The China Misdirection

The CCP ruled China. Is there a more misrepresented political party or organisation on earth?

My feeling is that the mainstream view on China is summed up by this quote from President Biden’s Security Council China Director, Rush Doshi.

“It is clear, then, that China is the most significant competitor that the United States has faced and that the way Washington handles its emergence to superpower status will shape the course of the next century.”

The unstoppable rising superpower. The next global hegemon. The ever patient masters of strategy and war games who are just waiting to usurp the United States global dominance.

I think it’s all misdirection. The next Century will not be Chinese and there are many reasons why.

Let’s start with a quick summary of Chinese History.

Firstly, from around 2500 BC up until 1911. This is the period of all those mythical Chinese Dynasties. The Ming Dynasty, the Zhou Dynasty, the Qing Dynasty just to name a few. These Dynasties lasted anywhere from 4 to 789 years.

Chinese History is basically a bloody story of one dynasty ruling a large block of the East Asian continent for as long as they could before they were weakened to the point where the next dynasty would overthrow them. The periods in between were filled with various uprisings and rebellions from one dissident group or another.

Ruling a patch of land this large with so many regional groups is a tremendously difficult task indeed. You would need at least a week to read through the various Chinese wars and battles.

One such war typical of the times was the Battle of Boju, fought in 506 BC between the States of Wu (the present day Shanghai region) and Chu (present day Hubei and Hunan). Supposedly the Commander of the Wu Army was Sun Wu – a man we now know of as Sun Tzu, author of The Art of War.

The Western world loves quoting the Art of War and I suspect the text is a major reason why we think of China as an ancient superpower waiting for their chance to take back the throne. I doubt most of those same people realise that Tzu’s greatest military achievement was seizing a small inland Chinese town that we now know of (or rather, have never heard of) as Jingzhou from another Chinese regional power.

Jingzhou (China, Yangtze River) cruise port schedule ...

What China has always been is an incredible trading nation. The Silk Road connected East and West for over 15 centuries and led to some monumental discoveries including everything from paper to gunpowder to Buddhism. But China’s role as a military superpower is grossly misrepresented – it has never been able to assert power beyond its own borders, as it has been far too busy fighting its own internal battles.

The last of the Chinese Dynasties, the Qing Dynasty fell around the turn of the 20th Century when it was overthrown by the Republic of China (ROC) and ushered in a new era of Chinese history that was a far cry from its former greatness. The ROC was formed in 1912 and the following 65 or so years was a truly unimpressive period. The dominant themes were internal power battles, failed attempts at Lenin style communism, then getting raped and pillaged by Japan.

In 1949, the Mao Zedong led Peoples Liberation Army (the PLA) seized China by force from the ROC in a bloody civil war and formally established the Peoples Republic of China (The PRC). To this day, Chairman Mao remains a revered figure as the Founding Father of the modern nation, despite the utter failures of his Great Leap Forward and Cultural Revolution campaigns. Mao died in 1976 and two years later Deng Xiaoping became the Supreme Leader, which marks the point where China became the Modern China that we now know.

As for the ROC, they fled the mainland once they realised they couldn’t beat the CCP in this war and retreated to a popular island outpost for failed Chinese sieges called Taiwan. 70 years on, the ROC continue to base themselves on that island and it’s fair to say tensions remain high to this day.

Whenever you hear something that mentions the great military power of China and their patience to reclaim their position as the global hegemon, it’s worth asking which China they’re actually referring to. The Qing Dynasty? The Republic of China? The Chinese Communist Party?

My guess is they’re referring to the CCP. But they’ve only ever ruled China for a mere 70 years and whose first half of that tenure was an utter disaster. Hardly the profile of a sleeping giant...

Before we talk about post 1980 China, we should cover some of the fundamental characteristics of the country to understand why its history has been so challenging.

It’s easy to forget, but for all of pre-1945 history, the most important feature of any country is its geography. How well suited are its internal lands, climate zones and waterways to establish unified civilisations? How suitable are the external borders to protect a nation from invasions?

Most of China is uninhabitable, hence why 95% of the population live on the east side of the dark line shown on the map above. Transporting goods overland is a slow and expensive engineering challenge, therefore population centres will nearly always be either seaside or beside a long navigable river – the Yangtze being the only one in China. This basic geography explains why China’s big cities are where they are. With a population of one and a half billion trying to occupy a landmass that’s mostly inhabitable, we can understand why the cities are so crowded.

In the stable post 1945 world most of the developed population has spent time at the top of Maslow’s Pyramid, so it’s easy to forget that there’s nothing more important than the items at the bottom. Food, water, warmth and security have been the needs that humans have fought over for most of history.

That presents a challenge for China should the world ever descend into chaos. China feeds 20% of the world's population on 7% of the world's arable farmland. Its water supply per capita is 25% of the world average. It accounts for 26% of the world's crude oil imports – double the amount of the next biggest. Totalitarian rule might be able to ration rest, but rationing food, water and warmth is an impossible task should its access to imports ever get cut off or restricted.

