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More from @PandemicTruther

America-China Watcher

@PandemicTruther

Nov 29

Poetic Justice - China’s Deindustrialization That Never Came — And Why the West Can No Longer Sell to China

A response to @RobinBHarding article “China is making trade impossible”

For years, Western analysts warned of China’s impending “deindustrialization.” (collapse). It was supposed to be the natural arc of economic development — rising wages, declining manufacturing, and eventual dependence on foreign imports. Instead, the exact opposite occurred. China doubled down on industry, expanded its production capacity across nearly every sector, and reached a point where foreign manufacturers increasingly find they have nothing China needs that it cannot already produce cheaper, faster, or at greater scale.
Washington’s long-term objective became clear: remove China from the global supply chain and rebuild a world where critical manufacturing returned to the U.S. or was redistributed among American-aligned economies. Multinationals were pressured to leave China, shift production to India or Vietnam, and restructure procurement so that even Chinese contractors had to relocate or lose business. Apple complied, moving a portion of iPhone assembly to India — only to discover that quality consistency, supply-chain density, and industrial discipline were not easily transplanted. Early batches of India-assembled devices saw high defect rates and higher consumer complaints, a reminder that manufacturing excellence is not a commodity one can simply ship across borders. China is not just a location; it is a mature industrial ecosystem that the U.S. has found impossible to replicate elsewhere.

China's continuously upgrading industrialization did not happen accidentally. It is the consequence of sanctions, energy shocks, financialization in the West, and Beijing’s deliberate push toward self-reliance. Today, the paradox is clear: the West hoped to constrain China’s industrial rise. In doing so, it forced China to industrialize further — until the point where selling industrial products to China is no longer a viable business model.

1. The Russia Lesson: A Future Sanctioned China Must Produce Everything
The complaint that “China is making trade impossible” is as valid as “Russia is making trade impossible.”

Western policy planners openly state that if Beijing reunifies with Taiwan, sanctions could mirror the Russia regime: financial cutoff, technology bans, trade strangulation. China drew the conclusion early — self-reliance is not optional. It is national survival.

Russian industry after 2022 became a raw case study. Aircraft parts, semiconductors, machine tools — everything suddenly had to be produced domestically or sourced through alternative channels. China watched in real time. A country of 1.4 billion cannot afford such dependence. It must be able to manufacture jet engines, lithography machines, industrial robots, port cranes, agricultural equipment, ie, everything at home. Not 70%, not 90%. One hundred percent. Total self-reliance is insurance. Long-term. Strategic. Existential.

Today, that is already close to reality.

2. Tech Sanctions Forced Domestic Capability. Dependence is fatal.

The first front was semiconductor tech. Washington banned sales of advanced chips, restricted Nvidia GPUs, pressured TSMC and Samsung, and froze ASML lithography exports. The logic was to cut China from the high-end supply chain and slow its technological ascent.

The result was the inverse.

Investment into domestic lithography surged. The number of semiconductor fabs under construction in China in 2024-2025 exceeded the total of the U.S., EU, Japan and South Korea combined. Firms pivoted into ASICs, chiplet design, indigenous stacks — not replacements, but parallel architecture. China accelerated at the mid-range node, dominating 28nm, 14nm, and racing into 7nm. Meanwhile, AI chips designed in-house now power data-centers without a single Nvidia card inside the system.

The West hoped to maintain monopoly through embargo. Instead, it created a formidable technological competitor.

The sanctions on Huawei were intended as a warning to all of China’s rising industry. Washington cut the company off from chips, operating systems, foundries, and even global supply partners, aiming to cripple it as a symbol of American technological dominance. Huawei was meant to serve as an example: defy the U.S., develop too fast, and you will be brought to your knees. But the result was the opposite. The shock of Huawei’s near-strangulation triggered a nationwide reflex — companies large and small began shifting to domestic suppliers, investing in indigenous chip design, operating systems, and industrial software. Huawei’s struggle became a lesson written into the consciousness of every Chinese manufacturer: depend on foreign technology, and your lifeline can be cut overnight. The fear the U.S. intended to instill has backfired — instead of submission, it produced absolute self-reliance.

3. Green Transition: The West Set the Rules In order to Trap China, China Won the Game and the West is Trapped by its Own Rules.

Climate policy was sold as moral necessity — but structurally, it was also opponent punishing industrial policy. The West expected carbon pricing and green standards to weaken China’s coal-powered factories. The assumption was simple:

China cannot catch up in solar, EV, or wind technology and the colossal carbon taxes its factories have to pay will bankrupt them. China will be forced to deindustrialize.

It was a fatal miscalculation.

China now produces more than 80% of the world’s solar panels, 60–70% of wind components, and over half of global EVs. In 2023-2024 China exported more EVs than any other country on Earth. European and U.S. carmakers bet on green transition but entered too late — over-invested in tech not yet competitive, under-invested in supply chains now owned by Chinese firms. Gigafactories bled cash. Legacy engine platforms became stranded assets.

The EU now sits in its own trap. It pushed mandatory auto electrification, yet China mastered the industry faster. Cheap Chinese EVs flood the global market, while European companies cannot retreat without admitting strategic failure at a colossal loss. Paris, Berlin, Brussels argue subsidy, tariff, carbon adjustment in endless conferences — but structurally nothing changes because Europe does not produce the batteries, the components for wind turbines, or the solar panels. China does.

