China Perspectives, 64 - OpenEdition Journals

China Perspectives

64 | march - april 2006Varia

Electronic versionURL: https://journals.openedition.org/chinaperspectives/593DOI: 10.4000/chinaperspectives.593ISSN: 1996-4617

PublisherCentre d'étude français sur la Chine contemporaine

Printed versionDate of publication: 1 April 2006ISSN: 2070-3449

Electronic referenceChina Perspectives, 64 | march - april 2006 [Online], Online since 21 December 2006, connection on 02July 2021. URL: https://journals.openedition.org/chinaperspectives/593; DOI: https://doi.org/10.4000/chinaperspectives.593

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TABLE OF CONTENTS

Society

Sexual Identity Among Men Who Have Sex with Men in ShanghaiSun Zhongxin, James Farrer and Kyung-hee Choi

Yosemite Villas–Mirror of Emerging Capitalism?An American-style gated community in Beijing

The Impact of Macao’s Gaming Industry on Family LifeAn exploratory studyGertina J. van Schalkwyk, Emilie Tran and Kay Chang

Economy

The Modification of the Chinese Exchange Rate PolicyIts rationale, extent and recent developmentsMichael Goujon and Samuel Guérineau

Defence

Taiwan: The Security Policy of the Chen Government Since 2000Mathieu Duchâtel

Book Reviews

Lucien Bianco, Jacqueries et révolution dans la Chine du XXe siècleParis, Editions de La Martinière, 2005, 631 p.Alain Roux

Peter Hays Gries, China’s New Nationalism. Pride, Politics and DiplomacyBerkeley & London, University of California Press, 2004, 215 p.Gary D. Rawnsley

Yasheng Huang, Selling China : Foreign Investment during the Reform EraNew York, Cambridge University Press, 2003, 406 p.Sandra Poncet

Laurence J. C. Ma and Fulong Wu (eds.), Restructuring the Chinese City : ChangingSociety, Economy and SpaceLondon and New York, Routledge Curzon, 2005, 283 p.Valérie Laurans

Christopher R. Hughes and Gudrun Wacker (eds.), China and the Internet : Politics of theDigital Leap ForwardLondon, New York, Routledge, 2003, 192 p.Anthony Fung

China Perspectives, 64 | march - april 2006

1

Anru Lee, In the Name of Harmony and Prosperity. Labor and Gender Politics inTaiwan´s Economic RestructuringCatherine Farris, Anru Lee, Murray Rubinstein (eds.), Women in the New Taiwan. Gender Roles and Gender Consciousness in a ChangingSocietyNew York, State University of New York Press, 2004, 196 p.Armonk, New York, Londres M.E. Sharpe, 2004, 390 p.Marina Thorborg


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Society


3

Sexual Identity Among Men WhoHave Sex with Men in Shanghai

Sun Zhongxin, James Farrer and Kyung-hee Choi

EDITOR'S NOTE

This research was supported by NIMH Center Grant No. MH42459 (Center for AIDS

Prevention Studies) and Japanese Foundation for AIDS Prevention.

1 Although homosexual practices were largely tolerated in classical Chinese society, after

1949, under the People’s Republic homosexuality has been regarded as “hooliganism”.

During the Cultural Revolution homosexuals were classified as “bad elements”, along

with landlords, rich peasants, counterrevolutionaries and “rightists”. In the 1980s and

1990s, gays were easy targets for police and security authorities, and became sacrificial

lambs to the broader goals of government and society1.

2 The 1980s witnessed small breaks in the taboo on public discussion of homosexuality,

and a few journalists and scholars started writing articles and books on homosexuality

at that time, though much of this literature was from a medical or mental health

perspective in which “treatment” or “prevention” of homosexuality was still the aim2.

Increased indigenous writing about gays and increased media exposure to global and

Asian regional gay rights movements led to great changes in the popular

understandings and legal treatment of homosexuality in the 1990s. The label of

hooliganism under the old Criminal Law, which included sodomy, was abolished in

1997, and in 2001 the Chinese Psychiatry Association removed homosexuality from its

list of mental disorders. In 2003, public discussion of homosexuality entered the

university curricula in mainland China3 and received positive feedback from the

mainstream mass media and society. However, even with the changing of legal

regulations and increasing openness, homosexuals as a group still felt misunderstood

and discriminated against.

3 In general, discussions of non-marital sexuality became popular in magazines, radio

and television programmes in the 1990s, creating a more accepting climate for


4

alternative sexual stories4. And in this climate it is becoming possible for the first time

in modern mainland China for a large number of men to identify themselves as

homosexual within limited public and private spheres. More and more young people

are now able to identify their same-sex sexual desires using identity discourses

borrowed from the public sphere or private conversations in a gay community. Within

this relatively new context it is important to ask how a number of ordinary Chinese

identify or label their sexual orientation, what the processes are by which they come to

decide on an identification of same-sex sexual desire, and how they share these

identities within their everyday social networks.

Chinese gay identity terms in the public sphere

4 “Homosexual” or “gay” are Western words translated into Chinese. According to

Zhang Beichuan, homosexuality was translated into tonglian’ai in 1920, and

subsequently became tongxinglian, but since 1981 tongxinglian has reappeared in some

medical books and other translated materials in China5. For Zhang Beichuan, “male

homosexuals”, “gay”, and “gay men” are the modern words to refer to this group of

men.

5 At the same time, the other important researcher in this field, Chinese Academy of

Social Sciences sociologist Li Yinhe, used tongxinglian instead of tongxing’ai, as in some

of her books6. On the other hand, many authors choose to borrow the Chinese term

tongzhi (comrades). This term has appeared in such books as those written by Hong

Kong sociologist Zhou Huashan7. Zhou argued that tongxing’ai or tongxinglian are the

labels structured by hetero-centric hegemonists, and their use will harm the tongzhi

communities and the tongzhi movement 8. Tongzhi has also gained wide acceptance

among overseas Chinese communities (including Hong Kong and Taiwan) and

movements targeting gay rights in China9.

6 As in the West, the AIDS crisis provided a major impetus for the tongzhi movement in

China. In order to succeed in AIDS prevention, government organisations and NGOs

began reaching out to men who have sex with men. The acronym MSM, “men who have

sex with men”, has been used to refer to this group in the West since the mid-1990s and

is now being widely used among those conducting AIDS/STD or risk behaviour research

in China. The concept of MSM is different from that of male homosexuals, as MSM is

based upon sexual behaviour rather than sexual orientation. It includes male

homosexuals and male heterosexuals who have sex with men, even though the majority

of this MSM group are still considered male homosexuals by the public. During recent

years, MSM or homosexual issues have been receiving social recognition from the

media. However, strongly associating gay issues with the AIDS crisis might also

stigmatise entire communities and heighten discrimination against them.

Self-identification among gay men in China

7 Even though publications on homosexuality are on the increase, most are “stories”

with some analysis. Scholars are still at the stage of “searching for” homosexuals in

China10. Aiming their writing at a general heterosexual public doubting even the

existence of homosexuals in China, these pioneering authors understandably focus on

“discovering” and “uncovering” the existence of homosexuals in China rather than on

the processes of self-discovery and self-disclosure of homosexuals themselves.

8 Popular ethnographic literature on homosexuality in China emphasised the hidden or

forbidden nature of gay relationships in China and the pressures to conform to the

norms of a hetero-normative patriarchal society in which marriage is expected. As Li


5

Yinhe writes, the main difference between Western and Chinese homosexual men is the

strong pressure to marry in China11. More recent research has focused on the gay sub-

cultures emerging in China in which self-revelation is possible within a limited circle12.

However, especially since the advent of the internet, urban Chinese attitudes toward

sexuality are rapidly changing. There are frequent reports on homosexuality in online

media, and many “straight” urban Chinese have adopted a more accepting attitude

towards homosexuality. Though men still face many of the social pressures described

by Li Yinhe, some gay men in cities such as Shanghai now are able to “come out” at

work or to selected not-gay friends, classmates and co-workers.

9 Research in the United States shows that gay men often do not reveal their sexual

identity to outsiders out of a fear of persecution, discrimination and rejection.

However, studies also show that men have higher self-esteem and a more coherent

social and personal identity if they are able to disclose aspects of their sexual identity

to a wide range of people in their social circle13. At the same time, we should not draw a

simply dichotomy between those who are “out” and those who are hiding their sexual

identity. As Eve Kosovsky points out, even gays and lesbians who are “out” must

continue managing issues of sexual disclosure in social interactions throughout their

lives14. In the classic model of gay identity development, Vivienne Cass describes six

stages beginning with “identity confusion” and ending in “identity pride” and “identity

synthesis”15. While this model is clearly teleological and based on a Western definition

of self acceptance and social engagement, self-disclosure has significant outcomes for

gay men in China as in the West. Men who conceal their sexual identify may experience

emotional distress, and coming out may be linked to a reduction in such distress16.

Implicit in the discussion of “coming out” is a general insight into the importance of

self-disclosure for building social ties. Research on self-disclosure shows that revealing

personal information is useful in building social ties and obtaining social support that

might not be available without the sharing of intimate details. Socially mediated

benefits associated with self-disclosure to a confidant include esteem support,

information support, and motivational support17.

10 A quantitative study of gay men’s coming out experiences in Hong Kong found that

men were more likely to disclose their gay identity to gay friends than to straight

friends, and to straight friends and siblings rather than parents. The authors argue that

it may be particularly difficult for men in Chinese societies to disclose gay identity to

their parents because of patriarchal family norms associated with Confucianism. Men

who came out and established ties to the gay community reported lower levels of

psychological distress18. This study was limited, however, to men who had already

“come out”, a group that may be less common in mainland Chinese cities such as

Shanghai. Moreover, some Western researchers argue that Western notions of “coming

out” and sexual identity should not be applied to Chinese societies, and that we must be

aware of local patterns of self-identification and local markers of sexual and social

distinction19.

11 Our qualitative study aims to describe various patterns of sexual self disclosure among

men in Shanghai. We first describe the terms MSM in Shanghai use to define a same-sex

identity. Through this we consider whether there is a single definitive conception of

gay identity among MSM. We then examine the stories by which men define their own

sexual identity. We can ask at what stage in life Chinese men first come to see

themselves as sexually interested in men, and what resources they use in arriving at


6

these identifications. We then look at the ways in which men manage these sexual

identities in different social contexts as adults, and what contexts these strategies have

for them.

Data and methods

12 A sample of 30 MSM in Shanghai was recruited between December 2003 and June 2004

through informal social networks. We first contacted gatekeepers of Shanghai’s MSM

community who volunteered for the Shanghai Hotline for Sexual Minorities, which

provide gay- and HIV-related services to MSM and asked them to refer to us potential

participants. Men were eligible for the study if they were 18 years old or older, lived in

Shanghai, and had same-gender sex. Eligible men were offered RMB50 (US$6.50) as an

incentive for participation.

13 Participants provided informed consent and were interviewed face-to-face in Mandarin

or the Shanghainese dialect using a semi-structured interview guide. The interview

guide asked seven broad topics : participants’ migration experiences, their life in

general, social networks of friends or important individuals, meeting venues that they

frequent, sexual partnerships, experiences with condoms, and coming out as gay. Four

interviewers were trained to conduct in-depth interviews. Each interview lasted

approximately two hours and was audio-taped. All study procedures were approved by

the institutional review boards of Fudan University, Shanghai, China and the University

of California, San Francisco, California. The audio-taped interviews were transcribed

verbatim in Chinese. Data analysis was based on answers coded topically and answers

grouped according to thematic similarity using the method of excerpt files of quotes.

The final data analysis involved selecting quotes that represent the points of view of

the largest groups of quotes.

Findings

14 The first section of findings briefly outlines the types of terms respondents used to

describe their sexual identity. The second section summarises the types of narratives of

how respondents came to understand their own sexual orientation. The third section

describes how these men represent their identity differently in various social circles.

Terms of self-identification

15 When asked how they identified or described their sexual identity, interviewees used a

variety of terms. The most common term in use among the interviews was the term

tongzhi, literally “comrade”. Some preferred this term because it didn’t have such

obvious sexual connotations, nor did it sound foreign like the term “gay”. As one

respondent said : “I like the term tongzhi…, it is not too foreign sounding, nor is too

much in your face” (Interview 19). Terms such as “homosexual” might be considered to

have negative connotations because of their association with the quasi-criminalisation

and medicalisation of homosexuality in the recent past in China. Still, these terms are

inescapable. One respondent explained : “Just like my gender, the term tongxinglian has

become a part of my body, part of my essential nature, but I really don’t know what

term I should use to describe myself. I feel that traditional terms like ‘homosexual’ all

have a derogatory connotation, and I can’t accept them. In comparison, the term

tongzhi is better”.

16 Another way of describing gay identity focused more on membership in the tongzhi

community. The term tongzhi has this connotation, but one could describe oneself as

simply being “in the circle” (quannei), referring to the “tongzhi circle” (tongzhiquan) : “I

like to use the term ‘someone in the circle’ to describe myself. Other terms make me


7

uncomfortable. People with this kind of behaviour can just use the term quannei, and

this will let others know” (Interview 15). For this respondent, being “in the circle” had

the connotation of being in a secretive and closed circle.

17 These arguments for the term tongzhi or quannei seem more common among men

associated with the active tongzhi community establishing itself in Shanghai. Many

respondents we interviewed preferred other terms. For instance, several men preferred

the English word “gay” : “I like to use the term ‘gay’. Online I will say that I am ‘g’.

Everyone will understand. These other terms, tongzhi and tongxinglian are too crude”

(Interview 14).

18 As one respondent explained, the advantage of the term “gay” (or the single letter “g”)

was that many straight people might not know what it meant, whereas they would all

know the term tongxinglian (Interview 1). As a foreign term, it also might seem more

classy and less crude than standard or colloquial Chinese terms. One respondent also

associated the term “gay” with a more upbeat and less sexualised social identity : “I like

to use the term ‘gay’ to describe myself, because it is not so cold. Like being together

and appreciating one another, enjoying this kind of life, not just having sex” (Interview

20).

19 We initially suspected that men who are part of the international gay scene in Shanghai

might be more likely to use the term “gay”, but in fact, none of the respondents quoted

above were associated with this scene. Most had no contact with foreign men. Rather

the use of the terms “tongzhi” and “gay” seems vaguely (and inconsistently) related to

a more politicised and blunt presentation of self as tongzhi versus a more oblique and

stylish presentation of a male sexual orientation involved in the foreign term “gay”.

20 A few respondents, especially older respondents who were not so much part of the

social circle of gay men in Shanghai still preferred the term tongxinglian, which has

been in use for much longer and is still the preferred term in straight society and in the

media. This use of tongxinglian is illustrated by an older married respondent with only

recent contact with a larger gay community : “I suppose I must be tongxinglian. I got

married because I reached the right age and I had to get married. Back then there was

not so much information, so I didn’t know there were so many others like this…We

knew nothing about tongzhi back then, we just knew that we liked a certain classmate

and so on. I did see an article in the newspaper about it, but I couldn’t find this group of

people. Now I can use the internet to find them” (Interview 28).

21 Many men described the internet in particular as the first place that they learned of

terms like tongzhi or came to have a positive identity as tongxinglian, a term that had

negative connotations from the early reform era. In addition to implying a more

mainstream orientation, the use of the term tongxinglian seems to mark the user as

somewhat outside the circle of tongzhi.

22 Another identity labelling issue involves distinctions between men who have sex only

with men and those who also have sex with women. For example, one respondent

described himself a “pure tongzhi” (Interview 6), meaning a person who only has sexual

interest in men. Another respondent used the term “pure gay” to describe himself. Like

the term “pure tongzhi”, it implied an absolute rejection of sex with women. For one

respondent, it even implied a rejection of men who had sex with women : “Making love

to a woman is disgusting to me, so I can’t go out and make love with one of those men


8

who is not gay… I am a pure gay and I want to find a man who is also a pure gay”

(Interview 1).

23 Not everyone we interviewed accepted the view of themselves as homosexual. Sex

workers, known as “money boys”, might completely deny any personal sexual interest

in men. The money boys we interviewed came from the countryside and did not have a

high level of education. Most do not view themselves as homosexuals even though most

of their clients are men. Selling sex may first of all be a social practice motivated

largely by economic reasons. As Travis Kong argued in his research report on the

sexual politics of Chinese male sex workers, sex work involves a worker performing

sexual acts that might not necessarily conform with his personal sexual interest20.One

said simply : “I am not homosexual, I only go with men for money” (Interview 21).

24 On the other hand, in his contact with clients at work this respondent had to feign

sexual interest in men, in a sense reversing the tendency of homosexual men to hide

their sexual interests in everyday work relationships. In contrast, another respondent

who also had sex with numerous female partners said that he was bisexual

(shuangxinglian). He also said : “I can describe myself as gay” (Interview 22). The term

“gay”, like tongzhi, thus could have flexible meanings within this broad spectrum of

male-male sexual desire. This might be one reason why some men insisted on using the

term “pure gay” or “pure tongzhi” to distinguish themselves from men who might be

bisexual or married.

Identifying oneself as a man who desires men

25 Excepting the two respondents who identified themselves as straight (both commercial

sex workers), almost all gay or bisexual respondents reported becoming aware of a

same-sex sexual desire at ages ranging from 5 years old to 20 years old21. Most

respondents reported noticing a sexual attraction to men during puberty or earlier,

well before their first sexual experiences with men. Many respondents did not have

their first sexual experiences with men until early adulthood, or even early middle-age.

Sexual partners then often introduced them to a larger circle of gay friends. For

instance, the following respondent described having sex unexpectedly at the age of 18 :

“At the age of 13 or 14 I first realised my sexual orientation was different from other

males. Back then when I saw pictures of men, I felt aroused. I was quite confused, and

also curious. Back then I had no idea what tongzhi were or what it meant, I was still

young, still studying. I didn’t think too much about this kind of thing... At the age of

16-17, I saw a guy jerking off in the bathroom, and I became aroused. So he suggested

we masturbate each another” (Interview 6).

26 A few respondents described their initial recognition of sexual interest in other men

beginning with their sexual initiation, usually by an older man. One respondent

described being “brought into” the gay life, by a teacher at a sports academy where he

was a boarding student : “The first time I understood all this, it was my coach, also my

headroom teacher, who ‘brought me in’. I was 17. One time in the shower room, all of

us kids were just fooling around, punching each other. Then this coach came up. Most

of the others left, but I just stayed around. He was in the bath tub, and I was in the

shower. He asked me : ‘are you clean yet ?’ I said : ‘I am already finished, ready to go’.

He said : ‘I can see that you are not yet really clean’. And he started helping me bathe.

Then he embraced me, giving me a sense of fun, but also a kind of fatherly caring. At

that time I didn’t understand anything” (Interview 12).


9

27 Later the coach invited him to share a dorm room with him because the dorm he was

staying in was “too crowded”. They eventually began engaging in sexual intercourse.

He said that at first he had a hard time accepting his sexual orientation, and even

thought about suicide because of social prejudices against gays. Later, he said, he

realised that he would be even less happy had he not discovered the gay world. “The

most important thing is that I recognised my orientation. The only thing that’s difficult

now is that I can’t find a suitable male partner” (Interview 12).

28 Whether respondents first became aware of their sexual orientation and then found sex

partners (the most common pattern among these respondents), or first found sex

partners and then became aware of their interest in men, most of them describe initial

discomfort and confusion with their gay identities, the stage Cass describes as “identity

confusion”22. Almost all of them used words such as “confusion” or “not

understanding” to describe this. They also harboured negative judgements about

themselves—that they were “abnormal” or suffering from a “moral problem”.

According to their interview narratives, most of them arrived at an acceptance of being

homosexual, or a more positive understanding of their sexual orientation, the stages

Cass describes as “identity tolerance” and then “identity acceptance”. Given the

negative perception of homosexuality in mainstream Chinese society, identity

acceptance seems to be mediated by access to specialised information and specialised

social resources. For the younger men in particular, the internet has been the most

important site not only for meeting other gay men, but also learning a more positive

model for gay identity. Chinese internet sites specialising in gay issues offer social and

intellectual resources for constructing a positive self identity.

29 Some men still express negative attitudes towards being gay. The most common

problem was a generally negative perception of the personal and sexual ethics of other

men in the gay circles they were part of. As the respondent quoted above said, the most

common complaint was that they could not find a “good man”. In particular it was

considered difficult to find a long-term boyfriend. This negative image of the gay

community, however, was often balanced out by more positive perceptions of

particular gay friends and acquaintances. Some men had more negative perceptions of

their own sexual orientation. One married gay respondent said : “This is a natural

mistake of the DNA. You can’t change it, you can only try to improve the quality of your

own life. God was not fair to me. I am damaged goods. It is a tragedy. If I am reborn, I

want to be a real man” (Interview 26).

30 Although this man had a successful career as a government cadre, and then a

businessman, his sexual orientation seems to have brought him personal costs. In

particular, he feels guilty towards his wife, who he sexually and emotionally ignored.

Because he first had sex with men when he was 31 and has lived at the margin of the

gay community, he also may have experienced more sexual frustrations than many

other men in this sample. He also experiences the difficulties most gay men experience

in managing their sexual identity in public roles. This is the subject of the next section.

Managing gay sexual identity in different social contexts

31 Our respondents described a range of patterns of dealing with a homosexual sexual

identity in interactions with different types of social circles. It is important to consider

each of these types of social circles separately when understanding the management of

sexual identity in Chinese society.

Natal family


10

32 As Wong and Tang report in Hong Kong, Confucian family norms make coming out to

family members difficult if not impossible for Chinese homosexual men23. Respondents

said there was “no reason” to let parents know, or that it would give them too much

“suffering”, or that they would be “unable to accept it”. Only three of our respondents

have told their parents about their gay identity. One said, “My mother cried three days

and three nights. Then she accepted it” (Interview 11). Two other respondents had

come out to other family members, but not to their parents. More typically

respondents had only hinted at their gay identities to family members, hoping for a

gradual or only tacit acceptance. For instance, one left a copy of a book about

homosexuality for his mother to read. Usually such attempts to bring up homosexuality

in an indirect fashion met with denial or incomprehension by parents. On the other,

such indirect strategies seemed to help these men establish a larger space for

maintaining their own gay identity when dealing with family members.

33 In keeping with Confucian ideals, many respondents emphasised the suffering that

coming out would bring to their parents, not to themselves. One respondent, a

graduate student in a prestigious Chinese university, identified very strongly with the

gay movement and felt that he should tell his parents. However, he did not frame his

decision as a break with traditional family ethics, but rather as an extension of family

values : “I told my family when I was 26. I believe that family members should have

mutual trust, respect and support. I should believe that they will eventually support

me. Their first reaction was surprise and a lack of acceptance. But I gradually educated

them and they accepted it” (Interview 16).

34 Like other respondents he also emphasised the importance of family in his life. “No

matter what I will consider their ideas and their standpoint..., but they can’t influence

me as to whether I like men or I like women” (Interview 16). In the end, he feels that

coming out helped his relationship with his parents.

35 As Li Yinhe reports the biggest problem for many gay men was marriage. Many

respondents still report strong expectations that they will marry. These expectations

are strongest when dealing with family, as one migrant from a small town in China

explains : “My gay friends all know about my sexual orientation. No one else knows. I

can’t let anyone else know. There is no advantage in letting them know. The people

where I work certainly don’t know….. My family members can’t find out. My family

members are Buddhists. Their views are very traditional. They couldn’t accept

homosexuality. If I let my mother know, she would scold me to death” (Interview 29).

36 On the other hand, other respondents had a less severe sense of these family pressures.

And some felt they could avoid the issue. A college student from Shanghai said : “I

never talk about these problems (marriage) with my family. However, it has got to the

point that I really have to talk about it. The main thing is that I am independent. At the

very worst, I can always just keep hiding it from them. Anyway, there are many people

now who don’t marry at all, or marry very late” (Interview 30).

37 Equally important in their stories was a sense of women’s sexual rights and women’s

rights more generally. Many respondents said that they had to think not only of their

family pressures, but the damage that marriage would do to a woman who married

them. Most were aware that marriage to a gay man was unacceptable for women.

38 In sum, respondents were still unlikely to come out to parents about their

homosexuality or sexual relations with men for fear of lack of acceptance, but also for


11

fear of hurting their parents. And those who did come out were likely to frame their

decision not as a rejection of family and family values, but as an attempt to gain greater

acceptance by the family and to extend traditional family values to include a

homosexual son. Finally, men still felt great pressures to marry, but some were

beginning to see staying single as a viable alternative.

Conjugal family

39 The majority of our respondents saw heterosexual marriage as incompatible with

homosexuality. Many single men hoped to resist family pressure to marry. This

represents an increasing identification with the idea of a stable homosexual sexual

identity, and also a recognition of the sexual rights of women in marriage. Many

respondents said that to get married would be to ruin a woman’s life. However, in

keeping with patterns discussed by Li Yinhe in the 1990s (1998), three of our

respondents were married and two had been married but were now divorced.

40 Married respondents often described an estranged relationship with their wives, and

those who were married usually hid their sexual relationships with men from their

wives. One man used a chance to take up a new job in Shanghai as a way of escaping

from his marriage. “It was last Chinese New Year when I finally told her. There was a

reunion of her old classmates and they all asked her why she picked me out of all the

boys who were chasing her. Now I don’t come home very often, and I don’t show her

any affection at home. That made her feel really bad. When I came back home this time,

she seemed angry at me. I finally sat her down and told her seriously that I was

homosexual. Actually, she should have already guessed. I hadn’t touched her for years

[since she got pregnant]. She had two choices, to continue this way, or to get divorced.

She always chose the former. My son, he probably has already guessed. He always sees

me with these handsome guys” (Interview 26). This respondent has a relatively high

income, and provides for his son, giving his wife an incentive to stay in the marriage.

41 While marital relationships were characterised by unhappiness, lack of communication,

guilt and misgivings, respondents were much more positive about relationships with

their children from these marriages. One described his 13 year-old daughter as “the

most important person in my life” (Interview 15). After his divorce, she lived together

with him and a boyfriend, whom this respondent described to his daughter as a friend

and he treats as a “younger brother”. He said that she was getting older, and had

accepted this man because he was good around the house. He hasn’t told her about

their relationship and avoids showing much physical affection in front of her : “In front

of my daughter, I must still act like a proper father. I won’t be too intimate with him.

But behind her back, I will do the work of comforting him. If she understands naturally

in due course that is a good thing, but if she doesn’t understand, I wouldn’t initiate the

conversation” (Interview 15).

42 In general, gay respondents were more likely to trust that their children would accept

their homosexuality than their own parents would. Parents have more authority and

power with children, and gay men are thus more comfortable with children than with

parents.

The straight world

43 Almost all respondents found it necessary to conceal their gay identity among their

ordinary straight friends. The confessions of the few who had tried to come out to

straight friends were sometimes met with incredulity or offers to take them to a

psychiatrist or doctor. One said he told two of his straight classmates but “they


12

wouldn’t believe me. If they believed me, I guess they would be supportive” (Interview

14). Some respondents come out to their straight friends in ambiguous or humorous

ways. This partial coming out seems a way of testing the ground both for the reactions

of the friends and their own ability to deal with a public gay identity. For one

respondent this took the form of giving out information about homosexuality without

necessarily talking about his own personal experiences (Interview 5). Another

respondent came out to his dorm mates in the university more directly. “When I am on

the internet looking at gay pictures, or watching gay movies, my roommates can walk

right by and see, and they will understand (that I am gay)” (Interview 25).

44 Only a few interviewees have open communication about their gay sexual relationships

with straight friends. One respondent said : “I have some straight friends who know I

am gay. I can talk to them about some (gay) topics, and they are happy to listen. They

treat it like a story. They involve themselves in the conversation and don’t try to stop

me talking about these things. They will ask me about myself, like have you got a

boyfriend, have you done this or that lately, stuff like that” (Interview 1).

45 In general, higher status respondents such as managers and graduate students had an

easier time revealing their sexual identity within their straight circles. Migrants, sex

workers and respondents with few economic resources were not only less likely to

come out to straight friends about their sexual interests in men. Indeed they were less

likely to have strong social connections at all. Their lack of social capital made them

more careful about managing their public sexual identities. The most general finding

was the pattern of avoiding sexual self-disclosure to straight friends. Given that some

general talk about romantic and familial relationships is relatively common among

straight Chinese men, especially close friends, this lack of intimate self-disclosure

tended to erode ties to straight friends.

46 Several respondents described a tendency to socialise less and less with straight friends

as they became more a part of a gay circle. The need to hide their homosexual relations

from their straight friends leads to a weakening of these relationships. Many limited

their intimacy with straight friends to practical and everyday matters. As one

respondent said, “Straight friends will always ask you if you have a girlfriend, so it is

more relaxing to go out with gay friends” (Interview 1). Another said : “I have less and

less contact with my straight friends. It is not that I don’t want to go out with them. It

is that I don’t want to see them. They will often call me to go out, and I will feel guilty

for not going. In the past I wasn’t like that, but I have just gotten to be that way over

time. So I don’t see them so much” (Interview 17).

47 In sum, a minority of respondents had had relatively successful experiences revealing

their gay relationships and identities to straight friends, classmates or co-workers.

Some men reported negative reactions or incredulity, but others found they were able

to expand their personal zone of comfortable self-expression to include gay friends. On

the other hand, other respondents found themselves pushing straight friends to a

comfortable distance, expanding their zone of comfort by expanding their contact with

other gay men. In both cases the goal was to create a space in which one did not have to

practice self-concealment or pretend to be heterosexual. On the other hand, not

disclosing details of one’s personal life to straight friends meant a weakening of those

ties in the long term, and this can be seen as a social cost of non self-disclosure.

The tongzhi circle


13

48 Almost all respondents reported that conversations and interaction regarding sexual

and intimate life were completely confined to the gay circle. For example, one

respondent said : “I communicate with friends in the [tongzhi] circle nearly everyday,

with other friends its about once a week…. The types of topics we talk about are very

different. With ordinary friends, it’s just small talk, like how have you been lately. It

won’t be very deep. With friends in the circle, we can go straight to the point, like how

has your sex life been lately, good or bad, or ask if you are getting on with your

boyfriend lately. With friends in the circle there is basically nothing I can’t talk about

(Interview 6).

49 Another respondent described the gay circle as a separate space in which one could

express one’s true self : “In the gay circle, everybody knows everybody, so if you want

to laugh, you laugh, if you want to walk a certain way, you walk a certain way. It’s like

returning to a world that belongs to you” (Interview 9).

50 Gay circles have by far the greatest communication about sexual matters and thus a

greater influence on sexual behaviour and sexual risk behaviour, including norms of

condom use and norms about multiple partnerships. Gay circles are also the space

where men develop a positive sense of their sexual and social identity as gay men.

51 Participation in various tongzhi circles also has negative social connotations for many of

our respondents. Respondents complained that gay men were gossipy, or men in the

circle were only after money or only after sex. Some respondents distinguished their

small circle of very close gay friends, whom they felt they could rely upon, from a

larger gay circle which they described as fickle and phoney. Most commonly men

complained that the permissive sexual atmosphere in the gay circle made it difficult to

start or sustain an exclusive long-term relationships. One 23 year-old waiter said : “I

still don’t have a steady boyfriend. In this circle it is hard to find a steady boyfriend. In

the circle people don’t seem to emphasise feelings” (Interview 29).

52 There was also mistrust across ethnic lines. Shanghai men complained that non-

Shanghainese men were likely to want money for sex or even to engage in extortion

after having sex. Most non-Shanghai men complained of prejudice from Shanghai men.

Because of this mutual mistrust, most gay migrant labourers had fewer chances to build

mutual supportive and communicative ties with local Shanghai men in the gay circle.

53 Although in most cases men were open about their sexual interest in men to their

sexual partners, they were not necessarily open about their sexual histories and

identities to all their sex partners. The most consistent pattern of non-self-disclosure

involved female sex partners. None of the men revealed their sexual relations with

female partners to their male homosexual partners. Men with female partners included

sex workers (“money boys”), most of whom claimed to be heterosexual, bisexual men

with female and male partners, and married men who still had sexual relations with

their wives.

54 Based on such a small sample we can only make tentative conclusions about the

identity-forming practices of MSM in Shanghai. However, some patterns clearly

deserve more attention. First of all, our findings indicate that there is no single

accepted term for identifying a male homosexual sexual orientation among MSM in

Shanghai. Men use a variety of terms, primarily tongzhi, gay, quanneiren and

tongxinglian. MSM use these naming terms them to hide their sexual identity from

people outside the gay community. For example, only more sophisticated outsiders will


14

know the meanings of the terms “tongzhi” or “gay”, so using these terms may offer

some anonymity in social interactions. Men also make use of these different terms to

indicate affiliations with one another and to make distinctions within the gay

community. Some respondents also use terms such as “gay” to indicate an aspiration to

a classy type of lifestyle, or “pure gay” or “pure tongzhi” to communicate distinctions

with sexual lifestyles they want to distance themselves from, such as bisexuality or

cohabitation with a woman. They make frequent distinctions between men from

Shanghai itself and migrants. In sum, these identity naming practices are tactical and

political in nature, but clearly not politicised to the extent that terms such as “gay” or

“tongzhi” indicate affiliations to distinct well-organised groups. The Shanghai gay

community is neither public enough nor organised enough to have created such clear

subcultures.

