By Cindy Li, BASC Research Assistant

The New York Knicks’ turnaround winning streak in early February put a spotlight on the newly signed Jeremy Lin and began the global Linsanity sensation.

Lin’s Cinderella story and Asian descent have allowed him to capture the attention of Chinese viewers. The effects of his overwhelming fame, however, may not be entirely positive. While one longtime NBA executive believes that Linsanity could be the catalyst that launches China on its way to becoming the next basketball power, The Economist argues that Lin’s American upbringing actually emphasizes the weaknesses in the Chinese athletic and education system.

On February 20th, 2012, just after the New York Knicks defeated the Dallas Mavericks (104-97), The Economist posted a blog entry, “Stop the Linsanity?”, which explores the detrimental effects of Jeremy Lin’s newfound stardom on China’s soft power. The article pits Jeremy Lin, the 6’3’’ American-born, Knicks player against Yi Jianliang, the 7 foot-tall Mavericks player drafted from China, effectively calling into question the Chinese sports system. Although China’s expanding economy and interest in basketball could more than support the development of a strong talent pool, it lacks an effective infrastructure that would facilitate professional success for talented athletes. The article provides an interesting analysis of Lin’s fame from the perspectives of Chinese viewers and leaders.

The unexpected success of Jeremy Lin should encourage China to reevaluate its athletic system, but the Economist’s claim that “Mr. Lin is, put plainly, precisely everything that China’s state sport system cannot possibly produce” is somewhat misleading. While Lin is the first American-born Chinese NBA player, the NBA has, in the past, drafted several players directly from the Chinese system, including Yao Ming, Sun Yue, Wang Zhizhi, Mengke Bateer, and Yi Jianlian. Admittedly, none of them were 6’3” and devoutly Christian, but how often does the US system produce a wildly successful 6’3’’ Asian basketball star? The truth of the matter is that even under a well-developed athletic system, the odds were stacked against him. The unlikelihood of the situation, however, has amplified his fame. As Yao Ming noted in an interview, “Lin is 6-3, more like a normal-sized person. He is the size that the average person can relate to. They like watching him play against many taller, bigger players and succeed.”

This appeal has undoubtedly taken effect on the Chinese audience, as businesses seem keen on leveraging Lin’s Chinese heritage. According to the Washington Post, with China as the NBA’s second biggest market after North America, Linsanity could be a key instrument in boosting its ratings in China. Coca Cola has already revealed plans to take advantage of Lin’s popularity among Chinese fans as it prepares to display Chinese ads courtside and possibly in the concourse at Madison Square Garden. Lin has also signed a two-year contract with Chinese-owned Volvo to promote its cars around the world.

Although Lin’s success can be used to highlight weaknesses in China’s sports system, the inspirational value of his story will certainly have a positive effect in China, both in increasing the popularity of basketball and in giving hope to aspiring Chinese basketball players. With continued enthusiasm and financial support, China could very well be on its way to becoming athletically competitive with the US.

By Jake Lerner, BASC Research Assistant

The Arab Spring came at an unfortunate time for Vladimir Putin. Though they began more than a year ago, the aftershocks of those democratic uprisings are still being felt around the world, most recently in Russia. On March 6th, Putin won the Russian presidential election with 64% of the vote, far more than the 50% needed to avoid a runoff. The win places him in office for another six years. However, the vote was marred by widespread allegations (and, in several cases, YouTube videos) of fraud.

Over the past week, tens of thousands of enraged Russians have taken to the streets in protest. Despite Russian media assertions that the protests were fading in the week after the election, as early as last Friday protesters rallied to challenge a pro-Putin documentary (which claimed protesters were paid to attend both the rallies this month and the similarly democratic protests in Russia last December). Nonetheless, the protests in Russia seem to be following more the pattern of other Arab Spring offshoot movements (such as the Occupy Wall Street movement in the US) than the Arab Spring movements themselves. Putin isn’t planning to flee the country any time soon: huge rallies in Moscow and other major cities have been met with mass arrests and pro-Putin counter-protesters (many allegedly bussed in from government workplaces).

The Arab spring has certainly lowered the threshold for mass democratic protest and made it more dangerous for rulers to rely on election day shenanigans. Russia’s people want free and fair elections, but whether their protests will result in real, lasting openness or merely be another hiccup in Putin’s (soon to be) eighteen-year tenure is anyone’s guess.

