If I were China, my concern would be not decoupling from the US alone (which is most likely manageable for China), but also from its network of vassals (who are in a kind of rebellion currently) if the US commands them to do so. I don't think a sudden disruption that big would be a win-win for anyone, but the vassals have shown in the past that they are happy to be suicided at their master's request under certain circumstances.
I suspect you are right there will be some vassals who will do their master's bidding no matter what harm to themselves. That said, this risk is always going to be there for Beijing. Timing wise, now is the opportunity to do a decoupling and force the vassals to pick a side when they are having their own economies disrupted by Trump.
China trades more with the rest of the world today than with US and its vassal states put together. Most of the vassal states are as dependent, if not more, on China as the US. For example, China is Australia's largest export market by an order of magnitude than any of its so called allies with "shared values" (the biggest of which is hypocracy). China can throw its economy into a tailspin. Similarly, countries from Vietnam to India will be deindustrialized if they don't trade with China. Most of Europe, Japan and South Korea are dependent on China-based supply chains and the Chinese market.
Again, to side with the US on decoupling will mean serious economic pain for the vassals. Who do you think can endure pain the longest? China will not come out without a scath but bear in mind the country knows poverty and economic hardship barely a generation ago. Taking down its enemies will be worth the pain.
It's hard to say. America and its allies are blessed with population who seem to be willing to tolerate for decades rulers with incredibly low approval ratings who are literally destroying their countries for absolutely no good reason. Look at the US, Canada, the UK, France, Germany, etc. They're all going down the drain, but their populations show no signs of ever planning to do anything about it.
well said. Never under estimate the power of delusion. Just look at women in abusive relationship and develop codependence with a drunk wife beater. those generally end well...
I think there is another important dimension. What is best for humanity and the world? As China often points out as one of the major powers in the world it holds responsibility to a more stable, global geopolitical and economical climate. I realize that each nation acts selfishly for its own interests, but a preservation of some economic tidings is safer for the world at large. To fully decouple and pursue a path to make RMB the new global reserve currency, I fear is just following the imperialistic behavior of the past. We are definitely at an inflection point of the relationship.
I don't think China is interested to follow the same path as the empires of European origin, including the US. Frankly, by now, it is clear empires don't pay - the elites certainly have benefited from it but the majority of the population are the ones who bear the cost of empire. How many of those mercenaries in the US armed forces killed in wars of choices came from the elite? Whose tax dollars go to the military congressional industrial complex instead of healthcare, education and infrastructure?
China would be royally stupid to repeat the same mistake and take up the imperial mantle. In addition, it doesn't have a political tradition of conquest and missionary zeal to promote a universalist "value" or religious belief system. The "whiteman's burden" is called such for a reason:)
I agree. I do think today's Chinese leadership is wise enough to avoid the dangers and faults of imperialism. However, the act or outcome of the RMB being a global reserve will have an addictive economic tendency to "borrow" from the "rest". This will be a difficult tendency to avoid. This is largely what I meant to be a slippery slope. Today's China must work with the rest of the world and integrate with it. Of course my hope is that future leadership recognizes these pitfalls.
I hope China does not have the RMB as the new reserve. It would be better for everyone to have a basket of goods instead, with monetary power not centralized with a single country or organization.
China will internationalize RMB by making it more prevalent for trading. At the same time, I don't think China has a timetable to ever try to make RMB a reserve currency for capital accounts. China still has capital control. Also reserve currency status automatically means loss of sovereignty as outsiders will hold your debt. of course there are many benefits with the reserve currency status but equally many pitfalls. There is an old Chinese saying "drinking poison to quelch your thirst". Having a reserve currency is just like that.
Any country being the "global reserve currency" will result in having a huge Trade deficit. This is called the "Triffen Dilemma". China has NOT internationalized the RMB because it can lead to external manipulation. Any Sovereign country MUST have 100% control of it's domestic currency. The current bi-lateral trade settlement process to bypass the US dollar will suffice until a digital BRICS currency or settlement system for trade is operational. Only the brainwashed and greedy "neo-liberal finance capitalists" inside China and abroad wants a "internationalized" RMB.
there is a distinction between internationalization of RMB and reserve currency status. RMB will be internationalized by making it more prevalent in trade settlement. But it doesn't have to the reserve currency for capital accounts. China still implements strict capital account control while it has removed most restrictions for the trading account. This will shield the country from financial market manipulations and "financial wars". It will also naturally limit RMB's use as "reserve currency". I don't think replacement of US dollar as reserve currency is China's goal. China is well aware of the Triffen dilemma and is steering clear of it. as for sovereign control over currency, China takes that as a given. the concept of sovereignty is central to the thinking of Beijing from technology to territory. The foremost intellectual and the most influential thinker among Chinese leaders, Wang Huning, wrote his thesis as a polisci student on sovereignty
This is just common sense. A country's Sovereign FIAT currency only has purchase if there are domestic Laws guaranteeing it's value and trustworthiness. Simply put, Money is Law. When domestic money travels outside it's borders, it's Laws can't enforce it's Sovereign money because other lands have different Laws. This is one reason why a domestic currency used to settle trade abroad requires a military to enforce. The British Empire, the American Empire, both allowed foreign countries to use it's domestic currency for trade which is why both countries required armies abroad to enforce it's own "money law relationship". For America, this Law was called "Rules Based Order". For an "export" nation like China, allowing internationalization of it's currency beyond bi-lateral trade is just asking for trouble in the future. Like a teenager getting a taste of smoking marijuana, it leads to curiosity as an adult and boldness to try ecstasy, lsd, cocaine and DMT. Far safer to be patient and create a separate "external" currency to settle trade using International Laws.
I am not sure how it could work if a currency is limited only to bilateral trade. What happens if there is a permanent trade imbalance? what will the surplus country do with the currency of the deficit country if it cannot use that currency for trade with a third party? There needs to be a circular flow to sustain trade. Ultimately can a trading currency be cleanly separated from reserve currency? I don't pretend to know the answer.
One thing for sure is China is not yet on a trajectory to pursue reserve currency status. Also clear is China will want RMB used more often for trade settlement, to circumvent any financial disruptions from the west, if nothing else. China should start doing what Russia had to do after the sanctions. Better to preempt the adversary. The earlier China goes down this path, the easier to mitigate the impact from an expected financial decoupling.
I just don't want China to become an another American Empire (or as I like to call it: Roman Empire 3.0). I rather China be a stable, reasonably-big Kingdom than an overstretched Imperium too difficult to manage.
the political tradition of China is inward looking (the "middle kingdom") rather than expansionary. it's a fool's errand to build an empire and try to impose on others who are not interested to subjugate. China has a set of clearly defined interests. I doubt it wants to overreach beyond those.
The best for humanity is if the US gov is relieved of its delusions about being "exceptional", and that this is done with a minimum of violence. In a very perverse sense, Trump is assisting this process - by laying bare the absurdity of these delusions.
Decoupling is a matter of degree and I’m sure that the Chinese government will thread the needle carefully.
That said, for the benefit to humanity at large, the only decoupling that matters geopolitically is that which China is already pursuing: export controls for critical materials in the broadest sense, but specifically processed/refined products for which China guards the technology and are “dual use”.
Because so few people of the current generation have read any ‘history’, I posit that we are at the cyclical point that China was with regard to the west some 350 years ago. It centred on a precious material, hard/“true” porcelain — which was desired by the European monarchies and led to enormous trade deficits (China was on a silver system and silver moved east).
Unlike the case of porcelain, which represents desire on purely “aesthetic” grounds, the materials today are needed to stoke the military conquests and subjugation of “alien” peoples who do not live in the “garden”. Recall that the apogee of colonialism, slavery and imperialism took place in the nineteenth century.
The rough century from 1700 to 1800 saw Europe undergo the change from civilization to barbarism. Why this happened is known to scholars whose work, sadly, is not discussed in the west (but it is in China). The end of this part of the cycle can now be imagined if the west can be starved of the ability to make weapons, for however long that phase lasts.
a very interesting historical angle. Gun power also came from China and got to the west through the Mongols. Then the west turned it into deadly weapons. Gun power was used in China mainly for fireworks back then.
the historical context of Europe turning into history's worst colonizers and slavers is a fascinating topic. I wonder how theology, medieval inquisitions, and dark age had to do with how Europe turned so bloodthirsty. Europe is by far the most militaristic of all continents, virtually at war all through history. The Golden Hords Mongols were certainly ruthless and barbaric at the peak of its power but they quickly got assimilated by the people they nominally conquered and faded without much of a trace. In contrast, Europeans have been in wars non-stop for a millinium.
