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China: Deceptions, Delusions and Denials

By October 7, 2005 No Comments

The following was a presentation by Brian McAdam on September 7th, 2005 to Public Forum: Focus on China, University of Ottawa. It comes with the permission of the Yang Hongmao Society – a group dedicated to the study of China’s relations with the Western World.

Canadians have to contend with five myths about China that have been perpetuated for a very long time. These are very powerful myths that have been the foundation of Canada’s relationship with China.

Myth #1 Trade with China is beneficial to Canada

Hints are thrown out that China has 1.3 billion customers and everyone should jump on the bandwagon. The government of China is adept at providing incentives for foreign countries and companies — incentives to support China’s needs and purposes. Those who fail to comply with China’s wishes are told there may be dire consequences. For example Canada’s trade with China will be greatly affected.

In fact Canada’s relationship with China trade seems to trump everything – especially human rights and even Canada’s own security. So I wish to present to you tonight some facts that are rarely said.

Trade with China may be beneficial for a select few, but not for all Canadians. Yes, Canada is exporting more to China – natural resources such as coal and oil to fuel their industries, but few ever talk about the other side of the coin. Instead, officials parrot the hype:

China is a priority market for Canada. It is the fastest growing economy in the world; it ranks in the top 10 world economies, currently on par with Italy, and ranks second in terms of purchasing power. China’s emerging middle class has the potential to soon become 200-million strong.”

Canadian companies and their government see that the train is leaving the station and they want to catch it. If we don’t someone else will. In short, in today’s interdependent world, China’s continued success is vital to our continued success. China is now Canada’s largest Asian trading partner. Globally, China is Canada’s second largest two-way trading partner with over $23 billion in bilateral trade in 2003. Preliminary figures for 2004 indicate growth of more than 30 percent in two-way trade between our two countries… China — as evidenced by the number of Canadians in this room – is at the top of Canada’s priority list as an export market and investment destination.”

The reality is that Canada has been rapidly developing a significant trade imbalance with China instead of “a modest balanced trading relationship” we had a decade ago. The deficit with China was larger than with any other single country. On a dollar basis, Canada imported four times as much from China as it exported. [Authors’s emphasis, with material drawn from Statistics Canada].

Canada’s recorded merchandise trade deficit with China has increased almost ten-fold since 1993, reaching to a record of $17.5 billion in 2004.

China is exporting hi-tech items to Canada like computers, cell phones, video recording equipment, etc., while Canada is still mainly exporting agricultural products to China; contrary to expectations. The structure of trade between China and Canada would make you wonder which one is the developed economy and which one is the developing country.

To make things worse, Canada is also losing out in its exports to the US as China is able to under-cut Canadian prices. [1]

Listening to the China trade hype one would think the amount of exports to China must be enormous. In fact, less than 2 percent of Canada’s total exports go to China, while 86.9 percent of Canada’s exports go to the United States.

Canada’s trade with China is not beneficial. [2] There is also a hidden cost most Canadians never consider.

“According to estimates from the Laogai Research Foundation, there are 6.8 million people incarcerated in China’s 1,100 labor institutions making slave labor goods being consumed by free-spending Westerners oblivious or indifferent to the plight of these poor souls.”

Myth #2 China has 1.3 billion customers

Cracking into the billion-consumer market has always been the goal of the Canadian government and has dominated the China/Canada relationship.

Many are lured by the idea that “If you can sell a widget to every person in China then that’s a billion dollars and you can go play golf the rest of your life.” [3] But all the evidence, historical and actual, shows this market to be a mirage. Phil Brennan of Newsmax explains:

That 1.3 billion-person market shrinks dramatically once it is looked at with cooler eyes: A whopping 900 million are peasants earning incomes so tiny it’s doubtful they could afford a bottle of Coke. An additional 100 million are unemployed rural workers who have moved into the cities seeking work. Without incomes, they are without purchasing power.

Using any arithmetic, that’s a cool billion … driven from the equation. The 1.3 billion shrinks to 300 million, a population roughly equivalent to [the US]. Among them is an emerging middle class with incomes a fraction of that of Americans.

The Chinese have companies too.” China, he adds, is “not a commercial void. Chinese businessmen are just as interested as American businessmen in selling to the Chinese. And they’re better positioned.

Finally, there is that matter US businessmen are not prone to talk about: China is a communist dictatorship with a huge and corrupt bureaucracy that tends to stick its fingers into every phase of Chinese life.

Yet despite all these drawbacks, American business continues to dream… largely ignoring such markets as India, which the New Yorker points out also has a billion people who are better educated and many of whom speak English.

