China Faces Threat of the U.S. in Three Directions

[Jung Rhee]

http://english.donga.com/srv/service.php3?bicode=060000&biid=2005022274848

China Faces Threat of the U.S. in Three Directions



FEBRUARY 21, 2005 22:51
by Yoo-Seong Hwang (yshwang@donga.com)


A Chinese weekly magazine issued in Beijing reported on February 21 that China feels a serious security threat from the fact that the U.S. is surrounding China, its potential antagonist, from three sides: east, west, and south.

The weekly says that the U.S. considers Japan and Taiwan as the first encircling net in the east and accordingly tries to strengthen its military alliance with Japan, sell advanced weapons to Taiwan, and push forward the establishment of an air base in Shadidiao.


Also, the U.S. is nurturing Guam as it core military base in Asia, setting the island as the second encircling net. To that end, the country augmented B-52 and B-2 strategic bombing planes, and deployed 64 air-launched cruise missiles to regions other than the U.S. mainland for the first time ever. It also decided to station three attack nuclear submarines at all times and deploy a Carrier Battle Group.


Meanwhile, the U.S. completed the western encircling net against China by setting up its military base in central Asia, while carrying out wars in Afghanistan and Iraq.


The country currently has 13 military bases in nine central Asian countries, including Afghanistan, Uzbekistan, Kyrgyzstan, and Tadzhikistan. Against this backdrop, China faces a direct military threat from the U.S. also on land for the first time ever.


The U.S. is trying to bolster the first encircling net through Japan and Taiwan by reviving the military alliance in the past centering the Philippines and Singapore. The country is also cooperating with countries like Malaysia, Indonesia, Thailand, Brunei, and Australia to set up military bases in the name of the war on terrorism.


The Chinese weekly says, “The U.S.’ encircling net against China exceeds the density that the country used to have in place against the Soviet Union in the Cold War era,” adding, “The U.S.’ strategic checking of Japan is basically completed.”


In the meantime, the Taiwanese media reported on February 21 that Taiwan is planning to conduct a joint training on computer war game along with the U.S. and Japan in “Han Kuang 21,” an annual military training scheduled for March.


China is expected to protest strongly against the plan, as it is the first joint training of the three countries on the assumption of China’s invasion of Taiwan.

[Chu Chi]

I suspect any conflict between China and the U.S will happen when one of the many strategic "back room deals" fails to occur.

Diplomatic, economic and military manuvering is often a cover for political deals that have already been made.

Tiawan may have already been "traded" for Iraq

All the rhetoric is designed to keep people "playing the game" of democracy...

CC

[VV o n g B a]

i'm surprised the US hasn't traded taiwan for north korea. north korea is obviously the more important threat to regional stability. if the US made a deal that gave up taiwanese protection for chinese backing of the overthrow of kim, both sides would be better off. not to say that it's right, but it does increase stability. the only reason i can see for not doing so is the US view that china could be more of a threat than north korea in the future.

[Napoleon Chynamite]

The U.S. needs all the leverage it can get on China for the future.

[Jung Rhee]

The U.S. needs all the leverage it can get on China for the future.


Gumby, interesting statement from a Chinese perspective. So you support the encirclement of China, I suppose you support Taiwan independence also, right? As an Ethnic Chinese, do you think China will be a threat to world peace? If so, why and how?

It is interesting to see the different points of view from different Asian Americans on this issue. :smile:

[yoMAMA]

The U.S is severly weakened by its overextension, especially in Iraq, which is great for China.

There's an old saying in China, "sit on a top of a moutain watching two tigers fight eachother".

Those two tigers are of course the U.S and Islamic terrorism.

[Napoleon Chynamite]

Gumby, interesting statement from a Chinese perspective. So you support the encirclement of China, I suppose you support Taiwan independence also, right? As an Ethnic Chinese, do you think China will be a threat to world peace? If so, why and how?