These issues are part of what is called in university curricula as “cultural history”.
To me, it is the “root” of differences between both the observable behavior of peoples as well as their value systems which must be understood and not just “perceived”. . A simple example: the Chinese tradition valorised modesty (ie non-boastfulness). In the west today, this is a sign of weakness and effeminacy. The reasons for this cannot be understood except by someone who comprehends both the formation of Chinese traditional thinking — and the contrast with western tradition (which changed rapidly over time, unlike the stable triumvirate of Confucianism/Buddhism/Daoism). As Victor Gao so eloquently put it, “we have been here for 5000 years and we expect to be here for another 5000 years”.
I observed the reaction among some television journalists who watched this replay of Gao — and, interestingly, it was two black journalists who were most taken aback — they had never imagined that a Chinese could speak so directly and powerfully. One woman journalist immediately asked: “wow, just how can they be so confident?”
In short, the Chinese insist on communicating in their own “voice” which is only partly comprehended by the outside world — this kind of expression (particularly in a media context)is limited by having only a “single register” (a term in literary analysis). And the Chinese-Americans, who ought to know better, are hardly superior to the mainland counterparts, despite their language facility — they are acorns who have dropped from the tree and rolled into a ditch.
China doesn't have to prove anything to anyone. The fact stands on its own legs - this is the only continuous civilization for the last 5000 years. Other countries and even empires rise and fall - Egypt, Persia, Rome, Mongol, Spain, Britain and now the US. But they reach the pinnacle once but after the fall, they won't reach it ever again (we'll see about the US). China has risen and fallen and risen again to the top at least 6 times (Qin, Tang, Song, Ming, Qing and PRC). Like Victor said, China has been here for 5000 years - longer than most modern nation states ever existed - and will be here for the next 5000. This is the ultimate long view.
My point is that Chinese people talking among themselves serves little purpose when China is constantly being examined and assessed by the rest of the world. When you say that “China doesn’t need to prove anything to anyone”, with all due respect, it is a sign of a problematic attitude.
Fortunately, however, your mentality is on the wane as the Chinese government and the public have now determined that China’s positions must be explained and defended in public forums. The evidence for this is quite broad including the rise of “wolf warriors”, the encouragement of visitors to China through changes in visa requirements, the rise of a new generation of western pundits on social media and with articulate observers such as Keyu Jin and Tings Chak.
those two things can be true at the same time. I don't think China needs to prove anything to anyone and at the same time, I don't object at all to take an aggressive stance on China's positions. I just don't feel China needs to start any conversation or debate by justifying what it is or what it does. China is what China is, period.
There is nothing China needs to apologize for. As far as outsiders are concerned, they can take it or leave it. China shouldn't be bothered with their opinions. When you are doing the right things, there is no need to explain or rationalize. Just do it. That's why the "middle kingdom" means ultimately.
The idea that China had gunpowder but failed to use it for military purposes is demonstrably false. Evidence suggests that China was likely the first nation to develop the cannon.
I would also cast doubt on China being the 'inventor' of gunpowder. Gunpowder is not hard to make, and was probably discovered independently in various places, especially where mining was involved since explosives have other uses besides warfare.
The main issue limiting the use of gunpowder is that, given the poor metallurgical knowledge of the time, cannons and other firearms had a bad habit of blowing up in your face after limited use. That made them both dangerous and expensive to replace at a time when horse mounted warfare was the preferred mode, and dragging cannons around with you over difficult terrain was not practical and exposed them to capture, so they were mainly used for defence of fortifications.
your doubt can apply to any subject using that logic. it is irrelevant. self-claimed historical brilliance and glorification won't carry a nation or a people forward - either for the Chinese or the west. What's important is who will do better in the future. We'll get to find out in the next decades.
"Europe is by far the most militaristic of all continents, virtually at war all through history."
If you look at a map it's not hard to understand why. Europe is small compared to China and has limited arable land, so competition for resources began very early in their history. I've read credible research that even suggests the Crusades were not so much about reclaiming the Holy Land as exporting the surplus population that was putting pressure on limited food resources. If true, Europe had a population problem as far back as the 11th Century. The plague years can be considered a "Great Reset" under that rubric. It freed up resources so those who survived could live better for a time.
Warfare is a two edged sword, if you'll pardon the pun. Most advances in technology, especially metallurgy, came from the need for more effective weapons. Advances in many areas too numerous to mention are directly attributable to warfare.
It's no mystery, therefore, that Europe was the seat of most scientific and technological advances in human history. When your very survival depends on it, people tend to become more militant. Most of the world never had that problem, at least not to the same degree, so the rate of progress elsewhere was accordingly slower.
In analyzing historic and cultural events, I tend to follow Marvin Harris and look at the underlying material causes for why things are as they are, not the personalities or cultural traits which in most instances are just symptoms of the response to material conditions.
no doubt people are shaped by the environment they find themselves in. China had more severe arable land issue than Europe and higher population density. Unlike Europe, which was never united after the Roman empire (even during that time, many parts of Europe like Germany and Scandinavia were not part of the empire), China went under centralized rule in 230BC under the First Emperor. The country did go through many cycles of fragmentation and centralization but the main thrust has been a centralized nation. Internal fighting happened mainly during dynastic transitions. On the other hand, wars between European states were a constant.
It's true warfare has been a catalyst for scientific progress, even today. I wouldn't go so far as to say European was the seat of most scientific and tech advances in human history - it certainly is the case in recent centuries but the most foundational technologies for human progress, which separate civilization from barbarism (Francis Bacon), came from China - paper, compass, printing and gunpower. They were spread to Europe through the silk road by way of Persia and the Arabia. Europe acquired those technologies many centuries after they were invented in China.
"the historical context of Europe turning into history's worst colonizers and slavers is a fascinating topic. I wonder how theology, medieval inquisitions, and dark age had to do with how Europe turned so bloodthirsty."
It could have something to do with Muslim expansionism who were equally ruthless and arguably bigger slavers than the Europeans.
most inter state and inter racial wars in history were fought over religion. people with monolithic religious beliefs - their god is the one true god - are typically the most fanatic and expansionist in their missionary zeal. Fortunately for China, it never had a monolithic religion and both Taoism and Bhuddism are tolerant belief systems that focus on self betterment rather than converting others.
"most inter state and inter racial wars in history were fought over religion."
I'll agree to the extent that the common people were motivated by religious beliefs, but the people in charge? More motivated by acquiring land, titles, slaves and booty I would argue.
Harris taught me to look for material causes while McLhuan taught me to look for the hidden ground, which is often the same thing. So, I tend to look below surface appearances for actual causes, and human greed and ambition is at the top of the list, well behind religion as a primary motivating factor. I mean, do you think (for example) the Borgias shared the same religious convictions as the masses under their dominion?
"...both Taoism and Bhuddism (sic) are tolerant belief systems..."
I'll give you Taoism, but I think the Rohingya people might disagree on Buddhism. Then there's Japan, which is also Buddhist, and no need to remind you of the atrocities they perpetrated on the Chinese people.
I've done a detailed study of the world's great religions (and a few minor ones as well). In practical terms the Sikhs have the best belief system IMO. Not surprising since they were late arrivals and had everyone's prior mistakes as examples of what to avoid. For me, Buddhism is the religion of weak excuses. Everything is Maya, which means nobody takes responsibility for anything. Going by my practical experiences in Thailand and Japan, although China might be different. Wasn't there long enough (1989) to notice.
Bhuddism originated from India but is not practiced there. I think when you refer the religious intolerance of the bharat, you are referring to the hindus who are not Bhuddists. As for the japs who committed those atrocities in WW2 and before, they were not Bhuddists either. Those are shintoists who believe the jap king is god who had zero god like quality. japan is not a Bhuddist country, just like it has nothing to do with Tang dynasty despite stealing the architecture and aesthetics from it. shintoism admires violence and this is why the japs willingly serve as vassals to the US as they outmatched them in violence and ruthlessness.
If you look at who went on the Crusades you'll find there were plenty of motives besides religion. Acquiring land, titles of nobility, gold, slaves...
As for crusades against non-believers, the modern term is jihad.
Going further back, read some of the early chapters of the Torah or KJB. Plenty of jihad in those days. Still going on in Gaza, going by their own declarations.
