The Chinese economy is a house of cards, a Ponzi scheme waiting to be exposed, a debt bomb waiting to blow up. The misallocation of capital and centralized planning, even buttressed by the allowance of low-level capitalism, will kill Beijing’s mandate from heaven, just as all planned economies eventually die. The novel coronavirus epidemic we are seeing spread from Wuhan like an Australian brush fire may be what rips the veil off the scam the Communist Party has been running for decades.
This development will have global consequences, possibly most of all for Vladimir Putin’s Russian Federation, who has staked Moscow’s future on trade with the east, after sanctions from the West shut down interaction with the developed world. The ‘East will save us’ narrative just evaporated quicker than piles of bodies in Wuhan can be incinerated.
Putin’s first olive branch to China, after the annexation of the Crimean Peninsula, consisted of signing a pipeline deal to essentially provide natural gas to China for almost nothing. Many analysts believe the Kremlin may be even losing money on gas deals with the East. This is unsustainable of course, but at least it brought a willing buyer for Russia’s main export. John McCain was right, unfortunately due to Russia’s repressive economic policies which destroys innovation, the country is essentially a gas station, with hydrocarbons consisting of about 50% of its exports.
Military cooperation with Beijing has followed the pipeline deals, and been visibly heralded by both capitals. Chinese tourism to Russia used to be dramatically on the rise, that is until Putin shut off contact with the PRC due to concerns about the viral outbreak.
Now all of this positive engagement is threatened, at least for the foreseeable future.
Donald Trump is right; it would be good for the United States to have better relations with the Kremlin. Despite the aggressive behavior of Russia’s security services against Western interests (chemical attacks, poisonings, money laundering, etc), there are many areas POTUS could pursue common interests and maybe even cooperation with Moscow.
These areas include the usual suspects like the fight against Islamic extremism, and environmental concerns. However, many other avenues are simply not discussed — like the struggle against communist infiltration across the developed world (Putin is not a fan of Lenin), the fight against the persecution of Christians across the Middle East, and even in the West, as globalists continue to intentionally marginalize the ‘Easter Worshipers’.
In fact, an argument can be made that Russia must move towards the West, in order for Putin’s government to survive. China will give Russia nothing; it will only take, especially now that the Communist Party’s grip on power may be weakened by the growing pandemic. Many suspect that the ‘long-term land leases’ Russia signed with China in Siberia may simply be a land grant to Beijing, something the Kremlin used to be petrified of allowing to happen.
Russia needs capital. Russia needs technology. Russia needs customers. And most of all, due to the severe demographic outlook, Russia most of all needs babies. Today Russia’s parents are afraid to have children; their financial outlook simply won’t allow for more than one child in most cases. I’m talking about the masses of course, not the ‘friends of Vlad’ in Moscow and St. Petersburg, where no one counts money.
This will be a very hard needle to thread for the leadership of the United States and NATO. Howeveer, a solution to the problems in Ukraine and Syria must be found, so that Russia can move back into the community of nations.
There is a new guard slowly coming of age in the Russian Federation. They are not the Cold Warriors of old, mirroring the changes happening in the West. This phenomenon will provide the opportunity for positive change.
Donald J. Trump is just the man to get the process started.
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