Monday, December 31, 2007

Made in China

Historically-speaking, China was known for its luxury goods: silk brocade, 'China' porcelain, scrolls of distinctive art and calligraphy, jade, and rare spices. A few hundred years ago, China's wares were so hotly sought after in the European markets, and commanded such high prices, that the British had to resort to peddling opium (yesterday's equivalent to Heroin or Crack) in order to turn the tables on a trade deficit as threatening then as it is today. China, it seems, has always been able to manufacture goods that the rest of the world is powerless to resist.

American consumers have been shocked to learn that their cheap, China-made bounty (available at the nearest Walmart) could be tainted, poisonous, or ill-designed. In a worst case scenario, the paint of that car toy your toddler is currently chewing upon, the shrimp you bought at the supermarket to feed him, and the toothpaste you'll insist that he use to brush with later this evening could all be quite toxic. Well, gee, what a surprise that the shoddy, bargain-basement wares from a country known for its corruption and lack of concern over the poisoning of its own environment might happen to be... less than good. There are many other 'externalized' prices one pays for finding the cheapest monetary bargain, after all; this is a fact as ancient as the diseased meat pies sold by street vendors the world over.

But despite the hopes and prayers of unionist laborers in low-value manufactury across America and Europe, this fiasco is not likely to spell an end to the export of jobs and import of cheap goods that have defined the modern (post 1970's) trade relationship between China and the West. In order to chart a pragmatic course into a future likely defined by symbiotic (but often problematic) business relations between East and West, we should encourage a more varied perspective of such problems as arise. God forbid that there should ever again be protectionism and isolationism of the sort that had Qing Emperors razing their own coastline to prevent trade and interaction between aspiring Chinese merchants and the foreign devils. That strategy led to their own economic disempowerment, bankruptcy, and eventually to bits of the Chinese motherland (Hong Kong, Macau, Shanghai, Qinghai, and Qingdao) being indefinitely 'leased' to outside powers.

That said, here I can provide a sampling of perspectives from the antipode of this particular disaster of globalisation:

The Chinese government's view (predictably) is that these pumped-up consumer fears are but unfair governmental orchestrations from its trade partners. Projection, anyone? Admittedly, with the growing angst among developed countries about their growing trade deficits with China, the theory at least has some plausibility. One could imagine that many flaws in Chinese exports previously overlooked by pro-business (sometimes pro-appeasement for reasons of other policy goals) governments have suddenly been un-overlooked. Ulterior motive or no, this still represents a victory for Western consumers. The Chinese government's next (predictable) step was to impound various imports from abroad (notably the US), claiming that they didn't meet China's rigorous standards of quality. Oh boy... another case, I suspect, of what 'what once was overlooked, shall not be any longer'. Fair enough. I have little reason to doubt that Tyson Foods (among others) would have no qualms about shipping meat products not fit for American table to China, and throwing scraps to various Chinese bureaucrats for the privilege of doing so. That leads us to China's third step in its mad dance to avoid losing too much face--the firing and execution of its former food and drug regulator, a Mr. Zheng.

Yes, this plan makes sense: When all else fails and you have a world-wide rebuke ballooning in your face, (1) deny everything, (2) make conspiracy theories (3) blame your detractors of hypocrisy, and (3) execute one scapegoat carefully chosen from a government faction that has fallen from favor.

The Chinese consumer has an often overlooked viewpoint on the issue. They (the people of the PRC) are well aware that whatever the case may be, a victory for the American consumer does not necessarily represent a victory of them. It was already common practice for most Chinese companies to export and sell their best quality merch (as it turns out, not quality enough) abroad, usually through a foreign trade company to give the products a more trustworthy face. Watered-down, less-durable, unsafe, often faked products, even cheaper to produce are reserved for a domestic market that faces less inspection, easy work-arounds (bribeable officials), and a populace that is not only generally uneducated about its rights as consumers (typically any 'rights' pertaining to the common people would be viewed as a threat by Beijing and awareness of such quashed accordingly), but just doesn't have much choice in the matter. Even as a burgeoning middle-class has ascended from the impoverished Mao-era masses, the majority have been left at the base of the escalator. That majority can't afford to buy expensive imports as the middle class does (so much for the hopes of every American entrepreneur to sell shoes to the 2.8 billion feet in China). The result: 'Made in China' is the only affordable option for most people. Without viable competition, value to the consumer is likely absent. Where would the Chinese go to find goods more affordable than what is already made in the workshops of Guangdong and Zhejiang?