Look at the rise of Christianity. They were a tool of Constantine the Great to suppress his opponents. The Roman Empire had religious freedom. It was a place of great learning. By the time of his death, all oppositions were destroyed. Christianity ruled the empire and all other knowledge were destroyed and suppressed. The death of knowledge lead to the decline of Rome. The Muslims had nothing to do with it. Some say the Muslims are just another sect of this one god religion that came from the Jews. They all worship the same god.
Interesting proposition, although the following point in your article is precisely why decoupling is never going to be initiated by the US:
"Removes China as the economic bogeyman and a distraction from real economic problems in its system like inequality of wealth distribution."
As long as the dominant narrative remains that America is getting "ripped off" by immigrants and "unfair trade," the ultra wealthy continue to cash in. Ensuring that public anger remains misdirected is key to furthering this agenda (which is primarily what the Trump administration is about). They can, as Steve Bannon put it, further "deconstruct the administrative state" by having the private sector take a greater role in delivering public services, thereby enriching the the owners of such companies in the name of "increasing government efficiency" at the expense of the public. They can trigger panic amongst millions of ordinary investors and use the economic turbulence caused by Trump's flip flopping to pave the way for the 'haves' to buy assets on the cheap. They can further the rig the tax system in favour of the rich by placing even more the burden of building up public coffers on ordinary consumers (i.e. tariffs, which is really just another sales tax). Large corporations, particularly in the retail sector, can use this moment to price gouge and further enrich themselves.
Due to geography and an 80 year headstart, the US remains a greater threat to China than the other way around (after all, the latter hasn't got military bases throughout Latin America and the Caribbean). As such, one possibility is China could proactively initiate the decoupling on security grounds (it is certainly a cogent argument). However, it'll likely come with some economic pain in the short run, so how much appetite the Chinese public has for it is an open question. Will it generate the kind of anger that prolonged Zero-COVID eventually caused, or will nationalism be a galvanizing force? The difference here of course is China can put in place a roadmap for decoupling which might soften the downside.
The other option is for China to continue playing the long game and wait for the US to gradually crumble from within. The most recent US presidential election might be instructive in that regard. Biden-Harris could point at various indicators to show that the economy was recovering (the bull market, beating GDP growth targets, somewhat slowing inflation etc.) but since ordinary people faced the pinch (price of eggs), they still voted for DJT because the blame immigrants + trade narrative seemed more attuned to reality (in their eyes, not actually) than "the economy has never been better". In 2027 when the economic turbulence and gutting of the public sector causes even more ordinary Americans to end up in even more dire financial circumstances, will they finally turn against their ruling class and say enough is enough? In other words, is there grounds for China to continue to flex it's muscles towards the US to some degree, while generally remaining on a path of 'strategic patience' (in the meantime strengthening ties with its neighbours, the larger Global South, the overwhelming majority of whom are fed up with Western neo-imperialism).
of course, I was being sarcastic when I mentioned the benefits to the US from a complete decoupling. I don't believe it will reap any of the benefits - often cited by US strategiests as the reason for decoupling. I don't think the US will be able to reduce trade deficit, reshore manufacturing, and reindustrialize if it decouples completely from China. More likely, it would be in a worse position in those pursuits. As for wealth distribution, it is the real central economic issue in the US but as you are saying, there is zero interest from either party to address the issue and China serves as the convenient scapegoat for the ills of the economic system the US has contructed to benefit the rich at the expense of everyone else.
As for Chinese appetite to decouple, I don't know the roadmap of the policy makers. But it is clearly the end state China wants to achieve. Normal trade is welcomed naturally but not at the expense of enabling the enemy (like export of rare earth to US military industry complex) or being subject to coersion and blackmail.
Some pain is inevitable but I doubt there will be much anger from the general population - this is initiated by the US and its malice is clear to all. The Chinese government should and will, correctly, ignore those who don't want decoupling for selfish interests. After all, the government is supposed to serve the interests of the majority, not some vested interests who side with the adversary at a critical juncture.
I have no doubt Beijing wants a managed divorce which softens the downside but there is clear benefit to rip the bandaid off in one go, especially since it is Trump who gets the ball rolling. A showdown is inevitable and Beijing should control the timing and the pace.
There was a youtube channel that argued should America fall, the whole world will be destablised and that no matter how turmultous the state of USA is now; its better to have it remained the global hegemony - which I call bullshit. I can't believe that with all the clandestine shit happening around the world, people are still clinging on to this obviously abusive relationship!
this is the same logic when some women cannot walk away from an abusive spouse. The world won't end if we do away the belligerent hegemon, like the old Chinese saying "the sky won't fall".
The American Empire is a continuation of the British Empire. Finance Capital is how the Empire controls the World. Military force is what the Empire uses to enforce the Uni-polar Financial System. The City of London and it's branches (i.e. Bank of International Settlements - BIS) is still the brains of "Finance Capital". Global hegemony will fall when the City of London is decapitated.
the jews are behind all this "financial capital" idea, the city of london and wall street. finance is the ultimate parasitic vocation which jews are innately suited for. the agenda of the international jew is to profit from the goyims killing each other
While Jews have played a significant role in Banking from the early days (i.e Spanish Empire), it would be incorrect to target Jews alone. In 1492, Queen Isabella and King Ferdinand gave Jews (i.e. wealthy bankers) a choice; death as a Jew or convert to Catholicism. Most chose to convert thus "parasitic banking" spread throughout Europe without friction. From Spain to Holland (1609) to England (1694), Jews, Catholics and European Aristocracy established private "Central Banks" in European Capitals and joint stock companies (i.e. British East India Company, Dutch East India Company) to plunder, enslave and murder peoples of foreign lands. Modern Imperialism via International Finance Capital is just a continuation of this Barbarity now called "(finance) capitalism, freedom and (liberal) democracy".
you are right Jews are not alone to blame. That said, they certainly are at the forefront of financialization (including establishment of the fed) and they are the loudest voice propagating the "virtues" of laissez faire financial capitalism. I wrote about their role in the Chicago school of economics. A vastly disproportionate number of such practitioners of "high finance" are from this ethno/racial group as well. The final objective of finance, in my view, is the enslavement of the general population through debt peonage. And the final stage of financial capitalism is feudalism.
It may be for the best. But dont see why it needs to be viewed as competition, all of civilization can win from both balancing each other out internationally and the increased science and technology innovations that occur from the ensuing redundancy
tell that to US policy makers who are hell-bent to preserve their hegemony over the rest of the world. the way things work is if the US intends to decouple, China's only choice is to reciprocate. if the US bans chip exports to China, China rightfully responds by banning rare earth exports. the US started the decoupling and China will see it to the end.
after all, if one party insists on global hegemony like Trump's tariff war against the world, which by definition rejects cooperation, then others (not just China) should put check and balance in place for that not to happen. JFK said well let's not seek "the peace of the grave or the security of the slave". unfortunately, much of the world is too cowardly to stand behind their own interests and knows only kowtow to the hegemon. China has made the choice not to.
I would not support decoupling (and I suspect it’s not the ideal outcome for you too) but you do make a pretty good case for decoupling in this post. I particularly like daring the Americans to see how much better off they are without China!🤣 (I doubt they will like it.)
I don’t think decoupling is inevitable but it is certainly a possible even probable scenario. But my base case is that the West eventually becomes a minor part of the global economy, and will continue to trade with China, directly or through third countries. If they really want to decouple completely, they would have to isolate themselves from the rest of the world, much like the Soviet block.
China doesn’t need to seek decoupling. Just leave it to the West. Let the record show that it’s the West that want to decouple, not China.
agreed. decoupling will hurt the US and the west in the long run. it will be painful for China but it will come out stronger.
the west, with its high cost and low efficiency economic system, will become less relevant over time. decoupling will just accelerate that process.
debt-financed consumption has its limits. when the music stops (e.g. dollar loses much of its reserve currency priviledges), they will experience a cardiac arrest and plunge into economic disaster. it's a race against time and the countdown has started already.
decoupling certainly is not ideal, just like none of all want war (maybe some do:(.
but reality is the two countries are parting ways and world economy will bifurcate gradually as well - most countries want to trade with both, but increasingly under pressure to pick a side, primarily from US pressure.
frankly both sides are consciously decoupling to prepare for the possibility of war, which will put the final nail in the coffin as far as meaningful economic or political relations are concerned. noone wants dependency on your foe when war breaks out. regardless of people's wish, I see decoupling as the eventual outcome - if not right away, a few short years down the road.
