Is China the winner in the Ukraine Conflict?

Letters from O'Brien #7

Dear Mr Smith,

After several weeks of continual updates from Eastern Europe, it appears as if we are once again in an ‘openly admitted’ Cold War. Propaganda from every side is ramped up to the max. Nuclear and biological weapons are on the table, espionage is likely at play, and Europe is once again the most likely to be caught in the flames. All very tragic and incredibly captivating.

I think for some, this is a worrying series of events which must be stopped at all costs. For others, it is a perfect opportunity. I realise you are more interested in the psychology of such things, but please humour me for a moment as I get these geopolitical thoughts off my chest.

UKRAINE - A SHORT HISTORY

Throughout modern history, Ukraine has been nothing short of an international chess piece, being played by one superpower after the other in the hopes of capturing this key region. Its size and location relative to the Black Sea made it a crucial point in power projection to the south for Russia, and important for controlling Russia to the north. By this measure, it is understandable why many invaders throughout history have prioritised Ukraine when there was motivation to push into Russia. 

Following the October Revolution in Russia, 1918, Ukraine slowly came under an increasingly violent regime. Under Lenin, the Ukrainian people began to suffer as collectivisation was slowly forced upon the north of the region. As time went on, the population began to stand against the various measures of control exercised by the Soviets. This would culminate in perhaps the most controversial event to take place within the Soviet Union. In 1933, Josef Stalin decided that the best way to break the will of the Ukrainian people was to use military force against them in a sweeping attempt to collectivise the region by force. 

Over the next 12 months, stretching into 1934, new regulations were forced upon the Ukraine; collectivisation was applied. The Soviets required all crop yields to be handed over. Farmers who did not comply would be shot, and anyone found with food produced in Ukraine were charged with theft, and capital punishment was enacted. On top of this, imports to Ukraine were blocked. The results were inevitable; there was simply no food, and the population began to starve. Within a year almost 8 million Ukrainians had starved to death, and no one in the West lifted a finger. People were selling human corpses for food, posters reminded parents that it is “bad to eat your children”, the event destroyed the nations will and forced those who remained under Stalins reign.

As the story goes, two first hand reports were created by western journalists in 1933. Gareth Jones, and soon thereafter Malcolm Muggeridge both travelled to Ukraine. There they witnessed the true extent of what was completely ignored in the West - people starving and dying on a massive scale, as soviet forces brutally mistreated the population. Both published what they had witnessed and were met with harsh criticism. 

Their reports were ignored in favour of a New York Times article by Walter Duranty, in which Duranty claimed the reports were lies, Ukrainians were not starving, just hungry. Many years later, it would be revealed that Duranty had never visited Ukraine during the famine, and was on the pay roll of the Soviet Union as a propagandist. 

Despite both first hand reports by Jones and Muggeridge, the situation was written off as propaganda, and the New York Times story continued to be pushed. The American people were kept in the dark, unaffected by Ukraine. Similarly the British throughout the 1930s, who were heavily in favour of socialist ideas, were also turning a blind eye to the Ukraine. 

For the Ukrainian people, these tragic circumstances under the Soviet boot would have long lasting effects, and the events would never be forgotten. 

By 1941, operation Barbarossa was put into effect. Germany had broken the Molotov-Ribbentrop pact and invaded the Soviet Union. Although often overlooked in the West given the German war crimes, for many Eastern Europeans who had suffered under Soviet occupation the Germany Wehrmacht and SS forces were seen as liberators. Many Estonian and Latvian groups greeted these forces with open arms. Even regions not directly under Soviet control, but rather under communism influence such as Croatia monopolised on the opportunity of anti-communism occupation. 

While this was to be somewhat expected in the Baltic states, which shared heritage with the Germans, Ukraine was a different story. The western side of Ukraine in particular was willing to take up arms against the Soviets. Likewise, the eastern half of Ukraine - many of whom were ethnically Russian - would eventually fight for the Red Army. 

But the prevailing feeling throughout most of Ukraine was that of ultranationalism. The Germans fanned the flames of the people, with various Wehrmacht and SS units forming specifically for Ukrainian volunteers. This includes the iconic SS Galicia, who are still seen by many Ukrainians as heroes. 

