(un)informed confusion
~ and other odd oddities ~

11.10.2006

没关系。。。

If there's one thing that's thouroughly disappointing when it comes to the foreign policy purviews of the Conservative government, it's their willingness to obfuscate the Canada-China relationship in favour of.... well, nothing, outside of what looks to be a bad case of diplomatic laziness.

This is just the latest in a series of articles run by the Globe outlining the sour grapes that have sprung up like lemmings in the Canada-China relationship. A question often asked by conservative bloggers when I (or someone else) mentions this usually entails: "should we really be disappointed in a government that has let slide its relations with one of the world's worst human rights offenders?"

My response? "Yes."

Change does not happen in a vaccuum. And change in China will not happen if the outside world continues to view the country as nothing more than either 1) a profitable manufacturing zone, or 2) a profitable manufacturing zone that threatens Western global hegemony.

A few points to think about:

  • Cross-pacific economic platforms such as the Asia Pacific Gateway and Corridor Initiative are, business-wise, good news. They encourage increases in the number of business interactions that take place between Canadian enterprises and China's new global competitors, and as the China-Canada relationship widens and deepens, the depth of these business interactions between both our countries will also grow. This means Chinese businessmen at all levels will begin to learn more about Canadian culture, and vice versa — opening up long-term, generational opportunities for cross-cultural understanding, new exchanges of ideas (business and otherwise), and an increasing awareness of how modes of governance on either side of the Pacific tend to work. Following from this...

  • Canada, being a multicultural nation whose interior makeup is less dissimilar from China's than one might think, has a lot to it can show China regarding how intellectual property rights, human rights, and vast cultural diversity can coexist within one functioning system — a democratic system in which geopolitical differences are an advantage, not a problem, and in which the centre does not need to oppress the periphery to maintain basic law and order.

  • China, for its part, has indicated that it is receptive to new ideas and change. In a recent survey of new CCP membership, the top cited priority was government reform. The reasoning behind this phenonemon is simple: if the core is corrupt, the periphery will be corrupt, too. And bad apples equal bad business. Corruption at the local levels, in the market, and in the courts make up China's greatest development hurdle. The newer echlons of the CCP recognize the need in China for a more open and democratic governmental system from which the substance surrounding the seed — business, law, society — will take shape. China can look at the Canadian example — warts and all — and take from it ways in which some of the ideas explored above can be adapted to their own changing framework of governance and growth.

  • Culturally speaking, Westerners on the whole know very little about Asian history, culture, and identity — so there's room to explore from our side as well. If business interactions lead to university partnerships, cultural exchanges, and an increase in cross-Pacific dialogue, we're headed in the right direction. Chinese entrepreneurs certainly have a lot to show their Canadian equivalents, and Canada's governmental system could probably learn quite a bit from exchanges with China's, if simply from a perspective of "here's how another society does things." China's government is adept at promoting business, inviting FDI, and successfully running a massive, decentralized country. Surely there's some nugget in there aside from Sun Tzu.

  • Canada could reap economic benefit from an expanding cross-Pacific relationship. China needs resources. We have them. Increasing trade with China is Canada's best opportunity to diversify its export portfolio beyond trade to the U.S.

    To use a recent example, Canada has essentially put all of its eggs in one basket — for the benefit of an analogy, income trusts. Imagine if something terrible happens to income trusts tomorrow — following the analogy, a new tax platform. Don't you think Canada would have been better off if it had some dollars invested in mutual funds and other securities, too?

    The point: increasing China-Canada trade is in Canada's immediate and long-term interests. If the American political wind shifts course against an open border, softwood lumber, beef exports, or what have you, Canadians will have a safety valve — another market to fall back on. 9/11 has only made the dangers of our dependency on American import dollars more acute; imagine if tomorrow Americans shut the border down because of a terrorist attack traceable to Canada. Imagine if the border never re-opened, or at least remained restricted. The American economy would lose some steam, to be sure, but the Canadian economy would be the real loser. The Canada-U.S. trading relationship needs a counterweight — and China is it.
For all these reasons, the Harper government shouldn't be letting its diplomatic relations with the PRC slide into oblivion. A good economic relationship with China requires a good political relationship with China, especially if your government cares about things like cultural exchanges, human rights, and attracting more than just a trade deficit. And a good political relationship with China is, for the time being, Harper's job.

9...thoughts from my fellow Saturnalians:

  • Chris:

    You obviously know alot more about this issue than I do...but shouldn't China be made to play by the rules if it wants to play the game. What I mean is, shouldn't the Chinese follow international law and conventions with respect to diplomacy, human rights, intellectual property, etc.

