Cozy Relationships Between Some In America And Some In China... Just The Way The One Percent Wants It

Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM), did an especially excellent OpEd for CNBC.com, The High Cost of Our Addiction to China. It worth reading in it's entirety at the link in the last line. I'm going to republish parts of it in a moment. But I want to give you some political context first-- rumors. These particular rumors come from the London Review of Books and they involve something not every American has been following, the dismissal of Bo Xilai, the Communist Party Secretary of Chongqing. Sounds boring? Some savvy observers argue that it's the most important political event in China since 1989. He's routinely described as one of the "princelings" of Chinese politics, his father, Bo Yibo being one of the Eight Elders of the Communist Party of China. Bo Xilai is a populist and leader of the country's "New Left," a champion of the market-driven capitalist extremists, the country's Ayn Rand cult and their Mafia allies. Unlike other anti-Mafia campaigns in China, Bo cracked down on the government officials who served as political back-up to gangsters, not just the gangsters themselves-- some of the detained were officials in Bo's own administration, others were from the city's police force, including the police chief. In March a top lieutenant of his, the new police chief, Wang Lijun, sought asylum at the American consulate in nearby Chengdu (unsuccessfully) and then accused Bo of a boatload of crimes. Bo was, in effect, purged from politics. Leftist websites such as Utopia, Red China, and Maoflag were full of angry commentary over Bo's dismissal-- and they were all shut down for "maintenance." The whole incident was forbidden to even mention on Weibo (Chinese Twitter). Rightists in China-- and the country's one percent-- were jubilant.

There were stories about a power struggle between Bo and Wang; about the corruption of Bo’s family (how could they afford to send their son to Harrow, Oxford and Harvard?); about coup attempts by Bo and Zhou Yongkang, the head of China’s security forces; about business deals and spying; about a connection between Bo and the mysterious death of the British businessman Neil Heywood in November. Even supporters of what has been called the Chongqing experiment-- the reforms implemented under Bo, who became party secretary there in 2007-- were unwilling to say that no corruption or malfeasance took place. In today’s China, these offer a convenient pretext for an attack on a political enemy.

As the stories multiplied, two main interpretations emerged. The first-- supported by a good deal of leaked information-- saw the Chongqing case as merely a matter of a local leader who had broken the law. The second linked the incident to political differences. With a population of 32 million, Chongqing is one of the PRC’s four centrally governed municipalities (the others are Beijing, Shanghai and Tianjin). In the 1930s and 1940s, the city was an important arms-manufacturing centre for the Kuomintang, and today serves as a hub for much of south-west China. The Chongqing model operated within China’s existing political institutions and development structures, which emphasise attracting business and investment, but involved quite distinctive social reforms. Large-scale industrial and infrastructural development went hand in hand with an ideology of greater equality-- officials were instructed to ‘eat the same, live the same, work the same’ as the people-- and an aggressive campaign against organised crime. Open debate and public participation were encouraged, and policies adjusted accordingly. No other large-scale political and economic programme has been carried out so openly since the reform era began in 1978, soon after Mao’s death.

...People who were old enough at the time remembered what the atmosphere was like after the mysterious death of Mao’s nominated successor Lin Biao in 1971. Information is selected or fabricated according to political need, and then released through channels determined by the same considerations. Rumours have flourished inside and outside China, and there are signs of conspiracy everywhere. Rumours are a product of backroom politics, and at the same time provide the means for backroom politics to come out into the open. On 10 April, another rumour went round: the government was going to make an important announcement. The statement came not in the main news bulletin at 7 p.m., but in the 11 o’clock news, when it was announced that Bo’s wife, Gu Kailai, had been arrested on suspicion of murdering [British "businessman" Neil] Heywood. Bo’s suspension from the Politburo and Central Committee was also announced-– allegedly to allow serious violations of party discipline to be investigated. As for Heywood, there are plenty of contradictory accounts there too: the official statement calls him a businessman, but some British reporters have suggested he might have been a spy.

Websites critical of the government, such as Utopia, were shut down in the days before Gu was arrested to forestall any uncensored comments about her, though the reason given was to remove improper discussions of decisions made by the National People’s Congress. While leftist websites were being closed down, foreign sites, including ‘hostile websites’ like the Falun Gong’s that are usually blocked, were suddenly selectively unblocked, providing a conduit for more rumours to flow into China. The means of transmission itself tells us a lot, involving as it does collaboration between the Chinese and US authorities, as well as interaction between domestic and foreign media. It became difficult to distinguish between the coverage in the New York Times, the Financial Times, the Wall Street Journal and the Falun Gong’s outlet, the Epoch Times, or to differentiate them from Chinese newspapers and websites. The question here is whether there is a single intelligence at work, or a network of forces collaborating to bring about a particular result.

The government doesn’t always seem sure which line to take on the affair. On the one hand, with Wen’s press conference, Bo’s sacking and Gu’s arrest what was first said to be an ‘isolated incident’ has been turned into a situation of the utmost political gravity. Wen’s talk of the Chongqing reforms presaging a repeat of the Cultural Revolution seems intended to indicate that open politics-- social experiment and competition between different political positions-- will no longer be allowed in China. (The chief similarity with the Cultural Revolution, as many online commentators have pointed out, is the speed with which Bo was removed.)

