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By Elizabeth M. Lynch, February 11, 2010

Curling – a.k.a. shuffle board on ice – is a sport long dominated by Canadians.  But in next week’s Olympic Games, Canada might cede its Olympic dominance to….China?  Yes, to China.  In fact, some would argue it already has – in women’s curling, China currently holds the world title.  So it will be interesting to see China attempt to topple Canada while in Vancouver.  On top of that, China’s curling coach, Dan Rafael, hails from Canada.  Expect the Canadians to fight back with a vengeance.

The Chinese government puts a lot of stock in its athletes’ performances at the Olympics.  During Beijing’s 2008 summer games, China won a total of 51 medals, with the U.S. in second place with less than 35.  China will come nowhere near such numbers in the winter games, but it expects to take home more than the 11 medals it did after the 2006 Turin Winter Olympics.  In addition to potentially winning gold in curling, China is expected to medal in freestyle skiing, snowboarding halfpipe, speed skating and pairs figure skating.

In the past 10 years, China has  put a lot of capital – both financial and human – into its Olympic training programs.  Chinese athletes are able to excel because all they do is practice; Olympic training is 100% subsidized by the government with the athletes receiving salaries from the state.  Athletes are chosen at a young age and come of age in the countries sporting training centers.  Usually, their education takes a back seat to their training.

Why?  Why should a country that still has a large number of people living in poverty, put so much money into Olympic sports?  It’s a way for China to prove that it has “made it.”  China’s rise does not come without baggage.  After ruling Asia, if not the world, for much of its 2,000 year history, starting in 1800, China was brought to its knees by the Western powers, first with the British after the Opium Wars and then other foreign powers when China was divided in various spheres of influences.  China has not forgotten this history and often brings it up – Chinese news reports about its Olympics exploits will mention that China is no longer the “sick man of Asia.”  The Chinese government also uses this history to increasing nationalist pride among its people.  It’s this nationalism that helps the Chinese Communist Party stay in power.

While some may be unsettled by China’s Olympic ambitions, others say, bring it on.  Really, the Olympics has not been nearly as interesting in our post-Cold War world.  Who can forget the sight of huge East German female swimmers?  Or judges from Soviet-bloc nations voting against Western athletes?  And the U.S. vs. U.S.S.R. hockey game?  It was a time when people actually watched the Olympics and when medals won was more than a victory in a sport, it was a triumph of an ideology.  Without the drama, intrigue and flaming of nationalist passions, what’s the point?  Maybe now NBC will be able to turn a profit on its Olympic coverage.

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By Elizabeth M. Lynch, February 10, 2010

Excerpts of this Interview Originally Posted on the Huffington Post.

I read lots of books about China, it’s what I do.   But there are few that I anxiously await for as much as Peter Hessler’s new

Photo Credit: Robert Burnett of www.rburnettjr.com

book Country Driving: A Chinese Road Trip. His last book – Oracle Bones: A Journey Through Time in China – was brilliant and is usually the book I recommend people read when they want to learn more about China.  But now there is Country Driving which equals, if not surpasses the elegance of Oracle Bones.  In focusing on everyday life in the villages and factory towns for the past ten years, Hessler watches a China transform before his eyes, and in the areas most impacted by its modernization.  While Oracle Bones showed a China dealing with the ghosts of its past, Country Driving shows a China wrestling with the demons of its own development.  If you want to understand today’s China, and the forces changing it, you need to read Country Driving.

I sat down with Hessler to discuss his new book and his thoughts on China – its problems, its future, its people.  How have things changed?  How have the people responded to these changes?  What is the impact of rule of law in China?  Is China the overwhelming power that the West currently makes it out to be?  Below is an excerpt of my interview with Hessler.

To listen to the interview, click here.

For a PDF version of the transcript, click here.

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Hi, this is Elizabeth Lynch of China Law & Policy.com and welcome to our podcast.  Today we are here with author Peter Hessler to discuss the release of his new book, Country Driving: A Journey Through China from Farm to Factory.  This is the third book Peter has written about China.  The first, River Town, tells the story of his two years teaching English in a small city in Sichuan, China.  His second book, Oracle Bones: A Journey through Time in China was a 2006 National Book Award finalist and a New York Times Notable Book of the Year.

Thank you for joining us today.

EL: My first question is just about your stay in China.  You first arrived in China in 1996 to teach English in the Peace Corp and you ended up staying there for 10 years.  What is it about China that kept you there?

PH: I guess it’s a surprise to me because it wasn’t a place I was interested in growing up and when I was in high school and college I certainly never studied Chinese or anything about Chinese history.  And actually when I was in college, it wasn’t that common for people to study Chinese in the late 80s, early 90s.  Actually, the first time I went to China was 1994.  I finished graduate school in England and I decided to go home to the east and take a long trip around the world.  I was really interested in seeing Eastern Europe and Russia and I was with a friend and we figured we would go through China and to Southeast Asia. Really I didn’t have much interest in China; I hoped to get through China quickly in that trip; people that were coming in the other direction said bad things about it – it wasn’t very easy to travel in – so it really wasn’t a place I was looking forward to.

We took the train from Moscow to Beijing and I arrived in Beijing and I was really sort of blown away by the place.  There was just a very tangible energy on the street; you could just tell that things were happening, people seemed motivated.  It was quite a contrast to what I’d seen in Russia which at that time – this was in 1994 – I found a little bit depressing.  So it really surprised me and so I ended up extending that trip.  I think my friend and I spent maybe close to two months total in China.  We didn’t speak any Chinese; we were just bumbling through as backpackers basically.  But it really did grab me.

I had always intended to apply to the Peace Corp but this changed my plans in that I applied to the Peace Corp but I really wanted to go to China.  I think that in the end, that energy that I sensed from the first week I was there was what ended up keeping me in China so long.  When I did join the Peace Corp in ‘96, I had a sense that it might be longer than two years.  Because I had been there and because I knew it’s a big deal to try to learn a language like that and to try to understand a place like that, I knew that it would take more than two years basically.  So I wasn’t surprised in some ways that it ended up being longer; I guess I wouldn’t have expected it to be a decade, but there was never a time…I never got tired of the place.  You certainly never feel like you know everything; for one thing, everything is change so even if you did by some miracle you know everything, it’s going to be different next week.

EL: In your new book, Country Driving, a lot of your stories focus upon you driving around China, getting your driver’s license, and the car plays a very significant role in your stories.  How did you decide to focus on the car and driving in China?  Was it a purposeful choice or was that just how the story developed?