    Right now, it appears to me that China does whatever it wants and the rest of the world is afraid to do or say anything. In July, I posted about China's disregard for intellectual property and its bully-like response to questions about the transgressions.

    This week, we see another example of China's tendency to act like a bully. The Chinese President is refusing to commit to a one on one meeting with Stephen Harper. Speculation is that the Chinese are annoyed at, among other things, Canadian complaints about corporate espionage and violations of intellectual property.

    It is obvious that good relations with China are economically desirable for Canada. But to what degree do we ignore the fact that China's record in the international community, is atrocious. If this were a small third world country, we would be threatening sanctions -- and perhaps even military intervention.

    By Blogger Devin Maxwell, at Mon Nov 13, 10:52:00 a.m. AST  

  • Its a tough situation. Although I tend to think that decent relations with China should exist, I still have trouble agreeing with economically benefiting off the oppression of others.

    I know that change occurs slowly, but at the current point in time the Chinese government doesn't seem interested in change. Indeed, they are only interested in control.

    By Blogger Eric, at Mon Nov 13, 01:06:00 p.m. AST  

  • I'll tackle these posts point-by-point. First, though, I must reveal I'm basically a realist when it comes to foreign policy. International norms are only so good as everyone plays by the rules, which in turn will only happen if it's actually IN each country's interest.

    "You obviously know alot more about this issue than I do...but shouldn't China be made to play by the rules if it wants to play the game. What I mean is, shouldn't the Chinese follow international law and conventions with respect to diplomacy, human rights, intellectual property, etc."

    They should, and for the most part, they do -- with the glaring exceptions of human rights and intellectual property laws. Both exist within in China, codified and not, but attempting to find out where paper meets practice in nearly impossible because China's domestic political landscape is saturated in a cyclical game of centre-periphery finger pointing. That is to say that politburo in Beijing will point out that they have intellectual property rights and workers' rights on the books, but that China's local officials are largely responsible for enforcing them. In doing this, Beijing can essentially keep its hands clean, and local officials can sit idly by while their SOEs or TVEs or what have you copy Western products and abuse workers.

    I will pipe in here and say that while the IPR side of things really hasn't gotten any better, workers' rights movements are making progress as China's legal system becomes inundated with work-related complaints and "activist" lawyers seeking to build a more equitable work environment.

    "Right now, it appears to me that China does whatever it wants and the rest of the world is afraid to do or say anything. In July, I posted about China's disregard for intellectual property and its bully-like response to questions about the transgressions."


    Following from my opening statement, it's useful to examine these points:

    -The U.S. and, to a lesser extent, the EU, will never push China too far because it would be the ruin of their economies. China holds the U.S. "hostage" in terms of the sheer number of American dollars/T-bonds it owns. It could dump them and cause the value of the American dollar to plummet overnight. China has serviced much of the American debt. And many major American corporations now turn profits ONLY in China. American consumers save billions each year as a result of trade with China.
    -China appears to be doing more for third-world economies in a span of 5 years than the OECD did in four decades.
    -If we accuse China of flouting international norms, oppressing its citizens, or what have you, it can respond by:
    a) pointing out that "we" do these things too;
    b) pointing out that "we" have no qualms with trading with other similarly oppressive regimes; and/or
    C) pointing out where the CCP is moving to accomodate criticisms.

    A generally boils down to things like the U.S. death penalty, illegal invasion of Iraq, detainees in Guantanamo, unfair trade policies regarding agricultural tariffs, the IMF/World Bank, and so on. A good way of looking at the Chinese response is this: "In China, all citizens are guaranteed a certain standard of living, regardless." Then someone might be inclined to bring up Hurricane Katrina, or the millions of Americans who have no medical coverage because they cannot afford it. Then they will ask, "who is the oppressed?" The Maoist way of looking at things -- indeed, the post-Maoist way of looking at things -- is that economic rights come before any other. In Western society, economic rights (from a Maoist perspective) seem to come last.

    Internationally, China has aimed to position itself as a champion of the Third World. In this sense, it sees most international norms as something that has kept the Third World "back." Of course, it makes sure it gets its own before it goes to others. China is playing on WTO terms, for example, but this hasn't prevented it from striking up all sorts of deals with Latin American and African countries, infuriating the U.S. China can also point at America's long history of invading places either partially or completely illegally as justification for its international errs.

    B general entails Western countries' long history of being completely partial in terms of who we trade with. Recent examples might include Russia, Kazakhstan, and Pakistan. Past examples would probably include Iraq.

