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Henry Thornton - SMERSH: A discussion of economic, social and political issues This week in China - 5 February 2010 Date 05/02/2010
Member rating 4.5/5
“What about the issues of sales of arms to Taiwan, U.S protectionist policies against China, Google and the proposed meeting of the Dalai Lama by President Obama. All these things are deeply disturbing to China.’

The response by the Americans on the panel, who all understood that the presenter was serious and voiced China’s concerns accurately, was awkward silence. There was embarrassed mumbling about constructive dialogue hopefully taking place this year.
By Graeme Mills Email / Print

Gossip from the Forest:  The Chinese people are not happy with being ‘looked down on’ by the ‘west’. Indeed, they are heartily sick of it and are backing their government’s firm stance against America on the several issues bedevilling relations at the moment: Arms Sales to Taiwan, Google, Trade Frictions, RMB revaluation, meeting with the Dalai Lama, Climate Change.
As to Taiwan? The average Chinese is happy for it to stay by itself as a poodle of the US. However, Taiwan cannot have it both ways, either choose China or America. Taiwan cannot get rich trading with China and at the same time accept arms from America.
There was an article in China Daily today that talked about the executions of 25 people found guilty of kidnapping and extortion. This has been a growing issue in China as the wealth divide widened. The government is now addressing the wealth divide, but it will take time. Having a luxury car or a conspicuous lifestyle in a major city made you a target for kidnapping and extortion.

Mei told me the story of her uncle, a well-respected medical specialist. A few years ago he treated a businessman from Honk Kong who had travelled specially to see him. The businessman had not been able to find a cure for his aliment. Mei’s uncle diagnosed the problem and successfully treated him. It turned out that the businessman was also the leader of one of the triads. He told Mei’s uncle that if he wanted anything, all he had to do was ask. Mei’s uncle thought that an offer best left alone and no contact was made.

Then the uncle decided to build a small hospital – I told you he was good. That raised his profile and sure enough, one of his children went missing and a ransom demand soon followed. After a few days of worry his brother suggested they contact the Hong Kong businessman to see if he could help. They did, and two days later the daughter was returned with the sincerest of apologies and assurances that in the entire history of mankind no such thing could ever happen again ….. your esteemed excellency. The uncle thanked the businessman and life went on as before.
CCTV – 9:  Fri night – Discussion about President Obama’s first year in office. The discussion came to the conclusion that he did OK, but certainly, despite the visit to China and the speeches, is not delivering. Most telling, at the end of the show the presenter posed the question, “What about the issues of sales of arms to Taiwan, U.S protectionist policies against China, Google and the proposed meeting of the Dalai Lama by President Obama. All these things are deeply disturbing to China.’
The response by the Americans on the panel, who all understood that the presenter was serious and voiced China’s concerns accurately, was awkward silence. There was embarrassed mumbling about constructive dialogue hopefully taking place this year.
Not while Hilary Clinton is around, it seems. Let’s hope she doesn’t forget her lipstick.

‘The West’s Preaching to the East must stop’, Fin Times 4th Jan. The author of this article, Mr Ronnie Chan, an ubber successful businessman from Honk Kong was interviewed. He started by noting that the original title for the article was ‘Global Rebalancing after the Crisis.’ However, that was not ‘sexy’ enough for the Fin Times, it seems.
He questioned whether there was a moral decline of political ethics in the (so called) ‘Free World’. He also criticised the U.S assumed moral superiority and its tendency to proclaim it.
He noted the US call on re-valuing the RMB and thought that it would revalue over time, but at China’s pace, not America’s.
He also said that after a country had built its wealth, political change also took place. China would be no different. However, it would not necessarily be along the lines of the west. Indeed, if it did become like American politics he would pull all his investments out of China immediately.
He observed that the US is looking for a scapegoat for the GFC – the fallout is now reaching China. “It is a bit like a drunk blaming the bartender”.
He Noted the U.S (and the ‘wests’’) breast-beating and accusations of interference in the free market in 1998 when the HK Government stepped in to stabilise their currency. Shortly after that the US bailed out LTCM. then the ultimate bailout in 2008/9 of just about the entire US Banking System. He questioned the morality when powerful hedge funds could threaten the well being of the people of Honk Kong just to make money and then cried foul when the government intervened to protect its people. Yet apparently it was OK for the ‘west’ to bail out private corporations using public money.
The presenter noted that China was both old and young. It had an ancient culture but was still a student when it came to engaging in global affairs. It was still learning how to get its message across and deal with the global media.
On Sunday there was a glimmer of hope. Ex-President Jimmy Carter led a team of workers from ‘Habitat for Humanity’  an initiative sponsored by himself and his wife, to a small town in Sichuan Province China to work with villagers building homes for them.
It was then President Carter who shook hands with Premier Deng Xiaoping and normalised relations between the U.S and China in1979. Thus opening up a huge market for China, a point not missed by Deng Xiaoping I am sure.
It is the men and women of good will on this planet that will ensure progress in the things that matter; human happiness and security. Above all, eventual equality of opportunity for every person on this planet.
Idealism, yes, but a worthy goal.
I was surprised that the Arms Sales to Taiwan was not covered that night. Mei told me that when the Chinese government had worked out its position we would hear about it. That happened two nights later, and my take on it is published in Henry here. 

For me the most interesting programme was on the 2010 No1 Document that heralded a major re-focus for China. 'Expanding rural demand should be the key measure in boosting domestic demand' was a key message.

This has to be one of the most important steps China has taken since it began its rise and rise. It is using its newfound wealth to improve the standard of living for the majority of the population, those who live in the west of China in country areas. While this has been going on for some time the focus has been the major cities and the coastal areas. This No1 Document heralds a clear change of emphasis by the government. The wealth that is accumulating along the coast and in the urban areas will now wash out to the west.
This follows the hopes of Mao Zedong who wanted to lift the living standard of all Chinese and the strategy of Deng Xiaoping. Deng saw clearly that China had first to create wealth before it could socialise it. This is certainly a major step in that strategy.
The added benefit to China will be to make a billion or so Chinese richer. With the social programmes of health (a CCTV report noted that 90% of people in the country now have health insurance) and retirement insurance those people will feel confident enough to reduce the amount they save and spend a little more.
The importance for China is a squillion or so consumers of Chinese products. The importance to the world is that they, like the middle class in China now, will be happy to spend their money on products and services made in the 'west' if those products meet their needs. Thus going some way to addressing the trade imbalance. The ball is clearly in the 'west's court on that one.
My favourite observation from a detailed report on CCTV-9 was of a young migrant worker who was given a loan to set up his own business. He is now earning around 100,000 yuan a year. As a migrant worker he would have been lucky to make 12,000 yuan a year. Multiply that initiative by the number of people in rural China of ability.
There was a rather dull programme interviewing the American author of a book on the collapse of Lehman Bros, ‘A Colossal Failure of Common Sense’. I wondered why he got such a good run to plug his book. Then it dawned on me that CCTV-9 was highlighting just what a mess Wall Street and the much-vaunted capitalism had got itself into.
China is suffering the worst drought in 50 years in the south . This will give the government pause for thought on how best to balance economic growth with environmental concerns. Also this report from CCTV
And finally, knock, knock Boeing, China's own big plane to fly in 2014.




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