The Coming China Wars

The Book That Started It All (For Me)

Team Substack,

I so pleased to offer the Coming China Wars (2006) in serialization for my loyal subscribers.

I thought it fitting that we go back to the beginning of my work on Communist China as a new administration comes to town.

What I always find so interesting about re-reading my first book on China, this Coming China Wars, is how the issues are as relevant today as they were then.

Back in that 2006 day, I was greeted by an even then woke and globalist media as a hyperbolic critic. Yet, today, this book reads like a Pentagon report.

And as this serialization comes to you through the miracle of Substack, you’ll see in one chapter where I even predict China will burden the word with a global pandemic!

So enjoy the read.

We start in this episode with the title page, table of contents, and introduction.

Eleven chapters will then follow in eleven episodes.

Let’s make 2025 a GREAT year for America.

Regards,

Peter Navarro

Table of Contents

Title Page

Copyright Page

Contents

Praise for The Coming China Wars

Author's Comment on the Updated and Expanded Edition

Introduction to China's "Butterfly Effect on Steroids"

1. The Cheating "China Price" and Weapons of Mass Production

2. China's Counterfeit Economy and Not-So-Swashbuckling Pirates

3. "Made in China"—The Ultimate Warning Label

4. The "Blood and Nukes for Oil" Wars—The Sum of All Chinese Fears

5. The World's Most Ironic Imperialist and Weapons of Mass Construction

6. The Global Warming Wars—Killing Us (and Them) Softly with Their Coal

7. The Damnable Dam and Water Wars—Nary a (Clean) Drop to Drink

8. China's Chaotic "Wars from Within"—The Dragon Comes Apart at the Seams

9. Inside the World's Biggest Prison with Yahoo! the Stool Pigeon and Comrade Orwell

10. Red Army Rising—The Coming China Hot Wars

11. Racing for the Ultimate Strategic High Ground—The Coming China Star Wars

12. How to Fight and Win the Coming China Wars!

About the Author

Acknowledgments

Index

Financial Times Press

Praise for The Coming China Wars

"This is a well researched and illuminating book and is a necessary counter to a large body of opinion that posits an inevitable and even peaceful rise of China and chooses to ignore most of the author's message."
—Richard Fisher, Vice President, International Assessment and Strategy Center

"What Al Gore does for climate change, Peter Navarro does for China. This book will hit you right between the eyes. A gargantuan wake-up call."
—Stuart L. Hart, S.C. Johnson Chair of Sustainable Global Enterprise, Cornell University, Author of Capitalism at the Crossroads

"A must read to be fully informed on U.S.-China trade. Hard nosed and impactful. Navarro lays it out."
—Peter Morici, Professor, Robert H. Smith School of Business, University of Maryland

"Peter Navarro is that rarest and most valuable of China-watchers—an economist who sees the big strategic picture as well. The Coming China Wars contains the kind of realistic analysis needed by all Americans today, from voters to presidential candidates."
—Alan Tonelson, U.S. Business & Industrial Council

The Coming China Wars

Where They Will Be Fought and How They Can Be Won

Revised and Expanded Edition

Peter Navarro

To the memory of Darren Russell—a good son,
a fine young man, and a very dedicated teacher.

Contents

Author's Comment on the Updated and Expanded Edition

Introduction to China's "Butterfly Effect on Steroids"

Chapter 1: The Cheating "China Price" and Weapons of Mass Production

Chapter 2: China's Counterfeit Economy and Not-So-Swashbuckling Pirates

Chapter 3: "Made in China"—The Ultimate Warning Label

Chapter 4: The "Blood and Nukes for Oil" Wars—The Sum of All Chinese Fears

Chapter 5: The World's Most Ironic Imperialist and Weapons of Mass Construction

Chapter 6: The Global Warming Wars—Killing Us (and Them) Softly with Their Coal

Chapter 7: The Damnable Dam and Water Wars—Nary a (Clean) Drop to Drink

Chapter 8: China's Chaotic "Wars from Within"—The Dragon Comes Apart at the Seams

Chapter 9: Inside the World's Biggest Prison with Yahoo! the Stool Pigeon and Comrade Orwell

Chapter 10: Red Army Rising—The Coming China Hot Wars

Chapter 11: Racing for the Ultimate Strategic High Ground—The Coming China Star Wars

Chapter 12: How to Fight and Win the Coming China Wars!

