“We have about 50% of the world’s wealth, but only 6.3% of its population. ... In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity. ... To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. ... We should cease to talk about vague and ... unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better.”

– George F. Kennan, US State Department Policy Planning Study 23 (PPS23), Foreign Relations of the United States (FRUS), 1948

Author’s Introduction

Boiling Frogs Slowly…

Ancient folklore has it that if you want to boil a frog in a pot of water, you first gently place it in water that is cold, and ever so slowly turn up the heat until the stupefied frog allows itself to be boiled to death, never aware what is happening. It is a metaphor that describes the long-term strategy of powerful US and British leading circles towards the future sovereign existence of the Peoples’ Republic of China. Some three decades ago China under Deng Xiaoping saw the introduction of a “socialist market economy.” In many respects the policy succeeded beyond the wildest dreams of many Chinese and indeed, of much of the world. The industriousness and creativity of the Chinese people has been a major cause of the economic success that elevated China from an economically poor country in the 1970’s to the economic colossus it is today.

The second factor that made the astonishing rise of China possible, however, was the growing interest of North American and certain European major powers in using the world’s largest and cheapest labor pool to gain dramatic increases in manufacturing profit through what came to be called “out-sourcing.” The initiative for the China opening came from powerful circles inside the United States. The key figures preparing Nixon’s historic 1972 Beijing meeting with Chairman Mao were then-National Security Advisor Henry Kissinger, and his assistant, Winston Lord, who would later become US Ambassador to China. Nixon’s Beijing initiative was in reality decided by the Rockefeller faction in US foreign policy. Both Kissinger and Lord were close protégés of the Rockefeller group.

When Mao met with Nixon in 1972, the only other US official present in the room – in a meeting that excluded Secretary of State Rodgers – was Kissinger’s assistant Winston Lord. For US policy circles, the US-China opening constituted a geopolitical strategy to win China as an ally against the Soviet Union during the Cold War.

In 1979 Deng, with strong encouragement from US circles, made the decisive shift to the “socialist market economy.” It was a brilliant and daring move, but not one without danger. In 1989, at the same time as a US strategy had led to the downfall of the Soviet Union, the CIA, acting through US Ambassador to Beijing Winston Lord and his CIA-tied successor, James Lilley, set off a chain of events that came to be known as the “Tiananmen Square massacre.” All indications are that it was intended to create political chaos inside China aimed at weakening the control of the Communist Party over China’s economic transformation. In any case, the US plot failed, but not before exacting a high price in terms of isolating China in the world politically and economically.

After 1989, as the People’s Republic moved to more open foreign investment and towards membership in the World Trade Organization, China became a preferred market for foreign direct investment by US and European multinationals. Over the past twenty or more years the results of that investment have been astonishing. China today is the world’s largest exporting nation in dollar terms and the second largest oil importer after the United States.

However, Chinese policymakers must never lose sight of the fact that once all the friendly handshakes and smiles and many toasts to US-China friendship fade, at the end of the day, US foreign policy, like British foreign policy before it – notably during the Opium Wars – is driven by American national interests. It follows the dictum laid down by Britain’s Lord Palmerston: “Nations have no permanent friends or allies, they only have permanent interests.”

From the time of Washington’s first China opening in 1972 until the fall of the Berlin Wall in 1989, the US “interest” in China was to subtly use the country as an antagonist against Soviet interests geopolitically. Once it became clear that various US policies had brought the Soviet regime of Gorbachev to its knees in 1989, the US intelligence circles around the Rockefeller-Bush faction attempted a similar destabilization of the CPC (Communist Party of China) regime in Beijing. They manipulated leading members of the CPC, including General Secretary Zhao Ziyang and others, to push for rapid economic reform – the kind of free market “shock therapy” dictated by the International Money Fund (IMF) – that devastated Russia and most of eastern Europe after 1990.

Following the collapse of the USSR in the 1990’s and the accession of China to the World Trade Organization (WTO), it was in the US security “interest” to flood China with investments aimed at making China a world export leader. However, the exports were US and European products, from cars to iPhones, that were now manufactured in China at extremely low wage levels. The profits largely went to US bank accounts, not Chinese.

Until around 2005, a policy of rapid economic growth in China was seen as no threat to US national “interest” – so long as the growth was based largely on the US-backed “free market” model. However, as China grew, her appetite for imports of oil, iron ore, copper and other commodities led China’s leaders to engage in bold and effective foreign economic diplomacy. The initiatives spanned the world, from Africa to the Middle East. China was slowly shifting from a useful source of cheap labor for American multinationals like Walmart, to a potential threat to future US hegemony, especially in Africa, Asia and the oil-rich Middle East.

Step by step, just as with the boiling of frogs, Washington has been turning the heat up on China since about 2005. Today it is dangerously close to a boil. It is not too late for China, but its people and leaders must have absolutely no illusions about the ruthlessness and determination of their adversary, the elite policy circles of the Anglo-American axis. The book you are about to read details how US policy circles increasingly plan to mortally wound and eventually kill China’s economic wonder.

– F. William Engdahl, Frankfurt am Main, April, 2014