The collapse of Chinese dynasties has often followed a similar pattern.
The imperial court grew out of control, burdened the population, and caused much hardship.
A string of disasters – floods, famines, droughts, fires, etc. – ravage different regions. This displaces many, on top of many deaths.
Yet the officials are either powerless or too callous to care about the people’s plight. They focus on their comforts, intrigues, squabbles, and feed their ambitions.
An uprising breaks out as the people have had enough. One region after another. These rebellions give forth warlords who duel it out to gain control of a region. Eventually a few outstanding ones form their own nation states. They continue to vie for power, until one overpowers them all and forms the next dynasty.
The cycle repeats, with a few hundred years in between.
Chinese history is cyclical. It may not repeat, but there’s a pattern. So much so that the Chinese people understand it.
The current ruling party is aware of history and dread the predicament it is in. That’s why China is a surveillance state with heavy censorship and a vast internal security force. The leaders fear that their revolution that gave them power will fall to another that’ll sweep them out of their positions.
They fear the general populace, who have suffered much over history amidst internal turmoil, conflict with neighbours, and natural catastrophes, interrupted by brief periods of stability and respite. The people will grumble less if given economic and societal stability. Liberty and self-will are secondary to the Chinese people, unlike the West. If the Chinese people don’t feel comfortable with their daily lives, they’ll first look for a solution from their rulers. Should these solutions fail and the government starts to suppress dissent, what follows is bloody, no exception.
Some innocently claim that the Chinese government is more peaceful and doesn’t invade other countries, unlike the Western governments. Of course that’s the case. Why would it rashly fight two fronts, one against its own people and another outside the country?
In saying all this, I’m going to make a big call.
Given recent scandals and purges plaguing the Chinese ruling party, both inside and outside, I daresay that the dream to bring Hong Kong, Taiwan and Tibet under Chinese rule while President Xi Jinping is in power is now dead in the water.
He won’t say it, but his actions have quietly shown it.
Today, I’ll explore this with you.
When consolidating power leads to doom
There’s a Chinese saying ‘there’s much loneliness being undefeated’. It’s the equivalent of our saying ‘it’s lonely at the top’.
In recent years, President Xi has consolidated more power. So much so that he is nearly as powerful as Chairman Mao in the 1960s. Like his predecessor, Hu Jintao, he chairs the Central Military Commission, the supreme military leadership body. He assumed this post upon confirmation of his succession in November 2012, months before he took leadership.
Ten years later in November 2022, when he was due to step down as past presidents would after completing two terms, the party elected him to a third term. Moreover, it conferred to him a lifetime appointment, effectively giving him supreme power.
The world looked upon this as the zenith of his achievements. Some within China also felt that this was it – the country is now ready for its next step. It has found a leader who’ll complete the dream of unifying China. The time has come for Hong Kong, Taiwan, and Tibet to return to Chinese rule.
Indeed, President Xi framed this China reunification as a major goal of his leadership.
This public proclamation caused mixed feelings internationally. There was national pride within, varying support to outrage in different countries. Over this period, open resistance and defiance in these three regions broke out, though they didn’t hold China back.
For some time, China looked like it would accomplish Xi’s goal. Rising economic influence, soft power diplomacy, rapidly improving technology, and crackdowns against uprisings inside China and in Hong Kong showed the nation’s might and potential.
And indeed many in the West will buy this view. After all, many Western nations self-sabotaged as they elected governments that sought to destroy their own heritage through social reform, mass immigration, censorship, and excessive spending. Some looked longingly at China’s government and thought that it’s brought order to its society.
I’ve hopefully shown you how ill-informed those views are, especially given the context of how the Chinese bureaucracy presents a façade to the world. Plus how our obsequious mainstream media and academic thinktanks in the West have simped pathetically to China. Part of this is due to their receiving funding from the Chinese government or its state-owned enterprises and institutions.
We’re going to look at a recent event that further shows how fragile things are beneath the exterior.
