Introduction: The "China Threat Theory" originated in 1998, after China successfully responded to the East Asian financial crisis and appeared after Soros failed to short the Hong Kong dollar. At this time, the United States found that it could not defeat China by pure economic means, and began to exert other means: when China wanted to promote East Asian integration, it provoked the "Diaoyu Island Incident"; When the China-ASEAN Free Trade Area was launched, it provoked disputes in the South China Sea... The new Cold War was already knocking on the door, and we were still asleep!
1
The Beginnings of the New Cold War: The Late 1990s
With the collapse of the Soviet Union in the early 1990s, the United States was the dominant power and was a unipolar hegemon when it entered the post-Cold War. In the post-Cold War period, the main contradiction between the dollar group and the euro group in the currency strategy of the financial capital stage occurred, which was the struggle between the two major financial capital groups. But at this stage does not mean that China has not moved at all, the most typical is that when the East Asian financial crisis broke out in 1997, all financial institutions in China, especially large state-owned financial institutions, its non-performing rate was much higher than that of all countries that had financial crises and financial collapses.
Generally speaking, you have a bad debt of about ten or twenty percent or so, because your capital adequacy ratio is only 8%. And how much is china? Non-performing assets exceed 30% or even more than 1/3. This means that if you have a deposit of 10 yuan, you can only use about 6 yuan, and if you hand over the reserve requirement and so on, you can probably only use about 5 yuan. You have to use the income generated by these 5 yuan or so to pay the entire deposit cost of 10 yuan.
It is said that China will collapse, how can it be possible to use 5 yuan to generate income to pay the cost of 10 yuan? Financial institutions operate financial assets, you can only use half of this financial asset, how can it be maintained?
At that time, China was a national system, and finance and finance were not separated. If the fiscal deficit is in deficit, it will take capital from finance. Finance often runs out of capital and is taken away by fiscal deficits. Sometimes when the fiscal deficit is serious, you even have to pay financial deposits to make up for the financial losses, otherwise you can't operate. The entire country's huge system, whether it is military, diplomacy, social security, education, medical care, all have to be spent, and they can't survive a day without spending.
In those days, finance and finance were not separated, and in the past, the Ministry of Finance and the People's Bank of China were both working on one floor. Especially in those years, the enterprises were seriously depressed, and we had to completely open the coast to foreign investment, so we made up for it, and even the equipment came. And when foreign equipment, especially low-end manufacturing equipment, comes in, it breaks the upstream card. Then China's upstream enterprise equipment manufacturing industry will go out of business.
What about workers? Therefore, it is necessary to rely on the bank to issue wage loans to keep the enterprise from collapsing. Hundreds of thousands of enterprises are closed, tens of millions of workers are unemployed, then they have to rely on the banks to constantly give money to maintain, so that everyone can not go to the streets and do not make a big deal.
When the East Asian financial crisis broke out as a whole, even South Korea's financial system collapsed, how could China not collapse? It is because the bank has suffered serious losses caused by the finance or the government, and all of them are paid by the government. This is called the national system, the government bears unlimited responsibility, and the losses of state-owned banks must be borne by the officials. All non-performing assets are handed over to the finance, and the four major asset companies are established, and the bank does not take responsibility for this bottom line. Then take out the foreign exchange, corresponding to the additional issuance of rmb to each bank as capital, which is equivalent to letting the bank light load, all these bad debts are unloaded at one time, and then you can continue to run.
China has the worst non-performing ratio, the worst asset quality, and the most deserving of bankruptcy, but the four major banks can easily go into battle, directly turn into commercial banks, and then start listing. Not only in Shanghai, but also in Hong Kong, not only to raise domestic capital, but also to raise foreign capital, just twenty years later, China's four major banks ranked in the top four of the world's largest banks.
This is the Chinese system, if you want to live in the post-Cold War stage of financial capital competition, how can you not be a "monster" and not a different kind?
So the new Cold War starts from the beginning, and although the Americans suffered a sudden political and economic crisis in 2001, and it identified with your G2, it was a financial capital statement and did not represent the consensus of all politicians in the United States. China was already a threat when it overcame the East Asian financial crisis.
So when did the China threat theory begin? after 1998. It is because China successfully coped with the Financial Turmoil in East Asia, not only did the mainland successfully cope with it, but also used its foreign exchange reserves to support Hong Kong's financial market after recovering Hong Kong on July 1, 1997.
Why does Soros hate China, especially the mainland? Not because he was a Hungarian, he suffered any socialist persecution, and so on, but because he fought all over East Asia at that time, and he was defeated only in a small Hong Kong, a land of bullets, could he withstand such a strange humiliation? The financial predator ate everything, and when he ate in Hong Kong, he nibbled on a piece of steel. The mainland's entire foreign exchange reserves are the backbone of Hong Kong's response to the financial shock.
