Why Chinese Miners Are Smiling

Why Chinese Miners Are Smiling

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Whoops! Right under everyone’s noses, they scored a monopoly on a rare resource we all use. In a swoop, this could bring the world to its knees.
From the December 2010 Trumpet Print Edition

Imagine if Walmart sold 97 percent of the world’s potatoes. It would have complete control over the sale of fries, chips and potato salad. There would be an outcry.

Think of the power it would have. If a district raised taxes or passed labor laws that Walmart didn’t like—bam: no potatoes. McDonald’s would be selling a Big Mac and fries without the fries.

China has this type of monopoly. Not on potatoes, but on rare earth metals, the vital ingredients of the technological revolution. These minerals are used in small quantities in a host of products from iPods to hard drives, guided missiles to smart bombs. And China is using its control of 97 percent of the industry to hold the world to ransom.

Its ownership of these metals is just a part of its wider plan to gain security by controlling the world’s resources. On October 18, China cut off exports of rare earth minerals to Europe and the United States.

This is economic war.

China had cut Japan off over a month earlier, using rare earths to force Japan into a humiliating surrender. On September 8, a Chinese fishing boat rammed two Japanese coast guard ships near islands claimed by both China and Japan. The skipper, Zhan Qixiong, was arrested. The Chinese were livid. They arrested four Japanese citizens, cut off all cabinet-level contact with Japan, and instructed travel agents not to offer holidays in Japan. More importantly, according to the Japanese government, they cut off all shipments of rare earth minerals.

Japan gave in and released Zhan unconditionally.

Now it may be America’s turn. The New York Times published a story on October 19 quoting three anonymous industry officials saying that China had quietly stopped all rare earths shipments to the U.S. and Europe. “The embargo is expanding” beyond Japan, said one official. China has denied there being any embargo. The spokesman for the Chinese Embassy in Washington claimed that his country is just implementing tougher environmental standards on the rare earth mining industry.

This cutoff may be China’s response to an investigation, launched by the U.S. in October, into whether China is breaking World Trade Organization rules by restricting clean energy imports and subsidizing its clean energy exports.

Will America be the next nation forced by China into a humiliating climb-down?

How to Get a Monopoly

For years, China has been laying the foundations for control of rare earth minerals—elements with an atomic number between 57 and 71, plus scandium and yttrium. China woke up to their usefulness long before any other government. In the 1960s, it started trying to get all the rare earths it could out of mines in Inner Mongolia.

During the 1980s the government offered subsidized loans to rare earth miners and similar industries. Production increased by 40 percent during the decade. The Chinese Society of Rare Earths was founded, the organization that, to this day, publishes the only two scientific journals dedicated to rare earth elements. As China gains a foothold in this field of research, interest in the U.S. has waned, according to Prof. Karl Gschneidner Jr. of Iowa State University.

In 1992 Deng Xiaoping, the late leader of China, said, “There is oil in the Middle East; there is rare earth in China.” His successor, Jiang Zemin, went even further, saying China must “improve the development and applications of rare earth, and change the resource advantage into economic superiority.”

In the 1990s, then, China quadrupled its rare earths production. Many mining firms ran at a loss, but with unlimited subsidized loans they kept running. In addition, a large number of illegal rare earth mines sprang up, cutting costs by ignoring worker safety. As a result, rare earth prices plummeted. On average, rare earth minerals cost only 5 percent of what they did before China got involved.

The low prices were a boon for the growing high-tech industry. But no other country could compete. Western rare earth companies shut down.

Now China’s control of 97 percent of the rare earth market gives it tremendous power. Over the past year, it has reduced its exports of rare earths, shrinking them from 50,000 tons per year to 30,000 tons. Then in July, the government announced it would export only 8,000 tons for the rest of the year. At the same time, it has raised export taxes for the minerals. Other countries are feeling the pinch.

Fixing the Problem?

Governments around the world are only just starting to address the problem. But solving it won’t be quick or easy. In July, the U.S. Congressional Research Service said that developing new rare earth mining projects could take 10 years.

Mining rare earth elements produces radioactive waste, which means that mining companies have to dig through a mountain of paperwork before they can even make a dent in the ground. In Western nations, they face stiff opposition from the environmental lobby. In both the U.S. and Australia—which have some of the biggest rare earth deposits—the governments are changing mining laws, though they haven’t yet released details. The uncertainty is making mining firms reluctant to start new projects in these areas.

Once a rare earth mineral is dug from the ground and separated from the rock and other minerals—a complicated process in itself—it is still only an oxide compound. It must be refined in order to get a pure metal. And China also happens to have a stranglehold on rare earth refining. Since no one else has been doing much refining for 25 to 30 years, China holds a clear technological edge in this area.

Even with determined effort, it would take several years to pry the rare earth industry out of China’s control.

Not Just Rare Earths

Nations worldwide are waking up to the need for security in the supply of a whole host of resources. A recent EU report warned that land grabs could erupt as nations scramble for minerals globally. South Korea has revealed plans to use its pension and sovereign funds to secure access to rare metals; it says it will even direct its foreign aid monies to countries that can return the favor with access to the precious resource.

The need for security goes beyond even metals and minerals. The Oakland Institute, an American think tank, says that China is “seeking to acquire land as part of a long-term strategy for food security.” It says Japan and South Korea, as well as Saudi Arabia and other Gulf states, are doing the same.

Australia and New Zealand are especially worried about China’s appetite for farmland. In June, a Tasmanian real estate agent reported that China had a strong interest in dairy farms in the north of the island. Bright Food Group, a firm controlled by the Chinese government, bought New Zealand’s third-largest dairy processing company and owner of 15 farms, Synlait.

Prof. Zhangyue Zhou of James Cook University’s School of Business said that China is buying up land overseas in order to secure a food supply for the nation. He warned that the farms China is buying will start sending food back to the home country rather than selling it to locals.

“Chinese vultures circle Australian farms,” Australian state mp Robert Brokenshire has warned. In fact, Chinese investment interest in Australia’s farms grew tenfold in the six months before this past April, according to the Real Estate Institute of Australia.

Foreign investment in Australia’s agricultural land is causing many to demand that the government intervene to regulate the purchase. China is also buying up farmland in Africa.

But farmland isn’t the only aspect of agricultural production that China is interested in. A consortium of government-owned Chinese companies is vying to take over Potash Corporation, based in Saskatchewan, Canada. Potash Corp. produces 20 percent of the world’s fertilizer and sells 45 percent of its goods to North American farmers. Experts worry that should China buy it, the fertilizer would be redirected to China.

Potash, a key component in fertilizer manufacture, is becoming scarcer. Some warn that the modern era of cheap food is coming to an end. China is expected to spend $15 million a year looking for domestic potash supplies.

“We Are at Economic War”

China is buying up the production of raw materials the world over, from food to rubber to iron and steel. It may not own anywhere close to 97 percent of the world’s steel or rubber production capacity, but it appears to be aiming at self-sufficiency in all essential resources. Most other countries have nowhere near that capability.

China is also purchasing foreign firms to gain access to new technologies. For example, in August PetroChina allied with Royal Dutch Shell to take over Australia’s Arrow Energy. Arrow Energy specializes in mining unconventional energy deposits. Its technology may allow China to begin tapping its estimated 30 trillion cubic meters of unconventional gas reserves.

At the same time, Beijing is working hard to increase its naval power. After all, if it owns natural resources around the world, it has to be able to keep shipping lanes open during a crisis.

This kind of self-sufficiency puts China in a strong position in the event of a trade war—or even a hot war. The U.S., by contrast, cannot even produce important armaments without China’s cooperation.

Of course, China isn’t the only nation seeking natural resources. Middle Eastern and other Asian nations are scouring the Earth for them, and Europe is joining in the fray.

Even staunchly free-market Japan is getting involved. Foreign Minister Katsuya Okada spent the last year visiting heads of state in mineral-producing countries to secure a supply of minerals for his country. “Until recently, the government took the attitude that this was something best left to market forces,” he said, “but the world has changed dramatically and the government cannot just sit back anymore.”

