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Tag: "china"

Sweatshops and the Trump Brand

[ 6 ] June 1, 2017 |

At least one person investigating labor conditions at the Chinese sweatshops for the Ivanka Trump brand has been detained by the state.

A labor activist who had been working undercover at a Chinese factory that makes shoes for Ivanka Trump and other brands has been detained by the police, as concerns rise over a crackdown on the country’s advocacy groups.

The activist, Hua Haifeng, who was working on behalf of the advocacy group China Labor Watch, was detained on suspicion of illegal eavesdropping, his wife, Deng Guimian, said late Tuesday. Mr. Hua and two other labor activists had been undercover at two Chinese factories that make shoes for Ms. Trump and other brands. They all disappeared on Saturday, according to their employer, China Labor Watch.

They were last seen in Ganzhou, a large city in southern Jiangxi Province. It is unclear whether the other two were detained.

The group had been investigating labor conditions at the two factories, one in Ganzhou and another in Dongguan. Their preliminary findings, which had not yet been made public, detail that workers were subject to exceptionally long hours.

Ms. Deng said a police officer from the Public Security Bureau in Jiangxi Province in south-central China called her on Tuesday afternoon to officially notify her of the detention. Mr. Hua could be held for days or weeks before being formally arrested.

Ms. Deng said her husband had worked for nongovernmental organizations, mainly related to labor issues, for more than a decade. She added that without his pay, it would be difficult to care for the couple’s daughter, 7, and son, 3, as well as three elderly relatives.

“I was panicked, very angry and almost lost control of my temper,” when the officer phoned, she said.

Li Qiang, the director of China Labor Watch, said that the three labor activists did not have any illegal eavesdropping equipment, and speculated that Mr. Hua and the other activists might have been detained over the use of cellphones. “Jiangxi police are just looking for an excuse,” he said.

The story here really isn’t the Trump brand. The Trump brand is definitely a useful entryway into the everyday horrors of the sweatshop and the repression of those who try to make them better or expose the exploitation that goes on inside those walls. If anti-Trump activism finally brings attention to sweatshops, then that’s a positive thing. But it’s like how Apple gets held up as representative for the problems of Foxconn and the electronics industry and McDonald’s for franchising and fast food. The exploitation and repression here is systemic. This is what happens to labor activists in China, Bangladesh, Guatemala, and other countries all the time. It’s only getting attention in the U.S. because it was Ivanka’s products the people were investigating. The story we should be focusing on is why workers have to suffer and die making our clothing.

This is also why telling Chinese workers to deal with the problem in China by pressuring their own government to make changes is a cheap argument that lets both apparel companies at the top of the supply chains and consumers off the hook. This is what happens when Chinese people fight for better labor rights in China. If we think these problems are important enough to solve, we have to hold corporations using these supply chains accountable. To do so, we have to demand that trade deals have enforceable regulations about corporate behavior and working conditions through courts or processes that everyday citizens can access and we have to open up U.S. courts for Chinese citizens or their associates in the U.S. to sue the companies for their actions in producing their good overseas.

Let this Trump story start moving us in that direction.


The Many Faces of Trump Foreign Policy

[ 115 ] January 18, 2017 |

From NBC. Admit it, you’d rather look at Nick Offerman than Donald Trump. Which is good. Because usage rights.

It won’t be too long before we start to get a better understanding of what foreign policy in a Trump Administration will actually look like. It’s useful to keep in mind that current rhetoric is no guarantee of future grand strategy. Remember when we all worried that the Bush Administration was going to be too isolationist? Good times.

But let’s assume, for a moment, that the past is prologue. Or the prologue is the main part of the book. Or whatever.

This raises an interesting puzzle: what the $@!#* • #!*$$%*(!! is he doing? Seriously. What the !#(&–^&!# stupid #$#(*$!! is going on?

As I noted in another post, on what godforsaken inhospitable bright orange gas giant is it a good idea to attack your most successful alliance at the same exact time that you’re picking fights with your nearest peer-competitor—that is, China? And it isn’t like the incoming administration has been sending unambiguous signals to key Asian allies while it’s been prodding China. Oh yeah, and also North Korea’s in the mix.

