This is a tale of two suicides — one averted in the 1980s, the other in progress with an uncertain fate. The subject of both suicides is the same: western civilisation. The means of both suicides is the same: selling a deadly adversary the rope with which to be hanged by. The first adversary was the Soviet Union, and that suicide was averted through clever economic countermeasures. The second adversary is China, where the suicide of the west is still in progress, with the final outcome uncertain.
The tale is told by a man who played a pivotal role in averting the first suicide, and who is asking for help in doing what is necessary to stop the second suicide.
Suicide of the West by Soviet Union: Averted!
In 1982, the Soviets had an empire stretching from Havana to Hanoi, but their hard currency revenue totaled only about $32 billion a year—roughly one-third the annual revenue of General Motors at the time. They were spending about $16 billion more annually than they were making, with the funding gap—the USSR’s life support—being financed by Western governments and banks.
[When President Reagan] learned that we in the West were financing [the USSR’s] brutal regime, he committed to slowing, and ultimately terminating, that flow of discretionary cash.
Our European allies had a completely different approach. Their belief in Ostpolitik, as the Germans called it, presupposed that commercial bridge-building would lead to geopolitical cooperation. If the West would offer financing and trade with the Soviets, peace and prosperity would result. Meanwhile, the Soviets were using the proceeds of Western loans, hard currency revenue streams, and technological support to build up their military, expand their empire, and engage in anti-Western activities.
The Reagan administration drew the line on a project called the Siberian Gas Pipeline, a 3,600-mile twin-strand pipeline that stretched from Siberia into the Western European gas grid. If completed, not only would it become the centerpiece of the Soviets’ hard currency earnings structure, but Western Europe would become dependent on the USSR for over 70 percent of its natural gas, weakening Western Europe’s ties to the U.S. and leaving the continent open to Kremlin extortion….
… At one point, despite the strain it placed on relations with our NATO allies, we closed the U.S. market entirely to companies that continued to supply the pipeline project over our objections. Four of the six affected companies went under within six months, and Europeans woke up to the fact that they could do business with us or the Soviets, but not both.
As a result of these efforts we capped Soviet gas deliveries to Western Europe at 30 percent of total supplies, delayed the first strand of the pipeline by years and killed the second strand, and eventually helped dry up the bulk of Western credits to the USSR. In a secret deal, we also persuaded the Saudis to pump an additional two million barrels of oil per day and decontrolled prices at the wellhead in this country, knocking oil prices down to about $10 a barrel—significant because for every dollar decrease in the price of a barrel, the Soviets lost some 500 million to one billion dollars. In short, the Soviet Union never recovered from these economic and financial blows. It defaulted on some $96 billion in Western hard currency debt shortly before the total collapse of the Soviet empire. __ Roger W. Robinson Jr.
The naive western Europeans were determined to help the USSR to succeed in becoming the energy lord of all of Europe. That would have made Europe the energy slave to a wealthy and powerful USSR. Instead, the US took an active hand and created conditions that led to the ultimate downfall of the USSR — and the liberation of Eastern and Central Europe from the bleak gray empire of death.
Suicide of the West by China: In Progress
The story with China today has certain similarities, but with one big difference: the U.S. has been playing the role of the naïve Europeans. Since adopting the Kissinger policy of engaging with China in the 1970s, our government has operated on the assumption that economic and financial relations with China would lead Beijing to liberalize politically. And since 2001, when we backed China’s entry into the World Trade Organization, the pace at which we have given China access to our best technology and capital and trade markets has accelerated. Yet China has shown no signs of embracing individual freedoms or the rule of law.
… China has over 700 companies in our stock and bond markets or capital markets. It has about 86 companies listed on the New York Stock Exchange, about 62 in the NASDAQ, and over 500 in the murky, poorly regulated over-the-counter market. Among these companies are some egregious bad actors. Hikvision, for example, is responsible for facial recognition technology that identifies and monitors the movement of ethnic Uyghurs. It also produces the surveillance cameras placed atop the walls of Chinese concentration camps holding as many as two million Uyghurs in Xinjiang. Both its parent company and Hikvision itself are on the U.S. Commerce Department Entity List (what many describe as the “Blacklist”).
Do any of us have the financing of concentration camps in mind when we transfer money into our retirement and investment accounts?
