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Hydropower in Laos: An Alternative Approach

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It’s time to take another look at the future of energy in Southeast Asia.

A report published in September by the Stimson Center, a D.C.-based think tank, challenges prevailing notions about the future of hydropower in the Mekong subregion, an area including Vietnam, Cambodia, Laos, Thailand, Myanmar, and southwestern China.

The report focuses on Laos, which in years past has proclaimed itself the future “Battery of Southeast Asia,” by aggressively developing hydropower dams on the Mekong. Laos has already built 29 large dams along the river’s mainstream and tributaries, with plans for over 100 in total. The land-locked country remains the poorest in Southeast Asia, and has planned to raise cash by exporting electricity to consumers in neighboring countries.

But project developers of these dams – who are typically Thai and Chinese companies – have faced criticism from civil society groups and international observers for the myriad social and environmental consequences brought on by dam construction. The Mekong is home to an estimated 1,000 species of fish, many of which migrate along the river and replenish the region’s fisheries. By changing the hydrology of the river, these dams threaten the biodiversity of the Mekong and the livelihoods of fishermen and farmers throughout the region. In times of drought – as has been experienced this year – the dams can cause regional insecurity by contributing to water scarcity problems downriver.

While dam construction has continued apace despite these dangers, the Stimson report argues that new markets and technologies are creating an opportunity to change course.

Challenges for Lao Hydro

The report highlights new developments that could steer Laos away from further damming on the Mekong. First, following a period of economic and political liberalization, Myanmar is emerging as a competitor for energy infrastructure finance. Myanmar boasts nearly 100 gigawatts of potential hydropower capacity, far exceeding what is possible in Laos. Such a glut of potential projects in the region is likely to siphon away financing that might otherwise go towards hydropower development in Laos.

At the same time, China’s economic slowdown could signal the end for cheap and easy hydropower finance in the region. In previous years, Chinese state planners encouraged outbound investment in strategic sectors such as hydropower projects in Southeast Asia. However, the report notes that government concerns about non-performing loans on the books of Chinese banks seem to have reduced the funding available for some projects in Laos. Rising local awareness about the social and environmental costs of these dams also adds a layer of risk that financiers may find discouraging.

Perhaps most critically, it appears as if planned generation in Southeast Asia is outpacing the region’s appetite for energy. China, once envisioned as a potential market for Laos power, is already experiencing serious overcapacity in its domestic power market. Thailand, while still a major investor in Laos hydro projects, has consistently overestimated its own consumption levels – and has lots of room to cut demand through energy efficiency measures. Both Cambodia and Vietnam have planned to reduce their reliance on imported energy, with the latter investing heavily in coal-fired power plants.

A New Vision for Laos

Taken together, these signals make a compelling case for a new energy strategy in Laos and in the region as a whole.

First, the report suggests that Lao planners should invest in a backbone transmission network to connect its patchwork regional grids. This is a good idea for a variety of reasons. A nationwide transmission system would help open up markets for Lao electricity both domestically and internationally by creating a more flexible grid. It would help planners integrate renewable energy resources like solar and wind. It would also be a great step towards electrifying the remaining 20% of the country still without power.

Secondly, planners should consider ways to diversify the country’s energy mix with wind and solar. With too much reliance on hydro, the region risks facing shortages during drought conditions, which will become increasingly likely due to the effects of climate change.

It also makes good economic sense. Utility-scale solar is now nearly cost-competitive with hydro in Laos. Solar avoids the social and environmental challenges associated with hydro that have led to disruptive public protests and cost overruns, making it a safer bet.

In fact, solar already plays an important role in electrifying Laos’ rural communities. Companies like Sunlabob have pioneered low-cost solar home systems to provide basic electricity services like lighting and device charging to remote communities. A new energy outlook from Lao energy planners would also be a great opportunity to optimize plans to fully electrify the country, whether by grid connection, solar home systems, or village-level microgrids.

Lastly, greater international cooperation in energy planning is needed. The construction of a national power grid will require technical assistance from international experts. The Asian Development Bank is leading this effort, and plans to invest $400 million in a national transmission network by 2020. The US has already begun providing power planning and optimization assistance through the Department of Energy and its national laboratories.

The US is also supporting renewables in Laos. In advance of President Obama’s visit to Laos in September 2016, the US Trade and Development Agency committed to funding a feasibility study for a 20 megawatt solar farm in the country.

China, as a regional power with an abiding interest in Laos’ energy sector, can also benefit from this shift. The world’s largest solar module manufacturers are Chinese, and government support for emerging solar markets is one way to bolster domestic manufacturers while also rebranding China as a responsible stakeholder in the region.

Laos’ energy future is still uncertain. Energy planners remain convinced that prioritizing dam construction is Laos’ ticket to prosperity, despite the risks. But as the challenges for Lao hydro become ever more apparent, a new way forward could be in the making.

Read the Stimson Center’s full report here.

This article was first published here on the Pacific Observer website.

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Thailand bets on China-led AIIB to finance massive infrastructure needs

Will China's AIIB-backed 'railway diplomacy' be enough to jumpstart Thailand's lagging economy?

Will China’s AIIB-backed ‘railway diplomacy’ be enough to jumpstart Thailand’s lagging economy?

On January 26, Thailand’s cabinet approved a budget of 52.82 billion baht (US$1.47 billion) to join the China-led Asian Infrastructure Investment Bank (AIIB).

Thailand will hold around a 1.43 percent share of the bank with payments beginning in five installments of 2.112 billion baht (US$58.90 million) due by the end of 2019.

“As the country [has] aggressive plans to improve its much needed infrastructures, the AIIB would offer great opportunities in terms of more loan availability” explains Nithi Kaveevivitchai, a research economist at the Bank of Ayudhya.

Thailand’s junta is attempting to revive the country’s flailing economy with an ambitious spending program of over US$100 billion that would include large-scale infrastructure upgrades for the country’s railways and roads, as well as air and seaports. Being one of the fifty-seven founding members of the AIIB, Thailand could potentially receive cheaper loan rates and more flexible lending conditions from the Beijing-based bank, compared against the US-led World Bank or the Japan-led Asian Development Bank.

The Thai government foresees it will benefit from intensified diplomatic rivalries between China and Japan. During a speech in April 2015, Thailand’s energy minister Narongchai Akrasanee, cannily asserted that “one thing we have learned is that if we welcome the Chinese, the Japanese will come running.”

Support for the AIIB in Thailand has not been unanimous, however. Kasit Piromya, a former foreign minister and current advisor to the Democratic Party of Thailand, criticized the creation of the AIIB as “part of China’s global strategy to dominate” and argued at the Asian Financial Forum that “China will be dictating terms and that will further weaken the Asean community.”

Since seizing power, Thailand’s military generals have instead sought to deepen political and economic ties to China, which is now the country’s largest trading partner. “It has been analyzed that any related projects that could benefit the supply chain network and trading routes between the ASEAN region and China would receive great attention from the AIIB,” assesses Nithi Kaveevivitchai.

The Sino-Thai railway link, which aims to transform Bangkok into the hub of China’s ambitious Pan-Asia Railway Network, appears to be a particularly likely candidate for an AIIB infrastructure loan. After months of bumpy negotiations – during which Beijing insisted on downgrading the railway from high-speed to medium-speed – the project saw a breakthrough in January 2016 when China agreed to Thailand’s demand that it slash its interest rate from 2.5% to 2%.

The Chinese government had long insisted on a 2.5% rate, arguing that Thailand was now an upper-middle income country, notes Mr. Nithi.

“Whether [the] AIIB will be used to fund this project is still too early to say… it could be seen as a good alternative for funding, especially if the development bank can offer a more competitive lending rate,” he adds.

The railway is currently facing further uncertainties due to its estimated budget of 500 billion baht (US$13.08 billion) and the Thai government is asking China to take more financial responsibility for the project.

Thai Deputy Prime Minister Somkid Jatusripitak told the Nation (Thailand) on February 5 that “Thailand was requesting that China be responsible for civil construction and related work for the 800km-plus railway track instead of just providing trains, rolling stock and related equipment, as the scheme is mutually beneficial so profits should not be the only factor for consideration.

In addition to issues of cost, critics in Thailand have asked whether the project is actually beneficial to the country, which has no mass goods in need of rail transit.

In parallel to the Sino-Thai railway link, Thai and Japanese authorities recently announced they have launched on a trial basis a train-delivery service using 12-foot long containers at Nong Pla Duk Junction in Ratchaburi province.The aim would be to eventually connect the junction to the Dawei deep-sea port in Myanmar, where Thailand has been developing a special economic zone (SEZ) with Naypyidaw since 2012. The long-delayed project was recently joined by Japan in 2015 and has the ambitious aim to become the gateway for the Mekong region to the Indian Ocean. China, however, has also expressed interest in creating a Dawei rail link, intimating a likely point of competition in the future. 

While it remains too early to be seen whether Minister Narongchai will be proven right, using the AIIB to expedite rail infrastructure loans could significantly help China  secure its fragile ascendancy over Japan in terms of ‘railway diplomacy’, as the two countries continue to compete for contracts across Southeast Asia.

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Filed under ASEAN, China, Economic development, Regional Relations, SLIDER, Thailand

Laos’s leadership transition raises questions over regional alliances

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Bounnhang will be the leader of Laos’ ruling Lao People’s Revolutionary Party.

Laos’ Communist Party elected vice-president Bounnhang Vorachit to be its next leader last week, after a vote by the newly formed 10th Party Central Committee.