As I was thinking about this—duly motivated by a discussion among fellow international-relations specialists on Facebook—I took to the Twitters to work out some alternative theories. Here they are:

The Chess Master.” Trump is a strategic genius. He recognizes that the US cannot afford to defend Europe while threatening war with China. He needs to take Russia out of the picture. So that means a “grand bargain” that will concede to Russia its privileged sphere of influence, as well as forward some of its other strategic priorities in western Eurasia. Not only does this free up the United States to take on Beijing, but it might even entice Russia to remain neutral—or support the US. It’s like the Austrian Diplomatic Revolution. Which turned out terrific for Vienna.

“The Transactionalist.” This is the conventional wisdom on Trump. He thinks in terms of short-term zero-sum bargains, mercantilist economics, and is deeply insecure about being taken advantage of. In his mind, NATO helps trade competitors. It’s basically a trade subsidy for Germany. But he can make big, splashy deals with countries like Russia. Maybe he can squeeze better deals from the NATO allies as well. There is a “T” in NATO, after all. It doesn’t have to stand for “Treaty.”

“Mirror Universe Teddy Roosevelt.” Trump speaks loudly and carries… a small stick… in his freakishly small hands. He’s all bluster. US foreign policy will largely carry on as normal, under the watchful eye of Defense, State, and second-tier national-security staff. In fact, Trump’s barking might just get a few NATO countries to make token increases in their defense spending, or offer more subsidies for American troops.

“The Buffoon.” This is kind of like Mirror Universe Teddy Roosevelt, but he actually means it; cooler heads aren’t going to prevail. It really is that bad. In other words, Trump is an impulsive narcissist and a walking example of the Dunning-Kruger effect. Don’t worry too much about strategic logic. There really isn’t any. But some nice commentators—at Fox News, NewsMax, whatever new #MAGA journals appear, or the National Enquirer—will be happy to tell us that it’s genius. In a hundred years, Chinese revisionist historians will argue that there actually was a calculated grand strategy. They will be wrong.

“The Leninist.” The Trump ‘brain trust’—some combination of Bannon and Flynn—just want to burn it all down. This is something Cheryl Rofer (blog, Twitter) emphasizes. As reported at The Daily Beast:

“Lenin,” he answered, “wanted to destroy the state, and that’s my goal too. I want to bring everything crashing down, and destroy all of today’s establishment.” Bannon was employing Lenin’s strategy for Tea Party populist goals. He included in that group the Republican and Democratic Parties, as well as the traditional conservative press.

In this scenario, it’s all about shredding globalism and liberal order. And that means watching NATO and the EU burn. Or, at least, gumming them up. Here, the eerie overlap with Russian interests is all a matter of convenience. They hate the liberal order, because it benefits the US and its allies. The Trumpistas hate the liberal order too, because reasons.

“The Transnational Rightist.” The Leninist is to revolutionary Marxism as The Transnational Rightist is to parliamentary socialism. There’s nothing intrinsically wrong with NATO and the EU that a Europe dominated by a mix of right-wing populist and post-fascist parties won’t cure. The enemy is the broad European center—the Social Democrats, the Christian Democrats, and so on. What Trump wants is the rise of political co-confessionals, such as the AfD in Germany, the Front National in France, and the Freedom Party in Austria. Hurting the establishment is good, but burning everything down would be a bit too much. Maybe just the EU. NATO can stay. Is Russia an ally of convenience or a fellow traveller? For now, it doesn’t really matter.

“The Useful Idiot.” Is Trump compromised by Kompromat? Is his overleveraged financial spider web dependent upon, intertwined with, or simply looking for the best deals in Russia? Does Trump just having a thing for strong, buff autocrats? Who knows? It’s all bad.

