Why You Should Be Preparing for China – Forward Observer

Why You Should Be Preparing for China

Good morning. It’s Sam Culper with this week’s Forward Observer Dispatch.

Here’s why you should be preparing for China, shooting war or not…

Obviously, in a shooting war with China, international trade will be disrupted. That’s a guarantee for sudden supply shocks because of U.S. reliance on imports from China. The risk of war isn’t imminent, but history says it’s likely to happen eventually.
One of the most important points often missed, though, is that whether or not the U.S. goes to war with China, supply shocks and systems disruption are still likely.

As I’ve previously covered in my Early Warning briefs, China and the United States are in a “decoupling” period that will result in a U.S.-allied trading bloc and a China-allied trading bloc, not too dissimilar from the Soviet bloc countries and the West during the Cold War.

As a part of decoupling, programs under both the Trump and Biden administrations have sought to:

  • re-shore jobs and industries away from China, either back to the U.S. or to U.S. trading partners
  • protect American supply lines by finding sources of key materials, such as rare earth minerals, outside China
  • increase export controls on China, and
  • restrict American investment in any Chinese company with ties to its military.

Meanwhile, China last year introduced its first round of export controls to the U.S., and the “Made in China 2025” strategy is intended to make the country’s economy and industrial base more self-reliant by decreasing imports and shifting production from “cheap” goods — like the kinds Americans buy — to higher tech equipment.

Bridgewater’s Ray Dalio wrote last year that the U.S. and China are engaged in a “Capital War,” in which both sides try to cut off much needed capital from the other.

The U.S. is trying to restrict foreign inflows into the Chinese economy, while China is undermining the U.S. Dollar’s world reserve status. (That, by the way, is the number one thing to be preparing for because of its strategic impact. If you want to know more, I cover the implications each Thursday in my Economic Early Warning report. DO NOT miss it.)

Here’s where things get interesting…According to Dalio, “The goal is to cut the enemy off from the capital that the enemy needs because no money = no power,” he writes. “Without the US disrupting China’s currency and capital markets they [China] will likely develop quickly and increasingly compete with the US currency and credit markets.”

In light of a response from China that could accelerate the loss of confidence in the Dollar and U.S. credit markets, the Biden administration may pursue the appeasement of China and opt not to escalate. This appears to be the Biden strategy ahead of the “reset” meeting being planned with Chinese officials this month.

Biden’s soft approach to China is likely to become a clear failure, in which case the administration reverses course. This likely means escalation, either militarily or financially/monetarily, as Dalio describes.

Regardless of what Biden does, considering the known stable of candidates for 2024, his successor is unlikely to take a soft approach. This almost certainly means eventual escalation in economic, geopolitical, and capital conflict, and potentially a military confrontation, either under Biden or his successor. Given the decoupling, this almost certainly means eventual supply shocks and systems disruption, with or without a military conflict.

Personally, my strategy is to identify what I use in daily life that comes from China (even unknowingly, so look hard), and then find alternatives. A large part of preparedness is knowing what to expect in the future and then mitigating those risks. This is one risk we can see coming.

Be well, and prepare accordingly.

Always Out Front,
Samuel Culper


P.S. – If you want to know more about what’s headed towards this country at a hundred miles per hour, then sign up for my Early Warning briefs. We “read the tremors before the earthquake,” as one subscriber put it. There’s still time to prepare, but it’s dwindling. Subscribe here –> https://forwardobserver.com/subscribe

Samuel Culper is a former Intelligence NCO and contractor. Iraq(x1)/Afghanistan(x2). He now studies intelligence and warfare.

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5 Comments

  1. China is starving now. Massive floods produced two years of massive loss of basic grain(s) Wheat, Corn, Soybean, and Rice.
    Coupled with 1/2 of all pork being infected with swine flu has decimated that industry.
    Vegetables rotted in the fields due to floods too.
    China is importing the grains but is paying a premium due to the virus disrupting transportation networks.
    Nations around the world have had enough of the CCP along with denying any sale of food grains.
    Economic warfare in food is devastating so the old adages
    3 minutes without air, 3 days without water 3 weeks without food applies to any nation.
    A desperate starving Chinese admiral/ general will pull a trigger at Taiwan and the missiles will start flying around the China Sea

  2. There will never be a real all-out shooting war between the US and China because they need each other two much. The US needs the Chinese junk and China needs the market for their junk. As long as there’s trade, there will be no war.

  3. If history is anything to go by, financial warfare always leads to military conflict. It was the mechanism that triggered the Second World War. Almost twenty years before that war broke out, the Allies tried to cripple Germany permanently, in hopes that it would never again be able to invade any Allied country and lay waste to it.

    The plan worked… almost. Instead, Germany’s economy and industrial capacity resurged, eventually leading to military arms production, which had been more or less banned under the Treaty of Versailles. War followed soon after. Much like modern-day China, Germany was growing rapidly and needed access to natural and other resources to maintain that growth.

    Germany saw itself as the leader of a global empire, a thousand-year Reich. China sees itself as a global leader as well, and appears bent on a path of world domination.

    Both Britain and the United States feared a resurgent Germany for a variety of economic and strategic reasons.

    Take the word ‘Germany’ out of the sentence above and replace it with ‘China’ and you can perfectly describe the situation we face now.

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