State media announced on Friday that the congress of the Lao People’s Revolutionary Party, which is held every five years, had selected a new central committee and politburo to lead the country. The 78-year-old Bounnhang is replacing Choummaly Sayasone, 79, as secretary-general and president, who is stepping down after almost a decade in power.

Some observers believe that the change in leadership signifies a tilt away from China and closer to longtime ally Vietnam, as Laos takes on the chairmanship of the Association of Southeast Asian Nations (ASEAN) regional bloc.

The secretive nature of Lao People’s Revolutionary Party, which has ruled the country since 1975, makes its internal politics difficult to understand, but the changes in the politburo offer some indications of a slight shift in the ruling elite.

The choice of Bounnhang, a senior figure of the regime who was a prominent member of the Pathet Lao armed independence movement and has previously acted as prime minister, is an unsurprising one for the single-party state.

However, few expected the departure from the party of Prime Minister Thongsing Thammavong, 71, who had been in the politburo since 1991. Speculation in Laos is rife that his exit from power is linked to the recent arrests for corruption of Central Bank Governor Somphao Sayasith and former Finance Minister Phouphet Khamphounvong.

The 70-year-old Deputy Prime Minister Somsavat Lengsavad was also reported as not having sought re-election to the central committee, where he had been been a politburo member since 2006. Though less highly ranked in the cabinet, he was notable for being the principal pro-Beijing voice within the government.

A fluent Mandarin speaker, Somsavat has shepherded many joint ventures with China and is currently overseeing the controversial Laos-China high-speed rail project, whose ground-breaking ceremony took place in early December 2015.

The 427 km railway would connect the Lao capital to the Chinese border and is expected to cost  US$6.04 billion. A Radio Free Asia (RFA) report from January 4 mentions some government officials as criticizing Somsavat for having accepted a deal unfavorable to Laos, noting that it was not the first “high-cost investment where he gave too much away as collateral for project loans with little or no payoffs for ordinary Lao citizens.

The railroad has been mired in controversy ever since it was announced in 2010. The project was alleged to have created tensions between Laos and Vietnam, whose “own relations with China were then at a standstill,” explains Ian Baird, a Laos expert and a professor at the University of Wisconsin-Madison.

Bouasone Bouphavanh, the then-prime minister, is believed to have been removed from power and replaced by Thongsing in 2010, due to perceptions that he was favoring Beijing over Hanoi. Soon after, plans were started for a Laos-Vietnam railway, but never formalized.

In recent years, Beijing has vied aggressively for influence in Laos through aid, loans and infrastructure investment.

“China is using its economic interests to get political power” says Baird. “Politically, though, Laos remains much closer to Vietnam. Most of the country’s leaders studied or trained in Vietnam, including Bounnhang. They were already in governmental positions in the 1980s when there were strong enmities between Laos and China, who were then almost at war, with no trade or real relations.”

“What the Lao are doing now is trying to balance between the Vietnamese and Chinese. They want political support from Vietnam and financial support from China…The United States is also getting closer to Laos, but has relatively low investments in the country.”

“Ultimately”, Baird concludes, “I believe that Vietnam has more power than China in Laos.

Such diplomatic balancing was already visible this week. The Associated Press reported on Monday that Thongsing had assured US. Secretary of State John Kerry that “Laos would help counter China’s assertiveness in the South China Sea.

Xinhua, meanwhile, detailed a meeting on Tuesday between Bounnhang and Song Tao, a special envoy mandated by Xi Jinping, where the former announced “he was ready to join hands with China to further develop the relations between the two parties and two countries.” Unmentioned publicly by either government was the death of two Chinese nationals in a suspected bomb attack on Sunday in central Laos, though it remains unknown whether they were individually targeted.

As this year’s ASEAN chairman and co-convenor of the upcoming Sunnylands Summit, it is likely that Laos will be trying to strengthen its own position in the regional balance, particularly in light of mounting tensions in the South China Sea.

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What’s Old is New Again: Predictions for Southeast Asia 2016

Will there be more skirmishes in the South China Sea in 2016? Photo: Getty Images

Will there be more skirmishes in the South China Sea in 2016? Photo: Getty Images

Much can change in a year’s time. In January 2015, Singapore’s Lee Kuan Yew was still alive, Aung San Suu Kyi’s future as leader of Myanmar was quite uncertain and East by Southeast was not making any predictions about international affairs in Southeast Asia. But again, much can change in a year’s time.

2016 will be a critical period for geopolitics in the region, as new strategic relationships are formed and existing ones strengthened. Many experts talk of a growing polarization of the region as countries position themselves between the US and China, a trend due in large part to rising tensions in the South China Sea. The conflict will take center stage in 2016. Look for the the Netherlands-based Permanent Court of Arbitration to publish its initial findings on the Philippines’ case against China in the first half of 2016. Despite not ruling on sovereignty issues, the outcome of this case will likely anger China and lead to a more aggressive stance towards the Philippines and other claimants. As the Philippines and Vietnam rely more heavily on the US for security guarantees in the South China Sea, more US flyovers and naval patrols in the contested waters are to be expected. Look for the US Navy to begin to use Vietnam’s Cam Ranh Bay for “maintenance” purposes and to park its ships on a somewhat permanent basis  in the Philippines’ Subic Bay after joint military exercises finish in April 2016.

Conversely, look for the emerging Sino-Thai regional axis to be solidified in 2016. This relationship, despite not bringing much to the languishing Thai economy, will tighten the ruling junta’s grip on power. Thailand’s long drift towards authoritarianism will add further strains on ties with the US, its long-term external security power. Of course, the permanent white elephant in the room in Thailand is the king’s health. With his majesty in poor health, lese majeste cases will continue to multiply as the junta’s concern grows.  His death and the subsequent succession struggle would likely send the country into chaos, even with the army in control. Such a collapse of the Thai political structure would have major repercussions for the region’s stability.

Laos is also in for a tough year ahead. Its chairing of ASEAN will do more to highlight its shortcomings than celebrate its successes. With the opening of Xayaburi Dam, Don Sahong Dam scheduled to break ground in 2016 and preliminary studies beginning on a third Mekong dam at Pak Beng, there will be renewed calls from the international community for Laos to reconsider its hydropower plans for the Mekong River. The landlocked country’s lack of finesse in dealing with the South China Sea conflict will also draw criticism, all punctuated by continuing questions about the kidnapping of Lao activist Sombath Somphone.

In Cambodia, the political impasse between the ruling Cambodia People’s Party and the Cambodia National Rescue Party will continue through the first half of 2016. Expect strongman Hun Sen to find an 11th hour solution paving the way for opposition leader Sam Rainsy to return from self-imposed exile to begin preparing for the 2017 parliamentary elections.

Barring another major fracture in Thai politics, Vietnam’s National Party Congress will mark the region’s most significant political transition in 2016. Nguyen Tan Dung is likely to be selected as Vietnamese Communist Party chairman, with Truong Tan Sang staying on as president or similar role to balance Dung’s reformist tendencies. Dung’s leadership will be key as Vietnam implements the Trans-Pacific Partnership, a painful process that will force Vietnam to learn to run and walk at the same time. Dung’s princeling son, Nguyen Thanh Nhgi, will also be elevated to the Central Committee and has a bright path ahead if his father can lead the country into a new era of high economic growth and balanced relations between the US, China and Russia.

Corruption scandals will continue to keep a stranglehold on Indonesian and Malaysian politics. In Indonesia, President Joko Widodo’s efforts to prop up a sagging economy will be hampered by an unstable cabinet and nagging questions relating to 2015’s Freeport corruption scandal. In Malaysia, Prime Minister Najib Razak will continue to face intense public scrutiny over the 1MDB scandal. It is possible that Najib will use a new national security law to muffle Malaysian civil society’s calls for his resignation.

After refreshingly open elections in 2015, 2016 will be a year of political posturing for Myanmar. As Aung San Suu Kyi and her victorious National League for Democracy take power in early 2016, the military will position itself to retain many of its past privileges. Look for Than Shwe and the other generals to create a formal post in the government for Aung San Suu Kyi, who is legally barred from the presidency, in a bid to define and contain her power as head of the NLD. Those expecting radical change from the NLD government will be disappointed – there will be little structural political reform, the NLD’s foreign policy will be largely similar to Thein Sein’s, and the ethnic reconciliation process will still muddle along. However, look for the new ruling party to permanently shut down the Myitsone hydropower project and consider suspending the Salween river’s cascade of dams in order to push along the ethnic peace process.

Like 2015, this year will see a further intensification of the Rohingya refugee crisis. However, with the world’s eyes adjusted to seeing the plight of refugees, there will be more attention paid to the issue and Aung San Suu Kyi will receive pressure from both Western and Muslim-majority countries to solve the problem of Rohingya persecution in Myanmar. Another ethnic group that came to the forefront last year, China’s Uighur population will also stay in the news in 2016. Increased crackdowns in their home Xinjiang province will force more refugees into Southeast Asia, and lead to a handful of Uighur-related terrorist attacks, both foiled and executed, in Thailand and Indonesia.

The regional economy will see decreased growth in 2016 as a result of slowing growth and structural issues in the Chinese economy. Chinese money will still flow south as the One Belt One Road strategy is rolled out and the Asian Infrastructure Investment Bank officially opens for business. Contrary to some expectations, the AIIB’s first loan recipient will not be Myanmar, but either Laos or Cambodia.

