From “no limits” partnership announced by China and Russia in February 2022 to the latest pledge to drive something that hasn’t been seen by the civilization in 100 years, the West is very concerned. Thanks to the United States’ strategic errors – and arrogance – Beijing and Moscow are now closer than ever, driven by a shared goal to fight back Washington’s efforts to suppress both nations.

 

In fact, as Chinese President Xi Jinping ended his 3-day visit to Moscow, he said something spectacular during his departure that has spooked the Western nations. He told his “dear friend” President Vladimir Putin – “Change is coming that hasn’t happened in 100 years. And we are driving this change together”, before telling the Russian leader to “please take care”.

 

Smiling, Putin responded – “I agree” – while holding Xi’s hand with both of his and ended – “Have a safe trip”. While the farewell has taken the Western news media by storm, analysts are expected to decipher and discuss those statements in the coming weeks – even months. After all, just before Putin launched his “special military operation” on Ukraine, both leaders pledged unlimited partnership.

Their warm goodbyes, caught on microphone, might not be intended for public consumption. But it could also be deliberately arranged to send a chilling message to the West that China and Russia are “united” in weakening American power and influence. Crucially, Mr Xi wanted to show his strong solidarity with Mr Putin against the West, while Russia has shown it is not isolated at all.

 

Interestingly, Xi’s visit came just days after the International Criminal Court issued an arrest warrant for Putin, clearly orchestrated by the U.S. to humiliate him. However, it’s hard to imagine how the Russian leader could be arrested without sparking a Nuclear War. As both leaders ended their talks, the IMF (International Monetary Fund) announced a 4-year loan package of US$15.6 billion to Ukraine.

 

Washington was running around like a headless chicken as the U.S. and NATO, like a broken record, continue urging China to pressure Russia to withdraw from Ukraine’s territory in order to end the Europe’s biggest conflict since World War 2. But in a joint statement, Xi and Putin have instead condemned the West of undermining global stability and accused NATO of barging into the Asia-Pacific region.

Not only Xi did not bother to mention Ukraine during his visit, Putin actually launched a new series of drone attacks on Ukraine as the Chinese leader left Moscow. To steal some thunder from China, Japanese Prime Minister Fumio Kishida made a surprise visit to Ukraine. It appears the West is fast running out of cards to show its support for Ukraine.

 

To drive a wedge between Beijing and Moscow, the Western media have begun cooking up a new narrative after Xi’s visit – Russia is just a junior partner, even a vassal state of China, as both nations set to shape a new “World Order” that would end America’s hegemony. It means the day where one nation-state plays the dominant role in organizing and regulating the world political economy is coming to its end.

 

Yes, this is why the U.S., beginning with Trump’s trade and tech wars, followed by Biden’s aggressive provocations on Taiwan, has been doing everything to contain the rise of the red dragon. But China is calling the U.S.’ bluff because the U.S. president has told the world that he is not willing to send troops to defend Ukraine. So, why would the Chinese believe the U.S. will defend Taiwan?

The British Empire ruled the world from 1815 to 1913. Beginning 1890s, its economic power was challenged by the United States and Germany. The Great Britain hegemony finally collapsed after two world wars, and saw the U.S. hegemony began during the Second World War. While the U.S. is still powerful in the global economy and military, statistic and data show its economic power is declining rapidly.

 

In 1950, the world practically revolves around the U.S. as it supplied half the planet’s gross product, only to drop to 21% today. Likewise, American Empire contributed 60% of global manufacturing production in 1950, but plunged to 17% in 2022. China overtook the U.S. as the world’s largest manufacturing hub in 2010, accounting for 30% share market in 2021.

 

Crucially, the U.S. current account was almost constantly in “surplus” from 1895 to 1977. Beginning in the mid-1970s and thereafter, the country’s national debt began to increase faster than GDP, especially during the 1980s when President Ronald Reagan cut tax rates and increased military spending. That’s how the U.S. turned into a debtor nation in 1986.

Public debt was US$3.339 trillion in 2001 during the presidency George W. Bush. Today, it’s a whopping US$31 trillion. Over the past 100 years, the U.S. federal debt has skyrocketed from US$408 billion in 1922 to US$30.93 trillion in 2022, and “net interest payments” on the debt are estimated to total US$395.5 billion. Federal Reserve alone held US$6.1 trillion (Sept 2022).

 

It’s both illusion and self-denial to argue that the U.S. will never lose its hegemony simply because the nation is still the global military superpower. One has to remember that military power depends upon the economic resources for funding and support. Besides, military prowess does not guarantee victory in every war – even the mighty America lost the Vietnam War (1962-1975).

 

Therefore, it’s not hard to understand why China and Russia talked about “change is coming that hasn’t happened in 100 years.” It’s not entirely rhetoric to say the American Empire is ending the same way the British Empire had ended about 100 years ago. In global finance, the U.S. is not only losing its dominance, but is also vulnerable. Its Achilles heel is the dollar.

