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TM, ®, Copyright © 2015 Piero Scaruffi All rights reserved.


China's New Era (a History Lesson for Westerners) and a History Lesson on Prussia (for the Chinese)
Why China will be the new moral and political leader of the world
Let's make China great again
Articles on China before 2017


  • (october 2017) China's New Era (a History Lesson for Westerners) and a History Lesson on Prussia (for the Chinese).

    I was in China until a few days ago. I've been in China most of 2016 and already four times in 2017. My first trip to China was a long time ago, when the only traffic was bicycles and foreigners were a rarity. Now i have three books out in China and i witness first-hand the "great leap forward" that is taking place (not Mao's bogus one of the 1950s but the real one of the 21st century). There is no question that China engineered the biggest economic miracle of the last three decades that has cast doubts on the Western model of democracy. There is only one party in China, the Communist Party, and pretty much nothing happens without its approval: it is a "big government" model that must look like the ultimate nightmare to the conservatives in Washington. But no matter how many times your favorite right-wing pundit uses the word "socialist" in derogative terms there is no question that the more socialist countries have generally fared better in recent decades. Whether this is a trend or just an exception to the rule only time will tell. One day i was preparing a presentation on China and i suddenly started thinking of Prussia: more about this later.

    For now, the day of 17 October 2017 might go down in history as the day that China officially passed the USA in terms of credibility around the world. On that day China's president (who, unlike his mentally unstable US counterpart, is widely respected around the world) delivered a three-hour speech at the meeting of the Communist Party that takes place once every five years (confusingly called "19th congress" because they start counting from 1921) in front of 2,300 delegates in Beijing.

    For both non-Chinese and Chinese listeners, it is difficult to figure out what is so special about Xi's three-hour talk, other than the reference to a more active role in the world. Mostly, it sounds like the usual self-congratulatory speech by the leaders of the Communist Party, enthusiastically approved by the 2,300 delegates (no dissenters!) including his predecessors Jiang and Hu who had disappeared from the media.

    But China's history is largely a history of moods, not of policies. Mao was a mass murdered and the Chinese know it, but they respect the mood that he created: he united the country, kicked out the foreigners, and founded the current republic. Deng was equally important in changing the mood, not only the economic policy. He created the mood that it is good to make money, it is good to innovate, it is good to imitate the West (which Mao painted as an arch-enemy). But after Deng, Jiang and Hu, the average Chinese still felt an inferiority complex towards the West. When i spoke with a Chinese venture capitalist about a humanitarian project at Stanford, he replied that the West can afford to "waste" money and resources on humanitarian projects whereas China is still a developing country. Now comes Xi's mood change: Xi is telling the Chinese people that China is now a great world power, not just a big developing country. One sentence stood out: "It is time for us to take center stage in the world and to make a greater contribution to humankind".

    Another key point of Xi's speech was that China does not want to copy foreign political systems; in fact, it wants to represent a role model for other countries. He specifically stated that "finally" the world has another model to choose from. Indirectly this was also an admission that Soviet-style communism failed (we knew that, duh) but it was, directly, a plain reminder that Western-style democracy is failing too. Chinese media remind daily the Chinese people of the crises and chaos in Western democracies.

    China's president Jinping Xi (who took power in 2012 at the previous meeting) is widely considered around the world as one of the few honest, competent and "adult" leaders. Merkel is the other one. Britain and the USA, the old role models of Western democracy, are viewed as run by incompetent amateurs elected by an ignorant and short-sighted public. When US president Donald Trump (also internationally known as the "dotard" and the "moron" or quite simply "Vladimir") speaks, the world treats him like a pathetic wining child. When China's president speaks everybody listens attentively, whether you agree or not with what he is saying.

    When Xi said that China should "take center stage in the world", he simply stated the obvious: as the USA (courtesy of Putin's lackey Trump) withdraws from TPP, Paris Climate Agreement, Unesco and so forth, China quietly takes the leadership with the One Belt One Road initiative, an inspirational speech by Xi in Paris, a commitment to the international order, and so on. China already "is" center stage: it is situated between Europe and Japan, between the Middle East oil and the Far East "tigers", between Russia and the USA.

