Click here for Full Issue of EIR Volume 21, Number 33, August 19, 1994

Trilateral Commission targets China I The inJamous Trilateral Commission haspUblished a reportputting China in the crosshairsJor looting and destruction. Michael O. Billington reports.

The Trilateral Commission in May 1994 released a report the old Silk Routes as the basis fur thecontinent-wide devel­ called" An Emerging China in a World of Interdependence," opment of the Eurasian land ma$S, which representsthe only prepared by Trilateral Commission members Michel Ok­ policy which could be successfully put in place when the senberg, president of the East-West Center in Hawaii and ex­ current bubble in the world flnancial markets collapses, China desk officer for the U.S. National Security Council; taking the "China bubble" with it. Yoichi Funabachi of the Japanese newspaper Asahi Shim­ It is precisely such a Eurasi� development perspective, bun; and Heinrich Weiss, the German industrialist who potentially supported by the United States, which the Trilat­ chairs the China Committee of the East Committee of Ger­ eral Commission views as the greatest danger for its inter­ man Industry. ests. Twice before in historysuch a policy was implemented, The Trilateral Commission has served, since its founding and both times the Venetian and British mentors of today's in the early 1970s by David Rockefeller and others, as one Trilateral Commission moved to crush it. In the late 17th of the leading institutions of the Anglo-American financial century, G.W. Leibniz coordinated the effortsof Jesuit mis­ elite, shaping policy in Europe, Japan, and the United States sionaries in China who were wCllrking closely with the great in the direction of freetrade and the"post-industrial society. " Ch'ing Emperor Kang Hsi, tCilgether with European and The commission's China report is an overt declaration of Russian leaders, to implement his "Grand Design," uniting intent to impose upon China-as with the entirety of the East and West in development rand cultural collaboration. developing sector-a new colonialism, through the auspices Only many decades of subversive Venetian operations of the U.N., the International Monetary Fund (IMF), the against the Vatican and againstl Leibniz and his circles suc­ General Agreement on Tariffs and Trade (GATT),and simi­ ceeded in breaking the alliance between the "Renaissance lar global institutions generally under their control. The faction" in Europe and its co�thinkers in China, leaving report demands that China be forced to accept policies which China isolated and (ultimately) vulnerable to the British will assure that it remains largely an impoverished nation, opium dealers and gunboats of the 19th century. lacking real industrialization, and sustained as a source of In the beginning of the 20th century, plans for Eurasian cheap labor for export-oriented process industries. development reemerged in Eutope, centered on the East­ The report also contains vicious insults against Chinese West rail development polici($ of Russia's Count Sergei history and culture, such that anyone even slightly familiar Witte and his French and GeIlllan allies, with support from with China should recognize the duplicitous and evil intent the Vatican. This current was picked up by Dr. Sun Yat­ of the Trilateral authors. sen in China, who led the Republican revolution in 1911 The circulation of this report coincides with the dramatic on a program for the internat.,nal development of China developments in Europe over the past months, which threat­ centered on multiple rail connections with Europe and the en the ambitions of the utopian "world government" advo­ Near East. The British orchestnlted World War I to destroy cates at the Trilateral Commission. President Clinton, in this potential, and deployed Bet1trand Russelland otherintel­ announcing a special relationship between the United States ligence operatives to disrupt Sun Yat-sen's work and foster and Germany (and overturningthe old "special relationship" a Jacobin opposition in the form of a Communist Party of with England), during his visit to Europe in July, opened China. up the potential for vast rail and other infrastructuredevelop­ The 1994 Trilateral report :on China should serve as a ment projects covering all of Europe and extending to the warning that equally deadly means are being prepared today east, as the basis for a future of peace. Chinese Prime to prevent any real development of the Eurasian landmass. Minister Li Peng and a team of 160 Chinese industrialists and specialists visited Germany in the same period, signing The U.N. utopians agreements for collaboration in transportation, energy devel­ The report adopts the now $tandard battle cries of those opment, space travel, and other areas of heavy industry and committed to imposing U.N .IIMF world government: "sus­ infrastructure.What is emerging is a potential for rebuilding tainable" development (a euphemism for various forms of

