SOS Chapter 13 China

VIII. Brainwash the Whole Country and Turn It into a “Mind Prison”

The most effective weapon the CCP uses to maintain its tyrannical rule is its system of control. In a well-organized fashion, the CCP imposes a mentality of obedience on every one of its citizens. Whether the Party contradicts itself or constantly changes policies doesn’t matter, so long as it can systematically organize a way to deprive people of their naturally endowed human rights. The government’s tentacles are omnipresent. Whether it is in rural or urban areas, citizens are governed by the so-called street or township committees. Until recently, getting married or divorced, and having a child all needed the approval of these committees. The Party’s ideology, way of thinking, organizations, social structure, propaganda mechanisms and administrative systems serve only its dictatorial purposes. The Party, through the systems of government, strives to control every individual’s thoughts and actions.

How brutally the CCP controls its people is not limited to the physical torture it inflicts. The Party also forces people to lose their ability to think independently, and makes them into fearful, self-protective cowards daring not to speak up. The goal of the CCP’s rule is to brainwash each of its citizens so that they think and talk like the CCP, and do what it promotes.

There is a saying that, “Party policy is like the moon, it changes every 15 days.” No matter how often the Party changes its policies, everyone in the nation needs to follow them closely. When you are used as a means of attacking others, you need to thank the Party for appreciating your strength; when you are hurt, you have to thank the CCP for “teaching you a lesson”; when you are wrongfully discriminated against and the CCP later gives you redress, you have to thank the CCP for being generous, open-minded and able to correct its mistakes. The CCP runs its tyranny through continuous cycles of suppression followed by redress.

After 55 years of tyranny, the CCP has imprisoned the nation’s mind and enclosed it within the range allowed by the CCP. For someone to think outside this boundary is considered a crime. After repeated struggles, stupidity is praised as wisdom; being a coward is the way to survive. In a modern society with the Internet as the mainstream of information exchange, the CCP even asks its people to exercise self-discipline and not read news from outside or log onto websites with keywords like “human rights” and “democracy.”

The CCP’s movement to brainwash its people is absurd, brutal, and despicable, yet ubiquitous. It has distorted the moral values and principles of Chinese society and completely rewritten the nation’s behavioral standards and lifestyle. The CCP continuously uses mental and physical torture to strengthen its absolute authority to rule China with the all-encompassing “CCP religion.”

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SOS Chapter 12 China

The Reform and Opening up—The Violence Progresses with Time

The Cultural Revolution was a period full of bloodshed, killings, grievances, loss of conscience, and confusion of right and wrong. After the Cultural Revolution, the CCP leadership changed its banners frequently, as the government changed hands six times within 20 years. Private ownership has returned to China, disparities in the standard of living between cities and rural areas have widened, the desert area has quickly expanded, river water has been drying up, and drug-use and prostitution have increased. All the “crimes” the CCP fought against are now permitted again.

The CCP’s ruthless heart, devious nature, evil actions, and ability to bring ruin to the country increased. During the Tiananmen Massacre in 1989, the Party mobilized armies and tanks to kill students protesting on Tiananmen Square. The vicious persecution against Falun Gong practitioners is even worse. In October of 2004, to take land from the peasants, Yulin City of Shaanxi Province mobilized over 1,600 riot police to arrest and shoot more than 50 peasants. The political control of the Chinese government continues to rely on the CCP’s philosophy of struggle and violence. The only difference from the past is that the Party has become even more deceptive.

Law Making: The CCP has never stopped creating conflicts among the people. They have persecuted large numbers of citizens for being reactionaries, anti-socialists, bad elements, and evil cult members. The totalitarian nature of the CCP continues to conflict with all other civil groups and organizations. In the name of “maintaining order and stabilizing society,” the Party has kept changing constitutions, laws and regulations, and has persecuted as reactionaries anyone who disagrees with the government.

In July of 1999, Jiang Zemin made a personal decision, against most other Politburo members’ wills, to eliminate Falun Gong in three months; slander and lies quickly enveloped the country. After Jiang Zemin denounced Falun Gong as an “evil cult” in an interview with the French newspaper La Figaro, Chinese official propaganda followed up by quickly publishing articles pressuring everyone in the country to turn against Falun Gong. The National People’s Congress was coerced into passing a non-descript “decision” dealing with evil cults; soon after that the Supreme People’s Court and Supreme People’s Procuratorate jointly issued an “explanation” of the “decision.”

On July 22, 1999, the Xinhua News Agency published speeches by the CCP’s Organization Department and Propaganda Department leaders publicly supporting Jiang’s persecution against Falun Gong. The Chinese people became enmeshed in the persecution simply because it was a decision made by the Party. They can only obey orders and dare not raise any objections.

Over the past five years, the government has utilized one-fourth of the nation’s financial resources to persecute Falun Gong. Everyone in the country has had to pass a test; most who admitted to practicing Falun Gong but refused to give up the practice have lost their jobs; some are sentenced to forced labor. The Falun Gong practitioners have not violated any laws, nor have they betrayed the country or opposed the government; they have only believed in “Truthfulness, Compassion and Tolerance.” Yet hundreds of thousands were imprisoned. While the CCP has enforced a tight blockade of information, more than 1,100 people have been confirmed by their families to have been tortured to death; the true number of deaths is much higher.

News Reporting: On October 15, 2004, Hong Kong-based Wenweipao reported that China’s 20th satellite returned to earth, falling on and destroying the house of Huo Jiyu in Penglai Township, located in Dayin County, Sichuan Province. The report quoted Dayin County government office director Ai Yuqing saying that the “black lump” was confirmed to be the satellite. Ai was himself the on-site deputy director of the satellite recovery project. However, Xinhua News only reported the time of the satellite’s recovery, emphasizing that this was the 20th scientific and technical experimental satellite recovered by China. Xinhua News did not mention a word about the satellite destroying a house. This is a typical example of the Chinese news media’s consistent practice of reporting only the good news and covering up the bad news, as instructed by the Party.

Lies and slander published by newspapers and broadcast on television have greatly assisted the execution of the CCP’s policies in all past political movements. The Party’s command would be instantly executed by the media in the country. When the Party wanted to start an Anti-Rightist Movement, media all over China reported with one voice the crimes of rightists. When the Party wanted to set up the people’s communes, every newspaper in the nation started to praise the superiority of people’s communes. Within the first month of the persecution of Falun Gong, all television and radio stations slandered Falun Gong repeatedly in their prime time broadcasting in order to brainwash people. Since then, Jiang has utilized all media repeatedly to fabricate and spread lies and slanders about Falun Gong. This includes the effort to incite nationwide hatred against Falun Gong by reporting false news about Falun Gong practitioners committing murder and suicide. An example of such false reporting is the staged “Tiananmen Self-Immolation” incident, which was criticized by the NGO International Educational Development as a government-staged action to deceive people. In the past five years, no mainland Chinese newspaper or TV station has reported the truth about Falun Gong.

Chinese people are used to the false news reports. A senior reporter of Xinhua News Agency once said, “How could you trust a Xinhua report?” People have even described Chinese news agencies as the Party’s dog. A folk song has it: “It is a dog raised by the Party, guarding the Party’s gate. It would bite anyone the Party wants it to bite, and bite however many times the Party wants it to.”

Education: In China, education became another tool used to control people. The original purpose of education was to develop intellectuals to have both knowledge and correct judgment. Knowledge refers to the understanding of information, data and historical events; judgment refers to the process of analyzing, investigating, critiquing, and reproducing such knowledge—a process of spiritual development. Those who have knowledge without proper judgment are referred to as bookworms, not true intellectuals with a social conscience. This is why in Chinese history it is the intellectuals with righteous judgment, not those having merely knowledge, who have been highly respected. Under the CCP’s control, however, China is filled with intellectuals who have knowledge but not judgment, or who dare not exercise judgment. Education in schools focused on teaching students not to do things that the Party did not want them to do. In recent years, all schools started to teach politics and CCP history with unified textbooks. The teachers did not believe the content of the text, yet they were forced by the Party “discipline” to teach it against their wills. The students did not believe the text or their teachers, yet they had to remember everything in the text in order to pass the exams. Recently, questions about Falun Gong were included in term and entrance exams for colleges and high schools. Students who do not know the standard answers do not get high scores to enter good colleges or high schools. If a student dares to speak the truth, he will be expelled from school immediately and lose any chance of formal education.

In the public education system, due to the influence of the newspapers and government documents, many well known sayings or phrases have been spread as truth, such as Mao’s quotation “We should support whatever the enemy opposes and oppose whatever the enemy supports.” The negative effect is widespread: it has poisoned people’s hearts, supplanting benevolence and destroying the moral principle of living in peace and harmony.

In 2004, the China Information Center analyzed a survey done by the China Sina Net, and the results show that 82.6 percent of Chinese youth agreed that one can abuse women, children and prisoners during a war. This result is shocking. But it reflects the Chinese people’s mindset, and especially that of the younger generation, who lack a basic understanding of either the traditional cultural concept of benevolent rule or the notion of universal humanity.

On September 11, 2004, a man fanatically slashed 28 children with a knife in Suzhou City. On the 20th of the same month, a man in Shandong Province injured 25 elementary school students with a knife. Some elementary school teachers forced students to make firecrackers by hand to raise funds for the school, resulting in an explosion in which students died.

Implementing Policies: The CCP leadership has often used threats and coercion to ensure the implementation of their policies. One of the means they used was the political slogan. For a long time, the CCP used the number of slogans posted as a criterion to assess one’s political achievements. During the Cultural Revolution, Beijing became a “red sea” of posters overnight, with the slogan “Down with the ruling capitalists in the Party” everywhere. In the countryside, ironically, the signs were shortened to “Down with the ruling party.”

Recently, to promote the Forest Law, the State Bureau of Forestry and all its stations and forest protection offices strictly ordered a standard amount of slogans to be put out. Not reaching the quota would be treated as not accomplishing the task. As a result, local government offices posted a large number of slogans, including “Whoever burns the mountains goes to prison.” In the administration of birth control in recent years, there have been even scarier slogans such as, “If one person violates the law, the whole village will be sterilized,” “Rather another tomb than another baby,” or, “If he did not have a vasectomy as he should, his house will be torn down; if she did not have an abortion as she should, her cows and rice fields will be confiscated.” There were more slogans that violate human rights and the Constitution, such as “You will sleep in prison tomorrow if you don’t pay taxes today.”

A slogan is basically a way of advertising, but in a more straightforward and repetitive manner. Hence, the Chinese government often uses slogans to promote political ideas, beliefs and positions. Political slogans can also be viewed as words the government speaks to its people. However, in the CCP’s policy-promoting slogans, it is not hard for one to sense the tendency of violence and cruelty.

SOS Chapter 11 China

VI. The Cultural Revolution—The World Turned Upside Down by Evil Possession

The Cultural Revolution was a grand performance put up by the communist specter as it possessed the entire China. In 1966, a new wave of violence rolled onto China’s land, and an uncontrollable red terror shook the mountains and froze the rivers. Writer Qin Mu described the Cultural Revolution in bleak terms:

It was truly an unprecedented calamity: [the CCP] imprisoned millions due to their association with a [targeted] family member, ended the lives of millions more, shattered families, turned children into hoodlums and villains, burned books, tore down ancient buildings, and destroyed ancient intellectuals’ gravesites, committing all kinds of crimes in the name of revolution.

Conservative figures place the number of unnatural deaths in China during the Cultural Revolution at 7.73 million.

People often mistakenly think that the violence and slaughter during the Cultural Revolution happened mostly during the rebel movements, and that it was the Red Guards and rebels who committed the killing. However, thousands of officially published Chinese county annuals indicate that the peak of unnatural deaths during the Cultural Revolution was not in 1966, when the Red Guards controlled most of the government organizations, or in 1967 when the rebels fought among different groups with weapons, but rather in 1968 when Mao regained control over the entire country. The murderers in those infamous cases were often army officers and soldiers, armed militiamen, and CCP members at all levels of the government.

The following examples illustrate how the violence during the Cultural Revolution was the policy of the CCP and the regional government, not the extreme behavior of the Red Guards. The CCP has covered up the direct instigation of and involvement in the violence by party leaders and government officials.

In August 1966, the Red Guards expelled Beijing residents who had been classified in past movements as “landlords, rich farmers, reactionaries, bad elements, and rightists” and forced them to the countryside. Incomplete official statistics showed that 33,695 homes were searched and 85,196 Beijing residents were expelled out of the city and sent back to where their parents had originally come from. Red Guards all over the country followed suit, expelling over 400,000 urban residents to the countryside. Even high-ranking officials, whose parents were landlords, faced exile to the country.

Actually, the CCP planned the expulsion campaign even before the Cultural Revolution began. Former Beijing mayor Peng Zhen declared that the residents of Beijing City should be as ideologically pure as “glass panels and crystals,” meaning that all residents with a bad class background would be expelled out of the city. In May of 1966, Mao commanded his subordinates to “protect the capital.” A capital working team was set up, led by Ye Jianying, Yang Chengwu and Xie Fuzhi. One of the tasks of this team was to use the police to expel Beijing residents of bad class background.

This history helps make clear why the government and police departments did not intervene but rather supported the Red Guards in searching homes and expelling more than two percent of Beijing residents. The Minister of Public Security, Xie Fuzhi, required the police not to intervene in the Red Guards’ actions but rather to provide advice and information to them. The Red Guards were simply utilized by the Party to carry out a planned action, and then, at the end of 1966, these Red Guards were abandoned by the CCP. Many were labeled counterrevolutionaries and imprisoned, and others were sent to the countryside, along with other urban youth, to labor and reform their thoughts. The West Town Red Guard organization, which led the expulsion of city residents, was established under the “caring” guidance of the CCP leaders. The order to incriminate these Red Guards was also issued after being revised by the secretary-general of the State Council.

Following the removal of the Beijing residents of bad class background, the rural areas started another round of persecution of bad class elements. On August 26, 1966, a speech of Xie Fuzhi was passed down to the Daxing Police Bureau at their work meeting. Xie ordered the police to assist the Red Guards in searching the homes of the “five black classes” (landlords, rich peasants, reactionaries, bad elements, and rightists) by providing advice and information and helping in their raids. The infamous Daxing Massacre [8] occurred as a result of direct instructions by the police department; the organizers were the director and the CCP secretary of the police department, and the killers were mostly militiamen who did not even spare the children.

Many were admitted into the CCP for their “good behavior” during similar slaughters. According to incomplete statistics for Guangxi Province, about 50,000 CCP members engaged in killing. Among them more than 9,000 were admitted into the Party shortly after killing someone, more than 20,000 committed murder after being admitted into the Party, and more than 19,000 other Party members were involved in killing in one way or another.

During the Cultural Revolution, class theory would also be applied to beatings. The bad deserved it if they were beaten by the good. It was honorable for a bad person to beat another bad person. It was a misunderstanding if a good person beat another good person. Such a theory invented by Mao was spread widely in the rebel movements. Violence and slaughter were widespread following the logic that the enemies of the class struggle deserved any violence against them.

From August 13 to October 7 of 1967, militiamen in Dao County of Hunan Province slaughtered members of the “Xiangjiang Wind and Thunder” organization and those of the “five black classes.” The slaughter lasted 66 days; more than 4,519 people in 2,778 households were killed in 468 brigades (administrative villages) of 36 people’s communes in 10 districts. In the entire prefecture consisting of 10 counties, a total of 9,093 people were killed, of which 38% were of the “five black classes” and 44% were their children. The oldest person killed was 78 years old, and the youngest was only 10 days old.

This is only one case of violence in one small area during the Cultural Revolution. In Inner Mongolia, after the establishment of the “revolutionary committee” in early 1968, the cleansing of class rank and purging of the fabricated “Inner Mongolia People’s Revolutionary Party” killed more than 350,000 people. In 1968, tens of thousands of people in Guangxi Province participated in the mass slaughter of the rebel faction “422” organization, killing more than 110,000.

These cases point out that those major acts of violent killing during the Cultural Revolution were all under the direct instigation and instruction of CCP leaders who encouraged and utilized violence to persecute and kill citizens. Those killers directly involved in instructing and executing the killing were mostly from the military, police, armed militia, and key members of the Party and the Youth League.

If during the Land Reform the CCP used peasants to overthrow landlords to obtain land, during the Industrial and Commercial Reform the CCP used the working class to overthrow capitalists to gain assets, and during the Anti-Rightist Movement the CCP eliminated all intellectuals who held opposing opinions, then what was the purpose of all the killing during the Cultural Revolution? The CCP used one group to kill another, and no one class was relied upon. Even if you were from the workers and peasants, two classes upon which the Party relied in the past, if your viewpoint differed from that of the Party, your life would be in danger. So in the end, what was it all for?

The purpose was to establish communism as the one and only religion dominating the entire country, controlling not just the state but every individual’s mind.

The Cultural Revolution pushed the CCP and Mao Zedong’s cult of personality to a climax. Mao’s theory had to be used to dictate everything and one person’s vision had to be embedded in tens of millions of people’s minds. The Cultural Revolution, in a way unprecedented and never again to be matched, intentionally did not specify what could not be done. Instead, the Party emphasized “what can be done and how to do it. Anything outside this boundary could not be done or even considered.”

During the Cultural Revolution, everyone in the country carried out a religious-like ritual: “ask the Party for instructions in the morning and report to the Party in the evening,” salute Chairman Mao several times a day, wishing him boundless longevity, and conduct morning and evening political prayers everyday. Nearly every literate person had the experience of writing self-criticism and thought reports. Mao’s quotations such as the following were frequently recited. “Fight ferociously against every passing thought of selfishness.” “Execute instructions whether or not you understood them; deepen your understanding in the process of execution.”

Only one “god” (Mao) was allowed to be worshiped; only one kind of scripture (Mao’s teaching) was allowed to be studied. Soon the “god-making” process progressed to such a degree that people could not buy food in canteens if they did not recite a quotation or make a greeting to Mao. When shopping, riding the bus, or even making a phone call, one had to recite one of Mao’s quotations, even if it was totally irrelevant. In these rituals of worship, people were either fanatical or cynical, and in either case were already under the control of the communist evil specter. Producing lies, tolerating lies and relying on lies became Chinese people’s lifestyle.

SOS Chapter 10 China

V. The Great Leap Forward—Creating Falsehoods to Test People’s Loyalty

After the Anti-Rightist Movement, China became afraid of truth. Everyone joined in listening to false words, telling false tales, making up false stories, and avoiding and covering up the truth through lies and rumors. The Great Leap Forward was a nationwide collective exercise in lying. The people of the entire nation, under the direction of the CCP’s evil specter, did many ridiculous things. Both liars and those being lied to were betrayed. In this campaign of lies and ridiculous actions, the CCP implanted its violent, evil energy into the spiritual world of the Chinese people. At the time, many people sang songs promoting the Great Leap Forward, “I am the Jade Emperor, I am the Dragon King. I order the three mountains and five gorges to step aside, here I come.” [5] Policies such as “achieving a grain production of 75,000 kg per hectare,” “doubling steel production,” and “surpassing Britain in 10 years and the US in 15 years” were attempted year after year. These policies resulted in a grave, nationwide famine that cost millions of lives.

During the eighth plenum of the Eighth CCP Central Committee meeting held in Lushan in 1959, who among the participants did not agree with General Peng Dehuai’s [6] view that the Great Leap Forward initiated by Mao Zedong was foolish? However, supporting Mao’s policy or not marked the line between loyalty or betrayal, or the line between life and death. In a story from Chinese history, when Zhao Gao [7] claimed that a deer was a horse, he knew the difference between a deer and a horse, but he purposefully called a deer a horse to control public opinion, silence debates, and expand his own power. The result of the Lushan Plenum was that even Peng Dehuai was forced to sign a resolution condemning and purging himself from the central government. Similarly, in the later years of the Cultural Revolution, Deng Xiaoping was forced to promise that he would never appeal against the government’s decision to remove him from his posts.

Society relies on past experience to understand the world and expand its horizons. The CCP, however, has taken away opportunities from the people to learn from historical experience and lessons. The official censorship of the media has only helped further lower people’s capacity to discern good from bad. After each political movement, the younger generations have only been given the Party’s uplifting accounts, but have been deprived of the analyses, ideals, and experiences of the insightful people from older generations. As a result, people have only scattered information as the basis for understanding history and judging new events, thinking themselves correct while deviating thousands of miles from the truth. Thus the CCP’s policy of keeping people ignorant has been carried out thoroughly.

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SOS Chapter 9

IV. The Anti-rightist Movement—Nationwide Brainwashing

In 1956, a group of Hungarian intellectuals formed the Petofi Circle, which held forums and debates critical of the Hungarian government. The group sparked a nationwide revolution in Hungary, which was crushed by Soviet soldiers. Mao Zedong took this “Hungarian Event” as a lesson. In 1957, Mao called upon the Chinese intellectuals and other people to “help the CCP rectify itself.” This movement, known as the “Hundred Flowers Movement” for short, followed the slogan of “letting a hundred flowers blossom and a hundred schools of thought contend.” Mao’s purpose was to lure out the “anti-Party elements” among the people. In his letter to provincial Party chiefs in 1957, Mao Zedong spoke his intention of “luring the snakes out of their holes” by letting them air their views freely in the name of freedom of thought and rectifying the CCP.

Slogans at the time encouraged people to speak up and promised no reprisals—the Party would not “grab pigtails, strike with sticks, issue hats, or settle accounts after the autumn,” meaning the party would not find fault, make attacks, place labels, or seek to retaliate. Yet soon the CCP initiated an “anti-rightist” movement, declaring 540,000 of the people who dared to speak up as “rightists.” Among them, 270,000 lost their jobs and 230,000 were labeled as “medium rightists” or “anti-CCP anti-socialist elements.” Later some summarized the CCP’s political stratagems of persecution into four items: Luring the snakes out of holes; fabricating crimes, attacking suddenly, and punishing with a single accusation; attacking relentlessly in the name of saving people; and forcing self-criticism and using the most severe labels.

What then were the “reactionary speeches” that had caused so many rightists and anti-communists to be exiled for nearly 30 years in far-flung corners of the nation? The “three major reactionary theories,” the targets of general and intensive assaults at the time, consisted of a few speeches by Luo Longji, Zhang Bojun, and Chu Anping. A closer look at what they proposed and suggested shows that their wishes were quite benign.

Luo suggested forming a joint commission of the CCP and various “democratic” parties to investigate the deviations in the “Three Anti Campaign” and “Five Anti Campaign,” and the movements for purging reactionaries. The State Council itself often presented something to the Political Consultative Committee and the People’s Congress for observations and comments, and Zhang suggested the Political Consultative Committee and the People’s Congress should be included in the decision-making process.

Chu suggested that since non-CCP members also had good ideas, self-esteem, and a sense of responsibility as well, there was no need to assign a CCP member across the nation as the head of every work unit, big or small, or even for the teams under each work unit. There was also no need that everything, major or minor, had to be done the way the CCP members suggested. All three had expressed their willingness to follow the CCP and none of their suggestions had exceeded the boundaries demarcated by the famous words of writer and critic Lu Xun [4], “My master, your gown has become dirty. Please take it off and I will wash it for you.” Like Lu Xun, these “rightists” expressed docility, submissiveness and respect.

None of the condemned “rightists” suggested that the CCP should be overthrown; all they had offered was constructive criticism. Yet precisely because of these suggestions, tens of thousands of people lost their freedom, and millions of families suffered. What followed were more movements such as “confiding to the CCP,” digging out the hardliners, the new “Three Anti Campaign,” sending intellectuals to the countryside to do hard labor, and catching the rightists who were missed the first time around. Whoever had a disagreement with the leader of the workplace, especially the party secretaries, would be labeled as anti-CCP. The CCP would often subject them to constant criticism, or send them to labor camps for forced reeducation. Sometimes the Party relocated whole families to rural areas, and barred their children from going to college or joining the army. They couldn’t apply for jobs in cities or towns either. The families would lose their job security and public health benefits. They became lowly members of the peasant rank and outcasts even among second-class citizens.

After the persecution of the intellectuals, some scholars developed a two-faced personality. They followed closely the “Red Sun” and became the CCP’s “court-appointed intellectuals,” doing or saying whatever the CCP asked. Some others became aloof and distanced themselves from political matters. Chinese intellectuals, who have traditionally had a strong sense of responsibility towards the nation, have been silenced ever since.

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V. The Great Leap Forward—Creating Falsehoods to Test People’s Loyalty

SOS China Chapter 8

I. Land Reform—Eliminating the Landlord Class

Barely three months after the founding of communist China, the CCP called for the elimination of the landlord class as one of the guidelines for its nationwide land reform program. The party’s slogan “land to the tiller” indulged the selfish side of the landless peasants, encouraged them to struggle with the landowners by whatever means and to disregard the moral implications of their actions. The land reform campaign explicitly stipulated eliminating the landlord class, and classified the rural population into different social categories. Twenty million rural inhabitants nationwide were labeled as “landlords, rich peasants, reactionaries, or bad elements.” These new outcasts faced discrimination, humiliation, and loss of all their civil rights. As the land reform campaign extended its reach to remote areas and the villages of ethnic minorities, the CCP’s organizations also expanded quickly. Township Party committees and village Party branches spread all over China. The local branches were the mouthpiece for passing instructions from the CCP’s Central Committee and were at the frontline of the class struggle, inciting peasants to rise up against their landlords. Nearly 100,000 landlords died during this movement. In certain areas the CCP and the peasants killed the landlords’ entire families, disregarding gender or age, as a way to wipe out completely the landlord class.

In the meantime, the CCP launched its first wave of propaganda, declaring that “Chairman Mao is the great savior of the people” and that “only the CCP can save China.” During the land reform, landless farmers got what they wanted through the CCP’s policy of reaping without laboring, robbing without concern for the means. Poor peasants credited the CCP for the improvement in their lives and so accepted the CCP’s propaganda that the Party worked for the interests of the people.

For the owners of the newly acquired land, the good days of “land to the tiller” were short-lived. Within two years, the CCP imposed a number of practices on the farmers such as mutual-aid groups, primary cooperatives, advanced cooperatives, and people’s communes. Using the slogan of criticizing “women with bound feet”—i.e., those who are slow paced—the CCP drove and pushed, year after year, urging peasants to “dash” into socialism. With grain, cotton, and cooking oil placed under a unified procurement system nationwide, the major agricultural products were excluded from market exchange. In addition, the CCP established a residential registration system, barring peasants from going to the cities to find work or dwell. Those who are registered as rural residents were not allowed to buy grain at state-run stores and their children were prohibited from receiving education in cities. Peasants’ children could only be peasants, turning 360 million rural residents of the early 1950s into second-class citizens.

Beginning in 1978, in the first five years after moving from a collective system to a household contract system, some among the 900 million peasants became better off, with their income increasing slightly and their social status improving somewhat. However, such a meager benefit was soon lost due to a price structure that favored industrial commodities over agricultural goods; peasants plunged into poverty once again. The income gap between the urban and rural population has drastically increased, and economic disparity continues to widen. New landlords and rich peasants have re-emerged in the rural areas. Data from Xinhua News Agency, the CCP’s mouthpiece, show that since 1997, the revenue of the major grain production areas and the income of most rural households have been at a standstill, or even declined in some cases. In other words, the peasants’ gain from agricultural production did not really increase. The ratio of urban to rural incomes has increased from 1.8 to 1 in the mid 1980s to 3.1 to 1 today.

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II. Reforms in Industry and Commerce—Eliminating the Capitalist Class

Another class that the CCP wanted to eliminate was the national bourgeoisie who owned capital in cities and rural towns. While reforming China’s industry and commerce, the CCP claimed that the capitalist class and the working class were different in nature: the former was the exploiting class while the latter was the non-exploiting and anti-exploiting class. According to this logic, the capitalist class was born to exploit and wouldn’t stop doing so until it perished; it could only be eliminated, not reformed. Under such premises, the CCP used both killing and brainwashing to transform capitalists and merchants. The CCP used its long-tested method of supporting the obedient and destroying those who disagreed. If you surrendered your assets to the state and supported the CCP, you were considered just a minor problem among the people. If, on the other hand, you disagreed with or complained about the CCP’s policy, you would be labeled as a reactionary and become the target of the CCP’s draconian dictatorship.

During the reign of terror that ensued during these reforms, capitalists and business owners all surrendered their assets. Many of them couldn’t bear the humiliation they faced and committed suicide. Chen Yi, then mayor of Shanghai, asked every day, “How many paratroopers are there today?” referring to the number of capitalists that had committed suicide by jumping from the tops of buildings that day. In only a few years, the CCP completely eliminated private ownership in China.

While carrying out its land and industrial reform programs, the CCP launched many massive movements that persecuted the Chinese people. These movements included: the suppression of “counter-revolutionaries,” thought reform campaigns, cleansing the anti-CCP clique headed by Gao Gang and Rao Shushi, and probing Hu Feng’s [3] “counter-revolutionary” group, Three Anti Campaign, Five Anti Campaign, and the further cleansing of counterrevolutionaries. The CCP used these movements to target and brutally persecute countless innocent people. In every political movement, the CCP fully utilized its control of government resources in conjunction with the Party’s committees, branches, and sub-branches. Three party members would form a small combat team, infiltrating all villages and neighborhoods. These combat teams were ubiquitous, leaving no stone unturned. This deeply-entrenched Party control network, inherited from the CCP’s network of “Party branches installed within the army” during the war years, has since played a key role in later political movements.

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III. Crackdown on Religions and Religious Groups

The CCP committed another atrocity in the brutal suppression of religion and the complete ban of all grass-roots religious groups following the founding of the People’s Republic of China. In 1950, the CCP instructed its local governments to ban all unofficial religious faiths and secret societies. The CCP stated that those “feudalistic” underground groups were mere tools in the hands of landlords, rich farmers, reactionaries, and the special agents of the KMT. In the nationwide crackdown, the government mobilized the classes they trusted to identify and persecute members of religious groups. Governments at various levels were directly involved in disbanding such “superstitious groups” as communities of Christians, Catholics, Taoists (especially believers of I-Kuan Tao), and Buddhists. They ordered all members of these churches, temples, and religious societies to register with government agencies and to repent for their involvement. Failure to do so would mean severe punishment. In 1951, the government formally promulgated regulations threatening that those who continued their activities in unofficial religious groups would face a life sentence or a death penalty.

This movement persecuted a large number of kind-hearted and law-abiding believers in God. Incomplete statistics indicate that the CCP in the 1950s persecuted at least three million religious believers and underground group members, some of whom were killed. The CCP searched almost every household across the nation and interrogated its members, even smashing statues of the Kitchen God that Chinese peasants traditionally worshipped. The executions reinforced the CCP’s message that communist ideology was the only legitimate ideology and the only legitimate faith. The concept of “patriotic” believers soon emerged. The state constitution protected only “patriotic” believers. The reality was whatever religion one believed in, there was only one criterion: you had to follow the CCP’s instructions and you had to acknowledge that the CCP was above all religions. If you were a Christian, the CCP was the god of the Christian God. If you were a Buddhist, the CCP was the Master Buddha of the Master Buddha. Among Muslims, the CCP was the Allah of the Allah. When it came to the Living Buddha in Tibetan Buddhism, the CCP would intervene and itself choose who the Living Buddha would be. The CCP left you no choice but to say and do what the CCP demanded you to say and do. All believers were forced to carry out the CCP’s objectives while upholding their respective faiths in name only. Failing to do so would make one the target of the CCP’s persecution and dictatorship.

According to a February 22, 2002 report by Humanity and Human Rights online magazine, twenty thousand Christians conducted a survey among 560,000 Christians in house churches in 207 cities in 22 provinces in China. The survey found that among house church attendees, 130,000 were under government surveillance. In the book How the Chinese Communist Party Persecuted Christians (1958), it is stated that by 1957, the CCP had killed over 11,000 religious adherents and had arbitrarily arrested and extorted money from many more.

By eliminating the landlord class and the capitalist class and by persecuting large numbers of God-worshipping and law-abiding people, the CCP cleared the way for Communism to become the all-encompassing religion of China.

SOS Chapter 7

Foreword

When speaking about tyranny, most Chinese people are reminded of Qin Shi Huang (259-210 B.C.), the first Emperor of the Qin Dynasty, whose oppressive court burnt philosophical books and buried Confucian scholars alive. Qin Shi Huang’s harsh treatment of his people came from his policy of “supporting his rule with all of the resources under heaven.” [1] This policy had four main aspects: excessively heavy taxation; wasting human labor for projects to glorify himself; brutal torture under harsh laws and punishing even the offenders’ family members and neighbors; and controlling people’s minds by blocking all avenues of free thinking and expression through burning books and even burying scholars alive. Under the rule of Qin Shi Huang, China had a population of about 10 million; Qin’s court drafted over 2 million to perform forced labor. Qin Shi Huang brought his harsh laws into the intellectual realm, prohibiting freedom of thought on a massive scale. During his rule, thousands of Confucian scholars and officials who criticized the government were killed.

Today the Chinese Communist Party (CCP)’s violence and abuses are even more severe than those of the tyrannical Qin Dynasty. The CCP’s philosophy is one of “struggle,” and the CCP’s rule has been built upon a series of “class struggles,” “path struggles,” and “ideological struggles,” both in China and toward other nations. Mao Zedong, the first CCP leader of the People’s Republic of China (PRC), put it bluntly by saying, “What can Emperor Qin Shihuang brag about? He only killed 460 Confucian scholars, but we killed 46,000 intellectuals. There are people who accuse us of practicing dictatorship like Emperor Qin Shihuang and we admit it all. It fits the reality. It is a pity that they did not give us enough credit, so we need to add to it.” [2]

Let’s take a look at China’s arduous 55 years under the rule of the CCP. As its founding philosophy is one of “class struggle,” the CCP has spared no efforts since taking power to commit class genocide, and has achieved its reign of terror by means of violent revolution. Killing and brainwashing have been used hand in hand to suppress any beliefs other than communist theory. The CCP has launched one movement after another to portray itself as infallible and godlike. Following its theories of class struggle and violent revolution, the CCP has tried to purge dissidents and opposing social classes, using violence and deception to force all Chinese people to become the obedient servants of its tyrannical rule.

SOS China - Chapter 6

III. Demonstrating Evil Traits

Eternal Fear Marks the Party’s History

The most prominent characteristic of the CCP is its eternal fear. Survival has been the CCP’s highest interest since its inception. Such interest managed to overcome the fear hidden underneath its ever-changing appearance. The CCP is like a cancer cell that diffuses and infiltrates every part of body, kills the surrounding normal cells and grows malignantly beyond control. In our cycle of history, society has been unable to dissolve such a mutated factor as the CCP and has no alternative but to let it proliferate at will. This mutated factor is so powerful that nothing within the level and range of its expansion can stop it. Much of society has become polluted, and larger and larger areas have been flooded with communism or communist elements. These elements are further strengthened and taken advantage of by the CCP and have fundamentally degraded the morality and society of humankind.

The CCP doesn’t believe in any generally recognized principle of morality and justice. All of its principles are used entirely for its own interest. It is fundamentally selfish, and there are no principles that could restrain and control its desires. Based on its own principles, the Party needs to keep changing how it appears on the surface, putting on new skins. During the early period when its survival was at stake, the CCP attached to the Communist Party of the Soviet Union, to the KMT, to the KMT’s governing body, and to the National Revolution. After capturing power, the CCP attached itself to various forms of opportunism, to the citizens’ minds and feelings, to social structures and means—to anything it could put its hands on. It has utilized every crisis as an opportunity to gather more power and to strengthen its means of control.

Steadfast Pursuit of Evil Is the CCP’s “Magic Weapons”

The CCP claims that revolutionary victory depends on three “magic weapons”: the Party’s construction, armed struggle, and united fronts. The experience with the KMT offered the CCP two more such “weapons”: propaganda and espionage. The Party’s various “magic weapons” have all been infused with the CCP’s nine inherited traits: evil, deceit, incitement, unleashing the scum of society, espionage, robbery, fighting, elimination, and control.

Marxism-Leninism is evil in its nature. Ironically, the Chinese Communists do not really understand Marxism-Leninism. Lin Biao [21] said that there were very few CCP members who had really read the works of Marx or Lenin. The public considered Qu Qiubai [22] an ideologue, but he admitted to have only read a very little of Marxism-Leninism. Mao Zedong’s ideology is a rural version of Marxism-Leninism that advocates the rebellion of peasants. Deng Xiaoping’s theory of the primary stage of socialism has capitalism as its last name. Jiang Zemin’s “Three Represents” [23] was pieced together out of nothing. The CCP has never really understood what Marxism-Leninism is, but has inherited from it the evil aspects, upon which the CCP has foisted off its own even more wicked stuff.

The CCP’s united front is a conjunction of deceit and short-term pay-offs. The goal of unity was to strengthen its power, to help it grow from a loner to a huge clan and to change the ratio of its friends to its enemies. Unity required discernment—identifying who were enemies and who were friends; who were on the left, in the middle, on the right; who should be befriended and when, and who should be attacked and when. It easily turned former enemies into friends and then back to enemies again. For example, during the period of the democratic revolution, the party allied with the capitalists; during the socialist revolution it eliminated the capitalists. In another example, leaders of other democratic parties such as Zhang Bojun [24] and Luo Longji, [25] co-founders of “China Democratic League”, were made use of as supporters of the CCP during the period of seizing state power, but later were persecuted as “rightists.”

The Communist Party Is a Sophisticated Professional Gang

The Communist Party has used two-sided strategies, one side soft and flexible and the other hard and stern. Its softer strategies include propaganda, united fronts, sowing dissension, espionage, instigating rebellion, double-dealing, getting into people's minds, brainwashing, lies and deception, covering up the truth, psychological abuse, and generating an atmosphere of terror. In doing these things, the CCP creates a syndrome of fear inside the people’s hearts that leads them to easily forget the Party’s wrongdoings. These myriad methods could stamp out human nature and foster maliciousness in humanity. The CCP’s hard tactics include violence, armed struggle, persecution, political movements, murdering witnesses, kidnapping, suppressing different voices, armed attacks, periodic crack-downs, etc. These aggressive methods create and perpetuate terror.

The CCP uses both soft and hard methods concurrently. Sometimes they would be relaxed in some instances while strict in others, or they would be relaxed on the outside while stiff in their internal affairs. In a relaxed atmosphere, the CCP encouraged the expression of different opinions, but, as if luring the snake out of its hole, those who did speak up would only be persecuted in the following period of strict control. The CCP often used democracy to challenge the KMT, but when intellectuals in the CCP-controlled areas disagreed with the Party, they would be tortured or even beheaded. As an example, we can look at the infamous “Wild Lilies incident,” in which the intellectual Wang Shiwei (1906-1947) who wrote an essay “Wild Lilies” to express his ideal of equality, democracy and humanitarianism was purged in the Yan’an rectification movement and hacked to death with axes by the CCP in 1947.

A veteran official who had suffered torments in the Yan’an Rectification movement recalled that when he was under intense pressure, dragged and forced to confess, the only thing he could do was to betray his own conscience and make up lies. At first, he felt bad to be implicating and framing his fellow comrades. He hated himself so much that he wanted to end his life. Coincidentally, a gun had been placed on the table. He grabbed it, pointed it at his head and pulled the trigger. The gun had no bullets! The person who investigated him walked in and said, “It’s good that you admitted what you’ve done was wrong. The Party’s policies are lenient.” The Communist Party would know that you had reached your limit, know that you were “loyal” to the Party, so you had passed the test. The CCP always first puts one in a deathtrap and then enjoys one’s every pain and humiliation. When one reaches the limit and just wishes for death, the Party would “kindly” come out to show one a way to live. It is said “better a live coward than a dead hero.” One becomes so grateful to the Party as one’s savior. Years later, this official learned about Falun Gong, a Qigong and cultivation practice that started in China. He felt the practice to be good. When the persecution of Falun Gong started in 1999, however, his painful memories of the past revisited him, and he no longer dared to say that Falun Gong was good.

The experience of China’s last Emperor Puyi [26] was similar to this officer’s. Imprisoned in the CCP’s cells and seeing people killed one after another, he thought that he would die soon. In order to live, he allowed himself to be brainwashed and cooperated with the prison guards. Later, he wrote an autobiography The First Half of My Life, which was used by the CCP as a successful example of ideological remolding.

According to modern medical studies, many victims of intense pressure and isolation fall prey to an abnormal sense of dependency on their captors known as the Stockholm Syndrome. The victims’ moods—happiness or anger, joy or sorrow—would be dictated by those of their captors. The slightest favor for the victims will be received with deep gratitude. There are accounts in which the victims develop “love” for their captors. This psychological phenomenon has been long used successfully by the CCP both against its enemies and in controlling and remolding the minds of its citizens.

The Party Is the Most Wicked

A majority of the general secretaries of the CCP have been labeled anti-communists. Clearly, the CCP has a life of its own, with its own independent body.The party runs the officials and not the other way around. In the “Soviet areas” of Jiangxi province, while the CCP was encircled by the KMT and could hardly survive, it still conducted internal cleansing operations in the name of cracking down on the “Anti-Bolshevik (AB) Corps,” executing its own soldiers at night or stoning them to death to save bullets. In northern Shaanxi province, while sandwiched in between the Japanese and the KMT, the CCP began the Yan’an rectification movement of mass cleansing, killing numerous people. This type of repetitive massacre on such a massive scale did not prevent the CCP from expanding its power to eventually rule all of China. The CCP expanded this pattern of internal rivalry and killing one another from the small Soviet areas to the whole nation.

The CCP is like a malignant tumor: in its rapid development, the center of the tumor has already died, but it continues to diffuse to the healthy organisms on the outer edges. After the organisms and bodies are infiltrated, new tumors grow. No matter how good or bad a person is to start with, after joining the CCP, he or she would become a part of its destructive force. The more honest the person is, the more destructive he would become. Undoubtedly, this CCP tumor will continue to grow until there is nothing left for it to feed upon. Then, the cancer will surely die.

The founder of the CCP, Chen Duxiu, was an intellectual and a leader of the May Fourth student movement. He showed himself not a fan of violence, and warned the CCP members that if they attempted to convert the KMT to the communist ideologies or had too much interest in power, that would certainly lead to strained relationships. While one of the most active in the May Fourth generation, Chen was also tolerant. However, he was the first to be labeled a “right-wing opportunist.”

Another CCP leader, Qu Qiubai, believed that the CCP members should engage in battles and fighting, organize rebellions, overthrow authorities, and use extreme means to return the Chinese society to its normal functioning. However, he confessed before his death, “I do not want to die as a revolutionary. I had left your movement a long time ago. Well, history played a trick, bringing me, an intellectual, onto the political stage of revolution and keeping me there for many years. In the end, I still could not overcome my own gentry notions. I cannot become a warrior of the proletariat class after all.” [27]

The CCP leader Wang Ming, at the advice of the Comintern, argued for unity with the KMT in the war against the Japanese, instead of expanding the CCP base. At the CCP meetings, Mao Zedong and Zhang Wentian [28] could not persuade this fellow comrade, nor could they reveal the truth of their situation: according to the limited military strength of the Red Army, they would not be able to hold back even a division of the Japanese by themselves. If, against good sense, the CCP would have decided to fight, then the history of China would certainly be different. Mao Zedong was forced to remain silent at the meetings. Later, Wang Ming was ousted, first for a “left wing” deviation and then branded an opportunist of the right wing ideology.

Hu Yaobang, another party Secretary, who was forced to resign in January of 1987, had earned back Chinese people’s support for the CCP by bringing justice to many innocent victims who had been criminalized during the Cultural Revolution. Still, he was kicked out in the end.

Zhao Ziyang, the most recent fallen Secretary [29], wanted to help the CCP in furthering reform, yet his actions brought him dire consequences.

So what could each new leader of the CCP accomplish? Truly to reform the CCP would imply its death. The reformers would quickly find their power taken away by the CCP. There is a certain limit on what the CCP members can do to transform the CCP system. So there is no chance for CCP to succeed in reformation.

If the Party leaders have all turned into “bad people,” how could the CCP have expanded the revolution? In many instances when the CCP was at its best—also the most evil, their highest officials failed in their positions. This was because their degree of evil did not meet the high standard of the Party, which has, over and over, selected only the most evil. Many Party leaders ended their political life in tragedy, yet the CCP has survived. The CCP leaders who survived their positions were not those who could influence the Party, but those who could comprehend the Party’s evil intentions and follow them. They strengthened the CCP’s ability to survive while in crisis, and gave themselves entirely to the Party. No wonder Party members were capable of battling with heaven, fighting with the earth, and struggling against other human beings. But never could they oppose the Party. They are tame tools of the Party, or at most symbiotically related to the Party.

Shamelessness has become a marvelous quality of today’s CCP. According to the Party, its mistakes were all made by individual Party leaders, e.g., Zhang Guotao [30] or the Gang of Four [31]. Mao Zedong was judged by the Party as having three parts mistakes and seven parts achievements, while Deng Xiaoping judged himself to have four parts mistakes and six parts achievements, but the Party itself was never wrong. Even if the Party was wrong, well, it is the Party itself which has corrected the mistakes. Therefore, the Party tells its members to “look forward” and “not to be tangled in past accounts.” Many things could change: The Communist paradise is turned into a lowly goal of socialist food and shelter; Marxism-Lenenism is replaced by the “Three Represents.”People should not be surprised to see the CCP promoting democracy, opening up the freedom of belief, abandoning Jiang Zemin overnight, or redressing the persecution of Falun Gong, if it deems doing so necessary to maintain its control. There is one thing that never changes about the CCP: The fundamental pursuit of the Party’s goals—survival and maintenance of its power and control.
The CCP has mixed violence, terror and high-pressure indoctrination to form its theoretical basis, which is then turned into the Party nature, the supreme principles of the Party, the spirit of its leaders, the functioning mechanism of the entire Party, and the criteria for the actions of all CCP members. The Communist Party is as hard as steel, and its disciplines are as solid as iron. The intention of all members must be unified, and the actions of all members must completely comply with the Party’s political agenda.

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Conclusion

Why has history chosen the Communist Party over any other political force in China? As we all know, in this world there are two forces, two choices. One is the old and evil, whose goal is to do evil and choose the negative. The other is the righteous and good, which will choose the right and the benevolent. The CCP was chosen by the old forces. The reason for the choice is precisely because the CCP has gathered all the evil of the world, Chinese or foreign, past or present. It is a typical representative of the evil forces. The CCP took the greatest advantage of people’s inborn innocence and benevolence to cheat, and, step by step, it has prevailed in gaining today’s capacity to destroy.
What did the Party mean when it claimed that there would be no new China without the Communist Party? From its founding in 1921 until it took political power in 1949, the evidence clearly shows that without deceit and violence, the CCP would not be in power. The CCP differs from all other types of organizations in that it follows a twisted ideology of Marxism-Leninism, and does what it pleases. It can explain all that it does with high theories and link them cleverly to certain portions of the masses, thus “justifying” its actions. It broadcasts propaganda every day, clothing its strategies in various principles and theories and proving itself to be forever correct.
The development of the CCP has been a process of the accumulation of evil, with nothing glorious at all. The history of the CCP tells us precisely its illegitimacy. The Chinese people did not choose the CCP; instead, the CCP forced Communism, this foreign evil specter, onto the Chinese people by applying the evil traits that it has inherited from the Communist Party—evil, deceit, incitement, unleashing the scum of society, espionage, robbery, fighting, elimination, and control.

SOS China - The Truth Chapter 5

The First KMT and CCP Alliance—A Parasite Infiltrates to the Core and Sabotages the Northern Expedition [14]

The CCP has always taught its people that Chiang Kai-shek betrayed the National Revolution movement [15], forcing the CCP to rise in armed revolt.

In reality, the CCP is a parasite or possessing specter. It cooperated with the KMT in the first KMT-CCP alliance for the sake of expanding its influence by taking advantage of the national revolution. Moreover, the CCP was eager to launch the Soviet-supported revolution and seize power, and its desire for power in fact destroyed and betrayed the National Revolution movement.

At the Second National Congress of the CCP in July 1922, those opposing the alliance with the KMT dominated the congress, because the party members were anxious to seize power. However, the Comintern vetoed the resolution reached in the congress and ordered the CCP to join the KMT.

During the first KMT-CCP alliance, the CCP held its Fourth National Congress in Shanghai in January 1925 and raised the question of leadership in China before Sun Yat-sen [16] died on March 12, 1925. Had he not died, he, instead of Chian Kai-shek would have been the target the CCP aimed at in its quest for power.

With the support of the Soviet Union, the CCP wantonly seized political power inside the KMT during its alliance with the CCP. Tan Pingshan (1886-1956, one of the early leaders of CCP in Guangdong province) became the minister of the Central Personnel Department of the KMT. Feng Jupo (1899-1954, one of the early leaders of CCP in Guangdong province), secretary of the Ministry of Labor, was granted full power to deal with all labor-related affairs. Lin Zuhan (or Lin Boqu, 1886-1960, one of the earliest CCP members) was the Minister of Rural Affairs, while Peng Pai (1896-1929, one of the CCP leaders) was secretary of this Ministry. Mao Zedong assumed the position of acting propaganda minister of the KMT Propaganda Ministry. The military schools and leadership of the military were always the focus of the CCP: Zhou Enlai held the position of director of the Politics Department of the Huangpu (Whampoa) Military Academy, and Zhang Shenfu (or Zhang Songnian, 1893-1986, one of the founders of CCP who introduced Zhou Enlai to join the CCP) was its associate director. Zhou Enlai was also Chief of the Judge Advocates Section, and he planted Russian military advisers here and there. Many Communists held the positions of political instructors and faculty in KMT military schools. CCP members also served as KMT Party representatives at various levels of the National Revolutionary Army. [17] It was also stipulated that without a Party representative’s signature, no order would be deemed effective. As a result of this parasitic attachment to the National Revolution movement, the number of the CCP members increased drastically from less than 1000 in 1925 to 30,000 by 1928.

The Northern Expedition started in February of 1926. From October 1926 to March 1927, the CCP launched three armed rebellions in Shanghai. Later, it attacked the Northern Expedition military headquarters but failed. The pickets for the general strikes in Guangdong province engaged in violent conflicts with the police every day. Such uprisings caused the April 12 purge of the CCP by the KMT in 1927. [18]

In August 1927, the CCP members within the KMT Revolutionary Army initiated the Nanchang Rebellion, which was quickly suppressed. In September, the CCP launched the Autumn Harvest Uprising to attack Changsha, but that attack was suppressed as well. The CCP began to implement a network of control in the army whereby “Party branches are established at the level of the company in the army,” and it fled to the Jinggangshan Mountain area in Jiangxi Province, [19] establishing rule over the countryside there.

The Hunan Peasant Rebellion—Inciting the Scum of Society to Revolt

During the Northern Expedition, when the National Revolutionary Army was at war with the warlords, the CCP instigated rebellions in the rural areas in an attempt to capture power.

The Hunan Peasant Rebellion in 1927 was a revolt of the riffraff, the scum of society, as was the well-known Paris Commune of 1871—the first Communist revolt. French nationals and foreigners in Paris at the time witnessed that the Paris Commune was a group of destructive roving bandits with no vision. Living in exquisite buildings and large mansions and eating extravagant and luxurious meals, they cared only about enjoying their momentary happiness and worried about nothing ahead. During the rebellion of the Paris Commune, they censored the Press. They took as hostage and later shot the Archbishop of Paris, Georges Darboy, who gave sermons to the King. For their personal enjoyment they cruelly killed 64 clergymen, set fire to palaces, and destroyed government offices, private residences, monuments, and inscription columns. The wealth and beauty of the French capital had been second to none in Europe. However, during the Paris Commune uprising, buildings were reduced to ashes and people to skeletons. Such atrocities and cruelty had rarely been seen throughout history.

As Mao Zedong admitted,

It is true the peasants are in a sense ‘unruly’ in the countryside. Supreme in authority, the peasant association allowed the landlord no say and sweeps away his prestige. This amounts to striking the landlord down to the dust and keeping him there. The peasants threaten, “We will put you in the other register [the register of reactionaries]!” They fine the local tyrants and evil gentry, they demand contributions from them, and they smash their sedan-chairs. People swarm into the houses of local tyrants and evil gentry who are against the peasant association, slaughter their pigs and consume their grain. They even loll for a minute or two on the ivory-inlaid beds belonging to the young ladies in the households of the local tyrants and evil gentry. At the slightest provocation they make arrests, crown the arrested with tall paper hats, and parade them through the village, saying, “You dirty landlords, now you know who we are!” Doing whatever they like and turning everything upside down, they have created a kind of terror in the countryside. [2]

But Mao gave such “unruly” actions a full approval, saying,

To put it bluntly, it is necessary to create terror for a while in every rural area, or otherwise it would be impossible to suppress the activities of the counter-revolutionaries in the countryside or overthrow the authority of the gentry. Proper limits have to be exceeded in order to right a wrong, or else the wrong cannot be righted... Many of their deeds in the period of revolutionary action, which were seen as going too far, were in fact the very things the revolution required. [2]

Communist revolution creates a system of terror.

The “Anti-Japanese” North-Bound Operation—The Flight of the Defeated

The CCP labeled the “Long March” as a northbound anti-Japanese operation. It trumpeted the “Long March” as a Chinese revolutionary fairy tale. It claimed that the “Long March” was a “manifesto,” a “propaganda team” and a “seeding machine,” which ended with the CCP’s victory and their enemies’ defeat.

The CCP fabricated such obvious lies about marching north to fight the Japanese to cover its failures. From October 1933 to January 1934, the Communist Party suffered a total defeat. In the fifth operation by the KMT, which aimed to encircle and annihilate the CCP, the CCP lost its rural strongholds one after another. With its base areas continually shrinking, the main Red Army had to flee. This is the true origin of the “Long March.”

The “Long March” was in fact aimed at breaking out of the encirclement and fleeing to Outer Mongolia and Soviet Russia along an arc that first went west and then north. Once in place, the CCP could escape into the Soviet Union in case of defeat. The CCP encountered great difficulties when en route towards Outer Mongolia. They chose to go through Shanxi and Suiyuan. On the one hand by marching through these northern provinces, they could claim to be “anti-Japanese” and win people’s hearts. On the other hand, those areas were safe as no Japanese troops were deployed there. The area occupied by the Japanese army was along the Great Wall. A year later, when the CCP finally arrived at Shanbei (northern Shaanxi province), the main force of the Central Red Army had decreased from 80,000 to 6,000 people.

The Xi’an Incident—The CCP Successfully Sowed Dissension and Latched onto the KMT a Second Time

In December 1936, Zhang Xueliang and Yang Hucheng, two KMT generals, kidnapped Chiang Kai-shek in Xi’an. This has since been referred to as the Xi’an Incident.

According to the CCP’s textbooks, the Xi’an Incident was a “military coup” initiated by Zhang and Yang, who delivered a life or death ultimatum to Chiang Kai-shek. He was forced to take a stance against the Japanese invaders. Zhou Enlai was reportedly invited to Xi’an as a CCP representative to help negotiate a peaceful resolution. With different groups in China mediating, the incident was resolved peacefully, thereby ending a civil war of ten years and starting a unified national alliance against the Japanese. The CCP history books say that this incident was a crucial turning point for China in her crisis. The CCP depicts itself as the patriotic party that takes the interests of the whole nation into account.

More and more documents have revealed that many CCP spies had already gathered around Yang Hucheng and Zhang Xueliang before the Xi’an Incident. Liu Ding, an underground CCP member was introduced to Zhang Xueliang by Song Qingling, wife of Sun Yat-sen, a sister of Madame Chiang and a CCP member. After the Xi’an Incident, Mao Zedong praised that, “Liu Ding performed meritorious service in Xi’an Incident.” Among those working at Yang Hucheng’s side, his own wife Xie Baozhen was a CCP member and worked in Yang’s Political Department of the Army. Xie married Yang Hucheng in January of 1928 with the approval of the CCP. In addition, CCP member Wang Bingnan was an honored guest in Yang’s home at the time. Wang later became a vice minister for the CCP Ministry of Foreign Affairs. It was these CCP members around Yang and Zhang who directly instigated the coup.

At the beginning of the incident, the leaders of the CCP wanted to kill Chiang Kai-shek, avenging his earlier suppression of the CCP. At that time, the CCP had a very weak base in northern Shaanxi province, and had been in danger of being completely eliminated in a single battle. The CCP, utilizing all its acquired skills of deception, instigated Zhang and Yang to revolt. In order to pin down the Japanese and prevent them from attacking the Soviet Union, Stalin personally wrote to the Central Committee of the CCP, asking them not to kill Chiang Kai-shek, but to cooperate with him for a second time. Mao Zedong and Zhou Enlai realized that they could not destroy the KMT with the limited strength of the CCP; if they killed Chiang Kai-shek, they would be defeated and even eliminated by the avenging KMT army. Under these circumstances, the CCP changed its tone. The CCP forced Chiang Kai-shek to accept cooperation a second time in the name of joint resistance against the Japanese.

The CCP first instigated a revolt, pointing the gun at Chiang Kai-shek, but then turned around and, acting like a stage hero, forced him to accept the CCP again. The CCP not only escaped a crisis of disintegration, but also used the opportunity to latch onto the KMT government for the second time. The Red Army was soon turned into the Eighth Route Army and grew bigger and more powerful than before. One must admire the CCP’s unmatchable skills of deception.

Anti-Japanese War—The CCP Grew by Killing with Borrowed Weapons

When the anti-Japanese war broke out in 1937, the KMT had more than 1.7 million armed soldiers, ships with 110,000 tons displacement, and about 600 fighter planes of various kinds. The total size of the CCP’s army including the New Fourth Army which was newly grouped in November of 1937, did not exceed 70,000 people.Its power was weakened further by internal fractional politics and could be eliminated in a single battle. The CCP realized that if it were to face battle with the Japanese, it would not be able to defeat even a single division of the Japanese troops. In the eyes of the CCP, sustaining its own power rather than ensuring the survival of the nation was the central focus of the emphasis on “national unity.” Therefore, during its cooperation with the KMT, the CCP exercised an internal policy of “giving priority to the struggle for political power, which is to be disclosed internally and realized in actual practice.”

After the Japanese occupied the city of Shenyang on September 18, 1931, thereby extending their control over large areas in northeastern China, the CCP fought shoulder to shoulder with Japanese invaders to defeat the KMT. In a declaration written in response to the Japanese occupation, the CCP exhorted the people in the KMT-controlled areas to rebel, calling on “workers to strike, peasants to make trouble, students to boycott classes, poor people to quit working, soldiers to revolt” so as to overthrow the Nationalist government.

The CCP held up a banner calling for resistance to the Japanese, but they only had local armies and guerrilla forces in camps away from the front lines. Except for a few battles, including the one fought at Pingxing Pass, the CCP did not make much of a contribution to the war against the Japanese at all. Instead, they spent their energy expanding their own base. When the Japanese surrendered, the CCP incorporated the surrendering soldiers into its army, claiming to have expanded to more than 900,000 regular soldiers, in addition to 2 million militia fighters. The KMT army was essentially alone on the frontlines while fighting the Japanese, losing over 200 marshalls in the war. The commanding officers on the CCP side bore nearly no losses. However, the textbooks of the CCP constantly claimed that the KMT did not resist the Japanese, and that it was the CCP that led the great victory in the anti-Japanese war.

Rectification in Yan’an—Creating the Most Fearsome Methods in Persecution

The CCP attracted countless patriotic youth to Yan’an in the name of fighting against the Japanese, but persecuted tens of thousands of them during the rectification movement in Yan’an. Since gaining control of China, the CCP has depicted Yan’an as the revolutionary “holy land,” but has not made any mention of the crimes it committed during the rectification.

The rectification movement in Yan’an was the largest, darkest and most ferocious power game ever played out in the human world. In the name of cleansing petty bourgeoisie toxins, the Party washed away morality, independence of thought, freedom of action, tolerance, and dignity. The first step of the rectification was to set up, for each person, personnel archives, which included: 1) a personal statement; 2) a chronicle of one's political life; 3) family background and social relationships; 4) autobiography and ideological transformation; 5) evaluation according to Party nature.

In the personnel archive, one had to list all acquaintances since birth, all important events and the time and place of their occurrence. People were asked to write repeatedly for the archive, and any omissions would be seen as signs of impurity. One had to describe all social activities they had ever participated in, especially those related to joining the Party. The emphasis was placed on personal thought processes during these social activities. Evaluation based on Party nature was even more important, and one had to confess any anti-Party thoughts or behavior in one’s consciousness, speech, work attitudes, everyday life, or social activities. For example, in evaluation of one’s consciousness, one was required to scrutinize whether one had been concerned for self-interest, whether one had used work for the Party to reach personal goals, whether one had wavered in trust in the revolutionary future, feared death during battles, or missed family members and spouses after joining in the party or the army. There were no objective standards, so nearly everyone was found to have problems.

Coercion was used to extract “confessions” from cadres who were being inspected in order to eliminate “hidden traitors.” Countless frame-ups and false and wrong accusations resulted, and a large number of cadres were persecuted. During the rectification, Yan’an was called “a place for purging human nature.” A work team entered the University of Military Affairs and Politics to examine the cadres’ personal histories, causing Red Terror for two months. Various methods were used to extract confessions, including extemporaneious confessions, demonstrative confessions, “group persuasions,” “five-minute persuasions,” private advice, conference reports, and identifying the “radishes” (i.e., red outside and white inside). There was also “picture taking”—lining up everyone on the stage for examination. Those who appeared nervous were identified as suspects and targeted as subjects to be investigated.

Even representatives from the Comintern recoiled at the methods used during the rectification, saying that the Yan’an situation was depressing. People did not dare interact with one another. Each person had his own axe to grind and everyone was nervous and frightened. No one dared to speak the truth or protect mistreated friends, because each was trying to save his own life. The vicious—those who flattered, lied, and insulted others—were promoted; humiliation became a fact of life in Yan’an – either humiliate other comrades or humiliate oneself. People were pushed to the brink of insanity, having been forced to abandon dignity, a sense of honor or shame, and love for one another in order to save their own lives and their own jobs. They ceased to express their own opinions, but recited party leaders’ articles instead.

This same system of oppression has been employed in all CCP political activities since it seized power in China.

Three Years of Civil War—Betraying the Country to Seize Power

The Russian Bourgeois Revolution in February 1917 was a relatively mild uprising. The Tsar placed the interests of the country first and surrendered the throne instead of resisting. Lenin hurriedly returned to Russia from Germany, staged another coup, and in the name of communist revolution murdered the revolutionaries of the capitalist class who had overthrown the Tsar, thus strangling Russia’s bourgeois revolution. The CCP, like Lenin, picked the fruits of a nationalist revolution. After the anti-Japanese war was over, the CCP launched a so-called “War of Liberation” (1946-1949) to overthrow the KMT government, bringing the disaster of war to China once more.

The CCP is well known for its “huge-crowd strategy,” the sacrifice of massive casualties and deaths to win a battle. In several battles with the KMT, including those fought in Liaoxi-Shenyang, Beijing-Tianjin, and Huai Hai [20], the CCP used these most primitive, barbarous, and inhumane tactics that sacrificed huge numbers of its own people. When besieging Changchun city in Jilin Province in Northeast China, in order to exhaust the food supply in the city, the People’s Liberation Army (PLA) was ordered to forbid ordinary people from leaving the city. During the two months of Changchun’s besiegement, nearly 200,000 people died of hunger and frost. But the PLA did not allow people to leave. After the battle was over, the CCP, without a tinge of shame, claimed that they had “liberated Changchun without firing a shot.”

From 1947 to 1948, the CCP signed the “Harbin Agreement” and the “Moscow Agreement” with the Soviet Union, surrendering national assets and giving away resources from the Northeast in exchange for the Soviet Union’s full support in foreign relations and military affairs. According to the agreements, the Soviet Union would supply the CCP with 50 airplanes; it would give the CCP weapons left by the surrendered Japanese in two installments; and it would sell the Soviet-controlled ammunition and military supplies in China’s Northeast to the CCP at low prices. If the KMT launched an amphibious landing in the Northeast, the Soviet Union would secretly support the CCP army. In addition, the Soviet Union would help the CCP gain control over Xinjiang in Northwest China; the CCP and the Soviet Union would build an allied air force; the Soviets would help equip 11 divisions of the CCP army, and transport one-third of its US-supplied weapons (worth $13 billion) into Northeast China.
To gain Soviet support, the CCP promised the Soviet Union special transportation privileges in the Northeast both on land and in the air; offered the Soviet Union information about the actions of both the KMT government and the US military; provided the Soviet Union with products from the Northeast (cotton, soybeans) and military supplies in exchange for advanced weapons; granted the Soviet Union preferential mining rights in China; allowed the Soviet Union to station armies in the Northeast and Xinjiang; and permitted the Soviets to set up the Far East Intelligence Bureau in China. If war broke out in Europe, the CCP would send an expeditionary army of 100,000 plus 2 million laborers to support the Soviet Union. In addition, the CCP promised to merge some special regions in Liaoning province into North Korea if necessary.

SOS China - The Truth Chapter 4

II. The CCP’s Dishonorable Foundation

The CCP lays claim to a brilliant history, one that has seen victory after victory. This is merely an attempt to prettify itself and glorify the CCP’s image in the eyes of the public. As a matter of fact, the CCP has no glory to advertise at all. Only by using the nine inherited evil traits could it establish and maintain power.

Establishment of the CCP—Raised on the Breast of the Soviet Union

“With the report of the first cannon during the October Revolution, it brought us Marxism and Leninism.” That was how the Party portrayed itself to the people. However, when the Party was first founded, it was just the Asian branch of the Soviet Union. From the beginning, it was a traitorous party.

During the founding period of the Party, they had no money, no ideology, nor any experience. They had no foundation upon which to support themselves. The CCP joined the Comintern to link its destiny with the existing violent revolution. The CCP’s violent revolution was just a descendent of Marx and Lenin’s revolution. The Comintern was the global headquarters to overthrow political powers all over the world, and the CCP was simply an eastern branch of Soviet Communism, carrying out the imperialism of the Russian Red Army. The CCP shared the experience of the Soviet Union’s Communist Party of violent political takeover and dictatorship of the proletariat and followed the Soviet Party’s instructions on its political line, intellectual line and organization line. The CCP copied the secret and underground means by which an external illegal organization survived, adopting extreme surveillance and control measures. The Soviet Union was the backbone and patron of the CCP.

The CCP constitution passed by the First Congress of the CCP was formulated by the Comintern, based upon Marxism-Leninism and the theories of class struggle, dictatorship of the proletariat and party establishment. The Soviet party constitution provided its fundamental basis. The soul of the CCP consists of ideology imported from the Soviet Union. Chen Duxiu, one of the foremost officials of the CCP, had different opinions from Maring, the representative from the Comintern. Maring wrote a memo to Chen stating that if Chen were a real member of the Communist Party, he must follow orders from the Comintern. Even though Chen Duxiu was one of the CCP's founding fathers, he could do nothing but listen and obey orders. Truly, he and the Party were simply subordinates of the Soviet Union.

During the Third Congress of the CCP in 1923, Chen Duxiu publicly acknowledged that the Party was funded almost entirely by contributions from the Soviet Comintern. In one year, the Comintern contributed over 200,000 yuan to the CCP, with unsatisfactory results. The Comintern accused the CCP of not being diligent enough in their efforts.

According to incomplete statistics from declassified Party documents, the CCP received 16,655 Chinese yuan from October 1921 to June 1922. In 1924, they received USD $1,500 and 31,927.17 yuan, and in 1927 they received 187,674 yuan. The monthly contribution from the Comintern averaged around 20,000 yuan. Tactics commonly used by the CCP today, such as lobbying, going through the backdoor, offering bribes, and using threats, were already in use back then. The Comintern accused the CCP of continuously lobbying for funds.

“They take advantage of the different funding sources (International Communications Office, representatives for the Comintern, and military organizations, etc.) to get their funds, because one organization does not know that the other organization has already dispersed the funds…the funny thing is, they not only understand the psychology of our Soviet comrades. Most importantly, they know how to treat differently the comrades in charge of dispersing funds. Once they know that they won’t be able to get it through normal means, they delay meetings. In the end they use the crudest means to blackmail, like spreading rumors that some grass-root officials have conflicts with the Soviets, and that money is being given to warlords instead of the CCP.” [13]

SOS Age of Delevering

Interest rates close to zero and all the related issues are relatively new in the U.S. and Europe, but they’ve been around in Japan for two decades. So, many wonder if the U.S. is headed for Japan’s 20-years-and-running deflationary depression. And regardless, what does the Japanese experience tell us about living in this atmosphere?

The Japanese bubble economy was cruisin’ for a bruisin’, and its demise was aided by the Bank of Japan’s hike in interest rates, starting on May 31, 1989. Soon, exuberant real estate prices collapsed as did stock prices and economic growth nearly ceased. Lately, the earthquake and tsunami have added to Japan’s woes, at least on a short-term basis. Real GDP fell 1.3% in the second quarter from a quarter earlier at annual rates, following the 3.6% drop in the first quarter and the third quarter in succession to decline.

Similarities



Gallery: Gary Shilling's 10 Investments To Buy There are a number of similarities that suggest that America is entering a comparable long period of economic malaise. The Age of Deleveraging forecasts a similar decade, at least quite a few years, of slow growth and deflation as financial leverage and other excesses of past decades are worked off. The recent downgrade of Treasurys by S&P parallels the first cut in Japanese government bond ratings in 1998, followed by S&P’s cut to AA-minus early this year and Moody’s reduction from Aa2 to Aa3 last month.

The recent slow growth in the U.S. economy—real GDP gains of 0.4% in the first quarter and 1.0% in the second—looks absolutely Japanese. Furthermore, the prospects of substantial fiscal restraint in the U.S. to curb the federal deficit is reminiscent of tightening actions in Japan in the mid- 1990s. The economy was growing modestly, but deficit- and debt-wary policymakers in 1997 cut government spending and raised the national sales tax to 5%. Instant recession was the result.

Big government deficits in recent years are another similarly between these two countries.


The U.S. net federal debt-to-GDP ratio is also headed for the Japanese level.



Japan’s gross government debt last year was 226% of GDP, far and away the largest ration of any G-7 country. All governments lend back and forth among official entities so their gross debt is bigger than the net debt held by non-government investors, and Japan does more of this than other developed lands. Still, on a net basis, its government debt-to-GDP is only rivaled by Italy’s and leaped from a mere 11.7% in 1991 to 120.7% in 2010. Is the U.S. far behind?




Japan, in reaction to chronic economic weakness, has spent gobs of money in recent years, much of it politically motivated but economically questionable, like paving river beds in rural areas and building bridges to nowhere. Is that distinctly different than the U.S. 2009 $814 billion stimulus package that was supposed to finance shovel-ready infrastructure projects when, in reality, the shovels had not even been made yet?



A key reason for the 2009 and 2010 U.S. fiscal stimuli and continuing deficit spending in Japan is because aggressive conventional monetary ease did not revive either economy. Zero interest doesn’t help when banks don’t want to lend and creditworthy borrowers don’t want to borrow. Both central banks found themselves in classic liquidity traps, so both resorted to quantitative ease, without notable success.
But Differences, Too

There are, then, many similarities between financial and economic conditions in the U.S. and Japan. Nevertheless, there are considerable differences that make Japan’s experience in the last two decades questionable as a model for America in future years. Note, however, that every time I visit Japan, I return convinced that I understand less about how they function than I did on the previous trip. I’m sure they behave rationally, but it’s a different rationale than in the West, or at least the one I understand.

The Japanese are stoic by nature, always looking for the worst outcome while Americans are optimistic—not as optimistic as Brazilians, but still prone to look on the bright side. Otherwise, why would the Japanese voters stand for two decades of almost no economic growth? Japanese are comfortable with group decision-making while Americans revere individual initiative, something the Japanese disdain. The nail that sticks up will be pounded down, is a favorite expression there. Perhaps because of this, the government bureaucracy in Japan is much stronger than in the U.S. while elected officials have less control and room for initiative.

Despite little economic growth, the Japanese enjoy high living standards.



And the Japanese are an extremely homogenous and racially-pure population. In a related vein, immigration visas don’t exist in Japan, so there’s nothing in Japan like the chronic shift of U.S. income to the top quintile. Nothing like the two-tier economic recovery that benefited top-tier stockholders in 2009-2010, but left the rest struggling with collapsing prices for their homes and high unemployment.

Fertility rates in Japan are about the lowest in the world and life expectancy is high. So the rapidly aging and declining population lack the innovation and dynamism of more youthful populations in the U.S. where immigration, legal and illegal, is high as are fertility rates.


Export-Led

Japan in the post-World War II era has been an export-led economy. “Export or die,” is the watchword. The result of robust exports and weak imports linked to anemic domestic spending is its perennial current account surpluses, which, along with earlier high saving by households and now by businesses, allow it to finance its huge government deficits internally, with foreigners owning only 5%. As a result, Japna’s government bond yields are extremely low.



In contrast, the U.S. is a chronic importer with a chronic current account deficit. So foreigners have perennially bought Treasurys with the resulting dollars they earn, and they now own about 50% of them. And Treasury note and bond yields are much more controlled by global forces and higher as well than in Japan. The U.S. is largely an open economy but Japan’s, except for her formidable export sector, is largely closed to the outside world.

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Gallery: Gary Shilling's 10 Investments To Buy Another big difference is the chronic strength in the yen and long-time weakness in the dollar, resulting in part from the difference between Japan’s chronic current account surplus and America’s chronic deficit. Even near-zero short-term rates and 10-year government bond yields of about 1% do not deter those who lust for the yen. Of course, in a zero interest rate world where interest returns have dropped close to traditionally low Japanese levels in the U.S. and elsewhere, Japan at present does not have much of a competitive disadvantage.

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The yen’s strength has led to Japanese manufacturers moving much of their production to lower-cost areas, but deflation in Japan has offset some of the difference. Corrected for deflation and on a trade-weighted basis, including trading partners such as Switzerland with robust currencies, the yen has been relatively flat since the 1980s, according to a Bank of Japan analysis.

Nevertheless, the government has intervened in currency markets numerous times, most recently spending $13 billion in early August, to arrest the yen’s climb vs. the greenback. And, of course, a government intervening against its own currency can’t run out of ammunition since it can easily create more of its own currency to sell on the open market. Still, intervention success has been limited, short-lived and expensive. Even a determined government with unlimited ammo has not been able to overcome the gigantic global currency markets that trade trillions of dollars daily.

Deflation

Japan, of course, is mired in deflation, and while we continue to believe America is headed there as well, the U.S. CPI is still rising. In fact, many in and out of the Fed believe serious U.S. inflation is in the wings. As shown earlier, the spread between 10- year Treasurys and TIPS implies an annual CPI rise of about 2% over the next decade. A similar measure in Japan reveals expectations of continuing deflation over the next 10 years.

MyView

One of the better economist forecaster to follow. He mentioned S&P 800, wow!



What’s Left To Be Done?

I conclude that the differences between the U.S. and Japan are too great to use the Japanese economic experience in the last two decades as a template for the U.S. in coming years. Still, as discussed in The Age of Deleveraging, I expect a similar lengthy period of slow growth and deflation as the economy delevers. In any event, can policymakers do much to forestall this outlook? I argue in The Age of Deleveraging that they can’t any more than the Japanese have been able to generate robust economic growth.

A decade ago, the Fed was worried about deflation infecting the U.S. and assigned a dozen of its top economists to study Japan to see how chronic falling prices could be avoided. Their conclusion: Institute massive monetary ease early before deflation becomes a well-established and anticipated phenomenon.

Now-Fed Chairman Bernanke in earlier years also believed the Bank Of Japan activities were too little, too late, and that then the Japanese central bank pulled back when the economy seemed to be reviving. Its holdings of government bonds jumped from ¥45.7 trillion in 2001 to ¥67.2 trillion in2004, but aren’t much higher today at ¥86.0 trillion. The BOJ’s securities-buying program earlier this year of ¥5 trillion, or around $65 billion, is only about 10% of the Fed’s $600 billion QE2 program. Note, however, that the Fed’s much larger quantitative easing hasn’t been a great success either, as discussed earlier.

Furthermore, the U.S. central bank’s fear of a self-feeding deflationary spiral has not occurred in Japan. That takes place when lower prices encourage potential buyers to wait for still-lower prices, which are then induced by mounting inventories and excess capacity. So those buyers wait even further, etc., in a self-feeding downward price spiral. In Japan, deflation has been an on-and-off phenomenon for 20 years with no cumulative downward spiral in prices. This graph also reveals that M2 money supply growth of about 3% annually in the last two decades has not prevented periodic price declines. Again, Japan has been and the U.S. now is in a classic liquidity trap.