China's Conundrum - More Detailed Response

KY's earlier posting that discussed the trade-offs between a "strong / bad" China and a "weak/good" China in the diplomatic, military and economic sense represents the prevailing consensus of the past 3 decades.

In fact, China's epochial era of reform and opening-up was one of moving from a weak to a strong(er) China together with moving from a bad to a better China. We can feel good about China's achievements today mainly because of this twin-tracked progress. The history of the reform and opening-up was, in fact, a case of "better" governance leading to a stronger China and not the other way round.

The "other way round" was tried by Mao during the late 1950s and the early 1960s when China tried to be "strong" militarily and politically/diplomatically even at the price of millions of lives of its people. At that time, there were many people who honestly thought China was becoming strong. But with the benefit of hindsight, we recognize that kind of "strength" is not real. Simply put: strength, if pursued as an end in itself, is not real strength. If a nation is power-hungry, how can that nation be considered strong? The same was echoed in today's North Korea and in yesterday's Stalinist USSR and Militaristic Japan.

Neither of us are starry eyed idealists and philosophers who feel that national "virtue" can somehow redeem the suffering of its people. Almost always, the suffering are real but the virtue are not. Interestingly, the Maoist-era of perpetual revolution and class struggle provides the most recent example. Just last weekend, I had a conversation with a friend - who had the (mis)fortune of having been a Canadian diplomat in both North Korea and Cuba - but who is deeply uncomfortable with the notion of a benevolent dictatorship. And I defended the idea that the form of government matter less than whether it is concerned about the welfare and development of its people. In fact, Cuba and North Korean are excellent contrasting examples. This is consistent with ancient Chinese political thinking that emphasized governance over the finer questions of political legitimacy although Confucius actually stressed a lot about public opinion/will of the people.

Virtue by itself is not to be confused with "Good", and vice-versa. When KY considered the binary choice between a Good/Weak China and a Bad/Strong; I think he meant perferring one that is less virtuous but strong enough to safeguard its people over a virtuous but weak China. And I ask myself, how can a nation be virtuous/good if it cannot safeguard its people? To me, the conundrum does not exist because part of "Strong" is protecting the "Good".

China today is both more "Strong" and more "Good" than ever. But if it wants to get to the next level - to either be a great power or even the worl'd's pre-eminent power, it cannot simply be more of the same of what it is currently. There should be a positive purpose for China's continuing growth for the Chinese people and also for the world, rather than being a power for power's own sake. As the saying goes, along with great power comes great responsibility. I am a believer that in the coming years, the challenge for the Chinese leadership/nation will be to find the direction of what a "Good" China ultimately means.

Here I was negligent in not explaining the logic behind it earlier. In human history, power shifts are rarely peaceful. Most rising powers were in fact short-lived because they were either pushed back by the status quo or overtaken by other rivals. Unless a nation is inconsequential or very isolated/disconnected from the existing webs of interests, the result of its expansion is usually one of disastrous internal or external conflict. The logic is that as a nation grows (diplomatically, militarily and economically) it will inevitably encroach the space and threaten existing powers, even in the absence of a zero sum game. The other threat, as often happen, is that even as nations become "Strong" they would "lose steam", become venal and corrupt or plunge into internal conflict. This is why so many empires are rarely even remembered.

Rarely do powers emerge and remain sustainable more than a few decades on sheer wealth and military power alone without "that something else". Throughout human history, "That something else" is almost always an idea - it could be a philosophy, an insight, a system or a technology. I do not only mean ideology. "That something else" is not always more virtuous than the status quo but it is a force-multiplier for the power having it and others wanted it too. In fact, the best and most compelling ideas confers strength without requiring any force; they work their magic via the power of example and by creating a desire to emulate.

For much of its history, the greatest source of China's power was the richness of its civilization and culture, e.g. during the T'ang Dynasty. Having states the sends tributes are victories that required no force. China's height of territorial reach during the Han dynasty was due to the maturity of another idea - the centralised administration and civil service - as an alternative to the fractious feudal system.

Rome had a powerful and ruthless army, but it also offered the lure of being an empowered "citizen" of a republic and the rule of law which is vastly more attractive than life under tribal serfdom of its rivals. Rome's advanced engineering, logistics and commerce improved welfare and protected against starvation. Rome lasted more than 800 years.

