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US Pavilion in Shanghai Fails to Do Its Job: "San Antonio Threw a ($500,000) Party and No One Came"

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In recent weeks I've written extensively about the nearly $100-million debacle that the US Pavilion at the Shanghai World Expo has become. So much false propaganda has been flooding cyberspace, most of it produced by an enormous PR effort but much of it also emanating from the State Department, it's all I can do to stay abreast of the sickening-sweet self-congratulations and continuing attempts to rewrite the history of the pavilion. The real story, however, is the stuff of a best-selling political expose.

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To briefly recap, the Bush Administration in 2006 decided not to support the project but muffed private fundraising for the next three years, leaving it to Hillary Clinton in the 11th hour to horse trade with 60-plus American and Chinese multinational CEOs, Friends of Hillary (and Bill). Even before the pavilion organizers had applied for or received their tax exempt status, the corporations anted up the dough, sure of their contributions' deductibility. In doing so, however, they commercialized the US Pavilion, turning it into a six-month-long infomercial that has been dubbed "the shopping mall."

The American people -- you and me, the citizens whose taxpayers will have to make up for the largely deductible corporate contributions -- show up as fleeting images on one two-minute film. Two other short films promote Obama and Clinton and tell a fairytale story about urban gardening in a future American city (in which, no doubt, food has become too expensive to buy, a trend already in the making). The rest of the US Pavilion is dedicated to multinational promotion, loads of it.

The mainstream press, which in the past published only puff pieces in praise of Hillary and her "heroic save" of the US Pavilion -- a feat that could have been accomplished more easily and quickly simply by asking a ready Congress for the money -- finally got the message when Hillary visited the US Pavilion on her current Chinese tour and came away startled by the Moloch she had wrought. The New York Times, Washington Post, and Foreign Policy reported on Clinton's double-take:

"Clinton Sees U.S. Pavilion at China Expo," Mark Landler, May 22, 2010

"The United Corporations of America," Ezra Klein, Washington Post, May 24, 2010

"Clinton visits world's fair in Shanghai, not as impressed with U.S. Pavilion," Preeti Aroon, May 24, 2010

So now that the story's now been told (up to a point) and various parties' formal complaints have been filed with the State Department, the IRS, and Congress, I'm turning my attention to a larger, contextual issue: the ongoing attempts to privatize public diplomacy for which the US Pavilion is clearly a test case.

Public diplomacy is America's main alternative to war as a way to speak our minds in a turbulent but listening world. Modern war is mostly ineffectual but costly in both treasure and lives. We need powerful public diplomacy to do the job that war cannot do at a fraction of war's price. If public diplomacy is compromised for private financial or political gain, however, it ceases to have credibility and force. We're left with only war to make our case. It could bankrupt our nation.

Privatizing American public diplomacy was the Bush Administration's policy. Regrettably, the Obama Administration, rather than repealing this policy, has instead accelerated its application. I will be writing about this in the future.

However, there's one last pavilion story to tell that says it all about how little the hugely expensive US Pavilion has done to better America's reputation in Shanghai and China generally.

Earlier this year, San Antonio, Texas, ponied up $500,000 for three "San Antonio Days" in the US Pavilion. That's half of what many corporations paid for six months of presence in the pavilion -- an equation that probably wasn't revealed to the Texans -- but for San Antonio, this seemed the perfect opportunity to sell itself to the Chinese. San Antonio is home to US Expo Commissioner General Jose Villarreal, San Antonio's favorite son and a big fan of the Expo (as he should be).

So San Antonio's mayor, councilmen, city managers, and members of its chamber of commerce packed their bags and made the 20-hour trip to Shanghai. Shortly after the Expo opened, they established a temporary big tent in the US Pavilion's VIP-only sanctum sanctorum. There they enthusiastically set about inviting Chinese VIPs to attend an ambitious series of presentations, seminars, workshops, and promotions. Those who have visited San Antonio know that it's a nice place with a charming Riverwalk and big dreams, like many cities in the Southwest staggered by the region's ongoing recession but positioned to recover.

According to the official China Daily, May 26, 2010, "San Antonio's mayor [sought] to fulfill the city's destiny."

