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  • 8/7/2019 WARGAME XXI




    Andrey V. Semenov2009

    mailto:[email protected]:[email protected]:[email protected]://www.financialarchitecture.org/http://www.financialarchitecture.org/mailto:[email protected]:[email protected]
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    In my mind in order to understand any civilization, culture orpeople we should look at the book - the book by which thecivilization, culture or people was influenced the most. In myopinion it is impossible to understand Europe and USA withoutunderstanding of the Bible, it is impossible to understandArabic countries without understanding of the Quran, neither toIndia without understanding of Mahbhrata . For Chinese at thetime of war the most representative book is probably The Art ofWar by Sun Tzu. Why I said at the WAR? Well, look around us -war is here - war for markets, customers, financial control andpower.

    In the practical art of war, the best thing of all is to takethe enemys country whole and intact; to shatter and destroy itis not so good. So, too, it is better to recapture an armyentire than to destroy it, to capture a regiment, a detachmentor a company entire than to destroy them.

    Therefore, in your deliberations, when seeking to determine themilitary conditions, let them be made the basis of a comparison,in this wise:

    (1) Which of the two sovereigns is imbued with the Moral law?(2) Which of the two generals has most ability?(3) With whom lie the advantages derived from Heaven and Earth?

    (4) On which side is discipline most rigorously enforced?(5) Which army is stronger?(6) On which side are officers and men more highly trained?(7) In which army is there the greater constancy both in rewardand punishment?By means of these seven considerations I can forecast victory ordefeat.

    The Art of War by Sun Tzu

    The art of war is of vital importance to the State. It matter of life and death, a road either to safety or to rHence it is a subject of inquiry which can on no accounneglected. The art of war, then, is governed by constant factors, to be taken into account in ondeliberations, when seeking to determine the conditiobtaining in the field. These are: (1) The Moral Law; Heaven; (3) Earth; (4) The Commander; (5) Method

    discipline.. These five heads should be familiar to every general: hwho knows them will be victorious; he who knows them will fail.

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    1. The Moral Law

    The Moral Law causes the people to be in complete accord with theirruler, so that they will follow him regardless of their lives,undismayed by any danger.

    The Art of War by Sun Tzu 6th century BC

    The moral law is a tricky part as always. It assumes that byusing ideology, people can be controlled, and power of suchideology depends from obedience the people to such Moral Law`s.How it can be done. ?Easiest way is simply grow up people withsuch ideology from birth through childhood to adulthood.Simply give people one truth, do not allow any deviation fromit and you have people that will follow you regardless of theirlives, undismayed by any danger to protect they Moral Law ,or

    your interpretation of such Law`s.Let`s look @ example of China:

    China has one of the world's oldest civilizations and has theoldest continuous civilization. It has archaeological evidencedating back over 5,000 years. China was the largest and mostadvanced civilization for much of recorded history and is viewedas the source of many major inventions. It has also one of theworld's oldest written language system .Historically, China'scultural sphere has extended across East Asia as a whole, withChinese religion, customs, and writing systems being adopted tovarying degrees by neighbors such as Japan , Korea and Vietnam.

    The first evidence of human presence in the region was found atthe Zhoukoudian cave and is one of the first known specimens ofHomo erectus, now commonly known as the Peking Men , estimatedto have lived from 300,000 to 780,000 years ago. After itsvictory in the Chinese Civil War, the Communist Party of China(CCP) led by Mao Zedong gained control of most of MainlandChina. On 1 October 1949, they established the People's Republicof China as a Socialist State headed by a "DemocraticDictatorship" with the CCP as the only legal political party,thus, laying claim as the Successor state of the ROC.

    So ,we have huge country with huge economic and culture valuewhere all old Moral Law`s was changed to universal doctrine of

    communism 2-3 generation ago enough time for the people to bein complete accord with their ruler, so that they will followhim regardless of their lives, undismayed by any danger.

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    2 Which of the two generals has most ability?

    The control of a large force is the same principle as the control of afew men: it is merely a question of dividing up their numbers.

    The Art of War by Sun Tzu 6th century BC

    That is, cutting up the army into regiments, companies, etc.,with subordinate officers in command of each. Tu Mu reminds usof Han Hsin's famous reply to the first Han Emperor, who oncesaid to him: "How large an army do you think I could lead?" "Not more than 100,000 men, your Majesty." "And you?" asked theEmperor. "Oh!" he answered, "the more the better."