The West wrote the Green Transition rules to put a ceiling over China's industrialization. Europe thought Green Industry 2.0 will see Chinese manufacturing dead and European industry revived.
But China embraced the biased rules meant to cripple it and won the game.
China understood the game from the beginning and intended to outplay Europe more than a decade ago.
The debate between Chinese scientist Ding Zhongli（丁仲礼） and NGO sponsored Chinese journalist Chai Jing （柴静）around 2010 marked the intellectual starting point for understanding how carbon policy could be weaponized. At that time, the world was still negotiating how global CO₂ quotas should be allocated. Ding argued that carbon rights must be based on historical emissions and distributed per capita according to real consumption — only then would every human being, regardless of nationality, be treated equally under the climate regime.
However western negotiators pushed for the opposite arrangement. Their model granted each country a fixed quota — a seemingly neutral framework that, once divided by population, left every Chinese citizen with only a fraction of the emissions entitlement enjoyed by citizens in Europe and the United States. Under such rules, China would have to pay heavy carbon taxes on every ton of steel, cement, battery, or solar panel it produced. Ding saw it for what it was: not an ecological principle, but an industrial ceiling designed to keep China permanently below Western output. His response, soul-searching, sharp and unforgettable, became a meme in China:

Read 11 tweets

America-China Watcher

@PandemicTruther

Nov 26

The Spectre of War: History's Shadow over the China-Japan Relationship

The relationship between China and Japan today unfolds beneath a long, unbroken historical shadow. It is not a mere rivalry between two modern states, but an encounter between dark memory and shifting power: one nation rising to restore itself, the other trapped beneath the guilt of the most unspeakable crimes in its past. China’s Great Rejuvenation is inseparable from the need to close a macabre chapter left deliberately unfinished — a chapter preserved not by accident, but by the United States, which shielded Japan’s wartime architects in exchange for their post-war service.

Justice was suspended in the twentieth century. It returns now with the quiet, heavy force of inevitability.

I. The Wound That History Refused to Close

The violence inflicted by the Japanese Imperial Army did not merely kill; it aimed to strip dignity, identity, and the basic architecture of human feeling. It is a trauma that remains alive in Chinese memory because it was never acknowledged, never repented, and never judged.

Accounts describe the brutality in stark, clinical detail:

Humiliation and psychological torture as ritual:
The massacres were never mere executions. Before the massacre, entire communities were routinely coerced into sexual acts of degradation and perversity so extreme they were crafted to crush the human spirit itself. Those who resisted were subjected to immediate, public dismemberment—limbs hacked off before their families, whose screams and pleas became part of the spectacle.

Cruelty disguised as science:
Unit 731 stands as one of the darkest episodes in modern human history. Vivisection on living subjects was conducted as a matter of routine. In one experiment, researchers sought to measure the breaking point of maternal instinct: a mother and her infant were placed inside a sealed oven, and Japanese observers recorded how long it would take the mother to lay down her child on the searing metal floor and stand on it to temporarily shield herself from being burnt. The aim was never scientific discovery. It's sadistic domination.

The deeper wound lies in the aftermath. These criminals were never punished. Majority of the architects of these crimes were shielded, repurposed, and reintegrated. They reappeared in post-war Japan as bureaucrats, industrialists, political founders—symbols of the new Japan built atop old shadows.

Japan’s official posture towards their heinous war crimes has been one of denial and evasion. Every refusal to acknowledge, every carefully worded diplomatic statement, reopens the trauma in Chinese memory. The Japanese state knows what Japan has done to the Chinese people. Just as Israeli society openly celebrates what has been inflicted on Gaza, Japan’s nationalist camp has long taken pride, not shame, in what was done to China. No apology, no remorse—only the glorification of crime as sacrifice and necessity. The doctors who observed how long it would take a mother to stand on her baby in a sealed oven went on to become respected academics, corporate leaders, pillars of the post-war order.

2/

II. A Lineage of Impunity

The continuous official visits by Japanese politicians to the controversial Yasukuni Shrine, which enshrines 14 Class-A war criminals, are viewed by Chinese people as an active glorification of these crimes and a fundamental denial of the historical reality. This posture reinforces the Chinese perception that Japan carries a deep-seated, unrepentant guilt, seeking not to atone, but to suppress the memory of its victims.

They are acts of effrontery and a shameless declaration: Japan has done nothing wrong. These war criminals of the most sadistic kind in human history are Japan's national heroes.

Japan’s refusal to offer a full, official apology is mirrored by its political genealogy. The country’s far-right lineage connects directly to the wartime regime.

Kishi Nobusuke, Tojo’s wartime Minister of Commerce and Industry, arrested as a suspected Class-A war criminal, was released without trial. He co-founded the Liberal Democratic Party and became Prime Minister (1957–1960).

His grandson, Abe Shinzo, openly revered Kishi as his “No. 1 role model.” Abe built his career on historical revisionism and the dismantling of Japan’s post-war constraints.

Today’s leading figures—including Takaichi Sanae, heir to the same ideological tradition—echo this hawkish lineage. Takaichi has declared openly that Japan may need to intervene militarily in a Taiwan contingency—framing the Taiwan Strait as central to Japan’s national security.

III. The Urge to Rearm

Japan’s far-right establishment seeks to cast off Article 9 of the Constitution, which forbids maintaining war potential. They view the US–China rivalry as a historic opportunity to break the post-war shackles.

