Reciprocal Journal

Reciprocal Journal

互惠 日记

This journal is dedicated to the cause of international understanding between China and America.
To the largest goal, which is peace between these two powerful nations, fostering a culture of equality,
mutual respect and reciprocal development.


Editor: Michael North

If you wish to contribute, or suggest a topic,
you may do so by sending an email to


October 10, 2019 A Toast

Ten days ago, we were fortunate to be invited to attend the official celebration of China’s 70th birthday, at Tienanmen in Beijing. We had a rare inside look at how China sees itself, past present and future, and how its people celebrated this milestone.

One of the events we attended was a State Banquet at the Great Hall of the People, where Xi Jinping proposed a toast to China, its people and its purpose. We were struck by a couple of  the things he said, and share them with you here. I characterize it as “A Community of Destiny” —

September 19, 2019: Reciprocal Trade and Investment

I’ve given some thought to how to reboot the relationship between America and China.

There are some basic issues, both real and concocted, that have driven these two natural allies into separate corners for the moment. But there are practical ways out and forward — with renewed opportunity for both countries.

We’re practicing the reboot through our joint venture company, Galaxy Trade and Technology. On the business level, we’re bringing Chinese magnesium more efficiently to world markets — but there’s much more. We hope others find these ideas useful. In the paper completed today, and finalized on October 1, 2019, we say:

“The Galaxy business model is different from most companies involving America commercial investment in China. Galaxy is not exclusively oriented either to imports or to exports. It is both, and more…

The company deliberately seeks to solve some of the imbalances in trade relationships that have led to recent issues between the US and China.

That means, in practical terms, that Galaxy practices fully balanced commercial relationships between US and Chinese ownership companies. Its international contracts ideally feature both an import and an export orientation, simultaneously and interdependently, framed by careful control of intellectual property.”

Here’s more; you can download the paper here in English: Reciprocal Trade and Investment

And you can download in Chinese here: 互惠贸易投资

September 17, 2018  Unintended Consequences

“In 2017, the country imported $260 billion worth of chips and $162 billion worth of crude oil. More than $200 billion of the chip purchases were US-made chips, according to Bloomberg data.

Even more were US-designed chips, for which US companies received royalties.

You might think this would be touted as a huge success for US exporters. But, the current sanctions and threats of sanctions against Huawei, ZTE and others have permanently soured the market for US chips and other technologies.”

It was obvious that this would happen, when the new US tariffs against Chinese high tech goods were announced. More at:

It’s happening quicker than we thought, but that’s the way with everything concerning China. They see, they adapt, they move. 
Some of the losses to US industry are irreversible.

September 16, 2019  Jack Ma

This video is a quick glimpse of a radically different China from the one currently portrayed in Western media — young, optimistic, an ironic sense of humor, heart-centered, un-self conscious.



At Jack Ma’s retirement party (age 55) over the weekend, one of the richest men in the world stepped down from day-to-day management of Alibaba, the firm he founded. The rock concert was broadcast throughout China on both private and state-run media.

He was rejected by 10 companies for a job, and by 30 companies for investment in his ecommerce system — as a school teacher just 15 years ago. He will spend his time now investing in making the world a better place.

If those in the West who are forming harsh paranoid judgments of China right now could see this video, understand the spirit behind it — and meet some of the 60,000 people who cheered as Jack Ma sang this song — their reading of the Real China might be different.


Yes, I agree — there is much more to a huge, complex nation like China than one video — and much behind the scenes. That’s my point; please have an open mind.

This is part of the China I see, when I go to live and work there.