Many of the waves of empires that followed were led by different religious ideas - not very convincing but effective nonetheless at the time. The Arabs had the Islamic religion (considered attractive and enlightened at the time because it was against slavery) but they also pioneered international trade. Nationalism was often the idea - often used by one monarch or regional power - to consolidated many parts of Europe and Asia into their current political entities. Europe gained military and economic strengths through science and technology - but the promise of modernity arguably did more to help them colonize the world. The Enlightenment offered an escape from religious oppression in thought and lifestyle. The industrial revolution multiplied human productivity and enabled the individual to accumulate wealth without being tied to the land. For millions, it meant jobs, material wealth but also freedom from peasantry. Along the way, came the modern rule of law, constitutional governments, equality, civil and political rights, social democracy, the global-economy and democracy - all very powerful ideas that allowed the West and later America to prevail because they were so attractive to the rest of the world.

I believe the key to China's peaceful rise, is to somehow be a source of positive contribution to the world. China's growth must serve a larger purpose in order to provide a balance to self-interest; which otherwise would be a source of internal conflicts. Many nations - especially in Latin America - lose their way a certain point of their development because development was built on a weak sense of common purpose.

Externally, the thing with China is that it has never been and will never be an inconsequential nation - not even when it was at its most feeble. The lesson from the last 30 years is that an isolated China is a weak China that cannot take care of its people. The lesson for the past 15 years is that China can succeed when it plays its role judiciously on the world stage (especially in the global economy). China no longer has the choice to simply mind its own business because China is becoming so huge that in the globalized and inter-connected world today that its actions or inactions impacts everyone else's. This also means that whenever conflicts arise, they cannot be resolved by protecting only China's national self-interest alone - China's national interests will increasingly be intertwined with its responsibility to look after the world's collective interests as well. So one way or the other, China will need to have a vision of how to contributions will be to the global system that is making its growth possible.

China Conudrum - A short response

Usually, my conversation with my father-in-law is about the stock market.

That particular day whilst visiting Shuri Castle in Naha, our conversation veered towards the topic of weak/strong China vis-a-vis bad/good China. (thanks to those plague from the Qing era).

We somewhat agree that it is preferable to have a strong China who is bad (in the context of democracy and human right) rather than a weak China who is good as long as the government is not as bad as that of Mao's. (My view of Mao's government is both bad and weak.)

It is embedded in almost all Chinese that they have been a victim of imperialism or foreign aggression. I cannot deny I do share this thoughts every now and then. Hence I am sometime less critical and more partial and more permissive of what China/CCP does.

We also come to the broad consensus that a weak country cannot be good especially for a large country like China. Being weak is synonymous with being bad in the modern history of China. (Strong/weak is read in the diplomatic, military and economic context).

While I offer no evidence of support, this sentiment is perhaps shared by the great many of the 1.3 billions Chinese

Having said all those above, there is no question that what you wrote is the way forward for China and it is the aspiration of many of us who are increasingly disappointed with the slow progress made in human right and democracy. You correctly pointed out that CCP's reaction to LXB's Nobel prize is evidence of her very own insecurity. This I am with you.

The problem with China today is the lack of confidence at the CCP leadership level. I am dead sure that they know what is inevitable yet they have chosen a (hopefully) longer road (though I am also becoming more frustrated).

Lets hope that LXB is the last famous prisoner of conscience. (admittedly this is a very unremarkable hope)

By the way, I suspect that the modern China (neither had the classical China) is uninterested to export any of her ideology or impose her way of life with the rest of the world unlike the European with her enlightenment, the American her democracy. Let me be candid, China hasn't had anything superior (I mean in soft power aspect) to offer the world yet.

That still leave me not an advocate for a more assertive China in the world affairs. I strongly believe the priority is still to elevate the standard of living and to ease the overbearing control over her citizens.

Glimpses of Ryukyu

The 19th century Meji Gvernment's annexation of Hokkaido and Ryukyu proved lasting. Unlike Penghu, Taiwan, Laiodong Penisunlar, Shakalin and Korea, these two territories remain firmly within the Japanese border despite the WW II's unconditional surrender.

Ryukyu Kingdom, once a small yet independent maritime nation, is now just Okinawa Prefecture. I had always been mystefied by this special island nation.

Her merchant ships had traded as far as Annam, Siam and Malacca. Her diplomats had successfully maneuvered between two empires paying tribute to both without irking either.

