Chinese President Hu Jintao reportedly will ask that President Bush personally express his opposition to the upcoming referendum in Taiwan over U.N. membership. Evidently, statements of opposition from Deputy Secretary of State John Negroponte (on Phoenix TV in Hong Kong) and former CIA analyst (and now National Security Council member) Dennis Wilder have not satisfied the Chinese authorities. According to the World Journal of September 3, Hu will make the request when he meets President Bush at the upcoming APEC (Asia-Pacific Economic Cooperation) meeting in Australia. A tempest is now brewing over a matter that Washington should have dismissed with a simple “no comment.”
Beijing is clearly worried that democracy in Taiwan will get out of hand. It has evidently been warning and threatening us—perhaps, and this is my own speculation, suggesting the Chinese government might undertake some symbolic or real military action if a “red line” is crossed. This would be most unwelcome given the current state of Iraq and Afghanistan. So Washington has made a huge effort to make absolutely certain that no trouble develops in Asia—leading to an overreaction that is proving seriously counterproductive.
Is a Chinese cyber-war against the West underway? Let us connect the dots.
In the most recent episode, earlier this month, Chinese hackers, operating out of Guangzhou and Lanzhou, two regions that are strongholds of the People’s Liberation Army (PLA), invaded the computer systems of key German-government ministries in Berlin.
Last November, the United States was hit, and not for the first time. Chinese hackers entered the network of the Naval War College, the Navy’s school for senior officers, forcing the closure of its internal network and the temporary suspension of all email accounts.
That followed an attack in June on the computer systems at Taiwan’s defense ministry and also the American Institute in Taiwan, the de-facto U.S. embassy there.
Then there is Titan Rain, the U.S. codename for an entire series of attacks on U.S. facilities from 2003 to 2005, that included raids on the U.S. Army Information Systems Engineering Command at Fort Huachuca, Arizona, the Defense Information Systems Agency in Arlington, Virginia, and the Naval Ocean Systems Center in San Diego. All are thought to have originated in China.
The British parliament was also attacked in 2005 by hackers believed to be located in China.
What is behind all these episodes?
In the past few days two Chinese officials have threatened to employ the “nuclear option” against the United States: selling dollars and U.S. Treasury obligations to retaliate against possible American legislation. Congress is now considering bills meant to counter Beijing’s tight control of the value of its currency, the renminbi. China possesses somewhere in the vicinity of $1.3 trillion of foreign exchange reserves. Analysts believe that the Chinese government holds about $900 billion in dollar assets.
“I personally believe we have so many foreign exchange reserves that we should be smarter in setting the issues,” said Xia Bin, one of the officials, at the end of July. “It should at least be a bargaining chip in talks.” This is the first time that a senior economic adviser to Beijing publicly has suggested using China’s reserves for political leverage. He Fan, the other official, wrote in the China Daily on Tuesday about Beijing’s causing “a mass depreciation” of the greenback.
Next year, at eight seconds after 8:08 on the evening of August 8, the most important event in the most populous country in the world will begin. At that moment, the Olympics in Beijing will start—and the People’s Republic of China will announce its arrival in the century it believes it will own.
Today, to mark the one-year countdown to the XXIX Olympiad, Beijing staged a grandiose nighttime ceremony in Tiananmen Square, the symbolic heart of the Chinese nation and the scene of mass murder in 1989. China’s Leninists are good at organizing gargantuan rallies glorifying themselves, and this extravaganza, which included International Olympic Committee President Jacques Rogge, was no exception. The anthem for the event was “We’re Ready.”
Will Beijing’s leaders be ready a year from now? Amnesty International, in a report issued yesterday, urged Communist Party officials to stop repressing the Chinese people. In an accompanying statement, Amnesty said “time is running out for the Chinese government to fulfill its promise of improving human rights in the run-up to the Games.” The report came out on the same day as one from Human Rights Watch and another from the Committee to Protect Journalists. On Monday in the Chinese capital, Reporters Without Borders unfurled a banner showing the Olympic rings as handcuffs. Beijing authorities detained and roughed up journalists who had staged the protest. Yesterday, activists at the Great Wall displayed a large banner reading “One World, One Dream, Free Tibet 2008.” They were detained as well.
This morning, the New York Times reported that Chinese authorities, working with the FBI, seized more than $500 million of counterfeit Microsoft and Symantec software and arrested 25 people involved in the counterfeiting operation. “This is a real milestone,” said David Finn, Microsoft associate general counsel. Finn is right. The Chinese deserve great credit for busting a ring that looks as if it were responsible for at least $2 billion of pirated software sales. (As Gao Feng, Deputy Director General of China’s Ministry of Public Security, has said, profit margins for software piracy exceed those for drug trafficking.)
Unfortunately, with those enormous profits, counterfeiters have been able to buy off the political system maintained by the Communist Party. Officials at the lowest rungs of that organization personally profit from protecting counterfeiters and often own part of the counterfeiting factories. The officials then buy protection for themselves from their superiors in the Party’s entrenched patronage system. The upshot of all this? Piracy in China is not going away anytime soon.
