"Country Driving: A Journey Through China from Farm to Factory" by Peter Hessler

By Jonathan Yardley
Subtitles should never be taken seriously these days, as book publishers often use them to distort a book's true contents for one reason or another, and "Country Driving" is no exception.

It is not "a" journey but several, taken over about seven years beginning in 2001 when Peter Hessler got his Chinese driver's license and set out to explore the country.

He had arrived there in 1996 as a Peace Corps volunteer, the subject of his deservedly admired book "River Town" (2001), and in 2000 had become Beijing correspondent for the New Yorker, where some of the material in "Country Driving" originally appeared in briefer form.
So there's a bit of a patchwork pattern to "Country Driving," but never mind.

It's an absolutely terrific book, at once highly entertaining (his accounts of the driver's test and of how the Chinese act on the road are often hilarious) and deeply instructive, as he paints a portrait of a country in the midst of change so widespread and profound that it can scarcely be grasped.

"The longer I lived in China," Hessler writes, "the more I worried about how people responded to rapid change. This wasn't an issue of modernization, at least not in the absolute sense; I never opposed progress. I understood why people were eager to escape poverty, and I had a deep respect for their willingness to work and adapt. But there were costs when this process happened so fast."

And:
"In the West, newspaper stories about China tended to focus on the dramatic and the political, and they emphasized the risk of instability, especially the localized protests that often occurred in the countryside. But from what I saw, the nation's greatest turmoil was more personal and internal. Many people were searching; they longed for some kind of religious or philosophical truth, and they wanted a meaningful conversation with others. They had trouble applying past experiences to current challenges. Parents and children occupied different worlds, and marriages were complicated -- rarely did I know a Chinese couple who seemed happy together. It was all but impossible for people to keep their bearings in a country that changed so fast."
That passage comes toward the end of "The Village," the second of the book's three sections.

It deals with life in Sancha, a tiny hamlet where Hessler and a friend rented a house in the spring of 2002.

Sancha is technically within the city limits of Beijing -- "Beijing wasn't too far away, only a couple of hours by car, but back then it was still unusual for city residents to visit the countryside" -- but it might as well be in another universe, being so primitive and insular.

The house that Hessler rented had three rooms, mud floors, electricity and a phone line but no indoor plumbing.

It was a welcome retreat from the city's bustle -- if you've never been to Beijing, you don't know the real meaning of "bustle" -- and it turned out to give Hessler an intimate view of how change was altering the lives of the ordinary Chinese who interested him far more than did their political and business leaders.
The one who interested him most in Sancha was a young man named Wei Ziqi, who lived with his wife and their young son.

He had gone to Beijing in 1987, after finishing the 10th grade, worked there for nine years but found city life uncongenial and returned to Sancha, "where he acquired the rights to farmland that had been left behind by other migrants."

During the years that Hessler spent time there, the auto population of Beijing exploded, and people began exploring the countryside by car.

Some of them found their way to Sancha.

It occurred to Wei Ziqi to open a modest restaurant serving traditional country food.

He called it "An Outpost on the Great Wall," a section of which was nearby, and he made a success of it.
That success brought many rewards, but there was a price.

Cao Chunmei, his wife, who did virtually all the cooking, "looked exhausted and Wei Ziqi seemed troubled." He "worried endlessly about money."

A year earlier, when his son had been seriously ill, "Wei Ziqi had seemed completely calm. But he had been prepared for that experience: in Sancha, where everybody grew up poor, they know what it means to struggle with sickness and death. Success is the hard part -- as an entrepreneur, Wei Ziqi stepped into uncharted territory."
Hessler became close to Wei Ziqi and his family -- his account of the little boy's illness and his own efforts to help him and his parents is exceptionally moving -- with the result that he got more in Sancha than he had bargained for: "In the beginning I had seen the village as an escape, a place where I could hike and write in peace; but now I went there for different reasons. In China it was the closest I ever came to home."

Eventually, "after four years, Sancha felt as familiar as any place I had known during adulthood," and "the longer I stayed in Sancha, the more I appreciated the rhythm of the countryside, the way that life moved through the cycles of the seasons. . . . Progress had arrived: each year led to some new major change, and always there was the sense of time rushing ahead. But the regularity of the seasons helped me keep my bearings."
Hessler's account of his years in Sancha is for me the highlight of "Country Driving," but that in no way diminishes my admiration for the other two sections.

In the first, "The Wall," he takes a couple of car trips through places along the routes of various sections of the Great Wall -- in fact it is not a single wall but a mishmash of many, built over the centuries primarily to resist Mongol invaders -- that are rapidly emptying out as people rush from the country to the city.

There is much here about the urbanization of China, a phenomenon far more vast and unsettling than most of us in the West understand, but there is also wonderful stuff about Chinese rental cars, speed traps, license-exam questions and the drivers themselves:
"In China, the transition has been so abrupt that many traffic patterns come directly from pedestrian life -- people drive the way they walk. They like to move in packs, and they tailgate whenever possible. They rarely use turn signals. Instead they rely on automobile body language: if a car edges to the left, you can guess that he's about to make a turn. And they are brilliant at improvising. They convert sidewalks into passing lanes, and they'll approach a roundabout in reverse direction if it seems faster. If they miss an exit on a highway, they simply pull onto the shoulder, shift into reverse, and get it right the second time... When approaching a toll, drivers like to switch lanes at the last possible instant; it's common to see an accident right in front of a booth. Drivers rarely check their rearview mirrors. Windshield wipers are considered a distraction, and so are headlights."
There's more about cars and drivers in "The Factory," the third section, as well as more about the complex, difficult transition from country to city.

It's about the establishment of a small factory at the city of Lishui in southern Zhejiang Province, and as in the other sections we meet some interesting characters, all of whom Hessler treats with respect and often affection.

Hessler clearly came to love China in the more than a decade he spent there, and he was endlessly surprised, amused and delighted by it.

He has a highly developed taste for oddness, incongruity and just plain weirdness, all of which he describes with not a scintilla of condescension.

"Country Driving" is a wonderful book about China that also happens to be a terrific book about the human race.

Medal of Underage Chinese Gymnast Revoked

By JULIET MACUR
After an investigation that lasted more than a year, the International Gymnastics Federation announced on Friday that a Chinese gymnast from the 2000 Olympics had been too young to compete.
The gymnast, Dong Fangxiao, a member of the Chinese women’s team that won the bronze medal, was found to have falsified her age in order to meet the requirements at those Olympics. The gymnastics federation said in a statement that Dong was actually 14, two years younger than the minimum.

Her results at those Games and at several other major competitions have been revoked.
The federation — which goes by its French acronym, F.I.G. — submitted a request to the International Olympic Committee to strip the Chinese team of its Olympic bronze medal.

If that happens, the United States women’s team, which finished fourth, will move into third place.

The gymnasts on that squad were Amy Chow, Jamie Dantzscher, Dominique Dawes, Kristen Maloney, Elise Ray and Tasha Schwikert.
“There still is what I believe to be unanswered questions about this issue, but there is only so much you can prove when it comes to falsified documents,” Steve Penny, the president of USA Gymnastics, said.

“I feel that the F.I.G. is taking this matter very seriously and has done a very responsible job here. They’ve done absolutely everything in their power to get to the bottom of a very sensitive issue.”
Mark Adams, a spokesman for the I.O.C., said the gymnastics federation’s recommendation to strip the Chinese of their medals would be studied by the I.O.C.’s executive board before any action was taken.

That would probably happen at the board’s next meeting at the end of April, he said.
The issue of age falsification has long been a problem in gymnastics, but it became a major issue at the 2008 Beijing Games, when questions arose about the age of at least two of China’s female gymnasts.

Sports registries and other sources showed that those gymnasts did not meet the age requirements, but Chinese officials blamed the age discrepancies on misfiled paperwork.

After a monthlong investigation, the federation said the gymnasts had been old enough to compete.

Defying Global Slump, China Faces Labor Shortage

Employers sit with recruitment posters on a street in Guangzhou. China's coastal industrial heartland is facing a severe labor shortage as many migrant workers have not returned.

By KEITH BRADSHER
GUANGZHOU, China — Just a year after laying off millions of factory workers, China is facing an increasingly acute labor shortage.
As American workers struggle with near double-digit unemployment, unskilled factory workers here in China’s industrial heartland are being offered signing bonuses.
Factory wages have risen as much as 20 percent in recent months.
Telemarketers are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs.
Some manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices.

Such increases would most likely drive up the prices American consumers pay for all sorts of Chinese-made goods.
Rising wages could also lead to greater inflation in China. In the past, inflation has sown social unrest.
The immediate cause of the shortage is that millions of migrant workers who traveled home for the long lunar New Year earlier this month are not returning to the coast.

Thanks to a half-trillion-dollar government stimulus program, jobs are being created in the interior.
But many economists say the recent global downturn also obscured a longer-term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.
Since China does not release reliable, timely statistics on employment, wages are considered the best barometer of labor shortages. And temp agencies here in Guangzhou raised their rate for factory workers this week to $1.17 an hour, from 95 cents an hour before the new year holiday.
The rate was 80 cents an hour two years ago, before the global financial crisis temporarily depressed wages and demand.
The dearth of returning migrants set off a desperate scramble this week to recruit the workers who did step off long-haul buses and trains returning from the interior.
At a government-run employment center in downtown Guangzhou, employers seeking workers outnumbered job-hunters Thursday afternoon.
Outside, Liang Huoqiao, a 22-year-old plastics worker, joined a small group of men and women studying a 40-foot-wide list of companies seeking workers.
“You can walk into any factory and get a job,” he said.
The official China Daily newspaper said on Thursday that surveys of employers showed that one in 12 migrant workers was not expected to return here to Guangdong Province.

