Lethal Trajectories - Michael Conley [9]
Hiding his astonishment at the news, Wang answered, “I am most interested to hear your analysis, Mr. Chairman, and I am particularly interested in why you’re more concerned with the United States than Japan.”
“Of course, that is a good question,” the chairman answered, pleased to test his hypothesis on his trusted aide. “China and the United States have been engaged in a cold war for two decades, though few acknowledge it as such. Unlike the Cold War of the twentieth century, this one is being fought over control of resources and markets rather than ideology. Publicly, we have de-emphasized global competition in favor of common efforts and interests with the West, but both sides know the reality of the situation.”
Wang nodded. Classic Lin Cheng thinking, he mused. Start with the big picture and work backward.
“In this so-called cold war,” Lin continued, “time and momentum are on the side of China. A senseless war over Chunxiao would disrupt our timetable. China has a huge advantage over the United States in the long term, thanks to our disciplined and flexible followthrough, but we are more vulnerable to short-term issues requiring quick fixes. The Americans operate on abbreviated timeframes tied to quarterly earnings or the next election. Their mindset, accordingly, precludes them from investing as they should in their longer-term financial and physical infrastructure, and it’s eroding their superpower status. Strangely, they don’t seem to recognize this.”
“I can see how time is in our favor, Mr. Chairman, but how does that relate to the current Chunxiao situation?” Wang knew the answer, but he knew that Cheng desired the chance to articulate it as he would have to at the PSC meeting.
“Good question. Simply put, I would much rather engage the United States on our terms, not theirs. Why arouse the sleeping giant with a senseless conflict neither side can win? China is far better off surpassing them quietly in all key power areas than energizing them in an open conflict. We can deal with Japan, but a confrontation with the United States is certain to upset our timetable.”
Wang nodded and asked, “How would you position your proposition today that America’s power is eroding, but she can still strike like a dragon if provoked by a precipitous counteraction against Japan?”
“America’s power is formidable,” Lin responded, “but their economy has been mismanaged. Their dollar and petro-dollar currency statuses continue to deteriorate; they have unsustainable debt loads and future entitlement obligations they can’t meet; and their ability to print money, monetize debt, and rely on their international fiat currency reserve status to sustain them is coming to an end. With those negative trajectories, why break the chain by overreacting against Japan and inviting the Americans to openly side against us? As I said, time is in our favor. No need to rush it.”
“I agree,” Wang responded, confident in Lin’s reasoning so far. Still, he wondered, how could such a great and prosperous country like America ever let such a thing happen?
“By comparison,” Lin continued, “China has become the new international economic powerhouse, and the financial focus of the world has shifted from New York and London to the Pacific Rim. Our GDP will overtake America’s in a few years, and our economic leverage over the United States is daunting by virtue of the surplus trade dollars we hold in our central banks and our institutional investments in American T-bills and private placements. We need America as a trade partner, but we have the power to send their economy into a deep depression if we were ever to withdraw our holdings and dump the dollars we hold.”
“We have that leverage indeed, Mr. Chairman, but I doubt many Americans know this. It’s one of their government’s dirty little secrets.