A brief note on wikileaks and sheltered State Dept employees.

[UPDATE 12/1 – A hearty recommendation for Richard Spencer’s piece in today’s Telegraph, “Why China hasn’t abandoned North Korea – and why wikileaks is a work of flawed genius.” Very much related to this post, only better.]

Earlier today the New Yorker’s Evan Osnos blogged disappointment (shared by many, including me) at the lack of juicy wikileaks about China and the Chinese leadership (ala the Qadaffi “voluptuous nurse” cable). And then, as if it were meant to be, wikileaks released the “Shenyang Cable,” complete with a section entitled “Princelings Behaving Badly.” (for those who don’t follow these things – ‘Princeling‘ is the nickname given to the children of high-ranking Chinese officials). The cable is entertaining/interesting for two reasons. First, it describes how the Princelings secure business deals in North Korea. And second, it describes two Chinese companies competing for sole mining rights to North Korea’s largest copper mine. One of those companies, Wanxiang Group, is described as close to Chinese Premier Wen Jiabao. And then we get this:

Without naming names, XXXXXXXXXX also suggested the strong possibility that someone had made a payment (on the order of USD 10,000) to secure the premier’s support.

That’s right: somebody at the US Consulate in Shenyang reported the “strong possibility” that China’s premier had been bribed for less than the cost of a used Buick in Shanghai. That is to say, somebody at the US Consulate in Shenyang – probably several somebodies – believes that the Premier can be bribed for less than the cost of a used Buick in Shanghai. Now, you don’t need to know anything about graft in China, much less world leaders, or Wen Jiabao, to know that $10,000 not only wouldn’t get the job done, it’d be viewed as an insult and an automatic disqualification from this any other mining contract. So I’m going to go out on a limb here: there’s simply no way that happened. None. Zero. Zilch. Now, is it possible that Wen has a “relationship” with Wanxiang? Sure. But not the one described in the cable.

And this gets to something that I think is going to become increasingly, uncomfortably obvious as more and more of these cables are released: US State Department employees in overseas posts often don’t know very much about the countries in which they’re posted. This is the result of a number of factors, not least of which is that they’re often sheltered – I mean truly isolated – from the countries in which they’re posted, living on upper-middle class wages in secure compounds where they have little to no contact with anyone but officials and employees of major US companies. US Consular employees in Shanghai, for example, live in serviced apartments at the Portman Ritz-Carlton (at US taxpayer expense), and often socialize accordingly. I don’t know the situation in Shenyang, but I feel comfortable suggesting that the person who felt comfortable reporting the alleged $10,000 bribe doesn’t regularly associate with people doing business in Shenyang (expat or otherwise). If s/he did, there’s no way that level of stupidity would have made its way into the cable.

That’s why I’m taking much of what I read in these cables – out of China or elsewhere – with a giant grain of salt (such as yesterday’s ridiculous ‘revelation’ that google’s problems in China are to due to a personal vendetta launched by a Politburo member). In the case of the Shenyang Consulate, at least, there’s now little reason to believe that the employees are equipped with even a budget-grade bullshit detector. If the State Department has anything to be embarrassed about, it’s not that these cables leaked, but that somebody once took them seriously enough to label as secret.

[UPDATE: Just to be clear – I’m not labeling the entire State Department as naive. Nor the entire US mission diplomatic in China. I’ve met some great FSOs – you know who you are, and you probably don’t want to be named – and I’ve also met a very fair share of not-so-great ones. That a diplomatic cable was sent to D.C. with the strong suggestion (whether endorsed by the reporting FSO or not) that the Chinese premier was bribed for the price of a used Buick – I blame that on a systemic failure of the not-so-great, naive ones. With thanks to Gady Epstein of Forbes for reminding me that I need to be careful about generalizing. He’s right.]

[UPDATE 2: Some interesting comments being left below, and in my inbox. For now I’m going to pull up comment #8 from Richard A, in part because I agree with it. And in part because it is just so vivid:

I know a lot of FSOs and other consular officials in Guangzhou. I am consistently unimpressed by their knowledge of China. The young FSOs who are shipped over for 2-3 years spend little time engaging with anyone besides Americans, other consular officials, or the Chinese who apply for visas and related documentation. I have found that many consular officials hold negative, sometimes hostile, views of Chinese people and the Chinese government, and other than language ability, demonstrate little capacity to understand China beyond what can be gleamed from mainstream, English-language media. I had dinner once at a consular officials house (after he and his family were well into their second year in China) and he was surprised when I explained that, “No, I can’t make turkey for Christmas because like most people here, there is no oven in my apartment.” Of course, he had never seen the inside of a Chinese home…

Not to belabor this point, but an FSO who hasn’t been inside of a private Chinese home is an FSO who lacks the cultural context to evaluate intelligence in China. This is a problem.]

