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China As Currency Manipulator. Why Can’t We All Just Get Along?

Posted in China Business

I just read an article by CNBC Columnist Shaun Rein, entitled, “Why A Fast Appreciating Yuan Won’t Help US Economy,” and I have a few bones to pick with it.

Let me start out by saying that I “talk China” pretty much every day and I have never spoken with anyone who believes that all of the United States’ economic ills are China’s fault, nor have I ever spoken with anyone who believes that China plays absolutely no part in them. I mean, let’s face it: either position would be reductive.

In this article, Shaun Rein comes as close as anyone to the latter position, and he does appear reductive in doing so. Before I go off on criticizing Mr. Rein’s most recent article, I would like to put on the record that I greatly respect Mr. Rein’s courage in consistently taking the most extreme positions favoring China, when he must know that by doing so he subjects himself to responses such as mine. His extreme positions have made him somewhat famous in the Chinese blogosphere for, among other things, the following:

1. Writing here that “Real poverty [in China] is pretty much gone.” In this same article, he also refers to China as being “like a teenage boy.”

2. Attributing here Hillary Clinton’s North Korea policy to her being distracted by her daughter Chelsea’s wedding, of which Peking Duck had this to say:

The problem is when Rein makes gob-smacking and bewildering assertions, as we see in the very first sentence of his column on North Korea:

Perhaps she was spending too much time planning Chelsea’s wedding, but Hillary Clinton’s recent announcement of a strategy to institute more economic sanctions against North Korea was misguided and half-baked.

FAIL. As multiple commenters have pointed out in the comments there, on the comments here and the comments at Modern Lei Feng, this demonstrates shockingly poor judgment for a columnist writing for Forbes. It’s challenging to think of a more sexist opening to an article. Imagine if we were critical of an Obama decision, and started off our critique by saying it was perhaps due to his being too caught up in planning for his daughter’s wedding. Yet this kind of WTF out-of-left-field whopper permeates Rein’s columns – whenever he writes about topics outside his area of expertise.

3. Proposing here that “the West” award a Nobel Peace Price to Deng Xiaoping so as to improve “the West’s” relations with China. This blog post does an excellent job highlighting the faults of this proposition.

4. Referring here to Google’s decision to take a stand against China as “dangerous and self-destructive.”

5. Calling on the United States to invest in North Korea. This post does a good job taking Mr. Rein to task for that.

Again, though, one has to give Mr. Rein credit for taking positions antithetical to the prevailing view in “the West.” But I am troubled by Mr. Rein’s recent CNBC piece, an article that reveals either a lack of understanding or a China bias so extreme as to be disingenuous.

Let me explain.

Mr. Rein starts his article by talking of a China investing conference he recently attended in New York, “which included speeches from the likes of American Secretary of Commerce Gary Locke and did [sic] hedge fund legend Barton Biggs.” Mr. Rein then notes his reaction to the conference:

Listening to many of the other speakers, I was surprised at their anger and fear towards China. I had hoped that rhetoric would dissipate after the mid-term elections last year. Many attribute China’s boom as a result of stealing American jobs and intellectual property, rather than efficient economic policies and hard work ethic.

It is unclear to me whether Mr. Rein is excluding Barton Biggs and Commerce Secretary Locke from among those expressing “anger and fear towards China.” I certainly hope Secretary Locke is excluded from Mr. Rein’s criticism because Gary Locke, a Chinese-American, is nothing if not temperate. Nonetheless, this paragraph concerns me because in it Mr. Rein seems to categorize those who disagree with him as spewing “rhetoric,” and implying that the only reasons for their doing so are political. Mr. Rein appears not to have considered that their views could be honestly held, and voiced not for political reasons, but out of concern for the American worker. There are plenty of good and serious and smart Americans on both sides of the debate regarding China and its currency and Mr. Rein’s questioning of motives here seems both unfair and unprofessional.

I also take issue with Mr. Rein’s statement that ‘[m]any attribute China’s boom as a result of stealing American jobs and intellectual property, rather than efficient economic policies and hard work ethic.” I question this statement on two grounds. First, I question whether “many” really do attribute China’s boom to “stealing American jobs and intellectual property,” as I have never heard anyone draw that sort of causation. I find it difficult to believe that any of the speakers at Mr. Rein’s event actually said that the reason for China’s boom is its “stealing American jobs and intellectual property.” On the flipside, I have also never heard anyone completely discount China’s economic policies and work ethic as contributing causes to China’s economic success, as Mr. Rein suggests “many” do.

Second, Mr. Rein makes this statement as though it would be absurd for anyone to think that at least a portion of China’s economic gains have come from stolen intellectual property. China is by far the leading counterfeiting country in the world and that counterfeiting has, at least in part, helped drive China’s boom.

Mr. Rein then talks of having challenged Secretary of Commerce Gary Locke “to respond to my position that a fast appreciating renminbi would not create more American jobs, as companies like Nike and Apple would relocate their manufacturing to cheaper areas like Indonesia rather than back to America. I maintained that the real danger to the global economy is the Federal Reserve’s latest round of quantitative easing, which already is exporting inflationary bubbles to emerging markets.”

I would not for a minute argue that there is anything close to a one to one correlation between China jobs and U.S. jobs. In other words, I agree with Mr. Rein to the extent that he is saying that a fast rising renminbi that leads to jobs leaving China will mostly lead to new jobs in places like Indonesia, rather than in the United States. But Mr. Rein’s assertion that a rising renminbi would not create new American jobs is misguided. Just a few weeks ago, in a post entitled “China Manufacturing: We’re Bringing It Back Home,” I wrote of how my tiny law firm has handled three matters “JUST THIS YEAR” involving American companies that are leaving China completely and, in doing so, are bringing jobs back to the United States. Rising China costs played a part in all of these companies leaving China, and if the value of the Renminbi were to increase, more American companies would leave.

My post did not even mention my American clients who have stopped hiring new workers for their China operations and begun hiring new workers for their United States operations because of the narrowing of costs between the two countries. Nor did it discuss the client who called me just since that post wanting to discuss moving the “low end” portion of their China operations to Vietnam and the “high end” portion back to the United States. Since China’s rapidly increasing wages are causing U.S. manufacturers to move jobs back to the United States, there is every reason to believe a higher valued renminbi would do the same.

My firm has another client (also not mentioned in that earlier post), a good-sized American manufacturing company, who had been told by one if its biggest customers (a Fortune 25 company) that if it did not start manufacturing in China soon, the Fortune 25 company would cease to do business with my client anywhere in the world. This U.S. company just recently told me that it would not be establishing manufacturing operations in China and that the Fortune 25 company had backed away from its requirement that it do so. The primary reason for the change by the Fortune 25 company was that producing our client’s super high quality products was, in the end, no cheaper overall in China than in the United States. If the renminbi had been worth 20 percent less than it is now, I very much doubt that this same decision would have been made by the Fortune 25 company, and, as a result, hundreds of American jobs would have been lost.

Mr. Rein also fails to acknowledge that China jobs going from China to countries other than the United States is not necessarily a pure neutral in terms of American job creation. Last year, we had a client shut down its facility in China and bring that manufacturing back to its facility in Ontario, Canada. I would bet that the Ontario factory and its Canadian workers both buy more American goods than the Chinese factory and the Chinese workers ever did. Mr. Rein disregards the fact that factories and workers in Canada and Mexico (and probably even Thailand and Vietnam) buy more American goods and thereby create more American jobs than do Chinese factories and workers.

Mr. Rein would have us believe that Commerce Secretary Locke’s failure to respond to Mr. Rein’s “challenge” was because Locke had no answer for Mr. Rein, but I’m guessing Mr. Locke simply chose not to engage with Mr. Rein because he saw Mr. Rein’s position as so extreme. According to Mr. Rein, Commerce Secretary Locke’s response to Mr. Rein’s accusations regarding the U.S. Federal Reserve’s quantitative easing was that “Bernanke needs to stimulate America’s economy through a loose monetary policy. He [Commerce Secretary Locke] did not take into account the criticism of Brazil and Germany about the Fed’s policies.” I object to the notion that the United States (or any other country for that matter) should set its monetary policy based on the views of a couple of foreign countries. The United States Federal Reserve is tasked with doing what is best for the United States, and right now the United States has a job problem, not an inflation problem. Brazil and Germany and China have the opposite problem, so it only makes sense for them to want the United States not to prime the pump. Does that mean the United States is wrong for doing so? Of course not. And does anyone really believe Gary Locke is not savvy enough to realize that America’s economic policies can have worldwide impact?

Mr. Rein then reiterates how the value of the renminbi can have no (as in ZERO) impact on American jobs, as though repeating a falsehood makes it true: “Are Locke and the other speakers right that a fast appreciating renminbi will create more jobs on American soil? No.”

Mr. Rein then suggests how it is that he is right and America’s Commerce Secretary and its leading investors and economists are all wrong:

In fact, more than 70 percent of big American multinationals operating in China told my firm they did not want the renminbi to appreciate too much because it will cut into their profits. The majority also said they would increase costs to the American consumer or move to cheaper production areas if it rose.

What does Mr. Rein even mean when he says “more than 70 percent of big American multinationals operating in China told his firm” of their views? What constitutes a “big American multinational operating in China? Something like 80 percent or more of the Fortune 1000 operate in China. Did Mr. Rein really hear from all 800 of these? Who at these big multinationals was doing the talking? I very much doubt it was the CEOs, so who? What led these “big American multinationals” to reveal these views to Mr. Rein’s firm? Were the “big American multinationals” really asked if they wanted the renminbi to appreciate “too much”? Does not the phrase “too much” itself have negative implications? If someone were to ask me whether I wanted the renminbi to appreciate “too much,” I would say, “no, I do not want it to appreciate ‘too much,’ I want it to appreciate just ‘the right amount’ and no more.”

Mr. Rein’s claim that the majority of these “big American multinationals” said “they would increase costs to the American consumer or move to cheaper production areas if it [the renminbi] rose” also means nothing. Is Mr. Rein saying that the majority of these “big American multinationals” would increase costs to the American consumer if the renminbi were to increase by .0001%? Or is Mr. Rein saying that the majority of these “big American multinationals” would increase costs to the American consumer if the renminbi were to rise “too much”? Without a specific percentage rise in the renminbi as a reference point, the views Mr. Rein attributes to these “big American multinationals” are extremely vague.

But even if we were to ascribe meaning to what Mr. Rein purports to have been told by the “big American multinationals,” this information is still irrelevant to the argument in which Mr. Rein claims to have bested Secretary of Commerce Locke. Mr. Rein’s thesis in his article (at least up to this point) has been that raising the value of the renminbi will not create any American jobs. How does the allegation that the Microsofts and Exxons of the world want the renminbi EXACTLY where it is right now (and not one scintilla higher) support Mr. Rein’s claim that the value of the renminbi has no impact on American jobs? Does Mr. Rein really believe that every “big American multinational” bases its ideal value of the renminbi on what will produce the most American jobs? “Big American multinationals” focus on what will increase their profits, not what will increase jobs for American workers.

On the flip side, I note that many of my United States clients who sell their products and services to China have noted how the strengthening renminbi is lifting their profit margins. This is exactly what one would expect. Those American companies that manufacture in China will tend to favor a lower renminbi and those American companies that sell from the United States to China will tend to favor a higher renminbi.

