Carlos Ghosh (64) was the CEO of three international auto corporations, Renault, Nissan and Mitsubishi Motor. He was arrested in Japan on November 19, 2018 at the Haneda airport, when he was flying in his private Gulf Stream jet to Japan to attend a board meeting where he was going to call for a vote to remove the CEO he promoted, Horton Saikawa and reinstate his aide Kelly. He was arrested on the grounds of false accounting and his close aide, Greg Kelly, a retired Director and former head of Human Resources, was also detained. Ghosn was allowed to stay in his Tokyo apartment with a hefty bail $13.8 M. The news of Ghosn’s arrest was very significant in business world in 2018 but his Hollywood style escape from Japan under heavy surveillance on the day before New Year Eve (12-30-2019) was mysterious and dramatic, not surprisingly appeared on headlines on most world-wide media. Although Ghosn’s escape plot is an intrigue story involving a former American Green Beret, Michael Taylor, deserving media’s and readers’ attention, but his career peaked as an CEO of multiple international corporations simultaneously tells more than an CEO’s greed and power as presented by the Japanese prosecutors. Ghosn’s case clearly demonstrated the problems of global corporate governance, executive compensation, employee protection, and cultural clash under different political systems and business philosophies. Thus, it is worthwhile for us to trace beyond Ghosn’s personal successful career and his intriguing escape from Japan to Lebanon (now an Interpol wanted man) to launch a discussion on some of the larger issues mentioned above.
 
Ghosn was born in Porto Velho, Rondonia, Brazil (1954) and moved to Rio de Janeiro in 1956 then returned to Lebanon at six with his family. He was educated in Lebanon and later studied in France at prestigious Lycee Saint-Louis and the Ecole Polytechnique to become an engineer. He started his career in tire business and worked his way up in Michelin, becoming its COO of South America at age of 30 returning Michelin-SA to profit. With effort in mastering English, he then became the COO of North America for Michelin in 1989 and CEO in 1990 overseeing the restructuring after Michelin acquired Uniroyal Goodrich Tyre Company. The Ghosns lived in Greenville, North Carolina. In 1996, Ghosn became the Executive VP of Renault’s Research, Engineering and Manufacturing and President of its South America Division and in a year he became the first CEO of the privatized Renault with a successful restructuring operation. In March 1999, Renault and Nissan formed an alliance, then Renault purchased 36.8% of Nissan (May 19999) Ghosn as CEO of Renault assumed COO of Nissan (6/1999) and became President in June 2000 and CEO in June 2001 after successfully accomplished a Nissan Revival Plan (achieved profitability of 4.5% and debt reduction from $5.6B to $2.76B) by cutting 21,000 jobs (14% in Japan), eliminating age/seniority promotion, abolish Nissan Suppliers crosslink relationship (earned him a nick name as keiretsu killer), and changed corporate language from Japanese to English. Nissan returned to profit and debt was reduced to half. Then Ghosn introduced the 180 plan (1 million vehicles, 8% profit and 0 debt) to be accomplished by 2005, which were all being met under his leadership.
 
Ghosn’s success drew attention in the auto industry. Billionaire investor Kirk Kerkorian bought 9.8% of GM in 2005 with intention to get Ghosn to be the new CEO but the plan was rebuffed by the GM Board. Next year, Ford offered CEO to Ghosn but he refused for not getting both the Chairman and the CEO positions. In the mean time, Ghosn embarked a push for zero emission vehicles and made Nissan as the world leader in electric cars, twice as big as Tesla’s sales in 2017. Renault invested in Russia AvtoVAZ and bought 25% share, Ghosn became chairman of AvtoVAZ from 6/2012 to 6/2016 making him the chief of several international corporations including two in the Fortune 500 list. In October 2016, Nissan bought 34% of Mitsubishi Motors, which later chaired, making the alliance group to be the 4th world largest auto group next to Toyota, Volkswagen and General Motors. Ghosn was the 4th foreigners to be CEO of a Japanese company (the other three were appointed by Ford to run Mazda). While Ghosn was successful in restructuring, his actions certainly have irked other Japanese corporate executives and employees as well as challenged some Japanese social and cultural norms. These elements probably brought his demise. Ghosn did announce in February 2017 his plan of stepping down from Nissan CEO position as of 4/1/2017 but remaining as Chairman and promoting his protege, Horton Saikawa, to be the CEO. However, Ghosn was removed from his Nissan Chairman position as of November 26, 2018.
 
