# China's Turn to Learn Old Lessons



## JBeukema

History does tend repeat itself, doesn't it? Didn't anyone learn from when we went through this? Oh who am I kidding, plenty of idiots _here_ still don't get it.


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## waltky

China gettin' uppity with it's neighbors...

*Tensions Flare Over Disputed Asian Sea*
_JUNE 10, 2011 - China Warns Its Neighbors to Stop Looking for Oil, While Vietnam Reports Sabotage in a Regional Security Flashpoint_


> Tensions in the potentially resource-rich South China Sea flared as Vietnam accused China of sabotaging a seismic survey boat while China warned its neighbors to stop looking for oil in the disputed territory without its permission.  Beijing's efforts to extend the reach and influence of its military, alongside its hunger for natural resources, have contributed to mounting worries in recent months over the stability of the South China Sea.  The conflict has escalated into a series of clashes between Vietnamese exploration craft and Chinese patrol boats and a worsening war of words with the Philippines.
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> The territorial disputes were a focus of a regional security conference in Singapore on Saturday, where Defense Secretary Robert Gates said the U.S. was committed to defending its Southeast Asian allies. Mr. Gates predicted more clashes could occur unless rival claimants find a way to peacefully settle their disputes.  Yet Secretary of State Hillary Clinton's move to offer Washington's assistance in facilitating multiparty talks over the waters while visiting Vietnam last year infuriated China.  In the latest incident, Vietnam's Foreign Ministry on Thursday said a Chinese fishing boat supported by two Chinese naval patrol craft cut a cable being used by a seismic survey craft operated by state-run energy company PetroVietnam.
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> Ministry spokeswoman Nguyen Phuong Nga said the Chinese boat's actions were "completely premeditated" and "seriously violated Vietnam's sovereign rights."  China's ambassador to the Philippines, Liu Jianchao, denied any wrongdoing in the area while also urging South China Sea claimants to stop drilling for oil and gas.  Security analysts say the incident reflects a pattern of Chinese muscle-flexing in the disputed waters, which are claimed in whole or in part by Vietnam, the Philippines, Taiwan, Brunei and Malaysia in addition to China, which considers the entire South China Sea as its sovereign territory.
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> The trigger for the worsening disputes is largely economic, says Carlyle Thayer, a professor at Australian Defence Force Academy at the University of New South Wales. The semi-submerged islands and reefs of the South China Seaespecially the Spratly Islands and the Paracelsare believed to lie atop significant reserves of oil and natural gas. Vietnam and the Philippines are already tapping some fields in the region.  China "seeks to control these resources because they are abundant and closer to home than oil from the Middle East,"
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## Homer

After WWII, China had already claimed the south sea and got the agreement of USA, British, USSA(Now Russia). Vietnam, Philipines and other south Asian countries didn't object. After WWII, to helping these development countries and also because China need a friendly environment to develop, China permit to develop the resources of south sea with these countries together. Even 1970's, Vietnam admit the south sea is Chinese territory. But then, guess what? Vietnam didn't take the offer of develop together, they occupied the most islands of south sea. Now they are pretending to be victims by thinking all the other countries are idiot without history knowledge. 

With Chinese help, Vietnam defeated Americans. And they betrayed and defeated Chinese by occupying south sea islands and they are going to defeat Chinese further by turning their illegal occupation into legal  with the great help of Americans. 

So the Vietnam is the greatest country in recent 100 years: they defeated France to get independence, defeated USA to be unified, and defeated China to be the third strongest country in the world as they were claimed in 1980's (just after USA and Russia).


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## waltky

Uncle Ferd been wonderin' why his sound card only plays Chinese music...