Elizabeth Lynch interviewing Peter Hessler; Photo Credit: Robert Burnett of www.rburnettjr.com

PH:  Usually when I do projects, I try to keep them very open-ended.  Actually with all of my books I’ve actually written a book and worked out a contract afterwards.  So I don’t like the idea of having to propose something before I do it because basically you don’t know what’s going to be there.  I like to respond to the material.

Basically this started as a magazine story while I was doing a piece for National Geographic on the Great Wall of China and I decided I wanted to drive along the Great Wall.  The trip became more and more ambitious as I was planning because I liked the idea of doing it.  I thought it would be interesting, I had just gotten my license.  And then that journey was just a great experience; it was probably the best trip I have every taken in China.  And after taking that trip I started to think, I would like to write about this in a book but I really feel like there are these other issues I would like to explore.  One of the things I noticed while I was driving across is that you go through all these little villages, where people are leaving and life is obviously really different from what it was 10,15,20 years ago.  I wanted to get a deeper sense of what that meant to people and how people respond to that.

Around the same time I was renting a house outside of Beijing in the countryside mostly just for personal reasons, just because I wanted to escape from the city, but I eventually started writing about that place and how people cope with the changes.

And as time moved on and I had these two parts of the book, I was thinking about, I realized I need also to give people a sense of where all this is going, all these people are leaving the villages, young people are migrating, they are going to these factory towns, I want to write something about a factory town as well and have this in the book.  You know, for me this is the way projects have generally developed.  You sort of feel your way along and you get to a point and you can sort of see the whole thing in the sense of what you need and what you would like to do.  And for me that was at the moment when I said okay, I want to go to a factory town and write about development there.  And once I got into that last project, which was in Lishui, I could see that that would be the book basically.

As far as the automobile, there was a link to all of them because the first one was a driving trip that kind of gave me an introduction to the north and to some of these rural issues; the second journey was to a village where they didn’t have a paved road when I started going out there and renting a house, and eventually they paved the road, there was a car boom in Beijing and this place responded very dramatically, people’s lives changed in enormous ways.  And then for the last section, about the factory town, I chose a town in Zhejiang province that was along the route of a new expressway because I knew that this was a highway that linked them to the coast.  That has a huge impact on your local economy if you have a road that goes to a port.

EL: The first part of Country Driving, you describe your drive along the Great Wall and you go through a lot of these villages that are, that seem like they are just closing down and they are mostly poor, you talk about them being depopulated, barren, no longer farm-able, and you even talk about some of the aid work there that is subject to a lot of corruption, in your mind, what do you think is the future for these villages?  If you go back 10 years from now, will they exist?  What do you see for these villages?

PH: It was very striking because China has been in the midst of this incredible migration.  Most of the figures now are 130 million, 140 million people have left the countryside – mostly young people looking for jobs in the cities.  When I was traveling, it’s amazing how this is the other side of migration; you’ve been to the factory towns or the cities where you see all these people, but where are they coming from?  You go to these villages, and I’d drive through, and you talk to people and they would usually say the population is decreased by half, roughly.  That was generally the number I would get from talking to people.  I never met anybody in a place who said, oh we haven’t lost population.  It was every single town.

Often it’s really striking that you just do not see people in their late teens and twenties in these towns, and thirties.  They’re either older people, elderly, or you see disabled people or you see small children because children are still being raised by their grandparents often in these villages.  So, it was something as I drove….In a way they are quite poor, they’ve always been poor, but they’re also incredibly open and friendly.  I never had a single bad experience in these little towns and people were incredibly generous – they would invite me in, they were totally trusting.  So it did make me sad to think about that, that these places are really changing.  And I don’t know who is going to be there in a generation.  It’s hard to envision who, why would someone stay basically, and people often told me that.  Along the way I was picking up hitchhikers, which is mostly because I had an empty car and I found that it was interesting, and most of those hitchhikers were young people migrating, and you talk to them and they say ‘there’s no way I am going back, there’s nothing there for me.’

So I don’t know what happens.  I think maybe eventually if China reforms some of the land use laws perhaps people would consolidate farms and there would be some farmers who could make a better living because they have bigger holdings.  That’s what should logically happen.  In some ways it’s not a bad thing, because a country….When they started the reforms they had like 900 million farmers or something in ‘78.  You don’t really need 900 million farmers in a country.  It’s inevitable that this is going to happen.  And we’ve been through it, Europe went through it.  If you look at 19^thcentury literature, there are all these poems, English poems, about villages that are dying and don’t exist anymore.  So this is an old story in that sense.  I think eventually you will see this consolidation and there will be some who remain as farmers but for this particular moment it is very hard to see the future.

EL: In terms of the law, you brought up some reforms to land use laws.  And in certain parts of Country Driving I know you mention, just in passing, the Chinese law and the legal system.  Your neighbor in Sancha, Wei Ziqi, he holds onto contracts dating back to the Qing dynasty, showing that he should have title to certain lands.  You describe how the law doesn’t protect the countryside and allows cities to buy farmland at cheap prices and then just flip it at a higher price.  And you also discuss the petitioning system.  When you bring up these interactions with the law, it seems like the law itself doesn’t really offer solutions for the people that you write about.  Do you think this is changing at all?  Do you see the law or the legal system developing in a way to protect these people?  In the field I am in, we hope that the legal system is changing to better protect a lot of these people, but on the ground do you feel that is really happening?

PH: You know, like so many things in China, there are so many levels to this issue.  I think there is a huge amount of vitality and energy in the legal field right now in China and if you go to Qinghua University, at the upper end it’s quite vibrant.  There are a lot of people thinking very hard about these issues, working very hard on them, there is a lot of life to it.  So I do think in that sense it’s clear that there are people that are interested in making this a better system, no doubt.  And I think eventually, it will happen.

For this book, really my focus was much more on working class people.  A lot of these people were farmers.  Basically, most of the people I am writing about are people who are from the countryside but are making this transition in one way or another to urban life or to being entrepreneurs; in the last section, people who are becoming factory workers or managers and so on.  So I am sort of seeing their perspective which is going to be very different from a legal scholar.

But it’s interesting, when even in these places, the people have a deep faith in law really and quite an interest.  You mention Wei Ziqi, this is someone who had just about eight years of formal schooling but he’s very bright and when he was older and had been farming for a while, he took a correspondent course in law for example.  And he kept all of these books that he got from that course that taught him how to draw up contracts for example.  So when I rented a house there, he wrote up a very formal contract and had me and the person I was renting with sign it.  And it had all these clauses – one of the clauses was that you can’t store explosives in the house – very detailed stuff.  It really had no legal status; you couldn’t take that contract to court but he believed….To him it was important and it showed sort of an interest in it and a respect for the law.  So you do sort of see that a lot.

