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In a recent article in the Australia, Greg Sheridan wrote “How China and its allies are winning the new cold war”. To slightly paraphrase one section, Sheridan wrote: “Beijing is taking every step to equip itself to fight a major war against the US. All the authoritarian (nations) have built, or are building, wartime economies. Almost all the democracies are half asleep. And it shows.”

Sheridan is largely correct. Most Western nations have either ignored, or simply don’t understand, China’s economic and military strategies. As an aside, we can also draw unmistakable parallels with Western disregard or ignorance of Russia’s ‘redlines’ regarding Ukraine and NATO – although the stakes are a lot higher when it comes to China.

Over the past 10-15 years, in particular, we (the West) have ignored or been too timid to counter China’s excesses, such as building islands in the South China Sea, because we wanted a continuing stream of cheap goods. We achieved that goal but missed the big picture although the Chinese haven’t been hiding their intentions.

Since President Xi came to power in 2012, the West seems to have misunderstood Xi’s oft stated words that China’s goal is “the great rejuvenation of the Chinese nation”. That isn’t some hollow patriotic slogan – he means it. And the goal is to be achieved by 2049 being the 100 year anniversary of the PRC.

And just to be sure the point got through, back on October 1st 2019, President Xi said in a speech marking the 70th anniversary of the PRC that: “Today a socialist China is standing in the east of the world and there is no force that can shake the foundation of this great nation.” He went on to say that reunification of China with Hong Kong, Macao and Taiwan was only partially achieved.

To achieve this unification and firmly establish China as the pre-eminent world power, China must continue to expand its base by forging partnerships that may disrupt or destabilise pre-existing localised alliances and undermine the international order.

One example of this was the ‘One Belt, One Road’ initiative which serves as a backbone to influence. Effectively, all projects are financed by the EXIM Bank of China with a loan ratio of 85% Chinese loan and 15% local government input. We know what often follows later is delayed debt payments resulting in transferral of local equity giving EXIM Bank (ie. CCP) control.

Alternatively, we have seen more direct actions some of which were characterised as ‘wolf-warrior’ diplomacy. China subsequently backed away from that approach only to replace it with new development loans or outright gifts such as roads, buildings and other infrastructure. Not in the Pacific, Africa and other places did this happen because China had a sudden rush of benevolence.

The point of these loans and other largesse is that Xi recognises that China’s plans to unification by 2049 cannot be achieved peacefully as core aspects of the prevailing international system are incompatible with its strategy. And, because the US is their main international competitor, China sees all US security alliances and partnerships, especially those in the Indo-Pacific region, as destabilising and irreconcilable with China’s sovereignty, security, and developmental interests. Thus, China’s efforts to foster widespread influence has a longer term goal of cultivating, and then choreographing, their community of allies.

This first stage of destabilising Western hegemony, and for China to meet its goals to become a “great modern socialist country”, is the applying of influence. Similar to Donald Trump recognised the ‘fly-over’ States as being ripe for the picking and consequent winning of the Presidential election in 2016, China has recognised that the West has largely ignored many nations whose ideology or geographical location is not deemed important enough. These must be cultivated as friends of China.

Other nations, including Australia, are subject to a periodic charm offensive from a Chinese delegation and we dutifully fall in line. Nothing too controversial is raised. We dare not raise the ire of China lest we suffer trade restrictions.

The second stage is for China to cement national rejuvenation and international status. Xi describes this as China being “the global leader in terms of composite national strength and international influence.” Couple this with a (planned) dominant world-class military and Xi’s words about China’s ascension to the top of the international order, and that China will establish a “community with a shared future for mankind”, should resonate within us.

Of course, there are some recalcitrants. Not everyone welcomes China’s vision of their global supremacy.

