“While it true that trade is fungible, that is, easily shifted around narrow embargoes, it is uncertain if China could find a reliable market for the mass of consumer goods it ships to America. The Europeans, prone to protectionist sentiment behind the wall of the EU cannot be relied upon by China to pick up the slack from the United States.” Mr. Ye continued, spicing his talk with detailed statistics and explanations. Clearly he liked conveying his knowledge — and he had the rapt attention of most in the room.
He concluded the economic impact portion of his talk, “The bottom line is that a truly effective U.S. economic embargo, with Japanese participation, would result in about 25 million workers losing their jobs. This would increase unemployment by about three percent. But these job losses would be heavily concentrated in the cities where the export industries are located. Urban unemployment would actually increase by about 12 percent with rural unemployment being largely unaffected, at least initially. Lastly, due to the large trade surpluses China has run for several years, its foreign currency reserves are sufficient to fund imports of strategic materials and weapons from Russia for several years.
“As to the question of alternate supplies in the event of a wartime embargo or blockade, China is very vulnerable. China is the third largest importer of crude oil in the world. It needs about one million barrels per day and most of this supply comes via maritime routes as opposed to overland from Russia or the former Soviet Republics in Central Asia. China is the world’s largest manufacturer of steel and it imports significant quantities of iron ore from abroad, although it does have sizable domestic production. China also imports large quantities of grain from Australia, the U.S., Canada and Argentina. Of note, China’s merchant fleet is now the world’s third largest, behind Japan and Greece. As to timelines, I do not know what the extent is of China’s strategic mineral reserves, but as for food imports, China can make do with little to no maritime shipments. The Chinese can simply shift grain use away from feeding livestock directly to feeding people; this should be more than enough to make up any shortfall. The key commodity that China can’t afford to be cut off from is oil. In this aspect, China is in a position very analogous to the position of Imperial Japan prior to World War Two when America led an effective oil boycott and later, once the U.S. entered the war, a naval blockade. I currently see no way they can overcome a naval blockade of their sea lines of communication. Unless agreements for reliable and sizable deliveries are made with overland neighbors such as Russia, China would grind to a halt in less than four months. Of course, that assumes an active naval blockade by the U.S. fleet. A simple boycott of Chinese goods by America and Japan would not serve to cut China off from any needed items — other than some high tech equipment.”
Mr. Ye offered a tight-lipped smile and took his seat. Donna noted he never glanced at the three by five cards he had prepared but held at his side during the briefing. It was now Colonel Lake’s turn. The time was 3:54 PM; Ye had run over a few minutes, consuming Dr. Wendell’s unused time. No one seemed to mind, Ye was good.
Colonel Lake looked across the table at Donna, drew a breath and stood up ramrod straight but looked at ease and relaxed. His light green long sleeve military shirt was adorned only with his nametag, the eagle epaulettes that signified his rank as a colonel, and the two-inch oval badge of the Office of the Secretary of Defense. His plain flat black tie was held to his pressed shirt with a simple silver tie clip that also was adorned by a miniature of the same rank-identifying eagle. The shirt had two sharp creases in it, each running straight down from the center of each pocket. Colonel Lake left his legal pad on the table and addressed the entire room as he spoke. Donna thought of the strange contradictions of the warrior class.
Colonel Lake began, all the familiarity of lunchtime gone from his voice, he was the epitome of a professional, “Good afternoon. I’m Colonel Lake and for this exercise I represent the Chief-of-Staff of the PLA.” The colonel launched immediately into his briefing, highlighting the strengths and weaknesses of each course of action. He wrapped up with a summary of each.
“Option one, using the PLA’s growing power to intimidate Taiwan has its attractions. First, it has worked before. In 1996, China fired missiles that detonated just off the coast of Taiwan in an attempt to dissuade a vote for the pro-independence presidential candidate. Whether such an approach could be used to force a union with Taiwan is a high-risk venture. If such a campaign of intimidation fails, China would lose face and its world standing would be diminished.
“Option two, launching a full-scale invasion to conquer Taiwan, offers the most rewards for the least risk. However, this option is not without danger. In the near-term, success could only be accomplished with three elements: surprise, the non-intervention of the U.S., and the use of chemical weapons to neutralize resistance at the invasion beaches. Using chemical weapons may cause a negative international response, but I might add, the Chinese may not be dissuaded. After all, Saddam Hussein killed his own people with nerve agent and barely raised a ripple. And, don’t forget, the outrage in the world community caused by the PLA killing 5,000 unarmed students in Tiananmen Square in 1989 was short-lived. In the mid-term, a sustained three to five year naval construction program may provide the PLAN with enough amphibious capability to forego the use of NBC and simply invade Taiwan with overwhelming firepower.
“Option three, launching a full-scale invasion of Taiwan as a prelude to a sustained campaign to conquer Asia, is bold and imaginative, but hardly sustainable. Certainly, Chinese planners would have to contend with the possibility that America and Japan would not stand idly by while a major power consolidated its hold on Asia. This might be a viable option in ten to 20 years, but not at the present time.”
As the colonel wrapped up his presentation, he sat down in his chair and looked to Mr. Dowling. It was exactly 4:10 PM, right on schedule.
Cliff Dowling spoke up, “I’ve decided I want no discussions or questions to precede the vote. We all had plenty of time to interact with each other during the course of the day, and, most of us have our day jobs to attend to after we release for the day.” Dowling continued, “So, let’s get to the decision. I will ask the four primary players which one of Colonel Lake’s options they prefer. With four votes, at least one option should receive two votes. At my discretion, I will ask for a second round of votes if the top vote getter only receives two votes in which case I’ll leave off one of less preferred options.
“All those in favor of option one, intimidating Taiwan, please raise their hands.” Dr. Wendell gave his characteristic half wave, his elbow still stuck to the table.
“All those in favor of option two, conquering Taiwan, please raise their hands.” Donna and the colonel raised their hands opposite each other.
Dowling raised an eyebrow almost imperceptibly, “All those in favor of conquering Taiwan as a prelude to conquering Asia please raise his hand.” Dowling had changed his sentence structure midway through as a slight gesture of humor. Mr. Ye raised his hand and shrugged, briefly cocking his head a bit to one side as he did so.
Dowling frowned, clearly he had not expected the economist to suggest a bold course of action. “I’d like to have a second round of voting, this time between options one and two only. All those in favor of option one?”
Ye and Wendell raised their hands. Donna thought about Ye’s reasoning — all or nothing — certain amount of sense to that. She decided this man was worth some additional questioning and resolved to grill him at lunch tomorrow. Donna and the colonel raised their hands at Dowling’s calling of the option two question.