Category: China

Chinese Communist Party Has “Instinct” for “Repression and Control”

(p. B1) To build a logistics hub next to Beijing’s main airport, Desmond Shum spent three years collecting 150 official seals from the many-layered Chinese bureaucracy.

To get these seals of approval, he curried favors with government officials. The airport customs chief, for example, demanded that he build the agency a new office building with indoor basketball and badminton courts, a 200-seat theater and a karaoke bar.

“If you don’t give this to us,” the chief told Mr. Shum with a big grin over dinner, “we’re not going to let you build.”

Mr. Shum recounts the conversation in a memoir that shows how the Communist Party keeps business in line — and what happens when businesspeople overstep. Released this month, “Red Roulette: An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China” shows how government officials keep the rules fuzzy and the threat of a crackdown ever-present, . . .

. . .

(p. B4) . . . Mr. Shum’s book has come out just as the future of China’s entrepreneurs is in doubt. The government has cracked down on the most successful private enterprises, including Alibaba Group, the e-commerce giant, and Didi, the ride-hailing company. It has sentenced business leaders who dared to criticize the government to lengthy prison terms.

. . .

“The party has an almost animal instinct toward repression and control,” Mr. Shum wrote in the book. “It’s one of the foundational tenets of a Leninist system. Anytime the party can afford to swing toward repression, it will.”

. . .

“Only in times of crisis does the party loosen its grip, allowing more free enterprise and more freedom,” Mr. Shum wrote. “China’s growing economy presented the party with an opportunity to reassert its dominance.”

. . .

Many businesspeople have managed to move at least part of their assets abroad, he said. Few make long-term investments because they are too risky and difficult. “Only idiots plan for the long term,” he said.

. . .

To win a green light for the airport logistics hub, Mr. Shum dined with officials nearly every day for a few years, downing one bottle of Moutai, the famed Chinese liquor, at each meal. His employees brought officials fine teas, ran their errands and looked after the needs of their wives and children.

One employee accompanied so many people to so many sauna trips that his skin started peeling off, he wrote.

The top airport and local district officials changed three times during the project’s span. Each time, Mr. Shum’s team had to restart the ingratiating process.

For the full commentary, see:

Li Yuan. “An Insider To Money And Power In China Tells All.” The New York Times (Friday, Sept. 24, 2021): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary has the same date as the print version, and has the title “An Insider Details the ‘Black Box’ of Money and Power in China.”)

The book discussed in the commentary quoted above is:

Shum, Desmond. Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China. New York: Scribner, 2021.

Essay Reprinted on Five Major Chinese Communist Web Sites Calls for Intensified Crackdown on Private Firms

(p. A10) For years, Li Guangman, a retired Chinese newspaper editor, wrote in obscurity, firing off attack after attack at chic celebrities and celebrated tycoons whom he accused of betraying the sturdy socialist values of Mao. Few outside of China’s fervent but narrow world of Maoist leftists read them.

Until now.

Mr. Li leapt to prominence recently after an essay he wrote railing at celebrity culture and misbehaving corporations ricocheted across China’s internet, spreading on far-left-wing websites and then on at least five major Communist Party-run news websites, including the People’s Daily, suggesting support from at least some officials.

The official boost for Mr. Li’s polemic startled Chinese political and business circles when doubt had already been rising about the growing role of the Communist Party in the economy. Among some, the essay left the impression that the party could intensify its crackdown on private corporations, tighten its grip on culture and hound the rich. Some critics pointed ominously to echoes of Mao’s Cultural Revolution of the 1960s, which had also emerged from attacks on the cultural elite by polemicists who were previously little known.

For the full story, see:

Chris Buckley. “Incendiary Essay Starts Guessing Frenzy Over Xi’s Plans for China.” The New York Times (Saturday, September 11, 2021): A10.

(Note: the online version of the story was updated Sept. 11, 2021, and has the title “Incendiary Essay Ignites Guessing Over Xi’s Plans for China.”)

