One belt, one road
by Gen. Qiao Liang
General Qiao Liang' speech, which we've been allowed to publish, was delivered at the University of Defense, China’s top military school. It casts a light on China’s new strategic thinking.
This document, which general Qiao Liang has allowed us to publish, was delivered at the University of Defense, China’s top military school, where the general is in charge of the education curriculum for the officers. The speech therefore must have the endorsement of the leaders of the school and ultimately also of the president of the Military Commission, Mr. Xi Jinping.
The document casts a light on China’s new strategic thinking. Beijing’s biggest challenge is not geopolitical but economic. This derives from a cold and cruel analysis of US behavior since 1944, the time of the Bretton Woods agreement, and more importantly since 1971, with the dollar decoupling from gold, and 1973 with the US imposing the use of the petro-dollar. Qiao Liang argues that the US goal in all these years was not just geopolitical; it was to accrue profits, and the US found a way, after the disastrously costly wars with North Korea and especially Vietnam, to make a profit out of regional crisis, with or without war. The general finds a dollar cycle of about 16 years: for 10 the US currency is weak, for 6 it is strong. The beginning of the strong dollar corresponds with a regional crisis that crashes a regional economy.
However, the US failed in its latest attempt to create a regional crisis around China in 2012 because Beijing didn’t fall for the US trap and get drawn into conflict with Japan or the Philippines over the Senkaku or the Scarborough Shoals. Qiao Liang is confident that China will not fall for a regional crisis and believes that new dramatic changes are ahead of us. The new bit money, which could well grow to dominate world finance, is challenging old transaction processes, and 3D printing may dramatically change production methods. These changes create a situation totally new for everybody and here Qiao Liang says the US should collaborate with other countries.
Therefore, according to this dispassionate analysis, China not only doesn’t see the necessity to fight a war but believes that a war directly or indirectly against America would be against Chinese national interests. It thinks that Washington will not fight Beijing for the next ten years, but to make sure that in ten years the US doesn’t change its mind, China must set its affairs in order and internationalize its currency, the RMB. This broad strategic vision also provides a deep justification for the ongoing anti-corruption campaign. China must hurry to overhaul its economy to face the risks of the next decade. If it doesn’t do it now, in a decade it could well be doomed.
This analysis then leaves ample room for collaboration with the US on the future risks that both face. In this analysis, China is confident, assured, and has a clear direction. Economists may agree or disagree with the analysis of the dollar cycles, but what is most important is that this analysis changes the playing field for the Chinese military: shooting weapons becomes not as important as understanding and managing finance. This should also help American military and strategists to better understand Chinese thinking.
(by Francesco SIsci)
First, the situation surrounding China and the US dollar exchange-rate cycle
1. For the first time in history, the emergence of the financial empire.
2. The relationship of the dollar cycle and the global economy
3. Now it’s China's turn
Second, whose cheese was moved by the rapid rise of China?
1. Why the birth of the euro provoked a war?
2. What does America want to balance with the "Asia-Pacific strategic rebalancing"?
Third, the secret that American soldiers fight for the US dollar
1. The Iraq War and the currency used in accounting oil deals
2. The Afghan war and US capital account surplus
3. Why aircraft carriers gave way to rapid global strike systems