What to make of Mitsubishi Materials’ Apology for WWII Crimes?

A slightly different version has been posted on Asia Times.

Seventy years after the end of WWII, Mitsubishi Materials staged a high profile apology to James Murphy, 94-year old survivor and former American POW. The ceremony took place last month at the Museum of Tolerance of the Simon Wiesenthal Center in Los Angeles, appropriately the museum established to remind the world of the European Holocaust.

Apparently the company representative of Mitsubishi sold the former American POW on the depth of his remorse and the sincerity of his regret such that Murphy was pleased to accept on behalf of all the American prisoners that toiled as slaves in wartime Japan. Approximately 12,000 American POWs were shipped to Japan to fill the labor supply shortage and about 10% did not live long enough to be repatriated home.

The well-covered event won accolades from mainly the western media for being the first Japanese company to step forward*, acknowledge and apologize for the wrongs committed by Japan during WWII.  Some even called it a “landmark” apology. Many expressed the hope that other Japanese companies will follow suit and perhaps even persuade the Abe government to do the same.

The company spokesman went on to say that Mitsubishi hopes to apologize to POWs of other nationalities and to negotiate with various Chinese groups with an agreement that includes cash settlement. Altogether, about 39,000 Chinese were taken to Japan for slave labor. Almost 20% died in various labor camps.

Of these, 3765 Chinese prisoners were known to work in the mines belonging to Mitsubishi’s predecessor entity. At least 722 did not survive the war. As reported in Japan Times and other sources, the company was to offer RMB100,000 (around $16,000) to each survivor or to their heirs since not too many are likely to be around with the passage of 70 years.

So far so good, but the issue is not as straightforward as suggested by the narrative so far.  Even though Mitsubishi seems to be the first company* to apologize and offer compensation 70 years after the end of WWII, there are a lot of indicators to suggest they did not do this willingly.

It has taken 70 years because Japanese government and companies have been ducking behind the San Francisco Peace Treaty of 1951 and the normalization agreement between China and Japan entered in 1972.

Japan has always claimed that the 1951 peace treaty got them off the hook from future obligation to pay any indemnity. Indeed, when American POWs filed suit for compensation, the U.S. courts struck them down because of the terms of the peace treaty stipulated forfeiting American citizens’ right to seek damages. But the line of reasoning does not apply to Chinese prisoners, since neither governments of China, based in Beijing or based in Taipei, were invited to attend this conference nor did either one ratify the treaty.

After the war, the allied countries investigated and assessed the war damage inflicted by Japan; the commission came up with a reparation sum of $54 billion to be paid by Japan. China as the nation that fought Japan the longest and suffered the greatest devastation sought the largest share but their claims were basically ignored. Just the sum of the claims by the rapacious western powers, namely U.K., the U.S., the USSR, France and Australia together, exceeded 100%. Ironically, the allies fought together but could not agree on how the spoils of war should be divided. The findings and conclusions were basically set aside and forgotten.

By the time of the San Francisco conference, Japan had already become a potential U.S. ally in the developing cold war and the matter of indemnity was perfunctorily dealt with. Asian countries that attended the conference got some reparation in the order of a few hundred millions dollars. China and Taiwan in absentia were given official title to their possession of the Japanese assets left by the departed Japanese. Even the then prime minister Yoshida of Japan admitted that Japan got off easy.

In contrast, when China lost a two-month war to Japan in 1894, Japan grabbed Taiwan and other islands and demanded harsh indemnity as stipulated in the Treaty of Shimonoseki signed in 1895. In total, China paid the equivalent of ten thousand tons of silver over a three-year period. With one brief military adventure, Japan enriched their government coffers by more than four times their then annual revenue. No wonder when Japan invaded China in 1937, their militarist leaders expected to own the country in a matter of months.

Concurrent with Japan signing the SFPT, Japan also entered into a security treaty with the U.S. The five-article treaty contained only a few hundred words and basically gave the U.S. the right to station military forces on Japan in exchange for protecting the security of Japan against “irresponsible militarism” existing in the world. The treaty gave both signatories plenty of latitude for interpretation and subsequent re-interpretation.

