The King and the Spratly Islands – Visions on China

“Veni, vidi, vici” – “I came, saw and conquered”

Julius Caesar 

Last week, the Dutch King Willem Alexander has made an official state visit to China, after he already enjoyed an unofficial, short holiday with his family in this country.

With this official visit and especially with the short, unofficial, but nevertheless telling private holiday, Willem Alexander emphasized the warm and mutually beneficial commercial relations between The Netherlands and China, the powerful, economic behemoth in the Far East. China is by far the largest exporter of (cheap) consumption goods and The Netherlands is host to Rotterdam, still the most important sea-port in Europe for container handling.

In other words: China needs the enormous sea-port, as well as the logistical experience and the excellent networks of The Netherlands and The Netherlands needs the constant influx of goods from China, in order to keep its logistical apparatus in motion throughout the year.

And as a part of this official visit, the Dutch business industry organized the biggest trade mission in Dutch history, with over 250 participants from 150 different companies and organizations. Their mission was to put their products and services in the spotlights, sign as many trade orders as possible and reinforce the bonds with their Chinese counterparts: customers, suppliers and the Chinese government.

Both sides – China and The Netherlands – had the sole interest of making the state visit a blatant success, with a lot of happy smiles, large words of praise and mutual satisfaction and wallets full of promises, contracts and orders for all participants in the trade mission. Nothing in the world should get the chance to spoil the party that this state visit ought to be.

Where Prince Charles of the United Kingdom had made a strong statement, by refusing to participate in the official state banquet for China offered by the British government, the Dutch King made an equally strong statement, with respect to China. He did so by spending his private holiday in this country too, apart from the state visit. That is a gesture that will not be lightly forgotten by the Chinese government.

There was no room for criticism of China, apart from a number of obligatory and further meaningless words by the King about human rights and some other things bothering the Dutch. “These were the mandatory parts of the visit, in order to keep the folks at home happy. Well, you know the drill… And now: back to business! We are the best and let’s forget the rest!”.

To call this generally uncritical behaviour of the Dutch “a missed opportunity”, is an understatement. As a matter of fact, it is a strong signal that trade interests come before everything else in The Netherlands, even where this should not be the case. Although the Chinese citizens often are proud about the achievements of their country (and rightfully so) and the increasing role of the country at the global stage, their daily lives generally leave a lot to be desired.

Of course, China has had a troubled past with respect to human rights and the political treatment of minorities and – as a matter of fact – its whole (rural) middle class and lower class population.

People, who go with the flow and exactly say and do what the political leaders want to hear and see, usually lead a decent and tranquil live, when they are lucky and nothing bad happens to them. However, people who have good reasons to disagree with the will of their leaders, are often in for a very rough treatment by the central and local governments: a treatment trademarked by harsh punishments and political suppression.

The ubiquitous corruption, environmental challenges, the sometimes questionable quality of even the most basic, daily foodstuffs and drinking water and the generally failing state of law and order in China pose a problem for many, many people in their daily struggle for survival. The mounting ego, self-satisfaction and deafness for criticism of their political leaders at all levels is another issue of concern, as well as the bulldozer-esque manner in which disputes between the government and the population are solved.

Summarized, the Chinese government is not always the government that the Chinese people deserve, to say the least. And that is not all... 

The foreign policy of China is increasingly aggressive and imperialistical, as it zealously wants to proof this country’s increasingly important role on the global economic and political stage: you could call this the Chinese sledgehammer policy.

China has increased its influence on the African continent and in South-America, by buying their way into the hearts and minds of African and South-American leaders. In exchange for trade contracts and unlimited access to all kinds of fuels, commodities, precious metals, food and minerals, the Chinese build roads and other infrastructural parts, which help the African and American leaders, as well as themselves in the process.

While this is at least in the interest of some of their “beneficiaries”, the Chinese foreign (or domestic) policy is not so friendly everywhere. Remember for instance the troubled past of Taiwan, Tibet and the Uighur minorities in China.