In actuality, the Germans only cared about the Ukrainian people so much as Ukraine served in the fight against Stalin. Hitlers long term ambitions in the region included harvesting crops for export to Germany, and even loading up trains with Ukrainian soil (some of the richest soil in Europe) which would be carted back to Central Europe. 

The impact of the war is still felt strongly to this day. Ultranationalist groups are seen as somewhat of the norm in western Ukraine. Decades of suffering under Soviet occupation has resulted in continued national socialist and ultranationalist ideas. For many Ukrainians, communism is the universal true enemy of humanity, and in particular the Ukrainian people, while collaboration with the US or EU is seen as an unfortunate but necessary precaution in the fight against such socialist ideas.

UKRAINE CONFLICT

So what is really going on here? Many have jumped onto theories which likely hold some truth (WEF agendas, US political corruption, etc.). As with most geopolitical rivalry, it is not as one dimensional as we would like it to be. In actuality, it seems as though the same bad actors are either freaking out, or attempting to monopolise this conflict. The US has certainly been fanning the flames of Ukraines (historically well justified) distrust of Russian governance.

While I hate to jump on the somewhat Marxian bandwagon, I feel (in this case) that the United States is to blame for much of what we are seeing. Both the Russian and Ukrainian people have a history of justified mistrust of the other side. The Ukrainian people suffered under Stalins regime, and many turned to ultranationalism following the Nazi occupation - who many saw as liberators. Ukrainian national socialism and ultranationalism is not a result of ‘CIA intervention’ - it pre-dates that - but it has been used by the US to help strengthen its resolve against Russia. Russia has continually been portrayed as a Soviet-era despot, hence the willingness of many western Ukrainians to continually fight what in actuality a changed nation. This is a whole other topic, however my point is this; the United States has attempted to monopolise the justified fear within the (predominantly western) Ukrainian people, just as they did in Iraq and Kuwait. However I believe that now in 2022 the US is projecting a strength they no longer posses - both militarily and ideologically - and they are not considering the longer term consequences. 

US POWER PROJECTION

How is it the US no longer has the power projection it once had?

Following the close of the Second World War, the United States set out with its new found strength to bring a swift resolve to what it deemed ‘destructive’ ideologies. For the most part, they were correct in their initial judgement; American politicians finally listened to their Military advisors who had been warning them about the incredible danger posed by Stalin and the Soviets, how they were not our allies or friends. Likewise, many American values were based out of a Christian foundation diametrically opposed to Marxist ideology. 

The goal could best be summarised in the words of General MacArthur, following the surrender of the brutal Imperial Japanese; “It is my earnest hope - and indeed the hope of all mankind - that a better world shall emerge out of the blood and carnage of the past. A world found upon faith and understanding. A world dedicated to the dignity of man and the fulfilment of his most cherished wish for freedom, tolerance, and justice.”

These words would become the foundation upon which patriots of the American system would willingly head off to remote locations across the globe to assist in bringing about the core values of Americanism. While it may be true that the classic American idea described by MacArthur may have led to a world of more freedom, tolerance and justice, if non-western nations would willingly lay down their different ideologies and conform to an American mindset.  The United States’ WWII victory in Europe, and their ability to shift the culture in Germany (which had a different, but somewhat similar heritage to the average American) set the precedent for all other future operations. The reality of those future operations, however, would be grim…

From Afghanistan to south east Asia, people groups simply disliked the ideas of Americanism, democracy, and indeed Judeo-Christian values. Communism served as the antithesis to democracy, Christianity, and fair market competition. Korea, the Philippines, and soon thereafter much of the world including Vietnam fell under the spell. Americas ideas continued failing. Iraq despised America, whom it saw as Zionist invaders, despite having somewhat similar systems of operation. And most recently, Central Asian attempts at Americanism failed, as the Afghani people simply couldn’t align their well entrenched monarchical heritage with democratic ideas. 

