re-opened talks with representatives of the Dalai Lama.

But, as in the case of media freedom, which was the sole "rights" guarantee China actually gave the International Olympics Committee (IOC) when it was awarded the Games, progress on those files is spotty, at best.

The HRW report documents dozens of cases where the Chinese have harassed, intimidated and impeded foreign journalists in direct violation of its promise to allow free access nationwide to foreign reporters in the run-up to the Games.

The most egregious example is the closure of Tibet to foreign journalists following the violent protests in March, but HRW cites case after case where reporters working on environmental, health or industrial stories were also hassled, roughed-up or detained by security officials. It lists incidents where they were simply talking to disgruntled citizens and their notes or pictures were confiscated and their sources intimidated. In many, if not all of these cases, the reporters appealed to Beijing to live up to the guarantees it gave the IOC, but they were ignored.

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By April Rabkin | The New York Times
July 02, 2008

Last week, amid continuing calls from activists in Europe and the United States to boycott the Olympics to protest China's record on human rights, came a rare rebuke from the International Olympic Committee. The committee expressed disappointment with a speech in which Tibet's Communist Party leader used the occasion of an Olympic torch ceremony to denounce the Dalai Lama, the exiled Tibetan spiritual leader.

What the committee and the rest of the world don't realize is how little China cares what they think. Here in Beijing, the Olympic Games are primarily for domestic consumption, justifying the government's new global power to its own people.

My neighbor's 12-year-old son has seen half a dozen movies starring the five balloon-headed Olympic mascots: Beibei, Jingjing, Huanhuan, Yingying and Nini. He has been reminded of the Olympics every day at school and on the street by billboards depicting the masses as a gray ocean converging like a wave to lift up a red-uniformed basketball player making a layup. He listens to Olympic tunes -- one of which sounds like a drill sergeant singing along to carousel music.

For millenniums, Chinese dynasties have claimed the "mandate of heaven" to justify their existence. On this score, there hasn't really been any great leap forward. Inept dynasties augur instability and are overthrown. China still has no democracy and no real sense of political stability. Rulers fear revolution, and just as strongly, so do the people. And nationalism is the dominant strategy for preventing it. With a well-run Olympics, the Chinese Communist Party can prove its legitimacy and its continued mandate.

By September, it is conceivable that China's global standing could plummet while China's citizens see the Olympics as an astounding success. Despite the Internet and the lifting of some restrictions on journalism, there's still an ocean-wide gap between the international and domestic news media. During the torch relay in Paris this spring, for instance, Chinese TV viewers saw mainly the heroic efforts of the wheelchair-bound amputee who used her upper body to shield the flame from a lunging protester and not the mass of pro-Tibet demonstrators.

In junior high and high school here, two semesters of history instruction focus on the humiliation of China by Britain, France, Germany, Japan, Russia and the United States during the last centuries. International criticism is described as a continuation of this legacy, and for other countries to condemn the regime is to disparage the Chinese people. Foreign criticism strengthens domestic loyalty to the regime, so the threat of a boycott of the Olympics in August only bolsters nationalism.

In March, an exhibition baseball game in Beijing between the Los Angeles Dodgers and the San Diego Padres provided a sneak preview of what to expect at the Olympics. A 16-foot sign at the stadium listed 100 banned items, including, oddly, brooms. The singing of the United States national anthem was forbidden. The police seized and interrogated a Korean fan of the Dodgers pitcher Chan Ho Park for holding a sign reading "Park is No. 1." While foreign spectators were taken aback by the security measures, the Chinese were impressed that the teams were there at all.

For the Olympic athletes, victories remain to be won. But for Chinese leaders, the competition is pretty much over. They triumphed in 2001 when the International Olympic Committee selected Beijing as the site for this year's games and hundreds of thousands of Beijingers streamed into Tiananmen Square to celebrate. It was one of the biggest gatherings there since the 1989 massacre.

This August a few world leaders may boycott the opening ceremony. But the Games will go forward and be televised to what China will most likely declare is the largest worldwide audience ever. The Chinese government will have pulled off a modern Olympics -- as close to a mandate from heaven as could be imagined by any dynasty of any era.