Saturday, May 4, 2013
Thursday, May 2, 2013
It is in the U.S. interest to support the Sino-Burmese relationship to communicate to China
that U.S. involvement in Burma is not part of a containment strategy nor an attempt to drive
a wedge in the bilateral China-Burma relationship.
After U.S. diplomats visited the Kachin State, China was wary of a potential U.S. intervention
in the conflict. Partially to avoid U.S. involvement in its border, China has been the host of
the recent ceasefire negotiations with the Kachin Independence Organization (KIO) and the
Burmese Government. Border stability is in China’s interest, and China is fearful that a
disintegration of the Kachin Independence Army (KIA) would present an opportunity for
Kachin guerilla fighters to attack targets indiscriminately in the region, posing risks to
Chinese investments such as the dual oil and gas pipeline. However, it is in the interest of the
U.S. that the KIO and the Burmese Government peace talks lead to a permanent integration
solution of the KIA and Burmese Army. Continued conflict with the ethnic minorities could
present a barrier to the elections in 2015, and it is in the U.S. best interest that free and fair
elections are held on time.
China recently appointed Wang Yingfan, a very senior diplomat and former Vice Minister of
Foreign Affairs, the first special representative on Asian affairs. Wang Yingfan will primarily
be focused on the Sino-Burmese relationship, and it is in the U.S. interest for Patrick Murphy,
the U.S. Special Representative and Policy Coordinator for Burma, to establish a relationship
and open communication channel with Wang Yingfan immediately.
As 2014 is the first year Myanmar is chair of ASEAN, the U.S. has an interest in increasing its
influence relative to China in Myanmar so that China’s influence does not weigh unduly over
Myanmar’s leadership of ASEAN.
China has started to build relationships with democratic oppositions in Myanmar. The U.S.
currently has the strongest relationship with Aung San Suu Kyi and the National League for
Democracy (NLD), and Thein Sein and the reform supporters in the Union Solidarity and
Development Party (USDP). In light of the uncertain outcome of the elections of 2015 it is in
the U.S. interest to also build relations with opposition parties in Myanmar as China is doing.
- It is in the U.S. interest to promote a stable Sino-Burmese relationship so that the Chinese are close observers to the strategies and benefits of the transition. A successful and prosperous transition to democracy in Myanmar could be a good example for Chinese who may push for reform in the future to refer to.
China is the largest source of Burma’s FDI inflows, about a third of the total $42 billion the
country received in 2012. The majority of the Chinese investment is in the hydro, oil and gas,
and mining sectors. However, a significant amount has gone into infrastructure. Chinese
companies view Burma’s need for infrastructure as a great opportunity. It is in the U.S.
interest for China to invest in Burma’s infrastructure because infrastructure investments
take a very long time to realize profits and will facilitate the entrance and ease of business for
American companies in Burma.
The U.S. has an interest in responsible Sino economic involvement in Myanmar to prevent
environmental and humanitarian disasters, and to protect the land for the benefit and
enjoyment of generations to come.
1. China has provided a vast amount of military support to the Burmese military and ethnic minority militias in Burma. It is suspected that China conducts military intelligence gathering activities from Burma. It is in the U.S. interest to understand the extent of the Sino- Burmese military relationship. It is in the best interest of the U.S. that China does not fund the ethnic militias.
To gain a greater understanding of the Sino-Burmese military relationship the U.S. should
propose a joint security exercise with U.S., Chinese, and Burmese partnership aimed at
cutting down illegal drug activities in the Golden Triangle. Thailand has been frustrated by
Burma’s inability to curb the flow of methamphetamines across the border, and China is not
likely to welcome U.S. forces on its border, but a Sino-Burmese-American join effort may be
possible on the Burma, Laos, Thai border.
Patrick Murphy should invite Wang Yingfan for an official visit to Washington D.C. to discuss
which policies in Burma the U.S. and China can work together on in order to show China that
the Burma – U.S. relationship is not part of a containment strategy, emphasizing, as
Ambassador Derek Mitchell said, that “U.S. involvement in Burma is about Burma.”
USAID should design projects for public private partnerships involving American and
Chinese companies in Myanmar. The partnerships will be mutually beneficial because the
Chinese companies can bring the capital and state financing while American companies can
bring the training and technological know how that Chinese and Burmese companies are
To enable the U.S. to invest with confidence in Burma and partner with Chinese enterprises,
the USG executive branch should ask the 113th Session of Congress to make it a priority to
pass new legislation fully removing the old sanctions.
China desires to be seen as a responsible international power. The U.S. should publically
commend China for taking a leadership role in the KIO/Burmese government peace process
and encourage further facilitation of the peace process.
High-level U.S. Government representatives should plan to be present at as many of the 2014
ASEAN meetings in Burma as feasible in order to demonstrate commitment to the pivot and
maintain an element of U.S. influence on Burma’s leadership of ASEAN.
U.S. diplomats fluent in Chinese and Burmese should be trained at FSI and posted in Yangon
to strengthen and facilitate communication between the three nations.
Memorandum for Secretary of State John Kerry concerning the 2015 Myanmar Elections Attitudes and Policy Regarding the Planned 2015 Elections in Myanmar
The USG should use 3 very basic criteria to consider the elections legitimate: 1)No widespread complaints of voter obstruction or intimidation 2)Election results that have not been tampered with 3)The elections are held and constitutionally eligible elected parties are allowed to take office in a timely manner.i If the 3 criteria are met, the USG should make moves to permanently lift sanctions. The USG should communicate these expectations and the potential for lifting sanctions to the Myanmar leaders in private and not telling the government what to do, but offering to helping the government host legitimate elections.ii
The Burmese government is sensitive to being perceived as a puppet of any country. There is a strong sense of nationalism and pride shared among Burmese citizens, which the USG will want to avoid aggravating by appearing to interfere in internal affairs. For this reason, the USG should not threaten the Burmese government with what US policy would be if the elections are not deemed legitimate.
