Can Trump Use Chopsticks? Mock negotiating the terms of the U.S.-North Korea Summit

As one of the final activities of my Korean history classes I had students split into two groups, one playing the United States and another playing North Korea, to negotiate the details of the U.S.-North Korea summit.

There were several questions on the table: Where will the summit be held? When? For how long? What will the schedule look like? What type of social activities will be held? How will the photo ops be arranged? Both sides also had to consider where they wanted to dig in, where they could compromise, and when to float an idea they were not attached to in order to give the appearance of compromising. They also had to mull over how the other side would answer these questions.

The North Koreans led off by inviting President Trump to North Korea and proposing that the summit be held in Pyongyang. Of course, there is precedent for this invitation in the final days of the Clinton administration. The U.S. side, not wanting to look like a supplicant, nixed that idea and proposed Seoul. The students playing North Korea were concerned about safety and countered with the DMZ and the Peace House. That turned out to be acceptable to both parties.

The U.S. side also had Switzerland and, interestingly, Vietnam on their list of potential locations. They were also prepared to vigorously object to a summit in China.

A quick agreement also came on the length of the summit. The two sides decided that the U.S. delegation should arrive on Friday May 11 and substantive meetings would take place on May 12 and May 13. The first social activity, a basketball game, would take place on Friday evening. It was a great idea, and one I hadn’t thought of, but we didn’t get too much into the details: Where would it be held? Who would play? After all, it is the middle of the NBA playoffs. Maybe this is where Denis Rodman comes in and puts together a team of retired NBA all-stars.

The negotiations were going quite smoothly until we got to the question of optics and stagecraft. Then everything broke down. The North Korea side really wanted the first photo-op to be Trump approaching Kim Jong-Un who was waiting to receive him. And they wanted Trump to bow. They were also concerned, given the recent Macron visit to the United States, about excessive touching. No plucking dandruff off the shoulder of Kim Jong-un! The U.S. side, naturally, could not tolerate such a protocol. Tensions simmered. A related questioned emerged: would Melania Trump and Kim’s wife, Ri Sol-ju, be with their husbands when they first met? At one point, the North Korean side actually accused Jimmy Carter of poisoning Kim Il-sung (who died soon after the former President’s visit to North Korea in the summer of 1994). It seemed like a good time for a “smoke break”; the North Korean delegation went to the hallway for a few minutes. When they returned, the U.S. proposed a compromise. No person would approach the other and there would be no bowing but the first meeting would be an exchange of gifts. Both first ladies would attend.

But the debate about optics did not there. When discussing the meals, the North Koreans really wanted the photo op of Trump using chopsticks to eat noodles. From their point of view, it was a non-trivial point. They wanted the U.S. president to show respect for Korean culture.

Both sides had some back and forth over how many people would be allowed in the room during negotiations. In what will surely be a high-stakes summit, this might be one of the key questions. The students playing North Korea wanted to limit the total number of people each side could have in the room. It is an area I wished we could explore more. Is the incentive from the North Korean point of view to keep the meeting small—Kim, Trump, translators and very few select aides—or is it to expand the number of people at the table?

At this point we were quickly running out of time. Negotiations were not complete, but there was another class gathered outside of the door.

Besides being very impressed with my students, who had put a lot of thought into the negotiations, the activity presented a stark reminder of just how much work there is do—in terms of strategy, organization, and optics—to make the summit happen and how, in a moment, it might fall apart.

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The U.S and North Korean negotiators

 

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A Class Period Gone Awry in a Wonderful Way

When I walk into the classroom, I have a good idea of how I want things to go. I’ve planned out the different portions of the class, thought a lot about pacing, know what points I want to emphasize, and where I want the class to end up.

And then there are the times when a 75-minute class veers in a completely different direction. Last week I had one of those days.

This semester I am teaching a class under the “Great Personalities” banner at the University of Nevada Las Vegas. Other instructors teach courses on Lincoln or comparing and contrasting Hitler, Stalin, and Mussolini. In my class, really modern Korean history in disguise, we are examining the lives, legacies, and offspring of Syngman Rhee, Kim Il-sung, and Park Chung-hee. We recently covered the Korean War and I set aside one day to discuss the local, national, regional, and global effects of the conflict.