“Tales of the Incompetent Transition.” Transitions often make for policy instability and amateur-hour mistakes. I arrived at the Pentagon in 2009. The Obama Administration had just rolled out its new plans for European ballistic missile defenses. They were much better than the old plans. They also involved ending the “Third Site” in Poland. That the Bush Administration had so carefully negotiated. Apparently, no one gave  Warsaw a ‘heads up’. Things were bumpy for a bit.

Point is, even well-run transitions full of experienced people can go bad. And this is not one of those transitions. Eventually, there will be national-security principals, assistant secretaries, deputy assistant secretaries, and the rest of the crew. People will be briefed. Many will have a clue. Things will settle down.

…. Of course, it could be any combination of these. And perhaps I’ve missed some possibilities. Thoughts?

[cross-posted at the Duck of Minerva]



Taiwan: The New Israel

[ 95 ] December 6, 2016 |
FILE - Sen. Bob Dole (R-Kansas) and President Richard Nixon outline the Republican campaign plans January 25, 1971. Dole said Wednesday May 15, 1996 he was quitting the Senate after 27 years to challenge President Clinton full time, ``with nothing to fall back on but the judgment of the people.''  (AP Photo, files)

FILE – Sen. Bob Dole (R-Kansas) and President Richard Nixon outline the Republican campaign plans January 25, 1971. Dole said Wednesday May 15, 1996 he was quitting the Senate after 27 years to challenge President Clinton full time, “with nothing to fall back on but the judgment of the people.” (AP Photo, files)

Glad to know that conservatives are looking to turn Taiwan into the new Israel, allowing the interests of a client state to supersede that of the superpower in order to serve right-wing foreign policy goals that severely undermine American prestige around the world. That Bob Dole is ending his long history in politics by seeking this goal should not surprise us.

Bob Dole’s lobbying Donald Trump on Taiwan went far beyond a congratulatory phone call from Taiwan’s president.

Dole, the only past Republican presidential nominee to endorse Trump before the election, briefed the campaign’s policy director, set up meetings between campaign staff and Taiwanese emissaries, arranged for Taiwan’s delegation to attend the Republican National Convention, and helped tilt the party platform further in the island’s favor, the disclosure released to POLITICO shows. He even arranged for members of Taiwan’s ruling party to take a White House tour, according to the filing.

Taiwan paid the 93-year-old Dole and his law firm, Alston & Bird, $140,000 between May and October, according to the new disclosure. His spokeswoman declined to comment.

Dole’s work is part of Taiwan’s decades-long investment in grooming conservatives to bolster its U.S. relations at China’s expense, dispatching lobbyists to ply Capitol Hill, feting congressional staff with trips to Taipei, throwing parties at a vast DC estate, and funneling money to China hawks at right-leaning think tanks.

Earlier this year, Dole set up a meeting between Taiwan’s representative to the U.S., Stanley Kao, and Alabama Sen. Jeff Sessions, a key Trump adviser and later his choice for attorney general. He also convened a meeting between Taiwanese diplomats and the Trump transition team. The disclosure didn’t specify exactly when the meetings occurred.

The filing also reveals Dole’s hand in making the Republican platform the most pro-Taiwan it has ever been. The 2016 edition added language affirming the “Six Assurances” that President Reagan made to Taiwan’s security in 1982.

Boy, how could this go wrong…..

And while I recognize that Bob Dole is not exactly a figure who attracts a lot of nostalgia, when Dole dies, can we please avoid talk of those days in the past when the Republican Party was full of reasonable moderates? It’s true enough that conservatism was less fanatical when Dole started his career but that was partly because it was out of power. Dole did more than his share to move this nation sharply to the right and continues to do so today, undermining national and regional security. Thanks Bob.

KFC Protests

[ 99 ] July 26, 2016 |


Personally, I’d protest KFC for its horrible food, but I guess this is also a reason to do so:

For years, authorities under President Xi Jinping have stoked nationalistic sentiments in China as part of a larger campaign to push Chinese Communist Party ideology. Part of that effort includes “civilization” volunteers, who are recruited by the Communist Youth League and tasked with spreading the party’s message online.

