Posts tagged: Strategic & Economic Dialogue

What is Up with Chen Guangcheng?

Chen Guangcheng, entering a Beijing Hospital with US Ambassaor Gary Locke and State Dep't Legal Advisor Harold Koh

More often than not, I am my friends’ go-to China person; something in the news pops up with China, I get the questions.  So I wasn’t surprised on Saturday when over some carrot cake at the Chelsea Market a friend of mine had questions about Chen Guangcheng: if he cared so much about human rights in China, why would he leave?  What is up with the Chinese government, keeping a blind man trapped in his own home?  How did things get so messy between the U.S. government and Chen?

It’s been almost a month since Chen fled the home that illegally became his prison. So what exactly is up with Chen’s escape and to answer some questions – what does it all mean?

Chen’s Escape Has Propelled Human Rights to the Top of the US-China Agenda

My friend’s question on Saturday caught me off guard – does Chen really care about human rights in China if he fled to the protection of the U.S. Embassy, ostensibly to seek asylum and leave China.

To ask a man with a wife and two children to be a martyr for his cause is asking too much.  As this blog has recounted previously, since Chen’s release from prison (oddly convicted of a traffic disturbance) did not result in freedom.  Instead, for the past year and a half, Chen and his family have been subjected to illegal house arrest and at times, physical torture by his captures.

It is true that by departing China, Chen’s ability to change China’s current system will be much reduced if not extinguished.  But his heroic flight has perhaps done more to highlight the Chinese government’s recent illegal oppression of dissent than anything else.  Over the past year and a half, this blog has increasingly written about the Chinese government’s crackdown on China’s nascent rights defending (weiquan) lawyers. Aside from people already interested in the issues, these posts – and the acts of repression which they have focused on – have received little attention.

Chen’s escape and his subsequent stay at the U.S. Embassy  altered this focus. With Hillary Clinton arriving for the Strategic and Economic

Inspiring Architecture? The US Embassy in Beijing

Dialogue (S&ED), the focus of U.S.-China relations shifted to human rights.  For one week, as the world watched, the U.S. and China’s relationship was thrown back to a 1980s-Cold War paradigm, when ideology played a more governing role.  For one week, the Western media’s attention finally focused on the repression of rights defending lawyers, and the lip service the Chinese government gives “rule of law” when it comes to civil rights and civil liberties.

It is amazing that a single man’s act, that one blind man’s heroic act, can still change the dialogue in U.S.-China relations.  It is a hopeful reminder that in this globalized world, individuals still matter; that one man’s quest for freedom is still “news.”  And don’t think Chen’s act was not a heroic one.  Not only was a blind man able to find his way to Beijing, but imagine if he wasn’t; imagine if he was caught.  Likely his fate would match that of Gao Zhisheng, a rights defending lawyer who, while in government custody, remains missing.

The U.S. Government’s Actions Supported Human Rights

Some have criticized the U.S. government – or more aptly, the Obama Administration – for its dealings with the Chinese government over Chen.  Initially, the U.S. Embassy worked out a deal with the Chinese government whereby Chen would stay in China, study law at a university in a coastal city away from the thugs of his hometown, and be left alone with his family.  This was what Chen initially wanted.

But once he left the safety of the embassy for a Beijing hospital, Chen began to reconsider his options.  As Prof. Jerome A. Cohen recounted to CNN, the promised U.S. Embassy official was unable to stay with Chen at the hospital and once he began speaking other rights defending lawyers – friends he hadn’t been able to speak to for a year – he began to more clearly understand the increased oppression of rights defending lawyers in China.  Chen was scared; Chen realized that without full information, he misjudged the situation.  That’s when he vocally requested that he be able to leave China for the United States.

Were some in the U.S. Embassy a touch too naive to rely on the Chinese government’s promises?  Most likely.  But being naive is not the same as turning one’s back to human rights.  It was Secretary of State Hillary Clinton’s decision to allow Chen into the U.S. Embassy in the first place.  Chinese citizens cannot just willy-nilly enter the U.S. Embassy; even American citizens are allowed limited access to their embassy (which resembles a high-security prison).  As the N.Y. Times has recounted, embassy officials were notified of Chen’s flight to Beijing and on April 25, Secretary Clinton gave the authorization to sneak Chen into the embassy compound.  Secretary Clinton knew full well that by providing that approval, a throw-down with the Chinese government on the issue of human rights was certain and the ultimate outcome unclear. It is unfortunate – although not all together shocking given the current acrimonious status of politics – that Washington D.C. cannot view this moment as a proud one for America and its ideals; that the web of support that both parties have built for a human rights network in China over the years enabled Chen to come to our door.   Instead, it appears that what could otherwise be a proud moment for Americans, is becoming a political tug-of-war.

