Facing the Dragon

Through decades of inscrutable Oriental diplomacy, China has succeeded in robbing Taiwan of all its former powerful friends. Across the Taiwan Strait, an old ally of the West now feels the hot breath of the Chinese dragon in its face.
From the January 1999 Trumpet Print Edition

East is east and west is west and never the twain shall meet. Thus wrote famed British author Rudyard Kipling amidst the golden years of the mighty British Empire.

Yet, contrary to this poetic observation on the seeming great gulf between the cultures, habits and traditions of the East which so separate it from the West, East did meet West, for a moment in time, during the 150 years of British possession of Hong Kong. But at midnight on June 30, 1997, British rule in the great merchandising sea port of Hong Kong came to an end. As has been stated by many, this was, in all likelihood, the last great British Imperial moment—and nothing has been the same since.

The Trumpet has well chronicled the startling economic and financial events which have rumbled increasingly around the world since that historic event. The Hong Kong handover was a seminal event that heightened the pressure on the floodgates of the “Asian contagion,” which burst through all its artificial restraints in the market crash of October 1997.

As was pointed out in our January 1998 edition, the handover “may turn out to be one of the most significant fulfillments of biblical prophecy in modern times” (“Asian Financial Meltdown”). On reflection, it should be evident to all that the British handover of Hong Kong to the mainland Chinese was an event that triggered dramatic change in the financial markets of the world.

Wall Street commentator Nick Guarino stated at the time of the October 1997 crash, “China has her own agenda. She was not going to stand aside and let the Hong Kong banks give capital to her enemies, such as Taiwan” (Wall Street Underground, October 1997, emphasis mine).

That is exactly the point. The great Asian tiger, mainland China, may well be awakening from the stultifying grip of 50 years under a traditional communist command economy, but it has simply been biding its time, awaiting the moment to successfully merge China, Hong Kong and Taiwan, Inc. into a conglomerate with which it could challenge the world.

Diplomatic Isolation

Following Margaret Thatcher’s visit to China in 1982, it became most apparent that Britain would not resist handing back Hong Kong to the Chinese at the consummation of its 99-year lease on the New Territories, the northern part of the British crown colony. Indeed, from the joint declaration governing the handover of Hong Kong, issued in 1984 by the British and Chinese governments, China could afford to be philosophical about its Hong Kong/Taiwan strategy, knowing that the ace-in-the-hole, Hong Kong, would fall into its lap just 13 years later. For this sly old tiger, possession of Hong Kong was the thin end of the wedge which would finally prize Taiwan out of its pariah status and into the clutches of mainland China.

Taiwan’s greatest trauma is its present diplomatic isolation. Since the time that deposed premier Chiang Kai-sheck was forced to flee, with his Kuomintang government, across the Taiwan Strait to the islands of Taiwan, communist China has maintained a binding policy of forcing the ultimate return of Taiwan to the Chinese fold by peaceful means or otherwise.

On the other hand, Taiwan has continued to hold unshakably to a policy that sees its government as the rightful rulers of the whole of China. However, the odds are overwhelming of Taiwan being swallowed up by communist China; especially when one considers the prospect of a powerful economy emerging in mainland China, with the world’s largest national pool of labor at its disposal. Only one opposing force has prevented this up to now: the demonstrated willingness of the U.S. to rattle the sabers of its military might in the Taiwan Strait when China has become aggressive.

All that changed on June 30, 1998.

China Courts America

Mainland China has courted and procured an ally in the leadership of the present U.S. government. But its relationship with Washington has been building for some time. Following decades of isolation from China, during which China was mostly viewed as an enemy, particularly as a result of the Korean and Vietnam wars, President Nixon broke the ice in 1972 with a visit to Beijing. Just one year previous, after China was admitted to the UN, Taiwan lost its UN seat. From Nixon’s visit emerged the “Shanghai Communique,” and with it the first crack in the wall that had shored up the U.S.-Taiwan alliance. In a carefully worded statement, the Nixon administration went public to declare its view on China and Taiwan. The communique stated that “the United States did not challenge the position that all Chinese on either side maintain there is but one China and that Taiwan is part of China.”

In 1978, under the Carter administration, a second communique was issued recognizing “the government of the People’s Republic of China as the sole legal government of China,” and acknowledging the Chinese view “that Taiwan is part of China.” The die was cast, sealing the ultimate fate of Taiwan. The upshot was, Taiwan’s diplomatic ties with Washington were ruptured and the treaty by which the U.S. had historically pledged to defend Taiwan from mainland aggression was canceled by the U.S. In 1979, American troops stationed in Taiwan marched out and returned home. China’s view, at the time, was that without guarantees of American protection, Taiwan would sink within three years.

It didn’t happen.

Means to an End

During the 1980s, as China developed its dialog with Britain in anticipation of its eventual takeover of Hong Kong, the aging Chinese premier Deng Xiaoping hit upon a catchall formula which was designed to fit the future of both Hong Kong and Taiwan in communist Chinese eyes.

The Chinese economy, under Deng, was evolving from a stultifying command economy into what the Chinese termed a “socialist-market economy.” This really meant that the Chinese were prepared to allow capitalist ventures on the mainland in order to kick start their ailing socialist economy into an end-of-millennium upgrade. The Chinese took to the new “socialist-market” philosophy like Peking ducks to water.

To explain how the Hong Kong and Taiwan capitalist economies would converge with the mainland Chinese economy, Deng hit on the convenient catch phrase, “One country—two systems.” Never in all recorded history had there been such a formula. Yet, in the Hong Kong deliberations, diplomats from both sides seized the concept and went to work to produce the joint declaration of 1984, intended to institutionalize Premier Deng’s “One country—two systems.” Chris Patten, the last governor of Hong Kong, realizing the longevity of Chinese strategic thinking, states, “Hong Kong was offered the guarantees of a protocol probably devised even more with Taiwan in mind. There would be one country, he [Deng] said—China—but two systems…” (Chris Patten, East and West, p. 29, emphasis mine).

The Chinese leadership was all too aware that most business between Taiwan and China is transacted via Hong Kong. The takeover of Hong Kong, with the retention of its systems of governance, commerce and administration, was to be but a stepping stone to the coveted prize of Taiwan, thus cementing the two greatest independent and thriving offshore Chinese economies with the mainland economy. “One country—two systems” was to revive the massive Chinese economic system.

As Nick Guarino has stated, “Capital-starved China has changed the game forever…. Hong Kong’s billionaire entrepreneurs are being handcuffed by the Chinese communists.” It now remains only for the multi-millionaire industrialists of Taiwan to be swallowed up in China’s hegemonic push across the Taiwan Strait—and Taiwan is quickly running out of both the time and the friends needed to support any resistance to this move.

It is obvious that China, following in the shadow of Japan and the four tiger economies of Southeast Asia (Hong Kong, Taiwan, Singapore and South Korea), has predominantly changed into an economic state. Although political union with Taiwan remains a prospect for the future, economically Taiwan is already part of what China watchers call “China, Inc.”

According to 1995 figures, Taiwan had an approximate $20 billion investment in China, plus $18 billion via indirect trade with the mainland through Hong Kong. In fact, the startling leap by China from the slough of a failed communist economy to the station of a leading trading power has largely been accomplished by the relocation of both Hong Kong’s capital and Taiwan’s labor-intensive manufacturing bases to the Chinese mainland.

Paradoxically, following the massacre at Tiananmen Square in 1989, the resultant sanctions imposed on China by Western powers proved a stimulus for Taiwanese businessmen. Despite their declaration of anti-communism as an article of faith, the Taiwanese rushed to fill the trade gap opened by the sanctions. In so doing they fell right into the tiger’s gaping maw! Welcoming them with open arms, Chinese authorities quickly established special investment zones for Taiwan. The results were startling for the Chinese export economy. Exports of toys rose by 41 percent in 1992 and shoe exports skyrocketed by 44.3 percent. Yet the downside for China was the serious collapse of its state sector, as many state enterprises’ best-trained workers and supervisors flocked to Taiwanese factories.

Since 1989, the scale of economic integration between Hong Kong, Taiwan and mainland China, particularly South China, has grown in leaps and bounds. The fact is, the Taiwanese economy is progressively being bound to that of China. This has particularly been the case since the East Asian economic meltdown. Like Singapore and Hong Kong, Taiwan boasts a more balanced economy when compared to the other Asian countries. This results from the frugality of its population, yielding high domestic savings rates, low debts and huge financial reserves. A by-product of the Asian contagion is that, while non-Chinese Asia is drawn into recession, the three Chinas will become increasingly dependent on each other for alternative markets. Whereas China will use Hong Kong’s stock market for new listings, Taiwan will be drawn into more foreign direct investment than was the case prior to the Asian economic crisis.

Successful Strategy

China’s strategy for taking over Taiwan is built upon three major initiatives: 1) Offer incentives for Taiwanese business to invest and trade on a major scale; 2) continue to undermine Taiwan’s international status by exerting pressure, internationally, to increase its isolation; 3) employ the threat of military force to subjugate the pro-independence faction in Taiwanese politics.

On all points, it has to be said, China is winning hands down.

On the first count, the Taiwanese have required little encouragement to rush to invest in China. Witness their swift response during the post-1989 sanctions era to fill the gap in Chinese trade created by the East-Asian financial crisis.

On the second count, China’s success may be gauged by the closure of the embassies of three of Taiwan’s most important residual diplomatic partners during the current decade: Saudi Arabia, South Korea and South Africa. Taiwan has resorted to buying diplomatic recognition from impoverished third-world countries of little value in high-powered diplomacy.

Associated Press reported on November 24, 1998, that “Russia pledged not to sell weapons to Taiwan and to support China’s claim to the Island, a Chinese official said today, underscoring Moscow’s solid ties with former Cold War rivals in Beijing…. Although the pledges were largely symbolic…they provided more momentum to Beijing’s campaign to isolate Taiwan diplomatically.” China is now pressuring Japan to lend her support to the further diplomatic isolation of Taiwan by having them agree with Mr. Clinton’s support of the “three nos.”

Thirdly, although Taiwan has answered Chinese threats of military force with heavy investment in defense, its efforts are being countered by China’s increasing defense budget. Although China is expert at muddying the waters when it comes to revealing its true expenditure on defense, estimates from Western intelligence sources indicate an increase of between 12.6 and 20.4 percent, annually, between 1988 and 1995.

All things being equal, discounting the employment of nuclear and chemical weapons and the sheer weight of numbers of its population, added to the recent and dramatic escalation of its economy (aided by Taiwanese investment), China is cast in the role of a giant waiting to swat a fly—prepared to bide its time, until the time is right on the international political scene to make its move.

In the Lurch

That time may be fast approaching. The traitorous actions of the morally bankrupt leadership in America are destined to accelerate China’s takeover of Taiwan more than any single event since the Kuomintang initially fled their mother country.

So unpredictable have been America’s multifarious foreign policy initiatives, over the past 50 years in particular, that nations are left guessing as to whether the U.S. is an isolationist or an interventionist power. One of the most insightful commentaries written about the unique national character of the United States was penned by that masterful journalist of his age, Luigi Barzini. In his treatise, The Europeans, Barzini wrote: “The truth perhaps…is that the United States can be both things, isolationist and interventionist, but one never knows which it will be and when.” The result of this schizophrenic national personality has been an “American foreign policy [which] appears to move uncertainly from appeasement to panic and back again. This has led numerous nations to observe of the United States, particularly since her failed venture in Vietnam, that the United States is forgetting its global responsibilities and entrusting the future to juvenile, deceptively optimistic, fairy-tale hopes. They fear Americans really believe…that peace will come to men of good will, and therefore that good will alone can somehow generate peace” (ibid.).

This is pure Disneyland. The reality of the history of man proves that peace must be bestowed on any nation or group of nations by a higher and more powerful entity—and that there must exist a system of government and rule of law promoting a healthy fear of rebellion against that higher power. Peace, historically, is imposed and maintained by the power of a governing authority superior to any power retained by those governed.

The duplicitous proclivity of American foreign policy is well known by the rest of the world. In relation to Taiwan, following the battle for Qemoy in 1958, Chinese Defense Minister Peng Dehuai, calling on the Taiwanese garrison to enter a peace process, stated, “The day will come when Americans will leave you in the lurch…. We are all Chinese…in the end, the Americans are our common enemy.”

China’s foreign minister Chen Yi at that time commented, in typical Chinese fashion, “Time is on our side, not on the side of the Americans…. The Americans will withdraw from Taiwan before my hair is completely white…within 10 or 20 years.” “This was rather prophetic, as in December 1978, exactly 20 years after the battle, President Jimmy Carter finally met China’s three demands: the severing of diplomatic ties with Taiwan, the withdrawal of American troops from the Island, and the termination of the defense treaty” (Willem Van Keminade, China, Hong Kong, Taiwan, Inc., p. 147).

President Reagan did try to restore diplomatic ties with Taiwan and supply it with the latest in military technology, including F-16 fighters. General Alexander objected, and this initiative did not proceed.

Finally, Panama

Even given this history of duplicity, one is still left wondering if, indeed, something more sinister is behind the remarkable convergence of three specific initiatives of America’s present Democrat-led government in relation to China and Taiwan.

Firstly, it appears undeniable that massive funds were channeled from Chinese sources to the Clinton election campaign. That is a matter of public record. One would have to assume that China thus endeavored to influence U.S. policy in favor of China.

Secondly, the visit of the U.S. President to China in June stands out glaringly as the forum at which he publicly declared America’s betrayal of Taiwan. “In Shanghai, Mr. Clinton expressed U.S. commitment to what is known in Taiwan and China as the ‘three nos’: no U.S. support for a declaration of independence by Taiwan; no U.S. support for the existence of ‘one China—one Taiwan;’ and no U.S. support for Taiwan’s membership in international organizations in which membership is based on statehood” (Dallas Morning News, July 3, 1998). President Clinton became the first U.S. president to publicly declare opposition to Taiwanese independence (see “Personal,” The Trumpet, August 1998).