    (Canada, for example, has an immense trading relationship with the U.S., which has since 2003 been embroiled in an illegal war in Iraq, detaining captives illegally overseas and in Guantanamo Bay. The U.S. has flouted both the declaration of human rights and the geneva convention in doing so, and went against the UN charter by invading Iraq. We also trade with Russia and Kazakhstan. These countries do not have spectacular human rights records.)

    "This week, we see another example of China's tendency to act like a bully. The Chinese President is refusing to commit to a one on one meeting with Stephen Harper. Speculation is that the Chinese are annoyed at, among other things, Canadian complaints about corporate espionage and violations of intellectual property."

    It will be interesting to hear what my colleague at the embassy has to say about this. According to Globe and Mail reports, we did the same thing to the Chinese a few months ago -- didn't return phone calls, ignored meetings, etc. Perhaps this is payback. East Asian cultures on the whole tend to be very concerned about "face" and appearance, perhaps even more so in political channels.

    "It is obvious that good relations with China are economically desirable for Canada. But to what degree do we ignore the fact that China's record in the international community, is atrocious. If this were a small third world country, we would be threatening sanctions -- and perhaps even military intervention."

    But it isn't, and we ain't. If we ignore China, they'll do business with someone else. Their prime markets -- Japan, Russia, Central Asia, the U.S., the EU, possibly India in the future -- either aren't willing to ignore them or simply can't afford to.

    On the contrary, if we engage China, we may have a much greater ability to influence the country, right from high-level meetings down to student exchanges and so on. In my opinion, this sort of engagement strategy would serve as a better catalyst for change than simply calling China out -- at which point China will cut off what it has with us and ignore anything else we have to say.

    I might also be inclined to point out that, at present, the economic and business-related initiatives between China and Canada have not been shunned by the Harper government. It's only the diplomatic relationship that's failing. So, at the moment, we are benefitting from China's economic renaissance -- but we're ignoring the government itself, and all those problems you two have brought up.

    My prescription is to engage China diplomatically, but to meet with our business leaders to ensure that the proper pressure is being applied in the proper channels insofar as intellectual property is concerned. Had the major dot-coms in the U.S. held some reservations about intellectual property before they moved into China, we might have seen a broader appeal for change. They didn't, at least not outside their own businesses, so the CCP has been slow to incur change.

    Unfortunately for us, what China wants most from Canada is our natural resources -- not much to do with IPR. This is why I am calling for a broader engagement, so we can get some stakes on the table, and then begin to make deals with the Chinese. Saying "we won't go in unless you fix IPR" is not likely to work, since China has a globe full of customers to choose from. Going in and then working the system in a coordinated fashion on the IPR front would likely work a lot better. This is in line with China's longstanding preference for behind-closed-door meetings, and summits and so forth, rather than public, face-damaging enunciations.

    (Or, if anything is to be learned, it should be that shutting China out won't go anywhere at all. And we'll be stuck with 80% of our trade going south of the border.)

    "I know that change occurs slowly, but at the current point in time the Chinese government doesn't seem interested in change. Indeed, they are only interested in control."

    The CCP is willing to change so long as it is in their interest to change. That's where international pressure MUST come in -- especially on the IPR front. But pressure with engagement, not as chastisement, will likely have a greater, deeper effect in China.

    By Blogger C. LaRoche, at Mon Nov 13, 02:25:00 p.m. AST  

  • Chris:

    I would like to talk to you at greater length about this, but not in a comment box.

    I would, however, like to make a few brief comments...

    1) Chinese officials acknowledge their human rights and intellectual property violations. It does not seem to me that the argument that the central government does not know what is going on elsewhere in the country holds water. When challenged, their response is "mind your own business" or "shut up or you'll regret it". The "RedBerry" situation I posted about in July is a perfect example of this.

    2) Canada is very different than the USA with respect to its international reputation. Canada is in a far less hypocritical position to criticize China on human rights and intellectual property violations. Although, that reputation is slowly being eroded by the current government.

    3) It is not difficult to quantify China's lack of commitment to human rights. Just this week a report revealed that 99.34% of individuals tried in the Chinese criminal justice system were found guilty.

    I agree that we need close relations with China. I am not for one minute saying we shoudl even consider severing ties with Beijing. My only question is, at what price? You say we could have some influence on the Chinese but, from my limited perspective, any attempt to do so has been met with diplomatic retaliation and threats.

    By Anonymous Anonymous, at Mon Nov 13, 03:15:00 p.m. AST  

  • Dev: totally understandable. And I think if Chinese investors want more of our oil sands or resources, we should stand up and tell them we're very concerned about X issues in China proper. China's natural response will be to tell a foreign nation to mind its own business -- so we have to take steps to ensure that IPR and so on IS our business. And that won't come from simply exporting oil to them.