The USG should make 4 further recommendations to the Burmese government in private: 1)Appoint and allow access to local organizations to partner with international organizations for elections monitoring, 2)Encourage the Parliament to amend the 2008 Constitution to allow all Burmese citizens above a certain age be eligible to run for President and to remove the provision of 25% of Parliament seats for the military 3)Encourage the participation of Rohingya, other Muslim citizens, and ethnic minorities in the election. If verifiable efforts and relative successes are made to act on the recommendations, the USG should tell the government it will start the process of a preferential trade agreement with Myanmar.
A commission to review the constitution for possible changes was establish in late Mar. 2013, but it was proposed by the USDP, and needs to integrate NLD members.iii As the Constitution currently stands, Suu Kyi is not eligible to be President because her late husband and 2 sons are UK citizens. It is possible the Constitution could be amended to make it legal for her to be President, especially in light of the statement from the current President, Thein Sein, in support of her candidacy, and her recent attendance at the Armed Forces Day.iv However, passing a Constitutional amendment requires approval from 75% of Parliament, which is unlikely when 25% of the seats are held by current members of the military. The US could suggest that the government wait to see the outcome of the elections, and if less than 25% of the candidates elected to the Parliament are from the military, than the Committee would be obliged to present Parliament with a Constitutional Amendment.v
The USG will likely receive pressure from the business community and related lobbying organizations to employ a loose definition of what constitutes a legitimate election and find a way to work with whatever regime is in power in 2015. The US business community has already made substantial investments in Myanmar, including the announcement of the opening of the first American hotel in Yangon in 2014 by Hilton Hotels, and would like access to Myanmar’s market of almost 60 million people, geostrategic location between the world’s two most populous countries, and resources such as natural gas, labor, jade, and timber.vi
Top Myanmar academics and diplomats will argue for continued engagement, regardless of the outcomes of the elections, because many do not view the sanctions as effective in influencing the military regime in the past. US Citizens who have had a chance to visit Myanmar and experience the poverty and severe underdevelopment of human capacity will likely encourage continued engagement in the hopes of bettering the lives of the majority of the country’s people who live in extreme poverty.
US Allies Japan and Thailand will argue for an approach of continued engagement because they are betting on an economic boom in Myanmar. Japan has recently invested a lot of foreign aid in the country in deals that American professors, such as Prof. Karl Jackson, have played a role in. Thailand, who recently encouraged the US military to invite the Burmese military to be observers at the Cobra Gold exercises will also support continued US engagement.viii Thailand will want to avoid any changes that could cause further unrest along the border or an influx of refugees. The number of flights from Thai border towns to Myanmar are increasing, and the border trade will soon be more closely monitored, providing a large tax collection opportunity.ix
The Chinese government, people, and businesses could verbally protest if they perceive the USG to be too involved in the elections process and influencing the results. The Chinese already suspects the increasing US interaction with Myanmar to be part of a containment strategy. The Chinese business community was slighted by the halt of the Myitsone Dam and is now facing increasing competition from international companies, and the nationalism of the Chinese people could be stoked if the US involvement in Myanmar is seen to be a catalyst for worsening Myanmar – Sino relations.
In the lead up to the election the most important thing the USG and Americans can do is communicate at every possible opportunity to the USDP, the Tatmadaw and ethnic minority militias, the business community, opposition political parties, and civil society groups that timely and legitimate elections in 2015 is in Myanmar’s best interest.
The US should continue, and expand, programs building the skills of journalists and support the 16 newly free and independent media outlets.x The media can further investigate the source of the violence in the country, and potentially expose the truth regarding the USDP involvement in framing it as stemming from religious conflict. It is possible that the recent conflicts in Bago Division are being framed by the government as stemming from conflict between Buddhists and Muslims as part of a strategy to cause political difficulties for Suu Kyi. If Suu Kyi stays quiet about the supposed religious conflict, the international community will criticize the Nobel Laureate for failing to stand up for human rights, but if she works to end the conflict and appears too supportive of the Muslim community (about 2% of the population), she could lose favor with the Buddhist majority of the country (about 85%) and lose many of the votes needed to be elected in 2015.xi Media can be watchdogs in the absence of rule of law or an electoral commission.
The American Center and USAID mission should continue educational programs about the different ways a legitimate election can be conducted so that the Burmese citizens are able to recognize and report inconsistencies leading up to the election. The American Center in Yangon can show and then discuss American movies that feature election stories during its weekly Tuesday free movie screening.
ii In-person conversation with former Burmese Foreign Service Officer. April 1, 2013.
iii Aye Aye Win. “Myanmar Parliament Agrees to Review Constitution.” The Associated Press. March 20, 2013. Accessed April 1, 2013. http://bigstory.ap.org/article/myanmar-parliament- agrees-review-constitution
iv Fuller, Thomas. “Myanmar Jarred by Peace Laureate at Military Parade.” The New York Times. March 27, 2013. Accessed April 1, 2013. http://www.nytimes.com/2013/03/28/world/asia/daw- aung-san-suu-kyi-appears-at-burmese-military-parade.html
v In-person conversation with former Burmese Foreign Service Officer. April 1, 2013.