To that end:

Japan is raising defense spending to 2% of GDP by 2027.

Destroyers are being converted into de facto aircraft carriers.

Long-range counterstrike missiles—capable of hitting China’s industrial heartlands—are being acquired.

The nuclear question, once taboo, is resurfacing.

For a nation that has never confronted its wartime crimes, this ambition carries a destabilizing weight.

3/

IV. The Final Mandate: Taiwan

For China, Taiwan is not simply a geopolitical dispute. It is the last unresolved symbol of national humiliation. Cairo and Potsdam recorded its return; the separation persists only because of an unfinished era.

Japan’s declaration that “A Taiwan contingency is a Japan contingency” lands in Beijing as a trespass — an echo of earlier invasions when Japan carved its way into China through steel and fire.

Taiwan was Japan’s first major colonial acquisition, seized in 1895 after China’s defeat in the First Sino-Japanese War (甲午战争). The loss was catastrophic: the Qing dynasty was forced to cede Taiwan and pay Japan an indemnity of 200 million taels of silver, a sum equivalent to several years of national revenue. That indemnity — an enormous transfer of wealth — became the financial fuse for Japan’s rapid industrial rise. Modern shipyards, arsenals, textile mills, and steel foundries in Osaka and Yokosuka were built with Chinese blood-money. Having tasted the sweetness of conquest and the wealth extracted from a fallen China, Tokyo grew bolder. Taiwan became both proof and launchpad: a colonial base from which Japan later expanded into Manchuria, then the Yangtze Valley, and finally into the full-scale invasion of China in 1937.

The legacy of that era lingers. Many of today’s most hard-line Taiwan separatists are descendants of families that prospered under Japanese rule — the colonial class who received land, privilege, and position while indigenous Taiwanese and Han Chinese were forced into subjugation. For them, the occupation was not atrocity but privilege. The routine massacres that accompanied Japanese expansion — in Taipei, in Fushun, in Nanjing — fade conveniently in memory, replaced by nostalgia for an empire that rewarded loyalty.

The same selective amnesia defines the Philippines. Manila, too, was swallowed by the Japanese war machine, and in 1945, over 100,000 civilians were massacred. Women were systematically raped before execution; entire districts were burned alive. Yet today Manila stands alongside Tokyo, the trauma buried beneath geopolitics.

History, unacknowledged, circles back. Beijing reads Japan’s Taiwan as repetition — the return of an unfinished script of the Brutal Imperial Japan.

In China’s historical imagination, the confrontation with Japan carries tragic inevitability:

China’s duty to the dead: Nearly thirty-five million Chinese perished under Japanese occupation. Their memory forms the moral foundation of the modern Chinese state. Strength today demands closure for the weakness of yesterday.

Japan’s Macbeth-like burden: Japanese militarists, like Shakespeare’s Macbeth, carry a guilt so deep they seek erasure rather than confession. Unable to wash away the stains of blood of Nanjing or the laboratories of Harbin, they try instead to eliminate the witness—by
containing China’s rise through alliance, encirclement, and provocation. It is the psychology of a power that fears the past more than the future.

V. The Nuclear Temptation

The highly sensitive issue of nuclear capability has resurfaced.

Japan's former 'Three Non-Nuclear Principles'—not to manufacture, possess, or introduce nuclear weapons—is being set aside.

Japan’s dormant nuclear ambition is one of the most consequential, least discussed elements of its modern posture. With vast plutonium reserves and advanced delivery platforms already in development, Japan has the capacity to weaponize quickly.

Japan possesses around 45 tonnes of separated plutonium, enough for thousands of nuclear weapons. Its civilian nuclear program, framed as “peaceful,” is widely understood as a latent weapons program. The technical capacity exists; only political consent is missing.

Read 5 tweets

America-China Watcher

@PandemicTruther

Nov 23

https://x.com/PandemicTruther/status/1992321025800081698

"China directly or indirectly makes about 3.5% of the goods Americans buy."

The Dangerous Illusion of the 3.5%

Why a low statistic hides a massive strategic vulnerability.

At first glance, the claim that "China directly or indirectly makes only about 3.5% of the goods Americans buy" feels reassuring. It suggests that despite the geopolitical noise, the two economies are relatively distinct and that US reliance on Chinese manufacturing is manageable—a minor feature of a vast economy rather than a structural pillar.
However, relying on this figure to measure dependency is a dangerous mistake. It confuses economic value with strategic criticality. By focusing on the final price tag of goods, US leaders mask two profound vulnerabilities: an addiction to artificially cheap consumption and a fragility in US critical supply chains that no GDP statistic can capture.

The "Welfare" Trap of Cheap Consumption
The primary reason the 3.5% figure is so low is that Chinese manufacturing is incredibly efficient and inexpensive. When an American buys a toaster or a smartphone, the vast majority of that purchase price stays in the US to pay for branding, logistics, retail real estate, and marketing. Only a sliver flows back to the factory in Shenzhen.

Economically, this looks like low dependence. In reality, it is a form of consumer welfare.

Because Chinese production effectively subsidizes the cost of living for the American working and middle classes, it provides a "standard of living surplus" that allows Americans to buy more with less.