    China is center stage because both the two superpowers of the 1980s self-destroyed. It is not the first time in history that two powers fight for decades until a third one emerges and defeats both. Think of Alexander conquering Greece after endless wars between Athens and Sparta, or of the Arabs conquering the Middle East after endless wars between Rome and Iran, or of Germany's rise in the 19th century after centuries of British-French wars. The dominating powers waste money and resources in fighting each other all over the place while a third country is quietly building up its potential.

    To understand Chinese policy, we have to understand that China is very good at learning from other countries' mistakes. To start with, China learned from the Soviet Union the danger of democratizing: the Soviet Union collapsed and splintered after its democratic reforms. In less than two years the Soviet Union, that was the second most powerful country in the world, vanished.

    At the same time, China learned from the USA (and from the British Empire) the danger of being a global superpower: eventually, you go bankrupt. China is not the most powerful country in military terms, and probably does not aim to be. The USA has 140 military bases around the world. It literally surrounds both China and Russia with it bases. China has not a single soldier or sailor around the USA. But China has money, whereas the USA is broke and has to borrow money from China. The USA is de facto on life support, on the verge of self-destruction just like the Soviet Union was. Not even Obama the pacifist could reverse this course. Obama withdrew soldiers from the endless wars of Afghan and Iraq but kept in place the grotesque planetary "defense" system of the USA. His successor is quickly making sure that military spending will resume at a breakneck pace, possibly including one nuclear crisis and one Middle-eastern war. Since the USA does not like to raise taxes (in fact, taxes may soon be reduced on rich people like Trump himself), all of this is unpaid, way beyond what the USA can afford with a $600 billion deficit and only $100 billion of cash reserves.

    China (whose government deficit is one sixth of the USA's and whose cash reserves are 30 times the USA's) could end the USA's supremacy at any time. It could simply overspend the USA on military projects. But China has probably no intention of doing so. Instead it has wisely used the USA for its own purposes. I once wrote that China is a colony of the USA because China's development entirely depends on the USA. You can also see it the other way around: China is funding the USA so that the USA, a bankrupt superpower, will keep protecting the world's trade routes. Those trade routes make China rich.

    China has learned to use the West for its own needs. If the US military wants to defend China's trade routes, let the USA be the military superpower (i.e. the one that spends the most to defend those trade routes). Being a military superpower has become a goal in its own for the USA, but it wasn't. A country has a military to defend its interests, which are primarily its domestic economy and its domestic security. The USA is using its economy to fund its military abroad instead of using its military to defend its economy. It wasn't this way a century ago. China has no such ambition. It is perfectly happy that the USA acts as a the policeman of the world. In a sense, China is using the USA as its private policeman: the current world order, imposed and promoted by the USA, has clearly benefited China more than the USA.

    China does not care that the USA keeps talking of democracy and capitalism as the ideal systems. China's socialism under the guidance of the Communist Party has amply proven to the world which system works better (and which system elects the wiser leader) and has established China as a more credible model for all countries in the world. Few foreigners noted the passage where Xi said that by 2050 China will become "prosperous, strong, democratic, culturally advanced, harmonious and beautiful". Yes, he also used the word "democratic" but after "prosperous" and "strong" and just before "harmonious". The word "democratic" has been ridiculed by the political situation of the USA, mostly hijacked by radical right-wing lobbies and by Russian operatives. China is perfectly happy to witness that Fox News in the USA is still busy attacking Hillary Clinton (one year after the elections) and ignoring the monumental events in China. China's attitude is: "let them fry in their own oil".

    Five of the seven members of China's Politburo Standing Committee, the seven who steer the country's policies, are retiring. President Xi and premier Keqiang Li are the only members to remain from the current committee. Xi's predecessors still wield some power: the new Politburo Standing Committee is a carefully balanced act trying not displease neither the Shanghai faction headed by Zemin Jiang nor the Communist Youth League headed by Jintao Hu. The second most powerful man remains Hu's protege Keqiang Li, the current premier. On the other hand Shanghai's chief Zheng Han is Jiang's man. Yang Wang is another product of the Communist Youth League, as well as one of the architects of the One Belt One Road initiative. Huning Wang, the de-facto foreign minister, served under both predecessors. The other two members are Xi's trusted Zhanshu Li, the top presidential aide, and Leji Zhao. Those who expected that only Xi loyalists would ascend to the top of the ranks have been disappointed: Miner Chen (another Zhejiang politician like Xi), It has widely been reported (and widely discussed in China) that now all the members of the Politburo Standing Committee are over 60, which means that all of them are likely to retire at the next congress in five years at the same time that Xi has assumed an unprecedented number of positions (only Mao had so many): who will succeed Xi? Both of his predecessors ruled for ten years and then gracefully bowed out to a younger successor who had been already elected to the Standing Committee but there is no young person now.