Her land saw the fiercest battle in the Pacific war theater with thousand of her civilians were herded to jump off the cliff seemingly for the dignity of her emperor who was but a foreign ruler just 70 years earlier.

Being a small nation sandwiched between two giants, they are destined to be swallowed by either one. I have this profound sympathy for her and her peoples.

My recent trip to Okinawa was predominantly a children-centric tour. We visited the Churaimi Ocean Expo and sampled the local diets that were commonly attributed as the reason of longetivity among the locals.

That gave me very little opportunities to have a deeper glimpse of Okinawa.

At the downtown fish market in Naha, a trader told me that the younger generation could probably understand bits of Ryukyuan language but could barely speak the tongue. They have largely been Japanized though are conscious of their difference from the mainland Yamato.

This is not surprising given that she had been annexed by Japan 130 years ago and first came under the Japanese Shogun's suzerainty 4 centuries earlier.

Further, genetically they are both Mongoloid and religiously there is no conflict. After such a long period of subjugation, it is actually surprising to see any surviving Ryukyu culture and language.

Another young and handsome trader at Okinawa World, a theme park built on top of a 900 meter underground cave with amazing columns of stalactites and stalagmites, selling dragon-fly souvenier told me that if at all any facial feature that distinguish them from the Yamato is their dark and thick eyebrow. I wondered how objectiev this could be?

It was also interesting that the same chap told me his name is 6 Chinese characters in length, 3 each made up his surname and first name, that is a wholesome 6 characters compared to the typical 4-5 characters in a Japanese name.

Another cultural relic that is prevailent all over the island is the shishi (read in Hokkien, you can perhaps figure out what it is). It is a Ryukyuan lion figurine that is commonly seen on top of the roof or stood in pair just outside the gate or the door. The function is to expel the evil spirits.

At the Shuri castle in Naha where the last Ryukyu Kings resided, we could still see plague gifted by the various Qing emperors as late as Tongzhi.

The modern Sino-Japanese conflict started with a Ryukyu ship wreckage off Taiwan in 1871 where scores of Ryukyuan subjects were killed by the Taiwanese aborigine. The Meiji smelt blood and claimed compensation against the Qing government. A small and unsuccessful expedition was launched in 1874.

It is unimaginable that the millions of dead that followed in the ensuing 70 years had direct link to this Pacific Island. A monument commenmorating the deads stood elegantly silent just below the principla Shinto temple in Naha. I was able to stand before the monument to reflect for a few minutes the historical significant of a marine mishap.

The island is slow-paced ( the speed limit on the highway is 80 km/ph and around 40-50 km/ph off the highway) and the peoples like the Japanese are courteous and well-mannered. English, suprizingly is not widely spoken despite a huge American military presence in the island taking up almost 20% of land mass in Okinawa island.

Okinawa is a beautiful island with sandy beaches and scenic coastal line. The seafood is abundant and there is a type of seaweed that taste like fish roe. It is called the green cavier. I don't remember the name but it is surely one of the dedicacy my younger boy and I remember.

The weather in December is mild with 15-20 celcius but it is the low season for tourist to this Japanese's Hawaii.

There are reasons to come back for this island that is riched in history.

China's Conundrum

During the Maoist times, one of the most profound truths was that Capitalism would inevitably collapse under the weight of its own contradictions. These days my fear for China is that it will - wittingly or unwittingly - be a victim of its own contradictions.

This is not a recent nor an original view point. However recent events has caused me to take this idea more seriously than before.

For a long time, until recently, China's rulers have - for the most parts - stood out for being exceedingly astute and strategic in their thoughts and actions. Theirs was an unenviable task of simultaneously running, stabilizing and transforming a nation unprecedented in history for its scale and success. A continent-size world, carrying the hopes, energies and fears of one-fifth of humanity; equally inspired and weighed-down by 5000 years of civilization. There was nothing trifle, petty or small-minded about the tasks they wake up to, the ambitions they wish for or historic responsibility their decisions would carry. Most remarkably, it seem that they had a playbook, a plan and in their minds knew clearly what they were playing for in the long term.

As you can tell, I am quite a fan.

But right now, I am not so sure. Perhaps the playbook has run its course - and no one has a copy Vol. II. Perhaps along with success came an unhealthy dose of hubris. Perhaps they decide to selectively ignore the playbook and try to be smar(er). Perhaps it is hardest when the playbook says to change - when things are going so well. Or, perhaps this is really the hard part ... no one had thought about what to do with the contradictions that are becoming harder and harder to avoid.