Who is Driving the Bus? The Chinese Central Government’s Lack of Control

Beep Beep! Who drives this bus??

What is perhaps the most shocking of all from this whole situation is the Chinese central government’s lack of control of local governments. Chen’s persecution has largely been conducted by the local government in his hometown, with local government officials still seething after his attempt to bring a lawsuit against them for forced abortions.  But even when Chen fled to Beijing, his safety could not be guaranteed, hence his changed desire to leave for the United States.  Many of his relatives left in their villages are being persecuted by local officials.  It makes one wonder – who really drives the bus in China?

Imagine a United States where Governor George Wallace could ignore federal law, have his way and continue segregation in his home state of Alabama.  Likely you can’t.  It’s unfathomable to think that a national government is unable to enforce its own laws, and in the case of China, that a supposed authoritarian dictatorship cannot control lower level party members.

Chen’s case reflects a center weaker than anyone previously thought.  And that is what is most frightening and should give people pause.  Does China really have the power to become a rising superpower or will it revert to its warlord past, where each city is governed by its own power broker and the central government remains impotent?

While China’s weakness appears to manifest itself often in human rights issues, it should not be just a concern for human rights advocates.  Anyone working in or with China – business people, government officials – should be troubled.  A weak center, especially as China undergoes an important leadership transition this year, does not bode well for China.

Prof. Jerome Cohen – The Fixer

On a final note, I want to focus on Prof. Jerome Cohen and his role in all of this.  As a research fellow for two years, I had the privilege of working

Prof. Jerome A. Cohen

with Prof. Cohen at NYU’s U.S.-Asia Law Institute.  In that time, I got to know a kind, brilliant man who never ceased to amaze me.  It was Prof. Cohen who first identified the ingenuity and necessity of Chen’s unschooled, “barefoot lawyer” approach in 2003 and deservedly catapulted him to the world stage.

While my two years with Prof. Cohen were filled with inspiring moments, I have never been more proud of him than I was with his handling of the Chen Guangcheng situation.  While this is all purely based on hearsay, it appears that it was Prof.  Cohen who got the U.S. and China out of what was becoming a crisis situation.  Prof. Cohen’s lifetime of experience with China, including high-level delegations soon after Nixon’s visit to China in 1972, allowed him to realize that all that was needed was a practical solution where everyone could save face: a scholarship for Chen to study law at NYU’s U.S.-Asia Law Institute and invitation for his wife and children to join him.

Now we wait and see.  The United States has approved Chen’s visa application and just yesterday he applied for his Chinese passport.  Although the Chinese government could renege on the deal, that looks increasingly less likely and ultimately not in their best interest.  It’s never a satisfying moment when one of your citizens essentially seeks protection from a foreign government for human rights abuses, but on some level, the Chinese government is likely happy that Chen, who has long been a rabble rouser and a cause célèbre for other Chinese rights defenders and foreign friends, is leaving the country.  Unfortunately for Chen and his family, he will likely never be able to return to his home country.

Pencils, Staplers & Pens, Oh My! China Submits Government Procurement Bid to WTO Body

By , August 2, 2010

As promised, on July 9, 2010, China submitted its proposal to join the World Trade Organization’s (WTO) Agreement on Government Procurement (GPA).  China’s government procurement market – in which the government purchases supplies and services to keep it running –is larger than the GDP of many small nations, accounting for $500 billion by some estimates, a size that makes many western companies salivate.  But China has no legal obligation to open its government procurement market to global competition.

Needless to say, the inability for foreign companies to access such a huge market has been a sticking point for many foreign governments in its dealings with China.  During May’s Strategic & Economic Dialogue (S&ED), Secretary of State Hillary Clinton raised the government procurement issue often.  By the end of the S&ED, China promised to submit an application to the GPA in July, its first submission since 2007 when China’s application was resoundingly rejected by other GPA member nations for being over-protectionist.  But the U.S. is not the only country with issues concerning government procurement.  German Chancellor Angela Merkel visited China in the beginning of July and market access was number one on her list of discussion topics with the Chinese leadership.  Even the U.S. Congress is threatening action, proposing the adoption of the “China Fair Trade Act of 2010” if China does not open its government procurement market.

So with all that pressure, will China’s 2010 revised offer to join the GPA open its markets to foreign corporations?

