Is It Safe? Our Perpetual Assessment of China’s FDI Environment

As the snow melts, flowers bloom, and your pet tries to hump anything that moves, we are all reminded of the changing of the seasons and the other cyclical narratives of our lives. For those of us in the foreign direct investment (FDI) biz, a perennial favorite has been trying to figure out if now is a good time to jump into the China market.

This fundamental China FDI question has been on the minds of foreigners since at least 1978 (maybe the 1840s) when China’s opening up (改革开放) to the rest of the world took place. Many companies cautiously demurred, others parachuted into the country with abandon, and the rest waited patiently for conditions “to be optimal.”

Human events are inherently unpredictable, however, and China’s economic liberalization has not progressed in a linear fashion. Some years we see very positive developments and in others all is doom and gloom. The only thing that does not change is the continuous pontificating on where things are heading, how should Company X respond, and what it all means in the grand scheme of things.

The basic question, immortalized by Sir Laurence Olivier in Marathon Man, is thus: is it safe? In the movie, Olivier plays an amazingly creepy, evil Nazi dentist who wants to get at some diamonds he has stashed at a bank in New York City, but he doesn’t know if the CIA is laying in wait. He kills Roy Scheider, the CIA agent after him, but not after Scheider makes contact with his unwitting brother, Dustin Hoffman. Olivier kidnaps and tortures Hoffman as only a dentist can, repeatedly asking him if it is safe to collect the diamonds.

Olivier: Is it safe?
Hoffman: Are you talking to me?
Olivier: Is it safe?
Hoffman: Is what safe?
Olivier: Is it safe?
Hoffman: I don’t know what you mean. I can’t tell you if something is safe or not unless I know specifically what you’re talking about.
Olivier: Is it safe?
Hoffman: Tell me what the “it” refers to.
Olivier: Is it safe?
Hoffman: Yes, it’s safe. It’s very safe. So safe you wouldn’t believe it.
Olivier: Is it safe?
Hoffman: No, it’s not safe. It’s very dangerous. Be careful.

The evil Nazi dentist is torturing Hoffman’s character at the time, which adds a bit more drama to the scene. Nevertheless, I’ve had client meetings that have resembled that more closely than I would like to admit. Such is our relentless fascination with the China market and whether conditions are safe to enter.

And there’s always something to talk about, isn’t there? These days, it’s all about Rio Tinto and Google, restrictions in the real estate sector, and onerous technology regulations. The grumbling and moaning from international business groups is getting louder, so the usual parade of pundits marches out to do battle.

As a frequent practitioner of the art of FDI analysis and prognostication myself, I am somewhat reluctant to shine a hot, glaring, revealing light on the subject. Eh, who am I kidding? It’s the highlight of my otherwise dull, dreary day.

In my attempts to oversimplify, overcategorize, and overgeneralize, I think I can squish the China FDI debate down into three groups/parts/categories (cliques?): the Bashers, the Apologists, and the Sages. Very few people actually fit into a single category of course, but hey, I’m writing this thing, and I make the rules.

Turning to the China Bashers first, this is a very familiar group, one that I’ve written about countless times. These are people who either do not like the Chinese government, hate the Communist Party, distrust the economic and legal system, or have a (hidden) dislike of Chinese people — or a combination of these things.

It should come as no surprise that the Bashers usually advise against investing in China, citing any number of negative factors, including economic pitfalls, political instability, or human rights concerns. It’s difficult to be pro-China investment when you see this in the future:

Senior Beijing officials now face the dilemma of all reform-minded authoritarians: the economic progress that legitimates their leadership endangers their continued control. As Samuel Huntington taught us, sustained modernization is the enemy of one-party systems. Revolutions occur under many conditions, but especially when political institutions do not keep up with the social forces unleashed by economic change.

The above quote from Gordon Chang, who has been talking down China for the past decade (odds are that some day in the future, he’ll be right), is an example of one of the more eloquent and well-reasoned commentators of the Basher faction. Needless to say, other members of the group tend to rant, and who would want to invest in the PRC after hearing this?

We are sending a message to the Chinese government: if you refuse to play by the same rules as everyone else, we will force you to. China’s currency manipulation would be unacceptable even in good economic times. At a time of 10 percent unemployment, we simply will not stand for it. There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China’s currency manipulation. This is not about China bashing; it’s about defending the United States.

The China Apologists, our second group for consideration, see the market here through rose-colored glasses. Traditionally, the foreigners of this group are the ones who would speculate, and salivate, about the potential profits if their company could sell just one widget to each person in China. More recently, that story has been upgraded, call it China Fantasy 2.0, to advertising revenue from tens of millions of hits on a web site.