*US Senators: China Blocking Probe of Counterfeit Electronics*
_June 14, 2011 - Two high-ranking U.S. senators are accusing China of hindering a probe of counterfeit electronic parts detected in the multi-billion-dollar U.S. Defense Department supply chain._


> The Chairman of the Senate Armed Services Committee, Carl Levin of Michigan, said the fake electronic components include counterfeit microprocessors purchased by the U.S. Air Force for flight control computers, and counterfeit microcircuits in missile defense hardware.  Appearing at a news conference at the Capitol, Levin said the problem must be thoroughly investigated and promptly corrected.  Counterfeit electronic parts pose a risk to our national security, pose a risk to the reliability of our weapons systems," he said. "The proliferation of counterfeit goods also damages our economy and costs American jobs."
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> The allegations of counterfeit parts surfaced in a report last year by the U.S. Government Accountability Office. Levin said inquiries by his committee and the U.S. Commerce Department yielded strong indications that the fake components originated in Chinas southern Guangdong province.  Levin said he and the ranking Republican on the Committee, Senator John McCain of Arizona, want to dispatch members of their staff to Guangdong to conduct interviews with electronics suppliers there.
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> Senator McCain and I have tried for the last many weeks to get the Chinese embassy here and the consulate here to issue visas to our staff, without success," he said. 'The Chinese have said, Well, even if this could be arranged, there would have to be a Chinese official present during the interviews.' That is a non-starter. We do not have [to allow] somebody looking at our staff while they are interviewing people who are relevant to an investigation.  The Chinese embassy in Washington did not immediately respond to VOA requests for comment on the matter.
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> Appearing alongside Levin, McCain argued that Chinese intransigence on the matter is unwise for both nations.  The United States and China are not destined to be adversaries," said McCain. "We have overlapping interests, and this is actually one of them. It should be in Chinese interests not to have counterfeiting of these electronic parts going on, because it would harm legitimate Chinese companies as well.  Levin said staff investigators are in Hong Kong, and will make another attempt Wednesday to secure visas for travel to Guangdong.
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> Source



See also:

*Clinton 'Concerned' by Chinese Trade Practices in Africa*
_June 14, 2011 - U.S. Secretary of State Hillary Clinton says she is concerned by Chinese aid and investment policies in Africa._


> Trade was a centerpiece of Secretary Clinton's trip to Africa this week as she met with business leaders to discuss continuing duty-free access to U.S. markets under the African Growth and Opportunity Act.  So it is no surprise that everywhere she went - in Zambia, in Tanzania and in Ethiopia - Clinton was asked about the country that has overtaken the United States as Africa's top trading partner:  China.  "China's presence in Africa reflects the reality that it has important and growing interests here on the continent including access to resources and markets as well as developing closer diplomatic ties. The United States does not see these Chinese interests as inherently incompatible with our own interests, she said.
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> Chinese-African trade rose more than 40 percent, last year, to nearly $127 billion.  Much of that was centered on mineral and oil exports, as Beijing looks to fuel its massive economy.  Secretary Clinton says the Obama administration hopes that China will be successful in its economic efforts on behalf of the Chinese people and that it will assume a greater, and more responsible role in addressing challenges in Africa.  "We are, however, concerned that China's foreign assistance and investment practices in Africa have not always been consistent with generally accepted international norms of transparency and good governance.  And, that it has not always utilized the talents of the African people in pursuing its business interests, he said.
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> Large Chinese construction projects in Africa often employ Chinese workers housed at the site.  African trade unions have complained that those projects do not create jobs or job training for local workers.  Clinton says U.S. diplomats in Africa are reaching out to Chinese colleagues to explore potential areas of cooperation while assessing China's overall role in Africa.  "We want to work more closely with China and other countries to make sure that when we are engaged with Africa, we are doing it in a sustainable manner that will benefit the nations and people of Africa, she said.
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> Although Washington has been replaced as Africa's top trading partner, it is still Africa's largest aid donor.  Clinton says U.S. investment and assistance programs in Africa are based on partnership, not patronage, unlike those who deal only with Africa's elites and often undermine good governance.  "It is easy to come in, take out natural resources, pay off leaders and leave.  And, when you leave, you don't leave much behind for the people who are there.  You don't improve the standard of living.  You don't create a ladder of opportunity. We don't want to see a new colonialism in Africa, said Clinton.
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> An editorial in the state-run English-language China Daily newspaper, responding to Clinton's comments, says China has never colonized any nation in Africa.  The editorial says, on the contrary, it is well known to African people and the world that China has helped Africa build many schools and hospitals.  The editorial says many African governments regard Chinese investment as an opportunity and welcome Beijing's consistent policy of noninterference in domestic affairs.  It says the strategic partnership with Africa has nothing to do with neocolonialism and is instead based on principles of sincerity, friendship and mutual benefit on an equal footing.  The state-run newspaper says the African people are wise enough to be able to identify who are their true friends.  It says, They don't need lectures in this regard.
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## waltky

China-Vietnam arguin' over who owns Spratly Islands...