vi “Hilton to open hotel in Myanmar.” The Bangkok Post. March 6, 2012. Accessed April 1, 2013. http://www.bangkokpost.com/breakingnews/339115/hilton-to-open-hotel-in-myanmar.
vii “Suu Kyi to visit largest Burmese community in US.” Mizzima News. August 28, 2012. Accessed April 1, 2013. http://www.mizzima.com/news/inside-burma/7860-suu-kyi-to-visit-largest- burmese-community-in-us.html
viii Ralph, Talia. “Cobra Gold: Myanmar gets invitation to US – Thailand military exercises.” The Global Post. October 19, 2012. Accessed April 1, 2013. http://www.globalpost.com/dispatch/news/regions/asia-pacific/myanmar/121019/myanmar- gets-invite-us-thailand-military-exercises
ix “Thai Airline to Launch Burma Flights from Mae Sot.” The Irrawaddy. April 1, 2013. Accessed April 1, 2013. http://www.irrawaddy.org/archives/31036
x Naw Say Phaw Waa. “Eight more publishers granted daily licenses.” The Myanmar Times. April 1, 2013. Accessed April 1, 2013. http://www.mmtimes.com/index.php/national-news/6201-eight- more-publishers-get-daily-newspaper-licences.html
xi Conversation with Burmese VOA journalist. March 30, 2013.
Monday, May 4, 2009
There’s no end to theories predicting the demise of the U.S., rise of the Middle Kingdom, World War 3 between 2 nuclear powers, or even possibly a new power duo partnership closer than the U.S. and Britain had at one time. The Sino-American relationship is clearly going to define international politics in the future. The balance of power between China and the United States has already been dominating the headlines, especially since the recent election of the United States President, Barack Obama. Every move each government makes is carefully watched and the wording of each press release analyzed and decoded as a democratic union and communist party attempt to work side by side.
In past Sino-American relations, the U.S. has been the more dominant and aggressive country while China has not been as forceful or vocal in international politics. Now, China is making more demands and has higher expectations of cooperation from other countries while the U.S. is more willing to compromise with and listen to other nations. It can also be observed that the relations between China and the U.S. have focused on overcoming the differences between the two, the contrast between an Easter and Western part of civilization, and thus the complex cultural dynamics between two countries, one still developing and the other highly modernized.
Looking toward the future, however, I predict the relationship will be the most successful if the leaders of each nation can emphasize the similarities their people and countries share. If the Sino-American relationship grows to be a strong partnership that could unite the world and work together to tackle many of the biggest global problems, the most immediate being the international financial crisis. To make this possible, the U.S. must work very hard to correctly perceive the Chinese and eradicate any gross misperceptions Americans may have. Obviously, China must also do the same towards the U.S. This bond will be possible if the Chinese misperceptions of American motives and intent can be eliminated and if American misperceptions of Chinese culture and mindset are corrected. These misperceptions fall generally into three somewhat distinct, yet heavily interrelated sets of concerns: those having to do with issues which are 1) economic, 2) political, and 3) social.
1) Economic Dimensions
While the Chinese (mostly only the upper class and emerging middle class) have enjoyed the material wealth brought by capitalism, the emerging “new left” intellectual and political population in China is critical of the American economic system. Voices among the latter dub it "crony capitalism" and think that it allows for the rich to get richer while neglecting the poor and rural people, leaving them behind (Cha, par. 12). Criticisms of the American finance industry have been plentiful during the current economic crisis, and many Chinese publications and articles blame the West for the catastrophe; they commonly diagnose American greed and lack of regulation as the problem (Jacques, par. 4). In fact, the Chinese government does not believe that the U.S. dollar will continue to be the strongest currency in the future (Jacques, par. 11). In this regard the Chinese have even called for an international currency and more regulation from the International Monetary Fund and World Bank, with less participation and decision-making from the United States (“Chinese premier delivers keynote speech at Boao conference,” par. 31).
At the same time, American leaders have accused the Chinese of manipulating their currency value to keep their goods artificially cheap so that the demand for their exports remains high (Lander, par. 1). But, in the current atmosphere and deep sense of uncertainty of what the future holds for the financial world, many Americans, such as influential investor Jim Rogers, are investing heavily in China and think “it’s the single strongest market in the world since last fall” (Kimelman, par. 10).
This strong market not only holds the investment of Americans, but the massive workforce and speedy rate at which expansive projects are able to be completed holds captive the American awe and imagination. This perception of China could not be more correct, and was recently demonstrated with the way Beijing prepared for the 2008 Olympics, constructing stadiums, hotels, and infrastructure what seemed to be almost overnight (Balfour par. 2). But what Americans do wonder is how long China’s economy can sustain these speed-of-light growth rates and GDP expansion? While American companies may be envious of the seemingly endless workforce and low cost of labor, they do perceive the challenge that China faces keeping these millions of people employed and occupied, with 6.1 million of them being recently graduated students (“Where will all the students go?” par. 3).
China knows that it has a valuable asset with its immense population and healthy workforce, but they perceive its benefit to be its quick money making ability while Americans would perceive the workforce to be less dependable and not innovative enough. I noticed this as well during my internship in Hong Kong last summer when I was confused and frustrated by the lack of creativity in my coworkers, but I quickly realized it was how they had been trained and what was expected of them.