55 Second, MSM in Shanghai that we interviewed generally have a strong sense of an

innate or deeply ingrained sexual orientation. Most report coming to understand that

they were sexually interested in men in early adolescence. A positive understanding of

oneself as a gay man usually came somewhat later through contact with gay men, and

most importantly contact with gay media. Here the internet was of paramount

importance. In China there are virtually no print media dedicated to gay or homosexual

themes, and those that do exist have very low availability. With over 300 websites

dedicated to gay subjects, the internet has a great deal of accessible material. Most men

reported coming to understand their sexual identity positively only after contact with

writings on the internet on homosexuality. Although less dramatic than the recent

growth of the internet there are also increasing social and physical spaces for the

development of a gay identity in Shanghai. There are several gay bars, a gay dance club,

public baths and saunas, parks and public cruising spots. In addition we have to think

of the increasing status divides reproduced in these spaces, with expensive Western-

style bars catering to a Westernised professional elite, working-class men congregating

in other spaces such as dance halls, and migrants congregating mostly in “free” spaces

such as People’s Square.

56 Finally, MSM in Shanghai still express reluctance to reveal their sexual identity beyond

the circle of gay friends. This means also that the gay circle is an important source of

support for these friends. Some men do come out to family members and straight

friends, co-workers and classmates. These men report some negative reactions

(incomprehension, or advice to seek medical treatment), but largely have supportive

reactions. An important dynamic involves variations in social status and social power.

Men with higher social and economic capital (good jobs and/or good education

qualifications) seem more able to reveal their sexual identities to straight friends.

Similarly, men were less worried about revealing their sexual status to their own

children than to their own parents. In both cases it seems that social status, power and

control of resources allow the men to gain more easy acceptance from others, whether

friends or family members. Men with weak social ties, such as migrant workers, feel

more constrained in their self-revelation. The ability to “come out”, therefore, seems to

depend on access to social resources.

57 In addition to differential social resources, men also weigh the potential costs and

benefits of coming out to various groups. For instance, some men in government

organisations reported that coming out would damage their reputations. In general

men feel constrained by perceived discrimination against homosexuality from coming


15

out to straight friends. Most gay men report hiding their gay identity from straight

friends, but they also report dissatisfaction and frustration with these practices of

hiding sexual identity. Hiding sexual identity also has costs. A perceived benefit from

coming out is the ability to maintain closer and more intimate ties with straight friends

and family. As gay men build social ties to other gay men, they often report an

increasing degree of social separation from non-gay friends. Furthermore, among

straight men a complete lack of self-disclosure about romantic and sexual behaviour

can be interpreted as social distance. Non self-disclosure and retreat into a gay circle of

intimate friends thus can lead to a weakening of social ties with non-gay friends, and a

consequent loss of social capital. Chinese men, whether gay or straight, place high

value on informal social connections, colloquially known as guanxi. So the costs of

social withdrawal and isolation could be higher than for Western men.

58 One of the most important issues for gay men in China is the problem of marriage. Here

we sense some signs of change. While most men experience pressures to marry, many

men feel that they may be able to avoid marriage. Respondents’ statements point to

recent social changes that will make it easier for gay men to avoid pressures to marry.

These include late marriage, increasing rates of non-marriage, married people who do

not have children and the increasing acceptability of pre-marital sex. Less directly

related to marriage, but providing a greater space for alternative lifestyles, are trends

toward renting an apartment on one’s own before marriage and the ease of moving to

other cities to work and live. All these trends make it possible to live a life as a “single”

man while not directly challenging parents over the issue of marriage or

homosexuality.

59 Equally important are general changes in sexual culture in China. The acceptance of

homosexuality is part of a much larger liberalisation of sexual attitudes more generally,

including an increased permissiveness about non-marital and non-reproductive sex24.

There is also an increased emphasis on women’s sexual rights. For most men, the

strongest argument against marriage was the violation of a woman’s right to a healthy

sexual life. We thus have to consider changes in attitudes toward homosexuality in the

context of changes in attitudes towards sexuality generally.

NOTES

1. Robert Geyer, “In Love and Gay,” in Perry Link, Richard P. Madsen, Paul G. Pickowicz,

Popular China : Unofficial Culture in a Globalizing Society, Lanham, Maryland, Rowman and

Littlefield, 2002, pp. 262-263.

2. For example, proof can be found in some recent mainstream psychology textbooks

and psychological consulting practices.

3. Funded by Chi Heng Foundation. In 2003, Fudan University started a course

“Homosexuality, Health and Social Science” (Tongxinglian jiankang shehui kexu) for

graduate students, by the School of Public Health of Fudan. And in autumn 2005, Fudan

University started a general education credit course “Lesbian and Gay Studies”


16

(Tongxinglian yanjiu) for undergraduate students, in the Department of Sociology within

the School of Social Development and Public Policy.

4. See James Farrer, Opening Up : Youth Sex Culture and Market Reform in Shanghai,

Chicago, University of Chicago Press, 2002.

5. Zhang Beichuan, Tongxing’ai, Jinan, Shandong kexue jishu chubanshe, 1994.

6. Li Yinhe, Tongxinglian yawenhua (The Subculture of Homosexuality), Beijing, Jinri

Zhongguo chubanshe, 1998. This book is a revised version of Li Yinhe and Wang Xiaobo,

Tamende shijie : Zhongguo nan tongxinglian qunluo toushi, Hong Kong, Tiandi tushu youxian

gongsi, 1992.

7. Zhou Huashan, Beijing tongzhi gushi (Stories of Beijing Comrades), Hong Kong,

Comrade Research Society, 1996, or Zhou Huashan, Tongzhi lun (On Tongzhi), Hong

Kong, Comrade Research Society, 1997, and Zhou Huashan, Hou zhimin tongzhi (Post-

colonial Tongzhi), Hong Kong, Comrade Research Society, 1998.

8. Zhou Huashan, Tongzhi lun, p. 362.

9. An example is John Loo (ed.), A New Reader on Chinese Tongzhi (Essays & Conference

Proceedings), Hong Kong, Worldson Publications, 1999, or its Chinese version : Lu

Jianxiong (ed.), Huaren tongzhi xin duben (A New Reader on Chinese Tongzhi), from a

Chinese-hosted global conference.

10. Included in this category of writing are Li Yinhe’s book (Tongxinglian yawenhua, op.

cit), those of Zhou Huashan (Beijing tongzhi gushi, Hou zhimin tongzhi, op. cit.), and other

books such as Chen Liyong, Zhongguo tongxinglian diaocha (Survey on Chinese

Homosexuals), Hong Kong, Tianma tushu youxian gongsi, 2003.

11. While discussing the chapter on “Marriage Life” in her book Tongxinglian yawenhua,

Li Yinhe argued that “the biggest difference between the Chinese male homosexuals

and their Western counterparts is that, in the West, only 1/5 of male homosexuals were

married. Based on our survey, however, some are already married, some are going to

get married, and only a handful of gay men are not going to marry”. Li states the most

important reason for Chinese gay men to get married, although all are reluctant to

marry, is the pressure of Chinese culture and norms, which emphasise marriage and

family values.

12. Lisa Rofel, “Qualities of Desire : Imagining Gay Identities in China”, GLQ 5 :4, pp.

451-474.

13. Vivienne Cass, “Homosexual Identity Formation : Testing a Theoretical Model”,

Journal of Sex Research, 20, 1996, pp. 147-167.

14. Eve Kosovsky Sedgewick, Epistemology of the Closet, Los Angeles, University of

California Press, 1990.

15. Vivienne Cass, « Homosexual Identity Formation : A Theoretical Model », Journal of

Homosexuality, 4, 1979, pp. 219-235.

16. Wong, Chi-yan, and Catherine So-kum Tang, “Sexual Practices and Psychosocial

Correlates of Current Condom Use Among Chinese Gay Men in Hong Kong”, Archives of

Sexual Behavior, Vol. 33, No. 2, April 2004, pp. 159-167.

17. Valerian J. Derlega, Gust A. Yep, Sandra Petronio, Kathryn Greene (eds.), Self

Disclosure, Newbury Park, Ca., Sage, 1993.

18. Wong, Chi-yan, and Catherine So-kum Tang, “Coming Out Experiences and

Psychological Distress of Homosexual Men in Hong Kong”, Archives of Sexual Behavior,

Vol. 33, No. 2, April 2004, pp. 149-157.

19. Lisa Rofel, op. cit., pp. 451-474.


17

20. Travis S.K. Kong, The Hidden Voice : The Sexual Politics of Chinese Male Sex Workers,

Hong Kong, Centre for Social Policy Studies, Department of Applied Social Sciences, The

Hong Kong Polytechnic University, 2005, p. 32.

21. A study of sexual orientation by Alan Bell, Martin Weinberg, and Sue Hammersmith,

of the Kinsey Institute (1981) indicates that sexual orientation seems to be determined

before adolescence, a finding supported here. Li Yinhe finds range of ages of sexual

identity recognition, ranging from 14 to 29. See Li Yinhe, Li Yinhe, op. cit., p. 39.

22. Vivienne Cass, “Homosexual Identity Formation : A Theoretical model”, op. cit.

23. Wong Chi-yan, and Catherine So-kum Tang, “Coming Out Experiences and

Psychological Distress of Homosexual Men in Hong Kong”, op. cit.

24. James Farrer, op. cit.

ABSTRACTS

Chinese men who have sex with men are increasingly aware of public discourses of

homosexuality, and have created numerous public spaces in which they can make contact with

other Chinese men who have sex with men (MSM). At the same time Chinese in general, as well as

MSM themselves, have increasingly also become aware of models of openly tolerated “gay”,

“homosexual” or “tongzhi” identities popularised through the media, especially internet media.

Therefore MSM in large Chinese cities now seem to have a greater number of possible models of

sexual identification than in the past, as well as a more tolerant atmosphere for revealing their

sexual identities in various social contexts. This paper uses in depth interviews with 30 MSM in

Shanghai to discover how they construct and organise their social identities as MSM. It examines

the terms men use to describe their sexual orientation, including the nuances that accrue to

these terms, stories of how men come to identify themselves as MSM, gay or tongzhi, including

their assessment of their sexual orientation, and their different patterns of revealing their sexual

identities to different members of their social circles. In particular, it looks at some of the

sociological factors that seem to influence self-revelation outside the gay circle, also the

consequences of these patterns of self revelation and concealment for these other types of social

relations.


18

Yosemite Villas–Mirror of EmergingCapitalism?An American-style gated community in Beijing

1 Yosemite Villas (Youshan meidi bieshu), an American-style gated community on the

outskirts of Beijing, is an exception. The publicity materials acquired there in October

2003, are unusually inventive and go well beyond the usual commercial appeal.

2 This article will analyse the various representations contained in this discourse, and

consider to what extent they might provide a key to understanding certain features of

China’s emergent capitalism, and the collective imagination of some of its elite.

3 For fifteen years, the number of areas of luxury villas (bieshu qu) has increased around

the Chinese metropolises1. Most are inspired by the architecture and a type of house

style influenced by foreign models2. In this respect they testify to the progress of the

multi-sided process of globalisation in China.

4 Not only do each of these styles (Australian, Japanese, Spanish, French, American…)

correspond to particular forms of architecture but also to a lifestyle. In their sales

pitch, the advertising documents handed on the spot to potential owners or tenants

systematically put forward this exogenity. This commercial strategy is particularly

active in the case of American-style residential enclaves. Insofar as the globalisation

process is often assimilated to the Americanisation of the world (for instance Dragon

Villas or Guangming Villas in Beijing), the American aspect is more often reduced to

mere scenery and a string of stereotypes.

5 Very few of them have developed any deep thought about their American features. On

the other hand, in the case of Yosemite Villas (Youshan meidi bieshu), the advertising

documents prove to be of remarkable interest for they present a wealth of values and

myths, and even a totally new interpretation of history regarding the Gold Rush.

Collected on the ground within the framework of fieldwork in October 2003, these

sources provide rich matter for the geography of representation and the issue of the

globalisation process3.

6 This article will broaden the analysis on three levels. It will outline the general

characteristics of this gated community and its American aspects in terms of

architecture, conception of the environment and values. This permeation into the


19

American identity will largely be based on American mythology especially of the large

expanses of the American west, the Gold Rush and various stories of success.

7 The article will also show how the advertising documents go beyond a simple

marketing strategy and reveal aspects of the current Chinese politico-economic system

and of the aspirations of some of its elite.

An American-style gated community at the doors of BeijingElements of methodology

and epistemology

8 The geography of representations can deal with images or texts without any particular

purpose beyond being affective, cultural or aesthetic. However in some cases, the

representations have a political purpose, corresponding to the propaganda of non-

democratic regimes or to the promotion strategy of a territory for electioneering

purposes.

9 In other cases, the representations take place within the context of a commercial

transaction. As a result, they are given the role of stimulating the demand for such a

product or urging the consumer to buy―the role of advertising. The representations

are there at the heart of the market economy. Advertising applies to products but also

to territories. It aims to improve their attractiveness.

10 Nonetheless, if the advertising document aims to maximise the profit of the seller (in

the broadest sense of the term), the means it uses to achieve its goal are often linked to

the dreams of the society itself or of a particular social category.

11 G. Durand4 understood well that advertising constitutes in its way a mirror of our

world. This mirror is often distorted. But even, and even especially, when

advertisements manipulate reality, they provide materials relevant to this analysis.

They highlight the dreams of those who produce them and of those at whom they are

targeted. Also they can more widely give a general idea of the dreams of a given society

(or one of its social strata) at a given time. Therefore, the advertising images and the

accompanying text constitute a source exploitable by the geography of representations.

12 In China, advertisements have often constituted a choice source for commentators

insofar as they reflect the major issues with which China has always been confronted,

i.e. the link between private and public as well as between national and international.

13 Thus, historian S. Cochran5 analysed the modes of construction of commercial culture

in the Shanghai of the first half of the twentieth century. He presented the

development of advertising in modern Shanghai, then an economically booming city

thanks to the development of the private sector and to the investments of greedy

foreign multinationals in the semi-colonial context of the time.

14 Nowadays, advertising often offers original and clarifying views of the process of post-

communist transition and current globalisation. Thus, D. Fraser6 studied

advertisements for luxury accommodation in Shanghai and identified some of their

mechanisms of commercialisation. More recently, S.W. Lewis7 tackled the issue of

globalisation and Westernisation through the study of advertising in the underground

public transport networks of large Asian and notably Chinese cities (Hong Kong,

Shanghai, Beijing).

15 The validity of the advertising materials as a whole scientific source is fully verified in

the case of Yosemite Villas. During fieldwork carried out in October 2003, we were able

to collect on the site three types of advertising documents, meant for a potential

clientele of owner-leasers, owner-residents and tenants (mainly foreigners).


20

16 Two have quite ordinary content, being a presentation folder for the villas (I) and their

features with thirty-six pages and plates, as well as an eight-page summary leaflet (and

a CD-Rom) dealing with the financial aspects of the development (II)8.

17 However, the third document (III) is of great interest. It is presented in the form of a

fifty-page booklet, bound and richly illustrated, concerning great American myths and

above all the notion of “the spirit of wealth creation”9. Obviously, the length, depth and

reach of such a text is greatly disproportionate to what a simple commercial process

would need, going well beyond a simple advertising document and promotional text.

18 This rich corpus of texts and images, based on a coherent and organised vision includes

great political, historical and philosophical meaning. Its content aims to give another

interpretation of the contemporary history of humanity.

American-style luxury villas

19 The majority of the components of the luxury secure residential enclave as seen around

the capital or in other Chinese megacities are also to be found in the Yosemite Villas.

The basic elements of what has become a truly standard territorial model are largely

present there. Yet most of these common characteristics are integrated into an

American type of general vision, or pretend to do so.

20 Yosemite Villas are part of the group of the gated communities concentrated in the

southern part of the Shunyi district. They are situated between two main roads serving

the north-east of the capital, i.e. in the west the Jingcheng Expressway (Beijing-

Chengde) and more notably in the east, the motorway leading to the airport. Like many

other similar villa areas, they are thirty minutes from the CBD and the embassy district

in Beijing. On the whole, one can find the main location factors that have led to the

emergence of what property developers now call the CVD (Central Villa District)

(zhongyang bieshu qu). As a result, in this part of the outskirts of Beijing, a territorial

system has been developing for the last fifteen years centred on a high concentration of

areas of luxury villas. There is a real “club system”10 where various educational

(international schools) and leisure facilities (golf courses, equestrian clubs...) are

distributed around residential spaces (gated communities).

21 Yosemite Villas occupy a total surface area of 59 ha, but so far, only a first stage of 81

villas has been built, centred on a lake and a club house. Once completed, this

residential enclave will include 600 villas. As some other enclaves have more than 1,000

villas, it is therefore only a medium-sized property development compared with the

scale of the Municipality of Beijing.

22 The future owners can choose between eight types of villa from 468 m2 to 596 m2). The

Villas have high grade service and leisure facilities. The impressive five-star Yosemite

Club House covers 12,000 m2 on four levels (with mini theatre, indoor and outdoor

swimming pools, spa-therapy, sauna, gymnasium, restaurant, bar, leisure centre for

children, beauty salon, playroom, reception room). Outside the community other

leisure activities are possible, notably thanks to a golf club and a horse riding club.

Shunyi International School situated nearby constitutes another asset. Nonetheless,

this long list is part of the inevitable pre-requisite conditions for a demanding clientele,

within the context of a hyper competitive economic environment. The prices

themselves are in line with the standard of this micro real estate market, with a rent of

US$8,000 per month for the largest villas and a sale price of US$2,200/m2.


21

23 Yet Yosemite Villas is not a development of luxury villas like any other. The concept of

luxury is deeply influenced by “the American spirit”. Their American-ness is explicitly

and insistently claimed. The presentation folder for the villas is thus entitled

“Permeation of the American living concept”. The text itself qualifies this residential

enclave of “American living”. The integration with nature is particularly highlighted.

This site is called “romantic ecological homeland” (gousi langman jiayuan). It is also

planned that the Wenyu river is to be transformed into an “ecological corridor”. As a

result, an important role is granted to the relationship between the gated community

and the Wenyu river. On page 4, the leaflet stresses that fact through three slogans:

“Unique Wenyu river”, “Beautiful Wenyu river”, “Wenyu river of Yosemite”.

24 “Unique Wenyu river”: out of the four water streams that the city of Beijing has, only

the Wenyu flows throughout the year.

25 “Beautiful Wenyu river”: the document stresses the width of the valley, the quality of

its water and its tree-lined banks. It also adds that 75% of the trees have survived ten

years or more after being planted.

26 “Wenyu river of Yosemite”: the Yosemite Villas are situated just 60 metres from the

north bank of the river, the central part of the luxury villas.

27 But the notion of environment is not reduced only to a simple respect of nature. As for

many villa areas, the advertising documents note the special features of the

environment. In this case, however, the sales pitch focuses particularly on this and

inserts this ecological preoccupation into a larger concept connected to a style, even a

philosophy of life. The folder declares that the Yosemite Villas project has been

inspired by the American culture of relaxation and leisure. The objective was to

recreate an American-type environment, defined by “the elements of simplicity,

kindness, health and dignity into all scenery within the community”.

28 This vision of life is found in the very architecture of the villas. The plan of the villas

elaborated by an American design office underlines the integration between the inner

and outer environment into an organic whole. Thus the villas are composed of a

cathedral-type living room (6m high), which opens out widely onto the outside with

large bay windows. The leaflet stresses the “pure independent” features of the villas as

well as the presence of a private garden (200m2 to 400 m2) around each of them. The

concept of this area of American-type villa relies on the association between the idea of

community, individualism and nature.

29 On the whole, the American-ness of the Yosemite Villas clearly appears through diverse

elements both material and non-material. Although it is stressed even more in the

omnipresent references to some of the great myths of the American nation.

A territorial identity based on great American myths

30 Yosemite Villas fully claims its American-ness. The advertising documents are clearly

based on great American myths to promote the sale or rental of the luxury villas.

Resorting to American mythology means the advertising taking on a particularly

elaborate form. It is through these documents that the developers endeavour to fire

potential customers’ imagination.

The large expanses of the American west

31 In his innovative study on advertising and areas of luxury villas in Shanghai, D. Fraser

identified the symbol of the oasis as a permanent feature of the property developers’

sales pitch of luxury individual residences in China11. He talked of a rhetoric of an


22

“oasis process” (lüzhouhua). This theme was confirmed several times through case

studies12.

32 But in the case of Yosemite Villas, there is a true change of scale, and even of the

nature itself. The rhetoric is no longer only that of the oasis but of the large open

expanses. It is inspired by the myth of the Great West in California and the wilderness.

33 The name “Yosemite Villas” refers to the Yosemite national park, one of the symbols of

nature conservation in the United States. It is a vast mountain park between 600m and

3,980m high (Mount Lyell) covering over 3,100m2 in the Sierra Nevada, to the west of

San Francisco. The granite rock was sculpted by the last Quaternary glaciers and left a

young landscape of rock peaks, waterfalls and trough valleys sometimes cluttered with

moraine. The emblem of the park is the giant sequoia. So, one can find them at the

heart of the golden medals that represent the symbol of Yosemite Villas.

34 It is also in Yosemite that the notion of natural heritage was coined. After an

unregulated tourist exploitation by private interests in the 1850s, Abraham Lincoln,

pushed a decree through Congress giving Yosemite Valley the status of inalienable

public property. Some time after Yellowstone national park in 1872, Yosemite was

created in October 1890. In 1984, the Yosemite national park was registered as a

UNESCO world heritage site. As a wild space, Yosemite park is a highly popular tourist

destination in the west of the United States. The advertising booklet shows an extract

of a tourist map of the park in the form of a yellowish parchment with torn ends. It also

includes pictures of mountain landscapes.

1. General Characteristics of the Villas

The Gold Rush

35 But the reference to the Yosemite national park aims not just to exalt the wide open

spaces of the American west. It is not only about an adherence to ecological principles.

Nor is it an updated and nostalgic version of the transcendentalism of R. W. Emerson

and H. D. Thoreau, fathers of a long tradition in American literature of “nature

writings” of the early nineteenth century, where nature was sublimated and idealised13.

36 The Yosemite Valley is the cradle of the Gold Rush. As a result, gold and golden shades

are present under various forms throughout the advertising documents. The colour

prevailing in the pages is based on an association between gold and brown. Either the


23

letters of the text are of a golden shade on a brown background, or the inverse, the

letters or drawings are brown on a golden page.

37 The documents are strewn with diverse golden objects by way of a theme. The symbol

of Yosemite Villas is a medal with the words “Yosemite Villas. Beijing. China”. An old

chest clearly evokes a treasure hunt. Further, a cup full of golden coins stamped with

the name Krugerrand refers to the world epicentre of gold extraction in South Africa,

while an old spade as well as a shining nugget at the bottom of a gold panning sieve

easily recalls the Gold Rush epic. The natural landscapes themselves have been shaded

in gold, like the cliff at the head of a waterfall. The other pictures of mountains cleverly

use the play of sunlight to refer to the gold colour.

The success stories

38 The advertising booklet of Yosemite Villas accords a special place to the stories of

people or firms embodying American success. These success stories achieved by rapidly

self-made men gave birth to hallmarks among the symbols of American capitalism. The

documents present a series of famous names that were established in 1851, each chosen

for a special quality. In the case of Levi’s, it is said that Levi’s has represented the image

of the cowboy for 150 years and become the symbol of American spirit. The jeweller

Tiffany is in the top list in this pantheon of success stories. According to the document,

this firm exemplifies “the originality and the calmness, the transcendence and

sincerity of the American spirit in each piece”. Likewise “in 1851, the New York Times

arrived in the world with a bang”. Praised for its “chemistry based on high quality,

sobriety and seriousness”, it is among the top ten American groups of daily

newspapers. The Yosemite Villas also emphasise the success of Reuter Press. It says that

in 1851 Reuter Press only had 45 pigeons and an eleven-year-old employee at its

disposal. Today, “thanks to their professional skill and an advanced perception, the

trust in Reuters is stronger”.

American mythology, a marketing tool

39 Resorting to some of the great American myths is not incidental. The aim is not to

highlight them in order to exalt the greatness and unique destiny of the American

nation. The use of these great American stories means the transfiguring of reality and

causing customers to dream of buying a house like these. Obviously, this is in line with

a real estate market strategy. Property developers use representations for commercial

purposes and several means of exploiting myths are identified.

40 The documents make great play of the notion of a dream. One of the chapters is indeed

entitled “Dream”. Thus the Gold Rush is analysed as the search for wealth but also the

pursuit of a dream. It is said that people searched for gold, and dreamed of a new life.

The text comments on the discovery of a giant nugget and the story of two American

gold seekers and specifies: “more exciting than 2.7 kilos of gold!”. It draws a conclusion

from the story, “if you have a dream, to fulfil it you have to do everything with

passion!”. Dreams have a de-realising and de-territorialising function. The text aims to

distance the commonplace reality of the outskirts of Beijing and take the reader to

faraway places.


24

2. Example of Calculation of Profitability

41 It enables residents to identify themselves with the mythic heroes that are talked

about, whatever the–often trivial and sometimes doubtful–origin of their fortune. The

owners become the protagonists of a glorious epic.

42 Thus, one of the keys to interpret the texts lies in its conclusion itself:

“Through the History and Regions.

2003. Popular China. Beijing. The Banks of the Wenyu River.

It is the Same Beautiful Place

The Same Persistent Dream

The Same Brave and Intelligent Gold Seekers

The Same Devout Adoration of the Wealth Creation Spirit

That Wrote the Legend of Wealth Creation

Why Not Call Such a Place ‘Yosemite’?

Yosemite Villas, a Reward for you!”

43 A constant parallel is established between the Yosemite national park and Yosemite

Villas, between the residents of (or investors in) the villas and the gold seekers, both

sharing in the cult of money. It clearly deals with a well-tried marketing technique

consisting of the creation of forms of identification through the call to dream. Flattery

and over-valuing are fully part of this manipulation for commercial ends. The

investors, even though preoccupied with financial calculations and not necessarily

adventure-loving, are metamorphosed into the much more gratifying mythic figure of

the gold seeker. They become the heroes of a new cult and take part in the same

legend. Likewise, the modest 69 hectares of this residential enclave and the very

ordinary banks of the Wenyu river are found elevated to the status of the impressive

Yosemite national park.

44 The advertising may resort to American mythology, but this reference is mainly a

pretext for a more commonplace financial interest. The leaflet justifies the

attractiveness of such real estate investment:

45 “The high quality of the residents and the central situation in the CVD offers a huge

investment potential. The most important factor is that the Yosemite villas are situated

nearby Shunyi International School where there are more than 1,600 foreign students.

Thus, investors will have a guaranteed source of several hundred international families

as residents. An area full of foreigners is often a place with a high reward on

investment, this has been constantly proved”.

46 Thus the gold mine is mainly made of a high concentration of foreign customers.

Generally the villas are bought by Chinese investors, to be rented to expatriate families.

Rather than taking part in a risky adventure as at the time of the Gold Rush, property

developers (Beijing Bishuiyuan Real Estate Development Co, Ltd and Beijing Lushuiyuan


25

Real Estate Development Co, Ltd) offer potential investors a regular income. The chart

of estimated profitability shows a rate of return on guaranteed investment of 11.7% a

year (see Table 2).

47 However, if the sales pitch presents an obvious commercial end, it is far from being

reduced to it. Many elements of representations it contains go well beyond this classic

exploitation. They clearly appear disproportionate in relation to this commercial

objective. As a result, the advertising documents of the Yosemite Villas development fit

into a larger vision.

Yosemite Villas, mirror of emerging capitalism in China?

48 The reference to the major American myths does not stand alone. American mythology

is put into a much larger perspective, and it is exploited in the service of a new

interpretation of history. So to what extent does this material provide a clue, however

incomplete, about the social strata at which it is aimed–and even about the socio-

political system as a whole?

49 This enquiry is subject to two methodological constraints. On the one hand, an analysis

of these publicity brochures, like that of any single documentary source, obviously has

its own limitations: Yosemite Villas is only one among hundreds of other gated

communities scattered around the major Chinese cities; the brochures’ intended

readers are only a fraction of China’s elite; and, finally, the promoters have their own

particular outlook on the world.

50 On the other hand, the demonstrable richness of these documents and the sheer

number of historical references, their organised structure, and their clear intention to

present an all-encompassing vision, prevent them from being treated as though just

mere publicity material. These factors impose the need to try to identify the nature of

the relations between them and the wider social system to which their intended

readers belong.

51 Accordingly, my use of the term “mirror” as a conceptual tool is an attempt to establish

the nature of this relationship between the particular and the general. It is intended to

raise certain questions, and should be understood as a metaphor, expressing

relationships and analogies, but also suggesting at the same time many possible ways of

extrapolating from the language and the representations deployed within these

documents.

Beyond the American dream, the “Wealth Creation”

52 The American myths have an important place in the sales pitch. But they are

systematically integrated into a larger perspective focused on an essential and

omnipresent notion, that of “wealth creation”. In this way, the historical and

geographical specifics of the myths are put into perspective. The American-ness of the

images, becomes an element within a discourse of a more global reach. This partial de-

Americanisation process has several forms. The reference to the Yosemite park is

treated solely as decorative and exotic. The pictures of mountain landscapes are not

there only for aesthetic purposes. They stress the notion of “wealth creation”. One

shows a waterfall flowing from a golden-shaded mountain, with in the right hand

corner a bucket full of gold coins. The caption specifies: “Double Achievement of Values

and Dreams”.

53 The Yosemite park is presented with a plan showing the campsites, picnic areas, car

parks, trails and ranger stations. But the tourist element is insignificant. In the general


26

presentation, the national park is defined according to the criteria of wealth creation:

“Sacred place of wealth creation”. The beauty of the landscape is secondary, for the

Yosemite Valley is “there where the dream started in 1851”.

54 Likewise, the Indian aspect of Yosemite Villas turns out to be particularly discreet. The

name “Yosemite” is that of an Indian tribe. One of the documents specifies only in the

caption for a picture of the park that it has been “Sacred Indian land for 3,000 years”.

But there is no reference to the forced transfer of the Indians to reservations in 1851.

No Indian is represented. The only Indian aspect appears in the form of two

arrowheads and spearheads in the lower corner of the picture. More generally, the

name of the place clearly does not match reality. There, the term “Yosemite”, both a

name of an Indian tribe and a national park in California, appears somewhat alien in

the Chinese context, and especially to the part of Beijing it is supposed to designate.

55 One way of going beyond the American-ness of the evoked myths consists of

universalising them. This is what prevails in the metamorphosis process of the Gold

Rush. The Gold Rush is not only presented as a historical event set in space and time

but as a symbol of the ability to extract wealth. Thus the booklet quotes the story of

Brunan, a figure who made his fortune by selling spades to gold seekers, thus the text

draws the conclusion from this anecdote that: “one cannot say that the gold beneath

the ground is not true gold, but there is the ability to extract gold from the ground.

Sometimes, wealth cannot be created from hard work”.

56 The leitmotiv of this text relies on the notion of “wealth creation”. Its content seems

both rich and vague. It includes financial but also psychological and philosophical, even

spiritual aspects. In the advertising text, wealth creation is first introduced as a kind of

spirit. Thus, the year 1851 is “the first year of wealth creation, when the page was

turned, history changed. The strength of this spirit started to rule the world! This

wealth creation spirit is characterised by passion and dreams that can go beyond

history and space”.

57 Those who have this spirit are supposed to be part of a new aristocracy associating

material wealth and spiritual values. “Wealth, freedom and spiritual sublimation

represent nirvana, and are symbols of the noble people of the age”.

A new vision of history

58 The advertising document offers a new interpretation of world history. Before and

after 1851. The Gold Rush would imply a departure point in History, breaking with the

four main traditional chronological periods (Antiquity, Middle Age, Modern era and

Contemporary era).

59 The title of the booklet is indeed “Dating back to 1851, the first year of fortune”. On the

second page, it says “welcome to the 152nd anniversary of the wealth creation spirit”.

Further, the singularity of this year 1851 and the historical break it is supposed to stand

for is highlighted elsewhere: “…it is clear, in retrospect, that 1851 is not just another

year in the flow of history, but also the declaration of the beginning of the spirit of

wealth creation”.

60 The year 1851 is established as the beginning of a new historical period. The discovery

of gold is not considered simply as one event among many others. It heralds a new era.

“In 1851, the gold nugget found in the Yosemite Valley triggers the start of the gold

mining era”. “The influence of the Gold Rush went beyond US borders. At the same


27

time, it eventually reached all human society and changed the historical course of the

world”.

61 As these documents mainly address Chinese investors, the text implies that from now

on this form of capitalism is expected to thrive in a privileged way, especially in China.

62 The text is not concerned with historical truth. It makes no reference to the many

failures of the Gold Rush, to the often risky and poor living conditions of the

prospectors. It twists historical fact into a series of success stories. Moreover, the sales

pitch gives a disproportionate role to the Gold Rush in the contemporary or even

American economic history. Attributing this event the status of a major watershed in

the history of humanity seems caricatured and unfair.

