Shanghai Scrap

Tomorrow at 12:30 PM, the US-China Business Council [USCBC] and the US Information Technology Office [USITO] in Beijing will host a luncheon briefing featuring Tim Stafford, an assistant US Trade Representative, and Dr. Ira Kasoff, the Deputy Assistant Secretary of Commerce for Asia. According to the notice for the event posted at the American Chamber of Commerce, the two gentlemen “will provide an update on plans for the Joint Commission on Commerce and Trade (JCCT) in 2010 and a briefing on their meetings with Chinese officials during their visit.” It should be an interesting briefing: the JCCT is a twenty-seven-year-old dialogue between senior US and Chinese government officials that has played a key role in resolving trade disputes and, in the process, has directly benefited – and penalized – companies involved in that trade (a list of China’s JCCT commitments between 2004 and 2009 can be found here).

The presence of Dr. Kasoff at the event should be particularly informative. As a senior Commerce Dept deputy for Asia, and a member of the Market Access and Trade Compliance Staff at the International Trade Administration in Washington, D.C., Dr. Kasoff is a highly influential figure in US-China trade relations. And he has been so for years: prior to his current role, he served in six US Commercial Service assignments in Asia, including a stint as the Chief Commercial Officer in Shanghai.

Thus, when Friday’s off-record lunch convenes at the Westin Chaoyang in Beijing, Dr. Kasoff’s stature ensures that he will look out at an audience that includes  representatives of leading American and Chinese businesses with a keen interest in how his actions – and, by extension, the work of the ITA and the JCCT – will impact their operation in coming weeks, months, and years. No doubt, many of those faces will be familiar to Dr. Kasoff from his years of work on US-China trade issues and, no doubt, many of them will be familiar to Dr. Kasoff’s wife, Ellen Eliasoph, a co-chair of the troubled US pavilion at Expo 2010 in Shanghai.

The reason is pretty straight-forward: Ms. Eliasoph, in her official State Department-designated capacity, has naturally solicited many if not most of the leading US companies operating in China for donations to the privately-financed US pavilion project (donations that are often measured in the millions of dollars). She has also solicited and raised money from Chinese companies. In both cases, her actions, and relationship to Dr. Kasoff have gone mostly unquestioned.

Those questions need to be asked. (more…)

Today begins the 100 day countdown to the largest World Expo – or World’s Fair – in history. Lots of reasons to note this moment, but if you’re a US citizen, I suggest three, all related: first, the folks behind the US pavilion haven’t managed to complete fund-raising for the structure; second, the US State Department has yet to respond to a Freedom of Information Act [FOIA] request for information that includes a breakdown of the pavilion’s budget and disbursements; and third, and most demoralizing, the architecture and design community is beginning to take notice of the US pavilion design, and they don’t like it very much. That design, below:

Let’s work backward through my list, starting with the already scathing reviews of the US pavilion. (more…)

Shanghai Scrap has viewed documents revealing that last week the US Department of State’s Office of Inspector General [OIG] forwarded a request for investigation into the Department’s stewardship of the USA Pavilion at Expo 2010 to the US Secretary of State’s Executive Director. The complaint requests a “full and fair recounting of the events that transpired … in the US Pavilion process over the last three years.” As reported on Shanghai Scrap, both the State Department and the private organization managing the US pavilion, have refused repeated requests to produce documents related to the pavilion selection process, pavilion fund-raising, and the basic rules governing operation of the pavilion (the “action plan”), among other essential details relating to the oft-troubled US pavilion at Expo 2010. The complaint calls for a transparent review of those documents for the purpose of preventing a repeat of the mistakes made in selecting and managing the 2010 pavilion.

Last year, a concerned US citizen filed a Freedom of Information Act [FOIA] request to obtain these documents (including the “action plan” which governs the US pavilion effort). As of January 4, 2010, it has not yet been fulfilled. (more…)

Based upon queries of my blog, and queries from US media outlets, it seems that US reporters are finally taking an interest in Expo 2010 and the oft-troubled project to build a US pavilion (Shanghai Scrap reporting on the issue, here). As for the latter topic, the interest is overdue: as of January 4, 2010, the private group authorized by the US State Department to design, fund-raise, and build the US pavilion has not yet finished the fund-raising – despite the fact that the Expo begins in 118 days. In early 2009, the situation was so dire that the Chinese government made high-level appeals to Secretary of State Clinton, who has since undertaken some of the fund-raising herself.