No Cause For Alarm

The Apologists don’t worry so much about economic, political or legal risks. They either firmly believe in what Beijing is doing or at least want everyone to think they believe that. In addition to starry-eyed business people and those who seek to curry favor with Beijing, this group also includes ardent Chinese nationalists and government propagandists, the latter of which are directly tasked with ensuring that the FDI money continues to pour in. Brushing off criticism this past January, a Ministry of Commerce spokesman said reassuringly:

The country [will] continue to attract foreign investment, he said. “Social stability, huge market potential and low cost of productive resources are still advantages for foreign investment,” he said.

Zhang said the government would stress national economic security while seeking to increase foreign investment. “We have to properly handle new challenges and situations when further opening sectors, including finance and telecommunications.”

In other words, unless you happen to be in finance and telecom, China is the place for you.

Even in the face of increased discontentment in the foreign business community, we are assured that all is not as bad as it seems:

Last Monday, Premier Wen Jiabao made clear to a group of global business leaders and economists that the country remains open for international business and investment. Fierce competition in the Chinese market that has been considerably broadened may have given rise to the frustration of some multinational companies. But that is a far cry from a closing door. China’s change in growth model will actually provide foreign businesses with more opportunities that, albeit, also allure more competitors from home and abroad.

Hard to argue against that with numbers like this from the government (or if you prefer, from Businessweek) that show a healthy inflow of foreign capital, nicely recovered from the recession.

Of the myriad hordes of sycophants, toadies, guanxi groupies and name droppers, we all know who they are. No need to name names and burn bridges.

Old China Horn

That leaves us with the China Sages, often called China Hands, the wise folk who strive for balance. I’ll put myself into this category since it makes me look better, and if I don’t, certainly no one else will give me that honor. The Sages, by and large, fall back on their experience and knowledge and attempt to look at the big picture while enjoying their reputation as a Sage — basically this means less ranting and more public preening. Here’s an example from a recent China Radio International show on FDI:

Ni hao, you’re listening to People in the Know, bringing you insights into the headline news in China and around the world, online at crienglish.com, and here on China Radio International. In today’s program we’ll discuss China’s business climate for foreign investment. So let’s get started.

The business climate in China has changed dramatically since the reform and opening up began more than 30 years ago, and continues to change. Our next guest has been in China for 30 years. Gilbert Van Kerckhove is the founder of Beijing Global Strategy Consulting and a member of the European Chamber of Commerce.

Who’s going to argue with Gilbert? The guy is practically an institution. As to the substance of the Sage argument, here are some wise words from Sage David Wolf of Silicon Hutong (and friend of the show, um, of the blog):

The investment climate is changing, as we should expect as China’s economy and it’s relative position in the world evolves. It also means, as some commentators are apt to forget, that America’s door to Chinese FDI is not as open as we would like to think.

It’s impossible to argue against common sense like that. But to be entirely candid about the Sage approach, there is another reason why we “thread the needle” between the Basher and Apologist points of view: business. I’m an FDI lawyer, David and Gilbert (I think) are consultants, and many other Sages out there are accountants and other service professionals. None of us can tell our clients that China is either an FDI paradise or hell on earth or we would quickly gain a reputation for being, well, a very bad advisor (i.e., business would dry up mighty fast).

So there you have it, the broad range of China FDI advice, in perpetual motion, fueled by constant chatter. When the economy is good, China is the boom town, when things are down, it is the one certain growth area, and when international relations become tense, you can be sure there is a China business angle.

Is it safe? I guess it really does depend on who you ask.



48 Comments

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.

  • Some HTML can be used to format your comment.
  • Add a picture to your comments with Gravatar.
  • Please be civil. Comments may be moderated.
  1. Terry

    You hit the nail on the head about service providers and their gravy train. I once heard a major consultant honestly admit “if I told the truth and didn’t tell them what they wanted to hear, I would be out of business!!”

    But given all that, I am totally in the self-appointed “Sage” or is that “Waffle” camp ;) – now back to my embroidery, only wish my old threading the needle eyes were a wee bit sharper :(

  2. “None of us can tell our clients that China is either an FDI paradise or hell on earth or we would quickly gain a reputation for being, well, a very bad advisor …”

    I think you’ve answered your own question pretty succinctly there, Stan: No, it’s not safe. Which is not to say that FDI is inadvisable.