Don’t hold your breath.  While China responded to some of the criticism lodged against its 2007 application – it shortened the implementation period from 15 years to 5 and significantly lowered the monetary values of the projects and purchases covered to be more in line with other member states – its 2010 application does little to actually open its government procurement market.

In Annex I of China’s 2010 application, a larger number of central government agencies are covered compared to China’s previous application – 61 to be exact.  But the largest market – namely government procurement on the local level – is completely absent.  Annex II, which is to list those sub-central government agencies covered by the agreement, is left blank.  Additionally, China’s state-owned enterprises (SOEs) are also not covered by the GPA

More high rise aparment buildings in Shanghai

application.  Although a hybrid between a government-run organization and a private corporation, SOEs maintain good ties with the government, especially on the local level.  As Monday’s New York Times pointed out, many SOEs whose businesses are completely unrelated to housing development, such as the Anhui Salt Industry Corporation, have been the biggest players in China’s real estate construction boom.  This is largely due to the SOEs huge amounts of cash and their ability to endless borrow from government-run banks.   But under China’s 2010 GPA application, these SOEs would be allowed to ignore competitive bids from foreign companies.

Although this is a disappointment for foreign corporations looking to crack into China’s government procurement market, China’s current 2010 GPA application is at least honest in admitting to the fact that the central government might have a lot less control over the provinces than many thought.

This is especially true if central policies seek to disrupt the symbiotic relationship that exists between local governments and local SOEs.  As Reuters notes in its report on China’s GPA application, China’s provinces have had a long history of preferential treatment of local provincial industries, even at the expense of Chinese corporations from other provinces.  These local SOEs – like the Anhui Salt Company – employ hundreds if not thousands of local workers, and local SOEs are often more willing to partake in a “I-scratch-your-back-you-scratch-mine” economy.  Take for example the real estate auction mentioned in the New York Times article.  At a government-run public auction, Anhui Salt put in an offer that far surpassed other offers, unnecessarily bidding up the price that it would eventually pay for the land.  But that inflated price goes directly to the coffers of the local government.  And in some provinces, where the government’s balance sheets are more of charade than actual accounting, this extra income is important.  Needless to say, provincial governments are inherently protectionist of its local industries and the system the two have created.

While many believe that the Chinese central government, with it authoritarian rule, can force provincial level governments to act a certain way, China’s 2010 GPA application reflects that there are actually limits.  It also hints that China might be more of a federalist system than originally thought.  Although the U.S. is a member nation of the GPA, because the federal government cannot mandate state government behavior when it comes to government procurement, states have to affirmatively agree to the join the GPA.  In the U.S., only 37 states are signatories to the GPA; the federal government can’t force states to comply with the GPA.  Similarly, China’s 2010 application and the fact that the central government apparently cannot force provinces to sign on to the GPA, raises the question if China is in fact a de facto federalist system.

At any rate, given the absence of SOEs and local governments from China’s GPA application, expect the 2010 offer to be rejected again.  What will be interesting is how loudly the U.S. will object when 13 states have yet to sign on to the GPA.

China’s Government Procurement Policies – Fair or Discriminatory? An Expert Weighs In

Last month’s Strategic and Economic Dialogue (S&ED) featured many thorny issues that have been plaguing U.S.-China relations for the past few months: North Korea, currency manipulation, Iran….and government procurement?  Yes, Brett Gersongovernment procurement. Not what one would think of as a controversial topic worthy of a major dialogue between two of the world’s leading powers.  So to help us understand the addition of government procurement to the S&ED agenda is Brett Gerson, an associate in the international trade and public procurement practices at Reed Smith and co-author of the recent article “Can China’s Government Procurement Market be Cracked?” in this month’s The China Business Review.

Click here to listen to the interview with Brett Gerson or read below for the entire transcript.
Length: 19 minutes (audio will open in another browser)

In the interview, Brett mentions three laws and regulations pertaining to government procurement in China. They can be found through these links:

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Potentially a $90 billion Procurement Shopping Spree

Potentially a $90 billion Procurement Shopping Spree

ELJust to begin, what exactly is meant by government procurement and how does this involve U.S.-China relations?

BG:  Well, essentially government procurement is the process whereby governments or government ministries or agencies can purchase goods or services at a large-scale to provide for use in the carrying out of government processes.  So for example, this could, as an example of goods, a government agency could purchase in bulk a large number of, let’s say, printers or staplers or another good.  It could also be services.  The government could enter into an agreement with an IT company to provide some type of computer services or internet maintenance or something like that.