Skirmishes have happened and will continue to happen in the South China Sea and we can expect to witness far more Chinese naval activity in the Straits of Malacca, Celebes Sea and Sunda Strait. The recent naval interaction in the South China Sea between forces of the PRC and the Philippine navy is just another taste of the future. Pushing and prodding, the Chinese navy and Coast Guard will exert territorial pressure against other nations – many of whom have treaties with the USA – but the US won’t intervene at this low scale, and the Chinese know it.

On all the available data, it seems that it is only a matter of time before the military forces of the PRC sufficiently exceed those of the USA that China will feel able to fulfill her destiny. The Americans currently have a decisive military advantage in some elements (ie. aircraft carriers; helicopters, aerial refuelling) but how long will that advantage last? China is known to have four aircraft carriers at various stages of construction plus a litany of other military hardware. In any event, would the USA really go to war over Taiwan if China had six aircraft carrier groups loitering in the region? Hypothetical of course and time will tell, but there can be no doubting China’s rapidly expanding military strength.

If we ask ourselves who, other than the USA, could come to Taiwan’s rescue, there is no answer. No other nation, or even collection of nations, has the necessary capability without in-depth American involvement. Yet even with American involvement, Taiwan is incredibly vulnerable with a billion citizens fuelled with determined resolve to unite China once and for all, just 160km off the Taiwanese coast.

In any case, China is convinced that the assorted treaties between Taiwan and other nations will prove worthless in the face of Chinese militarily supremacy.

Meanwhile, China and Russia have drawn ever closer as Russia supplies China with inexhaustible quantities of raw materials and their world views coincide. Both see a new era of the East rising from the ruins of the failing West. Announcements such as the Russia/China ‘no limits’ declaration don’t happen by accident – it was a deliberate assertion of their view of the global future. To that end, China will endure Western barbs for not imposing sanctions on Russia over Ukraine as China has her eyes on the far larger objectives of global dominance and unification.

Which brings us to another aspect of Chinese preparations. It is well documented that the Chinese Central Bank has been adding to its gold reserves. In the past eighteen months it has purchased more gold than it had done in the previous fifty years. Further, in the past year or more, it has also been using its foreign currency reserves to buy gold instead of renminbi as they did previously. This means the Bank is reducing its stockpile of, and dependence on, the U.S. dollar. In a similar vein, China has been reducing its U.S. Treasury holdings. Those holdings have reduced from $1.1 trillion to $775 billion in a little over three years.

If all this sounds familiar, you’re right. Russia made similar moves (buying gold, selling down their foreign currency reserves) from 2012 to 2022 as well as the creation of the trading platform that mimics SWIFT (known as SPFS) for trade between countries.

Now of course, BRICS+ nations have moved to using their domestic currencies for trade between each other via SPFS – all of which will further shield China from dependence on the American dollar. Taken in isolation, these actions could be dismissed but given China’s stated goal, appear to be the start of a long road towards de-coupling, or insulation, from Western economic retaliation.

The point is that China is patiently making preparations for reuniting with Taiwan, by force if necessary. These preparations will take time as the Chinese military is not (yet) sufficiently formidable to fully dissuade the USA from military action. However, when the time comes, we can be sure that China will ensure she is militarily and economically insulated from Western reprisal.

Despite all the handwringing, we have done this to ourselves. For example, we had a chance to act as China built artificial islands around the aptly named Mischief Reef. No serious person believed China wouldn’t militarise those islands but the West was too intimidated and lacked collective resolve to invoke sanctions, much less a military response.

There are numerable quotes from President Xi about reunification with Taiwan, but I will leave you with this one. Speaking at an event marking the 110th anniversary of the revolution that overthrew China’s last imperial dynasty in 1911, he said he said unification in a “peaceful manner” was “most in line with the overall interest of the Chinese nation, including Taiwan compatriots.” So far so good, but then he went on to say “No one should underestimate the Chinese people’s staunch determination, firm will, and strong ability to defend national sovereignty and territorial integrity. The historical task of the complete reunification of the Motherland must be fulfilled, and will definitely be fulfilled,”

Xi is resolute and the West is very unlikely to have the capacity or will to withstand China. We should expect that Chinese school children will be singing songs about Xi as the great leader who united China and ushered in the bright dawning of the East. Listen for them on your radio – they will be played at the top of each hour before the news.