By Patricia Sun, BASC Research Assistant

February 2, 2012 was a day worth remembering for villagers in Wukan (乌坎), Guangdong Province, China: after 5 months of protests, they cast ballots to elect a committee that would supervise future election of the village’s leaders. The influential protest burst out in late September as villagers failed to get sufficient compensation when CCP leaders sold the village’s farmland to real estate developers. The land dispute brought to the surface villagers’ long-lasting discontent towards CCP leaders of the village, Xue Chang (薛昌) and Chen Shunyi (陈舜意) and large-scale protest quickly became pervasive. As conflicts escalated, protesters elected thirteen representatives to negotiate with local government and requested a comprehensive investigation of the village’s land transactions, accounts and officials’ corruption. However, despite the efforts made by the municipal government to defuse the situation, conflicts between the local government and villagers escalated. In December, police abducted five of the representatives and put them in custody. The protest strengthened significantly after Xue Jinbo (薛锦波), one of the arrested protesters, died suspiciously three days after his imprisonment. The confrontation was eventually resolved in late December after the provincial government intervened by sending a working group to solve Wukan’s disputes, naming one of the leaders, Lin Zuluan (林祖銮) the party secretary of the village, and disbanding the original party branch and committee of the village.

The incident in Wukan and its eventual, seemingly peaceful, solution evoked mixed responses. As some celebrate the victory of the Wukan protesters and look forward to a democratic future in village-level governance, others cast doubts on the wider effects of Wukan’s protest. Given that direct election at the village level was officially implemented across rural China in the 1980s but still remains as a superficial procedure with limited substance, Wukan’s influence over other villages could be limited. More importantly, the victory in Wukan came at a high cost: a protester died and the ordinary life of the whole village was interrupted because of the protest for four months. The high costs of Wukan’s success signal that for other villages facing similar problems, the disputes are hard to solve without certain costs. That is to say, though Wukan’s villagers found their solutions, other villages should not expect the same offers will be provided. However, one cannot claim that the Wukan protests will have no effect. Even though direct effects of the incident on political reform might be limited, villagers in Wukan nevertheless set an example for other villagers seeking to resolve similar disputes over land rights and corruption. Moreover, considering the overwhelming responses of domestic and overseas media, the protests in Wukan will force provincial governments and central leaders to pay closer attention to similar problems elsewhere and hopefully to construct general solutions. At this point, maintaining stability (维稳), is still one of the most important tasks for governments at all levels, especially at the village and county levels. Amid a likely economic slowdown and annual outbreaks of thousands of protests, it is time for the central government to consider political reform. At very least they must consider making direct election at the village level become a reality so that villagers no longer need to fight for basic rights that are protected by the constitution.

By A. M. Newhall, BASC Research Assistant

On October 21st President Obama signed free trade agreements with Panama and Colombia while ignoring the impact such agreements have had on human rights and the environment in other countries in Latin America. For example, mounting evidence suggests multinational corporations frequently choose profit over social responsibility in developing countries with devastating consequences. Those most negatively impacted are indigenous people residing on or near resource deposits who have little hope for redress of grievance in their local courts. However, an October 25th ruling in the Ninth Circuit Court of Appeals in the case of Sarei v. Rio Tinto may help pave the way for successful litigation in U.S. courts by foreign nationals against multinational corporations that violate international humanitarian laws abroad.

Filed in 2000 under the U.S. Alien Tort Statute of 1789 as a class action suit brought by the Nasioi people of Bougainville in the Solomon Islands against British-Australian owned Rio Tinto mining, the plaintiffs seek redress for the environmental devastation of their island by Rio Tinto and the deaths of 10,000 Nasioi by the Papua New Guinea government in collusion with Rio Tinto. The decision by the Ninth Court that Rio Tinto can be held liable for human rights violations under the Alien Tort Statute joins earlier decisions made by the Seventh and Eleventh and D.C. Circuits in Sarei v. Rio Tinto.

The progress of the case is being watched by legal experts such as Paul Hoffman who view the Alien Tort Statute as a possible mechanism for strengthening corporate accountability for violations of human rights and environmental provisions such as those found in U.S. free trade agreements.

