ASIABIZBLOG

This Wall Street Journal article discusses what is a minor phenomenon at present, that of Chinese migrants to urban centers returning home, out of work, to their villages. One or two million jobless is an insignficant number, a police problem, perhaps. But given the many factory closings in south China and the several thousand riots annually, it bears watching..

Would WSJ please put more interesting voices to their videos?

Cliff Burns at ExportLaw Blog recounts the tale of Chinese operatives, who'd set up a front company to buy export-controlled items, ensnared by American operatives who'd set up a front company to catch front companies doing precisely that.

Front companies of foreign intelligence services are most likely a dime a dozen, but it is rare when they are discovered, no less made public and prosecuted publicly. During the mid-1980s, I was working in Osaka for a Japanese electronics company. A friend of a friend (both Chinese resident in Japan) approached me looking to appoint me U.S. representative of his company, the Japanese subsidiary of Sea Gull Co. (Hai Ou 海鷗).

Specifically, I was asked to find and conclude deals with American manufacturers of gluing machinery, which applies glue between the fibers and the base cloth of oversized carpeting. This seemed like a delightful opportunity. I'd visited carpet factories in Tianjin -- while selling electronic components to Chinese factories for another Japanese company in Tokyo, sort of a solo jaunt, shall we say, during which I searched and did not find product worth exporting to the U.S. -- so I knew the machinery was needed.

Through friends, I discovered Sea Gull's connection to Chinese naval intelligence. While I thought it possible that a unit of naval intelligence was indeed looking to go into the carpet business, the mere possibility of my being used as a front swore me off the deal really fast. With friends like these...

On the subject of spies, I recommend two books -- lots of fun reading.

我杀死了张作霖 -- the record of a Japanese spy who in September of 1931 helped plan the murder of warlord, Chang Tso-lin (available in digital form in Chinese; originally published in Japanese)

Vespa, Amleto, Secret Agent for Japan. Wikipedia entry here.

Kevin Swanepool, CEO of The One Club, discusses creativity in Chinese business and his organization's China Creative Workshops to encourage young advertisers in Greater China.

I do believe last summer that Asiabizblog predicted a steep drop in trade coming shortly. Well, here it is.

Beijing announced yesterday that its November exports dropped 2.2 percent after a 19.2 percent surge in October. Imports took an even steeper drop, falling 17.9 percent. Analysts now say growth there is slowing to its lowest level since 1990, curbing Chinese demand.

Surprising that few Americans are calling for protectionist policies to curb imports -- especially given the incoming Democratic administration, which wishes to be perceived as the party of the American worker (whatever that may now mean).

"Global trade is reversing course because it is a function of industrial production, and we're seeing the biggest coordinated slump in industrial production since the early 1930s," said Philip Suttle, director of Global Macro Analysis at the Institute of International Finance. "In the old days, you'd get weakness in one part of the world, and it would take three to six months to impact another part. But now, everybody is so interconnected through trade that the impact is happening instantaneously."

The executive bailout has been implemented; the worker's bailout to follow? Will we see an increased call for protection, from foreign imports as American unemployment surges? Looks like this may get bloody, soon..

As of today, direct ocean cargo shipments between Taiwan and China are permitted,. 經濟日報 (Taiwan's daily business newspaper):

海運直航協議正式生效，兩岸昨（12）日同時公布「海運直航許可管理辦法」、「台灣海峽兩岸海上直航實施事項」。交通部航政司表示，辦法明（14）日生效並發出許可，15日展開直航。台灣公司、船舶證照為兩年期，但大陸為總量管制，船舶證為一年效期。

17 carriers have applied for permits -- 12 of them mainland Chinese, five of them Taiwanese. 18 routes applied for originate in China; eight in Taiwan.

Direct flights, the impact of which I briefly discussed in June and which now occur daily, have come under criticism for ticket pricing.

The Validated End User (VEU) program, about which we wrote in June, will soon become but a bad memory, according the Washington Times.

The program allowed the companies to obtain dual-use technologies without the formal security checks required for an export license. Congressional investigators recently raised concerns that the program lacked safeguards, and that the Beijing government is refusing to allow U.S. officials to conduct full inspections at Chinese facilities to see whether companies are diverting U.S. high technology to the military.

And good riddance! Who, except those with high hopes and little experience with China, would believe that the Chinese government would agree to "full inspections at Chinese facilities?" [I think I'll produce a TV program entitled, "Whose Sovereignty is it Anyway?"]

The other shoe may drop soon. Let us not forget that the FDA recently opened an office in Shanghai, about which we wrote last month, specifically with the expectation that inspections will be conducted on Chinese facilities.

[Thanks to Carol Kalinoski, Esq. for the tip-off.)

