Towards the end of last year, Xi Jinping invited Dimitri Medvedev, Deputy Chairman of Russia’s Security Council under Vladimir Putin and leader of the United Russia Party, the majority party in the Russian Duma, to China, to impart advice on how to deal with the conflict in Ukraine.

Following the quantum leap that 2022 represented for world affairs, this meeting and the advice he gave in the final days of that year, provide us with insight into the Chinese leader’s thinking and thus into the geopolitical and geoeconomic prospects for 2023, and beyond. Particularly important is how Xi Jinping understands what he calls China’s “struggle,” the leitmotif of the ‘New Era’ that will see the implementation of the ‘New Development Concept’ first established in the Communist Party constitution in March 2018 and which underscores the development of the Chinese economic system.  The notion of “political solutions” comes up in the discussions of how to deal with the obstacles posed to this development plan by world’s current hegemon and purveyor of the neoliberal world disorder, the United States.

“Political solutions” are the quintessentially Maoist way of conducting this “struggle”. That Maoism is integral to Xi’s way of thinking is clear from the symbolic visit he made with all the members of the new Politburo Standing Committee immediately after the 20th Party Congress to Yan’an in Shaanxi province. Yan’an is the end point of the retreat of the Red Army in what is called the “Long March,” and the birthplace of the Communist Revolution. Standing under a portrait of Mao with the Chinese general and military strategist Zhu De in Yan’an, Xi explained the crucial importance of carrying

‘…forward the spirit of Yan’an, firm up historical confidence, strengthen historical initiative, carry forward the spirit of struggle, and unite in striving to achieve the goals and tasks proposed by the 20th Party Congress.’

The invitation that Xi extended to Medvedev towards the end of last year, and thus the meeting itself which took place on 21 December, came in reaction to a message that Medvedev had posted on 27 September, on his Telegram account, in reaction to developments on the battlefield, which read that it is conceivable

‘… that Russia is forced to use the most fearsome weapon against the Ukrainian regime which had committed a large-scale act of aggression that is dangerous for the very existence of our state.’[1]

Logically, however, anything that threatens the very existence of the Russian state under its nuclear doctrine would justify the use of “its most fearsome weapon”. This needn’t have been spelled out. Should the Russian leadership respond in this way to Ukrainian taunts, then the questions may arise as to what exactly constitutes ‘a threat to the very existence of the Russian state.’ For instance, one might ask, would such an outcome be identical with a fall, say, of the Putin government? And would preventing such an outcome justify using Russia’s most “fearsome weapon”? Medvedev, once considered the leader of the liberal wing of the Russian political élite, has, since the start of the Ukraine War on 22 February last year, turned decidedly hawkish. It was the first time anyone from the Russian leadership has actually referred in such a way to the use of nuclear weapons, although the Biden administration had been trying very hard to put words to this effect into the mouth of one or other of Russia’s leaders, for some time.[2]

It was a mistake for Medvedev thus to oblige the Biden administration, which has been using the tactic of trying to paint Russia as a rogue state, both to sustain popularity for the war, and also to try to destabilise its relationship with China. China, meanwhile, is being supportive of Russian arguments for waging war in Ukraine, ever emphasising its alliance with Russia, but is always cautious of appearing to support the war as such, insisting that the problem cannot be resolved militarily. This approach is not pursued out of any diplomatic concerns, as will become clear in the discussion below, but out of strategic and philosophical concerns.

Soon after Medvedev’s statement, the Biden administration began, on November 5, to push the Ukrainian leader, Volodymyr Zelensky, to become more accommodative of the idea of peace talks with Russia. This would serve the purpose of dealing with Ukraine fatigue amongst US representatives in Congress, and amongst US allies in Europe.[3] Zelensky’s absurd “decree” prohibiting himself from ever negotiating with Russia so long as Putin was its president, had to be rescinded for optical purposes. Amongst other things, the vast US military budget for fiscal year 2023 going through Congress, on which the American economy now crucially depended, had urgently to be passed before the newly elected members of the Republican Party became the majority party in the House of Representatives in January.

