Selling rice to China

This is how it’s done. Story that I missed from July:

A private importer in China last week bought U.S. rice for the first time ever, in the midst of a trade war between the two nations, a rice industry group said on Wednesday.

The Chinese importer bought two containers, about 40 tonnes, of medium-grain rice from California-based Sun Valley Rice, said Michael Klein, a spokesman for USA Rice, a trade group that promotes the sale of the U.S. grain. […]

China is the world’s largest rice grower and consumer, producing 148.5 million tonnes of the grain in the 2018/19 marketing year and importing 3.5 million tonnes.

Jurisdiction creep

I don’t see how this can be viewed as anything other than insane overreach of US power:

How far past the water’s edge do America’s laws apply? Can the US become a focal point from crimes allegedly committed in places like Indonesia, Africa, and Europe? Those questions are not hypothetical. Rather, they are being asked in courtrooms across the US, from New Haven, Connecticut, to Brooklyn, New York, to Salt Lake City, Utah, and up to Congress and the Supreme Court.

In New Haven, the Foreign Corrupt Practices Act (FCPA) trial of Lawrence Hoskins, a British national, enters its second week for actions alleged to have been committed in Indonesia. Already, an appellate court has pared back the charges being leveled at Hoskins on the grounds of governmental overreach. As the US Court of Appeals for the Second Circuit saw things, the FCPA applied to non-resident foreigners only in those instances where the government could demonstrate that the individual acted as an agent of a “domestic concern” or while actually in the US.

The crazy example of Huawei CFO Meng Wanzhou also fits in here. The US government is seeking the extradition of a non-resident foreigner whose alleged crimes were apparently not even committed in the US. Will anyone take US complaints seriously when China begins detaining Americans on spurious grounds?

He’s not wrong

Imagine the nerve, the effrontery, of some two-bit hack like Martin Scorsese presuming to tell us what cinema is:

When I was in England in early October, I gave an interview to Empire magazine. I was asked a question about Marvel movies. I answered it. I said that I’ve tried to watch a few of them and that they’re not for me, that they seem to me to be closer to theme parks than they are to movies as I’ve known and loved them throughout my life, and that in the end, I don’t think they’re cinema.

Some people seem to have seized on the last part of my answer as insulting, or as evidence of hatred for Marvel on my part. If anyone is intent on characterizing my words in that light, there’s nothing I can do to stand in the way.

Many franchise films are made by people of considerable talent and artistry. You can see it on the screen. The fact that the films themselves don’t interest me is a matter of personal taste and temperament. I know that if I were younger, if I’d come of age at a later time, I might have been excited by these pictures and maybe even wanted to make one myself. But I grew up when I did and I developed a sense of movies — of what they were and what they could be — that was as far from the Marvel universe as we on Earth are from Alpha Centauri.

[…]

I’m certainly not implying that movies should be a subsidized art form, or that they ever were. When the Hollywood studio system was still alive and well, the tension between the artists and the people who ran the business was constant and intense, but it was a productive tension that gave us some of the greatest films ever made — in the words of Bob Dylan, the best of them were “heroic and visionary.”

Today, that tension is gone, and there are some in the business with absolute indifference to the very question of art and an attitude toward the history of cinema that is both dismissive and proprietary — a lethal combination. The situation, sadly, is that we now have two separate fields: There’s worldwide audiovisual entertainment, and there’s cinema. They still overlap from time to time, but that’s becoming increasingly rare. And I fear that the financial dominance of one is being used to marginalize and even belittle the existence of the other.

Needless to say, a number of individuals on Twitter have been less than pleased by Marty’s op-ed. All I feel like adding to the discussion is that I’ve seen several of the comic book movies. Some of them are entertaining. All of them, with perhaps one or two exceptions, are to “cinema” what a bowl of Fruit Loops is to “dining.”

And this is an excellent place to plug Marty’s outstanding new movie, The Irishman. His best since Goodfellas? Quite possibly!

The ride-sharing death toll

I’ve never used the Uber or Lyft apps. High-tech hitchhiking never had much appeal to me; if I need a ride, I’ll get one from a licensed professional, thanks. Now we learn that “ride-sharing” apparently has a significant death toll via greater congestion:

The rise of ride-sharing services has increased traffic deaths by 2% to 3% in the US since 2011, equivalent to as many as 1,100 mortalities a year, according to a new study from the University of Chicago and Rice University.

