Doing business with “China Inc.”

For those of you who want to immerse yourself in information on China’s attempted acquisition of Unocal and all that it implies for the US, this massive article in the NYT is a must-read. It looks at far more than just the Unocal detail, and explores the different camps on both sides and their respective concerns and hopes about US-China trade relations.

China is both an engine of economic globalization and an emerging military power. In symbolic shorthand, it is Wal-Mart with an army.

The two sides aren’t neatly divided. But those who focus on economics tend to see partnership, cooperation and reasons for optimism despite tensions, while security experts are more pessimistic and anticipate strategic conflict as the likely future for two political systems that are so different.

In China, there are also two camps – the security hawks and the economic modernists, according to China analysts. The modernists see China joining the United States as the second great economic power of the 21st century, and the two nations sharing the gains from increased trade ties and global growth. The hawks regard that view as naïve, and fret that American policy is to remain the world’s only superpower and to curb China’s rise. So China’s response, the hawks say, is to try to erode United States hegemony and reduce America’s power to hold China down.

Both faces of China have been evident recently. Two weeks ago, a senior Chinese military official, Maj. Gen. Zhu Chenghu, said China should use nuclear weapons against the United States if the American military intervenes in any conflict over Taiwan. Then, bowing to pressure from the United States and other trading partners, China announced last Thursday that it would no longer peg its currency tightly to the dollar. It is a measured step, and it will not do much to moderate China’s huge trade surplus with the United States anytime soon. But the move is a sign of flexibility and accommodation.

“Do we see each other inevitably as antagonists, or do we see a world of globalization from which both sides benefit? That is the big issue,” said Kenneth Lieberthal, a senior official in the National Security Council during the Clinton administration.

“And that framework, one way or another,” added Mr. Lieberthal, a China analyst and a professor at the University of Michigan business school, “will drive an enormous number of policy decisions.”

So that is the China question: Is it an opportunity or a threat? If nothing else, the Cnooc bid for Unocal has shown how unsettled American thinking is on China and how deep the anxieties run, both in matters of national security and trade.

It is easy to dismiss Washington as a hot-air factory, but the scope of the outcry in Congress is significant. Resolutions and legislative proposals, all critical of Cnooc’s takeover bid, have piled up in the House and Senate, from Republicans and Democrats. A resolution presented last month by Representative Richard W. Pombo, a California Republican, declared that permitting the Chinese company to buy Unocal would “threaten to impair the national security of the United States.” It passed, 398 to 15.

Looking on as an amateur, I have to conclude the “China threat” school in the US is winning the PR battle; recent polls show vast majorities of Americaqns firmly against the takeover. Is that surprising? At a time when we’re all so worried, rationally or not, about China taking our jobs, it’s a real psychological blow to deal with China acquiring any major US company; but an oil company — that seems to cross all the lines, at least our emotional lines.

Read the article; it seems to represent every conceivable viewpoint, from pragmatic concerns about the takeover (voiced by former CIA director Woolsey) to less calm voices that see China’s armies ready to march into California any day now.

The Discussion: 22 Comments

Let’s face it, the name of the Party alone is a PR nightmare in the US.

July 24, 2005 @ 6:18 pm | Comment

They should change their name to the Democratic People’s REPUBLICAN Party of China.

July 24, 2005 @ 7:00 pm | Comment

The name of CCP is indeed a major negative for PR in US. On the other hand, attacking a position by associating with a negative item is called propaganda, and that is what US media did sometimes.

Regarding US media on china reporting, businessweek is the fairest and I think their reporting is well balanced.

On the other hand, CNN often makes my angry. Some of their columnists, Willy Wo-Lap Lam, reads like China daily editorial style.

As long as people in charge of money are satisfied, I guess US-China relationship will not too bad.

July 24, 2005 @ 7:27 pm | Comment

On the other hand, CNN often makes my angry. Some of their columnists, Willy Wo-Lap Lam, reads like China daily editorial style.
Posted by steve

Huh? Willy Lam? Are you saying Willy is pro-CCP or anti-CCP?

July 24, 2005 @ 9:04 pm | Comment

I don’t get it. So it is okay for the US to do bussiness with “Monarchy” on oil, but it is not okay to do bussiness with “Republic” on oil. Monarchy is preferred over Republic here. What difference would it make to change “Communist” to “Demoncratic”? I think China should go for “Monarchy” system to satisfy US so that China can do oil bussiness with the US. Not that I agree with this myself, it seems the only logical way under current hostile atmosphere.

July 24, 2005 @ 10:10 pm | Comment

That is a snarky comment about Willie Wo-lap Lam. When he was in HK with SCMP he was one of the very bright spots on China commentary. He had great contacts and called a spade a spade; probably why he is no long writing in HK.

