Peaceful Rise of China
by Tim Swanson
by Tim Swanson
War II, the US military has bombed, invaded and occupied dozens
of countries. In the last 25 years alone it has caused fatal action
in over a dozen countries spanning the globe. The American empire
currently boasts a peerless expanse comprised of more than 300,000
men and women stationed in over 700 bases throughout nearly 130
To fund its
ambitions, traditional empires have historically extracted rents
and tributes from the subjugated regions. The American empire on
the other hand, has craftily erected an unseen tax, through pegged
currencies and bank reserves.
Gone are the
days of hauling cumbersome reparations of bullion across valleys
and rivers to the local chieftain. The new, carbon-friendly method
for funding the federal empire is by selling US treasury securities
to countries that peg their domestic currencies to the USD. And
as Congress legislates a never-ending array of spending appropriations,
the US taxpayer is somewhat sidelined for bigger, faceless purses
thousands of miles away.
In order to
maintain their peg, countries such as Kuwait and Saudi Arabia must
purchase US treasuries and expand their credit supply to keep their
domestic ducat at par with the USD. However, the people who actually
pay for these treasuries are not central bankers, but rather anyone
with denominated assets in the domestic currency. Thus the average
Saudi consumer witnesses inflation first hand when the price of
everything, including oil, increases (e.g., they lose purchasing
power because more credit is chasing a fixed supply of goods).
Debt is literally
America’s largest export as foreign banks and sovereign wealth funds
have amassed trillions of increasingly worthless dollars; and it
is the number-one revenue stream that funds the American empire
from sea to shining sea. 
Chinese walk upside down
As the Summer
Olympics approach, self-righteous pundits from the West have concocted
a false image of a rising, military empire from the East bent on
could be farther from the truth.
While the rhetoric
and actions of Chairman Mao certainly held such ambitions, many
of the reforms of Deng Xiaoping are nothing short of liberalism
in its purist sense.
First and foremost,
he slashed the 4.5 million-men military by more than half and reinstituted
civilian control over it.
trend to verbiage extolled by Bush, Obama and McCain. Not only
do they not talk of dismantling the Imperial legions; they
all want to increase the size of the military.
 Dare we even discuss Congressional oversight over military
activities, or lack thereof? 
the Blue Team, perhaps the most influential sinophobic organization
today, speak of a widely expanding Chinese military.
 If one is to believe the official GDP numbers of either
country, China still spends less than half of what the US does as
a percentage of GDP (1.7% versus 4%). 
Ah, but the
Chinese military hides the military expenditures in the shadowy
Chi-Com corporations, right? Wait, and the US military doesn’t?
According to economist Robert Higgs, while the official US military
budget is roughly $550 billion a year, when the defense funding
that is spread across a slew of other government agencies is added
together, the scales tip at over
But the US
must continue to build up and maintain a force in the event that
hostilities with China occur, right?
The US spends
more than the rest of the world combined on defense appropriations.
The UK ranks 2nd, China ranks 4th. And even
if you doubled China’s defense budget by assuming they smooth their
numbers like their American counterparts, the Chinese budget would
reach one-tenth of what the US spends each year.
have been several cases of purported Chinese espionage of the US
satellite, nuclear, and intelligence gathering agencies, the Chinese
have a nuclear arsenal of about 200 warheads – equivalent in size
to the clandestine efforts of Israel. In contrast, the US military
has more than twenty times that number and threatens to use them
on a semi-monthly basis against a slew of imaginary enemies (e.g.,
Iraq, Iran). In fact, the US military is the only organization
to ever have detonated not one, but two of the weapons in an offensive
But the Chinese
are stealing the satellite imaging and guidance technology to use
on the continental US, right? Again, who is the organization that
they allegedly stole it from in the first place? Why does the US
military still have armed weapons aimed at countries that pose no
threat? Where is the uproar and protests in the street for the
fact that the US military has developed weapons of mass destruction
and guidance systems in the first place?
else, this is a great argument for why the US military should shut
down its government labs – so the lethal information cannot be used,
let alone stolen, in the first place.
be farther from the truth. Since the late ’70s, Taiwanese businessmen
have invested billions on the mainland setting up factories and
enterprises. In 2007 alone, cross-strait trade accounted for more
billion. And relations have become even rosier under the new
Ma administration, in which among other liberalizations, the first
direct flights between the two landmasses have taken place in sixty
every administration since Kennedy has heaped sanctions, barred
cultural exchange and threatened embargos on the isle of Cuba.