“We are at economic war,” said Jack Lifton, an expert on rare minerals. “The world where you could get everything for a price is history. And the West has been sound asleep on this. The level of ignorance about the upstream of mineral supply … is just out of this world.”

It seems the whole world—apart from the U.S., Britain and its daughter nations—has woken up to this reality.

China is prophesied to play a key role in end-time events. By securing so many strategic resources, it is ensuring that it can remain a great power even when the world falls apart.

For more about China’s future, request our free booklet Russia and China in Prophecy.

Is China in the Bible?

Is China in the Bible?


The scriptural, prophetic identity of the most populous nation on the planet.
From the December 2010 Trumpet Print Edition

“China: The Next Superpower.” “China: America’s Number-One Enemy.”

Such headlines have become common. It is logical that the nation with nearly 20 percent of the world’s population, the second-biggest economy and the biggest military (in terms of manpower) would inspire such discussion.

But will China become the world’s next superpower? The truth is, you cannot know China’s future unless you understand that nation’s identity in the Bible, the only source that can reveal the answer!

Yes, if you believe the Bible, you can actually know for certain—without a doubt—who will dominate the world very shortly!

Hundreds of think tanks spend countless hours and vast sums of money in search of an answer to this question. Yet, the Bible reveals the answer—if they would only believe!

The Bible is a book primarily about Israel, physical and spiritual. When other nations are mentioned, it is typically in relation to Israel. In biblical times, the interaction between the Chinese and the Israelites was of no major consequence, and so China was rarely mentioned.

However, the Bible does speak prophetically of China’s role in end-time events. Technological advances in communication and trade have shrunken the distance between China and the modern descendants of Israel considerably (for an explanation of who these nations are, request our free book The United States and Britain in Prophecy). Today China has considerable global influence: Witness, for example, the amount of U.S. debt China holds and the huge trade imbalance between the two nations, and the fact that China is the world’s most dominant trading nation.

An understanding of these prophecies hinges on knowing the biblical identity of the Chinese people. Before delving into this, however, we must gain a basic overview of Chinese history.

A Brief History of a Great People

The Chinese people comprise one dominant ethnic group and many small minorities. The ethnic Han comprise more than 90 percent of the 1.3 billion people living in China. Though minority ethnic groups—such as the Uygurs, Tibetans, Mongols and Manchu—make up a small percentage of the Chinese population, in absolute numbers they are still large populations. For example, there are actually more Mongols living in China than in Mongolia.

These other ethnic groups have been absorbed into China through conquest by the Han Chinese. The Han have long dominated the heartland of China, usually defined by the Yellow River in the north, the Yangtze in the middle and the Pearl River on the south. This rich agricultural region is surrounded by border regions occupied by non-Han peoples, such as Tibet, Xinjiang (home of the Muslim Uighurs), Inner Mongolia and Manchuria, the historical name given to the territory north of North Korea.

Historically, fierce nomadic cavalry armies from the northern border regions have posed a difficult challenge to the agriculture-based Chinese. The incursions motivated the building of the Great Wall.

When the Han were strong, just like today, the border regions were under their rule. When they were weak, they lost control of those buffer regions and in some cases were even invaded by their Turkic and Mongol neighbors.

The foreign invaders all achieved measures of success, controlling portions of Chinese territory for various periods, mainly in northern China. The most complete conquest was the Mongol invasion started by Genghis Khan in the a.d. 1200s: The resulting dynasty fully controlled China for a century.

All these invasions had one thing in common, however: They all met their end by the Han Chinese.

No matter which foreign invader occupied the throne, China always remained Chinese.

One remarkable demonstration of the resilience of their society and culture was the survival, amid all the invasions, of the Chinese language—a feat few other languages have managed.

This was partly due to the size of the Han population. In a.d. 2, the first available census shows a Chinese population of about 60 million, one fourth of the world’s population at the time!

To better rule this immense population, nomadic invaders typically adopted Chinese administration techniques and the Chinese language, a language quite unrelated to their own. Eventually their descendents adopted Chinese culture and the agricultural lifestyle as well. When the Han reasserted themselves, they easily absorbed the invaders that remained.

All the mixing and migrating of different peoples has made it impossible to characterize what a pure ethnic Han is. Nevertheless, prophetically speaking, China refers to all the people of China, not just the Han ethnic group. And at any rate, the Chinese and all the minority groups living in China are of the Mongoloid race, which stems from Noah’s son Japheth.

The Mongoloid Race

As Herbert W. Armstrong taught throughout his ministry, Noah’s son Japheth married a woman of the yellow race, and went on to father the Mongoloid people. The Hebrew word Japheth means enlargement, according to The Zondervan Pictorial Bible Dictionary, and a glance at the modern world shows that the Oriental populations have been enlarged and multiplied to an unparalleled degree. Japheth’s descendants have long been the most populous people on Earth, with the bulk living in China, Southeast Asia and Japan.

Genesis 10:2-5 show that the enlargement of Japheth began with the patriarch himself siring seven sons and an untold number of daughters. Obviously, these sons and daughters were a mix between the Caucasoid and Mongoloid races, the latter of which grew more definitive in subsequent generations. Soon after the dispersion at the Tower of Babel (Genesis 11:8), Japheth’s descendants migrated through Central Asia to the lands they occupy now.

One of the seven sons of Japheth bears special importance to the prophetic identity of the Chinese and even their nomadic neighbors. That is Magog, the second son of Japheth mentioned in Genesis 10:2.

Where Did Magog Go?

Again, the Bible deals primarily with Israel. Since Magog’s descendants migrated to an area largely independent of the civilizations developing in the Middle East, no sons of Magog are listed in Scripture.

However, Jewish historian Josephus indicated where Magog’s descendants settled. He wrote in the first century, “Magog founded those that from him were named Magogites, but who are by the Greeks called Scythians” (The Complete Works of Josephus).

In a prophecy in Ezekiel 38, the Bible labels this vast territory of northern Eurasia where the Scyths lived—a region that stretched from the Russian steppes east into modern-day China and Mongolia—as Magog.

This territory contained many different tribes of people of the white and yellow races, all of whom were called Scyths or Scythians by the Greeks (see last month’s installment in this series). The Ezekiel 38 prophecy demonstrates this as well, listing numerous nations and peoples associated with or dwelling “in the land of Magog.” The people who most prominently settled this land are typically identified as Mongolic and Turkic. The name Mongol is even derived from the name Magog.

The ancient history of this land is a story about different Turkic and Mongolic tribes vying for control of the area. Whenever a tribe grew strong enough, it would rule the area; in rare cases—such as with the Huns, Seljuk Turks and Mongols—if these nomadic tribes consolidated enough power, they conquered lands beyond their own.

The resulting conquests led to much cultural and genetic intermixing with the people of Central Asia—and makes their national borders largely irrelevant to defining their ethnic backgrounds.

Today the land the Bible calls Magog is dominated in the west by Russia—which is reasserting control over the region it once possessed through the ussr—and China in the east.

Details of the ancient history of Magog and its people remain obscure since the Turks and Mongols didn’t develop a written language until after their contact with the Chinese or Persian civilizations. Though these nomadic peoples have a sketchy history, they still play an important role in understanding China’s prophetic role.

While the Mongols’ connection to Magog is most obvious, they were just one tribe of a related people that carry the biblical name Magog. Ezekiel 38 is a prophecy about the land of Magog and all the distant “cousins” that live there and are associated with each other, such as the Russians and Chinese. One of the Mongolic nomadic tribes in this area bears a special relationship with China. They are the Khitan, a people responsible for China’s modern name and one of China’s biblical names, Chittim.

China Is Chittim

Isaiah 23:1 has a prophecy about “the land of Chittim.” To which modern nation does this end-time prophecy apply? This biblical name refers to both the island of Cyprus and to the nation of China, whose progenitors first populated Cyprus and gave it its name.

Jewish historian Josephus records that some descendants of Japheth—such as the families of Gomer, Tubal and Togarmah—first settled in southern Europe before migrating east into Asia. Kittim was one such family, originally settling lands to the west of Mesopotamia before moving to the Far East.