It’s becoming a very big issue between the U.S. and China because like many other areas of China’s market, there is immense potential for companies – both Chinese and foreign – to get into China’s procurement market.  Obviously the Chinese government is huge, they have a wide array of ministries and agencies both at a, sort of, federal level coming from Beijing, and at a provincial level.

EL: And how big is this market, this potential market, in U.S. dollars?

BG:  It’s hard to say exactly.  Most estimates hover around $90 billion which is really huge.  But it is tough because it is hard to say exactly which entities are state-owned enterprises, so which are entirely private and which are sort of public in nature.  But most estimates hover around $90 billion and I have seen a couple where in 2010 that’s expected to reach $100 billion.

EL: Currently, does China have any policy or laws in regards to government procurement of foreign companies’ goods or services?

BG: Yeah.  In 2002, China promulgated the Government Procurement Law.  It’s somewhat controversial in nature but it basically just states that Chinese government agencies and entities must purchase domestic goods, works or services except where those goods, works or services can’t be obtained within China under reasonable commercial terms.  Those reasonable commercial terms are defined as 20 percent more than imports.  Now, the problem with the Government Procurement Law is that it never defined what is “domestic.”  So companies, particularly foreign companies, had a hard time cracking that market because it was so easy for the Chinese government and Chinese government agencies and entities to just simply purchase products – goods or services – from Chinese companies.

Since 2002, there has been a lot of international pressure on China to better define what is domestic.  They finally did this in January 2010, just about six months ago, the Chinese government issued what’s called the Implementing Regulations.  These aren’t exactly law, but they define how the Chinese government is suppose to carry out the Government Procurement Law.  The Implementing Regulations set forth that….it better defined domestic.  It says that essentially domestic manufacturing costs that exceed a certain threshold, those products will be defined as domestic.  Now in the implementing regulations, they didn’t actually set the threshold.  We were able to look at some other guidance that the Chinese government issued recently and we were able to guess that they probably meant 50 percent.  Now, just a few weeks ago, right before the high-level meetings in China that you discussed, the Chinese government again issued another sort of policy guidance paper that did clarify that the threshold for a product to be considered domestic is 50 percent of domestic production costs.

ELSo if they have clarified this recently and this law has been in place since 2002, why is this now becoming such

China's Government Procurement Laws - Trade Protectionism?

China's Government Procurement Laws - Trade Protectionism?

an issue? What has caused government procurement to become almost the centerpiece of the Strategic and Economic Dialogue last month?

BG:  There’s two main reasons and they sort of come together.  The first is that in the World Trade Organization, there is an agreement called the Government Procurement Agreement [GPA].  It’s a plurilateral agreement meaning that some but not all of the World Trade Organization members are a part of this agreement.  It basically just states that if you’re a party to this agreement, you cannot favor products or services from your country against those from a foreign country.  China, when they first came on to the World Trade Organization in 2001, they promised that they would join the Government Procurement Agreement as soon as possible.  Now, they have submitted a proposal before, back in 2007, but it didn’t quite come to the level of international best practices.  The member countries essentially rejected it.  Since that point, the United States as well as major European countries and other members to the GPA, have pressured China to resubmit a proposal that do come up to the standard that the member countries expect.  Finally, China agreed just recently at the high-level discussions in China that they were going to submit a new proposal in July of this year.  Right before the time the World Trade Organization Government Procurement Committee meets.  So I think that is one of the issues that is really bringing it to the forefront, is that there is a lot of pressure on China to join the GPA agreement.

The other issue, and this was also discussed and mentioned by Hillary Clinton and Timothy Geithner, is China has set forth a very controversial policy called indigenous innovation policies.  And basically these are policies that direct provincial governments and agencies and ministries to buy only from certain product catalogs.  These catalogs are primarily made up of high-tech and IT goods and traditionally it’s been extremely hard for foreign companies to get their products onto these catalogs.  For example, and I mention this in the article, out of the Shanghai-based catalog, there are over 500 products that are listed on this catalog, and foreign products make up only two of these products.  Of those two, they are not entirely foreign entities, they’re joint ventures between a foreign company and a local Chinese company.

So I think those two issues, one that China has been slow to join the World Trade Organization Government Procurement Agreement and two, these indigenous innovation polices that make it very difficult for foreign companies to get their high-tech products listed on these procurement catalogs.

ELBut in terms of China favoring its domestic products over foreign products, is China really acting any differently than from any other countries in terms of government procurement?  Doesn’t in the U.S., isn’t the U.S. government required to purchase U.S. products?  How is China any different from that?

buy_americanBG:  Well there’s a couple of differences.  The U.S. and other countries that are members of the GPA do have policies that direct or allow their own domestic government entities to purchase only domestic products.