2) Political Issues
The political climate between China and the United States has been most deeply affected by the West’s push for China to democratize. China has interpreted this as the West’s attempt to keep China subordinate (Shirk, p. 262). What China misperceives about the U.S. is the mindset of the “white-man’s burden” or “American exceptionalism.” That is a sentiment held by the American people who hold that it is their duty to bring democracy to the rest of the world because they believe it protects human rights and is the best government for the people. However, Americans don’t understand the Chinese desire for stability, and their need to control a vast population of one and a half billion people. The American population of a little over 300 million people is much smaller and more spread out, generally living less densely, while over 90% of the Chinese population lives on less than 40% of the land (Ebray). The Chinese fear that absolute chaos will break out due to criticisms of the government or serious political activity. Jackie Chan, for example, expressed a belief that a free society leads to a chaotic society. He clearly prefers stability and harmony to the right to choose (“Jackie Chan's China comments prompt backlash”). In response to Chan’s views, many Chinese citizens have criticized him and come out in support of democratization. Yet Chan’s statements are clearly parallel to those of the authoritarian government in power in China. Americans have long misperceived that as China grows richer, it will slowly democratize, but in fact the Chinese Communist Party has retained a firm grip on the power (Fukuyama, par. 2). What the U.S. doesn’t always think about though is “were China to democratize today, the political consequences would likely threaten middle-class prosperity, if not political stability in general” (Fukuyama, par. 9).
As briefly alluded to earlier, ever since the founding of the People's Republic of China sixty years ago, the government has been relatively quiet and building its strength before becoming a vocal presence on the international scene. This adheres to a Chinese saying “taoguang yanghui - hide one's capabilities and bide one's time” (Jacques par. 4). Now Hu Jintao and other top leaders of China are speaking out, expressing strong opinions, and taking a more pro-active role in world affairs. Other countries are starting to call on China to act even more politically. For example, the U.S. is putting pressure on China to work with North Korea and encourage Kim Jong Ill to stop his involvement with nuclear weapons (Dingli). Americans perceive China as attempting to consolidate its influential presence in Southeast Asia and gather allies among the regional countries.
It seems evident that a major road-block in future Sino-American relations is going to be China's demands for respect as a world power but also the expectations from the Chinese to be offered special treatment and exceptions as a still-developing country. While the U.S. may be patient with that argument, it will not tolerate the perceived corruption that it believes has infiltrated even the highest levels of Chinese leadership. The U.S. wants to work with China but American leaders and business people cannot take part in the culture of gift-giving or favor-receiving that often permeates Chinese politics and business.
As China develops and matures, Susan Shirk, author of China: Fragile Superpower prudently warns that Americans must not overreact to China’s economic rise. Otherwise the U.S. risks sending the message that it aims to keep China subordinate no matter what, taking away any incentive China might have to act as a responsible world power (p. 267-8).
3) Social Aspects
Americans tend to view China as having a very formal and traditional culture. While elderly Americans might envy the respect they feel Chinese elderly receive and American parents hope to instill the Confucian value of filial piety in their children, some aspects of traditional Chinese culture are perceived to be outdated and unfitting in modern times. For example, promotions are often reserved for those with seniority or connections, discouraging young workers from hopes their hard work and energy will pay off in the near future.
In the past the U.S. has also been very critical of the human rights violations in China, especially the lack of free speech or any form of government opposition. China has not reacted well to these criticisms in the past, and has responded with equally scathing reports on the status of human rights in America. Under the current Obama administration Secretary of State Hillary Clinton has taken a much less vocal approach to the issue and refrained from publicly rebuking or questioning China's human rights practices, which Shirk believes have been counterproductive in the past (Shirk, p. 262). This has already proven to be good for Sino-American relations because the Chinese feel that the U.S. is finally treating them with more respect and not infringing on internal matters.
The Chinese and Americans also misunderstand each country’s journalistic culture. The media in China is closely monitored by the state while the American news sources fiercely protect their right for free speech. The Chinese misperceive American motives to be anti-Chinese when negative news regarding Sino-American relations is released. Chinese news sources would prefer to report that meetings and talks between the U.S. and China were successful in order to keep the national opinion in favor of the U.S. and avoid inciting a huge anti-West flare up. In order for China to help the U.S. deconstruct misperceptions about its media it should lessen the state control over the media so that Americans believe they are being fed more than just what the Communist Party wants them to hear. China recently launched a new newspaper, “The Global Times,” aimed at helping the international world “Discover China” and trying to improve the Communist Party’s image throughout the world. “The effectiveness of such efforts has yet to be proven, however. In media, Beijing hasn't yet hit on a formula to connect broadly with Western audiences” (Bodeen, par. 7).
The misunderstanding of the social differences in China and U.S. can largely be attributed to the lack of education in the West concerning Chinese culture, history, and language as well as a widespread, basic unawareness about current events, geography, and society in other hemispheres. In the standard American education curriculum Eastern topics are studied only briefly, and due respect is not given to Chinese philosophers, such as Confucius (Ash). An awareness of this could lead the Chinese to feel insulted and slighted, believing that Americans do not value or respect their ancient culture and the great thinkers in their traditions. However, the Chinese don’t realize that this is a flaw of the American mindset and not a result of any intentional action. If the U.S. worked to incorporate more Eastern philosophy and history in the curriculum the general American population would have a stronger foundation to understand and be in support of a strong Sino-American relationship.