I planned on using a technique to spur discussion that I borrowed from Mary Beth Norton after reading her article on class participation in the American Historical Association’s Perspectives magazine. She asks students to provide an answer to an open-ended question and defend their position to their classmates. The class then votes. The answer receiving the lowest number of tallies is eliminated and the process begins again until there is a winner.

We began discussing the effects of the Korean War in this way until one student made a remarkable comment: “If I were going to write a book on the Korean war and its effects, I would call it Nobody Wins.”

That is when things went sideways, but in a really good way. Instead of continuing on with the exercise described above (sorry Mary Beth!), we started to discuss how the class would write a book about the effects of the Korean War. Was Nobody Wins the best title? Should we split the book into sections or parts? What chapters should come first and why? Should the first chapter deal with something very local and personal—the separation of families—or should it be something much more global like the role of the Korean War in the broader Cold War? What would the structure of the book say about our interpretation?

I think framing the discussion this way helped spur so much discussion because it encouraged students to think as both a writer and a reader. It also allowed them to think about the complexity of historical interpretation in a low-stakes way.

One option for raising the stakes would be to take a brainstorming session like this and make it a final project, with students contributing the different “chapters” and the group as a whole working together on an intro and conclusion. At the end of the semester, the class would have its own book on the Korean War, or any other subject.

I’m still hoping to carry Mary Beth Norton’s idea all the way through a class, but even using the technique as scaffolding allowed us to take discussion in a very productive, though very different, direction.

And, just to conclude, we decided on the title Nobody Wins?—adding the question mark was quite sly, and maybe even a bit too clever, but also got the students thinking about how punctuation marks really matter!

 

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Solve for X: Math Competitions in the People’s Republic of China

Americans can’t stop thinking about the Chinese education system. U.S. politicians hold it up as a model; parents worry that their kids are falling behind Chinese students in science and math; Amy Chua, author of Battle Hymn of the Tiger Mother, tells American parents that their children are indeed falling behind. Even worse, the parents are to blame; they are too lenient. Most recently, Zhao Yong, Professor of Education at University of Oregon, insists that all these people are wrong. In his book, Who’s Afraid of the Big Bad Dragon? Why China Has the Best (and Worst) Education System in the World, Zhao paints a much more skeptical picture of the test-driven and competition-oriented Chinese education system. China has the best system because of its high marks of tests but the worst because these scores “are purchased by sacrificing creativity, divergent thinking, originality, and individualism.” It is just the latest salvo in the long history of the education wars in the United States.

There is an important question in the background of these debates: Should the U.S. education system be more like China’s (or South Korea or Finland)? Framing the question in this way also places limits on how we examine education in China. If we forgo this question, other topics and avenues of inquiry emerge. In fact, one small aspect of the history of education in the People’s Republic of China—math competitions—can help us think about continuities across the 1976 divide in Chinese history.

Math competitions started in the Soviet Union and the First International Mathematics Olympiad was held in Romania in 1959. It was a creature of the Cold War. China did not participate in these international competitions but developed its own system under the guidance and leadership of Hua Luogeng, a precocious math talent who only had a few years of primary education (the Ramanujan of China). In the early years of the People’s Republic of China, Hua became involved in mathematics education.  Held in large cities throughout China before the Cultural Revolution, these math competitions had several goals: to encourage students to study mathematics, to pick out those with mathematical talent that could be nurtured in order to provide the country with future scientists and engineers and to spread math education to the masses. The tensions in the PRC are evident in these competing and perhaps contradictory goals. The idea of fostering an elite but at the same time developing the masses as well as the political imperative that mathematical talent should serve the state in a practical way rather than obsessing about overly theoretical research.

The actual administration of the competition sounds very familiar. Held in the late spring of early summer, students had to be recommended by their schools. Each school in Beijing was only able to allow a certain percentage of their students in the final two years of high school to take part. Also, the group in charge of the competition, the Beijing Mathematics Committee (Beijing shi shuxue weiyuanhui 北京市数学委员会) repeated each year that the student had to take part willingly and could forced. Students from vocational schools, though, could not compete.

The Beijing Mathematics Committee was very concerned about putting additional pressure on students. The organizing committee was involved in a protracted struggle with high schools over how students were selected and prepared to take part in the competition. In the letter announcing the 1963 event, the Beijing Mathematics Committee said that in selecting students, high schools should not organize a special test but instead make choices based on a student’s regular performance. Once picked out, students were not supposed to undergo any other additional training or take part in specialized preparatory classes. This increased the burden on students and teachers and went against the spirit of the competition.