So what can foreign owners of intellectual property do? For one thing, they can publicly demand that Beijing protect their rights as vigorously as it has protected the five Fuwa, the cutesy mascots for the 2008 Summer Olympics. China has stopped counterfeiters from knocking off Beibei the fish, Jingjing the panda, Huanhuan the Olympic flame, Yingying the Tibetan antelope, and Nini the swallow. Yes, the latest raid reported by the Times is good news indeed, but there’s a lot more the Chinese government can—and should—do.
Since the awarding of the Olympics to China in July 2001, no major world city has changed more than Beijing, with its massive new construction of roads, bridges, terminals, hotels, and other facilities promised for the Games. According to official estimates, the Chinese government will spend $37 billion to get ready for next August. That is almost four times what Athens disbursed for its summer Olympics, which was by far the most expensive ever staged. Yet the 2008 Games may end up costing China over $100 billion, after taking into account the relentless building and “beautification” campaigns currently demolishing “illegal urban villages.”
Last week, the Geneva-based Centre on Housing Rights and Evictions issued a report claiming that 1.25 million Chinese citizens have been displaced from their homes in advance of the 2008 Olympics. Another quarter million or so will be forcibly moved between now and the opening ceremony. All told, an estimated 512,100 households and 1,483,300 people in Beijing will be affected. Some have received no notice of eviction and others no compensation.
China has denied the accusations. “The report is sheer groundless [sic],” said Jiang Yu, a foreign ministry spokeswoman. According to her, every relocated person received compensation and no one was forced to leave Beijing. The government maintains that only 6,037 households have been resettled since 2002.
Last Tuesday, in ten towns across Rongxian county in southern China’s Guangxi Zhuang Autonomous Region, several thousand peasants stormed government offices, torched patrol cars, and fought armed police over fines imposed to enforce Beijing’s one-child policy.
The Rongxian disturbances occurred less than two weeks after approximately 10,000 peasants rioted over the same policy in nearby Bobai county. In Bobai, protesters also set fires, smashed cars, and damaged and looted a government office. As many as five people—including three population-control officials—may have died. Protests occurred in 28 Bobai townships over a three-day period. The central government’s one-child rules vary, depending on location and other factors: Bobai regulations permit families one child if the first was a boy and two if the first was a girl.
Heavy fines helped cause the Bobai disturbances. Some of the penalties were as high as $1,300—in an area where annual incomes average about one-tenth of that amount. Failure to pay such a fine within three days of its assessment can result in the destruction of a family’s home and the seizure of its personal property. There have also been more than 250 instances of the application of “population-control measures”—forced sterilizations and forced abortions—in Guangxi in the last three months. The Guangxi demonstrations appear to have been triggered by this sudden two-pronged crackdown.
Eighteen years ago today, elements of the vicious 27th Army were mopping up scattered resistance in the center of Beijing. Most of the fighting occurred in the streets west of Tiananmen Square, where Chinese citizens took on armored vehicles with rocks. By the time the People’s Liberation Army pushed its way to the symbolic heart of China, the death toll had reached hundreds, perhaps thousands.
Beijing’s leaders do not permit commemoration of the dead and rarely talk about “that 1989 affair,” as they now euphemistically call it. In Hong Kong, however, Tiananmen remains close to the center of public discourse. This year’s June 4 vigil—an annual event in Hong Kong—attracted 28,000 residents, according to police, and 55,000 in the estimation of organizers. The crowd was about 10,000 larger than it was last year.
The increased turnout was no surprise. Ma Lik, chairman of the main pro-Beijing political party in Hong Kong, recently stoked public debate on Tiananmen. “We should not say the Communist party massacred people on June 4,” Ma told a group of journalists last month. “A massacre would mean the Communist party intentionally killed people with machine guns indiscriminately.” His larger point was that Hong Kong, now a special administrative region of China, should not have universal suffrage until its students have received “proper” national education. The fact that people still use terms like “massacre” show, in Ma’s opinion, the citizens’ lack of “heart-felt” patriotism.
This month Beijing is sending one of its largest delegations ever to visit America. Headed by the “Iron Lady of China,” Vice Premier Wu Yi, the group will participate in the second round of Treasury Secretary Hank Paulson’s Strategic Economic Dialogue, which begins in Washington next week.
In the last two weeks, Paulson has been trying to lower expectations for the upcoming discussions with the Chinese. That’s smart strategy. The first round of the dialogue, held in Beijing last December, was an abysmal failure. And the talks later this month are bound to be contentious: the Bush administration in March announced it would reverse decades of trade policy by imposing countervailing tariffs on products from non-market economies. The U.S. has also filed a series of World Trade Organization complaints against China: one in February and two more last month. The February case complains of nine discrete sets of manufacturing subsidies. The cases last month target both Chinese piracy of American intellectual property and China’s internal restrictions on the distribution of foreign films, music, books, and journals.