And so, this weekend the New York Times gives us “For Shanghai Fair, a Famous Fund-Raiser Delivers,” in which the authors – Mark Landler and David Barboza – correctly report that Secretary Clinton’s played a crucial role in securing pavilion funding, and thus preventing a major diplomatic rupture with China. At the same time, they document the State Department’s careful vetting of Clinton’s fund-raising role, including its determination that – due to her position – she “could not solicit private donations herself.”

This is a compelling story for those who follow the US pavilion, but it is also a seriously incomplete one – as the reporters who worked on the story surely know. So let’s be clear here: the reason that Clinton had to become involved at all is because the private group authorized to design, build, and fund-raise the pavilion had – by early 2009 – shown themselves to be completely incapable of accomplishing what they’d been authorized to do by the State Department. (more…)

Over the last two weeks, I’ve made several trips down to the sprawling 5.28 sq km Expo 2010 grounds on the Huangpu riverbanks. For my American readers, this revelation likely doesn’t generate much excitement – even if I tell you that – in scale and historical importance – Expo 2010 is designed to evoke and echo the Great London Exhibition of 1851, the 1893 World’s Columbian Exposition in Chicago, and the 1900 Exposition Universelle in Paris, and the 1939 and 1964/5 New York World’s Fairs. It’s one thing to hear such grandiosity (including the reported, and truly grand, US$46 billion being spent on Expo 2010), and another to see it in person. So, without much further ado, I’m going to share a set of photos that I’ve taken at the Expo grounds over the last couple of weeks – starting with an image taken on the elevated Expo Boulevard that runs most of the long length of the 3.93 sq km Pudong side of the site.

The dozens of national pavilions and group pavilions are located on both sides of this structure, and after the jump, I’ll share some links – when I can find them – to images of what the completed structures are intended to look like. I make no apologies for the quality of the photography – my trips to the grounds aren’t for photos, and when I take them, it’s usually in very brief passing. But I hope that they give readers a sense of why this event is so exciting – at least, to those of us lucky enough to visit it in the construction phase … (more…)

Two things I want to make clear from the outset. First, despite appearances, Shanghai Scrap is not becoming all US Expo 2010 Pavilion, all of the time. It just seems that way. Rest assured: I’ll be back with some quality iron ore/Rio Tinto blogging next week (for the record: I was blogging Rio Tinto and price-fixing in China back in 2007 [ie, before it was cool, ed.]). And second, nobody was more pleased to see the United States break ground on an Expo 2010 pavilion than me. I was there, and I clapped.

Now, for some reason, the pavilion groundbreaking – and other Expo-related news – just doesn’t seem to capture the imagination of the US media. So, in the interest of bringing Expo to the world, Shanghai Scrap offers the following images with limited commentary (orders from above: commentary and reporting must be saved for a future publication). First, the actual “groundbreaking.” From left to right, Beatrice Camp, US Consul General in Shanghai; Jose Villarreal, Commissioner General of the US Pavilion; Gary Locke, US Secretary of Commerce; Yang Xiong, Vice Mayor of Shanghai; Ma Xiuhong, Vice-Minister of Commerce; and Hong Hao, Director General of the Shanghai Expo Organizing Committee.

No, that sandbox is not the future location of a budget-rate US Expo pavilion. But it is a sandbox, no doubt about it. In fact, the actual pavilion site, not more than 10 meters away, has had construction crews working on it for some time, already (not sure how long – but clearly, the Shanghai organizers were determined that the site be used by someone, US or otherwise), and wouldn’t have made for a very attractive setting. But whatever. See after the jump for three images of the actual site. (more…)

Coming at the end of a tumultuous week in China marked by earthquakes, riots, and continued economic uncertainty, the news that the US had finally confirmed its participation in Expo 2010 (a/k/a, next year’s world fair) didn’t seem particularly significant. And, with much of Shanghai’s foreign correspondent corps preoccupied with more pressing news elsewhere in China, it didn’t receive much coverage. Fair enough, I think. However, insofar as the US pavilion – or lack thereof – had become an increasingly thorny diplomatic issue between China and the United States, the signing ceremony was an important signal that some kind of resolution was finally at hand. (more…)

[UPDATE 7/3: Sure enough, this morning, Xinhua issued a new story, denying that the US had confirmed: "US participation in Shanghai World Expo Remains Unconfirmed."]

