Wednesday, June 29, 2011

Introduction

After spending two years in Changchun, Jilin province, and another nine months at home in DC attending many conferences hosted by think tanks, I have decided to share some of my thoughts about China and the USA.  Let's not get ahead of ourselves though.  I am by no means a China expert, but I have some unique experiences that may provide insights.  I'm always looking for a discussion about China, and I value any thoughts or opinions you may have.  So check it out, and enjoy!

Some of my featured posts will include:

A comparison of the Dalian and BP oil spills
A look at the Taiping Rebellion and US Civil War
China/US energy cooperation
Rare earths
China's foreign development
Think tank event synopsis

Also some fun lite fare:

Chinese poems
Chinese eats
Business in China
The 8 seasons of Changchun
Travel in China
Teaching in China
Bears
Much much more!

I was attacked by a jaguar


My near death experience at a Chinese Zoo

My attention grabbing headline aside, I also wanted to say a few words about the state of Chinese zoos.  First, I really was attacked by a jaguar at a zoo in Suzhou. 真的。Let me back up a few years by saying, before my trip to China the only zoo I ever visited was the National Zoo here in DC.  Overall I would say the animals are well treated, well fed, and the cages are bolted in place.  The only disappointment at the National Zoo is the fact that the lions and tigers are in pits very far away from visitors, and you can’t get a close up view.

Not so in China.

The zoo I visited was in Suzhou, a garden city situated along the Grand Canal.  There are plenty of regional opera styles in China, and Suzhou opera is famous for horrific tragedies.  My potential fate at the paws, claws and jaw of a raging jaguar would have been fitting material.

Chinese zoos are depressing to begin with.  The animals are mistreated, starved and neglected.  Overall it is a dire situation, nearly as dire as the shoddy infrastructure containing the animals.

The saddest panda in the world, for instance, lives at the Suzhou zoo.  He was enormous, and my veterinarian friend informed me his size was due to malnutrition from not eating the proper bamboo.  He was dirty, and barley had enough energy to lift his hefty paw up to scratch his belly.

And then I visited the “wild cat” section.  I have never been face to face with giant cats before, I mean literally face-to-face.  The only thing separating me from the wild cats was a pane of glass.  Right away I should have noticed two things about the jaguar.  He was very thin.  He was also listless, pacing back and forth in his small rectangular cell.

In hindsight I know that means he was starving, and anxious because delicious human meat was passing his cage all day.

I did something stupid.  I sat down on my haunches, waved my hand at the jaguar, and said “hello friend! How are you? I’ve never seen anyone like you this close before!”  And then the jaguar smashed his entire body, with all his force and fury, against the thin pane of glass separating the two of us.  He was going for my face.  The thin glass pane shook, it seemed to bend outwards, and I saw, inches away from my face, the inside of the jaguar’s mouth.  In gory detail before me were his yellow teeth, quivering nostrils, and cold murderous eyes.

A raging death machine
 Image from worldwildlife.org

There would have been no contest.  None at all.  I can only imagine fending the starving jaguar off with my arms as he leapt on top of me, swiping away my pitiful defenses before having his fill of Montie meat.

The pane held, and I survived unscathed.  But the experience made me think: there must be incidents at zoos all across China where big cats break out and devour people.  Those statistics are people, and they probably suffered the scariest demise.

Needless to say, my advice for future zoo goers in the Middle Kingdom is straightforward: don’t get too close to the jaguars, the cages may not hold.

Tigers don't deserve it


The worst zoological offense I have ever heard of was the mass starvation of Siberian Tigers at the zoo in Shenyang.  The Provincial authorities were very proud of the fact that half the Siberian Tiger population lived at their zoo.  The only problem was that the zoo was privately owned, and when the owner began losing a fortune he wanted to close shop.  The local authorities would have lost a tremendous amount of “face” by the zoo closure, and forced the owner to keep the zoo open.  They did not pay the owner any money whatsoever, and so the keepers began feeding the tigers straw.  Then nothing at all.

What resulted was the destruction of half the total Siberian Tiger population.  Why were half the Siberian Tigers in the Shenyang zoo?  I don’t know.  What will happen to the species?  I don’t know.

