Expat egress

China expat

When China was still cool

The Golden Age of the Expat in China is decidedly over:

Fifteen years ago in California, a tall technology geek named Steve Mushero started writing a book that predicted the American dream might soon “be found only in China.” Before long, Mr. Mushero moved himself to Shanghai and launched a firm that Amazon.com Inc. and Alibaba Group Holding Ltd. certified as a partner to serve the world’s biggest internet market.

These days, the tech pioneer has hit a wall. He’s heading back to Silicon Valley where he sees deeper demand for his know-how in cloud computing. “The future’s not here,” said the 52-year-old. […]

Now disillusion has set in, fed by soaring costs, creeping taxation, tightening political control and capricious regulation that makes it ever tougher to maneuver the market and fend off new domestic competitors. All these signal to expat business owners their best days were in the past.

And employees as well, due to rising competition from Chinese talent and escalating language requirements. I wrote about it here.

Incidentally, I interviewed Mushero for an article about cloud computing in mid-2014. This is what he had to say:

“The market itself, even without the foreign players, has exploded in the last year,” says Steve Mushero, CEO of ChinaNetCloud, a foreign-owned sever management and cloud computing company based in Shanghai. When ChinaNetCloud started running cloud services in 2008, there was virtually no competition, and even until last year, Mushero says, the industry had very few significant players.

In retrospect, I arrived in China near the tail end of the expat optimism bubble (2010). Even in early 2012, an article like this rang true. (“China wants you. Job prospects are abundant.”) The turning point was probably around 2012. Now the word on the street is that China is a place to leave, not start your career. There are many exceptions of course, but the overall trend is clear.

Now an expat who has anchored himself to mainland China by working long-term and starting a family there, is less likely to exult about the opportunities in his host country than to sheepishly explain why he can’t leave.

France braces for more protests

The revolt of the Yellow Vests continues this weekend:

France was in lockdown early on Saturday with thousands of French security forces braced to meet renewed rioting by “yellow vest” protesters in the capital and other cities in a fourth weekend of confrontation over living costs.

The Eiffel Tower and other tourist landmarks were shut, shops were boarded up to avoid looting and street furniture removed to avoid metal bars from being used as projectiles.

About 89,000 police were deployed across the country.

Of these, about 8,000 were deployed in Paris to avoid a repeat of last Saturday’s mayhem when rioters torched cars and looted shops off the famed Champs Elysees boulevard, and defaced the Arc de Triomphe with graffiti directed at President Emmanuel Macron.

Protesters, using social media, have billed the weekend as “Act IV” in a dramatic challenge to Macron and his policies.

Clearly this is about much more than fuel taxes. What do they actually want? Here’s a clue:

From Stanley Pignal of The Economist:

@spignal

A new “unofficial” list of Gilet Jaunes demands here:
– cut taxes to 25% of GDP (so half current levels)
– better public services/massive hiring of civil servants
– Leave EU & NATO
– Default on public debt
– New constitution
– less immigration
– Scrap CFA Franc in W Africa (??)

3:33 AM – 7 Dec 2018

A question of passports

Canadian passport

Christopher Balding (“Not China Naive Balding”) explains why it matters, a lot, whether the arrested Huawei CFO Wanzhou Meng entered Canada on a Canadian passport, as has been rumored:

@BaldingsWorld

Here is what people don’t know about the dual passport situation with regards to Chinese citizens. You may ask, why would the CFO of Huawei enter Canada under a Canadian passport? There are very clear reasons and I absolute no doubt about it guarantee every Chinese 1/n

citizen with two passports knows what I am about to tell you. The simplest answer is that if you enter another country using a non-Chinese passport it is a lot easier, typically you don’t need a visa. That may be part of it but that isn’t the primary reason. 2/n

The primary reason, and let me reiterate, every Chinese I have ever met with two passports knows this, when you enter a country, which ever country passport you enter the country is what nationality the accepting country recognizes. In other words, when she entered Canada 3/n

with a Canadian passport, if that is in fact what she did, she is recognized as a Canadian citizen. If she enters France/Japan/China with a Canadian passport, she is recognized as a Canadian citizen by international law. Why does that matter you ask? If you ever get 4/n

into trouble, the only country the host country allows you to get consular or other access to is your country of citizenship. Most “Chinese” with second passports enter China using Canadian/US/Australian passports even if they have Chinese passports for this exact reason. 5/n

When Chinese with second passports travel abroad, they use the second passport not just because of the visa ease issue, but because they prefer being represented by actual humane governments. So when she entered Canada on a Canadian passport, if she did, 6/n