The charges made against Ghosn by Nissan and the Japanese prosecutors included using Nissan funds ($18M) for purchasing his residences in Paris ($5M), Beirut, Amsterdam and Rio de Janeiro ($15M), setting up shell companies in Netherlands for making investments with Nissan funds, under reporting of income with complicated deferred income payment schemes and various financial accounting problems. Ghosn till this day claim innocence, however, he did settle with the U.S. SEC to pay $1M fine for failing to report $140M Nissan pay barring him to serve as director for any US public company. Ghosn’s lavish life style and a salary equal to 240 times of that of a Renault employee and 11 times of that of Toyota chairman illustrate a fundamental issue in applying the American corporate culture to Japan and China. China and Japan both have a legitimate corporation law in many ways similar to the Western system but what is different is how these laws operate in the Asian societies with their unique political system and cultural background. Japan is not a communist country but she has a similar philosophy regarding protecting jobs and employees like China does.
 
We should not look at Ghosn’s case as a simple personal greed or financial accounting fraud case. When Ghosn cut 21000 jobs (3000 in Japan) and abolished lifetime employment system in Renault-Nissan, he should have realized that he was challenging the Japanese culture and its society. Changing corporate language from Japanese to English not only will not educate the Japanese to accept the Western business philosophy but will further increase resentment of the Japanese employees. Calling Nissan’s action against Ghosn as treason or coup or jealousy or corruption is a gross simplification of the deep problems existed in the international conglomerates operating world-wide especially in Asia, South America and Africa. As China is rising as a giant economy trying to establish and manage her global corporations as Japan did in the past decades facing competition with American corporations, it is advisable for the U.S., Japan and China to take the Ghosn career as a case study to examine the deep issues of corporate governance for global conglomerates. Perhaps, the young successful Conglomerate, Huawei, should be used as a reference for such a study.



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In the recent Foreign Affairs, Snap, 2-15-2019 (online), there is an essay entitled, Will China Seize Taiwan? Wishful Thinking in Beijing, Taipei, and Washington Could Spell War in 2019, authored by Prof. Peter Gries and a PhD student, Tao Wang. The paper appears to be a research work on the Taiwan Strait Issue consisting of some close monitoring of the events happened in recent years concerning Taiwan Strait and some reasonable interpretation of media reports including other scholars’ assessment on the central issue - how China will unite with Taiwan? The authors took an observer’s position to examine the issue from the perspectives of Mainland China, Taiwan and the U.S. The Taiwan Strait issue was historically regarded as a domestic dispute by two sides, People’s Republic of China (PRC) on the Mainland and Republic of China (ROC) on Taiwan. Each side claimed itself as the legitimate representation of the entire China, but the U.S. was intimately involved in this dispute by the fact that she first recognized and supported ROC (1911-1979) and later recognized PRC (1979- present) but wished to maintain a formal diplomatic relation with PRC and an informal relationship with Taiwan. 

The main conclusion of Gries and Wang’s paper is to warn the three sides that there is a danger of war if every side maintains its own wishful thinking: Firstly, China is determined to reunite with Taiwan. She feels a growing confidence in her economic and military strength to do so and use force if necessary. China is witnessing the rapidly deteriorating Cross Strait Relation due to Taiwan’s current Administration’s (DPP) anti-China Policy making peaceful reunification elusive. An interpreted belief was cited that the U.S. would sit out if a military confrontation occurred. Secondly, Taiwan’s current Administration is leaning towards pro-independence. The DPP Leader feels that Mainland China, with too many domestic problems and pressure from the U.S., is too sensible to take a military action to reunite Taiwan. A complacency attitude in Taiwan is resulting in a weakened military force by giving up compulsory military service and relying more on the U.S. military weapon sales. Thirdly, the U.S. is considering America first, not likely to send troops or want to send troops on behalf of Taiwan in the event of a military conflict at the Taiwan Strait. President Trump seems to think he can rock the boat such as toying with revisiting the One China Policy or using Taiwan as a bargaining chip against Mainland China without consequences. 

