May 2018 has been a squalid month in statecraft. No, not because Trump tweeted something even more asinine than usual. In fact, this has nothing to do with Trump, North Korea, Malcolm Turnbull (At least directly) or even Alex Salmond.
When Trump withdrew the US from a non-binding agreement with Iran, one that the Iranian president didn’t want approved by Iran’s parliament as that would make it legally binding, the lovelies of Europe got up on their hind legs (Copyright OZ) and started screeching about “rules-based international norms”, etc. See that post for more information if you’re inclined, I won’t repeat it here as that isn’t the purpose of this one.
Something very subtle has changed this month, something that most won’t even notice. It does, however, have a profound impact on international business laws — and diplomacy — in the future. The Chinese government demanded that Taiwan, Hong Kong and Macau be explicitly treated as part of China by international airlines. The consequence of not complying would be that Chinese authorities would make life more difficult for carriers that don’t reply.
In the past, a respectable modus vivendi existed. Carriers would respect the laws and preferences of each state in their national websites. This is similar to, for example, Google showing contested borders differently. Take, for example, the India-China border. In India, India’s claims are shown. In China, China’s claims are shown — with no mention of there being a dispute. In the United Kingdom, the various claims are shown with the lines of control treated as the de facto border. However, in their national — and international — websites, they had separate websites and titles — as is the norm.This respected national laws and international norms.
Now, however, these carriers have caved into China’s demands and have set a precedent in which businesses that have operations in China must comply with Chinese requirements globally. Beijing didn’t even have to do very much. They just threw a tantrum and most complied. To their credit, the Americans have launched a formal complaint and a bipartisan committee in Congress is working on a resolution to oppose this. But… The EU? They just bow. After screeching over the Iran affair, they’ve gone mute. Canada has also caved in. China can now do whatever it wants and enforce its will because they know that no one will oppose them. After harrying the Chinese for years about their human rights issues, after demanding that everyone adhere to international norms they fold to China without so much as a whimper of protest. It seems small, but this is how the Chinese do things. If they meet no resistance, they just demand more. If they do meet resistance, they see how firm it is and who the weak link is. If Europeans cannot stand up for their own rights, much less the right of an independent, democratic Taiwan with strong human rights protections to exist, they will be Beijing’s doormat.
Boadicea's Chariot 
China is a sleeping lion, Napoleon once warned. “Let her sleep, for when she wakes she will shake the world.”
The article below is quite interesting. I skimmed through it, but the message I took was that the generation born to the ‘One Child Policy’, do not and will not have the same work ethic as their parents and that this will lead to a failure of China to long maintain their current moment in the sun. And that is aside from the effects of the lopsided demographic that are a consequence of that policy. I am insufficiently wise to offer any view on the subject, but sometimes I reflect that it is quite pleasant being old enough to not have to worry too much about the future.
https://www.telegraph.co.uk/news/worldnews/asia/china/8796486/Why-China-wont-conquer-the-world.html
I suppose the greatest incentive to work is hunger – which seems to me, an ignorant outsider, to be less prevalent in China these days. The profit motive however is alive and well and likely to inspire even the naturally less-assiduous to work hard.
Sipu: The Corsican Failure misunderstood the Chinese. They’re not interested in ruling the world. They are, however, brilliantly manipulative and are adroit at expanding and defending their interests. Their greatest weapon, one that they’ve learnt to make the most of for centuries, is their size — especially of their market. They don’t even need to scream all that much, although they do for the theatrics. They wait until the Chinese market is vital for the bottom line of foreign companies. If a foreign government steps on their toes, they will simply delay renewing licences or slow down customs processing. In a real time economy, that can cost billions in short order and have major knock-on effects. Demographics don’t favour China. Western countries grew rich before they grew old. China grew old before it truly grew rich. Even though the one-child policy no longer exists, Chinese don’t want many children any more as they simply can’t afford to have them. China’s environmental degradation is another major issue. In many parts of China, what water they have is so poisonous that they can’t drink it. In some parts of China, rivers and streams are so polluted that swimming in them is lethal. But that isn’t the point. It’s the size of their economy. So long as China grows and so long as foreign companies rely on it, they have incredible leverage.