Genesis 10:4 lists the sons of Japheth’s fourth-born son: “The sons of Javan were Elishah, Tarshish, Kittim, and Dodanim” (New King James Version). Kittim is synonymous with the Chittim of Isaiah’s prophecy. Verse 5 mentions that these sons of Javan settled the isles, or the coasts. This occurred shortly after the dispersion of the Tower of Babel, when the sons of Javan migrated to the northern Mediterranean. These tribes gave their names to various cities and islands, such as Cyprus and Rhodes.

The Mongoloid types of these families, including the Kittim, did not stay in the Mediterranean, however. Over hundreds of years and many generations, some of these families migrated east into Asia from Cyprus, where they are found today, according to research by Dr. Ernest Martin, formerly of Ambassador College.

The descendants of Javan’s son Kittim came to Asia some time after many of their cousins had already settled there. After their migration through Central Asia, the Kittim made their appearance in modern-day northern China and Mongolia under the name Khitan in the fourth century a.d. In the 10th century, the Khitan people managed to create a dynasty that subjugated the peoples, including the Chinese, in modern-day northern China. Their territory stretched from what is now Korea to eastern Kazakhstan, including Beijing, the seat of government in China today.

Because the Khitans controlled the overland trade and communication route from China through Central Asia to Europe, China was called Cathay, after the Khitans. The designation first applied to north China, but later designated all of China. It is a name the Russians still use for China today.

Isaiah 23:1-3 reveal that Chittim, modern-day China, will form a part of a global economic market along with Europe, one that is prophesied to shut out the nations of Israel. It should be no surprise that China will be an integral part of this economic partnership with Europe, as it is now the world’s greatest exporter. These two trading blocs will soon dominate the global economy!

The history of the Khitan demonstrates what has happened to many of the Mongolic tribes that once roamed the western portions of what the Bible calls Magog. These nomadic tribes were not considered Chinese when they were conquering the Han civilization, but after centuries of living inside China’s borders, much of their populations have been ethnically absorbed by the Han Chinese. Whatever remnants of these Mongolic nomads that have managed to remain distinct, such as the Mongols, are now classified as ethnic minorities in China.

In the Khitan’s case, their absorption was so complete that an ethnic minority group from their descendants doesn’t even exist!

The history of these nomads shows just how strong a connection China has with biblical Magog. To a certain degree, they even share the same borders and the same people. But if this explains the Mongolic nomads whose descendants now live in northern China, what about the original Han people who settled and continue to live in China’s heartland?

Handling the Han

The history of the Han Chinese is much less obscure. In fact, the Han people record their history all the way back to the time of the Tower of Babel!

Ancient Chinese records speak of China’s first emperors, Yaou, Shun and Yu.

One such record, The Shoo King, explains that one of Yaou’s tasks was to deal with the effects of a great flood that ravaged the land: “Destructive in their overflow are the waters of the inundation. In their vast extent they embrace the mountains and overtop the hills.”

While scholars explain the inundation as a local flood in China, it is clear from the biblical account, God’s sacred Word, that these annals are talking about Noah’s Flood. Consider:

During Yaou’s lifetime a new leader, Shun, came to power. According to another ancient Chinese manuscript, The Bamboo Annals, Shun is described as having a “black body.” He was obviously not Chinese, and his mother was called “the queen mother of the west,” indicating him as a foreigner. The Shoo King gives the name of Shun’s father as Koo-sow.

According to Dr. Herman Hoeh’s Compendium of World History, this Shun was none other than the Nimrod of the Bible. Therefore Koo-sow, which can also be spelled Kusou, is Nimrod’s father Cush! And the “queen mother of the west” can only be Semiramis. She was the mother-wife of Nimrod who called herself “queen of heaven,” as documented in Alexander Hislop’s Two Babylons. These are the three principal figures of man’s rebellion at the Tower of Babel.

Nimrod was a son of Cush and therefore of the black race. The Bible describes him as a mighty rebellious leader who caused the people to revolt against God shortly after the Flood (Genesis 10:8-9). He gathered the different races and peoples together to build the Tower of Babel, but was stopped when God intervened and confused the languages (Genesis 11:1-7). The different races and peoples were then scattered to different areas of the world (verse 8).

At that point, Yu became the next ruler. Yu, China’s first great hero, founded the Xia dynasty; from that point forward, leadership was given on a hereditary basis. The return of government to a Chinese ruler indicates that the Chinese immediately left the area of Babel and broke free from Nimrod and his successors’ rule. Under Chinese rulers, they migrated to their modern-day location.

The chronology as presented by The Shoo King places the rules of these three kings toward the end of the third millennia b.c. (The Chinese Classics). This time frame also agrees with the Bible.

The Chinese have preserved the most complete secular history of their civilization, dating back more than 4,000 years. There is a lot of myth and legend included as well, but the general chronology of emperors is verified by archeological finds, as well as what is recorded in Scripture.

Archeological Proof

Western scholars and the Chinese themselves, heavily influenced by Western thought after the 1920s, believed the Xia dynasty and the history immediately following were mere inventions, mythical heroes and kingdoms.

However, an archeological find in 1959 at Erlitou in the western part of the Henan province revealed an early Chinese society dating back to the same time and place that The Shoo King records the Xia dynasty existed! The city found at Erlitou is the largest of all cities found dating to this time period and is believed to be the capital city of the Xia government.

Since that find in the North China Plain off the Yellow River, archeologists have found some 200 sites revealing the same culture throughout a broad area, demonstrating a rapid settlement and urbanization during 1900 to 1500 b.c. This was the formation of the first Chinese state! (The Chinese Neolithic:Trajectories to Early States).

TheBamboo Annals records the existence of other Chinese states and how the Xia rulers expanded their control over them. Archeologists have found evidence of other Chinese states, but none contained as many settlements as those closely identified with the city found in Erlitou where the Xia ruled—clearly the center of power of the first post-Flood Chinese civilization.

Interestingly, the archeological record shows a period of extremely low-population settlement in the period immediately before the Erlitou culture arrived. The archeologists, steeped in evolutionary thought, call the time before the Flood the Neolithic period. They have found evidence of a thriving civilization in China in this time period, followed by a contraction in settlement, with evidence pointing to drastic flooding in the region (ibid.).

Though the archeologists won’t admit it, this is evidence of a great flood followed by a resettlement of the area led by the Xia dynasty!

Back to Gog and Magog

So if history is clear that Shun is Nimrod, who are Yaou and Yu? How do these names fit in our biblical identity?

A basic understanding of Ezekiel 38 gives us that information. That chapter speaks of the land of Magog and specific people or peoples living in that land: “Son of man, set thy face against Gog, the land of Magog” (verse 2). Gog and Magog are also mentioned together in Revelation 20:8, showing a close connection between the land and peoples. When Arab historians talked of the Mongols, they used the terms Yagog and Magog.

According to Dr. Hoeh, Yaou in Chinese history is likely the same person the Arabs call Yagog in their tradition. Every prophetic indication is that China has a strong connection with Gog and Magog. Ezekiel 38:2 refers to China. Along with Russia, China dominates the entire area of Magog and is associated with the nations listed in subsequent verses.

Therefore, the Chinese Han people were ruled first by a Japhetic descendant associated with Magog—possibly his son, though the Bible doesn’t say specifically. During Nimrod’s rebellion at the Tower of Babel, the Chinese were ruled by Nimrod. After his reign, when God intervened and changed the languages, government over the Chinese returned to the Japhetic line, under Yu’s rule. These people then migrated north and east to modern-day China, setting up their capital in the North China Plain at the end of the third millennium b.c.

The location of China helps reveal other biblical identities as well.

Kings of the East

In a prophecy recorded in Daniel 11, a clash is foretold between “the king of the north,” a German-led European power, and “the king of the south,” a radical Islamic power led by Iran (these prophetic identities are explained in our booklets Germany and the Holy Roman Empire and The King of the South, both free upon request). Emerging victorious, the European army is then prophesied to conquer the tiny Jewish nation now called Israel. At that point, verse 44 foretells, “tidings out of the east and out of the north shall trouble” this European king.

Any map will show that north and east of Jerusalem are Russia and China, the two dominant powers of the land biblically referred to as Magog!