Gries and Wang concluded, the above wishful thinking by the three sides might lead to a dangerous situation. China might think that the Trump era would offer a “window of opportunity” for reunification. China can easily take Taiwan by force even possibly having no bloodshed, but the authors feel it may provoke the U.S. with an unpredictable reaction from Trump Administration. Here I would like to command Gries and Wang for their discussion and warning of a possible military conflict at the Taiwan Strait. However, I would also like to add a deeper analysis than their observations on the Taiwan Strait issue so that the three sides could understand, deal and resolve the root and obstacles of the reunification issue.

It is well known to the scholars who study the U.S. - China relation, including the Taiwan Strait issue, that the U.S. has adopted a “Status Quo” Strategy for Taiwan Issue, meaning to maintain the separation of Taiwan from the Mainland China in a status quo. Under this strategy, the U.S. honors the one China policy, but insists that the Mainland China cannot take Taiwan by force so long as Taiwan does not declare independence. (Gries and Wang termed this as “Dual Deterrence” in their paper) The “status quo” was maintained in the 80’s and 90’s when Taiwan was having a decent GDP while Mainland China was busy improving her economy. However, this strategy no longer works as China has improved her economy to be the number two in the world making Taiwan heavily depended on Mainland China in trade. This trend started during the Chen Shui Bian Administration (Democratic Progressive Party, DPP 2001-2008) and accelerated during the Ma Yin Jeou Administration (Kuo Min Tang, KMT 2009-2016) while China rised rapidly bypassing Japan becoming the number two economy in the world. Then DPP regained power and leaned towards pro-independence pushing an anti-China movement.

The anti-China movement has its root in Japanese descendants left in Taiwan post WW II. This small population grew and gained power through the party of DPP and had a tie with Japan and her right wing parties  (LDP+). The growth of DPP owed to the support of Japan and the tolerance of the U.S. under the “Status Quo” Policy. The current DPP Administration, Tsai Yin Wen, (2016-) just lost heavily in the mid-term (2018) election. Apparently, DPP’s anti-China Policy backfired. Mainland China has always been taking a paternal view about Taiwan looking forward to its reunification like expecting a runaway child to return home. Taiwan benefitted from Mainland China’s favorable policies offered to the Taiwanese, but Taiwan government behaved like a spoiled teenager taking those benefits for granted. The recent vivid anti-China movement gave Mainland a wakeup call.
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Although the rapid rise of China from a poor country ranked in the bottom of the world to her number two position surprised many, but the process was a humble one. As a very poor and weak nation, China experimented with communism and learned through many mistakes, diplomatically swallowing quite a few abuses. As a large country she was modest on the world stage, gradually beginning to appreciate the value of capitalism and market strength. Then China decided to embrace the West, accepting capitalism and trading her market for industrialization. She was cautious and industrious with rigorous economic development planning. In four decades, China had transformed herself and succeeded in her economic development but yet maintaining a governance model and development process of her own. Now China is a major contributor to the world economy with the ability to assist other developing nations.

Barring the evolvement of the anti-China sentiment in Taiwan through textbook revision and education reform, the reunification would be peaceful and smooth since the PRC constitution provides a liberal multiple governance system to coexist in China. (Hong Kong is an example even with her own currency) Clearly, it is the current DPP Administration that has created an urgency (‘window for action’) for Mainland China to set a timetable to reunite with Taiwan. The “window of opportunity” for reunification perceived by Dries and Wang was attributed it to the fact that Trump Administration might have given China the impression that his Administration will sit out if China would use force to unite Taiwan. Hence, they imply that window is open before the US 2020 election. I disagree with this assessment; rather I believe that the ‘window’ is really mandated by the behavior of the DPP Administration. Since the majority population in Taiwan has spoken through their 2018 election, accepting the One China Doctrine and willing to increase interaction with Mainland China, it would be logical for the U.S. to sit out the Cross Strait Reunification Process unless the U.S. deliberately wanted to initiate a war.