For most European and Canadian carriers, Taiwan is entirely off their radar. Only KLM and Air France have direct flights, anyway — but they all have growing, lucrative shares in the Chinese market. They have isolated Taiwan further. Europe and the US are further split, with the Europeans being the weaker link and desperate for many of their economies struggle to remain relevant. It’s a bit of an irony that two hundred years ago the Americans were the weak link, the link that could be counted on to buckle as they were interested in profit above else.
Janus: There are two Chinas. Parts of China are modern and world-class. In parts, Shanghai, Beijing, Guangzhou, Shenzhen, Hangzhou, etc. are more modern and cleaner than most Western cities. China’s upper and middle classes number in the hundreds of millions. While perhaps not nearly as well-off as middle classes in the West, that doesn’t matter as there are far more of them. For Bosch, they can sell millions of dish washers and fridges. For French and Italian winemakers, that’s millions more bottles exported. For Dodgy Al’s Bloody Awful, Lufthansa, Scandinavian Airlines, etc. more aeroplanes filled with paying passengers. Then there are the billion Chinese who aren’t so well off, some desperately poor. They’re the ones living in the outskirts of the cities, the ones living in isolated, provincial towns and villages. Having enough wood to keep warm that winter is their goal. There might usually be enough to eat, but that’s it. The Chinese aren’t keen on people seeing that or talking about that. They want tourists to visit Chengdu, Beijing, Shanghai and Hangzhou to get a good impression and then fly home. Seeing people living among piles of rotting rubbish, picking through scraps to find recyclables isn’t nearly as awe-inspiring.
I think I’ve picked up enough to comment – even though I was in Japan at the time China issued its ‘Directive’.
Qantas capitulated immediately -as one might have expected – miserable little airline that no longer serves pig in any shape or form whatsoever…
However, as I understand it, our PM and Foreign Minister, apparently, told China that she could not dictate to Oz what we choose to call various places in the world and that we would continue to call Hong Kong – Hong Kong, etc, etc.
It may be irrelevant – but it would seem that China is now threatening our export trade with their country. Well, I’m sure we have a few aces to play as well.
As you rightly say Christopher – give in to a bully and they simply demand more, and more. One politically minded co-traveller in Japan commented that people seem to have forgotten a man in the late 1930s called Neville Chamberlain. Bring out the history books!!
Unfortunately, you are are also right that as long as Big Business is making profits – Big Business will not rock any boats and will not be happy with any Government trying to interfere.
Boadicea: So far, Qantas and KLM continue to say “Taiwan”. The US carriers also haven’t bent, probably because they know there’ll be hell to pay at home if they do. Australia, to its eternal credit, has not hesitated in telling the Chinese to piss off when they go too far and encroach on Australia’s sovereign rights. The Australians have also done far better in protecting the rights of Chinese living in Australia. One thing that the Chinese government has done is send operatives among its student population to keep an eye on Chinese abroad, especially those belonging to student associations.
L’Alliance Francaise, the Goethe Institute, Camoes Institute, etc. all try to to portray their sponsoring countries in a positive light — and that’s not a bad thing. The Confucius Institute, however, is unique in being little more than a mouthpiece for the Chinese regime. The others are politically neutral, but not the Chinese. Many of their directors are party members and agents charged with keeping tabs on Chinese nationals abroad and to look for potentially pliable Westerners to be co-opted to serve Beijing’s needs. They offer free courses and even sponsor “promising candidates” to come to China to receive a “thorough education” in Chinese history, culture, life and the language. You know what that entails! They tried to recruit me, but it was obvious that I had too many ties to Japan and Taiwan.