The elephant in the living room has to do with the political legitimacy of China's rulers vis-a-vis the people. Without a democratic process, this rested on the unquestioned primacy of the CCP and by equating: Chinese nation = PRC = CCP. Hence any attack on the CCP invites knee-jerk xenophobic fury as an attack on the "Chinese people" and its cultural identity, history and to prevent its "rise". One can see that reaction to every critic and every threat to the dominance of the CCP.

But that is the easy way out, to convince the people that those who disagree with the CCP are agents led by foreign black hands, etc. To the average person in middle-China, Tibet and Xinjiang are "foreign" enough but even then the official line is always that foreign-based forces instigated the troubles. Added to the mixture, there were ethnic violence. With the Falun Gong it was harder given the earthy nature of its followers. but even then the foreign black hand angle was introduced. Fundamentally, I believe the CCP got away because their grievances did not resonate with the public.

It would be interesting to see how the CCP would respond, if the KMT/ROC claim to truly represent the pride of the Chinese people and culture. That would be a serious challenge to the CCP's stance that nobody but the CCP would stand-up for the Chinese people and civilization.

But here is the rub. CCP's argument as the defender of Chinese pride and by fanning a sense of victimhood usually works fine to divert attention but it does not address its fundamental deficit in political legitimacy. This is a tactic and not a strategy; mainly because will not work for the most serious threats to the CCP. This is also increasingly counter-productive (probably damaging) to China's rise as a great power .

As we are seeing with LXB, the main weakness of the CCP's nation-under-attack logic to internal critics - especially those of a peaceful nature and speaking from the dignity of the Chinese people. It is quite a sight, that the same PRC that (in front of its people) increasingly speaks boastfully and sometimes condescendingly to the world of its ascendence and superiority - gets into a nervous breakdown behind closed doors over the conviction and ideas of an individual in its prison.

The reality is that ordinary people in China lead lives that are increasingly free. Enough of them will disagree with the CCP from time to time. Given the technology, a mobile and networked society, no matter how hard one might try, the CCP cannot forever fully control every knowledge and social network. Once people who disagree know enough other people came to that same conclusion themselves. What then? As Lincoln said, "you can keep the truth from all the people some of the time and you can keep the truth from some of the people all the time, but you cannot keep the truth from all the people all of the time." Or as the Chinese saying goes, you cannot cover-up fire with paper.

Contrast the vehemence and invectives reserved for "foreign" critics with the treatment of mass protests (which are far from unusual actually) that boil over on widely-shared grievances - corruption, abuse of power, injustice or joblessness /hardship - in the heartlands like Hunan, Szechuan, Jiangxi, Hebei - you can see the limits of the CCP's current approach. In those cases, the CCP's responses are usually confused, improvised and highly cautious in order to defuse the tension before it spreads and becomes a wider challenge to the CCP.

In the meantime, the Chinese leadership appears to be lost for ideas other than to feed the beast of Chinese superiority. Many Chinese appear to have a hubristic view of China's place in the world - that China is always right, China always wins and nobody else really matters. Given the media environment, there are nobody either willing or able to offer any alternative world view. Given the education system, few people would be inclined to critical thinking and seek independent truth from questioning what is being told to them (something the Germans have made a central part of their education system for the past 60 years). Given the political environment, woe be to whoever has a contrarian view of China's view of itself.

Granted, such views of hubris and over-confidence are often not shared among its senior leaderships; who - knowing better - they fret, plan and labor to steer China through a world of opportunity and challenges. It is all and well for every man in the street to sing that China is #1 when things are well. But these days, if things go wrong, how do you then ask the people to bear with suffering and sacrifice, if - in exchange for total political control - the CCP is supposed to take care of everything and deliver the good life?

To the rest of the world, even at peace, China would be that insufferable kind of friend - who is constantly either boastful and looking for praise - and who bullyingly expect everyone to toe its line and serve its interests. At worse, an increasingly arrogant and hubristic public opinion will draw China into conflict with its neighbors leading to destruction of all concerned. If you remember, in World War I, both sides thought they were so superior that they would win the war in a few months. But that ended with the deaths of a whole generation of men and Europe losing its global economic dominance.