I guess my characterization of how….And for him in the village, he was aware of certain laws – like when he wasn’t getting a certain fee he was suppose to be getting, he would find some ways to make sure he did.  And he would say the law’s on my side.  It was important to him.

I think….One of my general conclusions on how people interact with the law in places like this and in the factory towns is that it is certainly not a fair system and it’s not a system that we would see as certainly as being anything close to finished, but it’s pretty functional to be honest.

You mention the land use issues, which are really unfair to people in the countryside, but it allows development to proceed in the way that it has.  In some ways they are at a stage now, it’s a weird stage in that there are huge problems clearly with the legal system.  But it works and the corruption even is sort of manageable – it’s almost like there are rules to it and people know how it works.  So their level of comfort is a lot higher than what you would expect.  As an outsider you think, this is just a bad system, these things are wrong and people shouldn’t tolerate it.  But from their perspective it’s different; it’s probably better, it is better than it was 20 years ago.  They also know basically how it works.  They find ways to make things work in their favor.  What they do is not what we would expect.

For example, in the factory town, where I spent a lot of time, there was really very little sense of the law there, in the sense I never met a lawyer there, I never got any sense of anybody doing any kind of NGO work, there’s no unions that I ever encountered.  The government had an official union and they would show movies on the street to factory workers – that was the only contact I had with them.  But it doesn’t mean that people were powerless.  It just meant that they didn’t find recourse in the law specifically.  If a worker had a problem, he didn’t talk to a union, he didn’t call a lawyer.  But he found other ways to do it.

I write for example about a family that works in a factory.  I’ve watched them over a period of years.  For example, when they started working in the factory they sent their youngest daughter with the older daughter’s ID. The youngest one is 15, barely 15, and she isn’t legal to work.  But because she has the fake ID she gets a job and then she brings her sister in.  Soon enough, the whole family is there.  And they end up with quite a bit of power because they have a network of six workers or so who were a huge part of the labor force and they could negotiate as a group.  So it’s a place where people have agency, the type of agency they have is not traditional, it’s not necessarily legally based.  So as an outsider, it’s very hard to understand, but at the same time, you kind of respect it.  When I watch that family, the Tao family, when I watch them negotiate, I didn’t feel sorry for them.  They were really good at what they did.  I would not want to negotiate with them, I wouldn’t want to be the boss.  I almost felt more sorry for the boss sometimes because they were just really tough people.  So you sort of admire them, but again you realize that it is not a finished system.  But it’s functional.

So when you talk about corruption in China, it’s not Nigeria.  It’s not some country where you go and they just, you try to set up a business and they set up a system of bribes that make it just completely impossible to function.  It doesn’t work like that.  The other example I give in the book is when these guys are setting up their factory, and the officials from the tax bureau came – I was sitting there watching this whole interaction – these three officials came from the tax bureau.  They were intimidating, they let the factory owners know that they were in control, and they sort of had this conversation, this very tense conversation.  They asked them questions about the business because they were just starting business and they said ‘do you have an accountant?’ And the boss said ‘no we don’t, we haven’t started selling anything yet so we will get one eventually.’  ‘Well you should get an account.’  ‘Ok, we’ll get one once we start doing business.’  He said ‘no, you should get an accountant now.  I have a friend that runs a business that has an accountant and here’s his card.’  And the boss is like ‘oh maybe we should get an accountant now.’  That’s kind of the way it works.  That interaction is over and the guy makes a phone call and hires the account.  You realize it’s not fair, but it works.  It’s not an onerous cost in a way.  So he wasn’t angry about it, he’s just like ‘this is the way it is.’  It’s going to cost 80, 90 bucks a month, no big deal, he’ll deal with it.

So, I think that is kind of the stage that they’re at.  They do have some huge questions that remain to be answered and it is very hard to tell, especially that land use issue which is that people in the countryside can’t buy and sell their own land.  That has been a huge problem over the years and it continues to be.  There have been lots of signs and lots of discussions over reform but that hasn’t happened yet.

EL:  When you traveling through the countryside and the factory towns, you see a lot of people on the move and you do see these inequities, but amongst the people themselves, what was their biggest gripe?  I think a lot of foreign NGOs that are in China, a lot of the work I do, there is a focus on the inequities in society or the environmental damage, things like that.  But do you feel that people that are in the countryside and in the factory towns, what do you think is their biggest issue?

Photo Credit: Robert Burnett of www.rburnettjr.com

PH: It’s very localized and if you ask people, it tends to be corruption and what they mean is corruption of local officials.  That doesn’t mean that the top levels aren’t corrupt, they just don’t see it.  So often they continue to have a faith that the top levels of governments are better run and the people are more honest but the locals, because they know the locals, they see what is happening, they are very cynical about that.  It is incredibly localized.  One of the years, the year that I wrote about where I was following a dam project in this book, they reported something like 87,000 public disturbances, protests in China that year.  And you should see these figures.  Every year it’s a figure like that, close to 100,000 and you think my God, the country is about to explode.  But when you do sort of encounter one of these instances and look at it, it tends to be so incredibly localized and it’s not connected to larger issues.

So you meet someone in the countryside and you ask them what’s wrong and they won’t tell you the land or the Constitution just isn’t fair in terms of land use laws.  It’s hard to have that kind of vision, they’re not seeing these sort of huge issues.  What they would tell you is my piece of land, I didn’t get the market value for that piece of land, and that’s really all that they are going to care about, about their own situation.  So you don’t see people making these connections.  You see some of the outsiders and the NGOs, folks like that are in different positions.  But the people that are in the villages, the factory workers, that’s not their issue.

To be honest, it’s such a demanding society, everybody is coping with so much change I often feel like they just don’t have the energy to go after those big issues.  You can’t blame them; they’ve got a lot of stuff to take care of.  Wei Ziqi, he’s trying to shift from being a farmer to being a businessman, he’s trying to join the Party in the local village, he’s trying to get a solid political position in his village.  He has all of these things to worry about, the last thing he’s going to worry about is trying to reform the Constitution.  He has no way to do that and it’s just not going to be his natural response.