This event is further expounded in Revelation 16:12, where it is prophesied that the “kings of the east” will gather an army that numbers 200 million soldiers! (Revelation 9:14-16). Such a vast army could only be assembled with the massive population of China. Clearly China is one of those kings of the east!

So back to our original question: Will China become the world’s next dominating superpower after the decline of the U.S.? The answer is no!

Though it will grow to tremendous world power, even superpower status—especially through economic means, as indicated in Isaiah 23—it will not rise to the top spot. That position will be filled by the European power led by Germany! After a short economic partnership, China will violently contend with the king of the north for global dominance.

But this war will end when Jesus Christ returns and destroys both powers!

After that, according to biblical prophecy, Christ will restore His government on Earth, a government that will bring peace and prosperity for 1,000 years. Yet Ezekiel 38 prophesies that not every nation will submit to Christ’s rule voluntarily. Soon after the Second Coming, the people of Asia will form an army in order to attack the people living in Jerusalem!

This will be the last great rebellion in the 1,000-year period. Christ will utterly destroy it and deliver His people. It is a grand statement from God: “Thus will I magnify myself, and sanctify myself; and I will be known in the eyes of many nations, and they shall know that I am the Lord” (Ezekiel 38:23).

Believing the Bible gives us an understanding of ancient Chinese history that scholars reject, and reveals the future status of China and major events this world power will participate in. But even more, it gives us the final and inspiring end result: Christ establishing His Kingdom on Earth!

God is offering the wonderful opportunity to know, now, who is the Lord! Horrible wars are prophesied to occur shortly, but God will deliver His people, those who know He is the Lord and rely on Him. That should lead to the next big question: Are you one of those?

For further study, order a free copy of our booklet Russia and China in Prophecy.

The Silk Superhighway

The Silk Superhighway


From the December 2010 Trumpet Print Edition

Who is China’s largest trading partner?

If you guessed the United States, you’re wrong. It’s the European Union.

If you got the first one right, here is another question: Who are the biggest exporters in the world? First place goes to the European Union. Second goes to China. Third would then go to Germany if it wasn’t already included within the EU. America comes in at a distant fourth place, followed by Japan.

The world has changed. Not long ago, America was both the largest exporter of manufactured goods and the world’s most important economy.

Change is accelerating elsewhere too. “Patterns of growth” are transforming in China and Germany, reports French Finance Minister Christine Lagarde. There is a “shift and an evolution” in domestic consumption and regional trade hubs, she says.

Yes, a shift is occurring—and it is titanic. Today’s global power centers of manufacturing and trade have swung back to Europe and China. The most important and lucrative trade routes are once again between the old world’s East and West. The modern Silk Road is swarming with the new merchants.

The Road to Greece

The most recent example of this trend is China’s growing partnership with Greece.

Encouraged by government incentives and rock-bottom prices, China is pumping hundreds of millions and on the road to billions of euros into Greece, even as Americans and other investors head for the exits. According to the Washington Post, the cornerstone of those plans is the “transformation of the Mediterranean port of Piraeus into the Rotterdam of the south” that will create a “modern gateway linking Chinese factories with consumers across Europe and North Africa” (June 9; emphasis mine throughout).

Greece’s severe economic woes created an opportunity that China is exploiting. Strapped for cash, the Greek government is privatizing the economy in blitzkrieg fashion—and that has opened the doors to rich Chinese investors. Government-owned utilities, rail and transport networks, even casinos are on the auction block. In June, the giant Chinese shipping company Cosco assumed full control of the primary container dock in Piraeus. In return, this one Chinese company has promised $700 million in infrastructure upgrades. In Athens, the government is pushing China to develop a giant new distribution center in the city’s old industrial sector. Beijing is also being courted to build a new monorail line, five-star hotels and theme parks.

Additionally, China is setting up a special $5 billion Greek-Chinese shipping development fund that will offer Greek shipping companies financial support to purchase Chinese-made vessels.

“We have a saying in China, ‘Construct the eagle’s nest, and the eagle himself will come,’” said Wei Jiafu, a high-ranking member of China’s Communist Party and chief executive of Cosco, in a televised interview in June. “We have constructed such a nest in your country to attract such Chinese eagles. This is our contribution to you.”

Already, half of all Chinese merchandise and 60 percent of China’s oil imports are transported on Greek boats, according to Chinese Premier Wen Jaibao.

Yet the Chinese aren’t investing in Greece out of the goodness of their hearts. It is part of a well-engineered plan to create a network of rail lines, highways, pipelines and shipping ports to boost East-West trade. The new Silk Road is booming, and China wants to control it.

Gateway to Europe

In early October, at a joint press conference with Greek Prime Minister George Papandreou, Wen highlighted the growing relationship between Europe and China. To emphasize China’s commitment to the European Union and the euro, he said that China would continue to support Europe’s economy. “China has already bought and is holding Greek bonds and will keep a positive stance in participating and buying bonds that Greece will issue,” Wen said. “China will undertake a great effort to support eurozone countries and Greece to overcome the [economic] crisis.”

Wen promised to address European concerns over investment rules and copyright violations, but said the EU needed to relax remaining trade barriers with Beijing in return.

So far, the Greeks—at least the upper political and business classes (and those who are not part of the unions)—see Chinese investment as nothing short of a “gift from the gods” (Washington Post, op. cit.).

“The Chinese want a gateway into Europe,” noted Greece’s Deputy Prime Minister Theodoros Pangalos in an interview. “They are not like these Wall Street [expletive] pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece.”

Even Germany—which as a major economic exporter is increasingly in competition with China for market share—seems content to allow the Eastern merchant powerhouse more access to Europe.

Angela Merkel came out in support of China being granted “market status” on October 8. During a joint press conference with Wen, she said, “Germany will continue to actively support the quick awarding of the market status to China from the EU. China will intensively continue to dialogue with the EU on this issue.” The U.S. and other countries currently use the fact that China is not considered a free market economy by the World Trade Organization as justification to levy tariffs and restrictions on Chinese imports.

Goodwill between Europe and China is growing in other ways too. On October 5, Bloomberg reported that Germany agreed to cede two of Europe’s seats on the International Monetary Fund board. One of the seats is all but guaranteed to be given to China.

The Silk Road is becoming a superhighway.

But as much as the increased trade will help Europe over the short term, it will inevitably come at the expense of America.

Anti-American “Mart of Nations”

Already China and Europe are collaborating on joint ventures such as nuclear research and the Galileo satellite system that are specifically designed to be a counterweight to American dominance.

But even more than being a counterbalance, the new alliance will create a multipolar global economy replacing American centricity. This is exactly what your Bible prophesies will happen over the next few short years.

Isaiah 23 warns of an end-time “mart of nations” that acts in economic alliance. This alliance includes the nations of China (Chittim) and Tyre (representing the commercial center of the European Union, also called the king of the north in other prophecies). This chapter, along with other scriptures, makes it evident that these two powerful economies are prophesied to work in confederacy to dominate global trade for a short period of time—at America’s expense.

Deuteronomy 28 foretells America being besieged by its enemies: “And he shall besiege thee in all thy gates, until thy high fenced walls come down, wherein thou trustedst, throughout all thy land, which the Lord thy God hath given thee” (verse 52). Other prophecies reveal that the enemy that besieges the modern nations of Israel will be a German-led European Union (Habakkuk 1:6-17).

Besiege in the above verse means to shut up or tie up, or to be cramped, and has economic connotations. Europe will lead the world in shutting America and its allies out during a global trade war that becomes a hot war. Prophecy tells us America will be “cramped in” to the point where even food can no longer reach its shores.

The Bible contains many prophecies of that European power attacking America—and many other prophecies of America being besieged. Isaiah 23 indicates which nations will join Europe in that economic blockade! “That is where China and the giants of Asia enter the picture,” writes Gerald Flurry in his booklet Isaiah’s End-Time Vision (request a free copy).

“When [the European Union] attacks North America, there will be no help or sympathy from Asia. In fact, considering that China has come to possess most of the world’s strategic sea gates (which, ironically, at one time were held by Britain and America), we believe there may be a brief alliance between the German-led [European Union] and certain Asian powers (Russia, China, Japan—the kings of the east). Should Europe … find a way to take advantage—even for a moment—of key resources and strategic holdings of China, Russia and Japan, it would have more than enough power to besiege the Anglo-Saxon nations and enslave them.