    Trivia: where are the women? While about 25% of the 2,000+ delegates are women (the same percentage that are members of the Communist Party and the same percentage that are members of parliament, which is a little higher than the USA's percentage), there has never been a female member of the Standing Committee.

    I don't know if Xi has studied European history, but i see 21st century China as very similar to 19th century Prussia (Berlin's state before Germany was unified). Hence my theory that China's "New Era" is simply Prussia's old era. At one point Prussia launched a program of rapid educational and scientific progress driven by the state that culminated in an economic and scientific boom one century and a half later. China is trying to do the same in a few decades.

    It started in 1741 with Frederick the Great's reform of the Royal Academy. He encouraged philosophers and scientists from all over Europe to move to Berlin. The first and most famous was Leonhard Euler, perhaps the greatest mathematician of the century. In 1763 Prussia mandated universal education for children (by comparison, Massachusetts did it only in 1852, first in the Americas, and England only in 1880). In the 1780s the intellectuals Immanuel Kant and Johann Herder were influential in shaping education in Prussia. Kant wrote: "Argue as much as you like about whatever you like but obey!" (1784), thus justifying Prussia's dictatorship while encouraging education. At the same time Herder stated that the goal of education should be the "Bildung", self-growth to become a good human being. Another indirect influence was Johann Winckelmann's book "The History of Art in Antiquity" (1764) that became immensely popular. Many German intellectuals saw the similarities between Athens and Germany, as well as between Germany and Renaissance Italy: the German nation was a federation of small states just like ancient Greece and 15th-century Italy. The man who formalized all of this was Wilhelm von Humboldt: he hailed the Bildung as the highest purpose of the state. In 1792 he launched a reform of education in Prussia with the establishment of classical schools based on Greek civilization and the "Abitur" examination. The immediate result was a great school of philosophy that hatched Johann Fichte, Friedrich Schelling, Georg Hegel and Arthur Schopenhauer. Soon there was another driver of reform: the humiliation of 1806, when Napoleon's French troops easily routed the Prussian army and abolished the Holy Roman Empire. Prussia's prime ministers decided that the only way to avoid a repeat of that humiliation was to adopt the innovation of the enemy: the Enlightenment. In 1810 the Berlin University was founded: this was the first university founded on research. In the 1820s Justus von Liebig at the University of Giessen started the first PhD program in science. Remember that, until then, engineers and doctors learned on the job and science was a hobby. Research had depended on patronage from nobility and gentry when the scientist was not financially independent like Charles Darwin. Prussia changed all of that and turned scientific esearch into a mission of the state. Prussia (and Germany in general) was still underdeveloped compared with Britain and France. It wasn't until the 1830s that the industrial revolution finally started gathering pace in Prussia. Prussia was still a very poor country. In 1854 alone 215,000 Germans emigrated to the USA. But by 1850 almost all German universities had converted to research institutes. Physics, chemistry and geology were regarded as equal to the humanities. The German world suddenly became a leader in the new sciences: Georg Ohm's electrical laws (1827), Gustav Kirchhoff's electrical laws (1845), Hermann Helmholtz's conservation of energy (1847), Rudolf Clausius' entropy (1850), Werner Siemens' dynamo and electrical machines (1866) Ernst Haeckel's morphology (1866), Hermann Helmholtz's physiology (1867), Wilhelm Wundt's psychology (1874), etc. And in 1870 the