16 Economics EIR August 19, 1994

© 1994 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited. anti-industrial policies); population control; limits on that the "New Great Leap" of the pas� 15 years has not been "greenhouse gases" and other anti-industrial policies prem­ based on developing the real economy, but on looting the ised on fraudulentenvironmental arguments; and restrictions resources and the population in a downward process leading on military technology and arms sales. The Trilateral intent to disaster. If the Chinese economy is measured in real is captured in their statements ridiculing China as having terms, there has been a falling rate of .gricultural production an "obsession with economic development above all else," per capita since 1984, and as well as a falling rate of rail and references to "irresponsible industrialization." The re­ construction. The production of certain consumer goods has port heaps praise on the southern coastal trade zone policy boomed as a spinoff of the cheap-labor export industries, of "export-led growth strategies," which has in fact created but this does not affect the critical qrisis in infrastructure. a speculative bubble economy based on low-skill, low-tech­ Even in those areas where gross output has increased sig­ nology coolie labor, real estate speculation, drugs, crime, nificantly (if not adequately), such as steel and energy pr0- and corruption. The problem with the rest of the country, duction, the output has been utilized primarily in the trade they contend, is that there is a real industrial base which zones rather than in the development of necessary national Beijing has stubbornly refused to shut down. infrastructure. The Trilateral strategy is to force Beijing to impose a The result is that the potential :population density in variant of the shock therapy policy which destroyed the China is literally decreasing. The cuttent "redundant labor" eastern European economies over the past five years. The in the countryside is somewhere between 150 and 200 mil­ primary means for this task is to bring China into GATT lion. The government acknowledges that if current policy and the new World Trade Organization (WTO), but not on projections are maintained, another 10 million will be added China's terms. ''The most pressing issue," the report says, to this total every year at least throu�h the year 2000. The is "getting China into the fold of the WTO . . . as rapidly Trilateral solution, of course, is not to launch great infra­ as possible, by agreeing to GATT rules." The problem for structure projects or nuclear-powered city building, but to the Trilateral Commission is that, under GATT rules, devel­ do away with the people. oping countries are permitted to join GATT without meeting The commission is particularly incensed at the bad pub­ all the free-trade requirements. The report states: "China's licity and adverse actions taken agai�st China for its bestial insistence that it be characterized as a 'developing country' forced population-reduction policies. The report insists that is another potential problem. This would allow China to the West must end the "unconstructive ideological barriers, maintain tariff protection for 'infant industries,' such as [such as] U.S. withholding of funds •..to protest China's automobiles, machinery, and electronics." These domestic population control methods." Afterall, they argue, "Its coer­ industries, and others, are slated by the Trilateral bankers cive tactics to control population growth, while widely con­ to be eliminated, to be replaced by either foreign-owned demned in the international commupity, have been effec­ production or imports. tive." Although they are glad to see the continuing, virtually The Trilateral Commission has a solution to this impedi­ unlimited supply of cheap labor flowing into the coastal ment: Purchasing Power Parities (PPP), an accounting meth­ trade zones, the report's authors re$ect the recurring fear od adopted by the World Bank last year (see box). According of the oligarchy that "a mass exodus Qf Chinese would surely to this magician's sleight-of-hand, the Chinese economy overwhelm the world . . . in a w0rld already awash in virtually tripled in size overnight. Suddenly, the financial migrants." press in the West began reporting China as the third-largest A related concernof the Trilateral! Commission is that the economy in the world, and many began proclaiming that massive unemployment, together wi� the economic crises in China is no longer a developing country. The Trilateral agriculture and in the state sector indqstries, may feed politi­ report introduces PPP accounting on page one, and claims cal unrest. The report warns against any moral response that the remarkable growth of China's economy is "further from the West in such a situation, bu� insists the well-known blurring the distinction between developed and developing methods of violent suppression used by Beijing must be nations." (To appreciate how repUlsive this statement is, understood as acceptable in the "Chlnese context": "When one need only consider the 150-200 million unemployed confronted with disorder, the challenge for both China's Chinese peasants who are recycled in and out of the trade rulers and the outside world will be not to panic, not to zone sweatshops, or the genocidal collapse of much of Afri­ conclude the regime's survival is at I stake, but to place the ca, in relation to the fact that PPP methods also accredit the unrest in its Chinese context and to i respond accordingly." African economies with an "overnight tripling" in size!) The This is not surprising, since author Michel Oksenberg, to­ report concludes that China must be held to advanced sector gether with his friend Henry Kissin$er, were the two most rather than developing sector standards: "We favor insisting visible figures on worldwide televisipn in the hours follow­ that China make firm commitments to meet GATT/WTO ing the military operations at Tian�men Square in 1989, standards." arguing for full support for Deng Xilloping's bloody tactics The use of Purchasing Power Parities covers for the fact against the student demonstrations. ,