“This is why Isaiah’s prophecy of an end-time ‘mart of nations’ that includes both European and Asian powers is so intriguing,” writes Mr. Flurry. “And why the trend of collusion between these two great economic blocs is worth watching.”

China’s new Silk Road to Europe is rerouting the flow of global commerce and finance—and it is skirting America. The early stages of America’s economic siege have begun.

Yet despite the bad news, there is great hope for America. “Two great trading blocs are positioning themselves to control the world,” says Mr. Flurry in his Isaiah booklet. “Both power conglomerates are discussed in Daniel 11:40-45 and in Isaiah 23. But that trading partnership won’t last long. Soon they will clash, just before Jesus Christ returns and destroys both of them.”

That’s the good news. World events are speeding along the greatest superhighway of all—the one leading to the return of Jesus Christ and the establishment of an equitable and just global economic system that is guaranteed to bring prosperity to the whole world.

Who Is the God of This World?

During a Key of David program earlier this year, my father expounded on a prophecy about Satan the devil being cast down to this Earth. And that’s something that’s actually prophesied in the pages of your Bible. And yet, as he brought out on that particular program, we hear so little about that reality today—the fact that Satan has been cast down to this Earth. In fact, you could take it a step farther and say that we really don’t hear much of anything about Satan the devil period, in this world.

Why is that? Why should there be so much confusion, or ignorance, about the devil? Many people scoff at the thought of his existence. They don’t even believe that there’s a devil. And others, while they might accept his existence, they will grossly underestimate his awesome power and influence. They assume that that deceptive influence is something that is easy to detect and that it’s really not that powerful.

Now on the other hand, there are those in the traditional Christian world who think that God and Satan are engaged in some kind of tug-of-war over trying to win the souls of men. And in just looking at the numbers over the centuries, over the millennia, and thinking about the number of people by the billions who never accepted Jesus as their Savior—I mean in that scenario, Satan is clearly depicted as being superior to God. And that’s not the case.

But the reason for this ignorance—you can start turning over to 2 Corinthians 4—the reason for this gross ignorance is because Satan, as the god of this world, has blinded the minds of men from the truth about his existence, in some cases. Or the truth about his power and influence for those who might accept that he exists.

2 Corinthians chapter 4, and look at verse 3 here. Paul says, here in the Moffatt translation, “Even if my gospel is veiled, it is only veiled in the case of the perishing.” Or those who are perishing. The gospel, the message that Jesus brought, it’s veiled, or it’s clouded, or it’s not something that so many people in this world understand. I mean, just look at the many different gospels there are in the traditional Christian world. You choose, basically, what it is that you want to embrace and follow. And it’s just nothing but confusion.

Verse 4 says, “In whom the god of this world has blinded the minds of them which believe not, lest the light of the glorious gospel of Christ, who is in the image of God, should shine unto them.” The god of this world, Paul says, has blinded the minds of them which believe not.

How come we don’t hear more about this god? You do hear a lot about God in the various religions in this world, but how come we don’t hear much about this god? The god of this world. The god who, in trying to overthrow Christ, boasted that he had all this power to give Christ, that he had all these kingdoms to deliver unto Christ. And in making this statement before Jesus, I mean Christ certainly would have refuted it if there was no truth to it. He would have said in Luke chapter 4 or Matthew 4—that’s where that account is recorded—he would have said, You don’t know what you’re talking about. Who are you to talk about the kingdoms that you’re over? But Christ didn’t say that because He knew, and we know because of what’s revealed in the Bible. That Satan is in fact the god of this world. Satan is in fact the ruler of this world—he’s the one who’s blinded the minds of those who believe not. And God, of course, has allowed all of this to happen.

You don’t have to turn over there, but Revelation 12:9 is one that we go to quite often, here, and my father referred to that verse in that Key of David program that I mentioned. But in Revelation 12:9 it says that Satan has deceived the whole world; the whole world has been deceived.

Let’s look at Ezekiel 28 and just cover some of that history that led up this widespread deception. Ezekiel 28, we’ll go back to the beginning here, to the time when Lucifer was being trained right at the very throne of God—God’s own throne.

Ezekiel 28 and verse 14. It says, “You”—it’s referring to Lucifer. “You are the anointed cherub that covers; and I have set you so,” God says through His prophet. “You were upon the holy mountain of God; you have walked up and down in the midst of the stones of fire.” So here was this supreme masterpiece of God’s creative power, as an individually created being, as Mr. Armstrong wrote in Mystery of the Ages. And God made this masterpiece; He set him as His anointed cherub to cover His heavenly throne, and that’s where Lucifer was trained—right at God’s throne. And then God assigned him this opportunity, or a field assignment, you might say, to this Earth where he came and was to administer that same government that he had been trained in. And where he, along with the third of the angels that were working under him, were to beautify and to maintain this creation on Earth—to make it better.

Isaiah 14 is the companion passage to Ezekiel 28. Let’s look at that quickly. God’s plan for the angels went off track the moment that Lucifer sinned against God’s law of love.

Isaiah 14 and verse 12. It says “How are you fallen from heaven, O Lucifer, son of the morning! how are you cut down to the ground, which did weaken the nations!” Yeah, how could this happen? How could something like this happen?, Isaiah wrote.

And he answers in verse 13, “For you have said in your heart, I will ascend into heaven, I will exalt my throne above the stars of God: I will sit also upon the mount of the congregation, in the sides of the north.” So notice he has a throne there. He had a throne when he was situated on this earth. And he wanted to exalt that throne above God’s. That’s where he began going off track. It started with his heart, or as it says there in verse 13, he said in his heart, “I will ascend.” So he had this sin of vanity and wanting to exalt himself above even God, his Creator.

Verse 14 says, “I will ascend above the heights of the clouds; I will be like the most High God.” See he would be like God; even above God. But God, as we know from other passages of scripture, and that was covered in that Key of David program, He brought Lucifer back down to this Earth, powerfully, forcefully. And, of course, there’s a duality to that putting him back to this Earth, and it happened again in this end time as my father covered in that Key of David broadcast. But in all of this, He, God, allowed Satan to continue ruling on the throne of this Earth. To continue on his throne. And that’s why, as is recorded in Genesis 3, it says that man has been cut off from God’s truth—from the tree of life. It says in Matthew 4, or that passage in Luke 4 that I mentioned earlier, that Jesus didn’t deny the fact that he had this power to give.

Paul, as we read earlier, acknowledged that he is the god of this world. And then John said the same thing in the book of Revelation, that he has deceived the whole world. Satan is the god of this world. This is not God’s world that we see before us. This is Satan’s world.

Ephesians 2 and verse 2, you can just look at later, but that elaborates on how Satan has maintained his deceptive influence over the minds of men. He’s a great broadcaster, Satan is, and he transmits his signal unperceptively through the air—just like a radio signal or a tv signal. Mr. Armstrong wrote about this in many of his works. He broadcasts in attitudes, in moods, in impulses. And that’s why man just has this built-in hostility toward God, as Paul said in Romans 8:7. Jeremiah 17:9 as well. There’s this hostility toward God and God’s government and God’s law. And you see it even in theology today—even in religion.

This satanic influence explains why man—even though he’s equipped with a mind that’s vastly superior to an animal’s—he’s still utterly incapable of solving even the simplest of problems. Look at this world. Look at how sophisticated it is. I mean, look at the technology, look at the advancement, in one case, in one sense. And then look at the multiplying evils. This is not God’s world. And even commentators who don’t consider themselves to be religious, can see that something is wrong, something is not right with what’s happening today; with what’s happening in nations; with what’s happening between nations; with what’s happening in families, in cities. Look at the evil in this world. God didn’t intend for it to be this way.

From the beginning He offered man, He offered Adam and Eve, the opportunity to draw from Him and His Spirit, to take from the tree of life, to eat from the tree of life. But Adam and Eve rejected that. And so God, it says at the end of Genesis 3, drove out the man. And man ever since has been cut off from God and left to himself to devise his various religions; to devise his systems of government, education, and on and on it goes.

