Sobering up on China

(Washington, D.C.): An amazing thing happened in Wednesday’s Washington Post: Readers were informed in a front-page article that Communist China has since 1998 repeatedly declared the United States to be “Enemy No. 1.” As the Post put it:

In government pronouncements, stories in the state-run press, books and interviews, the United States is now routinely portrayed as Enemy No. 1. Strategists writing in the pages of China Military Science, the military’s preeminent open-source publication, are grappling publicly with the possibility that the United States and China could go to war, specifically over Taiwan.

The Post goes on to quote Liu Jiangjia, an officer in the People’s Liberation Army, who wrote in the military’s main open-source publication, China Military Science: “A new arms race has started to develop. War is not far from us now.”

In fact, evidence of the PRC’s systematic use of propaganda to indoctrinate and ready its people for conflict with the United States has been accumulating for far longer than the past two years. Indeed, it is fair to ask why it has taken until now— after the vote on Permanent Normal Trade Relations with China and the 2000 presidential campaign are history — that this ominous information has emerged in a “mainstream” media outlet.

The China Threat

Fortunately, the other newspaper in the Nation’s capital — the Washington Times — has long been giving the threat from China the front-page treatment it deserves. In fact, on the same day the Post broke training and addressed the subject, the Times was featuring for the third day in a row excerpts from a highly relevant new book by its crack national security reporter, Bill Gertz. Mr. Gertz has revealed myriad secrets about (among many other subjects) malevolent PRC activities and official U.S. efforts to conceal and, in some cases, actually to abet them. He has drawn upon this reporting in writing his latest gripping work, The China Threat.

Particularly striking in the excerpt that appeared in the Times on Wednesday were quotes from “an internal military document obtained by dissidents in China…known as Document 65’…dated August 1, 1999…[and] signed [by the] General Political Department of the People’s Liberation Army.'” U.S. intelligence is reportedly divided on the question of whether this document is “a genuine leak or a deliberate disclosure.” Either way, its main points are stunning (emphasis added):

• “Taking into account [the] possible intervention by the U.S., and based on the development strategy of our country, it is better to fight now than in the future the earlier, the better. The reason being that, if worst [sic] comes to worst, we will gain control of Taiwan before full deployment of the U.S. troops.






• “…Before completely destroying the attacking enemy forces from the sea and their auxiliary bases which together constitute a threat to us, even if we successfully carry out interception and control the sky, our military and civil facilities will still incur some damages.”






• “It can be safely expected that once the U.S. launches an attack, the front line of the U.S. forces and their supporting bases will be exposed within the range of our effective strikes. After the first strategic strike, the U.S. forces will be faced with weaponry and logistic problems, providing us with opportunities for major offensives and [to] win large battles.”

Financing the Rope-Buying

Incredibly, Beijing is trying to get American investors to provide a substantial percentage of the financial resources it seeks to acquire the military capabilities China needed to threaten, and perhaps to attack, its “Enemy Number 1.” This takes the purported Lenin quote about Western capitalists selling the Communists the rope with which to hang them to a new, absurd height: The Chinese leaders hope the capitalists will unwittingly underwrite the purchase of such “rope,” as well.

Several recent developments suggest, however, that the wrong sorts of PRC efforts to penetrate the U.S. capital markets are coming a cropper. The following bode ill for the Chinese Communists’ bid to secure from American investors the tens of billions of dollars in largely undisciplined and non- transparent funds they would like to use to underwrite not only military modernization but technology theft, espionage, proliferation, regional hegemony, support for oil-producing rogue states, despoiling the environment, repression of human rights and Tibetan and religious freedoms, labor-related abuses, etc.:

• Sinopec IPO: For the second time this year, an enormous PRC state-owned enterprise has brought an Initial Public Offering to Wall Street in the expectation of easily raising billions of dollars, only to run headlong into trouble with what has become known as the “PetroChina Coalition” — an informal but cohesive group of American non-governmental organizations concerned with national security, labor practices, human rights, religious freedom, Tibetan autonomy, small business interests and environmental standards. As noted in an article entitled “Sinopec Stumbles” that appeared in the 2 November edition of the prestigious Far Eastern Economic Review:
  

  A second cash-hungry Chinese oil giant has limped on to the New York Stock Exchange after stumbling into protests from human-rights groups, religious organizations and labor unions opposed to its investments in Sudan. China’s second-largest oil firm, China Petroleum & Chemical Corp., or Sinopec, raised about $3.4 billion in an initial public offer on October 18 in New York, London and Hong Kong.
  

  Sinopec had looked set to escape the storm that engulfed the stock offering of PetroChina, China’s largest oil company, in April. But the day before Sinopec was slated to set the price for its IPO, the Asian Wall Street Journal disclosed that one of the company’s subsidiaries maintains an office and has company executives in Sudan. This prompted human-rights activists in the United States to warn that some of the proceeds from the subsidiary could be diverted to the Islamic government of Sudan, which has waged a 17-year war against Christians in the south.







• On 14 November, China announced it was deferring to a date not yet determined a sovereign bond offering valued at approximately $1-2 billion that was expected to be offered in New York sometime this month. While the PRC put out the word that it was doing so because of market volatility and the specious assertion that it “didn’t need the money,” the true explanation is that Beijing was concerned this offering would present too easy a target for those like the PetroChina Coalition determined to awaken American investors to the dangers inherent in underwriting such “no-strings” lending to Communist China. Indeed, the William Casey Institute of the Center for Security Policy — which has consistently played a leading role in the efforts of this unprecedented coalition — has confirmed from a Chinese official that the rationale for withdrawing the offering was “primarily the opposition of non-governmental organizations and a letter to the President [from the U.S. Commission on International Religious Freedom].”
  
  
  
• For the first time, the most influential public pension fund in the United States, the California Public Employees Retirement Fund (CalPERS) has made human rights, environmental and labor standards part of its “due diligence” process in evaluating which emerging market debt and equity offerings it will hold in portfolio. CalPERS’ Board is to be commended for its decision and encouraged to add national security to its list of non-financial considerations, consistent with the security-minded legislative audit currently underway in the State of California.
  

  Interestingly, these changes are not only sound practices from a public policy point of view. California’s State Treasurer, Peter Angelides has properly argued that the fund has lost a significant amount of its members’ money by investing in unstable and undemocratic countries. In other words, dealing with global “bad actors” is not only bad public policy, but bad business as well.

The Bottom Line

Greater transparency about the hostility towards the United States being systematically expressed by official Communist Chinese sources can only serve to reinforce concerns about the wisdom of Clinton-Gore Administration policies that have, whether intentionally or not, served to increase the PRC’s ability to do grave violence to American interests and citizens. It is of particular importance that those like the PetroChina Coalition — who share concerns about what Beijing will do with the proceeds of funds U.S. investors might be inclined, all other things being equal, to make available to China — redouble their efforts to deny such undisciplined resources to the People’s Republic.