Almost simultaneously, Olaf Sholz, Germany’s weak and beleaguered leader, decided to go to Beijing and pay Xi Jinping a personal visit on November 4, presumably to try to convince German industry that there was more to him than being an American puppet, and to discuss their business with the Chinese leader. Suddenly, however, Xi brought up the question of nuclear weapons during these proceedings. This seemed to be an abrupt and irrelevant addition to the proceedings and wasn’t at all relevant to the Sino-German commercial ties that Sholz had mainly come to talk about. Nevertheless, Xi took this opportunity to say that

‘… the international community should: support all efforts conducive to the peaceful settlement of the Ukraine crisis and call on relevant parties to remain rational and exercise restraint, start direct engagement as quickly as possible, and create conditions for the resumption of talks; oppose the threat or use of nuclear weapons, advocate that nuclear weapons cannot be used and that nuclear wars must not be fought, and prevent a nuclear crisis in Eurasia…’[4]

The Chinese leader’s views in regard to nuclear weapons and their use couldn’t have been clearer and stronger. That he was exhibiting anxiety at Medvedev’s messaging in what he was saying was borne out by the fact that, immediately after making this statement, Xi invited Medvedev to Beijing for a meeting. The meeting took place not long after the invitation, on 21 December, and was bluntly headlined ‘Xi-Medvedev meeting highlights bilateral ties; could promote “more profound and actual progress of peace talks.’[5] This indicated that the main subject of this meeting was going to be Ukraine.

Nevertheless, protocol would be established optically as a meeting between the Secretary General of the Chinese Communist Party and the head of the United Russia Party. In the formal preamble to the meeting, Medvedev committed the United Russia Party to

‘implement the consensus reached by the two heads of state, adding it would actively promote bilateral cooperation in the economy, trade, energy and agriculture sectors, jointly resist various external pressures and unfair measures, and promote greater development of a Russia-China comprehensive strategic partnership of coordination.’

Medvedev didn’t have to travel all the way to Beijing to say that the United Russia Party would back Putin’s agreements with the Chinese leader. So, Xi turned to the real business of the meeting when he made his statement on the situation in Ukraine. Xi said that

‘China decides its position and policy based on the merits of the matter concerned, upholds objectivity and fairness, and actively promotes peace talks…‘

adding

‘Hopefully, relevant parties will remain rational and exercise restraint, carry out comprehensive dialogue, and address joint security concerns through political means.’

What this statement said was that Medvedev and the Russian leadership had to ‘”‘remain rational and exercise restraint’, and that the matter of nuclear doctrine was a matter of ‘joint security,’ because China was implicitly involved when it came to warfare in the ‘Eurasian’ space.

Medvedev, being present, and in his capacity as the vice-Chairman of the Russian National Security Council, could now give his personal commitment and that of the Russian state that future messaging on war was to be coordinated with China.

Last but not least, the advice in regard to the solution of the Ukrainian problem, was that any solution must ultimately be ‘political.’ Political, mind you, not diplomatic. The messaging about ‘peace talks’ calls out for compromises. If conflict means these are out of the question, the only possible solutions to conflict in an interrelated world end up being unilateral “political” solutions.

Sino-Russian relations: Russia has a special place in the heart of the Chinese Communist Party. This goes back to Mao Zedong. When Mao achieved victory over the Kuomintang and its leader Chiang Kai-shek, the Truman administration fell into despair over the assessment that it had ‘lost China.’[6] No sooner than Mao established the People’s Republic of China upon this victory, than he went to Moscow, on February 14, 1950, to sign an alliance with the Soviet Union.

The symbolism attached to the relationship continues to this day. No sooner was Xi confirmed in his position as State President of China, the final of four different positions to which Xi was confirmed as Chinese leader, in February 2013, than he went to Moscow to confirm both his friendship with Vladimir Putin and China’s alliance with Russia. But, even as ties between the two countries have always been cherished by Chinese leaders, there have also been times when ideological disagreements have arisen. Mao, for instance, split with Nikita Khrushchev in 1956 over his policy of peaceful co-existence with the West. In the 1980s, Deng Xiaoping thought Mikhail Gorbachev’s reforms were ‘idiotic’.[7] Leaders in Beijing have thus often been critical of their counterparties in Moscow.