    China has the largest labor force in the world. According toChinese official data, over 700 million people were employed bythe end of 1990s. More than half of its labor force is engagedin agriculture, although that sector accounts for less than 20percent of China's GDP. In other words, China's agriculturallabor force is over 100 times as large as its U.S. counterpart.By the middle of the 1990s, most of China's urban workers wereemployed in state-owned enterprises (SOEs).In the 1990s, China'sincreasingly dynamic service sector employed more workers thanindustrial enterprises for each of the last 3 years. Latestsources from the State Statistics Bureau show that 6.4 percentof labor force in rural China shifted to the country's secondaryand tertiary industries in 1999. With 0.5 percent of its rural

    labor force having made a change in their life from agriculturalto non-agricultural labor, the net shifting amount of rurallabor force was placed at 5.9 percent of the rural total, up 0.4percent over the same period in 1998.According to one officialsurvey, as many as 50 million people leave rural areas in searchof urban jobs every year. Of this number, approximately 30million people leave their home provinces.

    The law currently mandates a maximum workweek of 40 hours.Minimum wages are established locally, and wages cannot bededucted or delayed without reason. If employees must work morethan 40 hours, overtime pay at fixed rates is mandatory. Workersare guaranteed at least one day off every week. Workingconditions are required to be safe and sanitary.

    In practice, however, the rights of Chinese workers areroutinely violated. Workers are often required to work far morethan 40 hours a week, have few days off, are paid below the minimum wage, and are not paid required overtime. Improperdeductions from wages are common. Some Chinese workers must paya large sum of money as a "deposit" to their employer, and theymay have to pay a "recruitment fee" in order to be hired. These

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    payments can prevent workers from leaving jobs where theirrights are violated. Physical abuse of workers, and dangerousworking conditions, are also common.

    So we can ask our selfs how it`s comparable with workingstandards around a world. We probably cannot imagine suchcondition in any develop country. But for China it`sworking at least for now, so we can feel power of whosegenerals.

    3 With whom lie the advantages derived from Heaven and Earth?

    In war, the general receives his commands from the sovereign. Havingcollected an army and concentrated his forces, he must blend and

    harmonize the different elements thereof before pitching his camp.After that, comes tactical maneuvering, than which there is nothingmore difficult. The difficulty of tactical maneuvering consists inturning the devious into the direct, and misfortune into gain.

    The Art of War by Sun Tzu 6th century BC

    For three decades after the 1949 revolution, China followed apolicy of socialist economic development based primarily on the

    centrally directed allocation of resources throughadministrative means. By the late 1970s, this approach wasincreasingly recognized as being untenable and unsustainable,and an overhaul of the economic system was initiated. Chinasapproach to economic reform has been gradual and incremental,without any detailed blueprint guiding the process. Thisincremental approach is best described by metaphor attributed toDeng Xiaoping as crossing the river by feeling the stones underthe feet and is still applicable to many of the reforms being

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    carried out by China today. This approach has been characterizedby the following features. First, reforms tend to be undertakenfirst on a pilot or experimental basis in some localities beforethey are applied to the whole country. In the view of theauthorities, this minimizes disruptions to the economy, allowsdeficient policies to be modified based on experience, and

    provides time to build the necessary institutions for fullimplementation. Second, another strategy frequently employed hasbeen the use of intermediate mechanisms to smooth the transitionto a market-oriented economy. One example of this is the settingup of Special Economic Zones in the early 1980s as a way ofgradually introducing foreign capital and technology. Finally,the Chinese leadership has consistently tried to preserve thesocialist character of the economy while introducing market-oriented reforms. For example, even though policies have beenconducive to the rapid growth of the no state sector, stateenterprise reform has been gradual with no signs of a massprivatization strategy for large and medium sized enterprises aspursued by other transition economies.

