US never go to war with China

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John Milligan-Whyte is called the "new Edgar Snow" and the "21st century Kissinger" and is the only non-Chinese to be elected the winner of the Social Responsibility Award from the China Business Leaders Summit.

John Milligan-Whyte and Dai Min are the executive producers and co-hosts of the Collaboration of Civilizations television series adapted by the eight books they wrote in the America-China Partnership Book Series published in English and Mandarin in 2009-2010 that created the "New School of America-China Relations."

They founded the America-China Partnership Foundation and Forum in 2008 and the Center for America-China Partnership in 2005, which was recognized in 2009 as "the first American think tank to combine and integrate American and Chinese perspectives providing a complete answer for America and China's success in the 21st century."

E-mail: info@CenterACP.com john.milliganwhyte@gmail.com website:http://centeracp.com/index.php

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Peaceful coexistence has today become both all that the US can afford militarily and economically and essential for US economic and national security. The Iran and North Korea crises are becoming impossible for the US to defuse without long over due new US policies towards China. The limitations of American military and economic power are unfortunately dangerously self-evident. The US military is already over extended and bogged down in two long wars. The US financial, economic, unemployment and government solvency crises are relentlessly entering even more dangerous stages. It is easy for the US to start or be forced into new wars that are impossible for anyone to win given the potential speed and economic impact of major wars. The world has changed. Conventional American policies and policymakers' mindsets must change faster than they can.

Fortunately, President Obama recognizes the need for and is now urgently searching for unconventional policies capable of bring the US back from the brink of economic collapse and unbearable humiliation or catastrophic wars with Iran and North Korea that can overnight engulf the Middle East, Asia and the world in economic, social and political collapse. In addressing the US economic crisis President Obama declared, "What we can't do is go back -- now that we're starting to climb out of this hole that was dug for us, we can't go back to the very same policies that failed us in the last decade; the same policies that led us into that hole," the Washington Post reported on June 2, 2010.

What is China to do? New American policies towards China are essential for the US and China to be able to solve the America's economic and the North Korea, Iran and other national security crises. Conventional American policies exacerbate rather than solve these crises for the reasons explained by the Center for America China Partnership's books and articles and now fortunately by Thomas P.M. Barnett.

On June 2, 2010 Thomas Barnett stated that China: "can now legitimately claim to be working on behalf of the global economic security as much or more than America. In short, it can claim that 'what is good for China is good for the world,' an argument to which only America could lay serious claim in past decades. This is why we're never going to war with China; codendency on globalization is profound."

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US News & World Reports describes Thomas Barnett as "one of the leading strategic thinkers of our time." Barnett has seen and understood the world from his roles of senior advisor to the US Secretary of Defense, Chief of Staff, Central Command, Special Operations, and led the five-year NewRulesSet.Project for the U.S. military. He is the author of two books that have been profoundly influential: The Pentagon's New Map: War and Peace in the 21st Century and Blueprint for Action: A Future Worth Creating. Barnett's comments were posted on his website, http://www.thomaspmbarnett.com/globlogization/2010/6/2/whats-good-for-china-is-good-for-globalization.html, in response to an article in the Financial Times on May 24, 2010, http://www.ft.com/cms/s/0/de337ab6-66ca-11df-aeb1-00144feab49a.html.

The Financial Times article titled "The way to increase America's exports to China" was published as the second round of the Strategic and Economic Dialogues began by Dr. Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a subsidiary of China's Ministry of Commerce, and John Milligan-Whyte, chairman of the Center for America China Partnership. Barnett quoted five paragraphs from the article stating that they are a "nice summary of China's thinking regarding our bilateral economic relationship" and "an excellent and hard-to-refute summary argument." These are those paragraphs:

"America is used to having it all its own way. In 1972, as the US opened diplomatic relations with China, it abandoned pegging the dollar to gold. That enabled it – through its monopoly on printing US dollars – to create huge trade and investment advantages. Its economy grew strongly as it managed the value of its currency at the expense of other nations.

Washington has not always fully acknowledged that from 2000, the year China joined the World Trade Organization, to 2008 the US dollar declined against many currencies, while from 2005 to 2008 Beijing gradually increased the US dollar exchange rate of the renminbi by 21 per cent.