On the other side of the coin, the US-led Trans-Pacific Partnership will begin the ratification process in a number of regional countries this year. Our bets on order of approval are Singapore first, followed by Brunei, Malaysia and Vietnam. Indonesia will likely commit to the TPP by the end of the year while Thailand’s economic struggles under the military junta will push it closer to joining. Much of the US-ASEAN Sunnylands conference in February will be centered on TPP ratification, along with South China Sea issues and counter-terrorism cooperation, and will serve to solidify relations between the US and the bloc. ASEAN leaders will be looking for assurances of American commitment to the region during the next administration and they will likely receive them. Of course the future of the TPP and the US Rebalance to Asia lies in the fate of the US Presidential elections and our prediction is that America’s first woman president will keep the Rebalance at the forefront of her foreign policy – after all it was her idea.

Last but not least, the Asian Economic Community will be the same on January 1, 2017 as it was at the head of this year – a half-baked dream with little hope of success.

To all of the East by Southeast readers and their families, we wish a you happy new year and much joy and success in 2016!

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Filed under ASEAN, Brunei, Cambodia, China, Economic development, Foreign policy, Indonesia, Laos, Malaysia, Mekong River, Myanmar/Burma, Philippines, Regional Relations, SLIDER, South China Seas, Thailand, USA, Vietnam

Mekong lessons: Reflecting on October trip to Southeast Asia

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I’ve just returned from my first business trip to Southeast Asia with the Stimson Center’s “Team Mekong.”  Below are a few lessons learned and brief observations from our visits in Bangkok, Kunming, Phnom Penh, Can Tho, Hanoi, and Saigon.

Good ideas gain currency

Before I joined the Stimson team in June, I must confess that my outlook on the future of the Mekong region was not filled with optimism. I cannot begin to describe how refreshing it is to join a team that is developing pragmatic and innovative solutions to some of the region’s toughest issues. Moreover, it’s extremely satisfying to watch the deployment of an idea gain momentum among decision makers and begin to take on a life of its own. Simply put, ideas work. At public forums in Bangkok, Kunming and Hanoi and in meetings with regional government officials Stimson’s “Team Mekong” launched a more refined version of the concept of the need for a “New Narrative” on Mekong hydropower development first mooted by my colleagues, SEA Program Director Rich Cronin and Research Associate Courtney Weatherby this March. The New Narrative challenges the current narrative that the construction of 11 dams on the Mekong’s main stem is a prevailing ‘domino theory’ of inevitability based on an emerging body of evidence. Stimson’s most recent report and its main argument can be found here, but it was encouraging to hear the idea confirmed when well informed hydropower experts placed their bets on no more than five dams, all of them above Vientiane excepting Don Sahong.

So if the Lao PDR government is banking on income generated from the construction of eleven main stem dams but only gets five in the end, shouldn’t it consider alternatives? Considering the known and unknown costs of downstream effects on fisheries and livelihoods, it seems prudent for Laos to give the entire basin development plan another look.  As a sustainable, one-country alternative to relieving the pressure of hydropower development on the Mekong’s main stem along with the unbearable downstream costs related to impacted fisheries and livelihoods, the Stimson team is continuing to develop the concept of a Laos national power grid designed for both the export of hydropower and national electrification as an alternative to Laos’ current economic development plan.

The grid would be designed to optimized trade-offs related to the food- water-energy nexus on a basin wide scale. On this trip, we received much encouragement for the national power grid concept from regional government officials, but challenges still remain in convincing Laos as to why national electrification will provide more benefits than the current plan.  As a suggestion, Vietnam, as a most concerned state in regard to downstream impacts can, share the story of the benefits of rural electrification with its neighbor through the history of its own development.  Further, Vietnam’s electricity demand is increasing at 12% year-on-year prior to the TPP and could act as a major purchaser of power generated from a Laos’s national grid.

No clear trends on the China Factor.

I see no clear evidence that China’s state-owned enterprises are trending toward improving practices in Southeast Asia or that there is a concerted move from policy-motivated concessional projects to those based on financial viability. A few firms might be making improvements here or there, but even these firms are not willing to release the details and data supporting these so-called improvements. In the case of Hydrolancang’s Lower Sesan 2 project in Cambodia, the developer claims its fish passages will be successful in protecting vulnerable fish species, but will not release the research or plans for those fish passages for public observation or scrutiny. The message for Hydrolancang and other similar Chinese dam developers hasn’t changed: “We’ve conducted 100% of research relevant to these projects, and we’re confident that all problems will be solved. You only need to trust us.” But trust is built on results and transparent public relations. China simply runs a poor track record on these factors in the Mekong region.

A surprising development is that China’s firms are playing the victim when discussing their Southeast Asian projects. Officers of these firms claim Beijing put them to task on these projects while the firms have to bear the risks and interact with prickly civil society groups, unwarranted Western criticism, and unstable host governments – the Myitsone dam serves as a case in point. Yet they fail to acknowledge the unbalanced stream of benefits granted by concessional contracts or the processes through which these benefits are gained.

Further, these firms often claim to strictly follow the laws and regulations of host countries related to environmental and social impacts. Yet weak states like Laos, Myanmar, and Cambodia have promulgated little to nothing in terms of environmental or social safeguards, so these claims of being responsible legal investors are interpreted as trite and non-persuasive.

Lastly, some anecdotal evidence points to Chinese money earmarked for overseas infrastructure development drying up in this latest round of China’s economic downturn. This discovery supports emerging conversations that Chinese firms are investing in more commercially viable or “bankable” projects. However, at the same time China’s One Belt One Road initiative appears to be creating a pool for free money given out on soft terms to any firm interested in constructing a project vaguely related to the objectives of the One Belt One Road whatever they may be. When weighing whether or not China’s upcoming investment on Mekong main-stem dams in the pipeline will be based on strategic motivations or sound financial decision making, this last point is particularly concerning.

New institutional frameworks are forming to coordinate regional policy making.

It’s becoming increasingly clear that the Mekong River Commission is NOT the institution to solve the big issues rising the Mekong region, though it still constitutes the only treaty-based intergovernmental organization in the region, and its technical review of the Xayaburi dam and its anticipated critique of the Don Sahong project have caused both developers to delay the projects and spend hundreds of millions on significant engineering changes and additional fisheries research. But in terms of actual governmental engagement, other institutions and bilateral arrangements are beginning to fill this gap. The US-led Lower Mekong Initiative (LMI), for instance, in its still nascent form aims to promote higher standards on water resource management and assessment of infrastructure development within the region. The LMI brings together the line ministries of the four MRC countries and Myanmar several times a year in working groups both on functional “pillars” and cross-cutting issues like the water-energy-food nexus, and the prime ministers of the LMI countries meet in the wings of the annual ASEAN-US Leaders Meeting, where transboundary issues and impacts from hydropower dams and other major infrastructure projects can be raised to the extent that the leaders are willing to engage on them.

In response to both the US-led LMI and the waning power of the MRC, China is assembling a multi-lateral organization for joint river basin management called the Lancang-Mekong Dialogue Mechanism (LMDM). Mekong watchers should pay attention to the outcomes of the first vice-ministerial meeting of the LMDM on November 12. Further, Cambodia is negotiating a transboundary environmental impact assessment treaty with Laos and Cambodia, Laos, and Myanmar are authoring new sets of environmental and social safeguards related to infrastructure development.

These frameworks are all coming together quite quickly. Yet even the US led LMI is said to be underfunded, uncoordinated, and unsure of its product. China’s forming of its own river basin organization is a welcomed foray into multi-lateral diplomacy, a realm often eschewed by the Chinese, but the intent and purpose of this organization is unclear. Serious cooperation on the use of the water and hydropower development will be highly limited so long as China refuses on national security grounds to provide downstream countries with the results of its hydrological and water quality studies, or the operation of its dams and other water releases from its monster reservoirs.  And whether or not new safeguards in the Mekong’s weakest countries will have teeth or just pay green-washing lip-service is unknown.  These developments all deserve our close attention.

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Report: “Mismanagement” stalling building projects across China

Work continues on the Darui Railroad in western Yunnan Image credit :cr8gc

Work continues on the Darui Railroad in western Yunnan. Image credit: cr8gc

Hundreds of highway and railroad projects are facing delays or otherwise running far behind originally envisioned construction timetables. This, according to a report issued by China’s National Audit Office, is a result of local governments improperly managing infrastructure funds — actions thought to have a direct effect on the country’s stalling economy.

In total, the audit of projects nationwide looked into 815 infrastructure programs across the country. More than 20 percent — 193 in total — were found “to be experiencing significant implementation lags due to a lack of funds or poor initial planning.” Together, the behind-schedule ventures represent government investment of 287 billion yuan (US$45.2 billion).

The architects of China’s economy have traditionally relied heavily on state-funded building projects as a means to revitalize the financial system in times of decline. Therefore, those lagging behind schedule due to mismanagement or misuse are seen as harming the economy in two ways, according to the audit. Not only are funds not being spent as quickly as they are authorized, but the benefits to localities through which new infrastructure projects pass must wait idly for any expected economic uplift.

In Yunnan, this is especially true in the province’s west. A railroad from Dali — traveling through Yongping, Baoshan, Mangshi and terminating at Ruili on the Burmese border — was originally expected to be completed in 2014. It will provide some of the most populated regions in western Yunnan direct rail access to Kunming for the first time ever. However, due to cost over-runs and awkward mountainous terrain, the line is now expected to open as late as 2019.

In an effort to speed up construction along the single-track Darui Railroad (大瑞铁路), Beijing injected a further five billion yuan (US$788 million) in annual funding for the endeavor beginning in 2012. The 335 kilometer railway is 75 percent tunnels and bridges, making for difficult surveys and slow progress, especially in places where engineers must dig under theGaoligong Mountains.