What I do know is that Chinese zoos need better maintenance, and this is an area where the US or other western countries could help out.  I know there are plenty of foundations and organizations out there, like PETA, which would probably do a lot more good feeding tigers than worrying about the number of pigs killed and eaten in the US every year.  That’s my take anyway.

Sunday, June 19, 2011

Floating Liquefied Natural Gas platforms in the South China Sea: A Game Changer for Asian Energy Production or a New Dimension to an Ongoing Conflict?

This is a particularly interesting piece that has not been talked about by some of the major policy wonks around DC.  On Monday, June 20th, the Center for Strategic and International Studies (CSIS) will host a conference on the security situation in the South China Sea.  It promises to be an excellent event, and I hope to contribute with a story I’ve been following rather closely.  While many of the experts have focused on nation states and their territorial claims to the contested region, few if any have looked at non-state actors and their significant role in shaping negotiations.

The most recent, and serious, dispute in the South China Sea involves Vietnam’s energy vessels.  In late May these vessels conducted exploratory maneuvers for potentially high yielding hydro-carbon deposits in the Spartly islands.  Parts or all of the Spartly Islands, however, are claimed by the Philippines, Malaysia, Brunei, Taiwan as well as China.  Although tensions are raised when these claimant countries patrol the contested territory with naval vessels, the presence of energy exploration craft significantly ups the ante; a warship will eventual leave the area after rattling it’s saber, however, energy vessels indicate a country’s resolve to permanently establish territorial rights.  In that sense, these energy ships are much more serious, and in China’s case a direct provocation.

On two separate occasions Chinese civilian fishing boats cut the cables of the Vietnamese exploratory craft.  Although China Daily, Xinhua and the Global Times all say it was an accident, that Chinese fishing boats were unwittingly tangled in the cables and had to cut themselves free, Vietnam perceived the incident as coordinated interference.  Vietnam has subsequently declared warships will escort future energy boat movements, and conducted live-fire drills as a show of force.
http://www.google.com/hostednews/afp/article/ALeqM5jC2NlCcBK5_w-_O43a60NLOV8EWg?docId=CNG.4533bdd2ca0ac7898dbba6d650dc2420.4e1

The stakes are high as China decides how it will respond.

To put things in perspective, the Spartly Islands are 650 km from the eastern coast of Vietnam, 1,000 km to the south of China’s Hainan, 160 km to the west of Malaysia, and 100 km to the west of the Philippines.  Brunei and Taiwan are also stakeholders.

Contested territory in the South China Sea
 Source: IEA.gov

Significant deposits of hydro-Carbons in the South China Sea, especially among the Spartly Islands, has led to high tensions.
Source: Nation Master Maps

The question on everyone’s mind is, who owns what and how can these disputes be resolved?

China, which claims 80% of the South China Sea, would prefer bilateral agreements with neighboring countries.  The Philippines, for instance, has been approached by China to jointly develop oil and natural gas fields.  This would be a win-win deal for China, which would theoretically split the resources with only one country.  If this plan were carried out to the fullest, engaging every country on a 50-50 basis, the net result would be China’s receiving the lion’s share of the South China Sea resources.

China's claims to the South china are based on ancient maps, some of which supposedly date back to 200BC.  Below, a Song Dynasty map of China's territory at land and sea.


Source: Asiafinest.com, http://www.asiafinest.com/forum/index.php?showtopic=270402

On a personal note, I tend to disagree with countries that cite historic precedence for territorial claims.  Taken to the logical extremes, Vietnam should still be Chinese territory (it was for 1,000 years)

The other approach, preferred by the United States, involves a multi-lateral resolution.  In a sense the end game might require multiple countries splitting the same resources, in which case neither China nor any country would acquire a majority of resources.  It could also take the form of a 19th century European diplomacy solution, in which the South China Sea is carved into territorial slices.  Brandy and cigars anyone?

Grounding the security dilemma by openly conveying national interests is essential to any permanent solution; the picture, however, is not complete without including all the stakeholders.  This includes, among other things, non-state actors.

