Will America win in an all out confrontation with China? The reality is both sides will lose. How much each side will loose? Which nation will recover more readily from the loss suffered from such an unwise and unthinkable confrontation? Will our over reach into another unnecessary cold war be productive? How essential is it for both nations to reach harmony consensus for win- win development instead of confrontation? America should have a public debate on this very urgent and important subject so we are better prepared for the consequence of our confrontational actions should we decide to embark on it. Leaders of both nations are fully aware of the severe consequences of an avoidable all out confrontation. But a public debate in America is needed so President Obama will not be subjected to undue pressure from the public to provoke China to the point of no return. American media is still mired in the past Cold War mentality as to have not done the necessary task to educate American public about China development. We are uninformed and under disillusion about how China can progress so fast economically during the past three decades. Despite the fact that the 2008 global financial crises was caused by America, there was rarely any complain from China. Chinese culture is not known to be critical of others. Fortunately Chinese leaders also read Sun Zi and follow Deng Xiaoping foreign policy teaching for China “Observe developments soberly, maintain our position, meet challenges calmly, hide our capacities and bide our time, remain free of ambition, never claim leadership” and avoid serious confrontations. American leaders are under pressure from the public to confront China for the last half century ever since the founding of the new Chinese Peoples Republic. Our citizens are constantly reminded by the media that we have the best political system and China must follow us to develop (See Martin Jacques, “When China Rules the World”, 2010). American media has vowed with confidence that China today is more dependent on our market. This is a misinformation by the American media to build up confidence to please the public. This misconception of the public can be dangerous as to force our leaders hands on too many unnecessary confrontations with China as witnessed by our superior than thou attitude on Internet Freedom, sales of arms to Taiwan and Obama’s meeting with Dalai Lama despite repeated warning from China. On further analysis it is easy to show that America is actually more dependent on China as our banker to support out twin deficits (See Appendix, Message to President Obama, Who is More Dependent on Whom, America or China, by Francis C W Fung, ). Ever since we think we won the Cold War because of our superior ideology we have convinced our self that we are invincible. We also are very proud that our military power is supreme and we are a creative nation that we lead in world technology. 1

The truth is that our business enterprise is competitive because we are ahead in industrial revolution and our most endowed land attracts vast number of talents who seek opportunities. Ideology is very fickle. A nation can change her ideology on a dime as we witness China’s transformation. During the last three decades of reform and opening up she has proved that her hybrid system of combined state economy with market economy can work quite well. Many foreign talents that used to come from Europe, Japan, China and India are now returning home because economic opportunities in their homeland are growing because of increased prosperity. This phenomenon is well known as we saw Japanese and Taiwanese scientists and entrepreneurs returning home during the last Century and recently some Chinese and Indian talent are doing the same. If current American provocation is unchecked there may come a point China will be forced to retaliate in action by discontinuing to subsidize our twin deficits. This reaction will most likely to lead to all out confrontation. The first to suffer is American consumers who will need to pay higher prices for essential goods to maintain our living standard. Next will be American and Chinese businesses because 70 % of imports from China are under joint venture management with foreign companies make more profit than that of Chinese business. It may not be fun to watch the domino effects of worldwide trade protectionism and stock markets crash, but it will happen like the 1929 world depression. When this does occur there is no telling who will be the bigger loser. Luckily the world will recover from the next depression if it should occur despite our efforts to prevent it. The question is who will be more likely to recover from it fastest? America has never had a major calamity that took place in our home land other than the Civil War. China, however on the other hand, during the last Century, experienced the devastation of numerous imperial aggression wars, the Japanese occupation, two major civil wars, the Cultural Revolution and the recent devastating Szechuan earth quakes. She showed remarkable resilience in recovering from all those calamities. In addition, as an ancient culture, she is the one showed continuous unity for a long uninterrupted history of five thousand years. As a dynamic young nation, America does not have a deep rooted ancient civilization as bounding force. China is a cultural state and not a political state as discussed in essay 3 in following Appendix. China is more centralized and cohesive as demonstrated by her developing pattern during the last three decades and her fast recovery from the last global economic crisis. (See Martin Jacques, “When China Rules the World”, 2010). As world’s manufacturing center, China certainly will be the first to have the get up and go to ex[port consumer goods to the rest of the developing world. Remember in any depression, when the stock market crashed, cash is king. Whereas America is currently heavily in debt, China has two trillion dollars of foreign currency reserve, adding the 700 billion from Hong Kong, this will make 2.7 trillion. She and other cash rich nations in Asia will certainly


