Published 21st August 2021
The Chinese Communist Party (“CCP”) thinks uber long term. It is no accident that they own 1 in every 5 dollars of US treasury debt.
So Uncle Sam, with eye watering levels of leverage, blessed with their “anyone but Trump” president and committed to adding trillions of dollars more to the national debt pile has its main geopolitical rival as its largest creditor.
China will soon overtake the US as the world’s largest economy. This has taken several decades but is the result of a centrally planned deliberate strategy, including currency manipulation and never having to worry about “debt”.
The CCP has successfully combined absolute control through subjugation of the Chinese population, whilst allowing those with the right credentials to “prosper” in turning China into the world’s factory.
With the fall of Afghanistan, they will follow a well trodden path of “infrastructure investment” in return for soft power and unfettered access to a trillion dollar supply of the minerals of tomorrow, not least lithium, a key component in the batteries that are set to power the world’s 4 wheeled future.
David Cameron and George Osborne embraced Chinese inward investment on an unprecedented scale with multiple trade missions, allowing the CCP access to key UK infrastructure, not least our nuclear programme. This flirtation with Sinophilia needs to end, whilst remembering that the overwhelming majority of Chinese people are not the CCP.
The world has been sleep walking whilst the CCP has been knocking over strategic dominoes one by one. The decision to (largely) remove Huawei from the UK’s 5G rollout is the equivalent of scoring a consolation goal when you’re 6-0 down in injury time. Way too little, way too late.
Whatever one thinks of Biden’s decision to turn tail from Afghanistan, it is clear that internationalism may finally be waning. COVID-19 has shown the value of localisation of supply chains and whisper it, the need for countries including the UK to restart indigenous manufacturing.
Western values such as democracy and diversity are losing traction in emerging nations. Just over 40% of nations have recognisable multi-party democracy. Let that sink in. The reverse to that is almost 60% do not.
China has progressively gained soft power through belt and road infrastructure investment predominantly within that 60% which it will successfully leverage in the coming decades. They have won that battle without firing a single bullet.
The US, for the foreseeable future at least can no longer be relied upon as a strategic military partner and the so called “special relationship” is dead.
It was always heavily one sided and the US has always had it in them to act unilaterally without informing its partners (think of the Grenada invasion by Ronald Reagan, much to the ire of Margaret Thatcher). Even a free trade deal looks optimistic in this presidential term.
With China buzzing Taiwanese air space up to a dozen times a day this week and no pushback from the US, an invasion looks inevitable. Rest assured, if and when it happens, it will be a time of the CCP’s choosing. They are in no rush.
Post Brexit Britain needs to stand on its own two feet. We remain a significant economy, 6th on the global stage but have become too dependent on services as a percentage of GDP.
I am not advocating a return to the 1970s when Trade Unions ensured cripplingly poor levels of output, efficiency and quality for privately owned and publicly funded entities. Quite the opposite. The state must also avoid picking winners.
Equally, we must forge new alliances and strengthen existing ones where it is in our national interest. Whilst domestically produced goods and materials may cost more, there is a renewed appetite to buy British.
The UK has some of the finest global intellects across a gamut of the growth sectors of tomorrow. Instead of exporting them all, let’s incentivise them handsomely to build a modern, dynamic British economy, with vastly reduced dependence on other nations. It will be money well spent.
America First is very much alive and kicking under Biden, despite his proclamation at the G7 that America is back. It certainly is. Back home.
The CCP has been CCP First from minute one.
Without becoming insular and navel gazing, it is time the UK pursued a UK First strategy too. Colonel Richard Kemp has called for a doubling of defence spending. Whilst there is no magic money tree, I’m what is set to become an increasingly unstable world, I support this wholeheartedly.
The Conservative Party needs to radically overhaul what the state is and what it is not. Personal taxation is at record post World War levels and government debt has trebled in just over 10 years of Tory led governments. Defence spending on the other hand has gone backwards with army personnel steadily decimated to 82,000.
We cannot “beat” China. We can however learn from them. Starting by thinking much longer term. Which is substantially longer than a single parliamentary term. Our leaders must keep the best of what we have but reform the cost and efficiency of public services without fear or favour.
As a large C Conservative, fiscal and defence hawk and proud Thatcherite, I genuinely believe that Britain remains a great place to live, work and has many positive attributes. It can and must pivot to face the realities of the New World Order. Standing still is going backwards.
© justchrisdavies 2021