...The Chongqing experiment, launched in 2007, coincided with the global financial crisis, which made a new generation feel less confident of the benefits of free-market ideology. The policies followed in Chongqing demonstrated a move away from neoliberalism at a time when the national leadership was finding it harder to continue with its neoliberal reforms. What the Chongqing incident now offers the authorities is an opportunity to resume its neoliberal programme. Just after Bo was sacked the State Council’s Development and Research Centre held a forum in Beijing at which the most prominent neoliberals in China, including the economists Wu Jinglian and Zhang Weiying, announced their programme: privatisation of state enterprises, privatisation of land and liberalisation of the financial sector. At almost the same time, on 18 March, the National Development and Reform Commission issued a report on ‘Important Points and Perspectives on the Deepening of Economic Structural Reform Priorities.’ It contained plans for the privatisation of large sections of the railways, education, healthcare, communications, energy resources and so on. The tide of neoliberalism is rising again. But it won’t go unchallenged, even when left-wing websites have been closed down. In the past ten days both the People’s Daily and the Guangming Daily have devoted several pages to the achievements of state-owned enterprises and the argument against privatisation.

Now, with that mess in the back of our minds, let's look at Paul's powerful OpEd about the alliance between American and Chinese Big Business interests... and the two governments those businesses (and mobster affiliations) control.

Ten years after the United States officially ended its yearly review of China's trade status, no one can credibly argue that China is any freer or more attentive to human rights, nor can they claim the United States is better off economically as a result of our bilateral trade and investment relationship with the People's Republic.

Just ask Chen Guangcheng if he is better off-- as he now faces a modern version of Sophie's choice. Tibetans are certainly not better off--they are self-immolating at an alarming rate in the face of cultural genocide. Here in the U.S., manufacturing workers are not better off, either; they are among the estimated 2.8 million Americans who have lost their jobs as a result of unbalanced trade with China since 2001. Chinese workers still toil in abysmal working conditions-- with multinational companies only deigning to raise standards when exposed by scandal. China's pollution has not abated either, and an estimated 750,000 Chinese prematurely die each year because of it. American security is not better off-- we have allowed China to purchase 9 percent of our public debt while we attempt to contain Beijing's capabilities in outer space, on the Pacific Ocean, and in cyberspace.

Yet granting China permanent normal trade relations was presented as some sort of a magic potion, with each new prediction growing more outlandish. Not only would we get more jobs, we might speed the rise of Chinese democracy! And if Congress didn't grant this wish? Isolation! Shame! Lost jobs!

So I won't be faulting Treasury Secretary Geithner and Secretary of State Hillary Clinton, who are in Beijing for the latest round of talks on strategic and economic concern, for falling short of expectations. That's because there is a lot of blame to go around. It's easy to target former President Bill Clinton, who, over the course of his career tacked from condemning the "butchers of Beijing" to becoming the foremost cheerleader for China trade. Or former President George W. Bush, who haplessly stood by as Chinese imports began to flood the American market at impossibly low prices, driving tens of thousands of American factories out of business and millions of Americans out of work.

But most of the blame, I'm afraid, lies with all of us. Too many Americans are addicted to cheap credit and to artificially cheap Chinese imports at big box stores. If we gazed beyond our computer screens for a minute or two, we'd notice America crumbling around us. Our infrastructure is falling apart. Our politics are in disarray. Our finances are shaky. And we've lost our long-term, strategic focus.

Meanwhile, China has pushed ahead with high-speed rail and clean energy, and we've sat on the sidelines. China has aggressively sought every kind of manufacturing niche, and in some cases our leaders have said "Let those jobs go-- we'll be better off without them." China regularly launches cyber-attacks, arrests dissidents, and cheats on its trade obligations. We simply smile and shake hands.

Paul goes on to suggest 4 ways to change the unsatisfactory dynamic in U.S.-China economic relations. The first depends on the good graces of the very man who the Chinese helped become the Speaker of the House, John Boehner, so... don't expect any miracles.

1. The House of Representatives should pass bipartisan legislation to deter China's currency manipulation. The only thing standing between business-as-usual and a real shot across the bow to Beijing is House Speaker John Boehner. Half of his caucus supports the bill, along with an overwhelming number of Democrats. Currency legislation was one of the few items passed by the Senate last year that overcame a threatened filibuster.

2. The Obama Administration should declare that reducing our $295 billion trade deficit with China involves not only increasing exports but also decreasing imports. If reshoring is ever to become a real trend, we must reduce the flood of imports coming in from China.

3. The Obama Administration should file a slew of trade cases at the World Trade Organization (WTO), and should self-initiate cases domestically to provide relief for battered industries such as clean energy and auto parts, as well as to establish just how little Beijing has done to honor its end of the bargain.

4. The Obama Administration (and various states) should bar procurement from China until Beijing provides 100 percent reciprocity based on the value of these government contracts. There should be no settling for empty promises or a signed agreement that is unenforceable.