Talking Points, January 27 - February 10, 2010

Talking Points
January 27 - February 10, 2010

“From the first railroads to the Interstate Highway System, our nation has always been built to compete. There`s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products….

“From the day I took office, I`ve been told that addressing our larger challenges is too ambitious; such an effort would be too contentious. I`ve been told that our political system is too gridlocked, and that we should just put things on hold for a while.

“For those who make these claims, I have one simple question: How long should we wait? How long should America put its future on hold?

“You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China is not waiting to revamp its economy.”
     US Pres. Barack Obama, Jan. 27, 2010

President Obama invoked China in his state of the union address to challenge and to mobilize Americans and their representatives to support his plans for action. The tactic isn’t new, whether on a national or household scale, but it is striking how “keeping up with China” is a new rallying cry. Will it prove effective?

*******

Of course, the effort is really to stay ahead of China. By any measure, the American economy is larger and American living standards are higher. The US military is stronger and its reach longer. And America’s attractiveness to others, though much diminished, is still greater than China’s.

Transportation
The President is right, though, about China’s commitment to building an advanced transportation infrastructure. In time for the 2008 Olympics, the government opened a 350 km/hr (219 mph) line to cover the 115 km (72 miles) between Beijing and Tianjin and a month ago high speed service opened on the 968 km (605 mile) route between Wuhan and Guangzhou. This new link between central and southern China cuts train travel time from eleven to three hours. Tickets ($72/$115) are roughly five times more expensive on the high speed trains than on the conventional ones, which is enough of a premium to keep many on the slower trains. Airlines, though, see the speed and convenience of the new lines as offering stiff competition. One has already dropped fares on its Wuhan-Guangzhou route.

China’s government plans to have 33,000 km (20,625 miles) of high speed rail by 2020. Total spending on the completed and planned projects is put at a staggering $300 billion. The US economic stimulus plan included $8 billion to aid in building 960 km (600 miles) of high speed rail by 2012. Other funding is to come from state and local governments. California voters, for example, decided in 2008 to borrow and spend $10 billion to build high speed lines. Earlier this week, $2.7 billion of the federal government funds were awarded to California. Average speeds on the US lines will be significantly lower than those in China. The Anaheim-Los Angeles line will have a maximum speed of less than half that of the Beijing-Tianjin line. Below are maps produced by the two governments to show planned routes.
 

PRC Ministry of Railways, 2007 map showing plans for high speed rail lines to be completed by 2020.

US Department of Transportation, 2009 map showing proposed high speed rail projects.

There is no doubt that China needs to strengthen its transportation network. The suffering endured by millions stranded by snow storms at train and bus stations in January 2008 demonstrated the fragility of the system.

Southern Metropolis Daily (Nanfang dushibao cover from January 2008.

Rail station crowds, cold nights, 2008 photo by Peijin Chen.

At the same time, some economists in and out of China have questioned whether or not the potential economic returns to these big budget projects justify their cost or the projects passed over in order to fund them.

Clean Energy
Obama is also correct that China’s investing heavily in clean energy generation. As Talking Points noted last July, China has edged past the US in the portion of its energy needs met through renewable sources. This is primarily thanks to wind power. China has doubled the number of its wind turbines each of the last four years. The pace of growth has slowed in recent months, but not for lack of capital. In December, China’s largest wind farm company, China Longyuan raised $2.3 billion through a Hong Kong stock offering. Two-thirds of company shares, however, remain in the hands of the Chinese state.

The demand for China Longyuan shares was enormous despite the industry’s overcapacity problems. An estimated 30% of the country’s wind power is not even tied into the grid. In part these are growing pains that planned improvements in China’s power grid will address, but in October the central government added wind power equipment to its list of industries it wants to rein in because there simply isn’t enough domestic demand for their products.
 

China is already the world’s largest producer of solar cells, most of which are exported. The country’s leaders are now looking to increase solar power generation so as to slow the growth of greenhouse gas emissions and to develop the world’s leading firms in this emerging industry.