63 The text also forgoes any reference to the Industrial Revolution and the colonial period

which, doubtless much more than the Gold Rush, enabled the creation of values and

accumulation of capital in developed countries. And again, history itself is reduced to a

question of money and its accumulation.

64 It is therefore appropriate to note that while in California 1851 was the year of the Gold

Rush, it also corresponds to a dramatic period in China, marked both by natural

disasters (the south-east of the country was devastated by typhoons), and above all by

the great popular rebellion of the Taipings (1851-1864), which started a long period of

crisis for China.

65 The promotional materials do not risk taking explicit political positions. Nevertheless,

there are political and ideological references. In some cases, it is their very absence

that mark them out. In that sense, the text must be analysed for what it says as much as

for what it does not say. Indeed there is no reference to the official Marxist-Leninist

historical context. It makes no concession to CCP revolutionary ideology. Chinese

history itself is totally ignored.

66 In other–very rare–cases, the central issue of the relationship between money and

power is approached in a quasi-subliminal way. Thus, the text specifies:

67 “Restless explorations and discoveries have favoured diverse historical and social

progress. However the real symbol of human progress is neither what some

adventurers have found, nor how they have fulfilled the desire of some emperor14, most

had the opportunity to dream and the possibility to fulfil our dreams”.

68 The message is clear, enrichment is mainly motivated by individual interest and not by

adherence to a patriotic objective or submission to a ruling power. It is far from the

Confucian image of the elite in the service of its country or the cultured intellectual

class. The only ethic consists of granting an eminent value to the ability to accumulate

wealth as quickly as possible.

China’s emerging capitalism and its foundations

69 In some respect, the advertising materials offer precious information not only about

the dream of the villa owners but also about the spirit and the very nature of the

capitalism emerging in China. Globally, it deals with an economic system characterised

by a mix of tradition, mercantilism and ultra-liberalism.

70 First, one of the characteristics that comes out of these documents is the fascination for

gold. There is a real “mining capitalism” or “extraction capitalism”. This attachment to

the yellow metal, traditional in most Asian societies is largely a cultural fact.

71 Yet the text also gives a broader vision:


28

72 “Because of the dreams, the Gold Rush rapidly spread throughout the world, not only in

the Yosemite Valley, not only in California, not only in the United States, but

everywhere on earth, the world became a giant ‘gold mine’ and everyone became a

prospector for gold, Levi’s, Patek Philippe, New York Times, Reuter Press...”.

73 The Gold Rush myth thus becomes a metaphor. The historical event becomes the basis

of a fantastical even fantasised vision of enrichment. The model offered to villa

investors is not that of the nineteenth century bourgeois or the capitalist self-made

man, it is that of an adventurer motivated by the dream of instant wealth. Monetary

profit is disconnected from the notion of work, enterprise and innovation: between this

game of chance and fortune seeking, wealth comes from no sort of creation at all.

74 This search is alluded to as a fever. Significantly, the text states: “History froze in 1851.

From the start of the Gold Mining Era, a fever gripped the world”.

75 Like C. Levi Strauss who made his famous distinction between “cold societies” and “hot

societies”15, the text opposes a long, cold even glacial historical period to a more recent

hot period. This fever is comparable to the economic takeoff that China has been

experiencing for the last twenty years. It resounds with the vertigo the Chinese

economic elite might have regarding the quasi-unlimited prospect of growth of the

country.

76 When the text evokes the American-like success stories, it underlines how fast they

made money: “Levi’s, Patek Philippe, New York Times, Reuter Press and the other

legends of the wealth creation of the Gold Rush Era, all of them have proved the

following statement: as long as you put your hands in the right place, bravery and luck

will bring a myth of quick fortune”.

77 The wealth creation is not only an economic objective to reach. It has become a cult

object. Beyond materialism itself, it includes a metaphysical dimension. As the

document does not wish to make special reference to the Christian God, completely

alien to Chinese investors or residents, it quotes instead other terms which are more

general and / or more adapted to this Asian context: “nirvana”, “totem”, “spiritual”,

“devotion”. “The kiss of God: extracting gold will bring wealth to those who fulfilled

their dreams with spades and empty hands. No-one thought they were so favoured as

to find gold. They were called ‘kissed by God’. But reality reminds us that the lucky gold

seekers were neither faithful worshippers of God nor called ‘favourite sons of God’. On

the contrary they sincerely followed and loved another spiritual force in the form of a

totem! Through many legends, they told the world that this was neither gold or God,

but the ‘wealth creation spirit’. The devout adoration of this kind of spirit meant that

many gold seekers naturally became rich and liberated their spirits of noblemen.

Because God only kisses the strongest!”

78 This cult of wealth creation is that of a fanatic individualism and social Darwinism, as

opposed to the Confucian principles of the traditional elite or the post-Maoist type of

paternalism, and is expressed through an exaltation of the individual and his

capacities. The villa owners become the flame-bearers of a new cult and at the same

time the members of a minor elite able to fulfil their dreams and, according to the text,

endowed with remarkable and exceptional qualities.

79 If this vision of the world seems to remove the political dimension to favour an

exclusively economic vision, it furtively picks up history again. Like many gated

communities in China, the references to the manor lifestyle and to the imperial period


29

are omnipresent16. The location itself is called “imperial” (zhizun weizhi). Life there is

also qualified as “imperial” (zhizun shenghuo ganshou). The clubhouse is built in the

“European palace style”. There it is qualified as “Noble Manor, Noble Club” (zungui

bieshu, zungui huisuo). The booklet specifies: “Not only will you enjoy quality services

but also the noble feeling of manor life” (bieshu shenghuo de guizu ganjue).

80 American-ness is battered down. The reference to the European or Chinese Ancien

Régime seems to be so little in line with the foundations of American democracy that

the residential complex claims to belong to. The sales pitch only keeps a partial and

reduced American-ness, taken from its democratic dimension. In the manner of this

current emerging capitalism in China, it uncouples the economic sphere from the

political sphere. In this way, it achieves a singular and unlikely combination between

American mythology and Chinese imperial tradition, between an imported capitalism

and a deep fascination for the past.

81 In conclusion, Yosemite Villas and its advertising documents that endeavour to assure

the villas’ promotion, clearly exhibit several levels of meaning. If restricted to a limited

interpretation, one may consider these sources a particularly intellectually elaborate

document, but which nevertheless remains simply a promotional document and

therefore of essentially commercial function. According to this point of view, it would

be excessive or at least risky to over-interpret these materials and uncover deeper

promotional meaning. A second interpretation consists of giving scientific credit to this

advertising, but limiting the reach to the special case of Yosemite Villas. Booklets,

leaflets, folders would make an exceptional but unique group of documents. A third

approach assumes that the meaning of these documents goes beyond both the

advertising genre and the case of Yosemite Villas, implying that the designers of these

documents are only expressing the unconscious of the target group of their message, or

even more widely the collective unconscious of the social strata that this target group

belongs to. In this way, the villa owners embody the new face of some of the Chinese

elite. It offers information about the way that a sector of the economic elite think about

themselves and think about history. It enables one to gauge the vertigo experienced by

the Chinese elite faced with the violent speed of the economic take-off and the huge

potential of future development.

82 But the underlying representation of the documents also gives insights―particular,

fragmented, but striking―into the capitalism emerging in China. Deprived of an

ideological or religious dimension, and of unions and political counter-power, rooted in

a multi-millennial imperial tradition and fed by a booming growth which never again

will be cyclic, in many ways this capitalism embodies a novel form of political economic

system. One may wonder whether it is the case of just the first stage of a capitalism

likely to evolve over time or whether it is to represent a novel mode of long-term and

original development, a veritable syncretism between a quasi-universal capitalism and

multi-millennial civilisation.


30

NOTES

1. Cf. David Fraser, “Inventing Oasis: Luxury Housing Advertisements and

Reconfiguring Domestic Space in Shanghai”, in D. S. Davis (ed.), The Consumer Revolution

in Urban China, Berkeley and Los Angeles, University of California Press, 2000, pp. 25-53.

See also Guillaume Giroir “Le phénomène des gated communities à Pékin, ou les

nouvelles cités interdites”, Bulletin de l’Association de géographes français, Paris, December

2002, pp. 423-436; “The Fontainebleau Villas (Shanghai), a golden ghetto in a Chinese

garden” in Fulong Wu and Yaping Wang (eds.), Globalization and the Chinese City, London

and New York, RoutledgeCurzon, 2006, pp. 208-233; “The Purple Jade Villas (Beijing): a

golden ghetto in red China”, in Klaus Frantz, Georg Glasze, and Chris Webster (eds.),

Private Cities: Global and Local Perspectives, London and New York, RoutledgeCurzon, 2006,

pp. 142-152; “The phenomenon of gated golf communities: the case of China”, in Fulong

Wu (ed.), Spaces of China’s New Urbanism, London and New York, RoutledgeCurzon, 2006;

“‘Hard’ and ‘soft’ enclosure in gated communities: some theoretical perspectives and

empirical evidence in China”, Urban Geography, 2006 (submitted). For a discussion of

middle class residential enclaves, see Luigi Tomba, “Creating an urban middle class:

social engineering in Beijing”, The China Journal, No. 51, January 2004, pp. 1-26.

2. Cf. Fulong Wu, “Transplanting cityscapes: townhouse and gated community in

globalization and housing commodification”, in Fulong Wu and Yaping Wang (eds.),

Globalization and the Chinese City, London and New York, RoutledgeCurzon, 2006, pp.

190-208. Foreign influences often combine with Chinese culture; writing about the

Fontainebleau Villas (Shanghai) where Western style buildings are incorporated into a

space laid out in accordance with feng shui principles, I use the terms “cultural

hybridity” and “intermingled civilisations” (see Guillaume Giroir, op. cit. 2006).

3. This paper was first presented in English at the First World Forum on Chinese

Studies, Shanghai International Convention Centre, Pudong, August 19th-22nd, 2004. I

would like to record my special thanks to the Shanghai Academy of Social Sciences

(SASS) and in particular to the Assistant Director, Mr. Tu Qiyu for the honour of being

an Invited Scholar.

4. Gilbert Durand, Les Structures anthropologiques de l’imaginaire, Paris, Bordas, 1959.

5. Sherman Cochran, Big Business in China: Sino-Foreign Rivalry in the Cigarette Industry,

1890-1930, Cambridge Mass., Harvard University Press, 1980; and Inventing Nanjing Road:

Commercial Culture in Shanghai, 1900-1945, Ithaca (N. Y.), Cornell East Asia Series, 1999.

6. David Fraser, op. cit.

7. Steven W. Lewis, “The Media of New Public Spaces in Global Cities: Subway

Advertising in Beijing, Shanghai and Taipei”, Journal of Media & Cultural Studies, vol. 17,

no. 3, September 2003, pp. 261-271. See also Cheng H. H.-I, “Consuming a Dream: Homes

in Advertisements and Imagination in Contemporary Hong Kong” in Mathews G. and

Lui Tai-Iok (eds.), Consuming Hong Kong, Hong Kong, Hong Kong University Press, 2001.

8. Villa Yosemite (Youshan Meidi): Intelligence in Wealth Creates Excellent Achievements, in

English and Chinese, undated, 8 p.; Villa Yosemite (Youshan Meidi), in Chinese on some

pages, and in Chinese with English on others, undated, 36 p.

9. Beginning from 1851, the First Year for Fortune. Villa Yosemite (Youshan Meidi, in Chinese

and English, undated, 50 p.


31

10. Guillaume Giroir, “Gated communities, clubs in a club system. The case of Beijing

(China)”, Proceedings of the Glasgow international conference: Gated Communities:

Building Social Division or Safer Communities?, September 18th-19th 2003, Glasgow

University urban geography department, Centre for Neighbourhood Research,

www.gla.ac.uk/departments/urbanstudies/gated/gatedpaps/gatedconfpaps.html.

11. David Fraser, op. cit.

12. In the case of Purple Jade Villas I show how this “oasis building” strategy on the

part of the promoters, and supported by the residents themselves, conflicts with the

disruptions and urban spread engendered by the developmental dynamic of the cities;

see Guillaume Giroir, op. cit. 2006.

13. Alain Suberchicot, Littérature américaine et Ecologie, Paris, L’Harmattan, 2002.

14. My italics.

15. Georges Charbonnier, Entretiens avec Claude Lévi-Strauss, Paris, Plon-Julliard, 1989

(first published, 1961).

16. Guillaume Giroir, “Les gated communities en Chine : civilisation, transition et

métropolisation”, in Guillaume Giroir, Transition et territoire en Chine. Le cas des

périphéries de Pékin, “habilitation à diriger des recherches” (accreditation to supervise

research), Université d’Orléans, 2003, pp. 198-216.

RÉSUMÉS

Guillaume GIROIR

Over the last fifteen years or so, several hundred gated communities have been built around

China’s major cities. Most of these tightly policed luxury enclaves follow a standard social model

and physical layout. In the advertising brochures, the sales pitch shows little variation.


32

http://www.gla.ac.uk/departments/urbanstudies/gated/gatedpaps/gatedconfpaps.html

The Impact of Macao’s GamingIndustry on Family LifeAn exploratory study

Gertina J. van Schalkwyk, Emilie Tran et Kay Chang

1 This project is a comprehensive situation analysis and needs assessment of the

psychological well-being of the people of the Macao Special Administrative Region

(SAR). Overall the aim is to gain an in-depth understanding of the context and needs of

the local community in order to appropriately provide psychological services and to

develop models for effective intervention strategies for the Macao community2. We

report here on the first phase of the project and on some of the many enabling and

disabling processes having an impact on the well-being of the local population. The

purpose is to describe the present situation with regard to family life in Macao focusing

in particular on the impact of the gaming industry on family and the respective sub-

systems (parents and children). As Macao gains its political and economic importance

alongside its booming gaming industry, interest in the studying Macao’s infrastructure

in social and psychological support systems have become increasingly relevant. The

gaming industry, the major of source of employment and revenue in the territory,

involves hidden factors compared to other industries in the region and inevitably

captures the interest of researchers in psychological and sociological topics.

2 Research into and literature on family life and psychological aspects of people in Macao

is extremely limited. The current knowledge base mainly relies on studies conducted in

Hong Kong, and about Chinese expatriates living outside Macao. The majority of

researchers who study the psychological aspects of Chinese culture and ethnicity pay

little or no attention to the uniqueness of the psycho-social situation and related needs

in Macao. In August 2005, an independent group of researchers with government

funding conducted a large-scale study on the Quality of Life in Macao covering several

dimensions related to how the local population perceive and experience the socio-

economic structures of their daily lives3. This study, however, did not consider

psychological aspects of people’s functioning and well-being. The lack of psychological

baseline knowledge and the mental health service delivery system, only in its infancy,

are thus an important backdrop against which the larger study was conducted.


33

3 Traditionally Macao has depended, for the delivery of social services, on an informal

network of religious organisations, neighbourhood associations, and various social

clans. At present mental health care services are mostly provided by social workers and

access to psychological services is limited to visiting professionals from Hong Kong and

a few partly trained psychological assistants (counsellors and paraprofessionals).

Recent figures show the Macao government supports approximately 89 social workers

for the population of about 482,000 people4. Figures for social workers in non-

government organisations and psychologists are not available. This is a matter of

particular concern and indicates that Macao is, to an extent, wanting in terms of

mental health care services. It also seems that communication and collaboration among

most of the service providers are neither well developed nor organised. Adding to the

challenge is the lack of providers of psychological services, and a common established

practice of loading mental health work tasks onto clergy staff, social workers and

health care workers at best.

Family systems

4 The paper describes the present realities of and challenges to family life in Macao.

Families often function according to a particular structure, and role appropriation for

the different members of the family system develops. The Family Systems approach

views the family as a social group of individuals “tied together through their common

biological, legal, cultural and emotional history and their implied future”5. As a

complex emotional unit the family is primarily a living, ongoing entity that is

organised as a whole system with its members in continuous interaction and forming

relationship patterns that extend over time and space. In the family, interconnecting

family members affect each other’s thoughts, feelings and actions based upon a

“circular causality that transpires between people within a family”6, as well as between

the family and the environment. Hence relationships emerge within the family and

between the family and social environment that influence individual development and

functioning. As a psycho-social entity the family has a distinct influence on each

member’s development and psychological well-being. The family can in fact be an

obstacle to psychological well-being, particularly when the family system faces change

to its core values or when a change in the functioning of one person predictably elicits

change in the functioning of others.

5 In Macao at least four family groups were identified representing different and unique

cultural heritages. Macanese families reflected a mixed-race heritage with Portuguese

and Chinese the dominant cultures, and customs that were particular to Macao.

Chinese families manifested in two distinct groups with families who migrated to

Macao and have been living there for at least three generations in one group, and

newer Chinese individuals and families who have migrated to the enclave since the

handover to the PRC in 1999 and are considered as first generation authorised residents

of Macao in the second group. The majority of families in the latter group came from

Guangdong, with 4,848 (70%) legal immigrants from that province in 2004 alone. Both

these groups still adhered to traditional Chinese customs and cultural heritage, with

the former showing more acculturation, either with or without strong ties to their

families of origin on the mainland. In the latter group the general trend was also for

more women to leave their family of origin and come to Macao either with or without

her children to find employment. An average 61.33% of legal immigrants from the

mainland in 2004 were women7. The fourth group of families were mixed: some families


34

were of Portuguese background maintaining strong ties with their country and culture

of origin, some expatriate families from around the world, and a fair community of

families originating from other Asian countries in the region (e.g., Philippines, Nepal,

etc.).

6 Family systems in the multi-cultural context of Macao to a large extent still reflected

conservative and traditional values and customs. Although the nuclear family system

was evident, we encountered a mixed cultural heritage that influenced values and

beliefs about what was considered “normal” family life. The data collected for this

project focused mostly on the first three groups of families with Macanese and Chinese

heritage, who constituted the largest proportion of the Macao population, with

approximately 9.5% of the population 19 years of age and younger. Although the

Macanese families reflected a unique mix in their cultural heritage, all the family

systems reflected strong macro-level beliefs about the values of family life, harmonious

living and filial piety.

7 Although psychological well-being is not traditionally a concept used in Chinese family

systems, folklore and ancient Chinese writings refer to the concept of happiness

associated with fu or fuqi (WW), which involves “anything positive and good in life”

and related to longevity, prosperity, health, peace, virtue and a comfortable death8.

This conceptualisation of happiness relates to what is implied by psychological well-

being as a complex set of behaviours, thoughts, feelings and relationships that underlie

the overall physical and socio-emotional wellness of people in a community. Research

into the concept of the purpose and meaning of life involves the well-being of

individuals and groups in different contexts such as the workplace, explorations

regarding the cultural values of happiness, and more recently, psychofortology9.

Whereas a lack of meaning in life could be associated with psychopathology10, some

authors11 indicate that purpose in and meaning of life constitutes critical components

of mental health with an emphasis on a sense of directedness and intentionality.

Sources of personal meaning influence coping strategies for stress, while strong

religious beliefs, group membership, values, clear goals and dedication to a cause

further indicates the extent to which the demands of life are seen as worthy of

investment and engagement.

8 It can thus be assumed that psychological well-being for the families of Macao will

emerge in this historical time, multi-cultural context and with the boom in the gaming

industry when positive emotions are fostered and encouraged while there is a lower

level of negative emotions in viewing one’s overall satisfaction with life. In order to

enhance the psychological well-being of a community, it is necessary to focus on

preventive interventions that would decrease risk processes that can contribute to the

development of psychological problems and pathologies12. Risk processes are those

features that reduce the biological, psychological and social capacities of individuals

and environments in order to maintain a healthy and well-balanced society.

Psychological services would focus on the promotion of coping abilities and the

development of adaptive and protective processes both for individuals and

environments so as to increase or enhance the capacities for sustained psychological

well-being. Frameworks for mental health care services should be developed aimed at

providing interventions that would answer to the needs of the local population and

that are accessible to all members of the community, children, adolescents and adults13.

The gaming industry in Macao


35

9 Today few people know anything about Macao other than it is a gambling haven on the

south China coast. In fact, this has been so only for the past 150 years and it took time

to convert the Chinese passion for gambling into the big business that the gaming

industry has become. Up to the mid-nineteenth century, Macao served as a trading post

in the lucrative sea trade Portugal had engaged in with Japan, the Philippines, China,

Malaysia, India and Europe. It had never been viewed as a real colony by Portugal and

in a sense it has only ever been a territory administered in order to reap maximum

profits. Although Macao’s fortunes experienced ups and downs—depending on how

open or closed the Chinese and the Japanese empires were to foreign trade at any

particular time—the tiny Portuguese enclave enjoyed a considerable degree of

prosperity.

10 It would be wrong though to assume that Macao was nothing more than a commercial

entrepôt. Macao has also been a “city of commerce and culture”14. Indeed, it was “in

Macao, if anywhere, [that] East and West did meet”, as once justly put by Charles Boxer,

a renowned historian of the Portuguese in Asia15. The encounter and exchange that

occurred in Macao have given the territory its blend of cultural and historical

heritage16, which uniqueness has been asserted by UNESCO17.

11 The Treaty of Nanjing, signed in 1842, not only ended the first Opium War, but also

sealed the fate of Macao by establishing Hong Kong18 and opening five port cities

(Canton, Fuzhou, Xiamen, Ningbo and Shanghai) to foreign residence and trade. Since

then, the newborn British colony dominated the maritime trade and provided a base

for businesses that Macao had never dreamt of or managed to develop. Having lost its

traditional commercial relevance and confronted with the economic and social decline

that went along with promising inhabitants emigrating to Hong Kong and elsewhere in

search of better opportunities, the administrators of Macao saw their livelihoods

deeply threatened and they had to find some other sources of internal revenue. In

order to survive, Macao needed to specialise in activities neither Hong Kong nor any

nearby port city like Canton could offer, and in 1851 Macao started, amongst other

endeavours, the coolie trade19. After this trade was prohibited in Hong Kong, Macao

became all the more involved and it was mostly subsidised by British, American and

Chinese capital, until the Portuguese Crown, under public pressure, prohibited it in

1873.

12 Another strategy thus had to be adopted by the administration and monopolies were

granted not only to profitable and innocent commercial activities such as fishing

oysters and sales of foodstuffs like salt, fish, pork and beef, but also to more harmful

and lucrative trades, such as the one on boiled opium and gambling20. The idea of

licensed gambling under the governorship of Captain Guimarães (1851-1863) proved a

success from the start, and “in 1910, the Governor, reporting to Macao’s Deputy in the

Portuguese Parliament, stated that 70 percent of all income of the Administration came

from the monopolies of gambling and opium and only 30 percent from other sources of

revenue”21.

13 There have always been some forms of gambling in China, although it was prohibited22.

Today mahjong is regularly played by local residents at family gatherings and with

friends. However, in the context of the prohibition under the imperial regime and later

added to by the surge of anti-gambling sentiments of the Chinese authorities in the late

nineteenth century, the very monopolies granted to gambling legalised gambling in

Macao and launched the Portuguese territory as a gambling enclave. This was


36

emphasised further when Hong Kong banned gambling in 1871. Gaming contracts were

granted to only a handful of figureheads linked to each other in a complex network of

associations, fierce competition and backstabbing.

14 In 1934 the gambling policy reached a turning point when the local administration for

the first time granted a monopoly of all casino-style gambling to the syndicate Tai Xing

Company, led by Gao Kening and Fu Laorong, thus formally institutionalising gambling

as an industry with carefully designed policies that excluded competition from other

potential bidders. Until the 1960s they managed to secure the monopoly for

themselves, and during the Tai Xing Co. era, gambling blossomed in Macao while the

ban imposed on gambling in the rest of China had been very strictly enforced by the

Chinese Communist Party, which came into power in 1949. Another turning point came

in 1962 when the Macao governor, despite the suggestion of the highest authorities in

Lisbon, granted the casino franchise to the Sociedade de Turismo e Diversões de Macau

(STDM) led by Stanley Ho and Yip Hon. The latter retired from the partnership in 1975,

thus allowing Stanley Ho to become the only casino magnate in the territory until the

end of the franchise on December 31st 2001. The STDM introduced Western games such

as roulette and baccarat to the casinos. Transportation between Hong Kong and Macao

was modernised by introducing highly efficient and fast hovercraft jetfoils, which had

the direct result of enabling Stanley Ho to consolidate the casino industry in the

Portuguese enclave.

15 In August 2001 the Legislative Assembly of Macao, preparing for the ending of the

STDM’s 40-year-old monopoly over the territory’s gaming industry, passed Law 16/2001

according to which it officially established the "Legal Framework for the Operations of

Casino Games of Fortune" and tourism, gaming, conventions and exhibitions, and the

service industry became the economic driving force for Macao. The SAR government

opened the sector to two new players from Las Vegas: the Las Vegas Sands Corp. and

the Wynn Resorts. Altogether with SJM (Sociedade de Jogos de Macau), an affiliate of

the former monopoly-holder STDM, the three licensed operators, joined by a few big

players, such as MGM, Kerry Packer and Galaxy through joint-ventures, have

announced frenzied investments and gigantic casino and hotel developments and

projects that are under construction on Macao peninsula and on Cotai, a strip of

reclaimed land between the islands of Taipa and Coloane. The area will feature not only

casinos and hotels (10,000 rooms in total) but also conference facilities on a grand scale

and is expected to employ 150,000 staff. The number of casinos increased from 11 in

2002 to 17 in the third quarter of 2005 and Macao has already become the second

largest gaming city in the world, behind Las Vegas in the United States. Thus, as we can

see, the gaming monopoly, designed to keep the colonial administration afloat in the

mid-nineteenth century, has by far exceeded all expectations. Indeed, in 2003, the

Macao Gaming Inspection and Coordination Bureau (GICB, 2003) reported that gaming

tax contributed 74% to the Macao fiscal revenue. In 2004, the total public revenue

amounted to 19.6 billion patacas of which 15.2 billion patacas came from the gambling

tax23, that is to say 77.8% of the government fiscal revenue: already a three percentage

point increase compared with 2003.

16 In this context it is apparent that the gaming industry plays a major role in the lives

and well-being of the local population. The economic growth and wealth that the

industry has brought to the community, has created numerous employment

opportunities and the Statistic and Census Services (DSEC) report that unemployment


37

has decreased from 6.4% in 2002 to 4.1% in the third quarter of 2005 with almost 58% of

the population working in the industry. Many young people are lured into working in

the industry for salaries that sometimes exceed that of peer graduates in the

government and private sectors. Furthermore, the industry not only supports casinos,

but also a variety of subsidiary business endeavours. In this regard, young girls are

imported to work in the sex trade, while large tourist groups visit the territory on a

regular basis mostly to participate in gambling but also to enjoy the historical sites and

heritage of Macao. It is estimated that approximately 1 million people visit the

territory each month, with PRC national holidays allowing this figure to rise to almost

1.5 million. For last October indeed, with the National Day week-long holiday, the

Statistics and Census Service indicated that the total number of visitor arrivals reached

1,663,623, up 10.2% year-on-year. Visitors from Mainland China, Hong Kong and

Taiwan, increased 9.8%, 10.9% and 2.9% respectively. In the first ten months of 2005,

visitor arrivals totalled 15,438,078, up 12.7% for the same period of last year. The

majority of visitors come from mainland China (57.9% of the total), Hong Kong (28.2%)

and Taiwan (7.8%), and among the mainland visitors, 491,989 (51.1%) travelled to Macao

under the Individual Visit Scheme24. But the “Cotai Strip project…—with thousands of

rooms, marinas, large entertainment venues, shopping, dining and huge convention

and exhibition facilities—is intended to draw people from farther away… visitors from

Japan, Singapore, Thailand, from other places in the Asian region, and from the rest of

the world”25. Given that the territory comprises only approximately 27 square

kilometres, this influx of tourists to the casinos and other facilities create a very

definite over-crowdedness not only on the streets of Macao, but in every corner of this

small enclave.

Exploration

17 The research in this first explorative stage of the project utilised the key informant

approach26. The intention was to gain an in-depth understanding of the present

situation is Macao in which the gaming industry poses both direct and indirect benefits

and challenges to the well-being of local residents. The key informant approach

allowed us to conduct semi-structured focus-group and individual interviews27 with

individuals considered knowledgeable about the community, the residents and their

needs (e.g., professionals, community leaders, church leaders, etc.). Because these

informants worked directly with the community and regularly interacted with the

families in Macao, they were considered as having a particular insight into the situation

in the community. The interviews were recorded on audio tape with the consent of the

interviewees obtained prior to the interview session. The audio recordings were

transcribed and translated to provide textual data for analysis28. Family profiles in the

form of three-generation genograms were used to provide information regarding the

family structure and family history, and the impact of this history on present and

probable future patterns29.

1.


38

Enabling and Disabling Processes of the Gaming Industry

18 Two assumptions need to be clarified before continuing with the discussion. In the

analysis we focused on the gaming industry in terms of the institutionalisation and

legitimisation of gambling as an economic growth entity. We did not at all look into

attitudes, habits and behaviour patterns of individuals or families directly involved in

gambling itself. Much has been written on gambling behaviour and more will most

likely follow. We rather focused the analysis on particular enabling and disabling

processes pertaining to psycho-social relationship and behavioural issues related to the

perceived impact of the gaming industry on individuals and family life in Macao.

19 Secondly, many of the themes that emerged from the analysis of the textual data could

be considered as universal problems also evident in other countries dominated by

entirely different industries. We also do not negate the fact that some social and family

issues could have existed in Macao for a long time and could possibly not be attributed,

either in the past or now, to the gaming industry per se. Whereas the enabling and

disabling processes regarding family life had been noticeable for a long time, most

likely since the start of the Portuguese administration of the territory and, related to

various industries, the rapid growth of the gaming industry in recent years has

exacerbated these issues to some extent. Our focal point was nonetheless on describing,

from a psychological perspective the perceptions and viewpoints of leaders in the

community regarding the present ways in which the gaming industry affected family

life and the psychological well-being of the people of Macao. There is for example a

tendency amongst young people to forfeit furthering their education, both school and

tertiary education, because of lucrative job opportunities in casinos, while parents who

work in the industry typically have ongoing changing work shift schedules that easily

disrupt their family life.

DiscussionPerceptions regarding the impact of the gaming industry on family

functioning

20 Overall, a traditional “Macao approach” to life that valued a stable, easy-going lifestyle

and taking things as they were without exerting much effort towards change were


39

observed. As one interviewee indicated, “I heard my colleague say that Macao people

can very easily be satisfied with what they have, but I feel that the newer generation

has their ambition and that ambition may be to get “quick” money” [01/01]30. Such an

aim for harmonious living cannot be faulted in itself and it combines well with the

traditional Chinese values of collectivism and moral qualities of loyalty and

faithfulness. Past generations have emphasised ren (W, humanness) and yi (W,

righteousness), good education and respect for life as central to the moral education of

the young. Through engagement with the gaming industry, however, the younger

generation have been encouraged to become involved in hedonistic behaviour patterns

and a drive towards individualist needs and materialism. It seems that the harmonious

co-existence of the past has mutated into a dependency on external forces and a need

for wealth that has overshadowed good education and respect for life and impacted on

the psycho-social well-being of the local population (“Local people become dependent

on income from tourism and gambling and do not develop other industries. The gaming

industry provides easy money; there is no motivation to work for their own well-being

—enhance their competences and motivation to look beyond “soft money” that comes

easily” [05/09]).

21 The rapid growth in the economy over the past five years and the increase in casino

licences have resulted in a distinct escalation in employment opportunities mostly in

the gaming industry, tourism industry and construction. Many people were able to find

jobs in Macao either as croupiers in the casinos or in subsidiary sectors of the industry

including professional services (e.g., bookkeeping), retail and services (e.g., cleaning,

catering), and construction. As our interviewees pointed out, “the economy was rather

slow in Macao but now it has increased…[and] with the opening up of China, we now

get tours coming into Macao, making Macao very strong in its economy…increase in

people’s daily living standards” [01/01] and “the casinos also have a positive face where

it provides a good income for the locals now” [02/07]. Recent figures showed that

almost 58% of the local population worked in the gaming industry and that there will

be an increase in the coming years when more casinos open in the territory. The

increase in revenue gained from gambling taxes has made it possible for the Legislator

to continue granting more subsidies to social services and families in general benefiting

from the boom in the gaming industry. Recently it was also announced that education

for all children would be free of charge up to completion of secondary school31.

22 The availability of work opportunities has in particular boosted migration of people

from the mainland to Macao, and legal immigrants job seekers from mainland China

between the ages of 20 and 60 was up from 1,583 in 2002 to 4,387 by the end of 200432.

Legal immigrants and people authorised to permanently reside in Macao contributed to

a rise of 7.27% during the same period from 2002 to the end of 200433. A concern was,

however, uttered by the interviewees in our project. The availability of work

opportunities in Macao, either in the casinos or elsewhere, often implied separation

from family members when one partner moved to the SAR while the rest of the family

still resided on the mainland. “There are some cases where the husband tries to ask the

government to have his wife sent down to Macao from the mainland, but because they

cannot wait for the long period of time, so by the time the wife gets here, the husband

will already have a new wife” [01/02].