*Vietnam-China Spratly Islands dispute threatens to escalate*
_June 16, 2011 : Tensions between China and Vietnam have risen in recent weeks, with Vietnam expressing alarm at what it says are increasingly aggressive actions by China in disputed waters._


> Tensions between Vietnam and China over disputed claims to the resource-rich Spratly Islands in the South China Sea are threatening peace in the region.  China sent its largest patrol ship Thursday on what it claimed was a routine trip through the area, but the deployment comes after a spate of other moves, including Vietnams staging of a live-fire exercise in the area and Chinas denouncement of it.  Neither country is likely to back down easily, and if they did, neither population would see it in a favorable light. Because of this, some worry tensions could escalate to the point of exchange of fire.
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> At the moment, Vietnam is trying to show that it is not going to take [challenges to its claim in the sea] lying down, says Minxin Pei, a China expert at the Claremount McKenna College. Rationally, China should cool it a bit. Having a fight with Hanoi is not a good idea. But if Vietnam sends back survey ships China may have no choice but to respond.  Since the latest spat in the South China Sea, known locally as the East Sea  Vietnam accused Chinese vessels of cutting cables to their survey ships in May  China has been a hot topic among Vietnamese. Both nations media has been full of sabre rattling, accusations, and avowal of rights to the area.
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> Protests in Vietnam
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> The escalating tension has fueled anti-Chinese sentiment across Vietnam, with hundreds taking to the streets in rare protests in Hanoi and Ho Chi Minh City.  Last Thursday, Prime Minister Nguyen Tan Dung called Vietnamese sovereignty incontestable.
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> The same day, Dung also announced a new military draft clarification, apparently the first announced since the 1979 border war between Vietnam and China, which China lost. And a big show was made of announcing the routine live fire drills in local media.  Vietnams live fire drills were something of an anticlimax ... no anti-ship missiles were test fired. And they were conducted so close to land there was no possibility of any Chinese ships being involved, says Vietnam expert Professor Carl Thayer, at the Australian Defense Force Academy.
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> *Complicated relationship*


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## Annie

Hmm, the op is banned and cannot respond. I'm assuming that means why waste time and trouble, it will be locked.


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## elvis

Annie said:


> Hmm, the op is banned and cannot respond. I'm assuming that means why waste time and trouble, it will be locked.



I don't see any reason to lock it at this point.


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## Annie

elvis said:


> Annie said:
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> Hmm, the op is banned and cannot respond. I'm assuming that means why waste time and trouble, it will be locked.
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> I don't see any reason to lock it at this point.
Click to expand...


this point being the actionable words. Seems that there are codes or posters that result in closing of some threads and the deletion of others to rabbit hole of many. I'll not waste my time with an op that has so many of both. 

Then again, why waste my time on posts that aren't easy in the first place, since we have so many disappearing threads and banned members without explanation? 

I don't blame the mods, can't think of one I don't respect. Yes, even Modbert, weird though he may be. You guys are fine. So the problem lies where? Who the hell knows, they aren't speaking.


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## sparky

And the income distribution system is defective. Workers contributions are not rationally assessed. Above all, we should change the way people think, correct mistakes and break the boundaries of social status in order to further the income distribution system reform

so China's gone liberal !

you heard it here first! China has all the libturds, litards, f*ing liberals we loath!


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## waltky

China playin' 'Big Me - Little You' with Vietnam...