My take on the negatives about the Chinese nation is more than just about the “Communists” moniker. IMHO it’s caused in large part by the irrational “yellow horde” image. Those kinds of frightful word images don’t die easily. After all it was still the 1960’s that the US visa system gave preference to Caucasian immigrants and discriminated against the yellows, the browns and the blacks. And it has only been since the 1950s I believe, that Asians could buy real property in the State of Washington and maybe other states.

July 24, 2005 @ 11:28 pm | Comment

Chinese Queen,

Since when has the People’s Republic of China been a true republic? Please enlighten us on the workings of your representative democracy.

July 24, 2005 @ 11:34 pm | Comment

Thomas, good question. You sent me to google “Republic.” Here is the link with some describtion and definition:

Not that I am in a position to answer that question since I am not in political fields but engineering, my knowledge is based on common sense and experience in China. Let us give you the benefit of the doubt on China’s “True Repulicanism.”, is “Monarchy” preferrable than “somewhat Republic?”

I am sure plenty of people here can comment on China’s true Repulicanism.

July 25, 2005 @ 12:02 am | Comment

Why the hell do some people always talk about “well-balanced” or otherwise coverage of China? I’m from England and I swear to god that I haven’t once ever thought about whether a media source/newspaper or whatever was “well-balanced” in its coverage of Britain.

I’ve also never heard this obsession with “bashing”, “bullying”, “hate”, “well-balanced”, “not well balanced” etc…and I’ve been around.

Why is China obsessed with this? l

July 25, 2005 @ 3:35 am | Comment

“I swear to god that I haven’t once ever thought about whether a media source/newspaper or whatever was “well-balanced” in its coverage of Britain.”

Good point. Sounds like you are proud of that!

Have you ever thought why muslim people growing up in Britan will bomb his neighbours?

Why one third, I repeat, one-third, of Britain muslim is sympathizing with terrorist?

Have you ever heard that muslim people complained that the western media coverage was biased?

“I’ve also never heard this obsession with “bashing”, “bullying”, “hate”, “well-balanced”, “not well balanced” etc…and I’ve been around.”

Well, I can say a lot more to make you angry. “You want truth? You can not handle the truth.” You need to take a moment to reflect.

July 25, 2005 @ 7:59 am | Comment

UK meida is well balanced against government, I feel.

July 25, 2005 @ 11:44 am | Comment

Here is my explanation of media bias that Chinese felt about western media.

Most people in China are having a pretty positive and optimistic feeling about their future and their life. Since they don’t have comparison, things like dirtiness of public bathroom, bad traffic, rudeness of their fellow countrymen, even pollution would not shock or bother them that much. These are just very insignificant elements of their life. Most people don’t know anything about internet blocking either. But those things can make a person grow up in western country feel unbearable. When a western reporter writes very negative and permissive about China on such topics in very high pitch tone, the Chinese think that western media are bias.

And also sometimes there is element of pursing sensationalism in western media, like some media program painted a picture of crass, cruel Chinese invaded Tibet, abusing the local spiritual Tibetans. Those programs very often mis-presented a lot of facts. A lot of Chinese view those kind of media programs not only bias against China, but sinisterly anti-China.

July 25, 2005 @ 5:03 pm | Comment

Good points LW. And it all goes back to the same point, when your government raises you in ignorance and closed-mindedness it can create ugly nationalism and intolerance.

July 25, 2005 @ 5:40 pm | Comment

The true definition of a Republic is a nation governed by laws, where the people have given sovreignty to the government, in whatever form. You could have a republican monarchy. Since China’s leaders have said they are deciding what type of legal system to create for China, I think it clearly is not a Republic anymore than the USSR was a Republic. The list of Wikipedia, excepting the federal republics like India, US, Germany, are literally a who’s who of 20th Century dictatorships.

Chinese people don’t seem to understand that all Western media is negative. Bush gets treated worse than the CCP as far as press attitude. Positive news is rarely presented in the West except for scientific breakthroughs and the economy, and even then most news will point out why the economy is going to crash soon. The war in Iraq is just a steady stream of suicide bombings, whereas life in Iraq is improving. But we don’t hear about it, because it’s boring. A lot of the positive takes years to happen (wheras negative is fast, big, and usually has blood and guts), so usually they’ll save that for a 60 Minutes special.

Everyone has an agenda. You can’t get the truth if you just read one side of the story. The U.S. press tends to get towards the truth because right and left paint their story and argue about it, and then move to the truth. In China, there is no discusion of the treatment of Tibet, for instance, other than “It is good.” Well, if a Western reporter goes there and Tibetan people say it sucks, they’re going to talk about it.

