Twofish's Blog

January 15, 2008

The Wrong Conspiracy

Filed under: china, finance, globalization, new york city, taiwan — twofish @ 6:11 am

Something that I find rather amusing is how people focus on the wrong conspiracy and miss things that are happening under their noses.  Tenement palm talks about a “China threat” writer that warns about the Chinese conspiracy to attack the West via nanotechnology, while missing completely the true devious and underhanded plans Beijing really has.  The real conspiracy is that China plans on becoming a great power by convincing people that they will become very rich and benefit them personally if they help China become a great power.  The most devious and sneaky part of the plan is that the easiest way that Beijing can convince people that a rich and powerful China will make them rich and powerful is to undertake policies that will actually make people rich and power if China becomes rich and powerful.

Beijing figures that if most people have their interests aligned with China’s, that there will be much less resistance to China becoming a great power.  So it is useful to Beijing to have lots and lots of cash to shower on people.  Now in order to have lots and lots of cash, you need a good economy, so part of this underhanded and devious plan is to restructure the economy so that China generates lots and lots of wealth.  This is where Wall Street comes in.  Since people on Wall Street know how to make money, China is bringing in lots of expertise so that it can figure out how to create wealth that will make lots of people rich.

Of course the China threat theorists would have us believe that China is really intent on using military force on destroying the West and taking over the world.  This notwithstanding the fact, that China is in no position to undertake an arms race with the United States, and history has shown that more weapons often leads to less security, both by diverting money that could be used to fund civilian ventures, and by scaring away your potential allies.  By contrast, you make more friends by smiling and throwing around a lot of cash, and if your friends can figure out ways that you end up with even more cash…. Well so much the better….

China does have this advantage of having had people think about how to structure a state for several thousand years.  The notion that the basis for a powerful state is strong economy rather than a strong military can be found in pretty much any writer from the Warring States period.  There has been several thousand years of discussion on exactly what economic and political policies are most beneficial and the latest discussions are part of a conversation that has been going on for a long, long time.  There is a similar body of knowledge in the Western canon, which unfortunately seems to be unused.  All of the stuff that is happening in the news today would have been familiar to Confucius, Sun Zi, Aristotle, and  Thucydides.  The difference is that in developing and thinking about grand strategy, the Chinese leadership does try to make use of history, while I don’t think that similar discussions are happening in Washington.



  1. I think Lev Navrozov is, from his writings, completely and utterly insane.

    But one of the reasons I think that those around him flog these theories of China’s military threat really has nothing to do with containing Chinese power. It has to do with money. Money for thinktanks and defense contractors, primarily. Guys like Lev end up being “useful idiots” for the guys who have their hand in the cookie jar.

    There are plenty of other people, many of whom have more sense and influence than Lev, who think more as you do. That said, however, when China inevitably hits a recession or worse, how many people do you think they can convince to help them with the promises of riches?

    Comment by davesgonechina — January 15, 2008 @ 6:53 am

  2. Ultimately everything has something to do with money. That’s why I have spent so much time studying finance.

    If China hits a recession, then it will be a blip on the screen. China has had recessions before, and a recession in Chinese terms means that GDP growth is 6% rather than 14%. The two problems that could happen are:

    1) China’s economy matures and encounters Japanese or Soviet style stagnation. This is not going to happen for another generation, and even if China does economically turn into another Soviet Union, the economy would be so much larger than the United States that there will still be a lot of money to move around. However, I don’t think that this is likely twenty years is a lot of time to fix things.

    2) China undergoes a major economic or political crisis. The problem here is that people still have this idea of China being far away and small. If China does undergo a major economic or political crisis then its going to trigger some massive upheaval in the United States.

    Comment by twofish — January 16, 2008 @ 11:18 am

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