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Wednesday, June 29, 2005

A tidal wave of optimism


LOS ANGELES -- Talk about an ocean of optimism! Here's a positive current for you if there ever was one: A close friend -- whom I dub The Very Successful Korean-American Businessman (VSKAB), who doesn't want his name to be used (but whose last name is Kim like several million other Korean-Americans), but who likes to use his capitalistic fortune to do good deeds -- is betting that before we realize it, the troubled Korean Peninsula will see real peace and North Korea will begin to open up.

But you ask: What is this multimillionaire smoking?

Whatever it is, maybe we could all use some of it -- especially Kim Jong Il, the stubborn North Korean president, and George W. Bush, the stubborn U.S. president. These two stand in the way of peace when they play the macho hardline game.

But my friend -- the VSKAB -- says he "has never been as positive" about a peaceful outcome of the Korean crisis. But, he's not exactly betting the whole farm on his hunch (I've been to his place in Los Angeles and it's about the size of Rhode Island). However, he did blow a few million recently picking up a noodle factory in Irvine, California, that was about to go out of business.

If it had, hundreds of Southern Californians would have suddenly been jobless. But when tipped off about that, and believing he could make a go of things, he took a plunge, betting that the factory's line of ramen noodles, now for retail sale on grocery shelves mainly in the Midwest, will find their way to North Korean outlets some time soon.

Our VSKAB, who has close ties to both North and South Korea, is a shrewd businessman as well as an expansive philanthropist. His calculation: North Koreans -- now and in the near future -- will remain both hungry and poor: "A Big Mac can cost up to two dollars," he points out. "Ramen runs 15 to 20 cents and all you have to add is the hot water."

Whatever their shortcomings, North Koreans do know how to boil water.

But how come the VSKAB is optimistic that this market will open up, given the legendary stubbornness of the two presidents?

"Bush has run out the bluster string and has nowhere to go but negotiations," he says. "The North Koreans are backed into the corner and China isn't going to do any more for them than they are doing now." A peace settlement, he concludes, just has to happen -- and I agree.

Kim is not unique in his expansive optimism across the ocean: Thousands of serious business people on both sides of the Pacific are betting on continued peace and prosperity between Asia and America. That's why my Korean-American friend reminds me so much of another big-time Asian businessman: Fu Chengyu.

This is the guy who years ago got his master's degree from the University of Southern California, returned to his native China to find his destiny, and wound up the top dog at China National Offshore Oil Corp.

The head of CNOOC -- like the VSKAB -- wants to gamble. He wants his company to acquire Unocal -- the Southern California-based oil and gas giant, despite the fact that (a) a U.S. oil company has already made a very solid takeover offer, (b) Congress may just poison the deal with anti-China rhetoric, (c) the maze of U.S. regulations and regulatory bodies that have to review such a foreign takeover sometimes seems to rival China's own enormous regulatory bureaucracies, (d) the American public may feel threatened by China's move and, finally (e) the deal -- if it goes through -- may not in the end make economic and business sense for Fu. (Though it may make great strategic sense for China itself, which is developing an unquenchable thirst for energy.)

OK, but is the oceanic optimism of the CNOOC head and VSKAB in the end rational?

The answer rests on three factors. One is this: Whether the cutting-edge businessmen and political leaders of China are starting to bite off more than they can really chew. Only they can answer that, but as someone who wishes to see China develop into a successful, modern state, rather than implode and become a hundred Yugoslavias, I can only offer a cautionary warning: Always look carefully before you leap.

The second factor is whether globalization is really the near cure-all that leading proponents (especially columnist Tom Friedman of The New York Times) claim it is. I'm anything but an antiglobalist, but I would not bet the farm, as it were, on the purity of its curative powers.

The third factor is whether Asia and America continue to remain at peace. This means no war between China and Taiwan, less friction between Japan and China, continuing calm between India and Pakistan, and of course some kind of peace settlement between North and South Korea.

On this last issue -- peace and security in Asia --- let us all err on the side of optimism. Why not? The alternative is simply too grim to contemplate. Besides, the whole world loves crazy optimists, right?

Tom Plate is a UCLA professor and a member of the Pacific Council on International Policy.
Copyright Tom Plate 2005


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