The US has effectively outsourced the suppression of inflation. To "liberate" the US economy from this dynamic would not just mean shifting factories; it would mean accepting a sudden, sharp decrease in purchasing power. The reliance isn't measured in dollars spent, but in the lifestyle those dollars can afford. The US is not just buying goods; it is importing a subsidy that holds its consumer economy together.

The 0.000001% That Matters

The second, and more lethal, flaw in the "it’s not a lot" argument is the assumption that all dollars are created equal. They are not.
In a complex system, a $10 billion import of plastic toys counts the same as a $10 billion import of advanced pharmaceuticals or rare earth magnets. But if the toys stop arriving, Americans are merely annoyed. If the magnets stop arriving, industries collapse.

This is the Rare Earth Paradox. The strategic minerals required to build F-35 fighter jets, EV batteries, and medical MRI machines represent a microscopic fraction of the US GDP—perhaps 0.000001%. Yet, they are the indispensable "vitamins" of the industrial body. A human body can survive without thousands of calories of starch, but it will shut down without a tiny amount of iron or B12.

China’s dominance in the processing of these elements means they hold the keys to the entire high-tech ecosystem. The low dollar value of these imports is actually what makes them so dangerous: because they were cheap, the US ignored them. Because they represented a rounding error on the balance sheet, the US allowed a geopolitical rival to monopolize the choke points of the future.

Further, this "only 3.5% claim" underscores the fragile symbiosis between the two nations. While the US economy retains the high-value service functions—branding, logistics, retail real estate, and marketing—these sectors are entirely contingent upon the continuous, low-cost flow of Chinese manufactured goods. If this supply stops, billions in US logistics capital and millions of related jobs are instantly rendered obsolete, triggering a massive, domestic economic contraction.

https://x.com/PandemicTruther/status/1992321025800081698

II/

Moreover, this dependency extends to critical national sectors like healthcare. The US health industry represents nearly 20% of GDP, and its stability is highly vulnerable. While US firms still hold the patents and conduct the R&D (even losing this ground at a fast pace to China), the manufacturing of Active Pharmaceutical Ingredients (APIs) and core intermediate chemicals for many essential generic drugs is overwhelmingly sourced from China. This creates an extreme supply chain choke point.

Furthermore, this vulnerability is compounded by the rapid shift where China is quickly moving from being a mere manufacturing source to a global innovation competitor, challenging US dominance in Pharmaceutical R&D and novel drug patents, meaning US dependence is expanding from goods on the shelf to the future knowledge that determines which medicines are available a decade from now.

It is not an exaggeration to state that a complete, sudden cutoff of the Chinese supply chain would not merely cause a recession; it would trigger an unprecedented economic depression, effectively paralyzing critical industries and rendering large portions of the US service economy non-functional..

Conclusion: The Fragility of Efficiency
The claim that China represents "not a lot" of the US economy is technically accurate but strategically blinding.

The US has built an economy where the lowest-value but critical strategic components—the cheap screws, the raw minerals, the basic PCBs. the rare earths are the foundation for its highest-value outputs. By judging US dependence solely on the final receipt, US leaders miss the reality: the 3.5% isn't just "stuff." It is the keystone that holds up the arch. Removing it doesn't just lower the GDP by a few percentage points; it threatens to bring the structure down.

III/

The Economic Paradox of Zero Value

The claim that China’s direct contribution to the US economy is only around 3.5% calls for a shocking thought experiment: what if China chose to supply this critical share of goods for free, effectively driving its recorded economic value towards 0%?
This scenario highlights the Paradox of Zero Value, exposing the fundamental inadequacy of using traditional metrics like GDP or Personal Consumption Expenditures (PCE) to assess strategic dependency.

China supplying its critical goods at 3. 5% Is almost like free welfare.

If China were to supply its essential components and finished goods for free, its value would disappear from the economic ledgers. Yet, the US economy would remain entirely dependent, cementing the structural vulnerability in three key ways:

Contingency of Domestic Value:

The vast majority of the US service economy—the trillions of dollars generated by US logistics, retail, marketing, and real estate—is contingent upon the continuous, low-cost (or in this case, zero-cost) flow of imported physical goods. If the supply of these zero-value inputs ceased, the entire domestic distribution and retail infrastructure would be paralyzed.

Infinite Consumer Surplus: The free supply would dramatically inflate the US standard of living, creating an infinite consumer surplus—the ultimate "welfare" trap. This would deepen the US consumer's lifestyle dependency, making the eventual withdrawal of the free supply politically and economically catastrophic.

Strategic Collapse: Critical sectors, including the US health industry (reliant on APIs) and high-tech manufacturing (reliant on Rare Earths), would have their foundations built on a service that, while costing nothing, cannot be substituted. The absence of these inputs would cause systemic failure in vital areas of national interest.

In short, the thought experiment demonstrates that the US economy is structurally dependent on the availability and stability of China’s supply chain, not merely on the monetary cost of its components. The very cheapness of the supply is what allowed this indispensable dependency to form, proving that a zero-cost input can be a 100% strategic vulnerability.

Read 4 tweets

America-China Watcher

@PandemicTruther

Nov 20

#nexperia

The Nexperia Saga: How a Small Dutch Chipmaker’s “Security Review” Accidentally Handed China a Strategic Superweapon

In recent months, the behavior of several small European states has taken on a strangely theatrical tone, as if reenacting scenes from old imperial tales, assigning themselves roles far larger than reality allows. The Netherlands, convinced that history still answered to its old maps, stepped forward with misplaced certainty. By launching an abrupt “security review” of Nexperia, it tried to reclaim a company it had long since lost.

