During the horrific scene, the CCTV commentator said: `Never again will the Chinese people become slaves to foreign forces. Even if they have to eat the roots of trees and live in caves, because of the hatred of China by the world, they will remain free and proud. Long live President and Party Secretary Wang Feng.'
Military vehicles rolled slowly in from the west. A line of main battle tanks led them. Then came towed artillery, multiple-rocket launchers, self-propelled guns, mortars, surface-to-surface and surface-to-air missiles, anti-tank guided weapons, and air-defence weapons. A ceremonial procession followed, during which pictures of submarines, aircraft, and naval warships were shown on huge screens mounted all over the square. A display of missiles ended the parade. The CSS-4 or East Wind 5 was the first to rumble into the Square. It had been unveiled in 1981, with its range of 15,000 kilometres and single re-entry vehicle 5 megaton warhead. The smaller submarine-launched CSS-N-3 or JL1 with its range of up to 3,000 kilometres and 2 megaton warhead moved in behind it. There were several others, well known to defence attache´s. But the last weapon in the parade was the pride of Chinese military power. It took its place just south of the flag podium. Shown live throughout the world, the missile was immediately recognized as the weapon which could hit the continental United States and anywhere in Europe. This was the solid-fuel-powered East Wind 32. Its range was 12,000 kilometres. Its accuracy had been honed with a new technical guidance system provided by a team of Russian scientists. It carried a lighter warhead, and, most dangerously, it was fired, not from a silo, but from a mobile launch vehicle. The East Wind 32 would be almost impossible to find through satellite reconnaissance until it was fired. During the day it could hide. During the night it could be deployed to its firing position. Mobile missiles with nuclear warheads had haunted the Pentagon during the nineties, because of the failure to track down and destroy Iraq's Scud missiles during the Gulf War. They had been concealed under bridges, in shelters, or parked in heavily populated civilian areas which the enemy could not bomb without international condemnation. Today, China wasn't keeping secret its missile capability. It was taunting the world's most powerful nation. China calculated that just one explosion on American soil would be enough to deter the United States from getting involved in a nuclear war with China. America had never before experienced conflict at home.
The warhead of the East Wind 32, its colours of red and silver sparkling in the winter sun, pointed directly north towards the Gate of Heavenly Peace where President Wang Feng, flanked by generals, had climbed to the rostrum to address the Chinese people. Wang had chosen a moment and place embedded with historical significance. This is where Chinese emperors had handed down edicts over the centuries and where Mao Zedong had declared the founding of Communist China in 1949. The view over the exhibits of Chinese military power was richly symbolic, the architecture of Chinese Communism, the Great Hall of the People, the Monument to the People's Heroes right through to Chairman Mao's Memorial Hall, where the body still lay embalmed. When Wang spoke, he chose not his own words, but those delivered by Mao Zedong in 1949.
`Our work will go down in the history of mankind, demonstrating that the Chinese people, comprising one quarter of humanity, have now stood up. The Chinese have always been a great, courageous, and industrious nation; it is only in modern times that they have fallen behind. From now on our nation will belong to the community of the peace-loving and the freedom-loving nations of the world and work courageously and industriously to foster its own civilization and well-being and at the same time to promote world peace and freedom.
`Ours will no longer be a nation subject to insult and humiliation. We have stood up. Our revolution has won the sympathy and acclaim of the peoples of all countries. We have friends all over the world. The era in which the Chinese people were regarded as uncivilized is now ended. We shall emerge in the world as a nation with an advanced culture. We shall be strong and feared. The Chinese people are no longer slaves.'
The Party controlled the cheers and waving of flags. But that made the response even more awesome. China had been down this road before. And each time it had ended in death, bloodshed, chaos, and the fragmentation of the ruling dynasty.
The Xinhua (New China) News Agency statement on China's changing military policy was characteristically vague. It said the State Council had reassessed the communique 16 October 1964, the day China carried out its first nuclear test. It then listed seven principles, the first and most important being that at no time would China be the first to use nuclear weapons. The statement said: `The reassessment has become necessary because of recent moves by foreign forces to invade the motherland.
`In a Western imperialist conspiracy, the brave officers and men of the People's Liberation Army are being slaughtered by foreign powers intent on the containment of China. This happened in the nineteenth century. In the twentieth century many Chinese lived as the slaves to Japanese, American, British, and French colonial powers. We will never be slaves again. It is the duty of the Chinese people to protect the motherland with any weapons they might have. China is a poor nation. But it can and will defend itself. As Mao Zedong said: "No matter what country, no matter what missiles, atomic bombs, hydrogen bombs… we must surpass them."'
When the Xinhua statement flashed across the screens of dealers in Tokyo their immediate, reflex response was to sell the yen. The prospect of a nuclear exchange between China and the US and the likelihood that Japan would also be a target was more than the Japanese currency could endure. It dropped to.60 and stabilized. But soon it dawned on financial market operatives that the threat of nuclear annihilation altered the calculus of financial markets. Foreign exchange turnover in Tokyo on a good day exceeded $20 billion. But as the morning wore on activity in the market became sporadic. Huge bursts of activity punctured long periods of virtually no trading. The client of Damian Phillips was sitting on nearly $260 million. Ahead of Xin-hua's announcement he had risked interception by foreign intelligence agencies and telephoned Phillips in Hong Kong. He spoke two words and hung up: `Buy Japan.' The Nikkei Index was in free fall when First China began selective buying of blue-chip Japanese stocks. The index had fallen 5.5 per cent the previous day. It had opened another 5 per cent lower at 34,056 and fell further as the morning progressed. Phillips had had his orders. First China, acting through Nomura, bought selectively but in size. It picked up 3 per cent of Nippon Oil, 1 per cent of Toyota, a 4 per cent stake in Matsushita, and a smaller, undisclosed, stake in Sony. Phillips had taken General Zhao at his word and did not feel constrained to use just the trading profits for the currency dealings to buy Japanese equities; he also dipped into the $1 billion and more profits First China had made on oil trading.