I think again this sort of contributes to the stability, the basic stability that I see in China.  There are a lot of complaints, but again, it’s sort of a pretty functional system.  And I never feel….My general sense is not that this place is about to explode.  I guess I don’t have that feeling.  I’m sort of going in more of a survey approach; I don’t look for problems and then focus, like, in the village.  I just went to the village and spent a lot of time there – and so you see what happens.  And the same thing in the factory town.  I went to this factory town and spent a lot of time there.  So I noticed what type of protest came up, but I wasn’t picking the biggest protest in the province – which really makes a big difference if you are a journalist or a social scientist.  China is a big country, you can find anything you want.  In some ways, this is a more representative approach in the sense of trying to just go to a place and see what’s happening there in a normal situation.  I noticed there are a lot of protesters.  One significant big issue in the factory town which was the new dam that they were building.  But the response to that was not very threatening.  People’s anger was very localized, they weren’t coordinated with any other kind of groups, it wasn’t like they were linked up with other anti-dam groups in China, there weren’t environmentalist down there.  So it kind of makes me feel that the system is basically sustainable for right now.

EL: In terms of those issues, in noting that there is some basic stability and even though there are these complaints, they are very localized and they’re not becoming a big issue.  But if every rural area is having similar complaints, even though they are not unified, do you think that perhaps maybe China is not as powerful as the West right now currently views it?  Do you see…Even though it is a stable system, there is a lot of I guess tension on the local level, do you see this as problematic and do you think the Chinese national government is going to deal with it in the future?  I guess what do you see for the future?

PH: It’s always a bad game to predict China’s future basically but I think basically, I suppose it’s en vogue to talk, we hear about how overwhelmingly powerful China is.  I tend to sort of temper that.  I don’t see China as on the verge of collapse, I’ve never felt that at all.  But I also don’t see it as this place that is an unbelievable juggernaut, that they are doing everything better than everybody else is doing.  There are a lot of problems with the system, there are a lot of flaws.  But there are still a lot of safety valves as well.

One of the things I write about in this books is what happens to people who could potentially be dangerous maybe to

Photo Credit: Robert Burnett of www.rburnettjr.com

the government, who could cause a lot of trouble.  You go to the villages, and the really bright people, the ones who would probably be the most angry about injustices and also the most capable of fighting something or resisting something, they leave, they become migrants because they’ve got opportunities.  So it’s like a pressure valve.  So you don’t see the really bright young person staying in the village and stirring up trouble.  That person is trying to find his way in a factory world.  So they have a whole other series of challenges to go.  They’re outside of their home community, they don’t have their networks anymore, so politically, they’re not in a position to do a lot.

In the village that I wrote about, the person I knew, Wei Ziqi, he’s one of the very few really bright people who stayed.  And what happens to him?  Well he has some power struggles with local authorities but he ends up becoming a Party member; he sort of becomes to some degree part of the local power structure.  This also happens – people get recruited.  So I think there are a lot of different pressure valves basically that sort of take some of the talented people out of the position where they would potentially cause trouble.

It’s sort of a hard thing because it can be very depressing in a way, like when I was in that dam community and I met a lot of folks there who were angry, petitioning, and bitter about it.  I noticed that they generally tended to be the lesser educated and they had the fewest financial resources, and this is partly because they were the ones who have been treated the worst, but they also were, I have to admit, also some of the least capable of really doing something basically.  And the people I met who were capable had either left or they were finding other ways to make their way.  There was one guy in that dam community that was really sharp.  When he talked to me he wanted to know what my journalist accreditation was, he had all kinds of questions about what kind of writing I do, he was the first one I met who was really sharp like that and really knew a lot of the issues and his vision was much broader in the sense that he’s like ‘they are moving people from these towns, there is nothing for them to do in these towns, they’re just building these towns and there’s no farming, there’s no business, there’s no factories.’  But he was well dressed, he had a cell phone so I asked ‘well what do you do, how do you get your money?’ and he’s like ‘well I sell building materials in the towns that they’re building.’ So he’s profiting in a way, he’s found a way, he’s kind of hedged his bets basically.  I just think there is still a level of opportunity that makes it hard for people to justify really, really devoting themselves to protesting.

I think eventually that changes.  But you have to reach a point in my opinion, where sort of the middle class, the upper class, the educated people, the ones with a lot of drive, when those people feel like they’re getting limited, because they have the tools.  Right now it’s like the people at the bottom I feel like are the ones that really get hammered.  And it’s a very sad situation but it’s very natural in the sense that those are also the people who are the least capable of affecting massive political change.

I think something will change with that but I think it is going to have to be when this other group starts to see it as being in their interest to be a little less self-oriented and a little more aware of ways in which the system can be improved.  Like I say, you have more and more energy going in this direction, but I think it is going to take time.  I never felt that we were going to see a political change in the next five years or something, a major political change.  I never had that feeling in China.

EL: On your road trip, as you were driving, when you were driving, were there any cities that you went through that reminded you of St. Louis or any other cities in the United States?

PH: I’m actually not from St. Louis, I grew up in Colombia, in the middle.  I’m trying to think.  The cities are totally different it feels like in China.  They always feel like they were just built yesterday basically a lot of these places, especially when you are in the factory towns because some of them were basically built yesterday – you can see them going up in front of your eyes.  So it’s a different world I guess.  Especially my driving trip I did, the first one, was in the north and the big city, I think the only really big city I passed through was called Baotou in Inner Mongolia.  Which is this weird place because they had they had a huge amount of money that came in from a government campaign, it just felt like a huge metropolis in the middle of the desert.  So they have a different feel and they feel like training grounds.  Everything is a trial basically in the sense that all of the people that come in from the outside, the buildings have just been built, the streets have just been built.  People need to figure it out on the fly.

EL:  And what about when you were driving, did you have any driving music that you listened to, anything like that?

Author Peter Hessler; Photo Credit: Robert Burnett of www.rburnettjr.com

PH: Yeah, yeah, yeah.  I was on the road for days.  I guess I did two trips, this was in two parts.  The first part of this book was a journey in two parts and each of them more than a month, that is a lot of time on the road.  Yeah, I brought good driving music – Bruce Springsteen, the Clash, and a lot of rap music as well when I am trying to stay awake, to keep myself motivated.  It was very fun, I enjoyed it greatly.  Also I had no schedule which helps.  I think driving in China can be really tough if you go for like 8 hours a day or something.  But I stopped when I wanted to, I tried to be careful so I wouldn’t get too tired.  It was a blast.  I really, really enjoyed it.

EL: Definitely, it sounded like you had a lot of fun, especially on the trip with the Great Wall.  But now that you are back in the States and you are now in Colorado and Country Driving is out, what do you see that is next for you?