Earlier today, Chinese media (Xinhua) announced that the US will participate in Expo 2010, running a brief story entitled: “U.S. to participate in 2010 Shanghai 2010 World Expo.” Shortly thereafter, at least one international wire – the AFP – took the story one step further and ran the headline: “US confirms participation in Shanghai World Expo.” And by the end of the day, several blogs – including my good friends at Shanghaiist – were running the story as if US participation at Expo 2010 was a done deal.

Well, sorry to say, but it’s not. The Xinhua story, and especially the subsequent AFP distortion of it, are based upon an incorrect understanding of what “confirmation” – a technical term, in this case – means in regard to the US presence at Expo 2010. I’ll get to that in a moment. But first, it’s worth noting that the source for the two stories is a July 1 US State Department press release announcing the appointment of Jose Villarreal as the Commission General of the US pavilion. In it, Secretary of State Clinton speaks of the US pavilion as a completed enterprise. And, partly due to the fact that she has been making fundraising phone calls on behalf of the pavilion, it likely will be.

But confirmation is a different matter, altogether. In the case of Expo 2010, confirmation means that the US has signed a “participation agreement” with the Expo organizers. And, despite its support for the authorized pavilion group, the State Deparment has, nonetheless, been consistent in its refusal to sign a participation agreement until all funding is in place to commence construction of the actual US pavilion. Now, it may very well be the case that the State Department has changed this policy (it has changed its official rules related to pavilion fundraising on at least one other occasion). But whether or not the policy has changed, the US still must sign a participation agreement with the Expo 2010 organizing committee. And, so far, no agreement has been signed because the money has not yet been raised (despite a recent US$5 million infusion from Pepsi).

Now, to be fair, the appointment of a Commissioner General would seem to be a pretty strong signal that State – or, at least, Secretary Clinton – is optimistic about the pavilion’s prospects. And, no doubt, she is right to be. In fact, in recent days the Expo organizers have backtracked on their earlier construction ultimatums, with one senior Expo official going so far as to assure potential participants that they can confirm participation “even a week before the event.” No doubt, the US will manage to pull that off. However, due to the inexplicable veil of secrecy that the State Department, and the pavilion group, have thrown over their effort, nobody knows how much of the US$61 million pavilion budget has been raised and, thus, how close the US is to signing a participation agreement. Hopefully, the new US Commission General will be more forthcoming on these matters than his new State Department-authorized colleagues.

[Mea culpa addendum: And yes, for several hours today, I, too, was under the impression that the participation agreement had been signed - until I read the State Dept press release.]

Over the last couple of weeks I’ve received a serious uptick in visitors in search of information on the (still non-existent) US pavilion for Expo 2010, and the sorry fiasco that has tarnished it. So, to make these searches a bit easier, I’ve just added a new ‘Expo 2010 – US Pavilion‘ category. Click there (or here) for a chronological listing of posts that I’ve done on the subject. More to come soon …

Yesterday Shanghai Scrap reported that Shanghai Expo 2010, Inc., the group authorized by the US State Deparment to fund, design, and build a US pavilion for Expo 2010, had issued a press release claiming – falsely – that the US Congress had adopted a resolution in support of their efforts. The key quote in the undated release – “We are grateful that the US Congress has adopted this resolution …” – was made by Shanghai Expo 2010, Inc. co-chair Frank Lavin – who also served as an ambassador to Singapore and an Undersecretary of Commerce in the most recent Bush Administration. Lavin couldn’t have been more wrong: not only has the resolution not been adopted by Congress, it has only three co-sponsors, hasn’t left committee, and was introduced by impeached former federal judge Alcee Hastings. In other words: Congress is not supporting Shanghai Expo 2010, Inc. Not even close.