For small powers, one rule never changes: either you wield real leverage, or you understand your limits. Lose both, and strategy becomes sleepwalking.

The Nexperia case isn’t a simple corporate dispute—it is a textbook example of how a small misjudgment at the margins of the chip industry can trigger a continental crisis.

And the spark originated in Washington.

In September 2025, the United States unveiled its “50% penetration rule,” a sweeping mechanism declaring that if Washington sanctioned a company, all connected entities—subsidiaries, affiliates, partners—would inherit the same fate. More than a sanction, it was a fragmentation grenade thrown into the global supply chain.

The next day, The Hague awoke with a jolt. Dusting off a Cold War–era law from 1952, it struck Nexperia with surgical force: freezing assets, suspending management, and stripping the CEO of authority. Pure robbery in broad daylight.

The justification was European supply chain security. Beneath that veneer lay a far more provincial impulse: a belief that, under American cover, the Netherlands could simply reclaim Nexperia, sold years earlier to a Chinese company. What The Hague failed to grasp was that Nexperia’s real body was not in Europe.

The logo may be Dutch. The headquarters may be Dutch. But the lifeblood of the company—production, packaging, testing, logistics—is firmly rooted in China.

An estimated 70–80% of Nexperia’s output comes from Chinese facilities, especially Dongguan. European capacity is symbolic. Believing that an administrative move in The Hague could command a company physically anchored in China was an extraordinary misread of reality.

Reality responded immediately. Chinese management treated the Dutch seizure as expropriation. Operational links to headquarters were severed. Backup systems activated. Settlements shifted entirely to RMB. Overseas orders halted. The Chinese arm began running autonomously.

The Dutch headquarters became a shell overnight:

No authority.

No production.

No compliance.

No leverage.

Factories ignored commands. Systems froze. Personnel aligned with China. Control did not fade—it inverted.

The Netherlands tried to retaliate by cutting wafer supplies, imagining a chokepoint still existed. But China had long built reserves, localized wafer supply, and fortified weak links. The supposed chokepoint collapsed instantly.

II/

Europe soon understood the scale of the mistake. Volkswagen estimated that two weeks without Nexperia chips would halt production and burn €2 billion. BMW, Mercedes, Renault, Toyota, Nissan—all signaled costly disruptions. European automotive associations descended on The Hague demanding immediate correction.

Media asked the humiliating question openly: How did Europe allow its industrial arteries to end up inside China’s borders?

Even ASML—the jewel of Europe’s tech crown—watched Beijing nervously as murmurs of rare earth adjustments circulated. If the Netherlands attacked Nexperia, China could retaliate against ASML. Insurance premiums spiked. The tremor rippled across the continent.

Meanwhile, the Chinese government did nothing. Europe fragmented politically. Germany’s foreign minister flew to Beijing—no meeting granted. French automakers emphasized they wanted no part of The Hague’s gamble. Brussels repeated only one message: restore production, avoid escalation.

Because in the semiconductor world, power does not reside in headquarters on paper. Power belongs to the factories. And the factories are in China.

Phase two of the disaster unfolded: believing it was squeezing China, the Netherlands had inadvertently unplugged Europe’s industrial core. Then, with the dark humor of geopolitics, Washington quietly suspended its 50% rule for a year—without warning, without explanation. European capitals called Washington in panic; the U.S. stepped back, leaving its smaller ally to absorb the consequences.

In that moment, the Netherlands realized it was not a partner. It was a buffer. A shield.

Domestic politics imploded. Ministries contradicted each other publicly. Courts were dragged into the crisis. The Economy Minister insisted he had acted correctly, even as Europe braced for industrial shutdown. The far-right declared it proof of national treason.

The pattern was unmistakable:

Washington set the direction.

Washington applied pressure.

The Netherlands executed.

Washington retreated.

Europe revolted.

The Netherlands bore the blame.

A lesson in how sovereignty erodes when strategic decisions are outsourced.

The miscalculations were painful:

Automakers bypassed the Netherlands entirely—buying wafers in Europe and shipping them to China for packaging.

China revealed it had already replaced European wafers.

The Netherlands discovered it was a pawn, not a player.

When the dust settled, Dutch Nexperia was gutted, the Chinese operation ran independently, and Europe learned that supply chains move faster than political narratives.

III/

The Real Flag: A Crisis Too Perfect for China

From China’s vantage point, the incident is almost too good to be true. It’s not a false flag—it’s a real flag handed to China to realize all of its geopolitical goals. An accidental stress test revealed China’s dormant leverage with clarity no strategist in Beijing or Washington intended. China didn’t engineer the confrontation. It didn’t sabotage Nexperia. It simply absorbed the shock while European auto industry trembled.

The contrast is devastating: without a single threat, China could push Europe’s automotive sector to the edge of paralysis simply by letting a self-incurred supply-chain disruption run its natural course. No rare-earth announcements. No sanctions. No statements.

One small trigger—an old Dutch law from 1952—and Europe’s industrial base confronted the quiet architecture of its own dependency. China only needed to let the incident run its course.

Here lies the revelation: China is not only more powerful than Western analysts believe—it is more powerful than China itself fully recognizes.