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The US stimulus plan increased America's debt and deficits and will decrease the value of the dollar. China increased its holding of dollars as America's other trading partners reduced theirs. As the US financial crisis loomed, China pegged the renminbi to increase stability and exert a positive influence on its economic recovery. It will keep a relatively stable renminbi exchange rate to ensure its economic growth is steady rather than uncontrollable, which would harm all nations. Currently, China is providing stability as the largest holder of US government debt and US dollar-denominated reserves.

China-US relations changed when the world learnt that America's financial system would collapse unless the government saved insolvent US-based global banks, insurance companies and carmakers. The bail-out turned the US government into the largest shareholder of formerly privately-owned companies, subsidising their commercial failure. Laisser faire theories, which US policymakers still demand that China adopt, were suddenly replaced by massive US government control of market forces.

The US often pursues policies that are "win-win" for itself alone. Its policy­makers would undermine China's vital national security and economic interests while seeking China's help in protecting America's vital interests. But the reality is that the policies America proposed are implementable and sustainable only if they are beneficial also for China. The Strategic and Economic Dialogue should focus on new US policies instead of trying to change China's policies, which are essential for global economic recovery.

Thomas Barnett has an extraordinarily American reputation and track record of successfully prompting American policymakers to realize that profound changes in US military strategic thinking are required. Today the US's conventional economic and national security policies have not provided either economic or national security although the US economy is by far the largest in the world and US military spending is over half of all nations. As Paul Kennedy explained in 1987 in The Rise and Fall of Great Powers, America was over extending itself militarily and economically, as Rome, Spain and England did. American policymakers ignored Paul Kennedy's analysis which has become reality unfortunately.

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New US armed conflict with North Korea or Iran will be catastrophic for the US and global economy. Military expenditures are 18 percent of the Obama's administration's budget. The US government has enormous deficits and debt that are already unsustainable at even current levels. China is the largest holder of US debt and dollars and its support for the US is vital for capital market confidence in US government's monthly debt issues. China as it should be, is helping the US to stabilize an unstable global economy. In doing so, it is indirectly funding America's military and other policies. Iran supplies 25 percent of China's oil and US armed conflict with Iran could quickly limit US and China oil supplies and cripple the US and global economy. Heavily armed, erratic and economically fragile North Korea is China's neighbor dependant on China for its oil and economic viability. North Korea's peaceful coexistence with the US is critical to the safety of South Korea, Japan, Asia's and global peace and economic growth. This kind of tinderbox of oil needs and alliances triggered two world wars in the past century.

US policymakers find it difficult to change their mindset or policies. They must immediately because of the American people's rapidly growing financial, economic, unemployment, government solvency, national security and military crises.

Chinese policymakers have understood for thirty years, as Thomas Barnett stated this week, that America and China must never go to war. President Obama implementing that advice requires healthy changes America's whole relationship with China. China's military spending is 12 percent of the US, although its population is 500 percent larger. China has been at peace with all nations since 1979 and had the fastest growing economy in the world because it's policymakers adopted Deng Xiaoping's policies of opening up to foreign investment and peaceful coexistence with America and all other nations. America must now reciprocate Deng Xiaoping's policies. President Obama must become America's Deng Xiaoping.

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For 60 years there has been a fundamental core problem in US-China relations that only President Obama can and needs to change now: US policymakers and policies have not accepted the legitimacy of the Chinese government. Chinese policymakers were optimistic when President Obama was elected with the promise and mandate for change at a time of profound American economic and national security crises. It has been 60 years since the birth of modern China and resulting outbreak of the Korean War, which never formally ended as the sinking of a South Korean naval vessel reminded us. The views of Thomas Barnett quoted above support an unconventional perspective for American policymaking: that America should accept peaceful coexistence with the 22 percent of mankind and the legitimacy and success of their indigenous government. It has been very successful in managing sustained economic growth, social and political stability, peaceful foreign and defense policies, and reform and opening up to American investment.