*China Warns Vietnam of Possible Military Response in South China Sea*
_June 21, 2011 - China's state-controlled media are warning Vietnam that Beijing will "take whatever measures necessary," including military action, to protect its interests in the South China Sea._


> The Global Times newspaper, in an editorial Tuesday, issued Beijing's sternest public warning yet to Vietnam as regional tensions rise over conflicting maritime claims to territories thought to be rich in oil and natural gas deposits.  The newspaper said that failure to reach a peaceful solution to the disputed claims, which center on the Spratly island chain, will prompt Beijing to use maritime police and naval forces, if necessary, to protect Chinese claims.
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> The editorial comes as the Hong Kong Commercial Daily newspaper reports that Beijing has moved up the start date for sea trials of a new aircraft carrier to July 1 because of the rising tensions.  The report says the carrier, a refurbished Russian vessel, will not be officially launched until October 2012.  The Chinese military has not confirmed the sea trials.  In Washington, U.S. Senator John McCain said the United States must help Southeast Asian nations boost their maritime forces to counter China's "unsubstantiated" claims in the South China Sea.
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> McCain, speaking late Monday, said he is troubled over Beijing's increasingly assertive maritime actions, especially in waters claimed by members of the regional block known as Association of Southeast Asian Nations, ASEAN.  McCain, in remarks to the influential policy group the Center for Strategic and International Studies, said Washington should assist ASEAN to develop and deploy maritime early warning radar, coastal security vessels and other basic maritime systems.
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## mike beev

How about America's turn to learn old lessons?  Can we just stay out of this one?  I made three cruses in the Tonkin Gulf Canoe Club, and it got us nothing. If they are all too greedy or nationalistic to share the oil, let them fight it out without us.  Besides, if we were to go up against China, who would we borrow the money from to run our own country?  You can't be a real superpower and a debtor both.


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## Soaringdragon

More on an old theme - learning that corruption doesn't pay:

In April, 2011, an arrest was made of a Chinese airline executive who was accused of benefitting from unethical behavior by certain western suppliers in the high-stakes business of selling aircraft, engines, sub-systems, equipment and services to Chinese airlines. China has come a long way in ensuring that large procurements are conducted in a fair and professional manner. However, some dirty individuals have emerged seeking personal gain while damaging their companies and misusing state-owned assets. In turn, some great American companies have been damaged with resulting loss of strategic positioning, business and jobs which will last for many years. The Chinese internet has carried some of this story - more follows.

1- Who was hurt, who gained? 
   Companies impacted: Boeing, GE, Pratt & Whitney, IAE and smaller suppliers
   Companies benefiting: Airbus, Rolls Royce, CFMI
American companies with splendid products and great business offers have had major set-backs while European companies willing to use bribery benefited from the actions of a dirty duo within some key Chinese airlines. 

2- Specific examples of manipulation (from largest procurement to smallest)
a)- In 2010, the 787 order was cancelled by China Eastern Airlines and replaced by the A350 despite a distant & uncertain delivery, date a minimum of 5 years away. Both Boeing and GE were hurt. Fundamentally, Boeing has no chance at China Eastern currently with their President reconfirming his intention not to buy Boeing aircraft as recently as May-June 2011.
b)- First in 2004-2005 and then in 2010, selections of Rolls Royce for A330s were manipulated at both Air China and China Eastern Airlines, respectively. In both cases, selection teams were told in advance (by clear actions of the chief perpetrators) about the desired outcome (in volation of China's procurement rules) and teams responsible for evaluations in their specialization areas were forced to draw conclusions with which they did not agree as professionals and were even threatened publicly and privately until their departments supported the desired selection. Pratt & Whitney was hurt at Air China and both GE and P&W at China Eastern.
c)- In 2007, Air China became a launch customer for the 787 in accordance with a China government plan. During the engine selection campaign, virtually the same method was used as in (2b) above. Air China became the only Chinese airline launch customer to select Rolls Royce instead of GE.
d)- In 2010, the CFM56 was selected for China Eastern Airlines' A320 purchase instead of the very attractive V2500 engine offer from IAE. This was influenced by a decision to use credits owed to GE from the cancellation of 787 engine contract. This paved the way for China Eastern to select Rolls Royce for the A330s in (2b) above which otherwise might have tipped a decision in favor of GE. 
e)- Other smaller decisions about IT systems/software and business strategy consultants were similarly manipulated to favor companies providing personal incentives. Again, an approach was used of (i) telling the procurement evaluators and others the desired outcome - even if the results of the professionals on the evaluation teams strongly favored the alternative supplier and hurt the airline; (ii) having a biased person head the overall evaluation and (iii) stacking a voting committee with non-professional, disinterested personnel so the appearance of consensus could be recorded.