    If it were safe you’d be in the business of convincing prospective clients that they need your services under false pretences, by which time investors’ experiences with your company would become the new cautionary tale for would-be entrants into the China market. In which case it would be unsafe again.

    Confused?

    Me too, but I’m sure you’re doing a great job making things ‘safer’.

    • Would it be too cynical and lawyerly to say that nowhere is safe? Humans try to screw each other over whenever possible. Some places are better than others, but we have not yet progressed so far as a species that we can really do like everyone seems to want and kill all the lawyers.

  3. BTW, Marathon Man is a cool movie that no one remembers. Its not just the torture scene. I liked its “realism”; its a spy / Nazi fighter film that uses an everyday camera to see the characters. And I loved it how the Dentist was forced to eat the diamonds at the end.

    I agree with you. Basically, everything you said is right. However, just because we have a vested interest in keeping customers come in the door does not mean we are fooling the customer. Reporting the situation using facts, common sense, and perspective makes us “China Sages” (FYI congratulations, you managed to coin an adjective which is even more pretentious and annoying than “China Hang”). Everyone has their own self-interest for sure. For the “Sage”, self-interest relies on been a truth-seeker, no an ideological pundit or cheerleader.

    • Agreed. I thought that’s what I said, but maybe it wasn’t clear. In a perfect world, good information drives out bad, and the good consultants are driven by self-interest to provide accurate advice. And that does happen a lot of the time.

      I’m a proponent of honesty. Aside from moral aspects, honesty means that you are more likely to have a satisfied client at the end of the process who will refer more work to you. You also sleep better at night, not lying awake wondering who is going to catch you in a lie. And do you really want a client who requires a lie before they’ll hire you?

      Sadly not everyone agrees with this, and others find it preachy.

  4. yangrouchuan

    I would discount the “sages” aka China hand-jobs, as they try to ride the fence and not get pinned to one position, thus they can pander to whatever group they happen to be in the presence of.

    On the other hand, many of them have “consulting” business in China and thus eventually lean towards the panda-hugger side of the fence but are wily enough to feign impartiality in a somewhat convincing manner.

    • It would appear from your tone that you would fall into the “basher” category. 随便你 . Fact is, the “sages” have a lot less on-the-line than the investment types who are looking to fund their China misadventures. And people on-the-ground at least have the ability to understand the context of news, unlike the “bashers”.

      I would probably fit into this “sage” catagory because I am a “consultant”. That being said…I don’t have a “side” other than the truth, as I see it.

  5. Just for the record, and in response to comments so far, I don’t think advisers necessarily sugar-coat their answers or waffle just to keep business. Some do, some don’t. Same with the other two categories: some honestly believe that China sucks/is great, others are lying for political purposes.

    One likes to think that dishonest consultants will get driven out of the market. I realize that is more my fantasy than anything else. Sadly, a lot of people who bullshit for a living do it for a long time and are well paid for it.

    Also for the record, the examples I gave of “Sages” like David Wolf were of people I respect, not consultants engaged in self-interested waffling.

  6. Hank

    To play devil’s advocate:

    If one takes a historical point of view …

    Didn’t a well-known American journalist in 1921 say, after visiting the fast growing Soviet Union, “I have seen the future and it works.” Were there “bashers,” “Apologists,” and “sages” at that time?

    Can one ask were there “bashers,” “Apologists,” and “sages” at the time of the fast growing Third Reich and its “people’s car” (Volkswagen)?

    Where there “bashers,” “Apologists,” and “sages” during the “Great Proletarian Cultural Revolution” ( 无产阶级文化大革命).

    Who are they? Does anyone remember them?

    • Hindsight is 20/20.

      There were also detractors when the USA was founded. Does anyone remember them?

      I think you are presupposing a conclusion based on certain current views of China. We don’t know whether China will end up being the Big Bad or the Benevolent World Leader, or neither.

      • Hank

        Yes, hindsight is 20/20.

        However, if you look carefully, you’ll see that the former Soviet Union, the Third Reich, the PRC during the Cultural Revolution, and the PRC today have a number of qualities in common.

        I don’t know what the USA has in common with the above group. What’s the point of classifying a fruit with a list of vegetables?

        Anyway, that’s besides the point.

        I believe by studying history and discovering who were the “bashers,” “apologists,” and “sages” for each of the given social systems, it will provide a perspective on viewing China today. There IS a continuity from the Soviet Union through the cultural revolution to the PRC of today. Yes?

        You said, “I think you are presupposing a conclusion based on certain current views of China.”

        Your classification of “bashers,” “apologists,” and “sages” by definition presupposes a conclusion.