23 Although separation from the family cannot be attributed only to the gaming industry,

the developments and available job opportunities in subsidiary industries such as


40

construction due to the need for more hotels and renovations could be interpreted as

an indirect role that the industry played in disrupting the family life of those who

migrated to the territory. When the family then reunited after a period of separation,

relationship problems often ensued that made living together again stressful. The

influx of employable workers and preference given to young adults to work in casinos,

for example, have also resulted in a change in the retirement age, putting middle-aged

adults in danger of struggling to find suitable employment in order to provide for their

families (01/03).

24 With regard to the family as functional unit, the working hours of employees in the

gaming industry was pointed out by the interviewees in our project as a major concern.

Casinos in Macao operate 24 hours a day so working in a casino often means “irregular

time shifts of casinos, dividing working shifts into early and night shifts. When people

have to go to work they will have to leave their children at home. This is a problem

which leads to psychological problems” [01/03]. A key informant from the social

service providers indicated that this was “especially the case when both parents work

in the casino, and the children does not get a chance to be with them, and therefore

they are bringing up themselves on their own” [01/01].

25 Two issues are relevant in this regard. Although not unique to the gaming industry

(e.g., nurses, paramedics, and other service providers also work night shifts), the

impact of irregular working hours and night shifts on the one hand influenced role

appropriation and on the other jeopardised family relationships. In a society where

traditional male and female roles were still dominant and gender stereotypes of the

father as breadwinner and disciplinarian and the mother as taking care of nurturing

needs still strictly adhered to, the ongoing changing work shift schedules could easily

disrupt family life34. Role reversal challenged personal and cultural beliefs, while the

absence of a role in the family (e.g., father/mother working night shifts, female single

parent family) could exacerbate risk behaviours (“parents who have no control or poor

discipline, mostly low education and unnatural working hours (working in factories,

casinos, elsewhere), were the major problems encountered in Macao” [08/14]). From a

psychological point of view, having and spending time with one another is one of the

basic premises for establishing attachment relationships between family members and

for parents to engage in the moral and cultural education of their children.

Perceptions regarding the impact of the gaming industry on family relationships

26 Problematic family relationships and emotional problems were among the prominent

issues that social workers attended to during the first six months of 2005 with about

38% of cases that dealt specifically with one or more disrupted family relationships.

The figures are not clear as to the number of cases directly related to the gaming

industry, but it is not unlikely given that the industry plays such a major role in the

material and psycho-social functioning of Macao families. During our fieldwork it was

mentioned that, particularly with regard to families where one or both parents worked

in casinos, “a lot of their relationships are all messed up and they cannot resolve this

situation. The children of these people will be greatly affected [and] now there are also

families who lock their elderly up at home” [01/02]. Although the exact reasons for

locking up an elderly parent were not mentioned, it was disconcerting to know that the

extended family was indirectly affected by disruptions in the family and probably by

involvement in gambling related activities. However, this needs further exploration in

the follow-up to this report.


41

27 Without sufficient time and continuous interaction to respond to one another’s needs

family relationships were particularly at risk35. The perceived absence of parents as

primary educators and socialisation agents of children, living in a society dominated by

gambling and often experiencing the over-crowdedness that accompanies an influx of

tourists to the territory, contributed much to the disrupting of family relationships and

the psycho-social development of individuals. Whereas people appreciated the

economic gains from the industry, families tended to avoid social areas where they

could spend time together and interact with peers and friends because these places

were also frequented by the tourists with whom they did not want to connect on a

social level. As the director of one of the major social service providers in Macao

indicated, “local people accept that tourism is good for the economy and open their

minds to other lifestyles, but the education level of tourists is low resulting in an

aversion by the local population to the influx of these people to the territory” [05/09].

28 Other relationship problems that were mentioned during our fieldwork included family

violence (“domestic violence affects the woman’s core self-esteem” [02/05]) and marital

conflict (“a lot of extra marital relationships can lead to violence …and affairs are also

the cause of many family break-ups, having great effect on the children” [01/02]).

Although family violence and abuse against women could not per se be attributed to

the gaming industry (other factors most definitely also played a role). There was the

suggestion by several interviewees that the emotional and relationship problems

usually ensued from one or more members working in the gaming and subsidiary

industries. Family members participating, for example, in the sex industry for

additional income contributed its own set of problems in relationships and one

interviewee commented that she has “found a lot of females―not the males―who are

actually the causes of family problems …having an affair …especially in the central

areas” [01/03]. Most distressing to most of our interviewees was, however, the

prospective impact of disrupted family life, whether directly or indirectly related to the

gaming industry or not, on parent-child relationships and child care.

Perceptions regarding the impact of the gaming industry on child care in the family

29 Parents, particularly those working in the gaming and related industries, often allowed

children to go unsupervised or engaged social services to care for their children,

displacing the responsibility of child care and parental education to sources outside the

family. An informant working specifically with children in a very poor area in the north

of Macao indicated that they were often confronted with cases “where both the kid’s

parents have to work the night-shift” and recalled a case where the parents “have

asked if the centre could look after their child for them…we would need to set up a

shelter for these people… their income does not permit them to employ someone to

look after the child. In most cases 60% of them come from single parent families”

[06/10]. Some parents engaged the extended family in child care (“grandparents take

care of the child but they have no real power to discipline the child” [08/13]), whereas

others sent their children to the mainland to stay with the family there for extended

periods of time, almost losing contact with the child entirely.

30 Lack of parental guidance or a sound parent-child relationship has been indicated to be

a major cause of problematic child behaviours. Psycho-emotional disturbances among

children often emerged from feelings of rejection, neglect and lead to a lack of self-

esteem and a decline in children’s academic performance36. In Macao the situation was

exacerbated by early exposure to gambling-related and subsidiary activities such as


42

prostitution. Our respondent working mainly with single-parent families in the north

of Macao, when talking about the influence of the gaming industry on children,

indicated that toys such as miniature slot machines and playing cards were easily

accessible and had as their aim “for these children to become addicted to them. For

example, there are also toy cards that they can trade for money. These toy cards have

also created problems where children have caused fights because they try to steal these

valuable cards” [06/10]. One direct and very worrying consequence of the gaming

industry is juvenile delinquency that has been gradually increasing as Lo Shiu Hing

pointed out in his article on gambling and organised crime37.

31 A Macao-based gangster, cited by Lo Shiu Hing, “estimated that up to 80% of the youth

in Macao have contract or connections with triads because they are forced to accept

triad protection”. For Lo, that was due to the rapid increase in Macao’s population since

newly arrived parents had to concentrate their time and energy in providing for their

families and therefore neglected the children38. In the first nine months of 2005, 114

criminal cases involving 218 adolescents were handled in Macao39 and the Statistics and

Census Services estimated that there was a 7.6% increase to 25.3% compared to the

previous year40. In a blueprint study by the Social Welfare Institute, it was also

indicated that 30% of adolescents in Macao have at one time or another been engaged

in stealing, fighting or damaging public property41. During our fieldwork, we were told

by a school director that he had to deal with a triad issue within the very premises of

the school just prior to his interview with us. Minors were also frequent among court

cases handled by the legal system, and “adolescents and children are seen in court

because of shoplifting, stealing (forced entry in residential areas), fighting in public

places… family background and friends are the cause for many problems among

adolescents” (08/13).

32 Anti-social and gang-related behaviours are not uncommon among adolescents who are

in the process of identity formation, particularly when they have to deal with

problematic parent-child relationships, do not receive adequate moral education from

their parents (“the school has to take over basic education from the family―the school

becomes a substitute for the family” [03/07]), and are faced with negative labelling in

society42. Although delinquent and gang behaviour of adolescents could again not be

seen as a mere direct consequence of the boom in the gaming industry and parent

absence because of employment in the industry, it seemed that young people were

more at risk for engaging in unacceptable behaviours and that the gaming industry has

to an extent aggravated the situation in recent years.

Perceptions of the impact of the gaming industry on psycho-social issues in the family

33 The groups mostly targeted for jobs in the gaming industry were the adolescents and

young adults, people who have reached the age of 18 years and who could legally

engage in economic activity. As one interviewee mentioned, “casinos have been able to

attract a lot of teenagers to work for them” [01/02]. However, many of these young

people forfeited further education and were attracted by lucrative salaries “taken out

of school to go work in casinos where they can earn up to 10,000 patacas per month—

sometimes higher than a graduate can earn” [08/13]. Estimates of exactly how many

young people rejected further education in favour of so-called “easy money” and

financial independence that flowed from working in the gaming industry were not

available and we considered this as particularly an area for further investigation.

Whereas the employment opportunities the industry offers were enabling in a major


43

sense and young people could, as required by the tradition of filial piety, now better

take care of their parents, disabling processes were also at work.

34 The easily accessible and lucrative employment available in casinos and the lack of

motivation to pursue educational goals put young people at risk. They emphasise an

immediate and short-term success and offer a gratification that together impede on a

sense of directedness and purpose in life and the overall psychological well-being of

people in Macao. Vocational interest is a product of positive family relationships, but

the environment also plays a role in guiding young people towards a positive life

orientation43. One of our key informants in particular pointed out that “lack of

motivation for school achievement leads to drop-outs” [03/07], and it seemed that the

wealth and prosperity brought about by the “lure factor of ‘easy money’ and recruiting

children away from the education system” [03/07] affected family life in particular and

had a “great impact on people’s way of thinking and their mental development”

[01/02].

35 Furthermore, the prospects of employment in the industry did not bring wealth and

prosperity to all the people of Macao. Many local families, who had been in Macao for

several generations, were suffering from an increase in poverty with real estate prices

escalating rapidly, and the high price of consumables. It seemed that there were

increasing numbers of families that could not maintain a good standard of living. This

trend was emphasised by the Social Welfare Department reporting that 7,732 families

applied for and received financial aid in the first half of 2005. Physical needs are among

the most basic needs for psychological well-being because without sufficient

gratification of physical and security needs, the individual could have difficulty

focusing his or her psychological energy on belongingness and realisation of

potentialities44. It seemed therefore that the gaming and related industries have their

advantages and drawbacks. Macao families benefit perhaps from the job opportunities

and increased salaries the industry offers, but at the same time they experience

problematic family relationships and their overall psychological well-being is thus put

at stake. Those who are not working for the gaming and related industries experience

financial hardship due to the increase of the cost of living since the boom three years

ago, and this new lacking of resources brings upon them new psychological stresses.

36 The gaming industry does indeed have an impact on family life. On the one hand, the

industry has boosted economic growth in the enclave and material prosperity for the

local residents. On the other, however, it also engenders several disabling and

disruptive processes that have particularly affected the psychological well-being of

individuals and families in Macao.

37 Reflecting on Macao within the perspective of the broader China, it was also odd to see

how the “one-country-two systems” model worked in this specific case. Macao had

been developing the gaming industry with the blessing not only of the SAR government

but also of the highest authorities in Beijing, while those very same authorities have

been campaigning since 2004 to crack down on gambling45. In January 2005, President

Hu Jintao reiterated the need for China’s youth to be equally ideologically and ethically

educated46. Well, it seemed that under the “one-country-two systems” the youth of

Macao did not enjoy the same treatment as the youth in the mainland47.

38 Maybe the most significant gap in our search for understanding was the lack of

meaningful baseline research and in particular the lack of public data pertaining to, for

example, shift work, the average age of employees in casinos, relations between wages


44

and age, and information about subsidiary trades such as prostitution, drug peddling

and triads. We had to rely on the perceptions of our key informants and a few public

data bases (e.g., DSEC). Therefore, this initial exploration could by no means be

considered comprehensive or adequately revealing of the extent and complexity of

factors influencing the psychological well-being of the local community in Macao.

39 Psychological interventions and mental health care are not common practices in

Chinese communities, and much still needs to be done to develop an understanding and

appreciation among the people of Macao for such services. The next step of this

research project will be to investigate the perceptions and attitudes of the local

residents at grassroots level, the people actually working in the gaming and related

industries, and identify their particular needs where psychological services are

concerned. It would be helpful to include other participants from the various sectors,

also the government and the gaming industry, in further investigations into the way in

which psychology can be implemented in this society to enhance the psychological

well-being of the people. We hope to explore, for example, the identity changes that

have occurred among individuals and the community as a whole since the recent boom

in the gaming industry and the handover of Macao to the PRC. Furthermore, we hope to

develop, through ongoing research and activity, the necessary frameworks for

providing psychological interventions that could empower the people of Macao and

provide them with coping strategies to deal with the influences of the gaming industry

on their individual and collective lives. Comparative studies and looking at other

developing countries dominated by a single industry would also be relevant. The

government has lately put some projects in place to encourage the implementation of

psychological services, but further research will provide insights into establishing the

necessary frameworks and infrastructure that can address the felt and anticipated

needs in the community for such services.

NOTES

1. This article is the outcome of research undertaken with a grant from the University

of Macau. The authors are all connected to the Faculty of Social Sciences and

Humanities where they teach, respectively, psychology and sociology. Correspondence

can be directed to the principle investigator at: [email protected].

2. We wish to thank all our key informants working respectively at Caritas, psychiatric

nursing recovery services, elderly care centres, and youth centres for at-risk children

and support of single parents, as well as the Ricci College (a secondary school in Macao)

and leaders in schools and institutions for higher learning for their willing

participation in this first part of the project. We also wish to thank the Macao Ricci

Institute for having organised a seminar that was well attended by members of the

Macao public and press for the first presentation of the outcomes of this project. To the

public attending the MRI Forum on December 13th 2005 and to the reviewers of China

Perspectives we extend a special word of appreciation for their comments that helped us

improve this final version of the paper.


45

mailto:[email protected]

3. Personal communication with Dr K K Tong, a collaborating researcher, September

2005.

4.Website of Direcção dos Serviços de Estatística e Censos (DSEC, Statistics and Census

Service), http://www.dsec.gov.mo/e_index.html, last visited on December 12th 2005.

5. Monica McGoldrick, Randy Gerson and Sylvia Shellenberger, Genograms: Assessment

and Intervention, New York, W.W. Norton & Company, 1999, p. 7; see also Murray Bowen,

Family Therapy in Clinical Practice, New York, Jason Aronson, 1978; Irene Goldenberg and

Herbert Goldenberg, Family Therapy: an Overview, Australia, Brooks/Cole Thomson

Learning, 2000; Christie Connard, “The Ecology of the Family. A Background Paper for a

Family-Centered Approach to Education and Social Service Delivery” on http://

www.nwrel.org; Gertina van Schalkwyk, “Mapping family systems for ethical decision

making” in Iva Smit, Wendell Wallach and George E. Lasker (eds.), Cognitive, Emotive and

Ethical Aspects of Decision Making in Humans and Artificial Intelligence, Vol. IV, Canada, The

International Institute for Advanced Studies in Systems Research and Cybernetics,

2005.

6. Goldenberg & Goldenberg, op. cit. p. 19.

7. Website of Direcção dos Serviços de Estatística e Censos (Statistics and Census

Service), http://www.dsec.gov.mo/e_index.html, last visit on December 12, 2005

8. Luo Lu, Robin Gilmour and Shu-Fang Kao, “Cultural values and happiness: An East-

West dialogue”, in The Journal of Social Psychology, Vol. 141 No. 4, 2001, pp. 477-493.

9. Psychofortology as a domain is a contradistinction to psychopathology and studies

the origins, nature, manifestations and enhancement of psychological well-being in the

lives of individuals and communities. See e.g., Mustafah Ahmed Arafa, Mervat W.A.

Nazel, Nahla K. Ibrahim and Ashraf Attia, “Predictors of psychological well-being of

nurses in Alexandria, Egypt” in International Journal of Nursing Practice, Vol. 9, 2003, pp.

313-320; Paula Brough, “A comparative investigation of the predictors of work-related

psychological well-being within police, fire and ambulance workers”, in New Zealand

Journal of Psychology, Vol. 34, No. 2, 2005, pp. 127-134; and Marie Wissing and Chris van

Eeden, “Empirical clarification of the nature of psychological well-being”, in South

African Journal of Psychology, Vol. 32, No. 1, 2002, pp. 32-44.

10. See Irvin Yalom in Sheryl Zika and Kerry Chamberlain, “On the relation between

meaning in life and psychological well-being”, in the British Journal of Psychology, Vol. 83,

1992, pp. 133-145.

11. See Carol Ryff, “Happiness is everything, or is it? Explorations on the meaning of

psychological well-being” in the Journal of Personality and Social Psychology, Vol. 57, 1989,

pp. 564-577; and Carol Ryff and Corey L.M. Keyes, “The structure of psychological well-

being revisited”, in the Journal of Personality and Social Psychology, Vol. 69, 1995, pp.

719-727.

12. See e.g., Karen Duffy and Frank Wong, Community Psychology, New York, Allyn and

Bacon, 2003 for more about developing service frameworks and the importance of

primary prevention for empowering communities to cope with the impact of external

challenges.

13. See, for example, James Dalton, Maurice Elias and Abraham Wandersman,

Community Psychology: Linking Individuals and Communities, Canada, Wadsworth Thomson

Learning, 2001.

14. Rolf D. Cremer (ed.), Macau: City of Commerce and Culture, Hong Kong, API Press, 1991.

15. Cited in Eric Sautedé, “The East Did Meet the West in Macao,” HongKong-Echos, No.

37, Autumn 2005, pp. 14-16.


46

http://www.dsec.gov.mo/e_index.html

http://www.nwrel.org/

http://www.nwrel.org/


16. Christina Miu Bing Cheng, Macau: A Cultural Janus, Hong Kong, Hong Kong

University Press, 1999.

17. UNESCO added “The Historic Centre of Macao”, covering some 20 historical

landmarks, including the old façade of Saint Paul and the temple of A-Ma, on July 15th

2005 to its prestigious World Heritage List.

18. Fernando Figueiredo, “A Conjectura Política: Depois De Hong Kong”, in A. H. de

Oliveira Marques, História Dos Portugueses No Extremo Oriente, op. cit. pp. 35-92.

19. Manuel Teixeira, O Comércio de Escravos em Macao / The So-Called Portuguese Slave

Trade in Macao, Macao, Imprensa Nacional, 1976; and Fernando Figueiredo, op. cit., pp.

56-58.

20. As shown by Joãn de Pina-Cabral, especially Chapter 4: “Paradoxes: Gambling and

the Imperial Civil Service Examination”, Between China and Europe: Person, Culture and

Emotion in Macao, London & New York, Continuum, 2002. This chapter is one of the

most, if not the most, comprehensive historical analysis of the gambling background of

Macao. Indeed, as pointed out by the author himself, p. 81: “The history of these

activities has not been researched in any systematic way. Most of the governmental

archival material previous to 1960 relating to gambling contracts seems to have

mysteriously vanished”. There are some collections of materials mentioned by Pina-

Cabral, like the green book of the Inspecção dos Contratos de Jogos published in 1985,

and Ana Maria Amaro, Jogos, Brinquedos e Outras Diversões Populares de Macau, Macao,

Imprensa Nacional, 1992. See also: Antonio Pinho, “Gambling in Macau”, in Rolf D.

Cremer (ed.), op. cit., pp. 247-257.

21. Pina-Cabral, op. cit. p. 81.

22. Jacques Gernet, Daily Life in China on the Eve of the Mongol Invasion 1250-1276, London,

George Allen & Unwin Ltd, 1962.

23.Website of Direcção dos Serviços de Estatística e Censos (Statistics and Census

Service), http://www.dsec.gov.mo/e_index.html.

24. Ibid.

25. Citing the President and Chief Operating Officer of the Las Vegas Sands (LVS)

interviewed by Paulo Azevedo and José Ho in “We Became More Bullish About the

Investment”, Macau Business, December 2005, pp. 10-15.

26. Duffy & Wong, op. cit.; Fred M. Cox, John L. Erlich, Jack Rothman and John E.

Tropman (eds.), Tactics and Techniques of Community Practice, Itasca, Illinois, FE Peacock

Publishers, 1984. Norman Denzin and Yvonna Lincoln also wrote on different methods

used in qualitative research in their Handbook of Qualitative Research, London, Sage, 1999.

27. Steiner Kvale, Interviews: An introduction to qualitative research interviewing. London,

Sage Publications, 1996.

28. We wish to thank our research assistant, Ms Jennifer Wilkinson, for the hours she

spent transcribing and translating the audio recordings of the interviews we conducted

for this project.

29. McGoldrick, Gerson & Shellenberger, op. cit.

30. Throughout the discussion section we will refer to the comments and contributions

of key informants who participated in this first part of the study in italics. We do not

use the informants’ names so as to protect their identity and a special code will

indicated that the comments were made by different participants in this exploratory

study.

31. Macau Post Daily, November 21, 2005.

32. DSEC, 2005.


47


33. Macau Post Daily, November 21, 2005.

34. See Sing Lau (ed.) in Growing up the Chinese Way: Chinese Child and Adolescent

Development, Hong Kong: The Chinese University Press, 1996.

35. Connard, op cit., and Goldenberg and Goldenberg, op cit., expand on the importance

of time and space for forming quality relationships in the family.

36. See Harry Gardiner and Carol Kosmitzki, “Lives across cultures: cross-cultural

human development”, Singapore, Pearson Education, 2005, and Barbara and Philip

Newman, “Development through life: a psychosocial approach”, Singapore, Thomson

Wadsworth Publishers, 2003.

37. Lo Shiu Hing, “Towards the End of the Stanley Ho Connection?” China Perspectives,

“Macau Special”, op. cit. pp. 56-65.

38. Ibid., p. 59.

39. As reported in Macau Daily, http://www.macau.ctm.net/modailylog/20051110/

index.htm.

40. DSEC, 2005.

41. Youth Problems and Youth Services in Macau SAR: A blueprint for the new millennium,

published by the Social Welfare Institute, 2005, and Wu Zhiliang, A juventude e o futuro

de Macau, Qingnian yu Aomen weilai, The Youth and the Future of Macau, Fundação Macau,

1994.

42. Gardiner and Kosmitzki, op. cit.; Barbara and Philip Newman, op. cit.

43. See Ryff, op. cit.; Lea Pulkkinen and Anna Ronka, “Personal control over

development, identity formation, and future orientation”, in Developmental Psychology,

Vol. 30, 1994, pp. 260-271; and Oi-Ling Siu, “Occupational stressors and well-being

among Chinese Employees” in Applied Psychology, Vol. 51(4), 2002, pp. 527-544

44. See for example, Maslow’s hierarchy of needs and the potential impact of

unsatisfied deficiency needs in George Boeree’s summary of Abraham Maslow, http://

www.ship.edu/~cgboree/maslow.html.

45. “China launches nationwide campaign against gambling”, People’s Daily Online, last

updated on January 12th 2005, http://english.people.com.cn/200501/12/

eng20050112_170335.html.

46. “Chinese president urges ethical, ideological education for youth,” People’s Daily

Online, last updated on January 19th 2005, http://english.people.com.cn/200501/18/

eng20050118_171045.html.

47. For further development on politics and ethics, see Emilie Tran, “Elite Politics and

Ethics in China: Resolving Non-Antagonistic Contradictions?”, Chinese Cross Currents,

“Success and Values”, Vol. 2, No. 2, April-June 2005, pp. 50-69.

RÉSUMÉS

The purpose of this article is to present a comprehensive situation analysis and an assessment of

the needs of the people of Macao in terms of their psychological well-being. It describes the

present situation with regard to the ways in which the gaming industry affects family life and

challenges the psychological well-being of the residents of Macao. Action research and a key


48

http://www.macau.ctm.net/modailylog/20051110/index.htm

http://www.macau.ctm.net/modailylog/20051110/index.htm

http://www.ship.edu/~cgboree/maslow.html

http://www.ship.edu/~cgboree/maslow.html

http://english.people.com.cn/200501/12/eng20050112_170335.html




informant approach were the basic methodology for this study, and semi-structured interviews

were conducted to gain an understanding of the enabling and disabling processes in family life

through the impact of the gaming industry. Textual data were analysed qualitatively for four

dimensions. Four themes emerged—family functioning, relationships, child care and psycho-

social issues in the family. Although not the only influence, it seems the gaming industry does

indeed affect the family unit and the psychological well-being of individuals and groups both

directly and indirectly1.


49

Economy


50

The Modification of the ChineseExchange Rate PolicyIts rationale, extent and recent developments

Michael Goujon et Samuel Guérineau

1 On 21st July 2005, the Chinese Central Bank revalued the yuan from 8.27 to 8.11 per US

dollar. This small revaluation (2.1%) was accompanied by an official modification of the

exchange rate system. The authorities announced that “the yuan will be no longer

pegged to the US dollar” and that “China will reform the exchange rate regime by

moving into a managed floating exchange rate regime based on market supply and

demand with reference to a basket of currencies”2. They did not publish details of the

composition of this basket.

2 The revaluation occurred during an intense two-year long debate, among scholars and

political leaders about Chinese exchange rate policy, since 2003. American policy-

makers have often complained that the yuan has long been significantly undervalued,

giving China an unfair trade advantage. Thus, China is blamed for a “currency

manipulation” that induces job losses in the United States, Japan, Europe and other

Asian countries, threatening world economic equilibrium. The yuan being revalued,

one might think, is due to China yielding to this international pressure (and

recognising its responsibility in the imbalance in world trade).

3 This paper suggests that this interpretation is simplistic and misleading. First of all, it

has been demonstrated that for 25 years the Chinese exchange rate policy has aimed at

both internal and external targets—and not only export competitiveness3.

Consequently, both must be taken into account in interpreting any exchange rate

policy modification. Following this, this paper looks at the rationale behind the recent

modification of the Chinese exchange rate policy in reviewing the two debates on the

need for revaluation and greater flexibility. The last section explores the short-run

impact of this decision.

The debate on the revaluationIs the yuan undervalued?

4 To provide empirical elements to the debate on the undervaluation of the yuan,

numerous studies have recently been dedicated to the assessment of misalignment of


51

the yuan. This series of studies since 2003 was preceded by another series in the late

1990s, which attempted to assess the sustainability of the peg to the dollar after the

Asian financial crisis (an overvaluation was then suspected). As expected for a rapidly

transforming economy, the estimated size of misalignment differs significantly across

studies, and some estimations show almost perfectly reversed evolutions4.

5 From Figure 1 where these estimations are reported, several general results may

however be emphasised: i) The initial overvaluation progressively disappeared during

the 1980s; ii) The exchange rate was close to its equilibrium value or slightly

undervalued at the beginning of the 1990s; iii) The nominal devaluation induced a

10%-30% real undervaluation in 1994; iv) Undervaluation was partially or fully erased

between 1995 and 1997; v) Since 1998, deflation and rapid economic growth have led to

a new drift of undervaluation. While there is major consensus on the undervaluation of

the current yuan, the range of the different misalignment estimations is very large,

from 10% to 60%. The critical point is the diagnostic on the 1997-98 period: the current

undervaluation is expected to be large (narrow) if one considers that the exchange rate

was already undervalued (near equilibrium) in 1997-98.

6 Which interpretation is the more convincing? Let us start with the main arguments of a

large undervaluation. The first argument is trade dynamism. The growth of Chinese

exports is impressive (for instance, merchandise exports increased by 33% in the first

half of 2005) and trade surpluses with the United States and the European Union are

huge (respectively US$162 billion and US$100 billion in 2004). These basic features are

systematically emphasised by foreign policy-makers. However, one can suggest that

trade balances would be more relevant than exports and then recognise that Chinese

imports also grew rapidly last year. Moreover, one can consider that the overall trade

balance would be more relevant than bilateral trade balances, and then observe that a

large part of the Chinese trade surplus with OECD countries is offset by trade deficits

with Asian countries.

7 Regarding the current account, China has run surpluses for almost ten years (3% of GDP

in 2002 and 2003), which supports the undervaluation assertion. This situation is not

common for an emerging economy, even more so when it regularly exhibits signs of

overheating (which increases demand for imports). Furthermore, Morris Goldstein

considers that the “underlying” surplus is larger than the actual surplus considering

the overheating effect and the lagged effect of the earlier real depreciation5. Since

China runs capital account surpluses (which is common for an emerging economy), the

“equilibrium” current account should exhibit a deficit. Consequently, there exists a

huge gap between the “underlying” and the “equilibrium” current account balance,

suggesting a large real undervaluation.

8 A large undervaluation would also be the main source of the dramatic accumulation of

foreign exchange reserves (from US$150 billion in 2001 to US$750 billion in mid-2005).

The central bank had indeed to buy huge amounts of dollars that would have induced

the exchange rate to appreciate under floatation.


52

1. Real Effective Exchange Rate and Yuan Misalignement

9 What reasons are there to be sceptical about the existence of a large undervaluation?

The weaker argument for a large undervaluation is the bilateral surplus with the

United States since, as noted earlier, China runs large deficits with Asian countries. In

fact, this particular structure of trade balances has been strongly induced by a

structural change in the division of labour in East Asia, i.e., the relocation in China of a

part of the production of the emerging economies which grew rapidly in the 1970 and

1980s. This relocation has simultaneously raised imports from Asian countries and

exports to OECD countries6.

10 Another structural factor of China’s competitiveness is the almost infinite pool of

labour (underemployed workers in the countryside and workers laid-off from state-

owned enterprises), which explains low (and flexible downwards) wages.

11 A good illustrative example of a structural advantage that China has over other

emerging economies on international markets is in textiles and garments, as

dramatically revealed since the end of the MultiFibre Agreement (MFA) on January 1st

20057. This is illustrated in Table 2 reporting EU trade statistics for the first five months

of 2005, where it is clear that Chinese exports tend to replace the exports of other

emerging economies.

2. European Union Textiles and Clothing imports

12 Third, the current undervaluation should only come from a recent appreciation of the

equilibrium real exchange rate because: i) the Real Effective Exchange Rate (REER) is

almost stable since 1998 as reported in Figure 1; and ii) 1998 was marked by

depreciation tensions, suggesting the exchange rate was not undervalued in this year.

An appreciation of the equilibrium Real Exchange Rate (RER) should come from relative

productivity gains (economic growth and reforms) according to the Balassa-Samuelson

effect. However, the imports liberalisation induced by its accession to the World Trade

Organisation inversely calls for a depreciation of the equilibrium RER (since it would


53

deteriorate China’s trade balance for any level of the exchange rate), even if the end of

MFA reduces the net effect of trade policy changes. It is reasonable to think that the

productivity gain effect would be greater than the net effect of trade policy, but would

not, under reasonable assumption, lead to a rapid and huge appreciation of the

equilibrium RER8.

13 Fourth, the equilibrium RER is supposed to ensure simultaneously external and internal

equilibrium but most studies have underemphasised this second condition. High

underemployment, as experienced by China, rather suggests a RER overvaluation

according to internal equilibrium condition. Consequently, studies that focus only on

the external condition simply overstate undervaluation9. The exchange rate is not the

instrument to be preferred against underemployment but a country that experiences

high underemployment cannot, arguably, afford a massive revaluation.

14 Last, a huge undervaluation is not compatible with the trends in the non-deliverable

forward market for Chinese yuan (in the Hong Kong or Singapore forex markets). First,

appreciation expectations were not dominant until November 200210. Second, the

observed discount on the yuan forward rate has remained very low since then (1,5% for

the one-year forward contract) until the recent revaluation. Even considering the

distortion due to the peg, it is hard to believe that the “real” undervaluation is, say,

twenty or thirty times greater than the forward rate discount.

15 Considering these arguments―but keeping in mind the difficulty to have a clear-cut

opinion on exchange rate misalignment―the “moderate undervaluation” hypothesis

(10%-15%) seems finally more convincing. Moreover, being a developing country, China

may reasonably keep a competitive cushion to manage external shocks. Therefore, a

smaller revaluation than the 10%-15% range would be acceptable by China and foreign

trade partners. But what should be expected from such a revaluation?

The main argument: the reduction of trade imbalances

16 China is blamed for undervaluation of the yuan, which is assumed to exacerbate

international trade imbalances (in particular the US trade deficit). Therefore, the

reduction of trade imbalances is the main benefit to be expected from the revaluation.

However, such a result depends on the very nature of trade imbalances and on the

value of trade price-elasticities.

17 Let us start with China. As noted earlier, exports dynamism is certainly explained as

much by structural factors (wage flexibility) as by the exchange rate policy. Moreover

Chinese exports have a high import content due to the export-processing sector11.

Therefore the China trade surplus is unlikely to be very sensitive to exchange rate

fluctuations12.

18 Do empirical studies find low price-elasticities? Unfortunately, export price-elasticity

estimations based on recent data are scarce and heterogeneous13. Since these

estimations cannot integrate the structural competitiveness of China, one could expect

that the true elasticities are in fact smaller than estimated, or are non-linear (an

appreciation-induced drop in exports would be smaller than a depreciation-induced

increase in exports).

