[Peter Goldmark] China as global rescuer

A hypothetical letter from the Western-educated daughter of China’s next paramount leader:

To: Comrade Xi Jinping

From: Your daughter

Respected Father,

As you prepare to assume the leadership role in China, I write to share with you thoughts on the global situation and China’s role that I have gained here in my studies at Harvard University.

The financial tornado of 2008 and ensuing economic difficulties have left both Europe and the United States gravely weakened. The United States is in economic stagnation, and will not soon see again the growth rates of 3 percent to 4 percent per year it enjoyed in the past. The euro crisis has left Europe in a state of financial and political paralysis; it is not clear if their political union can survive. This means that the Atlantic institutions, such as the International Monetary Fund and the World Trade Organization, are weakened in turn.

The strength of the Chinese economy, its currency reserves and its continuing rate of growth, create a pivotal opportunity for China in the financial rescue efforts that must take place in Europe and perhaps in some American states, and a chance to refashion the global financial system so that it protects China’s interests.

Over the past decade, China has been forced to develop a worldwide network of natural resource arrangements. In Africa and elsewhere, we have concluded pacts to feed our insatiable economy with a steady stream of raw materials, from food to minerals.

But this system of overseas natural resource suppliers is precarious, dangerously vulnerable to military interference by third parties as well as to changing regimes and national policies. To address these risks, we should insist on long-term access to food, energy and raw materials in return for our assistance in financial rescue efforts that will be needed in Europe and perhaps in the United States.

The surest and fastest way to strengthen our ability to ensure that our network of suppliers survives is to parlay financial assistance into a stronger leadership role in the international financial system that establishes and enforces terms of trade, international lending and currency relationships. When the ship is going down, he who controls the lifeboats can call a lot of the shots.

Let me add a dash of realpolitik here. We need to have an implicit threat as well as to offer financial assistance. It is vital therefore to continue the drive for cyber-dominance now under way in China, both as a defensive measure but more important as the most potent deterrent our country can mount against those who might wish to bring pressure against us.

The question of which country can bring down another country’s life-support systems may be decided by margins as thin as those nanoseconds that presently determine the outcomes of battles between hyper-trading forces on the world’s stock exchanges. We need to continue training our cyber-shock troops so that we can dominate cyberspace, just as the United States dominated the arena of airborne intelligence and nuclear arms in the period after World War II.

Because the United States is weak and Europe is consumed with its own internal crisis, the circumstances are ripe for us to become, in effect, the world’s reserve banker ― insisting on natural resource concessions in return for credit, participating in financial rescue interventions (as we did already in Greece) and reshaping the global financial system to protect and assure our primacy. This should be done on a practical and cooperative basis. A stable global financial system that protects our interests is desirable and feasible; anything that destabilizes that system is not in our interest.

I wish you luck, dear Father, as you prepare for the vast responsibilities that await you. And I can only hope that some day after I return from Harvard, you may find a role, however humble, in which I can be of assistance.

Your loving daughter,

Xi Mingze

By Peter Goldmark

Peter Goldmark, a former publisher of the International Herald Tribune, headed the climate program at the Environmental Defense Fund. ― Ed. 

(Newsday)

(McClatchy-Tribune Information Services)