Just as the coupled treaties in 1951 protected Japan from the personal grievances of Americans that suffered from Japan’s brutality, the normalization between China and Japan in 1972 gave Japan cover to reject claims from China. Conveniently, the1972 joint communiqué is subjected to “one document, two interpretations.” China’s official interpretation is that the government waived claims to WWII reparation from Japan but nothing about the people’s right to file claims against Japan.

Chinese complaints representing persons and groups began to be filed in Japan in earnest in the ‘90s. In 2007 the supreme court of Japan made a final ruling that dismissed all the suits on the grounds that the joint communiqué rendered the suits moot. However, the court found atrocities described by the litigants sufficiently appalling that they recommended to the Japanese companies being sued to settle the disputes amicably and somehow make the complaints whole. Unfortunately but not surprisingly, nothing much has happened.

Beginning in 2008, some of the attorneys representing the Chinese victims began to file their complaints against Japanese companies in the courts in China. In February 2014, the courts in China notified the principals of the dispute that they agreed to hear the case. Suddenly, companies such as Mitsubishi took notice and Mitsubishi Materials in particular began to offer to settle.

The calculation of risks and rewards for stalling and stiffing the Chinese victims has changed. China has become or about to become the largest economy in the world and the Japanese companies have too much at stake in this market to risk losing in a Chinese court.* In addition, good will from the people of China now has value.

When Mitsubishi Materials began to publicize their willingness to settle the Chinese claims against the company, the reactions inside China were mixed ranging from elation to condemnation. Some praised the apparent intention to pay a significant sum to the victims and saw this as a breakthrough in a long stalemate.

Others challenge the sincerity behind the offer pointing out that the company has been quick to inform the media of their intentions but has yet to meet with the groups filing the grievances and begin negotiations. They wonder if Mitsubishi will actually pay up. Still other groups expressed dissatisfaction in the wording of Mitsubishi’s apology.

When the people in China began to understand the legal remedies available from the western style of the rule of law, thousands joined various groups to file their complaints. But they did not realize that the wheels of justice grind at snail’s pace. By now the numbers that have survived the ravages of time have dwindled to a handful.

A number of lawyers in China have emerged to allege that they represent certain victims and are looking to manage a piece of the pie. It remains to be seen if that piece of the pie is real or illusory.

Heretofore Japan has been most skillful in bending historical facts to their advantage. The Peace Museum of Hiroshima serves to remind the world that the people of Japan have been the only victims of the atomic bomb but no explanation can be found to describe the events that led to the dropping of the bomb.

Ironically, Japan has applied for World Heritage designation on some of the mines as symbol of Japan’s emergence from feudal state into a modern one, including some belonging to Mitsubishi. Because of vigorous protest from S. Korea, Japan has grudgingly agreed to post wording at those sites indicating that slave labor from Korea were used in Japan’s march toward modernity. It’s doubtful that there will be signs onsite to inform visitors that WWII prisoners also toiled in some of these mines under inhumane conditions.

Japan’s inability to face history fully and make a clean breast of all the atrocities they have committed must be part of their genetic make up. They obviously need help. The latest effort to remind Japan of its past is a new webpage called 10,000 cries for justice, www.10000cfj.org.  This bilingual website is a repository of thousands of letters written by the Chinese in the ‘90s that provided eyewitness accounts of atrocities by the Japanese troops during the war, and coincidentally posted just days after the Mitsubishi deal came to public attention.

This is a powerful documentation of heinous acts committed by Japan including bayoneting infants, raping and then disemboweling women, decapitations, live vivisection experiments on human subjects, dropping of chemical and biological bombs on Chinese villages and many other acts against humanity.

The Abe government wants to forget all that. In fact he wants to rewrite Article 9 of Japan’s constitution so that Japan can become a full-fledged military power again—perhaps becoming a new member of “irresponsible militarism”? China won’t forget. Korea won’t forget. The Philippines and other parts of Asia won’t forget. Can the U.S. ignore history?