Now, against this backdrop, isn’t it clear why Jesus Christ came into Galilee preaching the gospel of the Kingdom of God? Jesus came with a message about another world, a different world, a world that God would build, a world that God would establish through His Son and His Bride. Jesus came with a message, a message of good news about a world-ruling government that’s to be set up on this Earth. And there’s so many scriptures that speak of this government, this utopia, this millennium, this family. And yet even in traditional Christian religion, they deny this. They don’t take this literally.

Now, Christ in His first coming, He said plainly that He didn’t come to set up that kingdom or that government then. He said before Pilate, “My kingdom is not of this world.” And if you remember that exchange in John 18, Pilate then asked Him, “Well are you a king then?” And what did Christ say? How did Jesus respond to that?

He said [verse 37], “To this end was I born, and for this cause came I into this world.” Jesus was born to be a king, it says in Luke 1. He was born to be a ruler. He was born to head up a government, a world government. He said so plainly.

Now, in the first century, because the Jews misunderstood Christ’s gospel message, they failed to grasp the vital purpose for which He came in their day. They didn’t understand the duality of those prophecies about Christ’s arrival—the fact that He was to come first as that Lamb sacrifice for the sins of mankind; and then again, in this end time, as that conquering King—as that Ruler. The Pharisees knew Jesus was the Messiah, Mr. Armstrong wrote in Mystery of the Ages. They knew that. They were looking for that. “He’s here,” some of them said. John 6, I mean you can read that account, they wanted to make a crown themselves and put it on Him. They knew what the prophecies said about the Messiah, about the Ruler, about the government. But for those that had those petty positions in the Roman government, the Pharisees and the Sadducees and such, they viewed Christ as a threat. Why would they view Him as a threat? Because of all the prophecies that spoke of Him as being a ruler. And so, instead of accepting Him, they fought against Him. They went after Him; they persecuted Him. They didn’t want a conquering king to overthrow the Roman Empire, as they saw it, because they wanted to hang on to those petty positions, as I said.

Even Christ’s own disciples were confused on the subject of His rule. And Christ had to set them straight on this in Luke 19 with a parable that spoke of a certain nobleman who went into a far country to receive for himself a kingdom and then to return—and then to come back. They were confused on the subject themselves, those whom Christ was teaching and educating. And so He set them straight on that with this parable. In that parable, the nobleman refers to Christ, who after His first coming was resurrected and then went away into a far country, so to speak, to receive the kingdom and then to come back.

Why is this so difficult to understand for so many people in this world when it’s so clearly spelled out for us in the Scriptures? It’s difficult to understand because there is a god of this world who’s blinded the minds of men to understand the simplicity of the gospel of Christ.

Christ isn’t back yet. He hasn’t yet set up this government because His government isn’t quite yet prepared and ready to rule. Why should that be so confusing that a king would need an administration or other rulers ruling with him, helping him, supporting him? Just like any king or president in the world today would have an administration or a staff. This is what Christ is preparing today in His Church.

In order for these problems that we see in this world, the chaotic problems that we see multiplying, there has to be a government from the top right on down that’s thoroughly prepared and trained to take over those reins once Christ does finally return to this Earth.

Let’s look at Acts 3. Acts chapter 3. For most people today, even in Christian denominations, they just spiritualize away these prophecies about Christ’s return, hundreds of them in fact, by saying that He, you know, somehow does it in your heart, or He does it in the Church. But Christ was born to be a king. He was born to rule.

Acts chapter 3 and verse 20, it says, “And he shall send Jesus Christ, which before was preached unto you.” This is after Christ died. This was after His resurrection. Do you think the disciples were confused on this subject? Do you think Paul, when he wrote about it in 1 Thessalonians 4, was confused on the subject of Christ coming back? Jesus said himself plainly, “If I go, I’m coming back again.” And the disciples, the true disciples of Christ, have always been looking for that arrival. They’ve always looked to the second coming of Christ. And of course there’s skeptics and scoffers—they’re prophesied in fact—that are going to deny those prophecies, that are going to deny that reality. But believers, followers of Christ, they live today as Christ lived, they strive to. And they look for His appearance. They look for His appearing, His coming.

[Acts 3:20-21], “And he shall send Jesus Christ, which before was preached unto you: Whom the heaven must receive until the times of restitution of all things, which God has spoken by the mouth of all his holy prophets since the world began.” God has not been unclear on this message. He has spoken this message by the mouth of His holy prophets since the world began. I mean, it’s prophesied back in Genesis 3. And dozens and dozens and perhaps hundreds of prophecies thereafter. But He hasn’t yet returned, as it says there, until the time is right for the restitution of all things.

That word restitution there means, “to restore something that had been taken away.” What is the meaning there? What was taken away from this Earth? What needs to be restored? And the answer to that is the government of God that was once on this Earth, being administered by this brilliant archangel, Lucifer, when he was administering God’s law in the way that he had been trained at God’s throne. But when he rebelled and turned away from God and turned to the ways of sin, that government on this Earth was taken away. And yet God allowed him to stay there on that throne until the government of God had been thoroughly prepared and made ready by His Son Jesus Christ and the Church, that is to marry Christ.

Isaiah 9 and verse 6, we’ll conclude over here. Christ does return to this Earth in this end time. One of His first tasks will be to banish Satan from this Earth—to dismiss him from his throne, to remove him from his throne, and to stop all of that deceptive broadcasting, that satanic influence, that just surcharges the air and fills this world with so much evil and violence; with so much vanity and selfishness; with so much division and strife.

God is going to get rid of that and start something new and different. God is not engaged in some kind of repair project where He’s like a mechanic in a garage trying to fix an old clunker. He’s got something new in mind, and Jesus came to start that. And it started so incredibly small—just 12 disciples, and then even after Christ’s death there were just 120 of them, the book of Acts says—120 disciples. He was not on a soul-saving crusade. He did attract thousands of people because of the miracles, the healings and such. But as far as the disciples, who He was actually teaching the meaning of those parables to, there was just a handful of them. And then the true Church ever since has been mostly scattered and just a small group of people who faithfully adhered to the instructions and teachings of their Savior. So much deception in this world.

Look at Isaiah 9 and verse 6. Why was Christ born? Says, “For unto us,” verse 6 says, “unto us a child is born, unto us a son is given: and the government,” the government it says, “shall be upon his shoulder: and his name shall be called Wonderful, Counseller, The mighty God, The everlasting father, The Prince of Peace.” See the government is placed on His shoulders because He is a king. He is a ruler. And after Christ turns this world right-side-up, I mean it’s upside-down today, after He starts this new world with that government, then the peace, as it says in verse 7 you can read later, it will just continue to grow and spread. First over all the surface of this Earth, and then out from there to the entire universe.

This Means War

This Means War

Feng Li/Getty Images

Where global trade disputes are leading—and how they will upend your life
From the December 2010 Trumpet Print Edition

Is China waging war on the United States? Many would say the notion that Beijing is actively trying to topple the U.S. is preposterous. But is it?

Sun Tzu, the fifth-century Chinese military general, taught that “all war is based on deception.” What if China has managed to blind America to its true motive? The thing about deception is that the deceived have no clue they have been deceived.

Is it even possible to discern China’s true ambitions?

It is. First, we must look past the politically correct words being uttered by politicians on both sides. We must see beyond platitudes and promises, and look squarely at the incontrovertible facts.

Among those facts are China’s unscrupulous land grabs in Australia, New Zealand and across the continents of Africa and South America. The fervor with which it seeks to gratify its insatiable appetite for raw materials. Its near monopoly over vital and strategic rare earth minerals. Its aggressive, unrelenting acquisition of foreign companies and businesses. Its insidious relationships with anti-American, anti-democratic states and tyrants. The brash confidence with which its leaders operate in international relations. Its striking military aggrandizement and growing appetite for military provocation.

Perhaps the most significant fact, especially for Americans, is the enormous leverage China has over the U.S. economy—and the fact that China’s leaders appear ready to use it as a weapon!

If we look at the facts, it’s hard to deny that the United States and China—even now—are at war!

Presently, it is a financial war. Moreover, the globalized nature of our world means this trade and currency war is not confined to just these two economies. In fact, the increasingly radical actions of these two behemoths have set off global trade and currency wars—wars that history and Bible prophecy say precede a tumultuous and terrifying future.

Race to the Bottom

Around the world, national economies, especially those of industrialized states, continue to suffer the aftershocks of the global financial crisis set off in the United States in September 2008. In Europe, North and South America and Asia, economies are stagnant, or only growing at a snail’s pace. National debt is soaring, industry is seizing up, and unemployment is rocketing.

Governments are looking at their stalling economies and becoming desperate.

A new trend is emerging. In an effort to kickstart their economies, more and more countries are enacting beggar-thy-neighbor fiscal policies to devalue their currencies. When the currency of a nation loses value, it becomes cheaper to foreign countries and investors. Foreign nations and investors are motivated to buy more goods, causing an increase in exports, which means more industry and manufacturing, and eventually lower unemployment. Sounds like a great way to help an economy, right?

The problem is, it amounts to an act of war against other nations.

In our globalized world, when one country devalues its currency to boost exports (and the broader economy), other national economies are significantly disadvantaged. The exports of the disadvantaged economies become uncompetitive. The result? Manufacturing and industry slump, unemployment rises and consumer spending drops. To remain competitive, the disadvantaged must react by devaluing their own currency.

If it persists, this race to the bottom threatens to paralyze global trade and destabilize the entire financial system! It would wreak particular havoc on the most debt-laden national economies.

This is precisely what experts fear is now happening.

In September, Brazil’s Finance Minister Guido Mantega declared that “we’re in the midst of an international currency war.” Billionaire investor and financial guru George Soros agrees. “I share the growing concern about the misalignment of currencies,” he wrote in the Financial Times. “Brazil’s finance minister speaks of a latent currency war, and he is not far off the mark” (October 7; emphasis ours throughout).

Dominique Strauss-Kahn, the head of the International Monetary Fund (imf), warned that in governments the world over the idea is beginning to “circulate that currencies can be used as a policy weapon.” “With almost no country wanting a strong currency … as they try to stimulate economic recovery, and with the U.S. and the EU pushing for a yuan revaluation, the big theme in 2011 is shaping up to be some sort of currency wars,” warned Chris Weafer, chief strategist at Russian investment firm Uralsib.

In October, Robert Kuttner, co-founder of the American Prospect, wrote, “Trade war is here—and we’ve disarmed.”

China vs. America

The two actors at the center of this global drama are China and the United States. In an effort to sustain high exports, China’s government has for years intervened to keep the yuan low compared to the U.S. dollar. Although this has long frustrated Washington, it was able to put up with Beijing’s currency manipulation as long as the U.S. economy chugged along at 3 to 5 percent growth per year.

But as the U.S. economy slows, Washington is searching for ways to boost manufacturing and, along with it, employment and consumer spending. To increase exports, the Federal Reserve has driven the dollar low. During September alone, the dollar tanked 4.5 percent against a basket of major currencies contained in the U.S. Dollar Index—by historical standards, a huge drop.

But economic growth remains slow, for a number of reasons. One primary reason: China. As long as Beijing keeps the yuan lower than the dollar, goods manufactured in the U.S. remain uncompetitive. How bad are the consequences? So bad that the White House—hardly a confrontational administration—now appears willing to confront Beijing on the issue.

In October, for example, the U.S. House of Representatives passed the Currency Reform for Fair Trade Act. Under this new law (which has yet to pass in the Senate), punitive tariffs would be imposed on Chinese exports as long as Beijing intentionally devalues the yuan to promote its own economic growth.

Of course, America was accused of using this law to start a trade war with China. Truth is, as Democrat Rep. Linda Sanchez stated before Congress, “We are already in a trade war. And China is using cannons and we’re standing here shooting [air-gun] pellets.”

Whichever way you look at it, the consensus is the same: Trade war is starting between China and the United States!

This is deeply alarming, especially for Americans! Why? Because if a full-scale trade and currency war erupts, China has decisive leverage over the United States.

This fact is becoming increasingly evident. In March 2009, the Pentagon conducted its first ever series of economic war games. “The soldiers were Wall Street traders and executives, economists and academics,” reported Eric Weiner in the Los Angeles Times. “The weapons were stocks, bonds and currencies. The participants were divided into teams: the U.S., China, Russia, Japan, the European Union and so on” (October 6).

“What the exercises showed was that the U.S. consistently lost to China in economic warfare,” Weiner noted.

In September, when U.S. President Barack Obama met with China’s Premier Wen Jiabao on the sidelines of the UN General Assembly, he demanded that China stop manipulating its currency. Wen, aware he was operating from a position of power, responded in a ho-hum manner—in essence saying, Just how much money do you owe us again?

China’s leaders, wrote Weiner, “know what our leaders are only beginning to understand—that China would probably win a global trade war.”

This past summer, Ding Yifan, a chief official at China’s Development Research Center, said that if America became too belligerent, China could not only refuse to lend more money, but could also dump its current holdings of U.S. government debt. His comments came during a conference where Chinese officials questioned the creditworthiness and reliability of the dollar. Since then, the question of the dollar’s value has emerged as a serious topic of discussion in government halls around the world.

The Threat Is Real

Too many people don’t take this threat seriously enough. Many analysts say that if China were to dump its dollar holdings it could cause interest rates to soar, and that would hurt China as much as it would America because it would destroy its best customer. Additionally, the U.S. Federal Reserve could simply print up whatever money was needed to cover government spending and push interest rates back down. Thus China would lose the most in any trade war, goes the argument.

These views are woefully simplistic. Those people are deceived.

First, if the Federal Reserve began widespread dollar printing—on the scale required to redeem China’s vast holdings—it would send the dollar’s value plummeting and destroy its place as the world’s reserve currency. The importance of reserve currency status cannot be overstated. Since the world uses dollars to conduct international trade, there is a built-in demand for dollars that supports their value even when the government runs gargantuan budget deficits. If demand for the dollar stops, the money Washington uses to pay its bills and fund its social programs vanishes. America sinks.

Just think, if America’s biggest creditor, which is also the world’s biggest exporter, pulled the plug on America, would the world even want dollars anymore? And even if America could survive China’s “nuclear” dollar option, what would happen if just one other major country—like Germany, Japan or Saudi Arabia—took China’s side and got rid of its dollars?

This scenario may sound extreme, but it’s one that pundits are beginning to realize could happen!

Second, what if China and the rest of the world found another currency to replace the dollar as the world’s reserve currency? Even now, as fear of trade and currency war increases, a growing number of world leaders and finance gurus are entertaining the idea. Calls are going out—and not just from the likes of Iran or Russia—for the end of the dollar’s reign. Other powers and emerging powers, like France and Brazil, have also called for a new global currency.

The imf is already making a move. Last year, it began issuing a type of currency called sdrs (Special Drawing Rights), based upon a basket of major currencies. In effect, the imf began acting like a global central bank—even selling bonds denominated in sdrs. China and Russia have invested billions in them. According to Omnis analyst James Rickards, the shift away from dollars has already started and will accelerate. sdrs could replace the dollar as the world’s reserve currency in two to five years, he told the New American. “It’s not speculation, it’s actually happening” (September 15).

In case you are wondering, the imf is dominated by European countries.

The movement away from the dollar is supported by the United Nations too. “A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency,” said the UN’s World Economic and Social Survey for 2010. “The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency.”

Watch closely: If America gets too testy, Beijing has the leverage to up the ante and draw even more countries into a concerted attack on the dollar. If a legitimate alternative to the dollar emerges and is embraced globally, this would mark the death knell of the American economy!

A Global Phenomenon

It is not just China and America engaging in currency manipulation and trade war.

As the Telegraph’s Ambrose Evans-Pritchard reported in September, “Brazil, Mexico, Peru, Colombia, Korea, Taiwan, South Africa, Russia and even Poland are either intervening directly in the exchange markets to prevent their currencies rising too far, or examining what options they have to stem disruptive inflows” (September 29).

On October 5, the Bank of Japan announced it would cut its key interest rate and institute a ¥35 trillion (us$418 billion) monetary easing program. By forcing the yen down, Tokyo is trying to help its largest companies (and employers), such as Toyota, Sharp and Sony, remain competitive in the global market.