The railway was first conceived of in 1938 as a way to connect Kunming with the British colony of Burma. The outbreak of World War II scuttled those plans. However, they have since been resurrected as one part of the massive BCIM trade corridor, which Beijing hopes will one day provide an overland link between Kunming and seaports on the Indian coast some 2,800 kilometers away.

This post was originally published on GoKunming and written by Patrick Scally. It is reprinted here, in its entirety, with permission from the author. 

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In China’s hinterlands, a new life for Myanmar’s Rohingya

President of Myanmar Thein Sein. Photo: Wikemedia Commons

President of Myanmar Thein Sein. Photo: Wikemedia Commons

On February 12, 2015 Myanmar President Thein Sein, prompted by protests led by Buddhist monks in Yangon, reversed a decision made ten days earlier to give voting rights to the country’s Rohingya population. The reversal, while surprising to some, was only the latest in a series of events to befall the Muslim minority who call western Myanmar’s Rakhine state home.

The Rohingya of Myanmar (also known as Burma) have lost more than voting rights in the past. Regarded as one of the world’s most oppressed peoples, the Rohingya are a distinct ethnic group that speak a dialect of Bengali and are thought to be descended from Arab and Persian traders.

Persecuted at Home

Under the military junta that ruled Myanmar for most of the latter half of the 20th century and the current, nominally civilian government, Myanmar’s Rohingya have suffered chronic poverty, food insecurity, harassment and forced labor, among other human rights abuses. Following Burma’s 1982 Citizenship Law, hundreds of thousands of Rohingya were denied citizenship and are still referred to as ‘aliens’ and ‘foreigners’ by government officials. They are neither allowed to travel outside their hometown nor marry without official approval.

Poor relations between the Muslim Rohingya and their neighbors have only made things worse. Tensions between Rakhine state’s Muslim population and the majority Rakhine ethnicity, who are Buddhist, boiled over in 2012, leading to anti-Muslim riots that spread throughout the country. In Rakhine state alone, over 200 people were killed and whole villages were burned to the ground. Conditions have not improved for Myanmar’s Rohingya population since then. The current boat crisis of thousands of Bengali and Rohingya refugees stranded off the coasts of Thailand, Malaysia and Indonesia is a consequence of awful conditions at home.

The Rohingya, however are certainly not the only group struggling in Myanmar. Despite what appears to be a nascent democracy, a civil war between the government and an array of armed ethnic groups along the country’s periphery has flickered continuously since the 1950s. The reasons for the conflicts are many, though issues of ethnic autonomy and control of precious resources like jade and timber loom large.

The conflict’s latest iteration began in February 2015 and is still ongoing. A flare up of tensions between the Myanmar Army and Myanmar National Democratic Alliance Army (MNDAA) in Kokang, Shan State, has killed hundreds and forced tens of thousands of civilians to flee across the border into China.

Many Rohingya have also left Burma in the past decades. Tens of thousands of them reside in ill-equipped refugee camps on the Myanmar-Bangladesh border, though others have escaped to new lives abroad. Their final destinations vary, but the majority resides in Saudi Arabia, Malaysia, Thailand and Pakistan. Of these Rohingya living overseas, who may number over one million, most work low-wage jobs in the construction and service industries. There are some, however, that have chosen a different path in a land closer to home.

Abdullah's storefront in Jinghong

Abdullah’s storefront in Jinghong

Eight hundred kilometers east of Rakhine state in Jinghong, China, Abedullah owns a small jewelry shop. It’s three o’clock in the afternoon he hasn’t sold a thing.

Abedullah, like almost one million of his compatriots in Rakhine state, is a Rohingya, but he has not lived there in thirteen years. Instead, he’s settled in Jinghong, the capital of Yunnan Province’s Xishuangbanna Dai Autonomous Prefecture, along with almost 600 other Rohingya. All of them sell jade.

According to Abedullah, who only agreed to give his first name, Rohingya merchants first came to Jinghong almost forty years ago. Following the end of the bloody Bangladesh Independence War in 1973, hundreds of thousands of refugees fled into neighboring Burma. Marginalized by the Burmese and eventually disavowed by the Bangladeshi government, tens of thousands of Rohingya fled overseas. A handful made it to southwest China’s Yunnan province.

Stories of Jinghong’s first Rohingya are hard to find and by all accounts, the number of émigrés remained small until the 1990s. It was then that the Chinese economy began to truly open up to the international market. As trade increased and more Chinese became wealthy, the country’s jewelry consumption level grew as well, skyrocketing over 4000% in a decade.

While all gemstones have grown in popularity in recent decades, none hold the place in Chinese culture that jade does. Regarded as a stone of mystical qualities since antiquity, jade is the king of gemstones in China and it is in Myanmar that the world’s highest quality jade is found.

As a result, jade shops are ubiquitous in dozens of towns along the China-Myanmar border. Jinghong is one of the largest. Straddling the Mekong River, this once sleepy town has grown into a city of six hundred-thousand and now hosts millions of tourists each year. Many of these tourists come looking to buy Burmese jade. As travelers have flocked to Jinghong in greater numbers in recent years, Rohingya merchants with connections to the Burmese jade trade have followed to keep up with demand.

A New Life

One of the recent arrivals is Xiao Fei, a 21 year-old who prefers his new Chinese nickname to his given name. Xiao Fei, like many other Rohingya in Jinghong, came at the behest of his family; his grandfather first arrived in the city almost thirty years ago. After saving enough money for a passport, Xiao Fei was able to leave his home in Yangon and help his grandfather set up the family’s second shop.

Xiao Fei had to save up for his passport because getting such a document is often impossible for many Rohingya in Myanmar. Since they are officially considered to be foreigners by the Burmese government, Rohingya can only obtain passports after paying expensive bribes to the right people. That is why, as Xiao Fei explains, “Only rich Rohingya can make it to China.”

Once in Jinghong, new arrivals find an environment altogether strange and inviting. The forest of newly-built apartment complexes and hotels certainly dwarfs anything found in Rakhine state, however the hundreds of established Rohingya businessmen form a tight community that provides everything from religious services to a lunchtime delivery service of halal Burmese cuisine.

It is the mosque that is the heart of the community, says Waynai, a trader living in Jinghong for six years. The Jinghong Mosque, located not far from the banks of the Mekong was first established decades ago by the city’s existing community of Hui, a distinct ethnic group of more than ten million people that practice Islam and speak Mandarin Chinese.

When the Rohingya began to move to Jinghong in greater numbers in the late 1990s, they became a part of the congregation, eventually joined by a small population of Uighurs from China’s northwest. Together, these three groups of Muslims manage the congregation. Despite disparate geographic and cultural backgrounds, the mosque is thriving with a healthy number of members, daily prayers held in Arabic and discussion groups where participants speak in Standard Mandarin.

The Jinghong Mosque

The Jinghong Mosque

However both Waynai and Abedullah agree more with the mosque’s Uighur members on theological questions. When asked whether or not he had any non-Rohingya friends from the congregation, Abedullah answers, “Yes, but not the Hui. They’re fake … they don’t have Allah in their hearts.” Instead, it is the Uighur community that he feels closer too. “[The Rohingya] are similar to the Uighurs because neither of us are free … we both have to struggle to survive.”

This struggle is why Ba Hlaing, a 31 year-old jade dealer, came to Jinghong eight years ago. At the time, his family lived comfortably in a suburb of Yangon but as he came of age, conditions for young Rohingya grew more difficult. “I would’ve liked to stay with my family, but there wasn’t anything to do, no money to make.”

“It’s because of [the government] that we’re so backwards now,” he says in a whirlwind of English, Mandarin and Jinghong dialect, slapping the table after each word.

Just then a Han Chinese couple enters Ba Hlaing’s shop. He greets them using his best Mandarin, standing, “Welcome to Ba Hlaing’s Jewelry! We have the finest jade from Myanmar! Would you like to look at a bracelet?”

After five minutes of browsing, the wife still has not decided on a piece and the husband, fidgeting, suggests heading back to their hotel. The couple leaves and Ba Hlaing sits down to light a cigarette. “That’s how it goes,” he sighs. Just like Abedullah, business is slow for Ba Hlaing, even during tourism’s high season.

Ba Hlaing believes the drop in jade sales is a consequence of Chinese President Xi Jinping’s much-publicized crackdown on corruption. Once-popular ostentatious displays of wealth, like jade pieces worth tens of thousands of dollars are now frowned upon and officials that might frequent jade shops like Ba Hlaing’s are staying away.

Burmese jadeite

Burmese jadeite. Photo: Wikimedia Commons

The jade, however, keeps flowing from Myanmar. Most of it is mined in a strip of remote jungle in Kachin State, in the country’s northeast.  Conditions in Myanmar’s jade mines are notoriously dangerous and the towns that spring up around them are known as much for their drugs and guns as they are for their jade. However bad mining conditions are though, the money can be worth it for those who can make it. Official figures from Myanmar’s government put jade exports at $1.4 billion between 2011 and 2014. Analysts from Harvard University’s Ash Center disagree, estimating jade sales – both official and off the books – at $8 billion for 2011 alone.

Once the raw jade has been extracted, it is sent to processing centers. The majority are located within Myanmar, in urban centers like Mandalay and Yangon, where the jade is polished and crafted into a final product. The next step is to get it into China, where the market is.

Most traders interviewed for this article admitted that the majority of the jade they sold was actually smuggled into Yunnan. A few well-placed bribes on both sides of the border can get shipments of jade, transported in trucks, into China reliably. Once the jade is in Yunnan, it usually makes its way to Ruili, a major border crossing between China and Myanmar.

