Taxes while living overseas are a pain, though not quite to the extent of motivating renunciation of US citizenship. Still, I sympathize with some of the arguments made in this NYT article about more American expats giving up their citizenship and going completely native. More significant than a double tax on certain levels of income (seriously who earns over USD91,000 per year anyway?) is access to financial services. While living abroad this can be quite difficult, since most US financial institutions don’t seem willing to accept wire transfers in foreign currency, requiring instead that bill (or tax) payments come from a US account. This would be a nightmare if one didn’t have an account open in the US (which can be done, especially for young expats by pretending to, for all legal purposes, be unemployed at home with your parents). Saving money in any meaningful fashion is also difficult, since expats living abroad are still subject to US capital gains taxes, and it’s often too much of a headache for foreign/multinational institutions to report offshore assets to the IRS.

The answer? Keep the blue passport, go native, and marry a local. It is fairly easy to turn a foreign spouse (here in Asia, usually a wife, for whatever reason) into a tax haven to the tune of several hundred thousand per year. You do have to trust them quite a lot but if managed correctly there is financial gain *and* you get an exotic and classically feminine partner who can boil noodles in the kitchen for you. Yes I’m suggesting that US tax law motivates some part of yellow fever. For women, I hear Latin American is a popular destination to find full of joie de vivre masculine types. They can probably launder money too.

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Rather than engage in substantive discussion with locals, I often resort to Communist propaganda slogans from the 60s and 70s in an attempt to both utilize reductio ad absurdum argumentation techniques and practice Chinese. Perhaps I’m incapable of communicating sarcasm in Mandarin since this morning my office mate, a teacher turned fund analyst, gave me a book as a gift today titled 新帝国主义在中国 (New Imperialism in China) which came out in January. The book was written by Nationalist public intellectual (intellectual here being used in the Glenn Beck sense) Lang Xianping. There’s a section in the intro titled 美国到底在干什么 (What, after all, is America doing?) which concludes with:

I believe that after reading this book, readers will understand, imperialism has never really gone away; it has just been reincarnated in a new form. So, what should we do? Chairman Mao once said a very important guideline: when illusion is lost, prepare for struggle!

我相信在读完本书之后，给位读者会了解，帝国主义从来没有消失过，他们只是以不同的形态借尸还魂罢了。那么，我们该怎么办呢？毛主席的一句话非常具有指导意义：丢掉幻想，准备头争！

Will report again if I read it cover to cover, at this point the text seems to focus on various reasons why American financial hegemony is extremely harmful to Chinese interests. American conservatives often point out that China owns ~USD2tr of Treasury Debt; Chinese conservatives lament that the American Treasury has a printing press. American conservatives say that free trade has hollowed out the American working class; Chinese conservatives say that free trade has forced Chinese laborers to manufacture products in exchange for increasingly worth less pieces of paper.

It’s difficult to digest everything that’s going on right now, particularly for someone who views nearly every event and personal interaction through a game theoretic Machiavellian lens. More information is required. So, brain dump. The relative silence of the Chinese government, rapid involvement of official organs of the U.S. government, and brazen tone of the original post seems to point to more damaging information about the attacks that has yet to be revealed. The downside risks of a nation-nation standoff on this issue seem to be much more significant than any possible gains. These U.S. state organs are run by intelligent people and wouldn’t become involved if there wasn’t something more serious than what’s already been publicized; potentially as yet unrevealed egregious details of the espionage that was conducted.

Consider also: Google is certainly not failing in China, and the notion is an exceptionally stupid explanation that plays directly into the simpering / entirely ignorant posture that multinationals seem to adopt when they consider the China market. The move may not be as costly as a lot of people seem to be suggesting. For the foreseeable future, China isn’t going to account for a large segment of the online ad market. In a decade that will change, though in ten years Google might develop a pseudo-intelligent-do-everything algorithm. The tables won’t turn but neither China nor IT broadly will develop in a vacuum. Significant changes could still occur.

This is a paradigm shift, regardless of what information we haven’t heard yet. A decade ago, the inevitable future plutocracy was supposed to oppress my rights and take advantage of people; yet here is a multinational doing what no nation state has been willing to do: take a decidedly scorched earth stance against the CCP. From Ultimi Barbarorum:

I was surprised that several Shanghai-based European VCs and businessmen I follow on Twitter were among the cynics, berating Google for not conforming to Chinese/Asian business practices based on saving face, consensus and relationship-building, instead reverting to an “American” ultimatum. But these views come from individuals who have already made their peace with China’s political system, and whose business models and reputation do not depend on the unfettered flow of information. Perhaps some of them are unwittingly using the occasion to signal their own reliability as partners in China: “Look at us — we’d never consider doing what Google just did.” Google may have burned its financial bridges, but they are burning their moral bridges, making them the Stupid Cartesians of this sorry episode, Baruch.

Other good readings here (Fallows):

… What happens after Google is so roundly cheered for taking so clear a stand? China will still be there; many of its people will hunger for outside information and most will aspire to modernization… The next step is to find some way to reduce the number of losses — including, yes, for the Chinese government, since (believe me) absolutely no good will come to anyone anywhere from the government’s feeling shamed, humiliated, or newly insecure. It is emotionally satisfying to see the Chinese government thrown off balance after its recent repressive moves. That won’t make things better for most people in China.

and here (Jay Ogilvy, via China Digital Times).

Chinese rights dissident favored to win Nobel Peace Prize. As well as a Chinese barefoot (self taught) lawyer. This will be exciting. China, of course, does not approve:

A decision by the Norwegian Nobel Committee in Oslo to honor Hu or Gao may increase tensions between the West and the government of the world’s most populous nation.

“I hope the committee will make the right decision and not challenge the original purpose of the Nobel Peace Prize or hurt Chinese people’s feelings,” said Liu Jianchao, spokesman for China’s Foreign Ministry, on Sept. 25. The prize should go to those who “truly contributed” to world peace, he said.

Via my barefoot friend, CMcL.

The 2008 EFW Report is out, and Hong Kong, Singapore, and New Zealand are the top three performers. The Report, published by the Economic Freedom Network and the Fraser Institute, contains five social indicators: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation. Included in this year’s Report is an article entitled Economic Freedom and World Poverty by Seth Norton and James Gwartney. I’ve written an article on Africa’s performance in the 2008 Report. Check it out here.

Also, if you’re interested, you can check out the Free Market Foundation website at any time, www.freemarketfoundation.com.

Pietermaritzburg Judge Chris Nicholson said last week that the decision to prosecute former Vice President and current President of the African National Congress (ANC) Jacob Zuma on fraud and corruption charges was not valid. The case was thrown out. The National Prosecuting Authority (NPA), however, has appealed the case.

In his ruling, Judge Nicholson mentioned that President Thabo Mbeki may have inappropriately interfered in the case- a suggestion that now has many calling for Mbeki’s resignation.

If Mbeki leaves office, either the speaker of parliament or Zuma would lead the country. Zuma is already the favourite in next year’s presidential elections. He is the current President of the African National Congress (ANC) (in the South African system you can be president of a political party but not necessarily President of the country).

The ANC is meeting to discuss the matter. They could force Mbeki to resign.

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