Mr. Rein then belittles the “arguments by Locke and others that China’s currency policy hurts America” as “misguided,” and goes on to point out “two other areas many of the panelists got strikingly wrong on China.”

Mr. Rein notes how “many said intellectual property protection is getting worse there [in China, when], in reality it is getting far better as the government cracks down on piracy and as consumers increasingly demand real items.” Mr. Rein’s claims that the Chinese government’s cracking down on piracy and consumers’ increasingly demanding real items is proof that intellectual property protection is getting better in China omit key information. Though these trends are probably factors in China’s intellectual property theft numbers, neither of them reveal what those numbers actually are. Are Chinese companies engaging in more or less counterfeiting now than they did a year ago? I was not able to find any good evidence one way or the other, but both the EU and the United States seem to think the problem is worsening (see this and this). Without these hard numbers, it is not fair to describe those who think one way as being “misguided.”

Then Mr. Rein goes off on a strange and seemingly unrelated tangent. He starts criticizing the “western world” for not giving “Beijing enough credit for ridding the country of long-standing gender inequality:

Secondly, the western world does not give Beijing enough credit for pushing for equality in the legal and education systems and ridding the country of long-standing gender inequality. There are now more females in degree, MBA and PhD programs; students and women have the right to initiate divorce.

The fact of the matter is, Chinese women are becoming the great purchasing force in the country. In the 1950s, women accounted for only 20 percent of household income. That rose to 35 percent in the 1990s and is now at parity. In fact, our research suggests women there will account for 55 percent of the $11 billion of luxury goods purchased there in 2011.

Even in rural areas, women are starting to earn more than men when they relocate to urban areas. Women get jobs as waitresses and make $350 a month while their husbands take home $120 a month in construction. Many women are becoming breadwinners and changing family dynamics in the process.

I do not understand why Mr. Rein discusses China’s gender equality in his particular article, but again, I have never heard anyone (American, “western”, or otherwise) say anything negative about what China has managed to achieve on this front.

Mr. Rein then concludes his piece by again harshly discounting those who disagree with his view of China:

As China takes its place as the world’s second superpower, America needs to understand it better in order to ensure peace and to take advantage of business opportunities.”

Too often politically charged rhetoric and ill-informed people are shaping American public opinion towards China. The reality is that China has played a critical role in helping the world’s economy recover from the financial crisis and is making great strides in protecting intellectual property and promoting more gender equality.

Mr. Rein seems to be implying that good China and United States relations rest entirely with the United States, and that if the United States would just understand China better, there would be peace and business opportunities for all. At the beginning of his article, Mr. Rein talks of all the high-level government officials and investors at the conference; by the end of it, he seems to view the speakers at this elite New York City gathering as representatives of “American public opinion.” Either way, I think it unfair for Mr. Rein to chastise all Americans and (not the entire “western world” as he did previously) for having the wrong “public opinion” regarding China, based on a few lectures he attended at an investment conference in New York City.

I am also troubled by Mr. Rein’s final sentence, which seems to say that because “China has played a critical role in helping the world’s economy recover from the financial crisis and is making great strides in protecting intellectual property and promoting more gender equality,” anyone who expresses disapproval of Chinese policy is “ill-informed.” I too am impressed by what China has accomplished, but I would never claim it is above criticism or that those who criticize it are “angry,” “ill-informed,” or “strikingly wrong.”

No matter where we stand on it, it is important that we use language that seeks to stimulate discussion, rather than shut it down.

What do you think?

  • Robert Z.

    Dan,
    Thanks so much for taking Shaun Rein to task on this. It is good to see him getting his comeuppance by someone actually taking him to task on his “facts” and “analysis.” It will be very interesting to see how he responds to this.

  • St. Alfonso

    Of all that you have written on here over the years, this is my favorite. I agree with what you wrote and I am glad you wrote it. You talk about Shaun Rein having guts, I think you have guts because I know there are going to be many who will be made very unhappy by what you have written here and I am waiting for that.

  • Neil

    In all fairness to Forbes, Gordon G. Chang, another one of its regular columnists, presents a different view of China. He shares similar ideas with Minxin Pei, so you may find more agreement with him as you have with Minxin Pei recently.
    Beware though, the polarizing effect of the internet. Before you know it, what you take as the prevailing opinion of the Chinese blogosphere will have become an increasingly narrow sliver of it, as you find more and more columnists from Forbes and elsewhere display cases of shockingly poor judgement.

  • John

    What did Jim Rogers say recently? There are people a few years ago that couldn’t spell China, but are now are all experts.
    This Rein must think he gains credibility by the forcefulness of his statements, however right or wrong they might be. Sounds like he’s headed for the consulting world!
    Keep up the great work with the blog. I really enjoy reading it.
    John

  • http://Chinacetrader.com China CE Traders

    Dan
    The difference between people like you and me and this guy is that we actually work in business and understand the unique issues that effect the relationship between China the US and the rest of the world. Guys like Shaun probably were raised in some liberal household, went to an Ivy League School and was going to do the world “good” by becoming a reporter.
    The fact is that Shaun would not have a clue about business, life, politics and economics in a place like China. He is just some “educated” do-gooder who has no idea how the world really turns.

  • ChinaMike

    Sean Rein has been overexposed. He is reductive and an absolute apologist who wouldn’t know nuance if….
    Christ I’m sick of this guy.

  • Charles L.

    I put Rein in a particular category of China expats made up of people who have left the United States for China, for whatever reason, and now, for whatever reason, want everyone to know how great they are for being in China and how much better they are than everyone in the United States. This category of expat feels that to convince people of this, they must always side with China and against the United States, no matter what. This is what leads to the arrogance and sheer silliness of an article like this. There are plenty of expat snobs here in Shanghai who will side with Rein on this and those are the expats I make it a point to avoid.
    By the way, what the hell are CNBC and Forbes thinking in peddling this simplistic shit anyway?

  • Aaron

    I think Dan’s view of China is very even handed.
    However, Dan’s view of China is not representative of the “American Public Opinion”, which is what Mr. Rein has railed against.
    In his criticism of the “American Public Opinion”, it is not a statement of EVERY possible corner of it, merely the general “opinion”. (And let’s be honest, Dan, most Americans don’t share your even-handed-ness when it comes to China).
    Is Mr. Rein “chastising” all Americans for it?
    Should Americans be “chastised” for it?
    I don’t know if Mr. Rein’s “chastisement” or Dan’s evenhanded-ness will change much in American Public opinions.
    Perhaps some day, Dan will “chastise” one side or another.

  • J. Keal

    I stopped reading his stuff months ago. Even though I mostly agreed with his substance, I found him to be arrogant, mean and dishonest and all he would do is make me mad. I don’t even want some one like that on my side. It is nice to see you dissect his writings like this.

  • Allen

    Dan,
    I feel you are nit-picking what Shaun wrote and have blinded yourself from not seeing the tree from the forest. Most of the questions you pose can be easily debunked as not relevant or as something that I can easily come up with an answer, if you just allow yourself to see the bigger picture of what Shaun is writing about.
    I don’t have time to respond point to point to your (in my opinion false) accusations…
    But I’d like to briefly touch on the issue of IP, as I think it will loom large in the future (if it has not already) of the relationship between U.S. and China. The American side unfortunately almost exclusively see IP as a win-lose proposition. Every IP China gets from America for free is an asset and revenue stream lost. When China uses IP from others without paying, China is stealing ideas and jobs to build its own economy at others expense. It never ceases to amaze me how we as a society got to such zero-sum thinking on the use of ideas when the reason we even have IP (as a policy) is because ideas are non-rivalrous and non-exclusive to start with!
    A cursory search of Internet also give you these two reports.
    http://www.economicpopulist.org/content/if-you-cant-build-economy-steal-one (If You Can’t Build an Economy, Steal One)
    http://www.npr.org/templates/story/story.php?storyId=5006911 (U.S. Attache: Piracy in China Hurts Growth)
    There are many others. I don’t think Shaun’s quote about IP is that far off at all.
    Anyways – I’m hoping that we get to meet in person soon – not to talk about these, but to get to know each other better. Remember to call me up when you are in the Bay Area.
    Best,
    Allen

  • http://www.keglawyers.com/blog Joseph

    So, you’re saying you’re not a fan of Rein or his commentary?

  • http://firm@harrismoure.com Dan

    @ Robert Z.
    I do not think of this so much as taking Shaun Rein to task and prove him wrong on his facts and analysis. When push comes to shove, I actually agree with him regarding the value of the Yuan. What I am trying to do here is tone down the debate a few notches and get away from ad hominem comments. I know plenty of very smart people who think the Yuan is just right and I know many of very smart people who think it undervalued. I just don’t think we should be calling anyone names or ascribing bad motives for either position.

  • Dan

    @ St. Alfonso
    Glad you liked it. I don’t think this post took guts. All am I really doing here is calling for a fair debate and I doubt many people will have a big beef with that.

  • Dan

    @ Neil
    I tend not to agree with Gordon Chang, who I see as being far too negative on China and almost unwilling to admit all the amazing things China has accomplished.
    What makes you think that the “prevailing opinion of the Chinese blogosphere will have become an increasingly narrow sliver of it, as you find more and more columnists from Forbes and elsewhere display cases of shockingly poor judgement” and to what opinions are you referring?

  • Dan

    @ John
    Thanks for the kudos. Much appreciated. Mr. Rein was a marketing research consultant already (and I believe he still is), in addition to his work for Forbes and CNBC.

  • Dan

    @ China CE Traders
    In addition to his work for CNBC and Forbes Mr. Rein was also does marketing research consulting in China. I have every reason to believe he knows how China works and I have no beef with that. What bothers me is how he seems willing to throw anything and everything at those who have the temerity to disagree with him.

  • Dan

    @ ChinaMike
    Mr. Rein is just trying to make a living like almost all of us. You will probably notice that I deleted much of your comment. I do not want this site to turn into a place to attack Mr. Rein or anyone else.

  • Dan

    @ Charles L.
    I have met people like those you have described but I am not ready to put Mr. Rein in that category, at least not yet. I think he just gets very worked up about what he writes about and then gets a bit blinded by his emotions. Having said that, I actually prefer those who write with passion (even if they are sloppy) than those who try always to avoid having an opinion. I do think Mr. Rein deserves kudos for taking such strong and unpopular stands. I just wish he would not act as though contrary opinions are a sign of stupidity or corruption.

  • Dan

    @ Aaron
    Thanks Aaron. I view “even-handedness” as a high compliment. I have never said my view of China constitutes American public opinion and I would agree with Mr. Rein that the view that China has gotten where it is merely by cheating is an extreme one. But just as I do not view my views as constituting American public opinion, I also do not view the views of a few politicians as constituting American public opinion either.
    Should Americans be chastised for thinking China has gotten where it is today strictly by cheating? Yes but I think those who think that are a small minority.

  • Dan

    @ J. Keal
    Thanks for the kudos.

  • Dan

    Allen,
    All of the questions I asked were based on Mr. Rein’s article. I know you say you don’t have time to respond to my “false accusations,” but I really wish you would because the last thing I want to do is to make “false accusations.” I am “all ears” and if you can convince me that I made false accusations, I will not hesitate to retract them.
    I don’t think Mr. Rein’s quote about IP was far off either. I think those who say IP protection is getting better in China have a point and those who say it is not getting better also have a point. I actually tend to side with Mr. Rein on this as I think it is getting better. It has certainly improved in the last five years. But that is my point. My point is that it is a pretty close call so there is certainly no need to belittle those with whom we disagree.