There were significant rewards for doing well in the competition. First and second prize winners received cash while third prize winners were given a mathematics education book. More significantly, the top three finishers could also be admitted to university without taking the college entrance exam. This was part of the system of college admission known was baosong (保送) that is still in practice today.

The Cultural Revolution put an end to math competitions but they emerged again the early 1980s and flourished in the 1990s and 2000s. Chinese students participated in International Math Olympiads and hosted the 1990 competition was held in Beijing. Just as in the period before the Cultural Revolution, performing well in local, regional, national and international math competition could secure a spot in university without taking part in the college entrance exam. The incentives only added to the popularity of Math Competitions and helped make the Math Olympiad “hot” (aoshu re 奥数热), which the government is now trying to dampen by placing restrictions on who qualifies for the baosong system based on stellar performances in math competitions.

The most significant and in some ways surprising point about math competitions is not necessarily about the math but about the nature of competition in the People’s Republic of China. Throughout the 1950s and 1960s there were all kinds of competitions—to produce the most material, to have the safest work record, to be the best at a sport, to be the best at math—and in the period after Reform and Opening till today competition in all forms is one of the defining characteristics of life in China. Looking more closely at the nature of these competitions is perhaps one way to move beyond the 1976 divide in Chinese history.

*For more about math competitions in the 1950s and 1060s see Beijing Municipal Archive file 010-002-00424

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Mao and Now: The 1976 Divide in Chinese History

When you exit the Tiananman West subway station in Beijing and walk north for ten minutes you arrive at an intersection. If you go left and proceed one hundred meters you reach a gate of Zhongnanhai, the compound where the top Chinese leaders live and work, just to the west Forbidden City. If, instead, you turn right at the intersection and walk one hundred meters, as I have done for much of the past year, you arrive at the west gate of the Forbidden City, home to the First Historical Archives of China, which holds a vast collection of material from the Qing Dynasty.

So much of Chinese politics takes places within the walls of Zhongnanhai. The factions, interests, personalities, jealousies all exist behind the veil. We know they exist and can speculate about them but we are always on flimsy foundations.

When the veil gets lifted, even just a little, and we can move from those flimsy foundations to firmer ground, it is important to pay attention. Perhaps one of the most significant pieces of this calendar year, and one that give us tremendous insight into the current political climate comes from Joe Esherick, professor emeritus of history at University of California San Diego, and the description of his back and forth with censors regarding changes to the Chinese-language version of his book Ancestral Leaves: A Family Journey Through Chinese History. As Esherick relates, there were a number of objections to his statements about various ethnic, religious and political issues.

However, the most interesting pushback from the censors came with Esherick’s treatment “of the era of economic reforms that followed Mao’s death in 1976 and took off under Deng Xiaoping in the 1980s.” In the text he created a sharp distinction, characterizing the Reform of Opening period after the death of Mao as the moment that laid the groundwork for the Chinese economy today where “a vibrant, often corrupt crony capitalism” drives the economic growth at a feverish pace.” This line did not go over well; the censor insisted that it could not be included. Esherick realized he was unlikely to win this battle because “the sharp distinction I was making between the two eras of Chinese socialism was exactly the opposite of the message of continuity that the current regime of Xi Jinping has mandated.” That is a very significant sentence.

In studying history our first inclination is to mark change and discontinuities. Then, after the passage of time allows for new perspectives and as more research materials become available historians focus more on continuities. Just because something changed does not mean that everything changed. Our understanding of the history of 20th century China follows this pattern.

First, let’s look at the Xinhai Revolution and the end of the Qing Dynasty in 1912. As Michael Gasster noted in a article from long ago, historians went back and forth on the importance and meaning of this event that ended centuries of imperial rule in China: first it was “the revolution, then ‘no revolution,’ then ‘something of a revolution,’ and now back to ‘not much of a revolution’ and one of ‘paltry achievements.’” [i] In a more recent analysis, Rana Mitter, historian at Oxford University, observes that the Xinhai Revolution “has achieved the most historically unusual of results: its meaning has become less, and not more obvious as time has time gone on.”[ii] Except that the result is perhaps not that unusual. We are inclined to see discontinuities before continuities. Continuities, which come later, render earlier judgments less certain.

