Issue 3 - China

HMR The Horace Mann Review

Vol XV Issue III Spring 2006

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Spring 2006

LETTER FROM THE EDITOR

THE HORACE MANN REVIEW VOLUME XV , ISSUE II, SPRING 2006

A Journal of Opinion on Current Events, Politics, Public Policy, and Culture Maximilian D. C. Thompson Editor-in-Chief

Zachary Fryer-Biggs Executive Editor

Alexandra Moss Layout Editor

Jonathan Sarnoff Kunal Malkani Anoushka Vaswani Charles Stam Senior Editors

Matt Thurm Editorial Director

Jacob Goldstein Alexandra Kass

Production Managers

Ali Shafei Rebecca Dell Managing Editors

Meghan Galligan, Aaron Krieger, Alex Sisti Senior Advisors

Genevieve Martin Artistic Director

Julia Wittes

Director of Photography Contributing Writers Andreas Sakellaris, Zach Malter, Ben Mishkin, Alex Sisti, Rhonda Shafei, Alex Kass, Diana Greenwald, Katherine Kavaler, Robin Shapiro, Kimya Zahedi, Gaurav Saxena, Adam Eisenbud, Rachel Rushkin, Sloan Heller, Lindsay Gellman, Adam Eisenbud, Matt Joseloff The Board of Trustees Daniel S. Levien, Bharat Das, Raj Hathiramani, Shaan Hathiramani, David Katz, Sabeel Rahman, Eric Todrys, Mark Todrys Faculty Advisors Dr. Sam Gellens, Ms. Sharon Kunde, Dr. Barbara Tischler THEREVIEW@HORACEMANN.ORG

The Horace Mann Review is printed quarterly during the academic year.

The Review is a member of the Columbia Scholastic Press Association, the American Scholastic Press Association, and the National Scholastic Press Association. Please contact The Horace Mann Review for information on advertisements at TheReview@horacemann.org.

Editorials represent the majority opinion of the Editorial Board.

Opinions expressed in articles or illustrations are not necessarily those of the Editorial Board or of the Horace Mann School. © 2006, The Horace Mann Review

She is a striking cult image: a woman who simultaneously represents both one of nearly 1.3 billion personal histories and also the history of a monolithic nation, complete and indivisible.

This is where The Review starts its discussion of China: a deeply ambivalent place. There are no convenient answers to the question of what role China will play internationally, how it will define its national identity, or what it will do with its financial might. Any indication that The Review might offer one would be not only misleading, but also untrue. Instead, the articles paint different, and sometimes contrasting, parts of the same picture.

Anoushka Vaswani interviews Citigroup CEO Richard Stanley about the supernova hot Chinese economic conditions. Kunal Malkani enumerates his arguments against protectionism in his opinion piece “Protecting America,” while the prodigious Jon Sarnoff details the long history of China’s international relationships with both its Asian neighbors and the global community in two articles titled “China and Its Neighbors” and “China and The West,” respectively. Zach Malter covers the ancient history of Islam and Judaism in China and Andreas Sakellaris highlights the current status of His Holiness the Dali Lama of Tibet. Ben Mishkin covers the ethics of Google and Yahoo in China, while Guarav Saxena and Adam Eisenbud bullet point the fundamentals of the Chinese economy.

The Review is also energized by the addition of two new writers, who have helped expand the scope of the China issue. Sloane Heller’s “Oppressed” explains the situation of women in China. Lindsay Gellman draws connections between the Triangle Shirtwaist Factory fire of early 20th century New York and the current status of many sweatshops in China.

In our year long dedication to coverage of the AIDs epidemic, Rachel Ruskin, also a new Review writer, covers the spread of AIDs in China and its potential to completely undermine Chinese society.

Lastly, this issue, Spring 2006, stands as a landmark in the recent history of The Review. Building on the foundation laid last year, this Editorial Board is now well on its way of fulfilling its mission as a quarterly.

The next and last issue of this year, Summer 2006, will be primarily under the auspices of the next generation of Review writers, editors, and managers.

To a good year and many more to come,

Maximilian D.C.Thompson Editor-in-Chief

The Horace Mann Review

CHINA The Review Discusses A Developing Empire

Employing the Sweatshop Abusing Labor

By Lindsay Gellman..........................................................................................................................................Page 6

Oogles of Google Censoship in China

By Benjamin Mishkin.......................................................................................................................................Page 8

AIDS Infects China The Fight to Prevent a Disaster

By Rachel Ruskin............................................................................................................................................Page 12

A Toxic Past Opium in China

By Gaurav Saxena............................................................................................................................................Page 16

China’s Economy An Introduction

By Adam Cory Eisenbud and Gaurav Saxena..................................................................................................Page 17

Women Oppressed A History of Women in China

By Sloane Heller..............................................................................................................................................Page 18

Globalizing Education The New Frontier of Advanced Education

By Anoushka Vaswani....................................................................................................................................Page 20

Spring 2006

The Horace Mann Review Spring 2006

China and Its Neighbors Internal Asian Politics

By Jonathan Sarnoff........................................................................................................................................Page 22

Finding Religion

The Western Influence on Eastern Tradition

By Zachary Malter...........................................................................................................................................Page 26

The Emergence of China

The Review Sits Down with Citigroup China CEO Richard Stanley

By Anoushka Vaswani......................................................................................................................................Page30

China and The West

China’s Cooling Realations with the Rest of the World

By Jonathan Sarnoff........................................................................................................................................Page 34

The Dalai Lama A History of a Leader

By Andreas Sakellaris.......................................................................................................................................Page 38

Saving Taiwan

An Island’s Cry for Independance

By Kunal Malkani...........................................................................................................................................Page 40

Don’t Fear the World

Why Protectionism is the Wrong Approach

By Kunal Malkani...........................................................................................................................................Page 42

The Horace Mann Review

Employing the Sweatshop

By Lindsay Gellman

“Will it take large-scale tragedy to expose the horrors of Chinese sweatshops and galvanize legislators and public opinion?�

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Spring 2006 On March 25 th, 1911, the Triangle Shirtwaist Company factory burst into flames. Located in lower Manhattan, the factory employed approximately five hundred workers, most of whom were young immigrant women. The doors of the factory were locked because overseers claimed that workers were stealing. These unsafe conditions allowed the fire to quickly overwhelm its victims. Workers crowded onto the unsteady fire escape, which collapsed under their weight. Many were forced to choose between jumping to their deaths or being burnt alive. Fire trucks arrived, but their ladders were too short to reach the victims. By the time the fire was extinguished, one hundred and fortysix workers had been killed.

An outpouring of newspaper articles brought attention to the atrocious work environment of the factory. As a result of the Triangle Shirtwaist Company fire, activist groups pushed for new legislation to improve factory working conditions.

Ninety-five years later, one would like to believe that all human beings work in safe environments where they are treated with dignity and respect. Yet in China, workers struggle daily in sweatshops and are subjected to hazardous and inhuman conditions.

The general public ignored the conditions in the Triangle Shirtwaist Factory until it was too late for the workers. Will it take another large-scale tragedy to expose the horrors of Chinese sweatshops and galvanize legislators and public opinion?

A sweatshop is a work environment in which workers are paid low wages and endure unhealthy or harsh conditions. The economics of sweatshops depends on the availability of unskilled laborers and a general disregard by factory management for workers’ rights.

Recently, sportswear giant New Balance has been accused by the media and political groups of using sweatshop labor at the Hongyuan Shoe factory in China. New Balance denies that it uses the factory for manufacturing. China Labor Watch and the National Labor Committee have investigated conditions at the factory, however, and have concluded that they are appalling. Employees at the factory generally work seven days a week. They

live in crude dormitories where men and women share bathrooms and showers. Workers claim that the food is repulsive and contains rat feces. In addition to these squalid conditions, laborers are at the mercy of the corrupt factory management. If they fight for better working conditions, they will be fired and lose their much-needed income.

A similar conundrum leaves consumers confused.

Purchasing products manufactured using sweatshop labor supports this inhumane economic system.

Concerned consumers can purchase merchandise made by specific labels, such as The Body Shop and Levi Strauss, who have joined the Ethical Trade Initiative (ETI). The ETI consists of companies which consciously monitor the working conditions of the factories they use.

However, boycotting the products of companies who allegedly manufacture products in sweatshops ultimately hurts the workers. The well-meaning consumer who does not wish to support worker exploitation causes company revenue to fall, which in turn decreases the company’s capacity to employ workers. Boycotts may cause workers to be laid off without improving working conditions, therefore punishing the workers rather than the corporations that utilize swear shops.

Because both sweatshop workers and consumers alike are unable to effect positive change in the global political economy, labor reform must be mandated by legislation. The leading nations of the world must pass laws which prohibit the sale of products manufactured under inhumane conditions. Activist groups must continue to investigate and expose inhumane and unsafe labor conditions. The death of workers at the Triangle Shirtwaist Company factory brought to light the terrible plight of sweatshop workers and the dangers of safety violations. As a nation which promotes democracy, the United States must no longer allow the trade of products manufactured by workers who are not guaranteed basic rights or dignity. Rather than slowly affecting change by economic decisions, let us take action now to improve conditions for sweatshop workers in China and around the world. « Page 7

The Horace Mann Review

Oogles of Censorship in China

By Benjamin Mishkin Censorship of the media often accompanies totalitarian governments. In this regard, China, which has had a single-party, totalitarian government since 1949, is no exception. Over the past thirty years, China has undergone extensive economic reforms, including privatization, increased foreign trade, the implementation of a market-based economy, and admission to the World Trade Organization, which have led to booming growth in the Chinese economy.

Political reform, however, has largely been outpaced by this economic change. The loosening of restrictions on the media that many hoped would accompany economic prosperity has not occurred. Recently, with the rapid increase in Internet access in China, the government has been forced to adapt its methods of censorship for the internet. Cyberspace may be difficult for the government to control, yet it has begun censoring many politically sensitive websites frequented by Chinese citizens. The implementation of “the Great Firewall of China,” as some have come to call this policy, has been facilitated by the cooperation of Western corporations, including Google, Yahoo, and Microsoft. This cooperation has attracted great criticism. Representative Christopher Smith (R-NJ), for example, called it a “sickening practice” in a hearing of the House Subcommittee on Africa, Global Human Rights and International Operations, and Asia and the Pacific, of which he is the chairman. These corporations have been accused of putting money— China has the greatest future in terms of internet growth—over morals in their dealings with China.