recover that much faster during this potential depression than the America, even if they are not targeted to rise already. History has ample documentation of the 1929 global depression. It is sufficient to conclude that at this time of crises, caution is the best part of velour for both America and China not to tempt fate. The most advisable course of action is for America and China both to continue cooperation and reach Harmony Consensus. A joint effort between the most powerful developed nation and the fastest growing developing country, America and China both will fulfill the manifested destination of greatness, bringing lasting peace and harmony to the world. Harmony is the most common value of human civilization and Harmony Renaissance is the next creative wave of energy mankind is waiting for to lead us to the next level of accomplishment beyond European Renaissance. Francis C W Fung, Ph.D. Director General World Harmony Organization San Francisco, CA

MESSAGE TO PRESIDENT OBAMA:” WHO IS MORE DEPENDENT ON WHOM, AMERICA OR CHINA?” It does not matter whether the future prediction of Orville Schell (1) or Martin Jacques (2) is on target about U.S. China relation. In fact the future prospect may be some where in between. Our concern should be how to avoid another cold war that is looming by our unnecessary confrontation of China in arm sales to Taiwan, critical of China by siding with Google Internet dispute with China and your coming meeting with Dalai Lama. American public needs to be in formed about these anatomizing tactics through public debates. Orville Schell is singing a familiar tune of China and U.S. will only get closer. Martin Jacques is predicting a likely scenario that Chinese culture may dominate the future world. Though nobody can be sure of the future, Jacques is closer to the target on the following counts. Contrary to U.S. media reports, 1) Chinese Harmony cultural values have more universal values than our proclaimed democracy values. 2) Chinese people and government is getting enough information through the Internet to move towards modernity for now. Her current success in economics and modernization are good indications.


3) China is a cultural state and not a political state (3). Her government will continue to have the mandate to govern if her performances justify the government has public confidence. Political reform must be accomplished according to her own move towards modernity. Grid lock or not, U.S. government must focus on the important issues to promote harmony between the two great nations. The world cannot afford another avoidable cold war. America by continuing the present path of confrontation, will benefit neither country nor the world. We need a public debate, but our press must better prepare our citizens. Your leadership is very essential to guide our nation in the direction towards world harmony.

The America media overwhelmingly agrees that China is more dependent on us because of our large market. In reality, the American public needs to be better informed. Our media 20th century mentality is not doing America any favor. Have it occurred to us, ultimately Chinese market is capable to be four times bigger than ours? The developing world is awakening; their combined market will be 10 times ours. We are the most powerful nation in the world because we are ahead of developing nations in technology and modern management not because of our superior cultural values. All ancient cultures have laudable cultural values that is why they developed. Larry Summers, your eminent economic adviser said, “The most momentous 21st Century development will be the rise of the developing world catching up with our technology and modern management” We are the greatest military power because we have invested consistently more than the whole world combined in our military industrial complex. We are successful in economics because our business corporations are competitive not because we have the exclusive rights to technology and innovations. Deng Xiaoping said “It does not matter whether it is black or white cat as long as it catches mouse”. Economic success does not depend on political ideology, success is more a factor of appropriate management. Now that modernization of the developing world is out of the bag, we will face competition whether it is Brazilian, Russian Indian or Chinese cats. In the transition to a multilateral world, China as a developing and consumer product manufacturing country has more to offer to the developing world in the consumer products that we all want. Our sales of superior armament have a limited and smaller market. Barring instability in China which we are eager to agitate, China has a long way to grow in her own and the friendly developing market. Japan and the four little tigers caught up with us in the last Century because they focused on consumer products and not arms sales. With similar culture and in the 4

same way, China and South East Asia will also catch up with us in time. So soon we will be more dependent on China and Asia in the 21st Century.