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June 25, 2024 11:43 am

Correct me if I’m wrong but hasn’t Putin cosied up to China coz of the US and Nato pushing the boundaries in Ukeland. No thought given that Russia would seek others to trade with. The US complaining that Ukeland had a puppet government controlled by Russia bad, but one controlled by us good. I don’t think china can decouple from the west. Spreading risk is all any country can do except for Ausfailure who’ll consistently put all their eggs in one basket. Taiwan has never been part of China except through incursion. Does this mean if a country invades China it is no longer Chinese. Might is right unless against china.

June 25, 2024 12:51 pm

China has recognised that the West has largely ignored many nations whose ideology or geographical location is not deemed important enough. These must be cultivated as friends of China.

China is now the largest foreign investor in Hungary and that investment has clearly come with some unsavoury political strings attached, such as not criticising China’s human rights abuses. A blot on Orban’s escutcheon.

Last edited 27 days ago by Roger
Bruce of Newcastle
Bruce of Newcastle
June 25, 2024 1:06 pm

All of China’s neighbours hate them because of obnoxious Chinese behaviour.

India recently cosied up to Taiwan, which shows just how badly Chinese diplomacy is going. Claiming a whole bunch of Indian territory doesn’t help. I suspect India has worked out from the Russo-Ukraine War and the Houthis in Yemen that an invasion of Taiwan is going to be an utter disaster for China. Ukraine is flat, yet has held the Russian Army to a standstill with massive casualties. Taiwan is mountainous. China could lose literally millions of PLA guys trying and failing to take the place. Defense has the upperhand on the current battlefield, hence the Houthis in their mountains thumbing their noses at just about everyone.

The other aspect is that Chinese obnoxious behaviour is causing decoupling, which is having a significant effect on Chinese employment numbers. Youth unemployment is serious, and that is feeding in to the laying flat syndrome and the population implosion. Beijing keeps on trying to encourage women to have babies, but are failing miserably – if there are no jobs for the men the women aren’t going to have families with them. Same in the West of course.

It’ll be interesting though since Xi is in a wicked use it or lose it equation. It won’t be many years before the aging Chinese demographics make sustaining military power infeasible. But if he uses it the results could, and probably will be catastrophic for his country – again because defense is the lord of battle at the moment.

June 25, 2024 1:15 pm

I have said it before, I’ll say it again.
China and her stooges push simultaneously two completely mutually exclusive narratives.

  1. China is already too formidable to beat, so just accept our new second class place in the Chinese century.
  2. China isn’t rival to us. They’re never going to catch up.

Various individuals at various times will buy into either of these stories because the actual reality is grim: we’re in the sh*t and the only way out is hard work over a long time including high prices, long hours and an end to the easy times of recent memory.
But try to say any of that and people start screaming at you.
Austerity is a dirty word.

June 25, 2024 1:19 pm

we’re in the sh*t and the only way out is hard work over a long time including high prices, long hours and an end to the easy times of recent memory.

The West has gone soft and stupid. The only question is, are we going to recover our mojo or go under.

June 25, 2024 1:27 pm

I reckon the US being ruled by unelected people in their Intello groups have lost sight of what’s good for the USA versus what’s good for them personally and their mates

The Intello groups power has been growing for decades and they can easily make or break presidents or any other role, if they feel like it.

Having complete power over other countries and millions of lives, builds hubris.

Now they have no clue how to dial it back, and have no qualms about having idiot Biden in the President’s role, their arrogance is so great.

What direction from here?

June 25, 2024 1:37 pm

The West has gone soft and stupid.

