by Jaap Post
If you have been a member of VNC for some time, you undoubtedly still have a pile of magazines lying around, the China NU. A beautiful magazine, in which a wealth of information can be found. For ChinaNU+, Jaap Post reads them all again in the run-up to VNC’s 50th anniversary and makes a very readable summary of them. In this issue, we continue with volumes 41 to 45, the period 2016-2020.
Shenzhen SEZ; From Shaky Experiment to Remarkable Success
In 1979, communist China decided to experiment with Special Economic Zones (SEZs), testing grounds for the free market economy and foreign investment. In 1980, Shenzhen was designated as the first SEZ. Although many followed, Shenzhen became the most successful, largely thanks to Deng Xiaoping. He ensured that the trial is not aborted prematurely. Following the crackdown on the student protests in 1989, foreign investment in Shenzhen declined, and with it, the Party’s confidence. Hardliners within the Party spoke of an “out-of-control capitalist experiment that exploits cheap labor.” Furthermore, they pointed to malpractices such as money laundering, smuggling, and bribery scandals. Deng, however, managed to silence the critics: “Shenzhen SEZ is an experiment. It will take some time before we know if we have done the right thing. Hopefully, we will make it a success, but if it fails, we can learn a lot from this experience.”
In the end, it turned out to be the most successful SEZ in the whole country. This was largely due to the unique approach. Typically, original villagers were relocated to new sides outside the SEZ. The residents of the SEZ Shenzhen lost their agricultural land, but the land in the village centers was not claimed by the state. They were actively encouraged to focus more on industry or to set up their own businesses. This lead to an explosion of activity and entrepreneurship. Initially, low-cost goods were manufactured, but gradually more and more high-quality technological products were developed and produced. In doing so, the ‘urban villages’ had made a crucial, albeit unforeseen contribution to the success of Shenzhen.
The Police: Your Friend
China NU regularly reports on Chinese individuals in the Netherlands and their activities, including police officers with Chinese roots. These police officers play a vital role within the National Police. Organized as the Chinese Police Network, they strive for better communication between the police and the Chinese community to strengthen the bond of trust. For instance, the willingness of Chinese citizens to report burglaries is relatively low, making them an easy target. Members of the Chinese Network introduce community police officers to Chinese restaurants, foundations and associations. They also assist Chinese tourists who have fallen victim to crime, providing outreach in Chinese with warnings and tips on crime prevention. Since organized crime among the Chinese community is often directed at other Chinese people, the Network supports the investigative branch with advice and assistance. The Network is also called upon for less high-stakes cases, such as inspection of Chinese catering businesses.
The number of people in the Chinese Network remains limited, as interest among the Chinese community in joining the National Police is low. Chinese parents much prefer their sons or daughters to become doctors, lawyers, or accountants. They are willing to do whatever it takes to get their children into university; that is their ticket to success and status, leaving the police force out in the cold.
Dry Eyes
China NU devotes another article to Chinese foreign investment, and for good reason. In 2015, these investments for the first time exceeded the total amount of foreign investment into China itself. Initially, China was primarily interested in raw materials and food; energy and food security were top priorities. For example, China purchased one million hectares of agricultural land abroad, which frequently drew international criticism. For comparison: the Netherlands owned 1.2 million hectares of agricultural land abroad at that time.
From 2015 onwards, in addition to Asia, China is increasingly focusing on the US and Europe with investments in industrial companies. The strategic goal has now shifted to acquiring technological knowledge and thus reducing the gap with the industrialized countries. This flow of capital controlled by the Chinese government often leads to heated discussions in the Western world with its free market and sometimes a government intervenes. For example, the German government is preventing chip manufacturer Aixtron from falling into Chinese hands. In Australia, the government is blocking a Chinese investment in the power grid on the grounds of national security. In the author’s opinion, many of these concerns are motivated by ‘China-phobia’: fear of an unknown player challenging Western hegemony. He therefore argues for the development of a Europe-wide policy with regard to Chinese investments and to use the same starting point as the Chinese: reciprocity. “As long as it is impossible for Western companies to invest in certain industries in China, we can demand the same from Chinese companies with a dry eye.”
Your Schnitzel, Please
In every issue of China NU, the discussion of books and films with a Chinese background is a regular feature. The review of a film about the Chinese meat industry is an example of this. Due to growing prosperity and the increasing population, the demand for meat is increasing. The amount of agricultural land in China is limited, so people look across the border. The title of the film review is “The Long Tentacles of the Chinese and Global Meat Industry”. The title of the film itself: “Socialism”. The film starts in a large Chinese pig slaughterhouse. An official says that six hundred pigs are slaughtered here every hour and he adds “all machines come from the Netherlands”.
The film illustrates the far-reaching global consequences of the ever-increasing meat consumption and the role that China plays in this. For example, the film shows huge mammoth farms in the American state of North Carolina, the center of the pig industry. Most of these companies have been bought by a Chinese food giant that slaughters 15 million pigs annually.
Extensive soy fields in Brazil are also shown. These are owned by large farmers, who use a lot of pesticides. The small farmers are left behind. According to one of the largest soy producers, there is enough cheap land, only the jungle still has to be cut down. The message from the filmmakers is clear: if the world is not prepared to make drastic changes of course, destruction of the jungle, massive use of pesticides and reduction of biodiversity will continue unabated.
A former basketball player and an aircraft carrier
Negotiating with Chinese people has its own characteristics. China NU illustrates this with a fantastic example in which many elements that are important when doing business with Chinese people recur; long-term vision, patience, perseverance, national pride, a white lie and friendship.
The story starts with Xu Zengping, a former basketball player of the Chinese army. After the fall of the Berlin Wall, the Chinese Navy secretly asks him to buy an aircraft carrier that has become obsolete. Ukraine has such an almost completed ship on offer, but China is abandoning the purchase so as not to alarm the US. After a few years, the ship has not yet been sold and the Chinese Navy asks Xu, now a successful businessman, to get his hands on the ship. However, with two warnings: the army has hardly any budget and official support from Beijing is lacking. Xu would like to do something for his country and agrees to these conditions. Because the shipbuilder demands that the ship not be used for military purposes, Xu circumvents this problem by lying that he wants to convert the ship into the largest floating hotel and casino in the world. For credibility, he even sets up a company in Macao. In the end, Xu buys the ship, including the design drawing, for twenty million dollars. Then the journey to China is delayed: the ship is not allowed by Turkey to pass through the Bosphorus and remains moored at a Ukrainian quay for a few years. Only when Beijing does show interest does it manage to get permission for passage in Ankara. The ship will be completed in China and commissioned in 2012 as China’s first aircraft carrier, the Liaoning. However, Xu himself gets stuck in large debts. Although he gets the purchase price back, the enormous transport and mooring costs remain at his own expense. He has to sell his villa and is dependent on a loan from a friend. Still, Xu is proud of what he has been able to do for his country. A very special and instructive example of the sacrifice and perseverance that often lie behind Chinese successes.
The author is Jaap Post; member since 2000, chairman from 2001 to 2008, currently advisor to the board and member of the Committee of Recommendation
