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ROGER BOYD
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BRINCISTAN Ascendant
China – US State of Play: The Chinese Multipolar Century Has Begun
BRINCISTAN Ascendant
The South Korean summit between China and the US may in the future be seen as a marker of a fundamental change in China-US relations, as the latter accepted China as an equal that must be given respect and the former started acting like the senior partner of the “G2” that it is becoming. This fundamental change has become increasingly obvious in the past ten months, as China very obviously gained the upper hand after nearly a decade of work to overcome the weaknesses that were exposed in Trump’s first term. The Chinese Party-State has followed a methodical and thorough approach to removing the nation’s weaknesses; in essence removing the US ability to attack it on economic, military and even propagandist grounds.
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Trade has been significantly diversified away from the US, and China has positioned itself as a bastion of free trade. For example, its provision of free trade to many of the poorer nations of the world, and the extension of its trade agreement with ASEAN.
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Trade payments have also been significantly diversified away from the US$, through local currency and Yuan based payments systems. China has also established itself as a major trading exchange for precious metals.
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China has rapidly moved up the technology value curve, removing dependency after dependency upon the West; through a comprehensive approach that utilizes all parts of society.
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Loans and investments have been very successfully re-oriented away from the property sector toward those sectors that develop and enhance the productive forces.
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China has also become the world leader in low carbon technologies such as electric vehicles, batteries, smart electricity grids, solar, wind, nuclear, electrified trains, electrified subways etc. The demand in these areas is rapidly growing, providing new outlets for the Chinese productive forces.
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China has deepened the partnership with a Russia that protects its northern border, provides a powerful military ally, acts as a very major supplier of natural resources, provides a market for Chinese goods, and brings useful alliances with nations such as India.
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China’s military capabilities have been significantly increased, to the point where it is now obvious to US officials that any war with China would be disastrous for the US. The performance of Chinese military technology in the Pakistan-India 12 day war has also raised China’s military reputation and may provide significant opportunities for arms exports.
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The unrest in Hong King has faded into history, and China’s opening up to Western tourists has produced a plethora of tourist videos debunking the Western propaganda about Xinjiang. While the US has become fully associated with the Gaza genocide and is seen using its security services against its own population, as well as legitimate foreign visitors. The current government shutdown, and the looming cut off of the SNAP (Supplemental Nutrition Assistance Program) benefits to the poorest members of US society – the majority of them the working poor – by a political class full of millionaires and funded by billionaires, will also serve to diminish the US brand abroad. In contrast, China is known for lifting hundreds of millions out of poverty.
Through 2025, Trump and the US oligarchy have slowly come to the understanding that the mixture of absurdly high tariffs and technology export restrictions can no longer hold back China. Quite the opposite in fact, with China matching new tariff for new tariff, actually directing companies not to buy Nvidia chips, and playing its rare earths trump card. The result has been two 90-day delays to the imposition of new tariffs and now a one year agreement that seems to include a 10% reduction in the US tariff on China, from 57% to 47%; with 21% having already been in place under the Biden presidency.
Both nations will put a halt to fees on each other’s ships at their ports, and the US will also not implement sanctions on Chinese majority-owned foreign companies. China puts off its newest rare earth rules (not the ones put in place earlier in 2025) for a year and promises to buy more US raw materials and foodstuffs, according to Trump; the Chinese communique quite vaguely mentioned such a promise. China’s food importers have already heavily switched to Brazilian and Argentinian suppliers, helped by China’s financing of the expansion of Brazil’s ports, and the long term damage to US agriculture is a reality; even if the Chinese state does purchase some extra soybeans etc. from US farmers. Notably there was no talk of China’s imports of Russian and Iranian oil. India is a weaker power who can be punished for such things, China is not.
The whole attempt to bend China to the US will through tariffs and export controls has come to nothing. A large irony is that the sanctions on Chinese majority-owned companies, now in abeyance for a year, were the reason for the Netherlands’ disastrous seizure of Chinese-owned chip maker Nexperia. Xi’s demeanour at the public meeting with Trump showed him to be the stronger party while Trump looked weak. It was left to The Daily Show to give an accurate take on the public meeting, as the mainstream press worked hard to ignore Trump’s obvious weakness; “Xi came in like his Mom forced him to have a play date with a weird kid at school”. All the other Asian leaders that Trump had met with went out of their way to be complementary, quite deferential and even offered a myriad of obsequious gifts. Trump treated the Japanese PM as if she was some floozy that he was enjoying a quick fling with.
Xi showed himself to be the stronger leader, and China the stronger nation. Covered in the first two minutes below:
The opening formal comments also showed a level of respect from the US which was an utter about turn when compared to the infamous Anchorage meeting in the opening months of the Biden administration. Xi’s opening statement showed a level of assertiveness balanced with the usual Chinese politeness.
