Due to the unprecedented events in East Asia, the Bank, in consultation with the major banks, bullion dealers, and discount houses, announces that until further notice all screen-based currency market dealing in the London market will be suspended. The Bank will offer assistance to any London bank which is placed in difficulty by this decision. The Bank is hopeful that the current crisis will be resolved in the next day or so and is cooperating with monetary authorities elsewhere to stabilize financial markets.
The Federal Reserve Bank of New York -- the arm of America's federal central bank which conducted market operations -- issued a similar statement at the opening of trading in New York. Although there was little legal underpinning for the Bank's statement, there was none for the New York Fed. But that was as maybe. As with London, the Fed could not stop two parties agreeing a price between themselves, if they wanted to take that risk. But as there was no professional market to speak of — the `book' had stopped in London — the Fed's calling a halt to trading was merely academic.
Zhongnanhai, Beijing
Local time: 2200 Thursday 22 February 2001
GMT: 1400 Thursday 22 February 2001
Jamie Song's Mercedes turned off Fuyou Street into the east gate of Zhongnanhai. Either side of the double gates was a PLA soldier and as Song's car slowed down they drew to attention. The road beyond the gate narrowed appreciably and the Mercedes proceeded at a snail's crawl. Low-rise concrete-block buildings jostled with formal highly decorated pavilions where the leadership gathered for important meetings. And it was at the steps to such a pavilion, built at the turn of the nineteenth century, that his driver deposited him. He got out. The air was cold and dry. The moon was trying to break through clouds that had lent a grim, grey aspect to the whole day. He got out and stretched his legs. Beyond the pavilion was a clump of trees and beyond them the Zhong Hai Lake. The entrance to the pavilion, at the side, was unprepossessing, just a sliding glass door in a wooden frame. The space immediately beyond it was equally unimpressive. More wood and glass, but the glass covered this time with an olive-green curtain. Song was led past this and into the room proper. A set of sixteen or so armchairs had been arranged in a U around a large conference table.
President Wang and the senior PLA and intelligence staff were waiting for him. The Foreign Minister took his seat at the end of the table, facing the President, who was flanked by the commanders of the navy and air force. Wang Feng opened the meeting by quoting from China's long-standing nuclear policy: `Our aim since 1964 has been to have a limited but strategic nuclear arsenal as a shield to keep the more aggressive superpowers from attempting global hegemony. Today, our policy is being put to the test. Unfortunately, the United States has chosen to show that it can defeat us in a conventional naval battle. If we do not resort to our nuclear strength, we will lose our territories in the South China Sea. I am sure all the comrades here agree that that is an unacceptable prospect.' Wang paused and then asked for a military assessment.
The senior PLA General said that China had more than 500 nuclear warheads. About 120 missiles were ground based. Some were hidden in caves and could be transported to launch sites under the cover of darkness. There were 120 aircraft, capable of delivering another 250 warheads, but these would only be effective against Vietnam and Taiwan. They might reach Japan without being shot down. The main Chinese strength was its submarines. There were now two submarines within nuclear striking distance of the American mainland, with no signs yet that they had been detected. The new version of the Kilo class diesel-electric attack submarine was now off the coast of California. Before the 1996 Taiwan incident she was due only to be commissioned in 2001, but the timetable had been revised and the Russian Rubin Design Bureau had agreed to help. The submarine was carrying Russian-made sea-launched cruise missiles with 200 kiloton nuclear warheads, which could travel almost 3,000 kilometres into America. The cities at its furthest range were Minneapolis, Kansas City, Little Rock, and Houston. Those due for targeting were Denver, Salt Lake City, and Phoenix.
President Wang asked why military installations were not to be hit. The General replied that due to the limited number of nuclear warheads it would be far more effective to destroy population centres and instil panic throughout America. `The American military machine cannot be defeated, but the nation can be defeated by its own people. Already they are frightened and have begun looting.'