The most blatant example of the current expansionist policies of China are the Spratly Islands in the South Chinese Sea. These “Islands” traditionally led a quiet live as reefs without strategic meaning; that was at least, until people discovered that the sea surrounding the Spratlys was laden with consumable fish and further contained large oil supplies.

Then the Chinese came, saw and conquered…

Position of Spratly Islands in the South Chinese sea
Picture courtesy of Google Maps
Click to enlarge

Even though the Spratly reefs are much closer to countries like Vietnam, Brunei, Malaysia and the Philippines, like the picture above shows clearly, China nevertheless ran the gauntlet with their territorial aspirations. The country asked dredging companies to create a number of artificial islands, by wading sand upon the vacant reefs and thus the Spratly Islands were born.

After their creation, these islands were filled with landing strips for planes and a few odd buildings as well as some additional infrastructure and they were subsequently claimed by the Chinese government. Everybody, who came too close to the islands was “politely asked” to get the hell out of there, or else…

Some small, Philippino fishermen saw their boat and only source of income attacked by Chinese ships and war vessels, who did not want competition in their newly acquired territory and did not scare away from using brute force against those "intruders".

Countries, like the Philippines and Vietnam, started international arbitrage procedures against the Chinese government (among others in the Dutch City of International Justice, The Hague) for wheedling the Spratlys away from the other Asian countries. However, the Chinese government told them to “get lost”, by stating that they would not accept any verdict by the International Court of Justice and by claiming that this court was working far beyond its jurisdiction, by accepting this case.

And now the latest leg in this increasingly dangerous international crisis, around these small islands in the South Chinese Sea, is started by the arrival of an American war vessel at the Spratlys. This ship is sent by the United States, in order to let the Chinese sing a different tune to the American allies The Philippines and Vietnam. On top of that, this war vessel must probably be seen as the front-runner of an emerging American fleet in the region.

The signal, emitted by the US war vessel, has been very well heard by 'Beijing'…

However, instead of acting as a means to hush up the tensions and settle the emerged differences in order to prevent from an international confrontation, the opposite happened. Currently, the Chinese are threatening the US at an increasingly shrill tone of voice. Their claim upon the Spratly Islands is final and the Chinese are willing to defend their claim, using lethal force against anyone else in the world: even the United States.

This is a very dangerous development indeed and it should wake up the Dutch government from its gold-plated dreams about trade and prosperity. The events around the Spratly Islands prove very clearly that all the current political certainties and economic agreements in the world can disappear at very short notice, as a consequence of the mounting imperialist aspirations of the Chinese government. And although I’m not particularly pessimistic that the events around the Spratlys might lead to a very large and uncontrollable war, it is an undeniable fact that China is not planning to give in to their neighbours, as well as to the United States.

Within the Dutch government, however, and in their trail the Royal House of Orange, this crystal-clear message seems to have fallen upon deaf ears. And, as a matter of fact, it also fell upon deaf ears within the British government, which was also very eager to negotiate itself into one lucrative contract after another with the Chinese government.

Except, of course, for that “stubborn old fool” Prince Charles who did not want to show a toothpaste smile at the Chinese leaders, in exchange for some contracts and cash ... 

But heck, who is Prince Charles anyway?! He will probably never be king after all, and his son William seems to already have more diplomatic skills than his aging father, in spite of his young age…

Nevertheless, I find it an unwise attitude of the Dutch royal house, government and business industry to close their eyes for the imperialist aspirations of the Chinese leaders. Just like they so often closed their eyes in the past for the reprehensible sides of other large Dutch business partners in the Middle East, like Saudi Arabia, Bahrain, Oman and other countries.

While the Dutch King speaks his soothing and swollen words of peace and friendship and emphasizes the role of business as a means for communication, development and mutual prosperity to his benevolent Chinese listeners, the Chinese government is fighting a pruning hard battle for the absolute power in their region and far, far beyond.

