ATT Foreign Trash in China — Get Ready for Smooth Sailing

Chundits’ anti-foreigner rhetoric may be a positive signal for international business in China.

When I worked in finance there was a saying — buy the rumor, sell the news. It meant that by the time mainstream media outlets published a big, market-moving story all the value of the news was already in the price. The opportunity was over — you were best off collecting your winnings and preparing for the next big thing.

Now that the Chundits (China Pundits) like Yang Rui are milking the last drops of bile from the recent drunken imbecile non-scandal, relations between China and the West are probably going to settle on a firmer footing than ever. Writers like Yang and the op-ed comrades at People’s Daily are neither thought leaders nor vanguards of public sentiment. These are official mouthpieces — the public relations lackeys of a semi-secret government policy body.  One of their main uses to the party is as misdirection or a smokescreen. Their comments are meant for public consumption — and that usually means they speak counter to real policy shifts. The more repugnant their vitriol, the closer we probably are to the inflection point of a trend.  Yang Rui’s “foreign bitch” and other racists slurs may very well mark the beginning of a more open and relaxed attitude within PRC officialdom ahead of the leadership transition this Fall.

Signs that a new Boxer Rebellion is NOT likely:

  • 1) Relations are actually pretty good — as they have been throughout the post financial crisis period. The Chen Guangcheng incident were resolved fairly amicably, considering the potential for recrimination and verbal sparring. Trade tensions between China, the US and Europe have been confined to WTO channels – and have been dull as toast.  America as the destination of the wealth, the wealthy, and the precious offspring of the upper class is more confirmed than ever. If there’s any serious anti-Western fervor at play, someone forgot to tell the elites and the middle class.
  • 2) Visas for foreigners getting easier.  A nationwide crackdown on criminals isn’t anti-Western — it’s anti-criminal. Westerners are getting Chinese green cards  and Beijing is considering three-day non-visa business stays   . While the “foreign bitches” controversy was splashing across international headlines, many missed an odd story playing out in the US.   About a week ago, the US State Dept was running hundreds of Chinese grammar teachers out of the country on a rail for a bureaucratic infraction  so picayune that it seems like something Kafka whipped up on a slow day. If the Chinese Public Safety Bureau pulled the same nonsense on thousands of American schoolteachers in China, The Atlantic and NY Times would be lamenting how a  new iron curtain was crushing the Chinese people’s collective dreams of progress.
  • 3) A down economy in China means that for the first time since 2007, China needs foreign markets and know-how again. The harder China lands, the better foreigners look to middle class and elite Chinese. After the financial crisis, China seemed to hold the secret to gravity-defying economic growth.  Things haven’t exactly done a 180, but China is looking more and more like a hard-landing in progress, and the US is sputtering its way back to “safest house in a bad neighborhood” status. China accounts for approximately 70% of EB-5 visa applications the ones where you buy a green card for $500,000 (dollars only – no RMB).

A drunken lout harassing innocent girls in public should spark indignation, anger – and possibly even some direct intervention. If a tanked-up Chinese tourist tried groping an American girl on the J Train in NY, he’d receive the same treatment as that idiot in Beijing did. Probably sooner though. (And hopefully from the woman herself.)  But that’s not that same as a wave of anti-foreign outrage.

The Western business community has much to fear in China. Prices are rising, wages are going through the roof, indigenous technology laws are thinly veiled IP theft, and the local markets is softening.  But one thing you don’t have to worry about is foolish racists like Yang Rui and his coterie of neo-Boxers.  They are insignificant, and shouldn’t influence your business planning in China one  bit.

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