    Economic reform since the late 1970s can roughly be dividedinto five phases: In the first phase (197884), the organizationof farming was decentralized to the household level,agricultural prices were raised, and some state-ownedenterprises were allowed to retain profits as an incentive forgood performance. The success of the rural reforms encouragedthe authorities to introduce further reforms to the urbanindustrial sectors in a second phase (198488), including someliberalization in enterprise pricing and wage setting,introduction of enterprise taxation, and breakup of the mono bank system. Fourteen major cities in the coastal areas werealso opened up to foreign trade and investment. The third (198891) and fourth (19921997) phases continued the reform process, but were also characterized by the lack of effectiveinstitutions and instruments for macroeconomic management.Inflation increased considerably after price liberalization and,in the third phase, the authorities recentralized many pricecontrols and administered sharp contractionary policies tocontrol double-digit inflation, this was effective instabilizing prices but also produced a sharp slowing in theeconomy, mounting losses in state-owned enterprises, and rapidincreases in interenterprise debt that threatened to furtherdestabilize the macroeconomic situation. In the fourth phase,simulative policies returned, leading the economy into another

    growth cycle. More fundamentally, however, the highlight of thefourth phase was in 1992, when the Communist Party formallyembraced Deng Xiaopings view that the market system was notincompatible with the ideals of socialism and called for theestablishment of a socialist market economy. This providedessential political support for major decisions to restructurethe role and function of government, as well as the developmentof plans to speed up enterprise, financial, and social reformsand set the stage for a more fundamental globalization of the

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    Chinese economy, in a fifth phase (1998 to present). This mostrecent phase has been characterized by a broader and moregeneral opening up of the economy, including more broad-basedtrade liberalization and comprehensive commitments in thecontext of accession to the World Trade Organization to open theagricultural and services sectors of the economy.

    So it is maneuvering, maneuvering and maneuvering again.

    4. On which side is discipline most rigorously enforced?

    Therefore soldiers must be treated in the first instance withhumanity, but kept under control by means of iron discipline. This isa certain road to victory.

    The Art of War by Sun Tzu 6th century BC

    In order to understand that Sun Tzu meant by discipline we canlook at the remarkable story of Ts`ao Ts`ao (A.D. 155-220), whowas such a strict disciplinarian that once, in accordance withhis own severe regulations against injury to standing crops, hecondemned himself to death for having allowed his horse to shyinto a field of corn! However, in lieu of losing his head, he waspersuaded to satisfy his sense of justice by cutting off his hair. Ts`ao's own comment on the present passage ischaracteristically curt: "when you lay down a law, see that itis not disobeyed; if it is disobeyed the offender must be put todeath."

    Compared to other countries, death sentences are carried outquickly in China. After a first trial conducted by anIntermediate People`s court concludes with a death sentence, adouble appeals process must follow. The first appeal isconducted by a High People`s Court if the condemned appealed toit, and since 2007, another appeal is conducted automatically(even if the condemned opposed to the first appeal) by theSupreme People`s Court of the People`s Republic of China inBeijing. The execution is carried out shortly thereafter. As aresult of its reforms, China says, the Supreme People's Courtoverturned about 15 percent of the death sentences handed downby high courts in the first half of 2008. In a brief report inMay, the New China News Agency quoted anonymous sources as

    saying China has a unique form of sentence; "death sentence withtwo years' probation This sentence is generally reduced tolife imprisonment after two years if no new crime isintentionally committed during the probationary period.

    In some areas of China, there is no specific execution ground.A scout team chooses a place in advance to serve as theexecution ground. In such case, the execution ground normallywill have three perimeters: the innermost 50 m is the

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    responsibility of the execution team; the 200 m radius from thecenter is the responsibility of the People`s Armed Police; andthe 2 km alert line is the responsibility of the local police.The public is generally not allowed to view the execution. Therole of the executioner was fulfilled in the past by thePeople's Armed Police. In recent times, the legal police force

    assumed this role.

    China currently uses two methods of execution. The most commonis execution by firearms, which uses an assault rifle to fire asingle shot of an expanding hollow point bullet to the head.Lethal injection was introduced in 1997. It differs from itsapplication in the U.S. in that it is carried out in fixedlocations as well as in specially modified mobile execution. Aslethal injection becomes more common, debate has intensifiedover the fairness of relying on lethal injection to execute highofficials convicted of corruption while ordinary criminals getexecuted by firearms. It is public opinion in China that lethalinjection is an easier way for the condemned to die.

