BOOK REVIEW Searching the globe for China Inc China's Silent Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing's Image by Juan Pablo Cardenal and Heriberto Araujo
Reviewed by Muhammad Cohen
The growth of China's global economic influence is the obvious lead story of the 21st century so far. As China's Silent Army convincingly demonstrates, no corner of the world is immune from China's reach, whether as a tireless hawker of goods from baby clothes to hydroelectric dams or as a consumer of natural and human resources, often as both a major buyer and seller in the same market.
Behind this economic juggernaut lies a key question: to what
extent is the Chinese government controlling Chinese commercial initiatives as part of a broader strategic plan? In other words, from the copper fields of Chile and Zambia to the forests of Siberia, are Chinese companies doing Beijing's dirty work? How and how much do Chinese diplomacy and business cooperate to serve Beijing's geopolitical goals? Can nations trust a Chinese provider with its telecommunication network, ports, or other vital infrastructure? Is business with a Chinese company overseas ever strictly business?
The authors of China's Silent Army, a pair of Spanish journalists with long tenures in Beijing, aspire to solve this mystery. In fact, they believe they've nailed it. But the book, updated from its 2010 debut edition in Spanish, succeeds only partially in its quest.
These economic correspondents helpfully explain the role of China's so-called policy banks, China Development Bank and Export-Import Bank, in supporting what they call China Inc to the tune of hundreds of billions of dollars. They also underline how China's authoritarian system allows it to combine its economic aid and diplomatic and commercial goals to a far greater extent than freer nations. The books delves into the shadowy China International Fund, the Hong Kong-based conduit for mainland overseas investment, particularly in Angola's petroleum sector.
Golden moment playbook
China's economic boom has left the government and its banks flush with money to lend on easy terms to the right borrowers, and repayment can be accepted in commodities rather than cash. Chinese contractors offer rock bottom prices for projects, without questions about environmental or social impacts. Unlike Western governments, Beijing does not limit where Chinese companies operate, so its diplomats may vote for sanctions in United Nations against a regime while its businesses do deals in contravention of those sanctions.
The book notes another extraordinary irony: China, a leading champion of anti-colonialism for the past century based on ideology as well as its own history, has become the world's foremost practitioner of 21st century mercantilism. Chinese companies specialize in extracting raw materials that they export back home for processing. In many cases, Chinese projects import their own laborers, even into countries where unemployment is rampant, using the excuse that Chinese workers are more efficient.
Most important, the authors show how China's diplomatic prime directive - no interference in internal affairs - enables it to tread where other countries tremble. Resource rich pariahs such as Angola, Myanmar (at the time the original version of the book was written, before its reforms began) and Sudan have few if any options besides China. These deals benefit the elites in these outcast nations, who have license to steal funds Chinese projects bring in, with the state on the hook for repayment.
China's willingness to play ball gives these regimes an alternative to reform, much as rising incomes and living standards, or at least the reasonable chance for them, keep China's Communist Party in power despite its moral and ideological bankruptcy. But the book doesn't make the connection that in fact, China's actions and choices in overseas countries necessarily alter the course of internal affairs,
Unfortunately, the story the authors provide doesn't get readers beyond the kinds of platitudes, generalizations and assumptions written above. They fail to present factual insights into the nuts and bolts of how China Inc works its magic, weaving together its diplomatic, resource and commercial desires to hit key strategic targets. Admittedly, that's a big task, but as veteran economic journalists based in China, authors Juan Pablo Cardenal and Heriberto Araujo would seem to be ideally placed for this task.
Hu, what, Wen
They don't plot the dots on companies doing China's dirty work. They simply name them, note which are state-owned, and leave it at that. They don't dig further into the record to tell us the players and influences behind these companies, the way reporters for the New York Times and Bloomberg did to the trace the wealth of the families of China's former prime minister Wen Jiabao and new president Xi Jinping.
That research was facilitated by Hong Kong's listing of directors and major shareholders with their unique ID numbers (rather than frequently identical names) that the Hong Kong government now wants to hide, over the objections of investor activist David Webb of webb-site.com and journalists.
