How China Stiffed the World in Copenhagen

Why Beijing insists, "Don't look at our books!"

BY JOHN LEE | DECEMBER 21, 2009

During the frantic final two days of negotiations at Copenhagen over the weekend, U.S. President Barack Obama and Secretary of State Hillary Clinton set a clever trap for Chinese Premier Wen Jiabao. Having just announced that the United States would establish and contribute to a $100 billion international fund by 2020 to help poor countries cope with the challenge of climate change, Clinton added a nonnegotiable proviso: All other major nations would first be required to commit their emissions reduction to a binding agreement and submit these reductions to "transparent verification." This condition was publicly reaffirmed by Obama, who argued that any agreement without verification would be "empty words on a page."

Everyone in the room knew that "all other major nations" primarily meant China. From the beginning, China has steadfastly refused to place its commitments within a binding framework or accept outside monitoring and verification of its progress toward any promised targets. But the eleventh-hour U.S. proposal immediately isolated China. The onus was now on Beijing to agree to standards of "transparent verification." If it did not, poorer countries standing to benefit from the fund would blame China for breaking the deal. Clinton's proposal had cunningly undermined Beijing's leadership over the developing bloc of countries.

Chinese officials retreated to their well-worn negotiation mantra, namely arguing that such demands were an insult to China and would be a violation of Chinese sovereignty and national interests. Wen had been outflanked and was angry, even leaving the conference center and subsequently snubbing Obama in a couple of previously planned bilateral and multinational meetings involving the U.S. president.

Which raises the question: Why such an extreme response? As Mark Twain reportedly said, there are three kinds of deceptions: lies, damned lies, and statistics. China has long been engaging in a dangerous game of manipulating important economic numbers and concealing domestic commercial realities. Despite all its progress over 30 years, Beijing is afraid to shine too bright a light in dark places, and even more afraid that outsiders might be allowed to do so. In important respects, the government actually embraces opaqueness as a perceived advantage. The thought of "transparent verification" was seen as the thin end of the wedge, allowing outside experts broad authority to peer into the workings of middle China. It would have caused Wen to feel the distinct pang of panic that guilty men feel when they realize the jig might soon be up.

For two decades, NGOs operating within China have struggled not only with wary officials in Beijing but more trenchantly with local officials for access and information. But teams of international economists, scientists, inspectors, and statisticians roaming China to gather information on carbon emissions and reduction initiatives would have been unprecedented. In promoting China, Beijing projects an image of order and competence to the world. In parts of its wealthier coastal cities, China is that. But these international teams would undoubtedly discover exactly how dysfunctional the heart of the country really is. They would see firsthand and report back how China's 45 million local officials remain the most formidable obstacle to improving transparency in China's sprawling economic structure -- protecting their turf, defending their privileges, arbitrarily enforcing the law, and when it comes to economic performance, blatantly cooking the books.

AXEL SCHMIDT/ AFP/ GETTY IMAGES

 SUBJECTS: EAST ASIA
 

John Lee is the foreign-policy research fellow at the Center for Independent Studies in Sydney and a visiting fellow at the Hudson Institute in Washington. He is the author of Will China Fail?

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SHERMIE BARBOUR

7:13 PM ET

December 21, 2009

Good article

China has to show us that they are sincere about this issue rather than set grand targets in order to receive easy praise from the world. This article brings some of the themes out well. The world should focus on China and if it wants greater respect and leadership, jopining together with countires like Sudan on this issue won't win them that.

 

VITO

9:54 PM ET

December 21, 2009

SMH...

The leading industrialized nations approached the issue of the environment entirely from the perspective of the economic and strategic interests of their own respective ruling classes. In fact, the concerns highlighted in the discussions in Copenhagen are the same concerns that lead us into the quagmires in Iran, Afghanistan and Iraq and numerous other wars around the world.

The International Energy Agency says that demand for energy worldwide will increase by more than 50% in the next 20 years. The economic growth of a nation will depend on access to sources of energy. This is why the US has invested a trillion dollars on wars aimed at dominance over the world's gas and oil reserves.