Some Chinese like to shift blame to their historical enemies, the Japanese, noting that the Japanese sell their lowest quality and unsafest goods to China, reserving their best merch for the American or European markets. I can imagine that this idea incenses the middle class (who can affort to splurge money on real, rather than faked, Japanese cars and electronics). But the Japanese can hardly be blamed for taking advantage of an opportunity blatantly left open to them by the government, and which scores of Chinese entrepreneurs (for each foreign one) have already taken advantage of. The vaunted 'hand of the market' may auto-correct, but only when transparency, a surfeit of product information, standards easily parsed, and viable competition allow consumers to vote with their feet. As one who has suffered for the failure of cheap DVD-players, battery chargers, and even a basic metal spoon--all bought in the Chinese domestic market--I believe that it is the Chinese consumer more than the American, Brazilian, or Danish one whom will suffer most.

Thursday, December 27, 2007

A Christmas Nightmare

Where are the warm holiday feelings I want to feel this time of year? In Chongqing, perhaps they have been smothered by an ever-present, cold blanket of smog. Beneath it, though there isn't snow, the locals party through the night.

But Christmas partying in China is not what it is back home.

No presents did I see, no carols except the ones meant to lure customers into shops; they brought no cheer to me. At the door of Pizza Hut, waitresses were smiling in a row. All had crimson stocking caps, but no sign of Santa with his sleigh. The last time that I saw him here, his cherubic face adorned the illustration of a naked dancing girl. Older Chinese just shake their heads at strange foreign customs that have no relation to Confucius or Marx. The younger ones have a different idea: to them, Christmas is just another sort of Halloween. A time to party hard.

While Christmas day was fairly quiet--we re-watched Home Alone--the night before and night 'of' were something altogether strange. Straying from my tower preserve, this is what I say: The peasants were on the march! With inflatable spiked clubs in hand. Was this the revolution? Were they off to slay The Man? Had Communist despots' doom come down, or could they be driving foreigners from the land?

Little children with the impish smiles scampered all about. They wore glow-in-the-dark devil's horns in their hair and sprayed silly string up in the air. In the square, thousands thronged and held mock battles with those inflated mallets and clubs--US stars and stripes, or Snoopy emblazoned upon their tips as they smashed into crazed Chinese teenage heads. Oh how fun, you might say, if only it were just a daydream and not your entire Christmas day.

Whap-whap-whap-whap, the sound of so many people having Christmas fights sounded like a full sail pummeled by the wind. A sad little kid dragged a spent and wilted caveman club through the crowd. I felt a bit like I imagined the kid to feel.

Thursday, December 13, 2007

A Trial by Trial Software

I think I can see the light at the end of the tunnel... or could that be the unblinking eye of my new desktop computer. This modest computer--HP Pavilion fare for the plebs, its video card is less than special and its built-in speakers fail to work, but with a rather nice 19' flat-screen--is sufficient for my current purposes, including blogging.

I must have realized that buying a computer in a foreign land that speaks a foreign tongue would not be as easy as just walking into a Best Buy, socking 'Steve' in the eye, and walking out with a nice desktop.

First there was the matter of choosing whether to buy a DIY computer (which can be either a Frankenstein's monster of perfection, or a perfect horror) of various parts bought separately, or to buy an off-the-shelf pleb product. I went with the pleb product because DIY computers can be notoriously high-maintenance, especially with the various Chinese knock-off parts floating about. There's also a lot more room to be cheated, whereas at the Gomei store (China's answer to Best Buy) it's pretty much sticker price or nothing. No bargaining involved (although I did try).

Many expletives and disappointments (over the lack of real speakers and low-quality video cards available) later, we walked out of the Gomei with our present configuration. That was only the beginning of the ordeal.