  • Dan

    @ Joseph,
    I think it is good to have emotional writers who push the envelope of arguments, especially on something as technical as the value of a currency. I don’t like writers who belittle those with whom they disagree, but as I have said in some of my comments above, I will always choose the writer who writes with passion and belief (even if that writer sometimes slips into polemics) over the writer who punctiliously avoids having an opinion.

  • jim1980

    China Law, I am going to criticize you for bring up this topic up. Shaun Rein writes based on his opinion and he is entitled to his. I understand that China Law can disagree with Shaun Rein’s view and post something on Shaun’s blog to criticize his view or discuss him in private. But it is another thing to create new topic just to criticize another fellow blogger. China Law, IMO, just crosses the “civility” line. Do we really want this “flame war” between fellow blogger similar to Billy O’Reilly and Olbermann for cable news? That’s just poor taste, IMO.
    Of course, China Law can write anything he want. After all, it is his blog. However, after reading a couple of sentences, I just couldn’t read anymore. It reads like child bickering. The whole message he tried to convey has lost on me.

  • Allen

    @Dan,
    My comments about IP is not about the “progress” China makes on IP. IP represents a set of policy tools with benefits as well as costs. In my view, it’s up to individual societies to set how those tools are used (or not used) as benefit the unique circumstances of each society. My comments are addressed to those “norms” – which are so casually bantered about here in the U.S. (what I read in NY Times, WSJ, etc.). I think Shaun’s observation about those are right on.
    Allen

  • Friend

    Did you see what Rein has been saying about you on Twitter? He says you seem mad and that you wrote this because you don’t have enough work. Seems to me this is exactly what you are criticizing about him. The guy has no class.

  • Charles Liu

    (Not the Charles L from above…)
    Dan, I like you blog, but I must say perhaps you are a little harsh on Rein. Citing FOARP to prove Rein is “unpopular” is like citing David Duke to prove black people is unpopular. I don’t know what PKD is like now days, I’ve boycotted his blog for 2 years now, after he banned me for contradicting him with factual evidence.
    And you have to give it up for Rein, Google is back in China, despite our media’s best effort to smear China on this last year (NYT’s Aurora malware “China Code” turned out be from 80′s Novell programming guide, Lanxiang Vocational School “hacker central” turned out to be a diploma mill for hair dressers.)
    As to the job thing, I’m sure you are aware of the fact even Chinese companies are now setting up shops in SE Asia. China didn’t steal our jobs, that distinction squarely lands on our own WASP homeboy CEO’s and decision makers who cut cost and pat themselves on the back with Rolexes and Ferraris. If the job didn’t go to China, they still would’ve moved their headquarter to Bahama and factories to another developing country with cheap labor pool.
    Stick with what we’ve come to trust CLB on, your critique and development on China’s business law.

  • http://www.foarp.blogspot.com FOARP

    @Allen – Since I’m now blocked on your website for pointing out – of all things – the weird double standard of criticising people for not obeying China’s internet content “laws” when you and your co-writers all used to write for a website that was blocked by the Chinese government, I’ll make my comment on your comment here:
    - The articles you cite – one is a blog post with a sensational title, the other actually seems pretty accurate (what, are you saying that piracy in China doesn’t hurt growth in the US?).
    - Dan’s “accusations” aren’t “false”, he does a good job of substantiating them, and you have done absolutely nothing to substantiate your claim that Dan is making “false accusations”.

  • Matthew H.

    Shaun Rein has been writing articles like this for years and he is going to continue to do so and whenever anyone actually confronts the factuality of his articles, he will continue to attack that person, rather than actually respond to the issues raised by the person seeking clarification.
    What I don’t understand is why Forbes and CNBC allow him to tarnish their (diminishing) reputations by giving him a forum for him. Nobody has even mentioned yet how he is always using his articles to mention what his company does, how he went to Harvard, and who he knows.
    I am most happy that you have gone after him for just making things up and I think he knows you have succeeded on that and that is why he has attacked you personally, rather than even trying to refute what you are saying here.
    We need more bloggers like you who actually strive to tell the truth, rather than just concoct stories to sell a service.

  • Mick

    His articles remind me of the stuff that appears regularly in China Daily.

  • Anon This Time

    I really liked this comment about Rein over at Peking Duck:
    1) His articles contain glaring inaccuracies (”real poverty is almost gone in China”, “Deng Xiaoping enacted laws to prevent his offspring taking power”, “the ‘west’ awards the Nobel prize” etc.).
    2) His self-promotion in his articles (education, business, CCP-connects) often without even the bare excuse of it being necessary to make a point in his article.
    3) His inept use of Blair/Clinton-style triangulation (”give Deng and Ghandi the Nobel”, “China doesn’t get credit for growing sexual equality”, “The US should invest in North Korea” etc.) to try to find a way of please his (presumably) US audience at the same time as his Chinese audience. As if people will go along with the moronic idea of awarding a Nobel to Deng Xiaoping just because we can also award it to Ghandi at the same time, as if people are going to give China a pass on its relatively poor enforcement of IP just because women aren’t as oppressed as they used to be, or will go for lavishing money on North Korea.
    4) The kissing-up to the CCP that happens as a result of 3)
    5) The way he reacts with what are essentially personal insults when people point these things out to him (Dan Harris’ business must be doing bad, Richard Burger is old and has little experience of doing business in China, to paraphrase a couple).
    6) The fact that he is treated as a “China” expert when he indulges in all of the above. The fact is that many of the “facts” in his articles seem to come off the top of his head, and are true merely because he feels them to be true, or are not actually “facts” at all (i.e., “80% of large US businesses in China I’ve spoken to say they don’t want Y to be too X” – What is “large”? Which ones have you spoken to? Who in their sane minds would want “Y to be too X”?).

  • http://www.rocafortconsulting.com Frederic Rocafort

    Great discussion.

  • Dan

    @ jim1980
    I think your position is ridiculous. I view criticism and debate as being essential. I did my utmost not to personalize this and not to turn it into a “flame war” and I think I succeeded. I am dealing with important issues, not flaming anyone.
    I think if you had read more than “a few sentences” of my post, you would never have written the comment that you did. I have a problem even taking you seriously when you purport to know what I said in a very long post, based on your having read “a few sentences.” I urge you to actually read the whole post and then return with your comments.

  • Dan

    @Allen (ii),
    Allen, if a country like China signs on to international IP treaties, as China has done, then it is not entirely up to them as to what IP laws they have and how they enforce them. Then you say “Shaun’s observations about those are right on,” but Mr. Rein never addressed those policy issues at all. He simply attacked those who claim China does a poor job protecting IP. I want to make clear that I do not disagree with all that Mr. Rein said; in fact, I agree with much of it. What I disagree with is his being so lose on his “factual” support and on his presenting all those who disagree with him as either idiots or Charlatans.

  • Dan

    @Friend
    I did not see what Mr. Rein has been saying about me on Twitter. I got off Twitter months ago for many reasons, among those my belief that 140 characters is not enough to espouse real views on real issues, but is enough to attack people personally for the views they hold.
    If Mr. Rein is attacking me personally on Twitter, I would say that is a shame and I would wish that rather than attack me personally, he simply address the issues I have raised in the post above. In particular, I would love for him to respond to his claims regarding the views of multinationals regarding the value of the Yuan. My goal here was and is to stimulate real debate on real issues, not attack anyone personally. As I make clear in my post and in my comments, I respect Mr. Rein’s willingness to take unpopular positions. My beef is not with his positions, it is with his throwing out unsubstantiated “facts,” his attacking those who disagree with him, and his sexism.

  • Dan

    @ Charles Liu (Not the Charles L from above…)
    I really do not equate my citing FOARP to citing David Duke. Though I frequently disagree with FOARP, I absolutely see him as a legitimate and influential blogger. As for Peking Duck, I find it very hard to believe that you were banned there simply for contradicting him with factual evidence. In the end though, your ad hominem attacks are irrelevant as the real issues here are the content, not the people putting out the content.
    As for Shaun Rein on Google, what particularly bothered me about that (he did the same thing with Apple) was his claiming to know better than Google what is best for Google and his claiming to know better for Apple what is best for Apple and when I read his articles on those two companies, I just thought to myself that I have a hell of a lot more faith in what Google is doing for itself than in what Shaun Rein is telling Google to do and a hell of a lot more faith in what Apple is doing for itself than in what Shaun Rein is telling Apple to do. I have been a long-time shareholder in both of those companies and I consider them to be two of the best run companies in the world and if those companies started taking their instructions from Shaun Rein, I would sell out immediately. To me, it is the height of arrogance for Mr. Rein to purport to be better equipped to run those two great companies than the people in them, who have been trained to run them and have at their disposal a lot more facts necessary for running them.
    Of course I am aware that China jobs are going to SE Asia. If you were reading my blog, you would know that I have totally jumped on the bandwagon and have even come out and said that for many businesses, they should head straight to Vietnam and ignore China. If you had actually read my post (and I am assuming that you did not), you would have seen that I am not for a minute disputing that the bulk of the jobs that will leave China if the value of the Yuan rises will go to places like Vietnam. What I am saying is that some of those jobs will return to the United States (not NONE of them, as claimed by Mr. Rein) and that the United States would be better off with increased jobs in places like Vietnam or India or Mexico than in China.
    I appreciate your telling me what to “stick with” and I fully intend to continue focusing mostly on China’s business laws. But I am not going to be silent when on an issue as central to business as the value of China’s currency and I am not going to be silent in the face of misinformation.

  • Dan

    @FOARP -
    I am not even all that sure what point Allen was/is trying to make and I am seeking to get him to clarify.

  • Allen

    FOARP,
    Who blocked you on our blog? I have not engaged you for a while (that’s not the same as blocking) because you twist and misrepresent information such that it is not possible to have an intelligent conversation with you. This latest accusation of “blocking” is the latest example. If you are having difficulty accessing our website, please seek some IT help to set up your computer properly. If you are not happy that one or two of your comments over the last several months have portions deleted, stop making glaring ad homenim attacks, take it like a blogger and write better quality stuffs next time when you head over to Hidden Harmonies China Blog.

  • Dan

    @ Matthew H.
    I do not think Shaun Rein just made things up. I think he got sloppy and that is one of the main reasons I wrote my post. I see it as important that we all try to stick to the facts on an issue as emotional as China’s currency. As for Forbes and CNBC “allowing” him to tarnish their reputations, I think you have it all wrong. Mr. Rein is a very controversial (to say the least) columnist and controversial columnists generate controversy and controversy generates readership. My beef with Forbes and CNBC is not with their publishing Mr. Rein’s columns, it is with their apparent failure to fact check them. I do not know the custom for fact-checking columns, but I do know that the columns Steve and I have written for the Wall Street Journal were pored over with fine-tooth combs and were made considerably better for that having occurred.

  • Dan

    @ Mick
    Come on, Mr. Rein is far more interesting than the China Daily, don’t you think?