China Charges Montenegro $1 Billion to Build Road “From Nowhere to Nowhere”

(p. 4) MATESEVO, Montenegro — One of the world’s most expensive roads slices through the mountains of Montenegro, soaring over deep gorges on towering bridges, before reaching its destination: a muddy field outside a hamlet with a few dozen houses, many of them empty.

Mirka Adzic, a resident of the hamlet, Matesevo (population: around 15), said she was delighted there would soon be a modern expressway so close to home as it would save her from having to take a treacherous mountain track, previously the only access to the outside world.

But, much as she likes the new Chinese-built expressway — which is supposed to open in November [2021] at a cost of nearly $1 billion after six years of hazardous work, two years behind schedule — she doesn’t really understand it.

Struggling to support a family on her husband’s meager salary as a driver for the Chinese construction company that built the road, she is baffled that her country, one of Europe’s poorest, has committed so much money to a gargantuan, state-of-the-art engineering project. Montenegro is now saddled with debts to China that total more than a third of the government’s annual budget.

Ms. Adzic is not alone. Montenegro’s new prime minister, Zdravko Krivokapic, who took over late last year from the government that signed the road and loan contracts with China in 2014, described the highway as a “megalomaniac project” that “goes from nowhere to nowhere” and badly strained his country’s finances.

. . .

A 2012 study led by a British company for Montenegro’s Ministry of Transport warned that construction costs would be unusually high because of the mountainous terrain. Even so, its cost estimates were considerably lower than the more than $900 million charged by the China Road and Bridge Corporation to build the 25-mile, but particularly difficult, stretch of the highway.

An earlier feasibility study, in 2007, by Louis Berger, an engineering company in Paris, warned that traffic along the proposed highway would not be “high enough to justify” investment “from a purely financial basis.”

. . .

Nearly $280 million, more than half of the total amount of money paid to local subcontractors, has gone to a single Montenegro company, Bemax, formally owned by a onetime cafe owner who, before he moved into road building, had no previous experience in engineering work, according to MANS, the research group.

Nebojsa Medojevic, a member of Parliament, claimed that Bemax was in reality owned by a close adviser of Mr. Djukanovic, Milan Rocen, a former ambassador to Moscow. Mr. Djukanovic denied this, saying he had “of course” asked his adviser and been assured the claims were false. Mr. Rocen has himself categorically denied owning Bemax.

For the full story, see:

Andrew Higgins. “Montenegro, a Nearly $1 Billion Road to ‘Nowhere’.” The New York Times, First Section (Sunday, August 15, 2021): 4.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 14, 2021, and has the title “A Pricey Drive Down Montenegro’s Highway ‘From Nowhere to Nowhere’.”)

As Chinese Marxists Limit Liberty, the Young Show “Silent Resistance” by “Lying Down”

(p. 4) Five years ago, Luo Huazhong discovered that he enjoyed doing nothing. He quit his job as a factory worker in China, biked 1,300 miles from Sichuan Province to Tibet and decided he could get by on odd jobs and $60 a month from his savings. He called his new lifestyle “lying flat.”

“I have been chilling,” Mr. Luo, 31, wrote in a blog post in April [2021], describing his way of life. “I don’t feel like there’s anything wrong.”

He titled his post “Lying Flat Is Justice,” attaching a photo of himself lying on his bed in a dark room with the curtains drawn. Before long, the post was being celebrated by Chinese millennials as an anti-consumerist manifesto. “Lying flat” went viral and has since become a broader statement about Chinese society.

. . .

Mr. Ding, 22, has been lying flat for almost three months and thinks of the act as “silent resistance.”

. . .

The ruling Communist Party, wary of any form of social instability, has targeted the “lying flat” idea as a threat to stability in China.

. . .

Mr. Luo was born in rural Jiande County, in eastern Zhejiang Province. In 2007, he dropped out of a vocational high school and started working in factories. One job involved working 12-hour shifts at a tire factory. By the end of the day, he had blisters all over his feet, he said.