I would worry more about US imperialism than decoupling. The US will use dirty tactics (terrorist attacks, false flags, etc) to stir up ethnic hate and eventually a war.
China seems to be naive. They have no idea how depraved the west is.
What happens in Palestine, Syria, Lebanon and Yemen should have been a wake-up call for China.
I doubt China would be caught by surprise by any US moves. Naivete would be the last thing to describe the Chinese leadership if you have followed Chinese foreign policy. Under the diplomatic niceties which China still sticks to, there is a crystal clear understanding of the nature of the enemy it is dealing with and an iron will to overpower it when the time comes.
China's state capacity is not something the countries you listed could even imagine, let alone compare. Dirty tricks won't cut it with real powers. I think even the US regime knows it - of course, it doesn't mean they won't try but I am pretty they don't bet their house on it.
There have never been a single Chinese leader, whatever their politics, who doesn't understand the nature of the relationship with the west, especially the US. The situation is completely different from even Putin, who had illusions about the west for the longest time.
Way back in the 18th century a guy named David Ricardo came up with a formula for international trade he called 'comparative advantage.' The guy was way ahead of his time IMO but if you aren't familiar with him or his ideas, here's a wiki article that will get you started.
your condescension is amusing. pretending to be erudite is tiresome. which hallowed halls do you hold your international trade lectures? If you have a point, write up your own thesis - which I am sure will be brilliant given how much you know about Richardo. You probably are also very proficient with Marx's Da Capital Volume II and III and Confucius' The Saying.
OK, I get it. You're the dispenser of wisdom around here and don't like to be challlenged. Bear in mind though, I may have directed that message to anyone reading this forum, not just you. That is how open debate is suppose to work.
I find your hostility puzzling. We're on the same page on a lot of points, so why you would take offence at me expanding on them, or debating them when we differ, I don't really understand. I thought you were above that, so the ad hominem comes as a bit of a shock.
Anyway, no point hanging around where I'm not welcome. I really though this place was different, but like so many substacks, it turns out it's just another echo chamber.
this substack is my personal musings, not some dispenser of wisdom. that is the domaine of people who write for mainstream newspaper columns. if you want to point out a contradiction or factual mistake, by all means call it out. If there is a perspective that you think can help understand the issue at hand in the works of Richardo or John Stuart Mill or Thomas Hobb, spell it out. No need to condesend. A web link is a lazy way out.
Looking at the big picture from my lofty heights an old Persian adage comes to mind:
"this too shall pass."
US midterms are less than 2 years away, by which time the pain caused by Trump's ridiculous trade policy will have negatively affected enough Americans to make another old adage come to pass:
"People vote their wallets."
A majority Democrat congress in 2026 is not hard to imagine under current circumstances, at which time a full court press to impeach Trump will resume, only this time with far more ammunition, most of it provided by Trump himself. What this spells for China/US trade relations isn't hard to predict either because the Democrats will quite rightly point to Trump, not America, as the source of the problem. That's not to say it will all come up roses, but (with apologies to Mao) a few flowers may yet bloom.
While I'm tossing adages around I'll mention another, this time from Türkiye, that Trump watchers should probably take on board: "dogs bark, but the caravan moves on." There is nothing a narcissist hates more than being ignored, except perhaps being compared to a barking dog. Trump is like that dog chasing your car. When he finally catches up to you at a light what can he do? Bite the tires? Even if he had a strong enough bite, it would still blow up in his face.
There's a historic pattern playing out here that should not be overlooked.
Post WWII Japan's economy was rebuilt with US investment. It was sold as benevolence but the real reason was the same as with Germany (Marshal Plan) - a bulwark against the Soviet Union. A prosperous Japan was less likely to take the communist path was the general idea and it seems to have worked. So, under that rubric, Japan entered the international markets as the low cost manufacturer and the expression 'made in Japan' became the hallmark of cheap (often shoddy) goods. That didn't last long though and taking advantage of the opportunity, Japan set about acquiring the skills and the capacity to move up the value chain to the point where the best high-end consumer goods are now made in Japan.
Korea then followed for much the same reason, with China following the same program of first capturing the low end export trade, then gradually moving up the value chain to high end manufacturing. Even at the low end they excel now, which Walmart shoppers may find hard to believe, but go shopping for clothes in Japan and you'll see. Almost all Japanese clothing is made in China these days, but as Japanese tend to put quality before price they are first rate threads.
So that's three nations that successfully followed the same program, but it would be a mistake to assume the game is now over with China dominating all markets because China now faces competition from India that has similar aspirations, and as Chinese/US relations deteriorate, India will become the new destination for US investment and the source of low cost merchandise.
What's interesting to note is that China not only followed Japan on the export model, but like Japan they weren't careful enough about the money flows and suffered a similar real estate bubble. Even more interesting, China and India are both BRICS members, which assumes more equitable trade relations between member states, but how likely is that with India nipping at China's heels? I have no projections on how this will all work out, just trying to draw attention to what seems to have been overlooked by most analysts.
your comments about India sound like someone who has never been to India. Making a comparison of this ragtag of a "country" with China, Japan and Korea is simply a laughable proposition.
I made money for over 20 years by identifying trends in the market. Now go ahead and tell me this is a just one-off situation and that India can't take the low end manufacturing away from you, which is still China's main export. Laugh yourself silly over it. Your opinion on India doesn't amount to a hill of beans, coloured as it is by endemic Chinese racism.
Incidentally, if you want elective surgery and aren't prepared to wait, you go to India, not China. This is one of those trends I'm talking about which started in the 80's and is now in full swing:
India has a lot of poverty, so did China starting out, but comparing China to Japan and Korea is just as laughable. China is a Potemkin Village stretched out along the coast. Go inland and you'll see the real China. Land of nail houses and collapsing bridges. Oh, and just like India, whatever you do, don't drink the water!
go live in bharat since you are such a big fan. also stay out of my Substack. Modi's ass licking trolls are not welcome and there are plenty of delusional india/jew loving places you can soak in. sad clown.
for some industries, I think that does make sense, starting with Nvidia rather than Apple:) When China is 50% of global markets for key industries (e.g. EV, solar, maybe AI in the future), it only is logical that China-based companies should be the world leaders. I suspend some US companies could be attractive acquisition targets for those leading Chinese companies (of course, in a hypothetical neutral world we don't live in).
Most discussion on this topic is of the US deficit. There is little discussion of the Chinese trade surplus. Do you think China needs to address this and if so how.
Or do you think China can continue these surpluses forever?
Thanks for your unique perspective. I always enjoy your articles.
at the moment, China's trade surplus is structural as it has the most efficient manufacturing base in the world. As long as trade remains largely free and open, China probably will run a surplus for the foreseeable future.
China is also reducing energy dependencies (such as oil and gas) and tech dependencies on other countries by pursuing technological breakthroughs across the board including green energy solutions.
That said, average Chinese consumption still has a long way to go. Once this potential is fully tapped, I assume China will consume more what it produces and the imbalance will mitigate.
The dilemma for other countries is whether they want low cost high quality manufactured goods from China or protect local industries even at the expense of inflated costs to their own consumers. I don't know how the dilemma will be solved but there should be a mechanism to table the issues and find a solution that is amenable to all parties.
Tech and human capital are forever. As long as China keeps this in mind and keeps putting resources into these two, China will be fine. The 2nd law of thermodynamics warns against complacency and the rise of the 1%. As long as China keeps these in check China will be the light for the world.
100% agree. the most important feature of the Chinese political system is that it is not captured by wealth, which will stack the rules in their favor against everyone else. one party rule or mult party rule or whatever governance system is just the facade. the core question is who does the system serve. as far as I am concerned, all the capitalist "democracies" are faux democracies and true plutocracies. whatever the shortcomings of one party rule, all systems have shortcomings, it works for the majority as long as political power doesn't serve the rich exclusively. all else is distractions.
If I were China, my concern would be not decoupling from the US alone (which is most likely manageable for China), but also from its network of vassals (who are in a kind of rebellion currently) if the US commands them to do so. I don't think a sudden disruption that big would be a win-win for anyone, but the vassals have shown in the past that they are happy to be suicided at their master's request under certain circumstances.
I suspect you are right there will be some vassals who will do their master's bidding no matter what harm to themselves. That said, this risk is always going to be there for Beijing. Timing wise, now is the opportunity to do a decoupling and force the vassals to pick a side when they are having their own economies disrupted by Trump.
