The Plan to tame China involves three regime changes (including Iran) and total control of global energy!
I’ve just spent a week in Shanghai on business. The pace of change in China is unprecedented. They are leaving not just the United States but the whole world behind as they steam ahead aggressively.
Not everything is rosy. The cranes that once adorned the Shanghai sky have diminished. But inside the factories, China is moving forward very fast. You can’t quite see it in numbers reported by the press, but the pace of Chinese innovation is much faster than anyone can imagine.
On the streets, electric cars are everywhere. And as you drive around town, the sheer size of new auto companies and their suppliers is mind-boggling. And everything inside these cars is more advanced than any Western counterpart. Not even TESLA comes close. To boot, China has ‘several TESLAs’ – with one company, BYD, outselling TESLA globally.
You pay for everything with your cell phone. Alipay, WeChat, … no cash is exchanged.
Inside factories, there are plenty of robots. There are ‘dark’ factories with almost no humans present – humming 24 hours a day. So much for the ‘Workers communist party’! The workers are now machines and robots.
China, along with India, is producing 5x as many scientists and engineers as the US. And more PhD graduates than in the US, each. In other words, an order of magnitude more STEM graduates than in the United States.
While there are, undoubtedly, slight drops in specific sectors of their economy, the fundamentals remain strong. China has the lowest energy costs among advanced economies. Inflation is under control. Unemployment is under control. Despite tariffs, they appear to be expanding their export base in many emerging markets. As you walk around factories and ask, ‘Who is this for?’ Who is that for? You hear – ‘a customer in India, or Turkey, or some African state’ … It almost doesn’t matter that Americans are not buying. They’ve diversified nicely – thank you.
Tourism is expanding. China now has visa-free travel. Airports are super modern and clean. China’s service sector overall is strong. They have made, or are in the process of making, the transition to a fully advanced economy.
Comparisons to American cities are daft. There can be no comparison. I wish I could share pictures and examples of architecture here; everything from expo centers to public transport hubs is beyond anything you might see in America or Europe. Bullet trains. Chinese-made passenger planes.
Meanwhile, the United States has scored a series of ‘bad’ own goals in Ukraine, Iran, or Venezuela – and voted in a clown into the Whitehouse.
Far from undermining Russia, it has created conditions forcing Russia to pivot eastward to supply cheap energy to a growing China rather than our European allies. It’s as if we have a preference towards China!
You can say the same thing about Iran and Venezuela. By sanctioning both, they had no choice but to find other customers and had to offer cheap (below-market) energy to a hungry, growing China.
And yes, China has taken full advantage of the situation, knowing the Russians, Iranians, and Venezuelans had no choice but to accept their terms and pricing. In effect, our sanctions have enabled substantial growth in China, fueled by the cheap energy we’ve precipitated via sanctions!!
The primary beneficiary of sanctions on Iran, Russia, and Venezuela is China. In other words, by imposing sanctions, we have inadvertently aided and accelerated China’s rise.
Five years ago, China’s economy was on the brink. Real estate companies had collapsed. COVID had ravaged its economy. Chinese companies were competing with the West in global markets, buying virtually every commodity at inflated prices. Today, it finds itself in the driver’s seat – as the sole buyer for sanctioned nations – and fully able to handle anything thrown at it by Trump or anyone else.
Contrary to how this is painted in the West, this is not a temporary phenomenon. This is, in fact, a strategic consequence of careful planning by China, for a sustained ‘march’ to global economic dominance.
Although its economy still relies primarily on fossil fuels for energy, China is quietly diversifying away from them. It is making humongous investments in advanced renewable energy, with, for example, the world’s largest hydroelectric dam project recently kicked off in Tibet, and solar/wind energy installations in Outer Mongolia paired with energy storage systems (flow batteries and green hydrogen installations). China is installing more renewable energy systems than the rest of the world combined. They are also leading technological innovation in the field. For example, I saw production lines for next-generation solar panels – with much higher energy conversion than conventional systems available in the West. The fossil fuel it does buy, it pays for in its own currency. So does, India. So much for the ‘Petro-dollar’. The world’s largest buyers of the world’s most important commodity – oil (and gas) are now NOT trading in US Dollars.
The reality is that, over time, this will mean a complete realignment of the global order, leading to a severe reduction in US economic and, consequently, political power. Europe and the US may have already lost the battle. It might be too late.
But the Trump administration apparently has a plan to reset this dynamic. New tariffs on the trade area are a big part of the ‘game,’ but they are obviously insufficient. Sanctioning major Chinese companies is another part of the ‘game’, but again, it is obviously inadequate (they’ve found other customers). At best, these maneuvers are band aids – or delaying tactics – slowing down the ‘inevitable’.
