"Election" Night

Believe it or not, but tonight is actually "election" night in China. Not that the population actually is voting, but the 17th National Congress of the Chinese Communist Party (CCP) ended today, and the new leadership team of China will be presented tomorrow. The composition of the team is likely to be a juxtaposition representing a compromise between various fractions and interests, instead of a bold alternative that will push reforms forward...

During the congress, China's enigmatic president Hu Jintao presented his ideas (for perhaps the first time ever despite already having completed a 5 year term in office) during a 2.5 hour long speech. During his speech he emphasized the continued focus on economic development while promising improved "intra-party" democracy. Now what this means is a bit unclear to me, as he also emphasizes the need for party officials to "agree with their elders".

Anyhow, tomorrow there will be some interesting news for the Middle Kingdom. Stay tuned!

An Inconvenient Nobel Prize

Just recently Nobel prizes were awarded. Al Gore and the IPCC (Intergovernmental Panel on Climate Change) received the Nobel Peace Prize for their work concerning global warming.

At the same time, three American economists received the Economics award for their work on mechanism design theory that supports the design of trading, negotiation and auction mechanisms.

Usually we are expected to clap and cheer for all our Nobel Prize winners, and that's what people generally do as well. But there is something fishy with one of these awards. While the award in Economics refers to work that has been made since 1960 and that has been tested by peer review since then, the Nobel Peace Prize is awarded to achievements in the last few years. Al Gore's movie "An Inconvenient Truth" was released last year and is the heart of a avalanche of marketing and media hype. The IPCC was only established in 1988 and has not gone unquestioned. For example, read this interesting articles from the Financial Times.

I thought t (I failed to find criteria on the Nobel Prize website) that the Nobel Peace Prize were aimed to award individuals who have made great achievements towards promoting peace (the medal carries the inscription "for the peace and brotherhood of men", in latin). Now however it seems that it is used to promote a political cause, based on certain (uncertain) assumptions about reality. Supposedly global warming is connected to peace through the supposed disruptive effects of global warming. If global warming would actually happen, those effects would most probably be produced and disturbances in regards to peace and political stability could be expected. However, is it a scientific fact that man-made global warming is happening?

I am not so sure.

Not that I have any scientific acumen to prove or disprove hypotheses regarding global warming. However, when people start to speak about scientific consensus (isn't challenging consensus a prerequisite for scientific progress?), and when scientists start to crusade for their findings, there are reasons to believe that science is being squeezed in favour of political correctness and the warm fuzzy feeling of consensus.

First of all, the factors that underpin the hypothesis of global warming are inherently uncertain, as this Caltech speech by Michael Crichton succinctly illustrates; "Aliens cause global warming".

Secondly, there are definitely critics of the global warming movement. For example, the Danish statistician Bjorn Lomborg has written a new book about global warming; Cool it - The Skeptical Environmentalist's Guide To Global Warming.

I call for a more scientific and less emotional and politically correct debate on global warming. I see more hype and religious crusading than science. Being a renaissance man, this makes me disheartened.

Click here to see the whole universe

I was sitting at work the other day, scouring through market research databases for annual reports of Chinese companies. Then I found this.

As I read the line "click here to see the whole universe" I felt the room fade away and I was sucked into this unbelievable opportunity: one click away from enlightenment!

I wonder what Philip Kapleau, renowned Zen master, would say about that.

Chinese Culture revisited

Wow! Going to the Induction Conference of AIESEC in Mainland of China really re-ignited my belief in the positive sides of Chinese culture. I was consistently impressed by the sense of community, the warmth and openness, as well as the gregariousness of the people I met there.

What has puzzled me regarding Chinese culture is that it seems to exhibit both introverted and extreoverted characteristics, simultaneously. Now, I realize that this is a paradox that only arises when European stereotypes of introverted and extroverted characteristics are being used.

The Chinese seem to be deeply gregarious, but they not outspoken or daring. The Chinese have a close connection to their heart, but they might not spill their guts for strangers. The Chinese seem to be keen to stay in line and do not tend to deviate from the crowd, but they are not introverted.

