Recall, the original quote has been expanded upon and, in doing so, makes it all the more impactful. “The only way out is through.” Robert Frost “And the only way through is together” John Green

People calling this a “plot twist”. More just a natural extension of how China has been operating on the margins for a decade now. Systems are in place (CIPS offering an alternative to SWIFT) and final settlement in gold. Current events have simply accelerated the process. https://internationalnewsandviews.com/iran-strait-of-hormuz-yuan-oil-trade-tanker-policy-report-399394-2/

It is a beautiful Saturday morning here in Shanghai. Have a great weekend all.

Primal isn’t showing Notes that I’m posting in my own feed?? Odd Damus is now the option of choice I guess.

Something going wonky with my Nostr.

China Morning Missive Wuwei (无为) and the Cultural Chasm Over the past several days I’ve been overwhelmed with client emails asking whether American activities in the Gulf are indirectly targeting China. It appears that the zeitgeist, including many Washington policy makers, is operating under the impression that China has been irreparably harmed and the Beijing leadership is at a loss for how to respond. My responses to those emails are short and to the point. “Ignore the noise. We’ve seen similar instances in the past (last year’s tariff episode?). Operate under the principal that China has prepared for this eventuality.” It continues to escape the rationale mind of many that China operates at the lowest possible time preference. I make this point often and do so because it represents the singular first principal to be applied whenever any assessment of China is being made. Not only is the application critical to understand how Beijing goes about structuring policies, both domestic and foreign, it is central to the very process of decision making itself. More specifically, the importance lies in a recognition that, for Beijing, action is far more often found in demonstrable restraint. There are genuine cultural anomalies present. They need to be considered and yet are always absent. Honestly, you’d think this would have been recognized by now given thirty years of observable Chinese behavior. It hasn’t. There isn’t just a cultural gap in America’s expert class when it comes to the topic of China, there is a cultural chasm. Be it the Taoist concept of Wuwei or the teachings of Lao Tzu, Chinese society is grounded in a willingness to take the path of forbearance. An outward projection of stillness. Consider the character for patience, Ren (忍). It is comprised of two characters, blade (刃) and heart (心). What this means to the Chinese is that patience is a concept that requires a willingness to endure adversity. Be mindful though. Non-action shouldn’t always be taken literally. It is a highly layered construct and quite malleable. Yes, the Chinese default setting is a static state, but every single event is viewed through its own unique lens. If there were to be an extreme event, then the Beijing leadership would most certainly resort to an immediate response. To the Chinese, however, there is rarely ever an occurrence that is truly extreme (ie unexpected) in nature. Restraint is the consequence of ongoing preparedness present across China. At all levels of society, anxiety is born from uncertainty and the greater the uncertainty the greater the anxiety. And to counter uncertainty means a greater effort to prepare. Again, we only need to look back to last year. Contrary to all American expectations, the Chinese successfully countered the Trump administration’s escalatory tariff regime. This was achieved through advanced preparation. It was a widely held view in China that tariffs would be deployed and parties across the country simply planned well in advance for that eventuality. Exports were frontloaded and cash hoards were amassed. This provided time and flexibility to negotiate and do so from a position of relative strength. So too is it the case with events now playing out in the Middle East. Beijing has well understood, and for decades, America’s motivations and objectives across the Gulf and preparations have been underway for quite some time. Beijing made overtures to create a separate series of regional relationships and did so with success. At the same time, there were various steps taken to mitigate all identified risks from future conflict. There was the aggressive campaign to build three significant rail lines (and pipelines) traversing the entirety of the Heartland. Alternative sources of energy (ex-Gulf partners) were established, from Russia to Indonesia to Africa. Even the domestic agenda of shifting to renewables and EVs can now be seen as having a geopolitical angle. China isn’t at a loss. China is, once again, very well placed. If there is to be a focus, it needs to be on a fundamental realignment in how the American foreign policy and business community goes about assessing China. This must begin by taking China seriously and literally. Stop miscalculating China’s capabilities. Secretary Bessent famously claimed last year that China was negotiating “with a pair of twos”. He was wrong. Today, Secretary Wright is stating that “China is about to lose the second of three gas station suppliers”. Again, the Secretary will come to learn that he, too, is wrong. The script must be flipped and, moving forward, it is highly advisable that the expectation shift towards China gaining from hegemonic actions taken by America.