About the Author

Acknowledgments

Index

Author's Comment on the Updated and Expanded Edition

Why go through all the trouble of writing an expanded and updated version of The World Is Flat only a year after the book was first published? I can offer a very brief answer: because I could and because I must.
—Tom Friedman

I offer this updated and expanded edition of The Coming China Wars because, like Tom Friedman, I can and I must. I can because, based on the initial success of the hardcover version of this book, my publisher thought it would be a great idea to offer a low-cost, paperback edition.

I must write Version 2.0 of The Coming China Wars for at least three reasons. The first relates to one of the lesser known, but more amusing quotations of John F. Kennedy. After a bruising campaign against Richard Nixon in the 1960 election, the new President would quip: "When we got into office, the thing that surprised me most was to find that things were just as bad as we've been saying they were."

My own surprise is not that the world's emerging "China Problem" is as bad as I said it was in the first edition. Rather, it is that many of the problems that I documented in that edition have become significantly worse—and have progressed much more rapidly than even I had projected. Indeed, since the initial publication of the book, not a day seems to go by without yet another chilling revelation about the dangers of a world economy increasingly "Made in China."

These revelations span the spectrum from exploding cell phone batteries, shredded tires, and fake Lipitor to poisonous toothpaste and deadly toys. But they also include startling news about broader global issues such as China's provocative blasting of a satellite out of the sky; its threats to "go nuclear" on American financial markets by dumping U.S. bonds and dollars; a rapid escalation in the harassment of foreign journalists; and China's continued and frankly despicable role in tragedies and events such as the Burmese repression, the ongoing genocide in Darfur, and a rogue Iran's destabilization of the Middle East.

The second reason why I must update and expand The Coming China Wars is that, based on a large mound of reader correspondence, I clearly missed coverage of a number of key issues. That's why I have added several new chapters to this edition.

One chapter absolutely essential for consumers and businesses operating in China deals in much greater detail with what has become an epidemic of contaminated and defective products from China. Consumers need to know how to protect themselves from this epidemic. Business executives likewise must learn how to ensure quality control when offshoring to the People's Republic—or risk costly recalls and debilitating lawsuits.

A second new chapter deals with China's very rapid Red Army buildup. Since publication of the first edition of this book, it has come to light that China's military budget is growing roughly twice as fast as its own red-hot economy. China's rapid and highly provocative military buildup includes modernization of what is already the world's largest standing army; construction of a deepwater navy to challenge the United States on the high seas; the addition of advanced nuclear submarines capable of striking U.S. cities with nuclear weapons; and a Chinese Air Force powered by the most advanced fighters and bombers available from the Russians. The political and strategic implications of China's arms buildup are worth a very close look, particularly because this buildup is quite literally being funded by the dollars that you and I spend every day on cheap Chinese goods in places such as Wal-Mart and Target.

A third new chapter very closely related to China's military adventures focuses on The Coming China Star Wars. While the U.S. space program continues its parabolic fade amidst budget cuts, embarrassing scandals, and interminable shuttle delays, China is aggressively moving forward with plans for a permanent Chinese space station, colonization of the moon, and travel to Mars. In conjunction with these bold plans, the Chinese are rapidly rolling out a massive space-related infrastructure that includes a powerful satellite network, a Global Positioning System (GPS) constellation known as Beidou, a fleet of deepwater space tracking ships, and ground stations established in Chinese client nations across the globe that will be capable of tracking U.S. military assets. The critical question examined in this chapter is whether China will be a friend or foe as it reaches for the stars; and you might find at least one possible answer to that question very disquieting.

