We Are Shocked, Shocked To Find Dodgy Data Here

More from the latest bunch of leaked U.S. diplomatic cables published by WikiLeaks telling us what we already knew but which get piquancy from the detail. In this case, it is a suggestion that provincial GDP data is inflated. Well, hold the phone. The spice comes from the comment being made by Li Keqiang, who at the time, 2007, was Party secretary in Liaoning. He is now a vice-premier in line to succeed Wen Jiabao as prime minister and thus become the man in charge of economic policy.

Like the fictional town of Lake Woebegon created by the American satirist Garrison Keillor where all the children are above average, it has long been a curious fact that no province has let its reported GDP fall below the national average. Local officials’ promotions depend on measures of local economic development. It is no surprise that they add up the numbers in a way that reflects the best possible light on themselves. Nor is that a uniquely Chinese trait.

China’s national GDP figures are more solid, though no economist would pretend they are perfect in either their accuracy or consistency despite efforts to improve them in recent years, many led by Li as it happens. You just can’t manage an economy the size of China’s without accurate data. Nor can China play the bigger role it seeks in multilateral organizations to which it has to report standardized data.

Li, who made his reported comments to the U.S. ambassador at a dinner in Beijing, was talking specifically about his own province but said he got a better sense of its pace of economic growth from monitoring economic activity that could be metered free of a political filter, such as electricity consumption, rail freight volumes and loan disbursements.

 

Cablegate: Details Of The Google Hack Published

The allegation that a Politburo member irked by finding critical comments after googling his name was behind the hacking of the U.S. search media company Google late last year was trailed when the publication of the U.S. State Department cables by WikiLeaks first started. Now the cables in question have been made public (via Guardian).

The source of the accusation is a “well placed contact” of an officer at the U.S. embassy in Beijing. The operation against Google was reported to have been coordinated out of the State Council Information Office without having “been discussed more widely in the Party”. It started with orders to the three big state-owned telecoms companies to stop doing business with Google. When this failed to get Google to remove the link on its (censored) Chinese site to (uncensored) google.com, the pressure was escalated into the December 2009 cyberattack. Google went public about the hacking, which was when, the cable suggests, the broad party leadership became aware of events.

The campaign, according to this contact was “100% political”. However, other contacts of the embassy claimed that a top leader was working with Google’s domestic rival Baidu against the American company and that there was a perception, promoted by the government, than the U.S. government and Google were working together to undermine Chinese government controls on the Internet and thus exerting “cultural hegemony” and interfering in the country’s internal affairs. U.S. Secretary of State Hillary Clinton’s speech last January on internet freedom in which she came down in support of Google, without giving any indication that her officials suspected a top-level Chinese leader as being behind the attacks on it, may, perversely have reinforced that view. Given the concerns in Beijing about about the high-resolution satellite imagery on Google’s mapping software, Google Earth, that would not have taken much doing.

The cable also reported that contacts in the technology industry had told embassy officials that that Chinese interference in the operations of foreign businesses is widespread and often underreported to U.S. parent companies.

[Name redacted] noted the pronounced disconnect between views of U.S. parent companies and local subsidiaries. PRC-based company officials often downplayed the extent of PRC government interference in their operations for fear of consequences for their local markets. Our contact emphasized that Google and other U.S. companies in China were struggling with the stated Chinese goal of technology transfer for the purpose of excluding foreign competition. This consultant noted the Chinese were exploiting the global economic downturn to enact increasingly draconian product certification and government procurement regulations to force foreign-invested enterprises (FIEs) to transfer intellectual property and to carve away the market share of foreign companies.

Two Koreas But Three Chinas

Governments are usually no more homogeneous than the people they govern. They have their factions and their parties, their lobbies and agendas. Yet analysts, professional and journalistic, commonly use countries and their capitals as shorthand for national governments. Readers understand the convention and the inexactitude is insignificant on most occasions. In the case of the reports that China would accept a Seoul-led unified government on the Korean peninsula, based on the U.S. State Department cables leaked by WikiLeaks, the distinctions are highly significant.

The reports are based on the comments of South Korea’s former Vice-Foreign Minister Chun Yung-woo at a lunch with the U.S. ambassador to Seoul, Kathleen Stephens, that we noted earlier. Chun was summarizing conversations that he had had with officials in China’s foreign ministry (full cable). As we have noted before, the foreign ministry is the least influential of the three institutions that set China’s policies towards North Korea. Untypically and for obvious historical reasons, it is the Party’s department that deals with other Communist Parties abroad that is in the driving seat with the military in close attendance. The preeminence of the Party and the PLA inevitable gives an old school and nationalistic tinge to policy that is amplified by long-standing relationships to a regime that has ruled North Korea since the Korean War more than half a century ago.

China’s internal real politik is a reason that there were three riders attached to Chun’s assessment of the acceptability of a Seoul-led unified government to China, or at least to some of China’s foreign ministry officials; first that the government wouldn’t be hostile to Beijing; second that U.S. troops would remain south of the DMZ well away from China’s borders, and third that Chinese companies would be free to continue to trade and invest in what was North Korea (and that would probably include companies in which the PLA has interests as well as mining and fishing operations that another cable from the U.S. consulate in Shenyang suggested were seeing backhanders go to officials of both countries).

It has been the long-held position in Seoul that the South Korean government would become the unification government in the event of a political or economic collapse of the North, and that that would be acceptable to Beijing, whose own oft-stated if vague long-term goal is the peaceful reunification of the peninsular. Peaceful reunification may mean one thing in Beijing and another in Seoul, but, equally, Chun was talking his own party line.

North Korea’s leader Kim Jong Il may be a “spoiled child”, as described by a foreign ministry official in another leaked cable, but he is the Party and the army’s spoiled child, in a way that he isn’t the foreign ministry’s. The party and the army are also less burdened than the foreign ministry by having to weigh the implications of foreign policy in one part of the world on that in another. The foreign ministry’s rising generation of officials are smart, worldly and patriotic. Their career trajectories are following the rise of a more internationally engaged and influential China. For them the need for a last redoubt to protect China’s northeastern border is just outdated. They are playing on a far larger stage than a 120,000 square kilometer vestige of the Korea War. But they are not the only Chinese actors with roles.

China Gives First Reaction To Leaked U.S. Diplomatic Cables

Beijing’s first public comment on the leaked U.S. State Department cables published by the online whistleblower WikiLeaks has been a short, sharp no comment from the foreign ministry. These are already choppy waters for the U.S. not much worth China stirring up further at this point.

Foreign ministry spokesman Hong Lei did add that “We hope the U.S. side will properly handle relevant issues”, the issues being taken to be the leaking rather than the substance of the leaks. We hear of some smug tut-tuting among some officials at what is seen as another sign of American government weakness and incompetence.

Among the censoring classes, we understand, there is a more sobering view that the leaks only reinforce the value of their work and a need to redouble efforts. We wonder, though, if nagging at the back of some minds is the thought that there but for the grace of God…, and even a tiny concern that it is a case of when not if a whistleblower leaps the Great Firewall with 250,000 state documents.