19 What could be the impact of revaluation of the yuan on OECD countries? China being

the source of around 6% of OECD total imports, and assuming a unitary price-elasticity

of OECD imports of Chinese products, a 10% revaluation of the yuan would lead to only

a 0.6% reduction of OECD imports. Moreover, the reduction of imports volume would be


54

fully offset by the increase in price with actually no effect on trade balance. In fact, any

improvement in trade balance should then come from the expansion of OECD exports

to China. Exports to China represent 4% of total US exports, assuming a unitary price-

elasticity, US exports would be raised by 0.4% following a 10% revaluation, i.e. US$4.6

billion as opposed to a US current account deficit of US$618 billion in 2004. According

to Jonathan Anderson, even a large yuan revaluation would have a limited impact on

the US trade deficit, which is more affected by trade competition with the European

Union and Japan14. In the same vein, Ronald MacKinnon and Joseph Stiglitz point out

that the USA will run current account deficit as long as US private and public savings

are very low, whatever the Chinese exchange rate policy15.

20 Recognising the small direct impact of the yuan revaluation, some authors emphasise

the possibility of contagion16. If the other Asian countries (also blamed for

undervaluation) follow China's decision to revalue, the overall impact of the yuan

revaluation on OECD trade balances would be greater. Morris Goldstein suggests that a

20% yuan revaluation could lead other Asian emerging economies and Japan to allow a

15% revaluation of their currencies17. Agnès Bénassy and Amina Lahrèche-Revil discuss

a case where most Asian countries follow a 10% yuan revaluation18. However, they note

that Asian countries would be certainly less prompt to follow an appreciating yuan (the

current scenario) than a depreciating yuan (recalling the fear of the “domino effect

scenario” during the Asian financial crisis).

21 At last, the expected impact of a 10% yuan revaluation on the intra-Asian trade would

be even weaker, given the growing importance of the vertical intra-industry

integration19. One cannot ignore however the impact of the revaluation on third

markets (EU and USA) where China’s products would be less competitive.

22 In conclusion, the Chinese responsibility in international trade imbalances and

consequently, the capacity of a yuan revaluation to significantly reduce trade

imbalances seems to be highly overstated. By contrast, China itself is obviously the

most sensitive to a large revaluation, which gives the Chinese authorities room to

determine exchange policy according to their own objectives, rather than to a

hypothetical effect on trade imbalances. Thus the next question is whether the

revaluation has a positive impact on China.

Other arguments: some conflicting effects

23 Some authors suggest that revaluation will serve China’s self interests20. The main

advantage in avoiding an undervaluation of the yuan would be to dampen hot money

inflows (probably about US$50 billion in 2003). Indeed, these inflows lead to a rapid

accumulation of foreign exchange reserves that has some awkward macroeconomic

effects21. On one hand, the amount of reserve accumulation that is not sterilised

produces a surge of money supply (+20% in 2003), which may have two main adverse

effects: i) it may give rise of inflation pressure through an increase in bank loans and

investment; ii) it may make the banking reform harder by giving banks an excessive

liquidity, which reduce the incentives to improve credit allocation inducing a new

surge of non-performing loans. On the other hand, the fraction of such an increase in

reserves that is sterilised (almost one half of the total in 2003) induces a significant cost

(interest payment on sterilising instruments such as government bond).

24 An indirect benefit from revaluation would be to lessen the risk of a revival of

protectionism from countries running bilateral trade deficits with China (mainly the

United States, Europe and Japan).


55

25 However, revaluation is potentially costly for China. One of Chinese policy-makers’

concerns is the risk of deflationary pressures, though mitigated by a current rise in

inflation (almost 4% in 2004). However, one cannot exclude the possibility that a large

revaluation may put downward pressure on wages, causing a fall in domestic demand

(already weak) and output.

26 Financial stability is also of concern. Revaluation is automatically reducing the value of

dollars assets held by commercial banks and the Central Bank, with the latter being the

main loser given its net foreign assets of US$750 billion. Additional destabilising effects

on the financial sector may be expected if the revaluation is carried through a

flexibilisation of the exchange rate, but this point is related to the exchange rate

regime, and not to the revaluation itself (see below).

27 Another undesirable effect might come from the strengthening of investment in the

non-tradable sector and particularly in the already speculative real estate. In addition,

the Chinese reluctance to revaluate may be linked to the political will to promote the

development of local firms, of which the productivity is probably lower than that of

foreign funded enterprises and joint-ventures.

28 At last, financial markets response to revaluation (and thus future speculative inflows)

is to be clearly anticipated. The size of the revaluation needed to cancel appreciation

expectations may be too large to be economically affordable.

29 To sum up, the above analysis suggests that China could bear a moderate revaluation

of, say, 10%, i.e. without incurring unacceptable costs on both external and internal

sides.

30 However, such a revaluation cannot be considered a unilateral effort on China’s part to

reduce international trade imbalances. Since China is not involved in an international

monetary arrangement, any co-operative action has to be negotiated between

sovereign partners (as it has been done in the 1980s between the United States and

Japan) and not unilaterally required by one of them. In short, as the Chinese prime

minister Wen Jiabao recalled22, China’s government freely determines its own exchange

rate policy. Moreover, considering that the responsibility of international imbalances is

collective, why should China (a developing country with a per capita income of around

US$1,000) take a greater share of the adjustment costs than the high-income economies

(above US$25,000 per capita)?

The debate on flexibility

31 Many agree that the yuan exchange rate system needs greater flexibility. Currently, the

main drawback of keeping the peg on the dollar is linked to short-term capital inflows.

In a context of appreciation expectations, and though the capital account is not

officially liberalised, these inflows are sizeable. The Chinese monetary authorities thus

need to sterilise a large share of these inflows to keep monetary growth under control.

The sterilisation is carried out through the sale of government bonds (or central bank

bills), and induces a significant cost, corresponding to the gap between the average

return on international reserves and the interest rate paid on government bonds23. As

China is opening up to the world economy, financial integration is increasing (even if

existing restrictions on capital flows slow down integration), which under a fixed

exchange rate, is not compatible with an independent monetary policy. Since China

needs monetary policy for stabilisation purposes, the transition toward a greater

flexibility seems unavoidable24. This view is predominant among scholars and economic


56

newspapers in OECD countries25. Moreover, if China would liberalise the capital

account, the need for flexibility would be even greater.

32 Several authors however think that the dollar peg remains the best available option for

China and other East Asian countries, both for trade and financial concerns26. Trade

intensity is a basic argument for pegging: The United States is still a major trade

partner of East Asian countries (even if share has slightly declined over the last two

decades), and of China (in 2004 the United States accounted for 15.2% of total Chinese

trade, with 22.8% for exports, 7.7% for imports). However several arguments give

stronger support to the peg. First, the US dollar is not only used for trade with the

United States, but is also the prevailing currency for invoicing trade in East Asia

(except for direct trade with Japan which is invoiced in yen). Furthermore, the benefits

of the dollar peg are reinforced by the lack of foreign exchange rate hedging

instruments (the only way to hedge foreign exchange risk with yuan is to rely on the

offshore non-deliverable forward markets located in East Asian financial centres,

mainly Hong Kong and Singapore27.

33 As for trade, the US dollar is the main currency for invoicing capital flows in East Asia

since domestic financial markets are underdeveloped. In particular, the majority of

East Asian economies are unable to borrow internationally in domestic currency.

Nevertheless, since they have run current account surpluses, most emerging East Asian

countries, and particularly China, are currently net creditors, thus accumulating a

large stock of dollar claims. Ronald McKinnon named this particular currency

mismatch the “conflicted virtue” syndrome. This mismatch leads to appreciation

pressures on domestic currencies, inducing the risk of loss on dollar claims value, thus

pushing governments to the dollar peg. Since a hard peg commitment is too risky and

regional co-ordination is far to be efficient, soft dollar peg remains an attractive

option28.

34 Moreover, greater exchange rate flexibility may produce serious disturbances in the

Chinese financial sector, which is not prepared to manage foreign exchange risk.

Admittedly, the restrictions on capital account transactions may mitigate these risks in

the short run, and give time to improve banking competences in this field.

Nevertheless, paying great attention to macroeconomic stability and recognising the

financial sector vulnerability, the Chinese government is greatly reluctant to

significantly increase yuan flexibility.

35 To increase exchange rate flexibility, four main options can be listed, ranging from the

more to the less flexible: free floating, dollar peg within a widened band, basket peg,

and adjustable dollar peg. Considering the fragility of the financial sector, free floating

is not a feasible option in the short term (although suggested by US treasury secretary

John Snow in 2003).

36 Morris Goldstein and Nicholas Lardy suggested a two-stage reform. In a first stage, a

widening of the band (from less than 1% to 5%-7%) would be carried out simultaneously

with a 15%-25% revaluation29. In the second stage, when the banking system would be

strong enough to allow a significant liberalisation, the foreign exchange regime would

move to floating. Widening the band is also advocated by Lu30, while Williamson thinks

that the basket peg would be the first stage of foreign exchange reform31.

37 Among the three short-run “feasible” options, the Chinese authorities have chosen a

basket peg, so far without information about the composition of the basket. A logical

composition would include the three main international currencies but giving more


57

weight to the US dollar. Williamson however derives an “optimal” five-currency basket

from the China trade structure32: US dollar (20,9%), euro (22,9%), yen (25,1%), and Hong

Kong dollar (19,3%) and Korean won (11,8%). At the regional level, Williamson

advocates the adoption of a peg to a common basket by East Asian countries and using

the same methodology, the optimal basket would be US dollar 40%, euro 30% and yen

30%. Recently, the Chinese monetary authorities indicated that the basket mentioned

in the July 21st decision contains more than three currencies, i.e. not only the three

major currencies, but probably also the Korean won and the Singapore dollar and other

Asian currencies with smaller weights.

What has occurred since July 21st?Is the exchange rate really flexible?

38 To date, the main target of the July 21st decision―to slow down hot money

inflows―seems to have been reached. Did it allow the Central Bank to significantly

improve actual flexibility? There is some purposeful ambiguity in the announcement of

the new foreign exchange regime on July 21st33. Allowing small and discretionary

exchange rate adjustments does not imply a loss of control over exchange rate

fluctuations. The modification of foreign exchange regime is actually likely to have a

slight impact if adjustments are scarce. A crucial point is the use of the band

mechanism, since the daily trading band of 0.3% a day theoretically allows a significant

appreciation, even in the short term. A few days after the revaluation, the Financial

Times calculated that a 15% appreciation could be attained in less than two months and

a half, and financial markets seemed to believe in the gradual appreciation scenario. In

Singapore, the one-year yuan non-deliverable forward rate then rose to 7.64 per dollar

(corresponding to a 6% appreciation over the next 12 months). Some financial

institutions (Merrill Lynch or BNP Paribas) forecasted a significant appreciation by the

year-end (respectively RMB7.5 and RMB7.9 per dollar)34. However, while initially

having declared that the revaluation is only an initial step, a few days later the Central

Bank denied that there is any plan for further revaluation.

39 Actually the Chinese exchange rate has experienced an almost unperceivable

revaluation trend since July 21st (from the revaluation rate of RMB8.11 per dollar, it

reached RMB8.10 at the beginning of August and RMB8.08 at the beginning of

September). The exchange rate stabilised at RMB8.07 at the end of October until

December, which corresponds to a 0.5% revaluation since July 21st. In short, the

scenario of a gradual appreciation seems to move away, or at least to be postponed for

several months. On September 30th―a few days after the G7 meeting during which the

United States and the European Union urged China to free the yuan further―the

Central Bank announced a widening of the yuan’s trading band against the non-dollar

currencies. The yuan’s trading band against currencies such as the euro and the yen is

then doubled to ±3 per cent. As in July, most foreign policy-makers commented

favourably this decision, although suggesting that the move was far from sufficient.

40 At this point, the move to flexibility is too modest to produce any significant effect and,

on statistical grounds, the de facto exchange rate regime is still to be classified as a

dollar peg, though less hard than it used to be35. However, this “pseudo-flexibilisation”

has the same virtue as the “mini-revaluation”, it makes harder to criticise China for not

contributing to solving world trade imbalances. This move is however probably not

only a diplomatic decision; it also aims at signalling that the move towards a more

flexible exchange rate regime is officially initiated.

Is there a contagion effect among Asian currencies?


58

41 Table 2 reports the very short-run response to the yuan revaluation of ten Asian

exchange rates since July 21st. Exchange rate responses have varied, depending on the

exchange rate regime and, on circumstances36. For instance, maintaining a currency

board arrangement, the Hong Kong SAR has not seen any significant move in the HK

Dollar exchange rate at 7.77 per US dollar (within the 7.75-7.85 trading band introduced

in May 2005). One can roughly classify the remaining countries as follows: The yen and

the baht have shown an almost complete absorption of the yuan revaluation even after

eight weeks; The won and the Singapore dollar (and to a lesser extent the ringgit) have

shown an almost complete absorption within two weeks but have tended to recover

progressively their past level since then; The rupee, the rupiah, the peso and the

Taiwan dollar have been affected by the revaluation announcement but only soon after

when they demonstrated independent fluctuations. Three months later, only the Thai

baht remains tied to the yuan.

3.Incremental Appreciation of Asian Currencies as Compared to Appreciation in the Yuan

42 An increased exchange rate flexibility or volatility in the region would have been

expected following the July 21st decision. Surprisingly however, almost all exchange

rates demonstrated an unchanged or even a smaller volatility after July 21st, except the

Indian rupee, the Indonesian rupiah and the Taiwan dollar (see Table 4).

4. Exchange Rate Variance Before and After the Yuan Revaluation

43 Admittedly, very short-run moves in some exchange rates gave strength to the

contagion scenario (particularly Malaysia, by scrapping its peg to the dollar and

allowing the ringgit to appreciate right after China’s decision37). However, one can

guess that this would be a simplistic interpretation. In fact, currently almost all

countries have experienced an economic and financial recovery since the Asian

financial crisis and the turbulent year of 2001, underpinning the move to greater

exchange rate flexibility. The yuan revaluation announcement may have created a

favourable regional context, and, for instance, Malaysian authorities used this

opportunity to abandon the peg with less risk of market speculation. In conclusion,

even if an instantaneous impact was noticeable across all Asian countries, the

contagion effect vanished rapidly, except for the Thai baht.

Has there been an impact on the economy?


59

44 One could consider that the time passed is too short to feel the effect of the revaluation.

However, some rough information could be extracted from short-term situation

indicators and from economic forecasts before and after the revaluation. Right after

the revaluation, comments mainly support the view of a forthcoming negative impact

on activity and price38. Two months on, this negative impact has less support.

Concerning the external accounts, export performance has not been affected by the

July 21st decision (see Tables 5 and 6). Furthermore and surprisingly, medium-term

expectations about the current account show even more improvement compared to

2004 (US$53 billion or 4.2% of GDP), the International Monetary Fund being the most

optimistic.

5. Actual Monthly Trade

6. Current Account Forecasts

45 Considering this impact on trade, it is not surprising that economic activity would not

be hurt by the recent revaluation (see Tables 7 and 9). There is no short-run effect on

industrial production in August (even more, industrial production growth in August,

+16.0%, would exceed the latest projection of +15.7%). Moreover, whatever the source,

the growth outlook has been revised upwards since the revaluation for the entire year

of 2005 (from 0.2 to 1.0 percentage point) and has been unchanged for 200639.


60

7. Industrial Production

9. Actual Monthly Inflation

46 Before revaluation, 2005 inflation forecasts ranged from 2.5% to 3.6%, showing a

downward trend from the 2004 peak of 3.9%. An appreciation of the exchange rate

should have put further downward pressure on domestic prices. The overall picture

does not depart from this theoretical outcome (see Tables 8 and 10. The year-on-year

CPI increase in August was down by 0.5 percentage point from July. Post-revaluation

revised forecasts for the entire year are effectively weaker now40. During the last

quarter of 2005, all 2005 inflation forecasts are lying within the 2.0% to 3.0% range.

8. Annual GDP Growth Forecasts

10. Annual Inflation Forecasts

47 While, as expected, a price deceleration has been slightly reinforced, a surprising

outcome is that external account and growth expectations have improved since the

revaluation. These results, arguably, may be explained by the small size of the


61

revaluation that was unable to lead to a dramatic break in the previous macroeconomic

trends.

48 By revaluing its currency, China did not yield to international pressure. Admittedly, the

Chinese government took into account the political benefit of such an action, since this

will mitigate protectionist pressure for a few months. However, its decision was

essentially driven by the wish to dampen the surge of hot money, attracted by

revaluation expectations. One might have expected that the revaluation was too small

to fight these expectations. However, the Central Bank repeated denials that a further

revaluation may succeed in curbing short-term capital inflows41.

49 To date, this is the main effect of the July 21st decision, since other expected effects are

limited. First, the lessening of exchange rate tensions is neither large nor old enough to

lead the Chinese government to speed up the move to de facto flexibility. Second, the

impact of yuan revaluation on Asian currencies has been modest and transitory. Last,

the yuan’s revaluation has not modified the previous macroeconomic trends of the

Chinese economy (increasing current account surpluses, sustained growth and

deceleration of prices). In a broader perspective, the most important effect of the July

21st decision might be to signal the official start of the move to flexibility, even if this

move is slower than it was expected two months ago.

NOTES

1. Earlier versions of this paper benefited from participant comments at the CES/CEFC

1st Biannual International Conference on Transition and Economic Development in

China in Shanghai, China (September 10th-11th 2005) and at the Centre d’études et de

recherches sur le développement international (CERDI) 5th International Conference on

the Chinese Economy in Clermont-Ferrand, France (October 20th-21st 2005).

2. People's Bank of China. Public announcement (www.pbc.gov.cn/english/).

3. Samuel Guérineau and Sylviane Guillaumont Jeanneney, “Politique de change et

inflation en Chine”, Revue d’Economie Politique, 113(2), 2003, p. 232, and Samuel

Guérineau, “Chinese Exchange Rate Policy Goals: Estimation of a Reaction Function

(1985-1994)”, CERDI, mimeo, 2002.

4. An analytical table of 15 articles providing estimations of misalignment of the yuan

is given in a previous version of the paper available on the CERDI website as a working

paper at http://www.cerdi.org/Publi/ED_Detail.asp?Id=739.

5. Morris Goldstein, “Adjusting China's exchange rate policies”, Institute for

International Economics, Working Paper No. 04-1, 2004.

6. Guillaume Gaulier, Françoise Lemoine and Deniz Unal-Kesenci, “China’s integration

in East Asia: production sharing, FDI and high-tech trade”, Centre d’études prospectives

et d’informations internationales (CEPII), Working Paper No. 2005-09, June 2005.

7. Studying the relative competitiveness between China and Vietnam on garment,

Demurger and Goujon (2001) find that the advantage of Chinese firms seems to be more

in the domestic industrial structure and environment than in labour costs and


62

http://www.cerdi.org/Publi/ED_Detail.asp?Id=739

productivity: Chinese industries are more integrated (various intermediary inputs are

produced locally in China), the business environment in China seems to be more

propitious to the development of the production sector with high saving and

investment ratios, abundant and skilled labour and support policies from the local

administration. Constraints such as regulation opacity and administrative clumsiness

exist in China but are relieved by an advanced economic decentralisation. See Sylvie

Démurger and Michael Goujon, “Compétitivité de l’économie vietnamienne comparée à

celle de la Chine”, CERDI report, in Forum Franco-Vietnamien Economique et Financier,

ADETEF CD-Rom, 2001, 67 pp.

8. Official data suggest that productivity gains decelerated in the second half of the

1990s, see Samuel Guérineau and Sylviane Guillaumont Jeanneney, “Deflation in China”,

China Economic Review, 16(4), 2005, pp. 336-363.

9. The Fundamental Equilibrium Exchange Rate method integrates the internal

equilibrium condition. See for instance Virginie Coudert and Cécile Couharde, “Real

Equilibrium Exchange Rate in China: Is the Renminbi Undervalued?”, CEPII, Working

Paper No. 1, January 2005. Nevertheless, internal equilibrium is assessed through an

estimation of the output gap, which ignores labour market disequilibria.

10. Hung-Gay Fung, Wai K. Leung, and Jiang Zhu, “Nondeliverable Forward Market for

Chinese RMB: A First Look”, China Economic Review, 15, 2004, pp. 348-352.

11. Françoise Lemoine and Deniz Unal-Kesenci, “Trade and Technology Transfers: A

Comparative Study of Turkey, India and China”, CEPII, Working Paper No. 2003-16.

12. Chen-Yuan Tung and Sam Baker consider that “the net effect on China’sterms of trade from even the sort of maxi revaluation that we advocate[15%] would be modest”. Chen-Yuan Tung and Sam Baker, “RMB revaluation will

serve China self-interest”, China Economic Review, 15, 2004, pp. 331-335.

13. An analytical table of 13 articles providing price-elasticity estimations is given in a

previous version of the paper available on the CERDI website as a working paper at


14. Jonathan Anderson, “Don’t Get So Excited About the Yuan”, Wall Street Journal, 2005,

July 26th.

15. Ronald McKinnon, “The East Asian dollar standard”, China Economic Review, 15, 2005,

pp. 325-330. Joseph Stiglitz, “US has Little to Teach China About Steady Economy”,

Financial Times, July 26th 2005.

16. As explicitly argued by Agnès Bénassy-Quéré and Amina Lahrèche-Revil, “since the

direct impact of the yuan on foreign imbalances was expected to be relatively small, the

main issue was on whether neighbouring countries would follow a revaluation of the

Chinese currency”. Agnès Bénassy-Quéré and Amina Lahrèche-Revil, “Trade Linkages

and Exchange Rates in Asia: The Role of China”, CEPII, Working Paper No. 21, December

2003.

17. Morris Goldstein, “Adjusting China's exchange rate policies”, op. cit.

18. Agnès Bénassy-Quéré and Amina Lahrèche-Revil, op. cit.

19. Agnès Bénassy-Quéré and Amina Lahrèche-Revil, 2003, estimate theelasticity of intra-Asian trade to bilateral exchange rates at 0.5.20. Chen-Yuan Tung and Sam Baker, “RMB revaluation will serve China self-interest”,

China Economic Review, 15, 2004, pp. 331-335.

21. Morris Goldstein, “Adjusting China's exchange rate policies”, op. cit.

22. At the 6th Asia-European Union Meeting (ASEM) in Tianjin, June 26th 2005


63

http://ideas.repec.org/p/cii/cepidt/2003-16.html

http://ideas.repec.org/p/cii/cepidt/2003-16.html

http://ideas.repec.org/s/cii/cepidt.html


23. The difficulty of coping with sterilisation costs is directly linked tothe well-known “impossible trinity” identified by Robert A. Mundell, “The

Appropriate Use of Monetary and Fiscal Policy under Fixed Exchange Rates”, IMF Staff

Papers, 1962, No. 09.

24. Eswar Prasad, Thomas Rumbaugh and Qing Wang, “Putting the Cart Before the

Horse? Capital Account Liberalization and Exchange Rate Flexibility in China”,

International Monetary Fund, IMF Policy Discussion Paper, PDP/05/1, January 2005.

25. The yuan is likely to appreciate with a more flexible exchange rate regime.

Therefore, from the US point of view, a good reason to advocate greater flexibility is to

gain appreciation of the yuan. Obviously, this argument confuses the revaluation and

the flexibility debates.

26. Michael Dooley, David Folkerts-Landau and Peter Garber, “An Essay on the Revived

Bretton-Woods System”, NBER Working Paper No. 9971, Cambridge, September 2003.

27. Fung and al., op. cit.28. To sum up McKinnon's view, soft pegging on the dollar is an acceptable third best,

since the first best (regional common currency) is politically unfeasible in the short

run, and the second best (hard pegging) is too risky without regional co-ordination.

29. Morris Goldstein and Nicholas Lardy, “China’s Exchange Rate Regime”, Wall Street

Journal, September 12th 2003.

30. Ding Lu, “China’s Capability to Control its Exchange Rate”, China Economic Review,

15, pp. 343-347, 2004.

31. John Williamson, “The Choice of Exchange Rate Regime: The Relevance of

International Experience to China's Decision”, Institute for International Economics,

2004.

32. John Williamson, “A Currency Basket for East Asia, Not Just China”, Institute for

International Economics, Policy Briefs, PB5-1, August 2005, uses the total trade and

excludes countries whose trade with China is smaller than 5% of the total.

33.According to Krugman's comment, “the statement was terse and uninformative” or

even “inscrutable”, Wall Street Journal, July 23rd 2005.

34.Dickie Mure, “Renminbi's tight rein a damper on US hopes”, Financial Times, July 22nd

2005.

35. Eiji Ogawa, “Chinese exchange rate policy”, paper presented at the 1st Conference

on Transition and Economic Development in China, Fudan University, September

10th-11th 2005.

36. As of April 30th 2005, the de facto exchange rate arrangements in the region were:

currency board in the Hong Kong SAR, fixed peg in China and Malaysia, managed

floating with no predetermined path for the exchange rate in Indonesia, Thailand,

India and Singapore, independently floating in Korea, Philippines, Taiwan and Japan.

IMF Annual Report Table II.13.

37. William Jr Pesek, “Unpegging the Ringgit is a Sign of Malaysia's Strength”,

Bloomberg News, July 28th 2005.

38. For instance, the State Information Centre cuts the GDP growth forecast by 0.5

percentage point, a export growth by 1.5 percentage points and inflation by 0.4

percentage point.

39. However, Crédit Agricole-CLSA chief economist Jim Walker expected that economic

growth in China will slow in 2006 (in a range of 5%–7%) as domestic demand eases and

manufacturers continue to face high oil and commodity prices.


64

40. Except for the International Monetary Fund that has maintained itsprevision of 3.0% because of a surprising growth in M2 in August, a y-o-yof +17.3% compared to a target of +16.5% and a July growth of 16.3%.41. The fight against revaluation pressure may also rely on interventions in the

domestic financial system, Huayu Sun and Yue Ma, “Policy strategies to deal with

revaluation pressures on the Renminbi”, China Economic Review, Vol. 16(2), pp.

103-117.

RÉSUMÉS

On July 21st 2005, China slightly revalued the yuan and officially modified the exchange rate

system. Interpreting this move as only the outcome of international pressures to reduce

international trade imbalances is however misleading. To support our argument, we explore the

rationale of the July 21st decision through a review of the twin debates of the exchange rate level

/ system in China. We argue that both external and internal concerns are taken into account by

the Chinese authorities in the management of the exchange rate. Moreover, responsibility for the

management of the Chinese exchange rate among the imbalance in world trade is in doubt. The

review of recent developments since the July 21st decision shows that its impact is limited. While

“hot money” inflows seem to have been tamed, previous economic trends have not yet been

modified1.


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http://ideas.repec.org/a/eee/chieco/v16y2005i2p103-117.html

http://ideas.repec.org/a/eee/chieco/v16y2005i2p103-117.html

http://ideas.repec.org/s/eee/chieco.html

Defence


66

Taiwan: The Security Policy of theChen Government Since 2000

Mathieu Duchâtel

1 Important new factors have appeared in the strategic equation in the Taiwan Strait

since Chen Shui-bian became President of the Republic of China (ROC) in Taiwan in

2000. The accelerated modernisation of the People's Liberation Army (PLA) and the

passing of the Anti-Secession Law have increased Chinese irredentist pressure on the

island. After the election of George W. Bush, the United States increased its military co-

operation with Taiwan, but American support remains ambiguous, especially as some

of Chen Shui-bian's political initiatives, his inability to impose his arms acquisition

policy on the legislative Yuan (Parliament), and a defence budget which is shrinking in

relative terms have provoked irritation in Washington. In addition, Japan has now

become an important but discreet player in the security triangle. In this changing

environment, Chen Shui-bian has followed the broad lines of Lee Teng-hui's security

policy. Where defence is concerned, in the six years of his presidency, the major

innovation has been the Taiwanese army's efforts to take on board some of the

technologies of the Revolution in Military Affairs (RMA)1, along with greater attention

being focused on dissuasive retaliation capacity. In order to implement his security

policy, Chen Shui-bian, as the first President not to command a Parliamentary majority

in the Yuan, and in a context of highly polarised political debate, has to face a sizeable

constraint: a domestic opposition that has the power to block part of his arms

acquisition policy.

Taiwan, a « defensive » power

2 The Taiwanese Minister for Defence has given the following definition of Taiwan's

security: “With the progress of globalisation and information technology, national

security has evolved from focusing narrowly on military security to looking at broader

pluralistic security issues, which include national defence, diplomacy, cross-Strait

affairs, the economy, technology, psychology, the environment, and crisis

management”2. This definition is part of a worldwide trend towards the widening of the

concept of security since the 1980s3. Security policies cannot be conceived as merely a

maximisation of military power through strategies of armament or of alliance. This


67

wider approach leads to conceiving security as a state to be achieved by the security

policy, and which can be defined as “the lack of military and non-military threats

which could call into question the core values which a person or a community wishes to

preserve or promote, and which lead to the risk of the use of force”4. Taipei has made

this approach its own. The means of its security policy are various. Nevertheless, as the

ministry indicates in its 2002 White Paper, its security policy, while it cannot be

reduced to military means, relies on them above all5. Like that of Lee Teng-hui, but with

slightly different means and in a context which has evolved, the Taiwanese security

policy of the Chen administration towards the People's Republic also means an analysis

from a security perspective of all the aspects of cross-Strait relations. The episode of

the giant pandas offered as a gift to Taiwan by China on the occasion of Lien Chan's

visit to the mainland, and which were criticised by the Mainland Affairs Council (MAC)

as being part of “United Front” (tongzhan) strategy, is a good example6. The claim laid

by the Republic of China (ROC) to the status of sovereign state makes this choice

necessary and rational, for reasons we will explain below.

3 In the 2004 White Paper the ROC's Minister of Defence defined three main security

objectives: safeguarding the integrity of national sovereignty, securing the sustainable

development of the nation, and preventing any military conflict in the Taiwan Strait7.

Moreover, the island's security policy serves the national interests of Taiwan, which

are the protection of the survival and development of the Nation, the safeguarding of

the security and well-being of the population, and the defence of liberty, democracy

and human rights on the island8. As with any other sovereign state, safeguarding the

integrity of national sovereignty is at the top of the hierarchy of security objectives.

Nevertheless, in the specific context of the Taiwan Strait, this hierarchy is a reminder

that the status of Taiwan—the question of whether it is a state or a rebellious province

—lies at the heart of the political conflict and the danger of war between the two sides.

In Taiwan, under Chen Shui-bian as under Lee Teng-hui, and even under Chiang Kai-

shek, the irredentist claim of Beijing has always been perceived as the core of the

Chinese threat. But to the Chen administration, the slogan “one country, two systems”,

the idea of an indivisible sovereignty of Chinese territory which makes it possible to

define secessionist activity9 is a direct challenge to the perception by Taipei of the ROC

in Taiwan as a state which is already sovereign and independent (zhuquan duli)10.

4 Taiwanese security policy is thus built on three pillars: the defence of the ROC's

sovereignty, the prevention of war and of Chinese coercive strategies, and the

maintenance of the island's political, social and economic system. Among these

mainsprings, sovereignty appears as the matrix, in the sense that its defence is

undertaken on all fronts. The People's Republic is far more powerful than Taiwan if one

refers to the two criteria generally used by the realist school to measure the power of a

state in the international system, which is to say the size of its economy and the

resources it allocates to the military sphere11. Nevertheless Chen Shui-bian's

administration has not yielded to Beijing's political demands. It has not accepted either

the One China principle, or the 1992 consensus 12; nor has it accepted the “one country,

two systems” slogan. It has therefore continued to declare that the ROC in Taiwan is a

sovereign and independent state, in accordance with the strategy adopted by the

Democratic Progressive Party (DPP) in the “Resolution for the future of Taiwan”

(Taiwan qiantu jueyiwen) in 199913. It must be recognised that up to now, Taiwan has

still been able not to yield to the Chinese irredentist claim, and that the difference in

power between the two shores cannot be reduced to their size, their population, or to


68

the number of men in their armed forces. Thus Taiwan today has real “defensive

power”, in the meaning used by Raymond Aron, that of the “ability of a political unit to

resist the imposition of the will of others”14. But how much longer can this last?

5 Defensive power is a political science concept, but in the case of Taiwan, it is based on

the island's military capability, and on its defence co-operation with the United States.

The concept of the asymmetry of power, developed for case of Taiwan by Wu Yu-shan,

sheds interesting light on Taiwan's strategic behaviour. The concept applies to

situations where a conflict over sovereignty brings together two political units of

widely differing size15. In this situation, the smaller political unit is faced with a

strategic alternative; it can choose between “balancing” (kangheng), or else

“bandwagoning” (fucong) with the more powerful entity16. Under Chen Shui-bian, the

Taiwanese authorities clearly favour the first of these strategies. The Minister of

Defence, Lee Jye explains that “without solid capacity and without real determination

(…), peace in the Strait cannot be assured, despite all our good will”17. In Taiwanese

security policy today, there co-exist the two forms of balancing which structural

realism distinguishes on the theoretical level: internal balancing, which concentrates

on developing military resources and the overall wealth of the state, and external

balancing, which favours alliances. Neorealist texts could have foreseen such strategic

behaviour on the part of Taiwan, in the context of the increasing power of what is both

its largest and closest neighbour. Kenneth Walzer's theory of the balance of power

states that the political units in a system will systematically seek to counterbalance the

increase in power of other units18. Stephen Walt's theory of the balance of threats

posits that the political units in one system counterbalance as a priority not the states

which are perceived as potential hegemons, but the states whose foreign policy most

threatens their interests19.