There are two kinds of animal: those tuned for abundance and those tuned for scarcity.
Watching men once again blown apart by high explosives on European battlefields, amongst the wreckage of towns and cities whose inhabitants have either fled or died; with losses mounting and attitudes hardening, we are in for some volatile times ahead.

June 25, 2024 2:18 pm

There is no coexisting with this evil communist regime

June 25, 2024 4:03 pm

China has a huge population that she thinks is her strength. It is not – it is her weakness.
Like a wrestler in a Jujitsu match, her size and weight can be used against her. One poor crop result followed by a drought and she is gone. No one can suppress 1.4 Billion empty bellies.
The communists know this, and we should be very wary of what she would do in extremis.

June 25, 2024 4:42 pm

Speedbox, this is a tour de force in analysis of a pressing problem for Australia – but one which many Australians are pretending that they cannot see.

Prior to Jim Molan’s untimely death, he wrote a short but focussed analysis of the “real and present” danger that China and the CCP poses for us “(“Danger on our Doorstep”). It seemed to me to receive little of the attention that it deserved. Indeed, we seem so uniformly blind to the Chinese threat that even the superb analyses of the Left’s own political warriors – such as Clive Hamilton(“Hidden Hand”) and Peter Hartcsher (“Red Zone”) seemed to have any effect in raising the alarm in this sleepy hollow of a country.

Well done, Speedbox!

June 25, 2024 8:05 pm

With (according to a quick google) 1.4 million ethnic Chinese in Australia, it wouldn’t take a huge proportion to bring the country to a standstill.
Big Australia has screwed us good and propper.

Perfidious Albino
Perfidious Albino
June 26, 2024 6:35 am

Yes, but I don’t think there a billion Chinese passionately invested in Xi’s vision. The clique in charge seem impregnable, until they aren’t. That said, Xi will be desperate to achieve his vision in his lifetime, which is where the real danger is, along with the corrupted polity in the US.

Rufus T Firefly
Rufus T Firefly
June 26, 2024 9:38 am

“Taiwan has never been part of China except through incursion.”

According to the US State Dept, as well as the UN, that statement is incorrect.

“The U.S. and Taiwan enjoy a robust unofficial relationship. The 1979 U.S.-P.R.C. Joint Communique switched diplomatic recognition from Taipei to Beijing. In the Joint Communique, the U.S. recognized the Government of the People’s Republic of China as the sole legal government of China, acknowledging the Chinese position that there is but one China and Taiwan is part of China.”

UN Resolution 2758:
“The General Assembly, ……
Decides to restore all its rights to the People’s Republic of China and to recognize the representatives of its Govt as the only legitimate representatives of China to the United Nations, and to expel forthwith the representatives of Chiang Kai-shek from the place which they unlawfully occupy at the United Nations and in all the organisations related to it.”
1976th plenary meeting
25 October 1971.

For those who may not be aware, Chiang Kai-shek was the leader of the breakaway “Republic of China”, (ROC), from Taiwan.

Boambee John
Boambee John
June 26, 2024 9:57 am

China’s big problem is the Little Emperor’s, sole children of parents who are themselves sole children.

Chinese culture is very family oriented. Losing a Little Emperor means the end of at least four family lines. Losing many thousands of them will have a severe ripple effect, not necessarily in Emperor Xi’s favour.

June 26, 2024 12:23 pm

Is the problem Chinese unification or the means the PRC might use to unify China? If its the former we have a problem because its perfectly reasonable to want to reunify a country that was previously in the middle of a civil war. Had a rump survived the American Civil War it would have remained an abiding aim of North to reunify. Less so of the CSA but in time might have become a policy under certain contingencies.
If it’s the latter, than try and engineer a circumstance in which more peaceful means are seen as the best means of reunification, or at the very least, give the pretense of unification some time in the future.