        I’m only suggesting that it would be wise to study the history of various “bashers,” “apologists,” and “sages” to understand the wisdom or error of their judgement. The “apologist” if today may be the “basher” of tomorrow. That’s all.

        In the early days of the Third Reich, Churchill was a “basher.”

        In the early days of the Third Reich, Ambassador Joseph Kennedy, President John Kennedy’s father, was an “apologist.”

        For the early PRC Edgar was an “apologist.”

        For the later PRC his wife is a “basher”

        • “There IS a continuity from the Soviet Union through the cultural revolution to the PRC of today. Yes?”

          What is that continuity?

          • Hank

            Duh!

            The Marxist-Leninist ideology of the Soviet Union.
            A ruling Communist Party

            The Marxist-Leninist ideology of the PRC.
            A ruling Communist Party.

            The mish-mash, pseudo Marxist-Leninist ideology of the PRC.
            A ruling Communist Party.

        • Inst

          And in commonality with the first group, the United States was a racist country controlled by elites which made its fortune through violent expansionism (slavery, eviction of Amerindians, attack on British-controlled Canada, infiltration-then-absorption of Mexican-controlled Texas) and piracy (see pirating of British industrial technology, endemic counterfeits in the late 19th century).

          That’s not to say that the Chinese are guaranteed success; I’m just saying that it’s facile and inaccurate to say that “China has commonalities with the Soviet Union and Nazi Germany, so must collapse”, you have to investigate the Chinese situation in finer detail to be able to make such a statement.

          As to your method of using ad hominem reasoning to determine the correct position on China; well, that’s what it is, isn’t it? It’s a fast, but ultimately dangerous method of making a judgment. Who says what does not have a strict correlation to the veracity of their statements. If Goebbels said the sky was blue would you dump all your stores of blue paint for depicting skies? It may stand to reason to put their statements through more scrutiny, but if you need a very accurate judgment you can’t just look at who is saying what without evaluating the statements by themselves.

          • Hank

            @Inst

            I believe you’re a little confused.

            The former Soviet Union and China came to power through a violent revolution led by a communist party. What’s the commonality with the US?

            The Third Reich established a one-party dictatorship and eliminated all democratic freedoms. What’s the commonality with the US?

            In all three countries, they established a one-party dictatorship and remained in power through their control of the armed state apparatus. What’s the commonality with the US?

            The issue of the US’ (England, Spain, France, Netherlands, Portugal, etc.) colonial and imperialist behavior is not the issue here.

            The question is how will “bashers,” “apologists,” and “sages” of the PRC regime be seen by history?

            Don’t get your panties tied up in knots. I did not say China must “collapse.” I know enough about Chinese history to know that one Chinese dynasty (government) follows another. Who says China’s history will stop with the PRC?

            Actually, I equate the PRC with the Sui Dynasty. That was a pretty severe government and the people suffered. (It also didn’t last long.) However, I’m sure you know which dynasty followed it. Anyway, I think the same thing will happen again. The Chinese people are indomitable.
            They’ll know what to do when the time comes.

            I don’t quite follow your mumbo-jumbo about “blue paint” but history will definitely sort out the question of who is a China “basher,” a China “apologist,” or a China “sage” (中国同. This question will be answered in your lifetime.

            Review your history!

    • Hank,

      Maybe. On the other hand…

      There were very few “sages” on China and Soviet Union in the US Government during the 1950s – 1970s. They were chased out by the anti-communist movement. (McCarthyism) . Hence, USA foreign policy during the cold war was dominated by a silly believe that Communism was a monolithic force bent on world domination.

      A real sage during the Communist revolution would not say “it works” because there is no precedent or experience to base it on. Same for Third Reich.

      “Sages” during the GCR were led around, much like visitors to N. Korea are today. BUT, those “sages” were not allowed to present to the decision makers in Washington either.

      • Hank

        Good point.

        I was using the term “sage” ironically. I thought that was how Stan was using it.

        There are very few real “sages” around today. Only history (maybe in 5-10 years) will show who had the insight for calling the shots on China.

        • Replying to your comment about my comment asking your point of view about continuity between Soviet Union, GCR China, an PRC of today… and thus building continuity in comment threads…

          To my understanding (which is limited because it has been a long time since I studied this), China broke continuity with Soviet Union when Mao created “Maoism”; the idea that communist revolution can come not from proletariat, but from the countryside.

          Khrushchev broke continuity when he ended “Stalin-ism”, thus setting the precedent for rejecting the infallibility of the Revolution. Mao did not forgive Khrushchev for this.