President Obama should remind Abe that the bilateral security agreement obligates the U.S. to protect Japan from irresponsible militarism not for Japan to repeat history and become one.

____________________________
* As I reported in another blog, the first lawsuit the Chinese won on a WWII related dispute with a Japanese company and actually collected on the damages in 2014, taking nearly 70 years and over the efforts of three generations. The ruling of this case from a Shanghai court must weigh on the minds of other Japanese companies as they face litigations stemming from WWII. 

The Case of Zhong Wei Shipping vs. Mitsui

The recent public apology Mitsubishi Materials extended to American POW for their stint as labor slaves in Japan during WWII followed by the company’s offer to pay damages to Chinese prisoners who also served as slave labor was widely acclaimed as the first legal win for Chinese victims of Japanese atrocities in WWII. In the course of doing my research, I found that even if Mitsubishi goes forward and actually pay indemnification; theirs was not the first for Chinese plaintiffs.

That dubious honor goes to the Chen family who doggedly pursue justice from Mitsui that span three generations. Finally, in April 2014 the grandson was awarded a judgment of RMB 260 million (about $43 million) on a lawsuit his grandfather initiated. This is widely regarded as the landmark case in the history of China Japan relations.

The grandfather, Chen Shuntong (陈顺通), started as a dock worker at age 14 and became the owner of Zhong Wei Shipping, then China’s largest shipping company by 1930 when he was 35. In 1936, the predecessor Japanese company to Mitsui signed a one-year lease for the use of Shunfeng and Xintaiping. With the capacity of more than 6000 tons and 5000 tons respectively, those were at the time considered the largest and state-of-the-art ships in China.

By 1937, Japan and China were officially at war and the ships were never returned to the owner. Upon conclusion of the WWII, Chen found out that both ships sank and were lost at sea during the conflict. The War and the loss of his ships led to deep depression and drove him to bankruptcy. He fell ill and died in November 1949. On his deathbed, he made his son swore to continue to pursue justice from the Japanese.

His son, Chen Qiaqun, left Shanghai and began to pursue justice out of Hong Kong. In 1962, he went to Japan and because Japan’s imperial navy had commandeered the ships, he began to seek compensation from Japan’s government before the Tokyo district court. The court ruled in 1974 that the statues of limitation on this suit had expired. End of the story in Japan.

In 1987, China’s court ruled that because the lease signed in 1936 took place in Shanghai and the principals were residing in Shanghai as were the ships in question, then the court in Shanghai has jurisdiction over the case. Next year Chen Qiaqun again filed the case on behalf of the Zhong Wei company. The first hearing in the Shanghai Maritime Court（上海海事法院) took place on August 15, 1991

In April 1992, Qiaqun passed away due to illness and he again made his two oldest sons promise to carry on the wishes of their grandfather. Between 1995 and 2003, there were four more hearings in court. Finally on December 7, 2007 the Shanghai court ruled that Mitsui, the successor owner, owed the Chen family 2.916 billion Yen or equivalent to 200 million Renminbi. At that time, this case was celebrated as the longest running case against a Japanese entity and the largest award for damages.

But that was not the end of the story because Mitsui did not take the case to China’s higher court nor pay the damages. On April 19, 2014, the Shanghai court seized a ship belonging to Mitsui for not honoring the ruling of the court. This move caught Mitsui by surprise and caused a sensation in Japan. The spokesman from the foreign affairs ministry of both countries quickly exchanged public statements into a media standoff.

Four days after the seizure, Mitsui appeared before the Shanghai court and paid 4 billion Japanese yen equivalent to 260 million Renminbi. Next morning, the ship was released to Mitsui.

Lesson learned from this story: Victims of Japanese WWII atrocities had no recourse until recently, only becoming possible now that China has become an economically strong nation and a judiciary system willing to hear cold cases more than 70 years old. It’s worth noting that the court in China did not rush to judgment but took the time to examine the issues involved.

My thanks to Thekla Lit for calling the original material in Chinese to my attention.