The relative evolution of Taiwanese defence strategy

6 Under Chen Shui-bian, the theatre of operations of a possible conflict with China has

been subjected to a relatively new perception compared to the era of Lee Teng-hui.

Geographically, Taiwan is in an advantageous position; its insularity protects it from

invasion by the PLA20. Nevertheless, the consolidation of the protection of the nerve

centres of political and military decision-making—as well as of certain economic

activities—against Chinese missile attacks, and the reinforcement of the island's

defences against attack from the air, for example by the recent deployment of batteries

of Avenger missiles in the Taipei region, have been one of the new administration's

priorities21. This is justified by the increasing pressure brought to bear on the island by

the modernisation of the PLA's long range capability and the ever-increasing

deployment of Chinese ballistic missiles pointing at Taiwan22.

7 Above all, we have witnessed a determining evolution in the strategic doctrine of the

island's armed forces. In over a decade, the Taiwanese army has moved from a

conception focused on the defence of Taiwanese territory, to seeking control over the

air and maritime space in the Strait, combined with a possible extension of the conflict

to the Chinese mainland. This development is subtle, insofar as Taipei has always

sought to prevent combat taking place on the island's soil. Since Taiwan renounced the

reconquest of the Chinese mainland by force in 1991, there have been two competing

military strategies to block any PLA offensive. The first emphasises anti-landing

capacity (WWW, fan denglu) and the army. The second aims at spreading the conflict to

the Chinese mainland, and on the contrary favours offensive equipment. Since 2000,


69

some elements of the second approach have been applied. The reconstruction of the

ROC's armed forces shows this evolution.

8 In 2000, after the election of Chen Shui-bian, Taiwanese defence doctrine changed from

“effective deterrence, resolute defence” to “resolute defence, effective deterrence”

(youxiao hezu, fangwei gushou). Behind this inversion is to be seen a new perception of

space in the Strait. The first concept, which was applied under Lee Teng-hui, suggested

that if the PLA crossed the Strait of Taiwan in order to launch an amphibious attack, it

would suffer very high casualties. Thus the deterrence was focused on invasion. Behind

the second concept, in contrast, lies the idea that all the forms of Beijing's coercive

strategy (whether a blockade, missile strikes, or attacks on Jinmen, Mazu or the

Pescadores) must be deterred. As it has been emphasised by the ex-Deputy Minister of

Defence, Michael Tsai Ming-hsien, Taiwanese doctrine now consists of introducing an

element of doubt among Chinese military decision-makers. It also rests on the basic

principle of dissuasion of the strong by the weak: what Taiwanese response could be

triggered by these coercive options23? Under Chen Shui-bian, the administration has

undertaken consideration of active defence, putting forward the doctrine of “decisive

war beyond the borders” (juezhan jingwai). As early as during his speech on June 16th

2000 at the Military Academy, the President declared that Taiwan must develop its

military capability in the sense of “high precision strikes, early warning capability, and

intelligence superiority, basing itself on the objective of winning a decisive battle

outside our territory”24. With the same aim, the Minister of Defence has elaborated

several tactical concepts: pre-emptively maintaining superiority on the levels of

electronic technology and intelligence, pushing back unlimited hostile engagements far

from the coast, carrying out joint air and sea operations, ensuring the security of

ground operations, preventing enemy intrusion, preserving the lifespan of armaments

and slowing enemy offensives with effective counter-measures25. While it is now clear

that Taiwan's main objective consists of keeping any conflict away from the island's

coasts, a new ambiguity now surrounds the question of whether Taiwan is moving

towards active defence properly speaking, which is to say preventive strikes against

Chinese ballistic sites, for example. Offensive defence, in the form of a dissuasive

counter-attack on the mainland, has received political support at the highest level, but

it remains highly controversial and something in the nature of a calculated strategic

ambiguity26. The Chen administration is clearly seeking to acquire certain weapons

which are central to its application, such as submarines or intermediate range cruise

missiles. The Taiwanese armed forces are presently entrenched behind the concept of

“no first strike”. But it cannot be ruled out that they will carry out counter-offensives

on the Chinese mainland if a military conflict breaks out, even though, in the case of

American intervention, Washington could demand that the conflict not be extended to

the Chinese coast.

Defence programmes currently under way

9 An ambitious programme to modernise the military is currently under way. It gives

greater importance to anti-submarine warfare, anti-missile and second strike

capabilities, as well as the integration of information technology in weapons systems

and their links, and to the reduction and professionalisation of the armed forces.

Reacting to the accelerated modernisation of the PLA, the Taiwanese army is

undertaking a Revolution in Military Affairs (RMA). Entitled “renovation of military


70

affairs” (junshi shiwu gexin), it is due to be completed by 2012, with the application of

two programmes: bosheng’an , and jingjin’an.

10 Bosheng’an consists of creating operational C41SR27 systems in Taiwan, with a view to

acquiring the capability to carry out joint operations between the three services. It is a

response to American assessments which placed the construction of C41SR systems

capable of rapidly detecting, reacting to and surviving a Chinese offensive, as the top

priority in the modernisation of the island's defence. The plan aims, with American

assistance, to build a joint command and control centre for the three Taiwanese armed

services (sanjun lianhe zuozhan xitong). Its communications systems would be

integrated with those of the American Pacific Command. According to a report by the

US-China Relations Committee of Congress, Taiwan's progress in this domain has been

“appreciable”28. In September 2003, an initial $27 million contract was signed with

Lockheed Martin. However, the total cost of the C41SR system will reach $2.1 billion by

2011, and total investment in the programme NT$46.1 billion29.

11 Next comes the improvement of Taiwan's electronic and information warfare

capabilities, in particular to prevent a Chinese strategy of “decapitation” (WWWW,

qunlong wushou), which would consist of paralysing Taiwanese decision-making and

command centres by attacking them electronically30. Today, electronic and information

warfare equipment takes up a sizeable part of the investment expenditure of the

Ministry of National Defence: 25.06% in 2001, 32.09% in 2002, 25.46% in 2003, 31.53% in

2004 (or NT$21.1 billion)31. Counting on its technological lead over China, Taiwan is

fully integrating its high technology industries into the project. Thus, before the

project was taken over by the National Security Council, co-operation between the

industries and the Ministry of National Defence was already a defined task which had

been entrusted to an ad hoc committee under the authority of the Presidential Palace

(a move which had provoked moreover negative reactions in the army)32.

12 Jingjin’an consists of planning a reduction of manpower and the introduction of new

weapons systems. The aim of this restructuring is to build a compact high-tech army.

Thus Taiwan is evolving towards greater professionalisation of its armed forces,

without for the moment giving up conscription. Since January 2004, the army has

entered the first stage of jingjin’an. Up to 2006, there will be reductions of 40,000 men,

from 380,000 to 340,000. By 2012, after the implementation of the second stage of the

plan, the army should only have 300,000 men. During the same period, the

professional/conscript ratio will increase, from 3.6/6.4 to 6/4. This policy has two

objectives: the professionalisation of forces in the context of contemporary warfare,

which demands in-depth technical training for many jobs, and the reduction of

manpower costs in order to make possible more investment spending. According to a

DPP Parliamentary report, the plan should make it possible to reallocate 6% of the

present defence budget to acquisitions. If numbers were reduced to 250,000 troops, as

the DPP suggests, 14% of the present budget could be reallocated to productive

investment33.

13 Lastly, between 2000 and 2005, new equipment was acquired by the Taiwanese army,

and new contracts signed. Some of these come under the seal of defence secrecy. In

2004, 18.94% of the defence budget remained secret, and mainly concerned

acquisitions. Other acquisitions are public knowledge. Among the most significant are

four Kidd class destroyers, worth 875 million dollars (two of which have already been

delivered) and an early warning radar surveillance system produced by Raytheon,


71

worth 752 million dollars, which is scheduled for delivery in 200934. There are also

numerous missiles which enhance the combat capability of the island's navy and air

force: Harpoon anti-ship missiles, AIM 120, Sidewinder and Sparrow air-to-air missiles,

as well as Hellfire and Maverick air-to-ground missiles. In weapons production, new

developments since 2000 stem from strategic choices made under Lee Teng-hui. The

most significant new development is the decision to build a military observation

satellite, which is essential in order to improve Taiwanese anti-missile defences, as well

as light armoured vehicles to intervene on the coast in case of a Chinese landing35. Most

of the missiles developed by the Chungshan Technology Institute have already been

deployed on their various carriers, Lafayette and Perry class frigates, IDF fighters, and

Ching-chiang patrol ships, as well as on the ground for the island's anti-air and anti-

missile defences36. The Institute is also working on an improved version of its sea-to-sea

missile (the Hsiung-Feng III), with the objective of exceeding the capabilities of the

Russian-built Sunburn missiles which China possesses, and which are considered to be

one of the most dangerous weapons in case of a naval confrontation between the two

sides37. Since Chen's election, it seems that the previous administration's efforts to

develop a medium-range ground-to-ground missile, able to strike military, political or

civilian infrastructure on the Chinese mainland, are receiving renewed attention. Such

a missile would give the Taiwanese forces dissuasive retaliation capability. In August

2005, the Taiwanese press revealed that Hsiung Feng missiles with a range of 1,000

kilometres would be deployed on mobile launchers by the Taiwanese army's new

Missile Command38. This report has not been confirmed by the Ministry of National

Defence39. However, in a hearing before the Defence Commission of the legislative

Yuan, the Minister of Defence Lee Jye stated that in future Missile Command would be

made up of only medium-range strategic missiles40. Similarly, under Chen's presidency,

Taiwan has installed, on the islands of Kinmen and Matsu, what were originally anti-

vessel missiles, but which could be fired at the Chinese mainland41.

The limits of the balancing strategy

14 Despite these efforts to modernise both its defence strategy and its armed forces, the

question remains as to whether Taiwan is really acquiring the means to defend itself.

On several occasions, the United States has made no secret of its doubts on that score, it

being understood that Taiwan was counting too much on American protection, and not

enough on its own forces. This American perception stems from the reductions in the

defence budget. It is also a consequence of the confrontation between the

administration and the majority in Parliament on the subject of the purchase of

weapons from the United States. It may well seem an exaggeration to talk about

internal balancing when the Taiwanese defence budget has not been the object of any

significant increase since Chen's election. On the contrary, the budget has remained

stable at a level lower than that of the previous decade (see Table 1). The slowdown in

the island's economic growth and the considerable increase in social spending are the

main causes of this. The Ministry of National Defence hopes that the budget will

increase to the level of 3% of GDP, a view which is shared in American defence circles.

The authorisation given by the Bush administration in April 2001, to sell Taiwan a

number of expensive weapons systems should have had the effect of producing an

increase in the island's defence budget. However this has not been the case.


72

1.Evolution in Taiwan’s Military Spending under the Presidency of Chen Shui-bian

15 The Chen administration has chosen a means of financing which is outside the

boundaries of the regular defence budget for three weapons systems which it considers

essential to Taiwan's defence, and in the promotion of which it has invested

considerable energy. Eight diesel-propelled submarines and twelve P3-C Orion anti-

submarine fighter planes have been chosen in order to remedy Taiwan's vulnerability

to a Chinese blockade. Six batteries of anti-ballistic PAC-III missiles are said to reinforce

Taiwan's defence against Chinese missiles. The constant improvements and the

particular attention paid by the PLA to submarines and missiles are said to oblige

Taiwan to reinforce its defences against these two weapons systems. A special budget,

which now stands at US$11 billion, higher than the 2005 defence budget, has been

proposed to the legislative Yuan42. This budget was originally US$18 billion when the

Yuan approved it on June 2nd 2004, and then US$15 billion when the administration

decided to include the purchases of PAC-IIIs in the regular defence budget43. No

financial deal has yet been accepted by the parliamentary majority. In March 2006, the

project had already been turned down fifty times in the legislative Yuan. Behind the

political confrontation between the Chen administration and the opposition, beyond

the internal political factors, one can see in these developments an alternative defence

project by the parliamentary majority, which centres on “defensive defence”44. It is said

to be for this reason that the opposition does not seek to block the acquisition of the

P3C Orions, equipment which is defensive in nature and which the American army

already operates in the Taiwan Strait.

16 The question of the special arms budget highlights a major feature of Chen Shui-bian's

security policy, which is being implemented in a totally new internal political context:

“The parliamentary opposition outnumbers the Presidential majority” (WWWW,

chaoxiao yeda), at the very moment when, for the first time in the history of the ROC's

institutions, Parliament has the power to control the defence budget, in accordance

with legislation passed in 2000. Since the approval of the budget by the executive, the

positions of the parliamentary majority and of the government have remained

irreconcilable, despite numerous attempts at compromise which have given the matter

the dimensions of a soap opera. The opposition refuses to buy the PAC-IIIs, since it

considers that the results of the defence referendum on March 20th 2004 make their

acquisition illegal45. On the question of the acquisition of submarines, opinion among

the parliamentary majority is divided. Some deputies in the Nationalist Party

(Kuomintang, KMT), such as Shuai Hua-min, envisage accepting the purchase of

submarines if their price is reduced46. Others emphasise the fact that the Americans no


73

longer produce diesel-propelled submarines and refuse to let the Taiwanese develop a

production facility, as had been demanded by Lin Yu-fang (KMT) and Kao Chung-yuan

(People First Party, PFP)47, which would oblige Taiwan to wait for fifteen years for the

submarines to be operational, in spite of the risk of a conflict breaking out sooner. In

any case, there is a consensus among the parliamentary majority that the present

conditions of sale are not acceptable. However, another dimension has to be taken into

account. Submarines, which are a strategic weapon par excellence, would give the

Taiwanese navy new offensive capability. It could for example attack the port of

Shanghai. Their acquisition could have unpredictable effects on cross-Strait relations

and on US-China relations. According to Jane’s Defence Weekly, Taiwan is alleged to

have complained to the Americans that the US Navy was seeking to sabotage Taiwanese

acquisition of submarines. A sign that the security environment of Taiwan has evolved

is that even the American desire to sell submarines to Taiwan should be doubted48.

External balancing: reinforced co-operation with the United States and Japan

17 Chen Shui-bian has met with less opposition in his efforts towards external balancing.

His administration has been able to seize a real strategic opportunity: the security

dilemma49, which is perceived by Koizumi Junichiro's Japan and George W. Bush's

United States in the face of the lack of transparency in the modernisation of the PLA

and in the PRC's strategic intentions. Co-operation in defence matters between America

and Taiwan has been increased, but it operates within a restrictive framework for

Taipei, which is linked to Washington's China policy. Since the end of 2003, and Chen's

“defensive referendum”, several voices, including that of President Bush, have

expressed anxiety over certain actions by Taipei, whose effect could be to alter the

status quo between the two shores. American protection comes with conditions, and

the atmosphere of “strategic clarity” initiated by the decision on arms sales in 2001 has

dissipated, and there has been a return to an ambiguous position. In practice,

Washington is currently following a strategy of twofold dissuasion, against moves

towards independence and against the use of force by Beijing. The logical connection

between these two dissuasions remains unclear. If Taiwan declares independence, will

the United States oppose the use of force by China? If China chooses a military option,

would a declaration of independence be approved?

18 In July 2004, in Tokyo, Condoleeza Rice, then National Security Advisor, stated publicly

that the United States and Japan should work together on the question of Taiwan. This

was the first time that strategic co-operation between Japan and America was

encouraged in an official statement. In Washington in February 2005, during a 2+2

meeting between their Ministers of Foreign Affairs and of Defence, the two states

published a joint declaration. For the first time since the signing of the Security Treaty

in 1966, Tokyo was willing to sign a document which explicitly stated that

“encouraging the peaceful resolution, through dialogue, of questions concerning the

Taiwan Strait” is part of “a common strategic interest”, which is shared with

Washington50. During the crisis in 1996, the United States did not even consult Japan

before sending two aircraft carriers to the Strait. One can therefore measure the

progress which has been made. Taiwan's security is now envisaged on a trilateral level.

Lai I I-chung accurately emphasises that the regenerated alliance between Japan and

America has become a key element in security in the Strait over the last few years51.

19 For the government of Taiwan, as is the case with its partners, this trilateral co-

operation is based on shared values, those of democracy and human rights52. The Chen


74

administration has clearly expressed its desire to forge a permanent link between the

island's armed forces and the workings of the alliance between Japan and America, in

particular by developing along with the United States and Japan the anti-missile

defences around Formosa53. If Taiwan were incorporated into a defence system which

was managed trilaterally, any attack on the island would be equivalent to an attack on

the United States and Japan. While this is not yet the case, certain measures have been

taken in the direction of increasing military co-operation. In the United States, certain

elements of the planned Taiwan Security Enhancement Act (TSEA) have in fact been put

into practice by the Bush administration, even though the law has not been passed54.

Examples include the necessity for the United States to clarify its commitment to

defend Taiwan, exchanges of military personnel between Washington and Taipei, the

installation of direct communications between the two High Commands, the

participation by American advisers in the annual Hanguang military exercises, and the

end of the ban on visits by high-ranking military officials, exemplified by the visit paid

to the United States in 2002 by Tang Yao-ming, who was Minister of Defence at the

time. According to Michael Swaine, it is with Taiwan that the American armed forces

have the most co-operation programmes under way55. In Japan, Tokyo has engaged in

active support of Taiwan's participation as an observer in certain international

organisations which do not require state status (such as the World Health

Organisation), in Track II trilateral security discussions with the United States and

Taiwan, in increasing parliamentary exchanges with Taiwan, and in inter-military

contacts with the Taiwanese56. At the beginning of 2003, for the first time since the

diplomatic rift in 1972, a Japanese military man was posted to Taipei: Nagano Yoichi, a

retired general in the land-based component of the Self-Defence Forces, holds the post

of director of the Japanese delegation to Taiwan, the Japanese Exchange Association

(riben jiaoliu xiehui)57. Another strong signal, according to the Taiwanese media, was

the participation of a delegation of officers from the Taiwanese self-defence forces in

the annual Hanguang military exercises in March 200558.

The “ securitisation” of exchanges between the two shores

20 Taiwan's security agenda in relation to China goes beyond the military sphere. It

demonstrates an “all security” approach, to the extent that any interaction with the

Chinese mainland poses for Taiwan a security problem which is societal, economic,

technological and even political. On the level of exchanges with China, the Chen

administration has in substance changed the approach followed under Lee Teng-hui,

whose political line towards China was “no haste, be patient” (jieji yongren). Since

2000, two new economic policies have been implemented: “positive opening, efficient

management” (jiji kaifang, youxiao guanli) and “strengthening the base, opening to the

West” (qiangben xijin). These two slogans emphasise the necessary pendulum

movement between prudent opening towards the mainland and management of the

security risks for Taiwan. While exchanges have been made easier and continue to

increase, a number of restrictions have been maintained. The example of direct air and

sea links is illuminating in this regard. In the present circumstances of political

confrontation, Taipei does not believe in peace through exchanges with the People's

Republic. In August 2003, the Mainland Affairs Commission (MAC) published a report

assessing the consequences for Taiwan of opening direct links59. This document still

represents the official position of the island's government. An entire section of the

report is devoted to assessing the security risks for Taiwan. It highlights the negative

effects on Taiwan's economy, on the island's status, its international image, its social


75

balance, its military security, its technological lead over China, as well as the denial of

Taiwan's sovereignty which it perceives in the conditions offered by Beijing. The

Commission expounds a protectionist argument, according to which the weakest

sectors of the Taiwanese economy would not survive the competition from the

mainland in a situation of liberalisation of exchanges across the Strait. It expresses

alarm over the accelerating delocalisation of industry to the mainland60. The

Commission also raises the question of “political security”, which is not confined to a

perception of direct links as harmful to the defence of the sovereignty of the ROC in

Taiwan. It also includes the idea that democracy and the rule of law would be indirectly

threatened by the opening up towards China, and is based on the perception of the

conflict between the two shores as being not a conflict of sovereignty but rather an

ideological struggle between a democracy and an authoritarian regime61. Before

opening direct links, the administration must set up a security net which will allow

Taiwan to minimise the security risks. This term must be understood as the application

of strategies of diversification, of increasing Taiwan's competitivity in order to better

turn to its own advantage the division of labour between the two shores, improved

legislation on technology transfer between the two shores which will allow Taiwan to

maintain its lead, but also costly modifications in the deployment of the Taiwanese

armed forces and border police. Taipei insists that China accept the involvement of

Taiwanese government agencies in the process of negotiation, both for technical

reasons and in order not to sacrifice the island's sovereignty62.

21 This approach distances itself from the middle way which brought Chen Shui-bian to

the presidency in 2000. This is especially so as, in January 2006, Chen set out a new

slogan “positive opening, efficient management”, which suggests that more restrictive

policies will be applied in order to manage exchanges between the two shores63. As is

shown by the former President of the Mainland Affairs Commission (MAC), Su Chi, the

DPP, once in power, has shifted from a position which consisted of all-out

encouragement of exchanges with mainland China to an approach which seeks to slow

them down and restrict them64. In reality Taipei's policy takes up the arguments of the

most independence-minded fringes of the political class. The example of the

international conference on “cross–Strait exchanges and national security” organised

in Taipei in November 2003 by Lee Teng-hui's “Taiwan Advocates” association, in the

presence of Vice-President Annette Lü Xiu-lian, is significant65. The contributors, a very

large majority of whom were researchers or politicians close to the DPP or to the

Taiwan Solidarity Union (TSU), set out arguments which sought to demonstrate that

the cost/benefit ratio is unfavourable to the opening of direct air links, on all the levels

of the island's security, including its psychological defences, its public health security

and its social security. The Taiwanese daily with the highest circulation, the Ziyou

Shibao (Liberty Times), also states its opposition to the opening of direct links, for

reasons of national security. On the contrary, the KMY KMT and the PFP call for their

being opened, as do the two other major dailies, the Lianhebao (United Daily News) and

the Zhongguo Shibao (China Times).

22 As Denny Roy's expression “the enemy within” reminds us, Taiwan has not succeeded

in achieving an internal consensus on the perception of China as either a threat or an

opportunity for the pursuit of its development66. This is one of the fundamental

divisions between the presidential majority and the opposition. According to the DPP

the blocking of the arms budget by the parliamentary majority, and the journeys by

Lien Chan and James Soong to the mainland have a negative effect on the “defensive


76

spirit” (guofang yizhi)67. To the presidential majority, Taiwan has to face a “protean

war of attrition”, as is emphasised by the President of the TSU, Su Chin-qiang68. With

this formulation, he offers a reminder that China applies against Taiwan the strategy of

the “Three Wars”, using the law, public opinion and psychology. In the face of this

offensive, the Chen administration has engaged in a policy which aims to work on the

“defensive spirit” of the Taiwanese population. The White Paper formulates in this

respect the concept of “all-out defence”, which is understood as the Taiwanese

population's capacity to withstand a conflict with the PRC in time of war, but also as

the population's determination to resist political strong arm tactics in peacetime69. The

DPP's emphasis on the “consciousness of being Taiwanese” (Taiwan zhutixing), and its

rhetoric, which presents the opposition's mainland policy as an abdication in the face

of Beijing's irredentism, have to be understood in this context.

The failure of the implementation of a framework for peaceful interaction

23 Internal and external balancing, prudence in interactions with China, and working on

the psychological defences of the population seem to be a rational approach to

defending the sovereignty of the ROC. This is all the more so since a whole aspect of the

security policy planned by the DPP before it came to power has proved to be a failure:

functionalist peace and collective security, which could have led, as the DPP saw it, to a

relaxing of security in relations between the two sides.

24 The desire to apply bilateral security arrangements with Beijing, and to incorporate

Taiwan into regional security arrangements, dates back to the presidency of Lee Teng-

hui. In August 1991, he was one of the first Asian heads of state to propose regional

security arrangements in the Asia Pacific, including the United States and Japan.

However, when the Council for Co-operation and Security in the Asia Pacific and above

all the ASEAN regional forum (ARF) were founded, in 1993 and 1994, Taiwan was unable

to take part. Because of Beijing's refusal to allow Taiwan to participate in international

organisations which require state status, the island is cut off from multilateral security

mechanisms. Thus the security of the Strait is never on the agenda of major

international conferences. Still today, every year, a Taiwanese delegation attempts to

bring pressure to bear in order to impose Taiwan's participation in the ARF, which is

perceived as the regional forum most likely to reduce the insecurity of the island's

position. Even in the absence of the Taiwanese, Beijing refuses to have the question of

stability in the Strait of Taiwan put on the agenda of this annual conference70.

25 Similarly, Taipei has up to now been unsuccessful in its project to establish with Beijing

a “code of behaviour on both sides of the Strait” and “confidence-building measures

between the two sides”. Both these projects, based on a long-term vision of a “structure

of stability and peace for exchanges between the two shores sides”, aim to reduce the

danger of a military incident between the two sides. They are the continuation of a

policy proposed by Lee Teng-hui, fairly late on, in April 1999; the “mechanism for peace

and stability in the Strait”, which is based on European experience. In the White Paper

put forward by the DPP in 1999 during the election campaign, confidence-building

measures already occupied a prominent place71. Chen Shui-bian seems to grant them

particular attention. Since his re-election in March 2004, he has regularly reiterated

and elaborated on these proposals in several speeches72. The confidence-building

measures (CBMs, or in Chinese xinxin jianli cuoshi) have been the subject of detailed

thinking in Taiwan. The 2004 White Paper describes the stages envisaged by Taiwan:

demonstrations of good will leading to the signing of an agreement to end hostilities73.


77

While there is no mechanism between the two sides for security dialogue or crisis

management, whether bilateral, or even more unthinkable, incorporated into a

multilateral framework, confidence-building measures are sorely lacking in the

maintenance of stability in the Strait74. What would happen in case of an air or sea

incident on the tacitly accepted frontier between the two shores, which runs along the

middle of the Strait75? How could such crises be managed quickly and effectively

without appropriate channels of communication? To Beijing, the signing of CBMs can

only be envisaged between sovereign states. On May 17th 2004, the Bureau of Taiwan

Affairs made public a declaration in which it proposed establishing CBMs with Taiwan

on the single condition that the island recognise the One China principle as defined by

Beijing, a condition which is unacceptable to Taipei76. On this point also, agreement is

impossible unless one of the two sides makes a major concession on the question of the

status of Taiwan.

26 The Chen administration has sought to build peace with China without renouncing the

independent sovereignty of Taiwan, and by trying to impose on Beijing the

“normalisation of cross-Strait relations” (zhengchanghua), which is to say the

recognition of that status. At the beginning of his first mandate, Chen proposed a policy

of integration between the two sides, which was presented as a functionalist peace

policy. At the heart of this approach is the ambition to build a dynamic peace based on

horizontal exchanges: a working peace, in the search for a definitive peace, through a

build-up of common benefits77. As noted by Byron Weng, this is not a unification policy,

for integration aims at uniting two sovereign entities in a process without constraint,

free and voluntary, but which does not blend them into a centralised unit, and respects

the aspects of separation between these two entities78. In his New Year speech in 2001,

Chen stated that “the integration of our economies, of our trade and of our culture can

be a starting point to gradually building belief and confidence in each other. This, in

turn, can be the basis of a new structure for permanent peace and political

integration”79. This policy has come up against the choice made by China not to

respond to the olive branches held out by Taipei as long as the island has not yielded on

the principle of One China. Without any inter-governmental dialogue, the policy simply

cannot be implemented, and has been abandoned by the Taiwanese administration.

Nevertheless, one can wonder about the motivations behind a political project

unacceptable to China, since it assumed the recognition of Taiwan as a sovereign

political entity.

27 This security policy is an interesting illustration of the concept of securitisation put

forward by Ole Waever, which designates a language act consisting of including in the

spectrum of a state's security policy a problem which is not necessarily part of it. Ole

Waever notes that the whole redefinition of the concept of security in the 1980s was

carried out by a series of additions: security is not only the military security of a state,

“but also…”. Thus, in theory, any security policy is contained between two extremes:

maximum securitisation and maximum desecuritisation80. While Beijing and Taipei

maintain irreconcilable positions on the island's status and on the definition of the

status quo between the two sides, the Chen administration favours maximum

securitisation, and only strong internal policy constraints, the attraction to Taiwanese

private players of the mainland economy, and the reservations sometimes shown by

the United States prevent him from applying maximum securitisation to cross-Strait

relations. These are important reservations, but from there to the desecuritisation of

his China policy is an enormous step, which cannot be taken without agreement on the


78

question of the status of Taiwan. For as long as Taipei seeks to “normalise” relations

between the two sides, without any concession on China's part, security policies based

on collective security, CBMs, positive-sum games, and a liberal peace will all be doomed

to failure. For the same reason, Chinese advances, whether conditional or not on the

acceptance of the One China principle, will logically be perceived as forming part of a

united front strategy against the island. On the other hand, the effort to maximise its

military power and the prudent management of relations between the two sides from a

security viewpoint will be the only two levers left to Taiwan in order to defend its

position as a sovereign state.

28 Translated from the French original by Michael Black

NOTES

1. The Revolution in Military Affairs (RAM) is a concept used when new technologies

exert a radical influence on military strategy. Stemming initially from an observation

of the technologies used by the United States during the first Gulf War (for example

satellite observation, furtive capability, electronic information and logistics

management), the revolution under way in the United States, which has been taken as a

model by both China and Taiwan, is said to be the eleventh technological revolution to

have had a structural impact on military operations. It especially concerns systems

known as C4ISR (Command, Control, Communication, Computer, Intelligence,

Surveillance, Reconnaissance) and rapid strike capability (projection power and

ballistic power). Charles-Philippe David, La Guerre et la Paix : Approches contemporaines de

la sécurité et de la stratégie, [War and Peace: Contemporary Approaches to Security and

Strategy] Paris, Presses de Sciences-Po, 2000. pp. 217-218.

2. 2004 National Defense Report, Ministry of National Defense, Republic of China, Taiwan,

p. 59.

3. The most representative work on this renewal is probably Barry Buzan, People, States

and Fear: An Agenda for International Security Studies in the Post-Cold War Era, Boulder, CO,

Lynne Rienner, 1991.

4. Charles-Philippe David, op. cit., p. 31.

5. 2002 National Defence Report, Ministry of National Defence, Republic of China, Taiwan,

p. 76.

6. “China’s Panda Ploy Irritates Officials”, Taipei Times, January 7th 2006.

7. 2004 National Defence Report, op. cit., p. 59.

8. Ibid.

9. Cf. Articles 1, 2 and 8 of the anti-secession law, passed during the third session of the

Tenth National People's Congress on March 14th 2005.

10. It should nevertheless be noted that in 1999, when Lee Teng-hui stated that the

relations between the two shores were special relations between states, all the political

parties accepted this position. The sovereignty of the ROC is thus the object of a

consensus among all the Taiwanese political parties.


79

11. Without going into the complex detail of the exact figures of the Chinese military

budget, according to the lowest estimates Chinese military spending is $40 billion (the

official figure is 29.9 billion for the fiscal year 2005), as against 8 billion for Taiwan. The

Pentagon's highest estimate is that the Chinese defence sector could be receiving as

much as 90 billion a year. Source: Department of Defence, Annual Report to Congress, The

Military Power of People’s Republic of China, 2005.

12. In 1992, the Strait Exchange Foundation (SEF, Taiwan) and the Association for

Relations Across the Taiwan Strait (ARATS, mainland China) met in Singapore. In their

preliminary exchanges, ARATS found acceptable the position of the SEF according to

which each of the two parties has its own interpretation of “a single China”. On this

basis, the two parties managed to avoid a confrontation on the question of sovereignty.

After 1999, although the term had never been used before, there was talk of the

consensus of 1992. Acceptance of the consensus by Taipei could allow the reopening of

dialogue with Beijing. The present position of the Chen administration is that there was

never any consensus in 1992.

13. The resolution of May 9th 1999 states that Taiwan is already a sovereign and

independent state which does not belong to the PRC, and is opposed to the slogan “One

country, two systems” and to the One China principle. Cf. the Chinese version of the

text on http://www.future-china.org.tw/links/plcy/dpp.

14. Raymond Aron, Paix et guerre entre les nations [Peace and War Between Nations], Paris,

Calmann-Lévy, 8th edition, 1962. p. 58.

15. Wu Yu-shan, “Theorizing on relations across the Taiwan Strait: Nine contending

approaches”, Journal of Contemporary China, Vol. 9, No. 25, November 2000, pp. 407-428.

16. Ibid., pp. 413-415.

17. Lee Jye, “Minister’s Remarks”, 2004 National Defense Report, p. XV.

18. Kenneth Waltz, Theory of International Politics, Reading, MA., Addison-Wesley, 1978.

19. Stephen Walt, The Origin of Alliances, Ithaca, N.Y., Cornell University Press, 1987.

20. On this idea, cf. Jean-Pierre Cabestan, who emphasises the climatic constraints of

the Taiwan Strait on a Chinese invasion: Chine-Taiwan, la guerre est-elle concevable ?