The problem between China and Russia over Medvedev’s Telegram post, however, takes place in different circumstances and under an entirely different framework. Russia, having not listened to Mao about its relations to the West, and not listened to Deng about its reforms, has suffered economically as a result. Now in its resurgent form, it finds an ally in China and is an integral part of the new Chinese project.

The Ukraine War: The Chinese leadership has been apprised of progress on the Ukraine front every step of the way. On February 4, immediately after the Winter Olympics and eighteen days before Russia’s 2022 invasion of Ukraine, Xi and Putin announced a ‘friendship without limits,’ an unusual variation on the notion of an alliance, presumably reflecting the unusual nature of what was about to happen. It hadn’t escaped the Chinese leadership that NATO expansion and the blank unresponsiveness of the United States to numerous diplomatic overtures by Russia, ever since Medvedev’s proposals for a European security architecture in 2008, had now finally caused Russia to act. This action sought to defang the advance prow of what had become a Europe-wide military formation targeting Russia that the United States had built in Ukraine over the previous eight years, since the Maidan “coup” in 2014.

The Western commentariat (media, academic articles, think tank reports) would call Russia’s military action “an invasion of Ukraine.” It ignored the limited ambitions that Russia had set for itself in what it called the “special military operation.” But acknowledging the Russian stance wouldn’t serve the “pump and dump” schemes, not dissimilar to stock market manipulations by hedge funds, used by Western media to maximise ratings and sell advertising space. Building the straw man would enable any Russian achievements short of total occupation and pacification of Ukraine to be labelled as “total failure,” as a series of grave “misjudgements,” or as a “disastrous performance” by the Russian military. If Russia got its way on the ground at all, at least a PR victory would be ensured in the imaginary of the mediasphere.

The media fog, of course, would also divert attention from what was really going on. Russia may seem to have moved to protect the self-declared Russian-speaking republics of the Donbas in February 2022. However, it had been there, in the background, all the time. The real aim of the new “special military operation” was in fact to “demilitarise” and “denazify” Ukraine: in other words, to knobble the advance prow of the Euro-continental size military formation the United States had now pointed at Russia. The extent to which Ukraine was to become a wasteland now depended on the lengths to which the United States was prepared to put Ukraine’s unlucky people in harm’s way, to achieve its aims.

As the war proceeded, after a few months of this brutal war, the Ukrainian army began to be depleted of effective soldiers. So other NATO forces, Polish and Romanian forces (“volunteers”) in particular, would be pressed into service and sent to the front in Ukrainian uniform. As these NATO forces started to include special forces that organised attacks on Russian targets behind the front lines, so Russia upped the ante with widespread missile attacks on Ukrainian infrastructure. Eventually, when drone attacks began to target airfields in Russia’s interior in retaliation, it was then that Medvedev made his statement about the use of nuclear weapons. At which point Xi Jinping pulled him up short with the message that…. the solution was not going to be military but political.

Xi on “political solutions”: Following Mao, Xi’s own thinking has always sublimated the diplomatic and the military to the purely political. He was resoundingly successful at the 20^th Congress of the Communist Party this last October. Xi not only secured an unprecedented third term as leader, but he filled the Politburo Standing Committee with loyalists and, as was the case in 2017, he didn’t appoint a successor, so ensuring a fourth term for himself by default. But, given this undeniable position of strength, his subsequent statement on the Taiwanese question was unusually restrained. In his main speech at the Congress, Xi declared that

‘peaceful reunification’ remains the ‘best way to realize reunification across the Taiwan Strait,’

adding that Beijing has

‘maintained the initiative and the ability to steer in cross-strait relations.’[8]

and that, in the most interesting part of this commentary, he understood himself to

‘have put forward an overall policy framework for resolving the Taiwan question.’