For the next two days, I wrestled with the machine (Monkey vs. Robot, so to speak). The machine came preinstalled with Linux rather than Windows, because in China a legit copy of Windows costs almost as much as a new computer. Ridiculous. I for one, would be more than willing to buy a legit copy of Windows (most American consumers never have to, since it's preloaded on their machines), but for a reasonable price. When I expressed my interest in buying a legit copy of 'English-language' Windows, though, the salespeople at Gomei all but laughed in my face. Does such a thing even exist in China?

Microsoft, I have one thing to say to you: You are missing the boat. When Google or some other company releases for free the same services you are charging an arm and a leg for, all the developing world--and a decent slice of the developed--will be right there waiting for it. Microsoft may well become a diminished brand in the future if something doesn't change. Piracy will always be your master as long as you attempt to hold onto inflated prices meant for the American market. Maybe China won't be making you much money, but currently your profits don't really have to come from there--America, EU, etc provide more than plenty of those. As the Yuan currency becomes more valuable, so will your Chinese profits. But certainly there won't be much of those if 90% of China is using pirated products.

In any case, I was for one evening stuck in limbo as I attempted to overwrite Linux Red Hat with my pirated copy of Windows. Surpassing that challenge, I was then stuck without proper drivers because Gomei doesn't provide them with the computer (but rather sends them out with an employee). Here I am waiting, still, for sound card drivers that will work. The ones they tried previously couldn't be used because I don't have Service Pack 1 on this pirated bit of Windows.

Oh, the automaton-ity!

Thursday, December 6, 2007

Russian Autocrats and American Hand-wringing

I wonder how my perspective would change if I were once again viewing the world through an American lens, rather than the expatriate sort. Strangely I worry much less about geopolitical threats than the domestic sort these days. In China, it is the trends in domestic affairs that are much more likely to land one in trouble.

A stateside friend messaged me recently to comment on the increasingly fearful rhetoric surrounding Russia. Russia? Hadn't that particular big bad bear lapsed into a vodka-soaked coma in the Yeltsin era? Has Putin really been so successful in his shadow-puppetry that Russia is now again considered a worry meriting distraction from the big bad panda and big bad camel?

I suppose it depends yet again on your perspective. To the Neocon persuasion, there can never be enough bogeymen with which to distract the American taxpayers. Some trends aren't looking so good for them. Al Qaeda seems to have been fairly quiet of late. In Venezuela, the populist Chavez ran his 21st century socialism into the shoals of unpopularity in a recent referendum. In Cuba, tourists and land-developers alike slaver over our dear old foe Castro's death bed. In China, the Olympics bring an odd assortment of cuddly anime-mascots and government clampdowns; problems too internal to much concern the average American. Most recently, our own spy-masters have downgraded the carefully prepped Iranian nuclear threat, and it seems that even irksome Kim Jong Il is succumbing to the warm fuzzy feelings that globalism brings. Blast you, Axis of Evil, you've foiled us once again! You were supposed to be a eternal threat (at bargain rates for today's discerning politician)!

By golly, this leaves us with the imminent possibility that the American public could forget all about foreign threats to the homeland, and focus instead on rather more inconvenient threats such as lack of health care, the social security crisis, and global climate change!

So whence should our newest threat, custom-designed to hand presidency and relevance back to the mis-fortuned Republican party, come? Now, how about Russia? Americans may have allowed themselves a daydream that the evil empire was finished, but how much convincing could it take to make them decide that the empire was preparing to strike back?

First, the opinions. As all Americans know, Russia is a naturally bellicose place. Its frozen tundras and steppes historically supported such blood-thirsty nomads as the Goths and Huns who overran the Roman Empire, and the great Mongolian hordes of Tamurlane and Chinggis Khan. A vast empire of frost and desert, empty steppe and shrinking inland seas, one shouldn't wonder that its inhabitants would feel a little bit peeved and looking for something to take it out on. Even the surrounding dictatorships of the 'near abroad' that sprung up after the death of the Soviet Union aren't so close anymore, following the recent 'color revolutions'. These grim facts of life wouldn't be helped much by a legendary state of constant intoxication.