China Morning Missive Wuwei (无为) and the Cultural Chasm Over the past several days I’ve been overwhelmed with client emails asking whether American activities in the Gulf are indirectly targeting China. It appears that the zeitgeist, including many Washington policy makers, is operating under the impression that China has been irreparably harmed and the Beijing leadership is at a loss for how to respond. My responses to those emails are short and to the point. “Ignore the noise. We’ve seen similar instances in the past (last year’s tariff episode?). Operate under the principal that China has prepared for this eventuality.” It continues to escape the rationale mind of many that China operates at the lowest possible time preference. I make this point often and do so because it represents the singular first principal to be applied whenever any assessment of China is being made. Not only is the application critical to understand how Beijing goes about structuring policies, both domestic and foreign, it is central to the very process of decision making itself. More specifically, the importance lies in a recognition that, for Beijing, action is far more often found in demonstrable restraint. There are genuine cultural anomalies present. They need to be considered and yet are always absent. Honestly, you’d think this would have been recognized by now given thirty years of observable Chinese behavior. It hasn’t. There isn’t just a cultural gap in America’s expert class when it comes to the topic of China, there is a cultural chasm. Be it the Taoist concept of Wuwei or the teachings of Lao Tzu, Chinese society is grounded in a willingness to take the path of forbearance. An outward projection of stillness. Consider the character for patience, Ren (忍). It is comprised of two characters, blade (刃) and heart (心). What this means to the Chinese is that patience is a concept that requires a willingness to endure adversity. Be mindful though. Non-action shouldn’t always be taken literally. It is a highly layered construct and quite malleable. Yes, the Chinese default setting is a static state, but every single event is viewed through its own unique lens. If there were to be an extreme event, then the Beijing leadership would most certainly resort to an immediate response. To the Chinese, however, there is rarely ever an occurrence that is truly extreme (ie unexpected) in nature. Restraint is the consequence of ongoing preparedness present across China. At all levels of society, anxiety is born from uncertainty and the greater the uncertainty the greater the anxiety. And to counter uncertainty means a greater effort to prepare. Again, we only need to look back to last year. Contrary to all American expectations, the Chinese successfully countered the Trump administration’s escalatory tariff regime. This was achieved through advanced preparation. It was a widely held view in China that tariffs would be deployed and parties across the country simply planned well in advance for that eventuality. Exports were frontloaded and cash hoards were amassed. This provided time and flexibility to negotiate and do so from a position of relative strength. So too is it the case with events now playing out in the Middle East. Beijing has well understood, and for decades, America’s motivations and objectives across the Gulf and preparations have been underway for quite some time. Beijing made overtures to create a separate series of regional relationships and did so with success. At the same time, there were various steps taken to mitigate all identified risks from future conflict. There was the aggressive campaign to build three significant rail lines (and pipelines) traversing the entirety of the Heartland. Alternative sources of energy (ex-Gulf partners) were established, from Russia to Indonesia to Africa. Even the domestic agenda of shifting to renewables and EVs can now be seen as having a geopolitical angle. China isn’t at a loss. China is, once again, very well placed. If there is to be a focus, it needs to be on a fundamental realignment in how the American foreign policy and business community goes about assessing China. This must begin by taking China seriously and literally. Stop miscalculating China’s capabilities. Secretary Bessent famously claimed last year that China was negotiating “with a pair of twos”. He was wrong. Today, Secretary Wright is stating that “China is about to lose the second of three gas station suppliers”. Again, the Secretary will come to learn that he, too, is wrong. The script must be flipped and, moving forward, it is highly advisable that the expectation shift towards China gaining from hegemonic actions taken by America.

Once again, it is just another Monday morning here in Shanghai. Everyone just going about their day.

