(Published 2023-06-25)
Yesterday’s first post was deleted. The second went through — and now it’s stuck in review again. Yesterday’s read was correct: Kadyrov was the real latent threat; Wagner never had the actual foundation for a genuine rebellion. Both Russia and Ukraine face the problem of warlordism, but Ukraine’s situation is far more severe. Russia still has the capacity to rein in its regional powers. Ukraine has completely lost control over its internal factions — and each of those factions has its own outside patron.
China’s auto exports have become the world’s largest, and traditional fuel-powered vehicles are expanding rapidly across former Soviet territories now vacated by Western brands under sanctions. Geely, Great Wall, BYD, JAC, and other major domestic automakers have seen sales and joint ventures in Russia multiply. Great Wall’s sales in Russia grew 250% last year, and Great Wall, JAC, and Geely have all built factories there for localized production. Russia’s famous Moskvich and Lada brands are now rolling out new products that are essentially rebadged Chinese vehicles — some don’t even bother with a new body, just swap the badge. The Eagle (America) won’t be sitting on its hands.
Ukraine has seen what happened yesterday and may have gotten its spirits up — clearing away the gloom from the stalled counteroffensive, ready to push things toward a more dangerous escalation. Because if the war stops, every person currently in power in Kyiv will have nowhere to hide. To survive, they must drag more parties in, stir the pot, blow things up — exactly what the Chef (Prigozhin) just did. Only then do they have chips to bargain for their own survival.
The pipelines are blown, the undersea cables are cut. Things are spiraling increasingly out of control. For Russia, it’s death by a thousand cuts — the longer it drags on, the more secondary problems will surface. But as long as the Eagle doesn’t step in directly, neither will the Rabbit (China). With its current manpower and equipment, a swift decisive victory isn’t on the table either. So Russia also wants to pull the Rabbit in. Why does Moscow keep provoking Japan? When the Soviet Union was fighting on its western front, it went to great lengths to appease Japan in the east to avoid a two-front war. But this time, Japan’s threat isn’t nearly that significant — yet Russia responds forcefully, even deliberately stoking tensions, and proactively opened Vladivostok as a transit hub for China’s domestic trade. All of this is nothing more than an attempt to bind us in. Once we’re tied to them, not only would Russia’s entire eastern flank be secure, but the Rabbit’s supplies could flow openly rather than covertly — and the pressure would shift squarely onto China.
Not long ago, China’s ambassador to France floated the idea that under international law, the borders between Russia and some former Soviet republics are merely administrative boundaries — not legally recognized state-to-state borders under international law, and would need to be formally demarcated between sovereign nations. This enraged the Baltic states and others. It also implied that Japan’s hold over the Ryukyu Islands lacks legal standing under international law.
And just before that, the same ambassador floated an even bolder position: as a sovereign nation, China has every right to sell weapons and equipment to Russia. Just because we aren’t doing so now doesn’t mean we won’t in the future. None of these statements are throwaway remarks — they are all moves in a strategic game.
Ukraine announced it would sanction Geely, on the grounds that Geely’s continued production and cooperation in Russia indirectly supports the Russian war effort. The message couldn’t be clearer: when Western automakers all pulled out of Russia, they believed Russian society would suffocate. And indeed, when sanctions first hit, many cars couldn’t find spare parts — American, French, German — all withdrew completely and refused to supply components. Then Chinese automakers seized the opening: they moved in, supplying not just parts but technology transfers, and set up local production. The Manzhouli crossing processes enormous volumes of heavy trucks every day. Even the hundred new military armored vehicles recently delivered to Chechnya came from a production base in Hubei — identical to the domestic versions, badges removed.