`Then why not Los Angeles or San Francisco? They are more symbolic cities,' continued Wang.
`We want to retain the sympathy of the large Chinese populations there and of the other Asian immigrants. They are a significant economic force of investment into our country and they may become a powerful political force in America itself.'
Wang nodded. The General continued: `But also 3,000 kilometres off the coast in the eastern Pacific is our updated version of the Xia strategic missile submarine. The Xia we sacrificed carried the JL1 ICBM with a range of only 2,700 kilometres. The new version is armed with the JL2, which can travel 8,000 kilometres. It means, comrade, that the destruction of Washington is in our reach. The Americans have no idea the submarine is so close. She left the North Sea Fleet headquarters at Qingdao some weeks ago, sailing in the wake of a freighter, which made her almost impossible to detect.'
`Are we going to declare the submarines?' asked Jamie Song.
`The Americans describe us as a deterred state,' said Wang. `They believe that by threatening us with nuclear attack we will surrender. We have been set apart from Iran, Iraq, and Libya, which they regard as uncontrollable and undeterred. If we can convince President Bradlay that China, too, will not be cowed and that unlike in the nineteenth and twentieth centuries we will risk our own destruction to protect our sovereignty, then we will win the war. So by declaring one submarine we can avoid the mutual destruction of two great countries. And we will keep one secret to ensure that if the Americans are stubborn China will not be the only victim. I am quite prepared to destroy a city, although I can't see how it benefits either side. That, Comrade Song, will be your message to Mr Overhalt.'
Crescent City, California
Local time: 0600 Thursday 22 February 2001
GMT: 1400 Thursday 22 February 2001
The wireless transmission mast of the Chinese Kilo class submarine was spotted by the captain of an American fishing trawler 25 kilometres off the coast of Crescent City, California. The two vessels nearly collided as the submarine came to periscope depth to receive a radio message. The skipper alerted the Coastguard, which sent a boat from Crescent City and a helicopter from Humboldt Bay, 125 kilometres away. Before it reached the area, the Kilo had gone deep and sonar operators monitoring microphones anchored to the sea bottom along the coastline had failed to pick up her acoustic signature. The Los Angeles class attack submarines USS Asheville and USS Jefferson City were diverted from their northern coastal patrols to find the vessel. But it seemed the Chinese vessel was quieter than the background noises of the ocean herself. The American commanders increased their own exposure to enemy attack by using active sonar transmissions which might reveal an echo of the Kilo's position. They found nothing. Helicopters dropped patterns of sonobuoys. Surveillance ships deployed towed arrays and a long string of hydrophones in the hope of finding the Chinese submarine.
This was the unseen enemy, moving through the darkness of the sea. In modern warfare there is nothing so deadly. As far back as the eighties, the Pentagon was faced with the harsh evidence that America's high-technology national defence system could be defeated by a single submarine. During American-Japanese war manoeuvres in the Pacific seven submarines tracked down three aircraft carriers. With anti-submarine warfare surveillance constantly operational, and cruisers, destroyers, and frigates hunting for the submarines, two of the carriers and eight other warships were sunk at the cost of four enemy submarines. The debate on how to proceed with naval defence was never settled. Futuristic schemes were put forward on how to tackle the threat of quieter and quieter submarines. Questio
ns were asked as to whether so much emphasis should be put on carrier groups, the centrepiece of American defence, when they had proved to be so vulnerable. There was disagreement over funding priority, particularly for the Star Wars space defence system, which few scientists believed would ever work. Efforts were made to move submarine detection away from its reliance on acoustics. Special radar was tested on satellites to recognize anomalies on the sea's surface and compare them, like a signature, to computer-generated images. Submarines would create tiny variations in height and roughness of surface waves. The surrounding sea water would change temperature. Marine organisms would be disturbed. The vessel would leave behind tiny particles. All this would show up on satellite pictures to reveal the wake, which was far longer but far more difficult to see than the wake of a surface ship.