1) Why China and the U.S. Will Only Get Closer
By Orville Schell | NEWSWEEK Published Dec 30, 2009 Issues 2010 It looks, at first, like a classic story of imperial rise and fall: the West's confidence in its institutions and economies has been badly shaken by the financial crisis, while China has increased its global role and basked in the vindication of its more state-dominated development model. Having grown accustomed to dominance, many Americans now find China's boom unsettling. After all, two states like this are historically expected to clash. Yet that clash is not guaranteed. What happens next will depend in large part on how Washington leads. China and the United States could easily become antagonistic. But things could unfold much more positively —if leaders on both sides recognize how many interests they share. That's not to say it will be easy. The two countries share a lot of historical baggage. For a century and a half, China smarted over its domination by the West, leaving it with a deep sense of humiliation. But for years now, China's economic miracle has been easing its insecurity. As confidence has grown, China has begun abandoning its tendency to define itself as oppressed and exploited. Beijing has also begun working hard to reassure the planet that its debut on the world stage will be harmonious. As a result, China is now in the right frame of mind to begin fashioning a new sort of partnership with the West. Creating such a relationship will still take enormous forbearance. For China, it will mean vaulting over its revolutionary ideology and resisting the temptations of hypernationalism. And for the United States, it will mean recognizing that, even though its supremacy is waning, China need not become an adversary. Americans must come to terms with the reality that their own vaunted democratic system has often failed them—by letting the economy run off a cliff, for example—and that China's one-party system, which is able to gather information, formulate policies, and then effect them quickly—clearly has its advantages. China and America also have plenty to build on. The two countries have an unusually strong sentimental and historical bond. Thanks to a century of U.S. missionary activity in China, many Chinese admire America's generosity, entrepreneurialism, and fair--mindedness—even if they often resent U.S. power and self-righteousness. More important, the two countries now face, and must work together to solve, two critical questions: how to construct a new financial architecture and how to solve climate change. Take the economy: the U.S. relies on China to fund its debt, and China relies on the U.S. to buy its goods. While Americans have started to save more and Chinese to consume more, this codependency is not about to end. So without China participating in the rebuilding of a new post-crisis economic architecture, both countries could run into serious trouble. And they know it. Climate change is even more urgent. The U.S. and China together produce almost 50 percent of the world's -greenhouse-gas emissions. Unless they find a way to stop hiding behind each other and start dealing with this problem, it will not matter what all the other well-intentioned states do. Everyone will suffer. So the challenge is not whether the U.S. and China can draw closer, but how to get them to recognize that they already are intimately intertwined. Fate has bound them together, and they must find effective ways to collaborate. Fortunately, this is the very definition of common interest. And there is nothing like common interest—and a looming sense of common threat—to form the basis of a strong, productive relationship.


Schell is Arthur Ross director of the Center on U.S.-China Relations at the Asia Society. © 2009

2) No Chance Against China
Google's defeat foretells the day when Beijing rules the world.
By Martin Jacques | NEWSWEEK Published Jan 16, 2010 From the magazine issue dated Jan 25, 2010

The blunt truth is tthat most Western forecasters have been wrong about China for the past 30 years. They have claimed that Chinese economic growth was exaggerated, that a big crisis was imminent, that state controls would fade away, and that exposure to global media, notably the Internet, would steadily undermine the Communist Party's authority. The reason why China forecasting has such a poor track record is that Westerners constantly invoke the model and experience of the West to explain China, and it is a false prophet. Until we start trying to understand China on its own terms, rather than as a Western-style nation in the making, we will continue to get it wrong. The Google affair tells us much about what China is and what it will be like. The Internet has been seen in the West as the quintessential expression of the free exchange of ideas and information, untrammeled by government interference and increasingly global in reach. But the Chinese government has shown that the Internet can be successfully filtered and controlled. Google's mission, "to organize the world's information and make it universally accessible and useful," has clashed with the age-old presumption of Chinese rulers of the need and responsibility to control. In this battle, there will be only one winner: China. Google will be obliged either to accept Chinese regulations or exit the world's largest Internet market, with serious consequences for its long-term global ambitions. This is a metaphor for our times: America's most dynamic company cannot take on the Chinese government—even on an issue like free and open information—and win. Moreover, as China becomes increasingly important as a market and player, what happens to the Internet in China will have profound consequences for the Internet globally. It is already clear that the Google model of a free and open Internet, an exemplar of the American idea of the future, cannot and will not prevail. China's Internet will continue to be policed and controlled, information filtered, sites prohibited, noncompliant search engines excluded, and sensitive search words disallowed. And where China goes, others, also informed by different values, are already and will follow. The Internet, far from being a great big unified global space, will be fragmented and segmented. Another Western shibboleth about the future will thereby fall. It will not signal the end of the free flow of information—notwithstanding all the controls, the Internet has transformed the volume and quality of information available to Chinese citizens—but it will take place more on Chinese than Western terms. If we want to understand the future, we need to go back to the drawing board. China—as we can see with increasing clarity—is destined to become the world's largest economy and is likely in time to far outdistance the U.S. This process will remorselessly shift the balance of power in China's favor. Just as once a large share of the American market was a precondition for a firm being a major global player, this mantle will increasingly be assumed instead by the Chinese market, except to a far greater extent because its population is four times the size. Furthermore, China's expanding economic clout means that its government is enjoying rapidly growing global authority. It can even take on Google and be sure of victory. Facing up to the fact that China is very different from the West, that it simply does not work or think like us, is proving far more difficult. A classic illustration is the West's failure to understand the strength and durability of the Chinese state, which defies all predictions of its demise, remains omnipresent in Chinese lives, still owns most major firms, and proves remarkably adept at finding new ways to counter the influence


