The China Challenge

Part of the problem with ongoing events in China and especially the protests in Hong Kong is that much of the crisis is internal to that country. The West, even the United States, has limited control over events.

Complicating matters is that the US is wracked by its own internal conflicts. The legitimacy of American political institutions is in doubt as never before. This is partly expressed in trade policy. While it would be wrong to suggest American trade policy is accelerating events in China surely it is factual to say that both crises are playing into each other.

Both nations are struggling with governance. China is testing the proposition of whether a totalitarian party can lead a great country in the 21st century. America is determining whether a neo-Aristocracy powered by fiat money can transition to as yet an unknown future.

It’s an open question which country is being destroyed by its ruling elite. Perhaps both.

The only effective American response to the China challenge is internal. It has to get its house in order if it is to regain its place as the cornerstone of the future. A crackdown in Hong Kong will lead not to a military response but to yet further stress on trade. But it will not be limited to trade. The impact of trouble in China on the global currency and financial systems has yet to be reckoned.

We truly live in interesting times.