By Daniel Chen, BASC Research Assistant

Over the past month, trade disputes have created heightened political tension between the world’s two largest economies. In October, the Senate took action against the China’s undervaluing of the renminbi, arguing that it unfairly supports Chinese production at the cost of American manufacturing. Now, the Commerce Department is investigating allegations that Chinese “dumping” of solar panels is pushing American producers out of business.

Over the summer, Solyndra, a company that made solar panels and received more than five hundred million dollars in federal loan guarantees, collapsed, making the issue particularly salient in America. Not only that, but China’s continued economic success amid slow growth in the United States has led to resentment and anger among many unemployed Americans. The perception that China has been unfairly subsidizing its exports through currency manipulation will be a particularly powerful issue as elections near.

For many people, the overarching question involves how these issues will affect Sino-American trade relations. On the one hand, the Senate bill regarding currency manipulation is misplaced and nonsensical. Even if China revalued its currency, why would manufacturing jobs return to America instead of Vietnam or Bangladesh? In addition, a revaluing of the renminbi is actually a necessity to sustain China’s remarkable economic growth. As The New York Times reported, a weak renminbi actually hurts Chinese domestic consumers. As China’s consumer spending is only about thirty-five percent of its GDP, its domestic market remains a largely untapped resource that can help fuel future growth. Instead of pushing draconian bills that have no hope of passage, American leaders should be seeking more constructive ways to partner with China to ensure continued economic cooperation.
On the other hand, the solar industry may be different. Under WTO rules, many Chinese subsidies, especially if they target exports, could be illegal. The growing market power of Chinese solar companies also raises the political stakes of inaction, which could realistically lead to U.S. lawsuits under the WTO. This could possibly lead to a harsh Chinese response, perhaps raising the possibilities for a trade war. Yet if American companies are facing unfair competitive pressures, what choice do they really have?

The next few months have huge implications for the future trajectory of Sino-American trade relations. While the Senate bill may make little sense, the allegations of Chinese dumping are far more serious. Will seeking action under WTO rules facilitate fairer Chinese trade practices or will it precipitate larger economic disputes? The Commerce Department and American officials must conduct an extensive cost-benefit calculus, weigh every possible option, and remember that with the possibility of trade retaliation and its commensurate implications, we must tread with the utmost caution.

By Viola Tang, BASC Research Assistant

After the U.S. Congress’s ratification of the KORUS FTA, the agreement has met staunch opposition in the South Korean National Assembly. While the ruling Grand National Party (GNP) is pushing for ratification, the Democratic Party (DP) has colluded with four smaller, liberal parties to oppose the bill. Despite four years of negotiations, last week’s developments highlight two key issues that remain unresolved: the lack of interest aggregation for the trade agreement domestically in South Korea, and the foreign policy costs of delayed trade negotiations.

Discussion on the bill coincided with a Seoul mayoral bi-election won by independent opposition candidate Park Won-soon over ruling party candidate Na Kyung. The election is the key political factor that puts to question whether South Korea’s parliament will be able to successfully ratify the agreement. Such an election result introduces political incentives for the opposition parties to prevent KORUS from passing by forcing the ruling party into ratifying the agreement with unilateral legislation, which would lower their popularity with the masses. This conflict is a byproduct of the GNP’s failure to aggregate interests among constituents and political parties, which would minimize domestic tension over KORUS.

The long delay in ratification has resulted in the foreign policy costs of mistrust and reduced enthusiasm for engaging in trade agreements with the U.S. On KORUS, the main point of contention in South Korea’s National Assembly is the investor dispute settlement (ISD) clause, which the DP argues would give large American firms undue room to bully small and medium-sized Korean enterprises. A similar issue caused tension during the ratification of NAFTA, under Chapter 11, which allowed companies making foreign investments that have lost money in a domestic court to sue that country’s government through an international body. This debate highlights a foundational element of distrust in U.S.-South Korea relations.

Outside, police fired water cannon on 2,300 demonstrators who attempted to physically break into parliament on November 3rd. Opposition lawmakers took to the streets and organized sit-ins in Seoul. While parliament was in session, South Korean authorities detained at least 15 people after a clash between police and protestors. Demonstrators claimed that the pact would endanger their country’s agriculture industry by flooding the market with cheaper imported goods from the U.S. This public pressure forced the GNP to delay voting on the bill until at least November 10th. For the GNP, forcing a vote could lead to voter backlash before next year’s general and presidential elections – a situation that epitomizes the dynamics that remain to be resolved with the KORUS FTA.