I like the Chinese as people. They are generally very kind, warm, decent and loyal when you get to know them. But I don’t like doing business with China and Chinese statecraft is absolutely toxic. The Americans drive a hard bargain and can be almost destructively self-serving. Yet, they largely stay within predictable perimeters. You know how they are, what to expect and how to deal with them. Even Trump, as unorthodox as he is, isn’t impossible to understand. There’s a method to his madness. The Chinese are masters at pantomime. They will provoke a fracas and see how it goes. If people are patient, don’t bend and wait it out the Chinese will back down. They’re pragmatists above all else. But if Western companies fold so easily, they will become utterly beholden. Worst of all, if Western governments are seen as being so weak-kneed and desperate that they won’t put up even token resistance, the Chinese will let things sit for a while before provoking another fracas. For example, demanding that companies operating in Taiwan obtain licences from the Chinese authorities to do so or requiring carriers to ensure that Taiwanese have “compatriot passes” in order to allow carriage.
As an individual there is very little one can do.
But the one thing one can do is utterly refuse to buy their cheap crap clothes and manufactured goods.
Absolutely not in this household.
I refuse to patronise the products of any country that single handedly is responsible for the massacre of elephants and rhinoceros and now, the pangolin. Disgusting people with their disgusting habits.
I live in the vain hope that some evil bird flu style disease that is utterly incurable will wipe out a few million of them and the wildlife of Africa might just get a break from immolation. It would be a fair return for the damage they do.
CO: In this case, I really can’t be too upset at the Chinese. They’re advancing their national interest, however crassly. Taiwan is of extreme strategic importance in the region. Controlling it would guarantee their access to the Pacific. At the moment, US allies: South Korea, Japan, the Philippines, Taiwan and Vietnam(!) hem China in. As China is no longer self-reliant, they need to be able to bring in commodities including oil. No, the ones I have lost a great deal of respect for are the Canadians and the Europeans. They bang on ad nosium about human rights, etc. but the second someone threatens crimping their bottom line a little they buckle faster than a pound shop folding chair. The Chinese are a generation or two removed from being illiterate peasant farmers. Can’t expect too much from them. Many don’t know any better because squalor and deprivation is all they’ve ever known.
Taiwan is civilised. Taiwan is modern, democratic, forward looking and dynamic. But there are only about 24 million Taiwanese and their market is already mature. They have cultural depth and richness, a great culinary tradition and they inherited the cultural wealth of China and Japan. As far as I’m concerned the Russians should be given a go at all the lands of the former Russian Empire. After all, what right do the Baltics, Belarus, Ukraine, Finland and Poland have to exist if China uses just as flimsy a pretext to claim Taiwan?
Christopher. I think you might find Qantas did change its web-site – for a very short time – until Australia made its position quite clear!!
Boadicea: When I checked it was still listed as Taipei, Taiwan. That may well have been the case but that only supports my argument. If European governments made it quite clear, if the Canadian government made it quite clear, that they would not be bullied by the Chinese this would have been at worse a storm in a teacup. Instead, the Chinese have won a major coup and set a precedent that won’t easily be undone. GAP also apologised not too long ago for selling a T-shirt that showed Taiwan as separate from China — in markets outside of China. What will happen with publishers who publish books critical of the Chinese government? What will happen to mapmakers who show Taiwan as either contested or independent in books and maps distributed outside China?
Christopher – I’m sure you are right – and Qantas NOW shows Taiwan as Taiwan rather then China. But, my point was that, initially, Qantas caved in immediately and it was only when the Australian Government told China where to go that it revised the web-site back to where it had been originally. How could an airline that (somehow – I know not quite how!) claims to be an Ozzie icon go against the Australian Government’s position?
I agree with you totally. the world really does need to tell China that they will not tolerate such nonsense.
As one of the people on my tour of Japan said of the situation:
“Wasn’t there a guy called Neville Chamberlain once upon a time?”
Boadicea: Businesses react to the assumption of sanction. If they assume that there’s a far greater risk to defying Beijing’s wishes than Canberra’s, they will disregard Canberra’s position. If Canberra makes it clear that there’ll be hell to pay, they’ll toe Canberra’s line. After all, China might be a lucrative Qantas market, but Australia remains the home market and political pressure from Canberra counts for far more. If London, Stockholm, Helsinki, Berlin, Copenhagen, Ottawa, Wellington, etc. had taken the same line, the likes of BA, SAS, Finnair, Lufhtansa, Air Canada, so on, would not have folded. These carriers will likely get very favourable treatment from now on in China and find that new routes and licences will be streamlined whereas Qantas, Delta, United and American Airlines will find that doing business becomes more difficult.