China trades more with the rest of the world today than with US and its vassal states put together. Most of the vassal states are as dependent, if not more, on China as the US. For example, China is Australia's largest export market by an order of magnitude than any of its so called allies with "shared values" (the biggest of which is hypocracy). China can throw its economy into a tailspin. Similarly, countries from Vietnam to India will be deindustrialized if they don't trade with China. Most of Europe, Japan and South Korea are dependent on China-based supply chains and the Chinese market.
Again, to side with the US on decoupling will mean serious economic pain for the vassals. Who do you think can endure pain the longest? China will not come out without a scath but bear in mind the country knows poverty and economic hardship barely a generation ago. Taking down its enemies will be worth the pain.
"Who do you think can endure pain the longest?"
It's hard to say. America and its allies are blessed with population who seem to be willing to tolerate for decades rulers with incredibly low approval ratings who are literally destroying their countries for absolutely no good reason. Look at the US, Canada, the UK, France, Germany, etc. They're all going down the drain, but their populations show no signs of ever planning to do anything about it.
well said. Never under estimate the power of delusion. Just look at women in abusive relationship and develop codependence with a drunk wife beater. those generally end well...
There is limited choice in the matter. Trump admin - in their characteristically abrupt style - is forcing the issue.
I think there is another important dimension. What is best for humanity and the world? As China often points out as one of the major powers in the world it holds responsibility to a more stable, global geopolitical and economical climate. I realize that each nation acts selfishly for its own interests, but a preservation of some economic tidings is safer for the world at large. To fully decouple and pursue a path to make RMB the new global reserve currency, I fear is just following the imperialistic behavior of the past. We are definitely at an inflection point of the relationship.
I don't think China is interested to follow the same path as the empires of European origin, including the US. Frankly, by now, it is clear empires don't pay - the elites certainly have benefited from it but the majority of the population are the ones who bear the cost of empire. How many of those mercenaries in the US armed forces killed in wars of choices came from the elite? Whose tax dollars go to the military congressional industrial complex instead of healthcare, education and infrastructure?
China would be royally stupid to repeat the same mistake and take up the imperial mantle. In addition, it doesn't have a political tradition of conquest and missionary zeal to promote a universalist "value" or religious belief system. The "whiteman's burden" is called such for a reason:)
I agree. I do think today's Chinese leadership is wise enough to avoid the dangers and faults of imperialism. However, the act or outcome of the RMB being a global reserve will have an addictive economic tendency to "borrow" from the "rest". This will be a difficult tendency to avoid. This is largely what I meant to be a slippery slope. Today's China must work with the rest of the world and integrate with it. Of course my hope is that future leadership recognizes these pitfalls.
I hope China does not have the RMB as the new reserve. It would be better for everyone to have a basket of goods instead, with monetary power not centralized with a single country or organization.
China will internationalize RMB by making it more prevalent for trading. At the same time, I don't think China has a timetable to ever try to make RMB a reserve currency for capital accounts. China still has capital control. Also reserve currency status automatically means loss of sovereignty as outsiders will hold your debt. of course there are many benefits with the reserve currency status but equally many pitfalls. There is an old Chinese saying "drinking poison to quelch your thirst". Having a reserve currency is just like that.
Any country being the "global reserve currency" will result in having a huge Trade deficit. This is called the "Triffen Dilemma". China has NOT internationalized the RMB because it can lead to external manipulation. Any Sovereign country MUST have 100% control of it's domestic currency. The current bi-lateral trade settlement process to bypass the US dollar will suffice until a digital BRICS currency or settlement system for trade is operational. Only the brainwashed and greedy "neo-liberal finance capitalists" inside China and abroad wants a "internationalized" RMB.
there is a distinction between internationalization of RMB and reserve currency status. RMB will be internationalized by making it more prevalent in trade settlement. But it doesn't have to the reserve currency for capital accounts. China still implements strict capital account control while it has removed most restrictions for the trading account. This will shield the country from financial market manipulations and "financial wars". It will also naturally limit RMB's use as "reserve currency". I don't think replacement of US dollar as reserve currency is China's goal. China is well aware of the Triffen dilemma and is steering clear of it. as for sovereign control over currency, China takes that as a given. the concept of sovereignty is central to the thinking of Beijing from technology to territory. The foremost intellectual and the most influential thinker among Chinese leaders, Wang Huning, wrote his thesis as a polisci student on sovereignty
This is just common sense. A country's Sovereign FIAT currency only has purchase if there are domestic Laws guaranteeing it's value and trustworthiness. Simply put, Money is Law. When domestic money travels outside it's borders, it's Laws can't enforce it's Sovereign money because other lands have different Laws. This is one reason why a domestic currency used to settle trade abroad requires a military to enforce. The British Empire, the American Empire, both allowed foreign countries to use it's domestic currency for trade which is why both countries required armies abroad to enforce it's own "money law relationship". For America, this Law was called "Rules Based Order". For an "export" nation like China, allowing internationalization of it's currency beyond bi-lateral trade is just asking for trouble in the future. Like a teenager getting a taste of smoking marijuana, it leads to curiosity as an adult and boldness to try ecstasy, lsd, cocaine and DMT. Far safer to be patient and create a separate "external" currency to settle trade using International Laws.
I am not sure how it could work if a currency is limited only to bilateral trade. What happens if there is a permanent trade imbalance? what will the surplus country do with the currency of the deficit country if it cannot use that currency for trade with a third party? There needs to be a circular flow to sustain trade. Ultimately can a trading currency be cleanly separated from reserve currency? I don't pretend to know the answer.
One thing for sure is China is not yet on a trajectory to pursue reserve currency status. Also clear is China will want RMB used more often for trade settlement, to circumvent any financial disruptions from the west, if nothing else. China should start doing what Russia had to do after the sanctions. Better to preempt the adversary. The earlier China goes down this path, the easier to mitigate the impact from an expected financial decoupling.
I just don't want China to become an another American Empire (or as I like to call it: Roman Empire 3.0). I rather China be a stable, reasonably-big Kingdom than an overstretched Imperium too difficult to manage.
the political tradition of China is inward looking (the "middle kingdom") rather than expansionary. it's a fool's errand to build an empire and try to impose on others who are not interested to subjugate. China has a set of clearly defined interests. I doubt it wants to overreach beyond those.
The best for humanity is if the US gov is relieved of its delusions about being "exceptional", and that this is done with a minimum of violence. In a very perverse sense, Trump is assisting this process - by laying bare the absurdity of these delusions.
Decoupling is a matter of degree and I’m sure that the Chinese government will thread the needle carefully.
That said, for the benefit to humanity at large, the only decoupling that matters geopolitically is that which China is already pursuing: export controls for critical materials in the broadest sense, but specifically processed/refined products for which China guards the technology and are “dual use”.
Because so few people of the current generation have read any ‘history’, I posit that we are at the cyclical point that China was with regard to the west some 350 years ago. It centred on a precious material, hard/“true” porcelain — which was desired by the European monarchies and led to enormous trade deficits (China was on a silver system and silver moved east).
Unlike the case of porcelain, which represents desire on purely “aesthetic” grounds, the materials today are needed to stoke the military conquests and subjugation of “alien” peoples who do not live in the “garden”. Recall that the apogee of colonialism, slavery and imperialism took place in the nineteenth century.
The rough century from 1700 to 1800 saw Europe undergo the change from civilization to barbarism. Why this happened is known to scholars whose work, sadly, is not discussed in the west (but it is in China). The end of this part of the cycle can now be imagined if the west can be starved of the ability to make weapons, for however long that phase lasts.
a very interesting historical angle. Gun power also came from China and got to the west through the Mongols. Then the west turned it into deadly weapons. Gun power was used in China mainly for fireworks back then.
the historical context of Europe turning into history's worst colonizers and slavers is a fascinating topic. I wonder how theology, medieval inquisitions, and dark age had to do with how Europe turned so bloodthirsty. Europe is by far the most militaristic of all continents, virtually at war all through history. The Golden Hords Mongols were certainly ruthless and barbaric at the peak of its power but they quickly got assimilated by the people they nominally conquered and faded without much of a trace. In contrast, Europeans have been in wars non-stop for a millinium.
These issues are part of what is called in university curricula as “cultural history”.