American firms are part of China’s solar power expansion. They have been producing solar cells in China and are now helping develop power plants. In September, First Solar signed an agreement with the Chinese government to build the world’s largest solar generating facility in Inner Mongolia. When the final stage is completed in 2019, it will generate enough power to satisfy the needs of 3 million households. Earlier this month, eSolar signed a deal to provide the technology for solar concentrating towers. The towers themselves will be manufactured in China. This is a common pattern – the Chinese government has mandated that most of the equipment used by alternative power generators be China-made.

Economic Restructuring
China’s government has invested enormous sums in modernizing the country’s infrastructure and establishing a strong presence in clean energy and other fields. Through its stimulus spending ($586 billion over two years) and, even more important, through a dramatic expansion of lending ($1.4 trillion last year), China’s leaders managed to keep the country’s economy growing in 2009. They also may have exacerbated problems Premier Wen Jiabao noted two years ago when to the National People’s Congress, “[T]he biggest problem in China’s economy is that growth is unstable, unbalanced, uncoordinated, and unsustainable.” Too much of China’s growth, Wen and others have argued, comes from investment rather than from household consumption.

Li Keqiang, Davos, Switzerland, S. Derungs photo.

That imbalance grew over the past year. China’s amazing 10% GDP growth in 2009 was powered by funneling government money and bank loans to large state-owned firms in industries such as oil and steel. These firms pay well, but employ relatively few workers. Unemployment and underemployment remains high and urban/rural and regional income gaps grow. Speaking at the World Economic Forum, Vice Premier Li Keqiang acknowledged the problem, saying “we will focus on boosting domestic demand.”

Expanding employment and lifting incomes is the key to encouraging greater household consumption. What Li proposed, however, is largely a continuation of existing pledges to strengthen the social safety net and subsidize the purchase of household appliances.

In his state of the union address, the US President described a China that is moving forward. China is making significant progress in critical areas. Investing heavily in infrastructure and energy generation, however, is nothing new for China’s leaders. Engineering fundamental economic restructuring, though, requires overcoming powerful interest groups within the party-state and breaking with well-established habits. It is proving much more difficult to accomplish.

Last week’s Talking Points examined Google’s experiences in China and the challenge it

issued to the Chinese government. Since then, the company’s announced it is delaying the release of two phones powered by its software. The government and its official media outlets responded with firm statements that companies in China had to follow Chinese law. A week ago, though, U.S. Sec. of State Hillary Clinton stated flatly,

“On their own, new technologies do not take sides in the struggle for freedom and progress, but the United States does. We stand for a single internet where all of humanity has equal access to knowledge and ideas.”

Here Clinton clearly asserted that search results on China-based Google.cn should be as unfettered as they are on U.S.-based Google.com and that restrictions on internet speech were assaults on freedom and progress. The talk included references to how the communications revolution enabled farmers in Kenya to make more money, mobile phone users in Bangladesh to master languages, and a Mumbai adolescent to organize a massive blood drive. Clinton said,

“Once you’re on the internet, you don’t need to be a tycoon or a rock star to have a huge impact on society.”

Of course, it is precisely this that worries China’s government. You don’t need to be an official or to have official sanction to utilize the net to share your views with a wide audience.

Clinton spoke on the need to combat cybercrimes of various sorts, including innovation-stifling intellectual property theft. But she also lumped authoritarian governments together with “violent extremists, criminal cartels, [and] sexual predators” among those using information networks “for darker purposes.”

This is strong language, but the Secretary emphasized that while the U.S. and China had differences on internet access, that the U.S. would seek to “address those differences candidly and consistently in the context of our positive, cooperative, and comprehensive relationship.”

The People’s Daily, the official voice of China’s ruling Communist Party, did not view the dispute as a side issue in an otherwise positive relationship. On Wednesday it published a commentary arguing that because its strength had been sapped by the financial crisis and war, the U.S. was turning to the internet rather than its military in order to dominate others. The U.S., it charged, was using Google to undermine China’s social stability and national security.

The commentary asserted that in the U.S. and other countries, Google carries out censorship in accordance with local requirements. Examples given include bans on child pornography, blurring satellite photos, and filtering out racist or anti-American posts. Why, the commentary asks, shouldn’t Google adhere to China’s laws when it does business in China?