There’s a couple of differences.  One, here in the U.S. we have what is called the Buy American Act.  The Buy American Act essentially says that federal agencies can only procure unmanufactured articles that have been mined or produced in the U.S. or manufactured articles that were made substantially of articles or materials mined or produced in the U.S.  But there are several exceptions.  One is you can waive that if it would be consistent with public interest or if observing that preference would be inconsistent with the public interest.  Second, where the cost of buying the U.S. good is, sort of, unreasonably higher than would you purchase them from a foreign entity.  The third exception is where the products in question are in too short of a supply in the U.S. to make that purchase feasible.

In addition to that, government agencies may purchase foreign-made information technology equipment.  So that’s sort of a big issue and that sort of touches upon the China indigenous innovation policies – there is sort of a cut-out for U.S. government agencies to waive the Buy American requirements for sort of high-tech, IT goods.

Also, the Buy American Act doesn’t include services which the Chinese government procurement policies will.  As you know, services is a huge sector for foreign companies in China: legal services, accounting services, IT services, things of this nature.

In addition to the Buy American Act, we also have the Trade Agreements Act and this is a pretty big issue because the Buy American Act will be waived where we have a trade agreement act, an agreement with another country.  These include all the countries that are signatories of the WTO Government Procurement Agreement that we mentioned before that China is not a signatory to; these also include all countries that we have free trade agreements with ; all these developed countries and also the Caribbean basin countries.

You are right in that the U.S. does have certain policies like the Buy American Act that on their face appear somewhat discriminatory.  But I think that the differences between China’s policies and the U.S. policies is that we have so many carve-outs for our Buy American Act: exceptions and instances where the Buy American Act requirements will be waived where we have agreements in place with other countries.  China is not one of them.

ELJust to go back to the indigenous innovation policy of China, because that was something that Secretary of State Clinton did mention specifically as a problem.  I guess just examining the equities of it.  Given that the U.S. and other countries were largely able to develop their technology sector before our current global trade system, and before there was competition from other countries, shouldn’t China also be permitted this luxury?  Don’t they have an opportunity to catch up?  Isn’t China’s indigenous innovation policy just a way to allow its small but growing technology sector to really flourish?

BG:  There is no question that China should be allowed to sort of foster the growth of their high-tech services but I

Investing in R&D in China might bring more benefit than an indigenous innovation policy

Investing in R&D in China might bring more benefit than an indigenous innovation policy

think, and Secretary Clinton and Secretary Geithner both mentioned this, that there’s ways to do this that are less discriminatory for foreign firms.  Rather than link the indigenous innovation policies to government procurement – which they are trying to do – we think that there are other ways such as using tax incentives or research and development support programs that can sort of achieve the same goals without the discriminatory effect.  We think that generally China grow this area by including foreign firms rather than excluding them.  Like I said, there are certainly sort of high-tech tax status programs that they can enter into and R&D programs.

One of the big ways that their policies discriminate against foreign firms is, initially when they released the indigenous innovation policies, they required that to get on these catalogues that I mentioned before, the company has to…the trademark of the product has to be owned by a Chinese company and they also had to have full ownership of the products IP [intellectual property] in China.  This was really stringent, this was tough.  Thankfully, just a couple of months ago in April actually, the Chinese government again released sort of guiding, implementing regulations memo.  Now, this doesn’t have the force of law but they’re proposing to relax these requirements by saying that instead of having full ownership of the trademark in China, the company need only have exclusive rights to the product’s trademark in China.  Instead of having complete ownership of the intellectual property in China, you only have to have a license to use the intellectual property in China.

So this is definitely a step in the right direction.  But ultimately, I think ideally foreign companies, U.S. companies, would want to de-link the indigenous innovation policies from government procurement.

ELJust getting back to the Strategic and Economic Dialogue, do you know what it was that the U.S. side was seeking to achieve in terms of government procurement and indigenous innovation policy.  I know that you had mentioned a little bit before but can you just summarize that the U.S. wanted out of it?

BG:  Sure.  I think the first thing they wanted is to urge China to submit an additional proposal, a new proposal, to the World Trade Organization Government Procurement Agreement, which they have agreed to do by mid-July so that’s definitely is a step in the right direction.  We don’t know exactly what that is going to say but we are think that it is going to be a step closer to international best practices and the other proposals that the member countries have agreed to.