Given the history of ideas in China (First confucianism, then communism) this should not be too surprising. Both ideologies stress the associtiation of the individual to the collective, hence causing both gregariousness and a wish to conform. Apply violent repression to non-conformists and you have a culture, where stepping out of line or taking the role of a maverick or lone revolutionary, are actions to be feared and avoided.

When false assumptions vanish, paradoxes crumble. Feels good!

Ignorance is Strength

In China, propaganda is all around. Being in Shanghai, China actually feels like a rather modern country with lots of free press (accesible to those who can pay). Ordinary Chinese see nothing of this freedom however. Their world is filled with government TV on buses and newspapers filled with propaganda. Let me give you a few examples:

"In conclusion, the US government is responsible for the current unresolved Taiwan question." Read why Beijing feels free to blame US for it's own issues.

A ubiquitous supplier of propaganda is China Daily, an english newspaper meant to indoctrinate foreigners into loving the Beijing government. Here is a great example of government messages being pushed straight through the newspaper.

China Daily also has a number of forums, where discussions are being held in a rather different tone from what Westerners will be used to. For example, read how the Chinese "debate" and "discuss" their country on their online forums.

Further, when the government peddles it's messages, it is always being peddled in Newspeak. Let's check out two examples:

• China Peacefully Rising. China claims a non-interference policy towards the internal issues of other nations. Supposedly this is to enable the same argument against those who wants to criticize China's internal issues. However, it is very hard to reconcile a policy of non-interference with the fact that China is the world's 3rd largest recipent of FDI and 21.16 billion USD FDI going out annually, growing 13 percent per year. China has large investments in Burma as well as several African countries. To claim a non-interference policy with regards to these countries is simply irresponsible.
• Socialism with Chinese characteristics. To justify the departure from communism and embrace of capitalism, socialism has been rebranded. Apparently chinese characteristics include the following;
  
• Departure from central planning
• Privatization of state owned enterprises
• Encouraging foreign investment
• Opening up financial markets to raise more capital, nationally and (soon) internationally
• Prioritization of eastcoast middle class and upper class and fierce repression of farmers and workers westwards
• Egalitarianism, what's that?

But what is left of communism and socialist ideals then? Well, dictatorship and propaganda, but that seems to be about it.

Seeker of Truth

On Friday I went to the Yue Festival in the Zhongshan Park in Shanghai. Generally Shanghai is void of green areas, but the Park is a wonderfully green landscape with a small lake and neat little bridges arching over the water.

Jingwei, Jia Jia, Carlos & Keue

Mikael, Nikunj, Jorge, Carlos & Bence

The Yue Festival itself was sparsely attended and it seems that every foreigner in town was there. I actually wonder what most of the people at the festival was actually doing in China. Most of them looked like backpackers or as normal teenagers (rockers and hip hoppers). Anyhow, Marijuana smoke was filling the air and people were having a good time.

The big treat for me was to see my favourite rapper Talib Kweli. He's born in Brooklyn, NYC, and is the son of two college professors. His name is Arabic and Ghanain and means "Seeker of Truth". He represents a more interesting branch of Hip Hop than 5 the guns-money-hoes obsessed 50 cent, and he is also more authentic than the sugarcoated Pop-Hop of P Diddy and his ilk.

Talib Kweli owning the stage!

His stage presence was enormous, his eyes piercing and a flow that would never stop. Add to this his socially conscious and intelligent lyrics, and you have a performance that can blow most rappers away. Here are a few lines from one of his most emotional songs, "Around my way". To me it brings up vivid pictures of a struggle for decency:

These conditions make us strong And we create our own businesses so later on
Our children have things in their name that they can say they own
A mix tape freestyle become your favorite song
No place like home when the cops ask you about your neighbors
Beat on you, threaten to incarcerate you

Thanks Talib for a great experience!

Peeling the onion

One of the most fascinating aspects of living abroad is the process of discovering the fundamental assumptions of yourself, your culture and the alien culture you are living in. I always knew this on a intellectual level, but it is a different experience to actually live it.

