Generational Dynamics World View News

[Phong Tran]

I don't think the tariffs are enough justification for China to go into a full military conflict for Taiwan. I did a quick search on what percentage of China's trade is with the US, and while the US is their largest trading partner, they only comprise about 14.7% (State Council Information Office). It's not as if it is 30-40% or higher as the media seems to want to portray, whether as a doom and gloom for or against Trump's policies.

So, essentially, I think it would be a recession for both the US and China as their economies readjust to the 'new world order', but not as devastating to China as would seem, and definitely not to the point of trying to take Taiwan. Taking Taiwan would never be about just taking Taiwan, they would have to project their navy to control the entire south china seas, including enveloping Japan, with potential threat deployment to both Australia and the US, otherwise there'd really be no point.

The US has seemed to withdraw from the Ukraine conflict, however, seem to want to sabre rattle with Iran, if I were China, I would let them. The more enemies the US makes, the more countries that will, if not be friendly with China, at least won't view them as the enemy. I do see why Trump would want to address the trade imbalance, reshoring, etc, I just don't know if calling China out the way he did was the best way to go about it.

[FullMoon]

That's a good post Phong.
Tariffs themselves aren't necessarily going to be the justification for war but the Sino/US escalation that's been going on is now getting faster and more intense. They already have enough justification and they're just waiting for when the time is either favorable or when it appears that they'll only go down quickly and lose the chance. They're getting themselves into dire circumstances and they're literally adrift with corruption and infighting, together with a collapsing economy taking a massive gut punch from primary trading partners. The war will probably be as Phong suggests and that means they'll be going for broke. Risk aversion has been their strategy but we're seeing that might be changing. If anything happens in Taiwan this month it's probably Navigator's island taking strategy and a lengthy blockade. It's already a very dangerous situation with little chance of resolving without serious consequences for everyone.

[tim]

http://www.generationaldynamics.com/pg/ ... og2011.htm

This is also a good time to respond to the frequently heard statements like, "Countries A and B will never go to war, because trade between the two countries is good, and war will be bad for business." If this were true, there would never have been a war. What actually happens is that trade does not prevent a war. Instead, trade makes the situation worse, because the stronger trading partner uses trade as one more weapon of war, as we're seeing now in the case of China and Australia.

[Phong Tran]

I think western thinkers tend to underestimate the CCP. They've been in power for a long time, essentially with a single purpose that has never changed, to become a superpower such that no other nation can ever humiliate them the same way that they were during the opium wars, during WW2 and the following years. While President Xi may be the figurehead and seem like a dictator who is destined to fall the same way others have, the entire CCP party are not just followers and yes men, but a political force behind the scenes developing their country day by day towards that single goal.

Their rebuff of the tariffs from the US puts them in a favorable light to the rest of the world, essentially as the underdog nation in a david and goliath battle against the US Superpower. That image and positive propaganda, would ultimately be defeated if they then attacked Taiwan. They also have the benefit of the saying, "when your enemy is digging themselves into a hole, don't stop them". China had taken advantage of the US to build up their production capacity, and technological knowledge and research, but it was also US companies, capitalistic greed and previous US administrations that allowed it to go on for so long. This dynamic allowed the US to extend and pretend that their economy was strong and that their standard of living was not being eroded decade after decade, since the 1980s.

I know people love to say that Trump has been playing 4D chess and that others are playing checkers; however, that attempts to attribute an intelligence to one party and lack thereof to the other instead of considering that China has probably played out the US sovereign debt time bomb scenario, as well as the current dissolution of their reliance on the US as a trade partner, for the past 10-15 years. In the following recession to come, they have faith that their Chinese citizens will bear it better than their US counterparts. In fact, they probably hope and anticipate that a prolonged recession and decrease in the US living standard would actually incite an even more divided US population against their administration. And having learned from history, they will not repeat the same mistakes that Japan did by bombing pearl harbor, to create an enemy that they can unite against.