According to Ba Hlaing, many Rohingya traders in Jinghong have a contact in Ruili, usually family, that buys the jade. Others, however, are directly connected to processing centers, most often in Yangon. For more valuable pieces, with sale prices upwards of $50,000, many traders will use air transport to ensure their safe arrival. While import taxes must be paid in these cases, the extra cost is often worth the peace of mind.

 A Tough Decision

Peace of mind, however, is getting harder to come by. With a slowdown in business and mounting issues back in Myanmar, many members of Jinghong’s Rohingya community are facing a tough decision whether or not to return home.

Ba Hlaing, for one, is planning on going back to Myanmar. Sales have decreased for the past two years and he fears that a protracted crackdown on corruption in China will keep jade sales low and prevent his shop in Jinghong from making a profit.

Despite the dire situation for the Rohingya in Myanmar, Ba Hlaing is choosing to remain positive. “I think things will get better for us,” he says guardedly. “We have [this year’s parliamentary] election and the world paying attention to us so democracy is a good thing.”

Abedullah, on the other hand, does not share Ba Hlaing’s optimism. He does not want to return to Myanmar and sees little hope for democracy delivering the Rohingya from oppression.

“Things are a mess in Myanmar right now, everything is a mess,” he says. “The economy is bad and the government and [the armed ethnic groups] are still fighting.”

When asked his thoughts on the country’s armed conflicts, Abedullah pauses before exhaling heavily. “You know, we want to go to war too. At least [the armed ethnic groups] have guns. We don’t have anything,” he laments. “The government even took the knives from our houses … But then they still call us terrorists.”

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Origins: A Study Abroad Homecoming

I did not study abroad to “have the time of my life” or “take it easy for a semester”. Don’t get me wrong—I love adventure. When I fall into a routine for too long, I often crave it. I have spent the past six summers traveling in some of the most remote areas of the world. Last winter, I took a Birthright trip to Israel and embraced my Jewish identity. So traveling to China should not have been a big deal—it should have been just another adventure. Another opportunity to learn about local culture while reflecting on my own privilege. But to me, studying abroad in China for four months was daunting. By returning to my birth country, I was committing myself to the unknown and opening myself up to heartbreak.

I have always been sensitive. Even in safe situations growing up, I often felt vulnerable and insecure. It is a miracle, really, that I have traveled so much, as new situations and environments often give me days-long stomachaches and have me calling home in an emotional upheaval. More surprising still is on every adventure, I opt to travel with all strangers instead of childhood friends, relatives, or classmates from home. But maybe I thrive on that very uneasiness. Maybe my restless side thrives on facing challenges and exploring new places, cultures, and people without a familiar face by my side. Even more accurate, though, is me pushing myself to explore my own identity.

IMG_8378.JPG

Identity is a loaded word. It has a different meaning in various contexts. Identity can encompass perceptions of self as well as others people’s perceptions of you. It can include religion, socioeconomic status, intellectual point of view, political stance. Identity can be defined in the context of one’s community, geographic location, educational institution. And that is just the brink of the layered, multi-dimensional term.

​The eve of October 24, 2014, I boarded a flight from my study abroad program in Kunming to Nanjing, China. It is no metaphor when I say my whole body was shaking in fear, anticipation, excitement, and angst. Truthfully, as I write this three months later, my body is still tense, my fingers trembling. It has taken me months to process, truly, those three days. I think I am still processing my experience—I don’t know if the processing will ever stop. Identity is tricky that way: it always changes. Identity can contradict itself while making all the sense in the world. My identity can restrict me and liberate me.

​That weekend, I returned to my birthplace, Yangzhou. At least we think it is my hometown. When I was three days old, the Yangzhou Social Welfare Institute (both an orphanage and a home for the elderly) states that its workers found me outside the gates. There were no traces of my birth parents. But I am nearly five-foot-nine and my city is known for its tall women. I take pride in that shared trait.

​Returning to Yangzhou was my top priority when I decided to study abroad in China. Initially, the program interested me because of its focus on regional development in Southeast Asia, the place I truly feel at home. Having dabbled in Chinese culture and Mandarin for years, I kept forcing myself to become interested in China. Yet those moments of interest never lasted. I easily could have studied in Thailand, Vietnam, or Cambodia. But that would have been the safe route. Conquering my fear of China and all its unknowns reminded me that I could be strong and face the world bravely. Coming “home” to Yangzhou seemed to be the natural test of my courage.

​This wasn’t my first trip back. In 2005, I returned to China with my family and one other family of three. The girl was my crib mate in 1994 and miraculously, our parents had connected through Families with Children from China, an organization dedicated to giving adoptive families support pre- and post- adoption. It is common for families to bring their adopted children back to their birth countries when they turn 10 years old. We traveled for three weeks, mixing heritage and cultural “homeland” experiences with the more touristy excursions. While in Yangzhou, we visited my orphanage; I met one of my caretakers. Since my parents adopted me at five months old, I have no recollection of China. But I created memories during my first return. I distinctly remember one boy who gripped onto my finger and refused to let go. I recall an infant in a neon-pink fleece crying and throwing her bottle across the nursery. I still feel the pang in my chest as it hit me for the first time: that was once me. I was once in a crib, wanting to be held, nurtured, cherished as someone’s own loved one. During that visit, I presented the orphanage director with a scrapbook of my life in New York. I included a page that said, “I am a Jew, and Proud, Too” as well as photos of my dear grandparents meeting me for the first time at JFK Airport.

​Now, nearly ten years later, I had the opportunity to “come home” to my orphanage again. If you could still call it that. A decade ago, there was a master blueprint for reconstruction. Now, the upgrades have been completed. The new and grand center replaces the old one. Wooden floors and smoothed-cement walls replace the linoleum and dilapidated cinderblock. The former cracked marble sign at the entrance has been replaced with a sleek glass panel. The first floor of the center has been converted to a museum that celebrates successful adoption stories, including a photo of John Huntsman and his family.

Entrance to the Yangzhou Social Welfare Institute

​I did not recognize this place. Maybe that was good, as it meant the needs of the new children were being met. The demographics of children have shifted: it went from, in 1994, being mostly abandoned infant girls to, in 2014, being a majority of mentally and physically disabled boys who span from infancy to middle-school age. I recognize that state-of-the-art physical therapy equipment and play areas are rare in Chinese orphanages. Yangzhou is a welcomed, successful anomaly. But a selfish little part of me wishes there was some memory of the old building, whether it be a metal crib, the dim lighting, or the familiar smell of hot powered milk.

​This new building felt sterile. The lack of crying children or chaos made me feel as if I were in an artificial environment. Most of all, though, I felt that with the tearing down of the old building, I was no longer part of this community. I was once again a perpetual outsider, someone looking into her past without a tangible connection. I was disconnected from one more part of my Chinese heritage. It hurt.

​Of course, this is false. The building I saw ten years ago was a remodeled version of what my parents had witnessed twenty years ago, in 1994, when they adopted me. Everything changes all the time. Nothing slows down just because you want to reminisce.

​But reminisce I did. A public relations worker pulled my file from the archives. Inside the cardboard box, carefully preserved, was my father’s business card, a copy of my Chinese birth certificate, my adoption records, and the scrapbook I had brought nearly ten years ago. Although the construction paper had faded, I was instantly comforted. Here, inside the new, smoothed walls of the orphanage, a part of me remained. I laughed as I saw the “I’m a Jew, and Proud, too” page, especially in the wake of my Rosh Hashanah encounter in Kunming. Being just five days before the two year anniversary of my grandpa’s death and the one year anniversary of my grandma’s, I gulped back the sobs as I flipped through pages of photos of me in their arms.

​It’s unnerving, this concept we call time. It distances us from pain, yet in one moment, one photo can trigger sorrow and joy simultaneously. Seeing those photos of my grandparents sparked emptiness in my heart that I hadn’t felt since their respective funerals. Yet at the same time, I was overcome with relief. Relief that I still remembered their comforting hugs. Reassured that they weren’t slipping from my memories or my grasp. Hopeful that they would be proud of my journey and the person I am becoming.

Skyline of Yangzhou, China.

Skyline of Yangzhou, China.

​Even Yangzhou the city was unrecognizable. Ten years ago, roads on the outskirts of the city were unpaved. The canals were beautiful but trash lined some of the older cobblestone streets. Rickshaws were the vehicle of choice. This time, electric motorbikes filled the paved streets. Trash bins and recycling cans sprinkled the sidewalks. There were Western toilets. It was unrecognizable, yet I felt at home. In the market, a woman asked me if I was a Yangzhou girl. Without hesitation, I answered “Yes” and she smiled. For once, I was a local, no questions asked. Unlike Kunming or other parts of China, where my native language does not match my face and my name does not complement my complexion, in Yangzhou, I did not feel like I was letting down others’ expectations of who I should be. Instead, I was candidly, unapologetically me. And no one countered this fact. Even when I fumbled my Mandarin, people smiled patiently. I explained to a shopkeeper that I was a Yangzhou girl but an American, too: I was returning home for a visit. She gave me a “welcome home” hug. I felt no resentment from her, unlike I have from other Chinese who discover I am internationally adopted.

​This is not to say that I fit in perfectly. I was still at the crossroads of my identity. But I felt accepted and I felt an inner calm. I have only felt this calm in Southeast Asia. Even in the United States, the land I call home, I feel out of place. Often, my inner anxiety exacerbates microaggressions, or non-conscious remarks others make about my identity. The expectations of others have become a burden to me. It is my nature to aim to please others; I hate letting people down, even if I have no control over the situation. My time in China has taught me that I have more grit than I give myself credit. It was four months of discomfort, yet I survived. No. I did more than survive; I grew up. I learned about myself. Sure, I learned that I do not want to live in China for the long-term. But I also learned that I am capable of it.