Not even to speak about the enduring domestic battle against the unwilling elements within the Chinese population, who stand up for their rights and reject the almighty government of President Xi Jinping and PM Li Keqiang. Often, while risking their own lives and the lives and future of their families.

The Dutch King, however, does not care about that… He is back home safely, among his family and friends, satisfied with a job very well done. And so are the Dutch government and business representatives. 

What will happen in the South Chinese sea or in China itself? Who cares…?! Really?!

Exit of CEO Jan de Ruiter of RBS The Netherlands. Final chapter of the massive acquisition of Dutch bank ABN Amro gone totally awry? And what are the lessons to be learned from this downfall?!

If the last two years had one trademark, it would be the return of the massive multi-billion dollar merger. These took place under pressure of the continuing consolidation in many industries, as well as under influence of the extremely low interest rates,  the ample availability of liquidity in the financial markets and the still relatively low asset prices. And last but not least: the possibilities that such an acquisition or merger sometimes offered to move one’s headoffice to a fiscally favourable location, in order to save millions and millions of dollars in tax money.

The massive oil-related acquisition of BG (aka British Gas) by Shell, the telecom merger between T-Mobile and Dish Networks, the ‘Global Top 3’ beer merger between  InBev and SABMiller or the ‘Aussie’ merger between Beach Energy and DrillSearch (oil industry) are just a few examples of the tidal wave of international consolidation flooding the corporate landscape currently.

Yet again, the sky is the limit for Mergers and Acquisitions and there seems to be no boundary for the ambitions of the large corporations, when it comes to enlarging their market share.

However, there is still one big, tell-tale example of the total wreckage that can emerge from mergers and acquisitions gone awry: the €75+ billion takeover of ABN Amro, by the ‘Three Cash-queteers’ Banco Santander, Royal Bank of Scotland (RBS) and Fortis Bank.

This led to the demise and subsequent reversed takeover of Fortis Bank by the fully nationalized(!) ABN Amro bank and the saving of RBS by the British government with billions and billions of pounds. Only Banco Santander came out of this match as a winner, in this sense that the bank (somewhat) profited from the acquisition of ABN Amro. And ABN Amro itself will make a renewed entry at the international stock exchanges at the end of this year (i.e. 2015), with an IPO of equity certificates, after having been government property for almost seven years.

When the smoke clouds of the ABN Amro acquisition and the subsequent governmental rescue actions of ABN Amro, Fortis and RBS had lifted, RBS had ended up with the international wholesale (payments) network of ABN Amro; ten years ago definitely one of the crown jewels of the former Dutch national pride.

Yet, this crown jewel did not bring RBS much luck, apart from the necessary (partial) nationalization of this Scottish mega bank... In fact so little, that within a few years from now, there will come an untimely end to this Dutch banking adventure of RBS. It shows once and for all that the acquisition of ABN Amro was one of the worst and most expensive corporate decisions in history and as a matter of fact, it should be a worst-case example of the hazards of such large mergers and acquisitions for generations to come.

Het Financieel Dagblad printed a series of articles regarding the exit of the CEO of the Dutch operation of RBS, Jan de Ruiter. Here are a few snippets of these two articles.

CEO Jan de Ruiter leaves RBS The Netherlands

RBS The Netherlands will further abolish its activities in The Netherlands without Jan de Ruiter as figurehead. The CEO of the British bank in The Netherlands has abandoned his current job and will just continue as an advisor. He will support Chief Risk Officer Idzard van Eeghen in the coming period in his assignment to further abolish the activities of the bank. De Ruiter called it ‘a natural moment to say goodbye to the bank’.

The career of De Ruiter at RBS has been under the sign of shrinkage. He moved from ABN Amro to RBS when the Brittons bought the corporate branch of ABN in 2007. Of the 3500 people that De Ruiter started with, only 450 will have remained at the end of this year. In due course, RBS in The Netherlands will end up as a side-office with only 15 employees, who help companies with financing issues and risk management.