Now, the facts. A cyber-skirmish was recently waged by unknown hackers (who could well have originated in the KGB) on the small Baltic state, Estonia. Russia aggressively taken state control over various portions of the Russian economy--notably the energy sector--and subsequently used energy cut-offs and rate hikes to threaten most of its neighbors. Even a very cosy relationship between the dictator of Belorus and the 'motherland' wasn't enough to stave off the bludgeon. In the economic arena, Putin has gone on a witch-hunt of all and any Russian tycoons not supportive of his regime as well as re-establishing political control over 'strategic' business assets (which may very well be the real reason the Western powers that be are crying foul).

So yes, Russia is not a very friendly actor on the geopolitical stage. She certainly has the capability to threaten any number of her smaller and weaker (and for the most part not-entirely democratic) neighbors. She may even boast a threat or two against the West. But I suspect that other growing economic powers that have thus far sat bemusedly at the sidelines of the current Russian/Western spats (namely China, India) would probably step in to help contain Russia if it ever looked like there was a serious possibility it would throw the lucrative Western markets into chaos. For this reason, Russia will probably continue to pick on the little guys--internal threats to the KGB's mandate, and Baltic and Caucasian states it deems naughtily wayward--and limit itself to the mere suggestion of threats against the bigger, wealthier ones to the west.

Perhaps Putin envies the growing eminence of the Chinese and merely wants to show that he (and the Russian Empire) still have cojones.

A City of Freezing Fog

Warming my frozen paws at the glimmering heater in my office, I look down on a city not merely enshrouded, but entombed, in fog. I'm starting to see why the Japanese bombers in WWII had so much difficulty razing Chongqing to the ground.

Their efforts were useless, of course. Some fifty plus years later, developers are razing the remnants of the old city without any help whatsoever from hostile foreign powers. I say no help from outside, because to my knowledge Chongqing is a sort of redoubt against foreign investment. I believe that FDI more often pours into the southern SEZs (Special Economic Zones) such as Shenzhen and Xiamen and Shanghai, and those in turn spawn filthy rich Chinese industrialists who invest their loot into the less developed 'wild western' provinces, such as Chongqing. In turn, Chongqingers invest in countryside villas and the tourist traps of tomorrow out in the countryside. Trickle-down (ie, pissing) economics at its finest.

There is a greater problem (for me) resulting from the trickle-down effect. Because relatively few foreigners (albeit numbers increasing) come to invest and inhabit Chongqing, Chongqing has relatively little use for the horde of foreign restaurants one can expect to find in more cosmopolitan cities such as Shanghai, Beijing, or Guangzhou. Instead, Chongqing natives proudly take their few investor guests to try the fiery delights of hotpot, rather than coddle foreign stomachs with foreign fare. Chinese investors from Shanghai-on-the-sweet-tooth may be interested, but I imagine the average foreign investor would be put off. And woe is me, who desires a more reasonable and varied palatte: If spicy food is the norm, why not at least have the choice of Indian curries or Mexican chillies? If cuisine drenched in fattening oil is the norm, where is my respite of fresh salad or creamy soups?

I've had many chances to chat with the owners of our local Singaporean and Belgian restaurants, as well as the lonely foreign food shop, outpost against a wilderness of red hot chile peppers. They also lament that while there is almost no competition in their areas of cuisine, they are also vanguards trying to hack their way into an unwelcoming market. Cry not, my flamsa frit friends; do not pine for the sultry internationalist city of Singapore, o' purveyor of beef rendang and samosa! For we fight a noble crusade against the unholy hotpot, and we shall prevail!


But I let my stomach run away with me. I should remember the lesson of the Japanese. No foreign invasion could change Chongqing against its iron stomach and its stubborn will; but the passage of time may allow those same Chongqingers to evolve that desired change by their own decision. Shanghai may have always been a whore for the West, decorated in the best oriental pearls as she may be. Chongqing is more like a lady of fiery and passionate emotions, to be won with great patience and bravery, rather than a simple influx of cash.