Royal Dutch Shell: A Regional Game Changer


On May 21st, 2011, Royal Dutch Shell (RDS) announced plans to develop a Floating Liquefied Natural Gas (FLNG) platform, to be constructed by Samsung Heavy Industries in Korea.  The project, when completed in 2013, will deploy at the Prelude natural gas fields in Australian waters.  Three weeks after the initial announcement, RDS went public with plans to build a second FLNG platform at the Sunrise fields in the Timor Sea.   This second FLNG project, however, has come under fire by the Timor Leste government; how the company responds will be a sound indicator of how RDS deals with small nations as it seeks to expand the program in the Asia Pacific region.  The expansion of FLNG programs needs to be taken seriously.

So, what is FLNG and why does it matter?  According to the RDS press release, the FLNG platform is six times larger than the largest aircraft carrier, and once the platform is stationed at the Prelude site it will produce 110,000 barrels equivalent of natural gas per day for 25 years.
http://www.shell.com/home/content/investor/news_and_library/2011_media_releases/fid_flng_20052011.html
The second FLNG project at the Sunrise field will produce an additional 100k barrels equivalent per day.

Royal Dutch Shell's Floating Liquefied Natural Gas super-structure is six times larger than the largest aircraft carrier

What’s more, according to the General Manager of FLNG Neil Gilmour, “there are opportunities for upstream ventures… in places like the South China Sea when agreements are reached in terms of who can access what”.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1134934/1/.html

This news is shocking because the introduction of FLNG platforms, capable of reaching previously inaccessible deepwater deposits of hydro-carbons, adds a new dimension to the South China Sea security dilemma.  Engineered to withstand category 5 typhoons, FLNG technology is a game changer for Asian energy supplies.

The liquefied natural gas extracted by a single FLNG, for instance, would provide 90% of Hong Kong’s electricity for a year.  FLNG could obviously be deployed towards the Chinese market, as demand for natural gas is expected to triple by 2020, from the current 9 million tons to 30 million.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1134934/1/.html

At the same time, FLNG programs are unobtainable for the majority of countries in the South China Sea, given restraints on capital, technical know-how, or capacity to undertake the project.  Royal Dutch Shell is essentially the only regional stakeholder with the means to implement a sweeping program of deep-water drilling.  As a stakeholder with tremendous economic clout in the South China Sea, however, RDS is also the most secretive when it comes to announcing their preferences for the regional stability.

By the numbers, only a small portion of South China Sea claimant countries are capable of deep-water natural gas extraction platforms.

Capital:
The estimated cost of constructing a Floating Liquefied Natural Gas platform ranges between 10 and 13 billion USD.  For Vietnam, the purchase of such a platform would cost 10% of the economy.

2009 Country GDP compared to RDS revenue in US Dollars:

China: 5 trillion                           Royal Dutch Shell, 2009
Taiwan:  379 billion                    Revenue: 458
Malaysia: 191.5 billion               Assets: 282 billion
Philippines: 161 billion
Vietnam: 92 billion                   
Brunei: 10.5 billion               

*Source: CIA World Factbook

Royal Dutch Shell was ranked the #1 largest company in the world, according to CNN, earning 15 billion dollars more than the runner up, Exxon Mobil.
http://money.cnn.com/magazines/fortune/global500/2009/snapshots/6388.html

As the largest company in the world, RDS is in a unique position to invest 10 billion dollars per FLNG project.  The only other countries with the capital to invest in deep-water natural gas extraction would be China and Taiwan.

Technical Know-How:
600 RDS Engineers worked on the design phase of the project.  Barring corporate espionage or sophisticated cyber attacks, it would be particularly difficult for other regional players to design anything similar.  (If hackers could break into Lockheed Martin, a military contracting company, then hackers can get anywhere) China has struggled for years to build an aircraft carrier, so to expect the country to engineer a floating super-structure overnight is too far fetched.
Source: RDS website, “Prelude FLNG in Numbers”

Capacity to undertake FLNG:
According to Claire Wilkinson, a spokeswoman for the FLNG project, there are only four companies in the region RDS considered capable of constructing the project.  Although she was reluctant to identify the other three, there was at least one Japanese and another two Korean firms.  Deep-water ports, capable of accommodating the 600,000 ton structure, are limited and proved to be a minimal qualification.  Samsung Heavy Industries’ proven track record won the day.

