China's strategic vulnerabilities


hullopilllw

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China eastern side toward Pacific is dead end. China and US is decoupling, soon followed by china and japan. There's nothing there.
That's why China looking toward the westward with alliance with iran for 25 yrs deal. So, dont spend any more unnecessary resources on things with dead ends.
You overlooked too many factors. The US is the only one that is considering decoupling. The rest of the world don't.
This is why even Saudi, UAE, Qatar, adversaries of Iran are all partners of China and have no qualms with regards to China having friendly ties with Iran.
Japan decoupling with China? Ha then Japan will not join RCEP in the very first place. I dont think you have seen the composition of Japanese exports to China. Maybe you should try giving it a look before jumping to the decoupling theory.
 

SimaQian

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Well it is better to diversify the risks. If there is really a choke hold at Malacca, only the Myanmar pipeline to China can supply oil and gas.
Which is still very near to US controlled bases in south Asia. A Thai canal is definitely better than none. At least warships need to divide
to two groups to impose a blockade.

Only the Gwandar port is relatively safe from choke hold in south Asia. But its not practical to build a pipeline from Gwandar to Xinjiang.




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hullopilllw

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Well let us hope this Thai Canal will be pushed through. This will minimize the risk of getting choked in Malacca straits. This has been in discussion in centuries.
Singapore will be up in arms protesting against it.

Weird because Singapore is the one that offers to host US Navy in their Changi Base, which leads to China having the Malacca Dilemma.
 

Jono

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This Thai canal project looks promising to both Thailand and China, but difficult to come into fruition due to geopolitical reasons.
I think money, and engineering challenges shouldn't be too big of a concern, but USA , Singapore and even Malaysia will sabotage the project by various means including regime change.
And could Thailand's political elites come to an unanimous consensus towards acceptance of this major project?
 

reservior dogs

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Let me take a stab at answering the original questions.

1. Chip Ban, The U.S. has already targeted Huawei and trying to prevent TSMC from supplying to it. If Trump wanted maximum impact, the ban would take effect immediately. The timing of the ban, in September, indicated that he wanted to use this as a negotiating leverage. It is not clear to me that Trump can afford to carry through with the ban. China would retaliate and there are many targets that it could use. A severe drop in the stock market in September will end Trump's presidential race. That is just one company in China. The thing is, China is the largest chip end user and it is capable of producing chips at 28 nm today. The ban would set China back a few years, however, many U.S. companies such as Qualcomm will see their businesses drop significantly. A bigger problem is that with their market share of end users and their ability to mobilize the smartest people of the entire country, China will replicate the technologies needed to manufacture more advanced chips. In five years, maybe ten, big competitors from China will emerge. Intel just announced that they are failing to deliver their 7nm( 5nm for the rest of the chip industry). Since Intel already failed for the most part to deliver their 10 nm(7 nm for other chip makers) chips, this spells the end of advanced American chip making. The only two companies still in the game are TSMC and Samsung. If Intel folds, Samsung is also going to be in trouble. That is because the money that Intel will spend fabbing their chips will go mostly to TSMC. Samsung is behind and unable to deliver at the most advanced node of 7nm and 5 nm today. With even more resources, TSMC will be the only game in town. In this incredibly expensive race, Samsung is on their last leg and also likely to give up. In five years when all the chip fabrication talent are under one roof with TSMC and China takes Taiwan, I don't know if it is going to be China sanctioning the U.S., or the other way around. In the long run, with China being the biggest market for chips and able to build and design them, the window is closing on a U.S. chip ban.

2. Kicking China out of the SWIFT system, If the U.S. see it advantageous to kick China out of the SWIFT system, we would have done so by now. Unlike the cold war days, China is number one trading partner with the largest number of nations. As they climb the technological value chain, more and more things could be purchased from China. China also imports a lot of commodities such as oil. If they are kicked out of the SWIFT system today, a parallel system will quickly be born where China will trade the goods they produce for commodities using RMB. The U.S. dollar, being the strongest reserved currency today, depends on people using this to do trade. Since the 2008 financial crisis, and especially during Covid-19 fiasco, The U.S. is printing and spending a lot of dollars. We have not seen worse inflation because much of the dollar is circulated outside of the U.S. Other countries are partially paying for our print and spend ways. Dollars represents things that it could buy. We are not making much stuff to sell to those that hold the dollar today. If China can make airplanes and chips, there is even less to sell. so our reserve currency depends on people using the dollar to trade among each other. If we kick out China, the 900 pound gorilla in goods produced and oil consumed, a huge chunk of the reason for holding the dollar will be gone. The U. S. have not been able to balance our books during the entire 2007-2020 boom bust cycle, with many good years of economic growth. Now we are faced with a deep pit that will take many years to dig out of. The debt the U.S. government owe the world, including its own entities, just exceeded 100% GDP today and likely to exceed 150% in a few years time, after we climb out of this pit. As interest ticks up, we are entering a dangerous vortex where ever increased amount of money needed to be printed to pay the interest and stay afloat. The U.S. dollar is already endangered of losing its reserved currency status without much help from anyone else. Kicking China out of the SWIFT system will end the U.S. dollar as the reserved currency and end U.S. dominance faster than Donald Trump can say "Huge".

3. Apps ban, Within China, they are already finding alternative to the Google Android OS. Banning the OS from China will accelerate this process.

4. Oil embargo, First, it is very expensive to enforce an embargo. A lot of war ships patrolling the sea lanes. Since it is a declaration of war, the Malacca Strait would not be a suitable place we can do it since it is within the fire power of the Chinese rockets. We would have to do this in the Indian Ocean. Since we can't get to the Indian Ocean via the South China Sea now, It will mean our war ships will have to go a long ways south of Australia to get to the Indian Ocean. If this were to happen, what would be the counter moves that China can make? Russia will continue to supply oil to China unabated. China can activate its ports in Pakistan. China can also station anti-ship missiles in Pakistan and Iran. A few batteries of DF-17 with the range of 1700 km. The Chinese merchant ships can sail under this protective umbrella to reach the ports of Pakistan and oil will be transported with pipelines from there. What about the Saudis? They have lost a major customer. Even with the U.S. pointing our guns at their face, the Saudis will try to find a way to sell their oil covertly to China since this is their only livelihood. In the Middle East, Iran will now be the top dog with China's help. endangering Israel and Saudi Arabia. China was balancing the many oil supplying countries without trying to make one side too strong, but the embargo would change this calculus. Oil will be traded via RMB. That spells the end of the U.S. control of the dollar oil linkage. It will be the beginning of the end for the U.S. dollar as a reserve currency. Weighed down by the cost of enforcing the embargo, we will have to print even more money and slide down the path of a second tier power. At some point, printing more money will have a more dire consequence in terms of inflation and lost of faith on the currency.
 
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Jono

Junior Member
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Thank you Reservoir Dogs for your honest assessment of the situation from your perspective. Salute to you.
The USA is clearly in a difficult and untenable/ unsustainable position. Co-operation with China is certainly the path America should take, it is plain and simple for all to see. President Xi has told America that the Pacific is large enough for both countries to co-exist. But alas, America is so used to her hegemony that she cannot accept a co-champion walking side by side.
"TSMC will be the only game in town". hence Trump is forcing TSMC to relocate to America.
 

Laviduce

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I thought the world obeys Trump so therefore shouldn't Germany let Russia back into the G7 like he wants...?
Russia and any other soverreign nation should stay far away from the G7. The G7 is nothing more than a US vassal club. Germany saying that Russia should not be admitted can be construed many different ways. I like to believe that Germany is on the fence, treading the middle ground between the US and Russia. There is no point of Russia joining this farce again anyway. The G20 is a far better platform and represents the interests of the globe far better than the G7 US vassal club.
 

ansy1968

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Thank you Reservoir Dogs for your honest assessment of the situation from your perspective. Salute to you.
The USA is clearly in a difficult and untenable/ unsustainable position. Co-operation with China is certainly the path America should take, it is plain and simple for all to see. President Xi has told America that the Pacific is large enough for both countries to co-exist. But alas, America is so used to her hegemony that she cannot accept a co-champion walking side by side.
"TSMC will be the only game in town". hence Trump is forcing TSMC to relocate to America.
Hi Jono, and great summary Reservoir Dogs

TSMC even hedge their bets by having shares in SMIC.
 

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