A similar dynamic is at work with the establishment of the People’s Republic of China (PRC) in 1949. The creation of the PRC was first seen as a rupture, a break, a divide, from the era of rule by the Guomindang (GMD). The GMD and the CCP, conventional wisdom held, were vastly different in terms of organization, economic programs and political beliefs. Given the Cold War context, the inability for scholars to do research in mainland China and the division between history and political science (historians stuck to researching the period before 1949), the 1949 divide in Chinese history was an accepted fact.

The current view is much different. As Joe Esherick argued in an important article in 1995, there are in fact significant “continuities between the Guomindang and the CCP” and that “Guomindang rule was as much the precursor of the Chinese Revolution as its political enemy.”[iii] He went on to write that 1949 was a watershed event but not an “unbridgeable chasm.” A lot of scholarship in the last twenty years supports this position and looks at the continuities between the GMD and CCP. One of the best examples is research that examines the origins of the state enterprise system and the danwei work unit in the in the 1930s and 1940s.

One of the next frontiers of Chinese history, then, is thinking more about continuities across 1976. At the moment, it looks very much like the 1949 divide, especially in terms of disciplinary boundaries: historians stay in the period before Mao’s death and the period after 1976 is the domain of political scientists. That will change. Perhaps the most important intellectual effort in this direction comes from Professor Elizabeth Perry Mao’s Invisible Hand: The Political Foundations of Adaptive Governance in China. In fact, looking for continuities in Chinese economics, politics, society and culture before and after 1976 is an area ripe for more active cooperation between historians and political scientists.

Strangely, the official party narrative about the continuities across 1976 is somewhat ahead of scholarly trends that still emphasize discontinuities but only because—and this is crucial— of perceived political necessity. That was the impetus for the censor’s insistence that Professor Esherick take out the line about the sharp contrast before and after the death of Mao in 1976. The academic community will likely arrive at a similar view that moves beyond seeing 1976 as an abrupt divide but the process will be slower and based on uncovering new materials and weighing the evidence rather than due to the prevailing political atmosphere.

 

[i] Michael Gasster, “Comments of Authors Reviewed,” in Modern China Vol. 2, No. 2 (April 1976): 207.

[ii] Rana Mitter, “1911: The Unanchored Revolution,” The China Quarterly 208 (December 2011), 1020.

[iii] Joe Escherick, “Ten Theses on the Chinese,” Modern China, Vol. 21, No. 1, (Jan., 1995), 47.

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The Most Recent Chinese Real Estate Market Collapse: Shanghai in 1934

Real estate, like pollution and traffic, is one of the topics you can’t avoid in China. However, unlike pollution and traffic, subjects on which there is a fair amount of consensus—“It is pretty bad”—the present state and future prospects of the real estate market is a source of intense debate. Pan Shiyi, the founder of the commercial property developer SOHO, ominously predicted that the residential real estate market was like the Titanic, headed for an imminent collapse. An article from Forbes earlier this year declared “China Property Crash Has Begun.” Others take the position that the housing market is not crashing but slowing. Of course, the deeper issue behind these debates is trying to forecast the ripple effects of falling housing prices on the shadow banking sector, government incomes and the economy as a whole.

Even though there is much disagreement about the future of the housing market, its recent past is not as controversial. In fact, as one commentator argues, “the development of China’s housing market is one of the world’s greatest and least recognized privatization success stories.” After allowing people to buy their government-allocated apartments at a significant discount to market value, the rate of home ownership and the housing market took off. Since then, as The Financial Times put it, the property market in China “has never experienced a real crash.”

When was the most recent crash in the Chinese real estate market? If we accept the judgment of the Financial Times that there has never been a real crash since the opening up of the market, we have to look back quite a long way, to Shanghai in the 1930s.

The boom and bust of the Shanghai property market, like a lot booms and busts, stemmed from worldwide trends and individualized, local decisions. China, at that time, under the rule of the Nationalist Government (1927-1937), was on the silver-standard. Since the 1870s, the worldwide price of silver in terms of gold dropped consistently. This trend accelerated in 1920s. Under these conditions, the price of commodities in China rose. There was a general boom. Due to Shanghai’s terms of trade with the interior of China and the fact that silver was valued more highly in China than in other areas parts of the world, the metal flowed into the country. By 1929, the amount of silver stored in Shanghai reached a record high.