If we move one level up the pyramid to security, we only need to assess China’s external borders to get an understanding of how well it has the rest of the nation's basic needs covered. Unfortunately for China, its borders might well be the worst of any country in the world.

To the North is Russia. Xi and Putin might seem chummy now, but the state of current relations are an outlier more than the rule. Whilst the two countries have never engaged in a major war, there’s been plenty of armed conflicts, with an on again off again relationship that’s never remained cordial for more than about a decade at a time. Bordering those two countries is Mongolia, whose recent 25 year trading history with China is again an aberration from the norm. The Mongols ruled all of China during the almost century reign of the Yuan Dynasty, before they were overthrown by the Ming Dynasty in 1368 and continued fighting for another 700 odd years thereafter.

Standing between mainland China and the European continent to the West is not only a whole lot of uninhabitable land, but also the regions of Xinjiang and Tibet. That these two regions are the homes of the currently persecuted Uyghurs and Tibetans tells you all you need to know about China’s traditional relations with those regions.

Further South is India, the other rising power of the Asian region, who started fighting China in the mid 1800’s during the Sino-Sikh War and their relations have remained tense since. Though the Himalayan borderlands are rugged and hardly worth fighting over, to this very day Indian and Chinese soldiers engage in hand to hand combat.

The rest of the Southern border is shared with Myanmar, Laos and Vietnam. Despite the average resident of Myanmar and Laos hating China, the relations with those two nations do not compare with the mutual hatred shared with Vietnam. When it comes to rivalries, it’s hard to top the disdain these two have for each other and have had for every bit of two and a half millennia.

That covers China’s land borders, leaving just the Eastern ocean borders to consider. Unfortunately for China, this is where the real problems begin. The most strategically important offshore island that sits to the middle of China and would give them a launching pad with unfettered access to the Pacific Ocean is Taiwan. Unless the CCP can finally break bread with the ROC, their only way to gain control of this territory is going to be with force. That won’t come easy, because just to the North of Taiwan is the only country in the world who hates China more than Vietnam, Japan.

Japan has several things going for it. It commands one of the strongest naval forces in the world, with the backing of the strongest by a factor of 10, the USA. These factors, combined with its archipelago geography, provides it with the ability to totally dominate the First Island Chain. As the map above shows, rather than providing China with a springboard to project power outward into the Pacific, the First Island Chain has them totally trapped.

Whilst on the topic of waterways and shipping lanes, there’s two words that should never be uttered at a CCP dinner party: “Malacca Dilemma”. The Malacca Dilemma refers to the problem the CCP has that nearly all of its imports, including 80% of its energy supplies, pass through the Strait of Malacca.

With around 90% of world trade being transported on the water, choke points matter. Military strategists understand the importance of choke points, which is why places like the Strait of Hormuz, Suez Canal, Panama Canal and Istanbul have histories littered with conflict. If one nation wants to launch an attack on another, it’s much easier and more effective to attack their choke point and cut off supplies than it is to launch a missile onto their people.

This article from one such strategist, Radigan Carter, covers the problem for China in detail. “The Strait of Malacca is one of the most important pieces of real estate on the planet. The strait determines the economic fate of nearly half the population of the world with oil flowing from the Middle East through this narrow strip of water to Asia.”

Russia's Arctic Passage Will Ease China's Reliance on ...

For all the incessant headlines we read on the trade war and Chinese domination, I wonder if any of these people have stopped for one second to put their military strategist hat on and wonder how a nation like the United States might combat China if they overstepped the mark? Hint, look at the image of the map above and ask yourself where you might cause some disruption.

Another hint. For all the obsession with renewables and a green future, there’s not a nation on the planet whose population could survive for more than a month or so without oil supplies.

So as we can see, China’s access to food, water, energy and security is not good. And yet, the rise to power in the 40 years since 1980 has been nothing short of remarkable – why?

The notorious US Diplomat Henry Kissinger completed a secret trip to China in 1971 and the contents of those conversations, whatever they may have been, explains all of China’s global domination. Everything really got going by 1980, once Deng Xiaoping was in control and the two nations agreed upon a strategy of “engagement”.

What exactly was engagement? We can see the bipartisan commentary from American Presidents over the decades to understand exactly what it was about.

President Nixon said “the Chinese market is not fully developed yet, and the United States can take advantage of it in many ways. We shall be happy to have American merchants continue doing business with China. This could be an important way of putting the past behind us.”

George H.W. Bush spoke about the “strong, important strategic and commercial and cultural relationship that we have with the Chinese”.

In advocating for China’s inclusion into the World Trade Organisation in 2001, President Clinton promoted the idea that “Membership in the W.T.O., of course, will not create a free society in China overnight or guarantee that China will play by global rules...But over time, I believe it will move China faster and further in the right direction.”