“Online” being the key word. It seems protesting in the street is a step too far for the Chinese government, which finds itself at the moment in the odd position of denouncing demonstrations against American fast food chain KFC — fueled by the very brand of aggressive nationalism they helped foment.

Since July 16, Chinese people in at least a dozen towns and cities have protested in front of KFC restaurants because they are seen as representing the interests of the United States. Many in China think US meddling helped lead to an embarrassing ruling on July 12, in which an international tribunal shot down Beijing’s extensive claims over the South China Sea.

Videos showing protesters confronting KFC customers have also gone viral on social media, where the rallies were organized.

Look, if the interests of KFC are the interests of the United States, then China should just conquer our country now. I mean, I could at least accept an argument that the nation be represented by Popeye’s. Or Five Guys certainly. But KFC?


[ 22 ] July 6, 2016 |

Above: Huang Mingwei

Did anyone blow up their fingers this weekend? Well, if you did or if you didn’t, know that the fireworks you enjoyed were made by Chinese laborers working in extremely dangerous conditions and then people may have died while making what you were exploding in fun.

On Sept. 22, 2014, Huang Mingwei fed her 2-year-old daughter, put on a peach-colored dress dotted with yellow flowers—her husband’s favorite—and cycled up the road to work.

It was a muggy first day of fall, a morning with nothing in particular to distinguish it from the decade of Mondays Huang had toiled at the Nanyang Export Fireworks Factory in southern China’s Hunan province. By that afternoon, 14 women—her co-workers—lay dead or dying in the rubble of the exploded factory, and Huang would begin a year-and-a-half-long hospital stay to treat severe burns covering 70 percent of her body. Of the 47 people working in the factory that day, only three escaped with no injuries. The rest became casualties of one of China’s most dangerous and ignored industries: the manufacture of the world’s fireworks.

In recent interviews, Huang, now 29, and other former Nanyang factory workers described the workday that nearly killed them and left their lives irreparably damaged.

Huang was in a packing warehouse when, at 3 p.m., someone in the building next-door triggered an explosion by sweeping rice hulls off the floor. The hulls, highly combustible materials used to burst the cardboard shell of a firework and heave its colored stars into the air, are a key ingredient in making fireworks. Chinese safety regulations dictate careful disposal of leftover hulls, but that day they were swept away like harmless debris, the casual meeting of friction with flammables setting off the catastrophe.

A fire engulfed the first building, then ignited a rolling series of explosions that swept through the too-close-set red brick shops like wind. Huang was knocked down by the first blast, got back to her feet, and ran outside, joining a rush of co-workers scrambling toward the hillside behind the factory. As the fire gathered fuel, flames shot skyward, sending shattered glass and bricks hundreds of feet. Building by building, the factory crumpled.

This is all perfectly preventable, as the article notes when it explores the details of both Chinese workplace safety law and the specific conditions inside the factory. But with all the problems in goods coming from China, the fireworks industry has not appeared on the radar of national or international groups who care about these issues. There’s only so much those who are committed can do if more people don’t join them and demand safe products.

Of course the United States could do something about this. It could say that it will not accept fireworks made from factories that do not have a proven safety record. It won’t do that because of course the geopolitics with China are far, far more complicated than the working conditions of a single industry or the working conditions of all industries. But it’s worth noting that shrugging our shoulders over this while we ooh and ah on Independence Day is not an acceptable response. On the other hand, to its credit, the Chinese government actually did something after this, jailing the factory manager and closing all the unsafe factories. This has actually led to a potential fireworks shortage. But the mangled workers are pretty much left out to dry for the rest of their lives because the government won’t pay for any surgeries that aren’t necessary to save their lives.

Organizing Chinese Walmart Workers

[ 8 ] June 11, 2016 |

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Walmart’s horrendous labor practices have long exploited the American working class and it’s anti-union extremism makes it a nearly impossible place to organize, despite significant resources from unions going toward efforts to open it up to unions. The same labor policies are in place in China and Chinese workers, increasingly empowered to stand up for themselves, are making the same complaints.