This was a remarkably confident statement, given the confused Sino-American dialogue over the fate of the island. The United States’ constructive ambiguity on the subject marries paying lip-service to the ‘One-China Policy,’ with arming Taiwan to the teeth, ostensibly for its “defence”. The confusion is not lessened by Biden’s recent novel remarks that the United States would come to Taiwan’s defence if the People’s Republic of China were to launch a so-called “unprecedented attack.” This is confusing because there is no mutual defence treaty between the United States and Taiwan, and none is being proposed, so there is no binding commitment for Washington to intervene.

In what sense has Xi established, in his mind, ‘a policy to resolve’ this difficult issue? What Xi seems to see as the ‘political’ resolution to the problem in Taiwan would be relevant also in the case of Ukraine: the process of changing facts on the ground. Building man-made islands across the China Sea to gain control of sea lanes, for instance, is the quintessential way of changing facts on the ground, or in this case, in the sea.

The reaction to Nancy Pelosi’s visit to Taiwan on 22 August, which involved an immense effort of military power projection, is another example. The PLA’s manoeuvres, following the visit, blocked access to the island for days. This was accompanied by the unprecedented and provocative act of firing of missiles over the island as part of the “training exercises”.[9] In the subsequent November elections, the ruling Democratic Progressive Party (DPP) fared extremely badly and its leader, Tsai Ing-wen, had to resign. That the Taiwanese people saw Pelosi’s visit as a mistake, invoking China’s ire unnecessarily, was a vindication of Xi’s tactics. But if the military manoeuvres themselves were an outsize response to a visit which established nothing really new in the US posture towards the Taiwanese question, they nevertheless provided a physical demonstration of the extraordinary increase that China’s military power had undergone in recent years.

There is an even more interesting, and indeed consequential, example of a ‘political solution.’

The so-called “Wolf amendment,” passed by the US Congress in April 2011, banned NASA from engaging in bilateral agreements and coordination with China.  This meant that China was the only country in the world that was officially stopped from participating in the International Space Station (ISS). The amendment was introduced into the US Federal Budget for 2011 by (now retired) Republican representative Frank Wolf from Virginia, on the basis, among other things, that the Chinese are untrustworthy in regard to theft of advanced technology. The amendment kept on being renewed, year after year.[10] Wolf participated in the debates in the 1990s under the Clinton administration between supporters, like Wolf, of Madeleine Albright’s position, at the State Department, that aimed to sanction China for human rights abuses, and the corporate interests which backed Stephen Rubin at the US Treasury, who was pushing for China to join the World Trade Organisation (WTO) and for marginalising any issues connected with its domestic politics.

The net effect of the ban is that China started its own space station, “Tiangong”, which was assembled between April 2021 and December 2023. With the ISS now being decommissioned, Tiangong is the only game in town for space experimentation and exploration. Meanwhile, China’s Mars mission, Tianwen-1, was launched in July 2020. This particular project stunned the space community, when it was discovered that the orbiter included a lander and rover, which have now been deployed on the surface of the Red Planet. The Chinese Space Agency did on Mars in one go what it took years for NASA to do. With all the sensitivities aroused by the demonisation of everything Russian in the mainstream Western media, Russia’s undoubted expertise in space is being increasingly allied to that of China, and this is becoming a cause of major concern in American space circles. We now see NASA Chief Bill Nelson apoplectic at the thought of the Sino-Russian joint construction of a moon base.[11] Facts on the ground, and in the sea, now extend into space, our moon and the planets. What space does provide to China as a nation is a new frontier, which is no metaphor, but is increasingly being understood literally. Space will provide the most incrementally significant scope for the kind of “political” solutions Xi has in mind.