A fourth new chapter squarely addresses China's human rights abuses, its suppression of free speech, China's brutal subjugation of Tibet, and what has become the world's biggest prison. Many readers questioned why I failed to address these topics in the first edition. As an economist, I originally thought these topics were more properly in the domain of politics. What changed my mind on this point have been several incidents involving self-censorship to gain access to the Chinese economy by three of the world's largest tech companies and Internet search engines: Google, Microsoft, and Yahoo! In the most despicable case, Yahoo! executives, hungry for business in China, played a key role in the jailing of a journalist who committed no other crime than forwarding an email message. Based on incidents such as these, it's clear to me that most of China's economic problems cannot be resolved without greater political transparency, and greater political transparency inevitably means the lifting of China's totalitarian curtain.

The third and final reason why I believe I must offer this updated and expanded version of The Coming China Wars is that I want to provide a much better set of answers to the core question raised by this book: How can we together fight and win these coming wars in a way that will benefit both China and the rest of the world? It is in this area of inquiry where critics found the most fault with the first edition.

For example, in his thoughtful review in the Asia Times, Benjamin Shobert wrote that The Coming China Wars "serves as an important touchstone for any prudent discussion regarding the implications to China's growth." However, Shobert also noted that the book "would have been more complete with an expanded emphasis on solutions to the issues he introduces." Echoing this theme, Publishers Weekly opined that "this informative book will teach readers to understand the dragon, just not how to vanquish it."

To firmly address this criticism, I have not only substantially expanded my own set of recommendations for consumers, workers, business executives, and government officials. I also offer sets of solutions that have been proposed by some of the most sophisticated China watchers in the world.

I hope that you find this updated and expanded edition of The Coming China Wars to be a very useful tool to help you navigate through the increasingly rough seas of the twenty-first century. My primary goal in this book remains that of a "call to action." My fervent hope is that by raising the level of awareness about the world's growing China Problem, this awareness will translate into economic and political actions both within and outside of China that are long overdue.

Introduction to China's "Butterfly Effect on Steroids"

Communist China has leaped onto the world stage as a capitalist superpower with astonishing speed. Today, China exports its vast array of wares at the competition-crushing "China Price," and we as consumers benefit greatly. If that were the end of the story, there would be no story—just an enchanting little ode to the virtues of competition in an increasingly "flat world."

Unfortunately, this story doesn't end with a cornucopia of cheap Chinese goods. Instead, this story about The Coming China Wars begins precisely at this point. It is a complex story about how the extremely rapid and often chaotic industrialization of the most populous country on the planet has put China on a collision course with the rest of the world.

At least one dimension of this complex story is already well understood. China's conquest of so many of the world's export markets has vaporized literally millions of manufacturing jobs and driven down wages from the heartland of America and the maquiladoras of Mexico to the slums of Bangladesh, the shores of Indonesia, and the once teeming textile factories of Africa. But that "good jobs gone bad" story, tragic and politically explosive though it may be, is only a very small piece of The Coming China Wars puzzle.

The real story provides a thousand variations on the famous Butterfly Effect of Chaos Theory in which butterflies flapping their wings in China set in motion a seemingly disparate and chaotic chain of meteorological events that eventually result in typhoons in Japan or hurricanes in the Gulf of Mexico. In this case, China is now flapping its mighty economic wings, thereby causing all sorts of energy, environmental, political, social, and military typhoons around the world. The myriad of dangers each of us now face from China's Butterfly Effects are very real and often quite personal, as illustrated in these fact-based vignettes from a "day in your life" in a world increasingly "Made in China":

· At the breakfast table, you turn on your Chinese-made TV to watch CNBC and watch intently as CNBC anchor Dylan Ratigan reports that another child has died from acute lead poisoning after swallowing a heart-shaped charm bearing the Reebok logo. The charm and its bracelet had been manufactured in China by a Reebok subcontractor that substituted cheap lead in the product to boost profit margins.