The Party-State very much understands that a year from now China will have further enhanced its position with respect to the US; any delay will always be in its favour. With the US administration undermining US technology advancements through its policies against foreign students, academics and researchers combined with cuts to government research spending. While the US continues with 7% plus government budget deficits and a stock market bubble that keeps expanding at the same time as the median American is cutting back on basic spending. With the Federal Reserve cutting interest rates in the face of rising inflation to keep all of the financial plates spinning.
It has also become apparent that the US has absolutely no leverage with which to stop China from supporting Russia during its increasing successes in its proxy war with the West, nor to stop China from continuing to work with Iran and to buy its oil. China’s increasing embrace of North Korea, following Russia’s military alliance with that nation, also underlines the general weakness of the US in the face of a tighter and tighter integration of BRINCISTAN and its peaceful partnerships with the likes of ASEAN. The statements of Japan’s new prime minister also point to a realpolitik acceptance of the importance of working with China rather than against it.
The Trump administration is greatly aiding this process of its own diminution as it attacks one foreign government after another, friend and foe alike. The Canadian government will be taking note of the Trump administration’s treatment of China while the US lobs extra insults and tariffs at its northern ally vassal. Being a US vassal is coming with fewer and fewer benefits, and rapidly increasing costs, as the citizens of Europe are finding out to their chagrin. While at the same time, Trump is playing war games with Venezuela, insulting the president of Colombia, using tariffs to interfere in domestic Brazilian politics and judicial proceedings, and using public money to bail out US and Argentinian vassal oligarchs. Russia is also showing the route to respect from the US: strength. A lesson all of the nations of the world should be fully taking to heart, the only thing that the US oligarchy has ever respected is strength.
The era of US unipolarity has very much ended, with the Korea meeting perhaps being seen in the future as a marker of when China started to assert its dominance. The next few years will see a lot more “Koreas” as the reality of US decline and Chinese ascendance becomes so obvious that not even the mainstream media will be able to ignore it, and I will not have to resort to a comedy show to get a somewhat better reflection of reality. China now needs the US less than the US needs it, and that asymmetry in the relationship will only become more unbalanced over time.
BONUS ADDENDUM
Algeria: The Lucky MENA Country?
In 1960, the population of Algeria was 11.4 million, in 1970 14.7 million, in 1980 19.5 million, 1990 25 million, 2000 30.4 million, in 2010 36 million, in 2020 44.2 million, and in 2025 it will be over 47 million. That’s more than four times the 1960 population. With a fertility rate of 2.53, and with a bulge in the population of females set to enter the most fecund years in the 2030s, Algeria’s population will continue to increase for decades.
In 2024, the goods trade surplus narrowed from US$10.4 billion in 2023 to US$3.9 billion due to a fall in both the volumes and prices of oil (Italy, France & Spain) and gas (Italy & Spain) exports. These dominate the nation’s exports, together with lesser amounts of nitrogen fertiliser and concrete. Even with these exports, the nation ran a current account deficit of 1.4% of GDP, as they balance the very large import volumes of food (France, Turkey and Brazil) and manufactured goods (China, Italy). Algeria even ranks below Morocco in terms of industrial development, has a very undeveloped tourism industry, and remittances are less than 1% of GDP.
To put it simplistically, Algeria exports oil, natural gas, fertilisers and concrete in exchange for food and manufactured goods. While the nation’s current oil refineries process crude oil, they cannot produce the higher value oil products such as diesel, gasoline, jet fuel and plastics; which have to be imported. The Hassi Messaoud oil refinery, planned for 2027, will produce 110,000 barrels per day of diesel and gasoline; which is about equal to current domestic consumption levels. This is part of a US$7 billion strategic plan to increase the domestic conversion of hydrocarbons into higher value products from 32% to 50% within five years. There will be an additional plant to produce about 25,000 bpd of gasoline, and another to produce about 400,000 bpd of diesel and 250,000 tons of asphalt. These will provide both the ability to serve domestic consumption needs and allow for some exports. With European refineries struggling and closing under the impact of higher energy prices, there is an opportunity for Algeria to increase its exports; especially with access to cheap natural gas for electricity generation.
With the value of Algeria’s oil and gas exports weighted more toward the latter delivered though pipelines to Italy and Spain, and its close proximity to Europe across the Mediterranean Sea, the country is much less exposed to fluctuations in oil exports prices and volumes. In addition, its move up the value-added curve into refining both removes its own refined product imports and brings new higher-higher-value-added export opportunities. The nation’s abundant natural gas supplies also support direct reduction iron (DRI) production with the output being fed into electric arc furnaces, supported by low-cost natural gas-generated electricity. The nation has just such a combination, and with the European steel industry wilting under high energy prices, this may be another possible area of industrial development. Algeria also possesses a methanol and plastics plant, and this is another area where Algeria has a competitive advantage.