    The central government often sides againt Western corporations on IPR grounds -- if they think a domestically-based business is profiting from it, and they can take the "hit" from a foreign-owned business either simply getting pissed off or leaving, they'll do it.

    In this respect, what China is doing is actually quite smart, in the most draconian or realeconomic sense imaginable. The FDI successes of the world were produced when domestic markets could match foreign investment in terms of competition. Latin America couldn't do this, and neither can Africa. Japan, South Korea and Taiwan all succeeded as industrializing countries that later developed into post-industrial ones (as opposed to Singapore and Hong Kong, which basically became international banks early on, something that China cannot do) by effectively controlling FDI and ensuring a strong, competitive domestic economy. Each country had a different way of doing this (Japan essentially removed domestic competition by incorporating zaibatsu, wholesale, into newfangled "keiretsu" conglomerates that worked closely with government and each other), but overall it requires major state interaction with the economy, industrial specialization, and an international market for whatever that specialization was (in their case, electronics).

    China's specialization seems to be cheap, reliable labour. China's labour is not the cheapest by a longshot, though, and the only reason it can attract such FDI is because there are lots of workers, the government makes it worthwhile for investors to get involved (good infrastructure, etc.), things are stable (compared to, say, Latin America or Africa), and the thought of tapping into such a huge market is insatiable.

    China, for its part, does not want Western corporations to run its economy. Provide injections, yes, but not run it. Thus, the CCP is privy to giving domestic businesses whatever tools they can to get ahead. At the local level, this involves pay-offs, landgrabs and local officials ignoring all sorts of legislation on worker rights, the environment, and tax codes. At the central level, this involves large swaths of complicated FDI and corporation-twinning policies, the obfuscation of intellectual property cases, and forcing SOEs to downsize and become efficient.

    The centre-peripher intellectual property problem is that the Chinese courts do rule against companies on things like copying movies, CDs, games, etc., but there are no enforcement tools except at the local level. As soon as China shuts one operation down, another 100 crop up. Even if China ruled against the defendant in ALL intellectual property cases, they still can't enforce the bulk of it. And new problems crop up soonafter.

    The RedBerry example is one of many, many examples in which a major Chinese firm has copied a Western product and made it just different enough to please the courts. Other examples involve the Chinese courts ruling against a Chinese firm, which then appeals the ruling and edits its product a bit so that it is further removed from the copied original. The firm will do this until it wins.

    Thus, my opinion is that the entire business climate in China -- the capitalist culture -- is such a problem that the government is reluctant to really interfere so long as China is on the winning side of these equations. On the other hand, they know full well they cannot piss of every major Western corporation. If FDI jumped ship out of China tomorrow, the whole country would either fall apart or plunge right back into the totalitarianism of the 1959-1969 Mao period.

    (The real centre-periphery problems entail corruption; all land in China is state-owned, but under the control of local officials. Given that all business must occur on land, somewhere somehow, this is a major problem.)

    By Blogger C. LaRoche, at Mon Nov 13, 05:27:00 p.m. AST  

  • On this: "I agree that we need close relations with China. I am not for one minute saying we shoudl even consider severing ties with Beijing. My only question is, at what price? You say we could have some influence on the Chinese but, from my limited perspective, any attempt to do so has been met with diplomatic retaliation and threats."

    Very good question. For the most part, publicly lambasting China's record on anything gets nowhere. Remember how I mentioned face. I think most of the work will have to be done on Chinese terms -- in boardrooms, in dealmaking situations, where Canadian firms, businessmen and politicians can express discomfort with Chinese political and legal reforms (and the lackthereof) without sounding off in front of a microphone. It could be as simple as closing a deal/walking away from a deal over IPR concerns -- with specifics. We'll certainly need the pariticipation of larger U.S. firms to make sweeping changes, though. One problem here is that industry is segregated; tar sands entrepreneurs don't have much to do with, say, a Canadian cellphone company being ripped off by a Chinese one. This is where the government will have to step in, I think, and coordinate how business with China is done far more than they do now. We have to get the range of business opportunities we can offer China working in tandem, not closed hallways.

    Human rights will be a much bigger challenge. Chinese officials understand why a Canadian company or even Canada itself would be angry over IPR if one of Canada's companies is being scooped by Chinese competition. And they want to attract that Canadian investment, so they will be open to discussing the issue.