better educated country (Prussia) won the war (against France): science had overtaken technology. The following year all the small German states accepted to unite with Prussia under the guidance of Otto von Bismarck. The reputation of education skyrocketed, and university education came to be required for most government jobs. It was easier for children of the poor to get an education in Germany than anywhere else in Europe. In France the intelligentsia was alienated from the state. In Russia the intelligentsia consisted of aristocrats, and in Britain of wealthy individuals. In Germany the intelligentsia came from all social classes and supported the state. Germany had not been a united state before 1871 so its science didn't have a center like Paris in France. Science was distributed across many capitals: Berlin, Munich, Dresden, Weimar, Hamburg... The intellectual life was vibrant, producing Karl Marx at the same time that it produced Friedrich Nietzsche and later Edmund Husserl (phenomenology). Bismarck was fearful of British-style parliamentary systems, he was fearful of the Catholic church, and he was fearful of socialism. His foreign goals were to preserve peace in central and eastern Europe (the League of the Three Emperors of 1873, the Triple Alliance of 1882) and to put Germany centerstage in Europe (the German colonial empire started in 1884, and in 1889 construction began of the Berlin-Baghdad railway). Domestically, Bismarck created the first welfare state with sickness insurance (1883), accident insurance (1884), disability insurance (1889) and the retirement pension (1889). These were all innovative ideas at the time. Germany became the leader in chemistry. In fact, the German chemical industry (like Bayer and BASF) pioneered the industrial research lab and would dominate the market for synthetic products. Berlin became the electrical capital of the world, nicknamed "Elektropolis". German chemistry and engineering spawned the boom in dyes, pharmaceuticals and electrical devices that would change the lives of everybody. Robert Koch isolated the causes of anthrax, tuberculosis and cholera (1875-83), Ferdinand Braun discovered semiconductors (1876), Karl Benz built a gasoline-powered car (1886), AEG invented the alternate-current motor (1890), and Felix Hoffman discovered aspirin (1897). During this time Germany experienced a long economic boom that made it the second industrial power of Europe after Britain. This created the fear of being surrounded by a coalition of envious enemies: Britain, France and Russia. Britain was spending a fortune in maintaining the British empire while Germany was investing in its industrial development. Finally, in 1900 Germany's industrial output surpassed Britain's. Germany was still behind in theoretical science: its scientists were great at improving a theory invented in Britain or France, but Germany had no equivalent of Isaac Newton (physics), Antoine Lavoisier (chemistry), Charles Darwin (evolution), James Maxwell (electromagnetism) and Sadi Carnot (thermodynamics). It was just a matter of time: in 1900 Max Planck started Quantum Theory and in 1905 Albert Einstein invented Relativity. The preeminence of German universities was absolute. In 1909 Max Planck delivered a lecture at Columbia University speaking in German: every physicist in the world was expected to understand German. All along, Germany eskewed the democratic model that was becoming increasingly popular in the USA, France and Britain in favor of its own version of democracy. In theory, every male citizen was entitled to vote in parliamentary elections, but parliament had little power over the government: ministers were appointed by the German emperor ("kaiser") and served at his will. Economic success also yielded a sinister strand of nationalism: in 1895 Alfred Ploetz published "The Efficiency of Our Race", and at the same time Paul de Lagarde hailed folkish Northern European culture as a better alternative to the classical Graeco-Roman culture.