Grasp what is happening here: Nationalism is emerging as a powerful and dangerous force in global finances!

The decision by the likes of China, America and Japan to devalue their currencies comes with disastrous consequences for the world’s smaller currencies and economies. As advanced economies devalue their currencies, the currencies of smaller economies, such as the Brazilian real, tend to rise, especially as investors seek higher yields and better returns. This, as Brazil’s finance minister lamented in September, “threatens us because it takes away our competitiveness.”

Similar trends have occurred with the Canadian dollar and Swiss franc. Also, the Australian dollar rose in October to its highest level against the U.S. dollar since 1983.

As Germany’s DerSpiegel declared in October, “The whole global currency system is in a state of jeopardy. It seems as if the world has been turned upside down—and has become very dangerous. Indeed, for better or worse, the well-being of entire countries depend on the value of these currencies, meaning that instability on the currency markets also threatens the structure of the global economy” (October 5).

Global economic chaos looks imminent!

First Trade War, Then …

Ultimately, trade and currency wars carry with them a greater danger than tanking economies and collapsing financial systems: They are a sign of the resurgence ofnationalism!

As national economies and the global economy flounder, national governments are turning inward. They are becoming more protectionist. And the longer national economies wallow, the more inclined world governments will be to embrace nationalist financial policies—even if it means arousing the ire of other countries!

A dangerous scenario is now developing.

History shows that trade and currency wars have a nasty tendency to snowball out of control. Remember the Great Depression. During the four years after the 1929 stock market crash, America regressed like at no other time in its history. Forty-two percent of America’s banks folded. Production at the nation’s factories, mines and utilities fell by more than half. People’s real disposable incomes collapsed by 28 percent. Stock prices cascaded to one tenth of their pre-crash height. Unemployment rose from 1.6 million in 1929 to a whopping 12.8 million by 1933—leaving one out of every four workers jobless. People lost their savings, their homes, their health and their hope.

Such conditions are starting to sound familiar once again. But what made the 1929 crash turn so much more deadly than the previous, short-lived crashes of 1920 and earlier? Many economists say it was unique because just months later, a trade war began that quickly engulfed the world.

Post-World War i industrial America, reeling from the effects of the stock market crash and subsequent job losses, erupted into protectionist fervor. Riding a populist wave, U.S. politicians imposed the Smoot-Hawley Tariff Act—one of the most draconian protectionist policies in America’s history. Historian Richard Hofstadter, with the benefit of hindsight, described the tariff act as “a virtual declaration of economic war on the rest of the world.”

That is just how the rest of the world saw it. Foreign nations were outraged. Within two years, 25 countries had retaliated; U.S. and foreign trade took massive losses. America exported $5.24 billion in goods in 1929; by 1932 the total had fallen to just $1.6 billion. Overall, world trade had declined some 66 percent by 1934.

In the 1930s, countries around the world defended and furthered their own interests even when it meant undermining the economies of other nations. Before long, the economic malady began to have dramatic social and political consequences. Populations became frustrated. Extremist ideologies and policies entered the mainstream. In some instances, like Germany, radical leaders tapped the mass frustration to gain political leadership.

By the end of the decade, the mass frustration had begun to boil over: The Second World War erupted!

Of course, trade and currency wars were not the sole cause of World War ii. But historians agree that economic chaos in the global financial system (and in national economies) played a central role in preparing the world for war.

Today, many prominent, mainstream figures are describing the global economy using military terms. Study World War ii and you’ll notice historians employing the same terms—“trade war” and “currency war,” the use of economic policy as a “weapon”—in their explanations of what led up to the Second World War.

To the question “What comes after global trade war?” history has a simple and terrifying answer: military conflict on a global scale!

An Apostle’s Warning

Throughout his 53-year work, Herbert Armstrong often described the conditions that would precede the biblically prophesied collapse of the United States. Despite being the most stable currency in the world, the American dollar would one day be in “jeopardy of being devalued,” he once wrote. When the dollar plummets, he warned, inflation would erupt and this would lead to “eventual economic collapse for the United States.”

So strong was Mr. Armstrong’s faith in Bible prophecy, he warned as early as the 1960s that World War iii had already gotten underway, and that it was “ECONOMIC in nature.” About America and Britain in particular, Mr. Armstrong stated, “God prophesied a virtual trade war will get under way against the United States and Britain—and [that] our national economics will falter, and then collapse!”

He delivered that forecast in March … 1968!

Forty-two years later, it is now evident that the trade war that will end in the collapse of America and Britain is here.

Are you ready for global financial chaos? It doesn’t matter if you live in America or Europe, South America or Africa—the economic bedlam that Bible prophecy says precedes global political and military conflict has begun.

China is waging economic war on the U.S., a war that is intensifying and will soon precipitate America’s collapse. As a means to this end, China is forming an economic axis with Germany and Europe (more about this pivotal development on page 12, “The Silk Superhighway”).

Scripture says this China-Europe economic axis will be responsible for besieging America and causing its final economic downfall. “And he shall besiege thee in all thy gates, until thy high and fenced walls come down, wherein thou trustedst, throughout all thy land: and he shall besiege thee in all thy gates throughout all thy land, which the Lord thy God hath given thee” (Deuteronomy 28:52).

As America falls, prophecies in Revelation 17 and 18 show that this European empire will replace the U.S. as the nucleus of global trade and commerce. In the end time, the Apostle John wrote in Revelation 18, the “merchants of the earth” will be “waxed rich through the abundance of her delicacies” (verse 3). (For more information about this prophecy, request a free copy of Daniel Unlocks Revelation.)

Why should you be concerned by trade and currency wars? Because these financial crises are creating the biblically prophesied conditions that precede World War iii!

Don’t remain ignorant of these developments. Take these crises seriously. More importantly, make it a goal to educate yourself on how to prepare for this imminent period of global chaos and carnage.

If you are willing to embrace God’s law and lifestyle, the Bible reveals that God mercifully provides a way to escape the impending turmoil. When the global tribulation strikes, God says that those who follow His law and support His work on Earth will “flee into the wilderness, where [they] have a place prepared by God” (Revelation 12:6, Revised Standard Version).

To learn more about this place of safety, and how you can find solace there during the soon-coming tribulation, request and study our free booklet Repentance Toward God.

Germany enters the rare earth debate

For most of us, the terms yttrium, praseodymium and terbium are about as riveting as staring at a blank wall. But in Germany last week, rare earth elements such as these were fodder for hours of lively discussion and debate.

On Tuesday, industry and government officials from Germany and across Europe gathered in Berlin to attend a conference organized by the Federation of German Industries. The primary topic of discussion? China’s monopoly over vital rare earth materials, and how Germany and the rest of Europe can secure a stable supply.

Citing remarks by German Economics Minister Rainer Bruederle after the meeting, the Wall Street Journal reported that Germany is especially “feeling the effects of current supply shortages of rare earth materials,” and that competition for rare earth materials “was now a problem of politics in addition to economics” (emphasis mine throughout).

This is not something Germany can forget about. Rare earth materials are essential in high-tech equipment such as tv screens, mobile phones, fiber optics, computer chips and electric motors. For Germany, a manufacturing behemoth, any shortage of these critical elements could spell disaster. In its report on the conference, the New York Times noted that “[t]he consensus among attendees, who included representatives from industry as well as the European Union, the World Trade Organization and the World Bank, was that trade rules were inadequate when it came to responding to China’s decision to cut back export quotas of such materials.”

In other words, Germany believes this must be addressed, and soon. Ultimately, Berlin has two options, neither of which serves the interests of the United States. First, and this is likely in the short term, it could come to some sort of bilateral agreement with Beijing securing the flow of rare earths into Germany.

The question is, would Berlin cut the U.S. into the deal? Or would America have to strike its own deal with China?—which wouldn’t be easy amid the ongoing Sino-American dispute over currency manipulation, trade and so on.

Second—and this option will be pursued even if an agreement with China is formed—Germany must secure its own source of rare earth elements. Although China controls 95 percent of the rare earth market, expect Germany to step up its pursuit of these materials, especially in mineral-rich regions like Africa.