Wednesday, February 24, 2010



Will America win in an all out confrontation with China? The reality is both sides will lose. How much each side will loose? Which nation will recover more readily from the loss suffered from such an unwise and unthinkable confrontation? Will our over reach into another unnecessary cold war be productive? How essential is it for both nations to reach harmony consensus for win- win development instead of confrontation? America should have a public debate on this very urgent and important subject so we are better prepared for the consequence of our confrontational actions should we decide to embark on it.

Leaders of both nations are fully aware of the severe consequences of an avoidable all out confrontation. But a public debate in America is needed so President Obama will not be subjected to undue pressure from the public to provoke China to the point of no return. American media is still mired in the past Cold War mentality as to have not done the necessary task to educate American public about China development. We are uninformed and under disillusion about how China can progress so fast economically during the past three decades.

Despite the fact that the 2008 global financial crises was caused by America, there was rarely any complain from China. Chinese culture is not known to be critical of others. Fortunately Chinese leaders also read Sun Zi and follow Deng Xiaoping foreign policy teaching for China “Observe developments soberly, maintain our position, meet challenges calmly, hide our capacities and bide our time, remain free of ambition, never claim leadership” and avoid serious confrontations. American leaders are under pressure from the public to confront China for the last half century ever since the founding of the new Chinese Peoples Republic. Our citizens are constantly reminded by the media that we have the best political system and China must follow us to develop (See Martin Jacques, “When China Rules the World”, 2010).

American media has vowed with confidence that China today is more dependent on our market. This is a misinformation by the American media to build up confidence to please the public. This misconception of the public can be dangerous as to force our leaders hands on too many unnecessary confrontations with China as witnessed by our superior than thou attitude on Internet Freedom, sales of arms to Taiwan and Obama’s meeting with Dalai Lama despite repeated warning from China. On further analysis it is easy to show that America is actually more dependent on China as our banker to support out twin deficits (See Appendix, Message to President Obama, Who is More Dependent on Whom, America or China, by Francis C W Fung, ).

Ever since we think we won the Cold War because of our superior ideology we have convinced our self that we are invincible. We also are very proud that our military power is supreme and we are a creative nation that we lead in world technology. The truth is that our business enterprise is competitive because we are ahead in industrial revolution and our most endowed land attracts vast number of talents who seek opportunities. Ideology is very fickle. A nation can change her ideology on a dime as we witness China’s transformation. During the last three decades of reform and opening up she has proved that her hybrid system of combined state economy with market economy can work quite well. Many foreign talents that used to come from Europe, Japan, China and India are now returning home because economic opportunities in their homeland are growing because of increased prosperity. This phenomenon is well known as we saw Japanese and Taiwanese scientists and entrepreneurs returning home during the later part of the last Century and recently some Chinese and Indian talent are doing the same.

If current American provocation is unchecked there may come a point China will be forced to retaliate in action by discontinuing to subsidize our twin deficits. This reaction will most likely to lead to all out confrontation. The first to suffer is American consumers who will need to pay higher prices for essential goods to maintain our living standard. Next will be American and Chinese businesses because 70 % of imports from China are under joint venture management with foreign companies make more profit than that of Chinese business. It may not be fun to watch the domino effects of worldwide trade protectionism and stock markets crash, but it will happen like the 1929 world depression. When this does occur there is no telling who will be the bigger loser.

Luckily the world will recover from the next depression if it should occur despite our efforts to prevent it. The question is who will be more likely to recover from it fastest? America has never had a major calamity that took place in our home land other than the Civil War. China, however on the other hand, during the last Century, experienced the devastation of numerous imperial aggression wars, the Japanese occupation, two major civil wars, the Cultural Revolution and the recent devastating Szechuan earth quakes. She showed remarkable resilience in recovering from all those calamities. In addition, as an ancient culture, she is the one showed continuous unity for a long uninterrupted history of five thousand years.

As a dynamic young nation, America does not have a deep rooted ancient civilization as bounding force. China is a cultural state and not a political state as discussed in essay 3 in following Appendix. China is more centralized and cohesive as demonstrated by her developing pattern during the last three decades and her fast recovery from the last global economic crisis. (See Martin Jacques, “When China Rules the World”, 2010). As world’s manufacturing center, China certainly will be the first to have the get up and go to export consumer goods to the rest of the developing world. Remember in any depression, when the stock market crashed, cash is king. Whereas America is currently heavily in debt, China has two trillion dollars of foreign currency reserve, adding the 700 billion from Hong Kong, this will make 2.7 trillion. She and other cash rich nations in Asia will certainly recover that much faster during this potential depression than the America, even if they are not targeted to rise already.

History has ample documentation of the 1929 global depression. It is sufficient to conclude that at this time of crises, caution is the best part of velour for both America and China not to tempt fate. The most advisable course of action is for America and China both to continue cooperation and reach Harmony Consensus. A joint effort between the most powerful developed nation and the fastest growing developing country, America and China both will fulfill the manifested destination of greatness, bringing lasting peace and harmony to the world. Harmony is the most common value of human civilization and Harmony Renaissance is the next creative wave of energy mankind is waiting for to lead us to the next level of accomplishment beyond European Renaissance.

Francis C W Fung, Ph.D.
Director General
World Harmony Organization
San Francisco, CA

No comments: