Much of what you see in China is planned/fake to some degree (updated 30 Sept)

Update 30/09/08: others are noticing the contradiction between walking in space and the disasters on the ground in China.  Many are saying that the solution is increased accountability within the system.____________I've said more than once that much of what you see here in China is scripted.  The 0lympics should have convinced you of that.  But, if you still don't believe it, read this report about recent Chinese astronauts first night in space--published BEFORE their rocket even left the ground!!!Foreigners going into factories for audits, inspections, first visits, etc. need to be very aware of this--I promise you, your Chinese partner is actively "putting their best foot forward" even if that foot is not theirs.Since this is just "business as usuall" from the government down to the smallest factory, from accounting to business dinners, is it any wonder that locals have very little faith that there is someone, be it in government, business or society, which is looking out for the little guy?  People here are dependent on themselves and their immediate families and that's honestly about it.About 2 weeks ago there was a great article (in the Times Online, I think) about the difference between the Chinese perception of a "successful" 0lympics and what the West will expect from London.  The difference lies in the importance placed on presentation vs "reality."  The best take away from the is the concept that China values clean, smooth (face-saving) presentations while "the west" likes to see raw emotion and "real" human interactions rather than fantastic stage productions.  The corollary is that any public presentation in China is known, or at least assumed, to be completely scripted (e.g. fake).What my experience in China and these issues speak to is a systemic lack of trust outside of any given individuals' inner circle of friends, family and close business associates.Here are a few more examples from the news and just this last one week of work in China.We know of a factory that will not keep the contractual agreements with the client for shipping/payment terms.  The factory has repeatedly held product hostage to price increases and shipping delays.  Now that everything is done and finally ready to ship, there is an argument over retention of the molds.  The factory will not honor the contract payment terms (balance after FOB) because they think that the client will, as they have done, play games with the payment to gain the upper hand in the mold argument.  The client, of course, says that the factory has proven to be untrustworthy and will not pay until the truck is secure in the port.  The stalemate requires someone (SRI in this case) to step in and act as an acceptable third party.Next example: Talking with the owner of a small print factory today I was reminded how “normal” this kind of thing is (product held hostage and the milk scandal).  I was trying to empathize that on a day that Chinese people should be proud (because of the space walk) there are still thousands (hundreds of thousands?) of people affected by contaminated milk.  My point was if you can’t trust people making baby food and the government inspectors then whom can you trust?!  The factory owner just shrugged and commented that this is how things work here.  If you have connections you can stay away from the contaminated milk, or make a lot of money, or just not have to pay as much to get the things done you need.  He listed a couple of example of social and business policies that “everyone knows you just pay officials” and you can get around the law.  He was much more resigned than angry.Next example, from the media: the melamine scandal is no longer linked only to milk powder—and it’s still growing.  Milk powder, fresh milk, yoghurt, ice-cream and other milk products, Pizza Hut pizza (cheese), cookies (Lotte Koala bears and others), White Rabbit candies, coffee (fresh and canned), bread, protein bars and drinks, cake mixes and “anything that should have protein in it.” Let me repeat that: anything that should have protein in it is now suspect!!! In Thailand, for example, that includes: “Oreo wafer sticks, Dove milk chocolate bars, M&M chocolate candies, Snickers caramel peanut bars and nougat, Mentos yoghurt candies, and Mao Huad coffee and oatmeal crackers.”  The EU has now banned ALL children’s food imports from China.(Angry side note: do you know that they are stopping any Chinese crossing the SZ/HK boarder with more than 4 cans of milk powder?!  Can you believe that?  How many times can the average Chinese cross the border in a week/month to buy milk for their children, family members or neighbors?  If you don’t have a HK ID it can be a few hour process and most people only have one day off a week.  I find this maddeningly insensitive—since the government is at least partially responsible!  Sure there will be some abuse of the crisis by people trying to make a buck off the situation.  But to limit people who really need it is really pretty cold hearted, I think.  Of course, (white) foreigners with more than 4 cans can cross with nary a question asked.  Now back to the trust story.)And then, just this morning, the NYT is reporting that eyewitness accounts and photos of the bus attack on the Chinese officers in Kashgar, China last month differ GREATLY from the official report.So as all of this is happening, I’m about half way through with a GREAT book, Will Hutton’s: The Writing on the Wall: China and The West in the 21st Century.  It’s well written, well researched, and timely.  Read it.  I’ll review it next week when I’m finished reading it.  Anyway, as I was reading this book and the milk crisis broke out I found myself thinking that everyone should read at least this section of his book (p.130-132)—so here it is!  Timely and appropriate section title:

Is Corruption Endemic?Lu Xiaobo, director of the East Asian Institute at Columbia University, take the analysis even farther.  IN Cadres and Corruption, he argues that a post-revolutionary party is trapped between its need to become a bureaucracy bound by rules, and its revolutionary purpose—to break rules and bureaucracies.  As judge and jury for its own cases, abjuring any external scrutiny, communism cannot easily police its own deviant party members.  But that is not the only reason corruption is difficult to eradicate.  The organization itself is driven into deviance because, one the revolution is over, there is an unbridgeable inconsistency between revolutionary rhetoric and the compromises of non-revolutionary practice.  The morality of revolution—that the ends justify the means—becomes a morality that justifies corruption.  And when as many as 40 per cent of officials are not paid regularly they seek self-preservation in a morally ambiguous political climate.  This reality, coupled with the growing opportunity for corruption, has characterized China’s development.  The deviant officials of the deviant part-state can prey on wealth with no ideological discomfort because of the ambiguity over where the state ends and private life begins.Lu’s argument is similar to my own.  China has a well developed concept of the state, but communism cannot permit the conception of an intermediate public domain between state and civil society.  In this respect it is the faithful heir to the Confucian tradition of governance with systemic corruption.  Absolute power, along with moral exhortation to its official class to refrain from plundering the people, is preferred to offering institutional, legal or ideological protection in authoritarian states; but, founded on the doctrines of communist revolution, official are more powerful and more psychologically predisposed to corruption in a communist one-party state than in any other.  I have argued in earlier articles that corruption flourishes where social norms that might induce a sense of shame are weak, where there is a widespread belief that a high income results not from effort or merit butt from effectively working the system and were there is a belief that corruption is victimless—crime involves someone else’s money.  In China all three inducements to corruption exists in spades.  Add the peculiarities of communism and it is not difficult to understand why corruption is so dominant and so hard to root out.James Kynge, a former Beijing bureau chief of the Financial Times, writes in China Shakes the World that in China ‘trust is a commodity constantly under siege.  Poverty and competition for scares resources impinge upon it.  The ideological vacuum that replaced communism undermines it.  The daily diet of propaganda disorientates it.  The venality of officials devalues it.  The ascendancy of a value system dominated by money hollows it out.  What is left is a society in which describing someone as “honest” can jus as easily be a gentle criticism as a compliment.’The costs of this mistrustful, corrupt environment can be very high.  Kynge describes a crooked blood bank scheme in Henan in the 1980s that was run with the full knowledge of corrupt local officials.  Donors received blood back, minus its plasma, from a general blood pool that had been infected by HIV-positive blood.  The scheme seems to have left as many as one hundred thousand children orphaned.  Yet the enriched officials have arrested Aids activists, shut down orphanages and harassed journalists.  In another scandal, officials allowed companies to sell fake and poisonous milk powder that caused disfigurement and even deaths; even though officials have been imprisoned, the production has reappeared on the market.Corruption is part of the system’s DNA.  Jiang and his successor Hu Jintao have thus been disabled, despite their rhetoric and their attempted actions.  Legislative injunctions have to be implemented and policed by the very system which is corrupt and which disallows any external independent agencies because they would challenge the party’s political independent agencies because they would challenge the party’s political hegemony.  The party begins successive ‘rectification’ campaigns and inquiries, but these are compromised by the fact that the investigators are themselves corrupt and becoming more so.  The climate of psychological warfare creates an atmosphere of fear and uncertainty: corrupt individuals demand even higher bribes because the risks are higher.

The full book can be purchased online at Amazon here.