  • Dan

    @ Anon This Time
    I agree with much (but not all of the analysis you cite).
    I do think his articles are sometimes way off on the facts (”real poverty is almost gone in China”, “Deng Xiaoping enacted laws to prevent his offspring taking power”, “the ‘west’ awards the Nobel prize” etc.), but I would not call them glaring inaccuracies. I would call them a columnist being sloppy to better make a point. For example, Mr. Rein’s “real poverty is almost gone in China,” made when he wanted to emphasis the progress China has made. In some respects, I actually agree with this comment. China has made absolutely unbelievable progress in all but eradicating starvation and I think the West fails to sufficiently acknowledge this. The sloppiness is in his use of language. What did he mean by real poverty? If he meant starvation, then I agree. If he meant poverty, then I disagree. Same thing with the Nobel prize. I am guessing Mr. Rein simply used the West as a shorthand. I do that all the time.
    As for his “self-promotion in his articles (education, business, CCP-connects) often without even the bare excuse of it being necessary to make a point in his article,” I haven’t noticed that in his more recent articles and I attribute that to his maturation as a writer. I am guessing that he is starting to realize that he needs to sell people on his ideas, rather than just expecting them to believe him because he went to such and such university. I only wish he would realize that his ad hominem attacks on those who disagree with him are the mere flip-side of this.
    I like what this person said about Mr. Rein’s attempts to triangulate — ”give Deng and Ghandi the Nobel”, “China doesn’t get credit for growing sexual equality”, “The US should invest in North Korea” etc. to try to find a way of please his (presumably) US audience at the same time as his Chinese audience.” That makes some sense to me.
    I am not going to accuse Mr. Rein of trying to kiss up to anyone as I have absolutely no clue what his motives are nor do I care what they are. I keep trying to stress the importance of his dealing with the issues and not delving into the backgrounds or motives of those who are discussing the issues and there is no way I am going to do that here.
    I have not seen the personal insults referred to so I have no comment on those.
    Mr. Rein is a China expert. He knows China. The fact that he has a tendency to get really sloppy with facts when presenting his arguments does not really impinge on what he knows.

  • Dan

    @ Frederic Rocafort
    Of all the comments I have received so far, your two word one is my favorite. It was my goal to generate real discussion on the issues and it pleases me to know that someone I know and respect thinks that has happened.

  • Timothy

    Dan: Enjoy your posts and have learned much from them. I guess I’m going against the grain here and the overall tone coming from the responses, but I am baffled at the level of your umbrage and hostility displayed in your post, and in some of your replies. Taking his comment/observation :
    “I had hoped that rhetoric would dissipate after the mid-term elections last year”
    and inflating it to to let you conclude:
    “because in it Mr. Rein categorizes all those who disagree with him as spewing “rhetoric,” and implying that the only reasons for their doing so are political”
    requires jumping a chasm as wide as the Grand Canyon. Huh ? Talk about taking liberties…. In the context of his article, he was simply making an observation of what he observed at a conference he attended; one that you did not. How in the world you can extrapolate that fairly harmless comment he made, into claiming he categorizes all (in bold font !) who disagree as “spewing” (an unnecessary and loaded adverb worthy of Fox News itself) rhetoric”, and how you can conclude the ONLY reason they do so is political, is something I don’t understand or agree with. He was simply pointing out a fact – prior to elections, the anti-China rhetoric coming from politicians is as predictable as the Cubs not winning the World Series.
    In my opinion, your longgggggggggggg post was small, petty, and uncalled for. I halfway expected you to say “and his mother wears Army boots”. He’s a well-read and well-followed professional with something to say on China, just like you. Some people will like him, and some won’t.
    I am a big fan of China Law Blog, and will continue to do so. You can do better.

  • ChinaMike

    Fair enough Dan. Your site, your rules. But what I wrote is more or less in line with the other 35 posts here.
    I’m sorry, but like most Chinese people I respect humility. I respect truthfullness. I respect real accomplishments. I abhor people who bring hyperbole, misinformation, and an atmosphere of confrontation over substance and clarity.
    Mr. Rein has made himself a very pubic figure and has made his “personal” stuff public and thus open to legitimate criticism.
    We all have to sell ourselves but there are lines and he seems to cross most of them most of the time.

  • http://www.foarp.blogspot.com FOARP

    @Charles Liu -
    “Citing FOARP to prove Rein is “unpopular” is like citing David Duke . . .”
    Stay classy Charles.
    @Allen – Were Rein criticising the Chinese government, rather than praising it, you would be the first to point out his mistakes – and you would be right to do so. Instead I see you lavishing praise on articles which are, by any standard, inaccurate and poorly conceived. To me, this is somewhat hard to understand.
    Tell you what, I’ll tell you which of my comments on your blog were blocked in their entirety (not partially deleted) when you tell everyone where it is that Dan made “false accusations” about Shaun Rein – deal?

  • Aaron

    I hope you put these following comments up in bold letter:
    EVERYONE, JUST CHILL!
    (and Dan, turn the other cheek. Excessive disection of other people’s material can also seem reductive and personal, even if you didn’t mean it as personal.)
    Can’t we just all get along? (Just say, disagree).
    I fear the type of heated rhetorics in discussions of China is indicative of how difficult is it to have rational conversations about serious topics.
    Peking Duck (and others) regularly throw out “Apologists” type labels against their critics. And Mr. Rein throws out a few of his own.
    All of these labels frankly sicken me.
    I ask a favor from all of the commentors, to stop with the use of these labels, PLEASE!
    If you want to disagree, just disagree, and state your reasons. Seriously, People.

  • http://www.foarp.blogspot.com FOARP

    One other thing – count me as someone who’s bullish on China IP as well, at least in the patenting field. Every week I deal with Chinese patent applications and professionals, and my experience is, in the main, quite positive. I would definitely say that the standard of examiners at SIPO is higher than at the USPTO, at least the ones who I have dealt with. The clients I’ve worked with (including Panasonic and Sharp) are also quickly expanding their China patent portfolios – and every one of those patents represents a potential 20-year bet on the Chinese patent system.
    But if someone in business or government were to tell me that, from his or her perspective, the environment for copyright or trademark enforcement were worsening, I’d shut up and listen, not accuse them of speaking out of anger, fear, or political bias.

  • Anon

    ”I put Rein in a particular category of China expats made up of people who have left the United States for China, for whatever reason, and now, for whatever reason, want everyone to know how great they are for being in China and how much better they are than everyone in the United States. This category of expat feels that to convince people of this, they must always side with China and against the United States, no matter what.“
    Right on with this general sentiment, whether or not appropriately applied to Rein.
    Great analysis and discussion–although I would ask: where has it been for the last two years? To be honest, I was a bit surprised to find this here, as much as I enjoy reading CLB. Rein’s brand of approach to the currency issue has been a pet peeve of mine as long as currency has been an issue. I’m also not sure why we have to be so critical of him alone. This is an all-too-common brand of nonsense that any number of people–from journalists, to lawyers, to think tanks, to politicians, to policy makers–have been pedaling on a regular basis for a long, long time now. It’s also not isolated to the currency issue. US-China issues are and always have been particularly vulnerable to manipulation by the politically motivated or the just plain misguided. I don’t know exactly why, but it seems that more than any other international issue, US-China issues always sink into a semi-Orwellian intellectual nether region where facts, logic, and common sense get chewed up and regurgitated into an indecipherable jumble of doublespeak and delusion…And people buy it. I see no need to single out one reporter or commentator among many for contributing to the mess.

  • http://pekingduck.org richard

    @Charles Liu
    You were never banned. Maybe put on a comment moderation list, but never banned. People disagree with me all the time, just check my “colorful” comment threads.
    @anon
    Shaun really has tweeted that “Richard Burger is old”? If so, he’s even classier than I’d thought.
    Superb post, Dan, as usual.

  • Allen

    @Dan (ii),
    My reply was in response to what I interpret to be a comment on China’s progress in IP.
    Let’s quickly recap our discussion to hopefully clarify:
    Shaun:
    —————————–
    Listening to many of the other speakers, I was surprised at their anger and fear towards China. I had hoped that rhetoric would dissipate after the mid-term elections last year. Many attribute China’s boom as a result of stealing American jobs and intellectual property, rather than efficient economic policies and hard work ethic.
    —————————–
    Dan:
    —————————–
    I question this statement on two grounds. First, I question whether “many” really do attribute China’s boom to “stealing American jobs and intellectual property,” as I have never heard anyone draw that sort of causation. I find it difficult to believe that any of the speakers at Mr. Rein’s event actually said that the reason for China’s boom is its “stealing American jobs and intellectual property.” On the flipside, I have also never heard anyone completely discount China’s economic policies and work ethic as contributing causes to China’s economic success, as Mr. Rein suggests “many” do.
    —————————–
    What Shaun wrote resonate greatly with what I see of IP discussions. Hence I wrote:
    —————————–
    I’d like to briefly touch on the issue of IP, as I think it will loom large in the future (if it has not already) of the relationship between U.S. and China. The American side unfortunately almost exclusively see IP as a win-lose proposition. Every IP China gets from America for free is an asset and revenue stream lost. When China uses IP from others without paying, China is stealing ideas and jobs to build its own economy at others expense. It never ceases to amaze me how we as a society got to such zero-sum thinking on the use of ideas when the reason we even have IP (as a policy) is because ideas are non-rivalrous and non-exclusive to start with!
    A cursory search of Internet also give you these two reports.
    http://www.economicpopulist.org/content/if-you-cant-build-economy-steal-one (If You Can’t Build an Economy, Steal One)
    http://www.npr.org/templates/story/story.php?storyId=5006911 (U.S. Attache: Piracy in China Hurts Growth)
    There are many others. I don’t think Shaun’s quote about IP is that far off at all.
    —————————–
    Your next response then (at least for me) threw things slightly into a tangent, about China’s progress – things getting “better” – which never Shaun nor I alluded to.
    —————————–
    I don’t think Mr. Rein’s quote about IP was far off either. I think those who say IP protection is getting better in China have a point and those who say it is not getting better also have a point. I actually tend to side with Mr. Rein on this as I think it is getting better. It has certainly improved in the last five years. But that is my point. My point is that it is a pretty close call so there is certainly no need to belittle those with whom we disagree.
    —————————–
    Nevertheless, I think the tangent is important, as it elicits to a fundamental schism that exists between developing and developed world’s perspective about IP. Whereas the developed world prefer to frame IP striclty in terms of trade issues, the developing world on the whole see sees IP for what it really is (at least how IP is justified domestically here in the U.S., as a policy tool to incentivize economic development and innovation) – hence the recent movement calling for access to knowledge (http://www.cptech.org/a2k/) and IP to serve a development agenda (http://www.wipo.int/ip-development/en/agenda/) instead of merely large multi-national corporate interests.
    We can go round and round, but I don’t think anyone would be interested in that. So let me just focus on the first point, your taking Shaun to task on the fact that China has been smeared for stealing jobs and IP.
    The last election cycle has seen people denigrating China for stealing from America, jobs, IP, everything you can think of. Many have written about it (see, e.g., ESWN (http://www.zonaeuropa.com/20101010_1.htm) or this op-ed (http://www.mlive.com/opinion/grand-rapids/index.ssf/2010/10/editorial_curing_michigans_chi.html)). Some have predicted such anti-China “rhetoric” to subside (http://www.reuters.com/article/2010/11/03/us-usa-elections-china-analysis-idUSTRE6A21K420101103), but if Shaun did not see that happening in the conference, it would seem to me perfectly within his prerogative to comment on that…
    Best,
    Allen

  • jim1980

    Dan basically questions every Shaun’s statement by raising doubt without fact to disprove Shaun’s statement.
    Let’s exam a couple of Dan’s statement and question validity of his statement.
    Exhibit 1) “Nonetheless, this paragraph concerns me because in it Mr. Rein seems to
    categorize those who disagree with him as spewing “rhetoric, and implying that the
    only reasons for their doing so are political”
    Where did Shaun said politic is only reason and did he said that anybody who does not agree with spewing “rhetoric”? Please point out for me the statement not your opinion. You are using your loose interpretation of his statement and change his meaning.
    Exhibit 2) “First, I question whether “many” really do attribute China’s boom to
    “stealing American jobs and intellectual property,” as I have never heard anyone draw that
    sort of causation. I find it difficult to believe that any of the speakers at Mr. Rein’s event actually
    said that the reason for China’s boom is its “stealing American jobs and intellectual property.”
    Were you there for the meeting? So are you imply Shaun’s statement is wrong or worse imply Shaun is a liar because you don’t see it your personally? Can I said that your statement is wrong because I do hear many Americans express that view personally?
    It is statements like above makes ChinaLaw blog looks petty. It is ok to argue about the fact. But if it is observation or personal opinion, I am not sure the point of argument since there is no right or wrong answer.

