My blog title is the 2nd part of an advice from the ancient book The Art of War by Chinese military strategist Sun Tzu (544 BC – 496 BC): “Appear weak when you are strong, and strong when you are weak.” The continued Chinese military plane incursions in Taiwanese airspace remind me of that Sun Tzu quote (eg, NR).
A recent report by Goldman Sachs economists, as quoted by Bloomberg, paints a weak picture: China Hidden Local Government Debt Is Half of GDP (see Saturday’s blog for text). Other examples of this weakness are: (i) the imminent bankruptcy of the “second largest” Chinese property developer Evergrande Group, and (ii) the “missing bond payment” by China’s “leading property developer” Fantasia (sic!) Holdings, and (iii) China’s severe electricity shortages disrupting its factories.
My view above isn’t new and hasn’t changed. In 2016, I already wrote about an expected Chinese economic implosion (2016-1, 2016-2). Similar other news articles followed (eg, 2018 Bloomberg, 2019 CNBC). Subsequently, the expected Chinese demographic implosion came to my attention (eg, my blogs of 2018, 2018 Bloomberg, 2021 CNN, 2021 NIKKEI).
As also noticed by others over the years, a weak China may even be more dangerous than a strong China. An intriguing recent NIKKEI article combines this strength and weakness: “low [Chinese] troop morale”, due to its “one-child army”, has “inclined [China] to add unmanned aircraft and ballistic missiles”.
I think, feel and believe that China’s implosion will (eventually) result in the transformation that American clairvoyant Edward Cayce (1877-1945) has predicted in 1943, and that “the height of civilization would move from the West to the Chinese people”.
In my view, the main obstacle in this transformation, is the revival of Chinese ideology, following decades of Chinese pragmatism (eg, my blogs on ideology vs pragmatism). Nevertheless, many articles suggest that (Chinese) Confucianism and pragmatism are intertwined (eg, JSTOR-2012, JSTOR-2021, SMU-2012, University of Tennessee-1971, the useless tree-2007).
I fail to see how the many contemporary Western beliefs would ever bring a return to Western pragmatism. Even a pandemic seems to increase our ideological beliefs, whereas a return to pragmatism would have made more sense. Hence, I have little doubt that Chinese pragmatism would have won from Western ideology, and its ever-increasing partisanship.
The recent return of Chinese ideology (eg, “common prosperity” or “common poverty“) gives us a time-out of perhaps several years. So far, there’s little to no indication that the West is eager to benefit from this time-out.
Note: all markings (bold, italic, underlining) by LO unless stated otherwise.