The Dutch branch of RBS has been terminated as a full-service bank by the parent company in Edinburgh. The branch is now busy with abolishing the wholesale payment services, the former ‘pearl in the shell’ which it bought from the ABN Amro estate. RBS is aiming for its domestic market and abolishes low-profitable subsidiaries. 

“From the beginning there has been a certain fatigue in the bank”

After RBS had acquired the foreign network of ABN Amro, there came an end to the bank that had been seen as the main financial institution in The Netherlands. Not much later RBS itself endured a direct hit from the crisis.

After Jan de Ruiter had left ABN Amro after a 20 year stint, in order to continue his career at RBS, he entered into an eight year long struggle-in-vain to make a success of RBS in The Netherlands. More and more activities moved to London, until only wholesale payment services remained. And now even that activity will be abolished.

De Ruiter had noticed soon that RBS had made ‘a terrible mistake’ with its acquisition of ABN Amro. Especially the banks that focused on corporate finance and business banking were targeted by the credit crisis. This was exactly what the acquired ABN Amro parts did. On top of this there was the special circumstance that these parts had been mainly financed with short-term loans. Especially this particular market was almost totally abandoned during the crisis. 

To his personnel De Ruiter emphasized, however, that also under the roof of ABN Amro itself, the damage would have been substantial.

This whole second article is a very good read indeed and I advise to read it for everybody who masters Dutch or uses Google Translate, as it paints a clear picture of the 'Mission Impossible' that De Ruiter was in.

I guess that Jan de Ruiter was partially right when he stated to his personnel that ABN Amro – without the acquisition by the ‘Three Cashqueteers’ - would also have endured a full blow of this devastating crisis. In hindsight we can safely state that in 2007 the dry rot had already set in at this ‘Dutch pride’ ABN Amro, making it in fact ‘an accident waiting to happen’.

What I want to emphasize, however, is that this reckless and mindless acquisition of ABN Amro by the three banks Santander, Fortis and RBS has brought not one, but three out of the four involved banks at the brink of self-destruction, at the expense of billions and billions in tax money, necessary to rescue these banks. 

That is a very important lesson to learn for all those daring and power-hungry companies, sitting on a stockpile of billions and billions of Euro’s/Dollars/ Yuans/Yens in nearly free cash. A large merger or acquisition is not an end-state, but a beginning of a new and very uncertain adventure with an unpredictable outcome.

Do workers more and more become people with no past and no future, only working in the present days? Maybe, companies should try to give their to-be-dismissed workers a second chance in a totally new role.

“Workers in many industries seem to become people without a past and without a future. They are hired for a particular, short-lived  assignment alone and just do their thing, until the job is done. Afterwards they go away, leaving everything behind as if they never existed”

Ernst Labruyère – 2015

To make things clear at the start of this article: I am a freelancer by heart and I love to work in new environments and jobs in the financial industry. The work is rewarding, also in the spiritual sense of the word, and it gives me the chance to get to know new, interesting people and inspiring colleagues. I love my job and I would never want it to be any different.

Nevertheless, I chose myself  to do the things I do, regarding work, and live the working life I live. It was a choice that I could make in all freedom and a choice that I will probably never regret during the rest of my life.

However, a great many workers in large industries do not have this choice anymore. Their jobs just cease to exist, as their executives-in-chief decide that their department or business unit is simply “not efficient”, “too expensive”, “not profitable anymore”, “overtaken by ICT-driven developments” or “no longer part of the core activities of their bank/insurance company / financial institution”. Their job becomes history and they are asked to leave.

Especially in the tech- and internet-driven financial industry with its mounting share of ICT-driven developments, strongly influencing the daily business, this is almost becoming a daily event.

The problem of such dismissed workers is not only that they lost their job! Their real problem is that dozens or hundreds of workers (i.e. their direct colleagues and peers) lost exactly the same job at the same time, as it had been taken away by a new ICT system, which does the same job in a fraction of the time. Or taken away by a customer that does not visit the brick-and-mortar offices anymore, as he can do all his banking and insurance business through the internet nowadays.