To me, it is the “root” of differences between both the observable behavior of peoples as well as their value systems which must be understood and not just “perceived”. . A simple example: the Chinese tradition valorised modesty (ie non-boastfulness). In the west today, this is a sign of weakness and effeminacy. The reasons for this cannot be understood except by someone who comprehends both the formation of Chinese traditional thinking — and the contrast with western tradition (which changed rapidly over time, unlike the stable triumvirate of Confucianism/Buddhism/Daoism). As Victor Gao so eloquently put it, “we have been here for 5000 years and we expect to be here for another 5000 years”.
I observed the reaction among some television journalists who watched this replay of Gao — and, interestingly, it was two black journalists who were most taken aback — they had never imagined that a Chinese could speak so directly and powerfully. One woman journalist immediately asked: “wow, just how can they be so confident?”
In short, the Chinese insist on communicating in their own “voice” which is only partly comprehended by the outside world — this kind of expression (particularly in a media context)is limited by having only a “single register” (a term in literary analysis). And the Chinese-Americans, who ought to know better, are hardly superior to the mainland counterparts, despite their language facility — they are acorns who have dropped from the tree and rolled into a ditch.
China doesn't have to prove anything to anyone. The fact stands on its own legs - this is the only continuous civilization for the last 5000 years. Other countries and even empires rise and fall - Egypt, Persia, Rome, Mongol, Spain, Britain and now the US. But they reach the pinnacle once but after the fall, they won't reach it ever again (we'll see about the US). China has risen and fallen and risen again to the top at least 6 times (Qin, Tang, Song, Ming, Qing and PRC). Like Victor said, China has been here for 5000 years - longer than most modern nation states ever existed - and will be here for the next 5000. This is the ultimate long view.
My point is that Chinese people talking among themselves serves little purpose when China is constantly being examined and assessed by the rest of the world. When you say that “China doesn’t need to prove anything to anyone”, with all due respect, it is a sign of a problematic attitude.
Fortunately, however, your mentality is on the wane as the Chinese government and the public have now determined that China’s positions must be explained and defended in public forums. The evidence for this is quite broad including the rise of “wolf warriors”, the encouragement of visitors to China through changes in visa requirements, the rise of a new generation of western pundits on social media and with articulate observers such as Keyu Jin and Tings Chak.
those two things can be true at the same time. I don't think China needs to prove anything to anyone and at the same time, I don't object at all to take an aggressive stance on China's positions. I just don't feel China needs to start any conversation or debate by justifying what it is or what it does. China is what China is, period.
There is nothing China needs to apologize for. As far as outsiders are concerned, they can take it or leave it. China shouldn't be bothered with their opinions. When you are doing the right things, there is no need to explain or rationalize. Just do it. That's why the "middle kingdom" means ultimately.
The idea that China had gunpowder but failed to use it for military purposes is demonstrably false. Evidence suggests that China was likely the first nation to develop the cannon.
https://en.wikipedia.org/wiki/Wuwei_Bronze_Cannon
I would also cast doubt on China being the 'inventor' of gunpowder. Gunpowder is not hard to make, and was probably discovered independently in various places, especially where mining was involved since explosives have other uses besides warfare.
The main issue limiting the use of gunpowder is that, given the poor metallurgical knowledge of the time, cannons and other firearms had a bad habit of blowing up in your face after limited use. That made them both dangerous and expensive to replace at a time when horse mounted warfare was the preferred mode, and dragging cannons around with you over difficult terrain was not practical and exposed them to capture, so they were mainly used for defence of fortifications.
your doubt can apply to any subject using that logic. it is irrelevant. self-claimed historical brilliance and glorification won't carry a nation or a people forward - either for the Chinese or the west. What's important is who will do better in the future. We'll get to find out in the next decades.
"your doubt can apply to any subject using that logic"
What logic? I don't understand. I'm just repeating what I've learned from studying the subject.
"What's important is who will do better in the future."
Sure, but how can you know where you're going if you don't know where you came from? I mean, that is the point of studying the past right?
"Europe is by far the most militaristic of all continents, virtually at war all through history."
If you look at a map it's not hard to understand why. Europe is small compared to China and has limited arable land, so competition for resources began very early in their history. I've read credible research that even suggests the Crusades were not so much about reclaiming the Holy Land as exporting the surplus population that was putting pressure on limited food resources. If true, Europe had a population problem as far back as the 11th Century. The plague years can be considered a "Great Reset" under that rubric. It freed up resources so those who survived could live better for a time.
Warfare is a two edged sword, if you'll pardon the pun. Most advances in technology, especially metallurgy, came from the need for more effective weapons. Advances in many areas too numerous to mention are directly attributable to warfare.
It's no mystery, therefore, that Europe was the seat of most scientific and technological advances in human history. When your very survival depends on it, people tend to become more militant. Most of the world never had that problem, at least not to the same degree, so the rate of progress elsewhere was accordingly slower.
In analyzing historic and cultural events, I tend to follow Marvin Harris and look at the underlying material causes for why things are as they are, not the personalities or cultural traits which in most instances are just symptoms of the response to material conditions.
no doubt people are shaped by the environment they find themselves in. China had more severe arable land issue than Europe and higher population density. Unlike Europe, which was never united after the Roman empire (even during that time, many parts of Europe like Germany and Scandinavia were not part of the empire), China went under centralized rule in 230BC under the First Emperor. The country did go through many cycles of fragmentation and centralization but the main thrust has been a centralized nation. Internal fighting happened mainly during dynastic transitions. On the other hand, wars between European states were a constant.
It's true warfare has been a catalyst for scientific progress, even today. I wouldn't go so far as to say European was the seat of most scientific and tech advances in human history - it certainly is the case in recent centuries but the most foundational technologies for human progress, which separate civilization from barbarism (Francis Bacon), came from China - paper, compass, printing and gunpower. They were spread to Europe through the silk road by way of Persia and the Arabia. Europe acquired those technologies many centuries after they were invented in China.
"the historical context of Europe turning into history's worst colonizers and slavers is a fascinating topic. I wonder how theology, medieval inquisitions, and dark age had to do with how Europe turned so bloodthirsty."
It could have something to do with Muslim expansionism who were equally ruthless and arguably bigger slavers than the Europeans.
https://en.wikipedia.org/wiki/Barbary_corsairs
most inter state and inter racial wars in history were fought over religion. people with monolithic religious beliefs - their god is the one true god - are typically the most fanatic and expansionist in their missionary zeal. Fortunately for China, it never had a monolithic religion and both Taoism and Bhuddism are tolerant belief systems that focus on self betterment rather than converting others.
"most inter state and inter racial wars in history were fought over religion."
I'll agree to the extent that the common people were motivated by religious beliefs, but the people in charge? More motivated by acquiring land, titles, slaves and booty I would argue.
Harris taught me to look for material causes while McLhuan taught me to look for the hidden ground, which is often the same thing. So, I tend to look below surface appearances for actual causes, and human greed and ambition is at the top of the list, well behind religion as a primary motivating factor. I mean, do you think (for example) the Borgias shared the same religious convictions as the masses under their dominion?
"...both Taoism and Bhuddism (sic) are tolerant belief systems..."
I'll give you Taoism, but I think the Rohingya people might disagree on Buddhism. Then there's Japan, which is also Buddhist, and no need to remind you of the atrocities they perpetrated on the Chinese people.
I've done a detailed study of the world's great religions (and a few minor ones as well). In practical terms the Sikhs have the best belief system IMO. Not surprising since they were late arrivals and had everyone's prior mistakes as examples of what to avoid. For me, Buddhism is the religion of weak excuses. Everything is Maya, which means nobody takes responsibility for anything. Going by my practical experiences in Thailand and Japan, although China might be different. Wasn't there long enough (1989) to notice.
Bhuddism originated from India but is not practiced there. I think when you refer the religious intolerance of the bharat, you are referring to the hindus who are not Bhuddists. As for the japs who committed those atrocities in WW2 and before, they were not Bhuddists either. Those are shintoists who believe the jap king is god who had zero god like quality. japan is not a Bhuddist country, just like it has nothing to do with Tang dynasty despite stealing the architecture and aesthetics from it. shintoism admires violence and this is why the japs willingly serve as vassals to the US as they outmatched them in violence and ruthlessness.
What religions have a Crusade against non believers? We only know of one religion that is actively destroying other religions/knowledge: Christianity.
If you look at who went on the Crusades you'll find there were plenty of motives besides religion. Acquiring land, titles of nobility, gold, slaves...
As for crusades against non-believers, the modern term is jihad.
Going further back, read some of the early chapters of the Torah or KJB. Plenty of jihad in those days. Still going on in Gaza, going by their own declarations.