Chinese media also played up comments Microsoft chairman Bill Gates made on ABC. Gates said “Chinese efforts to censor the internet have been very limited” and “it’s easy to go around” the Great Firewall. Global Times English site included those statements. The paper’s Chinese site, however, only included Gates’s comments that to do business in a country, you have to comply with the laws of that country.

Chinese officials assert that China’s internet is open and that netizens, as long as they remain within the law, enjoy freedom of speech. Clinton, Google, and others respond that the law is too confining. Too much discussion is constrained by China’s limits. This debate, then, is a very old one, rekindled by the rapid growth of the web and mobile phones.

Google’s Jan. 12 declaration was triggered by its discovery of “a highly sophisticated and targeted attack on our corporate infrastructure.” The clear implication was that this was a Chinese government-coordinated intrusion. Yang Jiechi, China’s Foreign Minister, met with Clinton on Friday. He affirmed the openness of the Chinese net and said that computer hacking is a problem for China as well. China, the government says, is also under attack. It reported Friday that cyberattacks from abroad rose by 148% in 2009. This information is unlikely to cause Google or the Obama administration to reassess the decisions they’ve made or statements they’ve issued.

It began last fall with dueling trade complaints and sanctions, continued with scuffles over climate change, frustrations over acting to halt nuclear weapons proliferation, and now includes charges and countercharges of human rights violations, computer hacking, and information imperialism. US-China relations are now more contentious than in recent years. On Friday, as expected, the US announced the sale of $6 billion in weapons systems to Taiwan, the second part of a package originally announced by the Bush administration in fall 2008. And as expected, Beijing responded by suspending military exchanges. Beijing had done this after the first sale in 2008. Beijing is also likely to condemn Pres. Obama’s planned February meeting with the Dalai Lama. (Click here for a US-China Today story and interactive graphic on Taiwan arm sales.)

US-China Today, our two-year old student-driven magazine on US-China relations and on critical trends in China, has a new look and several new features. Among the magazine's latest stories is one examining China’s efforts to expand its international media presence. The newest photo series focuses on the massive construction underway ahead of the world expo that is set to open on May 1. The magazine still offers a daily news round-up and quotes on US-China matters as well as a weekly newsletter and convenient RSS/Twitter feeds. Please visit uschina.usc.edu and let us know what you think.

China’s activities in Africa represent something new. China’s investments in Africa dwarf those of other nations. China’s in Africa to get its oil.

In her recent USC talk, Deborah Brautigam said that the statements above represented three of the most common misconceptions about China’s investments in and aid to African countries. Chinese aid to Africa began in the 1960s and while Chinese investments have risen a great deal, they are still small compared to those of other nations. And unlike many Western nations, Chinese firms are interested in much more than the continent’s oil. Brautigam argues that Chinese efforts haven’t always yielded positive outcomes for China or for the African countries where they took place, but that many have produced concrete benefits for both sides. Her talk attracted a standing room only audience, but if you missed it, you can see it now at the institute website.

Next week you’ll also be able to see Judith Mackay’s presentation on the size and complexity of the Chinese tobacco market and on efforts to shrink it through governmental action and other means. Mackay’s been a leading light in this struggle since 1984 and her presentation detailed the progress that’s been made and the immense challenges that remain.

This week USCI joins the USC Korean Studies Institute and the Center for International Studies in sponsoring a two day conference on the international relations of Asia. The gathering brings together distinguished veteran scholars and promising graduate students from up and down the Pacific coast. On Feb. 10, USCI’s documentary film series continues with screenings of The Colony and The Women’s Kingdom. Filmmakers Xiaoli Zhou and Brent Huffman will introduce their films and take questions following the screenings. On Feb. 11, Ran Ran, USCI’s postdoctoral fellow, will probe why China’s often impressive environmental policies are often poorly implemented at the local level. Details about these events and China-related programs across North America are available below and in the calendar section of our website.

Thanks for reading this week's Talking Points. Write to us at uschina@usc.edu.