ElK August 19, 1994 Economics 17 The Trilateralists do not overtly endorse communism, system into southern China, moving outward and fuzzing but they are hopeful that the Communist Party of China can the boundary between Hongkong and the rest of China." "transform itself into a corporatist party, incorporating the natural elites of the various sectors of society and thereby Cultural assault playing an invaluable integrative role." "Corporatism, " of The most disgusting aspect of the Trilateral report is its course, is generally associated with fascism, of the Mussoli­ fraudulent and insulting profile!of Chinese culture and histo­ ni variety, a model in high favor among the utopians of the riography. The fact that the authors felt compelled to degrade Trilateral Commission. the Chinese people in a publio report about their country is The Trilateral report lends its authority to the potential symptomatic of the colonial mentality guiding the Trilateral splitting of China into several parts, a favorite project among Commission ideologues. British intelligence China hands, especially Gerald Segal of Despite the general chaos which has characterized China the International Institute for Strategic Studies, who is listed in the ISO years since the first British Opium War, the nearly as a "consultant" by the report's authors. They follow Segal 5,OOO-year recorded history of China is one of recurring in defining Guangdong and Fujian provinces as constituting periods of dramatic developments in science and culture. a separate entity from the rest of China: "A trans-state eco­ Nowhere in the world was this history as carefully and exten­ nomic zone exists in South China, with the Hongkong dollar sively recorded for posterity than in China, beginning with circulating in Guangdong and the Taiwan dollar in Fujian." the histories of antiquity prepared by Confucius and his col­ Hongkong, the authors muse, has "extended its economic laborators in the 5th century BJC. This scholarly tradition of

each service. Their method ign�res the level of technology and the quality of the workf�rce which is invested in The magical 'purchasing the production of such goods land services, considering the IMF instead only the final product!. This method, therefore, power parity'of ignores the actual cost to the national economy in produc­ ing such goods. For example, the price of a ton of rice in In the spring of 1993 the International Monetary Fund an advanced economy reflects a stored-up value in the (IMP) released its annual "World Economic Outlook, " infrastructure of the economy, the technologically ad­ announcing a change in procedure for measuring and com­ vanced machinery, and the educational level of the farm­ paring a nation's aggregate output of goods and services. er, which makes it possible toi produce a greater relative Overnight,most Third World nations' economies doubled quantity of rice with a smaller relative expenditure of the or tripled in size, according to these IMF wizards. As national energy resources (althQugh there is a greatergross demonstrated in the accompanying article on the Trilateral energy utilization), and a sm�ler number of man-hours Commission's China policy, this accountant's trick has employed. Thus, the higher monetary value of this rice been used both to justify the disastrous policies of the IMF over a ton of rice produced in Otinareflects a cheaper cost over the past 25 years and to force the developing nations to the national economy of the advanced sector nation than to betreated as developed nations in relations with interna­ the lower-priced Chinese rice actually costs the Chinese tional trade and financial institutions. economy. Although the Chinese rice is produced and dis­ The IMF's "Purchasing Power Parity" (PPP) approach tributed with a smaller total energy expenditure for such is presented as a more accurate measure of the relative things as farm machinery, irrigation, storage, and trans­ size of each nation's economy, due to distortions which portation, this nonetheless represents a relatively high exist in the currency exchange ratios. The IMF's "World proportion of the nation's avail.ble energy resources.This Economic Outlook" explains these distortions as follows: deficit in technology and skill level is made up through a "In the case of developing countries, market exchange gross waste of manpower, deployed as unskilled labor to rates may deviate fromtheir PPP values because of differ­ do work better done mechanically. ences in the relative price of traded versus non-trade out­ In regard to services, the IMF's PPP method is even put. For example, the price of services in developing more ludicrous. For example, fue severe crisis in Chinese countries is typically very low in foreign currency terms, education and health services, IIlggravated by the massive and this implies a negative bias in exchange-rate-based deficit of professionals due tOI the 15 years without any estimates of living standards." college graduates during the Gultural Revolution and its Using the PPP method, the IMF claims to have estab­ aftermath, can in no way be placed on a parity price level lished a "universal value" for each item of production and with the advanced sector.