My friend, Professor Ivy Lee, has reminded me that there have been other cases that settled between Chinese slave laborers and Japanese companies. Somehow these cases have always led to controversy as is the case with the current pending cases.

Book Review: Empress Dowager Cixi By Jung Chang

This book review is on Amazon.

The author takes advantage of archival material only available in recent decades to write a remarkable and revisionist history of China's last Dowager Empress. Some the narrative will surprise the reader by the plethora of minutia the author uses in her portrayal of Cixi. She is unequivocal in presenting Cixi as a progressive, intelligent and reform minded leader, every bit as worthy to sit on dragon throne as Wu Zetian of the Tang dynasty, the only woman in China's long history who did reign in her own name.

At other times, perhaps lacking supporting reference material in her research, the author resorts to broad sweeping statements and generalizations that leave the reader to decipher between that which is based in historical fact and that's merely her conjecture and opinion. Indeed, just as Ms. Chang effectively raised the image of Cixi in her book, she has diminished the reputation and integrity of many of the ranking officials in the Qing court. For example Li Hongzhang, the most senior Han Chinese in court, widely regarded as a brilliant statesman and lead negotiator with the western powers is depicted as a less than competent person of doubtful integrity. Kang Youwei was nothing more than a scheming, conniving person in cahoots with Japan, who plotted to assassinate Cixi, restore Guangxu to the throne so that he can become the power behind the throne. Until this book, Kang enjoyed that reputation as the initiator of the famous hundred days of reform while Guangxu was in power.

The author has the irritating habit of bestowing handles to people as a way of denigrating them. For example, throughout her book Kang was consistently referred to as "Wild Fox" Kang. Zeng Guofan was "Marquis" Zeng and earlier mentioned Li Hongzhang was "Earl" Li. Presumably honorific titles relevant to the British peerage and merely dissonant in the context of the Chinese imperial court.

Perhaps because the author lives in U.K. and is married to a Brit, she goes easy on, much less squarely blame, the British empire for forcibly crammed opium into China and was responsible for the destruction of China's society and economy. The strongest condemnation I found in her book was, “Foreign opium imported into China was chiefly produced in British India and shipped solely from British ports.” Oh my goodness sake.

The merit of this book lies in filling the blanks in the history of the end of the Qing era. For example, not remembered was Robert Hart, an Englishman who came to China while young and stayed. He set up the customs collection system for China and by managing the duty collection, he became the de facto treasurer of China and responsible for a major source of revenue for China, without which China would not have been able to continue to enter unequal treaties and pay indemnity to the western powers. Towards the end of her life, Cixi conferred a title to Hart that ranked him third in the hierarchy of the imperial court, a rare honor for someone not related to the imperial family much less a big nosed foreigner.

For the history buff wanting to know about the last years of the Qing Dynasty, this book is a welcome and valuable addition--especially for the discerning reader with the care and willingness to separate the gems from the author's rant.

Book Review: The Dragon and the Crown

This review is posted on Amazon.

In telling the story of his life with understated modesty, the author, with the help of his niece, successfully subsumed his ego into a broad epic, a narrative of the transformation of Hong Kong. From the time Stanley Kwan was born to when he emigrated to Toronto, the population in Hong Kong grew roughly ten fold. The transformation from being a British colony to a modern megapolis was fascinating as seen from his eyes. It’s safe to say that most of the people in today’s Hong Kong do not know much of the story of the city, much less the rest of us that are mere third party witnesses.

I am now in my 70s and the friends and classmates from Hong Kong that I knew from my college days remind me of Kwan. Their father or grandfather had multiple wives and thus were members of huge families. Dominated by Confucian values, only the first born of the first wife enjoyed privileged lives. The rest had to fight for their share of patriarchal attention and an opportunity to a better education and career. Those that succeed, like Kwan’s daughters, found their way to schools in the West and established their careers outside of Hong Kong.