 Activists like Zhang Jun are part of an increasingly militant rank-and-file movement, which runs a loose network of about 5,000 Walmart workers across China, organized through social media, and has forged ties with labor advocates in Hong Kong and even the United States, with an open letter expressing solidarity. Though Walmart’s China operations count for just 3 percent of global retail sales (contrasting with China’s outsized manufacturing role in Walmart’s supply chain), they employ more than 100,000 workers at 433 outlets in 169 Chinese cities.

The Walmart brand itself turns out to be an ideal organizer. The plans to introduce “flexible” schedules as part of a workforce “optimization” program have galvanized workers’ anger across China, along with rising fears of labor deregulation.

Zhang Jun tells The Nation that under the initiative, workers would face intensified workloads and be deprived of legal recourse to challenge unfair schedule policies in the civil legal system. The destabilization of working conditions would “potentially make workers more fearful and less assertive in voicing their concerns on various grievances in terms of organizing unions,” he adds.

Walmart in China contends the “flexibility” initiative has “support from the majority of employees,” but it would “maintain open communication with” others “who are temporarily unable to understand,” reports The Sixth Tone. Walmart Corporate representative Marilee McInnis states via e-mail that the system “will enable Walmart to execute strategic talent management.”

Of course, if Walmart is using the same worker model in China as in the U.S., it can use its security model as the U.S. too, which is to call the cops for every little thing, effectively outsourcing its security onto taxpayers.

The Express-Times, like the Tampa Bay Times, found that Walmart was the site of more police calls in one year in its region than anywhere else. It published a similar story to the investigative report that had appeared earlier in the Tampa Bay Times and showed how Walmarts here had accounted for about 16,800 calls in a year, or two an hour, every hour of every day.

Casey then wrote to Walmart President Doug McMillon, urging the company “to examine its internal security protocol to ensure effective deterrence measures are in place and reduce the burden on local police.”

“Of course, police protect and serve every member of our communities, but the significant volume of calls from Wal-Mart stores raises serious questions about whether the company’s current security infrastructure effectively deters crime without overburdening local police departments, many of which already operate on stretched budgets,” the senator wrote in the letter, a copy of which The Express-Times posted online.

The Tampa Bay Times found that a large portion of calls to Walmart were for shoplifting, but an even bigger slice concerned general disorder, including drunk customers, mouthy teens and panhandlers. Experts said that more staffing, uniformed security and better store layouts could help Walmart deter many of those problems.

Casey contended that “large retailers like Wal-Mart bear responsibility to have in place reasonable security measures to assist in the deterrence of frivolous crimes.”

Reasonable security measures are for suckers. Walmart didn’t become a successful corporation through caring about anything but it’s bottom line. And I don’t doubt the Chinese police will be happy to help, especially if there are union organizers involved.

Can We Control Imports Based Upon Labor Standards in Production? Yes.

[ 8 ] June 6, 2016 |


There’s no good argument to be made that the United States can’t get a handle on the global exploitation of labor by placing bans on products made under certain conditions or from nations and companies that don’t open their factories to international inspectors. You can argument whether we should or the details about how such a program would work, but there’s no real argument that we can’t do it. That’s because we already do it.

Imports of the sugar substitute stevia, both extracts and derivatives, produced by PureCircle Ltd. in China will be detained at all U.S. ports of entry, after Customs and Border Protection announced June 1 that those products are made with the use of convict labor.

Customs Commissioner R. Gil Kerlikowske said companies must examine their supply chains “to understand product sourcing and the labor used to generate their products.” He said the agency “is committed to ensuring U.S. values outweigh economic expediency and as part of its trade enforcement responsibilities, will work to ensure products made with forced labor do not cross our borders.”

Producers use the leaves of the stevia plant to produce a sugar substitute.

U.S. law requires Customs to block imports that are made in whole or part by forced labor, including convict labor, indentured labor and forced child labor.