Cities farther north along China’s coast are also running low on labor; Wenzhou alone posted a shortage of up to one million workers.
Guangdong provincial officials announced on Wednesday that they were considering increasing the minimum wage, which varies by city and ranges from $113 to $146 a month.
Higher wages could ease labor shortages by prompting factories to reduce their work forces.
But many factories already pay well above the minimum wage.

They are wary of further pay increases because it is not certain they can pass the increased costs on to their customers — in particular, strapped importers in the United States and the European Union.
Rising wages suggest the re-emergence of a worker shortage that was becoming evident before the financial crisis.

A government survey three years ago of 2,749 villages in 17 provinces found that in 74 percent of them, there was no one left behind who was fit to go work in city factories — the labor pool was dry.
Mass layoffs in late 2008 and early 2009 because of the global financial crisis temporarily masked the developing shortage of industrial workers. But two powerful trends were still working to reduce the supply of young people headed for factories.
For one, the Chinese government has rapidly expanded postsecondary education. Universities and other institutions of higher learning enrolled 6.4 million new students last year, compared to 5.7 million in 2007 and just 2.2 million in 2000.
At the same time, China’s birth rate has been sliding steadily ever since the introduction of the “one child” policy in 1977.
Labor shortages have returned quickly in recent weeks as these long-term trends have collided with a recovery in overseas demand for Chinese goods.
Far more jobs are available these days in China’s interior.

Government projects like rail and highway construction have absorbed millions of workers, particularly after Beijing allocated nearly $600 billion to economic stimulus spending in 2009 and 2010.

Consumer spending is also rising briskly; auto sales more than doubled last month from a year before, and this has created many jobs in retailing, restaurants, hotels and other inland businesses.
Even before the holiday, companies were struggling to find the employees needed to keep assembly lines running.
At many factories, white-collar managers and engineers were forced to spend time on assembly lines to meet deadlines before the lunar New Year, because laborers were in such short supply. The managers often struggled with the tedious but intricate tasks required to make everything from toys to DVD players.
“People working in the office, like me, have been asked to help on the factory floor,” said Sky Niu, the sales manager at the Hengjia Electronics Company in Dongguan.

“Of course, we can only help on the simpler tasks, such as packing.”
The labor shortage is not benefiting workers just through higher wages.

Personnel managers here say they are also abandoning the informal tradition of not hiring anyone over 35 — they say they are now hiring workers up to 40 years old, and sometimes older, despite concerns about whether they can keep up week after week with the rapid pace of Chinese assembly lines.
It remains to be seen if Chinese factories will learn from their hiring difficulties now and be less quick to lay off workers during the next global downturn.
The current system “is not stable, it’s not healthy,” said Han Dongfang, the director of the China Labor Bulletin, a Hong Kong-based group that advocates collective bargaining.
Though the wage boost increases the prospect of inflation, it may have another more salutary aspect.

The Obama administration has been pushing China to let the renminbi rise against the dollar, which would erode some of China’s formidable advantage in export markets.

Rising wages in China have the same effect — while also giving Chinese families more spending power.
Letting wages rise benefits workers, said Jing Ulrich, the chairwoman of China equities and commodities at J. P. Morgan.

Letting the currency rise benefits currency speculators, she said.
Mr. Liang, the 22-year-old plastics worker, said that he expected his pay to double in the next five years and added that he already had set his priorities.
“For sure, I want to buy a car,” he said. “Car first, then maybe marriage later.”

Senators urge US to combat China currency policy

* China currency manipulation a subsidy, senators say
* Commerce Department urged to investigate charge
By Doug Palmer
WASHINGTON -- A bipartisan group of 15 U.S. senators on Thursday insisted China's currency practices are effectively a subsidy and urged Commerce Secretary Gary Locke to consider action against Chinese imports.
"There can be no doubt that China's policy of large-scale intervention in the exchange markets and the significant undervaluation of its currency acts as a subsidy to Chinese exports," the senators said in a letter that increased pressure on President Barack Obama to deal with the currency concern.
U.S. lawmakers and manufacturers have complained for years that China undervalues its currency by as much as 40 percent to give its companies an unfair trade advantage.
Beijing bristles at the suggestion it is "manipulating" its currency, known as the renminbi or yuan. It is likely to react strongly to any U.S. action based on that conclusion.
Obama accused China of manipulating its currency during his 2008 election campaign.
But since taking office, he has twice declined to formally label China as a currency manipulator in a semi-annual Treasury Department report. The next report is due on April 15.
Obama, who has angered China over recent decisions to meet with Tibet's spiritual leader, the Dalai Lama, and to sell arms to Taiwan, needs Beijing's cooperation on issues ranging from Iran's nuclear program to reviving global economic growth.

COMMERCE DEPARTMENT LEAVES DOOR OPEN
In their letter to Locke, the senators sided with U.S. coated paper producers and other manufacturers that have brought cases asking the Commerce Department to treat China's currency practices as a subsidy under U.S. trade law.
They want the department to include an estimate of how much China undervalues its currency when it calculates "countervailing duties" on Chinese goods in individual cases filed by U.S. producers.
There is precedent for the department to consider currency practices when calculating duties, but Locke has said previous cases against China failed to met the statutory standard.
It is scheduled to announce its preliminary countervailing duty decision in the coated paper case next week.
"As senators from key paper product-producing states, we are very concerned that domestic paper manufacturers and paper industry workers are substantially harmed by subsidized Chinese imports," the senators said.
"Moreover, we are concerned that the agency's failure to investigate China's actions regarding its currency derives from a flawed interpretation of the legal standard for the department's assessment of a subsidy allegation," they said.
A Commerce Department spokeswoman kept the door open to considering China currency practices in the paper case.
"It is important to note that we have not reached a decision about whether to initiate a countervailing duty investigation regarding the specific alleged subsidy in the Certain Coated Paper case," spokeswoman Parita Shah said.
"We share the senators' commitment to the continued rigorous enforcement of U.S. trade laws to ensure that U.S. businesses and workers maintain a level playing field."

PRESSURE ON OBAMA
The group of senators included Democrats Charles Schumer, Robert Byrd, Carl Levin, Barbara Mikulski, Russ Feingold, Debbie Stabenow, Ben Cardin, Sherrod Brown, Bob Casey and Arlen Specter, along with Republican Senators Lindsey Graham, Susan Collins, Olympia Snowe, Sam Brownback and Jim Bunning.
Each made a separate statement calling for action.
"The Commerce Department has yet to take this issue seriously and we must keep pressing the agency until it does the right thing," Schumer said.
"Because the yuan is artificially devalued by 15-40 percent below its true market value, American companies are losing market share for an unacceptable reason," Graham said.
"An investigation of Chinese currency manipulation as a countervailing trade subsidy makes sense," Byrd said.
China's has kept its currency, the renminbi, at about 6.83 to the dollar since July 2008. However, many analysts believe it could begin allowing it rise again this year.
Simon Johnson, a former chief economist at the International Monetary Fund, said Obama should formally label China as a currency manipulator in the April 15 report.
The United States should follow by making a push within the Group of 20 leading developed and developing nations to get China to raise the value of its currency, he said.
It also should press for new global trade rules against currency manipulation, Johnson said.

China Attacks on Google May Have Hit 100 Companies

By Brian Womack and Katrina Nicholas
The Chinese cyber attacks that Google Inc. reported last month may have targeted more than 100 companies, a larger number than previously thought, according to security research firm ISEC Partners Inc.
ISEC said it discovered the additional targets while working with victims of the attack, which originated in China.

Google initially alerted 30 companies to the problem, San Francisco-based ISEC said.
Google disclosed last month that it suffered “a highly sophisticated” cyber attack on its corporate infrastructure and threatened to withdraw from China.

The Mountain View, California-based company said Gmail e-mail accounts of Chinese human-rights activists were targeted by the hackers.
Chief Executive Officer Eric Schmidt said Jan. 21 that Google had begun talks with the Chinese government and would be “making some changes” to its operations in China.

The company was still following Chinese laws and censoring its search results locally, he said.
“Although none of the attacks or technique used in this series of attacks are particularly novel, the skill set, patience and tenacity of the attackers is much greater than most enterprises are equipped to deal with,” ISEC said in its report.
Jill Hazelbaker, a Google spokeswoman, didn’t immediately respond to a message seeking comment.
An exit from China would cost Google $600 million in annual sales, with would-be advertising clients instead spending at rival Baidu Inc., JPMorgan Chase & Co. said in January.

As concerns ease the Chinese government will shut the company’s operations, advertisers are returning and Google’s China business is hiring again, media buyers said earlier this month.
China, whose authorities censor media through state ownership of all newspapers, television and radio stations, may have 840 million Internet users, or 61 percent of the population, by 2013, according to EMarketer Inc. in New York.

The country had 384 million users at the end of last year, according to government data.
Google climbed 37 cents to $526.80 in Nasdaq Stock Market trading Friday. The shares have fallen 15 percent this year, after gaining 93 percent in 2009.

