After Taiwan, Sell Israel & Why Not Canada?

In 1998, when I ran the American Chamber of Commerce in China (no relation to the U.S. Chamber of Commerce in Washington), we had a dinner that had about ten or twelve speakers, a mix of Senators, Congressmen, and Cabinet Secretaries. Sen. Jay Rockefeller, one of the last to speak that night, started his remarks by quoting “Tip” O’Neill, the Speaker of the House from 1977-87. He said, “ It has come to that point in the evening where everything that needs to be said has been said, but not everyone has had a chance to say it.” A great line that I’ve borrowed before. So now its my turn to sound off about an Op-Ed piece published by the New York Times a few weeks ago.

The New York Times, my favorite newspaper, does a lot of things right. But it still makes some big blunders. In my humble opinion, the Editorial Pages are a weak spot. Too little quality control. Too little discipline (poorly thought out columns, based -- all too often -- on misinformation or even a certain lazy ignorance that still results in opinions that the Times willingly publishes). A case in point is the opinion piece published on November 10th, “To Save Our Economy, Ditch Taiwan”, by a guy named Paul Kane. That’s right, Kane advocates that the U.S. government sell Taiwan to the Peoples Republic of China in exchange for that portion of U.S. debt held by China, some US$1.15 trillion. In case you were wondering, that works out to about US$50 per person. Taiwanese aren’t cheap. A potential complication to this idiotic and shortsighted proposal is that Taiwan itself is the seventh largest sovereign U.S. debt holder. I guess Beijing would inherit that debt as part of the sale. Its not, literally, a sale, but its close enough.

Kane makes the case that military alliances are SOOOOO 1960’s that looking at the world in any way other than in terms of economics is just silly (I guess that’s why we’ve got Marines in Australia now, huh?). He says that the Chinese leadership would be startled by such a move by the U.S. Of all the assertions in his article, this is the only one that seems correct. Beijing would certainly be startled; then they would close the big red doors of Zhongnanhai so they could laugh in private. Then they would politely reject the deal. Why? Because they think Taiwan will “return home" on its own”, especially now that Chen Shui Bian is so discredited and the Guomendong government of Ma Yingjeou are shuttling back and forth from Taipei to Beijing. Why buy something at an inflated price when you can probably get it for free with a little patience? Whatever else one can say about the government of China (and there’s quite a bit), they are not stupid, not impatient, nor are they insensitive to Chinese public opinion. If they relinquished all of their U.S. Treasuries, the domestic criticism would be almost overwhelming. There’s nothing in this deal for the Chinese.

But that’s not at the crux of Kane’s fantasy. He proposes this as a fix-it solution for the U.S. In the unlikely prospect that this would be successful, it would wipe out almost 7% of U.S. Government debt. Quite obviously, that still leaves behind more than 90% of the debt burden. To suggest that the U.S. economy would see lasting benefit is, to say the least, mistaken. U.S economic security would not see any lasting benefit. Besides that, the image of the U.S. as a reliable and consistent ally would take a severe beating. Or not; more likely, it would just completely go away. Sort of like what would happen if the Obama turned over the entire State Dept. to Goldman Sachs. Most people would look at this idiocy as a shameful and selfish act of national desperation. After Taiwan, the U.S. could sell Israel to the Saudis, then Saudi Arabia itself to the Iranians. Would Putin be interested in Canada? Worth a shot, maybe. After all, what are friends for?

Would it help President Obama get re-elected? My guess is that it would backfire badly. Sort of like promising to appoint Ron Paul as Secretary of State, Rand Paul as Attorney General and Grover Norquist as Treasury Secretary.

It all sort of makes me wonder why Kane wrote his Op-Ed piece in the first place. He says, in his own defense, that it was meant as a satirical approach to the problems facing the United States. Kind of hard to believe, in that satire is generally identifiable as such, at least by the end of an article. He says it was meant to be provocative. He’s succeeded, of course. My guess is that he’d like to be seen as an authority on foreign and/or domestic policy (he tries, after all, to meld both with a simple -- or simple-minded -- “one size fits all” solution). If that was an aim, I think he’s damaged his own cause. Maybe his brain got a bit rattled as a Marine in Iraq. Or he’s spent too much time at Harvard. He may be eligible for the Larry Summers Award, given annually (by me) to the author of a public policy proposal most likely to have been designed with total disregard for the real world.

To be taken seriously, you have to do something (or write something) that’s worth taking seriously. “. . . Ditch Taiwan” is not deserving of anything except ridicule. Let’s hope no one takes it or its author seriously.

Welcome To Beijing, Mr. Ambassador

Ambassador Gary Locke, America’s first Chinese-American Governor and America’s Tenth Ambassador to China (and only Chinese-American to hold the post) was the guest of honor at a lunch today, hosted by the American Chamber of Commerce in China and the US-China Business Council. He’s had an interesting and rather unusual time of it so far, in ways that were also, probably, unexpected.

First, some background:

When I was a young boy -- maybe 10 or 11 years old -- I had a chance encounter with one of the many members of the Rockefeller family that lived in suburban New York. What I remember about that glimpse was that my father used it as a “teachable moment” about values. Strikingly, here was a member of one of America’s then richest families, driving down the road in a well-worn Ford station-wagon; one of those ubiquitous buggies with the big round taillights, mini fins canted up and out at a forty-five degree angle, and fake woodgrain on the side. A Woodie, as we used to call them but, of course, just painted steel that looked, from 30 feet away, like wood. Unassuming and rather modest for someone so unaccountably rich.

So: what does that have to do with welcoming a new American Ambassador to Beijing?

