I was going to write a piece on "the Will to Power" of the Han Chinese Rats, and why we must crush the Han Chinese Dictatorship AND ITS PEOPLE!
I am very glad to say that someone has done it for me!
The all-important point that the writer makes is that not just the Chinese Dictatorship, but above all the Han Chinese people as a whole are complicit villains in the adoption and prosecution of their folly of world domination!
Here goes then, this marvelous contribution from Christopher Joye at the Australian Financial Review.
I am very glad to say that someone has done it for me!
The all-important point that the writer makes is that not just the Chinese Dictatorship, but above all the Han Chinese people as a whole are complicit villains in the adoption and prosecution of their folly of world domination!
Here goes then, this marvelous contribution from Christopher Joye at the Australian Financial Review.
May 31, 2019 — 12.05pm
After
consulting numerous Chinese and US intelligence, defence and political experts,
I believe the probabilities have shifted materially from the benign modal case
in which China and the US resolve a trade deal towards much more polarised, or
bi-modal, outcomes involving a deal or no deal with each contingency appearing
equally likely. This could elevate volatility, which will beget investment
opportunities.
The
changing probabilities have emerged as Donald Trump seeks to straddle two
conflicting schools of thought on how to manage the challenge posed by the rise
of a totalitarian, one-party (increasingly, one-person) political system that
seeks to dominate its domestic and foreign counterparties to secure and sustain
its aspirational primacy.
Wittingly or unwittingly, Trump is the first modern leader to
push back on China’s quest in a credible and strategically thoughtful fashion.
One
forecasting complication is that nobody knows which of these two camps Trump
will eventually commit to. His long-time secretary says the only constant with
Trump is his intrinsic unpredictability, which former adviser Steve Bannon
describes as his “super power”.
Last
year the central case was that a transactional, market-sensitive and myopic
Trump – who is desperate to impress America's corporate oligarchs – would
strive to secure a (pyrrhic?) trade victory
heading into the 2020 election. It was assumed that this deal would be struck
irrespective of whether it addressed the growing concerns China hawks like
Bannon have regarding the Middle Kingdom’s “predatory” behaviour.
By
predatory, Bannon means the systematic program China has been implementing for
decades to slingshot its economic and military development to the point where
it is unassailable. This, of course, involves appropriating foreign technology,
intellectual property and military expertise to enable China’s ascendancy while
the state unfairly subsidises local enterprise to obtain market share from
offshore competitors playing by the rules of a different game (ie, fair and
free trade).
The
2018 interpretation of Trump’s mercenary character traits reflected the
prevailing wisdom in the economics community that getting a deal done was more
important to Trump than the substance of that deal. Whenever Trump deviated
from the path espoused by this “Goldman Sachs consensus”, he has been punished
by markets. And investors have become emboldened by the efficacy of their own
"reflexivity" whereby "ticker-tape" Trump has been forced
to sprout more deal-friendly rhetoric every time his hawkish hyperbole
precipitates a market meltdown.
In for
the long haul
The
hawks want Trump to resist his more impatient and hedonistic instincts to
prevail in the longer-term strategic game. More precisely, they want him to
weather immediate financial storms to preserve America’s hegemony, which is
predicated on the rules-based, liberal-democratic order where everyone competes
on equal terms without extensive state subsidies and/or interference.
This is
Bannon’s eloquently-articulated doctrine, which for the first time is gaining
bi-partisan currency throughout America. According to the hawks, China is
engaged in a multi-decade mission to wrest economic, military and geo-political
supremacy away from the US and its allies. The intensity of this mission has
accelerated under President Xi Jinping, who is the most powerful and
ideological Chinese leader since Mao, and in 2018 removed all term limits to
establishing a perpetual legacy.
Xi’s
ideology asserts that China has always required an existential challenge, if
not outright kinetic conflict, to galvanize her people to unite as one to
overcome perceived threats to her existence where Xi himself, the Chinese
state, the Chinese Communist Party and the Chinese people are increasingly
fused into a single, indivisible entity.
The
endgame is a utopian nirvana (socialism) that is never actually obtained. This
objective is, however, the unifying ambition that binds the Chinese people
together in support of maintaining the primacy of the Chinese Communist Party,
which is a vehicle to preserve the power and control of several key Chinese
dynasties, the current apex of which is represented by Xi. (Interested readers
should refer to John Garnaut’s writings here and here if they want
to understand this dynamic better).
Wittingly
or unwittingly, Trump is the first modern leader to push back on China’s quest
in a credible and strategically thoughtful fashion. As one analyst remarked, it
may just be the random coincidence of madness and strategy in Washington.
Finite
window
Hawks
like Bannon think appeasing China has propagated Western decline as financial
market elites accept sub-optimal deals that transfer enormous wealth to them
personally while ceding wealth creation opportunities to China over the long
run. And they believe that the West must act promptly in the finite window it
has left to excise this cancer from the global economy.
Bannon’s
project, which has gained unprecedented traction among Democrat and Republican
leaders during Trump’s term, advocates “decoupling” the Western and Chinese
economies as the least-worst option given China’s irreversible course. This
means tariffs are positive because they work to reverse China’s competitive
cost advantages and encourage rivals to develop substitutable products. This is
why we are hearing more and more about shifting essential supply chains out of
China into alternative domains.
Bannon’s
doctrine equates economic stability with national security, which has become an
increasingly common call to arms in Washington. One striking illustration has
been the radical change in the global approach to dealing with Huawei – China’s
most high-profile "national champion" and the world’s largest
telecommunications equipment manufacturer – which has metamorphosised from
being heralded as the next Apple to an existential national security threat.
A trade
deal could still be struck by Trump if markets go into free-fall and the
Goldman Sachs consensus prevails and/or Xi realises he has made a mistake by
precipitating decoupling, which will deny China the incredible prosperity that
it has extracted from the capitalist system that is the essential source of its
power and influence.
Notwithstanding
the apparent loss of face, the option still exists for Xi to sign up to some
sort of comprehensive deal, but then gradually back out of it over time and/or
stealthily cheat, which is arguably the optimal choice right now. I still,
therefore, attach a 50 per cent probability to a deal being done, one way or
another.
There
is an equal probability that no deal is done either because China miscalculates
and refuses to sign up to one because Xi welcomes a nationally unifying crisis,
or because Trump becomes enamoured with the political benefits of being seen to
use decoupling to save the US economy from being disintermediated by its most
important geo-political rival.
The
probability of this second scenario has increased since Joe Biden, a China
dove, entered the presidential race and claimed that China “was not bad” and
“not competition for us”. This has emboldened Trump to wedge Biden on America’s
China choice, which Trump thinks will play out in his favour at the 2020
election.
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