China Morning Missive Wuwei (无为) and the Cultural Chasm Over the past several days I’ve been overwhelmed with client emails asking whether American activities in the Gulf are indirectly targeting China. It appears that the zeitgeist, including many Washington policy makers, is operating under the impression that China has been irreparably harmed and the Beijing leadership is at a loss for how to respond. My responses to those emails are short and to the point. “Ignore the noise. We’ve seen similar instances in the past (last year’s tariff episode?). Operate under the principal that China has prepared for this eventuality.” It continues to escape the rationale mind of many that China operates at the lowest possible time preference. I make this point often and do so because it represents the singular first principal to be applied whenever any assessment of China is being made. Not only is the application critical to understand how Beijing goes about structuring policies, both domestic and foreign, it is central to the very process of decision making itself. More specifically, the importance lies in a recognition that, for Beijing, action is far more often found in demonstrable restraint. There are genuine cultural anomalies present. They need to be considered and yet are always absent. Honestly, you’d think this would have been recognized by now given thirty years of observable Chinese behavior. It hasn’t. There isn’t just a cultural gap in America’s expert class when it comes to the topic of China, there is a cultural chasm. Be it the Taoist concept of Wuwei or the teachings of Lao Tzu, Chinese society is grounded in a willingness to take the path of forbearance. An outward projection of stillness. Consider the character for patience, Ren (忍). It is comprised of two characters, blade (刃) and heart (心). What this means to the Chinese is that patience is a concept that requires a willingness to endure adversity. Be mindful though. Non-action shouldn’t always be taken literally. It is a highly layered construct and quite malleable. Yes, the Chinese default setting is a static state, but every single event is viewed through its own unique lens. If there were to be an extreme event, then the Beijing leadership would most certainly resort to an immediate response. To the Chinese, however, there is rarely ever an occurrence that is truly extreme (ie unexpected) in nature. Restraint is the consequence of ongoing preparedness present across China. At all levels of society, anxiety is born from uncertainty and the greater the uncertainty the greater the anxiety. And to counter uncertainty means a greater effort to prepare. Again, we only need to look back to last year. Contrary to all American expectations, the Chinese successfully countered the Trump administration’s escalatory tariff regime. This was achieved through advanced preparation. It was a widely held view in China that tariffs would be deployed and parties across the country simply planned well in advance for that eventuality. Exports were frontloaded and cash hoards were amassed. This provided time and flexibility to negotiate and do so from a position of relative strength. So too is it the case with events now playing out in the Middle East. Beijing has well understood, and for decades, America’s motivations and objectives across the Gulf and preparations have been underway for quite some time. Beijing made overtures to create a separate series of regional relationships and did so with success. At the same time, there were various steps taken to mitigate all identified risks from future conflict. There was the aggressive campaign to build three significant rail lines (and pipelines) traversing the entirety of the Heartland. Alternative sources of energy (ex-Gulf partners) were established, from Russia to Indonesia to Africa. Even the domestic agenda of shifting to renewables and EVs can now be seen as having a geopolitical angle. China isn’t at a loss. China is, once again, very well placed. If there is to be a focus, it needs to be on a fundamental realignment in how the American foreign policy and business community goes about assessing China. This must begin by taking China seriously and literally. Stop miscalculating China’s capabilities. Secretary Bessent famously claimed last year that China was negotiating “with a pair of twos”. He was wrong. Today, Secretary Wright is stating that “China is about to lose the second of three gas station suppliers”. Again, the Secretary will come to learn that he, too, is wrong. The script must be flipped and, moving forward, it is highly advisable that the expectation shift towards China gaining from hegemonic actions taken by America.

Everyone who is saying “this war is really about China” hasn’t a single idea of just how prepared Beijing became for this eventuality. Not a single lesson was learned from last years trade war. Bessent and pretty much every geopolitical cosplayer said China had no leverage. “China was playing with a pair of twos”. They were wrong. They are wrong this time as well. China has seen this coming for decades.

Here is a perfect example of why you need to tread carefully anytime there’s a flurry of commentary discussing China. Be it Beijing’s motivations, or the supposed fact that – somehow – action taken by the United States in the Middle East has provided for escalatory leverage. It may sound like a cliche, but you must know that the Chinese are playing multiple steps ahead of Washington. Perhaps some unsolicited advice. The next time you stumble across an individual weighing in on the China debate, simply ask that individual when was the last time they were in country. It’s all noise when it comes to the arm chair macro tourists and armchair geopolitical theorists. https://www.bloomberg.com/news/articles/2026-03-05/china-tells-top-refiners-to-suspend-diesel-and-gasoline-exports

China Morning Missive More of the Same, as Expected That time of year again, the China “Two Sessions” where Beijing leadership lays out its economic plans for the coming year. Much as expected, the path forward is essentially the very same path from 2025. Where I’m focused is on the continued deleveraging especially at the local government level. Basically, it is a “left pocket, right pocket” strategy where Beijing is issuing so called ultra-long special sovereign bonds and will use those proceeds to retire local government debt. There’s been no fiscal bazooka and there will be no fiscal bazooka. There will be no direct support provided to households. Once again, I will state emphatically that Keynes is well and truly dead in China. The lessons of 2008 were learned and policy was thusly adjusted. What this will also mean is continued deflationary pressure. My ongoing thesis remains intact as well. Beginning in 2017, but in earnest staring in 2020, Beijing shifted to an entirely new economic model. Property and infrastructure, the historic drivers of growth, were to be phased out and replaced by manufacturing, or more specifically what’s referred to as the fourth industrial revolution. There’s no question that what Beijing is seeking to achieve is a very big ask. There is no guarantee that the strategy will ultimately work. The economic structural issues were, however, recognized and a path forward was created to address those issues. That’s far more than can be said of any G7 nation-state. If, and this is a very big if, China does prove successful in the transition it’ll be game over. https://www.bloomberg.com/news/articles/2026-03-05/china-s-steady-debt-plan-calms-bond-market-on-ample-liquidity

Strongly advise reading this book. The only edition you should read. This specific book. Fantastic examples provided throughout. And I can say it has allowed me to properly assess much of the thinking out of Beijing when it comes to world affairs. Moreover, it has provided insight into how it is Beijing has operated over the past 30 years.

