ANCHOR: Is he right, Foreign Minister?
JAMIE SONG: You have in American gaols black kids, many of whom were born into broken families. They grew up in an environment of crime and drugs. Your social and political system doesn't allow for them. If it did, they wouldn't be gaoled as outcasts, they would be helped.
ANCHOR: But isn't it the-
JAMIE SONG: No, Mike, let me finish. This is a very important point. We don't have that problem. We have a handful, and I stress a handful, of people who we believe are a threat to the stability of our country. They are advocating the collapse of the Communist Party and multi-party elections. We in the Chinese government believe that if they had their way our country would fragment into warlordism, separatism, and possibly civil war. That handful of people is being confined so that 1.3 billion people have a chance of the best life we can give them. And I'm not talking about the vote. They have that in Russia and India, and I'm not seeing great hospitals, schools, roads, housing. We are seeing dead bodies in provinces like Chechnya and Kashmir which the central government is failing to control. There is instability, violence, and economic quagmire. And one final point. We don't seek to interfere in the internal affairs of the United States. May I respectfully suggest that you butt out of ours?
ANCHOR: Chris Bronowski, civil war if there are elections?
COMMENTATOR: The Foreign Minister is expressing a view which is prevalent throughout China. And he has got some plausible evidence, say from Russia or even Yugoslavia in the nineties, to back him up.
ANCHOR: So you're arguing that the Chinese one-party system is the most suitable for that country.
COMMENTATOR: I don't advocate, Mike. I explain.
ANCHOR: Bombay, India, your turn for Foreign Minister Song.
BOMBAY: Mr Song, why are you afraid of democracy?
ANCHOR: Have you answered that, Jamie?
JAMIE SONG: I think I did.
BOMBAY: You're talking absolute rubbish if I might say so. Our stock market capitalization is far higher than yours in Shanghai and Shenzhen. The fund managers in Schroders and Merrill Lynch attract American pension money to India far more than to China. It takes an average of three months to sign a joint venture in my country. Two years in yours. Our courts are not beholden to the ruling party. They are impartial. Both our countries are corrupt and you talk about Kashmir and war. Yes, we have problems, but our people know about them. You keep secret the body bags coming out of Tibet and Xinjiang.
ANCHOR: And your question?
BOMBAY: What is the point? The man is a bloody liar.
ANCHOR: Foreign Minister?
JAMIE SONG: Rivalry between India and China is traditional. It will be a hundred years before anyone can say for certainty which system is right.
ANCHOR: Bangkok, Thailand. Do you have a question?
BANGKOK: Yes. We in South-East Asia are worried about the attacks in the South China Sea. I would like to ask Mr Song, why was it necessary? Why is China destabilizing our region?
ANCHOR: That's back to lunchtime's session, Jamie?
JAMIE SONG: I know there is concern. But China is a superpower. Our defence forces will have to reflect that. You have the word of my government that trade which is the business of the Pacific Rim countries will not suffer. But as we have stated many times, we are only reclaiming sovereign territory which is rightfully ours.
ANCHOR: Gansu, China. You want to talk to your Foreign Minister.
GANSU: [Inaudible]
ANCHOR: You're live with the Chinese Foreign Minister.
GANSU: Why can't my government feed its people? [disconnect]
ANCHOR: Did you get that, Jamie? Why can't you feed your own people?
JAMIE SONG: The agreement for me to speak on your show was that I did not take calls from Chinese citizens.
ANCHOR: It slipped through, Jamie. I'll ask it. Are people starving in China?
JAMIE SONG: No.
ANCHOR: Are there food shortages?
JAMIE SONG: Absolutely not.
ANCHOR: Iowa, you have a question for Jamie Song.
MADISON COUNTY: Foreign Minister, I'm a grain farmer. Eighty per cent of my crop is sold to your country. To be frank, I'm scared. If things get really bad, will you stop buying my grain?