Second, I think that, the U.S. delegates really wanted the Chinese government to relax the indigenous innovation policies and de-link them from the government procurement policies.  As it stands right now in the Implementing Regulations, Article 9 says that Chinese government entities and agencies should favor indigenous innovation products which are only listed on these catalogues like I mentioned.  So I think what the U.S. government would like to see is getting rid of the indigenous innovation article from the Government Procurement Law.  It is unclear that the Chinese government is going to do that.

ELEven though it seems like there was some progress at the Strategic and Economic Dialogue and that China has agreed to submit a new proposal, do you really see though China, I guess, even if it submits a new proposal, do you see that proposal to the WTO to join the Government Procurement portion of the WTO, do you see that as actually being something that other member countries would agree to?  Do you see China acquiescing to a lot of the foreign pressure and is it really in China’s self-interest to do that at this stage in its development?

WTO-Logo3403BG:  It’s hard to say at this point.  I think we’ve seen that, in other areas, in strategic and economic areas, China has certainly refused to acquiesce to international pressure to do certain things or not to do certain things.  So it is hard to say without seeing their proposal.  I think that the GPA member countries would reject a proposal that is not up to standard.  They’ve done it before and I think they might do it again.  And I’m not sure that would be in China’s interest.  I think China at this point would have to understand what the member countries expect, what the parameters would be.  And it’s unclear to me that they would submit something that would be any less than that.  So it’s hard to say.  I don’t know.

Generally it seems that China doesn’t acquiesce.  However if the international community is successful in persuading them that it is in their best interest, to relax their indigenous innovation policies and to de-link them from government procurement, then I think they will go ahead and submit a proposal that’s up to par, that’s in line with international best practices.

Over the last several months, in January, since they issued their Implementing Regulations, there has been significant international backlash and they have sort of watered down some of the more strict discriminatory provisions in the Implementing Regulations.  So there’s been progress.  I suppose they only have another six, seven weeks before they’re going to submit their proposal to the Government Procurement Committee so it is unclear how much further they are going to go in watering those items down.

ELWell I guess only time will tell what happens in July.   Thank you.

BG:  It will be interesting; hopefully we can follow up and discuss what happened.

ELThat would be great.  Thank you so much for your time.

BG:  Thank you.

U.S.-China Strategic & Economic Dialogue Will Be Anything Less than Dull

Only a handful of the 200 U..S. officials at today's Strategic & Economic Dialogue in Beijing

Only a handful of the 200 U..S. officials at today's Strategic & Economic Dialogue in Beijing

The second U.S-China Strategic & Economic Dialogue (S&ED) is off to an interesting start in Beijing.  The U.S.’ agenda for the talks – agreement on Iran sanctions, change in China’s currency policy, and greater openness of China’s procurement market for foreign companies – was largely overshadowed this morning by South Korea’s announcement that it will hold North Korea responsible for the torpedo attack on a South Korean war ship, the Cheonan, in March 2010 which resulted in the death of 46 sailors.

As the S&ED was set to open in Beijing, South Korea’s president, Lee

Chinese President Hu Jintao greets U.S. Secretary of State Hillary Clinton at Monday's opening of the S&ED

Chinese President Hu Jintao greets U.S. Secretary of State Hillary Clinton at Monday's opening of the S&ED

Myung-Bok, issued the strongest statement against North Korea in decades and announced that all trade between the Koreas would be suspended, investment would be stopped, and North Koreans would not be permitted to visit South Korea.  Additionally, South Korea will also reinstall megaphones at the border between the two countries and resume anti-North Korean broadcasting, a practiced it stopped in 2004 when tensions were easing between the two Koreas.  Previously, North Korea stated that any retaliation by South Korea in response to the Cheonam incident would be seen as an act of war; today it announced planned attacks on any South Korean megaphones at the border.

In her remarks during the S&ED’s opening ceremony, Secretary of State Hillary Clinton, who is accompanied by 200 U.S. officials on this trip, brought up the issue of North Korea’s increasing “belligerent” actions and the need for the U.S. and China to work together in regards to North Korea.  Chinese President Hu Jintao did not mention North Korea in his speech.

But President Hu did bring up the currency issue in his remarks, to the surprise of most.  In his speech, President Hu promised that China would continue to reform its currency policy, but noted it would be on China’s terms and such reform would be gradual.