    I'll let the reader decide which part of Prussia's history mirrors modern China's.

    See also Why China will be the new moral and political leader of the world and Let's make China great again.

    TM, ®, Copyright © 2017 Piero Scaruffi All rights reserved.
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  • (july 2017) Why China will be the new moral and political leader of the world.
    Since the end of World War II the USA has been the "leader of the free world", helping Europe defeat fascism and then defeating communism. Fascism and communism were despised pretty much all over the world, and the USA was viewed by billions of people around the world as a better model, if not a liberator. When Islamism (the people who want to impose the original form of Islam) threatened the world, again the USA was viewed as the leader in defending the "free" way of life. Freedom has been valued above everything else for almost a century. But times have changed. The vast majority of non-Islamic countries are democracies, and many of them (Canada and most of Europe) are more authentic democracies than the USA (where the man who loses the election by three million votes becomes the president) and boast higher standards of human rights (the USA still has the death penalty) and higher citizen's participation (the president of the USA is usually elected by a lot less than 50% of the citizens entitled to vote).
    It is even doubtful whether the USA still defends the ideals of democracy, since its closest allies are Islamic dictatorships like Saudi Arabia (the originator of Islamic terrorism) and racist states like Israel. And its record of "helping" people create democratic states is terrible: Yugoslavia, South Sudan, Lybia, Syria, Iraq, Ukraine, Afghanistan never recovered from the "help" that the USA provided to the democratic revolution. Lucky the ones who were never helped by the USA, like North Korea and Iran.
    The USA is no longer the most educated country in the world, surpassed by both eastern Asians and northern Europeans. And the US economy, already surpassed by the European Union (before "Brexit"), will soon be surpassed also by China. Once countries adopt the capitalist system, it is hard for the USA to maintain its supremacy: they can all become as productive as US workers and in many cases even better. The immigrants that used to flock to the USA have more choice around the world, and the USA is even discouraging them from immigrating. Thank you USA for past leadership and role model.
    But the times are changing, as usual, and the world needs a different kind of leader, not a leader that bombs fascists and communists, but a leader that solves global problems. The leadership of the future will belong not to the "leader of the free world" but to the country that leads in tackling global problems such as climate change and terrorism. The USA, even assuming that its dysfunctional democracy still represents "the free world", has failed miserably in tackling global problems. Many actually blame the USA for contributing more than anybody else to climate change and terrorism (it is the USA that created the oil economy that benefited mainly the states harboring Islamic terrorism).
    China's president Xi has understood clearly this fact and positioned China as the country of global solutions rather than the country of regime change. As the USA was withdrawing from the biggest transcontinental free-trade agreement of all times, the TPP (Trans-Pacific Partnership), and from the Paris accord on climate change, China's president has been quick to seize both opportunities and position China as the defender of both free trade and climate science.
    2017 gave us a verdict: the new leader of the world is not the USA but China.
    It is telling that China is building a new "silk road" towards Europe, and that the European Union and China are increasingly partners whereas the European Union and the USA are increasingly rivals: most of the EU did not want the invasion of Iraq in 2003 and now does want to fight climate change, which happen to be precisely China's policies back then and now. It is just a matter of time before Europeans realize that their ideals and principles are more often aligned with China's global responsible approach than with the USA's greedy parochial protectionism. And viceversa: Angela Merkel is widely respected in China for her compentent and responsible leadership, whereas Trump... well, he's not exactly respected anywhere, let alone in China. (The Chinese shamelessly bribed him by granting him the trademarks that he wanted for his business and he immediately gave in like the cheapest whore in the brothel). The new leader of Europe is Germany, and, after Brexit and Trump, Germany finds itself much closer to China than to the old Anglosaxon powers. In fact, in June 2017 China overtook the USA to become Germany's main trading partner.