3- What was the common element in all these cases? 
Answer: Ma Xulun and his chief henchman Chen Qin at both Air China and China Eastern Airlines. Ma Xulun was the President of Air China and Chen Qin was Deputy Director of Planning when dubious decisions to select Rolls Royce for their A330s in 2004-2005 and 787 in 2007. A short time later, Ma was replaced as Air China's President and given a Group position without portfolio. The management forced Chen to leave whereupon he joined Air Macau and then an aviation consulting company.  

Ma became the President of China Eastern Airlines on the basis of bad advice given to the airline's new Chairman. Soon afterward, Ma brought Chen to China Eastern as the GM of Planning amazing staff members who were aware of his background. Chen again employed his strong-handed methods of trying to grap control procurement evaluations and threatening staff who disagreed with his manipulation of results. The China Eastern Airlines management team was even more shocked when Ma named Chen as GM of Marketing with the added responsibility as the sole selector of equipment for China Eastern Airlines - unprecedented among Chinese airlines both for his meteroric rise, the scope of his power and his dubious background for unethical behavior. This occurred only the day before Chen was arrested. But let us be clear: all the events mentioned above were orchestrated by the cunning Ma.

4- There is strong evidence that bribery and personal gratuities motivated Ma and Chen.
There are a number of people that have heard Chen boast of the money he received from agents of Rolls Royce and Airbus Industries, the major beneficiaries. Even before the announcement of the 2005 decision by Air China to select Rolls Royce for their A330s, Ma departed for the UK with his son to complete details on the fully paid UK university education that his son would enjoy. Again in 2010, this time just as China Eastern's campaign to select an engine their new A330s was beginning, Ma and his son visited Rolls Royce, providing a clear statement to the China Eastern staff about his preference for an engine supplier. During another celebration dinner, a senior Airbus Industries respresentative during a moment of indiscretion, boastfully mentioned the amount of money he had spent on bribes to pave the way for the 787 cancellation and the order to buy the A350 aircraft by China Eastern - this was heard by many people. 

5- This has culminated to date with the arrest and detention of Chen Qin.
Chen Qin has so far confessed to accepting large bribes from agents of Rolls Royce and Airbus Industries. In fact, the real bad guy who has been behind all this was Ma Xulun, currently the President of China Eastern Airlines. Chen Qin thought he was protected but he simply went too far, offended too many, left too many casualties and created too many people eager to see him brought down. Ma Xulun was more cautious and cunning, standing behind but also made serious infractions observed by many (a) letting personnel know unequivocally which supplier he insisted be selected in sensitive, high-stakes procurement competitions; (b) organizing clearly rigged voting sessions to pressure professionals into joining the majority; (c) travelling with and meeting respesentatives of Rolls Royce and Airbus Industries while advocating their companies and denigrating their competitors; (d) promoting his henchman Chen Qin to increasingly high level positions with control of equipment selection, to the amazement and consternation of his staff; (e) defying his concerned Chairman's directive to upgrade China Eastern's aging fleet by declaring to his staff that he would stick with the plan to current plan and that Boeing would have no chance for aircraft sales at his airline. 

Ma Xulun must be stopped, prevented from interferring with high-stakes procurements and brought to justice for his unethical behavior and misuse of China's state assets. Hopefully, all who are aware of this despicable situation will take action to complain about it until steps are taken to correct it and to avoid a repeat occurence. No nation can be strong if rampant corruption is tolerated - particularly in a business sector as significant as air trnsportation.


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## waltky

China claimin' the South China Sea...