How it was calculated: Researchers took statistics from the National Highway Traffic Safety Administration and compared them with the dates Uber or Lyft launched in a specific city. Then they checked accident rates in those cities relative to vehicle miles traveled. That rate shot up in San Francisco after Uber launched in 2010, a phenomenon that was replicated in other cities.

Deadheading: The increase in congestion is partly because drivers spend 40% to 60% of their time searching for passengers, a practice known as “deadheading.” On average, drivers in New York City traveled 2.8 miles between fares.

Our clueless elite

It’s hard to think of a more concise illustration of the gulf that separates America’s ruling class from those over whom they rule than this (full disclosure: I have never heard of Branson, and I’ve been to the Ozarks):

Have you ever been to Branson, Missouri? Do you even know what it is?

I gather it’s neither Aspen nor Hollywood.

Branson, Missouri, is an entertainment center, larger in every way than Hollywood. It is located in Branson, Missouri, in the Ozarks. It is one of the homes of country music stars and starlets. It’s a huge complex of every kind of family entertainment, from bass fishing to theater, music, museums, anything you can imagine. Now the fact that you have never heard of it typifies the limitations of the ruling class.

My oligarchical snobbery.

No, no, no. You haven’t even risen to that.

I’m a piker. I bet $5 on the trifecta at the dog track.

It typifies the limitations of the ruling class mind, not even to understand that over which you are lording it.

A great event of weighty importance

This type of pseudo-mythological imagery lends itself to ridicule in a modern, democratic society, but in a nationalist dictatorship it just works. Can we import their aesthetics without the famines and labor camps?

Aides to Kim Jong-un are convinced the North Korean leader plans “a great operation”, state media said on Wednesday in a report that included lavish descriptions and images of the leader riding a white horse up North Korea’s most sacred mountain.

In the photos released by state news agency KCNA, Kim is seen riding alone on a large white horse through snowy fields and woods on Mt Paektu, the spiritual homeland of the Kim dynasty.

“His march on horseback in Mt Paektu is a great event of weighty importance in the history of the Korean revolution,” KCNA said.

“International discourse power”

Bill Bishop weighs in on NBA-gate:

The NBA has leverage in China, if it works as a united front. PRC fans, sponsors, web sites and broadcasters can shun one team, but they can not and will not shun an entire league. Do you really think those fans are going to be satisfied watching CBA games? There would be a social stability cost to banning the NBA in China. I am serious.

This NBA episode may backfire on Beijing here in the US as there is bipartisan outrage. That said, given the DC news cycle Commissioner Silver will likely remain much more worried about CCP Commissars than the US Congress.

The broader context for this crisis is that the CCP has long pushed to increase its “international discourse power 国际话语权“, and as with many things its efforts have intensified under Xi. The idea is that China’s share of international voice is not commensurate with its growing economic, military and cultural power and that the Party should have much more control over the global discussion of all things Chinese, in any language, anywhere.

The Party is taking at least a two-track approach to rectifying this problem. On the one hand it is launching, buying, co-opting and coercing overseas media outlets. On the other it uses the power of the Chinese market to co-opt and coerce global businesses, their executives and other elite voices. The Global Times summed up the second track nicely:

The biggest lesson which can be drawn from the matter is that entities that value commercial interests must make their members speak cautiously. Chinese consumers are not overly sensitive. Wherever it is, touching a raw political nerve is extremely risky. Morey has neither the IQ nor the EQ to talk about political topics. He will become an example of clumsiness on some MBA courses.

I must admit I find the patronizing rhetoric of Chinese state media to be greatly entertaining. “He will become an example of clumsiness on some MBA courses” is a powerful dig.

China’s attempts to police foreign discourse about it have also hit a rough patch in central Europe:

Prague’s decision to end its sister-city agreement with Beijing reflects “tangible anger” in the Czech Republic over the president’s pro-China policies, analysts say.

The Prague city council voted on Monday to pull out of the partnership deal after mayor Zdenek Hrib’s unsuccessful bid to get Beijing to remove a “one China” pledge from the agreement. He argued that the pledge – confirming Beijing’s sovereignty over Taiwan – was a political matter and unsuitable for inclusion in the sister-city deal because it was a cultural arrangement.

The decision, which still needs approval from the city assembly, was understood to have prompted heated exchanges between Chinese diplomats and Czech officials.