The “Status Quo” Strategy does not make sense anymore. There is indication that Japan has revised her China policy realizing her interests is really in Mainland China not a wishful thinking of reoccupying Taiwan. Japan is embracing China’s One Belt One Road (OBOR OR BRI) initiative for mutual benefits. Japan must have realized that muddling with the minority pro-independence group in Taiwan does not help her relationship with China. The same logic applies to the U.S. China policy. Targeting China as an enemy has little justification, whereas collaborating with China brings mutual benefits to both nations. Especially, when the majority of people in Taiwan has spoken, any interference from the U.S is meddling and cannot be twisted as Human Rights action.

So while we should warn the three sides of the danger of war in the Taiwan Strait like Gries and Wang did, more importantly, we should make a deeper analysis and understanding of the issue to advise the parties to revise their policies to support a peaceful reunification of Mainland China and Taiwan, which not only fulfills the Chinese mandate for reunification but also insures a peaceful Asia and a prosperous world.

​Ifay Chang. Ph.D., Inventor, Author, TV Game Show Host and Columnist (www.us-chinaforum.org) as well as serving as Trustee, Somers Central School District.
 

 
The case of impeaching President Trump has been voted in the House of Congress. Two Articles of impeachment were passed. The first article charged the President with abuse of power - “using the powers of his high office, solicited the interference of a foreign government, Ukraine, in the 2020 United States Presidential election, thus warranted impeachment and trial, removal from office, and disqualification to hold and enjoy any office of honor, trust, or profit under the United States”. The House passed the first article with a vote of 230:197 nearly completely along partisan line. There were two democrats voted opposition along with the Republicans, Collin Peterson (75, D-Minnesota 7th District, 1991-), the most senior Congressman from Minnesota and Jeff Van Drew (66, D-New Jersey, 2nd District, 2019-), a freshman in the Congress contemplating switching party. Their opposition votes are reflecting the farmers support for President Trump. Peterson is a party member of the Minnesota Farmers Party and Van Drew’s district having large farms only turned red from blue in 2018 with a small margin of 2.2%. So these two opposition votes are easily understandable. The third Democrat, Tulsi Gabbard (38，D-Hawaii，2nd District, 2013- ）, a 2020 Presidential candidate, who supports censure not impeachment, voted ‘present’ not yes.
 
The second article charged the President with obstruction of Congress - “ordering the Executive Branch agencies, offices, and officials not to comply with Congress subpoenas, thus warranting impeachment and trial, removal from office, and disqualification to hold and enjoy any office of honor, trust, or profit under the United States”. This Article was passed with a vote of 229:198, pretty much in the same manner as in passing the Article I. The only difference was that Jared Golden (37， D-Maine，2nd District, 2019-）added the third Democrat opposition vote. Golden had promised to oppose Nancy Pelosi to be the House Speaker in his campaign and did vote for Cheri Bastos of Illinois. Golden voted yes on the first article thus his nay vote on the Second article was directed more towards opposing Pelosi than supporting Trump.
 
The House spent an entire day debating the impeachment, mostly short 1-3 minute speeches along party line, criticizing each other with full knowledge that they were on TV, hence, everyone was prepared with many reading from notes. The democrats stick to their guns of citing President’s conducts violating the U.S. Constitution and the Trust of the White House and the Republicans cling to the fact that the Democrats plotted and publicly stated to want to impeach President Trump ever since he won the Presidency and was inaugurated. In reality, this partisan real-time TV show is not seen by many Americans who have to work in the day time. Thus the reruns with commentators are very important in shaping the public’s opinion. After the House vote, the pro-Democrat CNN came out with the headline on its website, “Trump Is Impeached” and the pro-Republican Wall Street Journal immediately headlined, “Impeachment Vote Divide and Dismay Washington Inside and Out”. It appears that Democrats are not that joyful and Republicans are not that disappointed. My observation is that the two parties as well as the citizens have long been divided since the Bush-Clinton era, this impeachment case is simply adding salt to the dividing wound, won’t it hurt more?
 