With the delay of the Treasury Department’s report on China’s currency policy and recent op-eds in the state-controlled Chinese press regarding the need to give more flexibility to China’s currency — the yuan — it appeared that China would make some sort of concession on the currency issue.  However, the recent crisis in Greece and the European Union, which has resulted in a 20% drop in the value of the Euro against the dollar, changed that opinion.  By effectively tying the yuan to the dollar, as the dollar gets stronger against the Euro, Chinese goods become more expensive in the European Union, China’s largest export market.  So President Hu’s promise to do something about China’s currency policy was a bit of a surprise.  And the public nature of the comment was even more surprising since the revaluation of the yuan is a hot-button issue for the Chinese domestically: Beijing does not want to appear to be placating to U.S. demands.

But what remains to be seen is when: when will China adjust its currency policy.  Don’t expect that question to be answered at the S&ED which concludes Tuesday afternoon.

The U.S.-China Human Rights Dialogue: There is News to Report!

us20and20china20flagsAfter a two year hiatus, the U.S. and China resumed their human rights dialogue last Thursday and Friday in Washington, D.C.  Don’t be alarmed if this is the first you heard of the Dialogue; the U.S. mainstream press barely covered it.

The U.S-China Human Rights Dialogue is subject to criticism and much of it viable.  China doesn’t send anyone with much power to negotiate (for last week’s Dialogue the highest official was Chen Xu, Director General of the Department of International Organization of the Ministry of Foreign Affairs); the Dialogue itself is conducted largely behind closed doors and it is unclear what is accomplished; and there are never benchmarks set to determine if these dialogues actually produce any results.

But last week’s U.S.-China Human Rights Dialogue, even with the little that is

Assistant Secretary, DRL, Michael Posner

Assistant Secretary, DRL, Michael Posner

known about it, is newsworthy; it reflects a changing interpretation of human rights in the U.S.-China relationship.  From what can be gleaned from Department of State press conference, the new emphasis in human rights appears to be almost exclusively rule of law.  While Mike Posner, Assistant Secretary of State for the Bureau of Democracy, Human Rights and Labor, highlighted five different topics which were discussed at the dialogue (religious freedom, labor rights, freedom of expression, rule of law, and racial discrimination), the focus of the Chinese delegation’s field trip on Friday was largely legal.  On Friday, the Chinese delegation made the following visits: a meeting with Justice Sandra Day O’Connor to discuss rule of law and an independent judiciary; a talk with Cardinal McCarrisk at Catholic Charities’ Anchor Mental Health Center to discuss the relationship between the religious community and government as it pertains to human and social services; discussions with the Federal Mediation and Conciliation Services concerning labor rights and collective bargaining; and a talk with Thomas Crothers at the Carnegie Endowment for International Peace regarding the interplay among law, human rights and food safety.

In addition to the focus of an effective legal system as a part of human rights, here are some other interesting takeaways:

Why discuss with delegates from an atheist country the role of religious organizations?

This is perhaps the most interesting and most puzzling aspect of the talks.  China, run by the Communist Party, is a self-declared atheist country.  In fact, all of the Chinese delegates from last week are admitted atheists.  To be a Chinese official, Communist Party membership is a prerequisite; to be a member of the Chinese Communist Party renunciation of religion (Buddhist, Islam, Christianity, etc) is necessary.   So given this fact, the State Department trip to Catholic Charities offers an interesting insight into the U.S.’ policy toward religion, human rights, and China, particularly in regards to Christianity.

ChristianWhile ostensibly atheist, China is one of the fastest growing Christian nations.  Even based on the Chinese government’s official numbers –which are likely low-balled—from 1997 to 2006, China saw a 50% rise in the number of Christians.  The number, including those that attend the government-run churches as well as the underground, unofficial churches, is around 70 million.  Although this seems like a large number, population wise, it is only around 5%.  So for many Western Christian missionaries, the name of the game is China.  Western Catholics and Protestants both know this and are in China, albeit undercover, in large numbers.

While China has a growing Christian population, the Chinese government remains ambivalent about its development – sometimes seeing it as buttressing its authority and sometimes seeing it as a threat.  Although religious groups and charities have been important in the U.S.’ civil society development, China is a long way from having any sort of religious charities that could support human rights or rule of law.

So why the trip to Catholic Charities?   Perhaps the Chinese officials requested this because they are sincerely interested in learning more about the role religious groups can play in society.  Or perhaps U.S. policymakers’ idea of human rights, at least in China, is becoming less secular and more religious-based, particularly Christian.  Unfortunately, Assistant Secretary Posner did not explain why the Human Rights Dialogue with atheist China focused on the role of religious organizations in supporting human rights and we are left merely to speculate.