  • Dan

    @ Timothy
    I take very seriously what you have said. I don’t know you but the way you said it makes me think you are a serious person. I agree with you that I was too strong on that sentence and I apologize for that and I have gone back and toned it down considerably. I kept the word “spew” simply because that word so often goes with rhetoric.
    I absolutely agree with you that Shaun Rein has something to say about China and I say that a number of times in both my post and my comments. I greatly respect his positions. I just wish he were not so harsh towards those with whom he disagrees. And here I am referring not only to his article, but also to the way he has directly treated others who have criticized him.
    I do hope you remain a loyal reader as the last thing we want are those who always agree with us.

  • Dan

    ChinaMike
    NOTE: When ChinaMike refers to CLB’s rules, he is referring to the fact that we chopped off much of his comments as being too harsh against Mr. Rein.
    When you say Mr. Rein has crossed “lines” I am curious to what lines you are referring.

  • Dan

    @ Aaron
    I really do not think it is a question of turning the other cheek. I didn’t mean it as personal and I think it a shame that you viewed it that way.
    I also think your comment about Peking Duck is unfair. I definitely agree with you in not siding with those who loosely call people apologists, but I have never seen that tendency in Peking Duck. I tried to find out if he had ever called Mr. Rein an apologist and the closest thing I could find was the following:
    “Let me close by saying I’ve had to deal with being called an apologist for three years now. I always strive to give a balanced picture of what I perceive to be happening in China, explaining in my Tibet posts, for example, that you absolutely must look at it from Chinese eyes and put aside romantic Western stereotypes. To some, any positive words about the Chinese government makes you an apologist. So it’s not a term I toss around lightly. I urge you to read Shaun’s teenage boy column and determine whether it crosses the boundaries of admiration and wades into the waters of unabashed apologism. Your call. I won’t say a word.”
    And this was in the context of a Sinaca podcast dealing with the term apologist and I believe Mr. Rein was part of that podcast and was so because he had been called that. I have never called Mr. Rein that and I doubt I ever would because I think terms like that generally shut down discussions, rather than advance them. So I completely agree with you in hating terms/labels like that. I note that I didn’t use such terms.

  • Dan

    @ FOARP
    I agree with you on all counts re China IP. I too am bullish, but “if someone in business or government were to tell me that, from his or her perspective, the environment for copyright or trademark enforcement were worsening, I’d shut up and listen, not accuse them of speaking out of anger, fear, or political bias.”

  • Dan

    @ Anon
    I too loved that comment about how there is a “particular category of China expats made up of people who have left the United States for China, for whatever reason, and now, for whatever reason, want everyone to know how great they are for being in China and how much better they are than everyone in the United States. This category of expat feels that to convince people of this, they must always side with China and against the United States, no matter what.” I too am not prepared to say this applies to Mr. Rein.
    I think you are right to ask where this “great analysis and discussion … has been for the last two years.” The truth is that I have never wanted this site to focus on the “big” China issues. First off, its focus is on China law, with a bit of China business. Second, I do not think of myself as qualified to discuss most of the “big” China issues. I am not a political scientist and my knowledge of China politics is fair at best. I am not an historian and my knowledge of China history is fair at best. I am not an economist and my knowledge of China economics is nothing as compared to the Michael Pettises and Patrick Chovanecs of the world, who actually know and study China’s economy. So I have always preferred to leave the big issues to others.
    I stepped in this time because I have been reading Mr. Rein’s columns for quite some time and I have often found them unfair and inaccurate and this time I found it particularly so. I just could not believe someone was actually claiming that the value of the renminbi would have absolutely no impact on U.S. jobs. I found that intellectually dishonest and since the value of the renminbi is something of relevance to all of our readers, I stepped in.
    I also agree with you that “US-China issues are and always have been particularly vulnerable to manipulation by the politically motivated or the just plain misguided” and that they tend to “sink into a semi-Orwellian intellectual nether region where facts, logic, and common sense get chewed up and regurgitated into an indecipherable jumble of doublespeak and delusion.”
    You then say you “see no need to single out one reporter or commentator among many for contributing to the mess” and I don’t think I have done that. I am not saying Shaun Rein should be singled out for contributing to “the mess” and I’m not even sure he is contributing to the mess. I just dealt with his article because it was so clearly extreme on the currency issue, and yet it was a column on a well-known mainstream media site.

  • Dan

    @ Richard,
    Thanks for the kudos.

  • Richard (not the Peking Duck)

    Dan,
    Man, that was a cathartic blog post. Really nice to see Mr. Rein’s haphazard “journalism” methodically taken apart (and so politely too).
    I do wonder if Mr. Rein has ever actually spoken to anyone in manufacturing . The value of a country’s currency is just one of many, many things on the list of considerations when deciding where to manufacture.

  • Anon (Alex Z)

    FOARP is a cowardly troll who uses a pseudonym to cover up his real identity and uses his online presence to make false accusations about China bloggers and businessmen he doesn’t like. He’s destructive, and deliberately self-serving in his attempts to make a name for himself.
    Dan also has an occasional irritating tendency to criticize other people and businesses online in personal attacks. Shaun Reid is entitled to his opinion without having to be savaged.

  • Anon

    I do not understand why some people are getting so mad at this one post. Sure Dan went after Shaun a bit hard, but all of that was done on what Shaun himself wrote and there nothing on what he says or does outside of his columns. I have been reading Shaun’s comments on Twitter and his only reaction is that Dan “misunderstood” what he was saying. If Shaun wants to come on here to refute this post I am sure Dan would let him or he can always write something similar about Dan on CNBC. I have learned a lot from this row and I hope it continues. It’s about time we got some excitement and real writing on something that is usually so boring and both Shaun and Dan deserve credit for that.
    For the record, I am staying anonymous here because I know and think highly of both Dan and Shaun and I don’t want either of them to think I am favoring the other. Both Dan and Shaun are tough, take no prisoners type of people, but I don’t know many people smarter than either of them.

  • Vivian

    Shaun Rein was making up things and Dan called him on it and then Rein starts pouting. End of story.

  • Aaron

    @Dan,
    I disagree,
    Richard at PekingDuck may not use “apologist” so much in his own posts, but he implicitly endorses his commentors who throw that label loosely and often all over his blog.
    For example
    SKC writes
    “Your conclusion that CCP is motivated by fear for its self-interest is offensive to the victims of this belief.”
    —is it? If someone dies in attempting to fully practice their religious beliefs, is that offensive to them? On the other hand, I can certainly see it being offensive to the CCP, and to her apologists like you. So be it.
    February 15, 2011 @ 4:57 am | Comment
    20 By Richard
    SKC is totally right. A sudden burst of compassion for the health of its citizens is not the motivating factor behind the CCP’s assault on the FLG. If it were, they’d do much more to end life-threatening pollution and unsafe working conditions. This is an excuse that gives them free license to repress the FLG, pure and simple.
    -
    Let’s just say that when other people use “apologist” label to lump opinions they disagree with, PekingDuck does not protest very much (or at all), but gets quite upset with Mr. Rein’s “one-sided-ness”.
    I’m glad to see PekingDuck post a blog as a tone-down on the use of the label “apologist” on Mr. Rein, AFTER that label has been so thoroughly abused on PekingDuck against other commentors.
    Well, some may say, It’s not Richard’s job to police his own blog comments?
    Well, I may say, how he responds to those comments reflect his own opinions.
    At the very least, how he “yields” to the “American Public opinion” present on his blog reflects on his opinion.
    You may view the “American public opinion” as better than some of us have seen, but You may not realize how the “American public opinion” has shown through on the comments on your blog and PekingDuck.
    That perception, as they say, is reality.

  • Aaron

    Incidentally, RE copyrights violation article you cited,
    The topic of effects and extent of copyright violation by China is very heavily disputed issue, even in the US legal community.
    AIPLA had published an article about a year ago, estimating total copyright IP theft in the world in major economies.
    Copyright IP theft in China tend to be more visible, as in the street vendors.
    However, US, Europe and Russia have far more extensive IP theft hidden in P2P file sharing, and movie/game encryption hacking. (in terms of dollars). One only need to look around the new IP violation technologies. They are ALL coming from US, Europe and Russia, not from China. (Some new movies are being pirated on BitTorrent even before release date, from stolen copies from editing rooms).
    Entertainment industries are more concerned about BitTorrent technologies, and have recently pushed for a lot more laws to curb the use of P2P, and filed a lot of lawsuits.
    As an IP law professional, I would strongly suggest that People do not jump into vague conclusions of IP theft in China. (And we are only discussing copyright here.)
    IP theft is now on INTERNET, thus in the world in general. It’s not isolated to one nation or area.
    If one wants to say that IP theft has contributed to China’s growth, that’s generalized, and one can say the EXACT same thing about every other country.

  • Dan

    @ Richard (not the Peking Duck)
    It was somewhat cathartic in that I have been troubled by a number of Mr. Rein’s previous articles and by a number of other writers who act as though anyone who questions China is either an idiot or just being duped by the politicians.
    I really did try my best to be polite because the issues here are what Mr. Rein writes, not who or what he is. I actually had two people in my office review the post before it went up, with the explicit instructions to make it as polite and non-personal as possible. Nice to see we succeeded.
    Also nice to see that you agree with me regarding Mr. Rein’s tendency to be “haphazard.”
    Though his articles might make you “wonder if Mr. Rein has ever actually spoken to anyone in manufacturing,” I am convinced that he must have, that not necessarily regrading what it is they look at in determining where to locate. I completely agree with you that “the value of a country’s currency is just one of many, many things on the list of considerations when deciding where to manufacture.” Do you agree with me that a rising Renminbi will have at least some impact on American jobs?