"2010 World Expo USA Pavilion: San Antonio Days in Shanghai," official San Antonio website

And according to the Oriental Morning Post, May 26, 2010, "[Commissioner General] Villarreal said the USA Pavilion will launch a series of city promotion activities, and he revealed that he visits other pavilions every day, seeking for [sic] experience."

Unfortunately, the curtain came down on San Antonio's municipal roadshow almost the same day that it opened. Not literally, but as the San Antonio News Express put it, "S.A. threw a party in China but no one came."

"Presentation on S.A. can't compete with a world's fair," David Hendricks, May 26, 2010

This city is a financial center, but when a San Antonio delegation held an investment seminar here, almost no one came.

The competition was just too stiff: a world's fair going on outside the U.S.A. Pavilion, where the seminar was staged.

The city planned to tell Shanghai business owners and chamber of commerce leaders about the positives of San Antonio's business climate.

They intended to attract them with free tickets to the Shanghai Expo and free transportation to the fairgrounds.

Some of those invited came to the expo but skipped out on the seminar. Only 11 people attended the 70-minute event.

Lest the forthcoming delegations from Tennessee, Hawaii, Texas, and Chicago despair, there's still hope, according to a couple of San Antonio delegates:

"The effort San Antonio made to send a delegation to Shanghai and to hold an investment seminar will pay off as long as the city doesn't give up," said Matthew Abeyta, markets manager for Jones Lang LaSalle, a Shanghai commercial real estate broker.

"You're trying," Abeyta said. "You're putting your neck out there. It's a good gesture."

A different way to deliver the message might work better, Abeyta said.

"People here have short attention spans. You have to get to the point. Time is money," he said....

The No. 1 factor for Chinese companies to invest abroad is profitability, Abeyta added.

So far, profits have led Chinese firms mainly to Africa, where governments allow the companies to set their own rules, such as bringing in Chinese workers, paying Chinese wages, using their management styles and gaining concessions to buy natural resources. That doesn't happen in the United States or Europe.

"The Chinese companies can set up their own shops in Africa and say, 'Leave me alone,'" Abeyta said.

In other words, if you will allow operations that are not subject to government oversight or regulation, have workers who will be happy with "Chinese wages" and Chinese management styles -- which generally include no days off and limited or no sick leave -- and can provide access to cheap natural resources, you'll do well attracting Chinese investment.

This $500,000 lesson must have been painful for the confident San Antonians. But the fact is, the US Pavilion with its one-dimensional, single-path-down-the-middle exposition doesn't do any favors for exhibitors, either. The Chinese are no dummies; quite the contrary. Serious Chinese businessmen smell the commercial odor emanating from "USA" all the way from across the river, from the corporate pavilions where most hang out, and they stay away. They don't need disingenuous movies and corporate pitchmen to lure them into serious discussions.

San Antonio's failed effort calls into question the State Department's policy, devised by Clinton, of avoiding controversial topics -- even to the point of not mentioning American democracy or freedom of speech (which the US Pavilion tacitly contradicts) -- in order to concentrate on commercial issues. No way. Proud and confident nations get the Chinese' attention, fawning beggars do not -- or rather, they don't get the attention of China's top business leaders and investors. They must deal with the lower echelons.

That's not to say that blasting pro-American-democracy propaganda would help commercial relations with China, not at all: lack of respect for domestic traditions is another faux pas in China, and Chinese democracy isn't the same as America's. But not telling the honest story of America including describing those traits that stoke American innovation and drive the world's most dynamic economy means American having to sell investment and partnering opportunities with one hand tied behind its back.

Anyway, what's done is done. I hope that HuffPost readers from the other jurisdictions who will visit the US Pavilion -- Tennessee, Texas, Hawaii, and Chicago -- will pass this column along to their delegations so that they can be better prepared when they meet with the Chinese.

Earlier, I jokingly advised the business people who might be reading the San Antonio News Press, in a comment posted there, to consider setting up a barbecue and picnic tables in the US Pavilion's courtyard, staying out of the building entirely, and hitting up invited businessmen before they could be exposed to the cotton candy films and multinational commercialism inside. I had no idea how right that recommendation would be. Maybe the other delegations can give it a try. Apparently, they have little to lose.

Now on to public diplomacy, which is why I entered this fray.