Resentful Arrogant Perceptions

Long resentful that America and the West never treat them as equals the Chinese are determined to control their military destiny in cyber space as well as on the ground, sea and air. They want to match the U.S. on the world stage and dominate their hemisphere in the same way Washington dominates its own. China’s approach to international relations may seem crude, but it underpins the deep anger with which China has greeted the string of American embarrassments: charges of campaign-financing corruption, the rebuff to Premier Zhu Rongji’s concessions to win WTO endorsement, NATO’s assault on a sovereign Yugoslavia and the bombing of the Chinese Embassy in Belgrade, which no Chinese citizen believes was accidental. The downing of the Chinese fighter jet after colliding with a U.S. surveillance plane added to the perception of American determination to subjugate China. Moving weaponry and equipment based in Germany and Italy in the last half of the 20th century to Asia at the dawn of the 21st century to contain China only magnified the perception.

The outrage, fear and concern expressed by America when China admitted in December 2008, it was seriously considering building its first aircraft carrier to protect its national interests and as a symbol of national strength, is hypocritical political spin. How can America be so disingenuous, when at the same time President George W. Bush commissions America’s newest aircraft carrier named after his father which carries a lot more planes, is much bigger and is the 10th nuclear-powered Nimitz-class carrier to enter service with the U.S. Navy? Even though they are the world’s largest warships, they will be replaced by 2015 by even bigger and more advanced nuclear powered class of carriers. Former Vice President Dick Cheney said in 2006 these ships will help ensure the sea power of the United States for the next half century.

To defend its interests in Asia and contain China, the U.S. has been steadily transferring more aircraft carriers and other warships from its Atlantic fleet to the Pacific. The result is that of America’s 280 ships in the navy, the Pacific fleet’s share has risen from 45 percent to 54 percent and continues to increase. The fleet now includes six of the navy’s 11 carriers, almost all of the 18 Aegis cruises and destroyers that have been modified for ballistic-missile defense operations, and 26 of the 57 attack submarines.

To counter, China is not just getting into the aircraft business to compete. It is also developing ballistic missiles with non-nuclear warheads and guidance systems to hit moving surface ships at sea in the Western Pacific before they can get within range of Chinese targets. If they can develop technology that can shoot down satellites in space, it won’t be to long before they perfect their anti-ship ballistic missiles. They would have a range of up to 3,000 kilometers and be equipped with maneuverable re-entry vehicles designed to hit moving warships at hypersonic speed after being launched by rocket from land. This is a new technology and one the U.S. has never faced. If successful, the carriers that are the potent symbol of U.S. naval power will become sitting ducks in the opinion of Michael Richardson, a visiting senior research fellow at the Institute of Southeast Asian Studies.

It was therefore no surprise that China decided in January 2009, to honor the scientific team from Dalian University of Technology that came up with the satellite zapper that can destroy a satellite nearly 1000 kilometers above earth with the 2008 State Top Scientific and Technological Invention Award. What was a surprise is that it was a very public grand ceremony in the Great Hall of the People. China is definitely becoming more open and assertive. It is estimated that in a few years China will have more than 100 satellites in space.

Pork and Grains

The cost of Thai rice, the world benchmark, more than doubled in price in 2008. The price of pork also more than doubled. Many Chinese prefer to be paid with bags of rice than cash, a common practice historically. Arable land has given way to growing urbanization which has left millions of unemployed migrant workers with no farm to return to. China now imports more than 75 percent of its soya beans for domestic consumption. The most populous nation in the world has the most severe imbalance between population and land. As the population grows, grain production and the supply of pork are dropping.

Pork is a mandatory common staple in China. Sixty five percent of the meat Chinese eat is pork. The Chinese are hooked on pork the way Americans are on oil. Pork has been a mainstay of the Chinese diet for millennia. Beijing maintains vast warehouses where it stockpiles of frozen carcasses, which operate much like America’s strategic oil reserve. The government releases stocks onto the market during natural disasters crisis points in the hog cycle, and whenever it needs a political boost. China’s hunger for meat will have global financial ramifications, just like America’s hunger for oil has.

China’s leaders are well aware of this and would rather deploy their foreign exchange reserves to buy any food or commodity the country is short of on the global market ─ especially as commodity prices bottom-out. Especially, after the Food and Agriculture Organization of the United Nations said in 2008 food prices will stay high well into the teens of the century. China will then have to spend more on food subsidies to keep prices down and its citizens properly fed. In 2008, China had stockpiled between 150 million and 200 million tones of grain as well to keep prices down. China can afford to feed its people. Can America?

Extended Support Network

China is not only concerned, focused and pre-occupied with the needs on the home front during the global financial and economic meltdown, but the needs of Hong Kong, Macau and Taiwan. China liberalized yuan trade rules to bolster Hong Kong’s economy during the global meltdown. China adopted a 14-point plan which allows companies to conduct cross-border trade between the mainland and Hong Kong using yuan, set up currency swap facility, encourage mainland financial institutions to develop international services via Hong Kong, support more mainland firms listing in Hong, encourage the early start of the Hong Kong-Macau-Zhuhai bridge, press ahead with Hong Kong-Shenzhen airport and Hong Kong-Guangzhou express rail links, foster development of a world-class metropolis” in Pearl River Delta, support Hong Kong companies building next Shenzhen metro line, support Hong Kong developing border zone, facilitate co-ordination between delta container ports, raise export tax rebates, and take other steps to help Hong Kong firms on the mainland, allow out-of-towners living in Shenzhen to get visas for Hong Kong there rather than in home provinces, consider opening mainland market to more local service firms and secure stable food, water and fuel supplies from China to Hong Kong.

China pledged 130 billion yuan in loans to Taiwanese businesses operating on the mainland as part of an economic co-operation package to help the island weather the global financial crisis. Taiwanese firms will also be allowed to work on mainland projects under its stimulus plan. China also agreed to buy $2 billion worth of flat-screen displays made on the island. Beijing also pledged to do its utmost to provide whatever aid Taiwan needed during the global economic crisis.

China's Double-Fisted Handful

The reality is China cannot afford to follow in the financial footsteps of America and the Western world it leads. Furthermore, there is no domestic support for such action. China has been adversely affected by the Wall Street meltdown and needs to spend its reserves domestically to support its economy and create new jobs to replace the millions of factory jobs lost because of the global recession and loss of export orders.

China has to find 24 million jobs in 2009 to ensure social order. Jobless university graduates, unemployed migrant workers and disgruntled retired military personnel, of which there will be more than three million with their families in 2009, protesting government policies is a lethal political social cocktail. Especially in the major cities where most of the unemployed homeless migrant workers make up the multi-million floating population. With more than 60 percent of China’s population moving to cities by 2030 ─ that’s 900 million urban dwellers ─ economic stability and prosperity are essential for the Communist Party to retain public order and power.

When confronted with about 100 retired army nuclear engineers, representing over 60,000 suffering from radiation exposure while working on China’s atomic weapons program, staging public protests over their pensions which they are not receiving, while grain and pig farmers ─ who have made or broke Chinese Dynasties, including the Communist Party ─ unable to make a living on the farm, have created a food crisis that threatens to bring down the communist dynasty. Famines have been one of the primary causes that toppled Chinese dynasties. As the global prices for key grains ─ rice, wheat, corn and soya beans ─ have risen steadily since 2005 because of pressure from farmers who would rather plant crops for bio-fuels than food. China has seven percent of the world’s arable land to feed 22 percent of the world’s population.