A SERIOUS THREAT TO WORLD DEMOCRACY
Russia & China’s Big Picture Plan To Take Over the World
What empowered Russia & China against The West and why is China obsessed with Taiwan?
When Russia invaded Ukraine on Februrary 24, the world was shocked.
But with surprising resilience by the people of Ukraine, the unexpected struggles of the Russian military, and the concerted sanctions on the Russian economy by the western allies, the people of the free world was convinced that Russia made a huge mistake. People began to think that Putin had fallen mentally ill, his invasion of Ukraine was a spontaneous error, and that the Russian economy is now doomed.
But two months into the war, what we are currently seeing is turning out to be quite the opposite.
- Russia’s weaponization of oil and gas is putting Russia back on a strong footing against the west with some of the European companies giving in to Russia’s demand to pay for its gas in Rubles— “Europe Starts Splintering in Its Response to Russia’s Gas Threat” (Bloomberg), “How reliant is the world on Russia for oil and gas?” (BBC)
- Russian Ruble has fully recovered its pre-invasion value gainst the U.S. Dollar in just a month after nose-diving nearly 60% (Not so much in rubles as Biden asserted)
- From grains and fuel to food and services and Tesla, the price of everything is spiking to hurt the consumers of the world
- The concerted attack on Russia by the western world along with the simultaneous withdrawal of most global brands like McDonalds is drawing the Russians together on a united front under Putin. Many Russians initially rejected the war, but almost none does now (at least vocally) — “Now we’re going to f*ck them all.” by Farida Rustamova
- Russia is effectively using the threats of nuclear war to hold back the U.S. and its allies against actively joining the war.
- etc.
All in all, it somehow feels like the west is hurting even more economically than Russia, especially since Russia wasn’t even a big beneficiary of the global economy to begin with while it was always an important supplier of key resources.
In fact, Russia probably planned for this war for a very long time. Ever since 2014, Russia had been steadily reducing its holdings of USD reserves while increasing its gold, Chinese Yuan, and Euro holdings to withstand potential sanctions against its economy. Taking the effectiveness of such plan aside in the face of the west’s blockage of its offshore reserve accounts, it nonetheles shows that Russia had been preparing for the war as far back as 2014 when it invaded and merged Crimea by force (if not even before).
Russia seems to have understood very clearly all along their own strengths against the weaknesses of the western front.
In this article, we will examine why Putin is probably not out of his mind, but to the contrary, had been planning the war for at least several years with a clear understanding of the world conditions that would help him gain substantial leverage in his efforts to regain Russia’s past soviet glory.
In the same context, we will also examine the even greater danger of how China, as a strategic partner to Russia against the democratic allies, can make things much worse.
The Background That Empowered Russia And China Over the West
The current norms of our world have been developed through the various developments of the world in the span of the past multiple decades. The consequences of these “norms” that we have become so used to, living in democratic & capitalist economies, are exactly what is making us weak in the face of aggression by Russia (and China) and what these regimes are leveraging against.
Two of these norms that I would like to examine in more detail are
- Climate awareness
- A globalized & tech-dependent world economy
Climate Awareness
With global warming and deteriorating climate a pressing issue for the world, the developed nations have been making an aggressive shift to sustainable energy.
During the past decade or so, Europe, led by Germany has clearly made a huge mistake by self-destructing its nuclear power capabilites by abruptly shutting down its perfectly working nuclear power plants and shifting its focus to other forms of renewable energy like solar and wind. In the long term, such a transition is essential, but making such an about face when they are still largely incomplete sources of energy created a vulnerable environment for Europe. To make up for the gap in energy source, Europe has increased its reliance on Russia for the supply of a big part of its energy in the form of oil and gas.
As of 2019, Russia accounted for 41% of European Union’s natural gas imports. (“How reliant is the world on Russia for oil and gas?”, BBC)
Let’s take a look at the following data on how much energy Europe and Russia each produces and consumes:
We can see that Europe consumes more than twice the energy it produces, while Russia consumes less than half of what it produces.
