Shocking news to me out of Mongolia about the state of emergency in a country that’s been pretty stable over the past number of years. The BBC reports:

The president of Mongolia has declared a four-day state of emergency in the capital amid violent protests over claims the general election was rigged.

Crowds torched the HQ of Mongolia’s governing party - the former Communists - and attacked a police station.

So the possible reason why things are going crazy? Money:

Despite years of political unease, politics in Mongolia was relatively calm as long as the country was poor, the BBC’s David Bamford says.

But that has changed, as recently unearthed deposits of copper, gold and coal in the vast Mongolian plateau start to be exploited, our correspondent says.

As I’ll repeat over and over again here, International Economics (Liberalism) will always trump domestic politics (Strategic Choice).

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Hung Huang explains (in English) extremely well on the assumptions on both sides and what to learn from the international protests over the Olympics for both sides. This is a must view to really understand the issue:

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The concept of intellectual property rights (IPR) did not develop at the same time nor happen overnight in the rest of world; on the contrary, it took decades for the culture to develop and be accepted worldwide.

The ideas of copyrights, patents, and trademarks first arrived in China in the late 1800s, yet wars, rebellions, and revolutions all squashed the ability for China to develop the protection for IPR. In fact, the stealing of a book was seen as an ‘elegant’ offense within China, a forgivable offense as the person is trying to acquire knowledge—something valued by society.

With the establishment of the People’s Republic of China and the removal of private property this reversed and prevented any trends towards the development of an IPR culture. Only until the 1980s with the PRC’s acceptance of a market-based economic system did the PRC begin to establish rules around IPR.

Even with a rapidly growing software industry over the past decade in China, China’s software industry is definitively smaller and far less profitable than it should be. With pirated software accounting for over ninety percent of installed computer software, the loss in profits has been overwhelming to the domestic software industry. As such, the some firms within the industry have formed the China Software Alliance modeled on the US Business Software Alliance in an effort to promote awareness over copyright issues and push to change existing laws and policies for the software industry.

Yet, the software industry’s power is relatively small as the CSA took a very conciliatory approach and refrained from openly criticizing various government agencies responsible for cracking down on piracy and drafting the new copyright law, with much of the pressure from China came not through the domestic software industry, but by the US government through China’s joining of the World Trade Organization.

So what would be some business incentives from a pro-IPR perspective? Having copyrights on software allows companies to protect their code and the way they made the software in order to protect profits as without it other companies could directly copy the software and sell the software for cheap—like generic drugs. Other companies may make a worse software if not protected, making it seem like the original product was poor to begin with, reducing the company’s brand image. Without copyrights, companies would have few incentives to produce or charge cheaper prices if the risk of copying was extremely high.

I created a powerpoint presentation on this topic back in 2004 for a telecom class specifically on the China piracy debate.

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A few weeks ago I was privileged to go to the Asia Foundation’s event “The Future of Democracy in Southeast Asia.” I was mainly there to meet up with other IR/PS alumni as I’m more interested in East Asia and China in particular, but surprisingly the event turned more towards the relationship between economics and democracy which was quite fascinating.

The overall subject was how democracy was faring in the region and how that related (or not) to the lack of democracy. Larry Diamond from the Hoover Institution favored the more Modernization Theory approach and Big Bang aspect of turning around a country’s economy by quickly embracing democracy whereas Kishore Mahbubani noted that in fact what matters more is the role of good governance.

Listening intently to the arguments laid out by both sides, I actually could not help but envision the two of them as two differing viewpoints of mine where I truly believe that on the one hand democracy is the best form of government possible for economics in the long-term and for the well-being of the countries’ citizens. Yet, at the same time, democracy and elections are not everything if the democracy is so corrupt and governance so poor that the people begin to clamor for an autocracy that could benefit them instead.

In the same way, Japan, Taiwan, and Korea all developed economically with a system of government that was either not democratic, or at best a minor democracy. China even sees Singapore’s style of government as the best outcome for development rather than a quick change that Russia went through.

