Archive for the ‘China’ category

Judicial independence is the basis of Hong Kong’s economic value

October 2, 2014

This is my translation of the first half of this post by chenglap on a Taiwanese forum. I think it’s a strong rebuttal to the argument (which many people share) that HKers should throw all their effort into making money and not get involved in politics.

You misunderstand. The importance of Hong Kong, when you come down to it, isn’t its substantive “economy”; it’s the liquidity of transactions there. Hong Kong is indeed a major economic city, but not for economic reasons: for political ones. Not even Hong Kongers themselves understand this. Hong Kongers commonly believe their value, and the reason they’re rich, comes from their understanding of economics and how to do business. On the contrary, Hong Kongers don’t really understand economics, and something else is the foundation of Hong Kong’s value: Hong Kong’s independence.

If you keep your eyes open, you’ll discover that all Western systems separate Hong Kong and China and treat them differently. Obviously China cares a lot about this, so it always demands that the word “China” be appended to the name “Hong Kong.” You won’t see them doing that with Shanghai or Shenzhen.

I’m not saying Hong Kong is an independent nation. I’m saying Hong Kong’s value is in its independence in external affairs, toward the world outside the ethnic Chinese community, that is, in the eyes of the world.

To become a financial center, having a big economy is just an entry ticket. Global credibility is the core question. To put it bluntly, it’s a question of how chaotic local governance is. Some places produce oil and diamonds and are very wealthy, but that doesn’t mean they can become economic centers. If you don’t have a government and legal system that meets international standards and is globally recognized, you simply have no way to guarantee the safety of the assets kept in your city.

Hong Kong is trusted because its systems are all independent from the People’s Republic of China. It has an independent currency and independent financial system. It follows the UNCLOS. It has a different judicial system than mainland China, one with the same source as the U.S. and U.K. It basically preserves separation of powers, so the executive cannot control judges’ legal decisions. It has a citizens’ jury system, lawyers, and a legal system that are all recognized by countries following the U.S.-U.K. framework.

Hence, companies are willing to line up and take a number to put their assets in Hong Kong, and extend credit there, -not- because Hong Kong has a “good economy”, but because they believe that Hong Kong will protect these things. The courts are the defender of everything. No matter how good the economy is, if the government can seize your assets at will there, and the courts that are supposed to defend you are on the government’s side as well, then that place is a “paradise of risk” and can never become a financial center. Finance is built on credibility.

Unless East China undergoes major governmental change, Shanghai will never have the conditions of a true financial center, no matter how much it develops. It won’t have its own currency, its own financial network, its own laws, nor credibility, because its credibility is equivalent to the People’s Republic of China’s. Chinese judges are appointed by the Chinese government. They don’t have independence. Foreign businesses that have business disputes in China with Chinese businesses do not believe that the courts there will protect them.

If Shanghai’s legal system cannot regulate the government, and the government can do whatever it wants there, independent credibility cannot be built there.

When Shenzhen was made a Special Economic Zone, the architects considered this point and thought about establishing a “Shenzhen Dollar”, and midway through seemed to want to strengthen the area’s autonomy as well. This is because they realized that the trust placed in Hong Kong stemmed from its autonomy, and from the government not being able to do whatever it wants there. However, Shenzhen was unable to win these rights. Hong Kong has the Internet domain .hk, and Taiwan has .tw, but could Shenzhen have .sz? Sadly, no; that’s Swaziland.

Through investment in industry and cheap labor, these cities can develop better economies than Hong Kong and have higher commodity prices, but how could they build independent credibility or a financial system that isn’t controlled by the government? How would they create an independent judiciary? It’s not that Shanghainese and Shenzhenese aren’t as hardworking or talented as Hong Kongers; they are, actually. But the systems that have already been established there stem from political issues and their issues cannot be resolved simply by making more money.

Outsiders don’t believe in Chinese Hong Kong’s economy; they believe in its credibility. Obviously, many often say that if you have strong fists you don’t need to defend your credibility. Yes, you could then shout at your people that you can do whatever you want and they can’t stop it, but foreigners won’t go for that. The business environment would be like a casino where you could win money easily but couldn’t leave with your winnings.