          China essentially become a military dictatorship during the ending-days of the GCR. Thus ended the continuity between the political ideology of the CCP and Marxist Leninism.

          Zhou Enlai rejected “continuous revolution”, thus breaking continuity with Mao.

          Deng Xiaoping rejected the idea that the Government should regulate and control all sectors of the economy, thus breaking with the Soviet economic model.

          So what does China today have to do with Marxism? Heck if I know.

          • Communist countries don’t have such a great track record historically. On the other hand, China is hanging on to the “Communist” label by its fingernails. Not sure that discussion is even useful.

            The reason I use the term “Basher” (negative connotation) is not because I think we should all love China. Rather, I believe that a lot of Basher comments are lacking in real analysis and are based simply on ideology, racism, etc. — irrational bases.

            People who are China critics that base their opinions on real facts (historical or otherwise) are another story. For this post, technically they would be “Bashers,” but in general, I would rather call them “critics.”

            I’m not sure whether that helps to push the discussion along or not.

          • Hank

            I don’t mean to quibble over small change but Marxism was applied differently in every country where communist parties came to power. The essence – the dictatorship of a ruling “marxist” party – remained.

            This is exactly what you have today in China.

            Don’t get confused.

            We’re not talking about if China is a “pure” Marxist-Leninist run country.

            The question is how will history view (according to Stan) the “bashers,” the “apologists,” and the “sages” of the current PRC regime. Who will be right and who will be wrong.

            History keeps a good record. But it’s only 20/20 after the fact.

            That’s all.

  7. Hank

    @Stan,

    I believe you’re right. Some of us are “critics” of the Chinese system. We want to see the Chinese people succeed. We understand the history and the culture. We have family and close ties to China. What we criticize are policies, errors, or mistakes that will prevent the Chinese from succeeding.

    On the other hand, there are “bashers.” They want the destruction of China and everyone in it. They get confused in with the “critics” and that creates a big mess – a dark room with everyone with AK-47s shooting.

    It also doesn’t help that on the Chinese side, there definitely some “good guys” and some “bad guys.” The “bad guys” always hide behind their “chineseness.” Hard to tell them from the “good guys” in the dark.

    But, in the end. History will sort everything out.

  8. lolz

    The higher the risk the greater the rewards. That’s common sense. Investing in China is about managing the risks. The best advises therefore come from people who can talk about both the pro and cons, rather than coming from a certain angle.

    That said, most of the China bashers are not exactly qualified to talk about investing period because they don’t have any expertise in that field. Their reasons against investing in China have more to do with their existing prejudices and ideologies against China than sound reasoning. It is little surprising then, that while the anti-China sentiment is very popular in the Western nations, the businessmen from these same nations act in a completely different manner.

    • Very well said, and quite true.

    • “… while the anti-China sentiment is very popular in the Western nations”

      Not nearly as popular as anti-western sentiment in China I would suggest, not to mention the stacked deck that Chinese competitors get to play with when foreign companies try to do business in China.

      • lolz

        “Not nearly as popular as anti-western sentiment in China I would suggest, ”

        OH really? And where do you get this idea? I have been spending last month or so browsing through popular forums like Tianya and MOP almost daily. For the most part the Chinese netizens are very favorable towards the west. If there is a group of people which Chinese hate it would be Japan. Japan bashing is commonplace, and the Chinese seem to care more about Toyota’s problems than Americans. And it’s not only the Chinese netizens. If Chinese people hate the West so much they would not be giving themselves Western names, buying Western cars, eating western fast foods, wearing western cloth, or even bother to learn English and Western culture. If Chinese really hate the West they would do what Tibetans are doing with the Chinese. Many Tibetans do not try to learn the Chinese language, culture, and certainly won’t buy things Chinese unless they have to.

        BTW, based on what you wrote on this board and your blog I would imaging that most Chinese who you came into contact with probably have some negative feelings towards the west if they of think you as a representative.

        • “OH really? And where do you get this idea?”

          You missed the part where I said, ‘I would suggest’. You also miss the inference that anti-Chinese feelings in the ‘west’ are exaggerated by Chinese state bloviating, via which anti-western feelings in China become a symptom of said state orchestration.

          “I have been spending last month or so browsing through popular forums like Tianya and MOP”

          That ought to do it.

          “For the most part the Chinese netizens are very favorable towards the west.”

          And, if you read carefully, there is nothing I have said that contradicts ‘for the most part’.

          “If there is a group of people which Chinese hate it would be Japan.”