… The Chinese are estimated to have attracted nearly two trillion dollars of American investment in equities alone. We do not even know the extent of our real exposure to China, because it has dollar-denominated bonds issued elsewhere in the world that are ending up in Americans’ bond portfolios—our investment banks buy them overseas to utilize a loophole in our regulatory structure. But I can tell you that in the next 36 months, if nothing is done, our exposure will be two to three trillion dollars more than it is today. The Chinese are moving as fast as they can into the investment portfolios of the American people because they are in desperate need of our dollars.
… Astoundingly, Americans are even investing in China’s sovereign bonds—bonds issued directly by the Chinese government, with the proceeds to be used at its sole discretion. Remember Liberty Bonds during World War II? The U.S. sold Liberty Bonds to finance our war effort. Today Americans are buying Chinese sovereign bonds to finance our own potential destruction—anti-Liberty Bonds. The California State Teachers’ Retirement System, to cite just one example, owns Chinese sovereign bonds valued at over $4 million. The Prague Security Studies Institute is finding examples like this throughout our state public employee retirement systems.
Or look at university endowments. The University of Michigan has 44 percent of its $12.2 billion in assets in private equity and venture capital; of the venture capital portion, one-third of the investments are Chinese. This is not to single out or excoriate the University of Michigan. Its investment portfolio is quite typical of what we’re finding elsewhere.
… Even leaving aside China’s brutal repression of its own people, does anyone in America, Democrat or Republican, want to fund the production of weapons designed to kill American soldiers, sailors, and marines? Does any American want to underwrite the Chinese militarization of the South China Sea? Or finance U.S. sanctions violators, benefiting Iran and North Korea? Do Americans want to finance the destruction of their own liberty and the ruin of everything they hold dear? I think most Americans would react with outrage, if they knew the facts.
Next, it is urgent that Chinese bad actors be excluded from accessing U.S. capital markets—or at least be forced to disclose their malevolent past activities because of the material risks involved. To be candid, when it comes to China, there is a question whether one can even speak of good actors. Article 7 of the National Intelligence Law of China allows every commercial entity to be instantly weaponized—to commit espionage, technology theft, or whatever else is deemed to be in China’s national interest—by simple order of the government. That’s a matter of public record. In other words, for some fund managers who wish to eliminate bad actors from their portfolios, one solution is simply to eliminate Chinese enterprises.
… The good news is that we can win this economic and financial war. America dominates the global economic and financial domain—period. Our capital markets are roughly the size of the rest of the world’s combined, and we hold about 60 percent of the world’s liquidity. Wall Street might argue that if we safeguard our capital markets, China will just go to another international exchange, in which case our country will be the one hurt. The problem with that argument is that no other country has anywhere near the depth and volume of our markets. China’s need for dollars is so voracious that it would likely use up the volume of a Frankfurt or London in months, not years. There is nowhere else for a player the size of China to go. Just as in the early 1980s, when we had a monopoly on oil and gas equipment and technology for Arctic-like conditions, we have most of the world’s money today—and the leverage that goes with it. __ Roger W. Robinson Jr.
The US government and the US financial and investment communities are not taking the threat from China seriously. Neither do US universities or US corporations. They have been perfectly willing to sell China the rope with which to hang the US and all of western civilisation. But is that what an informed public would want to happen, if it knew?
The fact that most intelligent people do not know or understand the issues in the article above suggests that powerful interests inside western media companies, universities, and governments do not want the reading, thinking public to worry their little heads about such things.
Note: It goes without saying that Europe is following the same witless path with China that it took with the USSR. As in so many crises of the past, Europe is imperiling herself in a heedless manner, taking all of us ever closer to a situation where economic war will not suffice — where only more global wars of blood will settle the matter.
China does not allow its own imperial subjects even a small portion of the ordinary freedoms that westerners take for granted. Every aspect of a subject’s life is under scrutiny. Even an imperial subject’s internal organs are not considered his own, but rather the property of the state.
If China is ever successful at dominating the globe to the same degree as the US has dominated for half a century, it will extend the nightmare of China to the rest of the world. While that may give the more jejeune Europeans and supporters of Bernie Sanders something to cry about, it will give little satisfaction to those who might otherwise laugh at their naivety.