Also in the United States, despite the shale oil fracking revolution, energy production have been limited in the U.S. primarily because of an awareness for climate. Fracking is bad for climate.
Thus, in the modern era of globalization, the developed nations, with their high awareness of global warming and climate, have been increasingly outsourcing these “climate-destroying” activities to countries like Russia and China while working on a transition to fully sustainable energy.
And this is where Russia and China are striking back. With their grip on the supply of key resources — from oil and gas to grains to rare earth metals — that the west have been relinquishing for the sake of transitioning to sustainable energy, Russia and China are using these resources as weapons to strike the west while sustainable energy is incomplete and the west’s dependence on outsourced resources is the highest in history.
It sort of seems to me the developed nations have been enjoying all the convenience while avoiding all the hastles, but now they are facing a great reckoning by the less-developed countries who have been quietly expanding their power while doing the things the west didn’t want to do.
A Globalized & Tech-Dependent World
During the past several decades, the world has thrived under a globalized economy, the key advantages of which — for the developed world (e.g. Europe & the U.S.) — were the cheap labor & increased productivity provided by the offshoring of production.
The biggest benefits of reduced labor cost and increased productivity were the increased profits for companies, and subdued prices and abundance of choices of goods for consumers, resulting in an overall thriving economy.
However, a huge consequence of such environment also began to arise. While blue collar Americans lost their jobs to cheaper overseas laborers in China, white collar Americans’ profits and incomes have been growing exponentially. A quickly widening social gap has become a great problem for the U.S. and has given astonishing rise to socialist & populist voices, dividing the Americans and increasing hostility among the people.
For communist countries where social gap is already in its extremes and the regime has full control over its people, increasing divisions and hostility among the people of their enemies (e.g. the U.S.) and the relative ineffectiveness of a democratic government to fully control its people (at least in comparison to a totalitarian one) would be such welcoming things to observe.
Moreover, not only has offshoring improved the U.S.’s economic well being, but it has also improved that of China by much more, making it a global supwerpower capable of making even the U.S. blink. At the same time, the U.S. has become extremely dependent on China (and other producer countries) for the production of most of its goods.
Why is China Obsessed With Taiwan?
When we think of offshoring, we may be tempted to think about low-skill jobs like textiles and electronics manufacturing, but if we look at the semiconductor industry, we can see how much the U.S. economy has become dependent on the production capabilities of other countries.
In the early years of computers, most of the important developments in semiconductors took place in the U.S. (Bell Labs, Fairchild, etc.). As recently as 1990s, more than 80% of the world’s semiconductors were produced by the U.S. and Europe. But today, that value has dropped to less than 20%, but more importantly:
“TSMC and Samsung are the only companies capable of producing today’s most advanced 5-nanometer chips that go into iPhones” — Visual Capilist
“TSMC is just so dominant. It no longer really has much competition at all on the high end.” — Dan Wang, Technology Analyst, Gavekal Dragonomics
In essence, the production of high-end devices like iPhone is entirely dependent on the continued ability of TSMC (and to a smaller degree Samsung) to produce and supply the required chips.
But a potential problem here? China wants to invade Taiwan to make it a part of its own.
With Taiwan comprising more than 60% of world’s foundry market (TSMC 54%, UMC 7%) and TSMC making the majority of the world’s high-end single-digit nanometer chips, imagine what would happen to the world economy if China really invades Taiwan. Even Samsung, which is the only alternative to TSMC for high-end chip manufacturing, is of South Korean nationality under constant threat by North Korea (and China) that may not be free from military risk in the event of China’s attack on Taiwan. No one knows what kind of chaos a Chinese invasion of Taiwan can bring to the world so heavily dependent on technology, where everything runs on semiconductors.
For those of us that think China will not invade Taiwan because of the economic consequences that could bring, take a moment to think about who has more to lose: China or the U.S.? For one thing, if China takes over Taiwan, it is taking over 60% of world’s semiconductor production capability overnight and basically taking hostage essentially all of Apple’s (and just about any other) products that we all heavily rely on in our daily lives.