Stephon Marbury: Beijing’s Model Migrant

September 1, 2014

Stephon Marbury is one of the three most significant basketball players in the world. As a star of the two-time-champion Beijing Ducks and active cultural ambassador, he’s arguably doing more for America’s image in China than any other individual[1], and the acceptance he’s received there is especially heartwarming considering the reception other people of African descent have received in the country[2].

The stone the builders rejected became a cornerstone. So it makes sense that he’ll be the protagonist of a new musical in Beijing[3], surreal as it may be for NBA fans who remember his feuds and losing seasons at home. Hopefully ESPN or NBA TV blows up Twitter by playing a subtitled recording of the show in the States. Here[4] is the playbill, including photos of Marbury, who will appear on stage, and Mike Sui[5], who will play him for the speaking roles.

Nothing in the public sphere is truly apolitical in China, though, and that’s also sadly the case here. The musical presents Marbury as a model migrant worker and implies that if only the others worked as hard as him, they’d be that successful too (the paucity of their legal rights go unmentioned).

“The play, which will run for 11 consecutive nights [during the National Day vacation], centers on the idea that Marbury is a successful Beijing vagabond, or beipiao — a Chinese term typically used to refer to the millions of migrant workers who flock to the capital in search of employment without official Beijing residence permits,” says the New York Times. “The plot follows the story of a musician, a beipiao himself, who arrives in Beijing in search of fame and is inspired to beat the odds by watching Marbury lead the Ducks to their first-ever championship during the 2011-12 season.”

In the playbill, Director Zhou Wen-hong says: “Regarding Marbury’s success, his spirit has even greater social significance. Overcoming difficulties, never giving up, never compromising: everyone says these inspiring phrases, but how many people really accomplish them like Marbury has?”

Starbury is hardworking and he does come from afar, but presenting him as a model for China’s migrant workers is like lauding Mario and Luigi and questioning why the rest of the world’s plumbers aren’t that rich and famous. Even Horatio Alger would furrow his brow at the comparison.

It’s not just that Marbury was already a rich and famous basketball star when he came to China, meaning he had orders of magnitude more capital, leverage, and connections than any average person, and he joined an inferior league. It’s also that under China’s household registration system, migrant laborers are quasi-illegal immigrants within their own country and are mostly shut out of receiving any social services.

Basically, in China wherever your family was based in the 1950s determines where you and your children “belong” now. It’s like if you moved to Boston from Iowa but couldn’t put your kids in Boston schools or participate in the state pension or medical insurance system. “Only 1 in 7 of [China’s 262 million migrant workers] is participating in any form of pension and only 1 in 6 has medical insurance. In combination with this lack of access to most forms of social security, migrant workers are disproportionately employed in dangerous jobs, and as a result migrant workers accounted for 70% of all work related deaths in China in 2012 (according to the China Labour Bulletin).”[6]

Children normally inherit their parents’ hukou, regardless of where they are born, and are often barred from the public schools in the places they grow up[7], even in Beijing[8]. Changing your registration is possible but very difficult; you typically have to strike it rich first. Scrapping the system is out of the question; cities oppose changes proposed by the center; reform is slow; and even this year’s proposed changes are incremental[9]: i.e. “the very largest cities – defined as those above 5 million in population, which covers a dozen or more Chinese conurbations [including Beijing] – are still advised to ‘strictly control the scale of the population,’ using a points-based system to give priority to those with college degrees or who have studied abroad.” In the meantime, social activists and parents across the country will keep pushing for systemic reform.

By and large, Chinese migrants are improving their lives and giving themselves better futures despite all this, but they’re doing so in spite of the system, and they’ve never received the protection or opportunities they deserve. So, while it’s nice that Marbury and the city want to inspire them—Marbury has also been chosen as an “official role model in a citywide campaign encouraging people to ‘work hard and live morally'”—migrants are already doing everything he is and just don’t get the same opportunities. Paradoxically the message “work hard and live morally” seems crafted to give a mistaken impression people aren’t doing that now.