China's policymakers are ready, willing and able to help America's policymakers and people deal successfully with the most serious financial crisis in 100 years. Every leader of China including Mao Zedong wanted to an arrangement of peaceful coexistence with the US. However, Secretary of State Dulles would not even shake hands with China's Premier Zhou Enlai. After testing the Chinese in the Korean and Vietnam Wars, President Nixon and Secretary of State Kissinger were delighted to shake hands with Mao Zedong in 1972.

President Obama has the genius and constitutional ability required to now lead America in embracing and reciprocating China's policies of peaceful coexistence, which is the only thing that will solve the current and prevent future conflict between the world's two largest economies. The time has come for American policymakers to really accept China's government's legitimacy, capabilities and admiration and desire for friendship with America.

To clear the way for the breakthrough in US-China relations that is now as urgent as it is essential, President Obama needs to be the first US president to fully transcend the core problem in 21st century US-China relations: five generations of conventional American policymakers' ideologically driven hostile and therefore ineffective China policies.

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Senior American policymakers are part way thru the change in mindset and policies, but part way is not enough now because of the Iran and Korean crises. US China policies are based on tragically outdated 20th century assumptions. Many US policymakers' mindset towards China is today driven by Cold War goals and strategies seeking to destabilize and defeat China in the now fundamentally changed circumstances of the 21st century.

America's conventional policies are undermining global security and economic growth. These include selling arms to Taiwan, when cross-strait relations are steadily improving or because they are improving, and funding the Fung Gong to creating software to circumvent Chinese internet censorship, which the State Department announced just before the second round of the Strategic and Economic Dialogues, and funding unrest in Tibet and Unger, constant military information gathering that creates dangerous and unnecessary confrontations with Chinese military forces and collisions in the air and confrontations at sea, and the many other policies that endanger American economic and national security by seeking to undermine China's economic and national security.

Today, US policymakers simultaneously seek to undermine China's economic and national security and seek Chinese policymakers' help in protecting America economic and national security. This is an astonishing and relentless mistake that was less important before the current crises. Tomorrow it can destroy the American and Chinese peoples economic and national security. It can destroy mankind, without seeking to do so. Modern war between the worlds two largest economies has been termed "unrestricted war" and it is fast, economically devastating and foolish.

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Fortunately Thomas Barnett and others such as General Peter Pace, former Chairman of the US Joint Chiefs in the last Bush administration, recognize that the US needs a new approach with China. But neither they nor President Obama have announced that they have worked out what the US's 21st century China policies should be. They are obvious to President Hu Jintao and other Chinese policymakers, including China's military, but the Chinese have not been able to get Americans to understand. The new approach is presented in the America China Partnership Book Series, which the Chinese state created a "New School of US-China Relations" in 2009. It has been summarized in a shared blueprint for American and Chinese policymakers in A White Paper for the Presidents of America and China. And the American people have elected a President like Barack Obama who recognizes the change is urgently required. Both were essential to get the need for the obvious new policies understood in America.

During the past six American presidents' administrations, three generations of China's policymakers' have unilaterally implemented the Principles of Peaceful Coexistence. American policymakers have not realized how profoundly that benefits America. That failure is astonishing after the Korean War and Vietnam Wars in which American policymakers' tested China's conventional military prowess. Nonetheless China has been unilaterally implementing the Principles of Peaceful Coexistence, which American policymakers enshrined in the UN Charter after the globally catastrophic lessons of World Wars I and II. The last time the nations of the world faced economic conditions like those we face today, our forefathers endured a ten-year global depression and five year global war. It ended with the invention and use of weapons and science so powerful that a replay of past mistakes will likely make the earth uninhabitable by our species.

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That is why today, Chinese policymakers are using extraordinary means of signaling President Obama personally that American policymakers are making serious mistakes because of their conventional mindset. One example is the continuing arms sales to Taiwan because American policymakers, including Secretary of Defense Gates and other senior decision makers in President Obama's administration just do not "get it." They have not yet understood that a historic change in US China policy is needed and profoundly beneficial to US vital and other interests. In response to the Bush administration's last US arms sale to Taiwan, China suspended military-to-military exchanges and refused to allow an American aircraft carrier to enter Hong Kong. American policymakers simply resented and did not understand or did not accept the point the Chinese were making. They disregarded China's government's and the Chinese people's sentiments.