There was a heavy push for peaceful globalist ideals following the fall of the Soviet Union. The 1990s may have been the only time in history where globalism actually worked. The worlds powers were largely at peace, and international trade was benefiting everyone. The internet had wide reaching, positive effects. Many nations were encouraged by America to dismantle the nationalist mindset and integrate economic reliance across the globe. The United States was first to lead, as most of its industrial capacity was exported to Asia. It seemed as if the future was bright and international cooperation would lead to the betterment of mankind.

This was naive at best.

FAILING & SHORT SIGHTEDNESS

Following roughly a decade of peace between the global players, things once again began to unravel. It is for this reason that I believe Americas ‘globalist idea’ was not a step forward in geopolitics, but rather an anomaly which would ultimately fail itself. America would once again turn to the cold war mentality in hopes of securing key positions throughout the East. While US foreign policy has always included longer term goals such as increasing economic influence in strategic nations, this appears to be increasingly sporadic over the past decade. We will once again turn to Ukraine for an example of this - an example which I believe is a short sighted and desperate move by the United States to hold economic sway in a rapidly changing world.

What we are witnessing in Ukraine is not obvious in the emotionally engaging images presented on the news. While the Ukrainian people fight for their national sovereignty, they are caught in the middle of many international interest groups who all have cards on the table. Before moving on, I must take a detour and describe what I believe we are truly witnessing in Ukraine. 

In 2010 Ukraine extended a lease on a Russian naval base in Sevastopol, from 2017, to 2042. This is a key installation for the Russian navy, housing the entire Black Sea Fleet (hence the intervention in the Crimean Peninsula which we will get to soon). 

While this was happening, a strange series of events were taking place within the Ukrainian government, who had remained relatively neutral to both Russia and the United States. The Ukrainian government was approached with several offers - one of which was a merger-type agreement to move Ukraine into the EU. This merger deal required Ukraine to also accept NATO military requirements - without explicitly joining NATO. At this point, the Ukrainian government declined the offer, as it saw such a move as highly provocative towards Russia, particularly one article within the agreement, which would allow NATO forces to establish military bases across the region.

A collateral deal was also being discussed roughly around the same time. The United States government was pushing for an IMF loan program within Ukraine, however this would come at a cost. The Ukrainian government - under Viktor Yanukovych - had to meet certain conditions, one of which was reforming employment distribution. Cuts would have to be made to the education and health sectors, both of which were heavy contributors to the Ukrainian economy. And another was cutting the subsidies on natural gas. Once again, the Ukrainian government was hesitant to jump into such a deal, as economic reforms would make energy unaffordable for many citizens, while simultaneously weakening key sectors of the Ukrainian economy. 

The rejection of these deals would have long lasting impacts on Ukraine. US intervention within the Ukrainian political sphere would increase. This would happen at an unprecedented scale leading up to the 2013 Euromaidan protests. The ultranationalist element within the west of the country were strongly against the Yanukovych government, which it saw as a communist threat that could result in an opening up to Russian manipulation akin to the former Soviet Occupation. To Ukraines political right, the government had to be stopped. For the United States, this offered a perfect window of opportunity to push right leaning ideology into power, with hopes of finalising the previously abandoned deals which would bring Ukraine into Western spheres of influence. 

What followed was essentially civil war between three primary factions; neutral Ukrainians who had been relatively fine under the previous administration, right leaning groups who were against the current administration, and extremist groups who aligned themselves with primarily ultra-right ideas (although extremist left leaning Marxists groups were also active, and continue to operate in the current conflict). As hostilities broke out across the country in what was essentially a coup, the Russian government sent in forces to secure the Crimean peninsula. While this was partially done to secure the pro-Russian population who reported to have been massacred by ultranationalist groups, the real reason was to control the port of Sevastopol. 

Following the establishment of a new government within Ukraine, this is exactly what happened. The previous negotiations were back underway. The EU once again offered an IMF loan commitment, if the new government was willing to cut gas subsidisation. The new government was willing to oblige, and cut natural gas subsidies by half. In response, an unusually large IMF loan of $27 billion was established. This was practically unheard of, as it was many times larger than expected, and was also done during the middle of a what was essentially a civil war. At the time, analysts were at a loss as to why this had taken place. Ukraine would never be able to pay back the loan, and if it couldn’t, it was almost certain that a recovery program would be enacted in the form of capital seizure of land and natural resources. In this way, the IMF loan would act no differently to a Chinese Belt and Road initiative. 