[Note… A brief detour on the nature of Maoist thought, which will receive much more attention in upcoming articles, may help in understanding this last point…

Albeit currently marginal in terms of the political consciousness of our species, space will likely provide the Archimedean point from which a new planetary order will arise from the ashes of our decaying neoliberal world disorder: a new order that will increasingly have to view climate change and the collapse of biodiversity from a geoengineering perspective. Our survival will require more radical steps to be taken on a planetary scale than the ones currently being showcased in yearly COP meetings and persistently undermined by the corporate forces that control policy in Western countries. A miracle could happen, and fundamental political change and reform could occur in the United States, the United Kingdom, in Europe and the West in general. But this is unlikely. We need to take account of the fact that, as human beings, we are “situational creatures,” created by our environments, and also of the fact that neoliberalism is a recreation on a global scale of historical American capitalism. The populations of the West, therefore, especially the more recent generations, are a creation of these capitalist processes. To the extent that the essence of this capitalism is to celebrate competition and democracy as ideals, whilst actually actively undermining both, means that (not every individual but in operative terms) the average Western individual, is a “Wachowskian” creature that exists in a world of shadows. The essence of all politics is to control populations, but the means of control, in democratic politics, are reflected in the world of shadows as the essence of liberty. This idea is promulgated in terms of individual rights and thus a reductionist freedom to consume and acquire. This ties individual expression firmly to the needs of monopolistic corporations with their requirements that are inimical to the long term survival of all individuals together as a collective species. As a result, the “democratic” political system, as it has evolved, is tasked with destroying collective political expressions like, for instance, “socialism,” and promoting the radical fragmentation of society instead. The fundamental political principle of Maoism, at the opposite end of the spectrum, is the “mass line,” or the imperative of using methods for the political system to be able to respond to the needs of populations as a whole. This means that the political process is about addressing the needs of the masses, most especially their survival, although it is authoritarian and, as a result, often oppressive from an individual standpoint. Maoism thus inherits the imperative of the imperial Chinese court of justifying its rule by achieving overall “balance” and “harmony” in society. Maoism also adopted Lenin’s deep scepticism about multi-party parliamentary democracy and its unrealistic assumption that any form of liberty can possibly reside in the so-called “spontaneity” associated with casting ballots for different parties. Thus, the geopolitical divide that is taking shape, between China and the “West” – with China now no longer willing to even pay lip service to capitalism as in the Deng Xiaoping era – is fundamental. China’s rise represents the rise of a different philosophy and a differently created people. While China’s industrial machine is a voracious user of energy, its conquest of space is already giving rise to geoengineering ideas that will feed into the imperative that is already becoming a priority in the Communist Party slogan of preserving “beautiful China“… end note].

In sum, and going back to the main argument, “political solutions” are changes in the facts on the ground that are the means by which the ‘struggle‘ is conducted. In this context, and from Xi Jinping’s perspective in the ‘New Development Concept,’ while ‘dual circulation economy’ foresees an economy much more resilient than the export-led economy of the past, because of its demand-led inner core, war as such is disruptive of the ‘external circulation’ that is being built to support it in the Chinese periphery, and thus must be avoided. To the extent that war is unavoidable, as in Ukraine, it has to be rigidly contained: a war, after all, that in large part reflects the convulsions felt in the US corporate community by China’s desire to decouple from the “Chimerica” format.

The Russian hard “pivot to Asia”: So we see a decided shift in the tempo and direction of Russian military activity in Ukraine where Russian and Chinese priorities now converge. New facts on the ground are making their presence strongly felt, shaping a new political solution with extensive geoeconomic implications. Since the withdrawal of Russian forces in Kherson behind the Dnieper River, three lines of fortifications have been built across the Zaporizhzhia region, which extend the natural barrier formed by the Dnieper river in the Kherson region, all the way through to the Donbas region, where the heaviest fighting is thus automatically being concentrated. Fortifications have also been built starting from northern Donbas, across Russia’s Western borders with Ukraine, over the Kharkov region. A massive recruitment drive by the Russian armed forces for 300,000 reservists has now been followed by a decision to increase professional Russian forces by half a million personnel.