    While the US president denies the value of statistics, polls, science and facts, the Chinese president quotes statistisc, polls, science and facts. The world has lost its patience with a country that every now and then elects Reagans, Bushes or Trumps, presidents who pull the world backwards for four or eight years. The Chinese Communist Party has consistently appointed competent and diligent leaders. They are certainly not democratic leaders, and they certainly don't allow free speech, but they have mostly made clever decisions and are respected by every country in the world. The current president of the USA is probably the least respected leader in the world, and at one point Bush polled lower than Osama bin Laden in many countries.
    It is not just one ridiculous president embarrassing the USA: the world lost faith in the succession rule of the USA. First, the world had to cope with the incompetence and corruption of the George W Bush administration, that started two wars, didn't pay for them, and showered friends of Dick Cheney and Donald Rumsfeld with one trillion dollars meant to rebuild Iraq and Afghanistan. Now the USA showed the same movie again, but with even more comical actors: the new president is a certified scumbag, who based his campaign on vicious insults against everybody, and he lost the election by three millions votes. Who will be next? Rush Limbaugh? Sean Hannity? Some porno star? Will the USA get a president who lost the election by 5 million votes? 10 million votes? 20 million votes? China, meanwhile, has consistently enjoyed a smooth and drama-free transition of power, appointing leaders who have university degrees and decades of solid experience. The world can rely on any deal that China makes because its succession rule is a guarantee. The world can no longer rely on anything the USA does because its next president could be just about anybody. Dealing with the USA is like playing the lottery.
    It didn't take long for China to figure out what Trump is: a con-man, a snake-oil peddler, a traitor who would gladly sell his own children for a few pennies. Hence, China proceeded to simply bribe him: China approved 38 trademarks for Trump that Trump had been trying to get for decades, covering everything from hotels to golf clubs, that will enable Trump to expand his business empire to China; China approved three trademarks for Ivanka Trump's jewelry and spa brand (on the very same day that she and her husband Jared Kushner dined with China's president Xi at her father's exclusive Florida resort Mar-a-Lago); the Anbang Insurance Group, de facto owned by the Chinese government, approved a deal with the Kushner family worth $400 million for a tower in New York (this deal has been put on hold after the outrage it generated in Congress). In a blatant case of corruption, Trump has completely reversed his stance on China (remember when he called it "a currency manipulator"?) and now treats China as his best friend (well, second best after Russia).
    It is just a matter of time before the world realizes that China is a far more reliable and far safer choice than the USA to lead the global community.
    Historically speaking, it is not the first time that the fight between the two reigning powers benefits an outsider. Think of the Eastern Roman Empire (Middle East and Northern Africa, with capital in Byzantium) and the Persian Empire (Iran, Iraq and Central Asia), two mighty empires that weakened each other until some barbaric tribe from the Arabian peninsula defeated both (to this day, northern Africa speaks Arabic, Iran writes in Arabic script and Byzantium is a Muslim city called Istanbul). The decades-long Cold War between the Soviet Union and the USA seemed to have a victor: the USA. But the truth is that the Cold War bled both, and, by the end of it, the USA was left as weak as the Soviet Union: an overstretched empire with military bases in more than 100 countries and a skyrocketing debt. While the two superpowers where competing for military supremacy, China was quietly staging the most impressive economic boom of the century. China had military bases in only one country (itself) and a skyrocketing surplus of money. Future historians may see a simpler version of the facts: the Soviet Union and the USA undermined each other and a third player, China, emerged. Russia and the USA are still undermining each other. De facto, the Cold War never ended. Putin represents a wildly different ideology than Stalin's (almost fascist instead of communist) but he is as much a global rival of the USA as Stalin was, and does everything he can to weaken the USA. The USA weakened Russia from the moment the Soviet Union collapse: it moved Eastern Europe into the sphere of influence of the European Union and NATO, and it influenced the fall one by one of all the communist dictatorships supported by the Soviet Union. While these two are still fighting each other globally, from Syria to Ukraine, and even in cyberspace (where Russia is undermining the USA democracy more than anywhere else), China keeps growing and weaving its web from Latin America to Europe. Some day the USA will wake up in a world in which Europe, Latin America, East Asia and possibly even the Middle East will have embraced China. As i type, Pakistan and India are becoming members of the Shanghai Cooperation Organisation (SCO). Pakistan is the place where the USA used to have a lot of military bases. India used to be a regional rival of China and has signed a nuclear treaty with the USA. India and Pakistan are not even friends (far from it). But they are both joining an alliance dominated by China.
