Target: China: How Washington and Wall Street Plan to Cage the Asian Dragon

170 Pages·2014·2.52 MB·English

by  F William Engdahl

Target: China
How Washington and Wall Street Plan to Cage the
Asian Dragon

© By F. William Engdahl
Target: China
How Washington and Wall Street
Plan to Cage the Asian Dragon
© F. William Engdahl. All rights reserved

E-book edition,
Published October, 2014 by
www. ProgressivePress.com
ISBN 1615777210, EAN 9781615777211

BISAC Subject Area Codes
HIS008000 History / Asia / China
POL045000 Political Science / Colonialism & Post-Colonialism
POL062000 Political Science / Geopolitics

China today has become a world economic giant in just three decades. The country’s central bank
holds more than $3.5 trillion in foreign exchange reserves, mostly in dollars. Without the Chinese
colossus, the USA might have long ago gone bankrupt, unable to finance its exploding national debt.
Now that China has emerged as the world’s second largest economy, some powerful circles in Wall
Street and Washington are alarmed that the Chinese might no longer follow the agenda, but decide for
themselves what is best for China. They see China as a threat to their global power. The result is
growing tension between Beijing and Washington – in the Middle East, Africa, and in Asia.
Especially alarming is covert US backing of Japan in a conflict with China over remote Pacific
islands. China is beginning to feel escalating hostility, and not only from the Pentagon. Open conflict
between the USA and China could deal a death-blow to the fragile world economy.
This book explains in clear terms what is at stake if Washington continues to try to turn the Chinese
Dragon into an enemy state.
TABLE OF CONTENTS

Author’s Introduction
Chapter One: The Dollar-Renminbi War
Chapter Two: Energy Wars: The War to Control China’s Oil
Chapter Three: Environmental Wars: Shale Gas – Energy Independence or Environmental Threat?
Chapter Four: Food Wars – “Control the food, you control the people”
Chapter Five: Chemical warfare: Herbicides and Pesticides
Chapter Six: Health Wars: Drugs and Vaccines: America’s new opium war
Chapter Seven: Military wars – South China Sea, Indian Ocean and the Pentagon’s “String of Pearls’
Strategy
Chapter Eight: Economic Wars – Trade wars and the WTO
Chapter Nine: Media Wars – Google, YouTube, Facebook and Embedded Global Media
Chapter Ten: A Chinese Strategy for Victory
Chapter Eleven: China’s Land Bridge to Europe
Chapter Twelve: The West’s Achilles Heel
Afterword: Washington Foments a Color Revolution in Hong Kong against China
“We have about 50% of the world’s wealth, but only 6.3% of its population. ... In
this situation, we cannot fail to be the object of envy and resentment. Our real
task in the coming period is to devise a pattern of relationships which will permit
us to maintain this position of disparity. ... To do so, we will have to dispense with
all sentimentality and day-dreaming; and our attention will have to be
concentrated everywhere on our immediate national objectives. ... We should
cease to talk about vague and ... unreal objectives such as human rights, the
raising of the living standards, and democratization. The day is not far off when
we are going to have to deal in straight power concepts. The less we are then
hampered by idealistic slogans, the better.”
– George F. Kennan, US State Department Policy Planning Study 23 (PPS23),
Foreign Relations of the United States (FRUS), 1948

