By Oliver Green
China is now indisputably a severe strategic and military challenge and have been predicting as much for years. I also mentioned and discussed some of the methods in which we will have to resort to in order to contain and defeat it in the coming years in the CANZUK post discussion. However, it is not a credible challenger of the international system and will never supplant the United States as the global hegemony, no matter how much the Chinese Communist Party desires such an outcome by 2049. It simply doesn’t have the natural resources to meet its requirements, which is why Beijing has long been perusing a policy a trying to buy up everything in sight and depended on imports of raw materials (including from nations outside of its influence) to sustain its construction boom. But, China is becoming more and more aggressive precisely because it has already long exceeded the limits of its export driven boom instigated by the reforms of Deng Xiaoping, which was later accompanied by the surge in US/Western trade and investment and China’s joining of the WTO in 2001.
However, “China’s rise” is now over! Its double digit GDP growth is well and truly in the past, and its 5.2% growth rate for last year was only just enough to support its population of 1.4 billion people, and it has now amassed a massive debt to GDP ratio of over 287% as of last year as a result of all the economic stimulus measures, resource missallocation and resulting asset bubbles that were produced to sustain its double digit boom. In addition, it’s now losing its export competitiveness to other emerging markets due to its shrinking workforce and resulting wage inflation taking hold, as China is now facing acute demographic decline and an ageing population, and it is seeing an outflow of Foreign Direct Investment for the first time. Whilst China itself doesn’t possess any sufficient quantity of natural resources and is reliant on foreign imports and trade with the west. Also, Geo-politically China is in a very precarious position, as the rest of the world is only accessible to China via the South China Sea which is controlled by the United States navy, and something which any US President can choose to end at any time with the stroke of a pen, greatly helped by the fact that China is surrounded by US allies and has very few friends. Whilst the Chinese economy is also having to live with the raft of US sanctions which President Trump introduced and which President Biden has maintained since taking office!
Thirdly, China has remained addicted to exports, relying on them for nearly 18% of its GDP, with the US by far its biggest customer, as the CCP has totally failed in its attempts to properly diversify and modernise the economy toward a consumption lead model, largely because it’s a heavily distorted and centralised command economy, which lacks the genuine transparency, democratic governance and rule of law needed to produce a fully functioning, dynamic and open economy which investors, entrepreneurs and other participants can operate freely, fairly, confidently and sufficiently profitably in. Consequently, China remains stuck with the same wealth division and dynamic that it had in the 19th and early 20th Centuries, namely a relatively wealthy eastern coast line which benefits from western trade and investment, while the rest of the country and interior remain below the income levels required to boost consumption. So, China is effectively boxed in by powers hostile and distrusting of it, and the more aggressive and bullying it inevitably becomes as a result of its weaknesses, the more distrusting and defensive the rest of the world will be towards it, further isolating and preventing it from achieving its impossible goal of global hegemony.
In truth, China would have more luck if it were in a different part of the world and not occupied by desert, which accounts for roughly 27% of its geographical area. Therefore, the threat that China poses is one of an external dysfunctional and incompatible strategic adversary, (similar to the threat once posed by the Soviet Union) but definitely not as a contender or serious alternative of it! Consequently, we’re going to have to oppose China as we did the Soviet Union, through a sustained and committed process of containment, isolation, realpolitik and substantial collective military spending, coupled with sanctions and import tariffs. As an immediate priority we’re going to have to fully re-pivot to Asia via an expansion or replacement of NATO and re-invigoration of western alliance structures.
Throughout the Cold War the Soviet Union was contained through the establishment of alliances stretching from Western Europe to the Middle East, forming the bedrock of NATO. We now need to re-pivot by doing this again through establishing an equivalent series of alliances stretching from Australasia and South East Asia to the Middle East, and this is something that post-Brexit Britain is now well equipped to help with, as many of the nations along this line are either Commonwealth, Anglo-sphere countries or both, and which are all too keen to renew ties and cooperation. One example of this being the establishment of a new post-Brexit trade and defence alliance of the commonwealth and Anglo-sphere nations designed to act as a substantial cohesive global partner of the United States called CANZUK, a trade and defence partnership of Canada, Australia, New Zealand and the United Kingdom, which can be continually expanded to aid in the expansion and incorporation of south east Asian nations into a new western security and trade alliance structure to block China’s southern flank.
Furthermore, the United States itself will need to make good on its recently announced official policy of supporting the rise and success of India, which is the only nation on earth capable of matching China by population, and which is set to overtake China’s population by the middle of the century. There are other powers which we’re also going to have support at least for the time being in their re-emergence. The first is Turkey, so as to enable it to take a more active role in maintaining Middle East stability and serving as an additional counterweight to Russia. The other is Japan which we’re going to need to fully re-arm and enable as a serious regional buffer, as it’s the only South-East Asian nation capable of holding its own against the Red Dragon.
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