China insider sees revolution brewing

By JOHN GARNAUT

Mass unrest… Uighur women surround a Chinese riot policeman during protests in Urumchi, the capital of Xinjiang province, last July.
BEIJING: China's top expert on social unrest has warned that hardline security policies are taking the country to the brink of ''revolutionary turmoil''.
In contrast with the powerful, assertive and united China that is being projected to the outside world, Yu Jianrong said his prediction of looming internal disaster reflected on-the-ground surveys and also the views of Chinese government ministers.
Deepening social fractures were caused by the Communist Party's obsession with preserving its monopoly on power through ''state violence'' and ''ideology'', rather than justice, Professor Yu said.
Disaster could be averted only if ''interest groups'' -- which he did not identify -- were capable of making a rational compromise to subordinate themselves to the constitution, he said.
Some lawyers, economists and religious and civil society leaders have expressed similar views but it is unusual for someone with Professor Yu's official standing to make such direct and detailed criticisms of core Communist Party policies.
Professor Yu is known as an outspoken insider.

As the director of social issues research at the Chinese Academy of Social Sciences' Institute of Rural Affairs he advises top leaders and conducts surveys on social unrest.
He previously has warned of the rising cost of imposing ''rigid stability'' by force but has not previously been reported as speaking about such immediate dangers.
''Some in the so-called democracy movement regard Yu as an agent for the party, because he advises senior leaders on how to maintain their control,'' said Feng Chongyi, associate professor in China Studies at the University of Technology, Sydney.
''I believe Yu is an independent scholar. This speech is very significant because it is the first time Yu has directly confronted the Hu-Wen leadership [President Hu Jintao and Premier Wen Jiabao] and said their policies have failed and will not work.''
Pointedly, Professor Yu took aim at the policy substance behind two of Mr Hu's trademark phrases, ''bu zheteng'' [''stability'', or ''don't rock the boat''] and ''harmonious society''.
His speech was delivered on December 26, the day after the rights activist Liu Xiaobo was sentenced to 11 years in jail for helping to draft a manifesto for constitutional and democratic government in China, called Charter '08.
The sentence, which shocked liberal intellectuals and international observers, followed a tumultuous year during which the party tightened controls over almost all spheres of China's burgeoning civil society, including the internet, media, legal profession, non-government organisations and business.
Professor Yu's speech has not been previously reported but has recently emerged on Chinese websites.
He cited statistics showing the number of recorded incidents of ''mass unrest'' grew from 8709 in 1993 to more than 90,000 in each of the past three years.
''More and more evidence shows that the situation is getting more and more tense, more and more serious,'' Professor Yu said.
He cited a growing range and severity of urban worker disputes and said Mafia groups were increasingly involved in state-sponsored thuggery while disgruntled peasants were directing blame at provincial and even central government.
''For seeking 'bu zheteng' we sacrifice reform and people's rights endowed by law… Such stability will definitely bring great social disaster,'' he said.
Professor Yu's speech reflects deep disillusionment among liberal thinkers in China who had hoped Mr Hu and Mr Wen would implement political reforms.
Dr Feng said he still hoped the two would ''do something'' to leave more than a ''dark stain'' on China's political development before stepping down in 2012.
''The conservative forces are currently very strong,'' he said.

China's security-tightening and potential for future loosening were linked to a leadership succession struggle between Mr Hu and the Vice-Premier, Li Keqiang, on the one hand, and the former president, Jiang Zemin, and the current Vice-President, Xi Jinping, on the other.
''I haven't given up the hope that the Hu-Li camp may make some positive political changes to mobilise public support.''
The latest edition of the newspaper Southern Weekend broke a two-decade taboo by publishing a photo of a youthful Mr Hu with his early mentor, former party chief Hu Yaobang, who was purged in 1987 for his liberal and reformist leanings.

But Chinese internet search results for the names of both leaders were yesterday blocked for ''non-compliance with relevant laws''.
A Beijing political watcher said such crackdowns were being led by officials who had the most to hide, which did not include Mr Hu or his allies.
''Corrupt officials have such a high and urgent interest in controlling the media and especially the internet,'' he said.

''The more they feel that their days are numbered due to the internet and free information, the more ferocious and corrupt they become, in a really vicious circle leading to final collapse.''

Is China really so scary?

The global race to develop clean technology is often framed as a contest between Chinese-style capitalism and the more market-oriented approach favored by the United States.

China's military denied that the People's Liberation Army played a part in Internet hacking.

By Steven Mufson and John Pomfret

With the American economy struggling and the political system in gridlock, there is one thing everyone in Washington seems to agree on: The Chinese do it better.

Cyberspace? China has an army of hackers ready to read your most intimate e-mails and spy on corporations and super-secret government agencies. (Just ask Google.)

Education? China is churning out engineers almost as fast as it's making toys.

Military prowess? China is catching up, so quickly that it is about to deploy an anti-ship ballistic missile that could make life on a U.S. aircraft carrier a perilous affair.

The economy? China has gone from cheap-clothing-maker to America's banker.

Governance? At least they can build a high-speed train.

And energy? Look out, Red China is going green!
This new Red Scare says a lot about America's collective psyche at this moment.

A nation with a per capita income of $6,546 -- ensconced above Ukraine and below Namibia, according to the International Monetary Fund -- is putting the fear of God, or Mao, into our hearts.
Here's our commander in chief, President Obama, talking about clean energy this month: "Countries like China are moving even faster... I'm not going to settle for a situation where the United States comes in second place or third place or fourth place in what will be the most important economic engine in the future."
And the nation's pundit in chief, Thomas Friedman of the New York Times, even sees some virtue in the Chinese Communist Party's monopoly on political power: "One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."
In the past, when Washington worried about China, it was mainly in terms of a military threat: Would we go to war? Would China replace the Soviet Union as our rival in a post-Cold War world?

Or we fretted about it as a global workshop: China would suck manufacturing jobs out of our economy with a cheap currency and cheaper labor.

But today, the threat China poses -- real or imagined -- has flooded into every arena in which our two nations can possibly compete.
And it's not just in Washington.

Asked in a Washington Post-ABC News poll this month whether this century would be more of an "American century" or more of a "Chinese century," many Americans across the country chose China.

Respondents divided evenly between the United States and China on who would dominate the global economy and tilted toward Beijing on who would most influence world affairs overall.
"We have completely lost perspective on what constitutes reality in China today," said Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations.

"There is a lot that is incredible about China's economic story, but there is as much that is not working well on both the political and economic fronts. We need to understand the nuances of this story -- on China's innovation, renewables, economic growth, etc. -- to ensure that all the hype from Beijing, and from our own media and politicians, doesn't lead us to skew our own policy."
Having lived in China during the past two decades, we have witnessed first hand and chronicled its remarkable economic and social transformation.

But the notion that China poses an imminent threat to all aspects of American life reveals more about us than it does about China and its capabilities.

The enthusiasm with which our politicians and pundits manufacture Chinese straw men points more to unease at home than to success inside the Great Wall.
This is not to say that China isn't doing many things right or that we couldn't learn a thing or two from our Chinese friends.

But in large part, politicians, activists and commentators push the new Red Scare to advance particular agendas in Washington.

If you want to promote clean energy and get the government to invest in this sector, what better way to frame the issue than as a contest against the Chinese and call it the "new Sputnik"?

Want to resuscitate the F-22 fighter jet? No better country than China to invoke as the menace of the future.
Or take green technology. China does make huge numbers of solar devices, but the most common are low-tech rooftop water-heaters or cheap, low-efficiency photovoltaic panels.

For its new showcase of high-tech renewable energy in the western town of Ordos, China is planning to import photovoltaic panels made by U.S.-based First Solar and is hoping the company will set up manufacturing in China.

Even if government subsidies allow China to more than triple its photovoltaic installations this year, it will still trail Germany, Italy, the United States and Japan, according to iSuppli, a market research firm.
China does have dozens of wind-turbine manufacturers, but their quality lags far behind that of General Electric, not to mention Europe's Vestas and Siemens.

And although a Chinese power company has some technology that might be useful for carbon capture and storage, which many companies see as the key to cutting greenhouse gas emissions from coal plants, it has built only a tiny version to capture carbon dioxide for making soda, rather than exploring needed innovations in storage.
If not for our economic distress, we might be applauding China's clean-energy advances; after all, one first-place position we have ceded to China is in greenhouse gas emissions. Limiting those emissions is a job big enough for both of our economies to tackle.
But domestic anxieties have morphed into anxiety about China.

"Every day we wait in this nation, China is going to eat our lunch," Sen. Lindsey Graham (R-S.C.) said this month.

Arguing for nuclear power, as well as renewable energy sources and cleaner ways to use coal, Graham said: "The Chinese don't need 60 votes. I guess they just need one guy's vote over there -- and that guy's voted... And we're stuck in neutral here."
Like others, Graham emphasizes the China threat to propel his fellow lawmakers into action. "Six months ago, my biggest worry was that an emissions deal would make American business less competitive compared to China," he said on a different day.

"Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy."
In other areas, politicians and pundits also have a tendency to overestimate China's strengths -- in ways that leave China looking more ominous than it really is.

Recent reports about how China is threatening to take the lead in scientific research seem to ignore the serious problems it is facing with plagiarism and faked results.

Projections of China's economic growth seem to shortchange the country's looming demographic crisis: It is going to be the first nation in the world to grow old before it gets rich.

By the middle of this century the percentage of its population above age 60 will be higher than in the United States, and more than 100 million Chinese will be older than 80.

China also faces serious water shortages that could hurt enterprises from wheat farms to power plants to microchip manufacturers.
And about all those engineers?

In 2006, the New York Times reported that China graduates 600,000 a year compared with 70,000 in the United States.

The Times report was quoted on the House floor. Just one problem: China's statisticians count car mechanics and refrigerator repairmen as "engineers."
We've seen this movie before, and it didn't end in disaster for the United States.

