Prestowitz: Chinese goose and American gander

Chinese President Hu Jintao's arrival in Washington yesterday was accompanied by the announcement of the imminent signing of a major joint venture between General Electric and China's state owned Avic to produce sophisticated avionics (airplane electronics) in China for sale to Chinese and other airplane producers.

No doubt intended as a way of pouring oil on the troubled waters of U.S.-China trade relations by demonstrating mutually beneficial cooperation between U.S. and Chinese industry, the announcement instead demonstrated precisely why the waters are troubled.

Let's start with GE Chairman and CEO Jeff Immelt. About a year ago, in the course of a dinner he thought was private, Immelt complained that China is a miserable place in which to do business. It was bent on expropriating GE technology and made selling in China very difficult if not impossible unless a company also produced in and transferred technology to China, he opined. A few months later, Immelt spoke of having an epiphany about the dangers of off-shoring too much GE production. In the GE annual report, he wrote of the need for and his intent to put more investment in the United States and to bring some of GE's foreign production back to America.

But the announced deal will take things in the opposite direction. The investment and production will be in China and the technology (much of it initially paid for by U.S. tax payers and the Defense Department) will be transferred from the United States to China, thereby enabling China's aviation industry to move more quickly toward its goal of overtaking the U.S. and Europe in commercial and military jet production.

So what's going on? GE's Vice Chairman John G. Rice put it bluntly in commenting on the fact that China is expected to buy $400 billion of airplanes over the next twenty years: "We can participate in that or sit on the sidelines. We're not about sitting on the sidelines." Rice added that: "This venture is a strategic move that we made after some thought and consideration with a company we know. This isn't something we were forced into by the Chinese government."

Okay, but why can't GE sell to that big market without a joint venture with a state owned Chinese company? Why can't it just make the avionics in the United States and export them to the Chinese aircraft makers and airlines? After all, China doesn't have this technology right now. So GE is a lower cost and infinitely more sophisticated producer than Avic.

Well, one reason might be that if GE doesn't do this deal, another avionics maker might. But hold it. That has to mean that the Chinese are effectively making access to this big market conditional on producing in and transferring technology to China. So who is Rice trying to kid. Maybe the Chinese government didn't call him up and shout directly over the phone that "Mr. Rice we command you to do a joint venture with Avic and to transfer your technology and production to China." But Rice is not as dumb as he thinks we are. He was afraid that if he didn't produce in China, he wouldn't have a chance at the business.

And Immelt did say that he had cleared all this with the U.S. Departments of Commerce, Defense and State.

But that raises an even more interesting question. Will we be hearing of any joint ventures between U.S. and Chinese companies that will transfer Chinese technology and Chinese based production to the United States? I'm sure your guess was "no." And you're right. But why don't Obama and his Commerce, Defense, and State Departments make it clear to the Chinese that if they want to sell in the U.S. market they need to produce something here and transfer some technology here? China is way ahead of the U.S. in the production of solar panels for example. This is a technology being fostered by the Obama administration. Why not get the Chinese to help us in solar panels just as Immelt and GE (with the apparent approval of the Departments of Commerce, State, and Defense - and the White House) are helping them with avionics?

After all, isn't what's good for the Chinese goose also good for the American gander?


Baby Doc arrested. But will he be tried for all his crimes?

In the span of a mere 48 hours, Haiti's former dictator Jean-Claude "Baby Doc" Duvalier has returned to the troubled island from exile in Paris and been arrested in Port au Prince. France24 reported this afternoon that he had been indicted for theft, corruption, and misallocation of funds. But those would be just a few of many crimes  Duvalier is accused of committing during his 15 years in office, from 1971 to 1986.

"If he is going to be put on trial, he should be put on trial [for] all the human rights violations," Javier Zuñiga, special advisor to Amnesty International, told me by phone. "I think it will be travesty of justice if [he is tried for] only corruption, and not the extensive torture and disappearances."

Like most dictators, Duvalier took power promising to change the country's old, repressive ways. When he became president at age 19, Duvalier was trying to clean up the fallout from his father's messy regime.

Francois Duvalier, a medical doctor turned autocrat nicknamed Papa Doc, had presided over a literal reign of terror from 1956 to 1971. The army and the police ran the state and opponents -- or perceived opponents -- were jailed and tortured. The press was shut down and the economy tanked. Taking full advantage of U.S. fears of nearby communist Cuba, Papa Doc convinced Washington to look the other way. With his personal militia, the Tontons Macoutes -- named for a traditional Haitian boogeyman -- haunting the streets, Duvalier père had little fear that his crimes would come back to haunt him, as well.

Baby Doc, as Jean-Claude was called, promised to do better. The young leader was considered "an overweight playboy of little intelligence" when he assumed power. And he did, sort of, relax a few laws. Press freedom, for example, moderately improved. But he turned out to be a cut off the old block.

Baby Doc stretched his hands over the entire country by instituting a system of prefects, or regional governors, who were answerable only to him. They carried out his political whims, everything from assassination to arrests to intimidation. Overall, between 40,000 and 60,000 people are thought to have died under the two Duvaliers, father and son.

Life under the Duvaliers revolved around the state's security apparatus -- the army and the police. "Nobody was safe and nobody had any recourse if he or she was arrested," recalls Zuñiga, who worked in the country during the Baby Doc years. He describes the victims of torture and arrest that he saw firsthand-near-paralyzed from abuse, or sick and dying from gangrene after their wounds went untreated. "It really was hell." One particularly nasty locale during the Baby Doc years was Fort Dimanche, an infamous prison outside the capital, "where people were regularly tortured and conditions were very bad," Human Rights Watch lawyer Reed Brody explained by phone from Brussels.

And if you escaped the fate of intimidation, you were also likely to be poor. Very little economic development took place during that time, says Zuñiga; social services were "almost nonexistent." Thousands more fled Haiti-the first wave of "boat people" to the United States.

Then there was the money that Jean-Claude Duvalier stashed away. Several million dollars of the Duvalier fortune were frozen in Switzerland, meant to be returned home, though the verdict was later overturned. A case in the U.S. court system also found Baby Doc liable for $500 million of misspent funds. (In a bit of twist, the former president's widow took much of his fortune when she divorced him in 1992, and Duvalier has bounced around semi-destitute in recent years.)

Human rights advocates hope that Duvalier will now be prosecuted for his numerous crimes. "The strongest case in legal terms is the embezzlement," says Brian Concannon, Jr. of the Institute for Justice and Democracy in Haiti. "For financial crimes, if you've got documentation, they're easy to prove. [And in this case, we] literally have boxes and boxes of evidence."

The human rights abuses will certainly prove more challenging. There has never been a systematic investigation into what happened during the Baby Doc years, and what few attempts have reached courts in the past two decades have met obstacles like statute limits. A case in Paris, for example, was dismissed because the crimes took place before the country's relevant laws were in place. "Duvalier himself was not doing the shooting and torturing," adding another complication, says Concannon. "But it shouldn't be that difficult to piece together."

So Haiti waits, as do many of the exiles and victims who remember life under Baby Doc like it was yesterday."Our country, I will say again, was done wrong by his trickery and repression, still today, unpardonable actions," wrote the 82-year-old Haitian poet Gerald Bloncourt, chairman of an exile group that has advocated to put Duvalier on trial for over a decade, on his blog on Jan. 17.

Speaking of Duvalier's return, he beseeched, "I call upon all those who share [our concerns] to rise and denounce this latest attack on our ‘Human Rights,' [i.e. Duvalier's return] -- this new and colossal contempt for the Haitian people." 

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