of the U.S. global media. Western observers typically explain the intrusiveness of the Chinese government in terms of paranoia—and in a huge and diverse country the rulers have always seen instability as an everpresent danger—but there is a deeper reason why the state enjoys such a high-profile role in Chinese society. It is seen by the Chinese not as an alien presence to be constantly pruned back, as in the West, especially the U.S., but as the embodiment and guardian of society. Rather than alien, it is seen as an intimate, in the manner of the head of the household. It might seem an extraordinary proposition, but the Chinese state enjoys a remarkable legitimacy among its people, greater than in Western societies. And the reason lies deep in China's history. China may call itself a nation-state (although only for the past century), but in essence it is a civilization-state dating back at least two millennia. Maintaining the unity of Chinese civilization is regarded as the most important political priority and seen as the sacred task of the state, hence its unique role: there is no Western parallel. Chinese modernity will not resemble Western modernity, and a world dominated by China will not resemble our own. One consequence is already apparent in the developing world: the state is back in fashion; the Washington Consensus has been eclipsed. In this new world, Chinese ways of thinking—from Confucian values and their notion of the state to the family and parenting—will become increasingly influential. Google's fate is a sign of the world to come, and the sooner we come to appreciate the nature of a world run by China, the better we will be able to deal with it. Jacques is the author of When China Rules the World: The End of the Western World and the Birth of a New Global Order. © 2010

China is an ancient country with 5000 years of continuous history and tradition bound. This is unique among modern nation states. Notwithstanding the present Chinese government has made changes on the political scene, the Chinese remain cultural bound and strongly influenced by Confucius teaching. The idea of mandate from heaven, there is always a central authority, only weakened by outside influence is still alive today. Most Chinese basically are not political activists as long as the government is doing a good job in performance. Chinese people appear to be less politically active wherever they are. This appears o be true in China as well as most Chinese overseas communities including San Francisco, where the Chinese population is 40% or more. However the mandate of heaven is not irrevocable. This is evident as we witness the rise of peasant revolts to overthrow the Emperors in the changing of non performing emperors in history. This right to overthrow the non performing authority was also taught by Mencius the most renowned Confucius disciple. In Chinese the word country has the dual meaning of nation and family. So the connection of the concepts of family and country is strong. An authority establishing social and family order is acceptable based on performance. As a cultural state China can accept different religious and political entities to exist in different parts of China. That is why Deng Xiaoping’s proposal of one nation different systems for Hong Kong’s return went off without a hitch. This idea of multi religions and political systems can work in a cultural state and not necessary in a centralized political state. China as an 7