September 8, 2019: The Good Old Daze

There was a time when Republicans listened to people named Bush and Brzezinski; we may not have agreed with everything they said, but their sober common-sense, heard afresh now, hearks back to an age that seems now dead…

Here, at an economic development forum in Beijing, the sons of Bush and Brezezinski hold forth. Note the image of Premier Zhou Enlai in the history section, as a key exemplar of Chinese diplomacy. His influence continues to grow.

click to download:

August 15, 2019: A Legend

D.A. Pennebaker passed away a few days ago, at age 94.
This was his first documentary, made in New York when he was 28.
He would go on to great fame and honor. This first young film shows New York in 1953, a jazz-image-rhythm rarity with original music by Duke Ellington.
Captures the feeling of the great city, as it must have felt in the immediate post-war period. The energy that made America great, and keeps it great today — that fascinated the world, and that people everywhere, including to some extent in China, wanted to understand and emulate. A glimpse of the history of a powerful idea.
Daybreak Express; 5 minutes

August 13, 2019: Shanghai Brilliance
We met a kinetic group of young people, led by Ma Mengjia, a 20-something young woman who runs the TEDx Xujiahui franchise in Shanghai.

They just hosted an intense set of presentations on future economies at the main civic theater there. See video; you don’t have to speak Chinese to sense the energy —

TEDx Shanghai

The future of China, and perhaps the future of the world, is in the hands of such people.

We would like to connect TED Shanghai with the other TEDs we know — NYC, Honolulu, SFO, Washington, San Diego. That could be explosive in a beneficial way.

August 12, 2019: Common Enemies

Our friend and colleague, Arthur Lipper, attended the GPS 21st Century China Forum at University of California, San Diego this week — and emerged with the following thoughts:

“…to quote Nelson Mandela, “If you want to make peace with your enemy, you have to work with your enemy. Then he becomes your partner.” 

“Fear in animals is responsible for species survival. Fear is the most natural of all emotions.”

Download more here: Common-Enemies

August 6, 2019: Whom do you Believe?

On the one hand —

On the other —

I’m inclined to accept China’s more measured position. China did not devalue the yuan; the central bank does not directly control the exchange rate any more. They simply allowed the yuan seek its own level this week, according to market forces.

They are playing a cool hand here, and will ultimately prevail in the standoff with the current Administration in Washington, which has no clear policy goals or consistent leadership.

July 19, 2019 – A Balanced View from Brookings

For both Washington and Beijing, the patient rebuilding of a rules-based order, not the assertion of unilateral advantage by either, remains the only credible path forward. Rather than mirror-image Chinese xenophobic or paranoid behavior, the United States should insist on reciprocity in the relationship to promote openness, move aggressively to open China’s markets, welcome Chinese visitors and researchers, and defend our allies. The United States also needs to fix its own broken domestic politics and mitigate the downsides of globalization at home to diminish the gratuitous scapegoating of China. Without such efforts, the region and the world will inevitably move toward open-ended rivalry, or worse—from which no country, including the United States, can possibly benefit.”

Jonathan Pollack, a seasoned thinker with real experience in China, offers the above insight. Writing for the Brookings Institution with the arresting title, “Looking Before We Leap,” Pollack cautions against the retrograde thinking, which has become fashionable since 2017, that America and China should decouple our affairs, go it alone, and America should seek to curtail China’s continued growth.

The more mature approach, which we believe will re-emerge and will prevail in the end, is for America and China to link up as partners for economic and social development, as joint solvers of the truly vast global challenges we face.

A full consideration of Pollack’s thinking is worth a few minutes: US-China-Disengagement-Risks-Brookings-Pollack

July 16, 2019 – A View from China’s Young Leadership

I participated in a fascinating three-hour meeting yesterday, with about 60 technology, finance, energy and manufacturing people from across Shaanxi Province. Sat across from Deputy Mayor Cheng of Yulin (a city a little larger than Chicago, where our meetings took place). 
A sharp young leader typical of the generation that’s driving China, from where change actually happens — at the city and regional levels.
He’s the type of person responsible for the above story — and is directly tasked with achieving specific quantified goals, driving innovation with the U.S. and other countries.
His observation on the current trade discussions: “The effective business manager knows to expand his contacts and options during lean times, and to deepen his alliances and relationships during prosperous times. For the US and China, this is a lean time, so we are responding as needed; when the times change, we will be prepared for the prosperous times again.”