In light of the North Korean and Iran crises where, unlike the cross-strait relations of China and Taiwan, things are getting significantly more dangerous rather than improving, Chinese policymakers are concerned that similar types of errors in judgment by the US or its allies in responding to crises in North Korea and Iran or elsewhere today or tomorrow will plunge the world into ruin. They are concerned that US policymakers' zero sum game mindset, problem solving habits and strategies could cause serious a chain of events leading to disaster in the Middle East and Asia. They are concerned that American policymakers are not yet really willing to effectively collaborate with Chinese policymakers in creating reciprocally beneficial and implementable economic and military solutions to the global natural resource supply problems of the US and China and other dangers. They are concerned that American policymakers could present the world and China very suddenly and soon with limited and then only appalling options.

President Obama hopefully will ask himself, "Why would Chinese policymakers take such an extraordinary action of declining to meet with Secretary of Defense Gates," who is seeking to paper over issues like the Taiwan arms sales and seek Chinese support for conventional American policymaking solutions that will not defuse the North Korean and Iran crises?

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Chinese policymakers are sending a unique public signal to President Obama regarding the serious level of their concern by refusing to accept meetings not merely with US military leaders as before, but with Secretary of Defense Gates, as a result of the Obama administration's Taiwan arms sale. This creates a crisis that is itself very dangerous as it promotes US hostility. But the unique signal sets up the need for a president-to-president discussion of and creation of a profoundly better and different relationship between the US and China that is essential.

American policymakers wonder what has changed, since they are merely continuing conventional US policies of selling arms to Taiwan irrespective of China's national security needs? Everything has changed. American policymakers do not understand sufficiently that the US's relationship with China has abruptly and prematurely forever entered a new 21st century era when the US Federal Reserve Chairman Bernanke and Treasury Secretary Paulson told the world that the US financial system and economy would collapse without immediate government bail out of insolvent American banks and insurance companies. Now America is itself, like many nations, insolvent. What has changed is what Paul Kennedy feared would happen in The Rise and Fall of Great Nations published in 1987. Hopefully, President Obama will agree with Thomas Barnett's recommendations.

Presidents Obama and Hu Jintao will meet at the G8 summit meeting on June 25 to 27 and discuss face-to-face the rapidly developing crises in North Korea, Iran, the global economy, the lack of capital market confidence in far too many nations' solvency. President Obama urgently needs to find and announce new China policies soon in the "new era of partnership" he indicated in 2009 that he was launching. A new era requires new policies. These new US policies to be successful must be to reciprocate China's opening up to American investment and non-intervention in China's internal affairs and the commitment to peaceful coexistence with China. Nothing else can quickly, adequately and permanently improve America's economic and national security. Only a breakthrough now in discussions between the two presidents can restore the capital markets confidence that the volatile interaction of global military crises and financial and economic crises can be managed. Foreseeable events now can suddenly undermine confidence in all currencies if the simultaneous ominous economic and geopolitical crises can not be successfully managed. Without such new confidence the world will become economically, militarily and politically unmanageable by any combination of states actions.

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A White Paper for the Presidents of America and China that was delivered to the US Ambassador to China on November 1, 2009 is being posted now on the Internet. It presented ten new key questions for President Obama in formulating his China policies. The White Paper's first question is does President Obama believe that for America to win China must lose as many US policymakers do? He addressed this saying "There is room for us both" at the press conference following his November 17-18, 2009 meetings with President Hu Jintao.

The second question is whether he believes that protecting America's economic and national security require that America prepare for and conduct war with China? Many US policymakers and US trade, foreign and military strategies towards China are based on the assumption that the US must do so. Are US policymakers going to raise taxes or borrow the money from China to prepare for and conduct such a war?

The third question is does President Obama believe that many existing American policies towards China undermine America's economic and national security? The White Paper cites as an example, that US policy is to prevent Chinese oil companies from buying American oil companies, prevent China from interfering with America's sources of oil and acquiring oil from nations America disapproves of such as Iran. This approach seeks to be win-win only for America and is not realistic. America and China, the two largest economies, consume more oil than they produce. Many US policymakers today believe that this makes war between the two nations inevitable.