With piles of silver sitting in the city, the question became how to put it to use. The answer was real estate. As one real estate company advertised, “Whereas the import-export trade is extremely dull, only the real estate business is flourishing. The only safe investment for the excess silver accumulated in Shanghai is real estate.”[i] Money flowed into real estate. The rationale was familiar. Buildings in Shanghai were safe investments that could not fall in price. T. V. Soong, Minister of Finance for the Nationalist government from 1928-1933, thought banks were over invested in real estate and had expanded credit too much based on these assets.

By the early 1930s, silver began to flow out of China. For many years China had a balance of payments of deficits that were made up for by remittances from Chinese abroad. With the onset of Great Depression these payments dried up and in 1931 China was a net exporter of silver for the first time in more than a decade. By the end of 1931, wholesale prices were dropping. When the United States abandoned the gold standard, the worldwide price of silver rose. During this period, China’s trade deficit continued to grow, remittances continued to shrink and wholesale prices declined.[ii] Whereas the worldwide fall in price of silver had been inflationary for China, the rise in its price was deflationary.

During this period the Shanghai real estate market cooled but it did not collapse until the after the American Silver Purchase Act of 1934. The key figure here was Nevada Senator Key Pittman. Pittman was a life-long advocate for silver interests in Nevada and linked the low worldwide price of silver with the Depression. As he put it in the early 1930s the “general silver question is of great world-wide import and the China question is the most important that we have to consider relative to our surplus production.” The problem, Pittman thought, was that with the low price of silver in terms of gold, Chinese consumers did not have the purchasing power to buy American products. Raise the price of silver, he argued, and it would go a long way to ending the Great Depression.

When the U.S. embarked on a silver-purchasing scheme that mandated the government buy silver at above market prices until it reached a certain point of total reserves and a certain market price, silver flooded out of China. The outflow of silver that had started in the early 1930s picked increased dramatically in late 1934, with a similar impact on prices. The Nationalist government tried to stop the drain of silver but to no avail. With silver reserves shrinking quickly, banks refused to make loans against real estate collateral. Chinese banks “called in their outstanding credit, restricted the amount of advances, demanded additional collateral and refused to renew loans on maturity.”[iii] The falling value of real estate assets rippled through the rest of the economy.

The biggest news in the Chinese real estate world this week comes not from Beijing, Shanghai or Guangzhou but from New York, with Anbang, a Chinese insurer, agreeing to buy the Waldorf-Astoria Hotel from the Hilton Company for nearly two billion dollars, making it “the largest acquisition of a U.S. real estate asset by a Chinese buyer, as well as being the most expensive purchase ever of a U.S. hotel.”

It is the kind of landmark purchase that rightfully brings back memories of the gaudy, go-go 1980s when Japan’s “buying spree went global: first real estate, then banks and resorts and Hollywood studios.”

Despite the natural comparisons to Japanese investment in the 1980s, it is also fruitful to look back to the 1930s. As Patrick Chovanec, chief strategist at Silvercrest Asset Management, told CNBC, the key variable in the current Chinese real estate market “is the reliance on property as collateral to support virtually all forms of lending throughout the economy.” It is a situation very similar to Japan in the 1980s and Shanghai in the 1930s. Will this time de different?[iv]

 

*This is a cursory treatment of a complex topic. For more see:

Brandt, Loren, and Thomas J. Sargent. “Interpreting New Evidence about China and U.S. Silver Purchases.” Journal of Monetary Economics 23 (January 1989), 31-51.

Friedman, Milton. “Franklin D. Roosevelt, Silver, and China.” Journal of Political Economy 100 (February 1992), 62-83.

Friedman, Milton and Anna Jacobson Schwartz. A Monetary History of the United States, 1867-1960. Princeton: Princeton University Press, 1963.

Lin, Weiying. China Under Depreciated Silver 1926-1931. Shanghai: The Commercial Press, 1935.

Lin, Weiying. The New Monetary System of China: A Personal Interpretation. Shanghai: Kelly and Walsh, 1936.

Young, Arthur. China’s Nation-Building Effort, 1927-1937. Stanford: Hoover Institution Press, 1971.

[i] Tomoko Shiroyama, China During the Great Depression: Market, State and the World Economy, 1929-1937, (Cambridge: Harvard University Press, 2008), 146.

[ii] Shiroyama, 149-150.

[iii] Shiroyama, 162.