And not only at the employer in question, such jobs go away. No, in the whole financial (or other) industry similar jobs become a thing of the past, as all large employers make the same strategic decisions at the same time, driven by their competition.

This situation leads to a phenomenon, which is becoming more and more usual in the 21st century: a giant company in the financial industry – but also in other industries – is announcing a massive reorganization, slashing up to thousands of jobs in the process.  At the same time a different  business unit or staff department of the same company is hiring dozens and sometimes hundreds of new workers (most of them probably temporary or freelance workers) to get either a specific job done or an important project accomplished.

Both groups – the group of exiting, dismissed workers and the group of entering freelancers – are not aware of each others existence and there will probably be no exchange of people and knowledge at all between these two groups. One group is heading for the exit, while the other group is looking at a new assignment with another steep learning curve and another job to do, as always under high time pressure.

I truly understand the dynamics behind the management decisions involved in these situations; let that be perfectly clear.

Nevertheless, it leads to the peculiar situation that people with loads of experience in the financial industry (i.e. in any other large industry) and especially the company at hand walk out the door, while people with little or no experience in the same company or even industry (hence: freelance ICT, finance or legal workers) must do a very complex job, which... requires loads of experience in either the financial industry or in the company at hand.

So many projects simply fail, because suppliers, ICT workers and project leaders, finance workers and legal people cannot grasp the culture and the forthcoming behaviour within the head office, staff departments and business units of their assignor. They are nowhere close to understanding it or even becoming aware of it.

And the worst part is: at the time that the job is done after all and the ICT, finance and legal workers have finally acquired the necessary cultural feeling, ‘hands on’ experience, knowledge and skills of their temporary assignor, their assignment will have ended. Instead of being helped with finding a new assignment within the same (financial) institution or company, they are simply sent out of the door.

Perhaps many of the original, dismissed workers at the financial institution or company in question might also have chosen for a life of freelancer, in order to avoid long-term unemployment, and supply their sometimes desperately needed (financial) experience to new employers or perhaps even their old employer.

In the process, workers-turned-freelancers could become people without a past (i.e. experience within the company of their assignment) and a future (i.e. a prospect for a new assignment or job within the company), who just do their thing and afterwards leave, as if they never existed!

As a consequence, companies become totally unaware of their culture, past and future themselves, as few temporary workers take the time and make the investment to understand the culture and politics within their assigning company. “You are the boss, you call the shots” is traditionally their point of view.

Welcome to the new reality...

But what if...?! 

• What if companies see their culture, past and unified future as an indispensable part of their company; something that they should preserve actively at all costs and never ‘forget’, through the rapid exchange of personnel? 
• What if companies do not see their excess personnel as one-trick ponies anymore, but as people with numerous skills and endless possibilities, who just need “a break and a long shot”? 
• What if companies made real work of replacing dismissed workers within their company itself? 
• What if companies give their dismissed employees a chance to learn new skills and competences instead, while preserving their old experience, skills, competences and cultural understanding of the company at the same time? 
• What if companies give their excess employees the chance to work themselves in in a new business unit or staff department and become invaluable assets of their new department again, even if this would take them three months or more? 
• What if such excess workers would get in a master-apprentice role, in which they are coupled to an experienced tutor, who teaches them everything about their future job and thus prepares them for their new future?
  
• What if such formerly excess workers turn out to be 'exactly what the doctor ordered' for ICT projects gone awry and cultural misunderstanding among freelance personnel in temporary jobs?!

Would that not be great for both employer and employee, as less people need to be fired and less new, unexperienced people need to be hired in return?

Maybe, it’s a long-shot that we should try. And of course, this would not lead to companies never dismissing workers at all. Still, it could lead to companies not dismissing more workers than is strictly necessary.

Most people have many more possibilities than directly meets the eye. If you just give them the chance to prove themselves...