In 2014, he found a job as a product inspector in a factory but didn’t like it. He quit after two years and took on the occasional acting gig to make ends meet. (In 2018, he played a corpse in a Chinese movie by, of course, lying flat.)

Today, he lives with his family and spends his days reading philosophy and news and working out. He said it was an ideal lifestyle, allowing him to live minimally and “think and express freely.” He encourages his followers, who call him “the Master of Lying Down,” to do the same.

After hearing about Mr. Luo’s tangping post on a Chinese podcast, Zhang Xinmin, 36, was inspired to write a song about it.

. . .

Mr. Zhang uploaded the song to his social media platforms on June 3, and within a day censors had deleted it from three websites. He was furious.

. . .

Lying down is really good
Lying down is wonderful
Lying down is the right thing to do
Lie down so you won’t fall anymore
Lying down means never falling down.

For the full story, see:

Elsie Chen. “For Young People in China, ‘Lying Flat’ Beats Working.” The New York Times, First Section (Sunday, July 4, 2021): 4.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date July 3, 2021, and has the title “These Chinese Millennials Are ‘Chilling,’ and Beijing Isn’t Happy.”)

China Removed Gene Sequences from NIH Data Base Related to Covid-19 Origin

(p. A3) Chinese researchers directed the U.S. National Institutes of Health to delete gene sequences of early Covid-19 cases from a key scientific database, raising concerns that scientists studying the origin of the pandemic may lack access to key pieces of information.

. . .

The removal of the sequencing data is described in a new paper posted online Tuesday by Jesse Bloom, a virologist at the Fred Hutchinson Cancer Research Center in Seattle. The paper, which hasn’t been peer reviewed, says the missing data include sequences from virus samples collected in the Chinese city of Wuhan in January and February of 2020 from patients hospitalized with or suspected of having Covid-19.

. . .

. . . Dr. Bloom said their removal sows doubts about China’s transparency in the continuing investigation into the origin of the pandemic.

Some other scientists agreed.

“It makes us wonder if there are other sequences like these that have been purged,” said Vaughn S. Cooper, a University of Pittsburgh evolutionary biologist who wasn’t involved in the new paper and said he hasn’t studied the deleted sequences himself.

For the full story see:

Amy Dockser Marcus, Betsy McKay and Drew Hinshaw. “Covid-19 Gene Data Removed at NIH.” The Wall Street Journal (Thursday, June 24, 2021): A3.

(Note: ellipses added.)

(Note: the online version of the story was updated June 23, 2021, and has the title “Chinese Covid-19 Gene Data That Could Have Aided Pandemic Research Removed From NIH Database.”)

George Soros Tells Why Xi Will Fail

(p. A11) I consider Mr. Xi the most dangerous enemy of open societies in the world. The Chinese people as a whole are among his victims, but domestic political opponents and religious and ethnic minorities suffer from his persecution much more. I find it particularly disturbing that so many Chinese people seem to find his social-credit surveillance system not only tolerable but attractive. It provides them social services free of charge and tells them how to stay out of trouble by not saying anything critical of Mr. Xi or his regime. If he could perfect the social-credit system and assure a steadily rising standard of living, his regime would become much more secure. But he is bound to run into difficulties on both counts.

. . .

Mr. Xi is engaged in a systematic campaign to remove or neutralize people who have amassed a fortune. His latest victim is Sun Dawu, a billionaire pig farmer. Mr. Sun has been sentenced to 18 years in prison and persuaded to “donate” the bulk of his wealth to charity.

This campaign threatens to destroy the geese that lay the golden eggs. Mr. Xi is determined to bring the creators of wealth under the control of the one-party state. He has reintroduced a dual-management structure into large privately owned companies that had largely lapsed during the reform era of Deng. Now private and state-owned companies are being run not only by their management but also a party representative who ranks higher than the company president. This creates a perverse incentive not to innovate but to await instructions from higher authorities.