With our troops in Afghanistan and in the Persian Gulf, the US is satisfying its own thirst for energy and at the same time gaining control of vital pressure points to use against rivals. The pushing of clean energy technologies would reduce dependency on fossil fuels. The US does not want to spend billions of dollars on technology that could help potential rivals be more independent (This is a small part of the reason why they don't want Iran developing nuke energy). Additionally, Pressure is exerted by hired lobbyist of the fossil fuel industry to sabotage any measure to cut emissions in the US Congress. They regard any proposal to cut emissions as CUTTING into their profits. So in their eyes, Obama did a good job last week.

Finally, the developed nations used climate change as a weapon against developing nations. The US and European colonial powers used the issue of climate change to impose a global agenda that is favorable to their own political and economic interests.

After Hillary (the bad cop) dangled a one hundred billion dollar bribe (conditional high interest IMF loans) in front of poor African countries -seeking to woo them away from their alliance with China, Brazil, India, and other fast growing economies- Obama followed up on Friday morning with his bad cop routine by ridiculing China for not submitting themselves to the international monitoring of it's industry and demanding that they take greater responsibility for climate change than the US of A.

China, understandably, sees such demands as equivalent to asking them to reduce their rate of economic growth, which Beijing regards as a threat to national stability. China, whose industrial expansion is based on heavy industry, also sees the inspection process as a violation of it's sovereignty and a possible rationale to be used to impose trade sanctions -a position championed by sections of our political establishment.

When Wen Jiabao gave his speech he predictably countered Obama by criticizing the US for failing to live up to promises made by the Clinton administration at Kyoto. The Clinton administration never submitted Kyoto to Congress for ratification, and now ten Union controlled Democrats in the senate have already wrote Obama telling him that they wouldn't ratify anything that did not protect American industry from "foreign competitors" who do not have to meet global emissions limits. I.e China.

There is no big disagreement among scientists about the effect of greenhouse gas on the ecosystem. But a cohesive, and coordinated response comes into conflict with entrenched profit interests of the nationally based ruling classes of ALL major powers. No amount of pressure will persuade the billionaires and their political representatives to act against their own class interests for the sake of the poor people who will be killed or displaced because of damage to enviroment.

What a shame!

 

SHERMIE BARBOUR

10:49 PM ET

December 21, 2009

The US didn't sign Kyoto - at

The US didn't sign Kyoto - at least they didn't pretend to adhere to something and were up front about it. European countries who did sign allowed independent and foreign experts in to assess their progress or lack of it. The point is about verifiability - otherwise we might as well make commitments because no one will know whether we have kep them or not.

 

NORBOOSE

2:33 PM ET

December 22, 2009

Iraq and Afghanistan were not for as rational a reason as fuel

We didnt actually get very many oil contracts from Iraq, look it up, most went to China an d some minor Euro-based companies. Afganistan is about as damn barren as the moon. No US officials ever thought we could profit from Afganistan. Thats why we originally just used air raids, special forces, and some intelligence agents to overthrow the Taliban, and originally didnt put forth many resources for building the country (note: not "re-building," "building", as in, from the ground up.) As for Iraq, the reasons for that war simply baffle me. I think it was just stupid politics. I think the oil was a factor, but a secondary one. Modern warfare is far too expensive for most resource conflicts to be profitable ( Its no longer like the 1770's when you just needed some guys, some guns, boats to move them, a few horses, and maybe a cannon or two.) Also, the importance of strategic mineral reserves in severely overestimated by the general public. US officials know both these things, so Iraq was less about the oil and more about W being a jackass and Cheney being the freakin Anti-Christ.
Also, developed nations, powerful nations, and the west no longer seem synomonous. The US and Western Europe are much more seperate entities than many who use the term "the West" acknowledge. Europe does not carry any more weight than most second-tier countries. The three most powerful countries in the world are America (largely distinct from the actual, historical definition of the west), Russia (not considered western), and China (Not-Western). The second tier countries, in my opinion(these are much disputed) are Japan(not western), India (not western), Brazil (not western), Great Britain (WESTERN). Germany (I would consider it western) is really on the fence. Calling the Europeans "colonial powers" is a joke. The Euros are weak socially, militarily, have chronically stagnant economies, and often get shoved around by China and Russia. Per capita income does not determine a nations influence. I dont mean to attack you personally, your opinions would be well-considered if your world view was based in the late 50's.