It is interesting to see the different points of view from different Asian Americans on this issue. :smile:

Well, I actually don't consider my perspective a Chinese perspective at all. Aside from a fairly competent command of the language, I'm pretty damn whitewashed. And how did you infer from my statement that I supported all that which you stated above? haha I just said what I said as a result of my understanding that the U.S. obviously feels threatened by China otherwise it wouldn't be doing all this, and would not hesitate to take advantage of the Taiwan situation if it felt it could benefit in the future, which is why the U.S. just won't let it go.

Regarding your question about China being (or not being) a threat to world peace, I have no idea. I don't think I know nearly enough to even make general speculation, and I think speculation is the best most of us could do anyway no matter how informed.

[Jung Rhee]

I think the US is like God above all the east Asian countries. In reality, the neocon hawks are not scared of China or North Korea. The Bush administration owns the push button. They want war, they push for Taiwan independence. They want peace, they push for maintaining the status quo. I believe the encircling of China means the former button right now, they are pushing for Taiwan independence in the next four years.

[Napoleon Chynamite]

I think the US is like God above all the east Asian countries. In reality, the neocon hawks are not scared of China or North Korea. The Bush administration owns the push button. They want war, they push for Taiwan independence. They want peace, they push for maintaining the status quo. I believe the encircling of China means the former button right now, they are pushing for Taiwan independence in the next four years.

I sincerely doubt that the Bush administration seeks war with China,which seems to be quite possibly the worst country you could wage war with given the current era (except for the US, but then again the US will not wage war on itself), something bordering on economic suicide. You make it sound as if the US is some indestructible superpower (superpower yes, indestructible? no) with no dependency on economic or political relationships with other entities whatsoever. I mean, really, if a war breaks out, it's a no-win situation here for all parties. In analyzing U.S. motives, when you eliminate the desire for war, all you have left is the motive for maintaining U.S. monopoly on economic and military strength or keeping China from becoming too powerful. And in order for the U.S. to be God, the east Asian countries would have to worship it...oh wait. J/k Then again, the neo-con hawks may just be too stupid or narrow-minded to be taking all these risks associated with their actions into consideration, which wouldn't surprise me in the least.

[Jung Rhee]

I sincerely doubt that the Bush administration seeks war with China. I mean, really. It's a no-win situation here for all parties. When you eliminate the desire for war, all you have left is for maintaining the balance of power or keeping China from becoming too powerful. And in order for the U.S. to be God, the east Asian countries would have to worship it...oh wait. J/k

In a normal world, when people use their brain and think logically, you are right, BUT the neocons are irrational. US will come out as a winner afterall but the real losers will be Taiwan, South Korea and Japan as they will be the first to be attacked. OK, there will be two scenarios, one is confronting North Korea and two is confronting China. I believe North Korea is capable of nuking Japan and South Korea. And China can probably use nuke, but I don't think they will nuke Taiwan and Japan first, unless they are nuked by the US. I don't think China is capable of nuking the US mainland unless Russia is helping China, which is highly unlikely.

[Napoleon Chynamite]

In a normal world, when people use their brain and think logically, you are right, BUT the neocons are irrational. US will come out as a winner afterall but the real losers will be Taiwan, South Korea and Japan as they will be the first to be attacked. OK, there will be two scenarios, one is confronting North Korea and two is confronting China. I believe North Korea is capable of nuking Japan and South Korea. And China can probably use nuke, but I don't think they will nuke Taiwan and Japan first, unless they are nuked by the US. I don't think China is capable of nuking the US mainland unless Russia is helping China, which is highly unlikely.

So basically you're predicting the Apocalypse. I can't imagine anything remotely positive coming out of either scenario, even for the winner (the one who got less shit ruined than everyone else). If the first option happens, the entire Korean peninsula will be destroyed. If the 2nd one happens, I have no idea, but everyone including China and the U.S. will be fucked.

[Jung Rhee]

It may not be Apolcalypse, the two nukes in Japan didn't destroy the whole Japan. Besides, I don't think Russia would enter the war.

[Napoleon Chynamite]

It may not be Apolcalypse, the two nukes in Japan didn't destroy the whole Japan. Besides, I don't think Russia would enter the war.

