George Soros and the US-China Dialogue of the Deaf

China has never been a very friendly place for George Soros. In the 1980s as China was opening up he founded and funded the Fund for the Reform and Opening of China. Known as “The China Fund,” the group focused on promoting cultural exchanges and supporting research projects in conjunction with China’s Institute for Economic Structural Reform, a liberal think tank supported by then Premier Zhao Ziyang. After the 1989 Tiananmen demonstrations and military crackdown, and Zhao’s ouster, Soros’ institute was labeled a CIA front and his personal representative in China, Liang Congjie, was arrested and accused of working for a CIA front.

Congjie, who died at the end of October, would go on to found China’s first environmental NGO, the Friends of Nature. I knew him well in the early 1990s when I was a journalist in Beijing. Congjie was a Chinese patriot and a man of great honor and integrity, but he also had little patience for feudal politics and policies. Congjie had the greatest respect for Soros as somebody who was well intentioned and wanted to sincerely help China reform its economic and political system. When it came to reform, Congjie had sterling credentials. His grandfather was Liang Qichao who ended up exiled in Japan at the end of the 1800s for advocating reforms for the Qing Dynasty. Congjie’s father, Liang Sicheng, was the official architect of Beijing when Mao came to power in 1949. He unsuccessfully tried to convince Mao to preserve the old city walls.

Soros next surfaced with a $25 million investment in Hainan Airline in 1995, before regulators made it impossible for foreigners to invest in Chinese airlines. He now owns just over 18% of the airline, which is one of the best in China in terms of customer service. I believe that is currently Soros’ only remaining major investment in China, except for his hedge fund’s ownership of Chinese listed shares on various markets. A few years ago, I was asked by Soros to do a China seminar in his Manhattan living room with Adam Segal of the Council on Foreign Relations. The crowd was mostly wealthy New Yorkers who had traveled extensively and/or invested in China. Soros asked lots of smart questions and when I sat with him at dinner he expressed very rational and informed views on China.

I asked him if he planned to make more investments in China. He responded that he had basically given up on China as the government had decided to portray him as an enemy of the country. The Chinese propaganda machine had blamed currency manipulation by Soros’ hedge funds for the Asian Economic Crisis of the late 1990s. Soros said that since China had decided to demonize him that he had decided just to stay away and concentrate on other parts of the world.

Though he has kept his distance from China, Soros seems to retain affection for the Chinese people and he remains well informed about China and its evolving geopolitical and financial role. A recent editorial he penned for Project Syndicate on the evolving US-China relationship and the challenges of China’s changing global position is well worth a read.


As things stand now, each country (the US and China) is pursuing policies that do not help the other and are suboptimal for their own economies. The entire global economy would benefit if both sides listened to each other and coordinated their economic policies…

China’s rapid rise, and America’s equally rapid loss of power and influence, has created a dangerous situation. With the exception of the peaceful transition of world leadership from Britain to the US after World War I, such global power shifts have always involved armed conflict. The deterioration in US-China relations is particularly troubling because it takes place against a background of global imbalances and serious internal political divisions, which drive both countries to take intransigent positions…

When US President Barack Obama visited China in November 2009, he acknowledged China’s rapid rise and offered a partnership in maintaining and improving the world order. But the Chinese leadership declined the offer, explaining that China is a developing country that can hardly meet its own people’s needs.

That rift is unfortunate, because improvement in Chinese living standards ought to go hand-in-hand with Chinese participation in building a better world order. Only if China pays closer attention to how it is perceived and accepted by the rest of the world can it continue to rise in a peaceful manner.

China’s leadership knows that it must fulfill its own people’s minimum expectations in order to maintain internal peace and stability; now it must learn to make itself acceptable to the rest of the world in order to preserve external peace and stability. That means becoming a more open society and playing a more active role in maintaining a peaceful and stable world order.

China ought to regard this not as a burdensome necessity, but as an inspiration to greatness. The best periods in Chinese history were those in which the country was most open both internally and towards the outside world.




About James McGregor
James McGregor is an American author, journalist and businessman who has lived in China for more than 25 years. Currently, he is chairman of APCO Worldwide, Greater China. A professional speaker and commentator who specializes in China’s business, politics and society, he regularly appears in the media to discuss China-related topics. McGregor is the author of the books "No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism" (2012) and "One Billion Customers: Lessons from the Front Lines of Doing Business in China" (2005). He also wrote the 2010 report "China’s Drive for ‘Indigenous Innovation’ – A Web of Industrial Policies." From 1987 to 1990 McGregor served as The Wall Street Journal’s bureau chief in Taiwan, and from 1990 to 1994 as the paper’s bureau chief in Mainland China. From 1994 to 2000, he was chief executive of Dow Jones & Company in China. After leaving Dow Jones, he was China managing partner for GIV Venture Partners, a $140 million venture capital fund specializing in the Chinese Internet and technology outsourcing. In 1996, McGregor was elected as chairman of the American Chamber of Commerce in China. He also served for a decade as a governor of that organization. He is a member of the Atlantic Council, Council on Foreign Relations, National Committee on US-China Relations and International Council of the Asia Society. He serves on a variety of China-related advisory boards.

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