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At Large
The Chinese Shell Game
China’s government backed companies specialize in going around U.S. trade sanctions.
Many Chinese manufacturers of consumer products are so obsessed with shoveling products out the door that they cut dangerous corners in order to keep their selling prices down. First it was lead in children’s toys. Then faulty materials in wallboard that made several hundred U.S. homes uninhabitable because of mold and noxious odors. More recently it has been deadly cadmium in children’s jewelry. Why do Chinese manufacturers use toxic materials in their products? It’s cheaper.
After outcries in the United States, China’s biggest market, its government usually punishes one or two offending manufacturers and vows it will make more and better inspections in the future.
It turns out that Chinese corner-cutting isn’t restricted to consumer products. Some Chinese industrial manufacturers and trading companies, owned by the government, have devised an elaborate shell game to bypass U.S. sanctions. These sanctions, in place for more than three years, prohibit U.S. companies from importing products from foreign firms that sell missile technology to Iran. One of them, China Precision Machinery Import-Export Corp. (CPMIEC), has managed to skirt the sanctions with approximately 300 sales into the U.S. since the ban went into affect in 2006.
As reported by the Wall Street Journal, according to the Wisconsin Project on Nuclear Arms Control, a non-profit watchdog group which uncovered the shipments — from toys, oil drainage tanks, and anchors to auto parts — CPMIEC is one of several Chinese firms skirting the U.S. sanctions. The caseload requiring enforcement of 20 U.S. sanctions has becomes so heavy that it threatens to swamp the Treasury Department’s Office of Foreign Assets Control, which is in charge of the process.
The Wisconsin Project, in its report, notes that CPMIEC and others create shell subsidiaries to act as export brokers and shippers. U.S. companies receiving the goods usually don’t realize a sanctioned company is behind the sale. For example, the American Forge & Foundry Co. received some oil drainage tanks from China JMM Import & Export Shanghai Pudong Corp., which at the time was not on any sanction list. It was only recently discovered that this firm has the same address as a CPMIEC subsidiary. It was, in effect, a sort of corporate doppelganger.
Although many U.S. companies make use of software intended to detect names of exporters subject to sanctions, JMM China didn’t show up when a U.S. manufacturer purchased some lawn-mower parts from a firm that used JMM China as export broker. Chinese companies that want to skirt the U.S. sanctions are adept at creating new subsidiaries and altering names of some on the taboo list.
The Chinese government. predictably, objects to trade sanctions by the U.S., using meaningless comments such as this one from a Ministry of Foreign Affairs spokeswoman, according to the Wall Street Journal, “This kind of mistaken practice…damages the atmosphere for Sino-American cooperation on nonproliferation and is not beneficial to promoting international nonproliferation efforts.” How so?
China plays dog in the manger over United Nations sanctions on Iran by threatening a veto in the Security Council. Why does it do this when the danger of Iran developing nuclear weapons — with the threat they pose — comes closer by the day? It’s simple. Iran is a major customer of China. And, for the Chinese government, in its frenetic effort to keep economic growth at a high pace, trade trumps long-range security. Meanwhile, Treasury’s OFAC is one regulatory agency that could use more money and more agents.
(Mr. Hannaford is a member of The Committee on the Present Danger.)
About the Author
Peter Hannaford was closely associated for a number of years with the late President Reagan, beginning in the California Governor’s office. His latest book is Presidential Retreats.
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Metin2 yang | 1.21.10 @ 6:39AM
Good thing I'm not a youngin', otherwise that figure would skyrocket.
I agree.
Alan Brooks| 1.21.10 @ 12:14PM
They have Mao's image on their currency??
Alan Brooks| 1.21.10 @ 3:16PM
By GILLIAN WONG, Associated Press Writer Gillian Wong, Associated Press Writer – Thu Jan 21, 10:07 am ET
BEIJING – When Li Shiming was stabbed through the heart by a hired assassin, few of his fellow villagers mourned the local Communist Party official many say made their lives hell by seizing land, extorting money and bullying people for years.
Instead, villagers in the northern town of Xiashuixi have made Li's teenage killer something of a local hero. More than 20,000 people from the coal-mining area petitioned a court for a lenient sentence.
"I didn't feel surprised at all when I heard Li Shiming was killed, because people wanted to kill him a long time ago," said villager Xin Xiaomei, who says her husband was harassed for years by Li after the two men had a personal dispute. "I wanted to kill Li myself, but I was too weak."
The murder trial has again cast a harsh light on abuses of power by communist cadres and the frustration many ordinary Chinese feel with a one-party system that sometimes allows officials to run their districts like personal fiefdoms.
China's leaders have identified corruption as a threat to the country's progress, but an opaque political system dominated by the ruling Communist Party — which brooks no dissent — and the lack of an independent judiciary contribute to the problem.
In the case of party secretary Li, the young man who confessed to the stabbing — 19-year-old Zhang Xuping — has been sentenced to death for the September 2008 killing, his mother and lawyer said Wednesday. The sentence was quietly handed down last week and an appeal was filed this week, they said.