          In itself troubling, and the prime example of how the CCP’s dislike of open discourse frames the attitudes of the vast majority of Chinese citizens. Anti-western feelings in China are, as yet, a watered down version of the ‘anti-Japanese campaign’.

          “If Chinese people hate the West so much they would not be giving themselves Western names, buying Western cars, eating western fast foods, wearing western cloth, or even bother to learn English and Western culture.”

          That’s like saying “if you dislike the CCP so much why don’t you stop eating Chinese food?” In short, a non-argument.

          “Many Tibetans do not try to learn the Chinese language, culture, and certainly won’t buy things Chinese unless they have to.”

          Tangential at best, but while we’re at it, this is because Tibetans refuse to buy into the culture that is systematically destroying their own. And that’s a different ball game altogether.

          “BTW, based on what you wrote on this board and your blog…”

          …you have at best failed to understand, or at worst deliberately misrepresented my position(s).

          “… most Chinese who you came into contact with probably have some negative feelings towards the west if they of think you as a representative.”

          Only if they were institutionally defensive when confronted with a critique of their government, which takes us neatly back to the heart of the matter, doesn’t it?

          Thanks for visiting my site, though.

          • lolz

            “You missed the part where I said, ‘I would suggest’. You also miss the inference that anti-Chinese feelings in the ‘west’ are exaggerated by Chinese state bloviating, via which anti-western feelings in China become a symptom of said state orchestration.”

            Oh you are so clever stuart, I expected nothing less from yet another China Basher/English Teacher. I did not miss the part where you “suggested” that Chinese harbor strong anti-west sentiments. My question was what makes you think that way. So far you have not answered my question so I am still waiting. Do you have any evidence of what you suggested?

            As for the anti-Chinese sentiments in the West, you can get a sense of this by participating in popular forums, or read about research polls such as this one. http://pewglobal.org/database/?indicator=24 This has little to do with Chinese government but a lot to do with the media and how foreign politicians want to use the anti-China sentiment to help them get elected.

            “That’s like saying “if you dislike the CCP so much why don’t you stop eating Chinese food?” In short, a non-argument”

            LOL nice try stuart. I wasn’t aware that I only listed food choice as proof for Chinese’s affinity towards the west. If I did not list all of other items then you may have a point.

            “Tangential at best, but while we’re at it, this is because Tibetans refuse to buy into the culture that is systematically destroying their own. And that’s a different ball game altogether.”

            Thank you for admitting that Tibetan’s hatred towards Chinese. Can we further agree that this is an example of what real anti-whatever sentiment looks like? You know, rejecting the culture, language, and all of that business.

            “you have at best failed to understand, or at worst deliberately misrepresented my position(s).”

            Oh yeah? Are you suggesting that you don’t come across as a China basher? Your online persona sure paints you as a China hater because you only stress on the negatives. If you only speak ill of someone all the time wouldn’t others view you as a hater? Please tell us why you don’t consider yourself a one sided China-basher.

            “Only if they were institutionally defensive when confronted with a critique of their government, which takes us neatly back to the heart of the matter, doesn’t it?”

            Oh you are so noble stuart. Do you know the acronym MYOB? The thing is, people do not like ideas to be forced on them, even if they agree with some of these ideas. Also, have you ever thought that maybe people don’t like you because you come across as pompous and arrogant? Blaming those who disagrees with you as “institutionally defensive when confronted with a critique of their government” doesn’t help either. Not everyone can deliver a message well even if the message content is top notch. I actually agree with some of the things you wrote (other than your suggestion that anti-west sentiment is strong in China of course) but I also agree with the one who wrote that people like you only fuels the anti-western sentiments in China.

        • “Are you suggesting that you don’t come across as a China basher?”

          Pay attention: I’m saying unequivocally that I’m not, but that you, and others, have a perception issue. I am, however, a healthy critic of the Chinese government – which is not the same thing.

          “Your online persona sure paints you as a China hater”

          Nope. You do.

          “Please tell us why you don’t consider yourself a one sided China-basher.”

          I’m eating an apple. It’s delicious. Sure looks, smells, and tastes like an apple. But one thing intrigues me: why doesn’t the apple consider itself to be an orange?

          Because it’s not.

          “The thing is, people do not like ideas to be forced on them…”

          I think you need to address that comment to the Chinese government.

          “I actually agree with some of the things you wrote…”

          I agree with me too, but I’m happy to get turned around by sound arguments.

          “…but I also agree with the one who wrote that people like you only fuels the anti-western sentiments in China.”

          People like me?