ANCHOR: Are you going to honour your grain contracts?
JAMIE SONG: We have never initiated a threat of sanctions against the United States. We have only ever said that if America starts a trade war we will retaliate.
ANCHOR: Is that going to hit grain?
JAMIE SONG: How can I say? Why don't you ask the President what sanctions he has in mind?
ANCHOR: Can China survive without American grain?
JAMIE SONG: Absolutely.
ANCHOR: Iowa, if all your grain sales to China stop, what happens?
MADISON COUNTY: I go bankrupt. The banks will recall the loans. I reckon that would be for most of the farms around here. That's why we need things sorted…
ANCHOR: Foreign Minister, how much can you hurt America in a trade war?
JAMIE SONG: I haven't sat counting, Mike. But it's going to be bad.
ANCHOR: [pausing and adjusting his glasses to read a report put in front of him] Now we have some horrifying news just in. Jamie Song, please stay with us for your comment. All we know so far is that Chinese aircraft attacked a civilian convoy leaving Haiphong. Dozens of people have been killed, many of them Americans.
Hidei Kobayashi, Nomura Securities' Head of Strategy and Trading, hated public speaking. But on the morning of Tuesday 20 February he was asked to make a presentation to Nomura's board of directors about the crisis in the South China Sea.
He began by explaining that Dragonstrike was only partly about territory, and partly about teaching a lesson in real-politik to the lesser powers that shared a border with or harboured a claim to the South China Sea. Always at the forefront of concerns of China's leaders was the need to secure the oil and gas below the sea. By the end of the twentieth century there had been a fundamental change in the world oil market and a redirection of the market towards East Asia and away from Europe and North America. First of all there had been an important change in the relative power of the Organization of Petroleum Exporting Countries (OPEC) to influence oil prices. The mid-1980s were the nadir of OPEC's power, and its share of the market for oil fell to just 30 per cent in 1985 — down from 50 per cent in the mid-1970s, when it was at its peak of power and influence. But during the 1990s it rebuilt its position. This was not because of anything it did in particular but because of the rapid growth in the East Asian economies. As former exporters of oil — like China and Indonesia — began to grow rapidly domestic consumption absorbed more and more of their oil production. Discoveries of fresh oilfields could not keep pace with the speed of their industrialization.
For China the problem was particularly acute: by the turn of the century, after years of an average growth of 7 per cent in demand, it was facing a shortfall in oil of 3,500,000 tonnes a year and this had to be met by imports. Its efforts to find oil in home waters had been to little avaiclass="underline" the East China Sea produced some modest gas finds but no oil to speak of. The best find was a huge gas reservoir off the south coast of Hainan Island at the northern end of the South China Sea, and an 800 kilometre submarine pipeline had been constructed to pipe 2,900,000 cubic metres of gas a day to fire a power station in Hong Kong. Onshore, the application of new drilling techniques succeeded in extracting more oil from the Daqing field in the north-east, China's most productive deed the north-eastern oil-fields accounted for 70 per cent of onshore production. The Tarim basin in the far north-west proved prospective, but it was just about as far as you could get from where it was needed on the coast and transportation costs added $3 a barrel. Against that background, Kobayashi told Nomura's directors, it was not difficult to understand the attraction to the leadership of seizing the South China Sea, especially when briefing papers were telling them of the untold riches of the sea. `According to estimates,' one official document opined, `Nansha's oil reserves total over 10,000,000,000 tonnes. Geologists believe that the area of the Zengmu Reef belongs to a shallow continental shelf, with sedimentary rock thickness of around 15,000 metres, and is one of the zones with abundant oil and gas resources. It is very likely to become the second Persian Gulf.' By way of comparison, in its heyday Daqing produced 1,490,000,000 tonnes of oil during the thirty-five years to the end of 1995. With estimated reserves of 10,000,000,000 tonnes available for exploitation China would not need to import a drop of oil for the foreseeable future.