More on stolen iPhones at Best Buy Shanghai (Xujiahui): the Gangster Factor

Late last week I posted in regard to a bizarre encounter I had with a ‘freelance’ salesman/thief attempting to sell stolen iPhones inside of the Best Buy located in Shanghai’s Xujiahui neighborhood. In response, over the weekend I received several comments, two phone calls, and one email suggesting that the man who approached me is part of a wider gang problem in Shanghai that has plagued retailers in addition to Best Buy. See, for example, anonymous comment #8 [attributed to Marketing Manager] on my original post, and this excerpt from an email received overnight (the author requested that it be published without attribution):

We do not represent Best Buy, but we do represent a company in a similar position and let me tell you that keeping these guys out of the store borders on impossible.  The people selling this stuff in the store are gangsters and they intimidate and they have connections.  The staff are afraid and with good reason.  The issue is much bigger than just Best Buy.  In most cities, the police are absolutely no help at all.

This is credible information, and makes complete sense in light of what I saw last week: the staff of the Best Buy store could see precisely what was happening, and made no move to interfere. Store management, when I told them what was happening, expressed zero interest in interfering. And, let’s be honest here, it’s no secret that illegal commercial activity occurs all over Xujiahui (just take a look at the hawkers working the entries to the Xujiahui subway station) without any interference from the police (ie, full acceptance by the police).

What I don’t know – and I’d love to know – is whether or not gangs actively target foreign-owned retailers, knowing that they lack the resources and connections that Chinese businesses have, to deal with them. It’s a widely accepted fact of commercial life in China that foreign businesses have to comply with laws that Chinese businesses regularly ignore (politely, overlook). Perhaps this is one more expression of that widespread competitive disadvantage.

[UPDATE 11/29:

I was in the neighborhood this evening around 6:30, so I stopped into the store and rode the escalator to the third floor. It was definitely gangster free. In their place were relaxed, low-key sales staff eager to help me find a mobile.]

Happy Thanksgiving – offline ’til Nov. 29

In observance of the American Thanksgiving holiday, the staff of Shanghai Scrap will be mostly offline for the next five days. I’ll check emails, but sporadically, but because for goodness sake we can all use two things: a) a break from the communication treadmill, and b) a nice Thanksgiving meal with friends and family.

And since it’s Thanksgiving — thanks to all of the folks who read my blog. I appreciate every link and comment, every last reader. And, heck, I’m especially thankful for those folks who I’ve befriended through this blog – who knew you could make friends through blogging? So, in a year when I have more to be thankful for than others, I wish the friends of the ‘Scrap a Happy Thanksgiving. See you next week.

Get Your Used (stolen?) iPhones at Best Buy Shanghai (Xujiahui, 3rd floor)

Just in time for the Thanksgiving holiday shopping rush I come across evidence that at least one high-profile US-based entry into China’s cut-throat, price-sensitive retail market isn’t working out exactly as planned. I’m talking about Best Buy, North America’s largest electronics retailer. Three years ago they entered the Chinese market with plans to counter China’s aggressive sales culture with a low-key, service-oriented sales method (I wrote about these plans in early 2008 for MinnPost). They might have succeeded – but I’ll leave that question for another time. Tonight I’d like to talk about where they’ve clearly failed: security. Continue reading

Build, Demolish, Rinse, Repeat: A Shanghai Scrap Carmelite Update

Way back in January 2009 the staff of Shanghai Scrap told you about the demolition of Shanghai’s (then) 135-year-old Carmelite Convent  on the edge of the expensive, rapidly re-developing Xujiahui neighborhood (part 1, complete with historical background, here, and part 2, here; background on Carmelites, here).  The building wasn’t anything special – except for the fact that it was one of the city’s oldest structures, foreign or Chinese. But what made this demolition so egregious, so patently ridiculous, were the stated intentions of the (re) developers to build a 20% smaller replica of the convent just a few meters south of the original one. [UPDATE: also see comment #1, below, left by Lisa Movius, on why the destruction of the convent “was criminal – literally”] This struck me as stupid and wasteful, but I’ve been here long enough to know that it should also  strike me as one more thing: typical. That is, the Carmelite Convent is not the only historic structure in Shanghai to be demolished in favor of a replica that – for whatever reason – is more in the interests of the developer. In fact, in the case of some dilapidated slum dwellings, this might often be a good thing. In others, less so, to put it lightly.