    But when a foreign nation accuses China of oppressing the Falun Gong, or something that has nothing to do with Canadian interests in China and more to do with what could from the Chinese perspective be called "Western human rights imperialism," doors close and tempers rise. What does Canada have to do with the Falun Gong? Nothing. Moving the Chinese away from opressing groups, limiting political rights and restricting freedom of the press is going to be a tougher sell, particularly where and when those dimensions of modern China have no direct impact on Canadian or American FDI and short-term capital inflows. Business is business, and China's domestic politics is China's domestic politics, I suppose.

    This is where engagement may help. There's a new generation of Chinese students out there who have studied abroad, been exposed to other societies, and other ways of running a country. They're coming in the millions, and they return home. Lots of them will be joining the CCP. As I pointed out, political reform in the CCP is the top cited concern of new entrants. The economic renaissance in China has only really been going on for a decade -- technically since 1978, yes, but I feel China is becoming more porous as the years go by, and the great international thrust of it (i.e. Chinese companies exiting China) is relatively new. These businessmen go elsewhere. Students go elsewhere. Students study our system of government, they return. Businessmen see our system of business, they return.

    There's a term in Chinese called xiaokang (小康)that means "middle class" (loosely). The development of xiaokang is a major CCP priority. And the Chinese xiaokang is becoming huge. At the moment, most of the CCP is made up of either Soviet-educated or Chinese-educated bureaucrats. They've been in the party for life. Most of them are followers of Deng Xiaopeng who, even though he introduced the SEZ reforms that now consume China, was very right-wing and maoist otherwise (he is largely responsible for the Tiananmen Square crackdownm in 1989, for example). Hu Jintao, who by most accounts in more in charge of China than anyone else in the standing committee, has been mostly the same as Deng when it comes to individual freedoms, the press, and large, potentially threatening organizations such as the Falun Gong.

    This may eventually change, and we can encourage change by doing as much as we can to get Chinese to understand us, and vice-versa. As more of the CCP's members are educated abroad, and as wealthier middle class and upper class startups become more and more concerned (now that they're rich) with what sort of society they live in, you may see private individual interests intersecting the central political interests, as happened in the West. At the moment, the entire party apparatus is mostly seperate from business, except at the local levels, where corruption and dollars go hand-in-hand.

    Education, and patience, then, may play a huge role in opening China up from an HR perspective. The central government is already slowly losing its ability to censor the vast diversity of ways Chinese citizens can communicate with each other. It has found itself unable to prevent increases in rural unrest, or in the number of worker's rights lawsuits that have started appearing. The lid may come off soon. And I think it might have everything to do with how the Chinese economy performs for the next 10 years, and what the CCP can do internally to manage growing unrest, wealth disparity, and a large middle class.

    (Ironically, the growth both enables the CCP to remain 'legitimate' and also decentralizes power away from it).

    By Blogger C. LaRoche, at Mon Nov 13, 05:53:00 p.m. AST  

  • Well, seems like the Chinese just snubbed us by refusing to meet with us. Apparently they requested the meeting and then declined it. Sounds like it was an intentional set-up.

    CanWest and even the Toronto Star are spinning the story that it was Harper's excessive focus on human rights that earned us the snub, the G&M is spinning it that this will be bad for us economically. Could be good or bad for Harper depending on how the public tends to take it, it will definately win big among HK expats who fled from the Chinese government.

    Its funny really. Some of the same people who complain so loudly about Darfur then expect us to kowtow before the Chinese (who are big supporters of Sudan's government). Sounds like a case of trying to have your cake and eat it too. Or just blind partisanship.

    The problem with the situation with China is that really, we either kow-tow to them, or we stand up to them. Its very difficult to take a middle of the road approach and they want it to be that way. The arrest Celil and refuse to recognize his citizenship, forcing us to decide either to abandon our citizen or stand up to the Chinese and take our lumps. On Tibet, if we even let him into our country its considered a 'snub'. For Taiwan, if we meet with one of their ministers then its an 'outrage'.

    China does this intentionally IMHO.

    By Blogger Eric, at Wed Nov 15, 11:45:00 a.m. AST  

  • Hmm.. my mind is all over the place today.

    Sorry about the second post. But I might have changed my mind. Maybe this wasn't a real snub at all.

    I have a friend who works in the Chinese Foreign Ministry and when I spoke to him a week or so ago about the 'cooling' of Chinese-Canadian relations he dismissed the idea as a tempest in a teapot.

    Thinking back to what he said it might be that the Chinese really are just too busy this week with countries they view as more important. (like Iran)

    By Blogger Eric, at Wed Nov 15, 12:22:00 p.m. AST  

  • Chris:

    Seems that we were kind of prophetic with this discussion.

    By Blogger Devin Maxwell, at Fri Nov 17, 07:42:00 p.m. AST  

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