​Returning to China, overall, was not a homecoming for me. If anything, I felt alien. But going to Yangzhou gave me a new sense of what coming home could feel like. Home does not always have to be a place of comfort. It does not have to be familiar. Instead, it can be entering a new place and having a sense of calm wash over you at the same time new questions enter your mind. Coming home can feel like leaving home, and the familiar, simultaneously. I left New York and Southeast Asia, the places I feel safest, and traded them for China, my country of origin. But New York could be my nation of origin, as well. It was where I was given a family, and put down my first real roots. Even Southeast Asia could be my origin: it is the first region where I let go of every insecurity and allowed myself to live freely, unapologetically, and out of my comfort zone.

​My study abroad journey taught me about Southeast Asia, sure. Yes, I learned basic Mandarin. Of course I built up my spicy-food tolerance. But really, study abroad is not about the academics. I learned 5% about the country, but 500% more about myself than when I set off. Cliché as it sounds, the self-discovery process was difficult and rewarding. There is no tangible measure for understanding identity, yet I feel myself observing, questioning, learning, and adapting. My semester in China has taught me to cope with internal struggles and insecurities while exploring who I am—and testing my emotional strength—in a new society. I have lost count of how many times my sense of self has been turned around and twisted. And with every bend, my confidence has faltered. Yet coming to China has made me stronger and more independent. I have new survival tactics. I have learned to channel my vulnerabilities and emotions, turning it into productive and positive energy. I’ve encountered people of all backgrounds who have vastly different agendas and means of getting there. I have furthered my understanding of “informed global citizen” and have pushed myself to become a responsible rising one.

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Zen & the Chinese Art of Motorcycle Driving

Photo courtesy of GoKunming.com

Photo courtesy of GoKunming.com

One cloudless August day in 1998, I rented a bicycle and rode straight through the heart of central Beijing. It was the kind of day China’s capital never sees anymore — expansive blue skies, crisp, clean morning air and virtually empty city roads.

I cruised alongside hundreds of other riders crowded into bike lanes nearly as wide as the adjacent avenues. Bicycles dominated the city, outnumbering vehicles ten to one, with most being one variation or another of the classic Flying Pigeon. The riders all moved together in improbable synchronicity, like a shimmering shoal of fish. The lanes were extremely crowded but it felt as if the shoal carried me along and I effortlessly kept pace with everyone else, propelled by the exhilaration of facing my first day in China.

Fast forward to now, after more than 16 years in the country, and I struggle to find ways to keep that exhilaration alive. These days I ride my off-road motorcycle through the streets of Kunming trying my hardest not to flip the bird at every driver that gets in my way. This year, after a decade and a half of self-control, I finally let it fly. I took my right hand off the throttle, thrust my upraised fist toward the offending driver and extended my middle finger to the sky.

I was full of rage and hoped to provoke the same rage in the driver. I wanted to ruin his drive as he had ruined mine. Instead, the driver lifted his index finger, pointed at me and smiled. I could see him mouth two words to his friend in the passenger seat. “Kan! Laowai!” — Look! Foreigner!

I bought my first motorcycle in 2002 when I lived in Dali. I had never even ridden one before, but I planned a solo road trip north along the borders of Myanmar and Tibet. I didn’t have any idea what to expect, even strapping a machete to the side of my saddle just in case a band of ruffians threatened trouble. I never needed the weapon.

The countryside roads weren’t without their dangers. Tractors tore out from side roads without warning. Dogs, chickens and even children seemed to appear out of nowhere. But obstacles aside, I fell in love with China’s countryside and my mind raced with ideas of where to ride to next. With one twist of the throttle I was off to new adventures, making up songs and singing them as loud as I could over the roar of the engine.

But now, after more than a decade of driving in Kunming, I have been transformed. In place of gleeful songs, only obscenities broadcast from my helmet. I tear through the city as if I’m the Road Warrior on the run from murderous bandits. I honk my horn at every intersection as a warning to anyone who dares cross my path. Traffic rules mean little and courtesy even less. At times I feel like the Hulk — usually I’m the mild-mannered Bruce Banner, but with a spark of the ignition, the beast is unleashed.

In the past, I always obeyed traffic rules. I never got a ticket, made sure to yield the right of way and rarely honked my horn. More importantly I never lost my cool. Why then am I now so tempted to throttle so many that cross my path on the city roads? Or perhaps a more intriguing question is: Why am I becoming more and more like the very drivers I detest?

With a traffic culture that favors the aggressive and impatient, it is easy to blame everyone else for turning me into this creature. It is actually more dangerous being a law-abiding driver than an aggressive and selfish one. If you go too slow or stop for a crossing pedestrian, you might end up getting rammed from behind. And on a motorcycle, the safest place to be is out in front of all the traffic. Speeding or running a red light is sometimes the best way to stay out of harm’s way. On China’s roads, it seems that only the strong survive. Unfortunately, this is an attitude that derails any prospect of efficient traffic.

There are very few parts of the world outside of China that have ever seen such an immediate growth in urban traffic. Over the last decade, the number of cars on the roads in cities like Kunming has increased more than tenfold. Urban planners and law enforcement have struggled to adjust. The roads have widened and the laws continually change, but cities need more than just the stroke of a pen to adapt. Efficient traffic systems can’t just be instituted. They are cultural and evolve over time.

The safety of everyone on the road is best guarded when cars yield to motorcycles, motorcycles to bicycles, and bicycles to pedestrians. But the pecking order has been lost and so too has any proper ‘right-of-way’ mentality. Instead, roads in China are often plagued by many who cling to a sense of entitlement. Motorists feel as if they have earned the right of way just by the very purchase of an automobile. And those who can afford even more expensive cars feel that much more entitled. They drive brand new black BMWs, flashing their brights and honking their horns warning everyone ahead – ‘VIP coming through!’

Every time I mount my motorcycle, I do so knowing exactly what to expect. I know that someone will cut me off. I know that an electric scooter will dangerously tear through a red light right as I cross an intersection. I know that some fancy car behind me will honk its horn, urging me to acknowledge his self-importance. So why should I let it surprise me or stir my fury when I know exactly what is likely to happen? Expecting the worst is the best way to avoid the worst. And it should be a lot harder to get angry when I know what is coming.

China has changed at a rate never seen before at any point in time anywhere else on the planet. Everyone is racing to find their place in society, making sure that they don’t get left behind. Traffic culture is only one manifestation of this, and it is constantly evolving. Today’s traffic might be closer to a frenzy of sharks than a shoal of fish, but I’ll be better off passively following the current than angrily fighting against it.

After the middle finger incident earlier this year, I decided that before expecting change from any of the others sharing the road with me, I needed to at least be more responsible for myself. I’ve stopped expecting everything to fix itself all at once, and I try my best to be a part of the evolution by incorporating a little more common courtesy into my daily drives. I am increasingly amazed by how much I receive in return.

This doesn’t mean that I don’t still curse motorists that cross me from time to time, and it certainly doesn’t mean that I am now a perfectly patient driver. But the next time I let the middle finger fly free, I’ll at least try to do it with a smile.

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The Red Line, Bottom Line, and Direction of State-Owned Enterprise Reform (translation)

China's president Xi Jinping discussing State-sector reform in December 2013.

China’s president Xi Jinping discussing State-sector reform in December 2013.

Translators note: This essay was first published in Qiushi’s online journal Red Flag in early June and then recirculated on various CCP and government websites/publications including the official CCP News website, SASAC website, and most recently SinoPec’s  official site.  Its analysis provides key insight into the both the nature of China’s coming state-owned enterprise reforms and challenges to launching reforms.  

The author, Zhu Jidong, first outlines that the reforms will not be a massive sell-off or a granting of private and foreign firms access to state assets as many pundits have suggested, but rather a reform that re-introduces corporatization and mixed-ownership structures to China’s state-owned firms.  The essay continues with a discussion of the connection between the importance of state-owned industries and the survival of the Chinese state and Communist Party.  It touches on the dangers and risks of reform going off in a wrong and misguided direction and hints that power currently is unevenly distributed in the state-owned sector and that managers of state-owned industries could continue to use their power to make arbitrary decisions, engage in corrupt practices, and take advantage of reform.  The author calls on the Party and governments from the central to local level to promote the supervisory powers of various societal sectors to ensure the coming reform process is fair and transparent.  He encourages Party commissions and local governments to set up hotlines using various forms of social media for observers and whistle-blowers within the state-sector to utilize in reporting malfeasance and corrupt practices that occur during the coming round of state-owned enterprise reform.

 The timing of this essay’s release is critical as state-owned enterprise reform should be a key issue discussed at the coming 4th Plenary Session of the 18th Party Congress this fall. To date this is the essay’s only known English language translation.

 

 The Red Line, Bottom Line, and Direction of State-Owned Enterprise Reform

Deepening state-owned enterprise reform is a major undertaking and is a major issue gaining attention and controversy around the future fate of the party and the state.  During the “two sessions” of 2014, General Secretary Xi Jinping stressed that state-owned enterprises cannot be undercut but rather must strengthen.  State-owned enterprises must absorb the experience and lessons of past reforms and state assets cannot turn into an opportunity for speculative profiteers amidst the wave of reform.  The underlying spirit of this essay is to further advance the definition of state-owned enterprise reform’s red line, identify the bottom line, and clarify its direction.