*South China Sea Disputes Could Lead to War: Report*
_Tuesday, 28 Jun 2011 | China along with several Asian countries have competing claims over the South China Sea, which is thought to have vast oil reserves._


> Risks are growing that incidents at sea involving China could lead to war in Asia, potentially drawing in the United States and other powers, an Australian think tank warned on Tuesday.The Lowy Institute said in a report that the Chinese military's risk-taking behaviour in the South and East China Seas, along with the country's resource needs and greater assertiveness, had raised the chances of an armed conflict.
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> "The sea lanes of Indo-Pacific Asia are becoming more crowded, contested and vulnerable to armed strife. Naval and air forces are being strengthened amid shifting balances of economic strategic weight," report authors Rory Medcalf and Raoul Heinrichs wrote.  "China's frictions with the United States, Japan and India are likely to persist and intensify. As the number and tempo of incidents increases, so does the likelihood that an episode will escalate to armed confrontation, diplomatic crisis or possibly even conflict," they said.
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> The study on major powers and maritime security in Indo-Pacific Asia was published as China prepares to unveil its first aircraft carrier, perhaps this week, a development that has added to worries in the region about China's military expansion and reach.  This month, China sent its biggest civilian patrol ship to the South China Sea. That rattled the Philippines, which makes competing claims to some waters thought to hold vast oil and gas reserves.
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> On Monday, the U.S. Senate passed a resolution that deplored China's use of force against Vietnamese and Philippine ships in the South China Sea.  Senator Jim Webb, chair of an east Asian and Pacific affairs subcommittee of the Senate Foreign Relations Committee, said "a growing number of nations around the South China Sea are now voicing serious concerns about China's pattern of intimidation".
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> Chinese Foreign Ministry spokesman Hong Lei, speaking at a regular news briefing in Beijing, said the U.S. resolution "did not hold water" and that countries not directly involved in the dispute should not interfere.  "Countries not involved should respect the hard work of countries actually involved to peacefully resolve the dispute bilaterally through dialogue," Hong said.
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> *"Danger Zone"*


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## GiveMeTheFacts

SoaringDragon, I'm sure you need to protect your sources but can you give me an idea of the types of sources you used to get this information? This is essential to establish if this is factual or just rumors or worse.


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## Soaringdragon

GiveMeTheFacts said:


> SoaringDragon, I'm sure you need to protect your sources but can you give me an idea of the types of sources you used to get this information? This is essential to establish if this is factual or just rumors or worse.



This solid information comes from discussions with many parties: suppliers to the airlines named, people in China Eastern Airlines, people in Air China, people in CAAC and people who are aviation followers in China. All of the sources offered first hand observations. Examples include people who attended a dinner where a key European supplier who bragged about the quantitative amount of the bribe it took to achieve the incredible switch from Boeing 787s to Airbus A350s at China Eastern; people at a board meeting who heard an independent director (a high level professional from another airline) question in detail the wisdom of the switch given China Eastern's aging fleet; executives and professionals within both named airlines who detailed how they were forced proposal evaluations to include conclusions they did not agree with & how they were threatened by Ma Xulun's empowered lackey Chen Qin to vote the specified way or else; people who were concerned about how these openly dishonest procurements would hurt the reputations of their airlines and their nation. The sources are impecible and well researched.


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## BizQA

> Dirty Duo Damages China Eastern, Air China & Suppliers with Unprecedented Corruption


You say that USA companies Boeing, GE and Pratt & Whitney have no chance at China Eastern Airlines demonstrated by the 787 cancellation and engine selections which were manipulated. I thought China was careful to insist on open, fair procurement competitions - particularly those involving purchases of high value assets. If the situation is as you described, what should companies like Boeing, GE, P&W and others do to ensure there are reasonable opportunities for success in the future?


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## Soaringdragon

BizQA said:
			
		

> I thought China was careful to insist on open, fair procurement competitions


Aircraft particularly are used as "awards" by the China central government to balance relationships and to reward cooperation of the USA and Europe with China. It is amazing to think that an individual in place as the President of a major Chinese airline like Ma Xulun is would consider manipulating the aircraft selection process, hurting his own airline and accepting bribes while under the watchful eyes of the enterprise and government disciplinary organizations. There were too many people aware of his methods and who disagreed with the damage he inflicted. The Dirty Duo hurt too many and openly disregarded (a) their government's directives (on fair bidding processes & on supporting the launch of the Boeing 787); (b) their airline chairman's instruction to upgrade China Airlines fleet immediately; (c) analysis and opinions of long-time professionals charged with evaluating the merits and pluses/minuses of critically needed equipment, etc. 

