Category Archives: Politics

Tip of the Iceberg?

In an interesting turn of events, Brazil has passed China as the number one destination for private equity investments. In the economic and political realm this is an important occurrence as it is evidence of many of the different topics I have previously discussed in regards to China. This includes potential political instability, an economy stifled by restrictions, and consistent issues with human rights.

Brazil is less competitive and is perceived as having little or no political risk.

-Sarah Alexander, CEO/President of Emerging Market Private Equity Association

Is this the most significant thing to ever happen? Certainly not. However, it shows that the world is apprehensive about China’s future. Private Equity is a form of investment in which the investor gives money to a company and in return gains a significant portion of said company. What is important to note here is the aspect of ownership, and that as China’s fall in the rankings is evident of people’s decreased willingness to take ownership of a Chinese entity do to uncertainty. 24% of private equity investors cited political risk as a factor deterring their investment in China whereas in Brazil only 3% voiced this concern.

Do not get me wrong however—China is still number two in the world and is regarded by many as a highly attractive investment opportunity. The growth potential is tremendous as is shown by its 9.7% growth rate this previous quarter, and opportunities are present.

As I previously noted what interests me most about the change is the actual change itself. In some of my older posts I discussed the fact that at some point in the near future I thought signs of instability in China would emerge. This may not be a massive situation, however it is indicative of the larger issue at hand: people are skeptical of China because of the way it operates. I firmly believe that it is only a matter of time before we see some massive changes.

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Arresting the Artist

Not to beat a topic to topic into the ground, but I am once again dedicate a post to the notion of Chinese “voice suppression.” However, rather than this being a case in which a protest or gathering is broken up, a unique situation has arisen: a once beloved Chinese artist has now been arrested due to his growing political position which challenges the current communist government.

“Whether Ai Weiwei is right or wrong, this is still really big news, a really hot topic. I never thought, never thought, that the domestic media would actually lose the power of speech, and act both deaf and dumb. Sad, really sad.”

-Liu Xiaoyuan, Weiwei’s lawyer

Ai Weiwei

Al Weiwei, one of China’s most famous artists, has been arrested on dissent charges. The Chinese government has been on a six week campaign to reign in public opposition to their operations, and Weiwei made no exception. His detainment is of the upmost interest for in 2008 he was one a trusted cultural ambassador for China when they hosted the Olympics.  He even helped design the Bird Nest stadium that garnered so much praise during the event. Weiwei however boycotted the opening ceremonies to demonstrate his opposing views to China’s current political system. Since boycotting the games, his sentiment has only become more and more public, and in the wake of the recent uprisings in the Middle East, the Chinese government could tolerate Weiwei no more. When trying to board a flight on Sunday morning from Beijeng to Hong Kong, police took him. Similarly his apartment was searched and his wife also detained.He has not yet contacted his lawyer leading many to believe he is in some sort of odd legal scenario without boundaries.

As I have alluded to in previous posts, there is certainly something brewing in China in regards to human rights. Clearly the government understands this for they have made several blatant attempts, like arresting Weiwei, that show their desire to end the dissent. As more and more instances like these occur I become more inclined to believing that something big is going to happen in the near future. Although in my previous posts I noted I did not think that a major revolution could be around the corner, I am relaxing that opinion. I think the more public instances in which the government aggressively tries to combat opposition occur, the more likely we are to see uprisings. Weiwei has 70,000 followers on Twitter.

The Birds Nest

I’m sure they are not particularly thrilled he was just yanked off the streets because he wasn’t on the communist bandwagon.

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Filed under Cultural, Politics

How to Spread the Word Without an Effective Means?

Over the past few weeks, the notion of media impacting political changes has been mentioned quite frequently. Specifically, heavy attention has been drawn to the use of Facebook and Twitter in regards to their role in the crisis in Egypt, and now Libya. Protestors and activists used both of these social mediums to stage gatherings, and many believe they were the tools of success. However one thing that is not mentioned is the fact that one key element of society must be in place for any social medium to successfully operate: freedom of speech.

In a March 24th article in PC World magazine, co-founder of Twitter, Biz Stone, discusses the company’s role in the recent uprisings, as well as its possible relationship with the China. When asked about such relationship between the, Mr. Stone replied by stating:

“Our philosophy is that open exchange of information can have a positive global impact, and that’s not China’s philosophy.”

Regardless however, Mr. Stone did say that the company was searching for new ways of becoming an effective company within China. With over 100 million users, Twitter is growing on a daily basis.

So how are all these things intertwined? I really think that within the next two years, freedom of speech rights will become a more pressing issue within China. The recent demonstrations in Egypt and Libya show the discontent of massive amounts of people with their governments and their ability to use social mediums to address their concerns. In China, I noted the Jasmine Revolution in support of democracy. It was immediately stifled. It showed however that some Chinese people are dissatisfied with their lack of freedom, and I am curious as to what will be done in response. Since Twitter does not exist, and practically all other social mediums are censored to the upmost degree, how will meaningful gatherings and protests be able to occur? I can’t say from experience, but I can imagine organizing such things require an immense amount of effort and carefulness. This is why Twitter is so valuable for such circumstances; it is simple and effective in that it reaches tremendous numbers of people.