In Chamberlain’s defence, the UK was no in position to risk war with Germany. Hitler had rapidly rebuilt Germany’s military capacities and had helped turn that country’s armed forced into arguably the most capable in the world at that time. The UK, on the other hand, had cut its capacities. The UK was still responsible for the world’s biggest empire and it was stretched. Germany was a compact country with no real responsibilities outside its homeland. Chamberlain’s kowtows bought time. Today, people don’t even have that excuse.
With all due respect, Christopher your comment re Chamberlain is a fairly modern attempt to exonerate the man. Had he made his ‘appeasements’ and ordered an immediate upgrading of Britain’s military capabilities one might assert that his policy of appeasement was to gain sufficient time to allow Britain to face the inevitability of war. He did not. All Chamberlain wanted was Peace… and it would seem Peace at any Price.
Chamberlain certainly misjudged Hitler, much as we seem to be misjudging China and other aggressive countries.
My history teacher may have had it wrong – but she certainly told us that Britain was not happy about being asked to guarantee the Sovereignty of Poland after WW1. I think she was still a little dumbfounded that Hitler’s invasions of Poland was the catalyst of WW2.
If that was indeed the case, I’m sure Hitler knew that too, and did not expect Britain to go to war over such a detail.
Britain was no better prepared for war when it was finally declared than it had been when Chamberlain declared “Peace in Our Time’.
I do not accept the idea that Chamberlain was buying time – had he been Britain would have been better prepared. And it, quite clearly, was not.
Boadicea: Britain and France won the war and exacted a heavy price on Germany, Austria-Hungary and the Ottoman Empire. Their victory came at a profound cost. Britain lost the good part of a generation. Its reputation was badly damaged. Some of the territories it gained, especially from the Ottomans, were far more trouble than they were worth. Britain also received a heavy blow when 26 of Ireland’s 32 counties formed a separate state. That fact was not lost on many of its critics in the Empire and outside of it. It seemed a bit pointless, then, for a country that had lost so much to gain a nominal victory only to begin to question how it handled its victory to “guarantee” the sovereignties of states which had little relevance to its interests. Britain wasn’t hurt by Poland being under Russia and it wasn’t helped by it being independent. What would have been a regional conflict — Austria-Hungary versus Serbia, became a global conflict that wrecked a continent because of a complex system of alliances and guarantees of support. Very little was gained. After shaking off its humiliation, Germany was in a far better position, anyway and the hated Kaiser was replaced by something even worse. I’m not trying to defend appeasement, but the reluctance to enter into a similar system of diplomatic and defence guarantees is understandable considering what had happened in recent memory. Even though cooler heads had hoped to avoid the First World War — and it was avoidable, there wasn’t the institutional aversion to conflict that surrounded governments in the years prior to the Second World War. The latter conflict was the inevitable result of the aggressive, revisionist policies of Hitler, Mussolini and the Imperial Japanese Army.
I do, however, disagree that Poland was the catalyst for the Second World War. I share the view of the Chinese that it was the Marco Polo Bridge Incident. That is when the Asian Theatre started in earnest. Japan wasn’t an ally at the time, but Japanese policies mirrored those of Italy and Germany and the three were condemned to an uneasy alliance. The American and European Empires were unwilling to do more than put up token sanctions and make faint protests against Japanese aggression until 1940-1941. The Japanese had run roughshod over China for years without much opposition. They didn’t really take anyone that seriously because of it. The Italians did as they pleased and there wasn’t much real opposition. Then again, they were so incompetent that there was only a limited amount of damage that they could do. In fact, some of Hitler’s advisers tried to get Hitler to push the Italians to join the other side because Mussolini was such a liability.