She was telling you, and I absolutely guarantee she knew what I’m telling you, she would rather be represented by Canada than by China. She could get a visa no problem and enter with her Chinese passport. Let me put it another way, Chinese with means are making clear 7/n

And conscious choice who they want representing them if they get jammed up, and it is rarely China. In her case, that may not be the best choice. However, I absolutely guarantee you every Chinese with two passports knows this and chooses this way. Done

1:32 AM – 7 Dec 2018

And a BBC reporter comments:

@StephenMcDonell

to @BaldingsWorld

We did ask the #China Foreign Ministry yesterday if Meng Wanzhou had entered #Canada on a Chinese or Canadian passport but no response.

1:30 AM – 7 Dec 2018

Balding again:

@BaldingsWorld

High probability: Huawei CFO not arrested directly for Huawei activities but for running transactions through closely held separate independent Cayman SPV which she runs that channeled FX transactions and profits through NYC. If that is the case, she is screwed

3:19 AM – 7 Dec 2018

This is also interesting:

China has said it will immediately implement measures agreed under a trade war “truce” with the US.

The commerce ministry’s remarks came days after Donald Trump and his Chinese counterpart, Xi Jinping, agreed to give negotiators 90 days to resolve their trade spat.

Few details have been made public about what the two sides will negotiate, a lack of clarity that has unsettled stock markets.

“China will immediately implement the consensus both sides already reached on agricultural products, energy, autos and other specific items,” a commerce ministry spokesman, Gao Feng, said at a regular press briefing. […]

Gao’s briefing came hours after the trade detente risked being rattled by the arrest in Canada of a top executive from the Chinese telecom giant Huawei at the request of the US.

Hmmm. Clearly, there is a *lot* more going on here than meets the eye. As usual, it’s stupid to rush to judgment before the facts are revealed (a thing I am definitely guilty of).

The right rises in Spain

Vox party leader Santiago Abascal

Vox party leader Santiago Abascal

A right-wing political party called Vox (no relation, presumably, to the progressive news website) wins office in Spain:

After many years in the shadows, the far-right has now arrived as a force in Spanish politics. Local elections in Andalusia on Sunday gave the fiercely nationalistic and socially conservative Vox party 12 of the provincial assembly’s 105 seats.

Why it matters: That makes Vox the first Spanish far-right party to win office since the country’s dictatorship ended in the 1970s. Vox wants to slash taxes, quash Catalan autonomy, criminalize illegal immigration, build a wall on the Moroccan border, restrict the religious activities of Muslims, and radically centralize political control in Spain. Ironically: the party also wants to eliminate precisely the assembly in which it just won seats. […]

Still, what has helped Vox most of all is the surging number of Middle Eastern and African migrants arriving on Spanish shores.

  • Overall, migrant arrivals in the EU have fallen dramatically since peaking in 2014-2015, but the numbers in Spain have risen more than 500% since then.

Andalusia “has become the main landing point for growing waves of immigrants sailing across the narrow Strait of Gibraltar from Africa.”

The plot thickens!

Huawei CEO Meng Wanzhou

The internet is abuzz with more news and speculation related to the stunning arrest of Huawei CFO Wanzhou Meng:

• I previously noted that “This is about as dumb as the US trying to arrest Julian Assange, but with far nastier geopolitical implications.” For what it’s worth, here’s Wikileaks weighing in:

@wikileaks

Editorial comment: The U.S. extradition of Huawei CFO Meng Wanzhou from Canada, for actions performed in China, is the same extra-territorial invasion through lawfare, that the U.S. government is applying to the UK, by extraditing Assange from the UK, for publishing in the UK.

4:26 PM – 6 Dec 2018

• Comrade Balding, an academic formerly based in Shenzhen, has some very interesting thoughts, among them:

@BaldingsWorld

There’s more coming on Huawei. I just don’t know when it’s going public

8:58 AM – 6 Dec 2018

===

Fact: timing of Huawei arrest is a great big political F+*#?!U

Fact: everyone in China knew she broke the US laws. Obama admin knew Huawei broke the law. Trump admin knew Huawei broke the law.

It’s only political if you think she should get away with it

8:48 AM – 6 Dec 2018

===

FWIW, I’ve know for a few months that there is more coming down the road with Huawei. Have confirmation from multiple unrelated people

2:08 AM – 6 Dec 2018

• The Alibaba-owned South China Morning Post ran this piece Thursday on how Meng told Huawei employees “in an internal talk on compliance that there are scenarios where the company can weigh the costs and accept the risks of not adhering to the rules.” Is China planning to throw Meng under the bus?