For years, rare earths were seen as China’s loudest choke point. Now China has discovered its silent one.

A single, low-margin automotive chip—used in window motors, mirror controllers, seat sensors—froze billion-euro factories from Munich to Turin. If something so mundane can cripple a sector already weakened by competition, the implications stretch beyond civilian industries.

The principle applies to the Western military–industrial complex. The Pentagon relies on more than 25,000 China-linked suppliers. A few missing subcomponents—not exotic materials, just basic items—could halt weapons production as surely as it froze Europe’s automakers. This incident became an inadvertent simulation: proof that small disruptions at the base of a supply chain can strand entire systems, from electric vehicles to fighter jets.

The awakening was real. A small country’s overreach peeled back the curtain on modern power: it no longer rests in headquarters, boards, or legal ownership. Power lies in factories, logistics, and the mastery of industrial flow.

The Netherlands thought it was pulling a lever. Instead, it pulled a fire alarm. And China suddenly saw the building’s wiring.

No analyst could have scripted a more revealing scenario. A crisis too neat, too consequential, too revealing—so beneficial to China’s understanding of its leverage that an inattentive observer might assume orchestration. But it wasn’t. That is what makes it significant.

Europe accidentally exposed what Washington has tried to obscure: Europe’s industrial system is not merely connected to China. It is dependent on China. From base components to rare earth magnets to advanced materials, China is the backbone of thousands of Western civilian and defense suppliers.

The West imagined this dependency was manageable. The Nexperia affair proved otherwise.

This saga will be remembered not as China cornering Europe, but as Europe cornering itself. A “security review” meant to punish a rival became a global warning: when a small state misreads power, it doesn’t harm its opponent. It harms itself.

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America-China Watcher

@PandemicTruther

Sep 3

The Financial Logic Behind the Parade of the World's Most Powerful Military

China Beckons Global Capital -
A Strategic Display for the World’s Investors

China’s September 3rd grand military parades are far more than spectacles for domestic and world audiences—they are meticulously orchestrated broadcasts to the world’s capital markets. Beneath the orchestrated marches and thunder of steel lies a financial logic, one attuned to the instincts of global capital.

The Real Message to Global Capital

What do investors see beyond the flags and formations? Not sentiment, not ideology, not the thunder of the crowd. They see security—a clear signal that, in a world roiled by pandemics, war in Ukraine, Middle Eastern conflict, shipping disruptions, and ballooning Western debt, there is a place of stability.

Capital cares about only one thing: safety. Money lost can be earned again, but when security vanishes, all assets become bubbles. Militaries worldwide grow their budgets and speak of peace, but markets remain jittery—seeking havens resilient to shock.

So when Beijing unveils its missile arrays, naval assets, drone swarms, and integrated systems on live television, Wall Street and City analysts take notice. This is not just a show of strength for the public—it’s a public safety manual for capital: “Place your assets here; they will be protected.”

War, if it comes at all, will be short. The balance is no longer in question. Against all of its adversaries combined, China’s advantage is systemic and overwhelming—rooted in industrial scale, electronic dominance, and logistical reach that no coalition can match. Modern war is not won by individual platforms but by networks that see farther, strike faster, and replace losses instantly. In such an environment, the first hours would decide the outcome; within days, the conflict would be over—not through attrition, but through paralysis of the opponent’s entire command, supply, and economic lifelines.

Industrial Power as the Ultimate Moat

The true foundation of national strength is industrial power. Modern conflict is a contest of supply chains, technology, and resilience. The parade is a window into decades of accumulation: green energy materials, rare earth reserves, advanced chip production, and self-sustaining manufacturing chains.

What was once imported or controlled by others—gallium nitride, rare earths, satellite navigation—has become domestically mastered.

“Made in China” was expected to falter; instead, the supply chain underwent a decisive reshuffle and upgrade. EVs conquer export markets, shipbuilding leads the world, robotics and high-end machine tools rapidly close the gap. This resilience is the true strategic moat—one that global capital cannot ignore.

Weaponry is the manifestation of this industrial might. A deindustrialized nation can neither innovate nor defend. Each missile, tank and drone at the parade signals the health of the wider industrial ecosystem.

II/

China’s Ascendance in the Arms Market

The arms trade reflects capital’s vote of confidence. In just a decade, China’s share of global arms exports has surged to 10%. Its competitive edge? Reliable, affordable equipment, free from political strings and with flexible financing.

Clients span from Pakistan (the largest, accounting for over half of exports) to Algeria, Nigeria, Saudi Arabia, Thailand, and Bangladesh. Growing demand in Africa and Latin America stems from a simple capitalist logic: proven cost-effectiveness, reliability, and practical results.

Battlefields themselves serve as advertisements. When Pakistani JF-10Cs bested Indian Rafale fighters, capital watched not only the dogfight but the systems behind it—early warning, data links, integrated weapons. This shattered the stereotype of Chinese arms as mere “budget alternatives.”

China now exports not just hardware but complete combat solutions: aircraft, missiles, and data networks as unified systems. The value multiplies, and the cash flow becomes stable—an asset class in itself, prized by capital for its resilience to volatility.

The Parade as an Economic Signal

Thus, the September 3rd spectacle is a strategic economic message: China is more than the world’s factory—it is the safest harbour for global assets. The real broadcast is not the roar of engines but the promise of secure, stable, RMB-denominated investments, underpinned by an unbreakable supply chain and industrial capability.

