Dear diary, I am writing about an ingenious plan that went awry and altered the trajectory of history. The plan was conceived and implemented over a century by my colleagues and their predecessors, the smartest and the most visionary people in the world. Merely 25 years ago, the plan seemed to have come to fruition, and western intellectuals talked not only about the end of the Cold War, but the “end of history.”We were excited about the imminent New World Order (which is now referred to as the “international rules-based order”). Then Asia happened.
After WWII, we established an unprecedented system to control half the world. Thus, in 1992, we were confident about bringing in the other half.
In the early 1990s, China and India represented not only 40% of world’s population but also a vast pool of consumers and diligent workers. On the other hand, my colleagues also appreciated the opportunity to make trillions of dollars. It was win-win.
Unlike the average westerner who saw Asia only as a land of poor and uneducated people, we understood its potential. After all, for the first 1800 years of the last 2000 years, the two largest economies in the world were … China and India.
Of course, bringing more than 2 billion people into our system would also mean sudden loss of jobs, drastic reduction in wages, and a painful drop in the standard of living for many Americans and Europeans. However, we deliberately ignored or downplayed these inevitable ramifications.
So, how did our plan turn out?
India worked out splendidly, just as we planned. Although India was hesitant about opening up their economy — understandable, given their experiences with British colonialism — we gained their trust by helping millions of Indians emigrate to the West. In return, India privatized most of their major industries, including their media, and allowed us to become major shareholders. Now, India is tightly integrated into our system.
Chiiiiina! The biggest prize slipped away from our fingers. Most people don’t realize that the Tiananmen Square uprising in 1989 was actually a “color revolution” manufactured by the CIA, MI6 and social engineering experts, Gene Sharp and George Soros. We even had recruited China’s Gorbachev – Zhao Ziyang, the top leader of the Chinese Communist Party. Alas, the strategy failed, and Zhao Ziyang ended up spending the rest of his life in house arrest.
After that, we decided to pursue a patient approach, since we didn’t want to lose China’s efficient and cheap factories. Furthermore, we assumed that:
- As China got richer, its people will naturally get rid of the communist party
- Western products will always dominate the Chinese consumer market
- Chinese manufacturing will remain stuck in the low/medium-end of the value chain, since innovation is impossible in an authoritarian society
- China will become, at the best, only a regional power. After all, throughout its history, China had never demonstrated much desire in foreign relations.
Well, guess what, every one of our assumptions turned out to be wrong. China’s GDP grew 27-fold from 1989 to 2017, and yet 84% of Chinese are happy with their socialist government. Also, what was supposed to be just a factory for the West, became the largest trading partner for more than 130 countries.
Confounding our expectations, China has become #1 or #2 in many areas of hi-tech industries including solar energy, electric vehicles, smartphones, supercomputers, Artificial Intelligence and mobile payments. 9 out of the top 20 most valuable internet companies are now Chinese. The fact that a Chinese company, ZTE, made the world’s first 5G phone call earlier this year should be a “Sputnik Moment” for us.
Worst of all, China has proved the benefits of public banking. Without the government getting into debt, Chinese public banks give massive long-term loans for infrastructure at extremely low interest rates. This has enabled China to build 25,000 Km of high-speed railway systems, modern cities and other infrastructure projects that benefit the Chinese people. Such socialistic model makes our private banking system look bad!
Finally, we never thought that China would develop a grand vision such as the Belt and Road Initiative (the modern Silk Road). While we build military bases around the world, China is building high-speed railways, highways, seaports, airports, power plants and pipelines in 65 different countries. If this continues, there’s no doubt who’s going to have more global influence in the near future.
The biggest threat to western dominance is the Made in China 2025 plan. If they achieve expertise in semiconductor chips and a few other industries, we will lose our global hegemony.
Rest of Asia
Something remarkable has been happening all over Asia (I will narrowly use the word here to refer to only Asia Pacific. Technically, Asia extends all the way from Russia to the Middle East). After WWII, Japan succeeded in a brilliant way, which inspired the Asian Tigers – South Korea, Hong Kong, Taiwan and Singapore. However, the wild fire of enthusiasm really caught on when China lifted 700 million people out of extreme poverty and created the world’s largest middle class. Now, every country from India to Indonesia to Vietnam feels optimistic and confident that they can succeed as well, and many of them are consistently growing at breakneck rates of 6-7% per year. Economists say that 88% of the next 1 billion people to enter the global middle class will be from Asia. Thus it’s no wonder that Asians are now far more optimistic than westerners about the direction of their countries.
Asian countries – including even North Korea – have realized that wars and conflicts only get in the way of prosperity. This is, of course, very bad for our divide-and-rule strategy — we were hoping to use Taiwan, Philippines, Japan, South Korea, Vietnam and India to contain China.
If Asia continues to enjoy peace and cooperation, the geopolitical center of gravity will shift dramatically. Many people don’t realize that, in terms of purchasing power, China is already larger than the US. In nominal GDP, by 2030, China will be bigger than the US, India will be bigger than Germany, and Asia will account for 40% of global GDP.
Here’s a chart that shows how China + India have increased their share of the global economy (based on PPP GDP) compared to US + EU since 1980:
By 2050, the top five world economies might consist of four Asian countries.
While the rising Asian middle class is a lucrative consumer market for our corporations, we dread the rise of multi-national Asian corporations in a decade or two. In other words, we want Asians to be rich enough to buy Colgate and Pampers, but not too rich to mass produce toothpaste and diapers; we don’t mind Asians becoming the CEOs of Google and Microsoft, we just don’t want them to develop their own search engines and operating systems.
In the early 1970s, David Rockefeller and Henry Kissinger convinced the Chinese elites to open up their economy.
Then we created the WTO in 1995 and enlisted 128 countries, knowing very well what it would do to American/European manufacturing. Letting China into the WTO in 2001 accelerated the outsourcing of jobs from Europe and the US. To hide the devastation, we created the housing bubble on both sides of the Atlantic Ocean. Now, we’re also effectively using mass immigration and other social engineering tools to keep people distracted.
I will admit that, blinded by hubris and greed, we misjudged the rise of Asia, especially China. However, let me remind you that we have brought down many empires over the last 250 years. We’re not going to simply sit back and let revisionist powers rewrite the world order. This is why the next decade will be both fascinating and dangerous.
Author: Chris Kanthan
( Check out Deconstructing the Syrian War, my new e-book on the Syrian war, the most consequential war of recent times)