At the request of the Chinese government, Google has agreed to filter its search engine in China. Google’s website for Chinese users filters out terms the Page 8

government deems ‘sensitive.’These include references to Taiwanese independence or the 1989 Tiananmen Square Massacre. Searches related to Tiananmen Square, for example, will show pictures of only the Square itself, not of the anti-government protests. In comparison, nine out of the first fifteen images in the American version of Google are the famous picture of the lone young man confronting the column of tanks.

Google has been criticized by many who say that cooperating with the Chinese government to abridge the freedom of the press is a reprehensible practice.

Reporters Without Borders (RWB), an international non-governmental organization dedicated to defending freedom of the press, has strongly condemned Google.

RWB writes on its website, “The launch of Google.cn is a black day for freedom of expression in China.” The organization continues, “The firm defends the rights of US Internet users before the US government but fails to defend its Chinese users against theirs,” referring to Google’s refusal to give data on the prevalence of Internet pornography to the Department of Justice.

Google, however, argued that some access to Google is better than no access. Andrew McLaughlin, Google’s senior policy counsel, said, “Filtering our search results clearly compromises our mission. Failing to offer Google search at all to a fifth of the world’s population, however, does so far more severely.” Prior to the launch of Google.cn, the company’s Chinese language search engine was rendered useless to virtually every user in mainland China due to government censorship. In addition, Google.cn will not offer Google’s email, chat room and blogging services—Gmail, Google Talk, and Blogger. According to the company, this move was motivated by a desire to protect Google from being

Spring 2006

Chinese users will soon make up the largest internet population in the world compelled to give users’ personal information to the government. As McLaughlin stated on the official Google blog, “We’re not going to offer some Google products, such as GMail or Blogger, on Google.cn until we’re comfortable that we can do so in a manner that respects our users’ interests in the privacy of their personal communications.” The future does not look too bright for those who want Google to stop its censoring of Google.cn. Any change could only come after political reform in Beijing, which currently does not seem very likely.

Perhaps the only company to have generated more controversy than Google is Yahoo. RWB claims that Yahoo gave the Chinese government information about two journalists who have since been sentenced to long

prison terms. Li Zhi was sentenced to eight years in prison in 2003; he was convicted of “inciting subversion” for criticizing, in online discussion groups and articles, the corrupt nature of local Chinese officials. In 2005, Yahoo released information regarding the IP address of journalist Shi Tao, who worked for the Dangdai Shang Bao (Contemporary Business News). Zhi was convicted of “divulging state secrets” after he sent foreign-based websites the text of a government memo warning of possible destabilization due to the 15th anniversary of the Tiananmen Square Massacre. The verdict in Shi’s case states, “account holder information furnished by Yahoo Holdings (Hong Kong) Ltd.” Yahoo was asked to surrender this information after the government tracked “sensitive activity” to Shi’s IP address. Yahoo Page 9

The Horace Mann Review has signed the “Public Pledge on Self-Discipline for the China Internet Industry,” which provides a set of rules governing the conduct of Internet service companies in China and the relationship between those companies and the Chinese government. In Article 6 of the Pledge, companies agree to comply with the laws set forth by the Chinese government: “We pledge that in promoting the development of professional ethics of the Internet sector, the state laws, regulations and policies governing the development and administration of the Internet shall be observed consistent with and to carry forward the rich cultural tradition of the Chinese nation and the moral code of socialist spiritual civilization.”

In its defense, Yahoo has stated that it simply complies with laws and regulations in China. It insists that the Chinese government did not tell it for what purpose the information it provided would be used. According to a Yahoo spokeswoman, the government rarely does so.

RWB believes that blindly handing over information to the Chinese government is a much larger problem that mere self-censorship: as it says on its website, “information supplied by Yahoo led to the conviction of a good journalist who has paid dearly for trying to get the news out. It is one thing to turn a blind eye to the Chinese government’s abuses and it is quite another thing to collaborate.” According to RWB, Yahoo’s operations in China are based in Hong Kong and are subject to Hong Kong law. The company, therefore, is not required to hand over information to Chinese police. Instead, according to RWB, companies like Yahoo have made such cooperation a custom to improve relations. Yahoo, however, says that the request from the Chinese government was registered through legitimate law enforcement with Yahoo China, not Yahoo Hong Kong, and that Yahoo had no choice but to comply. As Michael Callahan, Senior Vice President and General Counsel of Yahoo, said in testimony before the House Subcommittees on Africa, Global Human Rights and International Operations, and Asia and the Pacific, “When we receive a demand from law enforcement authorized under the law of the country in which we operate, we must comply…All companies must respond in the same way. When a foreign telecommunications company Page 10

operating in the United States receives an order from U.S. law enforcement, it must comply…Ultimately, U.S. companies in China face a choice: comply with Chinese law, or leave.” Yahoo, like Google, has agreed to censor and filter its search engine. This close cooperation with Chinese authorities makes it possible that Yahoo will be providing more information useful to the government rather than to its users.

While Google has been cooperating with the Chinese government on its search engine and Yahoo has been providing information about its users, Microsoft has been cooperating with the government on blog websites. MSN Spaces, which is owned and operated by Microsoft, began service in China in June 2005. According to a study done by CBP Career Consultants Co., Ltd., a leading career consulting firm in China, 52% of white-collar workers in China’s four largest cities maintain a blog. Of that number, 41% chose to use MSN Spaces, in large part due to its increased privacy controls: users can prevent people they do not know from accessing their blogs.

As a concession to the government, MSN Spaces censored sensitive words similar to those censored

by Google when it began providing service in China, including “freedom,” “democracy,” “human rights,” and “Taiwan independence.” China has recently passed legislation that requires all bloggers to register with the government and give their identity within a month of creating their blog. This registration enables the government to monitor blogs for violations more easily and to find the creators of illegal blogs.

Recently, Microsoft was criticized for removing the widely read blog of journalist Zhao Jing. This criticism, many believe, prompted Microsoft to change its software to allow blogs blocked in their country of origin to be seen in other countries. Microsoft also changed Spaces so that bloggers will now be notified if posts on their blog have been blocked.

While it is regrettable that MSN Spaces blocks certain controversial phrases from appearing, the changes are significant as they allow information that would not otherwise see the light of day to be distributed across the world.

Microsoft’s cooperation with the Chinese government is nowhere near as compromising as

Spring 2006

Censorship of the media is not a new practice for China, whose authoritarian government relies upon control of information to prevent internal resistance and revolts Yahoo’s, which borders on collaboration, as Microsoft does not provide the government with information about its users. In light of the serious concern that censorship of the Internet, especially search engines and blogs, suppresses freedom of the press, Microsoft’s decision to allow blocked Chinese blogs to be read in other countries is an important step forward and one for which Microsoft deserves credit. This policy will allow people outside of China to learn first-hand about domestic Chinese affairs. While domestic pressure tends to be more effective in sparking political reform, foreign pressure can never hurt, especially in China, where internal criticism is so aggressively silenced.

Censorship of the Internet is not a new practice for China, whose authoritarian government relies upon control of the media and information to prevent internal opposition. The Internet challenges the government’s ability to control what the populace is told and what it believes. The ease, speed, and anonymity of electronic communications present many difficulties to government control. The Internet, therefore, has the potential to disrupt the current political order in China,

which oppresses and denies basic human rights to one sixth of the world’s population. When companies such as Cisco Systems sell the Chinese government the equipment it needs to track controversial and potentially “subversive” bloggers or to block websites that it deems politically sensitive, they counteract one of the greatest benefits of the Internet: enabling all people to communicate freely. When Yahoo decides that will it not only comply with the Chinese government in denying its users information, but also reveal information about them, Yahoo transforms itself from a company providing an important service into an informant for an oppressive government. By providing information, Yahoo has become the 21st century equivalent of the Swiss bank that took money from Nazi Germany “unknowingly”: a company that complies with and helps an oppressive government. If Internet service firms truly believe in political freedoms like the American ideals of freedom of speech and of the press, then they will allow the Internet to be a positive force for change in China, not a tool of « totalitarianism.

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The Horace Mann Review

AIDS Infects China

By Rachel Ruskin In 2002, Kofi Annan announced, “China has everything to gain if it can stem the tide of the AIDS epidemic, and everything to lose if it fails.” Today, the Chinese government estimates that 650,000 people in China are living with HIV/AIDS. The actual figure may be even higher. While this number is clearly not as staggeringly high as the number of people living with HIV/AIDS in other countries around the world, the issue of AIDS in China is still an extremely important one that deserves attention.

It is a rapidly growing problem, as almost 200 new AIDS cases are reported daily. Once ignored by the Chinese government, AIDS became a priority in late 2003. At this point, the government switched from stigmatizing AIDS patients to enacting laws to help them. While these efforts were an important change and gave hope to many, the Chinese government has far from lived up to its promise to help deal with AIDS. It has put insignificant effort into backing its AIDS-related regulations and has impeded the work of many AIDS activists because it fears that the work of nongovernmental organizations (NGOs) will hurt the government’s public image.

When AIDS first started to appear throughout China, the government refused to acknowledge it as a legitimate problem. It repeatedly tried to make AIDS a shameful disease by associating it with capitalism and the West. Helping those with AIDS was not considered an urgent priority as it affected primarily those who took part in so called “western” practices: injection-drug use, gay sex, and prostitution. No laws were made to help AIDS victims, and AIDS patients Page 12

were constantly discriminated against. They were declined jobs, turned away from housing, and refused health care.

Then, in the 1990’s, China’s Henan region became a centre of the nation’s AIDS crisis. Large numbers of people were contracting AIDS through the practice of “blood-selling.” This involved residents of the region, primarily impoverished farmers, selling their blood to various facilities where the blood was pooled and plasma sorted out. At this point, those who had given their blood would get the blood back, allowing them to sell again soon. However, these health facilities were not well run and blood was not tested regularly for HIV. Through this procedure, entire villages became affected with HIV/AIDS. In this case, people were not becoming infected because of practices considered controversial or immoral. In fact, the heath facilities where this activity took place were government run, so it was the carelessness and incompetence of government officials that led to this massive spread of HIV/AIDS. Yet the government still refused to take immediate action, continuing to defy the presence of a problem.