July 15, 2019: A Family Milestone

BEIJING: A celebration of the life of Zhou Huazhang, nephew of the former Premier of China, Zhou Enlai, took place yesterday in Beijing. Zhou Huazhang led a simple life, yet his accomplishments were significant. He helped China to emerge as a strong, united nation through a dedicated professional career. He also had a long history of positive connection with his family in the United States. Mr. Zhou passed away peacefully on July 2, 2019, at his home in Beijing. The celebration of his life, a statement of renewal for all his friends, family and colleagues, was held at the Grand Hyatt Hotel, Beijing beginning at 11:11 am.

Further press release follows:

And so it goes.

July 9, 2019 — Digital Currencies

Another area where — big surprise — China is well ahead of the U.S., which at the government level has yet to begin considering the policy issues around digital currencies:

Like global warming, perhaps the U.S. Treasury believes that digital currencies will just go away. In China, they are less naive. China is embracing the issue and taking control of its destiny. 

June 24, 2019: The Parthenon. And China at the British Museum. In one day

On a recent business trip to London, some time out to revisit the Elgin Marbles — the sculptures and friezes from the Parthenon in Athens.

Timeless, elegant, tragic. Moving iconic images from the headwaters of Western Civilization.

Just five hundred feet away, a recent major collection added to the British Museum: from the even deeper history of China. Art and artifact from the headwaters of Eastern Civilization.

Amazing to spend time in both worlds, on the same day.

June 17-18, 2019: The Financial Universe Moves On

As the freeze in US-China economic devleopment grinds into its sixth week, the world moves on. China and Europe forge a new financial and trade system that does not need American blessing or participation.

Two stories illustrate: “China’s leading commercial bank ICBC announced on Monday the appointment of BNP Paribas and HSBC as joint green coordinators and mandated lead arrangers for an inaugural green loan for ICBC’s London branch.”


HSBC says: “The funding demonstrates HSBC’s commitment and dedication to the green loan market, which we are determined to support and develop. This is part of our commitment to provide $100 billion in sustainable financing and investment by 2025.”

And yesterday, the long-awaited live integration of the London Stock Exchange and the Shanghai Stock Exchange was completed, and is now fully operational. Investors anywhere in the world can freely trade a wide range of Chinese securities, directly; the converse is also true — Chinese investors can buy and sell international securities any time, day or night.


“The connect, a two-way depositary receipt mechanism that brings together two of the world’s largest capital markets, brings together one of the world’s largest domestic capital markets – the Shanghai Stock Exchange – with the world’s leading international market, the London Stock Exchange.”

Very often, social and political change is signaled first in the world of finance, which is always alert to opportunities for growth.

The day will come when U.S. financial markets, still the most potent in the world, resume participation in strategic planning fro global growth. That will signal big opportunities for those patient enough to wait, watch and learn.

But not today.

June 11, 2019:

A good friend and longtime business associate, former executive at the Ministry of Commerce in Beijing, writes:

“China-US friendship is a bridge between the Chinese and American people, to share culture and business opportunities, and it’s the best way to create unity among all the people of the world.

I hope that through non-governmental diplomacy, China and the United States can  reduce the friction between political, trade and commercial interests, and promote a deeper, pragmatic link between the culture of China and American culture.”



June 9, 2019: Ping Pong Diplomacy

Representatives from the Zhou Enlai Peace Institute were invited to speak at the celebration of the anniversary of ping-pong diplomacy in Haimen, Jiangsu Province. The invitation came from old friends whom we first met Los Angeles — Yang Jiechi, and his associate Cai Chenghua — where we co-sponsored the “Building Peace” events.

Xiaofang Zhou and Michael North met many of the dignitaries present. Michael North gave an extended talk on the impact of ping-pong diplomacy in 1971, and its lessons for today and the future, addressing his remarks to the hundreds of high school students present.

A complete account: with photos and video:

June 6, 2019: Balance

Bring your own interpretation to this video:

June 5, 2019: The Real White Paper from China

There has been a great deal of analysis, commentary, reaction and speculation about the White Paper published by two days ago by the Chinese Government, intended to clarify issues around the current trade talks with the United States.

Much of it slanted, pre-judged, partial and out-of context, designed chiefly to support the conclusions of the writers, not necessarily to inform.