Finally, the Western press is very anti-American. And this is not just due to Bush. Although foreign leaders liked Clinton the man, Europeans still heard about how the U.S. is stupid, fat, and full of crime. One Italian girl asked me about all the homeless people in America that our media hide. I was a little shocked, since our media exposed the homelessness problem. But according to my Italian friend, there was lots more homelessness, millions of people in New York City alone.

It’s gotten to the point now, because of Bush’s policies and the fact that he is the embodiment of the America that Europe hates, that the anti-Americanism is being attacked by mainstream European politicians. And lets face it, Japan is treated horribly by the Korean and Chinese press. I saw the pictures drawn by small children in Korea that depicted the destruciton of Japan. So if Chinese want to talk about China being treated negatively, how about quitting with a story about WW2 and Japan every week. Really what Chinese people need to do is realize that their country is open, and you are going to have to hear a lot of negative view points that you haven’t heard before and maybe don’t like. Argue with them if you want, but don’t just say, oh you’re biased. Westerners will immediately think you have lost the argument. When I face anti-American viewpoints I have a discussion with facts with my European friend. Usually we both are more enlightened afterwards. Even if you still don’t agree, you can understand why that person thinks the way they do.

July 25, 2005 @ 6:42 pm | Comment

Matt has an intellegent approach. As he points out, the mainland Chinese have been blocked off from the real world by CCP’s stupid censorship and the Chinese cultural characteristic of burying the truth and negative criticism. It is no wonder mainland Chinese react so characteristically with naivete and wonder and feel in general that any and all criticism of China and the Chinese is biased.

July 25, 2005 @ 7:02 pm | Comment

Absolutely totally 100 percent true. But try to calmly tell this to some of them and they will attack you as though you are an ax murderer. Which actually goes to prove that Matt is exactly right.

July 25, 2005 @ 7:04 pm | Comment

Having realized all that of the characteristics of modern Chinese, it shouldn’t be difficult for you guys to understand many ideas or systems that work sucessfully in the west can not be simply copied to China.

I know we grew up with biased education and limited information. Had we had the same background, there wouldn’t be so many differences between us.

That’s the reality. No matter it’s right or wrong. And that’s why you shouldn’t be surprised if you constantly encounter such words: … with Chinese characteristics.

You may have noticed it’s not an easy task to change the mind of one person (in this case, wheelers like many other cults did have done a good job).

There are 1.3 billion Chinese brought up in this way. Give you Government China and let them apply your democracy in China for the 1.3 billion bias-minded people, imagine what would happen in 3 months.

July 26, 2005 @ 7:32 am | Comment

Bing, if we apply DEMOCRACY to China, it does not simply mean applying an electoral system, but also employing a free media system, which would engender not 1.3 billion people biased one way, but people biased in several differet ways, counterign each other and reaching an unsteady equilibrium that serves as the dynamic of change and success in democratic states.

So let’s do it! Everyone wins except for, hm, the CCP (which is not synonoymous with the Chinese nation despite their protestations to the contrary)

July 27, 2005 @ 11:10 am | Comment

You have a very good point about the pre-conceptions of the Chinese people in China mainland. Education (maybe in many situations just plain propaganda) and cultural input and mores do make a definite difference in perception of reality.
That being said and with your fine observations, what can be done to draw the Chinese world and the Western world closer together in free and real exchanges (by the way I don’t consider cultural performances as very effective)? I am not talking about money/commerce, but about people.

July 27, 2005 @ 7:47 pm | Comment


Many things can be done, and none of them alone is powerful enough.

The problem with many mainland Chinese is not just about their education.

You could learn many things from education to build an intelligent brain. But it’s only the society that can teach you to become a civilized man.

For a degraded society, an innocent graduate could easily grow a wicked heart.

July 28, 2005 @ 2:20 pm | Comment

You are wrong, Johnny K. China is a land govered for 4000 years by the top-down model. On top of that, sudden democracy transitions do not work when the majority of your country is poor, as proven by Russia. Not all authoritarian governments are bad, contrary to your believes. South korea, taiwan, singapore were all authoritarian when they developed at incredible pace from3rd world to 1st world countries. Think for a moment, if the students succeeded in 1989, what would have happened? There is a really bright man who created the least corrupt government in singapore without a western style democracy. Go look up some of interviews with Lee Kuan Yew, he has far more insights on this subject than you.

May 4, 2006 @ 7:20 pm | Comment

Russia turned out pretty well. China is mired in poverty and corruption.

May 4, 2006 @ 11:12 pm | Comment

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