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Xinyuan Real Estate Co., Ltd. Message Board

  • growth.value growth.value Oct 23, 2012 9:39 AM Flag

    Should China Play by The Rules

    China has been labeled as a cheater numerous times during the presidential campaign. Surely, China does not play the same level of rules as other western developed countries do. The question is whether China should play the same rules when its GDP per capita is still 1/10 of many top developed countries. This is like asking a 3 year old boy to play like a 30 year old adult. Please share your opinions. Here is mine:

    As a native Chinese living in the US for many years. I understand why the US has pressed China to follow the rules. The question is who created these rules. The answer is western developed economies. Are these rules benefit developed economies more than emerging economies? Answer is yes again. Making free traded currencies work in the long-run require countries to equip with highly developed finance infrastructure, which many developing countries do not have. Thailand is the perfect example who got lost by volatile capital inflows and outflows. Should or could developing countries have the same level of law enforcement enjoyed by developed countries? No. It is not realistic for countries like China or India to have similar quality level of law system when its GDP per capital or income level are only a fraction of the level of the developed countries. Again, this is like asking a 3 year old boy to play like a 30 year old adult.

    Financial Times had a nice article about the emerging of the US. At that time, it is the Europeans asked the US to follow the rules, but the US refused. The reason is simple. The rules were not as favorable as what the US wanted. However, many countries are not political strong enough to refuse what wanted by the "international rule makers". Japan is a perfect example.

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    • @gv

      Careful your Chinese is showing.

      Your reaction is typical Chinese when a laowai starts speaking the truth.

      Chinese don't get you cannot going from saying a guy has a good understanding of China to he has extreme views in a paragraph. You can do it in Chinese but you have to be more patient in English. Don't worry someday your will get it. Keep practicing.

      • 1 Reply to caseysxyz
      • @Casey, I like your sense of humor, but again your review is typical of one string of western view on China. Look, China is huge. It took me 30 years to understand China better. My view has swung between extremely positive and extremely negative before. Now, I have a more neutral view on China, just like my view on XIN.

        However, I strongly disagree that the majority of the public has a anti-American opinion. One's experience can be skewed by their personal network. I doubt you have more Chinese connections than I have, so it is possible that your experience may be much more skewed to one direction. Just like my experience in America. Should I tell my Chinese friends that Americans are deemed to be anti-China because every mainstream media and politicians try to portrait China as an adversary? I hesitate to do so because I doubt I know enough about America.

        Anyway, it is a human nature for to fear a potential competition from a strong adversary. As an intelligent investor, it is better to overcome such a fear.

    • @Walt, a Shakespeare reference? You're a man with surprising depths.

    • @Casey, that Russian businessman story's scary. What's your guess as to the motivation for the Chinese cops to sweep his death under the rug?

      Do you think they viewed really investigating an ex pat's death as a waste of time, a sort-of reverse racism? Or are you wondering about even darker motives, like if the Russian businessman wasn't completely legit and this was some kind of homicide, were the police paid off to make sure the investigation went away? Or am I letting my fandom of noir detective stories color my thinking here?

      Also, I didn't know there were two levels of police in China. Are the "real police" like our feds: the FBI, ATF, whoever?

      • 2 Replies to hmmm26
      • I really got no idea. I would like to say that is the weirdest thing I am have seen in China. The day is early might get a topper any second now. He could have just been really homesick. I got reminded of his demise daily as I had to walk past his blood and tissue splatter until the next rain. Well, at least they took the body away, which sometimes can be a challenge in China.

        Chinese love fireworks, dumplings and policemen. They got so many varieties,

      • @casey, I just caught up with your post on the CIA mission during Kosovo. Now you mention those details, it does ring a bell.

        And the fact they launched from Missouri tells us the strike was almost certainly made by B-2 stealth bombers, meaning that the mission used our most sophisticated technology, technology that surely had safeguards in place to prevent simple human error in reading a map.

        You're right; our story about how that happened just doesn't ring true. What would our motive have been for hitting their Embassy? Had they vetoed UN action? I can't remember now if Yugoslavia was a UN action or just NATO, but if it was just NATO then somebody must've vetoed it at the UN.

        Seems like the Russians, who have ties dating way, way back with the Slavs, would've vetoed UN action, but maybe the Chinese joined them?

    • @Casey and GV:

      1. I didn't know about that 18 and 19 year olds military training thing. Is that mandatory for every student on every campus?

      2. Are those students really still taught that an armed conflict with the US is possible? Do they believe that? Do the Chinese people believe armed conflict with the US is still possible? Do they see Taiwan as the flashpoint?

      How does that square with the impossibility of armed conflict between two nuclear nations? As Pink Floyd's Roger Waters once wrote about nuclear conflict: "That ain't 'au revoir', it's Goodbye."

      What do you guys think about the possibility of armed conflict between the US and China? It's completely impossible now, right?