18 Economics EIR August 19, 1994 I historiography becomes the subject of ridicule to Mr. Ok­ the policies of the Trilateral Commisslion from any positions senberg and his co-authors. of influence. Referencing the view of Harvard's recently deceased Si­ The report's authors then proceCfd to create their own nologist John Fairbanks, the report states that "the Chinese distortions of Chinese history. They begin with a fraud-by­ awareness of their own past is as much myth as reality." It omission: They refer to "the continUity of the civilization proceeds to list four "distortions" which "recent scholarship" and glory of [China's] accomplishments in the Han, Tang, has exposed�ach of the four being vacuous and pedantic Ming, and Qing dynasties.'" Missing ,is the Sung (960-1279 points that are, in any case, debatable at best. The report A.D.), which was the era of the Confucian Renaissance. concludes: "These four distortions that the Chinese have per­ the golden age of the Confucian school of Chu Hsi and his petuated about their history . . . were crucial in promoting predecessors, of dramatic economic!: expansion, overseas

imperial bureaucratic rule and facilitating the unity of the exploration, rapid population growth,' and a scientific revo- country. . . . Since time immemorial, Chinese leaders have lution. instructed intellectuals to write history not for accuracy but Perhaps the Sung was left out; by an oversight. But to make moral judgments and draw lessons for the present." further such omissions tend to demonstrate an intentionally It is understandable that the Trilateraloids would object to selective presentation. In discussing Confucian philosophy, making moral judgments and drawing lessons from history, the report states: "In the Confucial lexicon, filial piety, since, if the citizens of the western nations would utilize such loyalty, ritual or propriety were among the most esteemed criteria, they would immediately remove anyone advocating virtues." This is true-but far more jimportant are benevo-

Shadow play that result. In fact, the choice of the Purchasing Power Parities The IMF ignores the fact that th� recurring devalua­ values is totally arbitrary. There were several different tions of the Third W orId nations' cunencies in every case methods of PPP calculations made by different institu­ are forced upon these nations by the.IMF itself, as part of tions, with wildly different results. The method chosen by the "conditionalities" and "structUlial adjustment" de­ the IMF for China was that of J.S. Taylor, published in manded of them, under the threat (often carried out) of 199 1 by the Center for InternationalResearch in Washing­ an organized cutoff of all credit and; external aid. These ton under the title "Dollar GNP Estimates for China." nations are thus forced to export their raw materials and Despite many charts and tables, comparing the values of the products of their low-skilled wor�orce at a fraction of goods in China and on the "worId market," the entire their previous value, while paying black previously con­ exercise ultimately comes down to choosing a different tracted debt service severalfold without borrowing a cent. exchange rate. Taylor, showing considerable chutzpah, And, of course, imports become more expensive, holding says in his own report: "Fortunately, recent research by back the import of desperately needed technology and Taylor on shadow prices in China provides us with an contributing to inflation. alternative." This "shadow exchange rate," says Taylor, Although it is, in fact, necessary ito find a more accu­ is 2.23 yuan/dollar, as opposed to the current real ex­ rate measure for comparing economfes than that defined change rate of 8.64 yuan/dollar. Thus a unit of rice which by the artificially manipulated currepcy exchange rates, costs 100 yuan, or $11.50 under the real exchange rate, the IMP's monetarist sleight-of-hand. is demonstrated by is instantaneously revalued at $44.84, and the average its "W orId Economic Outlook," whiCh insists that, while peasant's consumption just went up fourfold! non-traded items and servicesshould be evaluated by their Any claim that this "shadow exchange rate" is deter­ version of the PPP standard, export �oods and debt pay­ mined by scientific criteria must be rejected out of hand. ments-i.e., the source of loot for t� international bank­ The IMF admitted when they adopted the PPP system that ing interests-must remain at the devalued real exchange they had a hard time choosing the Taylor system over rate: "It would not be appropriate . , . to use PPP-based other alternatives. One of the other methods would have weights to aggregate measures of international trade and made the Chinese economy seven times bigger than it capital movements, which are tran�acted at market ex­ really is, which they judged to be simply too much to be change rates, or data for external delit and debt service." believed. Another would have only doubled the economy, Ironically, if the IMF were to utilize their fraudulent which would not have been adequate to declare China to "shadow exchange rate" toevaluate debt service payments be no longer a developing country. Therefore, having over the past 20 years, many Third WIorIdcountries would decided upon the result they needed for their political be shown to have paid off their foreign debt many times , purposes, they chose the "method" which provided over.