“…when agreements are reached in terms of who can access what…”

So, what is the RDS position when it comes to resolving the South China Sea disputes?  Under what circumstances would Shell consider these disputes resolved?  Would the company accept a “Chinese solution”, a multi-lateral solution, or both?

As a significant player in the region, RDS opinions and company policy would greatly shape the course of resolving territorial disputes.  RDS has worked with China for over 100 years, and this relationship could play out in China’s favor should the Middle Kingdom argue “agreements have been reached” on a bilateral basis, in lieu of a multi-lateral approach.  Any comprehensive agreement in the South China Sea will produce unsatisfied parties, and potential holdouts to such a resolution will complicate “who can access what”.  A partial agreement may green light RDS entry to the South China Sea, which in turn would exacerbate tensions as potential holdout countries decide how far they will go to protect national interests.

Money Matters, and so do the events on the ground:
In April RDS stock prices surged with the announcement that it will access Alaskan fields.  The dramatic spike plummeted when news broke that RDS will be sued over a 2008 spill in Nigeria.  Both FLNG project announcements caused modest gains, and Neil Gilmour’s vague intentions of entering the South China Sea on June 13 could be a lurking variable for the hike.  There would be ramifications for RDS stock once any announcement to enter the sea is made official.

 Source: Stock statistics from Market Watch

For the moment, RDS is holding it’s cards tightly.  Claire Wilkinson, a spokeswoman for the FLNG project with direct communication to top company representatives from the Hague, provided few insights.  In an email exchange, she said, “we of course have an internal view on such things, but it’s not something we’d comment on publicly”.  The announcement would indeed have ramifications for RDS stock.  Entering the South China Sea would be huge news for investors, which could produce an unprecedented surge in stocks as RDS magnifies it’s access to the Asian energy market.  A premature stance in the region, however, could also have a significant effect if the security situation deteriorates.  The view of the world’s largest company regarding one the most dangerous hotspots in the world, however, is an important element to the equation as countries work towards resolution.

This is an ongoing story, and I hope to pursue it as more information unfolds following the CSIS conference, including China’s take on FLNG.

Saturday, June 11, 2011

A post on teaching the good, bad, and lame


Teaching!

I figured it was just about time to talk about what I did in China, which among other things was teach English to some excellent post graduate Chinese students!

To my disbelief, I was told during the first professional meeting with the administrators of Changchun University of Technology that I was selected to instruct post-grad students at the university.  Wow, I thought, I just graduated from college, and now I’M RESPONSIBLE FOR POST-GRADS.  The admins buttered me up with some flattering remarks that, after reviewing my resume, they considered I was the most capable for the job.  I was in for a rude awakening.

Unlike some of the other foreign English teachers, I was not given a textbook to work from, and was responsible for developing a total curriculum.  What the admins neglected to tell me was that I was going to be teaching an army of eager students.

So, when I entered the classroom my first day on the job, I was greeted by raucous applause from nearly 90 students… what did I prepare for my first lesson?  Well, following my TEFL training I had prepared a simple meet and greet with some pronunciation drills.  The TEFL training, by the book, said I should form a circle with the desks.  The desks were ironed in place by blots.  I scraped the meet and greet, and some how made it through the first two-hour period by improvising group work presentations on Chinese education.  Clever me.

 Class 9, panel 1... a panorama of my largest class...


Panel 2



Panel 3


As post-grad students in their mid to late twenties, most were older than me, so I hid my age and let them think I was older and more mature.  Suckers.  We had a good time though, and they loved my first homework assignment: send me an email requesting the subjects they most wanted to study, and introduce themselves.

After my first week I gauged I was responsible for about 400 students.  The class monitors, semi-elected class representatives, were kind enough to provide a list of student names.  Roll call at the beginning of class consumed about 10 minutes, and it took about a month to get a grip on faces-to-names.