Some decades ago, Americans were obsessed with another emerging Asian giant: Japan. People were so overwrought that autoworkers smashed imported Japanese cars.

On June 19, 1982, a Chrysler supervisor and his stepson, who had been laid off from a Michigan auto plant, killed a Chinese American man they apparently thought was Japanese.

Author Michael Crichton's 1992 potboiler "Rising Sun" summed up the nation's fears. In 1991, 60 percent of Americans in an ABC News/NHK poll said they viewed Japan's economic strength as a threat to the United States.

But then something happened. Japan's economy lost its game.

The 1990s became a "lost decade," so much so that during the toughest days of the recent financial crisis, Japan was invoked as a cautionary tale, lest we not do enough to jump-start our economy.
Now, some experts, such as Kenneth Lieberthal, a former senior director for Asia at the National Security Council and a man who has taught us a lot about China, say using China's green-tech rise as an excuse to whip America into shape isn't such a bad idea, because the result -- a cleaner environment or a more high-tech workforce -- makes a lot of sense.

And certainly it's better to compete on that than on the size of our respective militaries.
But there is a certain irony to the new Red Scare.

When we reported from China in the 1990s, some Chinese neoconservatives achieved rock-star popularity there for promoting the notion that the United States was conspiring to contain China, militarily and economically.

They argued that global economic growth was a zero-sum game and that China's gain would be America's loss; as a result Beijing had to be more assertive in its dealings with the United States.
Legions of U.S. diplomats and business leaders said no, no, no.

They assured China that the two nations could grow together. Americans tried to teach Chinese the meaning of the expression "win-win."
And that is the way introductory economics textbooks teach it.

As N. Gregory Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers, writes in his popular textbook: Trade "is not like a sports contest, where one side wins and the other side loses. In fact, the opposite is true. Trade between two countries can make each country better off."
And yet a sports contest -- or worse -- is exactly what the U.S.-Chinese relationship sounds like these days.

In discussing energy at the Feb. 3 meeting with governors, Obama warned: "We can't afford to spin our wheels while the rest of the world speeds ahead."
Speeding ahead is a worthy goal, but the United States does not need a bogeyman on its tail to get moving.

Paper Tiger: China's No Threat to the U.S.

There's little reason for the White House to worry
By John Lee
The mythical story of Damocles, a naive courtier to the tyrant Dionysius the Elder of ancient Sicily, has been making the rounds in Washington circles lately.

According to the ancient Greek legend, Damocles was forced by his king to sit at a banquet table under a sword suspended by a single hair to demonstrate the precariousness of the sovereign's fortune.

Consider the much-hyped weapons of mass economic destruction, the holding of U.S. bonds, China has at its disposal against America and it is easy to see why the conventional wisdom is that a Damoclean sword hangs over a humbled superpower.

However, on closer inspection, the Chinese sword is much less formidable—and the hair by which it hangs is in fact a sturdy and well-fastened rope.
To be sure, Beijing views economic warfare as a legitimate tactic against a strategic competitor. The threat of financial retaliation has been repeatedly raised by influential strategists within the People's Liberation Army.

For example, China's official news agency Xinhua reported Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao calling for broad retaliation against recent U.S. transgressions such as its arms sales to Taiwan and President Barack Obama meeting the Dalai Lama.

Urging a "strategic package of counterpunches covering politics, military affairs, diplomacy, and economics" and an "attack by oblique means and stealthy feints," these strategists have recommended the dumping of U.S. bonds as one way to demonstrate China's rising national strength.
They don't acknowledge, though, that China stands to suffer from any such demonstration of its alleged strength.

The country holds $700 billion to $800 billion worth of U.S. T-bills and around $1.4 trillion in American dollar assets overall. The dumping of T-bills would lead to a fall in the value of the greenback and significantly devalue Beijing's international assets.

But it is not just the case that the U.S. and China are locked in an inextricable economic embrace along the edge of a "Damoclean precipice"—another fashionable phrase within the Treasury. China is actually much more vulnerable than America, and has fewer economic options compared with the U.S. than is commonly assumed.

China sold an estimated $34 billion in T-bills in December. Some people see this as evidence of Beijing's economic leverage.

Unfortunately for their argument, though, the sell-off barely created a ripple. This is because Beijing's capacity to wreak havoc on the American dollar is overstated.

CHINA'S DEBT HOLDINGS
A little-known fact is that the proportion of U.S. government debt financed by Chinese foreign exchange reserves has been falling significantly since 2008.

For example, China purchased around $100 billion worth of T-bills in 2009. That's a lot of IOUs, but with the U.S. federal government running a deficit of $1.4 trillion, China is bankrolling only around 7% of the red ink.

In fact, following the December sale, Japan has overtaken China as the largest foreign holder of American T-bills.
Bear in mind that there is a further reason China cannot use its alleged economic WMD: It has no choice but to continue buying low-yielding U.S. bonds.

Indeed, the willingness of China to purchase U.S. bonds at weekly auction markets shows no correlation with peaks and troughs in the Sino-American relationship.
There are two related reasons for this.

China's foreign exchange reserves—well over $2 trillion—are the direct result of its trade surpluses, especially with the U.S.

However, China is the only major economy that pegs its currency to a dollar-dominated "basket of currencies."

To maintain this peg—and effectively artificially suppress the value of the yuan vis-à-vis the greenback—the Chinese central bank is forced to keep buying dollar assets.
China experimented with allowing its currency to rise 21% against the dollar beginning in 2005. By 2008, Communist Party officials and Chinese exporters insisted on putting an abrupt halt to the appreciation.

Experts estimate that the yuan is still 25%-50% undervalued vis-à-vis the dollar.

The deliberate suppression of the value of the yuan is designed to help protect its export sector, which generates well-paid jobs for hundreds of millions of Chinese, picking up the slack created by the coddled 120,000 state-owned enterprises.

Compared with the private sector in China, these SOEs are two to three times less efficient at generating employment.

Allowing the free conversion of dollars into yuan would cause a rise in the value of the Chinese currency and a significant decrease in the price competitiveness of Chinese exports.

CURRENCY RESTRICTIONS
Furthermore, there is a related reason Beijing chooses to buy T-bills with its spare foreign currency.

Restrictions on converting foreign currency (mainly dollars and euros) back into the yuan means that Beijing is left with a huge pile of foreign currency that it needs to park somewhere outside China.

The American economy is the only place big and secure enough to absorb the enormous surpluses that China is generating.

There are only so many mining companies and other businesses around the world that China will be permitted to buy.
The upshot of all of this is that Beijing's economic choices are limited, and its leverage over the U.S. is far weaker than is commonly made out.

Even if Beijing correctly worries about the size of the American deficit, it can do little else but continue to buy dollar assets.

Meanwhile, Washington should not underestimate its own leverage.

The Chinese sword hangs by a well-secured rope rather than by a single hair, and the weapon is blunt and smaller than the sword of Damocles in legend might have been.

Giving the U.S. a bloody nose is hardly worth breaking one's hand in doing so.

Despite Pressure, China Still Resists Iran Sanctions

By MARK LANDLER
WASHINGTON — Despite intense public and private pressure by the Obama administration, China has not yet shown any sign that it will support tougher sanctions against Iran, leaving a stubborn barrier before President Obama’s efforts to constrain Iran’s nuclear ambitions.
Diplomats from two major European allies said this week that China had refused even to “engage substantively” on the issue of sanctions, preferring to continue diplomatic efforts with Tehran. And one senior diplomat said he believed that the most likely outcome might be a decision by China to abstain from voting on a resolution in the United Nations Security Council.
“An abstention is better than a veto,” said the official, who spoke on condition of anonymity, citing the delicacy of the matter.
Secretary of State Hillary Rodham Clinton expressed optimism this week that China was edging toward the American view that the time had come for tougher measures against Iran.

But other administration officials acknowledged that her optimism was based less on tangible evidence than on a belief that China would not want to end up diplomatically isolated.
China, the officials note, has backed all three previous United Nations sanctions resolutions on Iran, overcoming its initial reluctance.

Last November, it joined 25 other members of the International Atomic Energy Agency in rebuking Iran for concealing a uranium enrichment plant at Qum.
“I think we’ve made a lot of progress,” Mrs. Clinton said Wednesday in testimony before the Senate, adding that she believed that the Security Council would adopt a resolution in the “next 30 to 60 days.”
In a sign that the administration may be managing expectations in light of China’s stance, she noted that the United Nations was not the only arena for squeezing Iran. The United States and the European Union are expected to impose their own sanctions, she said, and other countries could team up against Iran.
“We will look at additional bilateral and preferably multilateral sanctions with willing nations, on top of whatever we get out of the Security Council,” Mrs. Clinton said Thursday before the House Foreign Affairs Committee.

“So, in sum, we believe in a broad approach.”
For now, though, the spotlight is on the United Nations, where she said diplomats were “hammering out” the language of a resolution.

The United States, Britain, France and Germany are largely united around sanctions aimed at equipment and financing for Iran’s nuclear and missile programs, with an emphasis on measures against the Islamic Revolutionary Guards Corps, which runs those programs.
Russia is also expected to support a resolution, though diplomats predicted that it would try to water down the sanctions.
That leaves China, which declared again this week that it preferred diplomacy.