China’s largest, highly leveraged real-estate company, Evergrande, has recently run into difficulties servicing its debt. The real-estate market, which has been a driver of the economic recovery, is in disarray. The authorities have always been flexible enough to deal with any crisis, but they are losing their flexibility. To illustrate, a state-owned company produced a Covid-19 vaccine, Sinopharm, which has been widely exported all over the world, but its performance is inferior to all other widely marketed vaccines. Sinopharm won’t win any friends for China.

To prevail in 2022, Mr. Xi has turned himself into a dictator. Instead of allowing the party to tell him what policies to adopt, he dictates the policies he wants it to follow. State media is now broadcasting a stunning scene in which Mr. Xi leads the Standing Committee of the Politburo in slavishly repeating after him an oath of loyalty to the party and to him personally. This must be a humiliating experience, and it is liable to turn against Mr. Xi even those who had previously accepted him.

In other words, he has turned them into his own yes-men, abolishing the legacy of Deng’s consensual rule. With Mr. Xi there is little room for checks and balances. He will find it difficult to adjust his policies to a changing reality, because he rules by intimidation. His underlings are afraid to tell him how reality has changed for fear of triggering his anger. This dynamic endangers the future of China’s one-party state.

For the full commentary, see:

George Soros. “Xi’s Dictatorship Threatens the Chinese State.” The Wall Street Journal (Saturday, Aug. 14, 2021): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 13, 2021, and has the same title as the print version.)

Milton Friedman Will Be Vindicated on China

I was lucky to be able to take Milton Friedman’s Price Theory graduate course the last time he taught a full version of it. (I think he taught an abbreviated version a year or two later.) He was, and remains, one of my heroes. He predicted that China’s move to the market would also lead it to more political freedom. I suspect that he will still turn out to be correct, but with a longer delay than he or I thought likely. A dynamic economy depends on innovative entrepreneurship and innovative entrepreneurship depends on freedom of thought and speech. Xi is systematically destroying freedom of thought and speech in China; the house of cards will fall and Milton will be vindicated in the end.

(p. A15) “I predict that China will move increasingly toward political freedom if it continues its successful move to economic freedom.”

So spoke Milton Friedman in 2003. It seemed a good idea at the time, especially after the transformations of the dictatorships in Taiwan and South Korea into messy but functioning democracies.

. . .

Under Mr. Xi, Beijing has carried out genocide against China’s Uyghur minority, threatened Taiwan with invasion, shut down a pro-democracy newspaper in Hong Kong, covered up the origins of Covid-19, and so on. Even so, China’s economy continues to boom—it grew more than 18% in the first quarter from a year earlier—and Friedman now looks to have gotten it colossally wrong about capitalism and freedom.

For the full commentary, see:

William McGurn. “Milton Friedman Wrong About China?” The Wall Street Journal (Tuesday, June 29, 2021): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date June 28, 2021, and has the title “Was Milton Friedman Wrong About China?”)

Center-Left Biothreat Expert Says Many Scientists Rejected Wuhan Lab Origin, Not Due to Evidence, but Due to Trump

(p. A13) A few months before Covid-19 became a pandemic, Filippa Lentzos started reading about unusual flu cases in Wuhan, China. Ms. Lentzos, a social scientist who studies biological threats, belongs to an email group she describes as consisting of “ex-intelligence, bioweapons specialists, experts, former State Department diplomats” and others “who have worked in arms control, biological disarmament.”

As Chinese authorities struggled to contain the outbreak, she recalls, the expert circle asked questions about the pathogen’s origin: “Is this security related? Is it military? Is there something dodgy going on? What information are we not getting here?”

. . .

. . . in February 2020, a group of scientists had published a statement in the Lancet calling out “conspiracy theories suggesting that COVID-19 does not have a natural origin.” The New York Times and Washington Post dutifully attacked Mr. Cotton as unhinged. Media, with an assist from some virologists, dismissed the lab-leak theory as “debunked.”

