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Is It Time to Get it Right in China?

February 18, 2017

The author has traveled extensively over thirty-five years to many provinces of China evaluating potential oil and gas exploration opportunities. He has also served on the board of a Chinese energy company listed in Hong Kong with close connections to the inner circle of China, retained the leading Chinese drilling company for a ten-year drilling campaign in Mongolia representing their first international operation and sold two foreign oil and gas companies to Chinese state oil companies for over $500 million.

There are far greater China experts than the writer to offer their opinions including the former CIA Head of Covert Operations under Stansfield Turner. Moreover, he would understand China as a Columbia University graduate with a Chinese major. On the other hand, consideration of cultural and historical concerns has not been the strong suit of the past two U.S. Presidents before supporting military forays into other countries such as Iraq and Libya. By coincidence, the author recruited MBA's at Columbia in the mid-sixties to work for Esso in the Far East. Nonetheless, the author's experience is only a beginning to attempt to understand the Chinese people and how they think if anyone really does get it.
To be quite honest, despite the many business dealings enumerated above, most of the Chinese on the other side of the table have been less than enjoyable. An exception to that is Wong Chin Yong whom the author brought into an oil investment in Mongolia. He is still a friend though we both went through tons of grief together. Chin Yong said his worst experience was going to the distant steppes of Mongolia which was a very amusing experience for some of us though a bit fearful for a Chinese city boy visiting the land of Genghis Khan. In fact, 10 per cent of the males in Mongolia carry the Y chromosome of Genghis Khan as do some 0.5% of men in the world.
As we walked into our ger (yurt/tent) Chin Yong asked where the toilet was and the response was - "anywhere you like outside." He was happy to return to the civilized world of Ulaan Baatar. You may recognize the guy in the middle below and the guy on the right is Wong Chin Yong who is not inclined to smile that often, particularly when in the company of Genghis Khan descendants.

There are a couple of historical moments most people have forgotten that also shape our current state of play with China. Recently, Jane Perlez published in the Yan'an Journal 'Dixie Mission' Americans Scorned for Backing Mao Are Hailed in China. Now, you may think that is not a mainstream publication, but it is unlikely many of you have ever heard what was reported. The bottom line is in 1944 a group of American diplomats flew into Yan'an in northern China in a C-47 probably piloted by Hump pilots. Their mission was to assess Mao Zedong who had made the city in northern China his guerrilla headquarters and determine if he was the right guy for the U.S. to back.
Some of them concluded that since Mao had the support of the people, he would prevail in the impending civil war with the Nationalist Chinese Koumintang (KMT) forces of Chiang Kai Shek, whom U.S. General "Vinegar Joe" Stilwell nicknamed "Peanut" for his physical appearance and mental acumen. Those who reached the Dixie Mission conclusion fell under the merciless communist witch hunt of Joe McCarthy for having "lost" China. John Paton Davies, on the left below, gave the "Dixie Mission" its name from the fact that Yan'an was in rebel territory. He and John Stewart Service, on the right below, had their diplomatic careers terminated by the lunacy of that most embarrassing period of our history.

Mao wrote a letter asking the Dixie Mission to deliver it to President Roosevelt saying that he and Zhou En Lai would travel to Washington to meet with him. The letter was given to General Wedemeyer, Commander of U.S. forces in China, who did not have the letter delivered. Chiang Kai Shek's army was defeated in the civil war in 1949. In turn, the defeated forces plundered mainland China and took the spoils to the Chinese territorial island of Formosa, 112 miles off shore, where they established the "Republic of China" and became a thorn in the side of the legitimate Peoples Republic of China.

The KMT soldiers, who were left behind in southern China, made their way to the "Golden Triangle" where Thailand, Laos and Myanmar join to begin a lucrative opium trade which later funded another war in Laos. The Dixie Mission boys were persecuted from a career standpoint given the communist paranoia of the time. John Stewart Service wrote an accurate prophesy saying, "China would not be a replica of the United States or a replica of the Soviet Union" which is where we are today.

No matter, the Dixie Mission boys can rest easy as they are recognized in a museum in Yan'an, a village of two million people, as the Americans who "got it" in China. One can only imagine what the relationship of the U.S. and China might be today had we followed the best available expert advice at the time.

Michael Auslin recently published The End of the Asian Century which was reviewed in the Wall Street Journal by Tony Abbott, former Prime Minister of Australia. The conclusion is that the United States and China are the two countries in the world wearing the cloak of manifest destiny. China has traditionally referred to itself as the "middle kingdom" around which the rest of the world revolved, while the U.S. has the moniker of the "last best hope of mankind."

Over the course of the next several months, the author will try to offer an unsophisticated but seasoned view of the chances of each of these two leviathan countries coming to grips with their own domestic issues, their role in the global world and the particular issues of the populist trend of developed countries. Just remember President Richard Nixon picked up where the Dixie Mission left off on February 22, 1972 while we were trying to make a graceful retreat from Vietnam, another massive cultural misunderstanding. Nixon's visit laid the foundation for the "One China Policy" which President Jimmy Carter formally adopted in 1979 and has now been questioned by President Donald Trump.

What a different world we would have had if the United States listened to the request of Mao or, soon thereafter, of Ho Chi Minh that their movements were about liberation and their own national identity. Little did we know the "C" in communism would evolve to corruption and nationalism. Moreover, there was no international communist common identity as evidenced by the issues and bloodshed between China and Vietnam. Vietnam simply does not understand the manifest destiny of the two big boys, both of whom they have defeated in previous wars.



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