Even though the invasion by Japan interrupted his higher education, the schooling under the loose controls of the British administration had already taught the author Chinese and English in addition to his native speaking Cantonese. His language proficiency gave him opportunities to work with the Nationalist Chinese government during the war years and the American Consulate in Hong Kong in post war years. Step by step as he moved from one post to another, we saw how Hong Kong was also evolving and changing.

By telling the stories of his brothers, two of whom left Hong Kong to live and work in the mainland shortly after the Communist takeover, we also learn how the tumult inside China affected his family and made his feelings of patriotism and identification with China more ambivalent. His book helped me understand the origin of the Hong Kong mindset: “Make as much money as you can, while you can.” After WWII, the feeling of uncertainty on the fate of Hong Kong hung heavily on the people of Hong Kong.

This book is a wonderful read on the history of Hong Kong. Too bad the author left for Canada in 1984. While negotiations had already begun between London and Beijing, it was quite some time before the handover on July 1, 1997. The book does not explain why or how the city has been transformed to the state it is in today.

Perhaps the story he told on the near fatal run on the Hang Seng Bank is symptomatic of the Hong Kong Chinese inherent lack of self-confidence and a western worship mindset. In April 1965 a run was made on the bank, heretofore the strongest among the Chinese owned banks in Hong Kong. Facing insolvency, the owners had to sell a controlling interest to the British owned Hong Kong Shanghai Bank. As soon as the deal was announced, the panic went away. As one of my chat buddies often likes to point out: In the minds of many Chinese, the western f*rt smells more fragrant than their own. 

Time to Choose the Outcome for U.S. China Relations

This piece was first posted on China U.S. Focus.

A major piece in the most recent weekend edition of the Wall Street Journal points out that it’s time to rethink about the U.S. relations with China. This thought provoking article is extremely timely and the issues raised are critical to the future of both countries.

Just as the author detailed the vast change China has undergone since Nixon talked about China and then broke the ice with his historic visit to China, so has America.

Since the turn of the century, the last two American presidents have strived mightily to sell the message that everybody in the world should be more like us. Follow the American model of exceptionalism—as the thinking goes--and there will be peace and prosperity in the world.

Few bought the message; instead the world has become a much more volatile and dangerous place. From Ukraine through the Middle East to most of African, give or take, 900 million people face daily threats of death and destruction.

While beheadings on TV and tragic drowning of desperate refugees in the Mediterranean can’t be directly attributed to U.S. action or inaction, it’s a measure of how little American exceptionalism has made a difference. Instead, the U.S. is fully occupied with putting the genies back into the bottles in Afghanistan and Iraq.

By various estimates, the wars in just those two countries are costing the American taxpayers well north of $3 trillion and the bleeding hasn’t stopped. The official federal deficit is north of $18 trillion and still increasing. Is Washington seriously assuming that we can keep printing our way out of fiscal deficit?

What cost are we willing to pay in order to coerce China into following our exceptional footsteps? Is that expectation even realistic?

Since Nixon’s historic visit, China has been a willing economic partner with the U.S. but has never been interested in following the American model of democracy and government. Now that China is nearly on par with America economically and having seen the debacle of the Wall Street induced financial crisis, China is even less inclined to follow the U.S.

This does not mean that China is ready or desires to take on the U.S. as an adversary. China’s defense strategy depends on a credible ability to strike back with telling blows when provoked, rather than developing the capability to deliver the first blow.

Part of that strategy is for China to let the U.S. know that they have the capacity to retaliate. In the ‘90s, China invited chief of intelligence (Danny Stillman) from Los Alamos to China’s nuclear test facility so he can accurately appraise China’s nuclear weapon capability.

A Chinese submarine surfaced in the middle of the Kitty Hawk flotilla to let Pentagon know that China has the technology to approach the carrier undetected. China shot down their own satellite to demonstrate their ability to compete in star wars.

Most recently China has successfully test-fired a hypersonic delivery vehicle capable of speeds ten times the speed of sound and capable of penetrating America’s missile defenses. These tactical moves are designed to let Washington know that China would not be an easy rollover.