EIR August 19, 1994 Economics 19 lence, or agapic love (jen), ri$hteousness (i) and wisdom Currency Rates (chi). Why are these left out? The authors are attempting to justify their distorted and wrverted characterization of the "Chinese character": "Ce�ain powerful tendencies in The dollar in deutschemarks thought and practice traceable t� Confucius and his disciples New York lateafternoon fixing are widespread: the dominant qhinese tradition asserts that human identity is derived fro� the network of social rela­ 1.80 tions in which one is inevitably enmeshed. . . . Human beings, according to this view, clio not have innate character- 1.70 istics; they are malleable." ,

UO This degraded concept of rpan has nothing to do with - - Confucianism, which views m� as being born fundamen­ � ,. " I.SO � tally good by reason of the in�rn virtues of agapic love (jen), granted by Heaven, whiph subsumes wisdom, righ­ 1.40 teousness and propriety, and which distinguishes man from 716 7113 7120 7127 813 8/10 the beast. The notion of man asj a malleable tool of the state is associated not with Confuci�ism, but with its opposite, The dollar in yen New York lateafternoon ftxlng Legalism, the ideology of the ipfamous Qin dynasty of the third century B.C., which enslaved much of the population,

130 burned the Confucian Classics, and buried alive the Confu­ cian scholars who resisted. Not $urprisingly, the Qin Emper­ no or was the idol of Mao Zedonf;, who advised his subjects to conceive of themselves as $crews in a machine. Since 110 the Trilateral Commission so cl�arly expresses its preference for a docile Chinese workforce, I along the lines of the Legal­ 100 ..... ists and Mao Zedong, it is to �e expected that they would falsify Confucianism to make ,t appear to be Legalist, its QI\ opposite. , 716 7113 7120 7127 813 8110 The authors are undoubtedlr also aware that the Anglo­ The British pound in dollars American establishment whicq they represent contributed New York lateafternoon ftxlng significantly to the destructionj of the Confucian tradition and the creation of the Comm�ist Party. Beginning in the 1.80 1920s, radical positivists sucbj as Bertrand Russell, John Dewey, and, later, Joseph Nieedham, both directly and 1.70 through institutions such as the United Nations which they created, filled China with a dis�orted view of "western sci­ UO ence, " while denigrating the C�nfucian tradition in favor of -- -- I.SO """" the Taoist and Legalist ideolo�ies. The oligarchical families ;who created the Trilateral 1.40 Commission are just as intent t¢ay to prevent any renewal 6122 6n!) 716 7113 7120 7127 813 8110 of the Confucian tradition whiqb, they fear, could facilitate collaboration with the pro-gro\fth enemies of the Trilateral The dollar in Swiss francs Commission in the West, bas�d on a shared commitment New York lateafternoon ftxlng to the massive development pr�jects needed throughout the Eurasian landmass. The final cqapter of the Trilateral report UO on China states in blunt coloni,"ist terms: I.SO "Both China and the Ttilate.al nations must work togeth­ er to build sustainable, rather �han astronomical growth in 1.40 China ....But the Trilateral cpuntries must also recognize

� - that a cooperative approach "lay not elicit a constructive 1.30 �- .-./'"" Chinese response.... Such c,assic considerations as bal­ ance of power, realism, and a:keen sense of the Trilateral JJO interests must also govern we,tern and Japanese thinking 6122 6/l'J 716 7113 7120 7127 813 8110 about China."

20 Economics ElK August 19, 1994