Even today this scandal affects the how AIDS is dealt with in China. While the government now sees that those infected need to be helped, it remains reluctant to do anything that could call attention to its failures with blood-selling.

After years of ignoring the problem, China finally started to take steps to deal with HIV/AIDS in 2003.

On World AIDS day, Chinese Premier Wen Jiabao shook hands with a number of AIDS patients at a Beijing hospital. This event marked a major turning

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Today 650,000 people in China are living with HIV/AIDS point in China’s attitude towards AIDS. Jiabao is a major government figure and his interaction with AIDS patients demonstrates that those with AIDS should not be considered dangerous degenerates but people worthy of compassion and assistance. Soon after, the government started to change policy to help those with AIDS. It implemented a law known as the “Four Frees and One Care Policy,” which provided free antiretroviral drugs to HIV/AIDS patients who could not afford them, free drugs to prevent mother/child transmission for pregnant HIV/AIDS patients, free testing and counseling for HIV/AIDS patients, free education for those orphaned by AIDS, and care and economic assistance for all HIV/AIDS patients. This policy was hugely important and was the beginning of China’s efforts to treat HIV infected citizens.

Since then, the Chinese government has continued to create policies to better the lives of those with HIV/AIDS. In August 2004, China made it illegal to discriminate against people infected with HIV/AIDS. Page 14

This law addressed the government’s attempt to change the cultural view of AIDS by forcing people to view those with HIV/AIDS as members of society. During 2004, Jiabao further highlighted China’s commitment to dealing with AIDS by referring to it as China’s top priority.

Even recently, the government has enacted new laws to benefit those with HIV/AIDS. On January 18th 2006, China issued “The Regulation on AIDS Prevention and Control.” These laws aim to help HIV/AIDS patients live more normal lives. It emphasizes the rights of those with HIV/AIDS to not be discriminated against by protecting their rights to marry, be employed, and receive medical care and education. It also establishes an HIV/AIDS patient’s right to privacy, making it illegal for anyone to disclose information about someone living with HIV/AIDS without that person’s permission.

All of these regulations are clearly very important steps to managing AIDS in China. Unfortunately, AIDS

Spring 2006 activists report that they have not been implemented as vigorously as hoped. Government officials call the “Four Frees and One Care Policy” a major success, saying that over 10,000 Chinese AIDS patients have used it to receive antiretroviral drugs. Yet AIDS activists in Henan say that the program is not wellrun, inefficient, unfair, and corrupt. For instance, there have been reports of government medicine being sold on the private market, for profit, instead of being distributed to AIDS patients. Also, the staff at medicine distribution centers is often unknowledgeable and doesn’t always inform people of the side effects of AIDS medication. Another problem, according to activists, is that the government has given medicine primarily to areas receiving media attention instead of giving equal resources to all affected regions. When AIDS patients have tried to stand up for their rights, the government has repeatedly harassed them. Five people with HIV were detained after demanding the economic assistance that the government had promised them. Another man was detained when he complained that the antiretroviral drugs that the government had given him were expired.

The issue of China’s mistreating AIDS activists is of particular importance. It is a result not of ineptitude or small scale corruption but part of a major movement by the Chinese government to suppress AIDS activists. In doing so, the government is not acting in the way most beneficial to those suffering, but instead in the manner that will make itself look best. AIDS activists with the potential to help are being denied the chance to do so, insulating the Chinese government from reports about its failings.

An example of Chinese officials impeding AIDS activists can be seen through the closing of The Orchid Orphanage. This orphanage was started by a man named Li Dan as a place for children who had been orphaned by AIDS or whose AIDS infected parents could not afford to take care of them. When he tried to register this orphanage, government officials, fearing it would damage the image of the region, tried to stop him. They first requested that he turn control of the orphanage over to the government and, when he refused, demanded that he pay a huge amount of money. Li Dan actually did manage to raise the money

the government demanded, yet officials still refused to allow the orphanage to be registered. At this point, Li Dan was forced to register the orphanage as a commercial enterprise instead of as a Non-Government Organization (NGO). Even this act was not deemed acceptable. Police forcibly closed the orphanage and sent many of the children to government run facilities.

The Orchid Orphanage staff sent the rest of the children home to relatives, fearing more police action if they tried to keep the children. When these staff members then tried to bring what had occurred to the media’s attention, some of them, including Li Dan, were detained for long periods of time and beaten. During their detentions, those who had HIV were refused their usual medicine and suffered setbacks to their health.

Another major AIDS activist in China is Hu Jia. He founded a charity known as Loving Source in Beijing in 2003 that has worked for better treatments and information for those with AIDS and help for AIDS orphans. From the beginning, the government has given it a hard time, referring to it as an “antigovernment” organization. Since then its workers have been harassed, and it has had to move offices on numerous occasions. Just last month, major international donors pulled their funds as a result of pressure from the Chinese government. This major blow to the charity has caused Mr. Hu to recently resign from the organization. He did this with the hope that without his presence the government will start to leave Loving Source alone. Regardless of the government’s response, Mr. Hu’s departure is clearly upsetting given all the AIDS patients he has been able to help through his charity. It is very unfortunate that these patients will no longer be able to benefit from Mr. Hu in the same way because of the governments fear that he was spreading anti-government sentiment.

China has taken significant steps since AIDS was first documented in 1985. However, there is still much work to be done. The Chinese government has the opportunity to stop AIDS from reaching the level of epidemic that it has in Africa. However, in order to do this, it must recognize and accept its previous failings and embrace the work of NGOs as a helpful supplement to its own work, instead of working to alienate them. « Page 15

The Horace Mann Review

A Toxic Past Opium in China

By Gaurav Saxena A century ago, there were approximately one hundred million opium addicts in China. The government struggled to close the illegal trade and protect its people, while the British fought to maintain the trade. It took the government many years to eradicate the country’s drug use and cultivation. As the modern Chinese government grants more freedom to the society and the economy, the Chinese public is beginning to produce and use drugs once again.

Opium has had a long and bloody history in China.

Known as a powerful drug and painkiller for more than twelve centuries, opium has been the source of illicit smuggling and dangerous trade since the 17th century, when the habit of smoking opium with tobacco became popularized. The deadliest drug in Chinese history was born.

The British in particular were the major exporters of the drug to China. While the Chinese government fought strongly against opium, the British continued to push their highly successful trade into the hands of desperate addicts. The conflict between the Chinese government and the thriving British merchants set off a series of conflicts—known as the Opium Wars— which continued until 1858. China was subjected to a series of humiliating treaties—called the Unequal Treaties—that undermined its control over foreign trade and opened it up to European exploitation, as well as legalizing opium importation. Cultivation of poppy and importation of heroin continued to grow until 1906, when China was able to take steps towards banning the drug. It took 10 years before significant progress was made towards destroying the country’s poppy. Opium was no longer the visible, popular drug it had once been.

Today, modern China is again struggling with Page 16

opium. Approximately 2,500 tons are produced per year in the nation. Independent sources estimate that there are seven to twelve million drug addicts nationwide. More than 70% of these addicts are hooked on heroin. China’s problems extend beyond internal cultivation and use, since its neighbors such as Thailand and Burma have major drug smuggling routes into and out of China. Some countries further west such as Kazakhstan also supply China with opium. Fortunately, the extent to which China uses and grows opium is not as great as many of its neighbors. However, rising rates of drug consumption are galvanizing the government.

As China continues to grow in the twenty-first century, the drug trade has become more detrimental to the surging economy. The government has tightened border security, punished those suspected to be involved in the trade, and sentenced offenders to serious punishments. These policies are dangerous for a country that has committed numerous human rights violations such as censoring the media and passing down death sentences without trials. In addition, the effectiveness of these harsh laws is questionable.

Many police officers make arbitrary arrests, while dealers are able to bribe law enforcement officials.

China will have to find the right balance between protecting its people and encouraging economic growth by loosening regulations on trade.

Although China’s drug problem is far less severe now than it was a century ago, its changing economy has returned opium to the spotlight as a problem for China. As it launches into the twenty-first century, China’s government will have to assess and modify old policies in order to accommodate the needs of its « modern economy and society.

Spring 2006

China’s Economy An Introduction

By Adam Cory Eisenbud Gaurav Saxena • China has the fourth largest economy in the world.

• Currently, China has more than 2,000 SEZ’s, mostly in urban areas

• It has a population of of 1.3 billion.

• Poverty is still prevalent in China and the GDP per capita is only $6,200 per person.

• Its Gross Domestic Product (GDP) is greater than $2.25 trillion (compared to $12.41 trillion of the US economy, which is around 5.5 times larger) • China has a $200 billion trade surplus with the United States but a $100 billion net trade deficit.

• Its annual growth rate has increased steadily by 9% since 1979 • China has reformed strict business laws recently, which contributed to an increase in foreign investment • By 1979, China started to make an effort to privatize its economy, transferring control of businesses from state control to the private market

• Chinese unemployment is at 20%.

• 49% of of China’s labor force is occupied in the agricultural sector.

• Its industrial production growth rate is 27.7%.

• Its major exports are machinery and equipment, plastics, optical and medical equipment, iron and steel.

• At the World Economic Forum, Chinese Executive Vice Prime Minister Huang JU predicted China’s output would rise to $4 trillion by 2020 and more than double the $1.6 trillion output of 2005.

• The Chinese government has established Special Economic Zones (SEZ’s) over the past twenty years to increase foreign investment. These zones have special business laws and tax incentives.

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The Horace Mann Review

Women Oppressed

By Sloane Heller China’s rich cultural history has become highly valued in the West. China’s increased participation in international affairs has, for example, increased interest in the Chinese language, so much so that many high schools (including HM) are offering Mandarin classes. There are institutions, like the Asia Society, devoted to preserving the history and traditions of China and of other Asian nations. There is, however, a darker element to Chinese society. In March of 1992, The Fourth World Conference on Women was held in Beijing. This conference spurred questioning into the plight of Chinese women. These questions have a simple answer: even though laws preserving women’s rights exist in modern-day China, there are still strong social and cultural tendencies towards oppression.

The Chinese bias against women has deep roots in Chinese history. The semi-colonial, semi-feudal system of Old China kept women as downtrodden and oppressed as possible. According to Confucian doctrine, women must follow “the three obediences”: to one’s father, to one’s husband, and, in the case of widowhood, to one’s sons.

These obediences stripped females of their social identities.