Seems intuitively obvious to this writer that it will always be orders of magnitude more costly to develop first strike weapons that can overwhelm the adversary’s capability to retaliate. It’s the kind of asymmetric competition that does not make economic sense for the Pentagon.

Defense Secretary Carter has been vocal about China’s activity in South China Sea, as though he is building toward a provocation and a confrontation—preparatory to another Gulf of Tonkin like resolution?

Even DoD spokesperson has acknowledged that China has been late to the game of dredging and filling land to build bases. Others such as Philippines and Vietnam have been reclaiming and establishing bases on islands many years before China.

DoD expressed concerns that China’s intention is to interfere with high seas navigation. Since the presence of islets and shoals is dangerous to safe passage and is thus well marked on most maritime charts as areas to avoid, it’s hard to understand how reclaiming the islands can increase hazards to shipping. As if to answer Carter’s concern, the Chinese has erected lighthouses to help with safe navigation.

In game theory, there are four possible outcomes to any bilateral relations. However, in the case of the U.S. and China, neither party is likely to win at the expense of the other.

Only win-win or lose-lose outcomes are possible. Hopefully the leaders in Washington will see the wisdom of choosing the right outcome.

Book Review: The Real China by Dr. Hong Yee Chiu

This review was first posted on Amazon.

This is a remarkable book on a number of levels. Written by a retired space scientist, ostensibly without the "right" academic training in Chinese history or any other related social sciences, Dr. Chiu writes with the passion and zeal of someone driven to explain China, his country of birth, to America, where he resides and pays taxes. Many of us Chinese Americans are sympathetic to his objective but most of us lack his depth of understanding and knowledge of China's history, culture and attitudes, especially toward religion to pull off such a book.

He obviously did a lot of research and collation of Chinese myths, religious beliefs, traditions, political systems in a context that helps the reader understand where and why China is different from America. One simple example will suffice. He points out that in America, we believe "In God We Trust." In China, the Chinese might blame god (lower case) for whatever personal misfortunes but understand that the person is in control of his/her own destiny. Instead of trusting God, in China the trust is placed in "Self Reliance." As Dr. Chiu took pains to explain, 自立更生 (usually translated into self reliance) was not just a slogan from Mao's China but had thousands of years of history behind the notion.

I found the first half of the book particularly fascinating and educational. A lot of stories he described from Chinese history were new and fresh to me. He obviously also knew his stuff about the foundation of the western civilization and he expertly interwoven Chinese thoughts and traditions with that of the West and showed where they were similar but more frequently where they were so different.

In the second half of the book, where the author made the contrast between the meritocracy based government in China versus the popularly elected leaders in America, was less interesting to me, not for lack of trying on his part but probably because I was on more familiar ground. I agreed with him and I see the same rot of western democracy that he wrote about.

There is way too much loose talk about the inevitable conflict between a rising power and a reigning one. Reading this book by the policy makers in Washington can help them understand China better and perhaps help them conclude that a conflict is not an ordained outcome.

With professional editing to improve the organization, composition and layout, this could have been a 5 star review.

Collaborating with China is in America's National Interest

This item was first posted on Asia Times.

As reported in the weekend edition of WSJ, there are two contending schools of thought on how to deal with China’s rise. One school is to raise the pressure in confronting China such as increasing the surveillance flights over South China Sea.

The other is to concede the inevitability of China’s rise and find ways to accommodate China. Perhaps the most developed among this latter line of reasoning is the book in progress by Kevin Rudd, the former prime minister of Australia and visiting scholar at Harvard.

Rudd sees China’s economy sustainable, growing at more than 6% annually and he expects China’s economic, political and foreign policy influence in Asia to continue to grow. China is now a bigger trading partner than is the U.S. with every Asian country.

Forcing the Asian countries to choose between the security of the U.S. military presence and the economic linkage with China would be unwise, Rudd suggests. It would be an all around losing proposition.

I would go further and suggest that finding ways to collaborate with China is in America’s national interest.