While it is obvious that Ukraine would once again serve as a Cold War-style strategic point for US interests, what was not so obvious (at least to the Ukrainian people) were the consequences. Spurred on by US politicians and activists, Ukrainians were told that hostility towards Russia was not only acceptable, it was expected. This absurdity stands contrary to basic geopolitical rules; you cannot act hostile towards a larger nation and not expect repercussions, especially if that larger country happens to be under the leadership of several ex-KGB operatives, all of whom are perfectly willing to engage in nuclear war.  This is - without going into further detail - the primary flash point for Ukrain-Russia conflict.

I’m afraid I’ve become a bit sidetracked, but I will point out one last thing about Ukraine; the leadership has once again approached the IMF for further loans. Due to the current political atmosphere, the IMF managing director has recommended support. Regardless of the outcome of this conflict, this will have long lasting negative impacts on the Ukrainian people. I stand with several other geopolitical commentators in my belief that Ukraine will soon mirror the economic catastrophe that is Greece; perpetually in debt, and unable to find a reasonable way out. Likewise, this will also hurt American influence in the region - if not directly, then as a result of a hostile population, as we have seen throughout Southern Europe following western intervention. This forced policy, which may have worked somewhat in certain middle eastern nations, appears to be failing both at home and abroad, as the citizens of various countries grow increasingly agitated and distrustful of Westernisation. 

US FUTURE

I find one of the most intriguing parts of this whole conflict has been the willingness for America to push forward into this conflict. I believe politicians and decision makers are unaware of the possible mistake they are making. This is obviously spurred on by strategic and economic interest in the region, but in a manner that seems desperate. 

It may appear on the surface to be a monochromatic scenario; America and its allies, against Russia and its allies, however this is far too much of a simplification. The actuality - as we have seen in Germany recently - is that America’s friends (while presenting themselves arm in arm) are beginning to see the writing on the wall. While the governments of various Western European nations tolerated various destructive political and social movements over the past decade, so as to not appear contrary to America, it appears as if open warfare has been the breaking point, as nations such as Germany openly announce a regression from all globalist ideas, and a return to nationalism as its military is pledged $100 billion Euros. France will follow, and soon thereafter most of Europe.

To quote a rather generic line from The Dark Knight: “You either die a hero, or live long enough to see yourself become a villain.” What was once Americas greatest light - Christian morality - has slowly been eroded by socialist ideas, while state legislation has slowly eroded the rights of the individual and his business. The result is a demoralised population, with decision makers driven by greed. Even greed relies on a foundation, and that foundation is collapsing. 

WHO IS WINNING? 

So perhaps the real question to ask is who exactly is benefitting? Without considering the more complex theories (such as WEF plans) which we cannot verify, we should turn to the observable state of things. With the exceptions of arms manufacturers, no one appears to be benefiting from this conflict within the American sphere. Businessmen and politicians appear to have more to lose than gain (hence the many conspiracies). 

But if we turn our glance away from the smouldering political mess of the Ukrainian region (Ukraine, Russia, US) and to the East, we may find a long term set of plans which will ultimately uproot America from position of power. Since the beginning of the conflict, the world seems to have forgotten about China - a country with ten times the economy of Russia. China has remained in the shadow of US global power for decades, and wants to break away. Is this their chance? 

THE LONG GAME

As the saying goes; “appear strong when you are weak, and weak when you are strong”. This is a game the US has never been able to play, however China and Russia are perhaps the counterpoint and are very good at it. For three decades they have had the unique opportunity to exploit an increasingly naive Western global outlooks to their advantage. 

Chinas initial goal (following domestic economic prosperity) was to bring other nations under its political sphere of influence, which would be useful allies in the future. Key among these regions of control were South East Asia (including north Oceania), South America, and Africa. Africa has been of particular interest. As projections show, the rate of growth and economic prosperity within African nations such as Nigeria put it on track to become the worlds next manufacturing hub. 