It means exactly the opposite. The two nations that consume 42 percent of the world's oil must be both economic and military allies, aligning their economic and national security in a new era of peaceful coexistence, or neither will have the oil they require. It benefits no nation for oil to vary in price from 47 to 147 US dollars a barrel. Collaborating America and China could stabilize the price of oil at a price of 65 to 70 US dollars a barrel benefiting all nations and militarily and economically ensure the peace that is essential for steady oil production and transportation globally. The US and China entering a new era of really collaboration, because they both recognized they will never go to war, would change the Iran and other issues profoundly.

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The eighth question is whether President Obama believes that major American companies, such as General Motors, can remain profitable anywhere if it they are not profitable in China? America's new China policies must be reciprocally beneficial for America and China's trade, economic growth to be collaborative.

In summary, Chinese policymakers refusing the US Defense Secretary's request to visit China signals President Obama personally that conventional American policymaking will not be effective in the Iran and North Korea crises. It signals President Obama personally that Chinese policymakers need the US to accept the legitimacy and success and reciprocate the peaceful coexistence policies of China's indigenous government, and to reciprocate and open up to Chinese companies investing, and thus creating US and Chinese economic and employment growth. That breakthrough is what is essential to make the world governable.

By John Milligan-Whyte and Dai Min

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The key issue is US policies restricting trade with China

By John Milligan-Whyte and Dai Min

The United States is the world's leading "currency manipulator." However, Chinese policymakers have not publicly threatened to declare that the US is because they recognize that such conflict between the world's two largest economies during the global financial and economic crises would harm all nations. The US dollar has been the currency used in international trade since the Bretton Woods Agreement in 1944 in which the U.S. government, which then held an estimated 60 percent of the world's gold reserves, promised it would exchange on demand an ounce of gold for every thirty-five US dollar notes it printed. In 1972, as the U.S. opened diplomatic relations with China, President Nixon also announced the US was officially abandoning that promise to peg the value of the US dollar to the market value of gold. By then, the US had already printed, according to a leading Chinese expert, 5800 percent more US dollars than the gold the US held. Chinese policymakers know that successive America administrations' manipulation of the value of its currency and monopoly on printing US dollars enabled American policymakers to unilaterally create decades of huge trade and investment advantages and economic growth for the U.S., which has led the world in managing the value of its currency at the expense of other nations.

Prior to the recent second round of the Strategic and Economic Dialogues, President Obama indicated in a strongly worded statement that America needs to make a decision on labeling China a "currency manipulator" and that his administration was going to get tougher in demanding that China promptly increase the exchange rate of the RMB to the US dollar in an attempt to help America recover and increase American exports. Such a statement by President Obama is not what has come to be expected by China and was deemed entirely unacceptable. An American president publicly threatening a serious currency exchange rate confrontation with China is an example of why it is an illusion to think that disputes seeking to harm China's core economic and national security interests can be compartmentalized from reducing China's policymakers scope for collaboration in supporting America's core economic and national security interests.

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President Hu Jintao and President Obama subsequently discussed the valuation of China's currency on the sidelines of the Nuclear Summit in Washington. At the recent annual Strategic and Economic Dialogue U.S. Treasury Secretary Timothy Geithner said that it is "China's choice" whether or not it revalues the RMB. American policymakers are wisely beginning to interact with Chinese policymakers, at least in the executive branch of the US government, with respect instead of insulting them with criticism, as has been the case in past. Treasury Secretary Geithner stated at that time, "I am confident that China will decide it's in their interest to resume the move to a more flexible exchange rate that they began some years ago and suspended in the midst of the crisis." President Obama's press secretary then stated, "The administration will continue to press the Chinese to ... value their currency in a way that is much more market-based. That is the way we think is best at this point, and I think you've seen reports of the past week or so about the Chinese beginning to take some steps and realize on their own that this is the best path for them." Japan acceded to American demands that it revalue its currency with devastating effects it is still struggling to recover from. In the case of American demands that China promptly increase the RMB's exchange rate, China, America and all other nations would be harmed.