Author’s Introduction

Boiling Frogs Slowly…

Ancient folklore has it that if you want to boil a frog in a pot of water, you first gently place it in
water that is cold, and ever so slowly turn up the heat until the stupefied frog allows itself to be boiled
to death, never aware what is happening. It is a metaphor that describes the long-term strategy of
powerful US and British leading circles towards the future sovereign existence of the Peoples’
Republic of China. Some three decades ago China under Deng Xiaoping saw the introduction of a
“socialist market economy.” In many respects the policy succeeded beyond the wildest dreams of
many Chinese and indeed, of much of the world. The industriousness and creativity of the Chinese
people has been a major cause of the economic success that elevated China from an economically
poor country in the 1970’s to the economic colossus it is today.
The second factor that made the astonishing rise of China possible, however, was the growing interest
of North American and certain European major powers in using the world’s largest and cheapest
labor pool to gain dramatic increases in manufacturing profit through what came to be called “out-
sourcing.” The initiative for the China opening came from powerful circles inside the United States.
The key figures preparing Nixon’s historic 1972 Beijing meeting with Chairman Mao were then-
National Security Advisor Henry Kissinger, and his assistant, Winston Lord, who would later become
US Ambassador to China. Nixon’s Beijing initiative was in reality decided by the Rockefeller faction
in US foreign policy. Both Kissinger and Lord were close protégés of the Rockefeller group.
When Mao met with Nixon in 1972, the only other US official present in the room – in a meeting that
excluded Secretary of State Rodgers – was Kissinger’s assistant Winston Lord. For US policy circles,
the US-China opening constituted a geopolitical strategy to win China as an ally against the Soviet
Union during the Cold War.
In 1979 Deng, with strong encouragement from US circles, made the decisive shift to the “socialist
market economy.” It was a brilliant and daring move, but not one without danger. In 1989, at the same
time as a US strategy had led to the downfall of the Soviet Union, the CIA, acting through US
Ambassador to Beijing Winston Lord and his CIA-tied successor, James Lilley, set off a chain of
events that came to be known as the “Tiananmen Square massacre.” All indications are that it was
intended to create political chaos inside China aimed at weakening the control of the Communist
Party over China’s economic transformation. In any case, the US plot failed, but not before exacting a
high price in terms of isolating China in the world politically and economically.
After 1989, as the People’s Republic moved to more open foreign investment and towards
membership in the World Trade Organization, China became a preferred market for foreign direct
investment by US and European multinationals. Over the past twenty or more years the results of that
investment have been astonishing. China today is the world’s largest exporting nation in dollar terms
and the second largest oil importer after the United States.
However, Chinese policymakers must never lose sight of the fact that once all the friendly handshakes
and smiles and many toasts to US-China friendship fade, at the end of the day, US foreign policy, like
British foreign policy before it – notably during the Opium Wars – is driven by American national
interests. It follows the dictum laid down by Britain’s Lord Palmerston: “Nations have no permanent
friends or allies, they only have permanent interests.”
From the time of Washington’s first China opening in 1972 until the fall of the Berlin Wall in 1989,
the US “interest” in China was to subtly use the country as an antagonist against Soviet interests
geopolitically. Once it became clear that various US policies had brought the Soviet regime of
Gorbachev to its knees in 1989, the US intelligence circles around the Rockefeller-Bush faction
attempted a similar destabilization of the CPC (Communist Party of China) regime in Beijing. They
manipulated leading members of the CPC, including General Secretary Zhao Ziyang and others, to
push for rapid economic reform – the kind of free market “shock therapy” dictated by the
International Money Fund (IMF) – that devastated Russia and most of eastern Europe after 1990.
Following the collapse of the USSR in the 1990’s and the accession of China to the World Trade
Organization (WTO), it was in the US security “interest” to flood China with investments aimed at
making China a world export leader. However, the exports were US and European products, from
cars to iPhones, that were now manufactured in China at extremely low wage levels. The profits
largely went to US bank accounts, not Chinese.
Until around 2005, a policy of rapid economic growth in China was seen as no threat to US national
“interest” – so long as the growth was based largely on the US-backed “free market” model.
However, as China grew, her appetite for imports of oil, iron ore, copper and other commodities led
China’s leaders to engage in bold and effective foreign economic diplomacy. The initiatives spanned
the world, from Africa to the Middle East. China was slowly shifting from a useful source of cheap
labor for American multinationals like Walmart, to a potential threat to future US hegemony,
especially in Africa, Asia and the oil-rich Middle East.
Step by step, just as with the boiling of frogs, Washington has been turning the heat up on China since
about 2005. Today it is dangerously close to a boil. It is not too late for China, but its people and
leaders must have absolutely no illusions about the ruthlessness and determination of their adversary,
the elite policy circles of the Anglo-American axis. The book you are about to read details how US
policy circles increasingly plan to mortally wound and eventually kill China’s economic wonder.
– F. William Engdahl, Frankfurt am Main, April, 2014

Chapter One:
The Dollar-Renminbi War

Chinese dollar reserves from export earnings were rapidly approaching the
staggering sum of $1 trillion by the end of 2005. That in effect meant that the US
Government could run huge deficits to cover the costs of its wars in Iraq and
Afghanistan, and be assured that China had almost no choice but to invest its
growing dollar trade surpluses into US Government debt.
Alarm bells ring in Washington
By the middle of the first decade of this century, around 2005, China’s unprecedented rate of
economic growth began to set off alarm bells on Wall Street and in Washington.
In August of that year, China and Russia carried out their first joint military maneuvers, Peace
Mission 2005, an 8-day training exercise on the Shandong peninsula.[1] It was a strong indication that
the one geopolitical alliance Washington was most afraid of – namely, a political, military and
economic alliance between former foes and former allies Russia and China – was imminent. The
brazen US military occupation of Iraq two years earlier in March 2003 had sent shock waves around
the world.
In Beijing it was duly noted that Washington’s strategy was not about anything other than raw power.
Washington’s response to the growing independence of Eurasian powers – China, Russia and the
other nations of the Shanghai Cooperation Organization – was not long in coming. It began with a
verbal attack on China’s currency policy.
US is the real “currency manipulator”
The US Government began what was to become an ongoing verbal pressure campaign against what
they claimed was a deliberate undervaluation of the Chinese currency, the renminbi (RMB), against
the US dollar. Soon after the start of the second term of President George W. Bush, Washington began
a relentless campaign to pressure China into revaluing the renminbi. The Bush Administration was
well aware that the RMB exchange rate is at the very heart of China’s economy, which underpins the
nation’s political survival. For that very reason Washington has launched its relentless campaign
threatening to label China a “currency manipulator.”
On international currency markets China’s currency was still not fully convertible into dollars or
Euros or other currencies. But for accounting valuations of its trade, the Peoples National Bank of
China had de facto pegged the renminbi’s value to the US dollar, then China’s major export market.
A sharp revaluation of the renminbi, as demanded by Washington, of between 20% and 40%
beginning 2005, would have hit China’s exports severely, creating economic difficulties.[2] However,
a drastic fall in dollar export earnings by China would also have meant America’s largest creditor
would have fewer dollars with which to buy US Treasury bonds and the US home mortgage debt of
Fannie Mae and Freddie Mac.
China dollar reserves from export earnings were headed rapidly towards the staggering sum of $1
trillion by the end of 2005. In effect, that meant that the US Government could run huge deficits to