    Panama (a close US ally) has just switched allegiance from Taiwan (a US ally) to mainland China. Iran has just signed a major oil deal with China's CNPC at the same time that Trump wants to reimpose sanctions on Iran.
    There is also a deeper change that has to do with the very nature of the "freedom" that the USA sells to the world. Increasingly, the elected politicians of the USA serve lobbies, not the people. The citizens of the USA don't get laws that reflect their desires: they get laws that reflect the desires of the most powerful lobbies in Washington: the Israeli lobby, the gun lobby (the NRA) and the military-industrial establishment. The people of the USA never asked to spend billions to defend the remote country of Israel. The people of the USA want gun control, not more guns. The people of the USA never voted to keep more than 100 military bases around the world; and they certainly did not vote to spend a trillion dollars to "liberate" Iraq in 2003. But their so called "representatives" represent the lobbies not the people, and therefore all those things happened and will keep happening. Corruption has always been and probably always will be part of any political system, but in the USA it is has been encoded into the "democracy" through the rising powers of lobbies.
    The unelected politicians of China, on the other hand, do serve the nation. They have turned a starving nation into one of the fastest growing economies in history. They have built 20,000 kms of high-speed railway. They have built thousands of kms of subway systems. They have provided affordable education to everybody. They have doubled the living standards of the average Chinese family. Meanwhile, the elected politicians of the USA have achieved... well, i don't know what can be considered a real achievement in the last 20-30 years. A free and honest poll of US and Chinese citizens would probably result in opposite views of each country's congress: the US congress has an approval rating of about 10%, the Chinese congress would probably get a lot more. The gridlock, bickering, incompetence and corruption of Washington are very visible to all foreign observers. The speed of execution, the internal consensus and the competence of Beijing represent a powerful alternative and, in the eyes of a growing majority, a needed counterbalance.
    China is patiently waiting for geopolitics to turn its way. For example, China is accused of not living up to its ambitions because it doesn't act in the interests of the USA against North Korea. But China has a simple question: why does the USA care? The USA is not located in Asia. The USA replies that its allies Japan and especially South Korea are indeed located in Asia. China replies: "Why should you, USA, defend these Asian countries?" If the USA insists on "defending" these Asian countries, China's attitude is a logical "suit yourself". Why should China take care of North Korea in order to protect a country like South Korea that is an ally of the USA? Why in heaven should China do the job that the USA should do? The USA insists that there is something wrong with China's behavior, but China has plenty of reasons to insist that there is something wrong with the behavior of the USA: China, not the USA, should be protecting its Asian neighbors. It is only a matter of time before Japan and South Korea realize that China is actually correct: China is the natural protector of the "pax asiatica". After all, Japan and South Korea have always viewed the USA as a nation of barbarians: a nation of filthy, ignorant and violent people, The level of hygiene in the USA is abysmal (people routinely walk into their own homes wearing dirty shoes). The level of ignorance is staggering (the USA is the last country in the world to still use the imperial system of gallons and miles instead of the metric system). The level of violence is ridiculous (the USA has more guns per capita than any country in the world except the ones engulfed in civil wars, and has the highest murder rate of any major country, six times the murder rate in China). And there are so many professions who want a tip for everything, like beggars, even taxi drivers and hairdressers. There is little that the Japanese or the South Koreans will miss if they switch allegiance from the USA to China. China is simply waiting for the inevitable: sooner or later the USA will be abandoned by its own allies and then, yes, China will take care of North Korea in order to protect "its" new ally South Korea.
    Russia has long ceased to be a competitor. The Soviet Union used to have great scientists, who invented everything from space travel (the first artificial satellite, the Sputnik, in 1957, and the first astronaut, Yuri Gagarin, in 1961) to deep learning (in 1965 Alexey Ivakhnenko published the first learning algorithm for multi-layered networks); but Putin has devastated the Russian nation, turning it into a sort of Saudi Arabia of the steppes that sells gas and oil and distributes the profits among the ruler's friends. There is little that China can fear from Russia. Russia succeeded in undermining the US democracy through its puppet Trump (see A HREF=usa17.html#usa0517> Where we stand with the Trump-Russia investigation) but this will mainly benefit China.

