Heve you ever heard of a guy named Michael Pillsbury? Really and truly I have deep admiration for him. He's goooood.
He wrote a book about how the Chinese think about the world and based it all on modern Chinese writings. Its free and on the internet if you're interested in reading it.
It will explain fully where AIG's stupidity originates from.
I like Michael Pillsbury too. He is one of the "panda-huggers." Rumsfeld's changed his tune on China too by hiring Pillsbury because China's growing economic importance is not something that can be fought militarily but just has to be lived with.