The two nukes in Japan are a lot less powerful than the shit we have now, I think. We have hydrogen bombs that can take out entire coasts, not just cities. Besides, in the case of Korea, you just take out the cities of Seoul and Pusan, what else is left? Somebody with military knowledge correct me if I'm wrong.

[yoMAMA]

In a normal world, when people use their brain and think logically, you are right, BUT the neocons are irrational. US will come out as a winner afterall but the real losers will be Taiwan, South Korea and Japan as they will be the first to be attacked. OK, there will be two scenarios, one is confronting North Korea and two is confronting China. I believe North Korea is capable of nuking Japan and South Korea. And China can probably use nuke, but I don't think they will nuke Taiwan and Japan first, unless they are nuked by the US. I don't think China is capable of nuking the US mainland unless Russia is helping China, which is highly unlikely.

unless the U.S attacks China first, I don't see how China wants to go to war with the U.S.

the Chinese strategy now is to let the U.S exhaust her military and economic resources with the Islamic terrorists......that will be good for China, since its economic and military are all rapidly asending.

also, if the U.S goes to war with China, I don't see how it can even finance the war, since China is the #1 supplier of funds to the U.S, with Japan second [Japan can't possibly want a war with China either, since a bilateral trade boom with China has helped to drag its economy out of recession].....and there will be a financial crisis on wall street once China and Japan withdraws their funds from the treasury bonds.

[imturok]

Ancient Chinese prediction (A series of ancient cartoon schetches called Back-Pushing Drawings) suggests some time in the future, China's enemies will emerge from the north east direction (Japan?). A country (probably Russia) will come to China's aid to defeat her enemies.
For those who read Chinese:
http://www.wonderwis.com/yuyin/06003003-00.htm

[Jung Rhee]

unless the U.S attacks China first, I don't see how China wants to go to war with the U.S.

How about if Taiwan declares independence. What would mainland China do? Then what would USA do? I think Taiwan is the Frank Ferdinand of World War 3 possibly!!!

[thaite]

I don't think Taiwan wants war either, they're better off with the status quo. So is the US.

[tint]

How about if Taiwan declares independence. What would mainland China do? Then what would USA do? I think Taiwan is the Frank Ferdinand of World War 3 possibly!!!
If Taiwan declares official independent, Beijing will use military force to take control of the island. The US would do nothing. The EU would not support the US intervention, nor would they. The US would put the country in a great loss. If Sino-US War is to escalate, China would support North Korea invasion of the South and Japan will be drawn into the war. Muslims that hate the US will have a big ally. Expect terrorist attacks on U.S. cities to increase.

[haplesshobo]

unless the U.S attacks China first, I don't see how China wants to go to war with the U.S.

the Chinese strategy now is to let the U.S exhaust her military and economic resources with the Islamic terrorists......that will be good for China, since its economic and military are all rapidly asending.

also, if the U.S goes to war with China, I don't see how it can even finance the war, since China is the #1 supplier of funds to the U.S, with Japan second [Japan can't possibly want a war with China either, since a bilateral trade boom with China has helped to drag its economy out of recession].....and there will be a financial crisis on wall street once China and Japan withdraws their funds from the treasury bonds.

Seriously, didn't I already point out the impossiblity of this before in another thread. The bonds are not callable. And, the effect of a war between China and America would end up hurting China much more than the United States. We'd need to increase our interest rates, which are already at historic lows, and the consumer index would rise because those socks from Walmart would probably end up costing $1.50 instead of its current price of 99 cents. But, if China did this, it would devastate their entire manufacturing sector, which depends on trade with America.

Besides, this is all seems silly when China has always been circled by hostile neighbors with India below and Russia above, although Mongolia serves as a buffer.

[tint]

Seriously, didn't I already point out the impossiblity of this before in another thread. The bonds are not callable.
This would be funny situation.
PRC: When are you going to give me back my money?
USA: I'm kind of short on cash right now. You want to trade for something else?
PRC: Okay, I need M16s and ammos too, rocket launchers, Apache helicopters.
USA: You want some F16s.
PRC: Nah, I don't have an aircraft carrier.