Everything I have said above leads to this next point: at the heart of China's conundrum is that its leadership has exhausted what can be done with effort and competence. To get beyond this, China's leaders and people need to be guided by enlightened values and purpose that goes beyond its national interests.

Europe did not become the dominant force in the world only because it had a larger navy; but because it was the first to embrace science, humanism and liberalism (and throwing away religious dogmatism and autocratism). America did not dominate only because it has boundless resources and industry but because it was able to inspire people around the world with its ideals of political and economic freedom that bring powers to the individual.

For China to be a great power, it will have to see its history and civilization as more than just a self-protecting shield to justify its legitimacy as a world power. It will have to dig deep beyond the surface of its past glories - and into the essence of its ancient wisdom and values - in order to offer something that inspires and rallies the whole human race around China's true calling to its own greatness.

Rising Powers and the Global System

Couldn't have written this better myself.

On the way to a new global balance
By Philip Stephens. Published in the Financial Times December 16 2010

We are living through one of history’s swerves. A multipolar world has been long predicted, but has always seemed to be perched safely on the horizon. Now it has rushed quite suddenly into the present. Two centuries of western hegemony are coming to a close rather earlier than many had imagined.

The story is unfolding in dry economic statistics. Next year, just as this year, the economies of the rising states – China, India, Brazil, Turkey, Indonesia and the rest – are likely to grow by 8 per cent or more. Debt-burdened advanced nations will mostly struggle to expand by more than 2 per cent. The pattern is well-established. The global divide is between slow- and fast-growing nations as much as between the rich and the rising.

The geopolitical balance is adjusting accordingly. China is asserting itself in east Asia. India is building a blue-water navy. Turkey and Brazil are seeking to translate regional power into international kudos. Indonesia is hedging between Washington and Beijing. Europe battles against irrelevance; America with a burgeoning budget deficit and political gridlock.

Predictions of the passing of US primacy are premature. For all its troubles, America remains the sole superpower – the only nation able to project power in every corner of the earth. One of the under-noticed stories of 2010 has been the return of the US to Asia. Unnerved by Beijing and the lethal unpredictability of North Korea, China’s neighbours have clamoured for protection from Uncle Sam.

The picture of US power painted by secret diplomatic cables is essentially flattering. America’s pursuit of its national interest coincides most of the time with the provision of public goods for the rest of us. Washington worries in private as much as it does in public about the impact on global security of nuclear proliferation, failing states, terrorism and regional conflicts.

The other side of the WikiLeaks coin is that the US is an inadequate superpower. The diplomatic exchanges show how its unrivalled power has left the US unable to impose its solutions in the world’s troublespots. Only this month we saw Israel’s Benjamin Netanyahu wreck Barack Obama’s efforts to promote peace in the Middle East.

The world’s rising states are at a stage where they want to enjoy power without responsibility. Putting a kind interpretation on its latest muscle-flexing, China is the adolescent who has just discovered he has the physical strength of an adult. In ignoring Deng Xiaoping’s admonition to bide its time, Beijing is squandering soft power accumulated over a decade.

India wants the respect conferred by great power status, but is reluctant to give up the street credibility conferred by its old non-aligned leadership role. Delhi is also strangely incapable of confronting enmities in its own neighbourhood. Turkey wants to look east as well as west, but has yet to balance its new ambitions for Muslim leadership with its old attachment to Euro-Atlantic integration.

Europe is in bad shape. What started out as a private sector banking crisis has become a public sector debt crisis. The eurozone is under siege from the markets. The real threat is political. The economic shock of the continent’s relative decline against a rising Asia has merged with the continuing political aftershocks from the fall of the Berlin Wall two decades ago.

A united, more unapologetically nationalist Germany, has upended the European Union’s political equilibrium. The Union worked when leadership was shared by France and Germany. But Berlin now wants to call the tune. The single currency may be rescued, but I am not sure there is great enthusiasm for a German Europe. As for Britain, its fresh-faced prime minister has shown no interest in, nor aptitude for, crafting anything resembling a foreign policy.

Japan, where I have spent this week at a series of security discussions hosted by the German Marshall Fund of the US and the Tokyo Foundation, seems trapped in semi-permanent denial. Though alarmed by clashes with China in the contested East China Sea, Japan has had five prime ministers in three years. This game of political musical chairs somehow seems easier than thinking about a strategic response to the insecurities of east Asia.