You and what army?
Just last week, the Central Military Commission underwent yet another major shake-up in the space of a few months. A Vice Chair, Zhang Youxia, stepped down under investigation of corruption and other serious violations. Another senior general, Liu Zhenli, the Chair of the Joint Chief of Staff, was also part of this investigation.
These dismissals happened only three months after another Vice Chair, He Weidong, was dismissed from the post. That wasn’t enough, as the party announced his expulsion from both the Communist Party of China and the People’s Liberation Army.
In such a short time, not one, but two Vice Chairs stood down. Moreover, they were President Xi’s deputies, literally his left and right arms in the military. Then there are hundreds in the rank and file who are quietly purged.
These mightn’t sound like a big deal. But let me dig a little deeper into why Vice Chair Zhang’s dismissal is so significant.
I’ll return to my recent point about the claim that China hasn’t attacked other nations in recent times like some Western nations have. This means most Chinese generals and soldiers do not have actual combat experience.
Zhang was an exception. He fought in the war against Vietnam in 1979, making him one of a few generals in high command with actual battle experience.
Aside from Zhang, the remaining Vice Chair is Zhang Shengmin, a career general with no real battle experience.
A campaign across the Taiwanese Strait is complicated. Besides the US fleet defending Taiwan that China may be able to empower, China now has Japan openly declaring it could act should an invasion occur.
I believe that President Xi and his generals take this threat seriously. They also know without adequate experience, this plan could prove doubly disastrous. A stunning defeat will trigger internal revolt that could spread from the party rank and file to the ordinary populace.
Therefore, it may be prudent to engage in rhetoric as propaganda to energise the dwindling support domestically. Hold them off until the economic reality truly drops on the people.
But time is ticking.
TACO vs General Xi’s Chicken
I’m always amused by how Trump detractors make up new terms to undermine the Orange Man.
TACO (Trump always chickens out) is the latest one.
Perhaps these people might care to read Sun Tzu’s Art of War.
When you are strong, appear weak. When you are weak, appear strong.
For all the wild rants of US’ reality TV president, that’s showmanship. He talks tough, thumps the table, and goes on tweet storms.
But somehow out of nowhere, he and his counterparts walk out with a deal. Or those he threatened cave in. The latest is Canadian Prime Minister, Mark Carney, who walked back on a proposed trade deal with China.
Ok, President Trump doesn’t always get what he wants. He and his administration blunder and fumble around. There are many supporters who wished the administration fulfilled promises much earlier. Some are tired of waiting and have given up supporting him.
But getting back to China and President Xi, the chest-thumping in China seems hollower. And domestically, the economy and society are looking more dire. The government knows it, the people know it, and the tension is rising.
The party secretly wishes it won’t have to fight two fronts, especially when the one closest to it is simmering. Methods to appease it by pointing to the enemies outside to spur them are now all but off the table.
Who knows, perhaps Wu Xinbo is right. China and the US might have to reluctantly come to the negotiation table. They’ll carve out some deals, shake hands, and then hope they can gain the upper hand over the other through sneaky tricks and dirty manoeuvres. At least it won’t spill as much blood, which would be a good thing.
Since both countries want to build their economy and shore up their allies, trade beats war.
Which means commodity deals are on the table.
But should tensions rise as both sides vie to be #1, expect more fear and uncertainty.
What benefits most from this?
The oldest money – gold.
Even though gold slumped 10% in a day last Friday in US trade, it’s making back some lost ground.
This might be a good time to get into it.
I’ve recently written a book outlining my experience and insights from over 12 years of investing in this space.
Check it out here, Gold’s true message: A guide to building wealth in a failing monetary system.
Next week, I’ll talk about the Southeast Asian pig butchering scam and why China’s ruling party suddenly moved to suppress it to save face and cover its backside.
Till then, enjoy the coming weekend!
God Bless,
Brian Chu,
Gold Stock Pro and The Australian Gold Report
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