Ukraine had never paid much attention to these matters before. This sudden move was clearly directed from above. The real agenda isn’t about the war — it’s about blocking China’s auto industry from filling this space. Automotive has long been a driver of China’s economic growth. Russia has voided all patents, so building factories there for production and even R&D breaks through all kinds of patent restrictions. Locally produced goods exported to former Soviet and Eastern European markets can, legally, be distanced from China. We’ve used the same playbook navigating solar panel sanctions: much of the solar output shipped to the US and Europe from Vietnam, Myanmar, Cambodia, and other Southeast Asian countries avoids sanctions because it’s manufactured there. But the upstream is Chinese companies — or their joint ventures. Those exporting factories ship the finished product, but in substance they’re majority-owned assembly operations.
You can’t choke a living person to death. When you reach a certain position, others will come for you. You have your stratagem; I have my way over the wall. This is the game — and the most honest form of survival competition. The idealized market conditions described by academic economists have never existed in the real world. In reality, economics, politics, war, and finance are all instruments of survival competition — tools subordinate to human beings. The game only plays out between living beings, never between tools.
China let German automakers set up wholly-owned subsidiaries in China, placed massive aircraft orders with Airbus rather than Boeing, offered favorable terms to American capitalists while cold-shouldering their front-line politicians, and warmly received American financial conglomerates. These are all signs of a divide-and-conquer strategy. Who said China sees the Western bloc as a monolith? China’s trade with Europe is growing and the tone is warm — quite different from how it handles America. Germany is currently under someone else’s thumb and doesn’t have much room to maneuver. But Germany and France — Europe’s main power brokers — are both industrial giants. They have what we need; there’s deeper ground for cooperation. What America has most — and at its core — is capital, followed by its consumer market. Two or three decades ago, when Chinese society was starved for capital, we genuinely needed foreign investment and technology transfers. That’s no longer the case. The technology America was willing to transfer has been absorbed. What’s left, they won’t give. A series of conflicts have driven up domestic inflation, steadily shrinking consumption. Even without artificial barriers, the orders that market can deliver have diminished significantly.
Southeast Asian production countries not under direct sanctions have also seen their order volumes fall by double digits. For all these reasons, the foundation for mutual cooperation keeps thinning.
Things will be quite difficult ahead. The major debtor nations of the West would rather let some of their banks fail than ease up on rate hikes to fight inflation. Many mid- and downstream manufacturing nations follow your lead because you can offer investment and orders. Without orders, investment yields nothing. Persistently high inflation, combined with reduced household spending, makes consumption contraction irreversible. And it’s not just our consumption falling — theirs is too. We’re all the same: rice, oil, salt, firewood. When people feel insecure, they cut spending. Why don’t they keep handing out money? Because that kind of spending is manufacturing debt out of thin air. America’s total debt has already broken from $30 trillion to $32 trillion — in just two years, another $2 trillion added. Servicing that new debt alone would take the entire Chinese population two years of labor to cover, not counting the interest it generates. When total debt sat at $30 trillion, annual interest payments alone ran $650 billion. Their entire annual military budget is only $800 billion. Now that the total has grown, they’re likely paying $700 billion a year in interest — twenty times our military budget. If you were in that position, would you choose to live frugally and pay down debt, or take that money to wage war and plunder from others?
The real conflict today is not between East and West, not between civilization and barbarism — it’s between debtor nations and creditor nations. It’s the conflict between those who spent recklessly and ran up enormous debt, and those who worked steadily, produced diligently, and built up a surplus. One side wants to seize your wealth and walk away from its obligations. The other wants desperately to protect the hard-earned savings it has accumulated. Within Europe, Germany and France are the producers — their social wealth has real physical assets behind it. Britain and the Southern European countries are drowning in debt, spending more than they earn. Britain’s social wealth is primarily financial assets; some Southern European nations have almost nothing at all. In any conflict, those who posture most aggressively are often those most deeply in debt with the least hope remaining. Look at Ukraine — before the war started, it was already buried in debt, deeply aged as a society, with 83% of its valuable industries already sold off. Once capable of building aircraft carriers, it can no longer manufacture even speedboats. That is precisely why it is so easy to manipulate.