    In 1950's, the government collected a "bullet fee" from therelatives of the condemned. Capital punishment in China can bepolitically or socially influenced. In 2003, a local courtsentenced the leader of a trade organization to a death sentencewith two years of probation. However, the public opinion wasthat the sentence was too light. Under public pressure, thesupreme court of China took the case and retried the leader,resulting in a death sentence which was carried out immediately.

    Unlike some other countries practicing capital punishment, inChina, financial crimes such as counterfeiting, fraud, taxfraud, corruption, property crimes such as theft, and smugglingcultural relics, gold, silver or other precious metals can bepunishable by death. There are some 68 crimes that are eligiblefor the death penalty in China.

    Considering the size of the Chinese population the relativenumber of executions in China is still large. Even by theconfirmed numbers, the rate of executions in China (0.07 per100,000 people) is higher than the United States (0.02 per100,000) and Pakistan (0.05 per 100,000), though Iran (0.25 per100,000) executes more prisoners per capita. Dui Hua Foundationdeclares that the true figures were higher; they estimate thatChina executed between 5,000 and 6,000 people in 2007, down from

    10,000 in 2005.

    The exact numbers of people executed in China is classified asa state secret; occasionally death penalty cases are postedpublicly by the judiciary, as in certain high-profile orpolitically embarrassing cases. One such example was theexecution of former State Food and Drug Administration directorZheng Xiaoyu , which was confirmed by both state television andthe official Xinhua News Agency . Other media, such as Internet

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    message boards, have become outlets for confirming death penaltycases usually after a sentence has been carried out; suchpostings are quite distinguishable from others by a big red tick(check mark) near the bottom. In 2009, Amnesty Internationalestimated 1718 executions took place during 2008, based on allinformation available. Amnesty International claimed that the

    figure was likely to be much higher.

    Another example of discipline was showed in 1989 onTiananmen Square there the violent repression by the Chineseauthorities of this peaceful student-led protest in the mainsquare in Beijing (Peking) led to widespread internationalcondemnation. The 100,000-strong gathering in Tiananmen Square had been the culmination of several months of pro-democracydemonstrations. When government demands that the studentsdisperse were ignored, tanks and troops were sent in. Hundredsdied, up to 10,000 were injured and widespread arrests, trials,and executions of pro-democracy leaders followed.

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    5 Which army is stronger?

    Whoever is first in the field and awaits the coming of the enemy,will be fresh for the Fight; whoever is second in the field and has to

    hasten to battle will arrive exhausted.

    The Art of War by Sun Tzu 6th century BC

    The People's Republic of China has US$2.5 trillion in currencyreserves. The China Investment Corporation was established withthe intent of utilizing these reserves for the benefit of thestate, modeled according to Singapore's Temasek Holdings. Thestate-owned Central Huijin Investment Corporation was mergedinto the new company as a wholly-owned subsidiary company.

    The Corporation aims to invest in around fifty large-sizedenterprises across the world. Special treasury bonds were issuedto create the capital that the CIC needed. 1,550.35 billion yuan($207.91 billion) was issued in this bond sale. The bond process

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    was completed in December 2007.[5] According to Lou Jiwei, theCIC needs to make a profit of 300 million Yuan every day just topay the interest on the bonds and operation costs. The CIC paidits first interest on the bonds in February 2008 where it paid12.9 billion Yuan.]

    Available data provide only a partial answer to the questionof exactly how much China is spending overseas. We know thatChina's acquisition of overseas assets using accumulated foreigncurrency, though extremely large, is far from the largest in theworld.

    Asia, Africa and Europe

    East Asia saw transactions valued at USD 13 billion, including morethan USD 6 billion in engineering contracts, led by Singapore,which is also a leading site for small-scale Chinese equitiespurchases. West Asia, including Iran, the Russian Federation,and the Indian subcontinent attracted over USD 22 billion ininvestment, chiefly in energy. The Arab world drew only USD 7

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    billion in investment but, tellingly, twice that in largeengineering and construction contracts. Even the latter did notemphasize energy, but transport. Some of the clamor over China'sacquisition of energy assets is misplaced.

    On the other hand, sub-Saharan Africa has received

    considerable attention as an outlet for Chinese investment andit drew USD 25 billion, led by the Democratic Republic of Congoand Nigeria. This number may be something of an understatement,since the 2005 start for the dataset neglects considerableChinese investment in Sudan. Details on the investments areespecially difficult to obtain and recent Dollar figures may beinflated for political reasons as the amounts are not beingspent at present. In addition, a larger portion of outlays thanelsewhere is attributable to concessionary loan financing.