The authors of China's Silent Army don't share their collective decade and a half of Middle Kingdom experience to help us understand the distinctions, or lack thereof, between Chinese state and private companies that take part in international projects. They don't tell us whether any Chinese company can decide to try its luck overseas, or whether there's a selection or qualification process designed to ensure the company aspires to the correct goals and fulfills the proper state objectives.
China may not care where its companies do business, but does it care which companies are doing it? Answers to questions like that would give readers a clearer picture of whether Beijing is masterminding a coordinated effort to conquer the commercial world and monopolize key resources, or if Chinese companies' overseas expansion is simply natural progress following their explosive growth at home.
Instead of digging deep in Hong Kong and Beijing for evidence to help readers understand whether Chinese companies are just spreading wings or spreading Beijing's influence when they venture beyond the big motherland, the two reporters take off on a round the world odyssey to explore Chinese overseas businesses firsthand.
From the deserts of Turkmenistan to the supermarket aisles of Buenos Aires to the oil fields of Iran to the National Stadium of Mozambique, the intrepid pair brave many obstacles to get the story. Their travails recall my own Third World road tripping for Lonely Planet and Fodor's, but these authors often seem at such great pains to share their pain that it distracts from the more appropriate focus of their reporting.
Shooting for progress
One area they do paint with vivid detail is the extreme exploitation of local workers by Chinese companies overseas. In Zambia, Chinese companies pay copper miners a fraction of the local minimum wage, sparking frequent protests that can turn violent. On one occasion, a pair of Chinese supervisors fired shots into a group of local workers demonstrating for better working conditions, shooting 11 miners. A court dismissed the charges against the Chinese while wounded miners were still hospitalized, indicating there host governments priorities often lie.
Other workers complain of unexplained deductions to their wages, substandard housing and meals, plus inhuman working conditions. But, as the authors readily admit, Chinese companies overseas are simply exporting their labor practices from home. The startling revelation isn't that China mistreats workers in Africa or Latin America but that it gives some of its own overseas Chinese workers comfortable accommodations, including climate-controlled dorms and chefs from their home regions.
The authors haven't been well served by their editors. China's Silent Army is predominantly organized by commodity or services provided. That sequencing doesn't help build the case for examining the state role in business or lend itself to a smooth narrative. Worse, the book's first two chapters deal with Chinese immigrants, including shanta sini, Chinese door-to-door clothing hawkers in Cairo, and self-made millionaires in Latin America. The authors try to link these immigrants, whether they've relocated for the duration of overstaying a tourist visa or are third-generation overseas Chinese, of acting as agents of Beijing.
Conflating individual Chinese immigrants in search of a better life for themselves and their families with economic exploitation orchestrated by Beijing is like calling my grandfather who fled Minsk in 1905 a representative of the czar or his descendants acolytes for any of the subsequent governments to rule Belarus. Painting overseas Chinese with a brush this wide smacks of the prejudice that seems to come so easily to Europeans, from Geert Wilders' anti-Muslim screed to Britain's ad campaign to stop Romanian immigration.
The issue of Chinese economic activity overseas and its relationship to the Chinese state is one that deserves far more serious treatment than it gets in China's Silent Army. Perhaps Cardenal and Araujo would take on the task, exchanging the numb-bum bus rides for the task of tracing corporate links to government and illuminating the realities of private companies in China. That's the book I kept hoping I'd find here as it journeyed to some of the other darkest corners of the earth.
China's Silent Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing's Image by Juan Pablo Cardenal and Heriberto Araujo. London, Allen Lane, 2013. ISBN: 978-1-846-14539-1 978. US$23.85, 25 British pounds. 368 pages.
Former broadcast news producer Muhammad Cohen told America's story to the world as a US diplomat and is author of Hong Kong On Air, a novel set during the 1997 handover about television news, love, betrayal, high finance, and cheap lingerie. Find his blog, online archive and more at www.MuhammadCohen.com, and follow him on Facebook and Twitter @MuhammadCohen.
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