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A Summer of Charity and Controversy in China

Last week two of China’s leading periodicals, Caixin, and Nanfang Zhoumou devoted substantial space to ALS sufferers across the country. Nanfang Zhoumo featured a number of haunting images in a photo essay of those stricken by the disease with while Caixin focused on the inadequacy of the Chinese healthcare infrastructure to diagnose and treat rare illnesses. These stories were well timed. After the ALS ice-bucket challenge seemingly took over a significant portion of the Chinese internet in the dog days of August, with real estate moguls, movie starts, and athletes dousing themselves in ice, the topic began to fade from view.

Beyond this most recent viral sensation, charity—if, how and where to donate money and the nonprofit institutions that facilitate charitable giving —sometimes hovered in the background and sometimes stood at the center of many Chinese news stories this past summer.

Guo Meimei, who burst to fame and infamy several years ago after posting pictures of herself with expensive cars and clothes while claiming to be the business manager at the Chinese Red Cross lingered in a jail cell, accused of a variety of misdeeds, including prostitution and hosting gambling parties in a Beijing apartment. The original story involving Guo from three years ago only confirmed the perception of many Chinese who saw the world of charitable foundations as murky, corrupt and unreliable. You could never know what your donations were actually funding. The Chinese Red Cross, who had always denied any affiliation with Guo, tried to stop people from contemplating Guo’s demise and instead direct attention to the recent earthquake in a remote part of the southwestern province of Yunnan. It took a few days but the narrative eventually changed: soon an online merchant grabbed headlines for donating 5 tons of qiegao nutcake to earthquake victims.

Earlier in the year, the charitable foundation of actor Li Yapeng came under suspicion for misuse and embezzlement of funds, a common and recurring accusation. Several years ago the charitable work by actress Zhang Ziyi suffered from the same doubts, with Zhang ultimately holding a teary press conference. As The Wall Street Journal points out through a number of interviews, these scandals make charitable organizations like a black hole: your donations go in and then disappear. Previous scandals combined with constricting legal regulations means, as Huang Yanzhong of the Council of Foreign Relations writes, the “philanthropic sector continues to face a social capital (i.e., trust) deficit.”


Beyond the question of outright misuse of charitable funds is the issue of whether the ultimate destination of donated funds is appropriate. In July the couple behind the real estate company SOHO, Pan Shiyi and Zhang Xin, signed an agreement with Harvard University, to establish a fund to help Chinese students from poorer families afford the school’s tuition. The $15 million dollar donation is part of a larger plan to give $100 million to universities in the U.S. and U.K., all earmarked for lower-income Chinese students.

This donation came under attack immediately and from a number of angles. Why was the couple donating to Harvard when there were so many educational disparities in China? Pan, from a remote, underdeveloped part of Gansu province in the northwest of China, one thread of commentary went, should know better. Surely, others speculated, the gift was only a thinly guised strategy to insure Pan and Zhang’s children had a place at Harvard when the time came. Pan, an active user of Weibo, turned off the comments on his Weibo feed after he suffered a stream of invective, saying it had become nothing more than a trash dump. In many ways, response to Pan and Zhang’s donation to Harvard mirrored the controversial bequest to Yale’s School of Management by hedge fund manager Zhang Lei, in 2011.

Among the most controversial, and certainly the most colorful, charitable donations of the summer months came from the headline-grabbing billionaire Chen Guangbiao who hosted a “Lunch for the Poor” in New York. Taking out advertisement in The New York Times and The Wall Street Journal he invited 1,000 Americans to lunch and promised that he would give each guest $300 in cash. Before the lunch he was seen trying to give out $100 bills to random New Yorkers but at the lunch itself, complete with a number of volunteers dressed in People’s Liberation Army outfits, only a small handful received the promised cash, with others told they would receive vouchers redeemable at a local homeless shelter, though the process of securing the vouchers produced controversy as well. The entire episode did not play that well in the United States, or in China.

In this background, the ALS Ice Bucket provoked a number of responses from Chinese figures who had challenged in videos. Luo Yonghao, founder of Smartisan technologies, posted a message that he would not be taking part of the challenge (不凑热闹 )because he thought that the original intent of the challenge had been lost as some people failed to display the ALS website on the videos of them getting doused in ice. He did not take part in the challenge but donated $39, 500. Taiwanese model Lin Chiling also declined to take part in the challenge but pledged money, saying that instead of ice water she hoped streams of warm water ran over everyone.