Experts say Beijing is being driven partly by its commercial ties: it has vast investments in Iran’s oil and gas sector, and Iran is its second largest supplier of oil, after Saudi Arabia. It also has a deep aversion to sanctions, stemming from its own experience after the Communist revolution in 1949.
“China regards sanctions as ineffective, counterproductive and a form of interference in other countries’ affairs,” said Kenneth G. Lieberthal, a China expert at the Brookings Institution.
For all that, some experts said they saw hints that China might be coming around to tougher measures.
It did not object when the Financial Action Task Force, an intergovernmental body that combats money laundering and terrorism financing, put Iran on a blacklist last week. (China is a member of the task force.)

Nor did it protest last week when the atomic energy agency issued another report critical of Iran’s efforts to conceal its nuclear activities.
“I took that as a hopeful tea leaf,” said Patrick Clawson, the deputy director of the Washington Institute for Near East Policy.

“I don’t see the Chinese as on board with general-purpose sanctions,” he said. “But if you’re willing to go with nuclear-related things, I think you could get a Chinese ‘yes.’ ”
By playing hard to get, a European diplomat noted, China had put itself “at the heart of the process.”
Mrs. Clinton has kept the pressure on China by arguing that its energy security would be threatened by the instability that a nuclear-armed Iran would create in the Middle East.
Other countries are also pushing: a delegation of senior Israeli officials arrived in Beijing on Thursday, and was expected to raise the Iran issue. Saudi Arabia said last week that it hoped China would back a resolution.
Mrs. Clinton’s sales pitch is not limited to China.

Next week, she is scheduled to travel to Brazil, which currently holds a rotating seat on the Security Council and which has said it opposes sanctions. Officials said she would pressure the Brazilian government to fall in line.
The United States has said it wants international solidarity in the campaign against Iran’s nuclear ambitions.

But of the 15 countries that now hold seats on the Council, 5 are viewed as reluctant: China, Brazil, Turkey, Lebanon and Bosnia. Nine yes votes are needed to adopt a resolution.

Beijing plays potent dealmaker, blocker in China M&A

By Doug Young
HONG KONG -- Beijing is taking a father-knows-best approach to mergers and acquisitions, weighing not only commercial considerations but also political and other factors as it chooses which deals to approve.
The country's paternalistic approach to M&A was on display this week, as failure to win the government's blessing sank a bid by Tengzhong, an obscure Chinese maker of heavy equipment, to buy General Motors' gas-guzzling Hummer brand.
In the aftermath of the collapse, Chinese media were awash in commentary on the deal's many faults, signaling Beijing may continue to exercise a hands-on approach to foster deals in line with its policies and with a good chance for success.
"The Chinese government, when it decides on these deals, is making them on a policy basis and not just purely on the grounds of an objective regulatory standard," said Antony Dapiran, an M&A specialist at the law firm Freshfields Bruckhaus Deringer in Beijing.
"It's much more than in other countries like the U.S., where you have issues like national security. The scope for subjective review in China seems much broader," he said.
The official Xinhua news agency, often seen as a government mouthpiece, questioned Tengzhong for pursuing a deal that flew in the face of global trends to promote green technology.
"For anyone who is concerned about the environment and the development of the auto industry, the death of Tengzhong's Hummer bid is only a good thing," Xinhua said in a Chinese-language analysis published on Friday.

OTHER DEALS FALTER
The deal is just the latest in a series of high profile cases that have failed to win the government's support.
Last year, two of China's biggest privately held media companies, Sina Corp and Focus Media called off their merger after repeated stonewalling by the regulator over their application.
In another case that made global headlines, Coca-Cola had to cancel its plans to buy Huiyuan Juice after the commerce ministry blocked the deal on anti-trust grounds.
In addition to environmental concerns, many observers believed Tengzhong Heavy Industrial Machinery's inability to win government backing was due to its lack of international experience and high chance of failure.
In contrast, Zhejiang Geely Holding, parent of Hong Kong-listed Geely Auto, has said it has the support of Beijing in its efforts to buy Ford Motor Co's Volvo car unit. Geely, China's largest non-state auto firm, will gain Volvo's highly regarded brand and technology in a deal more in line with China's goals.
Mei Xinyu, a researcher with a think-tank under China's Ministry of Commerce, wrote in a commentary that the Tengzhong case was "clouded with doubts" from the beginning, and that government supervision was necessary for other future deals.
"Even if these dishonest speculators can gain short-lived fame, they will pay a price at the end of the day," Mei said.
Observers noted that while Tengzhong and the other two deals had their own circumstances, each involved a case of Beijing exercising its better judgment against the applicants' wishes.
Policy issues aside, Tengzhong's failure may also have reflected government wariness of buying big foreign brands, after unsuccessful deals such as Lenovo's purchase of IBM's PC assets and SAIC Motor's purchase of Korean carmaker Ssangyong Motor, which later filed for bankruptcy.
"The Chinese have come to see the reality that every time the Chinese touch a well known brand it turns bad immediately," said Li Qiang, an M&A lawyer at O'Melveny & Myers in Shanghai. "There's also the realization that these brands, if they don't come with the technology, they don't mean that much."

SUPPORT FOR RESOURCE BUYS
By comparison, the government has been much more supportive of recent overseas acquisitions by energy and resource companies, as such deals are in line with government policy aimed at procuring the materials China needs to feed its economic growth.
"So long as the government is involved, it's not left solely to the market for the parties to decide on the merit of the deal," said Allen Wong, an M&A lawyer at Simmons & Simmons in Hong Kong.

"I believe the government is trying to set the direction for outbound investments or acquisitions."
The Coke-Huiyuan and Sina-Focus rejections may also reflect different government priorities from those parties involved.
In the Coke case, many believe nationalistic concerns about a famous local brand being acquired by a foreign firm may have played into the government decision, on top of the anti-trust reasons cited.
Some analysts believe the Sina-Focus deal may have met with resistance because it would have created a new giant in the sensitive media sector, traditionally dominated by state-run firms that take their orders from the government.
"Generally speaking, there's been a theme of what they call 'The state advances and the private sector retreats,'" said Freshfields' Dapiran.

"At the policy level there's been more support for state-owned companies."
Others pointed out that China is not the only country that weighs non-commercial factors, citing the case of China's CNOOC withdrawal of its bid to buy U.S. oil firm Unocal after it became apparent the United States would block the deal.
"China is not the only country that has blocked acquisitions," said Simmons & Simmons' Wong. "In other places there are similar procedures... Similar considerations exist in every jurisdiction."

Senators Urge U.S. Action on Chinese Currency Manipulation

By COREY BOLES
WASHINGTON—A bipartisan group of senators urged the Obama administration to act urgently to investigate allegations the Chinese government is keeping its currency artificially low, saying a failure to do so is manifestly harming U.S. manufactures.
In a letter sent to Commerce Secretary Gary Locke Thursday, the group of 15 senators, including six Republicans, said there are serious concerns about the department's failure to conclude that China's currency manipulation is in fact a "countervailable subsidy" to its domestic exporters.
"In the face of China's actions to subsidize its exports at the expense of U.S. manufacturers and workers, the Department needs to act," the lawmakers said in the letter.
The missive was signed by lawmakers including Sen. Charles Schumer (D., N.Y.), a member of the Senate Democratic leadership team, and several others representing states with a heavy manufacturing presence.
In a statement, Mr. Schumer said the department hasn't taken the issue seriously and said he would keep the pressure on the administration until it did so.
The letter said U.S. manufacturers have filed at least a dozen allegations of specific instances where the Chinese government's keeping its currency at a low level is harming U.S. industry.
It cites the case of China's exports of paper and paperboard to the U.S., which increased by 21% to $2.3 billion between 2006 and 2008.
"The dramatic increase in exports is due in large part to substantial Chinese government subsidies," it said.
The lawmakers pointed to a pledge made in December by Mr. Locke to thoroughly investigate any such allegations.

But it concludes that the administration hasn't investigated these allegations due to a flawed interpretation of the legal standard of a subsidy.
"There can be no doubt that China's policy of large-scale intervention in the exchange markets and the significant undervaluation of its currency acts as a subsidy to Chinese exports to the United States," the letter concludes.
A spokesperson for the Commerce Department didn't return a phone call seeking comment for this article.
The issue of whether to confront China over the allegations of currency manipulation is difficult for the Obama administration.

While the country was recently overtaken by Japan as the largest foreign owner of U.S. debt, it still holds $755 billion in U.S. Treasurys.
During a trip to China to November, Mr. Obama gently pushed his counterpart President Hu Jintao on the currency issue.

But then just two weeks ago, speaking at a question and answer session at a Senate Democratic retreat, the president took a much harder line on the subject.
The U.S. needs "to make sure our goods are not artificially inflated in price and their goods are not artificially deflated in price; that puts us at a huge competitive disadvantage," Mr. Obama said.
Testifying before the Senate Banking Committee Thursday, Federal Reserve Board Chairman Ben Bernanke echoed these concerns, calling on China to be more flexible toward its currency.

Google's Spat with China Could Reshape Traditional Online Freedoms

How the Internet giant could use its might in closed societies
By Michael Moyer
WALL OF SILENCE: The Chinese government requires Internet firms to hide objectionable content from users, including those here in Beijing. Google is the first major company to refuse to comply.

Late last year a series of sophisticated Internet attacks emanating from China burrowed deep into the computer systems of some two dozen U.S. corporations, among them Northrop Grumman, Dow Chemical and Yahoo.

One fought back.

After revealing that the attacks targeted not only its core intellectual property but the e-mail accounts of Chinese human-rights activists, Google announced that it would stop censoring search results on Google.cn, its Chinese-language search engine.

The move led to threats by the Chinese authorities to shut down Google’s operations inside China.
The charges and retaliations seem reminiscent of so much cold war bluster, and indeed this encounter could be the first great clash of the 21st century’s two emergent superpowers—Google and China.