By Do-Hee Jeong

(Photo from the New York Times)

The Occupy Oakland protest on the front page of the New York Times website immediately caught my attention because of its close proximity to home and got me thinking about the potential direction of the greater Occupy movement. The Occupy movement has swept across America and the world like wildfire, mobilizing angry protestors in cities including New York, Chicago, Boston, Atlanta, London, Phoenix and San Francisco, and 78 other countries. The movement undoubtedly launches a powerful message against Wall Street and policymakers, representing the anger of the 99% over the government’s weak regulation and bailout of Wall Street and its business interests. The mere scale and strength of the movement are truly inspiring, giving a glimpse of hope for timely reform in America.

However, while protestors hold picket signs and chant about the strength of the 99% against the minority 1% elites of America, I cannot stop coming back to Mancur Olson’s theory of the collective action dilemma. The strength of the 99% lies in numbers – you basically have more people on your side than the 1%. This argument, however, rests on the assumption that the movement will be able to mobilize and maintain the continuous support of this majority towards a common end. Without a common agenda or manifesto that can sustain the movement beyond the initial emotional outcry, being the 99% may be a weakness that quickly dismantles the movement from within because of the idiosyncratic interests and goals that arise from the heterogeneity of the 99%. The 1% simply has a more homogenous front and resources to counteract the efforts of the movement.

While having an elusively general, open-ended agenda held together by the common threat of anger against Wall Street brought together a diverse group of protestors, it is questionable how long this shared outrage alone will be able to fuel the movement. While the Pew Research Center’s findings reveal that the majority of Americans believe the rich are getting richer and the poor are getting poorer and that the government does too much for the wealthy in America, the stark reality is that the majority of the 99% are still behind their television and computer screens as passive bystanders to the demonstrations. Different socioeconomic groups within the 99% will have contrasting interests and incentives to join and continue supporting the movement. How much reform are we looking for? How much are we willing to sacrifice for the cause? What direction should the movement take? The point is, the list of questions that can potentially divide the protestors can go on forever. Even if the leaders come out with a clearer list of goals, it is crucial that this new agenda penetrates through the differing interests and provides strong incentives to sustain the existing broad coalition of protesters.

The voices of the protest are being heard. The forces unleashed are truly powerful. However, where this movement goes and how it channels the strong current of discontent will heavily depend on how the leaders can respond to the needs of its supporters. While as part of this 99%, I would like to see the demands of the movement materialize into meaningful reforms, obstacles born out of the same strength of the movement jeopardize the movement’s coalition. Hence, the movement vulnerably stands in front of a critical junction: will the 99% turn out to be an elixir of numerical strength, or a self-perpetuated debilitation that disintegrates the movement from within?

By Michelle Tan, BASC Research Assistant

The 1997 APEC Economic Leaders’ Meeting (AELM) took place in Vancouver, Canada, in November, in the midst of the 1997 Asian Financial Crisis. Several of the Asian APEC economies had seen the value of their currencies plummet, the value of their stocks plunge, and many of their financial institutions become insolvent. In a noteworthy diversion from the usual APEC agenda of trade and investment liberalization, the leaders of the 18 Asia Pacific member economies endorsed the Manila Framework to cope with the crisis in their Declaration at the end of the summit.

The Manila Framework had been developed by senior finance officials of APEC in Manila a week before the summit meeting. It included three elements: a strong domestic response from each country involved to create an economic environment that could attract capital and maintain confidence; recognition that the role of the IMF should remain central in tackling the crisis and the adoption of new IMF mechanisms on appropriate terms in support of strong adjustment programs; and a cooperative financing mechanism through which member economies would, on a case-by-case basis, backstop IMF financial measures to ensure that adequate resources were available. APEC also pledged to work closely with the IMF, World Bank, Asian Development Bank and market regulators to enhance economic and technical cooperation and thus hopefully improve the regulatory capabilities of domestic financial systems.