      3. This doesn't fit here, but I always forget to ask, so I want to type it before I forget again: Is Tiananmen Square still a taboo subject to talk about in China? I've only visited China once, in 1998 (although plans are afoot for an autumn, 2013 trip), but I remember being surprised at how little anyone wanted to discuss that topic.

      When I travel, I always try to be sensitive to not come across as an "ugly American," so I learned that lesson fast and never brought it up again, but that was a pretty solid culture shock to me, being that folks here can pretty much say the federal government's a bunch of jackbooted, Fascist, goat humping pigs (or whatever), whenever they want to.

      4. GV, I agree on your point about the general populace never being able to fully understand important political issues. That's a huge problem in democracies, because it almost compels politicians to lie to the electorate when they're campaigning. A good example right now is how both candidates go all Hans and Franz (sorry, that's an outdated Saturday Night Live reference; basically, that they want to look very tough, with huge muscles) when they talk about China, even though both know that policy's not likely to change, regardless of who's elected.

      Winston Churchill once wrote that "Democracy is the worst form of government, except for all the rest." I often wonder if he was wrong, and if China's idea of only allowing a small, gifted subset of its citizens to vote for its leaders isn't a better way to go, in the long run.

      • 2 Replies to hmmm26
      • 1. If it isn't mandatory, the exceptions are rare.

        2 I have had student age people practicing English ask me whether I would go home when the war starts. Other than that I don't know. My days of hanging out with college kids is kind of in the rear view mirror by a few (cough) (cough) years er did I say years? I always get those mixed up with decades which one is right?

        3. Forget about the ugly American you can be on your best behavior, they are going to think you are an uncouth barbarian. So, relax. You know I have never talked in country with anyone about Tiananmen Square. I did go to graduate school with one of the leaders who was kick out of the country. He was a PhD teaching Eastern Philosophy at Beijing University. A PhD in Eastern Philosophy from Mainland China in a US MBA program, it was freaky interesting talking to that dude.

        The problem with the Chinese system is the interbreeding. You need a cycle of destroying and restoring to advance. At least that is my prejudice.

      • Certainly Adolf thought so

    • Playing by the "rules" could help China. The last thing China needs is a trade war. China has to do enough so that more developed countries don't feel forced to engage in protectionism that will hurt everyone.


    • Good thread. I've read all the posts, interesting perspectives. I've got to go meet my least favorite of our couple friends for lunch, but I'll think about this interesting stuff (bring it up, even, if the girls don't boo too much), and see if I can come up with some questions or comments for later.

      You're definitely right that China's been mentioned a lot in the campaign, by both guys, and always as the "boogie man" (do they have such a concept in Chinese culture?). I think they each must've spent 1 or 2 full answer times bashing China last night.

      • 1 Reply to hmmm26
      • @Hmmm, both candidates yesterday also mentioned that China could be a potential partner. The thing is that China as a developing country can never be as close ally as some other developed countries. It is the basic conflict of interest between developing and developed. However, the conflict at the meantime can be reconciled. Politicians understand this, but most public population do not. It is the popular public opinions that want China to play the same level of rules the US plays. The politicians just say whatever the public wants to hear.

        China actually can be liked by every American citizen, but the cost is just too large to be justified. The relationship between the US and China are like the relationship between Apple and Samsung. The US and Apple accuse China and Samsung copy illegally, but they have to use stuff manufactured by China and Samsung for obvious reasons.

    • As a native American living in China for many years, I could not disagree more. Three year old children play by themselves. They have to play by themselves because there are no rules.

      I am really tired of Chinese doing the most unacceptable things and thinking it is ok because we are a "developing" country. It does not work for a three year old, why should it work for China?

      It isn't about having the same quality of laws as a Western economy. It is about having any laws.

      An emerging America based its economic laws on a rules based instead of the European principle based system despite Europe's howling protests. The key is America did have a system. China has no system, zero, nada, zlich. China will again isolate itself from the world unless it rights its course. This, of course, is a three year old's choice. When they are five, in kindergarten . they might regret their choices when no one will play with them.

      • 1 Reply to caseysxyz
      • @Casey, my opinion is actually very similar to yours. China does not need to play with the US rules, but it does need sound rules. The thing is should anybody expects there is little counterfeit products from China? No. Back to the early days of the rising US, the US had many counterfeit products as well. The key for China is to make less counterfeit goods rather than to expect nothing. Also, regarding IP copycats, while it definitely hurts the inventors in the developed nations, developing countries have to find a shortcut if they want to catch up. Look, do you expect a poor country suddenly smart enough to invent a iPhone? If developing countries always have to pay the full price (high premium) to get IP properties, they will never be able to accumulate enough capital to develop their economies.

        Overall, based on the analogy, I feel China is better off to play a 2 year old rule than a 30 year gold rule when she is 3 year old. Playing 3 year old rule would be ideal though.

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