In any case, overnight (in Shanghai), the press release mysteriously disappeared from the official Shanghai Expo 2010, Inc. website – without any explanation or apology (to Congress). No doubt, Lavin and his colleagues are hoping that the matter will be forgotten. But fear not, dear readers: while preparing yesterday’s post, I made a screen capture of Ambassador/Undersecretary Lavin’s false claims of Congressional support, and – for posterity’s sake – I am posting them below (click for an enlargement):

Unfortunately, this is hardly an isolated incident. Over the last several months, several other members of Shanghai Expo 2010 Inc have made similarly misleading statements to bolster their effort, and then backtracked when those statements were either disproven or no longer in their interests (for the most notable example, see the fourth paragraph of this recent blog post). And, as I’ve noted before, it is precisely this pattern – this duplicitous pattern – that has so damaged the pavilion’s prospects among Shanghai expats and businesses.

[Personal Addendum: A promise to my readers: never again will you confront three Expo-related posts in a row.]

We are now less than two weeks away from the deadline for the US to begin construction on a stand-alone pavilion for Expo 2010. And, according to Shanghai Expo 2010, Inc., the group authorized to finance, design, and build the US national pavilion, things are looking up. Reportedly, Hillary Clinton has made supportive phone calls to potential corporate donors, and KFC/Pizza Hut has responded with a significant financial commitment.

But even with these relative successes, the pavilion effort still appears to be in trouble. The authorized group has been less than forthcoming about its fund-raising efforts, but according to what they’ve told other media outlets, they’re currently sitting on roughly 10% of the US$61 million that their proposal requires.

A few weeks ago I wrote a primer on the authorized US pavilion group’s failure to raise money. Of the four areas that I outlined, perhaps the most consequential remains the inexplicable veil of secrecy that the authorized US pavilion group, and the US State Department, have thrown over the process to fund the US pavilion. Specifically, both parties have declined offers to reveal the “Action Plan” that governs the fundraising and other activities of the authorized pavilion group. Why does this matter? By any measure, the US Expo 2010 pavilion effort has been – so far – a financial and diplomatic failure of the first order, alienating US corporations, key members of the Shanghai government and – reportedly – angering high-levels of the Chinese government. Presumably, the “Action Plan” has governed the actions of the State Department officials, and private authorized-pavilion organization, that have placed the US in this awkward position. Making it public might not fix the situation, but it surely would go a long way toward explaining it.

Thus, back in January, an interested US citizen filed a Freedom of Information Act request to obtain the action plan, and the Letter of Intent [LOI] authorizing the US pavilion group to begin work on the national pavilion (there remain many unanswered questions about the murky circumstances under which that LOI was obtained, as well – some background, here). Below, an image of the request (click for an enlargement).

Since then, a State Department official personally turned over the LOI to the requesting citizen. However, the “Action Plan” remains hidden from public view; the State Department and the authorized group will not release it (I’ve also made separate requests from both parties). Late last week, the citizen who made the FOIA request contacted State for an update. On June 11, he was told that “it takes an average of 333 days for a case to be processed.” Which means, if the request is approved, we might know by Thanksgiving (late November) the rules under which the authorized US pavilion group are/were operating. (more…)

[UPDATE: Make sure to take a look at comment #1, below, left by Rich Brubaker of the All Roads Lead to China blog, in which he witnesses what appeared to be two US State Dept employees soliciting contributions for the US pavilion in a hotel restaurant.]

In the next couple of days I’ll have much more to say about the current status of the US Expo 2010 Pavilion effort. For now, though: a brief but telling example of why Shanghai Expo 2010, Inc, the US State Department-authorized non-profit in charge of funding, designing, and building a US national pavilion, suffers such a credibility gap among some key business leaders and media in Shanghai (for more on this topic, see my Primer on why Shanghai Expo 2010 can’t raise $61 million, as well as this Expo-related post).

On June 4, US Representative Alcee Hastings of Florida (an impeached former federal judge) introduced H.R. 509 into the US House of Representatives. Entitled, “Encouraging the United States to fully participate in the Shanghai Expo in 2010″ the non-binding resolution calls upon the US government and relevant stakeholders to support the US Expo 2010 pavilion effort. The resoltion was then promptly referred to the House Committee on Foreign Affairs, where it currently languishes with – according to the Library of Congress’s bill-tracking system – exactly three co-sponsors. In other words: the resolution has little support and almost no momentum.