Assumptions about the world as-is that to me has appeared as truisms are suddenly thrown into relative space. As basic assumptions topple, they rock all the normative and descriptive structures that have been built upon them.

While reading Asia Times' excellent expose on Chinese business culture I was able to get rid of some of my frustrations from work. I have been here for a month, and I have been constantly frustrated by the slow pace of work and the lack of clarity regarding goals and responsibilities.

Unknowingly I had assumed, that efficiency (essential to profitable business execution) surely must be a universal value. Think about it, who would want to waste resources? And who would not want to run their business in the most profitable way? I kept telling myself that probably there is some Chinese mode of efficiency that I haven't been able to figure out.

What I realized was simply that efficiency is a western value, and in China there are many other values which takes precedence over efficiency; face value, social hierarchy, relationship; just to mention a few.

Conclusion: Any assumption can be wrong, especially the one's we think about the least. Chinese culture is simply more concerned with other values than efficiency. A 100% focus on efficiency in China would probably lead to sour relationships, offended colleagues and lower profits. Thus, things are somewhat slow around here and business execution is subordinated to other things.

China’s 11th five year plan

Centrally planned economies five year plans are famous as the main tools of planning entire national economies. They carry associations of ridicule from free-market economists who deride the impossibility of planning out an entire economy from a central government department. An indeed, some of the plans were ridiculous. At my parent’s house, we have a 1975 economic atlas from DDR (Deutsche Democratische Republik. It is filled with awe inspiring and impossibly straight 45 degree lines describing past and future production of shoes, pork and tanks.

Bad Boy or Good Guy?

Market economies never used central planning, so China comes up as an interesting exception. China is totalitarian, but definitely not a centrally planned economy. So what role does it’s five year plans play? Let’s have a look at the 11th (2006-2010) Five year plan (AIESECers read: China 2010).

Numerical targets have been set for the following categories: economic growth; economic structure; population, resources & environment; public service, people’s life. Some of the most interesting targets are among the following:

• GDP growth of 7.5 percent annually,
• GDP per capita to reach 2567 USD
• Urbanization rate to increase by 4 percentage units to 47%
• Energy consumption per unit of GDP down 20 percent
• Coverage of the new rural cooperative medical care system up from 23.5 percent in 2005 to over 80 percent

Clearly the goals cover all relevant parts of the Chinese economy. It is important to remember though, that since markets determine production in China, these targets are just targets, not government orders.

Further, the five year plan has been structured according to 4 overarching themes:

• New Countryside - rural development and poverty reduction in China’s poor western provinces.
• Peaceful Development - “China Peacefully Rising", a concept meant to ease the fear of Chinese military mobilization and interference in internal affairs of foreign countries. It is with reference to this policy that China refuses to intervene in Burma. Also, this policy is used to criticize interference in China’s domestic problems (Human Rights, Tibet, Taiwan etc.)
• Eco-Friendly Society - as is well known, rapid industrialization in China has taken it’s toll on the environment. E.g. city air in Shanghai and other megacities is extremely bad and China must also save face on the international arena
• Innovative Country - economic policy is no longer geared towards expansion and cheap labour, now is the time for China to increase education spending, foster innovation and increase intellectual property protection. China wants to transform the structure of it’s industries from low-cost production to technically advanced, high value-added industries.
  

Being a strategic planning nut myself, I can’t help to feel a bit impressed by the comprehensiveness of the plan. Possibly I am feeling the same sense of completeness that old-age communists got excited about when they charted national production in 45-degree angles. From what I understand, however, this plan is different from pre-1989 communist five year plans which were basically direct production orders to factories. With a market economy attached to the totalitarian superstructure, a five year plan seems to become every politicians dream; that of being able to do proper long-term strategic planning without the fear of having the national strategic focus completely shift every 4 years.

PSP vs. books

In Shanghai, a very common sight on subways are people playing games on their PSPs. It is not restricted to kids or teenagers, young adults have them as well. Also it's not restricted to guys, girls use them as frequently.

PSP: Cool?

However, a less common sight on subways are people reading books. Not to say that I have not seen them, it's just that the PSP is so much more common.