APEC received some criticism for what was seen as its inability to deliver a quick and effective response to the crisis. U.S. President Clinton infamously described the crisis as simply “a few glitches on the road” a day before the start of the summit, and APEC leaders failed to support Japan’s proposal for an Asian Monetary Fund due to strong resistance from the U.S. and IMF. Moreover, APEC’s endorsement of the centrality of the IMF to the resolution of the crisis alienated many Asian governments who found it hard to stomach the strict IMF conditionalities.

In the thick of the current Eurozone crisis, in a time of similar grave economic turmoil, APEC is set to hold its annual summit in Hawaii from 12-13 November. President Obama, President Medvedev of Russia and President Hu of China are expected to participate. None of the APEC countries are in the Eurozone, imbalances in the global system cannot be addressed overnight, and the euro crisis can ultimately only be resolved by the Europeans themselves. However, APEC can—and definitely should—still address some of the fundamental issues such as sustaining growth, creating jobs and trade liberalization. A solid and cohesive response to this global financial crisis in our increasingly interconnected world, and a strong declaration of this united intent at the end of the summit, will be a much needed confidence booster for investors and consumers alike in these turbulent times. APEC should draw lessons from past criticisms, and show how it is very much a relevant and responsive trade grouping.

Recent self-immolations by seven people in a Tibetan area of Sichuan Province demonstrate that the political status of Tibet remains a sensitive and volatile issue. The CCP crackdown on the 2008 Tibetan protests may have subdued external and visible signs of unrest, but once again, feelings of angst and anger are on the rise.

The perpetual question remains: what should China do with Tibet? Chinese prerogatives include the economic development of Tibet as well as the territorial sovereignty of the People’s Republic. However, the increasingly repressive means and the lack of sustainable economic growth continue to undermine the rationale for Chinese rule.

Firstly, Tibetans have legitimate grievances against the PRC. They claim that Han migrants are hurting the preservation of Tibetan culture. Not only that, but the preferential treatment of these migrants and discrimination toward Tibetans drives a larger wedge between the two groups, diminishing the possibility of reconciliation. Tibetans, especially after the Dalai Lama stepped down from his political role in the government-in-exile earlier this year, may radicalize in the future. While the Dalai Lama maintains a relatively conciliatory position of advocating meaningful autonomy, many Tibetans may shift toward a more defiant posture of full independence.

However, the argument for preservation of China’s territorial integrity is also justifiable. Given Western incursions in the nineteenth century, China is wary of any threat, foreign or domestic, that would diminish its territorial sovereignty. Thus, China’s historical perspective erects barriers toward Tibetan autonomy, especially as it is a “core interest.” For Chinese policymakers, Tibetan calls for self-autonomy are made by secessionist rebels that must be suppressed at any cost. Failing to do so, they argue, could result in Xinjiang and Taiwanese independence.

Nonetheless, the Chinese government’s attempts to improve the welfare of the Tibetan people have largely failed. As Sautman and Dreyer (2005) note, Chinese investment in Tibet exhibits the properties of a negative multiplier. For example, “over the previous thirty years, total industrial and agricultural output increased fourfold, while state subsidies increased by 65 times. An increase in one yuan in output value required an increase of 1.21 yuan in state subsidies” (Sautman and Dreyer 2005, 135). Furthermore, most of this investment favors PLA garrisons, a large administrative superstructure, and Han workers.

Thus, though approaching from divergent rationales, pursuing limited, guided autonomy would be in the best interests of both China and Tibet. Safeguarding against “splittist” sympathies, China should pursue a gradual policy that nonetheless allows real space for Tibetans to voice their opinions. Postponing or subduing autonomy may have catastrophic consequences: especially after the Dalai Lama passes away, who will moderate the more separatist factions in Tibet?

By Viola Tang, BASC Research Assistant

Outside Hong Kong’s newly opened Apple store, fans held up iPhones with a flickering candle app at the i-Vigil for Steve Jobs. His passing brought immediate and widespread reaction from across the Pacific. Within four hours of the news, nearly 35 million and 23 million message responses appeared on Sina Weibo and Tencent QQ Weibo respectively. Over the course of the day, Youku created a 55-minute tribute to Jobs, industry leaders spoke in honor of Jobs, and admirers poured out to place white flowers at stores all over China.

Despite the issues of piracy and labor and that have plagued Apple’s relationship with China, Jobs transformed Asia’s technology sector, was an inspiration to China’s aspiring entrepreneurial class, and will continue to impact the attitudes of this generation through his products.