Ru Zi Ke Jiao

From the N.Y. Post’s article China’s Debt Bomb:

“Last March, the Pentagon held its first-ever economic-warfare war game, with China as the putative opponent and with economists and bankers (including from UBS) helping out.”

“Details of what unfolded are still classified. However, sources told Fox Business News that the scenario played out as planned. That was the good news.”

“The bad news is that China won.”

NASH: The world has entered another MAD (as in Mutually Assured Destruction) period. America is addicted to “easy” credit and China is addicted to “easy” exports. Were China to simply lose it’s entire dollar portfolio – some 2 trillion dollars – that wouldn’t be the worst of it. The worst would be the millions of poorly educated Chinese who would be locked out of their factories – losing their homes (dormitories) – as well as their income. The same results occur if China stops buying American debt.

In one sense, America has already lost, and the article talks about that, referring to Sun Tzu’s dictum about wars being won or lost before they’re actually fought. And I believe that’s right. America has already danced the dance and now must pay the piper.

China can (and eventually will) turn their factory workers productivity inward to build a more civil society. (Imagine a China with 100 Shenzhens!) Chinese will continue to live in a country with an increasing standard of living. But America is going to have to get used to the opposite, a lower standard of living, indeed a lower quality of life.

Go ahead and read the entire article. You need to know your adversary. (I wish that the Chinese/American relationship wasn’t defined thusly – I worked to prevent just that – but too few were interested in joining this cause. Sometimes it’s easier to be enemies than it is to be friends.) What a pity!