PH: I’m doing some projects in the States now where I am researching a couple of things around where I live.  I live in southwestern Colorado near New Mexico and Utah.  So I’m pursuing some things there which has been great.  It’s been nice to do a couple of U.S.-based projects, interview people in the States which I haven’t done for a long time.

So I am shifting away from China for a while and I think my wife and I will probably be moving overseas again in about a year or so.  We would like to study another language and live in another part of the world, and write about someplace else.  We are thinking about possibly the Middle East.  We know that we will go back to China eventually because we both really like it there, we’re comfortable there, we still have a house north of Beijing in the village.  But we felt like it’s nice to do something different for a while.

For me personally, this third book for me felt like the last, I felt like I was closing a chapter in the sense.  To me it was a great final project because I had all kinds of new challenges.  I was putting together a lot of the knowledge I had learned over the decade plus that I had spent in China.  It felt like a natural stopping point.  I never wanted to reach a point in China where I felt like I was repeating myself or using the same type of story or the same type of structures or the same type of research projects over and over.  And this to me, each of the three books feels quite different to me and they have different focuses, so it was a good stopping point.  And we will be back at some point and happy to do that.

EL: I know for me and I am sure for a lot of other people if this is the closing chapter on your journey with China, a lot of us might be a little bit disappointed.  You’re one of, I think, the greatest writers about modern China.  But I want to thank you for taking time to talk to us today.  Just for our listeners, Country Driving comes out on February 9 and can be purchased at your local bookstore or on Amazon dot com.  Thank you Peter.

PH: Thank you.  Thank you for talking to me.

Rating:

Country Driving: A Chinese Road Trip (P.S.), By Peter Hessler (Harper Perennial, February 8, 2011), 448 pages.
 

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By Elizabeth M. Lynch, February 8, 2010

In Petition: The Court of Complaints, director Zhao Liang (pronounced Zhwow Le-ang) takes on a huge and important subject – the Chinese petitioning system.  While the documentary fails to produce a cohesive story, it does successfully portray vignettes of a society very much in turmoil and tells the story of the many people left behind by China’s progress.

In China, the petition system is a way for individuals to lodge complaints against corrupt government officials or corrupt governmental process to higher authorities.  Also known as “Letters and Visits” (from the Chinese xinfang and shangfang), it’s a form of extrajudicial action that can trace its origins to imperial days.   If an individual believes that a judicial case was decided not in accordance to law or local government officials illegally violated his rights, he can complain to officials in a higher level of government to hear his case, re-decide it and punish the lower level officials.  In some ways, every country has a similar process – if you don’t like the way a government official in New York City is treating you, you can complain to your city council member or write a letter to the mayor.  But what makes the petitioning system different in China is the fact that it is a formal process.  Every level and office in the Chinese government has a bureau of “Letters and Visits.”

The petitioning system is vital to the Chinese government’s success, be it today’s Communist government or to the

Beijing's new Letters & Visits Office - near the South 4th Ring Road

imperial courts of the past.  By ruling a large country through an authoritarian dictatorship, the Chinese central government inevitability leaves much discretion in the hands of local officials.  But through the petitioning system, complaints of local official corruption will eventually make its way to top levels of government and allow the government to solve the problem, satisfy the aggrieved individuals, and by getting rid of corruption, solidify its rule.  The petitioning system serves as a safety valve in a system that does not allow popular participation or protest.

But as Zhao’s documentary successfully shows, the petitioning system, which receives over 5 million petitions a year according to Chinese statistics (many outside of China speculate that the number is closer to 10 million), is largely a failure.  Zhao focuses on the thousands of petitioners who travel from the provinces to lodge their complaints in person with the highest petitioning body, the State Bureau of Letters and Calls in Beijing.  But many of these petitioners are there for years, repeatedly getting the brush-off by state officials.  With one petitioner, Qi, who is in Beijing to seek compensation for her husband’s death after local officials beat him, we watch her daughter, Ju’an, grow up before our eyes on the streets of Beijing.  Only twelve at the start of the movie, Ju’an eventually leaves Beijing with her boyfriend and returns years later with her husband and son only to find her mother still petitioning.

If all that was lost was time, the petitioning system might not be so bad.  But there is also violence, and a lot of it.  Zhao captures many of the “retrievers” beating petitioners.  Retrievers are thugs hired by the local officials whom petitions are being filed against.  Because each petition to the central government is a black mark on a local official’s advancement, these local officials are desperate to prevent the petition from being heard.  An easy way is through

A "lawyer" of sorts to help others with the petitioning process - Beijing, China

intimidation and violence.  In one particularly troubling scene, Zhao films an overhead shot of a group of retrievers chasing and beating a single petitioner.  Zhao also juxtaposes one scene of a petitioner discussing his case with another scene where the petitioner has a black, bloody eye after a day of beatings.

Petition also raises the issue of forced psychiatric confinement of individuals the government deems “difficult,” something that is becoming more common in China.  Petitioner Qi is repeatedly detained and forcibly sent to a mental hospital.  Another petitioner describes the treatment at the psychiatric hospital – forced medication of drugs that have not been tested.  After a stint at a Chinese mental hospital and a diet of untested anti-psychotic drugs, one wonders if these women are still in fact sane.

While Zhao successful portrays many of the horrors of the petitioning system, he never describes if this system works for anyone or if there are any redeeming characteristics of the system.  If the petitioning system is abolished, would that mean the people would be better off if this is their only outlet?  At one point, Zhao shows a group of petitioners calling for democracy.  After a female petitioner is hit and killed by a train while running away from a group of retrievers, her neighbors in the petitioners’ tent village decide to launch a protest in her memory.  Zhao films the rhetoric of some of these protest-petitioners, with many of them discussing the prevalent corruption, the need for transparency, and the desire for democracy.

But these calls for democracy should not necessarily be seen as a new revolution in China.  The petitioning system relies on the average citizen’s belief that the government system has failed on the local level but that the highest levels in Beijing still work; each petitioner thinks the same thing – if only President Hu Jintao could hear what I have to say, he would understand that this isn’t just a violation of my rights but is also terrible for our country.  They have to believe this; if petitioners believed that the central government was just as corrupt as the local level, they wouldn’t petition.  Zhao’s focus on these protesting petitioners and their calls for democracy are certainly attractive to a Western audience.  But it’s unclear how these petitioners define their “democracy” and whether that democracy excludes a role of the Chinese Communist Party.