There had been a fierce argument within the Chinese navy over whether to send a diesel or nuclear-powered submarine. The argument was won by those who favoured the low-technology Romeo and Ming tactics in the South China Sea battle. They believed the American navy, with its emphasis on NATO defence, was not trained to handle the sort of threat presented by the Kilo.
CNN Studios, Atlanta
Local time: 1000 Thursday 22 February 2001
GMT: 1500 Thursday 22 February 2001
From all over America reports were coming in of looting, murders, fires, and mob violence. Correspondents in Los Angeles, New Orleans, Washington, New York, Chicago, Dallas, and the farmlands of Middle America told similar dark and bloody stories of a people in a selfish panic to survive. Thousands of properties were broken in to. In the early stages the police blamed gang warfare, but it soon emerged that respectable middle-class families were also loading up their cars with stolen food. They armed themselves and killed to get their supplies. By midmorning supermarket chains were closing down. The staff and their families were allowed to stay inside until the crisis was over. In Memphis, looters backed a pick-up truck into a restaurant. When the forty-two-year-old proprietor tried to stop them, his chest was blown away with both barrels of a shotgun. In Albuquerque, hundreds of people besieged a supermarket just before the steel rollers were pulled down for it to close. Two cars smashed into the front glass to wedge the rollers up. The crowd poured into the store, taking all the fresh and canned food and jamming it into sacks, boxes, trolleys, and anything they could find. The staff locked themselves into the store room. As the looting spread, more vicious methods were adopted; arson, petrol bombs, even grenades and flame-throwers. In New Orleans, fifteen people died when they were trapped in a basement bar and petrol bombs were thrown down the stairs. In Los Angeles, parts of the city were taken over by organized looting teams which engaged the police in firefights. An armed motorcycle gang devastated Rodeo Drive in Beverly Hills before moving into the wealthy suburban areas where the National Guard set up a cordon of water cannon, backed up by armoured cars and military helicopters. In most American cities conditions deteriorated. The air was filled with wailing sirens of ambulances and fire engines and gunfire. Some of the worst-hit areas were the Chinatowns, which were attacked by mobs simply trying to vent their anger. The police and National Guard, already over-stretched, and with their own families threatened in the war, saw no reason to protect these ethnic communities. In Chicago, the husband and wife owners of the East Lake Restaurant hung a sign on the door in English saying: `Please come in and help yourself.' They left through the back door with a suitcase just as their grandparents had done in Shanghai fifty years before. Most of the Chinese in Chicago and many other cities chose not to protect their properties, or to argue their innocence. They had learned about racism in America. They also knew how determined Chinese rulers were from time to time to destroy their country. With remarkable patience, thousands abandoned their life's work that day. Most ended up in queues outside European and Latin American consulates claiming to be refugees from political repression. In San Francisco seven were killed in a drive-by shooting while queuing up at the Brazilian Consulate.
Within a seven-block radius of the East Lake in Chicago were at least twenty other Asian restaurants and stores. Graffiti was sprayed on buildings all around them with the insignia of black street gangs which held territory just a few blocks south. The Vietnamese and Korean communities were less restrained than the Chinese. As the gangs moved in, they defended themselves with a ferocity which reminded Americans why they had failed to beat these nationals in two separate wars. The Asians lured the badly commanded black youths into ambushes. They engaged them in hand-to-hand fighting, killing with lethal kicks and chops. After a bloody firefight in which the bodies of gang members as young as twelve were left on the streets, the Vietnamese advanced south into the territory of a gang which had attacked their supermarket. They besieged a bar. Under covering fire, the Vietnamese exploded two barrels of fuel outside the windows, threw in hand grenades, shot the survivors as they stumbled out, and then escaped. One television commentator began speculating that tens of thousands of Chinese patriots were rising up on American streets at the command of the Communist Party.