There’s a lesson here for Americans as well. Just as Marbury is presented as a model migrant worker despite having privileges no Chinese migrant would dare dream of, commentators like Bill O’Reilly compare Asian-Americans to African-Americans despite the chasmic differences between these two groups and then argue the wealth disparity between them proves African-Americans just aren’t working hard enough. Eddie Huang has already sautéed O’Reilly[10] about the speciousness of the comparison; in short: US immigration policy ensured Asian immigrants to the U.S. typically had particularly high levels of wealth and education; they had large family and social networks as they had generally suffered less state violence; and they and their descendants have received better treatment here from law enforcement and other institutions. Thus, while Asian-American success should be celebrated, using it against African-Americans is a divide-and-conquer strategy fit for colonialists.

It’s great to see people beat the odds, but their stories are remarkable for a reason: environment and history still determine what your odds are. Stephon Marbury deserves the accolades he’s received, but his Beijing career shouldn’t be likened to the struggles of the disenfranchised. Revel in Starbury’s fame, but dunk on politically motivated mythmaking whenever you see it.

James Smyth is a translator in Taiwan.











How Asia Works: Success and Failure in the World’s Most Dynamic Region

August 23, 2014

Amazon Link

I’m extremely fortunate to have stumbled upon this book. It reconstructed my views on developmental economics and doubles as a strong rejoinder to dogmatic laissez-faire.

It explains how Japan, Korea, Taiwan, and China have advanced so much economically–by following the 18th century English and 19th century American and German models of protected development, best described by Friedrich List–and how Southeast Asian nations have struggled despite taking far more of the neoliberal prescriptions of Adam Smith and the World Bank and IMF than their northern counterparts. There’s much to learn about here but we can summarize the three steps to prosperity as follows:

1. Peasant farmers must be given ownership of their land and receive infrastructure and technical support to increase productivity and build wealth. Fair land redistribution spreads wealth so much better than trickle-down economics.
2. During industrialization, infant industries must be protected from foreign multinationals, but there must also be enough domestic firms in each field to allow genuine competition, as monopolies degenerate into rent-seeking. Deals with foreign firms must require technology transfer in exchange for market access to allow the nation to build its knowledge base. Promising companies need sufficient capital to undertake long-term investment. To determine which firms deserve funding, use export performance as a benchmark because it is an objective indicator of competitiveness.
3. Finance must be directed toward productive development, not real estate and stock speculation.

Again, it’s not what race you are that determines how well your country does; it’s how effective its policy is. Learn about what’s been proven to work by reading this.

Governor Ishihara: “Tokyo is Going To Protect the Senkaku Islands. Any Complaints?”

April 18, 2012

Ishihara April 17Senkaku Islands
Left: Governor Ishihara at the speech. Photo by Kentarō Nakashima.
Right: The Senkaku Islands, which are north of Ishigaki, Okinawa and northeast of Taiwan.

Governor Ishihara: “Tokyo is Going To Protect the Senkaku Islands. Any Complaints?”
Yomiuri Shimbun: 石原知事「東京が尖閣守る、文句ありますか」
Kentarō Nakashima reporting from Washington, DC April 17, 2012

During a speech on the afternoon of the 16th in Washington, DC (before dawn on the 17th in Tokyo), Tokyo Governor Ishihara expressed his intention to purchase a part of the Senkaku Islands, which are held by Japan (and administered by Ishigaki, Okinawa) despite competing territorial claims by China and Taiwan [who call them the Diaoyu Islands].

He has received the consent of a man in Saitama who already possesses the islands and would like to complete the acquisition this year.

The Tokyo government is looking into purchasing three of the four islands – Uotsuri Jima, Kita Kojima, and Minami Kojima – first, and buying a fourth, Kuba Jima, which belongs to the man’s relatives, in the future.

The Governor pushed back against Chinese territorial claims in his speech, saying “the Senkaku Islands are part of Japan, and they were returned to the country at the same time as Okinawa. Now [China] is saying the islands are theirs. That’s outrageous.”

He added “it would be best if the national government bought the islands, but it’s not because it’s timid,” and “Tokyo will defend the Senkaku Islands. It may upset other countries, but can anyone complain about Japanese people making this acquisition in order to protect Japanese territory?”