Bernie Masters
Bernie Masters
June 26, 2024 2:41 pm

One significant issue not mentioned is China’s population projections. Thanks to its one child policy and increase affluence, birth rates are well below replacement levels and, by 2049, China’s population will have decreased by possibly 100 million people. Parents will therefore place a much higher value on the lives of their children and will more strongly oppose sending their children to war, a position quite different to 50 years ago when most families had 3 or more children. At the same time, the USA’s population is growing thanks to immigration and its immigrant population’s birth rates are much higher than the existing population. Opposition to war will therefore be weaker in the US than in China, so the USA is in my view more likely to stand up to China and protect Taiwan over coming decades rather than stand back when China invades Taiwan.

June 27, 2024 6:34 am

You mentioned the Taiwanese casualty rate. The Taiwanese casualty rate will be 100% of the population. If they don’t die in the war, they’ll be shipped off to the Chinese slave camps apart from the necessary ones to run the chip factories and essential infrastructure until new ‘reliable’ Chinese techs can be trained.
No one gets to thumb their nose at Xi without retribution.
The exodus from Vietnam will be nothing like what will happen if the Chinese overrun Taiwan, and the Taiwanese know it.
You can bet they have nukes and will use them – they have no other option.

June 29, 2024 12:15 pm

I’d argue the glitter of riches goes back past recent time. It goes decades and even acknowledged by James Kynge China shakes The World, Western Companies knew they were losing IP to the Chinese, they knew they were at the whim of the Chinese political system but the profit to risk ratio was absolutely enormous. People were getting rich off China’s rise so threw caution to the wind, some made a killing, some walked away tail between legs licking wounds.

I personally know of a consultancy in Australia dealing with the mining game that folded after a AUD2mil bill was left unpaid by Chinese who took the data invoiced but didn’t think it was good enough so didn’t pay. They had no footprint in Australia so the civil action was moot point bit like Ch10/Paramount is going to find out soon. Another but slightly different is the defunct Major Drilling probably 20yo did a drilling project in China shipped in 4 UDR drilling rigs, newish. Once the project was done the drill rigs were just taken off the port they were meant to depart from by the CCP with no reason other than they are ours now. The books I have read highlight this behaviour is the norm for China.

Will Hutton writes some food for thought as well then there’s a Professor whose name and book escapes me & I can’t find it on my bookshelf who was very good about Chinese psyche that was very informative for my perspective. There is some good authors and books around but I have only found in Asian Airport book stores unfortunately. LOL I did get sucked in once by Gordon Chang once but after researching him, he is like Harry Dent and the next Depression just round the corner…

As for those Islands in SC sea. Militarily the first strike would render them useless for air projection, probably knock out the radars as well. They are there as a statement of claim, I believe there is a clause within UNCLOS or it may even go back further to the colonial era/medieval conventions that if an area is uncontested but settled by a claimant after 20 years they have claim to that area. The Phillo’s on Thomas Shoal is quite bothersome to Beijing. That is what these islands are for, every time the US or NAT/US Pacific partner sails a ship in a “right of passage” it disrupts that claim. Hence the screeching and pure aggression when it is done.

As for Chinese military. Big and formidable yes but I think I stated as an observation the other day that they haven’t fought a war since Korea at peer level unless you include Vietnam in 1979. The start of any conflict is going to be horrendous casualty wise, Xi better have the nationalist rhetoric dialled up to 11 when the body bags come home. I also think US, Japan, South Korea wouldn’t let an invasion of Taiwan go uncontested, that would bring in us, possibly some European powers as well.

In conclusion I’d say you are smack on with the west don’t understand China or even their psyche being the centre of the world and possibly a reversion to Sinocentrism as apart from the Westphalian system we are used to. This could turn out to be the new world order if they prevail. However IMO having to do some transactions after spending 2 years of my life in the developing countries of Asia there is very much a my way or the highway when it comes to ethnic European foreigners.

Again as usual my 2c worth for what it is worth.

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