Believe and Obey

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Becoming China To Defeat China?

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The Perceived Problem

It is a bipartisan “truth” that China is a problem.  Even those who are skeptical of the US proxy war in Ukraine are all onboard the anti-China train.  It is true enough that China has grown stronger economically and diplomatically since they began liberalizing their markets in the late 1970s.

The US sees this rising China as an economic, military and diplomatic threat to global US hegemony.  This is an especially acute feeling regarding the US empire’s Pacific interests.  The first question that must be analyzed is whether this is a true threat or a fit of imperial paranoia.  That this section is titled the perceived problem should give some indication of where I am going with this.

The Actual Problem

The real problem here is much more about US relative decline than it is about the rise of China.  This feeds into the paranoia that marks all empires and international powers.  In addition to rampant US paranoia it has been the US that is the aggressor nation in the Pacific.  This is not to deny the nature or goals of the Chinese state, but to look at the reality of the situation.

It is the US navy that has ringed the eastern edge of the Eurasian land mass.  It is the US that has 375,000 military personnel in the region.  It is the US that is beefing up alliances with nations such as Australia, the Philippines, South Korea, and Japan.  In the aftermath of WWII the US did what Japan wanted to do.  They created a “Greater East Asia Co-prosperity Sphere”.  The US has long maintained economic hegemony through the primacy of the US dollar, as well as favorable trade relations that are skewed toward the US.  These policies do not help the entire US economy, they actually create deadweight loss.  The do, however, help those politically connected sectors and companies to profits they did not earn on a fair and honest market, which is exactly the point.  So, of course, the US is going to react negatively, potentially violently to a nation that challenges this arrangement.

The Nature of the Chinese Regime

The Chinese regime is certainly light years beyond the awfulness of Mao.  So while they are much more liberal than Mao, they are less liberal than Locke.  In reality the Chinese are much more mercantilist than a truly free market economy.  This is an arrangement not dissimilar to that of the US.  A group of connected companies (some of them state owned) get advantages that others do not and earn above market profits at the expense of the ordinary Chinese worker/consumer.

The other notable thing about China’s economy is that it is built upon a mountain of printed up money and massive debt.  The Chinese central bank has gone on a massive money creation spree that sees the state determine investment flows and winners and losers.  There is even less legitimate financial prices than in the Federal Reserve dominated US economy, and that is saying a lot.  David Stockman, former head of the Office of Management and Budget under Reagan, has rightly called this a “Red Ponzi”.  As Stockman points out:

So in two short decades, China has erected a monumental Ponzi economy that is economically rotten to the core. It has 1.5 billion tons of steel capacity, but “sell-through” demand of less than half that amount— that is, on-going demand for sheet steel to go into cars and appliances and rebar into replacement construction once the current pyramid building binge finally expires.  The same is true for its cement industry, ship-building, solar and aluminum industries—to say nothing of 70 million empty luxury apartments and vast stretches of over-built highways, fast rail, airports, shopping malls and new cities. In short, the flip-side of the China’s giant credit bubble is the most massive malinvestment of real economic resources—-labor, raw materials and capital goods—ever known. Effectively, the country-side pig sties have been piled high with copper inventories and the urban neighborhoods with glass, cement and rebar erections that can’t possibly earn an economic return, but all of which has become “collateral” for even more “loans” under the Chinese Ponzi.

This has created an explosion of malinvestment that has produced “ghost cities”, that are built but uninhabited.  The same overbuilt phenomena is true in the Chinese automobile sector.

This is much the same kind of deranged central bank policy that is going on in the US.  The major difference is that the Chinese never had a deep stock of built-up capital to fall back on, and their economy is much less flexible.  This massive set of squandered capital, malinvestments and debt will come crashing down on the Chinese.

All of this is because China is in reality an authoritarian regime.  Its economy is state managed, protectionist, and implementing a mercantilist industrial policy that is building up to a disaster.  Additionally, their government has created a system of “social credits” in order to control the populace, as well as stifled dissent and oppressed communities such as the Uighurs and the residents of Hong Kong.

Down the China Road

Predictably enough the US “leadership” sees all this in China and therefore wants the US to become…more like China.  There are explicit polices enacted such as the Inflation Reduction Act, and the Build Back Better Act, that are nothing but industrial policy.  The US has continued down the road of explicit trade protectionism, and anti-commerce policies, intensified by the Trump Administration.  Also a continuation, and intensification from the Trump years is the drive to enact social controls by banning the partly Chinese owned app Tick Tok, as well as restrict technology from being traded freely as well as a drive to invade US citizen’s privacy by surveilling their online activities via the so-called RESTRICT Act.  There are even proposals to create a “digital dollar”.  This would allow the government to see every purchase and transaction that anyone makes and would allow them to shut it off if said citizen did not behave.  It is also terrible economic policy because hard currency acts as a check against the unnatural lowering of interest rates.  In short there are a series of proposals in the pipeline to enact social controls within the US. 

In this drive to be like China to destroy China the US will only accelerate its decline economically and politically.  It is a clear case of blowing up the village to save it.  We know what kind of policy works economically and is consistent with a free society and it is not this.


Instead of driving to be more like the authoritarian China the US claims to despise how about the US reverses the damage done by the ways they are already like China.  Go back to sound economics; free trade, liberalized, deregulated markets, no subsidies or industrial policy.

This should go along with dismantling the surveillance state.  Stop spying on US citizens, stop trying to shield them from “misinformation” and allow for the free flow of goods, services, peoples and ideas.  Speaking of dismantling things how about the empire?  Remove the 800+ bases the US has overseas, return the defense of modern, wealthy nations to themselves.  Quit threatening the entire world with missiles and sanctions in the name of unrighteous imperial hegemony.  None of the domestic spying and social control is needed if and when the US becomes a peaceful nation among nations.  This will return the US to a sustainable path of real economic growth and prosperity, while lowering tensions throughout the world.

And what of China?  Sit back and wait for them to implode as all authoritarian regimes will.  The are already starting to show cracks economically and their demographics are terrible.  There is no reason why the US should be so ignorant in rushing to join China in its economic and social implosion.  As people of faith we simply need to trust enough to treat people the way we want to be treated and to stand up for the rights and dignities of all God’s children.  Doing this can help lead the way for the US to chart a better, more righteous path toward the kind of world God wants for humanity.

Praise Be to God

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