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The Long-Term Strategy for The Collapse of The Chinese Economy

Western experts have repeatedly made forecasts that China will soon meet the fate of the USSR, that the Chinese economy will collapse, but none of the forecasts have come true to date, so today everyone is convinced that China’s economic power is something of a constant, that other political actors should put up with this factor. However, in fact the situation is different.

Firstly, a frequent cause of misconceptions about the state of domestic politics in China is the lack of relevant information about it.

The causes may be Beijing’s closeness to the outside world and the lack of objective expertise in the field of Chinese studies. Indeed, Anglo-Saxon sources view Beijing exclusively as a threat and an enemy that “will surely fall soon”, while in Russia, for example, the situation is the opposite, where propagandists seek to please a stronger partner and idealize its policies too much. There is no denying that Chinese lobbyists and the overseas offices of Chinese media also contributed to that.

Secondly, there has been a sustained and deliberate strife against China, aimed at bringing down its economic and military capabilities. These measures have been implemented for a decade as part of an entire anti-Chinese strategy.

The first part of this strategy dates to the Arab Spring in 2011.

Many are not fully aware of the impact that anti-government protests and the overthrow of several political regimes in the Middle East have had on the world community since then. Nevertheless, even the PRC has been largely affected. Bashar al-Assad, Hosni Mubarak, Muammar al-Qaddafi, and Omar al-Bashir were all associated with huge Chinese investments.

The puppeteers who instigated popular unrest and overthrew rulers undesirable to Western elites also destroyed infrastructure built with Chinese money. China’s reputation was torn apart and the CCP found itself at a complete strategic disadvantage. Beijing’s “soft expansion” was literally trampled and burned by rebel groups and radical Islamists.

According to some reports, China unofficially supplied the Gaddafi regime with weapons worth $200 million, and the volume of investments it lost in Libya officially amounts to $18 billion – and that’s not counting the fact that Libyan oil accounted for 26% of total oil exported to the Celestial Empire. In 2011, China even threatened to send warships and landing units to support the regime of Bashar Assad, but still did not dare to go to the end – because America has already implemented its containment strategy off the coast of China itself.

It was time for the second phase. China clearly needed to modernize its military-industrial complex to protect its investments and respond to challenges near its borders. Since 2012, the South China Sea gradually began to become a full-fledged battleground: the U.S. Navy rapidly increased its presence in this conflict-ridden region, while “peaceful Chinese fishermen” were sinking Vietnamese border ships and killing Indonesian fishermen. Japan and Taiwan have embarked on sweeping defense reforms. It became increasingly popular in the media and among experts that national movements in such regions of China as Xinjiang, Tibet and Inner Mongolia were a growing threat to China’s territorial integrity.

Due to this factor, Beijing entered into a U.S.-imposed cycle of large-scale rearmament and the creation of entire branches of the military from scratch, which required enormous resources for development and production. Many might say that the Chinese have almost endless financial resources and can afford any modernization project, but this is not true. China is now already reducing the rate of spending growth, although it is still a long way from achieving qualitative and quantitative parity with the Western coalition.

In addition, there is the necessity to narrow the technological gap.

The Chinese weapons cannot compete with the latest U.S. developments; the PRC is mainly engaged in buying or plagiarizing obsolete technology from the former Soviet Union. This is especially evident in the aviation industry, where China tried to buy the Ukrainian Motor-Sich plant in order to obtain technology for the production of aircraft engines. By the way, the Ukrainians, not without instructions from American supervisors at the time, deceived Beijing and nationalized the factory, leaving the Chinese without money and without aircraft engines.

The third blow to China was the crisis in the production of the key industry of the coming “digital world” – microelectronics.

Microchips are an integral part of any modern technology, and leadership in their production means leadership in the entire global economy.

The peculiarity of this industry is its rapid development, and factories are constantly in need of more and more advanced units for chip production.

China has factories as well as rare-earth metals as raw materials, but the equipment for production is created in only two countries, the Netherlands and Japan.

Japan’s position on its adversary in the region is clear, and the Dutch ASML, which was the only partner of the Chinese companies in the supply of equipment for chip production, broke off relations with them after pressure from the United States. At the moment, China is stuck in the development of all innovative industries for several years, as it cannot modernize the most important component of any machinery.

The U.S. is also cutting off Chinese industry from innovation through other companies, for example, Google has deprived Chinese technology giant Huawei of access to its services.

As a result, we see that without Western technologies and patents on them, without technical support, China’s huge industry seems unpromising.

The latest crisis factor for China is the difficult situation in the energy sector, as mentioned above.

Since the spring of this year, China has faced energy supply disruptions. In the fall, the situation worsened, temporary power outages at factories began, the regularity of maritime supplies in the escalation described above was called into question, and the energy infrastructure in Central Asia is at risk after the fall of the regime in Afghanistan.

The suspension of coal shipments from Australia following a series of diplomatic scandals has been another severe blow to China’s energy sector, which in the context of a trade war with the U.S. should, on the contrary, work harder than usual.

Of course, at this point we are not talking about the unconditional defeat of the PRC in the global confrontation; even the head of the US Joint Chiefs of Staff, General Mark Milley, has recently stated the formation of a world order with three centers of power – the United States, China, and Russia. Nevertheless, there are doubts that Beijing will be able to maintain its stabilizing role in Eurasia and the Pacific, therefore, its weakening would only lead to new escalation points and give the US new opportunities to generate chaos in the world.