· Your spouse, one of the top-selling real estate brokers in your community, joins you at the breakfast table and promptly groans when CNBC economist Steve Liesman reports that interest rates and home foreclosures continue to rise in response to China's dumping of U.S. dollars in retaliation for a U.S. crackdown on defective Chinese products. Whereas you had the good sense to lock into a fixed-rate mortgage, your neighbor went the adjustable rate mortgage (ARM) route to save what he thought would be a few bucks on his monthly payment. Now, with interest rates spiking, his "exploding ARM" mortgage is doing just that, and he's maxing out his credit cards just to meet his payments.

· Later that morning, you walk out of Wal-Mart with a computer, a laser printer, a flat-panel monitor and some socks, shorts, and new running shoes. Outside, your eyes begin to sting, and your lungs begin to burn from the Asian "brown cloud" now visible on the horizon. It's 90-proof "Chinese chog"—a particularly toxic atmospheric smog that has hitchhiked on the jet stream all the way from China's industrial heartland where everything in your cart was manufactured.

· Driving home, you stop at a gas station to fill up your SUV at a very painful four bucks a gallon. As you watch the gas pump eat up your dollars faster than a Vegas slot machine, you listen to a report on your car radio about how China's addition of more than 100 million new cars to its highways and burgeoning oil demand have helped push oil prices over the $125 a barrel mark.

· Pulling out of the gas station back into traffic, you are horrified to see a sporty little compact car made in Shanghai scream through a red light and plow directly into a school bus when the car's counterfeit brake pads fail. Fortunately, none of the children are badly hurt, but the driver winds up in the morgue after the front end of his Made in China car crumples because of its low-quality steel and the driver-side airbag failing to deploy.

· That night, you get a very alarming call from the hospital. Your father has almost died from a heart attack because the Lipitor he bought at a local discount drugstore for his high cholesterol was a Chinese fake with no active ingredients.

Although each of these dangers is real, this book is not just a story about how China's emergence as the world's "factory floor" might personally affect you and your family. To illustrate the global reach of the China Butterfly Effect, consider these additional scenarios:

· A Filipino family of six is crushed to death when their newly constructed home collapses during a relatively mild typhoon. Government officials later determine defective Chinese building materials are to blame for the building's failure.

· Ten American soldiers are killed in Iraq in a single week by armor-piercing Chinese bullets that slice through their body armor like a hot knife through butter. The bullets had been sold to the Iranian government by state-run Chinese companies as part of a much broader deal involving access to Iranian petroleum reserves. The bullets were smuggled into Iraq by covert Iranian operatives seeking to destabilize the Iraqi regime.

· Telecommunications are disrupted across Asia when a critical satellite is damaged by a large piece of space debris. This space debris was left behind when the Chinese military, without knowledge of the civilian government, blasted one of its own weather satellites out of the sky to test China's anti-satellite weapons capabilities.

· A severe drought hits South America, withering crops and driving up food prices. Climatologists blame the drought on the ongoing destruction of the rainmaking Amazon River Basin to make way for soybean cultivation. South America's soybean boom has been triggered in large part by dramatically increased demand from China, which continues to replace much of its own farmland with factories and industrial parks.

· More than 5,000 villagers in Darfur are forced to flee their homes after a coordinated attack by the Sudanese government that begins with a bombing raid by a squadron of Chinese-made Fantan fighter aircraft. This air assault is followed by a ground-based attack by Janjaweed militia—an Arab paramilitary force tacitly supported by the Sudanese government, whose goal is to completely exterminate black Africans in Darfur. In a classic "blood for oil" deal, the Chinese fighters have been sold to the Sudanese government—China's biggest oil supplier in Africa—in direct violation of a United Nations ban.

The purpose of each of these Butterfly Effect scenarios is to illustrate the incredibly broad scope of China's growing impact on the world. The purpose of this book is to warn that unless strong actions are taken now both by China and the rest of the world, The Coming China Wars are destined to be fought over everything from decent jobs, livable wages, and leading-edge technologies to strategic resources such as oil, copper, and steel, and eventually to our most basic of all needs—bread, water, and air.

Each of the next 11 chapters of this book focuses on one particular battleground. The concluding chapter is dedicated to finding constructive solutions to the emerging conflicts.