More than a battle over territory or market share, it is a conflict over ideology, one that pits a free and open Internet that empowers individuals at the expense of existing power structures against an Internet micromanaged by those powers.

“What we’re talking about here is a defense of the essence of the Internet,” says Jeff Jarvis, director of the interactive journalism program at the City University of New York and author of What Would Google Do? (HarperCollins, 2009).
More than any other organization, Jarvis says, Google has both the means and the incentive to ensure that the Internet remains open.

It is also one of the few organizations with a broad enough online presence to define the standard operating rules of the Internet, explains Rebecca MacKinnon, a researcher at the Center for Information Technology Policy at Princeton University.

Google is “the first mover in so many different sectors,” she says. “It can set the norms for how open one can be online.”
For anticensorship advocates, Google is also one of the few organizations with enough raw computing power to significantly aid the fight against authoritarian regimes.

“My hope, and 
expectation, is that Google engineers who might have been a 
bit halfhearted about implementing censorship mandates in Google.cn could be full throttle in coming up with ways for Google to be viewed despite any network interruptions between site and user,” says Jonathan Zittrain, a co-founder of the Berkman Center for Internet and Society at Harvard University.
Google could combat China’s censorship efforts by helping those within China breach the so-called Great Firewall.

As with buildings in the physical world, every location on the Internet has an address associated with it—an Internet protocol, or IP, address.

In addition to filtering certain keywords, the administrators of the Great Firewall maintain a huge list of blocked IP addresses.

Circumvention tools send a user to an unblocked address, then pipe in all outside information through that “proxy” IP address. Yet at any time, this tunnel could collapse.

“One of these IP addresses could last forever, or for months, or for minutes” before the authorities find it and block it, says Hal Roberts, an expert in circumvention tools at the Berkman Center.
Hence, any large-scale circumvention effort requires a huge number of addresses to cycle through, along with an enormous amount of bandwidth to support all the tunneling.

“If we could magically convince all Chinese people to use [these services],” Roberts says, “then someone would have to pay for the entire outgoing bandwidth of China.”

That might strain Google’s resources, but not by much.
Still, there are good reasons for Google not to start this kind of proxy war.

Promoting a free and open Internet is one thing; actively undermining the laws of a sovereign nation is another.

Moreover, these same circumvention tools also work as anonymity tools—anyone can use proxy servers to hide their true identity.

“This makes them very useful for all kinds of bad activities,” Roberts says.

“They could be used to hack Google’s servers or for attacks against Google services using click fraud and spam. So there’s a strong question from Google’s point of view whether it is in their best interest to promote them.”
No matter what course the standoff takes in the months and years to come, it has brought into focus this battle for control over how unrestricted the Internet should be.

Right now users depend on companies such as Google to defend the Internet from forces—governmental and otherwise—that would exert more top-down control over it.

That may not be enough.

“Google—along with a whole range of Internet companies and communications companies—has created this layer on which we depend,” MacKinnon observes.

Yet there is no set of rules, no Internet Bill of Rights, that would codify the rights of citizens online.

“These companies are saying, ‘We’re good people, trust us,’” MacKinnon says.

“As with a benevolent dictatorship, it works really well when the current leader is a great guy. But then he dies, and his evil son takes over. And then everybody’s screwed.”

Factions Help Drive Modern China History

By TED PLAFKER
SHANGHAI — Guidebook descriptions of Shanghai tend to focus on the city’s brash hipness, its longstanding openness to Western influence and its role as the nation’s main shipping hub and commercial and financial center.

Politics usually get short shrift.
Yet political intrigue is an important part of Shanghai’s story and Shanghai’s political wrangling has played — and still plays — a central role in Chinese political life.

Factional battles between the central government and Shanghai’s own power brokers have driven some of the most significant political events of modern Chinese history, ranging from the Cultural Revolution that began in the 1960s to the tense aftermath of the violent suppression of the Tiananmen Square student-led demonstrations in 1989.
The history of the Chinese Communist Party had its beginnings in Shanghai when, in July 1921, Mao Zedong and other leaders gathered in the city for the first national party conference.

The site, a traditional shikumen, or stone-gate house, is now a museum, complete with life-size waxwork models and placards describing the goals of the party’s founders, including the elimination of class distinctions.
A touch incongruously, the museum sits in the middle of Xintiandi, one of the most upscale and chic new development projects in Shanghai — a district of boutiques, galleries and cafes that are favored haunts of local yuppies and Western expatriates but beyond the means of most residents.
Shanghai was likewise the home base of the leftists who carried out Mao’s Cultural Revolution, the decade-long orgy of political extremism that ended only with his death in 1976.

Lingering suspicion about Shanghai’s potential for destabilizing radicalism was a crucial factor in the central government’s reluctance to let the city participate in the early stages of economic reforms begun by Deng Xiaoping in the late 1970s.
Only in the early 1990s did Mr. Deng see fit to loosen the chokehold on Shanghai. And once he endorsed Shanghai’s revival, the city was quick to seize the chance to catch up.

Shanghai saw more new construction between 1992 and 1996 than it had during the previous four decades, culminating in the transformation of its sleepy eastern Pudong area into the mass of new skyscrapers that the former top leader Jiang Zemin could credibly describe in 2003 as “China’s Manhattan.”
The rules of Chinese political feuding have changed in recent years, with compromise and conciliation replacing the cutthroat combat of the past. But the perpetual tussle between Shanghai and the center has continued.
That high-level rivalry now pits the so-called “Shanghai Gang” of Jiang Zemin, against the “Youth League Faction,” named for the nation-wide Communist Youth League of China and headed by Hu Jintao, Mr. Jiang’s successor as president of China and Communist Party boss.
Mr. Jiang was the top Communist Party official in Shanghai in 1989, and when he was elevated to the national leadership that year, after the turmoil surrounding the Tiananmen Square protests, he took many of his Shanghai associates with him.

Despite his retirement from all official posts, he remains active as the titular head of the group.
As another leadership transition looms in 2012, the two factions have been battling over personnel appointments and policy differences.
Not surprisingly, the Shanghai faction favors emphasis on and funneling of resources toward the more economically advanced and urbanized coastal region of China, of which Shanghai is the keystone.

The Youth League faction, worried about imbalances between the coast and inland regions, has advocated a series of policy realignments in favor of the interior.
In late January, Mr. Hu made a public appearance in Shanghai.

On the surface, there was little noteworthy about the visit. He made no important remarks and his activities consisted of nothing more than meetings with local officials, visits to factories in Shanghai’s vibrant information technology sector and an appearance at the site of the Shanghai World Expo, which is due to open May 1.
But two factors marked the visit as significant by the arcane standards of Chinese political life.

It was Mr. Hu’s first publicly reported visit to the city since 2006, and he was greeted by — and photographed with — Mr. Jiang’s eldest son, Jiang Mianheng, who held a significant official post as Vice President of the Chinese Academy of Sciences but would not normally, under standard protocol, have had anything to do with a visit by Mr. Hu.
“There is really no reason for Jiang Mianheng to be showing Hu Jintao around in Shanghai,” said Cheng Li, director of research at the Brookings Institution’s John L. Thornton China Center.

“No one in China will miss the political message of state media showing these two together. The clear meaning is that the two factions have cut a deal,” he said.
Such a deal, several years in the making, could calm a power contest that has not been without casualties.

The biggest blow was struck in September 2006 when the top official in Shanghai, the Communist Party Secretary Chen Liangyu, was arrested and accused of involvement in a scandal involving the misappropriation of hundreds of millions of dollars from the city’s public pension fund.
Mr. Chen, a close ally of Mr. Jiang, was eventually convicted and sentenced to 18 years in prison, but his prosecution was widely seen as more of a political move than a simple act of law enforcement.

Mr. Chen, who was also a member of China’s ruling Politburo, had been extraordinarily bold in attacking the policies of Mr. Hu’s administration.
“There are a lot of senior officials who could easily be charged with corruption, but that happens very rarely,” said a Chinese journalist at a magazine published in Shanghai.
“Everyone here understood that the case against Chen Liangyu was a signal. It meant that the center was retaliating against him because of his opposition,” said this journalist, who requested anonymity because of the sensitivity of political commentary in China.
Still, according to Mr. Cheng, the Brookings research director, the case resulted only in the removal of an individual, and not the destruction of his faction or the continued punishing of Shanghai.

One major element of the peacemaking was a March 2009 announcement by the central government endorsing a plan to make Shanghai a global financial and shipping center by 2020.
“Tension is obviously there, but both factions are cooperating. They cannot overlook the fact that they are in the same boat, and maintaining Shanghai’s growth is an important goal for both sides,” he said.

Google Risks China Brain Drain

Internet Search Giant's Uncertain Future in Country has Employees Receptive to Job Pitches

By LORETTA CHAO
BEIJING—Technology companies in China have begun aggressively trying to poach talent from Google Inc. in the wake of its pledge to stop complying with Chinese government censorship rules, potentially complicating the Internet search giant's effort to continue operating in the country.
Headhunters and rival Internet executives say that uncertainty over Google's future in China has made engineers and other employees from the U.S. company's Chinese offices more receptive to their overtures.

Those employees were previously much harder to woo away from Google because of staffers' loyalty to the company.
Pedestrians walk near the Google China headquarters in Beijing on Wednesday.
Zhao Chenglong, chief human resources consultant for Beijing-based recruitment firm Finder Hunter, said that since Google's announcement he has helped his clients poach "several" Google employees.