I'm pleased to present Dr. Eileen Wibbeke, author of the textbook, Global Business Leadership, who recently gave a talk to Google executives on international business leadership at Googleplex.

The animus towards China -- specifically imported products -- has never, in my lifetime, been as acute nor as widespread than it is today.

This article and the popular comments below it show the depth of contrary feeling. Chinese products are blamed for being injurious to human health, cheaply made, made with slave labor, anti-American, etc., requiring strict import regulation or even the outright ban of Chinese imports.

Few American internetizens appear to have much to say that's postive about China. One can't foresee anything but greater kickback from Americans. Importers will need to diversity their sources, if they haven't already.

Asiabizblog wishes all of our readers the merriest of holidays and best wishes for the New Year.

Hope springs eternal and Spring is just around the corner. In that spirit, I thought I'd share with you a poem a friend in Beijing sent me this morning. [Thank you, dear Audrey!]

一張紙

出生一張紙，開始一輩子；
畢業一張紙，奮鬥一輩子；
婚姻一張紙，折磨一輩子；
做官一張紙，鬥爭一輩子；
金錢一張紙，辛苦一輩子；
榮譽一張紙，虛名一輩子；
看病一張紙，痛苦一輩子；
悼詞一張紙，了結一輩子；
淡化這些紙，明白一輩子；
忘了這些紙，快樂一輩子!

My (hastily considered) translation:

A Sheet of Paper

At birth, a sheet of paper, a lifetime begins;
At graduation, a sheet of paper, a lifetime of strife;
Upon marriage, a sheet of paper, torment for life;
Become a bureaucrat, a sheet of paper, a lifetime of political struggle;
Money, a sheet of paper, a lifetime of hardship;
Win an award, a sheet of paper, a vanity for life;
A doctor's diagnosis, a sheet of paper, a sorrow for life;
An obituary, a sheet of paper, the sum of one's life
When these papers recede in importance, we truly understand
These papers forgotten, a lifetime of happiness!

As further evidence of the negative feeling towards China, read this piece.

Citing three economists (Bernanke, Rogoff and Laurence Myer), as well as a handful of non-economist political figures, its authors claim that "some" American economists now view Chinese capital inflows into the U.S. as a necessary element of the credit collapse.

[Some. Indeed, three can mean "some." But the implication throughout the copy is that such sentiment is widespread among economists. What is going on in this article, anyway? Where is the editor?]

For the past five years, China has been one of the most prolific bidders [of Treasuries]. It holds $652 billion in Treasury debt, up from $459 billion a year ago. Add in its Fannie Mae bonds and other holdings, and analysts figure China owns $1 of every $10 of America’s public debt.

Evidently, these capital inflows are a root cause of America's current woes. Not only does there exist popular aniimus against Chinese goods, but among rational thinkers (economists) and decision-makers (senators) as well. At least, this is the claim.

Typical of the modern New York Times style, one which I find difficult to stomach, its authors ramble from reportage to opinion.

In the past decade, China arguably enabled an American boom. Low-cost Chinese goods helped keep a lid on inflation, while the flood of Chinese investment helped the government finance mortgages and a public debt of close to $11 trillion.

But Americans did not use the lower-cost money afforded by Chinese investment to build a 21st-century equivalent of the railroads. Instead, the government engaged in a costly war in Iraq, and consumers used loose credit to buy sport utility vehicles and larger homes. Banks and investors, eagerly seeking higher interest rates in this easy-money environment, created risky new securities like collateralized debt obligations.

“Nobody wanted to get off this drug,” said Senator Lindsey Graham, the South Carolina Republican who pushed legislation to punish China by imposing stiff tariffs. “Their drug was an endless line of customers for made-in-China products. Our drug was the Chinese products and cash.”

Mr. Graham said he understood the addiction: he was speaking by phone from a Wal-Mart store in Anderson, S.C., where he was Christmas shopping in aisles lined with items from China.

Very cute, that last paragraph. Another oft-employed stylistic device that brings the Op-Ed into the Front Section. This is rhetoric, employed to persuade. So what is the point?

My reading of the opinion burrowed deeply within this article is this: China's investment decisions are really of little consequence. Instead, American economists, political leaders and regulators -- the supposed anchors of our system -- have taken to foolishly blaming the hard-working people of China whose exports allowed us to live well, but cheaply. It is our own government administrations who are to blame.

While some [note my strategic and misleading use of "some"] of the claims in this article may be supported in fact, the trick of hiding political criticism in the World Section is a sham, a disservice to the reading public. Together with the cynical appeal to reader emotion and peppered with snide observations, one must question whether to rely upon the factual information the article purports to convey.