US companies are sometimes forced to transfer technology to Chinese partners as a condition in business deals. The Chinese government violates its WTO [World Trade Organization] obligations when it expressly requires technology transfers as a condition of doing business. It is also able to compel such transfers through use of its regulatory powers as well as its extensive role in the economy. These technology transfers pose substantial economic and security concerns for the United States.

–(2004 US-China Economic and Security Review Commission Annual Report to Congress).

Myth #3 China is becoming democratic

The Canadian government’s commercial diplomacy with China includes the faddish belief that what seems to be China’s move towards capitalism will lead eventually towards democracy. However, “the ruling Chinese elite holds a different view,” and does not “see China fated to evolve into a liberal democracy,” according to academics at Columbia and Princeton universities. The elite believe the Communist Party should stay in power. [4]

The Communist Party is not, as is invariably said, in transition from communism to a freer and more democratic regime. It is, instead, an autocracy while some also believe it is a maturing fascist regime. [5]

Myth #4 China has improved human rights

The Chinese Communist Party (CCP) is responsible for the deaths of more people than both Hitler or Stalin combined: An estimated 47-75 million people, and has an abominable record of abuse of human rights. [6]

Despite these facts, China’s leaders were given warm welcomes when they visited Canada; so too were the head of China’s intelligence who was involved in China’s murderous Cultural Revolution and the PLA (People’s Liberation Army) general who carried out the Tiananmen Square massacre.

The former and current administration is very reticent to criticize China’s human rights abuses such as forced abortions, religious and political repression, selling prisoners’ organs, mass executions and torture.

The Canadian government’s sycophants, apologists and propagandists do not want to address that the Chinese Communist government still actually and literally imprisons and tortures people, often to death, for their religious beliefs or activities.

Before former prime minister Jean Chretien’s first Team Canada trip to China, Foreign Affairs’ China experts advised him that instead of uttering the words “human rights” he should use the phrase “good governance and the rule of law.” [7]

A representative of Amnesty International said last week [in late August 2005] that “there is no improvement in human rights in China, and in certain areas, it has deteriorated.”

Myth #5 China is benign

Few in the Canadian government are familiar with China’s dark history. Most do not know nor have they made any effort to learn about the symbiosis of crime, business and politics in China.

Most Canadians cannot conceive of what Asian crime expert Bertil Linter describes as the “tangled web of bankers, gangsters, soldiers and spies” that exists in China and among the Overseas Chinese Diaspora. [8] Nor do they have any understanding of the implications of China’s emergence as a new superpower, which will use any means to achieve its ends even if it means the deaths of millions of its own citizens – or other people. Not knowing contemporary Chinese history, few can conceive of the barbarity and evil that the Chinese Communist Party is capable of.

Here are some reasons why we should not consider China to be benign:

Espionage: A joint CSIS/RCMP study in 1997, code named Sidewinder, warned the Canadian government about China’s espionage activities in Canada. It was aborted and denounced as a “conspiracy theory.” Eight years later we learn that China is indeed carrying out espionage activity in Canada.

Chinese defectors recently revealed that Beijing maintains a vast espionage network of more than 1,000 spies in Canada. Another Chinese defector warned Canadians of Beijing’s spy operations: Guangsheng Han says the luggage of important foreign visitors to China is routinely searched, Chinese delegations that go abroad frequently include spies and foreign embassies and consulates routinely engage in espionage.

China’s intelligence services have systematically targeted Canada’s science and technology sectors and use Chinese students and visiting scientists to steal technology for military use and to enhance the country’s global economic competitiveness. It is possible that Chinese spies cost Canada $1 billion every month through industrial espionage in terms of lost sales and markets. This loss represents twice the value of what Canada is exporting to China!

Spies are also charged with intimidating Falun Gong members in Canada. Falung Gong is a spiritual movement that was banned in China in 1999.

FBI Director Robert Mueller told the United States Congress that China has more than 3,000 “front” companies in America whose real purpose is to direct espionage efforts and acquire US technology for military purposes. “In Canada, intelligence reports indicate the number of Chinese front companies to be between 300 and 500,” according to an Asian Pacific Post article.

China’s Alliance with Chinese organized crime groups: As they did in the past – gangsters, officials, and China’s military are once again in an alliance. They collaborate to buy and spy to get high-tech secrets and political influence. Canadians are oblivious to what is happening and the threats this poses to Canada’s security.

Bertil Lintner, author and Asian crime expert writes: “Without the criminal underworld on its side, it would be almost impossible for Bejing to extend its writ beyond its frontiers, and that is what makes the new nexus between the Triads and China’s present leaders so dangerous for the rest of the world. China is, even more than North Korea, a state that feels that it has to engage in criminal activities such as drug running and the printing of counterfeit dollars to survive. And China needs the underworld to help it steal industrial secrets from more developed countries and to influence the politics of what is becoming its main rival, the United States.” [9]

The American government identified that Asian organized crime in Canada now poses a security threat to the United States! The report, entitled International Crime Threat Assessment, details how Chinese crime organizations from Hong Kong, Macau and Taiwan have exploited Canada’s lax immigration policies to establish a base for operations in the United States.