The sheer number of students was a major shock, and coming from a history of small schools with intimate class sizes, I was forced to eliminate some of my prepared lesson plans.  By the end of my second week I was already burnt out, and approached my boss asking for a modest raise in my salary, reflecting the new situation.  The other English teachers at the university had about half the number of students, I reasoned, it couldn’t hurt to ask I figured, given I was being asked to double my workload.  My boss’s response? A good chuckle, and some words of encouragement.  I was told quite frankly to give it another week or two, and watch as most of them would drop out.

True to her prediction, the class size dwindled to fifty, then twenty students.  As post-grad students with a long history of mandatory English classes, I was left with a core group that genuinely wanted to be there.  So for the rest of the term I was able to re-adjust my lessons, playing detective “who-dunnit” games and instructing them on the language of debate.

 Teaching English!


By the end of the first month the class size dwindled to a manageable level!


The ability to interrupt, in a cordial manner, is something totally lacking when students are learning English.  That’s understandable to a degree, who would want to stop a student from speaking when he or she is on a roll? 

More than any single lesson, I felt it was important to teach originality and thoughtful analysis.  Route memorization, as I was told, was how students got into college.  Higher learning demands, well, higher learning.

I emphasized that in a debate, YOUR position is right, and THEIR position is wrong.  Think what the other side will argue, come up with counter arguments and hammer in outside-the box ideas.  Also, as I was taught at school, a good presentation, debate etc., follows a simple formula:

1.     Tell us what you will say
2.     Say it
3.     Tell us what you said

Actually, that’s a lesson I want to beat into the heads of some of the experts in Washington, D.C. whenever they give presentations at conferences.

As the term was winding down I was supposed to give a final exam covering the lessons we learned throughout the course.  The assignment was to work in pairs and write a four-page paper on their perspectives of International Relations, principally the relationship between the USA and China, and give a presentation to the class on their findings.  Easy enough yeah?  Wrong, and if you thought so you get an F-.

Things fell apart right-quick.  First, remember that legion of students who dropped out?  Well, they all came roaring back for the final exam, and they expected a decent grade.  What could I do except fail 75% of them, as I had been taking roll the entire term and many had only attended two or three classes?  The second problem was blatant plagiarism.  This was especially the case with the drop out students, who turned in the exact same paper they found and downloaded from the Internet.  Those downloaded papers were terrible to begin with, which mostly looked at eating habits in China and US; “in China we use chopsticks, and Americans use a knife and fork”. Worst. Analysis. Ever.  More importantly, the plagiarism felt like a slap in the face, and the next class I diplomatically explained that if this shoddy, unoriginal and downloaded work had been turned into profs in the US they could face the risk of being expelled from school.

I felt guilty for handing out so many failing grades, and I decided to take the extra time outside of class and give the students who wanted a chance to write a paper and explain, one-on-one, why plagiarism was so serious.  Not every student took advantage of this offer, and they failed, but others were genuinely apologetic.  The most common explanation was that plagiarism was endemic to university work and other profs accepted it.  (As a side note, the # 1 course for plagiarism at the university was the mandatory Marxism class, nearly every student handed in the exact same paper as the class was not taken seriously by anyone.)  One of my students went so far as to say, “but I worked so hard finding a paper online…” That one made me laugh, and told him next time, work as hard writing an original and thoughtful piece.

The worst offenders were the Political Science students.  It felt like a test of wills dealing with them: as an entire class they turned in the same paper, taken from the Internet.  These were Political Science students, and naturally should have done a bang-up-job.  These “Young Pioneers”, aspiring members of the Communist Party, focused their energies on crafting Marxism papers, and my guess is that they were embarrassed to tell me about Communist thought.  I’ve read the Communist manifesto, as well as translated works by Mao (any aspiring Chinese expert needs to do so) so I was bummed I couldn’t hear about their perspectives.

So, as Voltaire famously said, “pour encourager les autres” I stuck by my harsh position and failed the majority of students.  Simply put, I didn’t think it was fair to the great students who showed up to every class and handed in excellent, original and thoughtful work.  For the others, perhaps they learned something too, if not English then at least how to shape up and be better students.

For those interested I’ll post an example of excellent student work in the future, as well as another example of shoddy, plagiarized and terrible student performance.

