According to Mark Landler, "Obama Arrives in China on Trip With Complex Agenda," one of the main goals for Obama in Beijing will be to secure commitment to the Trans-Pacific Partnership (TPP) as well as a new bilateral treaty with China:
Later on Monday, Mr. Obama was to speak to business executives from that group, the Asia-Pacific Economic Cooperation forum. He will also meet leaders from 11 countries involved in trying to create the Trans-Pacific Partnership, an ambitious American-led trade pact that would be a central pillar of Mr. Obama’s “strategic pivot” to Asia.
The White House has methodically lowered expectations that a deal will be reached in Beijing. But the fact that Mr. Obama is meeting the other leaders so early in the trip — combined with recent reports of progress in talks with one of the key participants, Japan — has prompted trade analysts to speculate that there could be some kind of a surprise.
The Trans-Pacific Partnership does not include China, so Mr. Obama’s main commercial proposal for the Chinese will be a new bilateral investment treaty between the countries. Economists said it could be the most significant opening of the Chinese market for American companies since China joined the World Trade Organization in 2001.
American businesspeople view the treaty as an indicator of how serious Mr. Xi is about overhauling the Chinese economy, after a start that many describe as shaky. It would require the Chinese to open dozens of sensitive markets, some that remained closed to American companies, or required Chinese partners.
“Optimism is moderating in the American business community,” said John Frisbie, the president of the U.S.-China Business Council. “The reason for that softening is policy uncertainty. What’s the reform policy direction? We’ve seen little tangible impact so far.”A reason for the moderating optimism in the American business community is the subject of an excellent report today by Keith Bradsher, "No Longer Business as Usual in China." China is using its antimonopoly laws to go after companies, a percentage of which are foreign multinationals, for corruption and price gouging:
While China has long presented unique challenges for businesses, the regulatory and legal environment has been especially perilous in recent months, with authorities pushing companies to cut prices and punishing them with large fines. GlaxoSmithKline, Volkswagen, Chrysler, Mead Johnson, Samsung, Johnson & Johnson and other companies have been hit with multimillion-dollar fines this year, while Microsoft, Daimler and Qualcomm are under investigation.
Then suddenly, in the last five weeks, there has been a lull in what had been a rapid pace of punishments. The pause has been all the more abrupt because Chinese officials were putting the finishing touches on what seemed likely to be their heaviest penalties yet in the continuing crackdown on monopolistic practices. The target was even identified by Chinese officials at a news conference in mid-September as Qualcomm, which invents and licenses mobile technology.
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While national and provincial investigators appear to have pressed pause, township governments have quietly stepped up their activities, raiding the local offices of multinationals.
The townships, which do not have the legal authority to enforce antitrust legislation, are operating under old, vaguely worded laws against price gouging as well as collusion that are still on the books even as China has modernized much of its legal code to embrace more market-oriented principles. The local investigators have been copying large amounts of memos, tax records and financial documents. The more complex documents have then been forwarded to more experienced investigators in provincial capitals.
“We have clients that are investigated by very, very rudimentary teams who have no clue what they are doing,” said an adviser to multinationals who insisted on anonymity because of the legal sensitivity of the cases. Those teams, the adviser said, nonetheless manage to accumulate large quantities of confidential corporate data, sending a shudder through the head offices of the affected multinationals.It is wonderful to read the squeals of Western corporate chieftains and captains of industry. Where are the hosannas to the rule of law? Of operating in a corruption-free commercial market?
Bradsher's story wonderfully, if unintentionally, highlights Western hypocrisy as it lays out the lax, captive regulatory environment U.S. and European multinationals have grown accustomed to:
Whether the Chinese government is focusing disproportionately on foreign companies is the subject of considerable dispute.
Foreign business groups calculate that half the recent national and provincial antitrust and collusion penalties have been aimed at multinationals even though they represent a very small share of the Chinese economy. But Chinese officials said in late September that if all collusion penalties assessed by local governments are included, then multinationals are only the targets a tenth of the time.
Western companies have been taken aback by many procedural aspects of the investigations, which diverge significantly from practices in the United States and Europe.
Chinese regulators have been pushing through antitrust cases in a few weeks, giving companies little chance to respond. In the United States, they take two years or more.
China also does not have clear rules on whether investigators need warrants to search offices or whether executives are entitled to lawyers, particularly foreign lawyers. So many companies have been raided that the European Union Chamber of Commerce in China has organized a conference for executives in Beijing on Nov. 21 titled, “Dawn Raids in China — How to avoid and answer a sudden knock at your door?”
Antitrust authorities in China also routinely share evidence with other agencies, including tax collectors. The information, which generally cannot be shared among agencies in the United States, has opened up new avenues for potential cases.