In a recent article in “The Guardian,” a London newspaper, Timothy Ash explains how an understanding of Confucianism could help explain Chinese contemporary society, politics, and even foreign policy (par. 5). For example, the Chinese government’s desire for stability, as commented upon above, directly stems from the Confucian value of harmony. This is underscored in this quote from President Hu Jintao in February 2005, promoting the Communist party's proclaimed goals of a harmonious society and world: “Confucius said, 'Harmony is something to be cherished'” (Ash, par. 3). As I observed on a trip to multiple mainland universities in 2007, more recently Chinese university students have been able to pursue the academic study of Christianity, the dominant religion and philosophy in the West in order to understand the way Americans think. If many more Westerners than currently do so would correspondingly take Ash’s advice and study Chinese philosophers and religions more fervently it would create the opportunity for a greater understanding and interpretation of China by outsiders. Because English is the lingua franca of the world, especially in business, the Chinese population has made a much more concerted effort to learn English than Americans have made with Mandarin. Although Mandarin is used in only a few countries as the core language, it has the greatest number of primary speakers worldwide, and it would be prudent of Americans to acknowledge this and respect China’s language by placing a greater academic emphasis on it (“The World’s Most Widely Spoken Languages”). In Jim Rogers’ book, soon to be released, A Gift to My Children: A Father’s Lessons for Life and Investing, he recommends that children learn Mandarin so that they too can share the benefits from China’s massive economic growth (Kimelman par. 7).
Although China is emerging as a strong global power with strong leadership, the country still has to undergo quite a bit of improvement and does not feel caught up to the consistent level of modernization that the United States has achieved. Because the two countries are at different places developmentally, the main priorities of each can come into conflict and resulting misperceptions about this can weaken the partnership between the two countries. The United States is often critical of China’s environmental standards and practices, or what it perceives to be a gross lack of such, while China does not feel that it should be held to such stringent green policies until it has had the chance to fully develop and catch up.
However, China does have the unique opportunity to bypass many of the environmental mistakes that the United States and other developed countries made by instituting green technologies and lifestyles now, instead of having to backtrack and change old habits or undo what has already been done. Yet, since the economic crisis, China has abandoned its environmental priorities even more in favor of speeding up the recovery of the hyper economic growth rate China has been accustomed to for the past decade (Ansfield). While China has numbers and statistics that make it sound like they are truly clamping down any environmental problems, the truth is that the de-centralized Environment Protection Agents are often more favorable to local business people than to the drinking water or natural flora and fauna.
What the U.S. and China must realize is that they have more in common than not in common, and both countries belong to the same world and are a part of human civilization. They cannot focus primarily on their differences and must realize what the benefits are which close cooperation between the two countries can bring for both their own national interests and to the international community. With two very different governing philosophies there will be no end of lively discussion and unique proposals set forth to address world issues. However, each country must treat the ideas and opinions of the other country with respect and an open mind. In a way, China and the U.S. almost have the relationship of a younger sibling and an older sibling. China must be coddled by the United States a little bit while the U.S. must be supportive and accepting of the invigorating energy China can bring and ideas for change. The U.S. and China can be compared to the yin and the yang: each country excels in an area that the other country may struggle in. A cliché saying often quoted says that opposites attract and these two countries may not always be the best of friends, but they are bound to be close partners. When working together, they must keep in mind each other’s weaknesses and tap each other’s strengths.
None of this will be possible with misperceptions clouding the vision of either side, however, and now is an opportune time to work toward a shared responsibility between of the great nations of the world.
List of Works Cited
Ansfield, Jonathan. “Slump Tilts Priorities of Industry In China.” The New York Times 19 Apr. 2009
Ash, Timothy Garton. “Comment & Debate: Confucius can speak to us still - and not just about China: There is a simplistic way to read this renaissance of an ancient tradition. The truth is very much more interesting.” The Guardian (London) 9 Apr. 2009. 19 Apr. 2009
Balfour, Frederik; Engardio, Pete; Roberts, Dexter; and Einhorn, Bruce. “Broken China.” Business Week. 23 Jul. 2007.
Bodeen, Christopher. “China Launches new English-language Newspaper.” Yahoo News. 20 Apr. 2009. http://news.yahoo.com/s/ap/20090420/ap_on_re_as/as_china_new_newspaper
Cha, Ariana Eunjung. “For China's New Left, Old Values;Emerging Movement Views State Power as a Remedy for Free-Market Inequalities.” The Washington Post 19 Apr. 2009.
“Chinese premier delivers keynote speech at Boao conference” BBC Monitoring Asia Pacific – Political 18 Apr. 2009.
Dingli, Shen. “China Tires of Pyongyang’s Antics.” Asia Times Online. 27 Apr. 2009. http://www.atimes.com/atimes/China/KD28Ad01.html
Ebray, Patricia Buckley. People. A Visual Source Book of Chinese Civilization. 27 Apr. 2009. http://depts.washington.edu/chinaciv/geo/people.htm
Fukuyama, Francis. “For China, stability comes before democracy.” The Daily Yomiuri- Tokyo. 13 Jan. 2008.
“Jackie Chan's China comments prompt backlash” Associated Press 19 Apr. 2009.
Jacques, Martin. “The Great Shift in Global Power Just Hit High Gear, Sparked By a Financial Crash.” The Guardian (London) . 20 Apr. 2009.
Kimelman, John. “Q&A: Jim Rogers Isn’t Buying a U.S. Stock Recovery.” Barrons. 20 Apr. 2009.
Lander, Mark. “China Jittery About Obama Amid Signs of Harder Line.” The New York Times. 24 Jan. 2009.
“The World’s Most Widely Spoken Languages.” Saint Ignatius High School. 27 Apr. 2009. http://www2.ignatius.edu/faculty/turner/languages.htm
Shirk, Susan L. China Fragile Superpower. New York: Oxford University Press, 2007.