Lurking behind all the discussions about charity is the simple but still unanswered question of what it means for China, as a country, and for individual Chinese citizens, to be rich. Stay tuned

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How much do we owe? Early controversies over the Boxer Indemnity

On September 1, 1901, The Qing Dynasty and a group of Western countries signed the Boxer Protocol. As one historian later called it, The Boxer Indemnity, one of the key features of the Boxer Protocol, with its “peculiar features, including complexity,” as well as “a self-defeating economic impact,” was “a continuing diplomatic and political nuisance” for over half a century.[i] It also created confusion and controversy soon after it was signed.

As the coalition of nations that provided forces for suppressing Boxer forces entered Beijing and the military conflict ended, discussion quickly moved to questions of financial settlement. How much of an indemnity could and should the Qing Dynasty pay? How much of the indemnity should each nation receive? During late 1900 and through 1901, various nations added up—often inflating—how much they believed they were owed due to military expenses, damages to property and the murder of individual citizens.

The final version of the Boxer Protocol specified the details of payment but also built the foundations of later controversy. Article VI of the Protocol stated that in an edict of May 29, 1901, the Emperor of China “ agreed to pay the Powers an indemnity of 450,000,000 of Haikwan (customs) taels.” This sum was greater than the combined amount of Qing indemnity payments between the first Opium War and the Boxer Rebellion. The stream of payments was divided as follows: Russia received the highest share at 28.97%, Germany 20.02%, France 15.75%, United Kingdom 11.25%, Japan 7.73%, United States 7.32%, Italy 7.32% Belgium 1.89%. Other nations received small percentages: Austria-Hungary 0.89%, Netherlands 0.17%, Spain, Portugal, Sweden, and Norway 0.025%.

Significantly, and the source of much later controversy, the English version of the treaty stated that the Boxer Indemnity was a “a gold debt calculated at the rate of the Haikwan tael to the gold currency of each country.” The protocol further fixed the rate of exchange between the Haikwan tael and the currencies of individual countries, creating a nominal entity known as a Boxer tael. One Boxer tael was equal to 3 British shillings or 0.742 American cents. This clause, as foreign nations, interpreted it, meant that the Qing government bore exchange rate risk. If the market value of silver in terms of gold fell, it would have to procure more silver to settle the debt; if the value of silver rose, it would have to procure less.

To meet these new obligations on top of existing international loan payments, the Qing dynasty shifted most of the payment burden on provincial governments. After the Boxer Protocol, new annual payments amounted to just over 20 million Chinese ounces (liang) of silver. The Board of Revenue recognized that although the payments would be would be very difficult to endure (kan 堪), they nonetheless had to be made.[ii] Some pre-existing revenue steams flowing from the provinces to center would be shifted to indemnity payments but the majority of the annual payments, some 18 million liang, was forced on provinces (tan pai 摊派).
With the central government putting so much of the payment burden on provincial officials, it is no surprise that objections to the clause stating the Boxer Indemnity was in fact a gold debt, originated from a provincial official, Liu Kunyi (刘坤一) , then the Governor-General of Liangjiang (Jiangsu, Anhui and Jiangxi provinces). Under the stipulation of the Board of Revenue, Jiangsu had been ordered to pay more than any other province; Jiangxi’s payment schedule was also one of the heaviest in the realm. Under conditions of depreciating silver, if the debt was indeed denominated in silver, China’s burden, and in turn the burdens on the provinces under Liu’s leadership would not be as great. If the Boxer Indemnity was in fact a debt denominated in gold, the provinces would have to procure more and more silver to purchase the same amount of gold. Over the next several years, it was provincial officials, that advocated a harder stance on the payment issue while the central government maintained a more accommodative position.[iii]

Throughout the first part of 1902, Liu Kunyi peppered the central government with memorials and telegrams, relying on several arguments to explain why he believed the Boxer Indemnity was, in fact, a debt in silver and not gold. First, Liu stood on precedent. All of China’s previous indemnities, he pointed out, were denominated in silver and not gold. How could the Boxer Indemnity be different? Next, he looked at the treaty itself. In the table listing the payment schedule there were only figures in silver liang and nothing about gold payments. If the payment schedule said the Qing had to provide that amount of silver, why should it suddenly have to pay more? Liu also made the argument that the Indemnity should be interpreted as a debt in silver and not gold because of the precarious state of Qing finances and its inability to pay the higher costs associated with a gold debt.[iv] In response to Liu’s arguments, the Ministry of Foreign Affairs (Waiwu bu 外务部) consulted Robert Hart, The Inspector General of Chinese Customs, who insisted that it was in fact a debt in gold, the exchange rates between silver and gold clearly established in the treaty.[v]