It will be difficult for the individuals in China hurt by this ugly affair to complain or to draw attention to the culprits and their methods. There are no whistle-blower protections in China there is a strong concern about damaging the reputations of the country; the well-established, venerated China Eastern Airlines; and the national flag carrier Air China.

The USA companies Boeing, GE, Pratt & Whitney and others can complain privately through various channels about the bidding process; their desire to have a fair and open evaluation of the competing suppliers; their concern about the manipulation that has taken place; and the certainty that it will continue at China Eastern Airlines with President Ma Xulun still in place. The USA companies could even legitimately request that the US Government highlight the situation in China-USA trade discussions.

Thre is no question that this unfair situation continues to hurt USA companies today. As stated in my earlier posting, China Eastern President Ma Xulun after recently being directed by his Chairman to upgrade the airlines' fleet with Boeing 777 or Airbus A380 aircraft, in the presence of his senior staff and high level Airbus management said China Eastern would stick with their plan to buy Airbus A350 aircraft (delivery date unspecified but many years away). He clearly said Boeing (and hence GE) would have no chance at his airline.


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## waltky

China wants to own the Pacific Ocean...

*South China Sea deal eases US-China tension*
_July 22, 2011 : China acquiesced to a draft agreement on the South China Sea dispute ahead of Secretary of State Clinton's arrival at an ASEAN summit last night  perhaps to block US 'meddling' in talks._


> Secretary of State Hillary Clinton today praised China and the regional bloc ASEAN for reaching a draft agreement this week to ease tensions in the disputed South China Sea.  China claims sovereignty over the entire sea, but the Philippines, Vietnam, Taiwan, Brunei, and Malaysia also claim parts of it as their own. A third of the world's shipping passes through this body of water, which is also rich in oil and natural gas, the Associated Press reports.
> 
> China, which has been accused of trying to intimidate the Philippines and Vietnam into stopping their oil exploration in the sea, has long resisted signing any agreement that would require that disputes be resolved peacefully until now. China's acquiescence to the draft agreement  which ends more than a decade of deadlock and brings the countries closer to a final, legally binding code of conduct  was likely spurred by a desire to get the issue off the table before Clinton's arrival Thursday night at the ASEAN summit in Bali, Reuters reports.
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> At last year's meeting, Secretary Clinton announced that the US considered the South China Sea dispute a national security issue because of its obligation to guarantee freedom of navigation, according to AP. The US has since held joint naval drills in the area with both the Philippines and Vietnam, CNN reports.  But China says the disputes are bilateral ones and perceives US involvement in the dispute as meddling and provocative. An editorial in China Daily today says that the dispute has been "heating up" since least year's ASEAN summit.
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> MORE


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## Soaringdragon

> New Information in the China Eastern Airlines Corruption Case


I explained before that the President of China Eastern Airlines, Ma Xulun, was involved in a number of corrupt procurements involving aircraft and engines and that his most important assistant in this, Chen Qin, Director of Planning, was arrested in this matter. Other facts have come to light:

To pave the way for the unwarranted and historic cancellation of the Boeing 787 at China Eastern Airlines, Chen Qin and Ma Xulun first had a consulting company (the one Chen Qin previously worked at) conclude that the 787 aircraft was not necessary at China Eastern. This conclusion was disputed by the Chairman, members of the Board of Directors, the technical staff and others. Nevertheless, Ma Xulun stuck with this position - after all, Airbus would reward him handsomely. 

Ma Xulun not only puts his own self interest above that of his company but he is also a vengeful person. Because he received huge amounts of money from Airbus and Rolls Royce for the 787 cancellation and the substitution of the A350 aircraft, he built strong loyalty to Airbus and Rolls Royce and antimosity for companies like Boeing. Boeing has no chance at China Eastern with Ma saying openly that he refused to consider their widebody aircraft.