One Czech diplomat told the South China Morning Post on Tuesday that they had stressed it was a city-level decision.

It’s almost as if angrily demanding pledges of loyalty from everyone in the world is a suboptimal strategy for winning friends and influencing people. The Czechs are starting to wake up, apparently, and so are Americans.

Study: China tariff would add $156B to US GDP

Container shipIt turns out that economists are starting to get on board with the idea that protectionism can work:

The Coalition for a Prosperous America (CPA) has won the prestigious Edmund A. Mennis Award from the National Association for Business Economics (NABE) for a study showing that a permanent tariff on China would benefit the US economy. The award from the nation’s leading association of business economists confirms a growing acceptance of pro-US trade policies needed to address the nation’s economic challenges.

The study, Decoupling from China – An Economic Analysis of the Impact on the U.S. Economy of a Permanent Tariff on Chinese Imports, co-authored by CPA Chief Economist Jeff Ferry and Senior Economist Steven Byers, modeled the effects of a 25 percent tariff on imports from China. It found that after five years the tariff would add $156 billion to annual GDP and 948,000 jobs to the US economy. […]

Michael Stumo, CEO of the CPA, said, “I am very proud of the cutting edge work of our CPA economics team. Receiving this important national award among a crowded competitive field of economic papers is an honor. We have long been concerned that standard economic models produce incorrect results, leading to trade policy that destroys US jobs. Our team has broken new ground on how decoupling from China will produce economic gains, rather than pain, even as America’s national interest is served.”

“The effects of freer trade on the US economy are complex, and often negative for long-term economic growth and income equality,” said Ferry. “In this study, we attempted to show that activist trade intervention like tariffs, if implemented correctly, can produce positive results for the US economy. We are very grateful to the NABE for recognizing our work.”

About time

No American, outside of the defense/foreign policy establishment, gives a quantum of a damn about the situation in Syria. So why are we still there? Because of the Kurds? With all due respect to the brave Kurdish fighters, it’s hard to imagine anything more unconnected from vital American interests than their plight. It’s time to go home. As I wrote last December:

It’s really very hard to understand what the US strategy was in Syria. Was there even a specific strategic goal? What was the desired end-state of this campaign?

Personally I suspect most Americans’ reaction to this news has been: Wait, we had troops in Syria? Yeah, the public was never consulted about this, at all. I am not the only person who finds it bizarre that an ostensibly democratic nation can be engaged in a major foreign military campaign for years on end without a scintilla of public approval, or even knowledge, let alone a formal declaration of war. Did you know the US has at least a dozen military bases in Syria? What is going to happen to those?

Of course, that post was in response to a previous promise to withdraw the 2,000 US troops then in Syria. Fast forward to today, and roughly 1,000 troops are still there. The withdrawal must continue.

Here’s the official White House statement released on Sunday:

Today, President Donald J. Trump spoke with President Recep Tayyip Erdogan of Turkey by telephone. Turkey will soon be moving forward with its long-planned operation into Northern Syria. The United States Armed Forces will not support or be involved in the operation, and United States forces, having defeated the ISIS territorial “Caliphate,” will no longer be in the immediate area.

The United States Government has pressed France, Germany, and other European nations, from which many captured ISIS fighters came, to take them back, but they did not want them and refused. The United States will not hold them for what could be many years and great cost to the United States taxpayer. Turkey will now be responsible for all ISIS fighters in the area captured over the past two years in the wake of the defeat of the territorial “Caliphate” by the United States.

Hurting their feelings

Imagine my shock that Joe Tsai, the Taiwanese-Canadian co-founder of Alibaba and owner of the Brooklyn Nets, is gravely displeased by a tweet posted (and quickly deleted) by Houston Rockets general manager Daryl Morey:

Open letter to all NBA fans:

When I bought controlling interest in the Brooklyn Nets in September, I didn’t expect my first public communication with our fans would be to comment on something as politically charged and grossly misunderstood as the way hundreds of millions of Chinese NBA fans feel about what just happened.

By now you have heard that Chinese fans have reacted extremely negatively to a tweet put out by Houston Rockets GM Daryl Morey in support of protests in Hong Kong.

The Rockets, who by far had been the favorite team in China, are now effectively shut out of the Chinese market as fans abandon their love for the team, broadcasters refuse to air their games and Chinese corporates pull sponsorships in droves.