Thus, I believe while a hot war is coming, it's too soon and would serve no political strategy for China, and would be more like something that North Korea would do. The Great Depression was said to be between 1929 to 1932 at it's lowest peak, but WW2 didn't start until 1939. In today's information and technological age, the time between recession/depression may be shorter but there still needs to be that period of suffering and hardship; and if the US could be the one to blame for having started it on April 2nd 2025, even better.

[spottybrowncow]

That was a great analysis, and I sincerely hope you’re right. The more time that we have to correct our ship’s course, if that is still possible, the better.

[FullMoon]

That's some good stuff for sure!

[Navigator]

China is indeed playing the long game. They have certainly been successful in moving the world's base manufacturing capability to their country and have been successful in convincing most of the west to self-inflict serious economic damage by bankrolling things like climate change initiatives, open border policies and BLM in the US.

They do indeed have a long range plan. A large part of it has been to manipulate world trade through government sponsorship/subsidy of manufacturing and export (primarily to the US).

Unfortunately for them, their economy is in much worse shape than that of the US, Japan, or Western Europe. Their real estate and banking sectors have been teetering on the precipice for a couple of years now. The large scale loss of export trade, and the downstream effect on manufacturing jobs, could put their economy into a tailspin much faster than the sovereign debt crisis will hit the US.

There have already been serious political disturbances in China related to the real estate and banking sector problems. Mass manufacturing layoffs would compound this, and could easily lead to anti-CCP movements that the CCP cannot tolerate. In response, they will need to go to martial law to maintain control and quash dissent, and the way to do this is to start a war (which initially will also galvanize and improve popular support of the CCP).

Thus the tariffs would have the effect of disrupting the CCP timeline for conflict, causing them to start the shooting war years in advance of when they had planned to.

The reality is that we have been in conflict with the CCP for decades. They have played the US for chumps throughout that time, using our myopic focus on profits to strengthen themselves while weakening us.

Thus Trump's tariff attacks on China are a well needed change in our grand strategy. It will help to start the re-industrialization of the US in many key areas (such as in rare earth metal production). Much better to do it now, before the actual shooting starts.

[Trevor]

Yes, China is indeed playing the long game. However, the short term has a way of making the long term obsolete. How many of our lives went as we planned them?

Let's not forget they've done one unbelievably idiotic thing after another. Their one-child policy has been a complete disaster, and they're only beginning to find out how badly they've screwed themselves doing it. Foolish as our policies have sometimes been, none of them can compare to the kind of misery that's brought. Having tens of millions of young men with no economic or marriage prospects isn't great for stability. Youth unemployment was so horrible that they stopped publishing anything on it, and if China's admitting their population is shrinking, it's likely been doing so for a decade now.

Their obsession with Taiwan is why I don't believe they can back down. Taiwan might not be a threat in the military sense, but they're a threat to the CCP's power. Taiwan is proof that dictatorship isn't innate to Chinese soldier, that they can thrive under a democracy. China spends about twice as much on internal security as they do on their exterior military, and they stopped reporting so-called "mass incidents" over a decade ago.

I'm not happy about Trump, to put it mildly, but he's absolutely right in taking a hard line on China. I know people like to say he's provoking them, but when the Philippines congratulated the Taiwanese president on his victory, standard diplomatic protocol, the CCP threatened to burn all their cities to the ground if they didn't retract the message. They're more than a rival, they're an enemy, even if many of those in power would rather obsess over climate change and pronouns.
XXXXXXXXXX
It's not that we don't still have our industrial capacity, even with all the jobs being outsourced to poor countries. It's that it's been drowned in red tape and bureaucracy. If you want to build something, you first need a 600-page environmental impact report to make sure it doesn't hurt in any way some tiny creature most people have never heard of. In my home state of California, they've used trillions upon trillions of gallons for the Delta Smelt, a fish about the size of my pinky.

And while constructing something, you need another 600 page environmental impact report, so little wonder we have so many cost overruns and delays. I might be exaggerating, but not by much. In a world war, this would be removed, but it would still take a couple of years to make up for all this, especially since I suspect our leaders will be slow to recognize what's likely to happen.