Nonetheless, I am an eternal optimist that all countries that want to develop into a first world (aka developed) nation status will have to develop a style of democracy suiting to the country’s citizens in order to consistently root out endemic corruption that grows over time under one system of rule (endemic in this case being longer than eight years). Interestingly, the development of democracy has occured when the average citizen earns around $5000 a year or can afford a car.

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Appeal pending, China has had its first defeat with the World Trade Organization.

Upholding a complaint from the European Union, Canada and US, the preliminary WTO finding agrees that current Chinese practice is protectionist.

Under existing Chinese rules, its carmakers must use 60% Chinese-made parts - or pay higher taxes.

The ruling says China must end this policy to meet its WTO obligations.

Now, before you consider that much of important news, consider that China is still relatively new within the WTO, so losing this case is not that surprising, especially considering how long these cases take on the international stage.

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I ran across a blog called “Journalism by Other Means” talking about The New Hegemony, a response via the New York Times article. I strongly suggest reading the full 8-page article (I know, that’s a lot of clicks and time) called Waving Good-bye to Hegemony. Part of the article definitely goes into my previous post on the Rise of Chinese Style Democracy, but I wanted to note some areas of disagreement on a wonderful article that makes me happy to see some journalists really caring about the US/international affairs contrary to this past 8 years (all after the jump…) (more…)

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For the economics / international affairs elite, this is a rather big news story in my opinion. The WTO, actually ruled against the US (a primary sponsor / benefactor of and for the WTO) and for Antigua plus some other Caribbean countries over the United States’s illegal banning of online banning. As a result:

The WTO’s recent ruling on Antigua’s complaint against the US over the banning of online gambling resulted in a payment to the island nation much less than they asked for. It appears, though, that this payment was just part of the WTO’s compensation package for Antigua/Barbuda. Via Kotaku, the Hollywood Reporter notes that the Caribbean country can now freely ignore US copyright laws - legally. This dispensation is apparently limited to some $21 million a year.

It remains to be seen as to whether the US will actually compromise now with Antigua, but nonetheless any enterprising firm *coughs* Pirate Bay *coughs* could easily set up shop and start legally ignoring American copyright laws.

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More and more information is coming out about the Bush Administration’s foray into torture by almost any means necessary in order to get acquire any information possible after 9/11.

Sadly, this is not confined to the US at this point as information previously came about about the use of foreign airports in Europe with likely permission of the respective governments and as of yet no inquiries or legal cases into finding out what was agreed upon, who knew what and why.

(more…)

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Back in 2004 when I was at a Model United Nations conference up in Montreal (McGill Model UN) I was on a committee acting out as the Chinese Politburo during the closed-door secret conference choosing who would be a successor to Hu Jintao. Now, I don’t know why they allowed us delegates to have a chance of technically “running” the committee by allowing the President to be a delegate rather than the administrator, but nonetheless I got to take over as President and had to deal with a war with the United States and a lackluster Japan. (more…)

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It’s been interesting to watch China’s rise onto the world stage for the past ten years for me, though nearly twenty years for all kinds of international politics. I can still recall watching on TV the fall of the Berlin Wall and the subsequent fall of the Soviet Union with tanks heading towards the Red Square and the ending of the Cold War. Essentially, I am a product of the post-Cold War generation not fully having the maturity to understand the fear of the Soviet Union until after it was gone. I recall a brief time under the first President Bush, but my true development of international politics developed under President Clinton’s two terms.

It was under these terms that the world got to finally see the triumph of democracy over Soviet-style Communism with a whole-hearted shift of the former Soviet Union breaking up and embracing essentially laissez-faire capitalism (Big Bang capitalism). America did the minimal it could to promote democracy within the former Soviet Union (the new Russian Federation), but not including the welfare of the people. Of course we should not have been subsidizing everything that would create a reliance on American money (or potentially insulting the Russians by creating an aura of inferiority to which they are not), but rather a middle ground to help stabilize the reformed country, similar to the bailout and NAFTA agreement with Mexico.

Our sole interest for democracy within Russia without concern for the well-being of the Russian people inadvertently led to the rise of corrupt capitalism, a yearning for a strong leader to deal with the harsh realities on the ground within Russia, and a secure way of doing so. It is my belief that at that point Russia began to look towards the rise of China.

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