ancient culture never created a national religion of her own, instead she accepted all outside religions. Most notably China merged Buddhism from India with Confucius and Daoism philosophy into various forms of coexisting Buddhism. In time China will develop her top down and bottom up converging democracy. It has to be in her way and on her own priority. It is already happening according to John and Doris Niasbitt in their book Megatrends of China. Outside pressure will only unite the Chinese people behind her government. This is witnessed by the incident of U.S. bombing of the Chinese Yugoslavia Embassy and the current dispute over U.S. arm sales to Taiwan. Millions of net citizens are writing in to support the government. As a cultural state, China will move towards modernity in a very unique fashion. It will adopt western technology and modern management but she will retain her long traditional culture. Like manner, in the future, large developing nations will modernize within the context of their own ancient culture. The rise of China after the 2008 financial crises becomes that much more dramatic. We will find China reach out to the world with her traditional friendship and harmony. Her way of harmony diplomacy will stand in stark contrast to American aggressive Smart Diplomacy. The world watched our War on Terror, Neo Conservatism and other foreign policies during the last decade as obvious excessive use of military power. It is time to understand China as a cultural state and not a political state and turn a softer side in reaching out to China. We are the most powerful nation in the world we can afford to show our magnanimity without appearing weak. President Obama with his diverse background has a unique and final opportunity. Laotzu has said “The more powerful the more one should be humble”. Let us hope U.S. and China can reach harmony consensus through better understanding. Francis C W Fung, Ph.D. Director General World Harmony Organization San Francisco

4) China urges work for improvement of relations
FM press conference on Feb. 23, 2010


BEIJING, Feb. 23 (Xinhua) -- China Tuesday called on the United States to work for the improvement of bilateral relations. Chinese Foreign Ministry spokesman Qin Gang made the call at a regular press briefing in response to questions on China-U.S. relations. The United States should earnestly abide by the principles laid out by the three China-U.S. joint communiques and the joint statement of the two countries, respect China's core interests and major concerns, cautiously and properly handle related sensitive issues and create conditions for the improvement and development of their relations, Qin said. He said the U.S. arms sales to Taiwan and U.S. President Barack Obama's meeting with the Dalai Lama had seriously damaged China-U.S. relations. At the end of January, the U.S. government announced plans to sell an arms package to Taiwan, which included Patriot missiles, Black Hawk helicopters and minesweepers. Then on Feb. 18, U.S. President Barack Obama met with the Dalai Lama in Washington, regardless of China's repeated and resolute opposition to the meeting taking place. China has clearly expressed its position with regard to the meeting many times, said Qin, adding that China demanded the United States respect China's position, right the wrongs, and take concrete measures to maintain sound and stable development of China-U.S. relations. "The development of China-U.S. relations is in the fundamental interests of both countries and conducive to world peace and development," Qin said.

5) Commentary: China cyber attacks against Google pure fabrication
BEIJING, Feb. 23 (Xinhua) -- The New York Times, the Wall Street Journal, Financial Times and some other newspapers have published articles indicating that cyber attacks targeting Google and several other U.S. companies were from China. Such allegations are arbitrary and biased. These articles take as evidence that hackers' IP addresses could be traced back to two schools in China. However, it is common sense that hackers can attack by


hijacking computers from anywhere in the world. This fact also explains why hackers are hard to be tracked down. Computers in China are easy to be hijacked by hackers as internet security technology and services are still underdeveloped in China. The majority of Chinese internet users also lack security awareness and adequate protection measures. The hackers' IP addresses could by no means vindicate the newspapers' allegations that the attacks were carried out by Chinese citizens or from within China. Certain newspapers went even further by indicating that the Chinese government and the military might have supported those cyber attacks. The New York Times says the Lanxiang vocational school in eastern Shandong province, one of the schools from which the cyber attacks were said to originate, has military support. Another school, the Shanghai Jiaotong University, "has received financing from a high-level government science and technology project." The New York Times went to great lengths to mention that "graduates of the (Lanxiang) school's computer science department are recruited by the local military garrison each year." The paper, however, did not care to tell its readers that a school in China does not need to have any special relationship with the military to have its graduates in uniform. It is also true in the United States, where the New York Times is based. China's attitude toward cyber attacks has been unequivocal and has adopted laws against such crimes, as China is one of the countries that bear the brunt of cyber attacks. It is way far-fetched to say that cyber attacks -- even if they were to originate from China or were to be carried out by Chinese citizens -- would have the support of the Chinese government. The U.S. government, on the other hand, takes a dubious attitude toward cyber attacks. According to media reports, the U.S. Homeland Security and Defense departments have both openly recruited hackers. People with a "blackhat perspective" and know how to "do threat modelling" are the best choices, said Philip Reitinger, Department of Homeland Security deputy undersecretary, at an information security conference last October. Cyber crimes could cause immense losses for individuals, enterprises and nationstates. Effective supervision and closer international cooperation are ways to boost cyber security. Finger pointing is not.



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