While there is room for improvement (especially the 2 hour length), in all, Petition: The Court of Complaints is worth the watch if only to feel the frustrations of a multitude of people and to allow them to finally be heard.

Rating:

Unfortunately, as of March 3, 2012, Petition: The Court of Complaints is not available with English subtitles on DVD or for streaming. It appears that it may be forthcoming as part of a three-movie box set of Zhao Liang’s documentaries, however no pre-order option is yet available on Amazon: Zhao Liang Collection – 3-DVD Box Set (Petition / Crime and Punishment / Paper Airplane ).

For those who speak French, it appears that the three-movie box set is already available on the French Amazon website here (note that subtitles appear to be all in French).
 

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By Elizabeth M. Lynch, February 5, 2010

Screening & Discussion of the Documentary “Petition: the Court of Complaints”

Director: Zhao Liang, China, 2009, 123 min

The film, an official selection of the Cannes Film Festival, looks at the lives of petitioners who come to Beijing to visit a government Complaints Office, and who wait for years on end to air grievances against local abuses of justice.

Followed by a discussion with the filmmaker Zhao Liang.

Co-sponsored by NYU’s Department of Cinema Studies (Tisch)

Free & Open to the Public

Date & Time: Saturday, Feb. 6, 1 PM – 5 PM

Location: Cinema Studies Screening Room, 721 Broadway, 6th floor

For more information please email zz6@nyu.edu

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By Elizabeth M. Lynch, February 2, 2010

In yesterday’s New York Times, Helene Cooper argued that the Obama Administration’s recent announcement of over $6 billion in arms sales to Taiwan shows a “new toughness” toward Beijing and perhaps even a “fundamentally new direction” in the Administration’s China policy.  But, by focusing on the arms sales, Ms. Cooper overemphasizes the event.  U.S. arms sales to Taiwan are far from novel or tough, and some may argue, periodically required under U.S. law.

Similarly, Beijing’s angry reaction was predictable.  In fact, for each prior Administration’s arms sales to Taiwan, the Chinese government has responded in much the same way: postponement of military-to-military meetings, issue formal protests with U.S. officials, and saber-rattling for the domestic consumption.  However, Beijing’s recent threat of sanctions against U.S. companies involved with the arms sales is new and serious.  But this is more a reflection of China’s growing confidence and less a reflection of a changed or “tough” U.S. policy toward China.

Why Does China Care so Much about Taiwan?  Isn’t it a Separate Country?

Nope, scrap that vision from your mind.  Taiwan is not a separate country, at least not in the eyes of the Chinese, Taiwanese or U.S. governments.   The People’s Republic of China (a.k.a. the mainland) views Taiwan (a.k.a. “The Republic of China”) as a renegade province and any relations between Taiwan and other countries is viewed as interference in the mainland’s domestic affairs.  While Taiwan has largely developed as an independent society, it agrees with the mainland’s assessment that there is only “one China.”  The Taiwanese government has never called for independence and the Kuo Min Tang party (pronounced Gwo min-dang and a.k.a. “the Nationalists” or KMT), which has ruled Taiwan for most of Taiwan’s separate existence, also espouses the view of “one China” and that eventually, the mainland and Taiwan will reunite.  The difference is who rules this reunited China.  For Taiwan, it’s the KMT; for the mainland, the Chinese Communist Party (CCP).

All of this stems from World War II.  After the War ended in 1945, the KMT and the CCP resumed their civil war, a civil war that was put on hold to fight the Japanese invasion from 1937 to 1945.  By 1949, the CCP’s victory was certain and the KMT government fled to the province of Taiwan to continue the Republic of China.

Thus began the baffling existence of two Chinas – the communist People’s Republic of China on the mainland and the KMT’s Republic of China on Taiwan.  Each China claimed that it was the “official” and “rightful” China and the other a mere province; each forced the international community to recognize only one China – either China on the mainland or China on Taiwan – hence the birth of the “one China” policy.

The U.S. continued to ally itself with the KMT and the Republic of China, recognizing Taiwan as the official China and all but denying the existence of the mainland.  But starting in 1972, with President Richard Nixon’s historic visit to the mainland, relations between the U.S. and the PRC began to improve and in 1979, the U.S. switched recognition of China from Taiwan to the mainland.

Obama’s Arms Sales to Taiwan Is Par for the Course in U.S.-China Relations

The Obama Administration’s recent announcement of arms sales to Taiwan follows a long line of arms sales by the U.S.  Almost every president since 1978 has sold arms to Taiwan.  In fact, the U.S., under the 1979 Taiwan Relations Act (TRA), is required to sell defensive arms to Taiwan.  In 1979, after changing recognition to mainland China, the U.S. did not want to leave its former ally completely open to attack or takeover.  As a result, Congress passed the TRA.

The TRA authorizes quasi-diplomatic relations between the U.S. and Taiwan.  For example, instead of having an official embassy on Taiwan, the TRA allows for the “American Institute in Taiwan.”  Additionally, and more importantly, the TRA established the U.S.’ responsibility toward Taiwan if it is threatened.  At issue here is the TRA’s requirement that the U.S. periodically sell defensive arms to Taiwan.

In announcing arms sales to Taiwan, the Obama Administration is merely following its obligations under the TRA.  Additionally, the Obama Administration has not acquiesced to Taiwan’s request for F-16s.  During the George W. Bush Administration, Taiwan repeatedly requested the purchase of F-16s.  Similarly, Taiwan put out feelers with the Obama Administration to see if there was a possibility that they could purchase F-16s.  Again, Taiwan was told not to put in a formal request for F-16s.

The F-16s are a big issue since they are not “defensive” arms; Beijing would very much view a sale of F-16s to Taiwan as going a bit too far.  But Obama’s package to Taiwan merely includes the usual: Patriot missiles, Black Hawk helicopters, mine-hunting ships and information technology.

If the Obama Administration wanted to use the Taiwan arms sales requirement to “toughen” its stance to Beijing as the New York Times claims it has, the Administration would have acquiesced to Taiwan’s request for F-16s.  Instead, it merely sold similar arms to Taiwan that President George W. Bush sold in 2008.

This is not to say that the Obama Administration does not have a strong China policy.  Secretary of State Hillary Clinton’s recent policy speech on internet freedom was a robust critique of countries like China that censor their internet and partake in cyberhacking.  This follows President Obama’s strong and public criticism of internet censorship while in China this past November.  The New York Times would have done better to focus its argument on the Administration’s novel and forceful rhetoric on internet freedom vis-à-vis China.