Now move over to the official Shanghai Expo 2010, Inc., website (again, the authorized US pavilion group), and the undated press release concerning the Hastings Resolution. The pertinent passage, for the purpose of this post, reads:

[UPDATE 6/19: Predictably, Shanghai Expo 2010, Inc. has since removed the offending press release from its website. Fortunately, I made a screen capture of it before publishing this post. You can view it by clicking the thumbnail, below.]

Commenting on the Resolution, Frank Lavin, Chairman of the Steering Committee for the USAP stated, “We are delighted with the strong support from the U.S. House of Representatives. This resolution reminds us that as Americans learn more about the Shanghai Expo, they tend to support it. We are grateful that the U.S. Congress has adopted this resolution and we believe it will be an important boost to our efforts.”

Of course, the US Congress has done no such thing! (more…)

At the moment, there ’s almost no reason to believe that the United State will occupy a stand-alone pavilion when Expo 2010 opens in Shanghai on May 1, 2010. And though this doesn’t seem to be a matter of much concern in the United States, it is a matter of intense concern in Shanghai, and in Beijing, with powerful voices beginning to suggest that the US will suffer real and lasting commercial consequences in China if it doesn’t use the next 348 days to rescue its floundering pavilion effort.

Over the last several weeks, as I’ve published various stories and blog posts on this subject, one question continues to come up: namely, why wouldn’t US companies with Chinese operations rush to become sponsors of a project likely to be visited by upwards of 70 million Chinese citizens during Expo 2010’s six-month run?

In the interest of answering that important question, and explaining why the authorized US pavilion team has raised only $2.8 million of a $61 million budget,  I’ve prepared this short primer on the various issues and reasons inhibiting – if not outright preventing – US companies from contributing money to what would appear to be the premier international PR event of 2010. In assembling this post, I’ve drawn upon conversations and emails with individuals connected with US corporations operating in China, many of whom have been directly solicited for pavilion contributions, or attended pavilion-related events. Most of these individuals have spoken or written to me off-record, out of concern that negative comments about the US pavilion effort might invite negative consequences, if not outright retaliation, from various quarters.

Broadly speaking, there are two issues. The first concerns US government restrictions on funding international expo pavilions; the second is broadly related to issues that have arisen with the US State Department, and its chosen entity to fund-raise, design, build, and operate a US pavilion. The first I’ll deal with briefly; the second will require more space. (more…)

[Additional Expo related articles and posts here, here, here, and here. More to come in the days and weeks ahead.]

Quite a bit of discussion on Shanghai Scrap, and elsewhere, on whether or not US interests are served by building a pavilion for Shanghai’s Expo 2010. That’s good: Americans need to be thinking seriously about this issue. So far, however, the Shanghai and Beijing governments have been unusually reticent about why they think the US should attend (beyond general statements that the US will “regret” it we don’t), and that’s given the debate a bit of an incomplete feel. Thus, I was quite interested to learn of a May 7 editorial on this very subject which appeared in the influential state-owned China Youth Daily, and People’s Daily. So far as I’ve been able to determine, an official English translation hasn’t yet appeared, but thanks to the (heretofore unknown to me) Watching America site, we have an unofficial one, here. Chinese, or English, the editorial does not mince words:

The lack of enthusiasm in America has something to do with its national traditions. American has traditionally pursued isolationism and is only concerned with itself rather than the outside world. Even though things changed after the second world war, on the whole, Americans still believe devoutly that “all politics are local,” and the congressmen only care about things that affect their own district. Naturally they do not approve of allocating money for this exposition.

I’ve spent a not insignificant amount of time reporting on the US Expo pavilion, and in my experience, the argument against usually goes something like this: the US already has a significant commercial and cultural presence in Shanghai, and in China, and with so much going on in the world – and in the US – isn’t there a better place to spend the US$61 million that the current, troubled US pavilion team is trying to raise? An unrelated argument, but one that is taken seriously in various quarters (including, some quarters of the US State Department) is that the US would be merely be “feeding the Chinese propaganda machine” if it builds a stand-alone Expo pavilion. (more…)