Zhang Xuping was paid 1,000 yuan ($146) by another villager, 35-year-old farmer Zhang Huping, to commit the murder after Li allegedly harassed the farmer for years, local newspaper reports said. The elder Zhang was reportedly routinely detained on trumped up charges ever since he led a group of farmers to seek the help of provincial authorities after Li razed 28 acres of trees belonging to them without permission or compensation in 2003.
The teenager entered a school where Li was attending a meeting, found the official alone and stabbed him through the heart. Li staggered out of the building and into his luxury sports utility vehicle but died before he could make it to a hospital, reports said.
The case quickly turned into an outpouring of sympathy for the young killer — and expressions of hatred for Li.
Zhang's trial, which was originally scheduled for August, had to be postponed to late November because thousands of people showed up outside the courthouse wanting to watch the proceedings, news reports said.
Nearly 21,000 people from the area around Xiashuixi petitioned the court for leniency for Zhang — to no avail.
In Xiashuixi, villagers contacted by the AP said that for years they had lived in fear of Li, who they say extorted money and used his influence to have those who resisted him detained or jailed.
Zhang Weixing, 58, said Li illegally seized his land of 3.3 acres and built houses on it three years ago, and he hired thugs to beat him, his wife and children when they tried to stop him.
"When we heard Li Shiming was dead, we felt happy because he did so many evil things and really made us villagers suffer," said Zhang Weixing, who is unrelated to the family of the accused, by phone. "We all hated him."
During his trial, the defendant apologized to Li's family, the state-owned Beijing Youth Daily newspaper said. But Li's eldest son rejected the apology in court and said he hoped judges would sentence his father's killer to "death by firing squad."
Li's death has dealt an immeasurable blow to the family, the son said, adding that his younger brother and sister were unable to focus on their studies and may stop going to school for the time being. Attempts to reach the Li family by phone were unsuccessful, and family members have not publicly addressed the allegations that he was corrupt.
Zhang's case echoes two other instances of ordinary Chinese who became anti-heroes after killing people in positions of power.
In June, a Chinese woman who fatally stabbed a party official to fend off his demands for sex was freed by a court in a decision that was likely made to avoid a storm of criticism.
But in 2008, Yang Jia, a man who confessed to killing six Shanghai police officers in revenge for allegedly being tortured while interrogated about a possibly stolen bicycle was executed despite an outpouring of sympathy.
Unlike those cases, China's state media after initially following Zhang's case did not report his conviction nor his death sentence — a likely indication the government ordered a media blackout.
A Beijing-based lawyer and legal blogger, Liu Xiaoyuan, said the court should have taken public opinion into account given the large number of people who had spoken out in Zhang's defense.
"If the village secretary had acted illegally and aroused the anger of the mass of villagers, then lenient punishment should have been considered by the court," Liu said. "It has become the will of people. The death sentence is too heavy."
The case reflects the desperation that China's rural poor are driven to when bullied by their leaders, wrote Chinese social commentator Yan Changhai on his blog.
"Zhang Xuping is guilty. His biggest crime is that he dared to resist a bandit-like official, and refused to be obedient and to be a slave," Yan wrote.
Yan blamed the murder on collusion between officials and local police and courts.
"If the authorities did not indulge Li Shiming's evil deeds, if even one of his evil deeds was punished by law, he would have avoided death under Zhang Xuping's knife," he wrote.
Pingback| 1.21.10 @ 7:48AM
Twitter Trackbacks for The American Spectator : The Chinese Shell Game [spectator.or links to this page. Here’s an excerpt:
MajitoQuerido| 1.21.10 @ 10:01AM
It's high time for manufacturing to start in the us and forget the cheapness of chinese crap...it appears it's not so cheap after all...if one considers the amount of kids being affected by these lead/cadmium laden...i wonder if some lab may not begin a research to see if these tainted goods have any correlation to the increased number of autism in children in the us...i suspect it'll be link in there...is the filthy lucre so enticing that the whole nation is willing to sacrifice hundreds at the feet of a few companies bottom line gains? instead of laying out billions of dough to banks to prop up financial shams, these money should be available to us citizens to start industry in here...such as Texas Jeans which make jeans in the us with cheaper prices that many walmart offerings...and they don't feel like cardboard fabric either...likewise tvs like vizio...only tvs made in us with a 100% lifetime pixel warranty...just like the us of old, good products, excellent performance and warranty that goes beyond 30 days...i say screw the chinese and their cheap, cheap, cheap gadgets...did i wrote screw the chinese?
Pingback| 1.21.10 @ 3:23PM
The American Spectator : The Chinese Shell Game | Berita Kita links to this page. Here’s an excerpt:
swarovki crystals | 1.24.10 @ 8:04AM
There many reasons for the quality of being made in china,many be the productivity level of some field of chinese is not so development as us,but they are improving,made in china will be better in the near future.maybe one day that made in china will be better than swarovki crystals.
swarovki crystals | 1.24.10 @ 8:07AM
There many reasons for the quality of being made in china,many be the productivity level of some field of chinese is not so development as US,but they are improving,made in china will be better in the near future.maybe one day crystals that made in china will be better than swarovki crystals.
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Converse | 8.11.11 @ 10:51PM
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