“Where will all the students go?; Chinese unemployment.” The Economist- U.S. Edition. 11 Apr. 2009.
Monday, April 27, 2009
AMENDED IN SENATE APRIL 8, 2009
AMENDED IN SENATE APRIL 1, 2009
SENATE BILL No. 858
LEGISLATIVE COUNSELS DIGEST
An act to add Section ¬110687 to the Revenue and Taxation Code, relating to the appropriations or use of taxpayer money to publicly finance stadiums or arenas for professional or university sports teams.
There is little existing law governing this matter and California city councils have spent and lost billions of dollars of taxpayer money financing large development projects for professional sports franchises. As it stands today, the education budget is constantly reduced, state workers are frequently laid off, yet nevertheless city council members still try to divert money for unnecessary sports facilities in hopes of promoting economic development and growth. There is no surplus money in the budget to be wasting millions of dollars on entertainment facilities. Public opinion is not in favor of this use of tax money and in almost every scenario these projects do a disfavor to the city because most often in the past the investment is not profitable for the city or even very stimulating economically.
This bill would require that no tax-payer money collected in the state of California could be used to fund professional sports and no government bonds could be issued to finance the construction of public performance facilities. The sports franchise must privately finance the operating and building costs of its own stadium as is expected of any other private business.
This bill would require cities still wishing to give professional sports franchises some sort of economic break to vote on any proposals of special tax rates, land deals, or other non-monetary assistance. The citizens would have to pass the proposal with a majority vote and there would be no way to overturn the vote; if it did not pass the only option would be to put it on the ballot the next year.
This bill would ease the pressure that professional sports place on city councils to help finance new stadiums and it would furthermore allow mayors to focus tax-payer money on more vital issues such as education and environmental concerns.
This bill would encourage the city to think of more creative ways to stimulate economic development and create public spaces based on outdoor parks and public recreation instead of professional entertainment.
This bill would encourage renovation of existing stadiums and sporting facilities so as to conserve resources and make use of the structures that we already have invested in so heavily.
Fiscal Committee: No
State-mandated local program: No
The people of the State of California do enact as follows:
SECTION 1: It is the intent of the Legislature to use the tax-payer money collected in the state of California for the greatest benefit of the greatest number of Californians. The Legislature hereby finds and declares that tax-payer money is not best utilized to fund professional sports. Private businesses should not be dependent upon support by the state and, as privately owned enterprises, professional sporting teams should not be unconditionally supported by the government.
SECTION 2: It is recognized by the Legislature that professional sporting franchises do provide certain, though limited, benefits to cities. They can boost morale and unify a city, so it is understandable that a city council may want to provide limited economic benefits to attract a sports franchise. However, any special arrangements made with a professional sports franchise shall be enacted only if a majority of citizens who vote in the local city elections support the proposition.
SECTION 3: It is recognized by the Legislature that the financing of the construction for stadiums can go through many layers and become rather complicated and that all proceedings the city government are involved in with the construction or renovation of a new stadium shall be clearly recorded and easily accessible for all citizens to see.
SUBJECT: Stadiums cannot be financed with public funds.
ORIGINAL COMMITTEE REFERENCE: Banking, Finance, and Insurance Committee
DIGEST: This bill forbids any tax-dollars raised in the state of California or government issued bonds to be used to finance the construction, renovation, or operations of a stadium or venue for professional sports.
Specifically this Bill:
1. Makes it illegal for any tax-payer money or government issued bonds to go towards financing the construction of a stadium for professional sports.
2. Requires that all stadiums must be renovated, constructed, or operated using private financing.
3. Requires that any special offers on land, any sort of economic benefits a city extends to a professional sports franchise, to anyone involved in developing or building the stadium, or to any private financing agents involved must be voted on by the city’s population on the next ballot and cannot be enacted unless passed by the majority of the population.
4. Urges city councils and mayors to use the money that might have been spent on professional sporting stadiums to fund the construction of low cost housing, improving the education system, creating affordable healthcare, and benefiting the public transit system.
5. Encourages professional sporting teams to share stadiums and split the cost of construction with other business interests. This increases the usefulness of the venues and allows for more quality structures to be built. The stadium should be versatile enough to also be an ideal location for concerts and other entertainment or large gatherings of people.
6. This bill could also entice professional sporting teams to renovate existing venues instead of building entirely new and unnecessary structures. This will be more cost effective and a better use of resources.
7. This bill makes any negotiations between the government and professional sporting teams completely transparent so that citizens are aware of how professional sports are being supported by their government.
EXISITING STATE LAW
1986 Tax Reform Act legislates that stadiums cannot be financed with any tax-free dollars. However, this simply put the pressure back on mayors and city leaders to fund the stadiums and so had the opposite effect desired because the professional sports teams found loopholes in the law and ways to work it to their advantage. This increased publicly funded stadiums and in the 1990s almost $4 billion tax payer dollars were used to pay for stadiums, most of which will never be paid back, either physically or in economic benefits.
S 1880, the Stop Tax-Exempt Arena Debt Issuance Act, Sen. Daniel Moynihan (D-N.Y.) This bill was not passed but was read in the Senate, so it shows that legislators have been thinking about this issue. However, this bill was introduced in 1996, and the 1990s was when the public financing of stadiums was at its height, and so it was an inopportune time to present this legislation. There were also many publicly funded construction projects already underway that made this bill really complicated because it was a retroactive bill. The author of the bill had noble attentions but his strategy for passing the bill was ineffective. He knew from the beginning that the bill most likely would not pass.