If the new fortifications are anything to go by, this is to be interpreted not as an invasion force, but as a deterrent force. It is a response to the apparent commitment of the United States to keep the war going ‘for as long as it takes.’ This means that increasingly impenetrable defences along the long Russian border with Ukraine, redefined now by formal Russian annexations of territory, are expected to be manned permanently. This requires a deep supply of personnel for purposes of rotation. In addition to this, the Belarussian military is in the process of being integrated into the Russian armed forces. Belarus itself is gradually being converted into the prow of a new military formation targeted at Europe, in not a dissimilar way that Ukraine was, when the United States trained it on Russia. Poland is directly affected by this, and the new Polish plans to expand the country’s armed forces, is in direct response to this significant development.

So, a curtain of steel falls across eastern Europe, one that now makes for a rather final and hard Russian “pivot to Asia.”

This has two fundamental geoeconomic implications.

The first is that the Russian landmass, its economy and resources are now firmly coupled to the Chinese project. The New Year’s message broadcast by Xi Jinping on 30 December is that

‘… under the guidance of both President Putin and himself [Xi], the China-Russia comprehensive strategic partnership of coordination for a new era has grown more mature and resilient…’.

If the strategic partnership with Russia is thus a feature of the “New Era,” this makes it a foundation stone of the “New Development Concept.” Between 21 and 30 December the messaging on the conduct of the war in Ukraine was sorted out, and coordination could thus be described as having become ‘more mature’ and ‘resilient.’

The empire’s descent into chaos: The second is that the onus of committing to the war in Ukraine for ‘as long as it lasts’ falls squarely on the shoulders of the United States, although the United States itself is passes on the hard part of the action to its proxies in eastern Europe.

Politically, the Biden administration is drowning in contradictions. Inflation is raging due largely to the dislocations and sectoral price misalignments caused by war and the aggressive US sanctions policy against Russia.[12] The US Federal Reserve, meanwhile, is responding to developments in a typically inappropriate way. Because US political institutions are very hard to reform, policy is always about applying the third best option. The Fed is raising interest rates because it wants to reduce aggregate demand and is doing this in order to try to quell current inflation. This will ensure that the recession that is coming anyway, will now turn into a depression, unless the Federal Reserve backtracks on its policy. With such unmitigated disaster potentially on the horizon, the only solution that the White House can pursue is to activate the only welfare mechanism the US Congress possesses which automatically carries with it the controlling vote of the corporate sector, and to embark on this, on an epic scale. A military budget that is unprecedented in size ($858bn) has all but passed in the nick of time before the January changeover in the House. Zelensky’s promotional round trip visit to Washington on Air Force One added the celebrity gloss, with the media calling his arrival ‘the second coming of Churchill.’ Meanwhile, Biden’s ‘as long as it takes’ Ukrainian strategy promises trillion dollar military budgets further down the road.[13]

The US-China technology war: The Biden administration continues, meanwhile, to add to the disruptive forces that are driving the economy down the stagflationary route by relying on sanctions to achieve its objectives, not just in regard to Russian energy, but also in its long standing conflict with China in the technology sector. From this particular aspect, US administrations had initially sought simply to deny the export of chips or other technologies to China that were designed or likely to be used for military purposes, or to control such technologies that involved a specific transfer of know-how detrimental to the US lead over its competitors, in cutting-edge commercial technologies with specific military applications. But this policy has suddenly grown and become much more aggressive with the Biden administration. Jake Sullivan announced in September that the US now sought to ‘maintain as large of a lead as possible’ in whole technology areas. This new policy departure, covering the advanced chip production and supercomputing sectors, erases the line between civilian and military applications.[14]

The US used extraterritorial controls to deny the Chinese telecommunications firm Huawei access to the global chip supply in 2019, effectively stopping Huawei’s expansion in its tracks. These measures had been limited at the time, however, to just one company. The new policy is now targeting whole sectors of China’s advanced technology ecosystem with its complex panoply of sanctions and export controls. In their use of far-reaching authorities that are both unilateral and extraterritorial, these aggressive new US policies will create a far greater shock to supply chains than the actions that had previously targeted Huawei. In the interrelated world of technology, they promise the kind of chaos, which will lead inevitably to unintended consequences and thus to the necessity for “political” solutions that have underpinned China’s explosive growth so far.