People’s Daily, the official newspaper of the Communist Party, devoted nearly an entire page on Oct. 13 to accusing foreign corporations of diverting large profits out of the country without paying taxes on them — a complaint sometimes levied against multinationals in the United States and Europe.
Yuan Shuhong, the deputy director of the legislative affairs office of China’s State Council, or cabinet, said at a news conference in Beijing on Thursday that China planned to enact an administrative procedures law to require that due process and other legal norms be followed during government regulatory actions. But the law may take considerable time to draft and approve, he warned.
Some lawyers contend that the Chinese government is simply looking to create a robust regulatory framework and stamp out corruption. Chinese government agencies “are becoming more and more sophisticated, and confident in launching investigations against foreign companies,” said Michael Gu, an antimonopoly specialist at the AnJie Law Firm.
To others, the legal cases are signs that the government’s growing nationalism — already evident in state-run media and China’s contentious relationships with neighboring countries — extends to economic policy as well. Critics contend China is going beyond the spirit, and possibly the letter, of the free-trade rules of the World Trade Organization, even though China, as the world’s largest exporter, has been the biggest beneficiary of the W.T.O.
“China should be out there in the front trying to make W.T.O. rules stronger, not undermining them,” said Susan C. Schwab, who was the United States trade representative from 2006 to 2009. “But I don’t get the sense there is anyone in Beijing making that case, because you’ve got a very self-absorbed focus on industrial policy coming out of parts of the government.”
China’s assertive stance has created a dilemma for the United States and other trading partners. While they are reluctant to defend companies that may have bribed officials or colluded with competitors, they are also unsettled by China’s insistence that companies cut prices for products or otherwise hamper business. The Obama administration has ended up saying little publicly even as American business leaders have fumed.
“We have been in regular contact with U.S. companies on a range of issues that may affect the business climate in China and want to ensure foreign firms are not singled out for Anti-Monopoly Law investigations and are treated fairly by Chinese enforcers,” Matt McAlvanah, the chief spokesman for the Office of the United States Trade Representative, said in a written reply to questions. “The U.S. has had longstanding discussions with the Chinese government on antimonopoly law and we will continue this engagement.”
Advocates of a more confrontational trade strategy have criticized the administration for not taking a more public stance. They point to various potential tools, like threatening to limit China’s access to the American market.So there you have it. Really all you need to know. The U.S. Trade Representative is being lobbied, with requests to threaten a trade war, to punish China for cracking down on corruption in its marketplace. I'm sure American consumers would love government action to cut prices; we just know not to expect it.
Andre Vltchek had a terrific piece, "‘Pro-Democracy Protests’ in Hong Kong," this past weekend on the Counterpunch web site. Vltchek travels to Hong Kong and talks to the Umbrella Movement protesters at the various occupation sites. He finds a lot of bourgeois youth hopped up on the Western media with little understanding of their role in the U.S.-backed color revolution scheme.
What Vltchek's story also accomplishes is an appraisal of China that is not predisposed to see it as a growing evil dragon biding its time until it can gobble up the peaceful democratic West:
For years, Western propaganda has tried to convince the world that China is actually ‘not communist’, not even socialist. A highly successful communist nation would be the worst nightmare to the Empire; it would torpedo Western dogma about the ideological victory over non-capitalist and non-imperialist forms of government.
So far, the propaganda has been extremely successful. If people were asked in Berlin, London or Paris, many would make ludicrous statements that ‘China is more capitalist than many openly capitalist countries.’
By provoking China, directly and through its client states like Japan, Philippines and South Korea, the West hopes that the big dragon will eventually lose its patience, will snap, and consequently gain a reputation as a highly aggressive creature. That could, in turn, ‘justify’ another arms race, perhaps even a direct conflict with China.
The more socialist China becomes, the more the West panics. And China is becoming increasingly socialist: by maintaining the central planning system, by holding in state hands its key industries, by commanding the private sector what to produce, or by declaring that if the people would not be given free medical care and free education, the country would lose its right to call itself communist. The more public parks are built, the more high-speed trains and urban subway lines, as well as theaters and cultural centers, the more terrified the West becomes.
Now the revanchist students in Hong Kong admit that China (PRC) actually is a communist nation, but from their lips comes something extremely negative. And they declare openly how much they hate communism.
It all goes really well in the West, because China, together with Russia, Venezuela and Iran, are on the top ‘hit list’.
Protests in Hong Kong surely came in at an extremely opportune time, for the Empire.
Although China is acting with tremendous restraint (much greater than the US, France or UK have shown towards their own protesters), it has become a target of yet another smear campaign in the Western mass media outlets.
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