He wouldn't specify the clients or the number, but said it was roughly the same number of Google China staffers he recruited in all of last year.

Mr. Zhao says other technology companies, sensing opportunity, have authorized him to offer unusually large compensation packages to potential recruits from Google.
It's been more than six weeks since Google's Jan. 12 announcement that it was no longer willing to continue following government requirements to censor search results on its Chinese site, Google.cn.

The firm said at the time it would be discussing "over the next few weeks" how it might continue operating in China despite that decision, and many observers had expected a resolution by now. But a person briefed on Google's talks with Chinese officials said this week that it could be weeks more before they conclude.
Analysts and industry executives say it is almost certain Google won't be allowed to operate the Chinese site unfiltered, but Google executives, including Chief Executive Eric Schmidt, have said they want to maintain an operation in China.

Google is still trying to fill roughly 40 open positions in China that it listed on its Web site before its January announcement.
A Google spokeswoman said the firm is "hoping to find a solution with the government.... We highly value our employees and will work to find the best solution."

Google employees in China contacted for this article declined to comment.
But personnel experts say the clouded outlook for Google in China makes keeping current staffers, let alone attracting new talent, difficult.

"Ultimately, Google will need to resolve the uncertainty issue" in China," says Michael Bekins, head of the global technology practice in Asia for executive-search and consulting firm Korn/Ferry International Inc.

"That's hanging over their head," he says. In the Chinese Internet sector, "the competition is really fierce... for that same talent."
One company pursuing Google staffers in China is Microsoft Corp., says a person familiar with the situation.

The software giant, which is trying to build up its Bing search engine in China, has hired a designer from Google who is scheduled to start soon, says the knowledgeable person.

A Microsoft spokeswoman didn't immediately respond to a request for comment.
Hao Wu, general manager of Daodao, the China subsidiary of Expedia Inc.'s TripAdvisor travel site, said his firm has approached Google employees who it previously deemed unattainable, and that many have agreed to talk to them.

"Once Google made the announcement to possibly exit China, many tech companies were interested in poaching their employees," Mr. Wu said.

"In the past we approached Google employees but very few were interested in leaving."
Internet executives say it used to be difficult to woo Google staffers in China because of its reputation for offering good opportunities and good pay.

Echo Cui, partner at recruitment firm Eiger Search, says Google has unusually high requirements for applicants, often accepting only top-ranking graduates from China's top universities, and typically will offer the most competitive package to hotly recruited candidates. Google's plush Beijing office also offers video games, a yoga studio and salsa classes—amenities that might seem fairly common in Silicon Valley but that few Chinese companies provide.
Google has made efforts to reassure its China employees about the future through regular updates and meetings, and by going ahead with the company's annual Chinese New Year party earlier this month, according to a person familiar with the situation.

Employees have also been invited to speak with managers about any concerns or questions, the person said.
Amy Cheng, a former Beijing-based recruiter for Google who is now director of human resources for Koolanoo Group, which operates several Chinese Web sites, said Google is still attractive to many Chinese.

It's "very hard to find something [that] matches what they can do at Google" in terms of the impact of their work, said Ms. Cheng, who left Google before the January announcement.

China warns US over future Taiwan arms sales

By CHRISTOPHER BODEEN
BEIJING -- China warned the U.S. on Thursday against any future arms sales to Taiwan and reaffirmed its decision to suspend military exchanges over Washington's plan to sell $6.4 billion in military hardware to the island.
China demands that the U.S. "speak and act cautiously" to avoid further damaging ties and upsetting relations between Beijing and Taiwan, Defense Ministry spokesman Huang Xueping was quoted as saying by the official Xinhua News Agency.
Huang also said there had been no change in Beijing's decision last month to put off military contacts to protest the Obama administration's decision to sell helicopters, missiles and other weapons to Taiwan.
"The U.S. side bears full responsibility for the current difficulties in exchanges between the Chinese and U.S. militaries," Huang said.
Huang's comments follow the publication this week of a U.S. Defense Intelligence Agency report stating that Taiwan's air defenses against China were likely inadequate.
Many observers saw the study as justification for the possible sale of advanced fighter jets to the self-governing island democracy. China considers Taiwan part of its territory and has vowed to conquer it by force if necessary.
Such U.S. reports are an outgrowth of a law -- passed 30 years ago when Washington cut ties with the island to establish relations with Beijing -- requiring the United States to ensure Taiwan has an adequate defense against Chinese threats.
China resents all U.S. arms sales to Taiwan, seeing them as interference in its internal affairs. In response to the latest sale, Beijing, for the first time, also threatened commercial retaliation against the aerospace companies that make the weapons offered in the latest deal.
Speaking at a regular news conference Thursday, Foreign Ministry spokesman Qin Gang repeated China's claims that the Taiwan arms sales undermine Chinese security and demanded the U.S. take action to repair ties.
"The people who tied the knot should untie the knot," Qin said.
The Taiwan arms sale is one of several issues that has roiled China-U.S. relations this year, including trade disputes, President Barack Obama's meeting last week with exiled Tibetan leader the Dalai Lama, and cyberspying accusations from Google Inc.
Huang criticized media reports linking the People's Liberation Army with cyber attacks on foreign governments and corporations, calling them "absolutely baseless, extremely irresponsible speculation with ulterior motives."
Also Thursday, China's Commerce Ministry accused Washington of abusing trade relief measures after U.S. regulators increased import duties on Chinese-made steel pipes to offset improper subsidies to manufacturers.
"These seemingly fair-trade measures in fact are abuses of trade relief measures which are intended to protect the domestic economy," said Commerce Ministry spokesman Yao Jian, referring to a series of recent U.S. trade cases against Chinese exporters.
Yao said the number of U.S. antidumping and anti-subsidy cases against Chinese goods rose by more than half last year to 23, while the value of goods affected rose by eight times to $7.6 billion.

Ang Lee Protege to Return to Chinese Screens

Tang Wei and Ang Lee

HONG KONG (AP) -- Chinese actress Tang Wei is set to return to movie screens in her native country after a reported ban prompted by her politically sensitive role in Ang Lee's spy thriller ''Lust, Caution'' three years ago.

Tang Wei's new romance, ''Crossing Hennessy,'' has cleared Chinese censors, said marketing official Veii Chan of Hong Kong production company Edko Films Ltd.

But a release date hasn't been set and it is not immediately clear how widely the movie will be released, Chan told The Associated Press on Wednesday.
With just a TV series to her credit, Tang was an unknown when Lee cast her over 10,000 other candidates in his 2007 Chinese-language production ''Lust, Caution.''

She became an overnight sensation for her role as a Chinese student activist who seduces a Japanese-allied spy chief in World War II-era Shanghai to pave way for his assassination.
But the politically sensitive subject matter may have caused the actress problems.

China is still very sensitive about the Japanese invasion during World War II and the atrocities committed by its military.

To make things worse, Tang's character falls in love with the spy chief and gives away the assassination plot at the last minute.
''Lust, Caution'' was released in China -- but with heavy editing for political correctness and sexual content.

Tang also did not escape unscathed. Chinese regulators ordered TV stations not to report on her and pull ads featuring her, according to news reports.
She did not act again until ''Crossing Hennessy,'' in which she plays a shopkeeper who is set up with a neighbor played by veteran Hong Kong singer Jacky Cheung.
Tang's appearance in a Hong Kong movie was a way to bypass Chinese regulators.

While this former British colony is now ruled by Beijing, it still retains a Western-style political system and enjoys greater creative freedom.
''Crossing Hennessy'' will be released in Hong Kong on April 1.

China's Localities Feel Pinch of Tighter Credit

By ANDREW BATSON
BEIJING—China's local governments, which ran up huge debts during the record-breaking lending spree of the past year, are now feeling the pinch as authorities in Beijing tighten credit.
Off-balance-sheet borrowing by cities, counties and provinces helped finance a wave of public-works construction last year that contributed to the nation's growth.

Now regulators in Beijing, worried that local governments won't be able to pay back all their loans, are increasing their scrutiny of this kind of debt.
That's likely to constrain the number of infrastructure projects that local governments launch this year, meaning a smaller boost to the economy as the nation's stimulus program enters its second year.

The lion's share of that stimulus consists not of government funding but enormous lending by state banks.
"While tighter credit is unlikely to affect most ongoing investment projects, especially since many stocked up on financing in 2009, local governments will have their work cut out to start new projects this year," said Stephen Green, an economist for Standard Chartered in Shanghai.
Estimates of the total debt accumulated by investment vehicles set up by local governments range from six trillion yuan (around $878 billion) widely cited in the Chinese media, to the 11 trillion yuan calculated by Northwestern University professor Victor Shih.

Those sums—on the same order of magnitude as all the official debt of China's central government—have drawn high-level concern.
"If this is handled poorly it could result in local government financing platforms being unable to repay their debts, creating bad assets for banks and other problems," central bank Gov. Zhou Xiaochuan warned in January.
Liu Mingkang, China's chief bank regulator, followed up in a nationwide conference call with bank executives on Jan. 26, telling them to "fully assess and effectively guard against risks from local government financing platforms."
The Shanghai Securities News reported Wednesday, citing unnamed sources, that banks had been ordered to stop issuing new loans to investment vehicles that are backed only by local governments' future revenue and have no registered capital.
Several Chinese banks contacted Wednesday didn't respond to queries about such lending.
Although local governments in China are generally prohibited from going into debt, most manage to circumvent the law by setting up their own companies to do the borrowing.

