When Will We Stand Up to the Chinese Government?

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For those of you who have heard my presentations over the past six months, I frequently mention Liu Xiaobo.  Liu Xiaobo is a Chinese dissident.  He had the audacity to write Charter 08, a document which called for free elections in China, the recognition of human rights and the abolition of subversion laws.  After a lengthy two-hour trial, he received a sentence of eleven years.  He was sentenced on Christmas day – something that many commentators believed was an intentional message to the United States.


I speak about Liu Xiaobo for several reasons.  First, this is an important reminder that China is very different than us.  This is significant because we have become deeply indebted to China – they are the largest owner of our Treasury securities.  Second, it’s just another example of what happens when a country becomes indebted – we’ve lost our ability to lecture the Chinese.  Finally, I think (unfortunately) that it’s another indication that we’ve lost our moral compass.  I would argue that when I was younger (I’m 46), we used to care more about issues like this.  We used to think about these issues and talk about them.  But, we don’t seem to care any more.


We see China as a huge market and that’s all that matters.  Interestingly, if you look at rankings of countries based on respect of human rights, in 2007 (the best ranking I could find) China was below Iraq, Cuba and Afghanistan.  In other words, if they weren’t such a huge market, we wouldn’t trade with them.


Now, things have become even worse.  On July 4^th (another interesting selection of days), a Chinese court sentenced Xue Feng, A US CITIZEN, to eight years in jail for attempting to traffic in state secrets.  Very few of the accusations were made public (we’re dealing with China), but it’s been widely reported (including by the BBC and The Wall Street Journal) that he was trying to purchase a COMMERCIALLY AVAILABLE DATABASE of information about the Chinese oil industry.  (At first, I wondered if he had been arrested for trying to buy this database since the Chinese government would have simply stolen it, but apparently this wasn’t the case…)


(Mr. Xue attended the University of Chicago and is a naturalized citizen.  His family lives in Texas and he was working on behalf of a Colorado company (IHS Inc.).)


To make matters worse, Mr. Xue was arrested in 2007 (so even if he is eventually released and deported, he has been in jail for three years).  He was not allowed to contact the US Embassy and his whereabouts were unknown for several weeks.  He claims that he was tortured (burned with cigarettes and hit over the head with an ashtray) and has supposedly shown evidence of this to the US Embassy.  (Personally, I don’t need much evidence to believe that the Chinese government would do this.)


President Obama sent a personal appeal to China prior to the sentencing.  Our ambassador to China attended the sentencing hearing.  Our Chinese embassy said that Washington is “dismayed” at the sentence.  Here in Austin, I’m “dismayed” that we’re bullied by China’s government and that we don’t talk about these issues on a regular basis.  The Chinese government is evil.  Period.  Why do you think that their human rights ranking was below Afghanistan?  The reason is that they have even less respect for human rights than the taliban does.


Before any of you start writing me to tell me that we’ll change China by trading with them, realize that China is already the largest exporter in the world.  So, I’m not sure that I’m seeing our impact.  And don’t start writing me to tell me about things that the US government has done.  China’s act is a deliberate message to the US – it’s not a mistake or an act of negligence.  Finally, I realize that the US arrests spies all the time, but there have not  been any spying allegations made here.


In the past seven months, China has executed four Japanese citizens and one British citizen – all for drug smuggling.  We can argue about whether harsh drug laws are appropriate or not.  But what you should realize is that Britain pleaded with China not to execute their citizen (partly because they said he suffered from mental illness) and China refused.  China executed him at the end of Britain’s Boxing Day weekend.  What does it say about a government that is executing foreign citizens and sentencing foreign citizens on holidays in those foreign countries?  How can anyone disagree that we are dealing with an evil government?


So here’s what I’m wondering.  If I’m a CEO, is it ethical for me to send my employees to China?  If they do market research, they can be imprisoned.  All I know is that Jenny and I are not going over there and our kids aren’t going either.  The other thing that I know is that if we were China’s largest creditor (rather than debtor), we probably wouldn’t be in this situation.


RANDOM THOUGHT

Can one company pay enough to make the entire Gulf Coast whole?  When I think about all of the people who have lost their income (e.g., fishing, tourism, shops in towns that are hurting, etc.) and the fact that this is a multi-year problem, it is hard to understand how BP will be able to finance this.
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