This is a result of the recent bill closing the loophole in the 1930 Tariff Act that allowed prison labor to make products if the products could not be acquired in any other way. China and American companies had blown that loophole wide open and now it is closed. If we care about labor standards overseas, if we don’t want 1100 workers to die when their factory collapses upon them, if we don’t want children to be exposed to massive pollution at school from clothing produced for the American market, etc., we can make the choice to stop it. We simply don’t make that choice. We don’t even have a national conversation around it. Closing the prison labor loophole and banning products made by convicts is not the end of creating international labor standards that provide workers dignity. It’s just the very beginning.

Chinese Pollution, Chinese Philosophy

[ 52 ] May 26, 2016 |


You owe it to yourself to read this interesting essay the intersection of Chinese philosophy and contemporary Chinese air pollution. Just a quick excerpt:

According to professor Liu, the Chinese word for pollution, 污染 [wu ran], has a very specific meaning. The first character of the word, 污 (wu), consists of 氵, the three dots of the ‘water’ radical that signified a meaning related to water, and the word 亏 (kui), which on its own means loss, or deficiency. The second character of pollution, 染 (ran), which also has the ‘three dots of water’ in it, means to infect, or to dye. In this sense, pollution in Chinese implies an action in which something foreign intrudes into something else, and by that, disturbs its purity. Taken literally, pollution is what happens when a foreign substance is mixed in with water, causing it to become impure.

Even though it might seem that the pollution is a recent problem, its seeds were sown much earlier, before China overtook the United States in 2015 to become the world’s largest economy, before China’s booming years in the 1990s when it became the world’s largest factory, and even before former leader Deng Xiaoping opened up China’s economy in the late 1970s to private enterprises and the rest of the world. According to the Professor, it was Mao who essentially changed China’s relationship to nature.

“In the past, Taoists believed that everything in the world, including humans, had to follow the rules of nature,” he explained. “But since Mao, we came to believe that we can manipulate the world to our own will.”

After the People’s Republic of China was officiated in 1949, Mao set out to transform the new nation from an agricultural society to an industrial powerhouse. Using newly developed scientific ideas and technologies, with much of its early stages based on the Soviet model, natural resources were all subjected to rapidly expand heavy industry, a maniacal increase in steel and coal production, and an amped-up agricultural yield by collectivizing traditional farms into agricultural co-operatives. Human lives were seen as natural resources too, and between 1958 and 1961, tens of millions of lives were lost in a famine caused by The Great Leap Forward, a Mao-led movement that urged farmers to prioritize steel production over farming, forcing many to melt their pots and pans in make-shift backyard furnaces to reach the steel quotas. The Professor traced the lineage of contemporary large-scale production and the technological conquering of nature back to Mao’s legacy.

“In the Mao era, [mankind] didn’t just think that [it] could manipulate nature, but believed that [it] should.”

These questions were very urgent to contemporary Chinese philosophers.

“What we care most about is: Is this the necessary road for humans, going from an agricultural to an industrial and then to a developed society? And in that, do we have to pollute?”

Of course, this was all just another way to get at the connections between personal wealth, national glory, and modernization, all of which has prioritized pollution over sustainability.

Read the whole, etc.

Chinese Energy

[ 3 ] May 7, 2016 |


Interesting developments in Chinese clean energy, which is of course of vital importance for the future of the planet, not to mention the health of the Chinese people.

China’s order to suspend coal-fired power plant approvals in some provinces will help alleviate grid congestion that has left clean-energy capacity idle, according to the World Resources Institute.

As part of efforts to prevent unnecessary competition between fossil fuels and renewables, the government will use an early warning mechanism to forecast and discourage local planning that may exacerbate coal power plant overcapacity, researchers Song Ranping and Hong Miao wrote in an April 27 blog post on the WRI’s website.

Solar capacity in the nation has soared more than sevenfold since 2012, while wind has almost doubled as China seeks to derive 15 percent of its energy from renewables and nuclear by 2020, according to Bloomberg data. The additional capacity has taxed the grid’s ability to transmit the influx of clean power.