[China and Taiwan, Is War Conceivable ?], Paris, Economica, 2003, pp. 54-55. John

Mearsheimer in his theorisation of offensive realism, puts forward the notion of the

“stopping power of water”: the fact that the oceans have always constituted a major

constraint on the expansion of great powers. The Tragedy of Great Powers Politics, W.W

Norton & Company, 2001, pp. 114-128. Moreover the morphology of the Taiwanese

coast would make an amphibious landing on the island very difficult.

21. “Avenger Surface to Air Missiles Deployed in Taipei”, MND, CNA, March 16th 2004.

22. In his speech on January 1st 2006, Chen gave as 784 the number of Chinese missiles

pointed at Taiwan. They had been estimated at about 400 in 2000.

23. Michael Tsai, “Introduction”, in Martin Edmonds, Michael Tsai, Defending Taiwan:

The Future Vision of Taiwan’s Defence Policy and Military Strategy, London, Routledge

Curzon, 2003, pp. 6-7.

24. Chen Shui-bian, “Decisive Battle Outside the Territory”, a speech given at the

Military Academy on June 16th 2000, reprinted in Taiwan Defence Affairs, No. 1, October

2000, pp. 129-132.

25. Cf. the White Papers in 2002 and 2004.

26. See the remarks by former Prime Minister Yu Shyi-kun on a “balance of terror”

between the two shores, arguing in favour of Taiwan's acquisition of counter-attack

capability. “Yu Heralds a Balance of Terror”, Taipei Times, September 26th 2004.


80

http://www.future-china.org.tw/links/plcy/dpp

27. See footnote 1.

28. Michael Pillsbury, “The US Role in Taiwan’s Defence Reform”, report from February

29th 2004, available on www.uscc.gov.

29. “Taijun tou juzi gao bosheng xiang mu” (The Taiwanese Army invests considerable

amounts in order to implement the Bosheng programme), Huaxia, October 15th 2003.

“Bosheng’an: queding you luoma gongsi chengbao”, (Bosheng Programme:

Confirmation of the choice of Lockeed Martin), Liberty Times, September 22nd 2003.

30. “Beijing Has E-Blockade Strategy”, Associated Press, November 17th 2004.

31. 2004 National Defence Report, pp. 150-153.

32. “Keweihui yu chashou bosheng’an: Bian zuzhi” (Chen Shui-bian prevents the

Committee for Technology from taking care of the Bosheng programme), Epoch Times,

June 4th 2005.

33. Taiwan bingli guimo yanjiu baogao (Report on the size of the Taiwanese armed forces)

August 2003, Political Committee of the DPP, available online at www.dpp.org.tw.

34. This is a multifunction radar system capable of detecting cruise missiles and

ballistic missiles as well enemy warplanes and vessels, and is essential to the

modernisation of Taiwanese anti-missile defences. “Taiwan to Get US Early Warning

Radar”, Reuters, June 24th 2005.

35. “Nation May Launch Spy Satellite by 2007”, Taipei Times, October 11th 2005.

36. For further information on Taiwanese missile production cf. Cabestan, op. cit., pp.

85-89. See also www.fas.org.

37. “MND to Spend NT$20 billion on Supersonic Missiles”, AFP, October 7th 2002.

38. Operational since January 1st 2004, this structure centralises decisions and

operations for offensive capabilities, anti-aircraft defence and anti-missile defence.

39. “Taiwan begins Development of Cruise Missiles”, AFP, August 12th 2005.

40. “Military Talks About Missile Programme”, Taipei Times, May 3rd 2005.

41. “The Dragon Next Door”, The Economist, January 13th 2005.

42. The same kind of financial arrangement had been made for the purchase of 150

F-16s and 60 Mirage 2000s. Cf. Cabestan, op. cit., p. 70.

43. “Taiwan Trims Arm Budget in Bid to Get Bill Passed”, Reuters, August 30th 2005. By

the beginning of March 2006, the budget had already been turned down 50 times in the

Legislative Yuan.

44. On this point, see the articles by the KMT deputy Su Chi, a member of the Defence

Commission of the Legislative Yuan and former director of the Mainland Affairs

Committee under Lee Teng-hui. Su Chi, “New Thinking on Arms Purchasing”, China

Post, January 3rd 2006. “Soft Power + Defensive Defence = National Security”, Lianhebao,

January 24th 2006. English version is available on www.taiwansecurity.org.

45. The first question in the referendum, a referendum which was invalidated by the

fact that participation was lower than the threshold level of 50%, asked the Taiwanese

population whether they approved of the acquisition of anti-missile defence systems to

strengthen Taiwan's self-defence capabilities in the face of the positioning by China of

ballistic missiles aimed at Taiwan. The law on referenda stipulates that a question can

only be put before the electorate again after three years have elapsed since the initial

vote; this is interpreted to mean that a referendum result is valid for three years. The

administration is said to have accepted this position. Cf. “MND to Resubmit Bid to Buy

Anti-Missiles in 2007”, eTaiwan News, February 23rd 2006.

46. “KMT May Back Purchase of Submarines: Lawmaker”, Taipei Times, February 18th

2006.


81

http://www.uscc.gov/

http://www.dpp.org.tw/

http://www.fas.org/

http://www.taiwansecurity.org/

47. The US Department of Defence vetoed the construction of submarines in Taiwan.

Initially, the executive Yuan had hoped that Taiwanese enterprises would be involved

in their construction, and even that the submarines would be entirely constructed in

Kaohsiung.

48. “Taiwan Says US Navy Is Sabotaging SSK Plans”, Jane’s Defence Weekly, February 10th

2006.

49. The theory of the security dilemma posits that a state's military modernisation

policy, even if it is defensive, will have the effect of causing other states to wonder

about its strategic intentions and to take countermeasures aimed at protecting

themselves from its increased power.

50. Joint U.S.-Japan Security Committee Statement, Central News Agency, February 19th

2005.

51. Lai I-chung, “Meiri tongmeng zhudao taihai shidai mailing” (The era of domination

of the Taiwan Strait by the US-Japan alliance is coming), Taiwan Think-tank, February

20th 2005.

52. See for example Chen's inauguration address on May 20th 2004. “Taiwan's long-term

friendship with the United States, Japan and our allies in the world has been founded

on the safeguarding of our common interests. More importantly, it is an alliance of core

values that we share: freedom, democracy, human rights and peace”.

53. Interview given to the Washington Times, July 17th 2001.

54. Passed by a landslide majority in the House of Representatives on February 1st 2000

(341 votes in favour, 70 against), the Act has never been passed by the Senate, in order

not to hinder the policy of engagement of the United States. For a history of the TSEA

(House Resolution 1838), see Steve Goldstein and Randall Schriver, “An Uncertain

Relationship: the United States, Taiwan and the Taiwan Relations Act”, Taiwan in the 20th

Century, The China Quarterly, special edition, March 2001, 165, pp. 147-172 .

55. “The Dragon Next Door”, The Economist, January 13th 2005.

56. See for example David Fouse, “Japan-Taiwan Relations, a Case for Tempered

Optimism”, Asia-Pacific Center for Security Studies, October 2004.

57. “Huxiang paixun jiangjun changzhu, Riben hai zai zuo Taiwan meng” (Mutual and

permanent despatch of high ranking delegates, Japan pursues its Taiwan dream),

Huanqiu Shibao, January 24th 2003.

58. Zhongguo Shibao, March 16th 2005.

59. “Liang’an zhiheng yingxiang pinggu zhi zhongdian shuoming” (Some points of

explanation on the assessment of the influence of establishing direct air links between

the two shores), Mainland Affairs Council (MAC), November 12th 2003. www.mac.gov.tw.

60. Ibid.

61. Interviews, Taipei, 2005.

62. Interviews, Taipei, January 2006.

63. “Chen To Tighten Cross-Strait Policies”, Taipei Times, January 2nd 2006.

64. Su Chi, Weixian Bianyuan: Cong Liangguolun dao yibian yiguo (Brinkmanship: From

Two-States Theory to One-Country on Each Side), Taipei, Tianxia Yuanjian, 2003. pp.

144-147.

65. Liang’an jiaoliu yu guojia anquan, guoji yantaohui lunwenji (Cross-Strait exchanges and

national security, articles from the international conference), Taipei, Caituan faren

quncehui, January 2004.

66. Denny Roy, “Taiwan’s Threat Perceptions: The Enemy Within”, Asia-Pacific Center

for Security Studies, July 2002.


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http://www.mac.gov.tw/


68. “Taiwan Has to Bolster Its Defence and Resolve”, Taipei Times, August 11th 2005.

69. Cf. Yang Chih-heng, “The evolution and adaptation of Taiwan’s military strategy” in

Martin Edmonds, Michael Tsai, Defending Taiwan, the Future Vision of Taiwan’s Defence

Policy and Military Strategy, London, Routledge Curzon, 2003, pp. 61-64.


71. National Defense White Paper, Taiwan Democratic Progressive Party, November

1999. Extracts available on http://www.taiwandc.org/dpp-pol2.htm.

72. Chen Shui-bian, inaugural address, on May 20th 2004. Chen Shui-bian, National Day

speech on October 10th 2004.

73. 2004 National Defense Report, p. 75.

74. Guo Lin-wu, “Xinxin jianli cuoshi yu liang’an guanxi” (Confidence-building

measures and relations between the two shores) in Xinxin jianli cuoshi de lilun yu shiji

(Theory and Practice of Confidence-Building Measures), Taipei, Taiwan Zonghe

Yanjiuyuan, 2001.

75. According to Chao Chien-min, Chinese fighter planes have regularly crossed the

median line for several years. In such a situation, there is an urgent need for CBMs

between the two shores, in order to avoid another military crisis. Cf. “Military

Confidence Building Measurements and the Security in the Taiwan Strait”, October

2005, at www.peaceforum.org.tw.

76. Xinhua, May 16th 2005.

77. According to the model of Mitrany's functionalism. Cf. David Mitrany, A Working

Peace System, 1943. pp. 61-77.

78. Byron Weng, “Modes of national integration”, paper presented at the symposium

on the comparison between national sovereignty and models of integration, Chen

Lungchi Foundation, Puli, February 24th 2001.

79. President Chen's Cross-Century Remarks, Taipei, December 31st 2000, available on

www.mac.gov.tw.

80. Ole Waever, « Securitization and Desecuritization », in Ronnie Lipschutz (ed.), On

Security, New York, Columbia University Press, 1995, pp. 46-86.

RÉSUMÉS

The passing of the Anti-Secession Law, on March 14th 2005, was a reminder that the People's

Republic of China has not renounced the use of force against Taiwan. Following the election of

Chen Shui-bian in March 2000, the positions of the governments on both sides of the Taiwan

Strait have hardened. Beijing demands from Taipei a recognition of the “one China” principle in

order to resume dialogue, while Taipei considers the Republic of China in Taiwan to be a

sovereign and independent state. This article describes the range of means—including

modernisation of the military, reinforced military co-operation with the United States, and

increasingly with Japan, as well as restrictions on various forms of exchanges between the two

sides— which are used by the Chen Shui-bian government to resist Chinese irredentism. It

emphasises the continuity with Lee Teng-hui's security policy, and the new constraints which


83

http://www.taiwandc.org/dpp-pol2.htm

http://www.peaceforum.org.tw/

http://www.mac.gov.tw/

affect the Taiwanese executive, in particular the refusal by the opposition parties, which control

the majority of seats in the Legislative Yuan, to approve the government's plans for arms

acquisitions.


84

Book Reviews


85

Lucien Bianco, Jacqueries et révolutiondans la Chine du XXe siècleParis, Editions de La Martinière, 2005, 631 p.

Alain Roux

NOTE DE L’ÉDITEUR

Translated from the French original by Philip Liddell

1 Patiently, passionately, Lucien Bianco has successfully concluded a mission that looked

impossible : to explore the immensity of the Chinese peasantry and to describe the

behaviour, over the half-century preceding the conquest of power by the Chinese

Communist Party (CCP), of those 400 million people who cultivated in the traditional

way 100 million hectares and eked out a miserable existence from it. From his very first

article (“Les paysans et la révolution : Chine 1919-1969”1

, followed by “Sociétés secrètes et

autodéfense paysanne (1921-1933)”2

, and by “Peasant movements”3

), Bianco threw doubt on a

number of certainties relating to what was then considered the greatest peasant

revolution in world history. His provocative hypotheses served to inspire dozens of

innovative monographs, particularly in the United States. He succeeded eventually in

winning access in the People’s Republic to a wealth of local archive material and

monographs (xianzhi and wenshi ziliao) made available only in the 1980s and 1990s. This

was the basis for a book, published in 2001, the title of which reflected its originality :

Peasant Without the Party : Grass-Roots Movements in Twentieth-Century China4

. Its original

analyses are partly taken up again in Bianco’s new book. And he goes on to offer a

much more orderly and systematic presentation of the results of his enquiries, thus

crowning nearly four decades of research. This work of maturity is an overview,

recalling in some respects the ambitions of former doctoral theses―but free of the

stylistic ponderousness one associates with this kind of production.

2 On the contrary, the writer chats informally (“me too”) with his readers, replying here

and there to objections that resurface elsewhere, as in a conversation, with no hint of


86

that lofty tone that academics are expected to adopt. Thus, addressing anyone

protesting against his decision to restrict his study to spontaneous peasant movements

while excluding those whipped up from outside, principally by the communists, and

further addressing anyone who might feel he was thus in danger of underestimating

the peasants’ fighting spirit, Bianco replies on page 221 that the communist

interventions, by systematically politicising the peasant movements, exposed them to

repression and drove as many peasants away from the struggle as it brought in.

Similarly, Chapter 3 (“Numbers”, pp. 104 to 129) is a model of intelligent evaluation of

the statistical data he employs. Bianco’s conclusions are half-way between some

writers’ excessive confidence in statistics and the systematic mistrust adopted by

others. A “materialist” himself (page 17), Bianco is not one of those inverted dogmatists

asserting culture before economics ; to him the economy is the basic motor of historical

change. Nor, however, is he a positivist, paralysed by fear of advancing any conclusion

not backed up by innumerable documents. This attitude saves him from adopting a

moralist position or from being contemptuous of the peasants in the third part of the

book (pp. 353-426), which deals with “peasant revolts and modernisation”. It was

tempting and partly justified to give the title “Peasants against Progress” to these three

chapters. They describe the opposition to the banning of opium and to the authorities’

legal measures to force Zhejiang peasants to purchase only the silkworm cocoons sold

by official agencies, and not to use the often unhealthy eggs obtained on the farm.

However, Bianco analyses the real motives behind this often violent unrest (pp. 366-369

and pp. 389-391). He does this, not by posing as an intellectual with an answer to

everything from the comfort of his armchair, but by placing himself on a level with

these poverty-stricken workers on the edge of starvation who find themselves deprived

of a living wage or driven into new expenditure. One is reminded of the recent Bolivian

election that brought Evo Morales, the Aymara Indian candidate of the “cocaleros”, to

the Bolivian presidency ! Unceasingly, Bianco shares with us his scruples and the

fragility of some of his hypotheses. He is ever-present, in the first person, in a book that

often reads like an intellectual adventure. Despite the mass of facts, figures, tables,

charts and graphs, despite the avalanche of notes, one can never tire of following him

in his explorations. The insertion of translated or summarised texts in the course of the

narrative, the richness of detail, the constant care to provide comparisons, all this

combines to transport the reader into a world teeming with millions of obscure lives.

One can breathe the acrid smells of the Chinese soil ; one is sucked into the mud of the

paddy-fields ; one sees the lined faces of these wretched people living from day to day,

resigned for the most part, but occasionally rebellious. Moreover, the book’s title might

have been borrowed from another excellent recent work on the world of the former

peasants, one often quoted by Bianco : La Rébellion française : mouvements populaires et

conscience sociale (1661-1789), by Jean Nicolas5

.

3 Indeed, Bianco presents to us the Chinese rebellion in a 90% rural China, taking as his

starting-point the record of 3,579 conflicts that took place between 1900 and 1949, 70

per year. The figure roughly corresponds to the 8,500 conflicts, as described by Jean

Nicolas, between 1661 and 1789, 65 per year, in a country twelve times less populated.

And indeed, this reference is explicit in the title Bianco gives to his own book, using the

Old French term “jacqueries”, or “peasant revolts” for events that took place several

centuries later and thousands of miles away, but in which he recognises profound

similarities.


87

4 In fact, the attitude of the Chinese peasants at the end of the Qing Dynasty and during

the Republic often mirrors that of the French peasants of the Ancien Régime. When we

leave China’s coastal cities, travelling up the rivers and deep into the interior, are we

not—even today—travelling backwards in time ? Just like the rebels in the time of the

Sun King, the Chinese peasants showed astonishing tolerance of the exploitation they

were subjected to, and very little class consciousness. When they did rise up, they

usually blamed the state and its agents. Thus, Bianco lists (in Table 5, p. 116) 1,140

uprisings against taxation and 800 against the administration, including 306 against

conscription. Admittedly, in contrast with these 1,940 occurrences of peasants clashing

with various forms of authority, he finds 1,395 conflicts within society itself ; but of

these, 802 were outbreaks of looting or subsistence riots and 380 were horizontal

conflicts (xiedou, vendettas) leading to often bloody skirmishes between villages or

clans. Only 154 recorded conflicts, that is, 4.3% of the total, arose out of resistance to

farm tenancy (kangzu), whereas the tenant farmers (diannong) who made up the great

majority of the peasants (each cultivating on average half a hectare) had to hand over

nearly half (46%) of their crop, in money or in kind, to the landowner—and on top of

that deduction they had to pay taxes.

5 Peasant revolt tends to be conservative. It defends the status quo under threat from

such-and-such an aggravation of taxation, surtaxes or some other exaction. And it

aspires to the dream of a golden age far in the past. Furthermore, the catalogue of

peasant struggles (Chapter 4) is very traditional. In particular, there is the “great feast”

(chi dahu) in the invaded estates of such-and-such country squire, as described with

delight by Mao Zedong in his famous report on peasant uprisings in the province of

Hunan. Even when one seems to discern something resembling a strike, as with the

jiaonong (jiaona nongju, the handing over of farm implements), this type of uprising (the

peasants would abandon their tools in front of the administration offices to show that

they were refusing to work in such conditions) existed well before the incipient

workers’ movement made this kind of resistance popular—so it was not a rural

duplication. Let us consider the classification of popular uprisings proposed by Charles

Tilly. He distinguishes between those he calls “competitive” where rivals dispute

possession of limited resources, those he calls “reactive” where collective rights are

defended against the state and its agents, and those he calls “proactive” where people

seek to acquire new advantages and put forward political demands where necessary.

This third category hardly existed. The conflicts before 1949 were mostly “reactive”

and secondarily “competitive”. People were not attacking the established order ;

rather, they were taking action against the disorder caused by injustices on the part of

those in power.

6 Having carefully examined this spontaneous peasant resistance, the author looks in

Part Four at the relations between peasants and the Revolution (pp. 423-494). Chapter

17, “Peasants and Communists in the Conquest of Power”, puts forward a different

interpretation of this event from that of Chalmers Johnson ; writing in 1962, with his

eyes fixed on the Vietnam War, Johnson saw in the victory of the communists in China

the success of the nationalists, Tito-style, facing the Japanese aggressors. It is also

different from that of all the historians who—taking their lead from Mark Selden (in

1971 and again in 1995)—have been insisting on social factors in the peasant

mobilisation behind the communists. Bianco borrows for his own use (p. 439) an

expression of Gregor Benton, for whom “it is weapons and not classes that made the


88

Chinese revolution”, while making it clear all the same that this victory would not have

been possible if the intellectuals and the other professional revolutionaries who were

leading the Communist Party had not been able to mobilise these victorious peasant

armies. By presenting the revolution as a construction and not as a spontaneous

uprising, Bianco supports Chen Yung-fa’s demonstration in his book Making Revolution :

the Communist Movement in Eastern and Central China 1937-19456

.

7 In his approach, Bianco relies on the results of the examination of the peasant world

that he has carried out over the earlier chapters : the peasants’ behaviour was

particularist and defensive ; their class consciousness was weak, but accompanied by

the desire to protect their local community. Indeed, Mao Zedong complained in 1928

that “the masses are cold and reserved” towards the revolutionaries. Without having

succeeded in completely changing that attitude, the communists did manage—with

unintended help from the Japanese—to push the peasants into a real turnabout : they

had to confront a political and social status quo that only recently they had been seeking

to preserve. We know the proverb “the poor don’t attack the rich ; the people don’t

attack the mandarins (pin mo doufu, min mo dou guan)”, to which one may add another

proverb—though it seems at first to be contradictory : “It is the mandarins who force

the people into rebellion (guan bi min fan).” The Communist Party had to act in such a

way, despite the peasants’ mistrust, that an occasional rebellion, due to the bad

behaviour of someone representing a power otherwise accepted, should become an

indestructible submission to a revolutionary party. This difficult alchemy, “hewing

from the rough stone the foot soldiers of the revolution” was the work of a hard core of

communist activists recruited first of all from the rural elite who had been educated in

the cities and then rejected. Their youth was a more decisive factor in recruiting them

than their social origin, despite assertions to the contrary from communist

theoreticians. Once the Communist Party had succeeded locally in building up an

effective administrative structure backed by credible armed forces, the peasants rallied

to it in order to survive, in the face of terrorist and predatory raids by the Japanese.

Without the latter, the CCP would probably never have succeeded.

8 When necessary, as during the winter of 1941, in Licheng in Shanxi, the communists

used the peasant forces to maintain control over villages seeking freedom. During the

civil war, from 1946 onwards, the vengeful spirit of the Guomindang, who wanted to

punish all those who had accepted communist power, and the White Terror, which

accompanied in the recaptured villages the victorious return of its armies until the

summer of 1947, combined in restoring to the communists their protective role. They

strengthened it by redistributing to the poor peasants and the farm labourers the land

seized from the landowners. Furthermore, the violence of the actions undertaken by

peasants against the wealthy (when the communists gave them the opportunity to

express it), which had appeared already during the brief Hailufeng Soviet between

October 1927 and February 1928 (p. 453), reflects the sharpness of those social tensions

in the villages concealed behind the Confucian parade of paternalist consensus

(ganqing) : the communist mobilisation brought to light this latent dynamism. Thus, an

unequal exchange was effected between the Communist Party and the peasantry : the

peasants contributed money, work and young recruits in exchange for security and

land. They still preserved a certain distance, as William Hinton shows in Fanshen,

published in 1966, which describes the hesitations of the peasants in a Shanxi village

that had fallen into communist control as early as autumn 1947. Without the


89

communists, the peasants would have remained at the stage of mere revolt. Their

revolutionary consciousness was built from outside. This interaction between the

Communist Party and rural society changed both of them, but not completely : the CCP

remained Leninist and determined to impose socialism at the instigation of a Party-

state that seized for itself the monopoly of power, whereas the elements of continuity

observed in the study of spontaneous uprisings among the peasantry were more

powerful than the disruption to which peasants were subjected between 1947 and 1951

in the context of the communist victory and the agrarian reforms.

9 The 36 pages, only 13% of the whole book, that Bianco devotes to presenting the overt

or covert resistance of the peasants to the communist government do not have,

obviously, the same status as the 455 preceding pages. He seeks in these last two

chapters to invite researchers to follow him in the approach he has taken so far, when

conditions become favourable. He identifies tendencies in the form of hypotheses based

on other people’s books, except for a few points where he has himself been able to build

up a dossier : the village vendettas (xiedou), for instance, or the anti-tax riots in

Renshou (Sichuan) in 1993 (pp. 470-471). To others is left the task of studying on the

ground the changes that sociologists or ethnologists may already observe, as does the

collective work directed by Isabelle Thireau and Wang Hansheng, the results of which

are presented in Disputes au village chinois, Formes du juste et recompositions locales des

espaces normatifs.7

We may compare the results of this field study, focused on the

countryside during the years following Deng Xiaoping’s reforms, with those reached in

the same writer’s earlier work in collaboration with Hua Linshan, Enquête sociologique

sur la Chine 1911-19498

. Bianco contributes an article, (Xiedou et équité) to Disputes au

village. Rather surprisingly missing from these two books (and consequently from the

article) is the excellent bibliography supplied in Bianco’s book.

10 Concluding his preceding survey, in these few pages Bianco puts his hypotheses to the

test of practical experience by examining the peasants’ subsequent behaviour during

the second half of the last century. He adds a reflection on the “weapons of the weak”

(an expression borrowed from James Scott), ranging from slow or botched work to

sabotage, which he sees rather as weak weapons, unlike Daniel Kelliher who in 1992

described them as the bases of “peasant power”. Elizabeth Perry, in a 1985 article

(published in the China Quarterly) on rural violence in socialist China, believed she could

distinguish two types of behaviour among the peasants, one essentially “reactive” up to

1980, and the other essentially “competitive” since the reforms. But Bianco favours the

continuity of an essentially “reactive” resistance, and still not very “proactive”, bearing

in mind that the spectacular increase in this resistance, which has risen from a few

thousand conflicts in the 1990s to 74,000 this year, is largely explained by the drop in

the efficiency of social control, compared with what it was in Mao’s time, and by less

severe repression, and does not in any way reflect greater impoverishment among the

peasants.

11 Lastly, Bianco reflects on present-day changes and on early indications, perhaps, of

politicisation. But he seems content to sum up with the judgement that closes his book

on page 493 : “The peasants are still not ready to take aim at the government . . .

Neither will they act as a reserve force for the city dwellers, whom they envy and

detest, and who despise them. City dwellers—and, in particular, intellectuals—are no

more eager than the Party leadership for a democracy that would give majority rule to

the peasants. This would continue to be the case for several decades to come, until a


90

still more massive rural exodus may settle once and for all the migrants and their

descendants in the cities”.

12 In exact conformity with this pattern were the recent serious incidents in Guangdong

province when peasants were thrown off their land with derisory compensation (and

have still not been allowed back). Thus, what do we observe in the village of Dongzhou,

in the sub-prefecture of Shanwei, where the police killed between three and twelve

demonstrators and established something like a state of siege ? Essentially, a strong

continuity with the uprisings of the last century : the demonstrators progressed from

peaceful behaviour, burning incense and kowtowing to the representatives of

authority, to extreme violence when no one would listen to them. Moreover, the

authorities sent to prison the local deputy police chief who apparently ordered his men

to open fire, while standing firm on the decisions that had prompted the

demonstrations. We should remember that this was quite close to Honghai wan,

formerly know as Bias Bay, a favoured haunt over decades past, of fearsome pirates. We

hear that reinforcements for the demonstration came hurrying in from the

surrounding area and especially from Lufeng. It would be hard not to think of those

peasant unions of Haifeng and Lufeng organised by Peng Pai ; or of the terrible Soviet of

Hailufeng where, during the winter of 1927-28, the forces of repression and the rebel

peasants vied with each other in horrific acts of cruelty, to be duplicated during the

Cultural Revolution. In this way one can understand a little better the nervousness of

the forces of repression and the unwonted boldness of the 300 peasant activists who

were defying them. Alternatively, one might rather pick out the new aspects of this

conflict : the demonstrators sending digital photos to the Hong Kong newspapers, the

presence of journalists assuming greater importance because the World Trade

Organisation was about to meet in Hong Kong, and the protest against the construction

of a coal-fired power station being accompanied by ecological considerations arising

from the pollution of a nearby fishing lake. Only the future can reveal whether these

peasant protests over the past year or two have ushered in a new era. And whether

Bianco will have to revise his conclusion.

13 For the time being, Jacqueries et révolution helps us not only to understand the history of

the Chinese peasants during the last century, but also to evaluate the present-day

uprisings of the Chinese peasantry, confronted by globalisation and the contradictions

of the harsh yet spectacular industrial revolution now in progress.

NOTES

1. Politique étrangère, 1968.

2. Jean Chesneaux (dir.), Mouvement populaires et sociétés secrètes en Chine aux XIXe et XXe

siècles, Paris, Maspéro, 1970.

3. Cambridge History of China, Vol. 13, 1986, pp. 270-328.

4. M.E. Sharpe, Armonk, N.Y.

5. Paris, Seuil, 2002.


91

6. Berkeley University Press, 1986.

7. Paris, Editions de la Maison des Sciences de l’Homme, 2001.

8. Paris, PUF, 1996.


92

Peter Hays Gries, China’s NewNationalism. Pride, Politics andDiplomacyBerkeley & London, University of California Press, 2004, 215 p.

Gary D. Rawnsley

“This only is denied to God : the power to change

the past”

Agathon

“Though God cannot alter the past, historians

can”

Samuel Butler

1 I read China’s New Nationalism in one sitting having re-read Iris Chang’s Rape of Nanking

(Penguin, 1997) the day before. Although a coincidence, my timing was fortunate. Peter

Hays Gries’s superb survey of Chinese nationalism is an indispensable complement to

the (not always fairly) criticised Chang. Gries’s discussion of Rape of Nanking helps

readers to put the book in a context that is based on the history of Sino-Japanese

relations and what appears as an unyielding struggle for status in Asia. He also

discusses the academic community’s disapproval of Chang, and rushes to her defence

by explaining : “Chang never claims to be a historian ; she is a sincere young woman

enraged by what she has learned about the atrocities of December 1937” (p. 84).

However, instead of examining the details of the debate, Gries is more concerned with

how what he refers to as “the Rape of Nanking sensation” provided “an opportunity for a

public contest between Chinese and Japanese narratives of the past before a jury of

Western opinion. Thus, two projects are intertwined in victimization narratives :

quantifying the pain and presenting the Chinese case to the world” (Ibid.). The book’s

research is driven by a desire to understand the origins of this narrative and explain

why the discourse of humiliation contributes to Chinese self-identity, identification of

“the other”, and ultimately the importance of nationalism in Chinese politics. This is a

very recent development : Gries reveals that the discourse of humiliation—the


93

narrative of victimization—challenges the heroic “victor narrative” of history that

dominated the first three decades of post-revolutionary China.

2 The aim of the book is deceptively simple : to offer readers an opportunity to engage

with the usually neglected Chinese perspective on Japan and America and their

relations with the Middle Kingdom. By careful research in multiple Chinese media,

Gries realises his goal through the prism of nationalism, here defined as the ideology of

the fourth generation leadership. China’s nationalism, like its practice of socialism, is

far from doctrinaire. Rather, China’s nationalism is essentially pragmatic and evolves

through interaction with the international community. As Gries reminds us, the

making of foreign policy does not occur in a vacuum, but is constrained by the

behaviour, interests and ambitions of other actors in the international system. Gries’s

most significant contribution is in recognising that the Chinese people themselves are

gradually asserting their power, using the nationalist discourse as a way of expressing

their own ideas and emotions to the Chinese leadership and the outside world. He is

critical that the west has too often regarded structures of political power as the sole

authorities that can define Chinese nationalism and determine how it might be

expressed. To prove this novel idea, Gries carefully analyses public reaction to two

critical events of the past five years : the 1999 American bombing of the Chinese

embassy in Belgrade, and the collision of an American spy plane and a Chinese air-force

fighter in 2001. His conclusion is persuasive : that the eruption of popular nationalism

among Chinese around the world that so enraged the Americans was not engineered by

the leadership in Beijing, but were the spontaneous outpouring of anger. “The Western

press’s insistence that a diabolical Communist elite manipulated the Chinese protestors

tells us more about ourselves than about what actually happened in May 1999” (p. 133).

Gries argues that contrary to Western opinion, the Chinese authorities feared these

outbursts because they epitomised the Communist Party’s gradual loss of control over

nationalist discourse.

3 Less convincing is the following claim : “The Chinese people are demanding a say in

nationalist politics : the fate of the nation is no longer the Party’s exclusive dominion.

Western policymakers should also recognize that because the party’s legitimacy now

depends upon accommodating popular nationalist demands, the Foreign Ministry must

take popular opinion into account as it negotiates foreign policy” (p. 20). This is a

rather bold claim. We can accept that the anti-American rhetoric suggests a renewed

popular activism that is embedded in nationalism, and there is evidence that the

Chinese political elite were forced to respond to this nationalist mood. However, this

does not prove that public opinion now plays an important role in formulating and

conducting foreign policy, and Gries needs to provide more evidence to support this

claim.

4 Most engaging are Gries’s insights into Chinese “face”, though he is careful to impress

upon his readers that “face” is a universal, rather than oriental concept. The discussion

takes some surprising turns. Gries reveals that the Chinese were unconcerned with

Samuel Huntington’s bizarre argument that the world is facing a “Clash of

Civilizations”. (Gries is not alone in believing that “Neither the structure of the world

system nor the cultural differences between China and America make conflict between

China and the United States inevitable” (p. 140). The same also applies to Islam, rarely

separated from Al-Qaida and too often treated as a homogenous civilisation). Instead,

the Chinese were delighted that the West had finally recognised that their status


94

deserved elevating, even if it meant they were now perceived as a substantial threat to

world peace. Similarly, Gries contrasts the enduring Chinese love affair with Henry

Kissinger and their suspicion of Richard Nixon. Kissinger is courted as an intellectual

equal to the Chinese (though, ever the fawning diplomat, Kissinger claims Mao an

intellectual superior). In contrast, Nixon is admonished as weak because he was forced

to open relations with China supposedly against his will : “Because face is a zero-sum

game, China’s win [in entering the UN in 1971] must be America’s loss, and American

humiliation at defeat must be represented by Nixon’s red-face fury” (p. 63). We can

argue over the historic detail, and there is every reason to challenge the Chinese

interpretation of these events : what is important is that, right or wrong, “Dissing Dick”

and “Hugging Henry” are part of a Chinese narrative that has been carefully

constructed to reinforce “face” and restore nationalist pride in the Middle Kingdom.