    Europe received USD 15 billion in Chinese investment as wellas a very large port development contract in Greece. Inaddition, hidden investments in Britain have recently been

    uncovered. The Heritage dataset identifies only five largetransactions valued at USD 6 billion in the United Kingdom, ledby policy lender China Development Bank. However, local media inSeptember discovered small stakes accumulated by SAFE in morethan 50 British companies. The total value of SAFE's stakes wascalculated at more than USD 16 billion.Chinas trade only with Africa and only in 2006 reached some $50 billion, boosting growth rates on the continent and spurring much-needed infrastructure improvements. Many African countriesview Chinese investment as an opportunity and welcome Beijingsstrictly business policy of noninterference in domesticaffairs. According to the International Monetary Fund, exportsfrom Africa to China increased with more than 40 percent between2001 and 2006. Imports from China to Africa increased 35percent. The total trade from China to Africa is estimated 55billion dollar per year and is expected to grow to 100 billiondollar by 2010.

    Trade volumes between China and Russia reached approximatelyUS $50 billion in 2007, growing at double digits every yearsince the Russian financial crisis in 1998. China is nowRussia's third largest trade partner, importing mostly energyand timber, while Russia is currently China's eighth largesttrade partner, importing a wide range of mostly finishedindustrial goods. More than 20 percent of trade between China

    and Russia is accounted for by the shuttle trade, with importantimplications for investments by Chinese small and medium-sizedenterprises.Over 2004-2007, 54 investment projects have been signed

    between Russia and China totaling US$5 billion. According todata from the Ministry of Economic Development and Trade of theRussian Federation this figure will more than double by the endof 2020. Given the overall FDI flows to Russia, estimated atUS$50 billion in 2007 only.

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    You can be sure of succeeding in your attacks if you only attackplaces which are undefended. You can ensure the safety of your defenseif you only hold positions that cannot be attacked.

    The Art of War by Sun Tzu 6th century BC

    Latin America.

    Over the past year, increasing attention has focused onChinas growing interest in Latin America. Most analysts appearto agree that Chinas primary interest in the region is to gaingreater access to needed resources such as oil, copper, andiron through increased trade and investment. Some also believeBeijings additional goal is to isolate Taiwan by luring the 12Latin American and Caribbean nations still maintainingdiplomatic relations with Taiwan to shift their diplomatic

    recognition to China. Some analysts maintain that Chinasinvolvement in the region could pose a future threat to U.S.influence. Others assert that Chinas inroads in Latin Americaare marginal and likely to remain overwhelmed by the economicand geographic advantage of the U.S. market. Although many LatinAmerican countries welcome the new Chinese investment, some viewChina as an economic threat, and are concerned that both theirdomestic industries and their U.S. export markets will beoverwhelmed by cheap Chinese imports. This report will not be

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    updated. For further information, see CRS Report RL32804, China-U.S. Relations: Current Issues and Implications for U.S. Policy.

    Chinas imports from Latin America grew from almost $3 billionin 1999 to $21.7 billion in 2004, a more than 600% increase in

    five years. Because of this growth in imports, China has run atrade deficit with the region for the past two years. Whileimports from Latin America are just a small percentage ofChinas overall imports, they grew from 1.81% of total Chineseimports in 1999 to 3.88% in 2004. Chinas top five import markets in Latin America in 2004 were Brazil ($8.7 billion),Chile ($3.7 billion), Argentina ($3.3 billion), Mexico ($2.1 billion), and Peru ($1.5 billion). Chinas exports to LatinAmerica have also grown considerably in the last five years,from $5.3 billion in 1999 to $18.3 billion in 2004, with majorexports including electrical appliances; woven and knit apparel;computers, office machinery, and other machinery; and mineralfuels and oil. During this period, the overall share of Chinas

    exports to the region as percentage of its worldwide exports,although small, increased slightly from 2.71% in 1999 to 3.09%in 2004. Chinas top five export destinations in Latin Americain 2004 were Mexico ($5 billion), Brazil ($3.7 billion), Panama($2.2 billion), Chile ($1.7 billion), and Argentina ($852million). While Chinas trade flows have increased dramatically, both globally and with Latin America, Chinese foreign directinvestment (FDI) abroad has not been significant. Chinascumulative FDI worldwide amounted to $33.2 billion at the end of2003 just 0.48% of global FDI stock with 41% concentrated inHong Kong, United States, Japan, and Germany. Turning to yearlyinvestment flows, Chinas foreign investment flows for 2003amounted to $2.85 billion, with $1.04 billion of that morethan one-third going to Latin America.2 Chinese investment inLatin America has focused on the extraction and production ofnational resources, but also has included investment in manufacturing assembly, telecommunications, and textiles.Chinas FDI in the region has been concentrated in Brazil,Mexico, Chile, Argentina, Peru, and Venezuela.3 Since the entryinto force of the North American Free Trade Agreement (NAFTA) in1994, China has viewed Mexico as an access point to the U.S.market.

    The United States and Australia

    Chinese non-bond investment in the United States through thethird quarter of 2008 features 11 large transactions involving more than USD 15 billion, chiefly overpayment for financialpartnerships such as SAFE providing USD 2.5 billion incapitalization to a fund created by TPG (the former Texas-Pacific Group). While this is trivial compared to the size ofthe American financial sector, the first large investment didnot occur until May 2007, so activity has picked up recently.

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    There have also been smaller technology investments, such asWuxi PharmaTech buying AppTec Lab Services for USD 150 million.The rest of the Western Hemisphere drew only USD 7 billion,chiefly to buy Canadian-owned assets in Latin America.

    The United States is not the largest target of Chinese non-

    bond investment; rather, it is Australia. The HeritageFoundation dataset contains transactions worth over USD 20billion, spearheaded by the USD 12.8 billion from Chalco. Therewere also several billion Dollars in large transactions from2003 to 2004. The trend is steeply upward. The value of Chineseapplications to the Australian Foreign Investment Review Board between November 2007 and June 2008 exceeded USD 28 billion,compared to a total of USD 8.5 billion in fiscal years 2006 and2007 combined.

    6. On which side are officers and men more highly trained?

    Thus the good fighter is able to secure himself against defeat, butcannot make certain of defeating the enemy.

    The Art of War by Sun Tzu 6th century BC

    Let`s look at some statistics:

    Student enrollment: China

    Education levelHigh Schoolgraduates(Million)



    1978 6.83 165 0.01

    1980 6.16 147 0.48

    1985 1.97 316 17.00

    1990 2.33 614 35.44

    1995 2.02 805 31.88

    2000 3.02 950 58.772001 3.41 1,036 67.81

    2002 3.84 1,337 80.84

    2003 4.58 1,877 111.09

    2004 5.47 2,391 150.78

    2005 6.61 3,068 162.00Source:National Bureau of Statistics

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    Distribution of students: China






    school1980 0.6 27.8 71.6

    1985 0.9 27.3 71.8

    1990 1.2 29.1 69.7

    1995 1.5 31.5 67.1

    2000 2.5 38.6 58.9

    2001 3.3 39.8 57.0

    2002 4.0 42.0 54.0

    2003 4.9 42.9 52.22004 5.9 44.4 49.7

    And lets look at The Condition of Education witch summarizesimportant developments and trends in education using the latestavailable data. The report, which the National Center forEducation Statistics (NCES) is required by law to produce, is anindicator report intended for a general audience of readers whoare interested in education. The indicators represent aconsensus of professional judgment on the most significantnational measures of the condition and progress of education for

    which accurate data are available


    In PIRLS 2006, the average U.S. 4th-graders' readingliteracy score (540) was above the PIRLS scale average of500, but below that of 4th-graders in 10 of the 45participating countries, including 3 Canadian provinces(Russian Federation, Hong Kong, Chinese Taipei , Alberta,British Columbia, Singapore, Luxembourg, Ontario, Hungary,Italy, and Sweden).Among the 28 countries that participated in both the 2001

    and 2006 PIRLS assessments, the average reading literacyscore increased in 8 countries and decreased in 6countries. In the rest of these countries, including theUnited States, there was no measurable change in theaverage reading literacy score between 2001 and 2006. Thenumber of these countries that outperformed the UnitedStates increased from 3 in 2001 to 7 in 2006.

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    The 2007 TIMSS results showed that U.S. students' averagemathematics score was 529 for 4th-graders and 508 for 8th-

    graders. Both scores were above the TIMSS scale average,which is set at 500 for every administration of TIMSS atboth grades, and both were higher than the respective U.S.score in 1995.

    o Fourth-graders in 8 of the 35 other countries thatparticipated in 2007 (Hong Kong, Singapore, ChineseTaipei, Japan, Kazakhstan, Russian Federation,England, and Latvia) scored above their U.S. peers, onaverage; and 8th-graders in 5 of the 47 othercountries that participated in 2007 (Chinese Taipei,Korea, Singapore, Hong Kong, and Japan) scored abovetheir U.S. peers, on average.

    oAmong the 16 countries that participated in both thefirst TIMSS in 1995 and the most recent TIMSS in 2007,at grade 4, the average mathematics score increased in8 countries, including in the United States, anddecreased in 4 countries. Among the 20 countries thatparticipated in both the 1995 and 2007 TIMSS at grade8, the average mathematics score increased in 6countries, including in the United States, anddecreased in 10 countries.

    In PISA 2006, U.S. 15-year-old students' averagemathematics literacy score of 474 was lower than the OECDaverage of 498, and placed U.S. 15-year-olds in the bottomquarter of participating OECD nations, a relative position

    unchanged from 2003.o Fifteen-year-old students in 23 of the 29 other

    participating OECD-member countries outperformed theirU.S. peers.

    There was no measurable change in U.S. 15-year-olds'average mathematics literacy score between 2003 and2006, in its relationship to the OECD average, or inits relative position to the countries whose scoresincreased or decreased.

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    The 2007 TIMSS results showed that U.S. students' averagescience score was 539 for 4th-graders and 520 for 8th-graders. Both scores were above the TIMSS scale average,which is set at 500 for every administration of TIMSS at

    both grades, but neither was measurably different than therespective U.S. score in 1995.

    o Fourth-graders in 4 of the 35 other countries thatparticipated in 2007 (Singapore, Chinese Taipei, HongKong, and Japan) scored above their U.S. peers, onaverage; and 8th-graders in 9 of the 47 othercountries that participated in 2007 (Singapore,Chinese Taipei, Japan, Korea, England, Hungary, theCzech Republic, Slovenia, and the Russian Federation)scored above their U.S. peers, on average.

    o While there was no measurable change in the averagescore of U.S. 4th-graders or 8th-graders in science between 1995 and 2007, among the other 15 countriesthat participated in the 1995 and 2007 TIMSS at grade4, the average science score increased in 7 countriesand decreased in 5 countries; and among the other 18countries that participated in both the 1995 and 2007TIMSS at grade 8, the average science score increasedin 5 countries and decreased in 3 countries.

    In PISA 2006, U.S. 15-year-old students' average scienceliteracy score of 489 was lower than the OECD average of500, and placed U.S. 15-year-olds in the bottom third ofparticipating OECD nations. Fifteen-year-old students in 16of the 29 other participating OECD-member countriesoutperformed their U.S. peers in terms of average scores.

    Unfortunately for now is no such statistics can be obtain fromChinese government, but I think statistics from NCES isrepresentative enough. Basically China have about 7 -8 millionshigh school graduates each year and on average they are one ofthe best students in Reading , Mathematics and Science , andfrom those students about 160-170 thousand pursue Masters degree- this is a small army of excellent trained officers foreconomic war for XXI century .

    7. In which army is there the greater constancy both in reward

    and punishment?When an army feeds its horses with grain and kills its cattle for

    food, and when the men do not hang their cooking-pots over the camp-fires, showing that they will not return to their tents, you may knowthat they are determined to fight to the death.

    The Art of War by Sun Tzu 6th century BC

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    China has been the fastest growing economy in the world overalmost three decades, expanding at 10 percent per year in realterms. As a result, real GDP in 2005 was about 12 times thelevel of 1978, when Deng Xiaoping launched China on the path ofeconomic reform (National Bureau of Statistics of China 2006a,24). China is now the worlds fourth-largest economy and itsthird-largest trader and highly likely, within a year, to moveup a notch in each category.

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    China had a trade deficit as recently as 1993, as shown in thegraph below. After 2004, Chinas trade surplus exploded from USD32 billion to USD 102 billion.

    Chinese imports, grew exponentially starting from 1978 until2006, as show in the graph below. The dashed line shows anexponential trend line. The exponential regression equation andR2 values are also shown.

    Chinese exports grew exponentially starting from 1978 until2006, as show in the graph below. The dashed line shows an

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    exponential trend line. The exponential regression equation andR2 values are also shown. As it says in Russian proverb:Picture cost a thousand words

    China Is already in Economic war the huge and they simply haveno other options for now , and in order for us to win , or

    simply not to lose we have to work , and work hard .In my mindChina will never implement democratic value ,in a sciencewestern world see them Eastern and Western cultures are simplyto different . They try... it didnt work for them so theychose a new doctrine doctrine of fair Economic war. In my workI didn`t put any country to compare with China, Why should I.?China fighting not with any particular country - they build newimperia (or restore old one)- economic giant with ambition torule the world in XXI Century. Will they succeed is difficult topredict. One thing is certain China is ready to battle andthat about us?

    You can ask: That we should do? How can it be won? In my mind the answer is quite simple - we can find it in the samebook - The answer proved to be working by 2600 years history:

    The art of war is of vital importance to the State.It is a matter of life and death, a road either tosafety or to ruin. Hence it is a subject of inquirywhich can on no account be neglected. The art of war,then, is governed by five constant factors, to be takeninto account in ones deliberations, when seeking todetermine the conditions obtaining in the field. Theseare:

    (1) The Moral Law;(2) Heaven;(3) Earth;(4) The Commander;(5) Method and discipline.

    These five heads should be familiar to every general:he who knows them will be victorious; he who knows themnot will fail.

    The Art of War by Sun Tzu 6th century BC


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    1.Sun Tzu on the Art of War penned by Dr. Lionel Giles2.China`s Growth ad Integration into the World Economy :

    Prospects and Challenges edited by Eswar Prasad

    3.U.S. Department of education , Institute of Education Sciences4. Towards More Effective Redistributing : Reform Options forIntergovernmental Transfer in China : IMF Working Paper ,forthcoming ( Washington : International Monetary

    5. Sources of Economic Fluctuations In Latin America andImplication for Choice of Exchange Rate Regimes Journal of

    Development Economics Vol 72, No.1 ( October )6. Labor Market Distortions and Economic Growth : Examining

    Institutional Components of regional Disparity in China Working paper #10 ( Beijing : Center for Human resourcestudies , Chinese Academy of Social Sciences ) .

    7.China Finance Yearbook , various issues.8.China Industrial Statistical Year Book , various years .9.China 2020 development Challenges in the new Century , byVicram Nehru10. China and the WTO : changing China , Changing World Trade

    by Panitchpakdi ,Supachai and Mark L. Cliford .11. Ministry of Finance , 2002 Accounting Information Quality

    Assessment Report , People`s Republic of China12. Special Report: China`s Employment Mess by Dorothy

    Solinger13. Foreign reform in China by Steifeld Edwards14. China`s Integration into the World Economy : Implications

    for Developing Countries IMF Working Paper # 03/24515. United States Trade Representative , Report to Congress on

    China`s WTO Compliance16. China : Competing in the Global Economy- Polices for

    Sustained Growth And Financilal Stability by Wanda Tsengand Markus Rodlauer.

    17. Realizing the Benefits of China`s Trade and InvestmentLiberalization : The domestic Economic Policy Changes Organization for Economic Cooperation And Development ( OECD )

    18. China report By Ministry of Economic Development andTrade of the Russian Federation

    19. http://www.thechinaperspective.com/ - China educationstatistics

    20. http://www.nationsencyclopedia.com/21. http://www.heritage.org/22. http://www.financialarchitecture.org/http://www.financialarchitecture.org/

    mailto:[email protected]://www.thechinaperspective.com/http://www.nationsencyclopedia.com/http://www.heritage.org/http://www.financialarchitecture.org/http://www.financialarchitecture.org/http://www.financialarchitecture.org/http://www.financialarchitecture.org/http://www.heritage.org/http://www.nationsencyclopedia.com/http://www.thechinaperspective.com/mailto:[email protected]