The North African nations - also known as the ‘gatekeepers of Africa’ - will be responsible for cross border transportation into Europe. This has been evident for some time, with geopolitical analysts pointing out the strategic importance of Libya, Tunisia, Algeria and Morocco. These fell on deaf ears in the West. In China and Turkey (who I believe will soon become a global power akin to Russia), ties were formed with these northern nations. The result for China? Political and economic sway over the European economy once the manufacturing switch to Africa occurs. 

In contrast, the United States largest contribution to North Africa in the past decade has been the short sighted and political motivated coup of the Libyan government. This absurd move achieved nothing, and has ruined US intervention in the eyes of many African nations. 

The United States - in my opinion - has been willingly blind to the fact that times are changing, and not in their favour. The West has been complacent with its current system, rather than expanding its ambitions into Africa. The reason? Because the current way of operating costs less, whereas expanding would come at a deficit. This is a serious mistake; while it may be cheaper to offshore manufacturing to China right now, it will become a nightmare in the future, as China itself offshores its own manufacturing, and leverages what remains domestically in favour of its own interests.

SWIFT AND CIPS

Now that China has secured itself firmly within the African continent, its next move is to decouple itself from Western economic sway. This was inevitable, and not a conspiracy. China cannot exceed the power of the United States until it does away with such things as the US dollar as the primary global reserve currency. Russia has also had this close to its ideological heart since the fall of the Soviet Union. 

At the core of American-centric international economics is the SWIFT global banking messaging system, which falls within the Western sphere of control. For some time, it has been subtlety revealed that many nations falling under the Chinese sphere of influence were considering the switch. For a nation like Russia, this would never have gone over smoothly. 

What both China and Russia realise is that the long term game is almost always worth playing against the US, who is in the middle of committing geopolitical suicide. 

The immediate result of kicking Russia off the SWIFT was a huge economic punch in the face. In the long run, what the United States and Europe have done is removed from its economic sway a large nation which will inevitable recover. In the long run, CIPS (the Chinese controlled Cross-Border Interbank Payment System) grows in strength. Sanctions imposed on a Chinese or Russian bank can no longer be ‘targeted’, since it will impact a node within an expanding network. 

GOLD AND THE FUTURE

Following the previous point, the ability for China and Russia to act autonomously from an international economy is limited by its ability to legitimise its own currency. Dire predictions over the past three decades have painted a picture in which the US dollar violently collapses in on itself - something set in motion following the decoupling of the US dollar from the gold standard. This was seen as a global issue, but only if the world stayed in orbit around the US economy. 

For decades it was practically impossible to move back to the gold standard without major economic impacts. This was primarily due to the reinforcement of the petrodollar as the primary global reserve currency. Any move in the opposite direction would either be shot down, or fail simply due to a lack of material backing. 

Now, it appears as if we are at the breaking point. As reported by the Nikkei, central banks around the world have been slowly creeping away from the dollar based system, instead prioritising gold. This has culminated in recent days with a set of reports claiming that Russia will move to the gold standard, as gold prices continue to climb. Whether or not this report is true is up for question, but it does highlight a key weak point in US centric economics.

With that in mind, let’s turn our attention to China, who for years has been importing gold from abroad. Both the Chinese government and Chinese citizens have shown a heavy interest in buying up minted gold from Australia, and importing to the mainland - this can be done easily, as minted gold coin is priced based off of its face value, not its weighted value. For example, 5 ounces (5x $1 coins) of minted gold coin is worth roughly $10,000 USD, but on paper it will show up at its face value of $5. This gives buyers a huge advantage when carrying gold across borders, as - unlike gold bullion which is reported at its weighted value - minted gold coin is declared at roughly a thousandth of its true value. 

While this is great for those wanting to purchase gold, it does incentivise China to buy up increasingly large quantities from nations such as Australia. Whether it be the government or its citizens, this gold may eventually be used to solidify a new gold standard within China. In fact, in light of recent events, this seems increasingly likely, as it would both bolster the Chinese economy in the long term (if they play their cards right), while also distancing itself from US economic sway. An added bonus would be Chinas ability to massively impact the US dollar if ever their 1.4 billion-person population made this drastic switch. 