After his speech, Governor Ishihara said to the press that he was considering sending a proposal to Ishigaki, Okinawa to jointly administer the islands. Regarding their price tag, he only said “I can’t say. They’re not that expensive.” The Governor is visiting the United States on invitation from the hosts of Washington’s National Cherry Blossom Festival.








(2012年4月17日14時34分 読売新聞)

Amnesty International: Only China Executed Thousands of Prisoners Last Year

March 28, 2012

Amnesty International: Only China Executed Thousands of Prisoners Last Year
Yomiuri Shimbun: 死刑執行、中国だけで数千人…アムネスティ
March 27, 2012

On the 27th, international human rights organization Amnesty International (based in London) reported on the state of the death penalty worldwide in 2011.

Of the twenty countries that carried out the death penalty last year, including China, Iran, and Saudi Arabia, only China executed a four-digit number of prisoners. The other 19 countries put together executed 670. 175 of the 193 countries in the UN (91%), including Japan, did not execute anyone last year. Last September, the number of countries without capital punishment increased by 2 to 141 (as of 3/13), a new record.

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“Don’t They Have Any Pride?” Minister Edano Criticizes China over Trademarks

March 14, 2012

“Don’t They Have Any Pride?” Minister Edano Criticizes China over Trademarks
Yomiuri Shimbun: プライドないのか…枝野氏、商標問題で中国批判
March 13, 2012

At a congressional budget planning committee meeting on the 13th, Minister of Economic Affairs Edano strongly criticized China over applications in that country to use Japanese agricultural produce and location names as trademarks, saying, “It’s a very grave state of affairs. If this kind of thing is done with impunity, isn’t it a problem for national pride? I want to ask them, ‘Don’t you have any pride?'”

Minister Noda announced that Japan is working with the Chinese government to improve its trademark registration system, saying that “While it’s only been a little bit, there has been a change of posture [on the Chinese side], so we want to follow up on that and request strict application of the law.”

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Poor Chinese Selling Organs to Japanese on Black Market; One Community Has Become an “Organ Village”

March 4, 2012

Poor Chinese Selling Organs to Japanese on Black Market; One Community Has Become an “Organ Villages”
Jiji Press: 中国で日本人に生体闇移植=違法行為か、貧困層ら売る―「臓器村」存在
Report from Beijing February 20, 2012

Several Japanese are going to China and secretly buying kidneys from the poor to receive in transplants, this newspaper learned on the 20th. Several parties involved in Chinese organ transplants have affirmed this information; they say “30-40 Japanese people come to China each year to receive kidney transplants, and most of those organs were purchased.”

In principle, organ transplants to foreigners has been illegal in China since 2007. Last year, the sale of organs was made illegal as well, further exposing the strength of the organ trade. An organ donor shortage in Japan is deepening, but Japanese citizens’ involvement in the black market could cause problems of its own.

In 2010, the NPO (non-profit organization) International Medical Information Center, which connects Japanese seeking donations with Chinese hospitals, heard from a doctor in a Shandong Province military hospital that “we use intermediaries for organ transplants” and introduced the NPO to a broker in Beijing. That broker said, “we use organs bought and sold on the market for organ transplants.” The NPO sensed the broker’s offerings would be illegal and refused.

This broker also told the NPO, “One rural village in Linyi County, Shandong Province is an “organ village”. A group of people there have organized the sales of their own organs. There are 15 we can use.” The market price for a kidney is about ¥50,000 Chinese yuan (about ¥620,000 Japanese yen or $8000 USD). Factoring in commissions for the broker and doctor, however, the total amount Japanese and other foreigners have to spend for a kidney transplant rises to ¥500-600,000 RMB (¥6.25-7.25 million JPY or $80,000-95,000).

A source familiar with transplants indicated that “transplants to Japanese people are occurring in places like Shandong, Tianjin, and Hunan.”

Until some years ago, most Chinese organ donors were prisoners on death row. Because of ethical and human rights complaints by the international community, the Chinese government now requires the consent of both prisoners and their family members in order to use executed people’s organs for transplants. Until now, most organs received by Japanese and other transplant patients in China came from death row, but these days kidney sales are rampant all over the country.

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