For all the presidential and diplomatic spin, I think engagement can be summarised very simply:

Global elites would encourage China to join the world economy, enabling an era of hyperglobalisation to commence. In return, the order would ensure the CCP had unfettered access to food and energy, as well as regional stability with external border protection.

It has been a remarkably good deal for the CCP. The complete mitigation of their Achilles heel, enabling the party to lead their nation from one of poverty and hopelessness to one of prosperity within a matter of decades.

Forty years on from the commencement of the engagement strategy, it’s very easy to assess the winners and losers of this deal.

The Winners:

The CCP, the totalitarian ruling party. When you rule a nation of one billion plus people without a popular mandate, your power depends on your ability to keep the people happy. If the Chinese people can’t access food or energy and live in poverty, they will quickly turn on their ruling party in favour of someone else offering a better solution. This was the case for China for the century before 1980.

The Chinese people, who care more for prosperity than they do for individual freedom. Those Chinese citizens who’ve been willing to forgo their privacy or individual freedoms and support the CCP agenda have been able to get tremendously rich. The ones you see decked out in Gucci and Louis Vuitton buying expensive, yet dormant property in the best parts of the developed world.

Global elites. Adding one billion rising middle class consumers to the global economy grows the total addressable market for any multinational corporation selling goods or services to a global market. As noted in this piece I wrote recently, “in 20 years China has gone from being responsible for 6% of total global liquidity to 30% today.” Adding that level of liquidity to global markets has done wonderful things for asset prices, ensuring that anyone who owns assets has become a whole lot richer.

The other benefit of having a trading partner with a more lax view on human rights than we’re used to in the West is that we can use that place to undertake some of the activities that we might not get away with on home soil. That might be the use of sweatshops to produce products, or the establishment of laboratories to undertake shady activities like gain of function research on man made viruses.

Ever notice all those progressive virtue signalling companies like Nike or Goldman Sachs have everything to say about racism or equal rights, yet nothing to say about China’s human rights violations?

The Losers:

The Chinese people who hold views that are not in line with those of the CCP, like the Tibetans or Uyghurs. The way totalitarianism works is that free thought or promotion of views that oppose the State are outlawed – the sentence being death, torture, or being held against your free will in a containment camp. Remember the famous ‘Tank Man’? We don’t know his name, because he was never seen again..

The Western middle class (or what’s left of it). Hyperglobalisation has created two clear classes of Westerners – those who’ve benefited and got much richer, then everyone else who has got much poorer. The decimation of local industries and jobs due to offshoring and global supply chains has helped Western Elites, at the expense of those who have lost their jobs and earning potential. Yeah sure the promoters of globalisation talk about how much cheaper your gadgets are, but notice the rising cost of the things you actually need like housing and healthcare have ensured that the middle class keep on the hamster wheel working harder and harder yet falling further behind. This has happened slowly, like a frog in boiling water, but explains why half of America voted in Donald Trump as President in 2016.

The environment. The old out of site, out of mind philosophy is great for the Westerners who have enjoyed access to cheap consumer products thanks to China’s relaxed stance on human rights issues. It’s also been great for our ability to pretend we’re good global citizens who recycle our rubbish and promote net-zero policies to protect the environment. We love our future of green new deals because it helps us feel good about ourselves, despite the fact that all we’ve really done is increase consumerism by many orders of magnitude and offshore the side effects to regions like China.

The status quo of the last few decades continues to benefit two groups more than anyone else – the global elites and the CCP. My personal opinion is that there’s a tacit agreement between those two entities to do whatever it takes to keep the music playing for as long as possible.

All the tough talk from the CCP is merely posturing. It helps them to maintain an illusion of strength with their own population, which is a necessity for a political party that is two weeks of hunger away from having its people turn on them. I think it’s encouraged by the global elites, who know that anything other than totalitarian rule on a population that large would see them return to the sort of nation they were before 1980 – which isn’t a positive for their ambitions of hyperglobalisation.

Within China’s own borders President Xi is all powerful, but on the global stage he is a complete puppet of the elite. The global elite are plotting the course of the world for the next decades, not the CCP. So long as the CCP remain a useful ally, they will feature, but the moment they no longer provide value they’ll be hung out to dry.

The single biggest threat to both groups is nationalism. An American President who chokes up the Strait of Malacca is an American President who ends the CCP rule. That blows up the global asset market, multi-national supply chains and brings a whole lot of jobs back home as the country returns to the pre 1980 world where they actually ran their own industries. It won’t be smooth sailing, but the aforementioned winners and losers will be reversed.

Notice how much we have been hearing about the battle between the West and China over the past decade? But also notice how little has actually happened. The battle between the West and China is one big piece of misdirection. You can make an elephant disappear in the middle of a theater filled with people…because what the eyes see and the ears hear, the mind believes.

But be careful, because the real battle happening in the world right now is the battle between nationalism and globalism. Our national sovereignty might be the elephant disappearing before our very eyes if we don’t wake up soon.