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By Elizabeth M. Lynch, January 31, 2010

China Law & Policy went live on the West Coast today, making our radio debut on Ian Masters‘ “Background Briefing” on KPFK 90.7.   A show that goes behind the headlines, we discussed the implications of the Supreme Court’s Citizens United decision and the ability for foreign money to potentially influence U.S. elections.  Feeding off of our recent article in the Huffington Post, we paid special attention to Chinese corporations.

Click here to Listen to “Background Briefing” on China & Citizens United
Length: 19 minutes

Mr. Masters, a trained BBC-trained broadcast journalist, puts on a very engaging and informative show.  Those of you in the L.A. area can listen every Sunday from 11 AM – 1 PM PST on 90.7.  The rest of us can live stream through the KPFK website.

Thank you to Susan T for her superb audio splicing talents!

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By Elizabeth M. Lynch, January 30, 2010

On Sunday (1/31), China Law & Policy will make its radio debut.   I will be on Ian Masters show, “Background Briefing,” at 3:30 PM EST/12:30 PM PST discussing the international implications of Citizens United.

You can listen live over the web at: http://www.kpfk.org/listen-live.html

For those of you on in southern California (L.A. area), tune your dial to KPFK 90.7

Thanks!

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By Elizabeth M. Lynch, January 29, 2010

Originally Posted on the Huffington Post

In 1966, because of the fear of foreign influence in U.S. elections, Congress passed the Foreign Agents Registration Act.  Eventually incorporated in the 1974 Federal Election Campaign Act, the law prohibits foreign governments, foreign political parties, foreign corporations and individuals with foreign citizenship from contributing, donating or spending funds, either directly or indirectly, in any U.S. election.

What started it all - Hillary the Movie

While this law has been important to the functioning of our democracy, the Supreme Court, in the case of Citizens United v. Federal Election Committee, has moved perilously close to abolishing it and opening the U.S. political process to foreign money, influence and—given the structure of some multinational corporations—direct pressure from foreign governments.

This change stems from the majority opinion’s unprecedented elevation of corporations to equal status with individual citizens in the sphere of political speech.  For convenience’s sake, the law does periodically describe corporations as “legal persons” and “citizens” of the state in which they are incorporated.  But in Citizens United, the majority has taken this legal short-hand literally.  In the majority’s opinion, courts are no longer permitted to take into consideration elements such as limited liability, perpetual life and preferential tax treatment that distinguish a corporation from an individual citizen when analyzing a corporation’s rights, nor are courts allowed to treat corporations differently from actual persons (as they have been  doing since the country’s founding.)  After Citizens United, the law can no longer look behind the curtain of the corporate form: Citizens United commands that the law pertaining to political speech treat corporations exactly as individual citizens.  Simply put, distinctions between corporations and human beings are no longer permissible and limitations on corporations’ political speech are unconstitutional.

In treating corporations the same as individuals, Citizens United leaves the door wide open for foreign influence in our politics.  In the case of Chinese corporations, this also means foreign government involvement.  Most multinational Chinese corporations, like Haier, China Telcom, and China State Construction Engineering Corporation (CSCE), have U.S. subsidiaries.  These are companies incorporated in the United States: Haier’s U.S. subsidiary, Haier American Holding Corporation, China Telecom’s subsidiary, China Telecom Americas, and CSCE’s subsidiary, China Construction America, are all incorporated in Delaware.

Under Citizens United, all three of these subsidiaries are citizens of Delaware and enjoy the same political speech rights as any other citizen of the United States.  Citizens United does not permit us to look behind their corporate veil to see their relationship to foreign corporations.  But make no mistake: these subsidiaries are heavily influenced—if not outright controlled—by their Chinese parent corporations.  This is not unique to Chinese corporations.  In a parent-subsidiary relationship, especially for foreign corporations, there is a lot of overlap between the parent and its U.S. subsidiary; the parent usually owns a majority, if not all of the shares of the subsidiary; capital is often infused to the subsidiary from the parent; and directors from the parent’s board usually sit on the subsidiary’s board of directors.  This is the relationship that Haier, China Telcom, and CSCE all have with their U.S. subsidiaries.

What is unique to Chinese corporations is the scope of their government ties—indeed, some are controlled outright by the Beijing government.  Unlike in, say, Western Europe, places like China, Russia and Vietnam still have a fair share of government-run corporations.  Haier, China Telecom and CSCE are all officially government-run.  While the Chinese government does not meddle in the corporation’s daily affairs, it will exert its influence if it suits the government’s self-interest. For example, in 1994, Haier, a manufacturer of washing machines and refrigerators, was pressured by the Chinese government into acquiring a pharmaceutical company, a venture that ended badly.

Citizens United allows for the very real possibility of the Chinese government’s direct influence in our elections through a Chinese corporation’s U.S. subsidiary.  While no official number exists about the number of Chinese companies with a U.S. subsidiary corporation, Dan Harris, a partner at the international law firm Harris & Moure and editor of the China Law Blog, believes that the number is substantial.  “My small firm represents a number of U.S. companies that are wholly-owned by Chinese companies or by Chinese citizens and that convinces me there must be thousands of such companies in the U.S.”  While certainly not all of these Chinese companies with a U.S. presence are directly owned by the Chinese government, there are likely many more than just Haier, China Telecom and CSCE.  And given China’s vast currency reserves ($2.4 trillion, the world’s largest), the Chinese government certainly has the money to spend on U.S. elections should it choose to do so.  Corporations in other countries, particularly oil-rich ones like Saudi Arabia and Russia, also own U.S. subsidiaries.  The threat of foreign involvement in our elections has been noted by the White House, as seen in the Obama’s critique of the decision during his State of the Union, and by Congress as it explores ways to nullify Citizens Untied.

This issue wasn’t completely lost on the majority in Citizens United—they simply chose not to deal with it.  While the majority hinted that there could be a compelling interest in preventing foreign nationals, foreign corporations or foreign governments from influencing the political process, the logic underlying Citizens United’s literal definition of the corporation as citizen prevents this.  After Citizens United, courts are no longer allowed to look behind the curtain of the corporate form to the realities of the situation or to distinguish between corporate citizens and individual ones; the majority opinion allows no leeway to examine the foreign origins of the shareholders.  For the purposes of political speech, one person’s U.S. citizenship, be it from a passport or from the documents of incorporation, is just as good as another’s; to draw distinctions would be discriminatory.

