This week in China: Mind the competency gap

This week in China: Mind the competency gap


China’s rail program on Tuesday lost what little face it had left as two subway trains collided in the tunnels under downtown Shanghai, injuring around 260 (no deaths reported yet). Since then, the spotlight of blame has snapped from the signaling system to a power outage to (surprise) their human overlords.

We at CER hope the buck stops there. One factor is being stubbornly overlooked: In many of the catastrophes that have wracked this country in the last few years, lower-level managers had time to raise the alarm to superiors and either did not, or did and were ignored. In Shanghai this week, train equipment failed 40 minutes before the crash, forcing conductors to switch to manual operations, run at slower speeds and communicate by phone. In the Wenzhou crash in July, passenger accounts suggest the first train was running nearly half an hour behind schedule, though official details on timing remain fuzzy. In 2008, executives at dairy company Sanlu withheld information for weeks that its baby formula had been contaminated with an industrial chemical, so as not to disrupt the Beijing Olympics. Meanwhile, its formula was slowly poisoning hundreds of thousands of infants.

Long-time Sinophile Kenneth Lieberman points out that China’s governing system keeps everyone looking up and speaking down, and not vice versa. We can only hope these events have scared officials into a full-scale safety review – not only of transport links, nuclear reactors, and the host of other DIY infrastructure projects around the country, but also of the management and training systems for the people who build and work in them.

At the moment, of course, the US does not seem blessed with particularly functional governing systems either (though at least it's still cooler than Belgium). Senate Majority Leader Harry Reid revealed plans this week for a bill under which the US Commerce Department would treat undervalued currencies as a subsidy, thereby allowing companies to apply for countervailing duties against imports. We hope this is just another incidence of politicians engaging in bizarre and elaborate displays to catch the eye of jaded voters (if only they were as entertaining as our avian friends). The passage of such a bill would probably invite retaliation from China and disrupt global trade at a not-terribly-convenient moment. US senators may hope to scare Beijing into continued RMB appreciation, export industry be damned. But most China pundits believe the government will have to put the brakes on currency appreciation to protect exports as global growth slows. Beijing has always almost answered to its domestic critics first.