The US administration clearly knows this. And they are planning something far more effective and sinister in this game. If you look carefully and read between the tea leaves, it’s clear what the Trump administration is up to. And it seems the Europeans, too, have bought into the plan. In one sentence, there is a plan to ‘corner’ the world’s energy supply regions to force China to ‘play to America’s tune’. There is a plan to reassert American dominance. A plan to contain and confine China’s rise and force it to accept the terms the US needs to maintain its dominance.
The plan is really very simple.
Over the next three years, the US will catalyze regime change in Venezuela, Iran, and eventually Russia. In other words, take complete control of China’s energy supply. The US recognizes that, despite China’s substantial investments in renewable energy, it will remain heavily reliant on energy imports to sustain its economy and growth.
First, the US will force regime change in Venezuela – now. It’s imminent. The Nobel Prize committee knew exactly what they were doing when they snubbed Trump by awarding an opposition leader in Venezuela the prize. They were fully aware of Trump’s plan. They could not grant a Peace Prize to a President who is about to make war and invade Venezuela (if its attempts at destabilizing the regime fail by sinking fishing boats off Venezuela’s coast). The writing is on the wall. There were reports this week in the press of Trump’s approval of a CIA-led coup in Venezuela. Trump just announced the deployment of an aircraft carrier to Venezuela’s coast. Maduro will be gone. American oil companies will be back.
Then, sometime in the spring, there will be a full onslaught on the regime in Tehran. Israel has already been planting seeds for regime change in Iran and is fully invested in this process. In my view, the change is likely to expand beyond Iran to a transformation of the entire region. A new Kurdish state will be created in Northern Iraq and Syria (and possibly elsewhere). The idea is for Israel to have a ‘non-Arab’ pathway east – which will continue into Iran, and then Central Asia. The plan appears to be a little more ambitious. The idea is to create an entirely new, independent economic ‘sphere’ in Central Asia that can be nurtured into a fast-growing market for Western goods and services (and not dependent on Chinese or Russian goods or influence). I would imagine there will be subsequent regime change in places like Turkmenistan, etc.
Meanwhile, the war in Ukraine will still be raging, and Russia will be systematically bled to death – until, just like 30 years ago, Russia completely collapses. It appears that Russia has been unwilling to make peace or to ‘pivot’ to the Anglosphere. Putin continues to ‘humor’ Trump and sees him as a buffoon (that he is). Putin is too proud to bow to Western dominance. And more than anything else, wants to reassert Russia’s stature in Europe. For now, the policy is for the West to defeat Russia on its own terms eventually.
This is the plan. The West will take control of the top three fossil fuel reserves in the world (after the United States) – Russia, Iran, and Venezuela – and then use its energy access to force China to bow to its terms.
But can Trump pull it off? Very simply – no, and here’s why:
- Sequential Risk: In risk management, there is a concept called sequential risk. It goes something like this: if at each stage there is, say, a 90% chance of a positive outcome, a three-stage process will have a (0.9 x 0.9 x 0.9) % probability of success, i.e., approximately 70%. So, without even exploring whether this three-leg plan can succeed, just the simple fact that it’s a three-stage game reduces the odds of success dramatically. And then there is a simple observation: in each case, the probability of success might be less than 90%. Do Russia, or indeed China, or Maduro, or the Mullahs understand what is going on? Absolutely! Will they make it easy? Is this a slam dunk for Trump? They are not stupid at all, and I am sure they have countermeasures in place to counteract this. Toppling three regimes sequentially is not a simple, done deal with a probability of over 90%.
- Indirect Actions: While Trump moves on Venezuela this winter, we have already seen China ban rare earth exports to the US, and Russia continue to grab more land in Ukraine. Instead of making all this super easy for America, maybe they will ‘bog’ America down in Venezuela and stop it from moving to stage 2 of their plan? Our allies in Europe are wilting under the heavy weight of uber-high energy costs (without access to cheap Russian energy), and Israel has just gone on a rampage in Gaza and witnessed a rain of missiles into its cities and strategic centers. France is bankrupt. How long will our alliances hold while energy costs and inflation skyrocket? Might there be massive social unrest in the West? These ‘characters and their allies (among the BRICS) can make things very uncomfortable – indirectly – while Trump moves on Venezuela. They can expand the fight.