Anyway. I’d mostly forgotten about this sorry Carmelite episode until this weekend, when I happened to pass the site of the old convent in a taxi and saw that it was being rebuilt. I returned a couple of days later, with a Benedictine, to photograph it. Here, from January 2009, is the historic convent in the last stages of its demolition.

Take note of the roof, and the close proximity of the remaining structure to the fence. And then, have a look at the photo below. The arrow points to the roof of the new convent. The white buildings in place of the old convent are dorms for workers building the replica convent and the highrises that will surround it.

After the page jump, a before and after view from the development’s gate. Continue reading

The Jiaozhou Road Procession

In my near decade-long association with China I have never witnessed something so remarkable or so moving as what I witnessed today, on the evening of the traditional seventh day of mourning, in the aftermath of the fatal Jiaozhou Road fire in Shanghai. My readers in Shanghai, and China, are already familiar with this event; for those outside of China, and not following the event and its aftermath: on Monday, a 28-story high-rise burned, and at least fifty-six people died as a result. Video here, a live blog here, and an excellent New York Times piece examining questions raised by the fire here. And finally, and best-written of all, a blogged dispatch, “Don’t Cry, Shanghai” by my friend Marta Cooper.

Around 2:00 this afternoon I was with two friends when one received a call notifying us that thousands of people were converging on the site of the fire with flowers. I hesitated to follow, but only for a moment: I’ve lived in this city, and among its people, for years, and I consider it and them as much home as anywhere I’ve ever been. I decided to go, but as a mourner for what happened in my home, and with flowers. When we arrived we came upon a line that stretched for blocks. Below, a photo taken while looking back, after having turned a second corner:

What this photo doesn’t show, because of the vantage point, are the bouquets of flowers carried by all of those mourners. I think it’s no exaggeration to suggest that at least half of these people were carrying carnations. As for those who weren’t, they were reverent and quiet. I did not sense gawkers, rubber-neckers, or the Sunday curious.

What I did sense, what I will not forget, was the rhythm to this procession. For the last long block, as the procession slowed, we began this odd stutter-step: we would walk five or six steps, and then we’d come to a dead stop, pause for ten seconds or so, and then start the cycle against, five, six steps. Nobody said anything, nobody was pushing ahead – rather, the crowd seemed to accept this odd, almost reverential step. As we moved slowly along, it took on a life of its own, almost like a mourning dance. I’ve never experienced anything quite like it. I wish i could explain it. But, when we reached the intersection beneath the burnt-out building, there was nothing and nobody directing this movement – we just flowed into what felt like a sacred space, with a brief admonition – quite right – that I should remove my hat before proceeding further. I laid my flowers atop a pile of thousands of bouquets, extending in two directions, for two blocks:

After the page jump, a brief note on the security and how one news organization covered it badly … Continue reading

Where [some of] Hong Kong’s old computers go to die.

Below, a stack of old PCs, monitors, and printers that, at one time, cost hundreds of thousands of dollars, new. Yesterday, at the time that I took this photo, they had just arrived in bulk at a Hong Kong warehouse where they were to be sorted and – for the most part – disassembled and recycled.

The warehouse is owned and operated by the Li Tong Group, the company designated to operate Hong Kong’s municipal computer recycling program (they also handle electronics recycling for private clients – including Apple, and its entire Asia Pacific recycling program). And yesterday Li Tong walked me through their EcoPark warehouse, home to the municipal program (client confidentiality prevented them from showing locations that handle waste generated by private clients), and allowed me to photograph most of it (understandably, proprietary processes were off-limits to the camera – but not my eyes).

I’m going to post a few of those images, for two reasons: 1) searches for “waste electronics” and “Hong Kong” typically generate horrific images of polluted, unsafe workshops where workers risk their health to extract gold from circuit boards. No doubt, that’s how electronics are usually recycled in Asia, but the situation is beginning to shift a bit, and Li Tong is at the head of the Asia Pacific pack. So, hopefully these images reveal another side; and 2) Just as many American hunters believe that meat eaters should, at some point in their lives, should kill and dress their steak, I – a non-hunter – believe that every techie should have to face up to what happens to that old monitor/PC/printer/scanner/iPod after it gets tossed to the curb. Continue reading