Back to providing an installment of my recent “Deconstructing Rivalry” Essay. Many of you will find today’s update of particular, even very specific, interest. It centers on diplomatic subterfuge via the IMF along with America’s original decision to debase its currency. In short, there is an important event that is too often overlooked when it comes to China’s motivations to build a parallel set of global systems, the nearly two-decade long process to reform IMF voting rights. It was, however, the policy response by Washington to the Global Financial Crisis, putting at risk China’s significant exposure to US Treasuries and GSEs, that demonstrated the length at which America would go to safeguard its unipolar primacy. Power, whenever required, would be wielded (weaponized) using the dominance of the US$ system. It would be the combination of these actions that would, ultimately, lead to the formal establishment of the BRICS block. View article → View article →

So am still working out the bugs with the “long post” functionality here on Nostr. Ended up posting this installment of the “Deconstructing Rivalry” essay twice for some reason. Anyway, for today we begin getting into the meat of the matter. @lemon a bit later than I had hoped but here you go. View article →

Hey all. Need assistance if possible. For whatever reason Reads isn't working for me to upload long posts. Is there another option where I can post a long form content other than Reads?

I strongly recommend taking up YOGA. It is the perfect anecdote to the chaos of the daily world. And you men out there …. This message is directed especially in your direction.

China Morning Missive Speculative Folly Yet another top Chinese general is purged, and, once again, the speculation is rampant. Claims are made and conclusions drawn and the attention quickly moves to what this will mean for the reign of Xi Jinping. There is talk of a coup. There is talk of a removal from office by “the Elders”. It is all a fugazi and, more importantly, a distraction from events underway that do matter, that do have significance. In terms of the Xi rumors, this would make for the seventh or eighth episode (I’ve lost count honestly) of how events in Beijing are expected to bring down this “Emperor for Life”. And that doesn’t count all the rumors of ill health. Then again, all the speculation is to be expected in a world driven by social media engagement farming. There may be, possibly, importance connected to this latest development, but it has taken away from actual events from the past week that do have real-world implications. Firstly, this past week provided an initial view into the strategic aims of China’s latest Five-Year plan. State Grid, China’s largest power transmitter and grid operator, announced a 40% increase in CAPX out to 2030. A commitment of Rmb4trillion (US$570billion). There’s been ample commentary of late of the massive gap between China’s ability to produce energy versus that of the United States. This announced investment demonstrates that energy, broadly speaking, will remain a top priority over the next five years and, with it, a further widening in the gap. Then there was the announcement that the Shanghai Futures Exchange will begin trading LNG contracts denominated in RMB as soon as February. Beijing has spent the past decade making inroads into the adoption of RMB for pricing across the entire commodity complex. This move would indicate there now being greater willingness among counterparties to accept RMB payment terms. The Qataris would be the most obvious group given the construct of the current bilateral trade relationship. What will need to monitor is if Australian suppliers, delivering one-third of China’s LNG imports, will accept RMB as well. The reason why Australia needs attention goes to another development from this past week. BHP announced that it would be accepting price concessions on iron ore exports to China after a lengthy period of stalled negotiations. And this deal comes just a few months after BHP agreed to accept 30% of iron ore purchases contracted in RMB. Finally, there are the reports of the growing gold reserves held by Poland. How this connects with China goes to how it is the bilateral trade relationship is managed. Poland settles just over a third of its annual trade with China in RMB. It does run a trade deficit with China but taking into account the role played by the Shanghai International Gold Exchange in final settlement, it is reasonable to conclude that a portion of the rising gold reserves by Poland is attributed to RMB surpluses being net final-settled with gold. These are the development that matter and is also a demonstration, once again, of China operating on a very low time preference. The most impactful events occur on the margins and are, almost always, overlooked and absent from geoeconomic analysis. It has always been a game of inches and will remain a game of inches.

Yahoo News

China’s top general is ousted as Xi ramps up crackdown

China’s top military general, Zhang Youxia, was ousted after reportedly being accused of leaking nuclear secrets to the US.

Fuck me. Just jumped on Twitter for the first time in two year. Had a look around….. If that is a representation of America today, well, I’m calling it. GAME OVER. Nothing but vitriol. Zero empathy. Zero introspection.