The People’s Republic of Capitalism

July 11th, 2008

Yesterday I had the opportunity to watch Part 1 of Ted Koppel’s documentary series The People’s Republic of Capitalism on the Discovery Channel. Instead of going to Beijing and Shanghai, the normal stops for most first-time visitors to China, Koppel went to Chongqing, a city I have visited and written about.

The documentary is very intelligent and well-done, Koppel covers companies in the US who relocate their manufacturing to Chongqing, and the effect on the lives of the American workers who lose their jobs in the US, as well as the Chinese workers in the factory in Chongqing. He also compares how differently WalMart is viewed in China and the US. Koppel does a very good job of providing context about the effects of globalization, which mix good as well as bad for everyone.

Part of the reason the documentary format is appealing is because:

  • Many news departments cannot afford to send someone to a foreign country to live in and understand a different society for any length of time, even for a country as important as China
  • Most editorial head offices have their own agenda, and see things very differently from the local people, which leads to an unbalanced view
  • The views of many Chinese are often dismissed because westerners think that they are, rightly or wrongly, closely supervised by minders and are only speaking the government line

Koppel is fortunate because he had an excellent record on his nightly news program, Nightline, which he hosted for nearly 20 years. And now, he is able to make the kinds of programs he likes, without having to worry about time and budget considerations. It would be nice if there were more journalists who could make documentaries the way Ted Koppel is able to.

The series is a four-part series showing on four consecutive nights. If you are outside the US, you will most likely be able to buy the series from iTunes, because Discovery regularly sells their documentaries in the Apple iTunes Store.

Behind The Scenes In China

July 9th, 2008

Just a quick note about what I see happening behind the scenes in China.

The administration of Hu Jintao has made a recent effort to push for transparency and accountability in China, especially related to disbursement of funds related to the Sichuan earthquake, and then acting quickly against corrupt local officials in Wengan in Guizhou province.

The center in Beijing is responding to a popular demand for greater accountability and transparency, and is using this as an opportunity clean house within the ruling party. The message from Beijing to the local party officials is simple: Shape up or be removed from your position.

When Deng Xiaoping introduced his reforms beginning in 1978, he gave local officials wide leeway as to how investment was brought in. The reason for this was simple: Beijing had no money; it was bankrupt. The side effect of this policy has been rampant local corruption. All kinds of games have been played in the name of making the numbers reported back to Beijing. Many of these corrupt officials have escaped China, and are living in the US in multi-million dollar mansions paid for in cash. Behind the scenes, the Hu administration has been quietly working with the US’s Justice Department to bring these officials back to China for prosecution.

As the amounts of the corruption have grown, so has popular resentment. Beijing knows that it must act to clean house. The failure of local governments and party organizations to act forcefully and clean up their own houses have handed Beijing an excellent excuse to act forcefully, and handed multiple PR victories to the center. Chinese bloggers who highlight local corruption have become the eyes and ears of Beijing on the local level. When the decision is made that local corruption needs to be escalated to the national level, then Xinhua mobilizes its formidable machine to shape public opinion on the national level. Then Beijing comes in and acts forcefully, removing the corrupt officials, and making them an example to local government and party organizations all over China.

If you believe that this is simply about accountability and transparency though, you would be naive. It is also about money and how investment decisions are made in China.

Beijing is seeking to recover many of the financial and investment decision making powers which Deng handed over to the provinces and local party officials. In the context of this drive against local corruption, the local administrations and organizations are in a weak position to resist Beijing’s efforts to recover investment-making decisions. China needs higher value-added, higher technology industries which rely more on research, development and IP. Provincial governments and party organizations have not acted quickly enough to upgrade from inefficient, dirty industries which rely on cheap labor. This means that now the investment decisions need to be made from the center in Beijing, with the support of public opinion, of course.

While the Chinese government does not understand PR in a western context, it knows exactly what it’s doing in a Chinese context.