Some of China’s renewable plants are idle as operators are unable to sell their output. The idle rate was 15 percent for wind turbines last year and about 31 percent for photovoltaics in the northwestern province of Gansu, according to data from the National Energy Administration.

Obviously these are just first steps on what should be a road of suspending all coal-fired power plants. That’s a hard row to hoe because, as the linked article later discusses, in China fossil fuels have priority over renewables, which is also mostly true in the United States. These two nations have to lead the way on changing that and both are struggling with it. But this is good, if limited, news.

Sinoizing Chinese Place Names

[ 29 ] March 27, 2016 |


China is extremely worried that its citizens are being good to Chinese because they are naming things like housing developments after foreign places. Evidently, this will “violate the socialist core values and conventional morality,” showing once again that socialism in China has absolutely nothing in common with anything having to do with actual socialism. Of course, China is fighting what is no doubt a losing battle, especially considering those who care about this the most are probably the same wealthy people who are increasingly internationalized.

Once a name is in use, though, changing it can be problematic. Officials tried to rename a street in Zhengzhou, the capital of Henan province, ostensibly because the Chinese character used to represent its foreign name was often mispronounced by people unfamiliar with the place, China National Radio said. But residents objected and filed a lawsuit to block the change, citing the potential loss of historical identity.

Previous efforts to change foreign place names in China have not been wholeheartedly embraced, either. In the southeastern city of Fuzhou, a housing development known as Fontainebleau was ordered by local officials to change its name, which became Gaojiayuan. Afterward, one resident complained to a local newspaper that she missed her bus stop after the signs were changed.

And a real estate agent confessed that while the official name was now Gaojiayuan, for the purpose of selling houses it would always be called Fontainebleau.

Personally, I am just amused that the Chinese are building houses that are supposed to emulate log cabins in Jackson Hole, although in a nation that populated, it’s a horrible use of land.

New Adventures in Capital Mobility

[ 29 ] February 21, 2016 |
epa01150223 Two men carrying goods to be recycled ride their flatbed tricycles past a red Porsche Cayman parked outside a high end housing complex in Beijing, China, 18 October 2007. Chinas economic growth is widening the gaps between the rich and the poor. By the government's own statistics, 20 million people in China still live in absolute poverty, and tens of millions more on less than a dollar a day, while a survey published last week found that the number of dollar billionaires had exploded to more than 100 last year from just 15 the year before. China's leader Hu Jintao announced in his speech on the first day of the 17th communist party conference, that the tax system would be reformed to redistribute wealth from the super-rich to the poor. EPA/DIEGO AZUBEL

epa01150223 Two men carrying goods to be recycled ride their flatbed tricycles past a red Porsche Cayman parked outside a high end housing complex in Beijing, China, 18 October 2007. Chinas economic growth is widening the gaps between the rich and the poor. By the government’s own statistics, 20 million people in China still live in absolute poverty, and tens of millions more on less than a dollar a day, while a survey published last week found that the number of dollar billionaires had exploded to more than 100 last year from just 15 the year before. China’s leader Hu Jintao announced in his speech on the first day of the 17th communist party conference, that the tax system would be reformed to redistribute wealth from the super-rich to the poor. EPA/DIEGO AZUBEL

Chinese capitalists are getting inventive in getting their money out of China.

But China’s experience has often proved that money will find a way to flow where it wants. In a post published on Sunday on Seattle-headquartered law firm Harris & Moure’s China Law Blog, Mr. Harris detailed his conversation with an adviser to a Chinese company. The adviser had called him essentially to ask Harris & Moure to help the Chinese company deliberately lose a lawsuit for a phony breach of contract that would result in a payout of $3.5 million, which the Chinese company would then send to the U.S.

The money, as it turns out, would be paid to entities in the U.S. controlled by the Chinese company itself.

Mr. Harris told China Real Time that the company, a privately-held Chinese manufacturer, wanted to pursue such a fake arbitration, rather than fake a simple legal settlement for the same amount of money, because it was concerned about convincing government regulators who have been closely scrutinizing offshore remittances.