The tradition of foot binding—breaking the arch of the foot to change its shape—is perhaps the clearest symbol of the abuse Chinese women were forced to endure.

The growing interference of foreign powers in China only worsened the situation. The Japanese, who invaded China in 1937, slaughtered over 30 million Chinese, mostly women and children. Within a month of the occupation of Nanjing, more than 20,000 rapes had been committed.

This dark time for the entire nation was reflected in an environment more hateful to women then ever before.

By this point, however, women had begun to fight back. For over one hundred years, Chinese women waged a campaign for their liberation. They petitioned each successive ruler for equal rights and social recognition, and they were met with success for the most part. The Heavenly Kingdom of Taiping, a Christian southern Page 18

Chinese rebel state that existed between 1851 and 1864, instituted a series of reforms to promote equality between the sexes; the Reform Movement of 1898 inaugurated the movements against foot binding and for establishing girls’ schools; and the Revolution of 1911 (which ended the Qing dynasty) ignited feminist thirst for the participation of women in politics. While these movements rallied support for women’s rights throughout the country and began to accord women equal political rights, they failed to alter the fundamental social structure of female oppression.

The Communist Revolution of 1949 seemed as if it would finally create real change. The Chinese Communist Party created activist organizations composed of women from all walks of life and, during the revolutionary years, issued various declarations about the equal rights and status of women. The feudal system of Old China, which had oppressed women, toppled. When the First Plenary Session of the Chinese People’s Political Consultative Conference convened in 1949, Soong Ching Ling was elected Vice-Chairperson of the Central People’s Government. She, along with Li Dequan, Shi Liang, and others, were the first women to hold political power in China in centuries.

In the Party’s system of land redistribution, which occurred directly after the end of the revolution, women were treated the same as men and given their first taste of land ownership. In addition, they were granted the right to vote and to run for office. In fact, the first elections held after The Electoral Law of the People’s Republic of China was passed in 1953 saw over 90% of women casting their votes and 12% of the deputies elected to the National People’s Congress being women. Furthermore, the Party waged war on female illiteracy, implementing various literacy classes and night school programs in urban and rural areas.

The first piece of legislature enacted by the People’s Republic was a watershed for women’s rights: the Marriage

Spring 2006

Laws preserving women’s rights exist, yet there is still strong social and cultural oppression Law. This law abolished the arranged marriage system, freeing all Chinese for marriages of love. According to the Chinese government, domestic abuse decreased significantly. This law seemed to herald the victory of the Chinese women’s rights movement.

Yet all was not well beneath the surface. Although laws were in place, social trends had not yet caught up to political ones. A deep-seated attitude of male supremacy, rooted in years of tradition, still reigned in China. It persists even today It can be seen in the sex-selective abortions taking place all over China and in that many more girls than boys are given up for adoption. The population control law limiting Chinese families to one child has created a resurgence of sexism, as sons are frequently more useful than daughters and families have only one chance to have a child. In addition, while the Marriage Law did free

women from the tyrannical arranged marriage system, it did not change the context in which marriage was viewed.

Until very recently, the man was considered supreme in the relationship. Sex was something women were not allowed to enjoy. These attitudes have changed, however, as contact between China and the West has grown. The late 1990s saw a great surge in the divorce rates in China, which was previously regarded as social death. Women are finally beginning to see their own worth as something separate from that of their husbands.

These issues are far from solved. As long as infant girls are poisoned so their parents can bear a son, China’s sexism problem will not have been solved. Women will battle for their rights in China until Chinese society as a whole comes to believe in Mao Zedong’s famous statement: “Women hold up half the sky.” « Page 19

The Horace Mann Review

Globalizing Education

By Anoushka Vaswani Global education is undergoing dramatic upheaval in 21st century. America is rapidly losing its dominance in education, especially in math and science. With the onset of globalization, China may soon eclipse the United States and become the global center for higher education. As education is, and has always been, the pathway to the job market, this global shift in education could have signiďŹ cant economic consequences for the United States.

Chinese culture is based on a Confucian model, making education an integral aspect of society: many primary schools in urban areas operate full time, granting the students only one day off a week.

The Chinese higher education system illustrates the growing disparity between Chinese and the American attitude towards education. China has a vast system of higher education consisting of regular colleges and universities, professional colleges, and short-term vocational institutes. There is a sense of urgency in China to promote education and build talent within the country, shown through the vast educational reforms in the last decade. China has pinpointed technological innovation and science as important economic forces and has specialized its universities around math and science; as such Chinese universities are trying to attract top faculty from American universities. Many universities in China have begun offering MBA programs targeting students who intend to stay in China to do business.

These universities offer programs focusing on local Asian markets, such as the Chinese Expatriate Program, which educates students in Chinese Page 20

business practices, legislative requirements, and marketing techniques. The universities will also be familiar with the unique requirements of the regional businesses, allowing them to ensure that their courses are up to date with market demands. As a result, the number of students seeking a postsecondary degree in China has risen by approximately 5 million. Over the past decade, China has been investing in its top 100 universities, aiming to build them into enormous research centers with the capacity to win Nobel Prizes.

On the other hand, while Chinese education is undergoing rapid transformations, American education remains relatively complacent. American colleges used to attract the best and brightest students; however, as higher education globalizes, these schools are facing intense competition from foreign universities, particularly in Asia. The number of foreign students applying to American graduate schools declined 28 percent in 2005, while the number of Chinese students seeking admission into Chinese universities has seen significant growth. Many Chinese students face equal if not greater competition than students trying to gain admission into America’s top universities. For example Tsinghua, one of China’s elite universities, accepted only 16% of applicants in 2004, making it as selective as University of Pennsylvania’s Wharton School. Many students at Tsinghua also take eight courses a semester, compared to the four to six courses taken by students in America per semester.

There appears to be a general trend of students from various parts of the world such as Germany and Singapore opting to go to schools in Asia, rather than schools in America.

The strengthening of the Chinese system of higher education presents America with problems beyond the realm of education, since more foreign students going to Chinese universities means fewer coming to America. America is dependent on these foreign students to fill science and math positions, since there are very few American students who choose these careers. Currently, approximately half of all the scientists and engineers in the United States are foreign born. 56% of the engineering PhD’s awarded today in the U.S. are given to foreign-born

students. America, which used to have the 3rd highest percentage of students who became scientists and engineers, has slipped to 23rd. Since the mid-1990s, the number of Chinese doctoral students in American universities has rapidly declined.

Scientific innovation is integral to the American economy. Patents are one of the principal ways companies and investors profit from their ideas and remain competitive. A recent study conducted by CHI research, a consulting firm in Haddon Heights, N.J, found that researchers from Asia generate more than one quarter of the U.S’s industrial patents. If these researchers, many of whom come to the U.S as students, decided to remain in their home countries, would the American economy be able to maintain its R&D dominance?

Ultimately, the recent focus of the Chinese on higher education could have significant implications on the United States’ job market.

Businessmen such as Ross Armbrecht, president of the Industrial Research Institute, suggest that businesses are not only attracted to China’s cheap labor, but also to its growing scientific talent. Approximately 400 foreign companies, including General Electric, have established research centers in China, resulting in fewer skilled jobs in America. It has been estimated that by 2015, 80% of world’s middle-income consumers will live outside America; China is predicted to have 595 million of these middle-income consumers and 82 million upper-middle-income consumers.

As more white-collar jobs are outsourced to China, it is crucial for America to once again become more competitive through education. America cannot afford to grow complacent as it loses its dominance to China. Unfortunately, education has not been a top priority for many Americans. A survey conducted by the National Academy of Sciences, the National Academy of Engineering and the Institute of Medicine found that the average American student spends more time watching television than in school. On the other hand many Americans are beginning to realize that the development of education is imperative to America’s continued economic success. America must approach education with a different attitude, or face economic degeneration in the future. « Page 21

The Horace Mann Review

China and Its Neighbors

By Jonathan Sarnoff For most of history, China has been the most influential nation in Eastern Asia. Under early Communist rule, however, it largely withdrew from the international community. After the death of Mao Zedong, the original leader of the Chinese Communist Party, China began reforms designed to institute a market economy. As its economy grew and became more integrated with the international economy, China adjusted its foreign policy to facilitate this economic growth and became more involved in international affairs. Today, China’s foreign policy is devoted to increasing China’s participation in the international economy while protecing the government’s iron grip on society. Guided by these priorities, China has adopted a pragmatic, non-ideological approach to foreign relations that is focused on securing its leadership of the East Asian community and becoming a counterweight to U.S. influence in the region. China, which had long been the great power of East Asia, is on the rise again.

The new Chinese approach to foreign relations is well illustrated by China’s relationship with the small developing nations of Southeast Asia. Last December, the first East Asian Summit (EAS) was held in Kuala Lumpur, Malaysia. The EAS was originally conceived of as the precursor to an East Asian Community that would parallel the European Union. China, unsurprisingly, viewed it as an opportunity to accumulate influence and power in East Asia and weaken the United States, which was not invited to join. However, as the EAS added nations that were more wary of growing Chinese power, such as India, Australia, and New Zealand, the Page 22

EAS’ potential as a China-dominated bloc decreased and Chinese interest diminished. China’s new approach to international relations has welcomed multilateral institutions as instruments of foreign policy able to both increase China’s economic prosperity and ensure regional stability—a dramatic change from China’s earlier policy and a sign of its growing involvement in foreign affairs.

Another prominent aspect of the commitment to multilateralism is the six-party talks currently being held in Beijing on North Korean nuclear weapons, which include the United States, Japan, South Korea, China, Russia, and North Korea. Of all nations in the world, China has the most influence on North Korean actions. During the Cold War, North Korea was able to successfully play China and the Soviet Union against one another, and each nation’s influence in Pyongyang fluctuated. After the fall of the Soviet Union and the end of the Cold War, however, North Korea’s main bargaining chip disappeared, and China’s range of diplomatic action on the Korea issue increased. As China has explored this range of action, its relationship with North Korea has worsened. China normalized relations with South Korea in 1991, for example, and did not veto South Korea’s application to join the United Nations. In addition, China severely reduced its humanitarian aid to North Korea, instead favoring a greater reliance on trade to provide North Korea with supplies. Finally, Chinese economic reforms of the past thirty years that have torn China away from socialism have damaged China in the eyes of North Korea, which

Spring 2006 views the Chinese as traitors to the communist cause.

