China's Third Center Strategy
China has hosted Trump, and will now host Putin. As the United States and Russia become more overt enemies, China seeks to be a friend to both.
Last week, I discussed why Trump visited China:
What would a grand bargain between China and the United States look like? The United States is primarily interested in maintaining dollar hegemony, and so it needs China to purchase US treasuries. China wants access to the US market as well as the energy resources of the Western hemisphere.
The summit has ended, and we are already seeing the broad contours of this grand bargain emerging. China has agreed to buy American LNG, and China agrees with Trump that Iran should not develop a nuclear weapon, should not close the Strait of Hormuz, and should not collect tolls.
President Xi Jinping calls for “strategic stability” between China and the United States, which I interpret to mean that both should co-operate to maintain the status quo. This is a tacit acceptance of the Donroe Doctrine, and America’s supremacy over the Western Hemisphere and America’s war against Iran. China accept America’s subjugation of Venezuela and strangling of Cuba, and China hopes that America concludes its “business” in the Middle East as soon as possible.
In return, Trump seems ready to “oppose” Taiwan independence, arguing it is a distant concern in an interview with Fox News’ Bret Baier. He has yet to approve the $12 billion arms sale to Taiwan. He wants to transfer Taiwan’s semi-conductor industry to America, and Taiwan Semiconductor Manufacturing Corporation (TSMC) is obliging by expanding its operations in the United States. The United States has tried to onshore manufacturing with little success, and Trump wants to lure the Chinese manufacturing base to America. There’s a rumor circulating that the Chinese plan to invest one trillion dollars in American manufacturing.
In an interview with Sean Hannity, Trump has said that he wants 500,000 Chinese to study in America, and he will allow Chinese to buy American farmland. He claims that this is to save American colleges from bankruptcy, and farmland value from declining. As I pointed out in my Substack last week and in my most recent YouTube lecture, the main reason is to distribute a portion of the $39 trillion dollar debt to the Chinese. Eventually, I believe that Beijing will allow Chinese to purchase stable-coins (digital currency backed by US treasuries), which would allow them to participate in the US economy without causing the RMB to free-fall.