Zoning out

From the Wall Street Journal…

“China’s probably calculating that [establishing an ‘air defence identification zone’ in the East China Sea] is incrementally making other countries accustomed to accepting its authority in international air space,” said Rory Medcalf, an expert on Asia security issues at Australia’s Lowy Institute for International Policy. “It’s looking like a potential liability because it could end up losing diplomatically and at the same time lose credibility with its own population.”

The moral of the story: decide exactly what a zone is for and what the rules will be before you announce its existence (or think better of it and don’t bother). It brings to mind the Shanghai Free-Trade Zone, launched a few weeks ago with considerable vague hype but no specifics. The headlines on the right are from today’s Standard (‘Shanghai FTZ cup half-full, virtually overflowing’) and the South China Morning Post (‘Shanghai FTZ cup half-empty, indeed pretty vacant’). Needless to say, the two papers are reporting the same story. The basics are that 1,434 companies have ‘registered’ in the zone, but 97% are Mainland firms; there is no word on why they are registering or what it even means in practice, but we have mumblings that the FTZ ‘looks much like the rest of the country’.

Closer to home, Shenzhen’s Qianhai is supposed to become some sort of financial or whatever hub. But again, it was announced with great fanfare, and authorities have still not revealed what exactly will make it special (apparently obsessed with rivaling the Shanghai FTZ, the region is currently on a PR push claiming that its six square miles of muddy land could host Yuan/interest-rate liberalization).

While the ‘zone thing’ is descended from the serious late-70s approach of localized experiments to pave the way for radical and broader policy reform, much of the initial momentum seems to come down to appearances and symbolism. Shanghai back in the 90s made banks move their head offices from the comfortable familiarity of the old town in Puxi to the inconvenient swamp-to-skyscrapers site across the river in Pudong. It was clustering by diktat. It looks like a financial services hub, so it must be one.

In an ideal world, these make-believe critical masses of capacity and skills would gain respect as and when they developed and came to earn it. But that isn’t what happens. A bunch of pudgy-looking Mainland officials in suits turn up in Hong Kong. They jump up and down with bulging eyes and their tongues hanging out, flapping their hands and jabbering away about their amazing new ‘zone’. Their Hong Kong counterparts and local media should look up briefly, shrug, and ignore them. But the unwritten rules say we must give these visitors face. So our own government people get up alongside them, bouncing up and down with their tongues wagging and hands flapping, shrieking about the wonderful new ‘zone’. Other witless officials, tycoons and journalists get suckered into it, loudly debating the ‘threat’ to Hong Kong and the ‘opportunities’ for Hong Kong, and never once questioning the patch of muddy land’s amazing but still-secret magic powers.

Meanwhile, the Philippines has zones that live up to the hype. Unfortunately, they are of the ‘disaster’ variety. Thanks to the wonders of Facebook, my domestic helper is keeping tabs on the destruction and reconstruction back home in northern Cebu Island following Typhoon Haiyan…

Clockwise, from the top: her house, still standing but minus a roof (a new one is being arranged); their less well-accommodated neighbours’ home, which lost roof plus walls, though the TV survived; the neighbours’ bed; the local church, which also lost walls and roof, leaving just the shrine to the Virgin and the baptismal font; and the family cooking and eating on the floor. This was one of the less badly affected areas.

The Philippine government pauses from its clean-up job to do the honours this week, declaring the weekend open – with impressive chutzpah under the circumstances – by telling Beijing what it thinks of that ‘air defence zone’. Obviously, Manila didn’t get the ‘give them face’ message.