This is evident to the extent that China has previously pushed its ‘yuan-to-oil’ program, and its yuan-to-gold conversion offer. Western nations - in a push to appear economically sound - have sold off massive amounts of gold to China, who has accumulated over 25,000 tons, with some reports pointing to 30,000+ tons. Allowing the yuan to be convertible into gold has a massive knock-on effect, as China can strengthen its reserve as gold prices increase. Likewise, increased scarcity means lowered international competition - amassing gold is expensive, and only further strengthens Chinas economy. 

INFILTRATION

In the broader sense, the CCP has been infiltrating the United States - both politically and economically - for decades. This subtle infiltration and economic manipulation cuts deep, and could be fatal for the US. 

An example of the subtle process of economic control comes from retired US Air Force General Robert Spalding - a critic of the CCP. Several years ago, the database of a US-based solar tech company was infiltrated by the CCP. By identifying an employee on LinkedIn, they managed to link various social media accounts to the same individual, find out his habits and interest, and contact him, claiming to be different people with similar interests offering relevant products. One of the sites linked was legitimate, but the clickthrough to the website allowed for the insertion of an undetectable keylogger-type program. This was used to infiltrate the database of the solar company he worked for. For the next year, orders were slightly manipulated on the spreadsheet before being sent off. This happened often, and in response the company had to continually expend energy correcting orders. After roughly a year, these microscopic manipulations of data by a CCP agent damaged the companies profit margins. 

This was later exposed when a Chinese based competitor approached and offered to purchase the now struggling company. One of the employees noticed the perfect timing at which the Chinese company approached them, and hence an investigation followed. What this shows is just how subtle this manipulation has been, and how unlikely it is that such actions would be exposed. 

WORLD WAR III

Now here we are. As we saw this past year, China has been amassing incredible amounts of food, holding over 50% of the worlds grain. This was a mystery for some time, but now we know why they were doing this. Likewise, our own food production is hurting as China cuts off fertiliser exports, and our own fertiliser production has slowed due to emissions regulations (something China promotes but does not follow, by the way), resulting in a 300% increase in fertiliser cost, and a massive shortage of food which is being blamed on everything but the truth.

This point in particular cannot be ignored. With over 50% of the worlds grain supplies in domestic storage, China appears to be biding its time in preparation for a major shift. An invasion of Taiwan (despite being projected for 2025 given Chinas current military capabilities) would result in global supply-chain hell. This could be heavily tilted in favour of China and its allies, if they ever decided to cut itself off entirely from the West. This would be a potentially fatal blow to the Australian, New Zealand, Canadian and American economy, who’s illogical decisions in recent years (such as burning off crops and destroying food reserves supposedly to reduce virus spread) were likely a result of influence on the state and federal level by the Chinese Communist Party.

China now controls 15% of the worlds exports. America 8%. Russians banks can be sanctioned by America, but Chinese banks under the CIPS system are too large to sanction without a global crash. The Chinese are all too willing to draw up new trade deals with the Russians in the face of Western sanctions to punish Putin. Marxian principles are eroding classic Americanism, while China cracks down on the propagation of Western ideals. Everywhere you turn, it appears as if we are at a tipping point. In many ways China is now on the same footing as the West. The United States no longer has the power to threaten China without detrimental domestic repercussions. 

For those questioning whether or not China and Russia would ever seek peace with the United States; the answer is an unequivocal no. As I have mentioned previously, despite its shortcoming, American culture is still founded upon individual sovereignty. The system can work, and since it works it can be seen as an alternative. It is for this reason that China and Russia hate America, and this hatred cannot be curbed by demilitarisation or appeasement. The very existence of the United States is seen as an ideological threat, and as such it must be eliminated by any means necessary.

To summarise, I believe recent events have shown that the United States is naively attempting to re-establish both legitimate and corrupt interests in the East. In the past, this was possible given Americas power projection and economic strength - now it is a different story, and the long term implications of the United States actions will come at a heavy cost. China is taking absolute advantage of this scenario, and here we are thinking this is exclusively between Russia and Ukraine. We are already at war with China and Russia. The first strike occurred years ago. Americas fatal mistake was refusing to even acknowledge it. 

Thank you for your time and reading my ramblings Mr Smith.

Kind regards,

O’Brien