5 However, the Chinese reserve the full force of their national venom for the Japanese.

Anyone familiar with Chinese history is aware of the bitterness that continues to

underlie Sino-Japanese relations. (In Wu Nian-zhen’s film, Buddha Blessed America, set in

1960s Taiwan, one of the main characters played by Lin Zheng-sheng casually dismisses

the Japanese by saying they are not really Asian anyway.) China’s defeat in the Jaiwu

war, resulting in the Treaty of Shimonoseki (1895), was more a humiliation than the

Opium Wars because “little brother” Japan had beaten “big brother” China : “The loss

of national face was even worse than defeat itself. Because Japan is depicted as having

caused the public loss of national face, anger directed against Japan thus assumes a

moral legitimacy and is not just a base desire for revenge” (p.72). The Rape of Nanking

(itself a symbolic term), and perhaps more importantly, Chinese discourse about the

events of 1937 (and about comfort women, the need for Japanese remuneration, the

demand that Tokyo issue an official apology for the atrocities committed in China, etc.),

further fuelled Sino-Japanese antagonism and helped to define Chinese in relation to

“the other”. Clearly, history, the interpretation and re-invention of the past, can have

an enduring effect on the national soul ; the Chinese have a particularly long history on

which to draw.

6 China’s New Nationalism is a readable analysis of a very important issue in Chinese

politics with far reaching potential consequences for the future of the political system.

By reminding us that the way we see ourselves and others does matter in international

relations, Peter Hays Gries has made an invaluable contribution to the scholarship on

Chinese identity, nationalism and foreign policy.


95

Yasheng Huang, Selling China :Foreign Investment during the ReformEraNew York, Cambridge University Press, 2003, 406 p.

Sandra Poncet


Translated from the French original by Jonathan Hall

1 Through his study of the structure of foreign direct investment (FDI), Yasheng Huang

offers the reader a fresh analysis of China’s economic reforms throughout the 1990s.

While acknowledging the beneficial effects of such investments, he distances himself

from those works which emphasise China’s economic successes. His argument focuses

on the costs of the reforms. In his view, the way in which FDI operates in China is more

a reflection of the country’s institutional weaknesses than of successful economic

performance.

2 The author considers the rapid expansion of FDI in China as due to the failure of the

reforms to ensure national economic integration and to increase the efficiency of

enterprises. By favouring inefficient state enterprises, the government has deliberately

(by legal and financial means) created an environment that encourages a

disproportionate expansion of FDI. FDI far exceeds the levels that might be expected

from the liberalisation process itself or from national economic fundamentals. It plays

a much greater role in China than elsewhere, participating in privatisation measures to

an extent denied to Chinese firms. Huang’s argument is categorical : if the government

had not systematically avoided the privatisation of the state enterprises and blocked

the development of local private firms, the beneficial effects commonly attributed to

FDI (particularly in imported technology) could have been achieved with lower levels of

foreign investment.


96

3 This original perspective is developed through six remarkably cogent chapters, in

which the author shows exemplary restraint in expounding his thesis. His arguments

are clearly defined, while he emphasises their limitations and discusses alternative

hypotheses that are carefully presented before they are tested against the facts.

4 His argument gives primacy to the aims and the constraints upon the Chinese

enterprises, considering these to be the major factors behind the rapid expansion of

FDI. This view of demand contrasts with established views of demand, understood in

terms of market access, competitive production costs, or cultural factors. Huang argues

that the massive inflow of FDI is more a response to institutional distortions than to

competitive opportunities and market dynamics.

5 Huang’s thesis is built upon five anomalies in the Chinese situation, which he identifies

in the introductory chapter. The first of these is the disproportionate reliance of China

on FDI. Secondly, the simultaneous rapid growth in the transfer of property rights and

the drastic reduction in contractual agreements between Chinese and foreign firms is

completely unprecedented. Thirdly, Huang emphasises how unusual it is to find export-

oriented labour-intensive industries dominated by foreign capital. Traditionally, there

is a preference for contractual agreements in this area. The fourth peculiarity concerns

the dispersal of FDI across different regions and sectors of the economy, as opposed to

the concentrations of capital to be found elsewhere. Finally, the relatively small sums

involved in FDI projects, and the disproportionate participation of small and medium-

sized investors, run counter to both the forecasts and international practice in general.

In his view, these anomalies suggest that FDI in China follow a different dynamic from

the generally recognised norm.

6 Having dealt with the different possible explanations (insufficient statistics, potential

demand, low production costs), and having outlined his own analytical approach in the

second chapter, Yasheng Huang attributes these unprecedented features to three

specific institutional characteristics of the Chinese economy. In chapters 3, 4 and 5

respectively, these are defined as the distortions in the allocation of resources due to

the financial system, the discriminatory practices arising from a legal system

unfavourable to private enterprises, and the fragmentation of the economy caused by

restrictions on the movement of goods and capital between the regions.

7 The third chapter gives a precise description of the negative consequences of the laws

and policies which favour state over private enterprises. His detailed account of the

costs involved in the biased allocation of resources to inefficient state enterprises is

very instructive. The consequences of this discrimination against private enterprises

are the underdevelopment of private businesses, the low output of the state

enterprises, and proliferating miniaturisation.

8 The next three chapters show the links between these distortions and the five peculiar

characteristics of Chinese FDI. They examine in turn how the constraints weighing on

the private enterprises (in the form of credit limits and restricted access to the export

market) and on the state enterprises (in the form of governmental exactions and

impositions of excess labour), in conjunction with the fragmentation of the economy,

have pushed Chinese firms into accepting control by foreign capital.

9 The rigorous clarity of exposition in Huang’s work deserves the highest praise. His

argument is based on case studies from different economic sectors, namely the

automobile industry, electrical goods and clothing. These examples allow the reader to


97

become familiar with the perverse effects on competitiveness brought about by policies

deliberately favouring state enterprises.

10 Nonetheless, two limitations could be pointed out. Firstly, although the author’s tone

remains relatively neutral throughout most of his argument, his language loses its

objectivity towards the end, when he throws himself into a violent denunciation of

official ideology. He believes that the ideological commitment to preserving socialism is

the only explanation for the refusal to privatise, and for the distorted allocation of

resources. This means that he rejects such alternative explanations as the need to

preserve social stability and the political system, or to maximise fiscal receipts, giving

credence only to nervous ideological reaction by the authorities.

11 Recent developments clearly contradict this view. The reforms of ownership in the

state enterprises underwent considerable advances in the 1990s. The authorities

proceeded to sell a number of state enterprises. Admittedly, these were small and

medium-sized ones, but it is nonetheless the case that the share of publicly-owned

enterprises in overall production fell rapidly, in favour of enterprises based on

increasingly diversified kinds of ownership, such as the limited liability companies,

enterprises of which the staff are major shareholders, and completely privatised state

enterprises. Not only do these developments undercut Huang’s view of the authorities’

categorical refusal to privatise, but above all they point to the second limitation to his

arguments. Although he believes that the deepening of the reforms will lead to an

improving situation for the private sector, and to a reduction of the role played by FDI,

his argument does not allow the reader to grasp the speed of these developments. The

main source of his data is the third industrial census taken in 1995. Although his report

on the situation reflects that period very accurately, it is now rapidly becoming

outdated.


98

Laurence J. C. Ma and Fulong Wu(eds.), Restructuring the Chinese City :Changing Society, Economy and SpaceLondon and New York, Routledge Curzon, 2005, 283 p.

Valérie Laurans


Translated from the French original by Jonathan Hall

1 This collection of articles edited by Laurence J. C. Ma1 and Fulong Wu2 is one of the first

publications from the dynamic China Urban Research Network. There are seventeen

contributors, mostly Chinese, who are geographers, resource managers, or

anthropologists working in universities in the United States and Hong Kong, and in the

Xi’an institute. They tackle a wide range of topics, such as the management of urban

development, the real estate market, the architectural environment, the impact of

industrial restructuring on urban spaces, the ways in which business quarters operate,

and the transformation of residential areas and housing. The fourteen separate

contributions share a common ambition, to update knowledge in the United States

about urban development in China since the start of the reforms. They raise four main

questions : 1) By what means were the market mechanisms set up in the main coastal

cities, and how has this affected the use of urban space ? 2) What is the role of

government, or what might be its role, in land management and in providing a judicial

framework for the market ? 3) How do the long-term residents view the changes in

their cities ? How is a sense of local identity recreated ? 4) What is the extent of the

social divisiveness brought about by the new segregation of residential areas ?

2 This volume challenges the accepted view that Chinese cities are becoming increasingly

westernised. It proposes instead a more nuanced view of the emergence of complex

cities, which requires a new theoretical approach to urban reorganisation in China.

According to the authors, the Chinese economic reforms cannot be summed up as a


99

simple transition from a planned to a market economy. The interest in these studies of

the new urban spaces lies in what they reveal about the way the different factors

behind the changes work together. The authors reject overhasty conclusions which

assert that China’s cities are being Americanised, merely on the grounds that

commercial centres are multiplying, gated communities are appearing, car use is

increasing, and the cities are expanding. These changes need to be understood in the

framework of an enquiry into the link between urban formations and the forces

producing them. In their view, the impact of globalisation, which is an extraneous

factor, is not sufficient to explain the ongoing changes in the cities. On the contrary, we

are witnessing the simultaneous activity of many forces, but the determining character

of these internally generated factors is all too often overlooked. There is therefore no

possible comparison to be made between the current transformation of China’s cities

and the development of urban centres in the West. How, then, should the restructuring

of Chinese cities be described ? To answer this, they invoke the concept of cities in

transition. However, this is not patterned along the same lines as its economic model,

which usually suggests a convergence of socialism and capitalism in the movement

towards a market economy3. The transformations in China’s cities remain incomplete

and unfinished. They tend towards multiform combinations and hybrid modes of

operation, which by their very nature cannot be defined in advance. Because of this,

the authors insist at length, both in their introduction and in their conclusion, that

attention must always be paid to the differences between China and the West in terms

of their socio-economic and their historical and political contexts. Before plunging into

new interpretations, the research scholars in their various fields are urged to forge new

theoretical tools (from criteria for selecting facts to analytical apparatuses) distinct

from those applied in the West.

3 The most satisfactory response to this challenge seems to come from the macro-

geographical studies which adapt the theory of comparative scales to interpret the

administrative hierarchy of urban spaces in China4. The analysis of the phenomenon of

illegal constructions departs considerably from expectations based on European post-

communist states, and suggests a situation comparable to that of other emergent

capitalist countries5. The most rewarding lines of argument seem to me to be those

arising from a close scrutiny of the regulations (such as those governing the real estate

market6), precise empirical studies (migrant housing7 or the collective imaginary

creating the various sites in Shanghai8), and the similarities between China’s coastal

cities and the urban centres in the west of the country9. Since the sale of land rights is

at the heart of China’s rapid urban expansion, that is where an analysis of market

mechanisms becomes most relevant.

4 The management of needs created by the massive influx of low income workers also

brings up the key issue of social equity. In this respect, nostalgia for old Shanghai is

frequently evoked, both in Shanghai itself and in Taiwan. But the spatial segregation

that is usually denounced under the cover of this nostalgia is not reducible to the way

in which certain historical quarters are turned into museums. The imaginary at work in

constructing the city’s new public areas reinvents on a larger scale the structures

inherited from the past. To study this social imaginary is to be able to identify the

different types of gentrification which contribute to the overall remoulding of the city.

And if the current development of Xi’an (a leading interior centre of production before


100

the reform period) is analysed in the light of the transformation of the coastal cities, it

reveals significant parallels between these comparable situations.

5 Although it is formulated with a number of theoretical caveats, these two authors’

enquiry draws mainly on debates concerning the physical consequences of the process

of accumulation in capitalist societies. The main thrust of their reflections is provided

by their analysis of neo-liberal market mechanisms10. But if one sets out to show that,

despite appearances, China is not developing towards a kind of Westernisation, is that

not already to descend to a rather facile criticism of the uninformed ? (Or perhaps the

authors consider the latter to be particularly common in the United States, which

might justify their project ?). The theoretical approach followed by this volume

dismisses any comparison of China with the West, and it seeks to forestall such

superficial interpretations. However, the conceptual approach to the reality of China

relies on references to Western experience, whose recurrence in China must be either

confirmed or disconfirmed. This procedure leads to a double contradiction. On the one

hand, it runs the risk of obliterating the specificity of the very processes that the

different research papers set out to emphasise. On the other hand, it is overhasty in its

own theoretical analysis of urban development in China. The exploration of this vast

field of endeavour is still at an early stage, and the concept of “cities in transition”

needs refining. The set of problems outlined here frequently err in the direction of an

excessive preoccupation with the effects of market mechanisms. In some cases they are

weakened by referring more to phenomena which affect Western countries

(particularly the United States) than by basing themselves on observations of the

reality in China. Some chapters repeat well-worn themes like the proliferation of

business centres11, and residential mobility12. Others take the opposite approach, and

simply describe or enumerate concrete phenomena without any convincing account of

what is at stake in such issues as the unequal development of the urban areas of

Shanghai13, or the inequality in housing, from the workers’ villages to the

condominiums14. This can lead to disappointing conclusions, which sometimes verge on

simple banality.

6 Despite my reservations about the use of interpretive apparatus which are sometimes

ill suited to the Chinese context, this volume provides a good introduction to current

urban developments. Although some empirical chapters lack consistency and fail to

advance the book’s ambitions, by contrast others have the real merit of opening up still

unexplored terrain.

NOTES

1. Laurence J. C. Ma is a geographer and emeritus professor at Akron University, and a

director of the Urban China Research Network, Albany University, U.S.A.

2. A Reader at Southampton University (U.K.), Fulong Wu was the organiser of a recent

international symposium entitled “Continuity, Transition, and Transcendence : Urban


101

Reform and Development in China”, which was held in London in August 2005 at the

Royal Geographic Society, in collaboration with the British Institute of Geographers.

3. Cf. p. 260, where “transition” is defined as a process of change from one state or set

of circumstances to another without this implying any “convergence” or

“reconversion” towards a preconceived or predefined model.

4. Cf. Carolyn Cartier, pp. 21-38 ; Jianfa Shen, pp. 39-58.

5. Cf. Alan Smart and Wing-Shing Tang, pp. 80-97.

6. Cf. Anthony Gar-On Yeh, pp. 59-79.

7. Cf. Weiping Wu, pp. 222-242 ; Li Zhang, pp. 243-259.

8. Cf. Tianshu Pan, pp. 121-137.

9. Cf. Huaiting Yin, Xiaoping Shen, Zhe Zhao, pp. 155-174.

10. Cf. p. 276, which states that many Chinese urban formations resemble those to be

found in the West, but their underlying processes do not correspond purely to the logic

of globalisation. The restructuring of Chinese cities only partially reflects the activity of

shared neo-liberal trends. That is because the transition does not constitute a smooth

normalising shift (from socialism to free market capitalism), but rather one deeply

rooted in the “accumulation regime”, meaning extensive accumulation, or state-

organised industrialisation, as opposed to post-Fordist accumulation. Tracing this

transition to its roots makes it possible to get beyond ideological labels (socialism or

capitalism) and achieve a sharper insight into the complexity of the post-reform urban

restructuring in China.

11. Cf. Piper Gaubatz, pp. 98-121.

12. Cf. Si-Ming Li, pp. 175-191.

13. Cf. Tingwei Zhang, pp. 138-154.

14. Cf. Youqin Huang, pp. 192-221.


102

Christopher R. Hughes and GudrunWacker (eds.), China and the Internet :Politics of the Digital Leap ForwardLondon, New York, Routledge, 2003, 192 p.

Anthony Fung

1 This edited volume provides a very comprehensive picture for scholars who want to

“get their feet wet” in the area of information and communication technologies (ICTs),

covering infrastructure, technological development, security and bureaucratic

operations of the Internet, in China. The in-depth analyses focus on how political and

economic constraints—manifested in forms of legal control, economic policy, political

intervention and foreign policy—have shaped, limited and steered the development of

ICTs in China. A recent CNNIC report indicated that the total number of Internet users

in China has already exceeded 100 million, which is the second largest Internet market

in the world (behind the United States)1

. Given this figure and the potential revenues

that can be generated from this huge and growing market, this book provides a timely

and critical scholarly work for us to reconsider not only the consequences of China’s

globally-connected Internet hype, but also the forces that operate behind this

expansion. Understanding the latter will also practically enhance the growing foreign

investment in the hardware and software of ICTs in China.

2 The major argument made in the book is that developments of ICTs in China are greatly

dictated by the political system in China. For example, in his study of broadband, e-

commerce and e-government, Dai dissected the national, provincial and municipal

strategy of China, concluding that political considerations must overweigh economic

benefits when it came to telecommunication reforms in China. Wacker is more explicit

in explicating the PRC’s formal censorship and informal control over the Internet, and

that ironically it is the Western firms that supply the technological means for China to

exercise such political control. Obviously, while this kind of political analysis dissects

the power structure, a limitation is its general neglect of the process and impact of ICTs


103

on the public. To be fair, I think the authors have garnered some user data to

supplement their top-down analysis.

3 In consideration of the political economy of communication technologies in China, this

volume offers two thought-provoking views. First, Monika Ermert and Christopher

Hughes’ chapter on the nature of domain name relates China’s ICTs development to the

global geopolitical issues. Practically, this is a significant theme not only for China, but

also for Europe and other countries in which the technological backbones, standards

and languages of the Internet are highly dependent on the United States. Theoretically,

the analyses also broaden the perspectives of the book to cover external, global factors

that hinder the development of ICTs in China.

4 Second, the state’s implementation of new laws controlling the ICTs, media, foreign

investment, and management of joint ventures, was thought to be the PRC’s passive

response to its entry into the WTO. Although there are places in the book echoing the

view that these legal structures exist in the form of “weak” laws, barring foreign entry

rather than enhancing development of the ICTs, and thus regard the few successful

cases in China barely as “anomalies”, (for example, in Dai’s case study of Murdock’s

Phoenix, which the author would conceive as an exception to the game), this book in

general hints at a more advanced view of the state. While the former view probably

regards the state as passive policy maker, and thereby hindering the development of

ICTs and scaring investors overseas, the latter, newer view suggests that the state is

conscious of making “weak laws.” In fact, it is only under these loosely written laws

that China is able to define the situation case by case, exercise tighter control of the

Internet, and develop its ICTs with greater national security.

5 I have to point out that this politics-prior-to-economics argument is not entirely a

fresh idea in China studies. Scholars have long established the argument in China

media2

, and there are growing empirical studies that have confirmed the omnipotence

of the state in carving out a media empire3

.

6 There are also some micro contradictory viewpoints. While most articles seem to offer

their views from the political economy of the state, Zhang illustrated that different

state or semi-state organisations such as MII, SARFT and many other parties are

competitors in the lucrative market and simply take different attitudes over

converging business. Among all these state organs, clearly, some rank economic

interests over the state interest. While not refuting the overwhelming power of the

state, Wacker also indicates that the control of the ICTs in China could involve “a

complex interplay between the state, the key commercial actors, namely ISPs, ICPs and

the official media” (p. 73). It is these views within the analysis that make the arguments

more stimulating. The strength of all this exploration lies in probing circumstances in

which the political demands might be overridden by economic constraints, ad hoc

bureaucratic decisions and macro policy, to name a few. This drives readers and would-

be researchers to reconsider the complex, interdependent factors that affect the ICTs,

rather than reducing all technological development to politics.

7 In terms of the originality of the studies, the data and figures released in the book are

new. Those who can read Chinese materials can also easily acquire the research reports

and the cited original research articles on Chinese websites. Much of the authors’ work

is largely based on secondary analysis of these published data. Given the importance of

the impact of ICTs on worldwide business and the political world-order, there are many


104

up-front surveys on China’s ICTs by formal survey groups (e.g. CNNIC), private

consulting firms and the United Nations. These data will be out-of-date when new data

are published. This makes the book’s figures and data its most valuable asset.

8 A few similar works on the study of Internet development in China supply more

extensive first hand data on the problem. Zhang and Woesler recently provided a better

description of the development of Internet surveillance by citing cases and methods

applied by the government to control Internet users, websites and service providers4

.

Also, whereas the legal aspects are only mentioned briefly in a few chapters in this

book Nah, Wong and Seok’s book comprehensively documented technical and original

laws or regulations, economic and social issues specifically on e-commerce in China5

.

9 I would suggest that the main value of this book lies in its ability to synthesize the

secondary data and reinterpret it in new ways for the reader. For example, while

integrating Machiavellian views on how the state can dictate the development of the

Internet, Wacker weighed current studies and concluded that the resistance of the

people and the democratic potential of civic virtual space is an area that needs to be

explored. With repeated interpretation and integration of the literature, the reader

gets well acquainted with different views and is inspired with new approaches and

perspectives regarding ICTs in China.

10 Lastly, because of the numerous and diverse viewpoints, I would argue that the value of

the book extends beyond the development of ICTs in China and includes those factors

governing the growth of the Internet which parallel other communication technologies

such as the fax machine, the mobile phone, digital television, and so on in China.

Moreover, ICTs are not just technologies per se ; the politics and economics of ICTs

epitomise the dynamics of the political economy of the Chinese state.

NOTES

1. CNNIC, The 16th Statistical Survey Report on the Internet Development in China, July

2005, http ://www.cnnic.net.cn/download/2005/2005072601.pdf.

2. For instance, Zhao Yuezhi, “Transnational Capital, the Chinese State, and China’s

Communication Industries in a Fractured Society”, Javnost : the Public, Vol. 10(4), 2001,

pp. 53-74.

3. Michael Curtin, “Murdoch’s dilemma, or ‘What’s the price of TV in China ?’”, Media,

Culture & Society, Vol. 27(2), 2005, pp. 155-175. Anthony Fung, “Think Globally, Act

Locally : China’s Rendezvous with MTV”, Global Media and Communication, forthcoming.

4. Zhang Junhua and Martin Woesler (eds.), China's Digital Dream - The Impact of the

Internet on Chinese Society, London, European University Press, 2003.

5. Nah Seok Ling, John Wong, Seok Ling Nah, China’s Emerging New Economy : The Internet

and E-commerce. Singapore, Singapore University Press, 2001.


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http://www.cnnic.net.cn/download/2005/2005072601.pdf

Anru Lee, In the Name of Harmony andProsperity. Labor and Gender Politics inTaiwan´s Economic RestructuringCatherine Farris, Anru Lee, MurrayRubinstein (eds.), Women in the NewTaiwan. Gender Roles and GenderConsciousness in a Changing SocietyNew York, State University of New York Press, 2004, 196 p.Armonk, New York, Londres M.E. Sharpe, 2004, 390 p.

Marina Thorborg

1 Two episodes stand out from one of my last research sojourns to Taiwan a few years

ago.

2 Episode 1 ! With the factory owner in a textile factory in one of the export processing

zones we look at the large empty production halls while he tells me of a disappearing

work force. “Two years ago half of the work force left and the same happened again last

year. Next year I expect the same if I´m not allowed to import workers! Only R&D,

(Research and Development) and high-end products, such as suede clothes are left,” he

says with a sigh.

3 Episode 2 ! I am sitting in a hotel lobby in Taipei with an old Taiwanese friend of mine

and some of his colleagues, all male. It is almost 8 p.m. and we are having a drink.

Suddenly my friend turns to me and says “Why don’t you go and have a nap ?” “A nap,

why ? The evening has just begun!” I ask. “Well, you’re the only woman here and, in

addition, a Westerner, so you can’t come with us, my colleagues would never ever

accept it”. So this Taiwanese professor and his friends politely say goodbye to me and

leave !


106

4 Both books under review here deal with Taiwan´s rapid economic development and

how this development has built upon the hard, undervalued labour of young women,

just as it did in South Korea1

, and how with increasing diversification of the economy

more and more workers voted with their feet, leaving the least attractive jobs, those

with the lowest pay and the longest working hours, such as was typical of the textile

industry. This phenomenon occurred in Taiwan ten to fifteen years ago and is

beginning to happen in the Pearl River Delta in southern China´s Special Economic

Zones, and also first in textiles, and for the same reasons2

.

5 Anru Lee, in her dissertation turned book, has one of her chapters, “Between Filial

Daughter and Loyal Sister” already published in the other book under review here. This

chapter gives an excellent feminist analysis of how the unequal treatment of daughters

is hidden under the cover of the Chinese “corporate family”. This chapter on Taiwan is

an equivalent to Janet Salaff´s important work on working daughters in Hong Kong3

.

Both show the flexibility and adaptability in family structures that basically remain

strongly patriarchal and hierarchal benefiting sons at the expense of daughters.

Another chapter on “Guests from the Tropics”—also published in Nan Chow Lee´s book4

—deals with how, from the late 1980s, the ban on importing foreign workers was lifted,

while simultaneously Taiwanese entrepreneurs began to move their operations

overseas. This will explain the first episode above.

6 Rapid industrialisation in Taiwan contributed to an optimistic mood and helped to

explain why in Taiwan just as earlier in the United States and as well in Thailand a

notion of class-consciousness by workers had a hard time to develop. The ideology of

“Black hand becoming boss” (hei shou bian tou jia) meant that everyone working hard

enough could one day become a self-made man and boss himself. Therefore many

workers were prepared to endure a few hard years. A pervasive structure of small and

medium-sized enterprises made this seem even more likely. This ideal was for men

only. Research from around the world has shown the worst working conditions

precisely in small family-style enterprises, where young women in so-called light

industry did the most tedious work5

. So the place where many, hardworking young men

could aspire to be their own boss was also where exploitation of labour was greatest

and hitting young women more than men.

7 A central theme of Anru Lee´s work is the embeddedness of culture in capitalist

development.

8 Some other researchers have termed this East Asian development

“hypermasculinisation”, showing young, single women as the big losers and

questioning this “England-1840-model”, asking if this is “development” when large

segments of a population, particularly young women, are left out6

.

9 The same development and similar analysis can be found on women and export-

industrialisation in China showing a patriarchal and hierarchal society joining hands

with global capital to the detriment of particularly young female workers7

.

10 The anthology on Women in New Taiwan not only deals with women and gender roles

but as well includes two chapters on male roles with a chapter on “Carousing and

Masculinity ! The Cultural Production of Gender in Taiwan”, by Avron Boretz

explaining male bonding in all male groups in all classes of society where only paid

hostesses participate, showing a confluence of both Chinese and as well Japanese


107

patriarchal legacies, long traditions of sex segregation, and veneration for old age. A

woman in such a male group competing in singing and heavy drinking would upset the

rules of male bonding and be an embarrassment. Only paid hostesses for sexual

titillation would fit in. This will explain episode number two above.

11 This fits with what is aptly described as typical behaviour of unattached, young men in

strictly sex segregated, patriarchal societies in a new study called “Bare Branches” and

would according to it in other types of societies be regarded as immature, adolescent

conduct not fitting for mature, educated, and attached men8

.

12 The chapter on “A Bright Summer Day” by Yu-hsiu Liu in this anthology brings this

degrading of women to a logical conclusion by showing clearly that the film with this

name is more concerned with the structure of the film then with the murder of a

woman. Male relationships are more important and a man becomes a real man only by

killing a woman, with sex and killing starkly intertwined. Here Freud is used to the full

with some dubious explanations.

13 A most interesting chapter by Ping-chen Hsiung on “Sons and Mothers” is concerned

with the practical implications of filial piety, showing that with simple demography few

men were ever to practise it as they would most likely be in their teens or early

twenties when their parents passed away given the short life expectancy in traditional

China.

14 Hence only in exceptional cases did a son have to take long time care of his parents,

particularly his mother. Because of discrimination and frequent and dangerous child-

birth men were outliving women. This meant that this ideal was so much easier to

uphold as it only exceptionally had to be practised.

15 Murray A. Rubenstein in her chapter on “Lu Hsiu-lien and the Origins of Taiwanese

Feminism”—currently Vice President of Taiwan—shows how influential one person can

be, given the right personality and timing. Most often Anette Lu Hsien-Lien has been

ahead of her time and by being tolerant and all encompassing has encouraged diversity

and co-operation, which has given the Taiwanese women´s movement a head-start.

This could have been more stressed in this otherwise well-researched and well-written

chapter.

16 In the chapter on, “Women´s Liberation Under ‘East Asian Modernity’ in China and

Taiwan Historical, Cultural, and Comparative Perspectives” by Catherine S. P. Farris a

few mistakes are made. Firstly on the opening page modernisation is said to contribute

to changing traditional views on gender while latest research show that the main

change occurs in the transition from industrial to post-industrial society9

. On page 343

the main reason is not given for why the campaign for the new marriage law during

1950-52 ended. It was because of mass murder, often with the accomplishments of

cadres, of women wanting a divorce, meaning those the authorities wanted to help with

the new marriage law of May 1st 1950 instead became the victims.

17 Therefore a new campaign started on Women´s Day, March 8th 1953, promoting

harmonious families, which also of course furthered production, while a divorce would

cause land to be split and slow production10

. On page 366 labour force participation is

said to be the highest in advanced socialist countries, (if they still exist ?) while in

reality it was higher in Scandinavia and without the very negative side effects as in

socialist countries, such massive overwork by women or high accident rates11

. Posing


108

socialism against capitalism seems a bit outmoded, like asking the wrong questions

after socialism´s massive failure. In Scandinavia already those things exist that

socialism is supposed to give to women but has not usually delivered.

18 The short chapter on Feminist Art in Taiwan by Richard C. Kagan after a brief, but

informative introduction only four female artists are presented which feels like a few

more would essentially have substantiated the introduction.

19 Together these two books give a comprehensive introduction to women and gender in

Taiwanese modern development with some useful comparisons to China and some

highlights on the importance of culture in explaining which particular type of

capitalism evolves and shows how Taiwan and China though they have different

political systems still have a common culture of degrading women leading to similar

types of exploitation. Hence there would be a great cross-Strait learning potential.

NOTES

1. Marina Thorborg, Korea Program on Women, United Nations Industrial Development

Association, UNIDO, Vienna, 1991, 146 pp.

2. Juliette Li, “The Pearl River Delta migrant labour shortage” in CSR Asia Weekly, Vol.

1, Week 9, p. 2, and Mei Fong, “A Chinese Puzzle”, The Wall Street Journal, August 16th

2004, and “Labour shortage in Pearl River Delta”, www.amrc.org.hk/5210.htm, April

13th 2005.

3. Janet Salaff, Working Daughters of Hong Kong, New York, Columbia University Press,

1995.

4. Ester Ngan-ling Chow (ed.), Transforming Gender and Development in East Asia, New

York, Routledge, 2002.

5. Oxfam Hong Kong Briefing Paper, “Turning the Garment Industry Inside Out

Purchasing Practises and Workers´ Lives”, Oxfam, Hong Kong, 2004.

6. Stephanie Seguino, “Gender, Quality of Life, and Growth in Asia, 1970-90”, The Pacific

Review, Vol. 15, No. 2, 2002, pp. 245-277, and Lawrence Haddad, “Women´s Status !

Levels, Determinants, Consequences for Malnutrition, Interventions, and Policy”, in

Asian Development Review, Vol. 17, No. 1, 1999, pp. 96-131.

7. Pun Ngai, Made in China Women Factory Workers in a Global Workplace, Durham and

London, Duke University Press, and Hong Kong, Hong Kong University Press, “ 2005,

and Ching Kwan Lee, Gender and the South China Miracle, Berkeley, Los Angeles, London,

University of California Press, 1998.

8. Valerie M. Hudson, Andrea M. den Boer, Bare Branches Security Implications of Asia

Surplus Male Population, Cambridge, Mass., London, MIT Press, 2004.

9. Ronald Inglehart and Pippa Norris, Rising Tide ! Gender Equality and Cultural Change

around the World, Cambridge, Cambridge University Press, 2003.

10. Marina Thorborg, “Chinese Employment Policy in 1949-78 With Special Emphasis

on Women in Rural Production”, in Chinese Economy Post-Mao, Joint Economy


109

http://www.amrc.org.hk/5210.htm

Committee, Congress of the United States, US Government Printing Office, Washington

D.C., 1978.

11. Marina Thorborg, “Work and Unemployment” and “Women and Gender in the

History of the Baltic Region”, in Witold Maciejewski (ed.), The Baltic Sea Region Culture,

Politics, Society, The Baltic University Programme, Uppsala University, 2002, pp. 401-414

and pp. 431-444. Marina Thorborg, “Latvian Women in a Comparative Framework”, in

Marina Thorborg and Inna Bronislava Zarinna (eds.), Gender Equality in Latvia at the

Threshold of the New Millennium, Riga, Latvian Academy of Sciences, 2000, pp. 10-23.


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