China Eastern and Pratt & Whitney agreed to form a joint venture company to repair engines for China's 737 aircraft and beyond before Ma Xulun came to China Eastern. After significant encouragement from the Shanghai and Chinese governments, China Eastern and Pratt & Whitney invested in and built a world class overhaul facility. Now Ma Xulun, who for some reason views Pratt & Whitney as an enemy (the act of a vengeful person?), is determined to renege on the joint venture contract despite the major investments made by Pratt & Whitney and its parent United Technologies Corporation. 

President Ma Xulun continues to act irresponsibly and with distain for international business practices.


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## BizQA

SoaringDragon said:
			
		

> Corruption in Aircraft & Other Purchases at China Eastern Airlines


Corruption is a worldwide phenomena. So why is this case of corruption at China Eastern Airlines affecting cancellation of orders for Boeing 787aircraft, substitute orders for A350 aircraft, A330 engine selection, decisions on a joint venture to overhaul engines for the 737 aircraft, etc so special?


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## BizQA

SoaringDragon said:
			
		

> China Eastern Airlines and Pratt & Whitney engine overhaul joint venture problems


A quick search of the internet shows that the referenced joint venture was launched several years ago in Shanghai, the home base of China Eastern Airlines, and focused on the repair of CFM56 engines. The aftermarket business seems to be where the profits are in the engine business. Now that the joint venture facility is built as you indicated, there would seem to be significant opportunity for China Eastern Airlines and Pratt & Whitney. You said that the China Eastern President Ma Xulun was "determined to renege on the joint venture contract." What does this mean?


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## Soaringdragon

Biz Q&A said:
			
		

> Corruption in Aircraft & Other Purchases at China Eastern Airlines


China is trying hard to reduce corruption. They recognize that they must do this to remain a strong business competitor in the long run. The fact that one perpetrator was arrested (albeit the junior member of the dirty duo) is an excellent step by the Chinese government - now the senior member, China Eastern Airlines President Ma Xulun, should be removed as well. 

In China's form of governace, the state maintains possession of the country's assets, in ideal terms, for the good of all the people. State owned enterprises (SOEs) use the country's assets (capital, land, raw materials, etc) to achieve business results. The leaders of major SOEs have responsibility to use the assets for the greater good, not to sell the assets and put the proceeds in their own pocket - this would be stealing from the state and its people. China Eastern Airlines, one of the big three airlines in China, started as a SOE and, today, a major ownership share is still maintained by the Chinese government. The China Eastern President is still responsible for using the state assets wisely and for the greater good. Buying inferior products or more expensive equipment than needed so he can put a supplier's bribe in his own pocket is stealing from the state and is a crime.

Corruption is widespread in China today. The only entities powerful enough to implement the step-change that is needed to reduce corruption are the Chinese government and the Party. When leaders of big SOEs and companies in which the state has a major ownership share are corrupt, when they abuse the procurement system and when they steal from the state, as is the case in the cited China Eastern Airlines corruption in aviation purchases, the Chinese government has a right to make an example of the high level perpetrators so all know that this type of abuse will not be accepted.


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## Soaringdragon

Biz Q&A said:
			
		

> China Eastern Airlines and Pratt & Whitney engine overhaul joint venture problems


As part of the joint venture contract between the two subject companies, as is typical, China Eastern Airlines is required to send their CFM56 engines to the joint venture for repair and, of course, to pay for the repair services performed. China Eastern Airlines President Ma Xulun does not want to send China Eastern engines to the joint venture despite the contract; he is in arrears on payments for services performed; and he does not want to pay. He is reportedly looking for ways to terminate the contract all together. 

Obviously, unilateral cancellation of a joint venture contract after the venture partner has made its investments and worked in good faith to create a world-class operation is a violation of accepted international business practices, not to mention contract law. This unreasonable action is apparantly being driven by President Ma Xulun's personal vindetta. Responsible parties in the airline in the Shanghai and China central governments hopefully will intervene. Of course, Pratt & Whitney and its parent, United Technologies Corporation, must stand firm, continue fulfilling their obligations in the joint venture and seek support from the right parties to prevent an injustice.


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