Best wishes,
The USC US-China Institute
china.usc.edu

Events

USC 

01/28/2010: Aging Research in China
USC MRF Hamovitch Center, Los Angeles, CA 90089
Cost: Free
Phone: 213-821-4382
Time: 11:30 am - 1 pm
Lunch Will be Provided
RSVP is required by Jan. 21, 2010
Dr. Peng Du will focus on the development of population aging and social gerontology research in China.

01/28/2010: Nanking
Leavey Library
University of Southern California
Cost: Free
Time: 6:00PM - 8:00PM
The US-China Institute presents the award-winning documentary, Nanking, followed by a discussion with director Bill Guttentag.
 

02/05/2010 - 02/06/2010: West Coast International Relations of Asia Conference
USC Davidson Conference Center
This workshop aims to foster discussion among international relations specialists working on Asia at West Coast universities.

02/10/2010: "The Colony" and "The Women`s Kingdom"
USC Leavey Library auditorium
Cost: Free
Time: 6:00PM - 8:00PM
The U.S.-China Institute presents a screening of two short films, The Colony and The Women`s Kingdom, as part of the documentary series. Join both directors for Q&A following the screening. 

California

01/28/2010: Talk by Wu Mi-cha
UCLA 6275 Bunche Hall
Cost: Free
Time: 4:00PM - 5:30PM
UCLA Center for Chinese Studies presents a talk by Wu Mi-cha. 

01/28/2010: Cold War Borders in a Post-Socialist World: Hong Kong / China
UCLA Hacienda Room UCLA Faculty Center
Cost: Free
Time: 4:00PM - 5:30PM
UCLA Center for Chinese Studies presents a talk by James Watson on the fate of international borders that were transformed by the collapse of cold-war socialism and the triumph of global capitalism.

01/28/2010: The Emergence of "History": A Survey of the History of Taiwanese Historiography
UCLA 10383 Bunche Hall
Cost: Free
Time: 5:00PM - 6:30PM
UCLA Center for Chinese Studies presents a talk by Wu Mi-Cha on the series New Directions in Taiwan Studies. 

01/28/2010: Buddhist Seal Manuals and the Nature of Dunhuang Buddhism: The Case of P. 3835v.#9
UC Berkeley
IEAS Conference Room, 2223 Fulton Street, 6th Floor
Cost: Free
Time: 5:00PM - 6:30PM
UC Berkeley`s Center for Chinese Studies presents a talk by Paul Copp on manuals from Dunhuang in the ninth and tenth centuries. 

01/29/2010: China’s First Panda Reserve: A Person, a People, and a National Cause
UC Berkeley
IEAS Conference Room, 2223 Fulton Street, 6th Floor
Cost: Free
Time: 4:00PM - 6:00PM
UC Berkeley`s Center for Chinese Studies presents a talk by David Johnson on the roles of the government, individuals, and Baima ethnic community in panda protection efforts. 
 
01/30/2010: Shanghai and World Expo: The New Face of China
Porter Ranch Library
11371 Tampa Avenue
Cost: Free
Phone: 818-360-5706
Time: 2:00PM
The China Institute at the California State University, Northride presents a talk on the upcoming World Expo in Shanghai.
 
02/01/2010: Ethnic Identity in China: New Perspectives & Research
Hahn 108
420 Harvard Ave. , Claremont, CA 91711
Phone: 909-607-8065
Time: 4:30PM - 5:30PM
Pomona College`s Pacific Basin Institute presents a panel discussion examining ethnic identity in China.  
 
02/03/2010: UCLA Integrative Medicine Conference
UCLA Faculty Center - California and Hacienda Rooms
Time: 8:30 AM- 5:00 PM
UCLA Collaborative Centers for Integrative Medicine presents an all-day conference highlighting the application of integrative medicine at UCLA and why integrative medicine matters in today’s healthcare. 

02/07/2010: Chinese New Year Concert: Special Dance and Music Programs from Shenzhen, China
California State University, Northridge
Northridge Center, the University Student Union (Parking in Lot G3, accessed by entering Dearborn St. from Zelzah Avenue)
Time: 7:00Pm
California State University, Northridge presents a unique cultural experience with dance and musical performance by students from China.