Russia counts itself among the rising powers. But it is a declining state trapped in its past. For reasons of domestic politics and of attention-seeking abroad, Russian leaders continue to pretend that the enemy lies in the west. National pride, they judge, can be restored only by standing up to the US and Europe.

The real perils are closer to home – endemic corruption, demographic decay and a hollowed out petro-carbon economy. Elsewhere, the strategic challenges come from Islamist extremism and the possibility of China and India bursting their borders in Russia’s depopulated eastern territories. Russia’s long-term interests lie in closer integration with the west. Dmitry Medvedev, Russia’s president, may grasp this. Vladimir Putin, his predecessor and likely successor, sticks with the old story.

The lazy way to describe the new geopolitical landscape is one of a contest between the west and rest – between western liberal democracies and eastern market economy autocracies. Neat as such divisions may seem, they miss the complexities. None are more determined, for example, than Russia and China to keep India from securing a permanent seat on the UN Security Council. Few are more worried than India by China’s military build-up.

A more sanguine view of the re-ordered world looks to the Group of 20 nations as an instrument to forge a broader consensus about east-west and north-south co-operation. There is some cause for optimism in respect of global economic governance; far less so when it comes to security and foreign policy.

The rising nations prize state power over international rules, sovereignty over multilateralism. The transition to a new order is likely to see more rivalry and competition than co-operation. The facts of interdependence cannot be wished away but they will certainly be tested. It is going to be a bumpy ride. A pity then that much of the west seems intent on hiding under the bedcovers.

I do not have any enemies

The Chinese version was posted by KY on NYHK on 22 Jan 2010.

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After graduation I stayed on as a lecturer at Beijing Normal University. On the podium, I was a popular teacher, well received by students. I was at the same time a public intellectual. In the 1980s I published articles and books that created an impact, was frequently invited to speak in various places, and was invited to go abroad to Europe and the U.S. as a visiting scholar. What I required of myself was: both as a person and in my writing, I had to live with honesty, responsibility and dignity.

Subsequently, because I had returned from the U.S. to take part in the 1989 movement, I was imprisoned for “counter-revolutionary propaganda and incitement to crime,” losing the platform which was my passion; I was never again allowed publish or speak in public in China. Simply for expressing divergent political views and taking part in a peaceful and democratic movement, a teacher loses his podium, a writer loses the right to publish, and a public intellectual loses the chance to speak publicly, which is a sad thing, both for myself as an individual, and for China after three decades of reform and opening up.

Thinking about it, my most dramatic experiences after June Fourth have all linked with courts; the two opportunities I had to speak in public have been provided by trials held in the People’s Intermediate Court in Beijing, one in January 1991 and one now. Although the charges on each occasion were different, they were in essence the same, both being crimes of expression.

Twenty years on, the innocent souls of June Fourth do not yet rest in peace, and I, who had been drawn into the path of dissidence by the passions of June Fourth, after leaving the Qincheng Prison in 1991, lost in the right to speak openly in my own country, and could only do so through overseas media, and hence was monitored for many years; placed under surveillance (May 1995 – January 1996); educated through labor (October 1996 – October 1999), and now once again am thrust into the dock by enemies in the regime.

But I still want to tell the regime that deprives me of my freedom, I stand by the belief I expressed twenty years ago in my “June Second Hunger Strike Declaration” — I have no enemies, and no hatred. None of the police who have monitored, arrested and interrogated me, the prosecutors who prosecuted me, or the judges who sentence me, are my enemies. While I’m unable to accept your surveillance, arrest, prosecution or sentencing, I respect your professions and personalities, including Zhang Rongge and Pan Xueqing who act for the prosecution at present. I was aware of your respect and sincerity in your interrogation of me on December 3.

For hatred is corrosive of a person’s wisdom and conscience; the mentality of enmity can poison a nation’s spirit, instigate brutal life and death struggles, destroy a society’s tolerance and humanity, and block a nation’s progress to freedom and democracy. I hope therefore to be able to transcend my personal vicissitudes in understanding the development of the state and changes in society, to counter the hostility of the regime with the best of intentions, and defuse hate with love.