Since then, the West has known that if this system is f Chinese mainland ought purely by economic means, it will not be able to defeat it, and this is the origin of the China threat theory.
In the context of the early new Cold War, it should be said that as early as the 1990s, when China successfully resisted the East Asian financial storm and stood firmly on the stage of world financial capital, we had already joined the competition of capitalism to upgrade to the stage of financial capital, and won the first battle in the competition.
2
Why is the new Cold War problem intensifying?
First of all, we must remember that the West, led by the United States, has upgraded to the stage of financial capital, changing from geostrategy to currency strategy, and currency strategy is the main connotation of today's new Cold War strategic confrontation, rather than the geostrategy of the old Cold War.
When China and the United States had a strategic cooperative relationship in 2001, the Eurogroup and the Dollar Group were still fighting and had not yet finished fighting. With its vast production capacity in real industries, China continues to provide the cheapest goods to the United States, helping the United States to issue a large number of more currencies and expand its financial capital power, but at the same time there is no inflation. This kind of beautiful thing can only be realized by the United States under the condition that China cooperates with the United States and that China cooperates with the United States. At the same time, financial globalization continues to lead to U.S. profits at the stage of finance capital. The U.S. real economy is flowing out in large quantities, and the place that can make them most profitable is China.
We have promoted capital construction on a large scale after 1998, and we are the country with the best capital construction, the highest quality of labor force, the strongest discipline, and the largest ability to create surplus among developing countries. At this time, the industrial capital of the United States flows into China, with an annual profit of more than 20%, and after China earns back foreign exchange, it then invests in the US treasury bond market, how much is the annual profit? 2%. By comparison, people are 10 times ours.
Our currency strategy of supporting the financial capital of the US dollar is promoting globalization, and China is of course a "strategic partner" of the United States. At this time, the United States did not regard China as its main enemy, which is normal.
Under what circumstances did something happen? When a large number of real industries in the United States are outflowing, the domestic contradictions in the United States begin to intensify, because employment is falling sharply, people's incomes are declining, the middle class is declining, paying less taxes, and the debt of the United States is increasing.
So the United States set up a debt clock, but the establishment of a debt clock cannot be stopped, because this is a problem of the internal structure of the United States. Since the real estate has been transferred out, how can there be employment? Of course, social contradictions will increase and polarize.
In the United States, a country of more than 300 million people, only 300,000 people are employed on Wall Street, and this is its main contradiction. The more it shifts its industries to China, the more China becomes its main competitor. Why? Because employment came to China.
In 2002, a large amount of capital entered China, and in 2003 China became the first country in FDI FDI, a very fast process. When a large amount of industrial capital flowed into China, there was no investment in the real industry in the United States, so where did the investment go? Real estate. The subprime mortgage crisis erupted in 2007 and directly evolved into the Wall Street financial tsunami of 2008. Obama had realized by this time that he came to power in 2008, what was the campaign slogan? We can make change, Change what? It is to change the real economy.
But as soon as he came to power, he just encountered the 2008 financial tsunami, and you can't blame him, no matter who goes to become the president of the United States, when faced with the contradictions of a large shift in the real economy, no employment in the country, social differentiation and even tearing. So what to do in a hurry? It's back to the real economy, so Obama says we can change, everyone says okay, you help us change.
As a result, as soon as he came to power, the financial crisis broke out, and he had to rescue the market in large quantities, to whom to give money, to multinational financial investment groups, in order to continue to maintain the globalization of financial capital. Then the money it creates, that is, the liquidity formed by quantitative easing, flows into the international market in large quantities, which in turn directly leads to the impact and suspicion of the dollar's credit in the world.
Why?
First of all, because everyone found that after half a day, it turned out that the United States would also have a financial crisis; Second, the financial crisis in the United States was originally based on increasing liquidity and then passing on the cost to the world. That is to say, under this blow, the financial capital of the United States continues to earn, maintaining a variety of raw materials, energy, grain, various spot and futures trading places around the world to speculate, and then continue to make money. But it leads to inflation in all these countries that need to import raw materials, import energy, or import food. For example, China is a typical country that needs a lot of imports, which generates imported inflation; The same is true for other countries.
Everyone suddenly questioned the US dollar group that entered the stage of financial capital and did not assume world responsibilities, and its credibility of course dropped significantly.