• Reuters correspondent “SJ” writes:

@SijiaJ

What happened on December 1? Xi & Trump met, Huawei founders’ daughter got arrested, Danhua Capital founder committed suicide

10:11 PM – 5 Dec 2018

• Wait, who committed suicide? From SCMP reporter Zheping Huang:

@pingroma

Prominent Stanford physics professor and blockchain venture capitalist Zhang Shoucheng died at age 55 on Dec 1 in the US after fighting depression, according to a family statement. Story TK

“Danhua lists 113 U.S. companies in its portfolio, and most of those companies fall within emerging sectors and technologies (such as biotechnology and AI) that the Chinese government has identified as strategic priorities,” the USTR name-checked Zhang’s VC in its Nov. 20 report

10:48 PM – 5 Dec 2018

Odd timing on that. “The family of Stanford professor Zhang Shoucheng, a world-renowned physicist and venture capitalist, denied speculation on Chinese social media that his death was connected to tensions in US-China relations or the arrest of Huawei’s CFO in Canada on Saturday.” (SCMP)

• An intriguing piece of gossip:

@maggiexiao

Replying to @BaldingsWorld

Rumor says Meng entered Canada with a Canadian passport. China recently strengthened its no-dual citizenships policy . So that means she voluntarily gave up her Chinese citizenship. If true, does China still have the rights to claim her back?

6:24 PM – 5 Dec 2018

• David Goldman comments:

First, never before has the United States attempted the extraterritorial rendition of a foreign citizen – Meng is a Chinese national – in connection with sanctions violations. It has imposed travel and banking restrictions, but seeking an arrest warrant for this is entirely without precedent. […]

The question is: Who ordered the arrest, and why?

It is possible that President Trump knew about it and sanctioned the arrest, to be sure. But it is unlikely that the president would escalate the conflict with China with the arrest of a senior executive of China’s flagship high-tech manufacturer on the same day that he sought to de-escalate the trade war.

If Trump did not initiate the arrest, who did? There are two alternative possibilities.

The first is that the order came from administration officials who believe that the United States must provoke a confrontation with Beijing now, before China becomes too powerful to intimidate. Some parts of the permanent bureaucracy and the intelligence community believe that China’s economy is fragile and that an economic war would produce an economic crisis and political instability, perhaps even toppling Xi Jinping.

That view may seem fanciful, but it is argued seriously, for example by some former senior officials of the Trump administration.

The second possibility is that Trump’s enemies in the permanent bureaucracy simply want to prevent the president from negotiating a deal with China that would enhance his image and remove risks to economic growth.

Goldman notes that the only American politician to comment publicly on the matter has been Senator Marco Rubio, who earlier this year tried to torpedo Trump’s agreement with Xi regarding ZTE. He “celebrated the arrest” in an email to Axios. Hmm.

• Huawei is in deep trouble and not only in the US. From Reuters: “Japan plans to ban government purchases of equipment from China’s Huawei Technologies Co Ltd and ZTE Corp to beef up its defenses against intelligence leaks and cyber attacks, sources told Reuters.”

• …And: “Australia and New Zealand have already blocked Huawei from building 5G networks.”

• …And: “Britain’s BT Group said on Wednesday it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations and would not use the company in central parts of the next network.”

• I’ll close with Professor Balding again – somewhat off-topic, but it caught my eye:

I think what most people who haven’t spent a lot of time in China don’t get is how abnormal the business, economic, financial, and negotiation climate is. People see the shiny tall glass office buildings and the Ritz and they make the assumption they get it. That’s wrong 1/n

The stories that get out in public are wild. The stories that never make it into the public are at least 10x crazier. The IP theft and theft stories you hear about in public are low hanging fruit where someone falls out of favor in Beijing. I know first hand accounts of 2/n

Flat out 10 ten digit USD thefts. Companies who have valid contracts telling a foreign partner they’re ignoring a contract and they will have them abducted or jailed if they even think about trying to enforce a contract with again 10 digit USD values. You DC/NYC debutantes 3/n

simply do not understand what you are dealing with.The rules are different. You think fentanyl doesn’t get various levels of state protection? Get real. You think this IP theft and gangsterism isn’t quasi official policy? Get real. You need to be realistic about your counterparty

6:14 AM – 6 Dec 2018

Death of a nation

Social collapse intensifies as US life expectancy drops for the third year in a row:

Life expectancy in the United States declined again in 2017, the government said Thursday in a bleak series of reports that showed a nation still in the grip of escalating drug and suicide crises.