microcosm that easily illustrates the mentality of the two governments
is recent natural disasters. Shortly after Hurricane Katrina landed
and devastated the Mississippi delta region, the governor for Louisiana
was unable to fully mobilize the Louisiana National Guard, because
35% of the units were deployed to Iraq. And to add insult
to injury both FEMA and Bush were too proud and incompetent to allow
outside help from assisting with the relief effort, including specialists
from other countries.
shortly after the powerful earthquake that shook Sichuan to its
knees, the PLA, which wasn’t trying to police the world, was able
to fully mobilize to assist in the relief effort. On top of that,
the PRC accepted aid not just from their historical adversaries
but also aid kits and search & rescue specialists from their
political rivals in the south, from Taiwan.
In fact, the PRC reportedly received so much aid and assistance
that they essentially ran out of physical room and had to temporarily
turn away helpers. In contrast, the boondoggle of New Orleans in
the aftermath of Katrina is legendary as large organizations like
Wal-Mart were turned away because they didn’t have permits.  
China may not have fully changed or modified itself in a manner
that outsiders desire, it has made substantial reformations. These
reforms should be applauded, encouraged and perhaps emulated by
the West. Western countries such as the US and UK are on a dangerous
road to become the very Orwellian countries that is dramatized in
while some civil libertarians chastise the PRC for its omnipotent
Seeing-Eye project, in London alone there are more than half-a-million
security cameras watching your every move. 
target critics have of the PRC is the persecution of the Falun Gong.
Does anyone else recall what happened to the Branch Davidians at
the hands of the ATF? Who bulldozed and torched a compound filled
with children? What about the recent hysteria surrounding trumped
up charges of the polygamist sect in Texas?
is unique right? What about federal funding of abortions vis-à-vis
Planned Parenthood, or the onslaught of taxes and inflation that
prevents American families from having more than one or two children?
yet: Iraq. While it has become chic to slap a Free Tibet or Save
Darfur sticker on the back of your VW van, in terms of the blatantly
observable disregard for human rights and civil liberties: what
about the 1.2 million Iraqis that have died either through collateral
damage or civil unrest since 2003?
a different tune
on yet another holy rite progressive citizens of the West condemn
the PRC: their precious protests and marches. While the average
Chinese person may be prevented from publicly voicing their dissent,
the West has all but given up on this purported natural right.
Not only has the West stood by while its governments have ransacked
and plundered regions of the planet, but by voting for wiretapping
immunity, warrantless searches, secret tribunals, and rendition-filled
prisons, it has become the very police state it supposedly abhors.
what foreign country has the PLA invaded and occupied within the
past 25 years? The last foreign entity China fought with was Vietnam
in 1979, for 16 days. They are now trading partners, erecting roads
and rails to exchange raw materials, ideas and finished goods.
In the last
decade alone the US government has attacked and occupied parts of
Africa, Eastern Europe and the Middle East. And to add insult to
injury, US politicos are trying to build a wall between its largest
trading partner – Mexico – the one country whose relatively cheap
manual labor and resources allows the non-war-protesting, Free-Tibet
residents of America to live comfortably in an inflation funded
Unrest in Tibet.
While some of the protests may be genuine, the CIA has had a long
history of funding Tibetan insurgents beginning with operation ST
Circus in the late 1950s.  This is not to say that Tibet should have been invaded or
occupied in the first place, as that is an issue for another article.
Rather, with the recent revelation that the CIA was given $400
million in 2007 to arm and equip insurgent groups with Iran,
and given the fact that the CIA also spent billions of dollars in
the ’80s arming and training the Mujahideen against the Russians
in Afghanistan (Operation Cyclone),
it is conceivable that the CIA is possibly behind the
recent unrest in Tibet. The incentives are there: embarrass the
Chinese at their coming-out party.
or Sino realist?
This is not
to defend or condone all of the actions of the PRC, rather as the
parable notes: it is to point out that before you complain about
the speck in someone else’s eye, you worry about the plank in your
most ironic illustration of how the West and East have traded places
both morally and economically involves the Korean War. It was recently
uncovered that the current interrogation methods practiced by the
US military in its fight against terror were actually scripted by
another entity nearly sixty years ago.