China-US relations began a new era on September 16, 2008, when Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson abruptly informed world that the United States financial system would collapse unless the government stepped in to save insolvent America-based global banks, insurance companies and automakers. The emergency approval of the US$ 862 billion bailout revolutionized the American government's commitment to a market economy, by turning the American government into the largest shareholder subsidizing the commercial failure of formerly non-state-owned leading global American companies. The failed laissez-faire economic theory, which American policymakers still demand China adopt, has failed in the real world and been replaced by a new era of massive American government control of market forces.

In preparation for the G20 meetings on June 26-27 China has announced that it will resume its incremental currency reform. This will enable the real causes of trade imbalances between the US and China to be discussed, such as US restrictions dating from the 20th century's Cold War era to be lifted, so that China can purchase the high technology products it imports from Europe to also be purchased from the US. China's political system enables its economy to be more "scientifically managed." The global financial crisis, and resulting economic, unemployment, government solvency and social problems in many nations have highlighted the stability and sustainable design and growth of China's economy, which is driver of global economic growth. It has grown at 8.7 and 8.2 percent in 2008 and 2009 and to date at over 11 percent this year in spite of the global financial and economic crisis.

The now almost 2 year old and growing financial and economic crises in the US, European Union and other nations has revealed that in today's globalized economy, as in nature, diversity and adaptability is the key to survival and evolution. If China's political and economic model was the same as the US's both the largest and second largest economies on which the other 192 nations' economies depend for economic growth would be malfunctioning simultaneously.

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China is the largest importer in the world. China's economic success is essential for the US, European Union and all nations recovery. China's policymakers will do all they can, short of destabilizing China's economy which would damage the global recovery, to help China's trading partners in both the developed and developing worlds. Although China's economy has become the second largest China remains approximately the 100th poorest country with 1.5 billion people with a per capita income that is about 8 percent that of America's 302 million people. Chinese policymakers will strive to ensure that its economy remains manageable while resuming the implementation of incremental RMB valuation increases. China will seek to ensure that the RMB exchange rate changes enable its economic growth to continue rather than become uncontrollable, which would harm all nations.

After China joined the WTO the US dollar declined in value 40 percent from 2000 to 2008 and from 2005 to 2008 China gradually increased the US dollar exchange rate of the RMB by 21 percent. But America's trade deficit globally and with China steadily grew nonetheless. Now America's huge stimulus-spending plan increased the US debt and deficits and will further decrease the US dollar's value. Nonetheless, in 2008 as the crisis loomed, China increased its holdings of US dollars as the U.S.'s other trading partners reduced theirs. At the same time, China pegged the value of RMB to the US dollar to increase stability and exert a positive influence on the Chinese economic recovery. Currently China is providing stability as the largest holder of U.S. government debt and US dollar denominated reserves.

Instead of triggering a fundamental economic and trade confrontation over the exchange rate of the US dollar and RMB, American policymakers in both the Obama administration and the US Congress now seeking increased China-U.S. trade and economic cooperation need to protect the mutually beneficial interests of both countries. To increase exports to China, the U.S. will need to remove American policies that restrict trade with China and propose policies that are reciprocally beneficial for both nations, which China's policymakers and people can implement and sustain. Continuing to restrict China's exports to the US while seeking to increase the US's exports to China is in neither the US nor China's interests. That is the issue that President Obama's administration must prepare a meaningful solution for at the G20 meetings and beyond.

John Milligan-Whyte is called the "new Edgar Snow" and the "21st century Kissinger" and is the only non-Chinese to be elected the winner of the Social Responsibility Award from the China Business Leaders Summit. John Milligan-Whyte and Dai Min are the executive producers and co-hosts of the Collaboration of Civilizations television series adapted by the eight books they wrote in the America-China Partnership Book Series published in English and Mandarin in 2009-2010 that created the "New School of America-China Relations." They founded the America-China Partnership Foundation and Forum in 2008 and the Center for America-China Partnership in 2005, which was recognized in 2009 as "the first American think tank to combine and integrate American and Chinese perspectives providing a complete answer for America and China's success in the 21st century."
E-mail: info@CenterACP.com; john.milliganwhyte@gmail.com