  • Dan

    @ Aaron
    I am not prepared to debate you regarding Peking Duck because I have not read all of his posts and all of his comments and I am not willing to do the research to be able to take part in this debate. What I will say is that I have a great deal of respect for Richard and I like him personally. This absolutely does not mean that I agree with him on everything or even the majority of things. I think our views are in many ways very different. But what I really appreciate about Richard is that he allows and encourages the expression of so many different viewpoints on his blog AND he does not typically make personal attacks against people for their views. He (and I) can be tough on people for their views but I see a big difference between being tough on people for their views and being tough on people. I really tried not to be tough on Shaun Rein with my post, but to go after him with no holds barred for what he had written.
    I am not sure what you are trying to say about what you call American Public Opinion. Your statement that I “may view the “American public opinion” as better than some of us have seen” makes no sense at all. American public opinion is one thing and what you may have “seen” is another thing. I don’t know what American public opinion is on the things on which Shaun Rein wrote because I have never seen any surveys on that. What I resent from Mr. Rein and to the extent I understand what you are saying I resent from you, is this taking what some politicians have said about China and then painting the United States as a bunch of unsophisticated, racist idiots. I resent this because I view it as both untrue and elitist. Say what you will about the United States, but I think we are one of the most open and welcoming countries in the world and the only reason you hear so much from those who are not is because so many are. In so many countries, the idea of letting in a massive number of immigrants of different races and religions and cultures and engaging in free trade isn’t even on the table, so there is no point in complaining about it.

  • Dan

    @ Aaron (ii)
    I do not dispute a thing you say, which goes back to what I said in my post. China does violate IP laws (so do other countries) and therefore it isn’t fair to act as though those who comment on this are clueless.

  • ChinaMike

    Dan, you were right to edit my comment. I let my emotions get the better of me and that has no place here. I am sorry for that.
    In regard to crossing lines: I am referring specifically to the difference between tastefully, tactfully and humbly selling your self and incessant self-promotion, self-aggrandizement, incessant referrals to your superior education, constant hyperbole to get attention and playing loose with the facts to get even more attention.

  • Aaron

    @Dan,
    “China does violate IP laws (so do other countries) and therefore it isn’t fair to act as though those who comment on this are clueless.”
    It would be more fair to say that Americans, Europeans also violate IP laws quite extensively, (more than China by some measures), and not approach it as a “China’s IP violation” issue.
    It’s a fundamentally an internet and World IP theft issue now.
    If one is approaching the problem with only a subset of world data for commenting, then it is rather one-sided, and not even-handed.
    -
    Not saying your commenting on China’s IP violation is clueless.
    But if I say it’s world IP problem, a typical response from some commenters probably would be the “apologist” label. (That WOULD be a clueless response. That would not be a legitimate rational comment).
    And I would say, the record is ample that Mr. Rein has been called an “apologist” by many commentors, and I might consider ALL those use of such a label on Mr. Rein as “clueless”, NOT because they commented on the issue, but because their use of such a label on Mr. Rein is an indication that they don’t know how to respond with reasonable arguments.
    Obviously, if they had any “clue”, then they wouldn’t have to use such a label.
    Also obviously, Mr. Rein might have a hard time “turning the other cheek” as you do.

  • Dan

    @ ChinaMike,
    Glad you understand.

  • Dan

    @ Aaron
    I am not sure what you are trying to accomplish with your comment.
    If you want me to say China is not the only country with IP issues, I’ve said that. If you want me to say that IP issues are getting better in China, I cannot speak to that one way or the other. I can say that enforcement in the courts and by the government is improving (I have said this in manhy posts) but on the flip side, my clients report that there is still a hell of a lot of copying going on in China these days and I don’t think anyone knows whether it is getting better or worse because I don’t think there are accurate numbers out there. It is a China IP violation issue because this blog is about China. For instance, I know for a fact that there are a whole lot of IP issues in Russia, but I am not writing about it because the title of this blog is China Law Blog, not Russia Law Blog. If you want the world to know about IP violations by Americans and Europeans, you are going to have to write about it because that is just not my turf. To accuse me of not being even-handed because I write about China IP issues and not those of the other countries in the world is ridiculous.
    I never called you an apologist though, nor did I even think it. As I have previously said, I have NEVER (as in NOT EVEN ONE TIME) used that word on this blog to describe anyone. I don’t like that word as I view it as an excuse for not engaging in real analysis or criticism. On the flip side, I do not like it when people accuse Americans of holding a particular view of China because they are stupid or sheep. Comments like that kill the discussion rather than advance it. So I agree with you when you say that responding to your views with the apologist label would “not be a legitimate rational comment.”
    I have no idea what the record is regarding Mr. Rein having been called an apologist. You say he has been called that by many and I believe you. But I have never called him that nor am I likely ever to call him that. And though I am not a fan of that word and do not myself use it, I am not going to condemn OR defend those who have called Mr. Rein an apologist because I have no idea what the context of those comments were and that can matter. I will say, however, that I am guessing you are right that those who called him that did so because “they don’t know how to respond with reasonable arguments.”
    I have never criticized Mr. Rein or anyone else for having “failed to turn the other cheek” and I really don’t know whether he has done so or not done so as I am not even sure I know exactly what that means. All I have been saying is that I would think more highly of Mr. Rein’s columns if he would focus more on really analyzing the issues and providing strong factual support, rather than in trying so hard to let everyone know he is smarter than those who disagree with him.
    Do you have a problem with that?

  • Allen

    Dan, my last comment hasn’t shown up yet. Can you check to make sure it gets posted? Thanks, Allen

  • Aaron

    I don’t have a problem with your comments or anyone else’s “comments”.
    I do have a problem with some people’s use of labels, such as “apologist”.
    Let’s just say that People who use such labels as their opinions are pretty clueless. That is self-evident.
    -
    Not accusing you of any thing.
    And I let the comments on PekingDuck (and other blogs) speak for themselves.
    (Whether those comments are representative of anything, any opinions, or any statistical relationships, I hold no judgment.)
    (But as an interesting thought, if someone did publish an article on the Problem of Personal labels in PekingDuck blog, using statistics, relative to nothing else, would that be a fair discussion, or a one-sided? Just a thought).
    -
    Again, I don’t have a problem, and I’m not accusing you of anything. You try to be “even-handed”, that’s good enough for me.

  • Dan

    @ Allen,
    The only comment I show for you is the one you left yesterday re FOARP. There is nothing in the hopper and I don’t recall seeing anything. You are going to have to leave it again. Sorry.

  • Dan

    @ Aaron
    I appreciate your comments but I do think they are misdirected since I have never called anyone an apologist on this blog. I am not even sure I have ever even called someone that outside of this blog.
    In response to your question as to whether if someone were to “publish an article on the Problem of Personal labels in PekingDuck blog, using statistics, relative to nothing else, would that be a fair discussion, or a one-sided,” I would say it could go either way. If the article did not attribute the comments to someone who didn’t themselves leave the comments (i.e. to Richard) then I can certainly see where it would be fair. I will also state that I see a difference between fairness and one-sidedness. I try to be fair on this blog but on issues on which I am passionate, I make no real effort to be anything other than one-sided.
    Let me give you an example of how that might play out. Let’s say I were to write a piece complaining about sexism. I would not make any effort to argue the other side which might seek to justify it. However, I would strive to be fair in that I would do my best to get the facts right. So if by saying I try to be even-handed you are saying I try to be fair, then I greatly appreciate that and i truly appreciate that youu think that.

  • Allen

    Dan, my comment about IP still hasn’t shown up yet although my request for that to show up has. Please check and let me know if I need to repost. It was not a short comment. Thanks, Allen

  • Shiva

    Great post from Dan. Huge volume of traffic, good performance on the search engine rankings and hitching a ride on CNBC’s coat tails. All very impressive.
    Yet at what cost? Shaun Rein is a respected, Harvard educated professional with his own Market Research firm in Shanghai. He gets paid for his opinions. I didn’t see any of the courtesy that deserves. At the very least a telecon with him to expand upon what he said would have been nice. But instead we get rapid machine-gun fire criticism. Dan Harris as the Destroyer of Worlds? Shaun Rein has a business to run, employees to pay and a family to support.

  • Al

    One of the interesting aspects to the currency debate is that foreign companies are affected in many different ways. Even within companies there are many different factors at play. For example, if you are speaking to executives in a company primarily concerned with their US profits, then an undervalued RMB is highly beneficial for sourcing purposes. However, if you speak to China-based execs looking to grow their China business, a strong RMB could either be highly beneficial or possibly neutral (in the unlikely case that all of their manufacturing is based in China). Regardless, based on my experience working with a wide range of multinational executives, it is impossible to imagine that 80% hold any unified opinion on the RMB valuation. I even doubt 80% of the people in any single Fortune 500 company hold the same view, with the possible exception of a Boeing-type company that does virtually no China sourcing.

  • Dan

    @Allen,
    Did you see my response? We never got it so you will need to re-post it. Sorry.

  • Dan

    @ Shiva,
    I have responded to every single comment left on this post but yours is so ridiculous I am tempted not to respond. Are you actually saying that because Mr. Rein went to Harvard and works for a living withe a family to support he should be immune to criticism? That is a bizarre argument. Had he gone to Princeton, would he be entitled to the same immunity? What about Stanford? University of Virginia? I am just trying to figure out where it is that line should be drawn. And are you saying that we should only criticize the unemployed and those who are rich enough not to need to work? Weird. Very weird. Please do tell me more. I would love to know what sort of background you come from that has caused you to think this way and whether you qualify as one of those people who should never be criticized. I don’t think I qualify and I certainly hope that I don’t because much of what I have learned and much of my improvements have come from being criticized by others.

  • Dan

    @ Al,
    I agree with you 110% but raise you one in that I doubt even 80% of the people at Boeing would have the same view on the issue.

  • Hillbilly

    Very nice discussion in most respects, especially in the degree that Dan grasps the feedback effects of job relocation on trade flows. After reading the original article I can see why Mr. Rein he does what he does. He has excellent marketing skills though, which is paramount in his field I suppose.

  • Shiva

    @Dan – You’re losing the plot. Of course it makes no difference if he went to Harvard or Princeton. The point I was making is that he is obviously well educated. Not only that – he runs a successful business in Shanghai. He is a professional. He spends time and effort on his thoughts and is entitled to share them. You do not have to agree, yet to compare, I found your remarks lacking in courtesy.

  • http://www.foarp.blogspot.com FOARP

    “FOARP is a cowardly troll who uses a pseudonym to cover up his real identity and uses his online presence to make false accusations about China bloggers and businessmen he doesn’t like. He’s destructive, and deliberately self-serving in his attempts to make a name for himself. ”
    Right, so let me get this straight, I’m a cowardly troll because I post anonymously, but I’m also self-serving in my attempts to make a name for myself?
    So far I can only think of two “businessmen”, other than Rein, who I have made posts critcising:
    One is a guy who used to falsely tell customers that he could get them access to senior government officials to ask questions in strict confidentiality, even to the extent of publishing faked interviews with them. A guy who used to threaten bloggers like Wang Jianshuo with legal proceedings, and with being falsely reported to the police as undercover journalists. A guy who used fake handles to astro-turf every post and every China-related website with comments praising his work. A guy who advertised himself as a legal and accounting professional with two university-level degrees when he in fact he left school at 16, had no relevant professional qualifications, and no relevant experience in law or accountancy before coming to China.
    The other is a guy who, according to court documents filed in the State of California, has been accused by at least three branches of the US Better Business Bureau of running “a sophisticated network of online scams that prey upon vulnerable job-seekers with unlawful, unfair, and fraudulent business practices.”
    I’m no hero, but I don’t think I was being unfair to these gentlemen by working to expose them.
    Rein is not a fraud like these two, but at the very least, his articles often contain glaring inaccuracies which deserve to be exposed.
    “Dan also has an occasional irritating tendency to criticize other people and businesses online in personal attacks. Shaun Reid [sic] is entitled to his opinion without having to be savaged.”
    No. Rein absolutely deserves to be savaged if he posts opinions which have glaringly obvious flaws (like arguing that the US should give the Chinese government an easy ride on IP/currency issues because of advancements in sexual equality when these are totally unconnected). Dan was a pussy-cat compared to what I would have written had I gotten there first.