The Impeachment case will be sent to the Senate from the House for due process of examination, debate and resolution. There are less members in the Senate with Republican being majority, thus we can expect a partisan decision from the Senate. Democrats’ hope that some Republican Senators will betray their party is very slim, but nevertheless the House Speaker Pelosi is pondering when is the most favorable time to send over the case to Senate to get the best possible outcome. The passing of the Impeachment in the Senate is unlikely; this is the reason that the U.S. citizens although somewhat divided but are not very excited, mostly feeling that the Congress is wasting the time. The citizens' thoughts are really on the 2020 election, their concerns are still with economy, wages, jobs, and the stock market. These are also the areas Trump has been focusing on, bragged about and put on his priority. From his administration, especially his trade policies including the US-China trade war, we can see that winning the 2020 election is his top priority. Whether it is the Impeachment or the trade war, the end result is not as important as their procedure or process. The end result of impeachment may be predicted but the impact by the process is not so. Both parties can not judge how the process (prolonging to the election) may benefit which party more. Hence, the Senate proceeding on the Impeachment may still be theatrical. Similarly, the end result of a US-China trade agreement will not produce a big winner and a big loser as neither of the the two nations can afford. The U.S. certainly does not want a futile trade agreement before the election, of course, China will not give in to a one-sided deal favorable to the U.S. without some gain and assurance from the next U.S. Administration. Thus maintaining an uncertainty in the trade deal with positive hope prior to the 2020 election is the best scenario for the U.S. China, although facing an uncertainty of the U.S. election result, is definitely agreeable to a delayed or reduced tariff as an in-trim deal.
 
The bipartisan politics in the U.S. has been in practice for a long time. It has been getting worse in the recent decades resulting in a low-efficiency government and a divided citizenry. Trump’s unorthodox and non-traditional behavior, although motivated by ‘America First’ and patriotism, but in practice, he has not been able to heal the divide. Now the impeachment episode is further dividing the country along party line. If the people could not understand the problems and use their vote to stop or fix the worsening partisan divide, the U.S. will continue to go downhill economically no matter how she blames the others or the world for her problems.
 
However, the division in the U.S. is repairable since the division is not ideological like the division being created in other regions such as Ukraine and Taiwan. Ukraine has a Russian backed separatist group. Taiwan has a complex political situation where the Progressive Democratic Party (PDP) is using fear-China and hate-China to create a divided citizenry which is very difficult to repair. In the U.S., there is no serious separatist movement, any talk of separation, say separation of  California, Hawaii or Texas, will be silenced and any such movements squashed instantly. The U.S. citizens will eventually realize that they have to vote to create an efficient government regardless of party line. The voters must encourage party switching (candidates and voters) for the purpose of serving the people. The people will see that any self-isolation or hate-China Policy makes no sense; only an efficient government will make America great again.
 
The political division in Taiwan is motivated by separatists encouraged by external influence pushing separation from China, yet Taiwan’s economy has a strong dependency on China and the two people are essentially one race. The PDP is brainwashing the youth for Taiwan independence from an ideological angle through education with false textbooks. This type of division is dangerous, difficult to repair and intolerable. The 2020 election in Taiwan is important in that the Taiwan citizens must get a wake-up call to realize that the current administration is cultivating a cancer which if not checked will grow large and eventually choke Taiwan to death since separation from China will bring destruction to Taiwan's economy and destroy its future. The 2020 election in the U.S. is important in that the U.S. citizens must recognize their division and need to make a repair. Perhaps, the independent Mike Bloomberg’s presidential candidacy will serve as a wake-up call.