As we all know, reform and opening up brought about development of the state and change in society. In my view, it began with abandoning “taking class struggle as the key link,” which had been the ruling principle of the Mao era. We committed ourselves instead to economic development and social harmony. The process of abandoning the “philosophy of struggle” was one of gradually diluting the mentality of enmity, eliminating the psychology of hatred, and pressing out the “wolf’s milk” in which our humanity had been steeped. It was this process that provided a relaxed environment for the reform and opening up at home and abroad, for the restoration of mutual love between people, and soft humane soil for the peaceful coexistence of different values and different interests, and thus provided the explosion of popular creativity and the rehabilitation of warmheartedness with incentives consistent with human nature.

Externally abandoning “anti-imperialism and anti-revisionism,” and internally, abandoning “class struggle” may be called the basic premise of the continuance of China’s reform and opening up to this day. The market orientation of the economy; the cultural trend toward diversity; and the gradual change of order to the rule of law, all benefited from the dilution of this mentality of enmity. Even in the political field, where progress is slowest, dilution of the mentality of enmity also made political power ever more tolerant of diversity in society, the intensity persecution of dissidents has declined substantially, and characterization of the 1989 movement has changed from an “instigated rebellion” to a “political upheaval.”

The dilution of the mentality of enmity made the political power gradually accept the universality of human rights. In 1998, the Chinese government promised the world it would sign the the two international human rights conventions of the U.N., marking China’s recognition of universal human rights standards; in 2004, the National People’s Congress for the first time inscribed into the constitution that “the state respects and safeguards human rights,” signaling that human rights had become one of the fundamental principles of the rule of law. In the meantime, the present regime also proposed “putting people first” and “creating a harmonious society,” which signaled progress in the Party’s concept of rule.

This macro-level progress was discernible as well in my own experiences since being arrested.

While I insist on my innocence, and that the accusations against me are unconstitutional, in the year and more since I lost my freedom, I’ve experienced two places of detention, four pretrial police officers, three prosecutors and two judges. In their handling of the case, there has been no lack of respect, no time overruns and no forced confessions. Their calm and rational attitude has over and again demonstrated goodwill. I was transferred on June 23 from the residential surveillance to Beijing Municipal Public Security Bureau Detention Center No. 1, known as “Beikan.” I saw progress in surveillance in the six months I spent there.

I spent time in the old Beikan (Banbuqiao) in 1996, and compared with the Beikan of a decade ago, there has been great improvement in the hardware of facilities and software of management.

In particular, Beikan’s innovative humane management based on respecting the rights and dignity of detainees, implementing more flexible management of the will be flexible to the detainees words and deeds, embodied in the Warm broadcast and Repentance, the music played before meals, and when waking up and going to sleep, gave detainees feelings of dignity and warmth, stimulating their consciousness of keeping order in their cells and opposing the warders sense of themselves as lords of the jail, detainees, providing not only a humanized living environment, but greatly improved the detainees’ environment and mindset for litigation, I had close contact with Liu Zhen, in charge of my cell. People feel warmed by his respect and care for detainees, reflected in the management of every detail, and permeating his every word and deed. Getting to know the sincere, honest, responsible, goodhearted Liu Zhen really was a piece of good luck for me in Beikan.

Political beliefs are based on such convictions and personal experiences; I firmly believe that China’s political progress will never stop, and I’m full of optimistic expectations of freedom coming to China in the future, because no force can block the human desire for freedom. China will eventually become a country of the rule of law in which human rights are supreme. I’m also looking forward to such progress being reflected in the trial of this case, and look forward to the full court’s just verdict — one that can stand the test of history.

Ask me what has been my most fortunate experience of the past two decades, and I’d say it was gaining the selfless love of my wife, Liu Xia. She cannot be present in the courtroom today, but I still want to tell you, sweetheart, that I’m confident that your love for me will be as always. Over the years, in my non-free life, our love has contained bitterness imposed by the external environment, but is boundless in afterthought. I am sentenced to a visible prison while you are waiting in an invisible one. Your love is sunlight that transcends prison walls and bars, stroking every inch of my skin, warming my every cell, letting me maintain my inner calm, magnanimous and bright, so that every minute in prison is full of meaning. But my love for you is full of guilt and regret, sometimes heavy enough hobble my steps. I am a hard stone in the wilderness, putting up with the pummeling of raging storms, and too cold for anyone to dare touch. But my love is hard, sharp, and can penetrate any obstacles. Even if I am crushed into powder, I will embrace you with the ashes.