Drawing the red line: Speculative profiteering opportunities cannot be made in the name of State-owned enterprise reform

“Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform,“ the document produced during the CCP’s Third Plenary Session of the 18th Party Congress clearly states for the positive development of a mixed ownership economy.  There are those who advocate the position that the development of mixed ownership economies will serve as a big push to advance privatization, to permit more private and foreign enterprises to control the shares of state-owned enterprises while at the same time allowing state-owned enterprises to retreat away from competitive sectors.  This has created a certain mindset of confusion throughout society.  Looking back at more than 30 years of Reform and Opening, the loss of state assets during the process of state-owned enterprise reform has been a controversial topic which triggered many problems.

Some people say that the purpose of reform is to sell state-owned enterprises, as if success is only delivered through wholesale sell-offs and the price of the efforts of privatization is the laying off of large quantities of employees. A sentiment exists that not only can state employees not share fruits of this kind of reform, but they also serve as the sacrifices of reform; further the state must shoulder the welfare burden of this heavy issue.  Correspondingly a minority state-owned enterprise upper management who once carried the torch of reform have become billionaires.  Now there are even those who advocate “To mix is to sell, if you don’t sell you can’t mix.” If the name of reform is to forcibly make state-owned enterprises sell off rights and assets to private and foreign enterprises, then state-owned enterprises are not strengthened, rather they are weakened..

Developing a mixed ownership economy calls for open and transparent principles. Some people stress that the process of developing mixed ownership is to allow private enterprises to participate in the affairs of state-owned enterprises.  But if upper management of some state-owned enterprises take up this slogan and combine it with the efforts of private managers, then the possibility of “state assets becoming opportunities for private exploitation in the wave of reform” will arise. The crux of reform is openness and transparency and it is a reform to be carried out under the supervision of the masses.

The basic policy of developing a mixed ownership economy is already clear and its essence, as well as its success and failure, is in the details of regulation.  It is imperative for the transfer of state ownership and assets to be an open and transparent process.  Financial assets should be made known to exchange markets.  Transfers should be public knowledge.  State-owned enterprises should engage in open, fair, and just exchange.  The state should establish an institution with the sole purpose of managing, supervising, and quickly establishing a platform for the transfer of state ownership and assets and mandate all state-owned enterprises regardless of reputation to openly, fairly, and justly execute the transfer of state assets.  The private transfer or third party management of the transfer of state assets is impermissible. At the same time, this platform must be built to be as transparent as a glass window in order to put a stop to end all under the table dealings.

In order to develop mixed ownership economies it is necessary to guard against foreign capital controlling the pulse of the Chinese economy.  In accounting for the livelihood of the Chinese people, China’s state-owned industries not are not only the key sector for economic stabilization and boosting the economy, but these firms also bear the load of fending off the control of International monopolistic capital controlled by multinational corporations.  They take on the heavy task of protecting the security of the national economy, and because of this, frequently are a target in the eyes of Western countries and multinational corporations.  If foreign capital and foreign firms are to enter the reform of the state sector, we must first consider the question of the security of the economy and the security of the entire country.  Otherwise after foreign capital and foreign firms enter this sector, it is possible they will spy on the state sector’s confidential policies and strategic decisions.  One can easily imagine that this will influence the security of China’s economy.

A 2006 report issued by the State Council’s Development Research Center expressed that among industries already open to foreign capital investment, each of the top five firms in those industries were nearly completely under the control of foreign capital.  Particularly among twenty-eight major industries, foreign capital exploits the controlling rights to multiple forms of assets of twenty-one industries.  It can be said that foreign capital controls these twenty-one industries.  Today this data should be even more shocking.  Because of this, we must guard against foreign capital from taking advantage of mixed ownership economies to control the lifeline of the Chinese economy and threaten China’s economic stability.   We must take strict precautions against foreign capital from seizing the opportunities of national defense, railways, energy resources, telecommunication, public industries, and those that are associated with national security and major industries associated with the economic pulse of the state and people.

The development of mixed economies needs to allow for the participation and supervision by the masses.  We must appeal for the positive activation of the masses to supervise the whole process of the development of mixed ownership economies and absolutely cannot allow for the invaders to embezzle from and take advantage of state industries.  The party committees and governments at the central and local levels have all installed hotlines, mailboxes, and websites and are positively ready to receive reports on neglect, malfeasance, and corrupt activities associated with state enterprise reform. We will positively investigate and make public the clues reported by the masses pertaining to the loss of state assets.  Toward the actions and behavior of those who embezzle state assets, we will investigate resolutely and severely punish. Through dissecting case studies involving the loss of state assets, we will establish and strengthen the institutions to protect state assets and the benefits of workers during the process of state sector reform.

In the development of mixed ownership economies, we must prevent the torchbearers of this reform from carving up state assets for their own purpose.  The selling of shares to managerial levels and to employees is a topic that will attract much attention during this round of state-owned enterprise reform.  Some locals are already implementing models for share distribution, so this direction has already been established. State assets are legal assets owned by the people of the socialist state of China, and the spirit of state assets cannot be violated. No one has the right to turn these assets into the private assets regardless if they are at the managerial level or a common employee.  Importantly the leaders and employees of state-owned enterprises cannot grant distribution of shares to themselves or transfer all of the people’s assets into private assets.  To permit or even encourage employees and managerial levels to hold shares or to institute models for the holding of shares is a means to permit these people to buy enterprise shares using their own money –  not to carve up state assets for their own usage.

Identifying the bottom line: State enterprise not only cannot weaken, but it must strengthen

In the Communist Manifesto, Marx and Engels pointed out that: “The question of ownership is the fundamental issue of the movement.” The common means of production is the economic base of the socialist system and state-owned enterprises are the principal part and pillar of the common means of production.  The Constitution of the People’s Republic of China clearly stipulates common ownership economy is the guiding power of the economy of the Chinese people and the state.  The state must guarantee the strengthening and development of the state economy.  The development of a strong state economy is assured by the state economy’s controlling the economic lifeline of the people and the state.  In order to express the superior characteristics of the socialist system as well as provide national defense and social cohesion, it is critically important to strengthen the power of China’s economy.

Through controlling the economic lifeline of the people and the state, the state-owned economy can keep the entire national economy running and serve as the engine of development.  The state-owned economy is the effective means for macro-economic adjustment, adjusting market inefficiencies and for realizing the prerequisite conditions of national strategic planning.  Because of this CCP General Party Secretary Xi Jinping has emphasized, “State owned enterprises not only must not weaken, but they must strengthen.” Regardless of the manner of reform, we cannot go beneath this bottom line, otherwise we will end up on the wrong road.
Even after if the many years of privatization and liberalization in Europe, the state owned economies of many countries in many still occupy dominant positions in key sectors and state-owned enterprise investment takes up approximately 20% of total national investment.  For example, state-owned enterprise investment is more than 27% in France.  Moreover the French national government owns more than fifty-one enterprises and employs 838,000 people.  The income of these enterprises contributes approximately 15% of France’s GDP ranking sixth in Europe.  Norway’s government owns forty-six firms which employ 230,000 and contribute about 9.4% of national employment, levels these firms’ incomes comprised nearly 70% of Norway’s 2008 GDP, an increase of 10% from 2004.  Although post-Soviet economies went through a spurt of privatization, by and large, the state-owned sector of many powerful former Soviet states is extremely large.  Russia’s state-owned fixed assets account for 40% of total state assets and state-owned enterprises control nearly 50% of the economy, and state-owned enterprises account for 31% of total employment.  Moreover, the state owned economy comprises more than 70% in Belarus.  Perhaps this is the reason why Russia and Belarus have the confidence to not fear the West and even dare to stand up to Western hegemony.

A few foreign friends have also provided advice for the reform of China’s state-owned economy. On February 15, 2012, German Prime Minister Schmidt reminded China in an interview that the question of ownership reform is one of hundreds of trillions of RMB. Currently most state enterprises are monopolistic and relate to state security.  These firms should develop in the interest of long-term stability and are not for the purpose of profit-seeking as top priority.  The profits of state-owned enterprises are the profits of the people; if these state-owned enterprises privatize, they will not necessarily become more competitive, and they will not necessarily provide more benefit.  Schmidt used the railway system as a case in point: some of China’s western railways are seriously bearing too much weight and collecting too little in fees.  If the railway firms privatize, these railways might halt transportation or raise their price.  This will bring major (negative) impacts to the development of the country’s interior.  If foreign friends can clearly see the danger, should their words fall on deaf ears?

China’s 2012 GDP was 51.9322 trillion RMB and per capita income 38,354 RMB.   This is already higher than 6000 USD.  This makes China the world’s second largest economy.  Moreover the rapid development of China’s state-owned economy was the major guarantor of China’s reaching the rank of the world’s second largest economy.  It is also the major motivational fountainhead of China’s economic development.  The CCP’s “Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform” calls for the transitioning of a portion of state-owned capital to enrich social welfare funds, improve the budgetary system of state capital operations, improve the rate of contribution of state-owned enterprises to public finance.  The decision sets the goal of 30% contribution to public finance by 2020 in order to guarantee welfare benefits for the people.  Further, this reveals how state capital relates to all people, and it is only through the strengthening of enterprise that the broad masses can enjoy the benefits of state capital.

Let me ask, can the state enrich social welfare funding through foreign capital and private capital?  Can foreign capital and private capital act without conditions, not seek return on investment, invest in the infrastructure of impoverished areas or fend off earthquake, floods, and other natural disasters? The answer is obviously no.  Because of this, if China is to strengthen and is to allow the people to better enjoy the fruits of reform and development, it must demonstrate the guiding function of the state-owned economy, continuously increase the state economy’s vitality, controlling capabilities, and influence, and make this bottom line clear to the world.