Ms. Lentzos, who places her own politics on the Swiss “center left,” thought that conclusion premature and said so publicly. In May 2020, she published an article in the Bulletin of the Atomic Scientists weighing whether “safety lapses in the course of basic scientific research” caused the pandemic. While acknowledging there was, “as of yet, little concrete evidence,” she noted “several indications that collectively suggest this is a serious possibility that needs following up by the international community.”

. . .

The article barely made a ripple. “If you look at the argumentation that’s used today, it’s exactly the same basically as what I laid out, which was, accidents happen,” she says. “We know that they’re having questions around safety. We know they were doing this field work. We see videos where they’re in breach of standard biosafety protocol. We know China is manipulating the narrative, closing down information sources—all of that stuff. All of that is in there. But it didn’t get much traction.”

. . .

American liberals—including many scientists—conflated open-mindedness about the question with support for Mr. Trump. Ms. Lentzos was one of the few who could separate their distaste for him from their analysis of the pandemic.

. . .

The most significant problem came from the scientific community. “Some of the scientists in this area very quickly closed ranks,” she says, and partisanship wasn’t their only motive: “Like most things in life, there are power plays. There are agendas that are part of the scientific community. Just like any other community, there are strong vested interests. There were people that did not talk about this, because they feared for their careers. They feared for their grants.”

Ms. Lentzos counsels against idealizing scientists and in favor of “seeing science and scientific activity, and how the community works, not as this inner sacred sanctum that’s devoid of any conflicts of interests, or agendas, or any of that stuff, but seeing it as also a social activity, where there are good players and bad players.”

Take Peter Daszak, the zoologist who organized the Lancet letter condemning lab-leak “conspiracy theories.” He had directed millions of dollars to the Wuhan Institute of Virology through his nonprofit, EcoHealth Alliance. A lab mistake that killed millions would be bad for his reputation. Other researchers have taken part in gain-of-function research, which can make viruses deadlier or easier to transmit. Who would permit, much less fund, such research if it proved so catastrophic? Yet researchers like Marion Koopmans, who oversees an institution that has conducted gain-of-function research, had an outsize voice in media. Both she and Mr. Daszak served on the World Health Organization’s origin investigation team.

. . .

Ms. Lentzos has experience working with United Nations agencies, including the World Health Organization. “It was incredibly exciting to finally go in. And then you become more disillusioned when you see how things operate, how things don’t operate,” she says. “Like any large organization, they are slow, and inflexible, and bureaucratic.”

For the full interview see:

Adam O’Neal, interviewer. “THE WEEKEND INTERVIEW; A Scientist Who Said No to Covid Groupthink.” The Wall Street Journal (Saturday, June 12, 2021): A13.

(Note: ellipses added.)

(Note: the online version of the interview has the date June 11, 2021, and has the same title as the print version.)

Capitalist Innovations Made Rapid Covid-19 Vaccines Possible

(p. A15) The Wuhan lab appears to have operated, in part, with U.S. government grant funding, although American scientists had no oversight role. Chinese scientists allegedly pursued gain-of-function research, increasing the virulence and transmissibility of certain viruses. It isn’t unheard of for a virus to escape from a government-funded lab, and the evidence increasingly suggests that’s what happened in Wuhan, even as China dubiously points a finger at the U.S. military.

Regardless of which government, if any, contributed to the emergence of Covid-19, the pandemic was quickly controlled by innovation from the private economy. New vaccines and private protocols, not government mandates, mainly slowed the spread in workplaces and schools. The pandemic originated from government failures that had to be corrected by private actors.

Even if the lab-leak theory proves false, and it turns out that SARS-CoV2 passed directly from animals to humans, one could still argue the Chinese government’s actions created the pandemic. Beijing covered up evidence of the virus’s early spread and allowed international flights from Wuhan during January and February 2020 while locking down domestic travel.