This ideological breach between the two nations has grown as China integrates itself in the international order. China’s influence with North Korea, therefore, although significant, is not as significant as is widely believed.

China’s priorities in the North Korean conflict are largely applications of its more general foreign policy aims: to preserve stability with the aim of preserving economic growth, especially through avoiding a nuclear arms race, to spur growth in China’s historically depressed northeastern provinces through economic ties with North Korea, to increase its international influence through its role in the sixparty talks, and to limit U.S. influence. In addition, China can use the Korea issue to pressure the U.S. on Taiwan—tacitly promising Chinese cooperation on North Korea in exchange for U.S. opposition to Taiwanese independence. Furthermore, China has a vested interest in avoiding conflict—China has a treaty obligation to come to North Korea’s defense.

Aditionally, the massive influx of refugees from the north could destabilize China; the regional instability could damage China’s economy; and the final regime in Korea would likely be pro-U.S. China’s options for resolving the conflict are limited, however, by its opposition to coercive measures such as economic sanctions and the use of force. This lack of Chinese

cooperation on sanctions also precludes certain U.S. strategies—as China accounts for the plurality of North Korea’s international trade and therefore sanctions that did not enjoy Chinese support would be ineffective.

China’s best option, then, is to encourage diplomatic negotiations through the six-party talks. While talks are occurring, China needs to step up enforcement of export and border controls and crack down on illicit Korean trade. Although China’s government institutions on export and border controls are still developing, the government has made a commitment to cracking down on violators. With sufficient encouragement and cooperation from the international community, China can limit illicit transfers from North Korea. In the long run, however, China’s greatest contribution to solving the North Korea issue may be economic reform.

Since 2002, North Korea has begun implementing the beginnings of Chinese-style market reforms. If the Chinese government can persuade North Korea to continue this process of liberalization, economic growth will encourage North Korea to integrate itself with the international community. This process is the best chance the world has to peacefully resolve the North Korean dispute.

While China’s rise in East Asian affairs has been characterized by increased involvement in multilateral organizations, it has also been distinguished by tensions with other Asian powers. Throughout history,

Japanese Prime Minister Junichiro Koizumi, South Korean President Roh Moo-Hyun, and Chinese Premier Wen Jiabao at an ASEAN (Association of South East Asian Nations) meeting in 2002

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The Horace Mann Review China and Japan have never been simultaneously powerful. Before the 19th Century, China dominated the relationship, since the Meiji Restoration of 1868, Japan has. Today, however, the two nations are competing for control of East Asia. Chief among the causes of tension is a growing surge of nationalism in both nations. Japan has recently seen the rise of increasingly conservative governments that have cultivated nationalist sentiment, the most glaring example of which has been the frequent visits (five times in four years) of Prime Minister Junichiro Koizumi to Yasukuni Shrine, a memorial to those killed in Japan’s wars—including 14 World War II war criminals. Only two other Prime Ministers in the past twenty years visited Yasukuni, and each only did so once. In China, where World War II is remembered as the War of Resistance against Japan, the government has seized on these visits to portray Japan as aggressive and belligerent. In addition, China has used the visits to damage Japan’s reputation in East Asia, where many other nations still remember the Japanese invasions of the early 20th Century. In China, too, the government has cultivated nationalist sentiment, which it uses to rally support for the Communist Party in the face of rapidly increasing inequality. The growing nationalism of both nations has damaged relations between them— large percentages of each nation’s population have negative feelings towards the other nation and contact between the governments has declined since 2001.

China’s rise has also caused tension between it and the other growing Asian power—India. China’s recent history with India has been rocky—the two nations fought a war in 1962, which was won handily by China, and currently claim parts of each other’s territory.

In addition, during strained periods of Sino-Soviet relations, China closely allied itself with Pakistan to counterbalance the Soviet Union’s alliance with India.

Many parts of Pakistan’s nuclear arsenal were provided

by China. China’s strategy is to “contain India”— China wishes to be the sole Asian “great power” and therefore seeks to limit India’s influence. In seeking to achieve this goal, China has supported some of India’s somewhat hostile neighbors, including Pakistan and Burma, to occupy India with multiple security concerns and damage its ability to concentrate on competing with China. China already has an advantage over India, Page 24

as it has a permanent UN Security Council seat, is a recognized Nuclear Weapons State, and has a larger economy. Recently, however, China’s new outlook on international relations has changed its policy towards India—China now seeks to limit Indian influence without being overtly antagonistic. The issue of borders, for example, has been somewhat defused. China has recently settled border disputes with Central Asian nations, and it appears increasingly likely that China will reach a similar agreement with India to preserve the status quo. In addition, China has moderated its relationships with some of India’s opponents, especially Pakistan. Where China once supported Pakistan nearly unconditionally on Kashmir (a region claimed by both India and Pakistan) by advocating an international solution as preferred by Pakistan, it now tacitly agrees with India’s desire for the two nations to resolve the dispute bilaterally. As is often the case with Chinese policy, economic concerns have motivated much of this shift—bilateral trade between the two nations has increased about 40 fold since 1992. India accounts for the majority of South Asian economic activity, and China’s desire to increase its economic activity in the region has forced it to deepen its relationship with India. Economically, this growing relationship benefits both nations.

As China’s economy has boomed and trade relationships with other nations have strengthened, China has begun its ascent towards the top of the East Asian community. It has deepened its bonds with many multilateral organizations, seeking to establish itself as a vital trade partner and leader of East Asian developing nations. It has moderated its antagonistic relationship with many old enemies, such as India and South Korea, in an attempt to maintain regional and economic stability.

At the same time, it has weakened its relationship with many former close allies, including Pakistan and North Korea, demonstrating its policy of maintaining friendly relations with all nations, regardless of ideology.

Furthermore, its leadership in negotiations with North Korea has shown its commitment to both maintaining stability and becoming a responsible member of the international community. China, riding a tidal wave of history and economic potential, is assuming the role of an international leader in East Asia. «

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The Horace Mann Review

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Spring 2006

Finding Religion

By Zachary Malter In China, the most populous country in the world, religion, customs, and tradition play a significant role in society. Unlike Europe or the United States, almost everyone is spiritual, yet most are not religious in the sense of following a specific god or religion. Although Buddhism may be the most celebrated religion in the nation, others have a considerable influence on the country and the people. There are at least 150 million Muslims and thousands of Jews living in China today.

Jewish settlers first arrived in China around the 7th and 8th centuries where they began to develop an isolated and unnoticed community in the city of Kaifeng. Their impact on the country was minuscule for hundreds of years and by the 1800’s Jewish influence had essentially disappeared. In the late 19th century, many Jews fled to Shanghai from Baghdad, Bombay, and Cairo. Eventually, some came from Russia, trying to escape the communist revolution, while others immigrated in order to escape persecution in Europe during World War Two. The religiously tolerant people of China cordially accepted the Jews, but eventually many of them left to return to their former homelands, and the religious influence diminished as the century progressed. However, the Jewish influence is now rapidly increasing; a Jewish semi-revival is developing.

As China’s global economic influence increases, more Jews from around the world are settling in China. These international Jews, moving for business, are helping the approximately five hundred Chinese Jews living Kaifeng rediscover their faith. Many Chinese Jews have been forced to recognize their religion; they can receive an array of benefits for acknowledging religion, which include fewer restrictions on the number of children they can keep and an easier chance of getting into college.

Islam also has an extensive history in China, beginning in the 7th century during the Tang Dynasty, in which

Islamic influence was channeled from the Middle East to China through the prosperous silk trade. The Chinese immediately embraced the Islamic Faith and it slowly gained prominence in the nation. Today, nearly twenty million Muslims live in China, making up two percent of the nation’s population, especialy in the city of Xinjiang, and the number of mosques has increased recently.

One of the most unique facets of the Chinese Islamic faith is that woman are given the opportunity to be imams. In addition, some mosques have been created exclusively for female worship and are not overseen by men. Females generally play an insignificant role in Muslim life, so Chinese Islam is undeniably very different and much less traditional than the Islam that most people practice.

China’s muslims are not always satisfied with their lives in China, however. They generally feel oppressed and certainly have not been afraid to voice their opinions. A countless number of demonstrations, some violent, have been staged by Chinese Muslims; one in 2004 outside government buildings protesting the construction of a dam on Muslim farmland, another calling for the removal of Anti-Islamic literature from stores. The Chinese Islamic community has been very outspoken against the government and is unwilling to accept mistreatment.

A wide variety of religions flourish in the eastern part of China. Because of the Chinese people’s religious tolerance, individuals are free to practice any religion or variant they may choose. Despite having very little in common, both Jews and Muslims have gone to China because of the country’s unique ability to accept people of all faiths. Both religions have had a noticeable influence on the nation. It appears that the push for tolerance has allowed two religions who elsewhere are intolerant towards each other, to coexist. « Page 27

The Horace Mann Review

Beijing Olympics

By Matt Joseloff

As the 2006 Torino Olympics fades away, the world’s attention shifts to 2008. China will be the host country, and it will be the first time in 20 years that the games are held in a developing country. The Beijing games are projected to further enrich the booming economy in China, and the Chinese goverment plans to harness the enormous economic potential of the Olympics.

China’s domestic product will grow at a rate of 9.8 percent each year up to 2008, according to the Beijing Municipal Bureau of Statistics. China expects the Olympics will generate as many as 2.1 million new jobs by the opening ceremony, including 430,000 jobs for the building of Olympic facilities. In 2001, The Beijing Municipal Development and Reform Committee estimated that Beijing’s investment and consumer demand during the games would total approximately $362.5 billion. The Beijing games will also bring about a tourist boom. “The overseas visitors are projected to spend $1,500 each while the domestic visitors are expected to spend $148 each. In addition to the normal increase in the number of tourists, the Games will bring an extra 2 million people to Beijing during, before or after the Games including 300,000 from outside the mainland,” says Wei Xiaozhen of the Beijing Municipal Bureau of Statistics. In 2008, China anticipates a tourism revenue of approximately $950.1 million.

“Just over two weeks of the actual Olympic Games will not generate an immediate effect on the economy.

In fact, the Olympic economy usually yields its remarkable results over 25 or even 50 years,” says Richard Kevan Gosper, chair of the International Olympic Committee’s press commission. “Naturally, the organizers need to do a lot of work to help the Page 28

public acquire a better understanding in this regard.”