Tuesday, June 7, 2011

Sordid stories of micro-business in China


There’s nothing special about a business venture that goes south, this happens frequently no matter which country, region or market.  Entrepreneurs learn from mistakes and try again.  In China’s case, ex-pats frequently come up with genuinely good ideas, and yet for one reason or another never make it.  Although I can’t honestly say I’ve put my eggs in a basket and tried to form a business in China, I know folks who have.  In Changchun three stories immediately come to mind, and they all have some common characteristics.  The run down, in a nutshell, is that a successful business must be inclusive to local Chinese.

The Mexican Restaurant

What struck me about the Mexican restaurant in Changchun was the price of a meal, which was sky-high due to the cost of imported cheese.  Cheese is not a staple in China like it is in many Western countries, and it sells for Western prices.  Mexican food isn’t typical in the Chinese diet either, because for many Chinese people dairy leads to upset tummies due to a high prevalence of lactose intolerance.  So, when you tabulate expensive products with undesirable food you get a recipe for failure.  The Mexican restaurant chugged along for a while, yet the client base was strictly expats and eventually the business went south.

 Mexican Grill farewell fiesta.  A business that relies on expats alone will not survive.

On a side note, Taco Bell tried and failed to make it in China as well.  I can only assume for the same reasons as the Mexican restaurant in Changchun.

The Doughnut Shop

I’m still convinced doughnuts could sell in China, however, the doughnut shop in Changchun lacked a proper doughnut machine.  The owners, who were smart Australian friends with a knack for Mandarin, knew that street traffic was the way to sell their product.  Several things went wrong.  Most obviously, they weren’t able to find a proper doughnut machine for a reasonable price.  The details are a little sketchy, but when they offered to buy a machine from a local Chinese vendor at an agreed upon price, then let the vendor sample a doughnut, she pulled the deal.  I was told she was afraid the foreigners had a great recipe and didn’t want to compete, again, kind of sketchy on the details.  After months of getting by on the local expats, the shop was handed over to the Chinese business partner and ultimately closed shop a year after I left.

The Coffee Shop

I heard an excellent program once on NPR about Chinese farmers who grow coffee beans as a cash crop, but detest the taste.  The farmer said something like, “I’ve never had a cup of coffee in my life, but I understand it’s so bitter people have to put sugar in it”.  The success of coffee in China revolves around being a status symbol, especially when a typical cup of brew runs 2-3 USD.  Regardless, I had a chance to meet several Chinese friends who started their own coffee shop in downtown CC, and I can only assume twelve owners is the key to any successful venture.  Their end game, however, was not exactly financial winnings.  As I was told, this was more or less an opportunity for each friend to build a resume with experience opening a business.  Academics alone certainly don’t cut it in the USA, and this seems to be increasingly the case in China.

Beijing: the Kro’s Nest Fiasco

This is old news, and not necessarily my story to tell, however when I went to the Kro’s Nest pizzeria in Beijing I ran into the fury of several local expats.  The Kro’s Nest, located at Worker’s Stadium in the San Li Tun district, sells excellent American style pizza.  As per Chinese regulations, the American owner partnered with a local Chinese who officially held majority control over the business.  The pizza was this American’s personal recipe, and it turned into a smashing success.  In 2010, however, the Chinese business partner pulled some nasty strings and had his American counterpart expelled from China, completing a hostile takeover.  I’m a guy who enjoys a nice slice of pizza whenever I find one abroad, and I never thought I needed to stop and consider the political ramifications of ordering “sausage and green pepper”, medium, deep dish.  Not being from Beijing, I was unaware of a boycott by the local expats.  When I sat down at the restaurant with a few friends I made at the hostel, a group of Beijing expats demanded to know why we were there.  That’s a dumb question, I thought, we’re here because pizza is delicious.  Then they told me the sordid story.  So, I fired back, why are you breaking the boycott? It’s hard to give up the best pizza in China.

 Not the Kro's Nest Pizzeria

for an excellent re-cap on the full story, visit:
http://www.adamdanielmezei.com/beijings-kros-nest-debaclein-a-nutshell/2805

If there’s a lesson to take away from these examples of micro-businesses, the bottom line is to develop a Chinese customer base and don’t be totally reliant on expats.  Once a business makes it, you won’t even need the foreign devils.