          It may be that less than complimentary comments fuel anti-western feelings in China, but that, I maintain, reflects the tired and aggressive rhetoric that is specific to the CCP (and the likes of Iran, I suppose) in response to criticism. The Chinese people deserve more mature guidance and more open discourse.

          • Bin Wang

            The mighty stuart’s treatise on what the Chinese people want … where can I pick up the audio CD?

          • For shits and giggles, stuart, you’re misrepresenting the philosophical conundrum with your apple and orange analogy.

            The correct analogy is:

            I’m eating something. I think it is an apple. It doesn’t think it is an apple. It thinks it’s an orange. But I swear it’s an apple. It swears otherwise. There’s no objective way to determine what it is for sure. Even if everyone else, or a majority of others agree with me and swear it’s an apple, it can still swear otherwise and still think otherwise. Even if everyone else, or a majority of others agree with it that it’s an orange, I can still swear otherwise and still think otherwise.

            You’re mistakenly and subjectively trying to establish objective state of being when there can only be state of perception.

            Just sayin’.

          • Kai,

            That was a good counter-analogy; a bit Kafka-esque, but I liked it.

            “You’re mistakenly and subjectively trying to establish objective state of being when there can only be state of perception.”

            It’s still an apple, though. Right?

            I humbly announce my retirement from this thread. Don’t all clap at once; there could be catastrophic consequences.

          • stuart, no, it’s not an apple. No one can know objectively what it is. All that matters is how it is perceived. Any analogy that presupposes a state of being is already inaccurate.

  9. King Tubby

    Assigning individual financial experts to categories is an arcane exercise similar to those classical Marxist attempts to assign different types of workers to either labour or capital. An idiotic exercise since new types of employment specialisation appear on a daily basis and particularly so since the 70s.

    Foreign investment and profit calculation is a cold business. Re China. I would want something far more specific before shelling out to an expert, *especially* along the lines of the first, second and third of the last four paragraphs of this article AND relating to the type of enterprise being considered.

    http://www.cis.org.au/executive_highlights/EH2009/eh102610.html

    Not so much about the Rio Tinto case, and more about the nature of the domestic business environment and its nexus with govt (policy, national security, conflict resolution, vested interests and their networks of influence, etc) at all levels.

    Shoals to be negotiated and this requires serious empirical study. Wishful thinking of whatever persuasion is no substitute for detailed knowledge of a particular business sector. Homework time.

  10. AndyR

    Great post! Though I agree with JC that the term “China Sages” may be the most annoyingly pretentious term ever…the whole idea of identifying “China” as a set of knowledge that someone can “know” or be an “expert” in is a problematic holdover from the post-WWII explosion of “area studies”. At the end of the day though, it is also just a good marketing strategy which sadly results more often than not in a China “punditry” whose commentary often overstretches the bounds of their real expertise. For example, Stan is a lawyer, so we do not necessarily need him commenting on the identity politics of a “dwarf village” in Yunnan. (Just making a point, I appreciate the fact that Stan does not go too far outside the lines of his expertise, which is why I still pay attention to his blogs). BUT, many other so-called “China experts” are more than happy to claim expertise on ANYTHING China related, which unfortunately ends up dumbing down a lot of the reporting and commentary on China.

  11. yangrouchuan

    China experts’ greatest achievement is convincing the US to roll over on Taiwan and Tibet to gain China as an ally. Look where that got us now. The idea that some old white fools (and Shawn Rein) are experts in anything about China because while in China they are 1. at local bar 2. groveling at the feet of officials 3. cracking whips over the heads of their local staff and 4. picked up some local slang is utterly idiotic.

    Anyone who proclaim their China expertise is simply full of stuff and nonsense. And you can see how well it has paid off for all of them, living under slightly upscale local conditions.

    • lolz

      “China experts’ greatest achievement is convincing the US to roll over on Taiwan and Tibet to gain China as an ally.”

      Hmm, the cold war people who were fearful of USSR had a lot more to do with Nixon deciding to normalize relation with China than the Sinologists. At the time Taiwan was still just another small and corrupt military dictatorship. The US never saw Tibet (or Taiwan, for that matter) as anything more than a pawn to contain China, just as the US only saw China as a pawn to contain Soviet influences.

      “Look where that got us now.”

      It’s odd to see so many Americans blaming China for its recent demise when it’s pretty obvious that America’s biggest enemy is itself. China did not force America to invade Iraq, nor did it force Americans to buy non-American made goods. No one forced Americans to borrow money they don’t have so they can flip houses. The fact is that even if China did not exist America would be in the condition it is in today. The difference would be that the American capitalists invest in other 3rd world nations and not China.