U.S. Raises Issue of Liu Xiaobo’s Imprisonment, the Disappearance of Gao Zhisheng, and likely the Disbarment of Tang Jitian and Liu Wei

Assistant Secretary Posner informed the press that U.S. officials discussed many specific Chinese dissents’ cases during the Dialogue.  However, the only two cases he named were those of Liu Xiaobo and the very odd case of Gao Zhisheng.

Liu Xiaobo has a long history of human rights activism in China.  In 1989, he

Activist Liu Xiaobo

Activist Liu Xiaobo

participated in the Tiananmen protests and has repeatedly criticized the Chinese government.  His activism has received many accolades from the West, including Reporters Without Borders’ Foundation de France Prize.  In December 2008, Liu Xiaobo was one of the organizers of the Charter ’08 movement, a movement calling for more democracy, less corruption and greater accountability of the Chinese government.  For these activities, Liu was arrested and sentenced to a very harsh 11-year prison term for inciting subversion of state power.  Even for China, the sentence is particularly long.

Although Liu’s sentence was harsh, the outcome was not surprising from

An emaciated Gao Zhisheng in March 2010 after a year in police custody

An emaciated Gao Zhisheng in March 2010 after a year in police custody

China.  Gao Zhisheng’s case however is just downright bizarre and Kafkaesque.  Gao is a self-taught lawyer and received much praise by the Chinese government for his work in public interest law.  But that was back in 2001.  By 2006, Gao had fallen out of favor and his work, particularly the representation of the repressed religious organization Falun Gong, was seen as a threat to the Chinese government.  In 2006, Gao was detained, arrested and eventually found guilty of subversion.  His three year prison sentence was converted to five year probation and he was allowed to remain at home.  After harassment, physical abuse and threats to his life, in February 2009, one month after his wife and child fled China for the United States, Gao was mysteriously abducted by Chinese police.  His whereabouts remained unknown.  The Chinese government remained largely silent in regards to Gao’s whereabouts until January of this year when in response to questions regarding Gao’s disappearance, Foreign Ministry spokesman Ma Zhaoxu retorted that Gao was “where he should be.” Although ominous, Gao eventually reemerged in March 2010 at Wutai Mountain, hundreds of miles from his home.  Announcing that he was giving up rights activism for the opportunity to be reunited with his family, Gao went to Xinjiang Autonomous Region at the beginning of April to visit his in-laws.  After one night there, Gao was abducted a second time and to this day, his whereabouts are unknown.

In addition to Liu and Gao, Posner also mentioned that the cases if recently disbarred public interest lawyers were also raised.  This likely means Tang Jitian and Liu Wei, two public interest lawyers who were recently stripped of the right to practice law.  Both Tang and Liu merely represented

China’s increasingly hard-line stance against rights activists and public interest lawyers reflects a country that may not be interested in establishing the rule of law, at least at it pertains to non-economic spheres.  Raising these issues is important not just for the people being detained or harassed, but also to see how China moves forward in response to the issues.  For example, President Obama, in his trip to China last November, reportedly raised the issue of Liu Xiaobo’s detention.  However, the Chinese government did not lighten Liu’s sentence in response.  Instead, the Chinese government sentenced Liu to the overly harsh term of 11 years in December, a month after President Obama’s visit.  It will be interesting to see what happens to Liu Xiaobo, Gao, Tang and Liu Wei after the Human Rights Dialogue.  Does China care anymore about the U.S.’ criticism?

Even the Chinese know what the real purpose of Arizona’s new law

To create a feeling of mutual respect, the U.S. usually voluntarily discusses design-swappableits own human rights issues during these dialogues.  In last week’s Dialogue, Assistant Secretary Posner volunteered Arizona’s new law against illegal immigrants as an example of a potential human rights violation in the United States.  However, according to Posner, the Chinese were not concerned about the law as it may apply to their citizens visiting the U.S.  Even the Chinese know that the law’s likely racial profiling will be for Mexicans, not Chinese.

How to Move Forward

Last week’s Human Rights Dialogue was only the second since 2002, after China suspended the talks.  Actually having the Dialogue itself is a major accomplishment.  Additionally, at the end both sides agreed to have another session in 2011, making the Dialogue an annual event.  For purposes of a continuing conversation, this is a good sign.  But the criticism that China merely plays lip service to the Dialogue is apt.  That is why it is important that during this month’s Strategic & Economic Dialogue (S&ED), to be held in China May 24 and 25, that high level officials, including the Secretary of State, raise human rights.  China places more emphasis on the S&ED compared to the Human Rights Dialogue.  But if the U.S. really wants China to move forward in human rights and rule of law, the topic must also be raised at the S&ED.

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