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this post was submitted on 03 Dec 2024
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They made a miscalculation with Russia. Russia itself was shocked how well it stood up to sanctions.
I think they know the implications very well. The calculus is simple: right now they have the high ground and most of the cards. They have hegemony, dollar dominance, control of SWIFT, the ability to sanction anyone anywhere and strike fear into huge chains of private actors like companies that they don’t touch anyone who touches anyone who’s on the shit list. They have cultural dominance and they have high technology dominance.
If they do nothing they lose all of that. The longer they wait the weaker they are and the stronger China is. The only reason they haven’t gone harder yet is China was smart to weave themselves into the western economic system. But that’s what these moves are for, to reduce their exposure and then end it. They do it piece by piece to reduce the shock and prevent any capital backlash. Salami-slicing.
You have to remember that during the Cold War the CIA managed to buy Soviet titanium for their military aircraft without the Soviets catching on while doing their damnedest to strangle the USSR with economic embargo.
The US has mature intelligence and sanctions apparatus with decades of experience and intel from a coterie of vassals and their various hacking and internet cable intercept efforts. China can’t uno reverse sanctions as effectively due to its position.
I think the US succeeds in its high tech decoupling though fails at suppression.
But if they can’t suppress them they’ll exclude them and bifurcate world supply chains, create bloc conditions like the first Cold War and work to foment unrest, extremism, counter-revolution, and balkanization in China, Russia, and other partner nations like Iran.
Another thing. China having to send goods to be finished in Vietnam or India is good for the US ability to impose sanctions on China while evading retaliation. As we’ve seen with Russia and in fact that Cold War titanium buying the US will launder its purchases with the help of companies in those countries to appear like they’re going elsewhere meaning China’s sanctions won’t have much bite without that whole mature intelligence apparatus to catch and stop evasion which is what the US has and can do.
I think we're well past the point of the west having any sort of dominance. Russia showed that you can trade outside SWIFT just fine, and now that's only going to accelerate. Once you figure out how to do it with one county, it becomes much easier to scale that to others. Everybody understands the risks of being stuck in western financial system, and everybody except the vassals is trying to derisk.
The west is a tiny percentage of the global population, and most of China's trade growth is already coming from the Global South https://asiatimes.com/2024/05/2-words-explain-china-export-surge-global-south/
There's also no technological dominance to speak of. China has either caught up or is leading in most technologies. China is slightly behind in chips, but that won't last long. https://archive.is/knQyl
Meanwhile, Russia is now far ahead in military tech. For example, the west has nothing comparable to Oreshnik or Iskanders. Russian military now has by far the most experience fighting a serious war, and the military industry is outpacing the west.
The empire is now stuck in losing proxy war in Europe, it's got trouble in West Asia, it's getting squeezed out of Africa, and their allies in places like Korea are becoming unstable. While the US would love nothing more than to focus on China, there are too many existing pressure points for them to do that.
The reality is also that the west is utterly deindustrialized. Russia is able to produce three times artillery shells of all the western countries combined, and Chinese industry absolutely dwarfs Russia. https://www.cnn.com/2024/03/10/politics/russia-artillery-shell-production-us-europe-ukraine/index.html
It will literally take decades for the US to build out industry at that scale, and that's assuming there was sustained political will to do that.
What I expect to happen is that we'll see economic blocs forming around G7 and BRICS. There's likely to be decoupling going forward, but BRICS is simply a bigger economy with more resources and people. The west is on the losing end of this equation.
The reason the west pulled ahead after WW2 wasn't because the US is smarter than everyone else or they're supremely competent. It was simply because the US got to sit the war out because they were across the ocean. Europe burned, USSR burned, China burned. All the while, the US built out its industry and then when the war was over it became an economic powerhouse by virtue of being spared the destruction.
Today, the situation is completely different. China has a far stronger economy than the US, and it's far more politically stable. It's the biggest trading partner for majority of the world, and it produces essential things that the west does not.
The bite of sanctions and tariffs is going to mostly affect the public in US. It's going to be exact same scenario Europe finds itself with Russian energy today. Europe still buys it, but it has to go through intermediaries driving up prices. People in US will still be buying Chinese goods, but they're going to see even more inflation coming their way. This will only further feed into political instability within the US.