    China now has a golden chance to extend its reach across the entire globe. A Pew poll of June 2017, conducted across 37 countries of the world, showed that only two countries have faith in "Vladimir" Trump: Russia and Israel. The rest of the world (74%) despises him either a little or a lot. What is worse is that this time the president's low approval ratings are affecting the world's opinion of the USA, not just of its current president: only 49% have a positive view of the USA, compared with 64% in the same survey of 2015 and 2016. And, for the first time in history, Canadians no longer regard the USA as a force for good: only 43% have a positive view of the USA. Britons, that used to be the USA's main supporters, are now split: only 50% see the USA as a force for good in the world. Number of Germans who consider "Vladimir" Trump dangerous: 76%. Number of Britons who consider "Vladimir" Trump dangerous: 69%. Number of people in the world who consider "Vladimir" Trump dangerous: 62%.
    Trump's "election" (or whatever you want to call it) has made it inevitable that history will repeat itself: two empires fought it out for decades, and then a third one came out, much leaner and meaner, and sent both into oblivion.

    TM, ®, Copyright © 2017 Piero Scaruffi All rights reserved.
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  • (may 2017)

    Let's make China great again.
    2017 will be long remembered one of the pivotal years in the history of the world. It started with the USA canceling the Trans-Pacific Partnership (TPP), a free-trade alliance of 12 Asian and Pacific economies that would have asserted US influence in east Asia for several generations, and it is now culminating with China's OBOR meeting, that will instead assert China's dominance in Asia for at least the short term.
    I have long resisted the notion that China was the coming superpower, destined to surpass and dwarf the USA. China owes everything to the USA. See China is a colony of the USA. The USA protects its trade routes. The USA accounts for most of China's trade surplus. The USA de facto gifted modern technology to China (by allowing Chinese companies to copy US technology). Until last year China was riding the surf created by the USA, vulnerable to any change in US foreign policy.
    Not anymore. Within days of entering the White House, "Vladimir" Trump, an illegitimate president of the USA installed by Russia, erased the Trans-Pacific Partnership which would have been the greatest trade deal of all times, uniting more than 50% of the world's GDP. At the same time, "Vladimir" Trump, following orders from Moscow, abdicated in Europe: he hailed Britain's decision to leave the European Union (precisely what Putin wanted) and declared NATO "obsolete", sending shock waves through European allies and causing jubilation among Russian hardliners. China did not miss the opportunity. First of all, China's president Xi immediately understood who Trump is: a colossal crook who can be bribed easily. While visiting the USA, Xi offered Trump what Trump wanted: the right to expand his business empire in China. At the end of the meeting, as China was granting trademarks to Trump's business, Trump announced that he now liked China very much. Secondly, China seized the unique opportunity offered by this crook, liar and traitor installed by Russia as president of the USA: China tripled its efforts to take control of the strategic trade routes that made the USA great before Trump entered the White House.
    Trump scapped the TPP, the single most important trade deal since the end of the Cold War, that would have created a trade block of Asian and American nations (notably excluding China and Russia) accounting for more than 40% of the world's GDP and would have cemented US influence in Asia for generations. Instead, the day after Trump canceled the TPP, China met with the remaining 11 TPP members to discuss an economic alliance that would include China and NOT the USA. China smelled blood and convened in May 2017 in Beijing a meeting of 68 world leaders (including Russian president Vladimir Putin but not including any top US politician).
    The colossal "One Belt One Road" (OBOR) trade initiative, a 21st Century version of the ancient Silk Road travelled by Marco Polo, is now surgically targeting the three regions abandoned by the USA under Trump. A series of long land corridors are meant to connect China with Europe, bypassing the oceans controlled by the US navy. A pipeline in Myanmar and a port in Pakistan are meant to bypass the strait of Malacca (controlled by the US navy). And a new trade pact within Asia will have China instead the USA as the leader, center of mass and military protector.

    OBOR's terminal is not in the Americas but in Europe, the continent that Trump wants to dismantle and the continent that he doesn't want to defend. Xi's target is not so much Asia, which is naturally bound to fall under Chinese influence now that Trump has killed the TPP: it is Europe, a much bigger prize.
    China plans to finalize the Regional Comprehensive Economic Partnership (RCEP) within one year. It is a free-trade agreement between the ten member states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and the six states with which ASEAN already has free-trade agreements (Australia, China, India, Japan, South Korea and New Zealand).
    At the same time that Trump the negotiator is asking NATO countries to pay a few billion dollars more, China announced a $124 billion investment in OBOR, on top of the $900 billion already invested.
    Trump promised to cut US foreign aid to poor country. Immediately, China announced a plan to increase its own foreign aid.
    China's ambition is clear: while communist USA, ruled by a Russian puppet, falls back into protectionism, capitalist China is expanding its commercial links with 110 countries around the world. China is now the new defender of free trade. Beijing is the new capital of world trade.
    The combination of an ignorant senile illiterate US president who can be easily bribed (when he doesn't take orders from his Russian boss) and a Chinese president who graduated in engineering at one of the best universities in the world (Tsinghua University) is lethal for the USA. The world is fed up with an unpredictable and unreliable nation that can elect ridiculously incompetent men like George W Bush and "Vladimir" Trump, and is increasingly looking forward to a more predictable and reliable leader of the world: China.
    Xi is sending a clear message to the world: there's a new sheriff in town, and it is certainly NOT Trump.

    TM, ®, Copyright © 2017 Piero Scaruffi All rights reserved.
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TM, ®, Copyright © 2015 Piero Scaruffi All rights reserved.