North to south, from Ukraine to Afghanistan to Iraq and the Middle East to most of the African continent, roughly one seventh of the earth’s land mass and as many of the population face the daily prospect of death and destruction. This has been more than plenty for the U.S. to deal with.

Just Afghanistan and Iraq has cost the U.S. north of $3 trillion—depending on how expenditures are counted—and still no end in sight. The U.S. national debt is over $18 trillion and no sign of shrinking. To freely pick up the option of adding China to the list of adversaries makes no fiscal sense.

In Xi Jinping, China’s new leader, Rudd sees a strong leader impatient for China to take its place on the world stage.

According to Rudd’s report, “Xi does see potential value in strategic and political collaboration with the United States. I argue that Xi is capable of bold policy moves, even including the possibility of grand strategic bargains on intractable questions such as the denuclearization and peaceful re-unification of the Korean Peninsula.“

In other words, by collaborating with China, it would be possible to resolve certain knotty problems that the U.S. despite its military might cannot solve.

With its $4 trillion in reserve, China has been going around the world making friends by proposing win-win infrastructure investments. Recently, Premier Li Keqiang while in Peru proposed building a railroad from Peru traversing through the Amazon to Brazil. It would be a land bridge from the Pacific to the Atlantic.

It is bold and it is visionary but China has the experience and expertise to undertake and bring to completion such vast projects.

With the “one belt, one road” initiative, China proposes to invest in a string of ports from China’s east coast all the way through the Mediterranean to Greece and Italy and high speed rail through Central Asia to the seaports of Western Europe.

Even countries that are wary of China such as India, Philippines and Vietnam have sign on to be part of the initiative because they can see the value of becoming part of the economic integration that the initiative promises for the future.

Only the U.S. has been slow on the uptake. The Obama Administration wasted political capital trying to convince nations not to join the Asian Infrastructure Investment Bank on the soothsaying (and lame) concern that the bank would not be transparent.

Figuratively speaking, 57 nations broke the door down and trampled Treasury Secretary Jack Lew in the rush to join the bank. The founding nations recently met in Singapore and quickly drafted the articles of incorporation.

Unlike the World Bank and Asian Development Bank, nonpaid and non-resident board of directors will oversee the bank. And, unlike the stodgy predecessors, the new bank will aim for high standards of efficiency and transparency.

Each nation will have votes related to their capital contribution. China with the largest contribution will have the highest number of votes but will not have veto power. Smaller Asian nations will have more say in this bank than they ever did at the World Bank or the ADB.

China’s national interest is to be at the heart of global economic integration. Infrastructure investments will enhance the global economy, consistent with their long-term objective. 

Competing with the U.S. militarily or otherwise is not in their interest. It shouldn’t be for the U.S. either. Instead, replacing confrontation with collaboration should be in America’s national interest as well.

Much needed infrastructure improvements in Asia will cause the Asian economy to boom. A growing Asia will be a vital stimulus for the rest of the world. And certainly not least as the world’s second largest economy by then, the U.S. would be a significant beneficiary.

I can offer an illustrative date point in support of this view. Last year, nearly 2.2 million tourists visited the U.S. from China and they spent around $23 billion as compared to 23 million visitors from Canada and they spent $26 billion, about 9 to 1 difference.

China is already the world’s largest source of tourists with the reputation as the biggest per capita spenders. The ten-year, multiple entry visa negotiated last year will greatly facilitate more visitors from China, unless jaundiced geopolitics get in the way.

The path to begin collaboration is not complicated. Washington should stop telling Beijing what to do and stop making accusations in public. Incidents of verifiable cyber incursions and theft of intellectual properties should be discussed and resolved in private and not used for the benefit of fanning domestic antagonism.

The U.S. has long forgotten the practice of the Golden Rule when it comes to international policy. In the case with China, applying the golden rule would simply mean do unto China as America would have China do unto the U.S.


For America to yield to the idea that ratcheting tension with China is the right approach is to concede to the inevitability of the Thucydides Trap, namely that a rising power and a reigning power will always lead to conflict. This outcome might be good for the defense budget and the military industrial complex but tragic for everybody else.