China wants to become the world’s dominant power, which obviously means it will have to supplant the US. From John Mauldin at mauldineconomics.com:
Every investment decision should have an exit strategy. What will you do if your idea doesn’t work? Ideally, you make that decision before you invest. Mistakes are inevitable but survivable if you recognize them quickly and act to minimize their costs.
The same is true in business, international relations… or even a chess game. Great ideas don’t always work out as expected. Then what?
In last week’s letter, we discussed some serious flaws in the decision to bring China into the world trade system. People across the spectrum mostly see this now; although they differ on what to do about it.
When the US and ultimately the rest of the Western world began to engage China, resulting in China finally being allowed into the World Trade Organization in the early 2000s, no one really expected the outcomes we see today. There is no simple disengagement path, given the scope of economic and legal entanglements. This isn’t a “trade” we can simply walk away from. But it is also one that, if allowed to continue in its current form, could lead to a loss of personal freedom for Western civilization. It really is that much of an existential question.