The data continued the longest sustained decline in expected life span at birth in a century, an appalling performance not seen in the United States since 1915 through 1918. That four-year period included World War I and a flu pandemic that killed 675,000 people in the United States and perhaps 50 million worldwide.

Public health and demographic experts reacted with alarm to the release of the Centers for Disease Control and Prevention’s annual statistics, which are considered a reliable barometer of a society’s health. In most developed nations, life expectancy has marched steadily upward for decades.

Life expectancy for men declined year-on-year, while that of women remained the same. Women enjoy 5 more years of life than men. Kirsten Gillibrand is right!

Overall, Americans could expect to live 78.6 years at birth in 2017, down a tenth of a year from the 2016 estimate, according to the CDC’s National Center for Health Statistics. Men could anticipate a life span of 76.1 years, down a tenth of a year from 2016. Life expectancy for women in 2017 was 81.1 years, unchanged from the previous year.

The growing drug epidemic has claimed more lives in one year than the total US combat deaths in World War I:

Drug overdoses set another annual record in 2017, cresting at 70,237 — up from 63,632 the year before, the government said in a companion report. The opioid epidemic continued to take a relentless toll, with 47,600 deaths in 2017 from drugs sold on the street such as fentanyl and heroin, as well as prescription narcotics. That was also a record number, driven largely by an increase in fentanyl deaths.

China is the main source of the illicit fentanyl in the US, raising an interesting parallel to the illegal opium trade which devastated Chinese society during the 19th and early 20th centuries.

US kidnaps daughter of Huawei founder

Wanzhou-Meng

Ok, I don’t think this is the trade war people signed up for:

Canada has arrested the chief financial officer of China’s Huawei Technologies who is facing extradition to the United States on suspicion she violated U.S. trade sanctions against Iran.

Wanzhou Meng, who is also the deputy chair of Huawei’s board and the daughter of company founder Ren Zhengfei, was arrested in Vancouver at the request of U.S. authorities.

“Wanzhou Meng was arrested in Vancouver on December 1. She is sought for extradition by the United States, and a bail hearing has been set for Friday,” Justice department spokesperson Ian McLeod said in a statement to The Globe and Mail. “As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms. Meng.

A Canadian source with knowledge of the arrest said U.S. law enforcement authorities are alleging that Ms. Meng tried to evade the U.S. trade embargo against Iran but provided no further details.

She is being sought by federal prosecutors based in New York:

Huawei released a statement saying its CFO was arrested while changing planes in Vancouver and is facing charges in “the Eastern District of New York.”

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion,” the statement said.

How is this even remotely legit? Has Meng even been to the US? I don’t see how the US has jurisdiction here.

We’ll find out more soon, but at first glance this strikes me as extremely dubious, both legally and politically. This is about as dumb as the US trying to arrest Julian Assange, but with far nastier geopolitical implications.

UPDATE: China responds:

Remarks of the Spokesperson of the Chinese Embassy in Canada on the issue of a Chinese citizen arrested by the Canadian side

2018/12/06

At the request of the US side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law. The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim. The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou. We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.

UPDATE: Bloomberg has a good rundown of the situation.

Analysts said it’s more likely the case proceeded separately from the trade talks as part of Trump’s efforts to step up prosecutions against Chinese companies that conduct economic espionage and violate sanctions. In October, the U.S. said Belgium extradited a Chinese intelligence official accused of stealing trade secrets from U.S. companies — an unprecedented development.

Either way, China is almost certain to view Meng’s arrest as a major escalation in the trade war that will foment fears of a wider Cold War between the world’s biggest economies. As part of trade talks, Trump has insisted that China stop providing government support to strategic sectors including artificial intelligence and robotics as part of its “Made in China 2025” policy.

This is misguided. Why would China stop providing government support for strategic sectors? Those sectors are key to China’s future competitiveness in manufacturing and technology. In effect, the US is badgering China to radically change its growth plans out of deference to its chief global rival. China will never do that, even if it agrees to do so on paper. The smart play for US would be to drop its free-trade fantasies and pursue its own industrial policy.

Curse of The Greg Zone

Weekly Standard It's Mueller TimeJust over a week after I lambasted Bill Kristol for his homicidal urges towards China (for which he still has not been banned from Twitter), we learn that the magazine he co-founded may be shutting down. Coincidence? You be the judge.