The US will never engage China in a war. The American people would not be able to stomach 50,000 soldiers coming back in boby bags.

[yoMAMA]

Seriously, didn't I already point out the impossiblity of this before in another thread. The bonds are not callable. And, the effect of a war between China and America would end up hurting China much more than the United States. We'd need to increase our interest rates, which are already at historic lows, and the consumer index would rise because those socks from Walmart would probably end up costing $1.50 instead of its current price of 99 cents. But, if China did this, it would devastate their entire manufacturing sector, which depends on trade with America.

Besides, this is all seems silly when China has always been circled by hostile neighbors with India below and Russia above, although Mongolia serves as a buffer.

Yes the scenario is entirely possible.

Look at the way wall street panicked last week, when the central bank of south korea said it will divest itself of some of their dollar holdings [they only have $200 billion worth of dollar holdings].

[haplesshobo]

Yes the scenario is entirely possible.

Look at the way wall street panicked last week, when the central bank of south korea said it will divest itself of some of their dollar holdings [they only have $200 billion worth of dollar holdings].

Where are you getting this information? I cannot find it. I went through financial headlines, and I didn't see anything that mentioned this.

If Taiwan declares official independent, Beijing will use military force to take control of the island. The US would do nothing. The EU would not support the US intervention, nor would they. The US would put the country in a great loss. If Sino-US War is to escalate, China would support North Korea invasion of the South and Japan will be drawn into the war. Muslims that hate the US will have a big ally. Expect terrorist attacks on U.S. cities to increase.

Well, I don't think anybody really knows what America's reaction would be. Our policy is specifically vague on this matter. If we came out and said we wouldn't, then that would have given China the green light to attempt this. I posted somewhere else about how China cannot pull off a succesful invasion of Taiwan for another 7-8+ years. I think America's response depends who the President is, and which party controls congress.

As for the assertion that we wouldn't be willing to fight because of the potential for casulaties is what Ossama thought too. Instead, we've invaded two countries since then.

And, why would Muslims ally themselves with China. China has internal problems with them in the Xijiang province.

[yoMAMA]

Where are you getting this information? I cannot find it. I went through financial headlines, and I didn't see anything that mentioned this.



Well, I don't think anybody really knows what America's reaction would be. Our policy is specifically vague on this matter. If we came out and said we wouldn't, then that would have given China the green light to attempt this. I posted somewhere else about how China cannot pull off a succesful invasion of Taiwan for another 7-8+ years. I think America's response depends who the President is, and which party controls congress.

As for the assertion that we wouldn't be willing to fight because of the potential for casulaties is what Ossama thought too. Instead, we've invaded two countries since then.

And, why would Muslims ally themselves with China. China has internal problems with them in the Xijiang province.


First, there's no such entity as "Muslims". China is a trading partner with Iran [maybe weapons proliferator too], but they are not allies.

Also, China is taking advantage of America's conflict in the middle east for its own advantages, for example signing the huge deal to develope the largest natural gas field in Iran.

[Jung Rhee]

First, there's no such entity as "Muslims". China is a trading partner with Iran [maybe weapons proliferator too], but they are not allies.

Also, China is taking advantage of America's conflict in the middle east for its own advantages, for example signing the huge deal to develope the largest natural gas field in Iran.


Now there is one more reason for Bushs neocons to invade Iran, remember one of the reason they invaded Iraq because Saddam was doing business with the UN, France, Germany and Russia.

[tint]

Well, I don't think anybody really knows what America's reaction would be. Our policy is specifically vague on this matter. If we came out and said we wouldn't, then that would have given China the green light to attempt this.
Stop dreaming. The American public would never support their sons and daughters dying for Taiwan.

I posted somewhere else about how China cannot pull off a succesful invasion of Taiwan for another 7-8+ years.
Wise move to underestimate your opponent.