Few countries have placed as much hope in the Olympic games as China does. Past hosts have used the Olympics in order to make themselves more prominent on the world stage, as “coming out” parties, but China is looking to gain more from these games.”We want to convey the image of a China that is more open and that is making progress,” says Jiang Xiaoyu, a senior official on the Beijing Organizing Committee. To convey this image, China is pulling out all the stops.

Though summer games are on average three times larger than the winter games, China will expend over ten times what Italy spent in Torino.

Where is this money going? China is constructing eleven new venues for the games and renovating and expanding another eleven in addition to a brand-new $2 billion new airport terminal and runway. With the costs of improving highways, railways, and other infrastructures, China’s expenditure will be around « $16 billion.

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The Horace Mann Review

The Emergence of China The Review sits down with Richard Stanley, Chief Executive Officer for Citigroup in China How has the Chinese economy changed over the past twenty to twenty-five years?

become similar to other big companies around the world.

Currently, China is reforming its financial system. There is change in how capital is allocated. For example, banks I think that ever since Deng Xiaoping started the process are being changed so that they lend money on the basis that of transformation in China, the economy has changed the borrower is credit worthy. from a traditional soviet style economy to a market based economy. Over period of about 26 years, China has made What are some of the factors contributing to China’s an enormous change about the way business is done. The strong economic growth currently? change has been monumental for relatively short period of time. There are three major factors that caused this China is playing the catch-up game. Because it has had economic transformation. so many years of underperformance in the economy, the The first change was breaking down the system government is putting all kinds of investments into building of collective farming, where farmers worked on the roads, airports etc. There is also a huge amount of foreign government’s land so they didn’t reap the full benefits direct investment coming from foreign multinational of their output. In the early 80’s, most people worked in companies. Lastly, China has good fundamentals. It has agriculture and China had difficulty feeding itself. When one of the largest domestic markets in the world and a hard the government gave the control of farmland to individual working, well-educated domestic population. farmers, there was a huge change. Not too long after this change, China was able to grow enough food it feed its What are the consequences of China’s economic people. growth on society and the environment?

The next change was in industry manufacturing. In the late 80’s, many state owned enterprises (SOE’s) existed It is changing the way the Chinese people live their lives. in all kinds of industries. These were companies driven The young people going to college have a very different by product quotas rather than profit and efficiency. For life experience compared to their parents. They are not example look at a shoe factory: the government would tell working for SOEs, so the government is not providing for the shoe factory how many shoes to produce. Quality and their housing, medical care etc. The young people have to profit didn’t matter. The government began dismantling go and get job, buy their own house and other things such these SOEs. Now, the shoe factory’s business manager has as cars and save for their own retirement. The people are to worry about producing a good shoe, selling enough of more independent. A majority of people also have more the shoe to produce a profit, etc. Companies in China have money in their pocket. It is clear that old system was not Page 30

Spring 2006 growth equally. Many countries such as the US face the challenge of bridging the gap between the rich and the poor. The Chinese government is trying to create a localized pension system to provide for retirement. It is still in the early stages of developing a type of social security program. There is also a new focus from the government about helping the farmers. It is cutting taxes in the farming sector to ease the burden on the farmers and is keeping food prices slightly higher.

Regarding the environmental problems, there seems to be a lot of talk but not a lot of action. The government has a lot of work to do going forward.

How does the Chinese economic transformation affect the US economy?

The US has many problems because it has trade deficits with the rest of the world. Its own fiscal budget is dependent on foreign capital. The world trade supply in Asia has shifted because factories, business etc. are moving to China.

China then produces the end product, which is being sold to the US. China has a trade surplus with the US economy.

Unlike America, however, China isn’t consuming, which is creating imbalances in the trade between the US and China. Many Chinese save approximately fifty percent of their income. Therefore, there is some political tension between the US and China. The Chinese government is sustainable because the government couldn’t create enough working towards stimulating the consumer demand of the wealth to provide for its people. Now wealth is created for people and creating more demand for local and foreign products. China has the potential to become a major world the economy.

On the other hand the environment is in very bad shape. consumer.

China is also driving up oil prices. Its growth has There is a lot of pollution in big cities as they continue to created a large demand for oil, which is an unavoidable industrialize. consequence of growing so fast.

The US has also benefited from China’s growth. Foreign How is the Chinese government dealing with the companies have been able to gain access to China and consequences of China’s economic growth? make large profits.

The first part of the Chinese government’s strategy is to What are some of the challenges of doing business in continue its high growth trajectory. An enormous amount China? of jobs need to be created in the private sector, which needs to absorb the people being let off by the SOEs (since the The first challenge is that China has strict complicated government is dismantling them). The government is trying to create enough economic growth the employ the regulations that are sometimes unclear. The second main challenge is that I don’t speak Chinese and can’t new workers and reemploy the old workers.

The government is also trying to focus on sharing the communicate as well as I would like. However, the Page 31

The Horace Mann Review Chinese people are very open generally and it is a great we will also see the emergence of famous Chinese brands place to work and live. such as the Chinese version of the Ipod and I think Chinese companies will become household names around the How has China’s growth affected Citigroup? world. I’m very optimistic about the future of this country « in the world.

Citibank has benefited. We help MNCs (multinational corporations) that are coming to China and provide them with banking services. Under the World Trade Organization Richard D. Stanley is CEO of Citigroup in the (WTO), China has also agreed to open its market in many industries including banking by the end of 2006. I hope to People’s Republic of China (PRC). He has direct see a fully open market started next year and Citibank will responsibility for the management of Citigroup’s be able to offer consumer banking services to individual businesses and infrastructure in China. He is based Chinese people in their own currency. This has tremendous in Shanghai.

Mr. Stanley was formerly Cluster Head of Corporate potential. We are building our consumer-banking sector in China to support its growth. We are also setting up and Investment Banking (CIB) forASEAN (Singapore, partnerships with local banks. Although we are restricted Malaysia, Philippines, Indonesia, Thailand, Vietnam, to only foreign currency, next year we will have the ability and Brunei) and Citigroup Country Officer (CCO) to do everything we do in other countries. So, I think for Singapore. He had responsibility for Citigroup’s we are in a good situation right now and looking toward corporate banking, corporate finance, investment an even better future. We stand to benefit from China’s banking, global transaction services, equities, fixed income and treasury activities in the cluster. economic growth and the opening of the market.

Before becoming Cluster Head, Mr. Stanley was the Citigroup Country Officer for Citibank in the People’s I know you have lived and worked in both China Republic of China. He had business responsibility for and the United States. Could you compare your the Global Corporate and Consumer Bank, and was experiences?

Citigroup’s senior representative in the PRC. Mr. Stanley joined Citigroup, New York in I used to work in New York and I left in 1990. There are surprisingly few differences. There are a few differences 1981 on an internship and returned a year later in culture, but not in day-to-day life. One of the big as a Management Associate in the International differences is that the media in the US is more open and Financial Institutions Group. He has held a variety of you have more access to different perspectives. However, positions in Cash Management, Securities Services, the world is globalized and I still do the same things as I Relationship Management, and Strategic Planning in did in the US. The NBA and the Olympics are very big New York. In 1990, he moved to Singapore as Head here. Globalization is making the loves of people in many of Financial Institutions and Securities Services.

In 1996, Mr. Stanley served as member of a countries quite similar.

London-based Task Force responsible for developing and implementing Citigroup’s Emerging Markets What does the future hold for China? What do you Strategy. Later that year, he moved to Thailand as think China will look like in 2020?

Head of Corporate Banking. He was named a Senior The future is very bright. The government needs to Credit Officer in 1997. He was appointed to head the continue this growth. What you will see is continued China office in 1999.

Mr. Stanley is a member of the Board of Directors development in the big cities. China will make its market more open for foreign business and become a huge of the Shanghai Pudong Development Bank. He exporter of capital to the rest of the world. There will be received his MBA from Columbia University in more positive interaction with the foreign world. I think 1990.

A Brief Biography

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Spring 2006

You can remember your bank account number, but can you remember your anniversary?

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The Horace Mann Review

China and The West

By Jonathan Sarnoff Throughout history, China has resisted contact with the West. Traditional Chinese thought holds China as the “Middle Kingdom”—the center of the world—and is surrounded by barbarians. Thus, Westerners largely initiated the first contact between China and the West.

The Silk Road, for example, was developed after Roman conquerors encountered silk in the Middle East.

In addition, it was largely administered not by Chinese or Europeans but by Central Asians. Direct contact between China and the West did not begin until the 2nd millennium C.E. Again, the West initiated the contact.

China, however, remained relatively uninterested, confining Portuguese traders to the Macao peninsula.

As more European nations arrived to trade, China continued this policy, restricting merchants to specific ports—Guangzhou (then called Canton) and Macao— levying high duties on European imports, and banning Europ much of the interior of China to Europeans. It was not until the 19th Century that Europeans were finally able to break open China.

The First Opium War was fought between 1839 and 1842 between the British, who sought to allow the importation of opium into China to correct Britain’s trade deficit, and the Chinese, who disliked the drug’s effect on society. Britain handily won the war, and forced China to sign the Treaty of Nanjing, the first of the Unequal Treaties, a series of treaties imposed

by Europeans on China in order to facilitate European exploitation of China. These treaties granted numerous benefits to Europeans, including land cessions (Hong Kong), reparations, fixed tariff rates, extraterritoriality Page 34

( foreign citizens tried by their consuls, not by the local legal system), and access for European merchants to additional areas of trade including inland China. The series of Unequal Treaties continued through the 20th Century, during which time European powers seized more and more control of China. The overthrow of the Qing Dynasty, in 1912, heralded the end of strong European control of China. The new government was devoted to ending imperialism, and Europeans were soon distracted by World War I. In addition, political instability in China, especially after the beginning of the Chinese Civil War in 1927, dampened European interest in the region. During World War II, China joined the Allies. Four years after the war’s end, however, the Communist Party won the Civil War, bringing relations with the West to a halt.

The new government limited its ties with the developed world, and instead focused on allying with the developing world to form a united front against the two superpowers. The cultural revolution of the late 1960’s successfully alienated China from many nations.

After this period of turbulence, China reemerged as a significant player in international affairs. In 1972, it normalized relations with the United States, and it continued to normalize relations with many Western nations throughout the 1970’s. Since then, China has further integrated itself into the international community through significant economic reform.