California State Law:
SB 4 by Murray in 1996
BILL SUMMARY: SB 4 would create a California Public Performance Facilities Authority, within state government, to acquire, construct, manage, or operate public performance facilities, including sports stadiums and performance halls. SB 4 would authorize the Authority to issue revenue bonds, incur other forms of indebtedness, and sell premium seat licenses, facility naming rights, and sponsorship rights, and to impose a facilities fee on tickets for these facilities.
AB 2805 by Ridley Thomas
BILL SUMMARY: Revises existing law provisions in the California Redevelopment Law for project area time extensions, applicable only to the City of Los Angeles for the purpose of rehabilitating the Los Angeles Memorial Coliseum for occupancy by an NFL franchise.
This bill will force professional sports to become more independent as private companies and save the state of California millions of tax dollars that can be better spent on other projects. The ultimate goal is to make the most of the hard-earned tax-payer money. Cities will no longer be trapped into funding enormous projects that they cannot financially support. The money California does not spend on funding the construction of stadiums can also be used towards recovering the massive budget deficit and crisis the state is facing.
There important fiscal effect of this bill is that it would allow for a better allocation of public money. Even if there are no new stadiums built in the state, there will not be a negative fiscal effect because there is no evidence that they provide huge economic benefit.
The state will not lose any money in tax revenue if these operations leave because any revenues they might have made were more than lost with the financing the state provided to build the stadiums.
Appropriations: No Fiscal Committee: No Local: No
Affordable Homes Collaborative
After-School All Stars, Los Angeles
Alameda Community Learning Center
Alliance for Affordable Services
United Teachers Los Angeles
University of Southern California
DC Fiscal Policy Institute
Coalition Against Public Funding for Stadiums
ARGUMENTS IN SUPPORT
California is in a huge budget crisis as a state and the cities are also severely suffering financially. It is time to get priorities in line and realize that the state should not be spending more money on professional entertainment, even with the intention to stimulate economies. Based on the lack of success of past developments that tax-payers have invested in, it is obvious that what the economy needs is not a new stadium. Hotels, businesses, and tourism can be attracted without needing to build entire new large developments. In fact, most fans will travel less than 20 miles to attend a professional sporting event. Professional sporting events do not generate new income; they are in fact a substitute entertainment event. Families or individuals who spend money going to a professional sports event would be going out for entertainment anyways and would be spending that money elsewhere, at a bowling alley, in a restaurant, or at the movies. Tax dollars should be concentrated where they are needed, for example in schools, public transportation, and healthcare. Investment in stadiums almost never turns out to be profitable for public financiers and there is no reason why tax-payers should be taking on the almost certain result of no return. The estimated construction costs of stadiums are almost always underestimated and therefore cities can be trapped into paying much more than they ever agreed.
In fact, these new stadiums start off a vicious cycle. When the construction is completed, the new ticket prices are astronomical to help pay for the construction costs, fans can’t afford these new ticket prices nor are they willing to pay them, especially in this economy, and then the stadium is half empty, the concessions don’t make very much money, staff are laid off because they aren’t needed; then the morale of the team decreases, restaurants near the stadium aren’t patronized because there are fewer fans going to games, fans buy less merchandise because they will not be wearing it at games and city income is low, defeating any positive benefits a stadium is supposed to bring.
Even if professional sports teams threaten to leave California because they will not receive public assistance to build stadiums, it will difficult for them to find a new home as there are few cities and states that are in the financial position to invest in these sorts of grandiose and unnecessary projects. In California it is completely unethical for our state to invest in these projects when the state is experiencing a huge budget deficit. Public opinion is not in favor of these projects and the citizens would be in outrage if it appeared their politicians were approving construction projects that were basically lining the pockets of the owners of the sports franchises. California has much higher priorities right now and cannot put professional sports ahead of our other values.
Government Finance Officers Association
United States Conference of Mayors
National League of Cities
Uniform and Textile Service Association
National Association of Bond Lawyers
Bringing Awareness of the Chargers Stadium Search
Anschutz Entertainment Group
Majestic Real Estate
ARGUMENTS IN OPPOSITION
If California stops supporting professional sports the teams will all leave the state and live in other states. The revenue from the taxes on stadiums’ concessions, tourists, and income taxes from all the people who are employed by the stadium and professional sports teams will be lost. Cities need stimulation economically, especially in these dire times, and the perfect way to do that is to build new attractions to keep professional sporting teams and fans happy. These stadiums employ thousands of people and all of those jobs would be lost if professional sports teams were to leave, increasing the unemployment rate. The teams are also a great way to unite communities and generate spirit and city pride. Since the stadiums are not only used for professional sporting events, the city would lose a venue to house many non-profit and community service events, concerts, and other large attractions such as Motocross or Monster Truck events. Swap meets, fairs, carnivals, private functions and parties are also held in these stadiums. Many new stadiums also are restoring and incorporating historic buildings and these buildings may not receive the funding to be preserved without being a part of a new stadium development. Professional sports help lower crime rates by giving the youth something else to do and care about. Going to professional sporting events is a part of every American youth’s childhood and we do not want to deprive children of that and drive them to the streets because of boredom and lack of entertainment. It is also not the role of the state to tell the local counties what to do with their tax-money, and it should be up to the tax-payers to decide how they would like their hard earned dollars spent.