    • King Tubby

      China experts’ greatest achievement is convincing the US to roll over on Taiwan and Tibet to gain China as an ally.

      Taiwan: It was a political manouvre by Nixon to put the then USSR on the back foot in the global chess game. (No trade benefits if I recall, except for Pepsi…faintly recall a photo op featuring the lolly water which was engineered by Donald Nixon.)

      Tibet: Lets not go there. You never give up, do you?

      (This and the latest piece are a nice turn of the page after google overload. Good one.)

    • friendo

      Americans always blame others for their own mistakes.

      • King Tubby

        friendo
        A really nifty comment, and one sure to hurt the feelings of the American people. Reading most of your your posts is like being gnawed to death by a dead sheep. Any thoughts on the actual topic, or is that outside your skill set?

  12. Hank

    @Stuart

    (This isn’t some April Fool’s joke?)

    Yes, it’s still an apple.

    How’s this for an example. A pompous idiot is eating some shit but he thinks it’s peanut-butter. But some silly lawyer tell him it’s shit but our pompous idiot is convinced it’s peanut-butter because of the creamy texture and soft brown coloring.

    Who is right, the pompous idiot or the silly lawyer?
    (“All that matters is how it is perceived.”)

    Another example:
    At one time the majority of the pompous people in Europe thought the world was flat and you would fall off if you sailed too far west. A few silly lawyers thought the world was round.

    Who was right, the pompous majority or the few silly lawyers?
    (“No one can know objectively what it is.”)

    Here is a twist on the stupid riddle, “if a tree falls in the woods …”

    If you forget when you go to work and leave the water running in the bathtub, will the water overflow since no one is there to see it?
    (“No one can know objectively …”) Tell that to the non-objective water on the floor.

    We live in an objective materialist world. Through science and experience, we begin to understand how this objective world is structured.

    If our ideas (subjective world) we have in our heads do not conform to the objective world, we will make mistakes in our analysis. People who place importance on the subjective world as opposed to the material world are called idealist.

    Actually, the philosophical struggle between idealist vs materialist is as old as history. I use the terms “idealist” and “materialist” in their philosophical meaning.

    • In an ideal would we all have the choice between peanut butter filling or shit topping with our apples?

      I’m buying bananas tomorrow. Fact.

    • Hank,

      Can a person objectively be a “China-basher”? Is the state of being a “China-basher” the same as the state of being an apple? Is a “China-basher” part of an objective materialist world? Like an apple? Like overflowing water?

      You missed the point.

  13. King Tubby

    The fruit loop basket. Metaphysicians, commenters on the ideal versus the material. How many angels can sit on the head of a pin, and is it a pin or plain drivel being written. The Vatican has job opportunities for guys like you.

    • Hank

      King Tubby,

      What are you trying to say?

      • King Tubby

        Was referring to 8.31, 11.23, 11.55, 12.35, 5.25 and 5.51.
        Medieval Schoolmen hard at work.

        Back to trade and investment in China and a link which makes both sides look pretty tarnished, and which also illustrates the point made above:

        LOLZ…while the anti-China sentiment is very popular in the Western nations, the businessmen from these same nations act in a completely different manner.

        http://www.counterpunch.org/kampmark04012010.html

        Or as I said in a back post: profit calculation is a cold business.

  14. oiasunset

    Stan you are totally outdated.

    Among the Chinese fenqing circle, Mr. Gordon Chang is a founding member of the Chinese “Strategic Fooyou Agency” (SFA). The SFA motto is “In Party we trust, all others we crab (harmonise, that is).”

    The theory goes that in the 1990s, the Chinese government contracted Mr. Chang to spread the notion that China is about to collapse itself anyway so it doesn’t really worth the attention of the US. The mission was wildly successful and China did get precious 10+ years room to grow under the US radar, until it is too late for the US to react in any meaningful way.

    Mr. Chang’s stance always follow that of Wen Jiaobao, who always reminds everyone that China is weak inside and faces huge problem (Mr. Wen recently ventured to say that China has 200 million people unemployed, which is at leat one in four people of working age!)

    Rumours say that Mr. Chang was a colonel of the SFA and was recently promoted to general rank.

    Search 战略忽悠局 in Baidu you will find 13,800,000 entries about SFA, which is kinda of sad because the US is now certainly aware of this agency and won’t fall into its ploys easily anymore. Fortunately Mr. Chang has developed many more SFA agents these days and they are diligently trying to persuable the US (and the western world) to leave China alone.