One of the central features of China’s foreign policy is the hunt for resources. China’s demand for raw materials that fuel industry and trade has grown

Spring 2006

American President Bush and Chinese Premier Wen as its economy has boomed, its cities have grown, and its number of cars has skyrocketed. Where China was once East Asia’s largest oil exporter, it is now the world’s second largest importer. Its share of the world’s consumption of aluminum, nickel, iron, and copper ore is now twenty percent and is expected to double by the end of the decade. Ensuring a continuing supply of these resources is essential to continued growth in the Chinese economy, which is the Communist Party’s most effective method of preserving stability.

The resource that China has pursued with the most enthusiasm has been oil. The Chinese government has recently strengthened political ties with the Arab League, whose members provide nearly half of China’s oil. China has also used its oil-based diplomacy in Africa and Latin America. In 2000, it founded the China-Africa Cooperation Forum, which was devoted to increasing Chinese trade and investment in African nations, many of which produce oil and other resources.

This investment paid off—Africa’s percentage of

Chinese oil supply grew from 24.3% to 28.7% between 2003 and 2004.

China’s aggressive quest for resources has unsurprisingly been interpreted as threatening, however, by many industrialized nations in the West, who see China as an insatiable consumer of evershrinking commodity stockpiles. As much of the increase in the global demand for oil is driven by China, many fear that China’s demand will cause severe inflation of oil prices. Furthermore, China’s aggressive diplomatic moves have led to national security concerns. The influence of these concerns was well demonstrated in the fallout from the China National Offshore Oil Corporation (CNOOC)’s bid to acquire Unocal, an American energy company.

The House of Representatives overwhelmingly (39815) approved a statement saying that the sale would “threaten to impair the national security of the United States,” despite near unanimity from experts that the deal posed no significant threat. The threat of China’s Page 35

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quest for resources is one of the largest contributing factors towards growing American concern over increasing Chinese power.

Some good signs do exist relating to China’s energy consumption, however. Last year, the Chinese government created a new agency, the State Energy Office (SEO), which reports directly to the Prime Minister. The SEO has been charged with reducing China’s dependence on foreign sources of energy. The creation of this office is a welcome sign of Chinese rhetoric on energy conservation—politicians, including Prime Minister Wen Jiabao, have urged China to limit consumption of resources—being backed up by action.

Furthermore, China is seeking to diversify its energy consumption by relying on alternative fuels, such as coal (it has the worlds third largest reserves) and nuclear energy. Ultimately, the U.S. and China must find a way to collaborate on investment in energy and development of conservation to avoid conflict over diminishing oil deposits.

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Recently, China has severely reduced its use of confrontational diplomacy. In an imitation of the U.S.’s system of regional alliances, China began deepening ties with many neighboring nations at various levels of “partnership” in the 80’s and 90’s. In China’s quest to install itself as a central figure in a new worldwide multilateral order, it has become necessary for China to develop support among various nations across the world. China has therefore ameliorated its bilateral relationships with many of these nations. The relationship with Russia is a good example of such reconciliation. The Sino-Soviet rivalry was one of the most significant realities of the Cold War period.

After the collapse of the Soviet Union, the bilateral relationship between the two nations changed to reflect China’s desire for engagement. In 1991, they agreed to reconsider the existing border treaty and resolve all outstanding disputes. By 1997, this process had been completed. In 2001, the two nations signed the ChinaRussia Good Neighborly Friendship Cooperation Treaty, which established an entente between the two countries. China has realized that it must develop closer relationships with nations across the world if it is to continue its rise to global leadership.

China has also stepped up its commitment to opposing nuclear proliferation and supporting arms control. Prior to the end of the Cold War, China largely viewed nonproliferation as the responsibility of the U.S. and Soviet Union. In fact, much of the nuclear programs of many nations in the region, such as Pakistan, were built through illicit Chinese aid. Since the beginning of the 1990’s, however, China has taken numerous steps towards strengthening the international nonproliferation regime. In 1992, China finally ratified the Treaty on the Nonproliferation of Nuclear Weapons (NPT), the primary international instrument for curbing the spread of nuclear weapons. In addition, China signed and ratified the Chemical Weapons Convention (CWC) in 1992. China’s agreement to participate in nonproliferation and arms controls demonstrates its understanding that participation in and devotion to preserving peace and stability through nonproliferation is both important to China’s domestic interest and a sure road to acquiring increased international influence.

A crucial note in the history of China is the

Spring 2006 involvement of the United States. One region of the U.S.-China relationship that has been a source of growing tension is the political system of the Chinese government. The Chinese government is a totalitarian one that has displayed a general disregard for human rights, which has drawn the ire of advocacy groups and governments across the West. To understand the resistance of the Chinese government to Western reforms, it is first necessary to understand how the Chinese government views the end of the Cold War and how it views its own place in Chinese history.

While the West sees the Chinese government as a relic of an older era—one that ended with the collapse of the Soviet Union—the Chinese government sees itself as stewarding the nation through a period of dramatic reform that can promote the strength of China without a fundamental overhaul of the government. China sees the experience of Russia, which now possesses a fraction of the economic and political strength of the Soviet Union, not as a triumph to be emulated but as something to be avoided. While many in the West would argue that liberalizing Chinese society immediately would provide sufficient benefits to outweigh any negatives, the Chinese government feels that over-

rapid liberalization would cause cataclysmic change and would lead to the collapse of Chinese society.

Instead, China wishes first to promote economic liberalization and good government, and then gradually to open up society. The Chinese Communist Party has indeed seen dramatic change recently—its leaders are better educated, more competent, and less corrupt than many of the leaders from previous generations.

The area of political reform will nonetheless be one of conflict in the Sino-American relationship, as the U.S. supports rapid political liberalization to accompany China’s economic liberalization while China itself favors postponing political liberalization until China’s economic liberalization has proceeded further.

The past quarter-century has seen a meteoric rise in China’s role in the international community.

Today, China is among the world’s foremost nations, assuming more and more power and responsibility in international affairs. As China’s economic and military power continues its rise, China will hold an even more important position. The future of international relations may depend on whether China’s ascension to international leadership can take place in cooperation « with the West.

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The Horace Mann Review

The Dalai Lama

By Andreas Sakellaris

With approximately 700 million adherents, Buddhism is the world’s fourth largest religion. It dates from the sixth century B.C.E., when it was founded by Siddhartha Gautama, a northern Indian prince who abandoned the luxuries with which he had grown up to seek the meaning of the suffering he saw in the world. He entered a life of extreme asceticism and taught that the world was transient and impermanent and that, in order to escape the cycle of life, death, and rebirth and achieve enlightenment, or nirvana, individuals had to renounce their attachment to material objects. Gautama eventually attracted large numbers of followers. From his teachings, Buddhism was born.

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As Buddhism spread out of India following Gautama’s death, it began to diverge into different sects. By the first century BCE, Buddhism had split into Theravada Buddhism, which focuses on individual pursuit of enlightenment, and Mahayana, which emphasizes communal pursuit of enlightenment and possesses a pantheon of Bodhisattvas, individuals who achieved enlightenment but elected to remain behind in order to help others achieve it. A third sect, Vajrayana, developed as an offshoot of Mahayana towards the middle of the first millennium C.E. This sect combined Hindu mysticism and yoga with Buddhist teachings.

Vajrayana Buddhism was first introduced to Tibet in the 7th Century C.E. In the 9th and 10th Centuries, it began to replace Tibet’s indigenous folk religions, from which it adopted numerous elements. Due to Tibet’s relative isolation, the divergence of Vajrayana Buddhism from more traditional versions, and the influence of Tibetan folk religion, Tibetan Buddhism differs greatly from other forms of Buddhism.

Among these differences is the unique position of the Dalai Lama. The Dalai Lama is the supreme head of Tibetan Buddhism. His title means “Ocean of Wisdom.” He is believed to be the reincarnation of Avalokiteshvara, the Bodhisattva of Compassion, who rejected enlightenment in order to remain on earth and assist others in achieving enlightenment. The title of “Dalai Lama” was first used when Altan Khan, a Mongol leader, bestowed it upon Sonam Gyatso, a monk at a Tibetan monastery, in 1391.

As Gyatso was the third monk in his lineage, he is now known as the third Dalai Lama, and the previous two were posthumously assigned the titles of first and second Dalai Lama. In the seventeenth century, the fifth Dalai Lama united Tibet under his rule. From then until 1959, when the People’s Republic of China invaded Tibet, the Dalai Lama was the ruler of Tibet.

When a Dalai Lama dies, other monks search for his reincarnation among the children of Tibet based on

Spring 2006 statements of the previous Dalai Lama, visions of other lamas, and the successor’s ability to identify objects belonging to the Dalai Lama. It often takes a few years for the reincarnation to be found. The 13th Dalai Lama died in 1933. In their search for his successor, the leaders of Tibetan Buddhism discovered Lhamo Thondup, a twoyear old child born on July 6, 1935, in northeastern Tibet.

Thondup adopted the name Jetsun Jamphel Ngawang Lobsang Yeshe Tenzin Gyatso (he is normally called Tenzin Gyatso) when he was enthroned in 1940. In 1959, he passed the exam with honors, earning a doctorate in Buddhist Philosophy. He assumed full political power of Tibet when it was threatened by Maoist China in 1950, and conducted peace talks with Mao Zedong and other Chinese leaders in 1954. Following China’s occupation of Tibet in 1959, the Dalai Lama was exiled to Dharamsala, India, where he has resided ever since.

In Dharamsala, he founded the Central Tibetan Administration—Tibet’s government in exile. Unlike most governments in exile, the CTA actually resembles a government, as it performs many governmental functions for the 100,000 person-strong Tibetan exile community in India. The exile community democratically elects the leaders of the CTA. The first Prime Minister-in-exile, Lobsang Tenzin, was elected in 2001. In India, the CTA and the Dalai Lama have taken significant steps to preserve Tibetan culture in the face of Chinese occupation. He has created an education system for Tibetan exiles and founded a university, the Central Institute of Higher Tibetan Studies, and the Tibetan Institute of Performing Arts.