Political Interference: In the article Feeling the long arm of China: The Consul-General is making sure politicians know where her country stands, Jan Wong states “Interviews with politicians, community activists and documents obtained by the Globe and Mail show that the Toronto consulate and its friends have repeatedly tried to influence political decisions at the federal, provincial and municipal levels that conflict with the interests of China’s Communist regime.”

There are signs that the Canadian judicial system has become poisoned by Communist China’s misinformation. [10]

Military Threats: The US Government has cited China as the number one threat to global security.

China has been posing an increased threat to the rest of the world for a long time, with generals threatening nuclear attacks. It can launch nuclear weapons that in 30 minutes could kill one hundred million Americans.

A Pentagon report states that much of China’s defense strategy seems to be derived from guidance that then Premier Deng Xiapoing gave to the military and national security establishment in the early 1990s. This guidance, known as the “24 Character Strategy,” advises military planners to “observe calmly; secure our position; cope with affairs calmly; hide our capacities; and bide our time.”

The Epoch Times recently reported on a briefing General Chi Haotian, China’s former minister of defence allegedly made to China’s senior military leaders: The War is approaching us and War is not far from us and is the midwife of the Chinese Century [emphasis in original]. The following lowlights of what he allegedly said are shocking:

Would the United States allow us to go out to gain new living space? First, if the United States is firm in blocking us, it is hard for us to do anything significant to Taiwan and some other countries! Second, even if we could snatch some land from Taiwan, Vietnam, India, or even Japan, how much more living space can we get? Very trivial! Only countries like the United States, Canada and Australia have the vast land to serve our need for mass colonization.

There has been rapid development of modern biological technology, and new bio weapons have been invented one after another. Of course, we have not been idle; in the past years we have seized the opportunity to master weapons of this kind. We are capable of achieving our purpose of “cleaning up” America all of a sudden. When Comrade Xiaping was still with us, the Party Central Committee had the perspicacity to make the right decision not to develop aircraft carrier groups and focus instead on developing lethal weapons that can eliminate mass populations of the enemy country.

This yellow land has reached the limit of its capacity. One day, who knows how soon it will come the great collapse will occur any time and more than half of the population will have to go,

We must prepare ourselves for two scenarios. If our biological weapons succeed in the surprise attack [on, presumably, the United States but bioweapons would not be any great respecter of our common border – ed], the Chinese people will be able to keep their losses at a minimum in the fight against the United States. If, however, the attack fails and triggers a nuclear retaliation from the United States, China would perhaps suffer a catastrophe in which more than half of its population would perish. That is why we need to be ready with air defence systems for our big and medium-sized cities.

Yes, there are more skyscrapers, cell phones, cars, and Gucci products in China, but there is less freedom. Many are tortured, and China now has missiles targeted at the United States and has spies employed in stealing America’s nuclear secrets and technology from Canada.

Since Marco Polo first visited China 700 years ago, the Western World has believed that there are untold riches in China. The importance of China’s supposedly vast markets has been trumpeted for centuries, but “recent history is littered with the dashed plans of foreign companies that made disastrous miscalculations about China.” [11]

With very few exceptions, these ventures were disastrous, according to a new book The China Dream: The Quest for the Last Great Untapped Market on Earth by Joe Studwell. He writes that political leaders, international agencies and analysts have also been misled many times by the apparently unlimited opportunities in China.

In the 1990s, the “China gold rush” went to unprecedented levels as foreign investors to this day want to believe that dreams do come true. But, as Studwell argues, that century after century, China’s economy crashes and their dreams turn to dust. He predicts China’s economy will stall again with potentially catastrophic results that will be felt around the world. Studwell, who is one of the most respected business journalists covering China, predicts a full-blown economic and political crisis for China.

Canada has taken a Pollyanna, head-in-the-sand approach toward China, seduced by hopes of selling billions of widgets to China’s 1.3 billion people. The Canadian government is not only ignoring the threat China poses, it is also turning a blind eye to China’s despicable human rights policies – which are repugnant to Canadian values.

The Canadian government has failed to understand China’s strategy of trade, influence buying, and espionage to achieve their goals of building a modern military and to support the aims of the People’s Liberation Army and the Communist Party that rules China. [12]

The Canadian government has based its foreign policy relationship with China upon myths and delusions, while steadfastly denying that there are any problems with their relationship with the most evil and blood-soaked regime in the world today. In addition, there are those that willingly conspire with the Chinese Communist Party either for ideological purposes, or out of sheer greed.

How far will the Canadian government go to please Beijing?