Given that the majority in Citizens United so easily overturned it previous rulings with regard to limitations on

Justice Samuel Alito

corporate participation in elections, one ought not expect the Court to maintain any consistency when a case involving political donations from a U.S. subsidiary of a foreign corporation comes before it.  The Justices will want to reach the result that American subsidiaries controlled by foreign entities cannot provide support to political activities; Justice Alito, with his mouthing of the word “not true” during Obama’s State of the Union address, certainly signaled this.  Such a result, however, will require the Court to overturn the logic of the corporate citizen as equal to an individual citizen. A majority will likely call this an “exception.” In reality, it is more of an excuse.  In either case, such a ruling will likely prove difficult to enforce.

Many Chinese corporations have American subsidiaries that are private, i.e., are not subject to the same reporting requirements as publicly-traded ones.  In some states, such private corporations have no reporting requirements at all.  With a private corporation, it is difficult to determine share ownership, identity of officers or even names of the directors.  This difficult detective work will become the responsibility of the Federal Election Commission (FEC).  Ironically, the majority in Citizens United found that the campaign finance law’s requirement that corporations work through their Political Action Committees (PACs) during the law’s 30-60 day quiet period was too burdensome since it required copious amounts of paperwork.  Imagine the time, effort and money the FEC will be required to put into determining the ownership of any number of private corporations.

In equating corporate citizenship with individual citizenship, the Court does more than just disregard its own rules of precedent and stare decisis.  It also provides an image of a corporation completely disconnected from reality, does a grave disservice to our political process and jeopardizes our democracy.  And that, Justice Alito, is the truth.

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By Elizabeth M. Lynch, January 28, 2010

State of the Union addresses are mandated by the Constitution, and like most requirements in life, are often dull.

Barach Obama's first State of the Union

The speech usually turns into a laundry list of the President’s priorities with little rhetorical flair.  Often the most exciting part is when the TV cameras pan the audience and catch Senators and Congress members misbehaving.  This year it seems as if everyone Congress member was “tweeting” on their blackberry.

So to spice it up a bit, we at China Law & Policy decided to analyze President Obama’s first State of the Union address in terms of China.

Not surprisingly, President Obama’s speech focused mostly on the domestic agenda.  But China was mentioned twice, although both times only briefly.   China was first mentioned in regards to the technology behind its fast trains.  Similarly, when President Obama brought up China a second time, it was in regards to its technological advancement and that the U.S. must not fall behind.  In both instances, China was used more as a foil than anything else.

More compelling were the points when China wasn’t named but perhaps should have been.  In terms of trade partners, President Obama stated that he wanted closer ties with Panama, South Korea and Colombia.  But this is likely less of a snub to China than the fact that the Obama Administration is waiting on Democrats in Congress to approve free trade agreements with these three nations.

China was also absent when President Obama discussed the nuclear threat from both North Korea and Iran.  In fact, no other nation was mentioned and while President Obama was very forceful in threatening the two countries with increased sanctions, his actions appeared rather unilateral.  This is in contrast to his predecessor; in George W. Bush’s 2003 State of the Union address, the President specifically mentioned China as necessary to reach a peaceful solution on the Korean peninsula.

Does this mean that the U.S. is not receiving China’s support on this front?  It’s hard to tell.  Given the American public’s focus on the economy, health care and the corruption culture of Washington, it’s not surprising that President Obama’s speech had very little focus on foreign policy.  To draw any conclusions from the little he did say is speculative, but at the same time is something to be aware of and to watch.

Click Here for a Transcript of the State of the Union Address

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By Elizabeth M. Lynch, January 24, 2010

Thomas Friedman

It is dangerous to use financial analogies to describe a non-financial event; the comparison usually misses the mark and often overly simplifies a complex issue.  Thomas Friedman fell into this trap last week when he recommended short selling the Chinese Communist Party (CCP) in his op-ed.  In attempting to predict the CCP’s fall, Friedman failed to do his due diligence and realize that like most things in China, it’s not all black and white.

First, the metaphor of “shorting” non-financial products has to stop.  Or at the very least be explained.   For readers of this blog and Friedman’s column who are not day-traders, “shorting” is a specific financial term.  When you “short” a stock, you borrow shares of the stock from a third party and sell these borrowed shares on the assumption that the price will decline in the near future.  When the stock is trading lower, you purchase it and return the shares borrowed, thus making a profit.   In essence, “shorting” implies that the product is presently overvalued and the value will decrease in the near future.

While you can’t actually “short” a country or a ruling party, Friedman uses the analogy to imply that the CCP is currently overvalued and its value, or in this case its power, will eventually decline.  According to Friedman, the CCP’s power will decrease because of its insistence on suppressing the Chinese public’s freedom to information, specifically over the internet.  For Friedman, this pits two different segments of Chinese society against each other: “Command China” which he defines as “traditional state-owned enterprises” and other extensions of the CCP and “Network China” which is made up of “highly entrepreneurial” companies that feed off of the creative energy of a free internet.

In drawing this distinction, Friedman paints with too wide a brush.  If the Chinese business world could easily be divided into decrepit, state-owned industries run by the Party and vibrant, Silicon Valley-like companies that are independent of the Party, the CCP’s demise likely would have already occurred.

Network China is not as independent of the CCP as Friedman makes it out to be.  A company’s success in China, even a

Shorting the CCP?

small technology company, is often dependent on the owners’ connections with government officials.  The companies of Network China are not outsiders to the system; they are very much insiders and largely profit from good relations with the CCP.  Take for example Baidu, China’s homegrown search engine.  Although Google’s search engine is at least as good as, if not better than Baidu’s, due to Baidu’s close relations with the government, it has a much larger share of the Chinese market.  Government and Party connections are important assets on a company’s balance sheet and, at times, are instrumental to a company’s success.  The companies of Network China continue to profit from their connections; it is unlikely that they will be the ones to seek change.

Furthermore, Command China and Network China are inextricably linked.  The Chinese banks that provide loans to the start-up companies of Network China are state-run and members of Friedman’s Command China.  When it comes to loaning money, the Chinese leadership has more than a bully pulpit; it can out right force its banks to provide these loans, as it did for much of 2009 while banks in other parts of the world constricted their lending.  In many ways, the government’s control of the state-run banks has been a boon for Network China.  Why change it?

The Chinese government’s increasing censorship of the internet is troubling, and not just for those of us abroad.  The Chinese people themselves have been in an uproar about Google’s threat to leave China and realize the damage that a censored internet can have on their development.  Just don’t expect change to come from Friedman’s Network China; these companies are already co-opted by the system.  If change is to come, expect it to come from average Chinese netizens and expect it to be a long process; not exactly ideal for short selling.