I much prefer to read the original document, and form my own judgments.

Attached — the original document from the State Council website, in .doc format, titled China’s Position on the China-US Economic and Trade Consultations


The download link, from which many other interesting documents are available, is:

Reading this document, one gets a clear, unfiltered idea of what the Chinese are actually saying. It’s worth noting that no similar document exists from the U.S. government.

For those wishing a truly precise version, concise as only Mandarin Chinese can be, the original-original text is here:

June 1, 2019: More reasons the world needs China

Another reason the world needs China is that China the world’s most populous country, and fastest-growing major economy, has assumed leadership of large-scale, industrial implementation of environmental and clean energy initiatives. The U.S. has, for the time being, withdrawn from such efforts at the national level, though significant independent work continues at the state and local level. Other countries are making important efforts too, but none on the scale and pace of China.

See this story, current report on progress made in cleaning up China’s toxic environment. China still has a long way to go, and it will take some time. But the effort is under way, and a study of how China is doing it is worthwhile.

Those of us who spend time in China’s big cities — Beijing, Shanghai, Tianjin, Xi’an have all been in our path in the past few months — note, anecdotally, that the skies seem more blue, the air less thick, on many days.

May 24, 2019: The Roar of the Lion

You may enjoy this video, from our meetings in Lexington Kentucky last week —

“The Lion in this moment is the people of the United States, the people of China. But who among us will deliver the roar?

Now is the time for the roar to be delivered. the roar of Sino-US relations, of building bonds, of being partners, of being friends, of coming together, weaving a fabric together… Now is the time. We cannot grow weary, we cannot give up. We must rise up, as ambassadors, for what is the right thiing to do… To do the right thing for the world …

When there is strength and stabiity and peace in China…when there is strength and stabiity and peace in America…both the east and the west will be stronger, the world will be stronger, the world will be safer, and there will be more opportunity for all of us.

I’m not afraid of hard work. I ask each of you to roll up your sleeves, put on your overalls, deliver the roar of history. Because history is knocking, and now is the time.”

From the closing address; Governor Matt Bevin of the Commonwealth of Kentucky. National Governors Association US-China Cooperation Summit, Lexington Convention Center, May 24, 2019.

Governor Bevin is one of the leading supporters of President Trump, in a state that voted heavily for Trump in 2016.

May 23, 2019 — Governors Conference in the Washington Post

From the front page of the Washington Post today — all about the Kentucky conference we are attending, China and the trade war —


Several people we met at the conference today, including Governor Bevin, are quoted.

All that Kentucky Bourbon magic.

May 21, 2019 — Press Release: New US-China Magnesium Joint Venture Announced at National Governors’ Conference

A trade and economic development conference, sponsored by the National Governors Association in Lexington Kentucky May 22-24, will announce Galaxy Trade and Technology, a new joint venture between companies in the United States and China. The joint venture combines the best of America and China, and demonstrates new principles of reciprocal management. It links a group of magnesium mines in China, together with global trade, logistics and finance in America.


May 10, 2019 — The First Reaction by China to the Tariff Hikes

A quick read of this first response from China to the big tariff surprise from Washington — which had not even been intimated until four days before — and was executed in a tweetful moment.

“The Ministry of Commerce expressed ‘deep regrets’ on Friday at the United States’ decision to hike tariffs and said China will have to take necessary countermeasures….China hopes that the US side can work with China to jointly build a China-US relationship based on coordination, cooperation and stability.”

The impulsive move took virtually every other U.S. government official by surprise.

April 25, 2019Views of the Belt and Road

The ever-insightful Paul Haenle offers off-script views of the Belt-and Road — from the perspective of some of the countries most affected, most critical, and competing.

Russia, India, Europe and the United States — all get their turn in this analysis, from writers in those fields. This is one of a series of valuable pieces coming from the Carnegie-Tsinghua Center in Beijing.


“All countries, including the United States, should have a strong interest in supporting better infrastructure and connectivity. In this way, they should welcome China’s contribution to global infrastructure development. However, China also needs to address the BRI’s shortcomings, in areas such as transparency and sustainability.”