3
The early expression of the new Cold War
When the FINANCIAL CRISIS broke out in the United States, China advocated 10+1, and the trade between ASEAN and China was the ASEAN surplus and The Chinese deficit, but the share of intra-regional trade was quite large, probably China's third largest trading partner. Once China joins, South Korea will also join, 10+2; Then There's Japan to join, 10+3. 10+3 means that once the Asian Economic Community is formed, there will be Asian dollars like the EU euro, and the world will stand on three legs.
This is certainly a good thing for the world, but what does it mean for the United States, a unipolar hegemonic country, and a country that is globalizing the dollar led by finance capital? The Eurogroup it has to fight, what about the Asian dollar? Of course, you have to fight. Therefore, the Diaoyu Dao incident between China and Japan, the South China Sea incident between China and the European Union, and the Takeshima incident between Japan and South Korea are all inseparable.
Then the United States announced a high-profile return to the Asia-Pacific region during the Obama era, and wanted to engage in the so-called Pacific Free Trade Area with ideological lines. This is actually the early expression of the new Cold War. What ideology? It is the old Cold War ideology of the Western tradition. At this time, we are not alert, and everyone is still stuck in the so-called liberal market economy preaching that the old West and American textbooks teach you.
What does this mean for China? This means that the new Cold War has knocked on the door.
Obama's policy quantitative easing system led to china's first import inflation, followed by a halt to quantitative easing, resulting in a sharp drop in raw material prices. At this time, the world's demand is declining, even the raw material producing countries have no demand, raw materials can not be sold, oil prices have also fallen, so that the world into deflation, all the goods produced can not be sold. Hit by either import inflation or import deflation, China has seen what it calls "supply-side reforms."
At this time, China began the "Belt and Road", establishing bilateral currency agreements with countries along the route, and then advocating the establishment of oil futures and iron ore futures with the renminbi as the settlement currency.
The mainland is a large number of importers, there is no pricing power at all, if you use US dollars, it becomes a tool to transfer contradictions and transfer costs to the outside, then in the end you have to use the renminbi. This time, although we have not made a sub-dollar, we have tried to cut the cheese of the United States in the largest market of raw material futures and oil futures.
Therefore, at this stage, a series of new Cold War ideologies brought out by the traditional old Cold War ideology have suddenly emerged, which have transformed the theory of China's collapse into China's new imperialism, neo-colonialism, new revisionism, and so on. It was also at this stage that China was recognized by American politicians and financiers as a challenger to the United States.
It is an objective evolutionary process, not who subjectively says whether you want to be the boss or the second boss. To tell the truth, Chinese has been the country with the largest economy in the world for thousands of years, but it has never been the boss and has no experience in ruling the world. In all of China's philosophical system of thought, there is no content to be the hegemon of the world, so it is not prepared. So today's Americans suspect that China has ambitions, wants to be the world boss, wants to replace it, which is simply absurd for Chinese, who wants to be you, tired to death.
China is not a country that fights foreign wars, we are not like this in history, this kind of trap, that kind of hegemony, this conflict and what kind of discussion, we have not had in our history. But the new Cold War now forms an old Cold War ideology, which is anti-communism, and everything you have is packaged in the old Cold War's fabricated anti-communist story. They think that as long as you call the Communist Party, you must be centralized.
The new Cold War ideology of American politicians now resembles don Quixote vs. Windmills. But China is not a windmill, we have maintained self-sufficiency for thousands of years, and although there are many internal contradictions, there is little historical experience that clearly wants to build world hegemony.
None of our current social elites and interest groups have the experience of the old Cold War, so many people do not understand what happened in the process of gradually evolving into a new Cold War. I think it's normal, but I also hope that everyone will pay close attention to making up for this shortcoming in knowledge, people have taken this as a new strategy, but you don't know anything.
4
How did the old Cold War transform into the new Cold War?
In essence, this transformation process is still the dollar system as the world's unipolar hegemonic system, since it can suppress the euro in the post-Cold War era and break the foundation for the rise of the Asian dollar, it is of course impossible to tolerate the strategic challenge of China's use of the renminbi to complete settlement, that is, in the stage of financial capital.
Therefore, the new Cold War dominated by the currency strategy in the stage of financial capital is actually an objective evolution, and China is passively included.
But then again, you don't do this, change other practices, such as continuing to be a cow that is skinned twice a year, selling yourself and returning it to others to count money, it does not mean that you can't live, although you are peeled very badly by others, there are still meat and bones, and you continue to grow skin, and you continue to be peeled by others, and so on. But this is not the world pattern we are willing to accept.
So how is China going to deal with this at the moment? This requires us not to have any romantic overtones, nor to carry any opportunistic imagination, that is, to face such a huge challenge very objectively. Therefore, we must clarify the objective evolutionary process, explain the current structure clearly, and then discuss how to inherit the previous experience, clarify the current problems, and form the response we should have.