 

LIFEINCHINA

6:52 AM ET

December 22, 2009

In fairness...

I moved to Western China six months ago, and it has given me a new perspective on China's denigrated policy of murky stats. Two things:

1) China is a "face culture." It is also a context heavy culture. That means that it's okay to say something that is untrue as long as the people with whom you are speaking know what you really mean and that lying will save face (prevent shame) for someone involved. In my opinion, the suspicious stats issued to the world are an example of this cultural phenomenon on a great scale.

2) We can't blame China for being not living up to our ecological standards when they are not in the same place as we are economically. Imagine trying to impose modern air quality and emissions standards on the US during the industrial revolution. That's what the world wants to do in China now. If factories in China shut down or spend the money to go green(er), people will lose jobs and hundreds of thousands, possibly millions will die. There's not a lot of social services for the jobless here.

We should exercise caution in complaining about Chinese environmental and statistic policies when we are not prepared to help them deal with the economic consequences our standards would require.

 

KIWIXIAOHUOZI

9:23 PM ET

December 23, 2009

monitoring is essential

I'd agree with you, LifeinChina, that it's hypocritical for the West to expect China to take anything less than its fair share of carbon credits, and refuse China the opportunity for its own industrial revolution.

Nevertheless, its hard to see how ANY targets will really be reached without independent monitoring.

Independent monitoring and holding China to unreasonable standards are two different things.

 

FREETRADER

12:30 PM ET

December 22, 2009

I also live in China...

and while point #1 of LIFEINCHINA's post is accurate as far as it goes (although also beside the point) the main thrust is completely wrongheaded. If manufacturing a product in China currently costs 100x, even an increase of 10% of the manufacturing cost would shift the manufacturing cost to just 110x. If the same product were manufactured in Italy, the additional emmissions costs would increase production cost from, say, 130x to 140x (even assuming that the increased cost of adherence to emissions protocols would cost no more in the West than in China, which isn't true) meaning that China would maintain the cost advantage that drove the manufacturing to China in the first place.

As far as 'millions' dying in China as a result of emissions controls, well, that is simply a laughable statement. In fact, the last time millions of people died in a Chinese famine, is was due to incompetent centrally-directed planning, and was made much worse by the unwillingness of the beaurecrats, locally and centrally, to be honest in either their planning or reporting as arbitrary industrial and agricultural production targets were magically met, year after year -- while millions starved.

It goes without saying then, that any agreement with the PRC that doesn't involve outside audits is worthless. Indeed, far beyond the issue of climate change, the world would do the Chinese a huge favor if it can convince their government to start reporting numbers that are based in reality, not in buearecratic wish-fulfillment. Unfortunately, I wouldn't hold my breath on that.

 

CAFFIEND

11:47 AM ET

December 23, 2009

Carbon figures aren't so easy to cook

Tracing money in China may be difficult, but measuring carbon emissions is not - it is simply total coal and oil production and imports. There are a limited number of coal mines and electrical generation stations, especially since China has been pushing to close older small inefficient or dangerous examples of both. China refused carbon targets because of the targets themselves, not because verification would be hard or intrusive.

 

SHERMIE BARBOUR

4:51 PM ET

December 23, 2009

That's the point. We don;t

That's the point. We don;t know whether China has closed the inefficient coal mines and power stations, and they won;t provide evidence that they have. Power stations are also being built at a rapid pace but China will not release verifiable details such as how efficient these are, and even how many are being built.

 

XUNCHEN LIU

2:19 PM ET

December 23, 2009

It's Unfair

Carbon issue concerns everyday life. It's impossible to be counted and unreasonable to allow western country to investigate the details of our everyday life. Would any western country allow China to monitor their economy?

Politicians will use every excuse to blame China on this issue and make trouble for China to do any business. US spend 6000 b a year in defense budget and 1500 b a year in Iraq and Afghanistan. 1000 b seems a big number, but it's too cheap to buy even a island country.