“India has eyed the BRI with suspicion since its announcement. New Delhi turned down Beijing’s invitation to the inaugural Belt and Road Forum in May 2017. Instead, it has made pointed statements about transparency and debt burdens.”

“Moscow’s current relatively benign attitude to the BRI took some time to emerge. Its immediate reaction was largely negative, driven by fears that China wanted to expand into Russia and Central Asia, territory that Moscow considers important in security and economic terms.”


More from Paul Haenle:

Carnegie Tsinghua Center for Global Policy

April 28, 2019Opening Address, Belt and Road Forum

Here is the opening address by the President of China to the Belt and Road Forum in Beijing.

The original Chinese is here. We have also translated it into English, which provides a useful reference.
I like to go back to the original source for important ideas, rather than reading press summaries or the commentary of analysts. There is always some nuance missed by the mainstream or diplomatic press.

Which is certainly the case here. Many sophisticated ideas, opening up doors of opportunity for business and civil society, answering key questions.

April 24, 2019 – – American Participation in the Belt and Road

Spotted in Fortune Magazine today — an opinion piece by China’s Ambassador to the United States. He challenges American business to get off the sidelines and participate in the Belt and Road.

“The Belt and Road Initiative means countless opportunities for US businesses, and China invites more of corporate America to participate in the projects to benefit themselves and the world at large…The situation has implications not only in terms of missed opportunities for growth in the US, but for the cause of global development, which needs the ingenuity and the industry of the US.”

Citibank, Caterpillar, General Electric, Honeywell — they are all playing. Every American company must also be an international company, and the Belt and Road is an area where significant growth is being powered, with huge infrastructure projects in more than 100 countries. The Chinese are opening an on-ramp.

April 23, 20119  Hunter Lovins —
After years of admiring her work in “Natural Capital”, I met Hunter Lovins at a conference at the United Nations last fall. Did not disappoint — a committed capitalist for the account of planet earth. Her most recent flaming missive got my attention today:
“Last night a young friend wrote me in some distress.

“He’d been at an impact investment event at which I’d spoken. An audience member had asked the panel how they dealt with climate skeptics: did they still promote the climate protection philosophy behind their portfolios?

“Predictably, the others equivocated.

Which pissed me off. “This,” I growled, “Is why ‘impact investing’ is getting a bad name. It’s trying to be everything to anyone who might let you manage their money.”

For investors, the ETF “Change Finance,” (CHGX) is worth a look.

April 12, 2019 — Belt and Road, Reconsidered

I wish everyone could go to events like this, at the U.S. Institute for Peace —

Though I did notice that there is no representative from China in these discussions. Their perspective would surely be relevant to a full understanding of the issues. <?>

United States Institute for Peace is an interesting institution. Funded by Congress, with a bipartisan blue-ribbon Board. And some blind spots.

One of its original sponsors and biggest advocate was Senator Spark Matsunaga of Hawaii, whose Matsunaga Institute here in Honolulu continues its solid work to establish the case for peace.

April 10, 2019 — EU-China Relations

Balanced views on EU relations from China’s official national newspaper —


April 11, 2019 — China Copyright Law Matures

You may have heard that China has loose intellectual property rules, and does not respect international copyrights.

This was true — up to about 5 years ago. That’s when China initiated a crackdown on copyright enforcement to come up to international standards. The signs of progress along these lines are everywhere.

This story is quite cute, about the lengths to which China went recently, to publicly dress down a copyright infringer and fix an issue.

March 9, 2019 — Siding with Rich China over Fickle U.S.”

From the South China Morning Post, some practical observations by the Malaysian Prime Minister:
“If forced to take sides in the high-stakes geopolitical rivalry and trade war between the United States and China, Malaysian Prime Minister Mahathir Mohamad would prefer the economic largesse of Beijing.

“He pointed to the current state of unpredictability of the American superpower as a negative factor when asked about the impact of Sino-American tensions on other, smaller nations in the region.”

A future American administration may be able to repair the damage done to international relations since January, 2017 — but it will take patience, concerted action and long-term commitment.

Full story at