Look at the rise of Christianity. They were a tool of Constantine the Great to suppress his opponents. The Roman Empire had religious freedom. It was a place of great learning. By the time of his death, all oppositions were destroyed. Christianity ruled the empire and all other knowledge were destroyed and suppressed. The death of knowledge lead to the decline of Rome. The Muslims had nothing to do with it. Some say the Muslims are just another sect of this one god religion that came from the Jews. They all worship the same god.
Interesting proposition, although the following point in your article is precisely why decoupling is never going to be initiated by the US:
"Removes China as the economic bogeyman and a distraction from real economic problems in its system like inequality of wealth distribution."
As long as the dominant narrative remains that America is getting "ripped off" by immigrants and "unfair trade," the ultra wealthy continue to cash in. Ensuring that public anger remains misdirected is key to furthering this agenda (which is primarily what the Trump administration is about). They can, as Steve Bannon put it, further "deconstruct the administrative state" by having the private sector take a greater role in delivering public services, thereby enriching the the owners of such companies in the name of "increasing government efficiency" at the expense of the public. They can trigger panic amongst millions of ordinary investors and use the economic turbulence caused by Trump's flip flopping to pave the way for the 'haves' to buy assets on the cheap. They can further the rig the tax system in favour of the rich by placing even more the burden of building up public coffers on ordinary consumers (i.e. tariffs, which is really just another sales tax). Large corporations, particularly in the retail sector, can use this moment to price gouge and further enrich themselves.
Due to geography and an 80 year headstart, the US remains a greater threat to China than the other way around (after all, the latter hasn't got military bases throughout Latin America and the Caribbean). As such, one possibility is China could proactively initiate the decoupling on security grounds (it is certainly a cogent argument). However, it'll likely come with some economic pain in the short run, so how much appetite the Chinese public has for it is an open question. Will it generate the kind of anger that prolonged Zero-COVID eventually caused, or will nationalism be a galvanizing force? The difference here of course is China can put in place a roadmap for decoupling which might soften the downside.
The other option is for China to continue playing the long game and wait for the US to gradually crumble from within. The most recent US presidential election might be instructive in that regard. Biden-Harris could point at various indicators to show that the economy was recovering (the bull market, beating GDP growth targets, somewhat slowing inflation etc.) but since ordinary people faced the pinch (price of eggs), they still voted for DJT because the blame immigrants + trade narrative seemed more attuned to reality (in their eyes, not actually) than "the economy has never been better". In 2027 when the economic turbulence and gutting of the public sector causes even more ordinary Americans to end up in even more dire financial circumstances, will they finally turn against their ruling class and say enough is enough? In other words, is there grounds for China to continue to flex it's muscles towards the US to some degree, while generally remaining on a path of 'strategic patience' (in the meantime strengthening ties with its neighbours, the larger Global South, the overwhelming majority of whom are fed up with Western neo-imperialism).
of course, I was being sarcastic when I mentioned the benefits to the US from a complete decoupling. I don't believe it will reap any of the benefits - often cited by US strategiests as the reason for decoupling. I don't think the US will be able to reduce trade deficit, reshore manufacturing, and reindustrialize if it decouples completely from China. More likely, it would be in a worse position in those pursuits. As for wealth distribution, it is the real central economic issue in the US but as you are saying, there is zero interest from either party to address the issue and China serves as the convenient scapegoat for the ills of the economic system the US has contructed to benefit the rich at the expense of everyone else.
As for Chinese appetite to decouple, I don't know the roadmap of the policy makers. But it is clearly the end state China wants to achieve. Normal trade is welcomed naturally but not at the expense of enabling the enemy (like export of rare earth to US military industry complex) or being subject to coersion and blackmail.
Some pain is inevitable but I doubt there will be much anger from the general population - this is initiated by the US and its malice is clear to all. The Chinese government should and will, correctly, ignore those who don't want decoupling for selfish interests. After all, the government is supposed to serve the interests of the majority, not some vested interests who side with the adversary at a critical juncture.
I have no doubt Beijing wants a managed divorce which softens the downside but there is clear benefit to rip the bandaid off in one go, especially since it is Trump who gets the ball rolling. A showdown is inevitable and Beijing should control the timing and the pace.
There was a youtube channel that argued should America fall, the whole world will be destablised and that no matter how turmultous the state of USA is now; its better to have it remained the global hegemony - which I call bullshit. I can't believe that with all the clandestine shit happening around the world, people are still clinging on to this obviously abusive relationship!
this is the same logic when some women cannot walk away from an abusive spouse. The world won't end if we do away the belligerent hegemon, like the old Chinese saying "the sky won't fall".
The American Empire is a continuation of the British Empire. Finance Capital is how the Empire controls the World. Military force is what the Empire uses to enforce the Uni-polar Financial System. The City of London and it's branches (i.e. Bank of International Settlements - BIS) is still the brains of "Finance Capital". Global hegemony will fall when the City of London is decapitated.
the jews are behind all this "financial capital" idea, the city of london and wall street. finance is the ultimate parasitic vocation which jews are innately suited for. the agenda of the international jew is to profit from the goyims killing each other
While Jews have played a significant role in Banking from the early days (i.e Spanish Empire), it would be incorrect to target Jews alone. In 1492, Queen Isabella and King Ferdinand gave Jews (i.e. wealthy bankers) a choice; death as a Jew or convert to Catholicism. Most chose to convert thus "parasitic banking" spread throughout Europe without friction. From Spain to Holland (1609) to England (1694), Jews, Catholics and European Aristocracy established private "Central Banks" in European Capitals and joint stock companies (i.e. British East India Company, Dutch East India Company) to plunder, enslave and murder peoples of foreign lands. Modern Imperialism via International Finance Capital is just a continuation of this Barbarity now called "(finance) capitalism, freedom and (liberal) democracy".
you are right Jews are not alone to blame. That said, they certainly are at the forefront of financialization (including establishment of the fed) and they are the loudest voice propagating the "virtues" of laissez faire financial capitalism. I wrote about their role in the Chicago school of economics. A vastly disproportionate number of such practitioners of "high finance" are from this ethno/racial group as well. The final objective of finance, in my view, is the enslavement of the general population through debt peonage. And the final stage of financial capitalism is feudalism.
It may be for the best. But dont see why it needs to be viewed as competition, all of civilization can win from both balancing each other out internationally and the increased science and technology innovations that occur from the ensuing redundancy
tell that to US policy makers who are hell-bent to preserve their hegemony over the rest of the world. the way things work is if the US intends to decouple, China's only choice is to reciprocate. if the US bans chip exports to China, China rightfully responds by banning rare earth exports. the US started the decoupling and China will see it to the end.
after all, if one party insists on global hegemony like Trump's tariff war against the world, which by definition rejects cooperation, then others (not just China) should put check and balance in place for that not to happen. JFK said well let's not seek "the peace of the grave or the security of the slave". unfortunately, much of the world is too cowardly to stand behind their own interests and knows only kowtow to the hegemon. China has made the choice not to.
tariffs are fine, there a sales tax, everyone should have tariffs, its more honest
We should all reciprocate and do deliberate redundancy just like President Van Buren said
I would not support decoupling (and I suspect it’s not the ideal outcome for you too) but you do make a pretty good case for decoupling in this post. I particularly like daring the Americans to see how much better off they are without China!🤣 (I doubt they will like it.)
I don’t think decoupling is inevitable but it is certainly a possible even probable scenario. But my base case is that the West eventually becomes a minor part of the global economy, and will continue to trade with China, directly or through third countries. If they really want to decouple completely, they would have to isolate themselves from the rest of the world, much like the Soviet block.
China doesn’t need to seek decoupling. Just leave it to the West. Let the record show that it’s the West that want to decouple, not China.
agreed. decoupling will hurt the US and the west in the long run. it will be painful for China but it will come out stronger.
the west, with its high cost and low efficiency economic system, will become less relevant over time. decoupling will just accelerate that process.
debt-financed consumption has its limits. when the music stops (e.g. dollar loses much of its reserve currency priviledges), they will experience a cardiac arrest and plunge into economic disaster. it's a race against time and the countdown has started already.
decoupling certainly is not ideal, just like none of all want war (maybe some do:(.
but reality is the two countries are parting ways and world economy will bifurcate gradually as well - most countries want to trade with both, but increasingly under pressure to pick a side, primarily from US pressure.
frankly both sides are consciously decoupling to prepare for the possibility of war, which will put the final nail in the coffin as far as meaningful economic or political relations are concerned. noone wants dependency on your foe when war breaks out. regardless of people's wish, I see decoupling as the eventual outcome - if not right away, a few short years down the road.