In addition, the Dalai Lama has been involved in discussions to return Tibet to self-rule. Originally, he supported independence for Tibet, but he has since moderated his position and now seeks autonomous self-rule similar to the situation in Hong Kong. All of his proposals for solving the Tibet issue have been rejected or ignored, either by China or by the CTA. He has stated his wish to return to Tibet, but only if the Chinese government allows him to visit without preconditions, which it has refused to do. Despite this, he has tirelessly pursued a peaceful course in his fight for Tibetan freedom, much as Gandhi had in India. The Dalai Lama has spoken in favor of respect and peace between different, often conflicting, faiths, and has always advocated nonviolence. Because of his peaceful fight for Tibetan independence, he was awarded the Nobel

Peace Prize in 1989.

In his quest for Tibetan freedom, the Dalai Lama has become a public and international figure. He has met with numerous international and religious leaders, including the late Pope John Paul II, Patriarch Alexius II of the Russian Orthodox Church, the Archbishop of Canterbury, the President of Taiwan, President Bush, and numerous other dignitaries.

As the Dalai Lama is over seventy years old, concerns exist about the viability of a successor. When the tenth Panchen Lama, the second highest lama in Tibetan Buddhism, died in 1989, a succession dispute emerged between the Dalai Lama and the Chinese government.

When the Dalai Lama named Gedhun Choekyi Nyima as the eleventh Panchen Lama on May 14th, 1995. Nyima was soon imprisoned by Chinese authorities, however, and his whereabouts are unknown. In his place, the Chinese installed their own Panchen Lama. When the current Dalai Lama dies, it is very likely that the Chinese government will do the same thing they did with the Panchen Lama. The Dalai Lama has, however, already stated that he will be reborn to a Tibetan family outside of China, as his reincarnation will have to finish the task of freeing Tibet from Chinese influence. The search may be rendered more difficult by the Tibetan diaspora. The Dalai Lama has suggested that the institution itself may be nearing an end. In an interview on his website, he said, “Personally, I feel that the institution of the Dalai Lama has served its purpose.” The democratic constitution for Tibet proposed by the Dalai Lama contained a provision that allowed the national Assembly to remove the powers of the Dalai Lama with a two-thirds vote. The Dalai Lama has said that he feels he is still “useful” to the Tibetan people and Tibetan culture, however, so it is likely that the institution will continue.

At a time when China is in the midst of an economic boom and has evolved into the US’ largest trade partner, it is being confronted with tough choices on coordinating its shift to a market economy and growing involvement in international affairs while avoiding the massive political turmoil and degradation of economic and political power that accompanied the fall of the Soviet Union. One of the factors that will decide what type of nation China will be when it emerges into the modern world is the issue of how it treats minorities like the Tibetan Buddhists and the Dalai « Lama.

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The Horace Mann Review

Saving Taiwan

By Kunal Malkani

The small island of Taiwan and its 23 million-person population may not seem too significant on a map, but in fact this island is the greatest point of contention between China and the United States. Unfortunately, it has great potential to cause a confrontation between the world’s greatest power and the world’s fastest growing one.

The central issue is that Taiwan is essentially its own nation, with a functioning government, a strong economy, and a population that increasingly views itself as Taiwanese. China, however, claims that Taiwan is a part of its sovereign territory and demands that Taiwan be ‘re-unified’ with the mainland. Part of the problem with this issue is that the history of the problem does not provide a clear determination of Taiwanese independence: Taiwan has historically been self administered, a part of China, a part of Japan, and, for the last 50 years, in a state of ambiguity. Fearful of provoking China, even Taiwan’s nationalistic government has not declared independence from the mainland.

For China, this issue is significant in a few ways.

First of all, China believes that it must preserve its territorial integrity: it cannot be seen as giving in to independence forces, so-called “trouble makers,” for fear of encouraging other movements in mainland China. Additionally, China cannot be seen as backing down in the face of pressure from the United States.

As a global player increasing its power by economic and military measures, China wants to increase its influence in the Asia-Pacific region, a task that would require standing up to the United States. Finally, China Page 40

does not want to set a precedent for allowing other nations to interfere in its national sovereignty.

A few years ago, this issue was unresolved but in no danger of escalating to a serious crisis situation. Despite China’s massive military force, Taiwan, supplied with advanced US and European weapon systems, was able to easily outclass the Chinese military. In addition, given Taiwan’s air superiority and China’s outdated weapons, China was unable to seriously threaten Taiwan with invasion.

However, due to China’s increasing defense spending (that has accompanied its strong economic performance), China has been able to rapidly make up this technological difference. China has been actively procuring advanced Russian weapon systems and has attempted to gain access to European systems as well, despite a moratorium following the Tiananmen Square massacre. While China as of yet does not have the capacity to carry out a successful invasion or even a blockade of Taiwan, it has a sufficient number of both nuclear and conventional ballistic missiles to paralyze Taiwan. Additionally, the Pentagon estimates that China will have the capacity to carry out a blockade of Taiwan within a few years. China has also stated its resolve to use “non-peaceful measures” against Taiwan and pay “any price” to prevent Taiwanese attempts at independence.

While obviously the United States should try to avoid antagonizing China over situations like these, it is vitally important that we support Taiwan.

Our interests are clear: China is a communist, unrepresentative state, while Taiwan is a democracy.

Spring 2006 We cannot allow the proverbial beacon of freedom in Taiwan to be crushed while we claim to advance the cause of democracy worldwide. The 23 million people of Taiwan, who increasingly view themselves as being Taiwanese instead of Chinese, should have the opportunity to determine their own governance.

Taiwan’s governing system also has the potential to influence China into forming a more representative, democratic government over time. Additionally, the United States has historically been a staunch ally of

Taiwan, and we must prove to the world that even in the face of another power (China), the United States will support our allies. We cannot allow China to supersede our influence in such a precarious region.

Again, our allies must be certain that the United States will come to their aid and help them defend their national interests and territorial sovereignty. Finally, we should make it clear to China that threatening the United States will not result in our standing down but rather in a hardening of resolve.

However, despite our interests in securing Taiwan and its democracy, it is certainly not worth sacrificing American lives, or even an American city, for it. Instead, we should step up our commitment to sell advanced defensive weaponry to Taiwan and encourage Taiwan to assume a large role in her own defense. We should make it clear that American support is contingent on a reasonable level of defense spending from Taiwan.

Instead of a commitment of military assistance, the United States should exert diplomatic and economic pressure to prevent and react to aggressive Chinese actions. While not as potent a deterrent as military force, we should recognize that the United States wields an incredible amount of economic influence.

Although a decupling of economic ties would severely impact both the United States and China, the Chinese economy, which operates under razor thin margins, would be impacted more. Therefore it is unlikely that in the face of diplomatic and economic measures from the United States and hopefully other parts of the world, China would use military force against Taiwan.

Using these measures, the United States can help Taiwan’s democracy, prevent Chinese aggression, and defend our interests in Asia without putting American troops on the line. It is necessary for us to detach ourselves from the dangerous situation that is developing without giving up on our democratic allies.

With the increase of rhetoric from both the Chinese, who are threatening to use force against Taiwan and any party that assists them, and Taiwanese side, which has recently adopted measures towards eventual independence, the United States should demonstrate that we are willing to assist democracies around the world, but cannot do so at the risk of starting the next « World War. Page 41

The Horace Mann Review

Don’t Fear the World

By Kunal Malkani As our trade deficit, particularly the one with China, continues to rise and reach record levels ($804.9 billion in 2005), the voices clamoring for protectionism grow louder.

It is easy to see how politicians justify measures to decrease this trade deficit: they argue that the Yuan is unnaturally deflated, China is engaging in illegal dumping activities and that the deficit is damaging to our economy. They also claim that the market will be unable to regulate this deficit without government intervention. However, engaging in protectionist activities, whether tariffs or quotas, will result in far more damage than good.

While the United States must push China to deal with economic issues such as the Yuan, which is currently pegged to the dollar, intellectual property rights, and government subsidies, we must resolve to keep our trade free. Despite arguments to the contrary, having a market based trading system, free from as much government intervention as possible, benefits the United States and the entire world as well. Many people claim that the large trade deficit and a free market economy results in the loss of jobs and the replacement of high-quality jobs with lower paying ones.

This, however, goes against the economic data: despite high oil prices and natural disasters, more people are employed, wages are rising, production and consumer confidence remains high, and economic growth is strong. In short, the US economy’s link to the global market allows it to remain resilient and continue to perform well in times of uncertainty in the market.

The United States cannot afford to throw up protectionist barriers of any kind. Aside from the fact that it is US consumers who benefit from cheap imports, the US also benefits from the willingness of other countries to keep their markets open. Our economy requires capital from other nations to continue its economic growth, and engaging in protectionist activity can damage this essential investment.

We cannot expect other nations to keep access and trade open when we openly disregard the policies that we claim to espouse.

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Protectionist measures distort and encourage inefficiencies in the market: there is no sense in forcing consumers to buy the exact same product at a higher cost. If prices for manufactured goods increase, consumers and corporations will be unable to keep up their level of spending. For example, when protectionist tariffs were leveled on imported steel, the United States’ economy was hurt in multiple ways. American companies that required steel to do business lost their competitiveness and, had the tariffs been made permanent, many of them would have been forced out of business.

Additionally, the World Trade Organization authorized foreign states to levy tariffs against US products. In this case, the infamous steel tariffs were eventually removed after damage to US industries, consumers and image.

The most recent misguided proposal under consideration in Congress is the Schumer-Graham Bill, which threatens China with a 27.5% tariff unless it revalues the Yuan. The logic behind the bill is seriously flawed. First of all, the rising trade deficit with China is negligible due to the falling trade deficits with other countries in Asia. In addition, despite China’s large trade surplus with the United States, it is running a net trade deficit of $100 billion, largely to feed its manufacturing sector. Therefore, if China were to revalue its currency, its imports would become cheaper, counteracting the rising dollar cost of its exports. Our trade deficit is a natural result of a high level of consumer spending (with virtually zero savings) and therefore any tariff would be unlikely to significantly reduce the trade deficit.

The bottom line is that the United States has benefited the most from a globalized world economy. While proponents may couch protectionist measures in terms of protecting our domestic manufacturing sector, the truth is that it is best for us to do what we are most competitive at. The United States does need to deal with other economic issues, particularly the budget deficit which is approaching unsustainable levels.

However, protectionist measures will dramatically hurt our economy: after all, where would we be without Wal-Mart’s « everyday low prices?

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