The third initiative of this present U.S. government, and perhaps the most mind-boggling (having received very little press coverage), is the handover of the Panama Canal on December 31, 1999. Of major concern is the fact that the giant Chinese corporation Hutchison Whampoa has secured the rights to control operation of the crucial canal ports of Balboa and Cristobal from that date. This was done with the approval of the current U.S. administration. It is tantamount to handing control of the Panama Canal to China. This will give to this great emerging trading nation total control of the flow of all goods, including oil, between the Atlantic and Pacific Oceans.

Captain G. Russell Evans, in his 1998 Briefing Report on the Red Chinese Takeover of the Panama Canal, raises the point that this impending handover of Panama to the Red Chinese has “all the earmarks of a quid pro quo for the millions of dollars illegally contributed by Red China to the 1996 Clinton-Gore re-election campaign! Our major media failed to report this quid pro quo. Why?”

China is on a roll! And it is clearly being aided and abetted in its endeavors by a double-dealing U.S. administration which is prepared to turn its back on an old ally in the process! The writing is on the wall for Taiwan. It is only a matter of time before it either capitulates to its mainland communist relative or is overrun by her, economically, politically and militarily.

Betrayal, Then Disaster

Former U.S. Defense Secretary Caspar Weinberger scathingly attacked President Clinton for selling out Taiwan. “Mr. Clinton’s extraordinary diplomatic and political blunders will…encourage the Chinese to believe that they can use force against Taiwan. And we will develop ingenious arguments as to why we need to do nothing to stop China” (Forbes Magazine, August 10, 1998).

What seems so startling in this diplomatic minefield laid by the U.S. is that it flies in the face of the clear facts which America’s own intelligence services have brought to light. In April last year, a new CIA report indicated that 13 of China’s 18 long-range missiles have single nuclear warheads aimed at U.S. cities. To any sensible, moral mind this would indicate that China regards America as its major strategic enemy. Most of its long-range CSS-4 missiles point to the hearts of major U.S. cities!

This report put the lie to a statement made by the U.S. President in October 1996. “There is not a single, solitary nuclear missile pointed at an American child tonight. Not one. Not one. Not a single one” (Washington Times, May 1, 1998).

Clearly, China is set on the road to dominate its area of the world with the twin-pronged fork of trade and military power. “The danger to the United States of a Red Chinese takeover of the Panama Canal is very real. America will lose control of this vital choke point, through which massive amounts of shipping and our U.S. Navy pass, between the Pacific and Atlantic Oceans. Red Chinese J-11 attack jets, if launched from air facilities in Panama, could strike the mainland United States. Communist China will also have a critical base for its warships in our backyard” (Evans, op. cit.).

Chinese strategy appears to be geared towards control of the sea lanes, the vital trade lifelines crucial to major export economies such as Taiwan and Japan. With their possession of the Panama Canal pending, plus their rise as a naval force in the South China Sea, China will soon be in the driver’s seat when it comes to controlling the vital oil supplies which flow by supertanker through these choke points.

The U.S. sellout of Taiwan is not only a great betrayal of a staunch ally, it is the prelude to great disaster. Like the silly dove, Britain (Hos. 7:11), handing over Hong Kong, one of its final great strategic sea gates in the East (Gen. 24:60), the U.S. is turning its back on its only possible remaining stronghold in East Asia from which exists the prospect of containing a dedicated archenemy.

Yet, this is so prophetic!

Britain and the U.S. are the leading nations of biblical Israel. Prophecy reveals that these once-great nations will stoop to consorting with and buying favor from their archenemies (Hos. 1:2; 2:13). The latter-day diplomacy of this world’s greatest nation has descended into a great betrayal of an old ally, sinister financial deals with its enemy and lying deceit to its public.

What will be the outcome of the wholesale sellout of Taiwan by the U.S.? Watch for Japan to respond, particularly by an upsurge in militarism and nationalism, as it emerges from its depressed economic state. The third largest economy in the world behind the U.S. and EU will not stand idly by and allow its vital oil supplies to be tampered with. The scene is set for either a historic alliance between China and Japan or heightened tension between these ancient enemies.

Either way, the U.S. stands to be left in the wake of these Eastern nations. History indicates that America, under such stresses, retreats into isolationism. Prophecy indicates that the day will arise when that isolationism will become plain cowardice, and even her trained military men will not heed the call to battle (Ezek. 7:14).

What a great shame it is that Britain and America must descend to this base level, and be punished for it by a merciful God—before He can use them in the future as a teaching resource for all nations to learn His way! For insight into the outcome of these events, write now for our free booklet, The Lion Has Roared, and discover that there is real hope for a renewed national glory to be given not only to Britain, America and other nations of Israel, but to all nations in a better world to come!