“They wanted it to look really official,” he said in a phone interview. “Arbitration also moves quickly, so they could conceivably do it within three months.”

Mr. Harris said he got the call in the last two weeks, and it was the first and only of its kind he’s so far received. He said he altered the nationality of the adviser recounted in his blog post – the adviser was a Westerner, but not Australian – to shield the identities of those involved.

It became clear to Mr. Harris in his conversation with the Western adviser to the Chinese company that there wasn’t even a real counter-party in the U.S., where the Chinese company wanted to move its funds. “We would have helped to form this company that would have sued this Chinese company,” he told China Real Time.

Curious as to how China deals with these issues going forward, especially as large swaths of its wealthy class really sees the West as a more desirable place to live.

Cheap American Labor

[ 20 ] December 5, 2015 |
Dothan Mayor Mike Schmitz (left) and Lian Ning (center) gesture with Schmitz's signature go-go-go sign after announcing that his company, Nanjing Zijin-Lead Electronics, would open a small 3D printer manufacturing facility in Dothan during the U.S.-China Symposium inside the Dothan Civic Center on Friday.

Dothan Mayor Mike Schmitz (left) and Lian Ning (center) gesture with Schmitz’s signature go-go-go sign after announcing that his company, Nanjing Zijin-Lead Electronics, would open a small 3D printer manufacturing facility in Dothan during the U.S.-China Symposium inside the Dothan Civic Center on Friday.

It’s hardly surprising that if American companies are scouring the globe looking for the cheapest and most easily exploitable labor possible that Chinese companies would do the same within the United States when it is in their interests to do so. This story of how Alabama gave a ridiculous package of tax breaks and benefits to a Chinese company in order to draw low-wage work with no chance of advancement is quite depressing.

To help push the deal, Alabama Gov. Robert Bentley (R) dined with Li. Company executives visiting the region were greeted with imported Chinese tea and Mandarin video messages. Alabama’s state workforce team explained how, if chosen for the job, they would visit Golden Dragon’s Chinese headquarters, study the process, and make videos and training courses for the new U.S. employees. In Alabama, Golden Dragon wouldn’t pay taxes for 20 years; it would get free roads and land.

Alabama also did something no other state was willing to try: Its legislature passed the “Made in Alabama” act, a tailored law that allowed the state to reimburse Golden Dragon for several prior years of tariffs. A version of the law had first been drafted by Cheng and a lawyer, according to Cheng and a lawmaker who sponsored the bill.

Ultimately, the company was given the choice of the reimbursements or an extra $20 million in cash. Golden Dragon chose the cash.

All told, according to interviews and documents reviewed by The Washington Post, Golden Dragon received subsidies worth some $200 million — the bulk of it in local and state tax abatements, plus the cash, $5 million in land and road costs, and nearly $2 million in worker training. County leaders say they had little choice: They had spent years trying to lure companies, reaching out unsuccessfully to more than 100. Even Golden Dragon only settled on Wilcox after a site in a neighboring county proved too small.

The problems here are multiple. First, if the poorest counties in the country are giving these tax breaks, that means that there are no taxes to improve the reasons why the counties are so poor to begin with–poor education, underdeveloped infrastructure, under-trained workforce, etc. Second, the workers, as this article explains in good detail, simply cannot live middle-class lives with these jobs. They barely make enough money to survive. The promises of the Asian companies that this will benefit the states and the workers aren’t proving out. These jobs are better than unemployment–but they aren’t that much better. These jobs don’t build hope and they don’t build a future. The county is no better off than before.

Given that it’s Alabama, I’m amazed that the workers voted to form a union–but it passed by a single vote, giving the company little reason to take it seriously and it has naturally dragged its feet. Good luck to them. But as a whole, this is no way for Alabama to build up its economy.

It’s also worth noting that today is the anniversary of Alabama repealing its child labor law in 1894 in order to attract New England textile factories fleeing worker agitation and state restrictions on how it treated labor. That really built the Alabama economy too.

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