- Direct Domestic Upheaval: Much of Trump’s planning is predicated on an explosive growth of data centers and the rise of AI (Artificial Intelligence). In his mind, this is a once-in-a-lifetime opportunity to choke China. While the US economy expands in an area where China cannot undermine American growth, the US can wage war. But this could be a false premise. AI might turn out to be an economic bubble that bursts, leading to a financial collapse. The strangest part of this ‘assumption’ is that data centers need massive amounts of energy to function. China has by far the cheapest energy among developed economies—not the US—and also has the capacity to enter the AI game just as easily as the US does. It’s simply not clear that the US has a strategic advantage with AI. The way China operates, it could build data centers more quickly and cost-effectively and manage them more efficiently than the US or Western Europe. Ultimately, data processing can and will be done wherever it’s most cost-effective. The US cannot corner this service.
Another consideration of this AI boom is that it will lead to mass unemployment. In the final analysis, the value added by AI lies in reducing labor costs across many operations. As you move to self-driving autonomous vehicles, you will need fewer drivers! Far from bringing economic prosperity, this ‘boom’ could turn into a ‘bust’ if it leads to massive social changes and upheaval.
In this highly interconnected world, China can very carefully calibrate its actions to cause maximum domestic upheaval in the US. A good example of this is its recent complete stoppage of Soybean purchases from the US, forcing American farmers into Bankruptcy. The domestic ‘war’ could be larger than the ‘proxy wars’ against China. Trump is fully aware of this, and the recent effort to expand ICE and involve the national guard in major cities is clearly a signal to potential ‘disruptors’ of how severe the consequences will be if ‘federal’ forces are engaged.
- Wars are not cheap. If any of these actions lead to kinetic exchanges involving U.S. forces, the bill will be in the trillions. And the US doesn’t have the means to spend that kind of money. There is a serious risk that, in one of these three regime-change ‘battles,’ an escalation will occur that no one has predicted. Did Israel imagine, for example, that Iran would hit back and hit hard in the 12-day war? Will Maduro, the Mullahs, or Putin be pushovers? I can totally appreciate that the populations of Venezuela, Iran, and Russia are sick of their authoritarian governments. I support regime change in these three countries for the sake of their populations. But if these regimes have sustained themselves in power for decades, perhaps they know a thing or two about ruthlessness and fighting opposition? I would not rate the chances of regime change success in each theater at 90% or better. In my view, the overall chance of success with this project is less than 50%. We’ve tried regime change in Venezuela in the past and failed.
- China does not stand alone. China is now a key market for many significant economies, including its BRICS partners, Brazil and India. Will they sit back and allow one of their major partners to be undermined in favor of the West? Everyone forgets the West’s colonial history and how, in many places around the world, there is little support for Western regime change actions – and interference. Other nations may already have joined China’s pushback. And this ‘global’ push back will not be inconsequential for the United States.
I could go on with this analysis, but I think it’s safe to say Trump’s plan is perilous. It may not, in fact, provide the desired outcomes and may have the net effect of undermining the West itself. And if the West loses, it will be a loss not only for America and Europe, but also a considerable setback for democracy and freedom around the world. The net outcome of such a loss would be a substantial rise in authoritarianism and the reinforcement of Maduro, Mullahs, Putin, and China’s communist party (and its dark command and control system).
The point I am making is that the West needs to play to win and avoid risk as much as possible. Is this the best plan it can come up with? Is Trump the man to make it happen? Have the folks at Langley thought this one through? Will this turn into another Iraq debacle? Another genocide? Another Ukraine bloodbath with 7 million refugees peppered across Europe? Has the US really won any serious war it has fought in the past 50 years? Can the Pentagon execute?
There is a view that is best articulated by saying that a partial win is worth it. i.e., if one of these three nations undergoes regime change, then the whole project will be worthwhile. The huge absorption of one of these massive energy reserves alone could be game-changing in itself! Yes, maybe. Maybe not. It will all depend on how much we spend to make it happen. The costs may outweigh the risks. So far, there has been NO payback for our adventures in Iraq or Afghanistan. We gained nothing.
I’m not pouring cold water on Trump’s plan; I am simply pointing out some risks. I have little faith that the analysts at Langley have done their job. The blowback from Ukraine has been horrible – another great idea that came out of Langley. Again, the war in Ukraine has strengthened – not weakened – Russia and China. This notion that a sustained war will eventually undermine Russia and China comes from the same mouths that got us into the war to begin with. Thankfully, they’ve fired Victoria Nuland (who was an architect of the war in Iraq and the Ukraine War). How much credibility do these people sitting in their comfortable offices and homes in Virginia really have? When was the last time they saw (physically witnessed) the massive carnage and human dislocation they’ve engineered? PowerPoint slides don’t win wars. Langley has consistently underestimated America’s opponents. What is America’s plan B?
Leave a Reply