The opening of the Gara Djebilet iron ore mine, which sits atop one of the largest reserves of iron ore in the world, in 2022 allowed for the replacement of the US$2 billion of iron ore imports and allowed for the rapid expansion in Algeria’s iron and steel industry and export volumes; built by companies from a number of foreign countries, including China. The mine is served by an over 1,000km railway line built by a Chinese company. A new polypropylene plant will also produce 550,000 tons per year. The automotive sector is also expanding, with Fiat’s Oran plant opening in 2023 and moving from partially disassembled part (SKD) to fully disassembled part (CKD) production with a capacity of 90,000 vehicles per year. Renault has had a plant in place since 2014, with a capacity of up to 75,000. With Geely beginning production at its plant in 2026, and Hyundai and Chery starting production in 2027. These plants will both replace car imports and provide a platform for car exports; Algeria enjoys free trade for industrial goods with the EU. The above both reduce Algeria’s dependency in oil exports and manufactured good imports, and provide employment opportunities for Algeria’s young population.
Algeria looks well-positioned for any secular fall in the demand for, and price of, oil exports. Its exposure through the tourism sector is extremely limited due to the undeveloped nature of that sector, and there is not a large dependency upon remittances.
The vast majority of the Algerian population lives in the northern coastal areas, as the rest of the country is a desert.
geo-ref.net
wikipedia
In the summer, the coastal temperatures average 25-35 degrees centigrade. In the winter, 10-18 degrees centigrade; the area exhibits significant climatic seasonality. Even with the enhanced warming impacts of the reduction in ship-based sulphate aerosols in the Mediterranean, temperatures will most probably be manageable within the next few decades.
The temperate area in the north, which supports agriculture, is about the size of France. Even so, Algeria imports large amounts of wheat (for bread, etc.), corn (for the poultry sector), dairy products, soybeans (animal feed), tree nuts, beef and veal. What these agricultural products share is a high water intensity, and Algeria is an arid country; even in the north. With the Algerian diet moving toward a Western one, the demand for such products will only increase. Algeria has started to tap into the Northwest Sahara Aquifer System (NWSAS) in the south, shared with Tunisia and Libya, which holds about 120,000 billion cubic metres of groundwater, much of it non-renewable, to turn the desert green. Current extraction rates are about three times the natural renewal rate. The NWSAS is significantly larger than the US Ogallala aquifer, and is therefore not in danger of being exhausted this century, especially when the cultivatable lands drawing from the aquifer are much smaller than those in the US. Some surface features, such as oases, may dry up in a few decades but the NWSAS as a whole will last much longer than that.
The NWSAS is only utilised in the south of the country, as the north gets its potable water primarily from rainfall-replenished aquifers, and surface water captured from rivers and 72 reservoirs. Additionally, there is an increasing number of seawater desalination plants. As aridity and the population increase, there are increasing efforts to utilise brown water for non-drinking purposes and to reduce per capita water usage through infrastructural upgrades and more water-efficient appliances. In extremis, the NWSAS could also be tapped to help supply the north.
Overall, Algeria seems to be in a strong position to deal with the effects of climate change and any fall in the demand and price of oil; at least for the next few decades. In this respect, we could call it lucky, but its history has been anything but lucky.
The French invaded Algeria in 1830 and took 45 years to conquer it while wiping out at least a quarter of the population. After which, hundreds of thousands of French settlers arrived in the country and took property that was confiscated from the local population; with the French share of the population being about one fifth. The French authorities set about assimilating the nation into being an integral part of France. The resistance of the Algerian population broke out into a war of independence in 1954, a brutal war that lead to the deaths of about 700,000 Algerians before it ended victoriously in 1962.
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EDITOR’S ADD-ON |
Sadly, the victorious FLN proved to be both authoritarian and corrupt. With the fall in oil prices in the 1980s driving significant unrest, it was forced to allow multi-party elections. But when the opposition Islamic Salvation Front appeared set to win the legislative elections, those elections were cancelled, and civil war broke out. This lasted from 1992 to 2002, and over 100,000 are thought to have died in it. From 1999 until 2019, Bouteflika ruled the nation, being elected and repeatedly re-elected in highly questionable circumstances until forced out by national protests. Tebboune then took over in an election with a record level of abstentions, and was re-elected in 2024 with a questionable 84.3% of the vote. The Algerian government has been, and is, high on the corruption scale.
Since 1960, Algerian GDP per capita (PPP) has tripled, which is a very disappointing rise given the low base level and the nation’s fossil fuel resources. Since 1985, the real GDP per capita (PPP) has only increased from US$4,000 to US$4,750; an incredibly small rise over four decades. Excluding the COVID period, GDP per capita growth has averaged below 2% for the past quarter of a century. Not such a lucky country, with an authoritarian and corrupt regime and strictly performative elections. For Algeria, it is the quality of the governance that is the problem, for what should be a relatively lucky country. Some of the industrial projects point to an improvement in this area, hopefully that will come to pass.
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