China Capitulation Part 7: Iran’s fall shatters China’s global ambitions

We’ve only just started the third month of 2026 and the state of global affairs has changed dramatically.

I remember reading about the lightning strike by the US on Venezuela that led to the capture of its president, Nicolas Maduro, and his wife by the Delta Forces in the first week of January.

And in the weekend just past, Israel and the US bombarded Iran on Saturday evening. By Sunday morning, we learnt that the Ayatollah Khamenei and a handful of top military and political officials were dead.

Over the last three months, we began to hear the term ‘decapitation strikes’. It describes a strategy of bringing forward your enemy’s defeat by toppling the country’s leadership.

This isn’t a new strategy per se. For one, the Ancient Chinese called it ‘to defeat the bandits, capture their king’.

The mentality is that capturing or defeating the enemy’s leader will sufficiently demoralise them that you can secure victory.

However, it’s important to note that there are nuances in this strategy. In other words, this strategy doesn’t always guarantee a quick and decisive victory. It depends on several factors.

Identifying the Achilles’
heel of a dictatorship

Sun Tzu’s Art of War states that knowing your enemy and yourself will guarantee that you can win a hundred wars.

The essence is grasping psychology – when you know your capabilities and grasp that of your enemy, you secure the upper hand.

War isn’t simply about a clash of might. If that’s the case, you wouldn’t hear of countless battles where the underdog secures a decisive victory. The winner secures their victory by understanding their enemy. He plays to his strengths while hammering at his foe’s weakness.

How does it apply in the case of ‘decapitations strikes’ against Venezuela and Iran? It comes down to their power structure.

Both countries are dictatorships where the leadership consolidates its power under a supreme ruler. The ruler secures himself with the military and a law enforcement force that focuses more on stabilising the leadership than on enforcing law and security. There may be opposing parties that exist in name only, often without much power. Their leaders may easily end up in jail at the whims of the rulers.

Such dictatorships usually rule with an iron fist, treating its citizens as property rather than fellow countryfolks. This imposes a false sense of security as there is little room for dissent. However, this security is an illusion because the system is fragile and unstable. Forcing people against their will to live under a power they don’t agree with is like sitting on a powder keg.

Both Iran and Venezuela were such powder kegs. Their governments faced much criticism from other nations, leaving them with few allies internationally. Coupled with economic weakness, the glue holding people together under a repressive regime would dry up. This exposes the government to threats of an uprising.

Interestingly, both nations are rich in resources. However, they had limited access to international markets. This is because the US led its allies to lock them out of many trading systems. Their key trading partners were Russia, China and some African and Middle Eastern countries. Most of these partners are developing economies and are hostile to the West.

However, these partners cooperate out of sharing the same adversaries. Their ideologies aren’t compatible and their economic, social and military positions are unstable. They’re hardly reliable allies.

And what happened to both countries confirmed these in a stark manner…

Confirming who calls the shots

In the week after the Venezuela strike, I wrote an article revealing the Trump administration’s plan to weaken China’s economy and break its stranglehold on the supply of key natural resources and manufactured goods.

On the surface the US targeted Maduro’s regime because of its apparent threat to the US domestically through the drug trade, gang warfare, destabilising society, and election meddling.

However, Venezuela was only the entrée of the plan. Iran was the main course.

The objective of striking Venezuela and Iran was aimed squarely at hitting China’s supply of cheap oil to fuel its machine.

China’s economy is already in a turmoil from a combination of a collapsing property market, low consumer spending, corruption and wastefulness in the government and business sector.

Accessing cheap oil from these two countries had helped stem the pain and keep the machine cranking. With both countries amidst regime changes, it looks like China’s hope to surpass the US as the preeminent superpower is over.

A prolonged conflict or
mission accomplished?

History shows that it often repeats itself. However, sometimes it jumps when those steering it decide to try something new.

Many are bracing for the strikes against Iran to culminate in boots on the ground to conquer Iran, just like in Afghanistan and Iraq. This would invariably lead to a massive cost in both lives and resources.

We saw how gold, precious metals, oil, and base metals moved since the conflict broke out. Gold, precious metals and base metals dipped strongly as the strikes began, before paring the losses partially. Meanwhile, oil rose by as much as 20% from fears that the Strait of Hormuz would close and cause a major shortage in the oil supply.

Keep watch on these prices as they reveal what the experts think about the future.

I have a feeling that the conflict may last for a few more weeks before it subsides, but it won’t be a protracted war that many pundits are forecasting.

What do I base this on?

The Trump administration knows sending troops to take over a country only brings more trouble than benefits. It’s better to harness those more familiar with the region to manage affairs.

This seems to be their plan to capture the spirit of the people than their land and cities.

Look no further than the Abrahamic Accords and the Doha Accord in 2020 that aimed to bring the Middle East and Afghanistan to manage their own affairs.

Moreover, Russia and China didn’t directly intervene in the strikes despite having both military installations and strategic interests. That suggests they must have all talked beforehand. I can’t prove that there were deals made to keep them from turning this into a wider conflict. You don’t appear to abandon your strategic allies and leave their leaders in the crosshair, unless there was a bigger payback.

So what does this leave us with?

The new strategy for war isn’t direct subjugation of the land. It’s about getting the people to ’buy in’, allowing you to control by proxy. Not in the form of colonial rule, but by letting those most familiar with the region handle matters.

Welcome to a new era of war and foreign relations.

My colleague, Lachlann Tierney, has provided an insightful presentation detailing what he believes the US is doing to secure key resources in the coming years. Particularly, it has to do with resources and the coming AI boom.

Click here to learn more about it.

That’s it from me this week. Join me next week as I evaluate China’s mission to dominate in AI and robotics, with parallels to its plans to industrialise through increasing steel production in the 1950s.