Books: Not cool?

The question is what effects this has on Chinese society. Probably it means that people choose to not expand their mental boundaries (at least not through reading). This is probably aligned to what the government desires as well. Non-expanded and uninformed worldviews are easily workable for totalitarian regimes.

Even though the Chinese does not seem to be big on reading books, the government insists on banning books anyway. The extent of censorship is rather extensive (note that even video games are censored, so the PSP is not quite safe either...). This situation raises a number of questions:

• Can a climate of innovation be created when freedom of thought is being curbed?
• As China starts to wield more power in the international arena, what is it's understanding of the cultures and societies that it is dealing with?
• If Chinese graduates are not being pushed to expand their world views, how will they be able to compete with graduates from the West?
  

Insights on democracy

Having spent a month in a totalitarian country, I have come to realize certain things regarding the idea of democracy. The over-arching insight is that democracy is far to aggregated a concept to be spoken of in a meaningful way. I have been sketching at a useful breakdown into it's constitutent parts, and the best I can come up with is the following:

• Rule of Law
• Transparency of institutions
• Freedom of speech (and thought)
• Freedom of association
• Governors selected by the governed

A western liberal democracy would probably ask for Private Property Rights to be added to the list. This would allow for competitive markets to arise.

Now, China is in severe violation of the 5 elements of democracy listed above, as well as the respect for Private Property Rights. Not in the sense that property is never respected in China, it just depends on who you are. Possibly you could say that there is private property protection, but no uniformity in the protection that is offered to peasants, workers and investment bankers...

Every now and then in discussions with expats, the question of China's eventual embrace of democracy comes up. Usually there is lack of consensus and views go far apart. Some say that economic growth will bring about democracy, other hope that Foreign Direct Investment will bring about democracy through the pressure that corporations and foreign governments can put on China. My personal view is that economic slow-down will bring about democracy in China.

Let's have a look at the argument. It's assumptions are that China has long since left the ideals of communism and centrally planned economics. The main goals of Chinese government these days are economic growth, international respect and political stability. As long as China's competitive advantage of low-cost labor and cheap production persists, China will not need to take any steps to implement any of the aspects of democracy.

However, there will be a time of decreasing FDI, and decreasing GDP growth. In such a period the government will need to energize the SME sector as well as stimulate levels of entrepreneurship throughout the country. This is where certain aspects of democracy comes in again. To make this happen, Rule of Law and Transparency of Institutions must be available to SMEs and small entrepreneurs. This has been widely discussed in two brilliant books by Hernando de Soto and C.K. Prahalad. Also, it could be doubted if China can ever generate a highly innovative economy given the severe censorship and government propaganda. Decades of programming people to become willing serfs does not create maverick innovators.

Surprisingly, recent events in Sweden has shed lights on Freedom of speech and it's relation to an Open Society. As the newspaper Nerikes Allehanda (read Nowhere-ville Daily) published pictures of Mohammed as a dog, protests broke out in islamist circles over the world. In Sweden voices were raised for various issues; freedom of speech, requests to illegalize defamations of the Prophet as well as subtle requests for the "responsible use of freedom of speech". Now, this might seem like a truism, why would we want to encourage irresponsible usage of anything? Politrucks and bloggers were subtly asking for self-censorship with respect to Islam and the feelings of offended Moslems.

This brings us to the question of why we actually strive for Freedom of Speech at all. Simply put, in any diverse society, views and opinions will deviate, people will embrace different values, gods and ideals. It is not to publish my Top-10 list of breakfast cereals that I need freedom of speech. No, freedom of speech is needed exactly when I want to express something that deeply conflicts with values of other people, that to them is disrespectful or or incomprehensible. I can certainly feel offended by the views of communists and believers who wish to regulate my life based on transcendental insights. But if I start to request for the expression of these (in my view, absurd) views to be banned, then we are entering a downward spiral. Once we start to forbid defamations of Mohammed, why not forbid defamations of the prime minister, the ruling party or the King? Any restrictions of the Freedom of Speech, eventually leads to totalitarianism.