Who is Dabao?

I was born in New York, the son of Shanghainese/Taiwanese immigrants to the US. I grew up in a middle class neighborhood in Arcadia, CA and attended public school until the age of 12 when my family and I moved to Taipei, Taiwan where I attended middle and high school. I moved back to the US for college and went on to study Literature and Economics. After college graduation, I started an internet education company and moved to Japan. After that bubble burst, I moved to the SF Bay area, worked as a venture capitalist investing in biotech and IT companies. I left SF to attend medical school in New Hampshire where I completed an MD/MBA. I will be returning to SF after a detour in Honolulu, HI, Baltimore, MD, and Portland, OR. In 2011 I met the woman of my dreams to whom I am happily married.

Among my favorite things to do are traveling, learning new languages and EATING.

So sit back, kick your feet up and enjoy my blog!

Return of Cold-war Geopolitics?

Saya has been pretty spooked about taking a trip to Shanghai with me lately. Because of her worries, the anti-Japan, anti-Chinese sentiment on both sides, I would like to try to make sense of what is happening geopolitically.

There are several players involved here. Japan, China, North Korea, Taiwan and of course the United States. Lets start with the root of all of this – money.

As a little background, The US is still kicking itself for backing the wrong horse. If only Chiang Kai Shek hadn`t been such an ego-maniacal asshole and not lost the war in 1949 to the communists, everything would be all gravy. The red-white-blue KMT flag would be flying over Beijing, the Chinese blue army would be flying F16s and the suits at the Pentagon would be high-fiving each other as new purchase orders for engines, naval systems, avionics, radars, sonars and command and control systems came in from their new and getting richer ally in the east.

Instead, Mao and the CCP won the civil war in China and now the US sells arms to a the Taiwan military to the tune of $15 billion a year, a number that is starting to look less attractive compared to China`s $51 billion annual defense budget (as a reference the US itself spent $420 billion on arms in 2003). The China market has been dominated by Russian and increasingly European technology which is naturally very different from the infrastructure (training, communication systems) that the US military systems run on. The additional political and economic capital that would be required to sell arms to China does not justify switching at the moment　(a small piece of a $50 billion dollar pie is not as attractive having the whole $15 billion pie in Taiwan to yourself). Hence the status quo. The US sells arms to Taiwan but poo-poo`s the Euros and Russians who sell to the Chinese. In the meantime, the US is trying to use its political influence in Taiwan and Japan to further its influence in the region.

America is dangling the idea of a permanent seat on the UN security council to Japan for a couple of reasons 1) The US wants to buy Japan`s allegiance and use it as a bulwark against growing Chinese influence in the region 2) The US doesn`t really care as much these days about sharing its sovereignty in multi-lateral forums like the UN anyway – as Bush repeatedly shows us, the US can act with or without the consent of everyone else on the planet

The Chinese see through this and are letting its people rough up some Japanese businesspeople and students to the extent that it does not harm its economic interests (ie limit the protests to small businesses like restaurants). Meanwhile, I`ll bet the security around those spanking new Toyota factories in Tianjin is very tight (Toyota announced a half billion investment in China in 2004).

Meanwhile, the war on terrorism is starting to shift its focus from Iraq to soon-to-be nuclear rogues Iran and North Korea. Here the Chinese have, or so the Americans think, the upper hand because North Korea won`t bite the hand that feeds it (ie their nukes are not aimed at China). The US wants China to help in the multi-lateral talks to stop the North Korean nuclear program. China is trying to leverage this position to gain concessions from the US regarding Taiwan. For instance, we did not really hear much official US response regarding last month`s declaration of the anti-secession law in China (despite massive protests in Taiwan). Despite all this, it is probably not realistic that a simple exchange (China stabilizes North Korea, US allows Taiwan to be taken) will happen in the near term. The status quo will be that China pretends to help the US in getting North Korea to talk while it waits for the opportune moment take Taiwan with the least political and economic cost. In the meantime, China probably doesn`t mind if a few terrorists get their hands on some North Korean nukes and make an attempt on a major US city. If anything, this will make the US more desperate for Chinese help in North Korea.

There is a good article by Columbia professor on China and North Korea
http://www.asianresearch.org/articles/2404.html

Meanwhile, China still wants Taiwan because the current CCP leadership has staked its legitimacy on taking back Taiwan (something Mao could never achieve but longed for until his last days) and because not doing so (ie allowing Taiwanese independence to happen) would not only go against 50 years of brainwashing the Chinese people, but would cause instability in other border regions Xinjiang, Tibet. China currently enjoys huge direct investments from Taiwan whose competitive advantage in electronics manufacturing is being coopted by the Chinese (a recent Economist studies shows that economically 68% of Chinese and Taiwanese exports overlap). With a million or so Taiwanese making money in China, an increasingly reluctant and distracted US, it is becoming a near political impossiblity for Chen Shui Bian to declare independence and risk war.

In this entire picture, the biggest loser will be Taiwan whose existence is currently on the chopping block. While China`s influence continues to expand economically and politically, Taiwan`s bargaining position shrinks. The tipping point in this equation will really be when the US can no longer afford NOT to sell arms to China and decides to trade in Taiwan for whatever concessions it can get from China. Hopefully, my family will be living in Shanghai by then.