Discussion of the details of the treaty quickly moved from an argument about principles to a real payment problem in the summer of 1902. Yuan Shuxuan (遠樹勛), the Shanghai Daotai, and the official in charge of indemnity payments, said that the Qing could not make payments at the exchange rates established in the treaties. They made payments, but not as much as they should have in terms of Boxer Protocol. On June 10, the Chinese minister in the United States, Wu Tingfang (伍挺芳) cabled the Ministry of Foreign Affairs to say the U.S. government agreed that The Boxer Indemnity was a debt in silver and not gold. The next day in Beijing, the American Minister, E.H. Conger attended a meeting of foreign ministers on the indemnity question, and expressed his personal opinion that the debt was in silver and not gold. He did not receive notice of Washington’s stance until after the meeting, whereupon he informed the Chinese government of this position.[vi] The United States, however, was the only country to interpret the Boxer Protocol in this way. Despite the initial hard line on payments, there was some sympathy, particularly from Great Britain, with the Chinese predicament and discussion emerged about finding ways to lessen the burden on Qing, either buy having customs duties payable in gold or by lengthening the term of the payment.

As these discussions continued throughout the rest of 1902, the price of silver in terms of gold continued to fall and the “decline has been more rapid than anyone expected with the protocol was signed.”[vii] At the end of the year, The Economist thought that the silver market of late had been in a “panic-stricken condition.”[viii] Some observers attributed the fall in price of silver directly to the payment of the Boxer Indemnity, with The Washington Post noting that “as a result of collecting large sums of silver in the empire and throwing them on the open market to raise gold to pay for the indemnity, the price of silver has been depressed by nearly 25 per cent.”[ix] With this logic, and all other things being equal, the price of silver would continue to decline as the Qing continually collected silver and sold it on the market for gold, increasing its own debt burden by the simple action of replaying it.

For the next three years, debate on the nature of the Boxer Indemnity continued. At the same time various proposals emerged, from Robert Hart and the American government, advocating that the Qing government stabilize the rate of exchange between gold and silver by adopting the gold-exchange standard. Ultimately, though, in spring of 1905, the Qing agreed it was a debt denominated in gold and took out another loan to make up for the payments it had missed from 1902 to 1905, ending the first, but not the last, controversy in the very long, and now neglected, history of the Boxer Indemnity.

[i] Frank H.H King, “The Boxer Indemnity—‘Nothing but Bad’,” Modern Asian Studies, Volume 40 Issue 3 (July 2006): 664.

[ii] Yihetuan dangan shilia, xiace (Beijing: Zhonghua shuju, 1990), 1197-8.

[iii] Shen Xuefeng, Wanqing caizheng zhichu zhengce yanjiu 86; Wang Shuhuai, Gengzi peikuan (Taipei: Zhongyang Yanjiuyuan jindaishi yanjiu suo, 1974), 207.

[iv] For Liu Kunyi’s correspondence and arguments see Gengzi shibian qinggong dangan huibian, No. 11 (Beijing: Renmin Daxue Chubanshe, 2006), 20, 56, 65-67, 102, 107, 118.

[v][v] Discussion about the silver/gold nature of the Boxer Indemnity among historians breaks down according to nationality. Frank H.H. King holds that “Regardless of other considerations, China had accepted an advance and was being required to carry the exchange risk, a normal procedure. See King, 674. Wang Shuhuai stresses the real ambiguity in the language and form of the Boxer Protocol. See Wang Shuhuai, Gengzi peikuan , 192.

[vi] Wang Shuhuai, Gengzi peikuan, 193.

[vii] “The Chinese Indemnity,” The New York Times, April 10, 1903.

[viii] “Mexico and the Silver Problem,” The Economist, December 13, 1902, 1931.

[ix] “The Chinese Indemnity Will the Creditor Nations Break Concessions, or Force China Into Bankruptcy,” The Washington Post, January 8, 1903.

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