The Weekly Standard, whose paid circulation dropped by an estimated 10% between 2016 and 2017, has made itself rather redundant in recent years by driving away Trump-supporting readers, while failing to offer an alternative to the McCain-style neoconservatism that is far more effectively espoused by The New York Times and The Washington Post.

Anyway, I take no joy in the prospect of people losing their jobs, and wish the staff of the magazine well in their future endeavors.

French insurrection

Bane Dark Night Rises speech

Open-source warfare is winning in France, as the Yellow Vests force the beleaguered President Macron to back down on his planned fuel tax hike. Here’s an interesting Marxist analysis of the current ructions, complete with some good-old-fashioned hatred of the rich and unironic usages of the term “lumpen”:

The Gilets Jaunes (yellow vest) protests in France are at a turning point. In the face of building radicalism, which now threatens the very survival of his government, Macron has changed his defiant tone and promised to “suspend” the fuel tax hike that provoked the movement. This retreat came after street battles over the weekend between thousands of protesters and the police that have left over 200 injured in Paris alone and resulted in at least one fatality.

The organised working class has begun to enter the struggle (although the labour union leaders have dragged their feet), as have students, who are occupying their institutions in solidarity and raising their own demands. But despite Macron’s attempt to defuse the situation, the explosion of anger and frustration at years of austerity and inequality has acquired a logic of its own, and it will not be easy to put the genie back in the bottle.

The events of Saturday and Sunday marked the third straight weekend of unrest in the French capital. Thousands of protesters took to the streets of Paris – while the exact figures are unclear, it is certain that over 100,000 took part in demonstrations across the country. This is fewer than came out last weekend (200,000 according to the official figures, which is a major underestimation), but the mood was far more radical, and it was clear that the demands of the movement have moved well beyond the question of the fuel tax. Amongst certain layers of the movement there is an insurrectionary and revolutionary mood. The 5,000 who marched down the Champs Élysées at midday on Saturday were shouting and carrying the slogans “Power to the People!” and “Macron resign!” Many bore the latter slogan on their vests.

Boy, that escalated quickly.

As Idir Ghanes, a 42-year-old, unemployed computer technician from Paris, stated: “We have low salaries and pay too much tax and the combination is creating more and more poverty… On the other side, there are government ministers and the president with their fabulous salaries.” Other protestors, like Marie Lemoine, 62 (a school teacher from Provins) pointed out the pro-capitalist and hypocritical nature of Macron’s policy: “We are being targeted instead of the airlines, the shipping lines, those companies who pollute more but pay no tax… Macron is our Louis XVI, and we know what happened to him.”

Note: Louis XVI was beheaded.

Jeanne d’Hauteserre, the mayor of the 8th city district of Paris, near the Arc de Triomphe, told BFM TV, “We are in a state of insurrection, I’ve never seen anything like it.” Several regional representatives of the central government spoke anonymously to Le Monde of an “explosive and almost insurrectional” or “pre-revolutionary” situation. They also noted that it was a section of the population rising against taxes that sparked the revolution of 1789. One representative concluded: “What is expressed the most is the hatred of the President of the Republic.”

Perhaps unsurprisingly, Marxist.com views this is a class conflict.

While it is true that there were lumpen and far-right elements in the demonstrations over the weekend, these were marginal. From the beginning, the yellow vests movement has penetrated into very deep layers of society, with Front National voters and middle-class elements taking part alongside the working class and trade unionists. But as the movement has begun to radicalise and the working class imprint on it increase, a lot of the rubbish on the right is being thrown out and the class contradictions within it have become clearer. For example, another viral video shows Yvan Benedetti, former president of the ultranationalist group L’Œuvre française (himself dressed in a high-visibility jacket), being attacked and driven off by anti-fascists within the yellow vests.

Video:

Subsequently, over the past week, over 300 high schools have been occupied and blockaded around the country, including in the southern city of Toulouse and in Créteil in the Paris area.

Wow.

And it looks like the party may be just getting started. Marxist.com is calling for “a 24-hour general strike, as a starting point for a series of renewable strikes, with the objective of bringing down the government.”

No matter happens to this particular movement, it is clear that a new chapter has opened in the class struggle in France, where as Frederick Engels put it, the class struggle is always fought to the end.

And:

For the yellow vests, these announcements are very far from having answered their demands. They wanted the tax to be scrapped altogether, and a mere suspension does not seem to have appeased their anger. […]

And the yellow vests are maintaining their call for renewed demonstrations, this coming weekend in the French capital.

Cauchy said: “We must not fear demonstrations on Saturday in Paris, because they will take place.”