Supported by land holdings and the promises of officials, such firms found plenty of obliging banks during the recent lending spree.

And with most tax revenue going to central government coffers in Beijing, local agencies had no other way of paying for the new railroads, bridges and dams called for in the national stimulus plan.
The central government has taken several steps to slow down new bank lending this year.

Amid the more risk-averse atmosphere, local government companies no longer are favored customers.

The country's largest bank, Industrial & Commercial Bank of China, said this month it will "strictly manage" lending to "urban infrastructure projects carried out by local government fundraising platforms."
Local capital markets are also becoming less welcoming.

In 2009, domestic bond issues by municipal investment companies totaled 121.2 billion yuan, according to the National Development and Reform Commission, double the pace of previous years. But these bond issues have already fallen off from their peak in early-2009, and could slow further.
Regulators have raised the bar for new bond applications by companies linked to lower-level governments with weaker finances, a person familiar with the situation said.

However, the central government is still processing applications for bond issues from these companies, as there is a backlog from last year.

"The government isn't shutting down the bond market," this person said. "But there is a growing awareness of credit risk."
The NDRC declined to comment, and the Ministry of Finance didn't respond to a request for comment.
Local governments' plans for the year appear to have factored in a tighter fundraising environment.

The Wall Street Journal examined the government work reports for 2010 that China's 31 provinces have published over the past two months.

Of the 28 provinces that announced a formal target for investment growth this year, 26 are aiming for lower growth in 2010 than in 2009; the remaining two want to keep growth steady. On average, the provinces are targeting an increase in investment for 2010 that is 11 percentage points below what they achieved in 2009.
Curbing local governments' reliance on off-balance-sheet debt isn't a simple task, because they face real financial pressures.

For now, some local officials seem willing to accept the central government's tougher line.

"We will standardize all varieties of government financing platforms, and focus on preventing financial risks," Shandong Gov. Jiang Daming said in a January speech.

Others are still reluctant: Guangxi Gov. Ma Biao said in a speech that he will "give full play to the role of investment financing platforms and expand the scale of fundraising."
The central government's concern is understandable, since it will ultimately have to pick up the tab for any debts the local governments can't sort out themselves.

"Beijing is still responsible for the debt risk of local governments, and they are not allowed to go bankrupt under any circumstances," Xu Lin, director of the fiscal and financial affairs department of the NDRC, wrote in a recent article.

U.S. slaps duties on steel pipe from China

* Ruling is victory for U.S. Steel, union workers
* U.S. expected to announce more duties in April
WASHINGTON -- The United States on Wednesday imposed preliminary duties ranging from 11 to 13 percent on steel pipe from China to offset government subsidies, the Commerce Department said.
The decision puts further strain on U.S.-China trade relations, already tested by disputes over other U.S. trade actions and China's currency policy.
It is a victory for U.S. Steel Corp and the United Steelworkers union, which filed a petition in October asking for protection against the Chinese imports.
Texas company V&M Star LP and Illinois company TMK IPSCO also signed the petition asking for relief.
Roger Schagrin, an attorney representing the petitioners, said he believed the Commerce Department underestimated the amount of Chinese government subsidies.
But "we're still happy (with the countervailing duties). They're in the double digits," Schagrin said.
The case concerns seamless carbon and alloy pipe of 16 inches (41 cm) or less in outside diameter used in industrial piping systems to carry water, steam, petrochemicals, chemicals, oil products, natural gas and other liquids and gasses.
The United States imported $382 million of the pipe from China in 2008, compared to $130 million in 2007.
Imports declined in 2009 along with the overall drop in world trade but surged late in the year as importers tried to beat anticipated duties, Schagrin said.
The Commerce Department set a preliminary duty rate of 12.97 percent on the Hengyang group of companies and 11.06 percent on the Tianjin Pipe Group Co and related firms.
All other Chinese producers and exporters will face a country-wide duty rate of 12.02 percent.
U.S. petitioners have also asked the Commerce Department to impose anti-dumping duties in addition to the countervailing duties announced on Wednesday.
Those duties aimed at below-market prices are often far larger than countervailing duties that Commerce imposes.
"We're optimistic that we'll get significant anti-dumping duties" when the decision comes out in April, Schagrin said.

Feeling at Sea on the Roads of New China

By DWIGHT GARNER

COUNTRY DRIVING
A Journey Through China From Farm to Factory
By Peter Hessler
438 pages. Harper. $27.99.

American travel writers over the past century have taken special delight in describing the intricacies, and the lunatic comedy, of driving etiquette in foreign countries.

Some enterprising publisher is bound to scoop up the best of these observations and issue a queasy-making anthology: “Carsick: A Global Reader.”
When that anthology does arrive, Peter Hessler’s new book, “Country Driving: A Journey Through China From Farm to Factory,” deserves a special place in it.

It’s not merely that Mr. Hessler convinces us that the Chinese, being new to driving, are simply awful at it.

He makes the additional, and delightful, case that perhaps no other people “take such joy in driving badly.”
The Chinese rarely use turn signals or windshield wipers or seat belts or headlights. They tailgate and honk like mad.

“People pass on hills; they pass on turns; they pass in tunnels,” Mr. Hessler writes.

“If they get passed themselves, they immediately try to pass the other vehicle back, as if it were a game.”
The Chinese government is little help.

Traffic lights are occasionally mistimed, Mr. Hessler notes, showing green in all directions.

A left turn lane might be on the far right side of the road. Highway patrols are so rare that officials put fiberglass statues of police officers at some intersections, to function like traffic-calming human scarecrows.

Get a dent? Hop out and haggle for an instant settlement.
Mr. Hessler is a staff writer for The New Yorker, and he was that magazine’s Beijing correspondent from 2000 to 2007.

“Country Driving” is his third book about China, after “River Town” (2001), which was about two years he spent there teaching English while in the Peace Corps, and “Oracle Bones” (2006), a multi-layered survey of that country’s past and present.
His new book is an exploration of China’s burgeoning highway system, and it definitely contains some epic drives: Mr. Hessler, for example, undertakes a 7,000-mile trip across northern China, following the Great Wall all the way from the East China Sea to the Tibetan plateau, his rental car packed with a tent and food supplies that will make your teeth ache: Coca-Cola, Oreo cookies, candy bars, Gatorade.
But “Country Driving” isn’t really an Asian version of William Least Heat-Moon’s “Blue Highways.”

Mr. Hessler’s book is more ambitious than its subtitle makes it sound.

This work is as much about staying put — about hunkering down and observing — as it is about barreling down the highway.
Mr. Hessler spends years in a small farming village in the mountains north of Beijing, and more years in a quickly growing city in southeastern China.

He watches, and takes careful notes, as both places are irrevocably changed by major new expressways. And every now and again he hits the road himself.
The big story Mr. Hessler has to tell in “Country Driving” is about a country that’s feverishly on the move.

Speaking of the early years of the last decade, he writes, “To drive across China was to find yourself in the middle of the largest migration in human history — nearly one-tenth of the population was on the road, finding new lives away from home.”

His book chronicles the flight from rural China, and from farming and folkways, to new cities and their sprouting factories.
The story of this emerging China has been told before, of course, by other writers, and by Mr. Hessler himself, in his previous books and magazine journalism.

But the reporting in “Country Driving” is impressive in its scope.

This book contains dozens of characters and multiple set-pieces and subplots.

Along the way Mr. Hessler delivers eloquent disquisitions on everything from how to buy a used car in China and what hospital stays are like to the history of the Mongol conquest and the pros and cons of the Great Wall as a defensive structure.
Mr. Hessler is an impeccable compiler of facts, in the John McPhee Eagle Scout mold, and he lays these facts out elegantly.

There are moments when you worry he is making a fetish of his clear, careful sentences, moments when tidiness comes awfully close to somnambulance. There isn’t much libido in Mr. Hessler’s writing — not a lot of passion, not much self-revelation.
But like the quiet kid in the back of the classroom who ultimately becomes the best man at your wedding, Mr. Hessler, with his good-naturedness and tact, grows on you.

So does his sly humor, which accumulates slowly, like the toothsome crust at the bottom of a rice pot.

After picking up his share of hitchhikers in northern China, he begins to define the smell of the sickly-sweet perfume the women often wear: “Eau de Inner Mongolia.”
And after explaining how Chinese rental car agencies, exasperatingly, ask you to return a car with exactly as much gas as was in it when you drove away, rather than returning it full, he writes: “The Chinese people had invented the compass, paper, the printing press, gunpowder, the seismograph, the crossbow and the umbrella; they had sailed to Africa in the 15th century; they had constructed the Great Wall; over the past decade they had built their economy at a rate never before seen in the developing world. They could return a car with exactly three-eighths of a tank of gas, but filling it was apparently beyond the realm of cultural possibility.”
As Mr. Heller makes his way across China in a series of rental cars, watching trucks blow past him, he observes that almost any product we buy in the developed world has “probably already spent time on a Chinese road, and someday it may return there to be recycled.”
He mourns the countryside that is rapidly vanishing in China, but he also admires the grit of the rural people who escape.

“They had a gift for self-invention,” he writes, “that rivaled anything in Dickens.”
“Country Driving” is most affecting in its portrayal of lives ripped up at the roots, sometimes for the better, sometimes not.

He describes the “hollow feeling” many Chinese have, because rapid change has left them exhausted and uncertain.
Peter Hessler is a fine tour guide for the new China, a writer who is capable of tossing aside the country’s (deplorable) maps and admitting: “In China, it’s not such a terrible thing to be lost, because nobody else knows exactly where they’re going, either.”