I would worry more about US imperialism than decoupling. The US will use dirty tactics (terrorist attacks, false flags, etc) to stir up ethnic hate and eventually a war.
China seems to be naive. They have no idea how depraved the west is.
What happens in Palestine, Syria, Lebanon and Yemen should have been a wake-up call for China.
I doubt China would be caught by surprise by any US moves. Naivete would be the last thing to describe the Chinese leadership if you have followed Chinese foreign policy. Under the diplomatic niceties which China still sticks to, there is a crystal clear understanding of the nature of the enemy it is dealing with and an iron will to overpower it when the time comes.
China's state capacity is not something the countries you listed could even imagine, let alone compare. Dirty tricks won't cut it with real powers. I think even the US regime knows it - of course, it doesn't mean they won't try but I am pretty they don't bet their house on it.
There have never been a single Chinese leader, whatever their politics, who doesn't understand the nature of the relationship with the west, especially the US. The situation is completely different from even Putin, who had illusions about the west for the longest time.
Way back in the 18th century a guy named David Ricardo came up with a formula for international trade he called 'comparative advantage.' The guy was way ahead of his time IMO but if you aren't familiar with him or his ideas, here's a wiki article that will get you started.
https://en.wikipedia.org/wiki/David_Ricardo
your condescension is amusing. pretending to be erudite is tiresome. which hallowed halls do you hold your international trade lectures? If you have a point, write up your own thesis - which I am sure will be brilliant given how much you know about Richardo. You probably are also very proficient with Marx's Da Capital Volume II and III and Confucius' The Saying.
OK, I get it. You're the dispenser of wisdom around here and don't like to be challlenged. Bear in mind though, I may have directed that message to anyone reading this forum, not just you. That is how open debate is suppose to work.
I find your hostility puzzling. We're on the same page on a lot of points, so why you would take offence at me expanding on them, or debating them when we differ, I don't really understand. I thought you were above that, so the ad hominem comes as a bit of a shock.
Anyway, no point hanging around where I'm not welcome. I really though this place was different, but like so many substacks, it turns out it's just another echo chamber.
this substack is my personal musings, not some dispenser of wisdom. that is the domaine of people who write for mainstream newspaper columns. if you want to point out a contradiction or factual mistake, by all means call it out. If there is a perspective that you think can help understand the issue at hand in the works of Richardo or John Stuart Mill or Thomas Hobb, spell it out. No need to condesend. A web link is a lazy way out.
Looking at the big picture from my lofty heights an old Persian adage comes to mind:
"this too shall pass."
US midterms are less than 2 years away, by which time the pain caused by Trump's ridiculous trade policy will have negatively affected enough Americans to make another old adage come to pass:
"People vote their wallets."
A majority Democrat congress in 2026 is not hard to imagine under current circumstances, at which time a full court press to impeach Trump will resume, only this time with far more ammunition, most of it provided by Trump himself. What this spells for China/US trade relations isn't hard to predict either because the Democrats will quite rightly point to Trump, not America, as the source of the problem. That's not to say it will all come up roses, but (with apologies to Mao) a few flowers may yet bloom.
While I'm tossing adages around I'll mention another, this time from Türkiye, that Trump watchers should probably take on board: "dogs bark, but the caravan moves on." There is nothing a narcissist hates more than being ignored, except perhaps being compared to a barking dog. Trump is like that dog chasing your car. When he finally catches up to you at a light what can he do? Bite the tires? Even if he had a strong enough bite, it would still blow up in his face.
There's a historic pattern playing out here that should not be overlooked.
Post WWII Japan's economy was rebuilt with US investment. It was sold as benevolence but the real reason was the same as with Germany (Marshal Plan) - a bulwark against the Soviet Union. A prosperous Japan was less likely to take the communist path was the general idea and it seems to have worked. So, under that rubric, Japan entered the international markets as the low cost manufacturer and the expression 'made in Japan' became the hallmark of cheap (often shoddy) goods. That didn't last long though and taking advantage of the opportunity, Japan set about acquiring the skills and the capacity to move up the value chain to the point where the best high-end consumer goods are now made in Japan.
Korea then followed for much the same reason, with China following the same program of first capturing the low end export trade, then gradually moving up the value chain to high end manufacturing. Even at the low end they excel now, which Walmart shoppers may find hard to believe, but go shopping for clothes in Japan and you'll see. Almost all Japanese clothing is made in China these days, but as Japanese tend to put quality before price they are first rate threads.
So that's three nations that successfully followed the same program, but it would be a mistake to assume the game is now over with China dominating all markets because China now faces competition from India that has similar aspirations, and as Chinese/US relations deteriorate, India will become the new destination for US investment and the source of low cost merchandise.
What's interesting to note is that China not only followed Japan on the export model, but like Japan they weren't careful enough about the money flows and suffered a similar real estate bubble. Even more interesting, China and India are both BRICS members, which assumes more equitable trade relations between member states, but how likely is that with India nipping at China's heels? I have no projections on how this will all work out, just trying to draw attention to what seems to have been overlooked by most analysts.
your comments about India sound like someone who has never been to India. Making a comparison of this ragtag of a "country" with China, Japan and Korea is simply a laughable proposition.
Yeah, well....
https://www.zerohedge.com/geopolitical/generac-ceo-will-slash-reliance-chinese-supply-chains-within-18-months
I made money for over 20 years by identifying trends in the market. Now go ahead and tell me this is a just one-off situation and that India can't take the low end manufacturing away from you, which is still China's main export. Laugh yourself silly over it. Your opinion on India doesn't amount to a hill of beans, coloured as it is by endemic Chinese racism.
Incidentally, if you want elective surgery and aren't prepared to wait, you go to India, not China. This is one of those trends I'm talking about which started in the 80's and is now in full swing:
https://www.apollohospitals.com/
India has a lot of poverty, so did China starting out, but comparing China to Japan and Korea is just as laughable. China is a Potemkin Village stretched out along the coast. Go inland and you'll see the real China. Land of nail houses and collapsing bridges. Oh, and just like India, whatever you do, don't drink the water!
go live in bharat since you are such a big fan. also stay out of my Substack. Modi's ass licking trolls are not welcome and there are plenty of delusional india/jew loving places you can soak in. sad clown.
Have you considered that certain US companies - like Apple - might move their HQs to China? Would make long-term sense not to sacrifice that market.
for some industries, I think that does make sense, starting with Nvidia rather than Apple:) When China is 50% of global markets for key industries (e.g. EV, solar, maybe AI in the future), it only is logical that China-based companies should be the world leaders. I suspend some US companies could be attractive acquisition targets for those leading Chinese companies (of course, in a hypothetical neutral world we don't live in).
Most discussion on this topic is of the US deficit. There is little discussion of the Chinese trade surplus. Do you think China needs to address this and if so how.
Or do you think China can continue these surpluses forever?
Thanks for your unique perspective. I always enjoy your articles.
at the moment, China's trade surplus is structural as it has the most efficient manufacturing base in the world. As long as trade remains largely free and open, China probably will run a surplus for the foreseeable future.
China is also reducing energy dependencies (such as oil and gas) and tech dependencies on other countries by pursuing technological breakthroughs across the board including green energy solutions.
That said, average Chinese consumption still has a long way to go. Once this potential is fully tapped, I assume China will consume more what it produces and the imbalance will mitigate.
The dilemma for other countries is whether they want low cost high quality manufactured goods from China or protect local industries even at the expense of inflated costs to their own consumers. I don't know how the dilemma will be solved but there should be a mechanism to table the issues and find a solution that is amenable to all parties.
You probably don’t realize this, but nothing is “forever”, including our mortal selves. Whether we are borderline hysterical or not.
Tech and human capital are forever. As long as China keeps this in mind and keeps putting resources into these two, China will be fine. The 2nd law of thermodynamics warns against complacency and the rise of the 1%. As long as China keeps these in check China will be the light for the world.
100% agree. the most important feature of the Chinese political system is that it is not captured by wealth, which will stack the rules in their favor against everyone else. one party rule or mult party rule or whatever governance system is just the facade. the core question is who does the system serve. as far as I am concerned, all the capitalist "democracies" are faux democracies and true plutocracies. whatever the shortcomings of one party rule, all systems have shortcomings, it works for the majority as long as political power doesn't serve the rich exclusively. all else is distractions.