. . .

American capitalism supported decades of innovation that created conditions conducive to the rapid development of the Covid vaccines. About 70% of the returns to medical research and development across the world come from the U.S., where price controls are less prevalent than elsewhere and companies compete to bring new treatments and cures to market. Without the U.S. market, investors would have shied away from funding the cumulative advances that eventually led to successful Covid vaccines. In this sense, the U.S. market-based healthcare economy saved the world from Covid-19. None of it would have happened in a government-run health system.

For the full commentary see:

Casey B. Mulligan and Tomas J. Philipson. “Government Failure Gave the World Covid.” The Wall Street Journal (Tuesday, Aug. 10, 2021): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 9, 2021, and has the same title as the print version.)

Longshoreman Union Reduces Efficiency of American Ports

(p. A15) Global supply chains are buckling, driving up prices, creating shortages and frustrating consumers.

. . .

One problem is productivity. In Asia, ships are worked 24/7, or 168 hours a week, compared with 16 hours a day, or only 112 hours a week, at Los Angeles-Long Beach. Terminal gates used by truckers to deliver and receive seaborne containers operate only 88 hours a week, vs. 168 in Asia. For larger ships, it takes 24 seconds on average to move a container at the Chinese ports of Shanghai, Qingdao and Yantian, vs. 48 seconds at Los Angeles, according to IHS Markit port-performance data.

. . .

A decades-long history of toxic labor-management relations has led to huge cost increases that discourage operators from expanding work hours, limit their ability to automate terminals, and end in avoidable delays during contract negotiations. Many companies won’t soon forget six months of costly delays at West Coast ports during contract negotiations with the International Longshore and Warehouse Union in 2014 and 2015. More than 30 container ships were backed up at anchor off the ports during that episode. Companies will be closely watching the next round of negotiations in 2022.

There is no sign that the labor-management paradigm will change, and a Democratic administration is unlikely to challenge longshoremen’s unions to make compromises.

For the full commentary see:

Peter Tirschwell. “Behind Your Long Wait for Packages.” The Wall Street Journal (Thursday, June 3, 2021): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 2, 2021, and has the same title as the print version.)

34,300 Hong Kongers Apply for British Visa to Leave “A City That Is Lacking Freedom”

(p. B1) LONDON — Lin Kwong had a good life in Hong Kong. She taught sports management part time at a college and chaired an amateur drama club. Her young son, Chee Yin, was doted on by his grandparents. She had friends and favorite restaurants. But in February, she made the difficult decision to leave it all behind.

“Nothing is as difficult as staying in a city that is lacking freedom,” she said.

In the year since China imposed a sweeping national security law on its territory of Hong Kong, a former British colony, tens of thousands of people have made plans to leave the city. And like Ms. Kwong, many are headed for Britain, where holders of British National Overseas (B.N.O.) pass-(p. B3)ports have been given a pathway to work and citizenship. In the first quarter of the year, 34,300 people applied for the special visa, according to Britain’s immigration department.

. . .

Ms. Kwong often posts on social media, wanting to show the benefits of life in Britain. At a memorial in London last month on the anniversary of the 1989 Tiananmen Square massacre, she posted a photo of a lit candle. In Hong Kong, the long-running annual vigil had been banned.

At a protest in London on June 12, hundreds of Hong Kongers marched through the city center chanting “Fight for freedom!” and “Stand with Hong Kong!” Organizers wore masks with a Union Jack pattern, and sang “God Save the Queen.”

For the full story, see:

Isabella Kwai and Alexandra Stevenson. “Departing Hong Kong For New Life.” The New York Times, First Section (Monday, July 12, 2021): B1 & B3.

(Note: ellipsis added.)

(Note: the online version of the story was updated July 31, 2021, and has the title “Hong Kong Migrants Seek Fresh Start in U.K. After Crackdown.”)