Nevertheless US has already make it clear that no money will be given to China. Fair enough, China has already used and will use its own money to cut emission. So it's reasonable to leave a note: shut up and worry about your own business.

 

SHERMIE BARBOUR

4:49 PM ET

December 23, 2009

The point is that China is

The point is that China is claiming to commit to certain targets and will receive carbon credits in a fituire scheme. Both these requiire verification in the same way that China feels it has a right to know what is being done to its US debt.

 

KIWIXIAOHUOZI

9:19 PM ET

December 23, 2009

Transparency is the only way to ensure fairness

Your rhetorical question is misleading, for two reasons:
1) It's China's carbon emissions that other nations want monitored independently, not its economy.
2) There's no reason the monitoring would be done by Western countries. I'm sure Clinton would have no problem allowing the monitoring to be done by a team of (for instance) competent Chinese, Japanese, Korean, and Indian scientists, if China insists on rejecting Western countries. The key is that monitoring needs to be done by an independent body, i.e. a group of people answerable and loyal first to the U.N. or to other international organisations, not to the Chinese government or any other single government. The best way to achieve that would be for monitoring to be done by a team made up of many nationalities.

Furthermore, I'm sure Western nations like the US would be happy for monitoring by such an international independent group if the same monitoring were applied to China and other nations.

 

FREETRADER

12:05 AM ET

December 24, 2009

Nonsense

OF COURSE the US and other Western countries would subject themselves to monitoring -- they do all the time. It is what happens in an open society: the numbers are checked, and woe betide the government that cooks the books. In the West, you don't get hauled off to the gulag for investigating the government's numbers. The fact that you go straight to the "what Western country would allow..." shibboleth is simply an indication that you don't understand the issue at all.

Of course, China's promises on this issue are almost as meaningless if they actually do what they have promised to: reducing carbon intensity when you are already by far the most inefficient and polluting country was never going to be very difficult. Verified or not, the PRC's promises are worth very little. And to answer your final comment -- the massive pollution generated by China's dirty coal burning plans are everyone's business.

 

DANIEL MICHAELI

10:53 AM ET

December 24, 2009

Why China took the position it did

If the central government was planning on cooking the books on China's emissions, why did Lee write an article mostly about the perceived risk of transparency exposing China's local corruption problem? Would that even be relevant as a factor in deciding whether to allow international monitoring, if China's goal were simply to fabricate its emissions figures?

The post assumes that the international scrutiny concern is paramount, when in fact the paramount concern is one of economic development. If the central government really were willing to take the steps the world hopes to see, it would invite the world in as a way of taming local leaders. Parts of China's bureaucracy have actually used international scrutiny to enact reforms that they wanted to see.

This isn't a function of face, as LIFEINCHINA claims above. Nor is it about "allowing outside experts broad authority to peer into the workings of middle China," as the article claims--because, frankly, there is little that is likely to surprise the outside world given all the reports that have come out in recent years.

The main concern is about Chinese economic growth, and therefore social stability.

I actually responded to this article in greater depth on my Asia Ruminations blog: http://www.asiaruminations.com/ . I would invite anyone interested in this issue to comment there.

 

SHERMIE BARBOUR

6:13 PM ET

December 24, 2009

It seems to me that the

It seems to me that the author is saying that Beijing is afraid that outsiders will realise the extent to which it is not in control of much of the country meaning that it cannot implement and honour any agreements it signs on to in this area.

It would not want to use external pressure to tame local leaders since this would ac tually expose its own impotence. This is my reading of the article anyhow.

 

DANIEL

2:21 PM ET

December 27, 2009

Great article. Thanks for

Great article. Thanks for sharing this perspective on China.
Intempo Rebel

 

ISLAND PARADISE

12:15 PM ET

January 11, 2010

Copenhagen

The climate change summit in Copenhagen was billed as the last chance to get a global agreement before its too late. Its not just the Chinese, the developed countries didn't do a great job in being open either.

 

ISOMAIL

1:03 AM ET

January 17, 2010

 

MUQTADA123

8:00 PM ET

January 22, 2010

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