Conservatives have been complaining about this for as long as I can remember. What I find interesting is that some liberals are starting to agree. We have California's train to nowhere, Biden's effort to build electric vehicle charging stations that cost billions, with only a literal handful of stations. A multi-billion dollar project to provide high-speed internet to rural areas didn't connect a single home. I suspect it's gotten so egregious that even some liberals are appalled.

[Phong Tran]

China definitely has internal societal problems as Trevor and Navigator have pointed out. Whether those issues could be the catalyst that allow the CCP to enforce martial law and to attack Taiwan, or at least create a naval blockade around the country, I'm still not sure. If they were to attempt a naval blockade, the advantage would be that it's at least much closer to their military sphere of influence and would require less naval capacity and force, however, if that military demonstration were to be quickly defeated by the US/Coalition Naval forces, the CCP would never live it down. An external humiliation such as that would almost surely result in an internal revolution and CCP downfall.

It's easy to criticize their one-child policy based on the negative resulting consequences, especially female infanticide, however there were positive factors that actually contributed to China's economic development and growth during it's incredible GDP rise from 1980 to the early 2010's. It is estimated that it reduced births during those years by approximately 400 million. Those births would have slowed China's economic growth as more agricultural imports would have been required to support that population growth. As well, looking at their youth unemployment and surging unemployment today due to the trade war, it could be argued that had they not enforced the one-child policy, they would have been in an even worse internal situation by early 2010s. At least the extra 10-15 years has allowed them to move a greater population out of poverty while increasing their middle class population. The problem was that they ultimately relied too much on manufacturing and construction for their economic growth.

The weakness of the CCP, just like most political communist governments is that they unfortunately don't realize when they should let go of their control. The key reason why their economic innovation and structures to develop internal consumerism are absent is because no one trusts that the CCP would not just confiscate anything and everything they have if they wanted to. Thus, capital does not stay to help build a middle class feedback loop; it instead flees for self-preservation, thus, the housing bubbles in places like Australia, Canada, US, etc, the cross-border escape and growth in cryptocurrency (Bitcoin), Gold, etc.

Circling back to the trade war, and the US and China's struggle for dominance, I believe the US made a miscalculation. I believe their intention was to reiterate to the world that they were and still are the only superpower in the world; that if you want access to the latest technological advancements and best manufactured products, then you should be willing to pay for it. But in doing it the way they did, instead of reinforcing their identity and US Dollar as the reserve currency, they actually did more harm than good. Not to say that the reserve status will crumble tomorrow or next year or even in 10 years, but the seeds have been planted for the US Dollar to be replaced; by what, who's to say. One of the requirements for a reserve currency is that the currency has to be readily available for trade, and the US has basically told the world that they will be reducing the amount of US currency availability for global trade. I know John has always said that there will be a global deflationary depression, and that would make sense if no there was no longer a true reserve currency that anyone would use except gold or bitcoin. Good currencies always chase out bad and once hoarding starts, countries will only purchase what they need and keep the rest.

[Navigator]

The CCP didn't just make a monumental disaster in the one child policy. More recently they shut down Tutoring, which was a major industry/employer of younger university grads. Then they put serious clamps on their domestic computer gaming industry, also causing that sector to go into a serious downturn. Both of these decisions erased a large number of good jobs that youthful university graduates were looking for.

Now they have a very serious cultural problem with what is called "Let it Rot" (a term youth are using to explain why they are dropping out of society). Young people with little/no prospects are refusing to enter the workforce and live a subsistence lifestyle at home. This is causing further contraction of the economy, and is enabling anti-CCP sentiment.

Taiwan seems to be the issue that the CCP has chosen to rally its people around the flag (and CCP leadership). So in a crisis of confidence concerning CCP rule, they will most likely move against Taiwan. A blockade against Taiwan might seem a pragmatic approach, but I don't think the CCP will opt for that. As you point out, the USN could break the blockade, and the CCP would lose serious face (if not collapse). Also, it would be tough to institute martial law if they only went with this option.

Instead, I do see them going for a much more aggressive approach, probably a surprise attack against USN targets and western Pacific US bases (Guam, Okinawa), once they decide to pull the trigger.