[yoMAMA]

Where are you getting this information? I cannot find it. I went through financial headlines, and I didn't see anything that mentioned this.


http://www.washingtonpost.com/wp-dyn/articles/A25310-2005Mar10.html

[haplesshobo]

tint,

its common wisdom that China does not have the military capability to pull of an invasion of Taiwan for another 8+ years.

I could explain why, but I suspect it might be a waste of time.

[haplesshobo]

yoMaMa:

Treasury bonds are not callable, but they are still liquid in the sense that there is a active secondary market for them. Its the secondary market where the article was talking about. However, that doesn't change that the bonds are still not callable.

Think of it like this: I give somebody a loan which they don't have to pay back in 5 years. This person can sell this loan or trade it with other people, but whoever ends up with the loan doesn't have to pay me until 5 years have passed.

[yoMAMA]

yoMaMa:

Treasury bonds are not callable, but they are still liquid in the sense that there is a active secondary market for them. Its the secondary market where the article was talking about. However, that doesn't change that the bonds are still not callable.

Think of it like this: I give somebody a loan which they don't have to pay back in 5 years. This person can sell this loan or trade it with other people, but whoever ends up with the loan doesn't have to pay me until 5 years have passed.

That's true about the treasury bonds.

But remember that a significant portion of the Chinese central banking holding of dollar assets are mortgage backed securities....and those are certainly resalable.

[Chu Chi]

I have a question that someone here from "back in the day" may be able to answer.

When Nixon went to China in the 70s, did Taiwan get any warning?

Hints?

"heads up"...?

CC

[yoMAMA]

I have a question that someone here from "back in the day" may be able to answer.

When Nixon went to China in the 70s, did Taiwan get any warning?

Hints?

"heads up"...?

CC

Don't think so...it was all in secret, with Pakistan as the middle nation, and the talk first started in Switzerland (I think).

[mrazntre]

This might explain a few things:

http://kcal9.com/topstories/topstories_story_072215327.html

[haplesshobo]

That's true about the treasury bonds.

But remember that a significant portion of the Chinese central banking holding of dollar assets are mortgage backed securities....and those are certainly resalable.

I'm assuming you know what a mortage backed security is.

Its basically a pool of different mortages.

So, again, is a mortage callable? If you take out a mortage from the bank, can it suddenly decide to call in all the money you owe to the bank at once? No, there's a set timetable where you pay off a certain portion each month, with interest. So, why would a pool of mortages be any different?

Yes, there's a active secondary market, where these can be bought and sold. But, its basically the same scenario as the treasury bonds. The new owner won't be able to call in all the money you owe suddenly like you've stated.

I think the reason you're confused is because you don't understand the concept of 'prepayment risk'. But, that's where people prepay their mortage earlier than required. This isn't a necessairly a bad thing for the bank since it gets its principal back early. However, the scenario depends on the interest rates since the pool was issued.

[mrazntre]

This might explain a few things better, taken from http://content.realestateabc.com/loanguide/mortgage1.htm:

Mortgage Backed Securities

Once Freddie Mac, Ginnie Mae, and Fannie purchase the pools, they break them down into smaller ownership parcels. These are called "mortgage backed securities." Each security represents a small ownership interest, not in your specific loan, but in the pool of which your loan is only one part. The risk is therefore diversified and it is a very safe investment.

The mortgage backed securities are sold on Wall Street to institutions or individuals looking for a safe investment, but one that earns a higher interest rate than treasury bonds. You may even own some as part of your retirement fund or investment portfolio. Perhaps you have heard of Ginnie Mae bonds? Those are securities backed by the mortgages on FHA and VA loans.

By selling the bonds, Ginnie Mae, Freddie Mac, and Fannie Mae obtain new funds to buy new pools so lenders can get more money to lend to new borrowers.

And that is how the cycle works.

So when you make your payment, the servicer gets to keep their tiny part, and the majority is passed on to the investor. Then the investor passes on the majority of it to the individual or institutional investor in the mortgage backed securities.

From time to time your loan may be transferred from the company where you have been making your payment to another company. They aren't selling your loan again, just the right to service your loan.

There are exceptions.