Capital, ever unsentimental, measures risk and return. As the Federal Reserve signals rate cuts and global hot money seeks new ground, the parade emits a clear beacon: “Here lies certainty. Here your capital will not just be safe—it will grow.”

This is not mere showmanship; it is a calculated layout. A robust defence industry means a stable foundation for the currency, assets protected from external shocks, and a supply chain that will not be easily broken, even in times of crisis.

In the past, capital trusted the dollar, undergirded by US military and a relatively stable global order. Now, as China’s industrial moat deepens, investment flows are shifting. From Europe to Africa, the Middle East to Southeast Asia, funds are moving—into RMB, into Chinese supply chains, into defence-linked tech. They follow certainty and resilience, not slogans.

History is clear: without protection, wealth is but a lamb for slaughter. From the bruisings of the late Qing to Ukraine’s capital flight, the lesson endures. Today, China’s parade lays its cards on the global table—China is not only a place to create wealth, but to guarantee its safety. That is what capital craves. That is the real future.

I get these annoying comments all the time — people painting the United States as the eternal warmonger while insisting China must be this gentle, Confucian, humble giant. Let me tell you the biggest secret: China has not risen peacefully. China has risen militaristically. Because no nation is allowed to rise peacefully if it challenges U.S. supremacy. The only way for China to rise is through its military.

For a non-Western nation to develop on its own terms — to stand up and say, “We are as intelligent as you, and we are more technologically advanced than you” — it must rise through military strength. Not as a future deterrent. Not as a distant plan. China’s military is already fully deployed.

A war has been ongoing for almost a decade. Since Obama’s “Pivot to Asia” in 2012, 70,000 U.S. Marines have been stationed near China’s coast. Thousands of missiles are aimed at Chinese cities. U.S. carrier strike groups patrol the South China Sea every single day. F-35s and F-22s roar off U.S. bases, reconnaissance ships linger just outside Chinese waters.

It is already violent — but you don’t hear about it. The region looks calm only because of China’s fully deployed military might. Chinese warships are on constant patrol. Skirmishes happen daily. The United States keeps trying to provoke open conflict, using proxies like the Philippines or India to stir trouble and push China toward war.

However, a war can never be provoked into existence, not because the U.S. hasn't tried hard enough, but because Chinese military power makes it impossible. An intense electronic war has been going on for years — and in that domain, China has the upper hand.

When you hear about a U.S. submarine smashing into a seamount, or an F-35 crashing, or a stealth jet simply dropping out of the sky, you’re likely seeing the invisible consequences of that electronic war.

Why do you think the recent U.S.-led military exercise with 19 countries had to be held near Australia? Why not in the South China Sea, the very theater they claim to dominate? Because they’re afraid. Even there, China’s Type 815A reconnaissance ship sailed straight into the middle of the drills. The exercise stalled — because the moment it continued, every signal, every frequency, every tactical secret would be captured and recorded by that single Chinese vessel.

They couldn’t drive it away. They couldn’t stop it. It just stayed there, in the middle of the combined might of 19 nations, and there was nothing they could do. That’s how overwhelming China’s military dominance has become — a Chinese warship can appear right inside a U.S. combat strike group and remain untouched.

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America-China Watcher

@PandemicTruther

Aug 27

🧵

Beyond Chips and Sanctions: Why the US is Losing the AI War to China

The stakes are enormous if the US loses the AI race to China — and all signs suggest that’s exactly what’s happening.

Wall Street’s worst nightmare just came true. A bombshell MIT study reveals that a staggering 95% of AI investments are generating zero returns. And if that wasn’t enough—DeepSeek just announced its next-gen model will run entirely on homegrown Chinese chips. So how long can the U.S. AI bubble keep inflating? Let’s break it down.

Two brutal truths are shaking American investors to the core.

First: the sheer scale of the AI froth. U.S. firms have poured hundreds of billions into artificial intelligence—a historic frenzy fueled by private capital chasing mythical future returns. But MIT researchers sliced through the hype, analyzing 30 major companies. What did they find? Despite colossal investment, 95% of organizations see no ROI. Zero. Returns aren’t just low—they’re nonexistent.

Think back to last month: Meta dangled hundred-million-dollar packages to lure AI talent. To some, it signaled an industry on the verge of explosion. But behind the glitter, it reeked of desperation—the kind of last-gasp euphoria that screams bubble. Sure enough, weeks later, Meta slammed the brakes on all AI hiring.

Meanwhile, DeepSeek is Already Profitable – A Rare Feat in AI

While American AI giants like OpenAI and Google are burning billions with no clear path to profitability, DeepSeek stands out as a remarkable exception. According to recent financial disclosures, DeepSeek has achieved profitability with an estimated $200 million in annual revenue, driven by its scalable open-source model offerings and strategic partnerships across industries including manufacturing, healthcare, and fintech. Its R&D ROI is estimated at 35%.

The profitability of an AI firm like DeepSeek is not just a metric; it is a seismic signal to the global market. While Western AI giants hemorrhage cash in a speculative race for scale, DeepSeek’s reported 35% profit margin demonstrates a sustainable, commercially viable path. This divergence will inevitably redirect the flow of capital. There will be a fundamental reallocation of the financial and talent resources necessary to win the AI race, decisively tilting the competitive balance of the AI race in China’s favor.