Can the U.S. sanction China as aggressively as it did to Russia? Maybe. But the U.S.’s biggest ally — the European Union — is already struggling so much with just the Russian situation; imagine how they could possibly handle sanctions on China of similar force. Also remember how the world reacted with a seizure to Donald Trump propping up his attacks on China during his term; the sanctions that would aim to cripple China in a similar degree as to Russia should be beyond comparison of what Trump had done in scale and I’m not sure the U.S. under Biden has the balls to implement such self-devastating economic measures.
Will the U.S. step in to protect Taiwan militarily? Well, the U.S. can’t step in to protect Ukraine outright because Ukraine is not part of NATO; Taiwan is officially not even recognized as a country by the U.S. and the rest of world nor is it even a member of the United Nations. As China reminds the west: “Don’t mess with another country’s domestic affairs.” Apart from its economic significance to the west, Taiwan officially has even less of a justification than Ukraine for the west to step in militarily. And China, as is Russia, is a nuclear superpower. U.S. stepping in simply means it’s going to be a World War III with the risk of nuclear devastation.
What’s important to keep in mind is that China has openly and continuously stated that Taiwan is already a part of “One” China and that it can take Taiwan by force if needs be.
China has been trying very hard for a long time to expand its semiconductor capabilities led by SMIC, but have failed to achieve its goals. With China escalating its intent to take Taiwan by force in recent years, it seems China clearly has a reason for why it wants Taiwan so much.
On a side note, Russia, China, and North Korea — all communist totalitarian regimes — have always been actively engaged in global cyber attacks with the goal of bringing systems down or to steal others’ money. What bastards they are.
The Horrors of Communism — Why We Must Not Let Them Win
I wonder how many Americans (or citizens of any other democratic nation) really understand what living in a communist society truly means. Many may have traveled to Shanghai or Beijing and felt the country is not so much different from their own country in terms of freedom.
But observing how China is imposing Covid-19 lockdowns can open you to the horrors of living in a non-democratic totalitarian country and what the communist regime is capable of doing to its citizens.
Some of the appalling things currently happening in Shanghai:
- Chinese authorities are physically confining each one of Shanghai’s 26 million citizens inside their homes by sealing their front door with a piece of warning paper, which, if torn from opening the door, will get you punished for violation
- People who have been confined to their homes for weeks are screaming en masse from inside their apartments crying out that they are starving, hoping the government would hear them out
- Robot dogs and drones are roaming around apartments, announcing to the people to not sing or scream from inside their apartments
- As existing isolation facilities reached full capacity, Chinese authorities decided overnight to turn some residential apartments into facilities and notified residents to empty their homes, dragging them out by force and beating up those who resist
- Of course, search results for any of these on Baidu is blocked
One American citizen currently in lockdown in Shanghai (from the above video) said in an interview that a majority of foreigners living in Shanghai that she had polled said that they’re going to leave China after this.
As people who live in a free democratic world, we must be thankful for the environment that we live in because in other parts of the world — in a communist nation like China — there is no such thing as human rights if it’s a hindrance for the regime. The freedom we enjoy every day should not be taken for granted.
Let’s Stay Strong
Despite the evils demonstrated by Russia and China in recent months, I was really moved by the concerted support for Ukraine and active rejection of Russia’s aggression by the free-willed people of the democratic world.
Widespread support for Ukraine through social networks, various forms of donations, military participation by brave individual citizens, and Elon Musk’s Starlink support for Ukraine have all shown the power of democracy and the power of the people against totalitarianism.
While we may get wary and lose interest as the war drags on, we should be aware that this may not end with just Ukraine, but could ultimately expand into a world war as Russia invades more nations like Moldova, and China invades Taiwan.
I really hope such a tragedy never happens, but in case it does, let’s all remember the importance of the freedom we enjoy and stay strong together to protect our freedom from the aggression of the totalitarians.