Many people think of the selling off of state production rights and assets when they hear of mixed ownership economies and envision the single possibility of private enterprises and foreign enterprises entering into state-owned enterprises.  Actually the development of mixed ownership in no way should be or is a one-way concept.  Moreover, the development of mixed ownership is two-directional and even multi-directional.  Private and foreign enterprises can enter the state owned sector by purchasing production rights and assets, and state-owned enterprises can also purchase the production rights and assets of private and foreign enterprises and even control the shares of some private and foreign enterprises.  This is the true meaning of mixed ownership economy.

If the development of a mixed ownership economy means only the selling-off of state production rights and assets then the obvious result is the weakening of state-owned enterprises and not their strengthening. Because of this we certainly need to clarify that the development of a mixed ownership economy is not for the purpose of weakening state-owned enterprises and surely is not to privatize.  We need to promote dual directional and multi-directional mixed ownership structures of state-owned enterprises, private enterprise, and foreign enterprise and not simply sell off the production rights and assets of state-owned enterprises to private and foreign enterprises.

Setting the Course: Continuously strengthen the vitality, controlling abilities, and influence of the state economy

In order to promote national modernization, guarantee power the mutual benefit of the people, the continuous development and strengthening of state-owned enterprises is the major force that supports the rise of the Chinese economy. It is also the guarantor of the endurance, strength, and perfection of the party leadership.  “To continuously strengthen the vitality, controlling abilities, and influence of state-owned economy” is the direction set forward for reform in the state sector by the CCP’s 18th Party Congress.

State-owned enterprises should take steps of self-improvement and like a phoenix rising from the ashes take on social responsibilities, establish a proper image, and increase the degree of promoting the processes of reform.  This requires us take a serious look at  the existing challenges to the current development of state-owned enterprises and persevere to strengthen and perfect the party leadership and realistically strengthen the positive characteristics which promote the working class as masters of society.  We should take action in accepting the supervision of multiple levels of society, severely punish graft and corruption, and in the deepening of state-owned enterprise reform promote the continuous improvement of modern enterprise system.

At the high strategic level we must prioritize and continuously strengthen the vitality, controlling abilities, and influence of state-owned industries. As the corporatization of state owned industries attracts strategic investors and key groups, state owned property rights are diversified, and the vitality, controlling abilities, and influence of the state economy continuously strengthens.  But at the same time we can see that the existing problems within state-owned industries are many.  The salary differences in some state-owned enterprises are comparatively large even to the point of great disparity. Disparities exist in the execution of corporate social responsibility programs within some state owned enterprises.  The management method of some state-owned enterprises is careless and accidents have occurred, some state-owned enterprises’ modern enterprise systems are just for show or have large degrees of patrimony.  Some leaders of state-owned enterprises make arbitrary decisions, their lives are extravagant and degenerate, they practice nepotism, and even will sell off state interests for their own personal benefit.

These issues not only influence the initiative of employees, but also damage the vitality, controlling capabilities, and influence of the state-owned economy.  The report of the 18th Party Congress calls to stimulate new energies in various market sectors and calls for all state-owned enterprises to adopt a specific and realistic focus. Thus the increase, stimulation, and demonstration of these new energies is a major challenge that all state-owned enterprises and their leaders must face directly, and this challenge must be highly respected at the strategic levels.  The issue of how to continuously reform and increase the state-owned economy’s vitality, controlling capabilities, and influence is for the relevant departments, work units, and experts located within the Central level’s  Leading Groups on Comprehensive Deepening of Reform to deepen research and determine the right path, polices, and regulations.

We must clearly see that from the distribution of industries, to date 90% of state-owned enterprise are outside the realm of competitiveness.  A slogan such as “Allow state-owned enterprises to leave the realm of competitiveness” is a covert argument of those who support privatization, and the basic motive of those who support privatization of state enterprises is to destroy our party’s economic base.  We must prioritize at a high degree how to scientifically develop a mixed ownership system while preventing new losses of state assets and guard against people from taking advantage of state assets in a new round of privatization.  To develop mixed ownership economies, we should select a portion of firms within a portion of industries as demonstration sites and expand the scale of development after summarizing experience and learning.  We must act accordingly to the path, policies, and regulations set by the central government in order to orderly develop mixed economies and prevent a mad rush.

We must persevere to strengthen and perfect the party leadership of state-owned enterprise reform.  General Party Secretary Xi Jinping has stressed many times “China is a major power, and we absolutely cannot allow any subversive errors.” What are subversive errors?  It is those errors of directionality which depart from the fundamental characteristics of socialism. And it is on this point that the 3rd Plenary of the 18th Party Congress stresses that comprehensive deepening of reform must strengthen and perfect party leadership.  Serving as the resolute leadership core of China’s socialist cause, the CCP naturally also forms the leadership core of China’s economic construction and serves as the leadership core of state-owned enterprise reform.

During the coming reform of the state-owned sector, we must demonstrate the offensive and defensive functions of party organs and the vanguard and model nature of party members.  Further we must dare to shoulder responsibility and resolutely confront all erroneous words and deeds.  It is only through perseverance in strengthening and perfecting the party leadership that the existing degeneration, extravagant waste, and nepotism within state-owned enterprises can be solved. We must unite and lead the masses the struggle against the activities of those who would embezzle state assets in order to maintain the right direction of state-owned enterprise reform. The nature of mixed ownership economies is decided by who controls shares. This is the central issue. The Central government should not give up shareholding rights in the name of state-owned enterprise reform.  Moreover, the Central government cannot change the characteristics of strategic enterprises.  This is what is meant by persevering to strengthen and perfect the party leadership as a strong base and powerful safeguard.

We must strengthen the master status of the working class.  Strengthening the master status of the working class is to continuously strengthen the vitality, controlling abilities, and influence of the state-owned economy’s solid base.  The working class is China’s leading class.  It is the representative of China’s advanced production force and production relationship.  It is our party’s most solid and most reliable class base and the comprehensive construct of a moderately prosperous society.  Lastly, the working class is the main force of upholding and developing socialism with Chinese characteristics.  To uphold and develop socialism with Chinese characteristics, we must rely on the working class with our whole hearts and whole minds and strengthen the master status of the working class to realize the full function of the working class as a main force.

In recent years the issue of corruption has arisen within state-owned enterprises and within some industries to the point of extreme severity. A contributing factor to this corruption is that the master status of the working class is wrongly viewed.  Some leaders and cadres within state-owned enterprises do not take supervision by the working class and the interest of workers to heart, and for their own personal benefit, these leaders will sacrifice the interests of workers and the state.  Relevant documents have expressed that the gap between actual average salaries of leaders of centrally owned enterprises to their employees is exponentially widening.  This has raised questions and criticisms in some enterprises.  When developing the mixed-ownership structure, state-owned enterprises should consider the raising of employee’s salaries.  Actually many centrally owned enterprises achieved rapid improvement and synergy in increasing industrial efficiency and employee’s salaries when shifting to mixed ownership.

Chen Jieyuan, Party Secretary and Board Chairman of the Shanghai Port Group LLC said, “In recent years, The Shanghai Port Group, through has experience the sweet taste of mixed ownership.  From 2006 when we fully listed on the market, our net assets have doubled, profits have basically doubled, and employees’ incomes have doubled.  These three “doubles” mark the direction in which state-owned enterprise reform should persevere especially in the process of developing mixed ownership, priority should be placed on promoting the distribution of shares to employees, establish a modern enterprise system, and fully raise income of employees.

The data shows that in 2010 the average income of an employee in a state-owned enterprise was 38359 RMB, 5% higher than the national average.  The average income of an employee in a private enterprise was 20759 RMB, 43% lower than the national average.  It is obvious which kind of enterprise serves as a better model for increasing the incomes of workers.  Because of this, the only way to strengthen the master status of the working class is to continuously increase the income levels of employees in the private sector, not the other way around.  Relevant organs at the central level should come up with a proposal for the distribution of shares to employees based on rigorous surveying and research and make this a major breakthrough point for feasibly strengthening the master status of the working class.

We must require state-owned enterprises to accept supervision from many levels of society.  This is the major guarantor for the continuous strengthening of the vitality, controlling ability, and influence of state-owned enterprises. We must open various channels of supervision, promote and accept the supervision of the masses, and accept and participate in supervision of the process of mixed ownership reform.  We must also draw from the concepts and management experience of private enterprises and foreign enterprises. Party committees at the central and local levels and governments should set up whistle-blower hotlines, mailboxes, and websites and accept reporting from all levels of society on malfeasance, dereliction of duty, and corruption during the process of state-enterprise reform. Concerning state-owned enterprise reform these committees should take advice and suggestions from various societal levels, and make use of the body of people’s wisdom and power to make good on state-enterprise reform.

Especially with the rapid development of the internet, online news, Weibo, Wechat, forums, blogs, podcasts, these broadcast formats provide the best arena and platform for the people to supervise government and fight corruption in an ever-strengthening manner.  Relevant organs should organically integrate educational experiences from the mass party line and pure and clean frameworks into the reform of state-owned enterprises.  These organs should positively involve the participation of the masses, make progress in using the internet, and widen and open to the masses channels for reporting corrupt practices.  Anti-corruption departments must especially focus on clues related to the loss of state assets which are revealed through reporting from the internet, and encourage and direct the masses to report on the egregious ways and issues of corruption through legal methods.  Those who would attempt to transfer state assets into personal exploits should be called out and swatted like mice crossing the street. This is the way to uphold the core status of common ownership.

About the author:  Zhu Jidong is a researcher at the Qinghua University Research Center for College Moral Education.  Holds a post-doctorate in Marxism Theory, is Head of China Academy of Science World Socialism Research Center and General Secretary of National Cultural-Security and Ideology Research Center.

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