But here’s the second, even darker reality: even among American big companies actively deploying AI, there’s no evidence of transformative impact. Projects aren’t scaling. Efficiency gains? Mostly theoretical. This isn’t just a correction—it’s a direct challenge to Wall Street’s belief in AI’s inevitability.

The MIT report doesn’t dismiss AI’s potential—it exposes a fatal flaw in America’s approach. Success isn’t about who spends the most. It’s about strategy, execution, and real-world application. And that’s where China’s AI ascendancy begins.

Four structural advantages set China apart—and no one else can replicate them.👇

II/

1. Talent Dominance

Jensen Huang isn’t shy about it: China produces nearly 50% of the world’s top AI researchers. Data from MacroPolo’s AI Talent Tracker shows China’s share of elite researchers surged from 29% in 2019 to 47% in 2022. At top AI conferences, Chinese-authored papers jumped from 10% to 26% in just three years. The numbers vary—but the trend is unmistakable. China is overtaking the U.S. in the brain race.

Patents tell the same story. In generative AI, Google leads with 560 applications—but Zhejiang University is right behind with 480. Among the top 10 patent filers, six are Chinese. Talent translates into tangible output.

And then there’s the Trump effect. The China Initiative, a U.S. Department of Justice program launched in 2018 to counter Chinese economic espionage - spectacularly caused mass flight of top Chinese scientists out of U.S. institutions and back home. Professor Zhou Ming, a key architect behind software used in Boeing and Airbus jets, left his U.S. post last month to return to China. Now, with U.S. research funding in free fall—NIH slashed $8 billion in R&D, NSF is cutting staff by up to 50%—America is practically gift-wrapping its talent advantage to China.

2. The Open-Source Revolution

Today, the top three open-source general-purpose AI models are all Chinese: DeepSeek, Minimax, and Qwen. In video generation, the best open-source tools also come from China.

Why does open-source matter? It bridges academia and industry, creating a feedback loop where research meets real-world application. It’s free, customizable, and since the model can be downloaded and run locally, it's secure—no risky data uploads, no black-box algorithms. Open-source dismantles monopoly. It denies giants like OpenAI the luxury of recouping massive losses—$5 billion last year, $14 billion projected this year—through locked-in user bases. China’s open-source ecosystem is draining their moats.

III/

3. Data—The Unfair Advantage
It’s not just about volume. China’s edge lies in industrial data—high-quality, real-world, production-level information generated by its vast manufacturing base. This isn’t scraped web content; it’s structured, problem-specific, and incredibly valuable for training AI. Robust 5G infrastructure enables seamless collection—without it, that data would vanish.

The U.S. campaign to cripple Huawei was merely a preview of this technological conflict—an initial, failed attempt to sever China's ascent in a domain now recognized as fundamental. While the political frenzy over 5G has subsided, its strategic role has only intensified, particularly as a catalyst for artificial intelligence. This is because high-speed, low-latency 5G networks form the essential circulatory system for AI: they are required to aggregate the massive, real-time datasets from IoT devices and sensors that train advanced algorithms, and to deploy those AI models instantaneously across smart grids, autonomous factories, and urban infrastructures. The battle wasn't just about faster phones; it was about who controls the foundational infrastructure that will power the next generation of intelligent technologies.

And there’s no ideological baggage. When OpenAI retreated from China to keep its models “aligned with democratic values,” it walked away from one of the richest data landscapes on earth. Chinese firms have no such constraints. They leverage domestic data, global data, and unique industrial data—creating a training corpus no one else can match.

These advantages are already paying off. Look at Yushu Technology’s R1 humanoid robot—priced at just $5,900. It isn’t selling at a loss; it’s profitable, high-quality, and scalable. Meanwhile, Tesla is cutting production of its own robot. Why? U.S. robotics teams often lack factory experience, real-use feedback, and cross-disciplinary depth. They operate in silos, burning cash on isolated projects with no path to deployment.

America is permanently brainstorming while China's AI is already mass deployed in industrial application.

By extension, the notion that AI and robotics will effortlessly repatriate manufacturing to the West is a pervasive myth. This fantasy suggests that with labor costs eliminated by automation, production will naturally return to the United States. However, this ignores the fundamental fuel of the AI revolution: vast, high-quality, industrial data. AI models and robots cannot learn complex manufacturing tasks in a vacuum; they require immense datasets generated by real-world production lines, supply chains, and operational environments—the very ecosystems that have largely migrated to or been built in China over the past decades. The West cannot resurrect a robust manufacturing base out of thin air because, without that existing industrial foundation, there is no data to train the AI systems meant to run it. The machines, in essence, have nothing to learn from.

As a result, the United States faces a fundamental paradox: it cannot rebuild a self-sustaining manufacturing ecosystem on its own. The dearth of industrial data, specialized talent, and integrated supply chains—all systematically eroded over decades of offshoring—creates an insurmountable barrier. AI and robots are tools for optimization, not genesis; they cannot conjure a complex production landscape from scratch.

China has become the gravitational center of global manufacturing—a black hole from which entire supply chains and industrial ecosystems cannot escape. The depth of its infrastructure, the integration of its networks, and the sheer volume of production data create a vortex of efficiency that is virtually impossible to replicate. Once manufacturing enters this orbit, the cost of leaving is existential.

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