 

When sanctions were slapped on Moscow on Feb 24 after the invasion of Ukraine, all foreign currency reserves – US$630 billion – held by the Central Bank of Russia with U.S. banks were effectively frozen. Now, Putin is the biggest cheerleader of Yuan, revealing that about two-thirds of the trade settlements between Russia and China were with the Chinese currency and ruble.

 

China’s trade with Russia hit a record 1.28 trillion Yuan (US$190 billion) last year, even as Moscow’s imports from the European Union fell on sanctions. Essentially, Russia has become the top foreign market for the Chinese currency. In fact, Putin publicly announced that his country prefers Yuan in trades between Russia and other countries in Asia, Africa and Latin America.

 

The Yuan’s market share in Russia jumped to 48% in November 2022 from less than 1% in January the same year. Heck, the country briefly became the world’s third largest offshore trading hub for the Chinese currency in July 2022 – behind Hong Kong and United Kingdom. The Russian sovereign wealth fund has actually doubled the share of Yuan reserves to 60%.

The trade numbers might not look impressive. But the chain reactions cannot be underestimated. Russia’s other energy export destinations included India, ASEAN, Japan and even Saudi Arabia. This potentially creates demand for Yuan settlement when Russia sells oil and gas. Additionally, the Russia-China new economic cooperation could be promoted to other SCO and BRICS countries.

 

It’s quite a clever plan to push Saudi Arabia, already said it’s open to the idea of trading in currencies besides the U.S. dollar, to start selling or buying energy commodities in Yuan. Who do you think China, the world’s largest oil and gas importer, will choose – buying Russian oil in Chinese Yuan with 30% discount thrown in, or buying Saudi oil in American dollar at market price?

 

Even if the kingdom prefers to trade in its own currency, it’s still a victory for Russia and China because it would shift toward “de-dollarization”. It was by design, not coincidence, when Xi Jinping personally brokered the peace plan for arch-rivals Saudi Arabia and Iran to restore their diplomatic relations. It allows the Middle East to diversify their foreign relations, moving away from being overly dependent on the U.S.

Challenging the American Empire hegemony, the peace agreement shows the diminishing influence and credibility of the U.S. in that region as Saudi and Iran enter China’s orbit. The best part is, it was Saudi who asked China to assume a mediator role, a proposal that Beijing and Tehran readily accepted and ultimately led to the deal, according to Stimson Center.

 

But here’s the biggest headache for the idiotic Biden – he has pushed China and Russia to an unofficial military partnership. China, an economic superpower, is hungry for resources and raw commodities like oil, gas and coal to power its economic engines. It also needs advanced military technology. Guess who can provide them cheaply – Russia, of course.

 

Russia, a military prowess, is hungry for investments to keep its economy running. It also desperately needs new customers as its fossil fuels are being banned by the West. On top of that, the Russians need to buy machinery, electronics, vehicles, ships and aircraft. And guess who has deep pockets, massive market and all types of electronics – China, of course.

Now that Russia and China have joined forces, they are incredibly powerful. The People’s Liberation Army (PLA), lacking major combat experience, can depend on Russian. Last December, both nations stepped up military cooperation in yet another joint exercise in the East China Sea. Heck, they have even started “sharing a toolkit” of approaches and strategies to undermine NATO.

 

Just imagine China and Russia has merged as one nation. It is more powerful than the U.S. and NATO members combined. If the West continues to push their luck, China could start supplying Russia with military aid to fight not only Ukraine, but also against NATO. Russia, on the other hand, could extend support for China in its invasion of Taiwan and undermine the U.S. in South China Sea and Asia Pacific.

 

The best part is Xi Jinping did not find it worthwhile to speak with Ukrainian President Zelensky, despite the widespread anticipation from Washington and Western media after Beijing’s proposed 12-point peace plan. Instead, Zelensky said he has “invited” China to participate in a Ukrainian-designed peace formula to end the war. But president Xi is playing hard to get.

Ukraine is losing the war, and it is not in a position to demand. If indeed it is winning, as trumpeted by Washington and NATO, exactly why did Zelensky sack Eduard Moskalyov, the commander who had been serving in the military’s Joint Forces Operation since March 2022? Beijing doesn’t really care what Zelensky or Biden thinks about the peace plan. Its target was other non-Western nations.

 

Other Articles That May Interest You …

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• Bypassing US Dollar – India And Saudi Arabia To Turn To Chinese Yuan In Trades With Russia & China
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• China Strikes Back!! – Trade War Becomes Currency War After Suspends U.S. Agricultural Goods & Devalues Currency
• From Trade War To Tech War – After 5G Technology, The US Aims To Cripple China’s Artificial Intelligence
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March 24th, 2023 by financetwitter

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