countzero's blog

Martin Jacques: Understanding the rise of China





Speaking at a TED Salon in London, economist Martin Jacques asks:  How do we in the West make sense of China and it's phenominal rise?  The author of "When  China Rules the World," he examines why the West often puzzles over the growing power of China.

We have been discussing some of the ideas presented by Martin Jacques for more than ten years and for those of you coming here, or just having an interest in general of the world we live in, it would not be a waste of your time to spend 20 minutes listing to Mr. Jacques speak on this topic.

Are you in China at the pleasure of the Emperor? Michael Sylvester

Le Petit Journal ran an engraving in 1898 about the West carving up China, which at the time wasking.jpg deemed to be the West protecting the world agaisnt the 'yellow peril.'  The term is often credited to Kaiser Willhelm in the same year that this cartoon first appeared. 

The governance that followed was known as the Treaty Port days here in China, which followed the Opium War days in the mid 1800's.   You know, that whole thing about Britian selling opium to the Chinese for silver.  After the Brits hooked the Chinese on opium, they then used the silver collected from drug dealers in China to buy tea with it in China to send back to England.  Often, here in the South, the drug lords and tea sellers were the same government actors.

SOPA vs The Great Chinese Firewall? Michael Sylvester


While there is such a thing as a Chinese firewall, even here it is perfectly legal to have a VPN that allows you to browse anything, anytime, anywhere.  

Meaning, it is expresely permitted to mask your online activity. As long as the State does not make any money on getting you that online access.  We even pay for ours with our Chinese credit card...   Interesting, especially when happening the same week that China topped 500 million online users.

Chinese legal topography. There is a way to get from A to B. Michael Sylvester

Remember back in school when you first saw a topographic map?  Some were even those threemap.jpg dimensional plastic things as big as a table that showed the lakes, rivers, mountains and such. They were like little models of the world that you could touch.  Totally cool when you're six. 

Well, I was always fascinated with them and when I was old enough to start sailing, it was a pretty easy transition to understanding the outlines of a coast, the depth of a channel, where the reefs were, etc... So, it is pretty cool that I make those for a living now here in Mainland China.

My maps come in the form of legal opinions, rather than in the fancy three dimensional colored plastic versions I first saw back in elemantary school - but they are maps, of a sort, just the same.

Picking your battles in China...Michael Sylvester

Sometimes, it does not matter who is right or wrong.  Life happens.  And while it is ok toskunk.jpg lose your patience or your sense of humor for a few minutes every now and agian - there are times when you are swept up in a series of events that are going to beat you whether you like it or not.

We do a pretty good job of keeping these to a minimum with our clients.  But, every now and again you just get sideswiped.  When that happens the only thing you can do is recognize you have to pick your battles and move on.

A tree branch falls on the power lines during a snow storm?  Get out the candles and call it a romantic night at home.  A freighter runs aground in New Zealand?  Send all your customers a link to CNN and figure out how to push the restart button.

China is not behind an iron curtain, but it might help you to think it is sometimes...Michael Sylvester

iron curtain.jpgChina is not behind an iron curtain, not formally anyway but it might help you to think it is sometimes...

For while there is a formal legal and financial system here, it is written to deal with the way the world works here...not where you come from.  This should not be a surprise but it still seems to cause great consternation when we are dealing with our clients.

Their law is written for their world and world view and particular circumstances and is not anti-anything really...

Yes, China is part of the world economy and things can ebb and flow into and out of China much more seamlessly than ever.  However, money flowing in or out crosses the border.  So, rather than worry about what you might be able to get away with inside China, the State here manages the choke point or bottleneck and leaves much of the rest alone as development charges on.   

China's emerging civil society openly arguing about the nation's public image in the Year of the Dragon? Michael Sylvester

There is an interesting argument going in the opinion / editorial pages of the local papersYear of the Dragon.jpg here.

To welcome the Year of the Dragon, China Post last week issued a stamp featuring an image of the mystical creature.  However, the design by Shenzhen-based Chen Shaohua has triggered controversey (among the Chinese themselves) as some have criticized the dragon stamp for appearing too ferocious and potentially damanging China's image abroad.

For example, writer Zhang Yiyi attacked Chen's design, saying it showed ignorance of how the dragon is seen in other cultures.

In response to the criticism, Chen Shaohua told the Shenzhen Special Zone Daily that he hoped his dragon would help exorcise evil spirits in 2012 and protect China's economy at a time of global financial turmoil.  

Secured Sourcing in China; Michael Sylvester

How does Secured Sourcing work?dots.jpg

X + 5% is how it works, meaning, the cost of your goods plus 5% that’s it.

No trading companies, no brokers, no agents, no commissions and no more worrying about pushing ‘send’ when transferring  funds for your next outsourced purchase in China.  You remain in contact with the shop floor on your orders, and we merely facilitate communications.  

We are not a trading company.  We act as local counsel to hundreds of companies from every corner of the world.  Now, after a decade of experience here on the ground, we are simply putting the lessons learned to work through Secured Sourcing.

Bailments / Molds / Tools in China; Michael Sylvester

worker.jpgA common tooling arrangement with a Chinese manufacturer outlines that a fixed number of production runs or units are required before the tooling is returned to you.   Sound familiar? 

If you have ever engaged in such an arrangement, you gave away your designs by approving the contract.  Here in China, a factory draws you in by offering to front the tooling costs to be returned to you after a certain time / production run period.  But, by doing so you have confirmed their ownership in perpetuity of both the tooling and the underlying design embedded in that tooling.  And because you gave your design away, you will never have a legally enforceable right to get it back.  I know there are varying opinions on this subject and if you want to pay someone a thousand dollars an hour to fight that fight for you, go ahead.  It will not work, but if it makes you feel better to buy your lawyer another yacht, so be it.  It is your money.

China Compliant Contracting

contract signing.jpgLet’s start with the basics.   While Hong Kong was ‘handed over’ to China in 1997, because of some unique treaty based obligations embedded in the Sino-British Joint Declaration first initialed in 1984, China and Hong Kong must be considered two separate countries for most business purposes, especially those dealing with outsourced manufacturing of goods. 

What about that contract you have with your ‘partners’ in Hong Kong?  Such an English language contract to procure goods over in Mainland China is not worth the paper it is written on if not also backed up with a China compliant contract in Chinese.   

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