A wise approach to China

I was reminded of Qiao Liang, a renowned Chinese general and war strategist, as I read Chinese Foreign Minister Wang Yi refer to an old ancient Chinese saying about Xiang Zhuang performing a sword dance to assassinate Liu Bang on behalf of warlord Xiang Yu in an interview. Wang suggested Seoul would serve the interest of Washington by deploying a U.S. missile shield in Korea that can act as a spy on China.

Qiao, who was born to a military family, is the brain behind Chinese military strategy. He coauthored the book “Unrestricted Warfare” with a peer in the People’s Liberal Army, Wang Xiangsui, in 1999, which has been described as one of the most progressive publications on military theory. He claimed in the book that anything can be used for war weaponry, and that any field can turn into a battlefield.

Threat of terrorism, espionage and diplomatic activities, legal, economical, financial warfare and even media can be proxy means, and these alternative methods “have the same and even greater destructive force than military warfare,” the book claimed.

Tokyo suspected the collision between a Chinese fishing boat and Japanese coast guard vessels in 2010 - amid heightened territorial dispute over a group of uninhabited rocky islets called Diaoyutai by the Chinese and Senkaku by the Japanese in the East China Sea - had been planned and orchestrated under ancient warfare strategy.

Qiao in a lecture last year argued the real threat from the United States was not military, but rather finance. He accused Washington of stealing the wealth of other states through revaluation of the dollar to conclude that Beijing has to do whatever to protect its economy from the abuses of dollar hegemony. He argued that the Chinese military must defend capital from fleeing out of the country through U.S.-led conflicts triggered around it.

His rationale is not entirely new. About a decade ago, “The Currency War” written by Song Hongbing became a huge bestseller. It sold millions of copies and was translated and distributed in 30 countries. The book bared how rapacious Western financial institutions can be and how they rule their countries and the world. It warned China should be ready for the attack of U.S.-led capital. Partly because we share suspicion towards western capital, the book was widely popular with Koreans.

Since then, Chinese authors have turned out hundreds of books bearing similar titles, repeating similar warnings about plots by international bankers or U.S. institutions to make China their next target. It was not just state-funded scholars, but state-run broadcasters and publishers also joined the chorus. China was being referred to as the G2, a formidable superpower that could one day replace the United States. Beijing was confident it would outpace in manufacturing, consumption, and exports in time. But the trickier part was finance.

Finance that is based on tradition, human expertise and connection was an area China, with its closed and secluded nature, could not easily mimic and perfect. The Beijing leadership lived with the fear that the United States could strike through its rich and powerful financial arms. Politics, economy and security all mean the same to China, especially when it concerns the United States.

Overreaction breeds from excessive fear. It may explain why Beijing authorities responded vehemently with trade suspension and outright currency intervention when the stock market crashed last year. State-run Chinese media was scathing towards American billionaire investor George Soros for his comment that the Chinese economy was amounting to a crisis in the likes of 2008. The People’s Daily accused Soros of openly declaring a war on China by going short on Asian currencies, and the Central Bank governor declared his agency won’t tolerate speculative forces.

The Chinese central bank pours out $100 billion a day to defend the yuan and many warn even its $3 trillion reserves won’t be enough. But it cannot go on reining the capital movement while it is closely connected to the Hong Kong bourse and the 1.3 billion Chinese people free to take $50,000 overseas per person. About $1 trillion exited the country in this way last year.

Wang Yi’s anger and criticism against the possible deployment of the Terminal High Altitude Area Defense (Thaad) in Korea is understandable. But his metaphor to suggest Seoul is the puppet for Washington is ill-placed. Whether we like it or not, we would inevitably have to take some of China’s anger. We would not want any disruptions in Chinese tourists and shipments to China. It’s going to get tougher and tougher doing business with China. We must become wiser and shrewd in dealing with China. To China, politics, economy, and security mean the same thing.

JoongAng Ilbo, Feb. 18, Page 34

The author is an editorial writer for the JoongAng Ilbo.

by Yi Jung-jae