In the countryside, where food was more plentiful, people organized themselves into self-defensive communes. There was a run on gun and ammunition shops. Farms were turned into self-sufficient stockades. As one sheriff in Wyoming said: `No one seems to be breaking the law much. But there's a lot more guns around than there were twelve hours ago.' Car dealers also reported the buying up of four-wheel-drive vehicles, trucks, and station wagons. `Some people are coming in with their money in sacks and buckets, taking a car, and driving off with it,' said a dealer in Kansas City. `They don't take no papers and don't wait for me to count it. They're paying all right. Sometimes too much. Nuclear war sure is good for business as long as it never happens.'
State governors and finally the President went on network television to appeal for calm, but their appearances only seemed to increase the panic.
China World Hotel, Beijing
Local time: 2300 Thursday 22 February 2001
GMT: 1500 Thursday 22 February 2001
The driver of the Lincoln Continental navigated through the back streets of the diplomatic district to get to the China World Hotel, where the Embassy had booked a suite on the Horizon Floor. Half-burnt effigies lay in the roads. The military newspaper Liberation Army Daily, which many of the students had been carrying, blew around in the streets. Posters had been pasted up on embassy walls proclaiming the glory of President Wang. They only saw three cars on the short journey; taxis with foreign fares. The bicycle lanes were empty. These roads had been commandeered by the Party. They were off limits to the Chinese people. No one would dare venture in. A quiet hung over this part of Beijing, a sanitized section of China where the battle against Imperialism had been played out for a few hours and then just as quickly abandoned. Soon the car was in the China World Trade Complex, lit up and busy. The doorman, rugged up in a red coat, showed Overhalt in.
Music from a chamber orchestra on his right wafted across the lobby. He heard the beat of a Filipino rock and roll band from a darkened bar on his left. The staff kept an elevator waiting for him. The carpet inside said: `Have a nice Thursday.' On the twenty-first floor Jamie Song's guards met him and took him straight to the suite at the end of the corridor. The Foreign Minister was already there and had mixed himself a vodka and tonic from the minibar.
`Reece, how good to see you,' he said in English.
`You too, Jamie,' replied Overhalt. Song told his aides to leave the room, but Overhalt spoke knowing that every word was being taped, translated at the Ministry of State Security technical surveillance post just behind the hotel, and fed straight to the Central Committee in Zhongnanhai. Overhalt believed all this would be an advantage. `After you called me on Wednesday,' he continued, `I spoke to the President. It was on his urging that I am here tonight. Your demonstrators, I fear, may have cost us time and raised the risk of a nuclear exchange.'
The Foreign Minister looked directly at Overhalt with a passive expr
ession. `There is nothing the Party can do against the people who wish to express spontaneous anti-imperialistic feelings.'
Overhalt ignored the remark and swiftly brought the conversation round to Dragonstrike. `Anyway I am here now. This crisis, a crisis of your making, has got out of hand. So I will be quick and blunt. I told you earlier today we had missiles with firing solutions ready to go. I am now authorized by the President to tell you this: if China fires a missile we will launch a retaliatory strike. There are no ifs, no buts. We don't just mean Beijing. We mean Dalian, Qingdao, Shanghai, Wuhan, Chengdu. Your cities will become radioactive rubble. Your infrastructure will be broken concrete and twisted metal. Your country will no longer work.'
Jamie Song interrupted: `Reece, hold back, hold back. Who's talking nuclear war?'
Overhalt was not sure whether his friend was genuinely unaware of how much the PLA had increased the stakes of the war. `You have primed your land-based ICBMs for launch. You have abandoned your no-first-strike policy. Yet your naval forces are being slaughtered. If we wish we will destroy what's left of your air force. If that happens the PLA will be publicly humiliated. The Party will crumble. Your dream of the economic superpower within the authoritarian state will never happen. Is that what you want, Jamie? For China to lose, like the Soviet Union? Is that your aim?'
Dragon Strike -- A Novel of the Coming War with China (Future History Book 1) Page 28