  • Jon Sadler

    Kudos to you Dan, I also get sick to the back teeth of “China hands” like Shaun Rein sitting in their Shanghai & Beijing offices demonstrating they know crap-all about China. My small office regards you as a China Legend and the only blogger who sticks up for the Small American businessman. The others are Fat Cat phonies only interested in their egos. Keep sticking it to them. You know China far better than those guys do.

  • Dan

    @ Hillbilly
    Thanks for the kudos.

  • Dan

    @Shiva (a/k/a John Tsang),
    So let me get this straight, if someone is “well educated” and “spends time and effort on his thoughts” then we are not entitled to criticize them. It sounds like that is what you are now saying, which really is no different than what you were saying before. So what constitutes being ‘well educated” enough such that one becomes immune to criticism? A bachelor’s degree from a top school? A Masters degree from a good school? A Ph.d from a mediocre school? Gosh, I have two very good degrees of which I am quite proud….why do they not qualify me to not be criticized by you? You are criticizing me because you disagree with me and you think I am wrong. I am fine with that and I am guessing you would think I am wrong no matter if I had never even attended college or if I had Ph.d from MIT in physics. So why do you keep harping on education?
    Same with your claim that Mr. Rein “runs a successful business in Shanghai.” Does this mean he is NEVER wrong? Does this mean we cannot criticize him. I too run a successful business and I am wrong dozens of times a day, in work, at home, with friends, on this blog, in my thoughts, in my actions…. I am dying to know your background that makes you think criticism is so horrible.
    You say Mr. Rein is “entitled to share them” as though I ever questioned that. OF COURSE he is entitled to share them. I encourage him to share them. I applaud him for sharing them. I respect him for sharing them. I have consistently called him courageous for sharing them. I want him to share them. I think the world benefits from his sharing them. I think it important that we be exposed to diverse viewpoints, including those with which we disagree. I have said again and again and again that I think it great that Mr. Rein takes views not generally held by others. We need that. Badly.
    When George McGovern was a U.S. Senator, I always considered him to be one of the most important and best senators we had, even though I almost always disagreed with him. I liked him so much despite the disagreements because I thought he was an important voice in the Senate. He was smart. He was thorough. He was honest. He cared. He was civil. He was respected. And I always used to say that even though I mostly agreed with him, he was even sometimes right and we needed him out there on the left to keep us all honest.
    I am not going to put Mr. Rein in the same league as Senator McGovern, but I do think his is an important voice out there. There are very few well educated American businesspeople who take the positions he does and it is important that he do so because the rest are going to be wrong sometimes and we need people like Mr. Rein to keep trying to point it out. So please, whatever you do, don’t accuse me of trying to shut him down or of ever claiming he is not entitled to speak out. Those sorts of accusations are entirely false, but they sting nonetheless.
    Lastly, you say you found my remarks lacking in courtesy. All I can tell you is that I tried my utmost to be as courteous as possible in this post. I actually asked two people in my office to review it for that alone. I am curious which remarks you found discourteous. Will you please call those out for me?

  • Dan

    @ FOARP
    I know why you have to maintain anonymity and I have no problem with that.
    I think this is the first time in my life I have been called a “pussy-cat” and I am not sure whether to thank you for it or cut off your knees.

  • Dan

    @ Jon Sandler
    Thanks for the over the top kudos.
    Much appreciated.

  • Ben Fulladen

    @FOARP – China investigator par excellence. Keep up the good work exposing the wannabes and sticking it in their ass. These “old China hands” – and we know who you are talking about — deserve to be shot down in flames. The revolution against these egoists and blog heavy idiots needs to be curtailed just as we found out the liars in Libya and Egypt.
    Dan is the Wikileaks of China biz, and you are definitely one of the honored generals. I’m fed up of being lectured to by people like that. Time Dan was on CNBC and the old guard dismantled, they know nothing and are supremely arrogant in their views.
    China Law Blog is where to come for unbiased opinion and the truth about these imposters. Can some US networks & blogs please take note. Time to boycott CNBC.

  • Dan

    @ Ben Fulladen,
    Whoa, whoa, whoa.
    I don’t think we have ever “exposed” anyone on here unless you are saying that our views on issues constitutes the exposing.
    I also do not think we should be dismantling anyone and I think I am too old to be part of any “new guard.”
    I also do not think our opinions are any more “unbiased” than anyone else’s.
    And please, let’s not boycott CNBC, which has actually had me on a few times to discuss China and asked me many more times than that. It’s important to have a diversity of viewpoints on China, don’t you think?

  • Allen

    Dan, here is my re-post of a comment I posted 2 days ago in your bid to seek “clarification” regarding my comments about IP.
    I feel as if we might going around in circles, so let me re-trace our conversation, starting with your quoting Shaun:
    Shaun:
    —————————–
    Listening to many of the other speakers, I was surprised at their anger and fear towards China. I had hoped that rhetoric would dissipate after the mid-term elections last year. Many attribute China’s boom as a result of stealing American jobs and intellectual property, rather than efficient economic policies and hard work ethic.
    —————————–
    Dan:
    —————————–
    First, I question whether “many” really do attribute China’s boom to “stealing American jobs and intellectual property,” as I have never heard anyone draw that sort of causation. I find it difficult to believe that any of the speakers at Mr. Rein’s event actually said that the reason for China’s boom is its “stealing American jobs and intellectual property.”
    —————————–
    Allen:
    —————————–
    I don’t have time to respond point to point to your (in my opinion false) accusations…
    But I’d like to briefly touch on the issue of IP, as I think it will loom large in the future (if it has not already) of the relationship between U.S. and China. The American side unfortunately almost exclusively see IP as a win-lose proposition. Every IP China gets from America for free is an asset and revenue stream lost. When China uses IP from others without paying, China is stealing ideas and jobs to build its own economy at others expense. It never ceases to amaze me how we as a society got to such zero-sum thinking on the use of ideas when the reason we even have IP (as a policy) is because ideas are non-rivalrous and non-exclusive to start with!
    A cursory search of Internet also give you these two reports.
    http://www.economicpopulist.org/content/if-you-cant-build-economy-steal-one (If You Can’t Build an Economy, Steal One)
    http://www.npr.org/templates/story/story.php?storyId=5006911 (U.S. Attache: Piracy in China Hurts Growth)
    There are many others. I don’t think Shaun’s quote about IP is that far off at all.
    —————————–
    Dan:
    —————————–
    I don’t think Mr. Rein’s quote about IP was far off either. I think those who say IP protection is getting better in China have a point and those who say it is not getting better also have a point. I actually tend to side with Mr. Rein on this as I think it is getting better. It has certainly improved in the last five years. But that is my point. My point is that it is a pretty close call so there is certainly no need to belittle those with whom we disagree.
    —————————–
    Here I thought we went off on a little tangent with you bringing up China’s “progress” on IP – that it’s getting…
    Allen:
    —————————–
    My comments about IP is not about the “progress” China makes on IP. IP represents a set of policy tools with benefits as well as costs. In my view, it’s up to individual societies to set how those tools are used (or not used) as benefit the unique circumstances of each society. My comments are addressed to those “norms” – which are so casually bantered about here in the U.S. (what I read in NY Times, WSJ, etc.). I think Shaun’s observation about those are right on.
    —————————–
    Dan:
    —————————–
    Allen, if a country like China signs on to international IP treaties, as China has done, then it is not entirely up to them as to what IP laws they have and how they enforce them. Then you say “Shaun’s observations about those are right on,” but Mr. Rein never addressed those policy issues at all. He simply attacked those who claim China does a poor job protecting IP. I want to make clear that I do not disagree with all that Mr. Rein said; in fact, I agree with much of it. What I disagree with is his being so lose on his “factual” support and on his presenting all those who disagree with him as either idiots or Charlatans.
    —————————–
    Which brings to my last comment which has disappeared, the gist of which goes:
    ‘m glad Dan we went off on a little tangent here, because it highlights one of the disconnects in perspectives between developing and developed worlds. While people in the developed worlds would like to formalize knowledge as a distributive (win-lose) IP trade issue, developing worlds would like to focus on knowledge as an empowering, transformative tool, going back to IP policy roots of treating IP not as a natural right, as a tool to promote development.
    From the developed world, IP trade disputes is really a financial dispute in the same league as squabbles over price of steel, chicken, wheat, etc. From the developing world, it is a dispute about livelihoods, about access to knowledge (http://www.cptech.org/a2k/) and actuating a development agenda (http://www.wipo.int/ip-development/en/agenda/).
    OK I admit China is not really a developing country per se. It is probably unique in itself in its pace of development as well as its sincere desire to adopt IP to promote development. Still that does not mean the developed world’s use of “piracy” as the only means of characterizing any “free” use of ideas to be correct. As I alluded to in my first comment, knowledge and ideas are naturally non-rivalrous and non-exclusive, all the rules we make about knowledge is meant to promote development – and to the extent it does not, those rules should have little normative pull and should be changed.
    Rather than my going on more tangent, let me refocus on conversation to the very first point again, you taking issue with Shaun’s characterizing America perception of China stealing jobs and IP.
    As you know, we’ve just had an election cycle, where China has been trashed as stealing all sorts of things from America – jobs, IP, whatever. Many have written about it (see, e.g., http://www.zonaeuropa.com/20101010_1.htm, http://www.nytimes.com/2010/10/10/us/politics/10outsource.html, http://www.voanews.com/english/news/usa/US-Campaign-Attack-Ads-Take-Aim-at-China-105062199.html, http://ncp.pcaaca.org/presentation/highly-charged-political-rhetoric-trade-politics-scapegoating-china-during-2010-us-midt).
    Viewed against this background, if Shaun does not see much improvement, I think he has all the right to point out what he thinks as American misperceptions.
    You also took issue with Shaun’s use of the word “rhetoric,” but the truth is that many others have already written about looking for this “rhetoric” (http://www.reuters.com/article/2010/11/03/us-usa-elections-china-analysis-idUSTRE6A21K420101103) before Shaun.
    You are right on one thing though, when Shaun says, “Many attribute China’s boom as a result of stealing American jobs and intellectual property, rather than efficient economic policies and hard work ethic,” he probably does not mean “everyone,” as in Commerce Secretary Locke or Barton Biggs. As you already stated, Locke as is a pretty measured man.
    But again I don’t think Shaun did. It was you who mentioned them by name, attributing them to Shaun, when Shaun only used the word “many.”
    Maybe I am missing something here, but I feel you are making up presumptions, attributing them to Shaun, and then attacking Shuan as if they had been made by Shuan all along.

  • Clive Linehan

    Dan,
    Having a go at established China Hands is a joyous thing to behold. Keep it up!

  • Stephanie F.

    Dan,
    You certainly have gotten more abuse than I would have expected from putting up an excellent and thorough and (near as I can tell) accurate counter-analysis to a CNBC column. You dealt only with the issues not the person and I think both the pro- and the anti-Shaun Rein commentors on here are off and trying to generate controversy where there really should be none. This should never have turned into a Shaun Rein issue at all and I do not fault you for that having occurred. I for one sometimes agree with Shaun Rein’s articles and I sometimes disagree with them. I don’t know him personally. My view of him before all this was that he does need to be more careful in his writings, but that is true of everyone who has to get something out every day or every week for their publication. That is very difficult and mistakes will be made.
    Nothing in the comments is going to sway me one way or the other on this obviously polarizing figure. I like him for staking out his strong opinions but I wish he would back them up with more substance.