It turns out
that when the PLA captured UN troops (including Americans) during
the Korean War, they put together a handbook of interrogation techniques,
many of which were condemned by the international community as torture.
Guess what standard techniques the US military is currently
using to extract information from alleged terrorists at Guantanamo?
People’s Republic of Capitalism
the late 70s and early 80s Deng Xiaoping created Special
Economic Zones within various regions of China. These were the
first experiments in a move from centrally planned socialism to
decentralized capitalism. And boy have they ever paid off. While
tomes have been written on the rise of Hong Kong and Singapore as
business-friendly export zones, each of these SEZs have become textbook
examples of how fast free markets can transform both skylines and
the standard of living. Take for instance Shenzhen. Most people
have never heard of the former fishing village, yet over the past
three decades it has turned into a metropolis rivaling the wealth
and development of Western cities like Chicago or Paris.
powerhouses are fueled by laissez faire policies that much of the
West has given up on. Relatively low taxation coupled with a cheap,
deregulated labor force has turned China into the world’s second
largest economy in less than three decades. Foreign investment
flows into the country at a rate unparalleled anywhere else in the
world in an attempt to capitalize in the largest urbanization transformation
(e.g., currently about 57% of the Chinese population still lives
in a rural setting and is expected to migrate substantially over
the coming decade).
In fact, Chinese
cities are choked with a never ending stream of rural peasants who
wish to pull themselves out of subsistence. Since 1981, some 600
million Chinese workers have
emerged out of poverty to seek a healthier, wealthier life within
urban cities. And as a result, China boasts not just a large share
of construction cranes in the world but internally consumes more
concrete than the rest of the world combined.
All in an effort to erect modern high-rises, mass transportation
systems, neck-bending skyscrapers, power plants, highways, airports
– or in short, everything it missed out on in the previous generation.
new stock exchange even boasts listing from publicly traded toll
companies. Yes, while the West abhors at the notion of privately
built and maintained roadways, the major expressways that collect
tolls in China (more than 20) can be shorted or gone long like any
other security. 
Tens of thousands
of state-owned companies have been privatized over the past two
decades. By 2003, more than 25 million government workers were
the pink slip as their firms were reorganized, decentralized
– and right-sized. From the period of 19972002, the number
of state enterprises decreased from 262,000 to 159,000. Agencies
that were once part of the government fabric, the commanding heights
controlled by the state, have been restructured into publicly owned
firms (e.g., China Telecom, PetroChina).
August 24, 2005, China dumped
1,300 state-owned companies onto the stock market all at once
$270 billion worth of assets. And with the freedom to succeed comes
to the freedom to fail – many of the firms have experienced less
than stellar returns. But that is not because capitalism has failed,
but rather the internal management practices and business models
are simply ineffective and unprofitable. Some have even – gasp
– gone bankrupt.
at the beginning of this year there are now more employees on US
government payrolls than on private. Government-sponsored enterprises
such as Fannie Mae and Freddie Mac have not only contributed to
a housing bubble, but have contributed significantly to a credit
crunch that has been temporarily
suspended by SEC commissioner Chris Cox – who effectively prevented
the short-selling of 19 firms including Fannie and Freddie.
it or not, China is party to seven Free-Trade Agreements. While
these certainly are from perfect nor are they pure free trade (I
have even criticized them in the past) it shows just
how far they have come from the days of being an isolated, protectionistic
land of communal farms. In contrast, members of Congress such as
Hillary Clinton recently railed
against free-trade agreements, including the failed Columbian agreement
for being too free, too liberal. Talk about a 180.
calling the kettle black
But China is definitely on the right track. And while China may
be the namesake for crunchy fortune cookies, the West may one day
be remembered as having gambled away its wealth by playing the lottery
on the back of each fable: your past success will overshadow your
future decline: 53 82 07 87 94 63 – the current cost, in dollars,
of the Iraq War.
 As of this writing there are 150,000
troops stationed in Iraq. They will remain at this level
for at least 45 days (“the pause”). As of April 2008: there are
57,000 troops in Germany. 33,000 in Afghanistan. 33,000 in Japan.
27,000 in South Korea. 10,000 in the UK. 10,000 in Italy. 1,200
in Spain. And the seemingly never-ending list continues down
the line. Note: the US currently has five active Marine Expeditionary Strike
Groups each comprised of approximately 6,000 seaman and Marines.