One of the most curious subtexts of Ambassador Gary Locke’s short time here in the Peoples’ Paradise is that he has come in for a bit of chatter from Baidu posters and the Sina Weibo masses for some incongruous, at least for many Chinese, Ambo-sightings. This has nothing to do with Amb. Locke’s speeches. It has everything to do with something more akin to his political body language.

The first sighting was a photo of the new ambassador on his departure from Seattle-Tacoma Int’l Airport, on his way to Beijing. He did something totally unremarkable for most Americans. He bought a Starbucks coffee -- it was Seattle, after all -- while his backpack was slung over his shoulder. My reaction was: well, you have to put your pack over your shoulder so you can use your hands to manage your coffee. The Chinese reaction was completely different: “He bought his own coffee? Why? What’s with that? And he carried his own bag?”

More recently, he’s apparently been scouted tooling around Beijing on a bicycle, shocking the locals even more.

All of this is quintessentially American. At least that part of the American character that most Americans are proud of. Its like a Rockefeller tooling around suburban New York in an everyman’s aging Ford station wagon. And why not? For many Chinese that I’ve heard from, this is a very refreshing thing. A “Senior Official” (and Beijing is overflowing with them) who sees himself as a normal human being (albeit with a pretty interesting and high ranking job)? Bravo!

For many other Chinese, its a sign of America’s inescapable and inevitable decline. High ranking officials, they believe, should let no opportunity escape to remind everyone that they are: powerful; not like you and I; special; held to a different standard; and so on. If you can, and don’t, there must be something wrong. But there’s nothing wrong with Amb. Locke. I’m sure his State Department armored limo is in great condition. He’s just self aware enough to know who he is. Who he really is. In the U.S., no matter the reality, people with either power or money or both want to be seen as being “just everyday folks” or, as the Chinese would say “laobaixing (老百姓)”. Its an eloquent statement, and a welcome one.

So, Mr. Ambassador: Welcome to Beijing!

And Thank You!

The Tide Turns

As the world watched the Obama inauguration with a great sigh of relief, one group of observers, hidden away behind the vermilion walls of Beijing's "Zhongnanhai" seemed a bit nervous. We expect a bit of anxiety from the shrunken and increasingly disdained Republican minority in Congress as well as from those Investment Bankers that are still employed. With the Republicans, the worry is understandable; the voters have spoken and the verdict was a harsh one. Now that Henry P. is out of Washington, along with his lap dog Neel Kashkari, the American public can hope that there will be at least a little bit of accountability in the Big Bank Bailout. In all likelihood, the days of "no questions asked" cash gifts to both troubled & untroubled banks will end. To many knowledgeable observers, its not the bailout that is at issue anymore, but the lack of accountability for what amounts to windfall gifts.

But back to the official Chinese reaction: much has been made of the Chinese censorship of the translation of Obama's inaugural address. From my perspective, this is not very surprising and nothing new. Censorship is alive & well in the Peoples' Republic. But underlying the surface facts, as usual, is another reality that is more telling. Official China, indeed, does seem to be a bit nervous. The question is, "Why?" To some extent, its perfectly understandable. As the Chinese themselves have pointed out, U.S.-China relationships have been remarkably unruffled over the last eight years since the Hainan Plane Incident in 2001. The only real threat coming from Washington wasn't from the Bush Administration at all, but from Congress and was centered around trade relations and, in particular, the relative value of the Chinese Renminbi against the U.S. Dollar. Since that time, the Peoples Bank of China has allowed the RMB to appreciate by almost 22% (from July 2005 through October 2008, its apex). That is not an inconsiderable movement, in the world of currency values. This doesn't mean that the pressure for change won't return, but at least defenders of PBOC currency policy will have a more defensible position.

So what is it that makes some people here nervous? The answer lies, at least partially, in who Obama is & how he thinks. As the first African-American President, Obama has achieved something that is almost inconceivable to Chinese leaders. China, of course, is approx. 92% ethnically Han. The likelihood of a Chinese head of state being Mongolian or Zhuang or Manchu (as they were during the Qing Dynasty) is extremely remote. And even the Manchu Qing largely pretended to be Han while they reigned. Even less likely are those minorities better known to the outside world: Tibetans & Uighurs. The even remote possibility that this could happen in China causes anxiety for some Chinese. The second reason has to do with who Obama is, not what he is. And who he isn't. Obama is not a party hack. He has had only three years as a member of the U.S. Senate. He is best known as having been a community organizer as a young man; community organizers are not your basic insiders. Obama also symbolizes to many the hopes & aspirations of the common man, not often these days something the rich and powerful in China are sympathetic to. In his initial appointments, he chose people of proven ability, but also of independent mind who speak their minds without fear. Obama also, I believe, looks to the Chinese -- with their often simplistic understanding of the U.S. -- as a sort of American Cory Aquino, a manifestation of "People Power". And in Obama's case, sporting a success fueled by outsiders (women, African-Americans, Hispanics, Jews, etc.), by small financial contributions (not big corporate ones), and popularly elected, no less. Obama's campaign famously used state-of-the-art eTools -- Instant Messaging, Facebook, even the more prosaic email & Internet web sites that have become ubiquitous political resources in the worlds' democracies for years. For some of China's Han leaders, Obama's rise to leadership is as worrisome as an imaginary charismatic Tibetan or Uighur leader who might rise to power in China on a wave of public popularity among the Laobaixing, the Chinese masses.

It is Common Wisdom among close (and even casual) observers of U.S.-China relations that, whatever may be said during Presidential campaigns about China, after a switch in power things continue pretty much as they have been since Jimmie Carter normalized relations 30 years ago. I don't expect that to change and China's leaders shouldn't either -- even if the rhetoric heats up by a few degrees. But the tide of history has surely turned in U.S. politics. The whole world has, rightly, taken notice. If this moment is an indicator of the flow of world history, as I believe it is, then China's leaders are right to be a bit anxious.