  • Bolshevik Vic

    Dan, concerning FOARP and your comment ” I know why you have to maintain anonymity and I have no problem with that.” One suspects that if certain people found out his identity he’d be hit rather quickly with writs for libel from some members of the China business community. Its interesting you host people like that.

  • Eric Minto

    It’s a shame how the comments have focused so much on Shaun Rein rather than the real issues you wrote about, like what should the United States and the world, including China, do about China’s currency. What impact will changes have around the world. One of the reasons I am a regular reader of this blog is because both the posts and the comments are always of such a high level and I come here to learn and I usually do. The comments this time are disappointing because they almost all focus on Shaun Rein not the issues. It’s boring.

  • Dan

    @ Clive Linehan,
    Shaun Rein is really young. I think he is around 30 and has been writing his column for only a few years now. I did not intend to “go after” anyone, young or old hand. My point was to go after what I saw as loose journalism. Shaun Rein just happened to be the “victim” this time. There have been plenty of other victims in the past and there will be plenty more in the future. This post just got so many comments because Mr. Rein is so controversial and for that I say good for him. There’s an old PR maxim that it is better to be hated than to be ignored.

  • Dan

    @ Stephanie F.
    I am fine with the “abuse,” but it is more than I expected, particularly since I really really tried to make it a post on the issues Shaun Rein has raised and the way he raised those issues, rather than on Shaun Rein himself.
    You actually don’t know the half of it. I have had to delete probably around 10 comments that were filled with what I saw as unpublished vitriol against either Shaun Rein or me. Not to mention the around 10 comments I had to trim of vitriol before I could publish them.
    Good for you for sticking by your own guns on this. I’d be doing the same if I were you.

  • Dan

    @ Bolshevik Vic
    Since the inception of this blog, our policy has been not to block anybody, no matter how unpopular they are and no matter what they do on their own blog or on other people’s blogs. Our policy has also been not to block those who contribute under pen names or completely anonymously, which a large number of our readers do.
    Instead, our policy has been to block and “trim” improper and inappropriate comments one by one. When appropriate, I have deleted and trimmed FOARP comments and I will continue to do so, not based on the fact it is FOARP, but based on the nature of the particular comment.
    So when I was talking about FOARP’s anonymity, I was both referring to his particular circumstances (he told me in an email once that he choose anonymity so that he can more freely comment without it impacting his business life) and to anonymous comments in general. We judge by the comment, not the person.
    And believe me, this has gotten us a lot of heat from a lot of people. Most of the heat doesn’t bother me, but when it comes from friends whom I greatly respect, it does, but we have not backed down. For years, we used to publish comments from Mark Anthony Jones (a/k/a MAJ).
    MAJ had done at least one really terrible thing online to a friend of mine and there were many who complained about our publishing his comments. But we went right ahead and published them and they were, for the most part, really good. I seldom agreed with him but at the same time, his comments “pushed” me in that they forced me to tighten my analysis and try to see things from a different perspective. This is just one example.
    In the long history of this blog, we have banned only one person and that is someone who comes on here under a bunch of aliases with one agenda: advancing his own business and tearing down others. After having to delete hundreds of those comments, we just decided it would be easier to put up a block against his two or three different IP addresses. That’s been it.
    We do NOT host FOARP any more than we host the thousands of other people who comment. Most importantly, we do not necessarily agree with the comments left on here but whether we agree with them or not will never be a criterion for their going live. I have no idea what percent of the FOARP comments I have agreed with or disagreed with because I have never made any effort to keep track.
    Now that I have explained our policy, do you really think it fair to say we host FOARP? Do you really think we should block him? is there anyone else you think we should be blocking as well, or just him?

  • Dan

    @Eric Minto,
    You are absolutely right. People, can we return to the real issues here?

  • Gary Masterson

    I appreciate what you do and I thought this was a fantastic post. I suggest you extend to Shaun Rein the chance to write his own response as a post right here.

  • Dan

    @ Gary Masterson,
    Mr. Rein has not requested it, but that is a great idea. If Mr. Rein wants to respond here to what I have written he is free to do so.

  • http://www.foarp.blogspot.com FOARP

    @Bolshevik Vic – Despite what you might think, posting anonymously does not protect me against a bona fide defamation suit, since ISPs can be made to reveal the IP addresses, and ultimately the identity of those who make defamatory posts and comments on the internet. Even if this is not done, hosting sites can be made to remove material that is defamatory.
    Believe you me that I take the risk of defaming someone, even unintentionally, quite seriously. However, despite certain individuals claiming that they have been defamed by me (although never actually saying in what way), and despite those people having ample resources to sue me in my own home country (where the legal presumption is that defamatory statements are false until proved true), I have never been the subject of such proceedings.
    I have not defamed anyone. I do not remain anonymous to avoid legal proceedings.
    No, instead I remain anonymous to avoid the kind of extra-legal harassment much beloved of certain individuals, including empty threats of defamation proceedings designed to waste time and money; attempts to dirty my name with my employers, peers, and clients and ruin my career; and threats to make false accusations against me to the authorities, potentially endangering my home life and livelihood.
    Dan does occasionally edit my comments, but has never done so in a way which would misrepresent my opinions. It is his site, and he can do what he likes with it, I have never queried his edits or even raised the subject with him.

  • Dan

    FOARP,
    Glad to hear that my edits of your comments haven’t misrepresented your opinions. In pruning people’s comments, I may weaken them or delete them, but I strive not to change them. If i have to change them, I will delete them, which I do have to do from time to time.

  • Andeli

    Shaun Rein got angry at us hicks in the United States and lashed out at us by stretching (inventing?) the facts. CLB responded by pointing out Rein’s history of this and by refuting Rein’s article point by point. This made Rein’s cronies angry and so they bitched about it on here, at which point we common folk struck back. Nothing more needs to be said.

  • Mark McDonald

    Shaun Rein is based in China, lives there and runs a China market research practice there. He writes on what he sees and thinks. It may not be mainstream, but he is breathing the subject. Shaun Rein is criticizing Americans who live in the United States and have little or no China experience. When it comes to China, who do you think knows the subject more intimately?

  • Dan

    @Andeli,
    That’s one way of looking at it, I guess.

  • Dan

    @ Mark McDonald,
    Even if all that you say is true, don’t you think the Americans Mr. Rein is criticizing know are in a position to know at least as much about the impact of foreign currencies as does Mr. Rein I don’t see how Mr. Rein’s being in Chin automatically makes him an expert on U.S. politics and on how China’s currency will impact U.S. jobs. If one follows your argument to its logical conclusion, a 22 year old migrant factory worker in Harbin knows more about currency impacts on the United States than does the top five economists in the United States. In other words, your argument really doesn’t make much sense.

  • Mike

    With growing surprise and not a little amusement, I’ve watched this whole ‘debate’ unfold. Not being American (or Chinese), the thing that amuses –if not scares– me, is that these sorts of discussions are always so polarized, America vs China (like the rest of the world doesn’t exist), right or wrong, yes or no, stealing American jobs, manipulating currency….
    Given the assertion by some that Mr Rein is an expert because he’s edumecated and he’s in China (is that “real China” or a T1 expat bubble?) means that I must be an expert too. My expert opinion is that he’s talking out of an orifice better left to other functions, and Dan isn’t. Nothing wrong with that, really, as we all do that sometimes, usually after drinking too much, but it is a bit dim to go on-line and share it with the world.
    Dan’s dissection of Mr Rein’s assertions/case is masterful. The key to any discussion re China is that absolutes/extremes are always off the mark. There is no yes/no, black/white, etc, only maybe/somewhat and shades of grey. Mr Rein seems not to have been in China (outside bubble that is) long enough to realize this, not having gotten screwed-over often enough to demote from in-puppy-love to married-five-plus-years-level of China-infatuation. Give it time…. (or he charges wu mao for his marketing consultancy, that’s another possibility:)
    Oh, and by the way, a case could equally be made that not (just) China is a currency manipulator, but the USA is too — having the printers running 24/7 and all. The US dollar should be devalued! Same thing, different emphasis. But if we consider the price of say hamburgers or fish or cars or houses or what have you, screwing around with the currency either way is probably neither appropriate nor effective, and everybody (me too:) should just shut up and get back to work already….

  • Gavin

    I think it is wrong and unfair that you have taken one article by Shaun Rein and make it seem like he is a complete idiot. I agree that it appears he wrote this article quickly and in anger and without insufficient research, but will you agree that Shaun Rein has written much better articles than this one?

  • Dan

    @ Mike,
    You have some interesting observations, that’s for sure. Thanks for checking in.

  • Dan

    @ Gavin,
    You would have a point if you were even remotely correct, but you are not. I did not seek to make Shaun Rein sound like an idiot and I do not think that most people would see him that way either. In fact, I have stressed again and again how much I respect his writings. But instead of my saying how much I respect his writing, I just did a search on the search engine on this blog for “Shaun Rein” and it came up with 15 posts in which we have mentioned him and ALL of them speak of him positively and in virtually all of them we extol what he said and we compliment him for having said it and we agree with him. So why is everyone making such a big deal when we disagree with someone 1 out of 16 times? Heck, I disagree with myself that often.
    These numbers along ought to be proof that we are not out to get Shaun Rein and that all we were doing here was criticizing ONE article he wrote. The fact that Mr. Rein himself has not bothered to come on here and “defend” himself ought to be the proof that he has not been terribly affected by all this. I’m guessing (and I hope) he is sitting back laughing about the whole thing, assuming he ever even noticed it.

  • Ewan

    I doubt you’ll ever see the likes of Shaun Rein commenting here. Why come back to a dog that bites?

  • theAdmiral

    Wow… That was an interesting read.
    @Dan – Nice job. Your post was on the mark, and if Mr. Rein cannot find something constructive in your post, perhaps he should consider keeping to the day job.

  • deldallas

    Dan — you have my respect and thanks for doing this post.
    There are a lot of developing country expats out there (in PRC and elsewhere) that learn the line of correlation between political expediency and profitability is often a slippery slope.
    Do we find ethics to be a set of exploitable prisoner’s dilemmas or the definition of the foundation on which our value is built? When we look back on our lives, will we see people who believed in things beyond survival of their ‘tribe’ and asset accumulation or not? We all get to choose these things.

  • marvin n

    (China is) “like a teenage boy” wouldn’t you say more like a huge baby, cryng and demanding attention to its needs while seeming oblivious of how adults live and interact with other adults in the adult world?

  • Another Steve

    I actually had the opportunity to meet Shaun Rein in Thailand recently and he is every bit as [NOTE: We deleted a large portion of this because it was a personal attack on Mr. Rein and his family and we did not think that was at all appropriate]. Despite my [views of] him personally, I do not think he is without his uses as a polemicist. I have to say his ability to garner publicity is second to none. He is constantly saying so and so is wrong and he says it with so much force that he is believed even though [DELETED]. We all could learn a lesson or two from him in terms of getting our name out there. So as much as I dislike him personally and hate his quisling politics, I respect him immensely as a businessman.

  • pfcwms

    A well-argued piece in favor of keeping the marketplace of ideas open.