Fans in China are calling for an explanation – if they are not getting it from the Houston Rockets, then it is natural that they ask others associated with the NBA to express a view.

The NBA is a fan-first league. When hundreds of millions of fans are furious over an issue, the league, and anyone associated with the NBA, will have to pay attention. As a Governor of one of the 30 NBA teams, and a Chinese having spent a good part of my professional life in China, I need to speak up.

What is the problem with people freely expressing their opinion? This freedom is an inherent American value and the NBA has been very progressive in allowing players and other constituents a platform to speak out on issues.

The problem is, there are certain topics that are third-rail issues in certain countries, societies and communities.

Supporting a separatist movement in a Chinese territory is one of those third-rail issues, not only for the Chinese government, but also for all citizens in China.

The one thing that is terribly misunderstood, and often ignored, by the western press and those critical of China is that 1.4 billion Chinese citizens stand united when it comes to the territorial integrity of China and the country’s sovereignty over her homeland. This issue is non-negotiable.

A bit of historical perspective is important. In the mid-19thcentury, China fought two Opium Wars with the British, aided by the French, who forced through illegal trade of opium to China. A very weak Qing Dynasty government lost the wars and the result was the ceding of Hong Kong to the British as a colony.

The invasion of Chinese territories by foreign forces continued against a weak and defenseless Qing government, which precipitated in the Boxer Rebellion by Chinese peasants at the turn of the 20th century. In response, the Eight Nations Alliance – comprised of Japan, Russia, Britain, France, United States, Germany, Italy and Austria-Hungary – dispatched their forces to occupy Chinese territories in the name of humanitarian intervention. The foreign forces marched into the Chinese capital Peking (now called Beijing), defeated the peasant rebels and proceeded to loot and pillage the capital city.

In 1937, Japan invaded China by capturing Beijing, Shanghai and the then-Chinese capital Nanjing. Imperial Japanese troops committed mass murder and rape against the residents of Nanjing, resulting in several hundred thousand civilian deaths. The war of resistance by the Chinese against Japan ended after tens of millions of Chinese casualties, and only after America joined the war against Japan post-Pearl Harbor.

I am going into all of this because a student of history will understand that the Chinese psyche has heavy baggage when it comes to any threat, foreign or domestic, to carve up Chinese territories.

When the topic of any separatist movement comes up, Chinese people feel a strong sense of shame and anger because of this history of foreign occupation.

By now I hope you can begin to understand why the Daryl Morey tweet is so damaging to the relationship with our fans in China. I don’t know Daryl personally. I am sure he’s a fine NBA general manager, and I will take at face value his subsequent apology that he was not as well informed as he should have been. But the hurt that this incident has caused will take a long time to repair.

I hope to help the League to move on from this incident. I will continue to be an outspoken NBA Governor on issues that are important to China. I ask that our Chinese fans keep the faith in what the NBA and basketball can do to unite people from all over the world.

Sincerely,
Joe Tsai

Those of us who are familiar with China have received this history lesson before. Many times. And in a sense, the reaction of the fans is understandable. For other examples of this type of thing, see here, here, here and here.

Quote from the second link:

The Marriott International hotel chain has apologised and condemned “separatists” in China after the Beijing government shut down its website over an online questionnaire that suggested some Chinese regions were separate countries.

China’s Cyberspace Administration, the internet watchdog, said the hotelier had “seriously violated national laws and hurt the feelings of the Chinese people” after a customer survey listed Tibet, Taiwan, Hong Kong and Macau as separate countries. The regulator ordered Marriott’s website and booking applications to close for a week.

Note that phrase, “hurt the feelings of the Chinese people”—another formulation that China watchers will be very familiar with—and compare to Tsai’s version:

When the topic of any separatist movement comes up, Chinese people feel a strong sense of shame and anger because of this history of foreign occupation. […] the hurt that this incident has caused will take a long time to repair.

Shame. Anger. Hurt feelings. Separatism. Opium Wars. This is what American companies must now deal with because, well, 1.4 billion customers. (China is the NBA’s largest international market.)

Here we see the clash between two different, utterly incompatible value systems, each with its own virtues and flaws, which are now mutually entangled in a way that never before would have been possible due to globalization. The increasing preposterousness of the situation suggests that a great Untangling is coming, and soon.