Given your love, sweetheart, I would face my forthcoming trial calmly, with no regrets about my choice and looking forward to tomorrow optimistically. I look forward to my country being a land of free expression, where all citizens’ speeches are treated the same; here, different values, ideas, beliefs, political views… both compete with each other and coexist peacefully; here, majority and minority opinions will be given equal guarantees, in particular, political views different from those in power will be fully respected and protected; here, all political views will be spread in the sunlight for the people to choose; all citizens will be able to express their political views without fear, and will never be politically persecuted for voicing dissent; I hope to be the last victim of China’s endless literary inquisition, and that after this no one else will ever be jailed for their speech.

Freedom of expression is the basis of human rights, the source of humanity and the mother of truth. To block freedom of speech is to trample on human rights, to strangle humanity and to suppress the truth.>>

I do not feel guilty for following my constitutional right to freedom of expression, for fulfilling my social responsibility as a Chinese citizen. Even if accused of it, I would have no complaints. Thank you!

Central Bank to the World

Last week, I came across a news article that made me gasp with amazement. http://www.nytimes.com/2010/12/02/business/economy/02fed.html

It is easy for everyone to forget too quickly how close we all got to the end of the global financial system. This article lay it bare for any one with an understanding of how global finance works to realize how lucky we managed to get off the hook; and who we have to thank. The United States Federal Reserves.

Put simply, in early autumn on 2008 the global financial system froze. There was no more money in the system because no one trusted anyone else anymore. The market for commercial papers which operate like a gigantic overdraft facility for corporations needing short term cash flow were empty. No commercial company - no matter how large or solid or profitable - was considered safe. No bank would trust another bank.

Financial and non-financial corporations holding on to securities/collateral in return for loans suddenly found no takers for what they were holding. Without a ready and liquid market, the value of most instruments were plunging quickly towards zero for all intents and purposes. As their value diminished, lenders call in more security or call in the loans which choke off the oxygen for the commercial borrowers.

Companies like Caterpillar, Harley-Davidson, General Electric, McDonald’s, Toyota and Verizon were gasping for air as everyone was pulling in their liquidity. It was a run on the banks except they are corporates.

It was not just American corporates who found their oxygen cut off. Banks from all over the world were lining up in the firing line. Royal Bank of Scotland, Barclays, UBS of Switzerland; Mizuho Securities of Japan; and BNP Paribas of France all joined Citigroup, Merrill Lynch, Goldman Sachs and Morgan Stanley.

Who else could step in but the Fed? One can complain ceaselessly about their ridiculously unfair power to create US$ out of thin air - and doing so seemingly at will - but in this case, they lived up to the great responsibility that came with this unique ability. It's quite astounding when you consider the time pressure with which they had to act and the reckless courage with which they acted. Any delay or second-guessing and the falling dominos will turn into an avalanche. Warren Buffet in his recent article "Thanking Uncle Sam" said as much.

The Fed stepped in as the buyer of last resort for these markets and provided obscene amounts of liquidity in return for whatever assets the borrowers could show up with. Like a paramedic, the Fed was pumping the chest and administering CPR and giving its blood to everyone else.

In total, the Fed stepped in with US$1500 billion into the commercial papers market and US$9000 billion in short term loans to financial institutions. Not only that, the Fed extended US$2000 billion in swap lines to other central banks. The European Central Bank drew the most but nine other central banks also made use of them: Australia, Denmark, England, Japan, Mexico, Norway, South Korea, Sweden and Switzerland.

The cumulative total sum that the Fed bet on the survival of the global financial system is more than $12 Trillion or about the size of the US Federal debt or 22% of the GLOBAL GDP. All of that, and relentlessly so, within a matter of months. And fortunately, it got all the money back with interest as the underlying borrowing corporations are fundamentally sound and the actions kept the dominoes standing. The fact that it worked is clear from the often dismissive attitude some people have begun to take to the financial crisis of 2008.

You might have heard of people accusing that the seriousness of the 2008 crisis was over-stated. No, the fact is that it was vastly under-stated. Vastly. Were the Fed a little slow, a little hesitant, a little less courageous, a little unlucky, a little picky about who gets the money or a little more self-interested (after all, the US is gambling with its own net-worth to save everyone in the system) the global economy - Europe, China, India, SE Asia, Latin America, Japan - would very well have cratered into a downward spiral. In that world, people would be praying for what we have right now.

So credit where credit is due. No pun intended.