I’m not claiming that massive unrest will hit China soon, but in the event that people do decide to make a change, how will the word be spread?

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Filed under Cultural, Politics

Voice Suppression

I mentioned in my post “Innovation Deprivation” a few weeks ago that I found it hard to believe China would be able to topple the U.S. as a world power as long as its communist government practiced violence and oppression towards its citizens on a regular basis. As each day passes it is becoming clearer and clearer that China is facing serious issues in regards to human rights, and there is no telling how the overall situation might play out.

In a February 20th Wall Street Journal article entitled “Call for Protest Unnerves China,” it is described in great depth that the censorship and overall control stemming from the government is not looked favorably upon by Chinese citizens. The most recent display of oppression can be seen in the Chinese government’s issuance of police officers to stifle the “Jasmine Revolution,” a pro-democracy protest (originating in Middle East) among 13 different Chinese cities. In response to these demonstrations, the Chinese government blocked the word “Jasmine” in all search engines, confined at least 100 individuals that publicly supported the movement to house arrest, and publicly arrested supporters of the cause. The most recent showing of this was when man laid down several Jasmine flower petals, and tried to take pictures of them on his cell phone. Chinese authorities immediately detained him.

Chinese Authorities Intervene in "Jasmine Revolution" Protest

Although this issue of human rights is only one element of a nation, it is certainly an important one. One of the greatest triumphs in American history was the signing of the constitution, which allowed individuals to freely voice their opinion government without repercussion. Ultimately, this has given Americans an opportunity to have their voices heard, thus giving those who do make the rules an opportunity to mend policies for citizens’ benefit. How could that possible in a country such as China where people’s opinions are not only disrespected, but silenced?

Sure, the Chinese economy may be growing at a rapid rate, and its cities are experiencing commendable growth. In the human rights department however, it seems as though the country is digging a deep hole to nowhere.

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Innovation Deprivation?

“We need to out-innovate, out-educate and out-build the rest of the world.”

-U.S. President Barack Obama during 2011 State of the Union

In the eyes of many including Barack Obama, the U.S is facing serious issues. The economy is unstable, healthcare reform is troublesome, and of course, international politics are not so simple. (See the Middle East) However, while elaborating on all these things in his recent State of the Union speech, President Obama spent serious time discussing a different crisis; a decline in American innovation. Why does this scare him, and so many people others around the United States? Because to those individuals, a lack of U.S. innovation signals a greater problem—lost ground to China, the United States’ top competitor. There is no doubt that the U.S. should forge ahead with programs to boost innovation capabilities, however is it time to panic just yet?

The real answer is no. The U.S. is the world’s leader in education, business, human rights, as well as several other important domains. Take Duke University for example: It is home to a host of students from different ethnicities and nationalities. Duke produces leaders in wide variety of realms, and affords its students a top-notch education. Duke demonstrates the United States’ strength in that it is one of several institutions that operate at this high level.  According to a US News and World Report, 31 of the top 100 universities in the world are located in the U.S. whereas China only has 2. In regards to lost innovation in business, if one simply reflects back to U.S. accomplishments over the past 10 years, it is clear that there is no deprivation of creativity. Facebook, twitter, and Google are the products of American individuals and companies, and they are just a few of the several companies that have been immensely successful and changed the quality of life. China, although creating ingenious products like the Toyota Prius, has not experienced the same success. Lastly, China cannot compare to the U.S. to cultural acceptance and human rights. The easiest way to illustrate this is through the fact that in 1989 the events at Tiananmen Square occurred, but still to this day, Chinese individuals do not have access to information regarding what happened. Their Internet is censored, and their ability to search freely, and voice your opinion is heavily limited. In the U.S., freedom of speech and ability to browse is practically a given.

Do not take everything said to mean that U.S. does not have several things to address. Although both citizens of the U.S. as well as the government need not to panic, there is validity in the claim that heavy emphasis should be placed on growing innovative capabilities within the states. China has rolled out a program that includes both big investments in national industries as well as patent laws that favor Chinese companies. Similarly, the Chinese government is requiring that all foreign companies transfer their technology to China before selling their products in that market. Without taking the appropriate steps, complacency would be troublesome for America. However, if handled correctly, the U.S. should, and will remain on top.

The question then becomes, how can the U.S. address this issue? It’s a loaded answer, but for starters, it’s an absolute necessity that the United States begins incentivizing innovation. Companies should be rewarded for creating cutting edge products, and individuals should want to create new things. The U.S. government could attempt a subsidy program, or better yet for large corporations, tax breaks. Or perhaps award scholarships to those students who are able to come up with beneficial ideas. Things such as this will have the effect of instilling a drive in these groups to enhance research and development, which in the end produces results. I am aware it is much easier said than done to install programs, however there are several viable options that could yield positive results.

When it comes down to it, the U.S. was founded on the notion of creativity and innovation. It is what allowed the forefathers to create such a unique and successful nation. Without the consistent presence of new products and ideas, the U.S. would not have sustained over time. In order to last another 200 years as the preeminent world power, America needs to dig deep and explore its creative side. Although now is not the time to sound the alarm, that day could come down the line, if the issue of innovation is not addressed.

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