SENATE DISTRICT 39
I am pretending to be Christine Kehoe and represent San Diego in the California State Senate and provide legislation to benefit my constituency. San Diegans will be very favorable toward this bill because the city recently supported the construction of Petco Park, a new ballpark in the downtown area. While the neighborhood has seen economic revival and is becoming a great destination, this is not purely the result of the ballpark. The convention center, trolley service, and an influx of housing, hotels, restaurants, and nightlife to the area have brought urban renewal to San Diego. The city not only paid for most of the stadium but is now stuck footing the bill for the large chunk of the operating costs. Citizens enjoy Petco Park but they do not think it is worth the bill that they have assumed.
The city has been under pressure from the Chargers to build them a new stadium for many years and, so far, is not giving in. This bill would help take pressure off the city officials from funding another stadium for the Chargers. The Chargers have long been threatening to move to Los Angeles but Los Angeles has not been offering them a great deal. The team has also looked at going to Chula Vista, which is a city that is part of San Diego County. However, neither city has offered a public financing deal that the Chargers have accepted.
This bill requires a very straightforward strategy to pass. It must be presented soon because the budget crisis is fresh, as is the global economic recession, and so people are feeling conservative with their money. There is a Democratic majority in Sacramento and they would be the most in favor of this bill because they generally prefer to support affordable housing, education, healthcare, and environmental measures over business, while Republicans are often in favor of business and believe in the trickle down effect.
All the evidence and proof is available to back up this bill; it just needs to be compiled by the committee. The most compelling argument would be an analysis showing the little to no positive economic benefits for a city from building a new stadium. Evidence and case studies of privately financed stadiums must also be presented to show that stadiums can be privately financed and how successful they have been. It would be helpful if a few developers or financing agents would also speak out about their willingness to fund the construction of a new stadium and to work with professional sports teams. Also, numbers are going to be very important evidence in supporting this bill and an analysis of the salaries of professional sports players and team owners should be released and compared to those of teachers in the public school system or the cost of building affordable housing. The revenues from the stadiums and professional sporting teams should be released along with an explanation of where all the money goes.
Some ideas of alternative benefits that cities can offer professional sporting teams to aid in the construction of stadiums should also be presented so that businesses know there are many ways to work with this bill.
A lot of public opinion polls should be conducted because the public is definitely in favor of this bill and this would help put pressure on the legislators to vote in favor of this bill. There should also be a lot of publicity around this piece of legislation so that the public can get involved and write to their assembly representatives and senators.
Though initially controversial, once the research behind Senate Bill 858 is presented the argument will be convincing and the bill will pass. The bill also is not as drastic as it first seems. It still leaves open many ways for cities to attract professional sporting teams and assist them in the building of stadiums; it just prevents them from being directly financed with money collected from the tax-payers. Also, research has shown that the stadiums that are privately funded have a better business plan and the budgets are more sustainable, so those stadiums are the few that actually end up turning a profit. There is plentiful economic research which has proven that stadiums actually do very little to revive a city economically; the only examples of professional sports teams really reviving a community is when they move to small cities and communities.
In fact, if there are any economic benefits to building these brand new stadiums for professional sports teams, they are mostly felt by the team owner and players whose salaries are astronomical. Because of complicated laws around the public financing of stadiums, it makes it difficult for the team owner to pay back revenue to the city and then the city ends up footing most of the bill for the stadium and the operating costs, as the case in San Diego with Petco Park.
The time is also right to present this bill because California has just gone through a huge crisis attempting to get the budget passed and the state has a huge budget deficit to make up. If this bill is not passed, it will look like the state is being irresponsible and frivolous with the tax payer funds. Also, there have been recent examples of publicly financed stadiums that are bankrupting the city government and huge failures that aren’t even filled by the fans, such as the new Yankee Stadium in New York, which is costing over $1.3 billion.
All of the arguments in favor of publicly financed stadiums are easily rebutted and supported with little to no hard facts and evidence. The favorable arguments are theories and cannot be proven. It has been argued that professional sports can lower crime rates by giving the city’s youth something to do, but a study was done and there was no effect on the crime rate before and after the construction of a professional stadium; the major factor in determining crime rate was the size of the city.
There are also many ways to compromise on this issue, which professional sporting teams and legislators will realize when they are debating over this bill. For example, the city can help build the infrastructure surrounding the stadium, easy public transportation to the stadium, and public parks and recreation space around the stadium, creating a larger destination and attraction. Professional sports teams can also join together and share a stadium which would split the cost, allow them to finance a better facility, and put the huge investment to work more often. If the stadiums are privately owned rather than publicly financed they will also be easier to rent out for conferences, concerts, other entertainment acts like Motocross or Monstertrucks, fairs, farmers markets, swap meets, and high school or university sports events because it will not have to go through the bureaucracy of the government agencies.
This bill will be popular with both parties because in fact it represents the government taking a step back and out of meddling with businesses which conservatives will like and also shows a refocusing of tax dollars on essential issues like education that liberals will appreciate. In the recent economic crisis it has shown that the government should not be involved in business and it is best to just let that sector succeed or fail on its own accord, and the same is true with professional sports. City leaders will like this bill as well because it will take some of the pressure that team owners have attempted to place on them to finance a stadium. Any negotiations between the mayor and team owner must also be completely transparent and will help both parties remain accountable and reasonable and keep the public informed. This is very important because a few construction projects have claimed to be privately financed when they were really using tax-free government bonds and other loopholes in the system, like the PILOTS deal in the financing of the new stadium in New York.
The success of this bill would encourage other legislators to enact even more stringent legislation limiting even more benefits and deals the city can give the sports team until they are completely independent businesses.