North America

02/01/2010: Media Training Seminar: “US-China Relations: What’s the Big Story and How Do I Cover It?”
Indiana University
IUPUI Kelley School of Business, Room BS 4095 801 W. Michigan St, Bloomington, Indiana 47405
Indiana University`s Kelley School of Business presents a media training seminar featuring Washington Post`s John Pomfret.
 

02/04/2010: Political Development in China: The Role of Civil Society
Indiana University
IUPUI Kelley School of Business, Room BS 4095 801 W. Michigan St, Bloomington, Indiana 47405
Time: 12pm
Indiana University`s Research Center for Chinese Politics and Business presents a talk by Professor Chu Songyan. 

02/07/2010: Up the Yangtze
Spurlock Museum, Knight Auditorium
Time: 7:00PM
Asian Educational Media Service presents the screening of a dramatic feature documentary on life inside the 21st century Chinese dream. 

02/09/2010: Changing Gears in China and the US, with Peter Hessler
Asia Society and Museum
Address: 725 Park Avenue, New York
Cost: $10 members; $12 students with ID/seniors; $15 nonmembers
Time: 6:30PM - 8:30PM
The Asia Society presents a talk by Peter Hessler on life in a rapidly changing contemporary China. 
 
02/10/2010: Confucius: His Life and Legacy in Art
China Institute
125 East 65th Street, New York City
Time: 4:00PM - 5:00PM
The China Institute presents a gallery talk on the exhibition on the life, teachings and continuing influence of Confucius.  

  02/10/2010: Institutions, Families, Communities: Towards a social history of the Ming military in southeast China
Location: TBA
Time:  4:30PM - 6:00PM
University of Pennsylvania`s Center for East Asian Studies presents a talk by Michael Szonyi on the social history of Ming institutions.

Exhibitions  

01/06/2010 - 02/17/2010: Sketches of China: Works on Paper by Hyunsook Cho
Pacific Asia Museum, Gallery of Contemporary Art
46 North Los Robles Avenue, Pasadena, CA 91101
Phone: (626) 449-2742
Sketches of China presents the artist`s re-interpretation of traditional Chinese ink painting in different media

 09/22/2009 - 06/30/2010: China`s Great Wall: The Forgotten Story
NYC offices of the Rockefeller Brothers Fund, New York, NY
The Forgotten Story is a series of historically-based photographs of the Great Wall of China. It is a collaboration between Jonathan Ball, a California based photographer, and David Spindler, one of the world`s foremost experts on Great Wall history.

11/03/2008 - 11/03/2009: Ancient Arts of China: A 5000 Year Legacy
Bowers Museum
2002 North Main Street, Santa Ana, California 92706
Bowers Museum presents a collection that portrays the evolution of Chinese technology, art and culture. 

11/15/2008 - 11/15/2009: Masters of Adornment: The Miao People of China
Bowers Museum
2002 North Main Street, Santa Ana, California 92706
The Bowers Museum presents a collection of exquisite textiles and silver jewelry that highlights the beauty and wealth of the Miao peoples of southwest China. 

02/12/2009 - 02/12/2010: Art of Adornment: Tribal Beauty
Bowers Museum
2002 N. Main, Santa Ana, CA
Cost: $5
An exhibit featuring body adornments from indigenous peoples around the world.

____________________________________________________________________

Please invite others to subscribe to USCI’s free email newsletter for regular updates on events and programs. We will not share names or email addresses with any other entity. Sign Up.

We provide information about China-related events as a community service. If you would like your event considered for inclusion in the USCI calendar, please click here to submit event details.

If you would like to support USCI by making a donation please visit http://www.usc.edu/giving/.

USC U.S. – China Institute
3535 S. Figueroa St.
FIG 202
Los Angeles, CA 90089-1262
Tel: 213-821-4382
Fax: 213-821-2382
Email: uschina@usc.edu
Website: http://china.usc.edu 

You have received this e-mail because you have subscribed to receive updates from USCI. If you feel this message has reached you in error or you no longer wish to receive our updates, please click, unsubscribe, and enter "Remove" in the subject line.