In addition, the US has six Carrier
Strike Groups deployed, each comprising 10,000+ seaman and
Marines. The US government is also in
the process of building 50 permanent bases in Iraq. See also
from Global Security.
 According to the US Commerce Department (pdf) in
2006, U.S. exports grew by 12.7 percent over 2005 to $1.4 trillion.
During the same timeframe, foreign holders of US treasuries
increased their reserves by $100 billion (or a 7.5% ratio).
In the past year
alone, these same foreign banks gobbled about another $500 billion
it's hard to imagine that the US exported more than $500
billion in CPUs or cell phones.
in 2004, the US exported $111 billion in goods to Mexico, and
sold $5 billion in US treasuries to it (year-on-year difference)
In 2004, while the US exported about twice as many goods to Canada
it also sold them $7 billion in US treasuries. In either case,
the largest single export to all countries is not automobiles
or TVs, but rather US treasuries. See also: “Concern
grows over a fiscal crisis for U.S.” by the San Francisco
 Seymour Hersh noted that there is no oversight
regarding the $400 million appropriations for the CIA to conduct
covert warfare in Iran. Nor has Congress once stepped in to cancel
any funding or remove troops from the Iraqi theater – which is
under their legal jurisdiction. Other instances such as the Iran-Contra scandal
also come to mind.
 Fortunately not every uniformed officer is gun-ho
or sinophobic. USN Admiral Timothy Keating is spearheading humanitarian drills with Chinese
Lt. Gen. Zhang Qinsheng. It is hoped that this will lead to an
agreement similar to the 19723
accord between the USSR and US regarding conduct and communication
on the high seas.
 Regarding GDP numbers, it turns out that China
may have overstated the increase in GDP (1
Furthermore, GDP is not necessarily the most accurate number to
gauge economic growth, see “What is up with GDP?” by Frank Shostak.
In addition, other measurements like CPI have been twisted in
the past. In fact, "core" inflation was concocted
in the early ’70s, by President Nixon who got then-Fed chairman,
Arthur Burns, to hide the effects of Nixon’s inflationary policies.
See also: interview
with John Williams.
 Instead the rescue effort was led in part by Blackwater, the
same unaccountable mercenaries that have killed hundreds of civilians
in Iraq and Afghanistan. See: “Blackwater
Down” and “Overkill in New Orleans” both
by Jeremy Scahill.
 While the PRC may not be fully open with the
official incarceration numbers, the United States has for the
past decade held the world
record for the largest prison population. As of February
2008, with 2.2 million adults or 1 in 100 the US
other countries, including China.
 The subways of New York and Washington D.C.
are now patrolled by men with automatic weapons. And in the UK,
the government plans
to monitor, record and store every digital artifact produced in
emails and phone calls.
 Over the past several years, the official One-child policy has
come under internal CCP scrutiny and may be liberalized within
the coming years. Furthermore, ethnic groups, parents that were
only-children, and various other exceptions are exempt from the
regulations and are not penalized for having more than one child.
 According to Just
Foreign Policy the number of Iraqi deaths is more than 1.2
million. According to Iraq Body Count – which only tabulates
deaths directly related to Coalition violence the number
of civilians that have died is at least 86,000.
 How many permanent military bases has the PRC
erected across the globe? There is roughly the same amount of
Japanese military troops involved in world conflicts as Chinese
peacekeepers. Which one is supposed to be pacifist again?
 Dare I mention the institutionalized methods
of racial discrimination enforced by the US government prior to
the civil rights movements? Or wholesale theft of Native Indians
 As Dan Rather chronicles in his latest documentary on the
Discovery Channel, the Chinese want to live longer, healthier
and above all, richer lives.
 As noted in Jim Rogers book A
Bull in China: Jiangsu Expressway, Co., Zhejiang Expressway,
Co., Anhui Expressway, Co. See also "From
Mao to Wow!" by Kurt Andersen and "America
and China: The Eagle and the Dragon" by Mick Brown. For example:
Jiangsu Expressway, Co., Zhejiang Expressway, Co., Anhui Expressway,
Swanson [send him mail]
is a graduate of Texas A&M University and currently lives in
Seoul, Korea and enjoys kimchi and soju cocktail. Visit his blog.
© 2008 LewRockwell.com