Trim Size: 6in x 9in k Midler ftoc.tex V1 - 10/30/2017 4:26pm Page vi k k k Trim Size: 6in x 9in k Midler ffirs.tex V1 - 10/30/2017 4:24pm Page i What’s Wrong with China k k Paul Midler k Trim Size: 6in x 9in k Midler ffirs.tex V1 - 10/30/2017 4:24pm Page ii Copyright © 2018 by WILEY. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. 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For general information about our other products and services, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. k k Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Library of Congress Cataloging-in-Publication Data Names: Midler, Paul, 1968- author. Title: What’s Wrong with China / by Paul Midler. Description: Hoboken, New Jersey : John Wiley & Sons, Inc., [2018] | Includes index. | Identifiers: LCCN 2017043469 (print) | LCCN 2017048361 (ebook) |ISBN 9781119213727 (pdf) | ISBN 9781119213734 (epub) | ISBN 9781119213710 (cloth) Subjects: LCSH: Economic development—China. | China—Commerce. | China—Economic policy. | China—Civilization—21st century. | China—Social conditions—21st century. Classification: LCC HC427.95 (ebook) | LCC HC427.95 .M53 2018 (print) |DDC 330.951—dc23 LC record available at https://lccn.loc.gov/2017043469 Cover Design & Image: Emily Mahon Printed in the United States of America 10987654321 k Trim Size: 6in x 9in k Midler ftoc.tex V1 - 10/30/2017 4:26pm Page iii CONTENTS Chapter 1 The Pirate Ship 1 Chapter 2 A Mania for Money 10 Chapter 3 Blush of Shame 16 k Chapter 4 Beating the System 19 k Chapter 5 Intermediaries 26 Chapter 6 Dulled Senses 35 Chapter 7 Emotional Negotiators 42 Chapter 8 Oliver Wendell Holmes 55 Chapter 9 Chemicals, Guns, and Gimcracks 67 Chapter 10 Sinocentric Thinking 76 Chapter 11 “That’s My Hand” 86 Chapter 12 Lack of Conscience 93 Chapter 13 Tacit Collusion 99 iii k Trim Size: 6in x 9in k Midler ftoc.tex V1 - 10/30/2017 4:26pm Page iv iv Contents Chapter 14 Networked Behaviors 108 Chapter 15 Partner on the Deal 121 Chapter 16 Self-Regulating Empire 125 Chapter 17 Corps de Ballet 134 Chapter 18 Informal Paradox 139 Chapter 19 Brown Numbers 148 Chapter 20 Reform, Reform, Reform 152 Chapter 21 The Dynastic Cycle 159 Chapter 22 Nibble, Nibble ... 166 k k Chapter 23 The Social Order 174 Chapter 24 Cat’s Paws and Telegraphed Punches 179 Chapter 25 The Great Absorber 186 Chapter 26 Kleptoparasitism 192 Chapter 27 Cleaning the Slate 196 Chapter 28 Massacred in Business 199 Chapter 29 The China Watchers 203 Chapter 30 Isolationist Past 212 Chapter 31 The Benefit of the Doubt 219 k Trim Size: 6in x 9in k Midler ftoc.tex V1 - 10/30/2017 4:26pm Page v What’s Wrong with China k k k Trim Size: 6in x 9in k Midler ftoc.tex V1 - 10/30/2017 4:26pm Page vi k k k Trim Size: 6in x 9in k Midler fbetw.tex V1 - 10/28/2017 12:22pm Page vii The problem of China is largely pathological, and very slightly political. —Putnam Weale (1925) Don’t try to give the American people the whole truth about China. In the first place they wouldn’t believe you, and in the second place their stomachs k are too weak. k —Hallett Abend (1931) To understand China at all, it must first be very clearly understood, no matter what the Chinese say of themselves in public, that all but an infinitesimal fraction of the Chinese people are convinced that there is nothing fundamentally wrong with China. —Rodney Gilbert (1926) k Trim Size: 6in x 9in k Midler fbetw.tex V1 - 10/28/2017 12:22pm Page viii k k k Trim Size: 6in x 9in k Midler c01.tex V1 - 10/28/2017 7:36am Page 1 CHAPTER 1 The Pirate Ship wo weeks before boarding my first flight to Asia, a friend ofmy k Tmother’s wished me well, letting me know she was jealous. k “You’re so lucky,” she told me. “Wish I was going.” She had never been to the Far East but was enamored by its ideas and traditions, especially medicine. “Just think about it,” she said. “They’ve been practicing medicine for thousands of years. They know all kinds of things we don’t.” It was an unintended send-off as I found her words echoing back to me two weeks later in Taipei. I had been invited to join a group of office workers on a day trip their company had planned, andonthe return—at the drop-off point—I managed to get my hand smashed in the door of their van. “Duibuqi!” cried the woman who injured me. I was frozen in pain. A colleague offered that she had something. “Chinese medicine,” she said enthusiastically, before bolting. A glass jar was presented, upon which were some handwritten Chinese characters. The lid was removed, revealing a dark, viscous liniment. And as it was applied to my hand, I held out hope. Three women stood around me now, concentrating fully on my paw and taking turns offering commentary. “That’s better,” one assured. 1 k Trim Size: 6in x 9in k Midler c01.tex V1 - 10/28/2017 7:36am Page 2 2 What’s Wrong with China “Much better,” another confirmed. While everyone stood around waiting for something to happen, my hand continued to throb and a strange thought entered my head: Was this Chinese traditional medicine? Was this how these people thought the human body worked? Broken bones healed in a jiffy with a magic salve? I was in my twenties then and somewhat embarrassed to have such rude thoughts. But the scene struck me as comical, and I had to suppress the urge to laugh. Thanking everyone for an otherwise lovely afternoon, I lied and told them I was feeling better. I then made my way to an area hospital, where I received a set of X-rays for the hand, which luckily had not suffered any fractures. It was a strange beginning to a career in Asia, and perhaps an unproductive one. Westerners in it for the long haul were supposed to arrive mesmerized—enchanted at least—and that condition was meant to carry them through the several years it took to pick up the language. The bloom would come off the rose eventually, but itwas meant to do so only after a fair amount of time had passed. The effect of having my bubble burst almost upon arrival put me k in an odd disposition: Chinoiserie and other Orientalia now struck k me as daffy. I had little interest in studying anything Chinese inthe traditional sense, and along with that ennui went any intention of taking my time in this part of the world seriously. Thankfully I was young—this was twenty-five years ago—and I didn’t need much of an excuse to stick around. A reliable old motor- cycle, a rooftop apartment in the mountains outside of the city, an assortment of colorful characters for friends, and the odd job would suffice. I spent no time on language training and managed to pickupa fair amount of Mandarin in spite of myself. Wrapping up three years in Taiwan, I returned to the United States and entered a graduate school program that began by sending me to Beijing for the summer. And that was how I wound up in my first proper Chinese language course with a woman named Miss Zhang. In our first one-on-one session, Miss Zhang tossed mewhat she must have thought was a softball question: “Why are you still in China?” She was taking the American government’s dubious view (it was Beijing’s as well) that the years I lived in Taiwan should be clocked as time spent in the People’s Republic of China, and she asked because few nonnatives ever returned after a stint.