Loans above $300,750 do not conform to Fannie Mae and Freddie Mac guidelines, which is why they are called "non-conforming" loans, or "jumbo" loans. These loans are packaged into different pools and sold to different investors, not Freddie Mac or Fannie Mae. Then they are securitized and for the most part, sold as mortgage backed securities as well.

This buying and selling of mortgages and mortgage backed securities is called "mortgage banking," and it is the backbone of the mortgage business.


* But I'd like to add, the Chinese government can do whatever the hell they want to do so if they decide they want to call, they certainly can because that's what dictatorships do.

[lethal]

Did no one question the credibility of the article? This article implies that the US invaded Afghanistan and Iraq to finish the encirclement of China?

"Meanwhile, the U.S. completed the western encircling net against China by setting up its military base in central Asia, while carrying out wars in Afghanistan and Iraq."

Does that seem absurd to anyone who is not a conspiracy theorist? Hell, Bush isn't smart enough to do that.

Also, here's a rather lengthy article on world economics, the China-US debt relationship, and the pegging of the Yuan to the Dollar.

http://www.msnbc.msn.com/id/7170226/site/newsweek/

[SunWuKong]

Did no one question the credibility of the article? This article implies that the US invaded Afghanistan and Iraq to finish the encirclement of China?

"Meanwhile, the U.S. completed the western encircling net against China by setting up its military base in central Asia, while carrying out wars in Afghanistan and Iraq."

Does that seem absurd to anyone who is not a conspiracy theorist? Hell, Bush isn't smart enough to do that.

i think a lot of people in mainland China actually thinks that. no doubt with a little help from the government-controlled press.

but i noticed that the author of the article is Korean.

[yoMAMA]

Seriously, didn't I already point out the impossiblity of this before in another thread. The bonds are not callable.

of course the treasury bonds can be resold on the open market.

otherwise, how can the feds conduct its interest rate changes?

(the fed "changes" the interest rates by either selling or buying the treasury bonds on the open market, which is done by the federal open market committee).

so when greenspan the old fart says.....hey, let's raise the rates, the FOMC goes to work. :biggrin:

when they sell the bonds, the rate (federal funds rate) go up. and when they buy the bonds, the federal funds rate go down.

and yes, China has that kind of financial leverage over the U.S. :eek:


I just looked at my notes from an old econ class :biggrin:

[Martino]

Did no one question the credibility of the article? This article implies that the US invaded Afghanistan and Iraq to finish the encirclement of China?


Afghanistan has always been strategically important in what the British called The Great Game. Why else would both Russia and the US alternate between threatening and wooing countries in the region to place (rather large) military bases?

But the geo-political games aren't just about China, it's amount the entire region.

[haplesshobo]

of course the treasury bonds can be resold on the open market.

(the fed "changes" the interest rates by either selling or buying the treasury bonds on the open market, which is done by the federal open market committee).

when they sell the bonds, the rate (federal funds rate) go up. and when they buy the bonds, the federal funds rate go down.

and yes, China has that kind of financial leverage over the U.S. :eek:

I just looked at my notes from an old econ class :biggrin:

Or, you could have simply looked on page two of this thread where I wrote:

Treasury bonds are not callable, but they are still liquid in the sense that there is a active secondary market for them.

The effect of that would be if China sold off everything:
We'd need to increase our interest rates, which are already at historic lows

It seemed to me that you were claiming that China could suddenly demand repayment of T bonds from the US and thus could control US, but that ignores the fact that T bonds are not callable.

That's also ignoring that China could not dump that many treasury bonds at once on the secondary market without losing a fortune on it. It wouldn't be able to move so many at once, and they'd be left holding a lot of T bonds which would have dropped in value if it tried to sell it off. It would end up shooting itself in the foot if it tried to do that, and end up hurting itself more than to the United States. Even if it was succesful in precipitating economic recession and inflation where there was a perfect storm, it would destroy China if it economically hurt the country that it's exporting all its goods to.

The big worry people have isn't that China will do that, but that it will slowly stop buying up T Bonds.