In the advanced chip production and supercomputing sectors, supply chains cannot be effectively weaponised, because of the multiple networks of different inputs that generate chokepoints in several different countries. Intricate and often overlapping production networks create numerous, complex dependencies among different locations—especially China, Japan, South Korea, Taiwan, the United States, and European countries—at different stages in the supply chain. Several countries have greater control over specific parts of the supply chain than do others, but no single country dominates the entire network.

Still, the United States accounted for 46% of the semiconductor market in 2021. The dominance of three firms in particular, Cadence, Synopsys, and Mentor also means that it is globally dominant in the making of electronic design automation software integral to designing complex circuitry. Furthermore, the ability of US administrations to weaponise its allies’ production facilities as part of its sanctions campaigns, especially Japan in regard to sales by Canon and Nikon, and Holland with regard to sales by Advanced Semiconductor Materials Lithography (ASML), means that the United States has a controlling influence on the equipment supply or “tooling” side of the semiconductor sector. But even so, sanctions applied in such an ecosystem will, almost by definition, have unintended consequences. Inflation is already such a consequence. The disruptions in chip supply during the pandemic that affected the auto sector led, as we know, to skyrocketing used car prices as production of new cars plummeted. These may have been caused in large part by mismanagement by the auto executives themselves, but nevertheless are an indication of what can and will increasingly happen.

But there will be structural medium and long term effects that will work their way through the system as well, as chip suppliers and their suppliers are forced to change production methods, and possibly also overall strategy, in reaction to how all these sanctions impact their bottom line.

In the tooling sector, which the United States is specifically targeting, the establishment of a factory costs billions of dollars, up to as much as $20bn, and lead times are enormous when bringing together the skill sets required to bring production online. It may be that the new policies may indeed put China to a disadvantage, at least in the short-term. But firms of this size and complexity, when subjected to sanctions, also become vulnerable, given their very high levels of investments and commitments. In this regard, we have the example of ASML, which makes photolithography machines that use light to produce the thin films that protect silicon wafers in the etching of circuitry in the production of computer chips and is a global monopolist when it comes to using extreme ultraviolet light . ASML is complaining to its government that the sanctions which have hampered its exports to China since 2019, have unfairly benefited US companies selling alternative technology.[15]

But even as these US tooling companies, who took advantage of the sanctions on ASML, are now forced to leave China, this may see their prospects decline sharply as a cycle of shrinking market opportunities leaves them with less revenue to invest in innovation. This same dynamic played out in the commercial space sector in the 2000s, after the United States unilaterally imposed stricter controls on satellite exports to China. US market share and capabilities declined as European firms started offering products that excluded US components, not just to the China market but globally. So, US administrations will be forever chasing after changing circumstances, as the short term effects of new controls on China will dissipate and the supply chain shifts towards alternative suppliers lured by the enormous profits that a powerful actor like China can promise.

But even as the United States conscripts Taiwan in banning sales from Taiwan Semiconductor Manufacturing Company (TSMC), the world’s most advanced specialist chip “foundry” (and also a shareholder of ASML), to the People’s Republic, this doesn’t take account of the prospect of the way “political” solutions are sought in a cohesive planning environment like that in China. Radical shifts in product design and production methods can be caused by changes in the overall way the Communist Party decides to frame the problem it faces in the technology race. Something is definitely afoot in this regard. While China is forced to use legacy chip technology for the moment, we see by Xi’s appointments to the Poliburo of figures from the world of science and technology, like Ding Xuexiang (Xi’s chief of staff), Ma Xingrui, Zhang Guoqing, Yuan Jiajun, Chen Jining and Li Ganjie that an entirely new plan is being sought. What is clear for the moment is that the old method of simply pouring money into new semiconductor experiments is now cancelled. Quite possibly, the presence on the Politburo also of Chen Min’er, ex-governor of Ghizhou Province, who witnessed failed experiments in the semiconductor field, might have something to do with this. What is undeniable is that the technology war is at the centre of Xi’s struggle and a political solution is being sought.

In sum, the Biden administration and the US State Department are pursuing policies in the same knee jerk manner of all administrations since Richard Nixon, not seeking compromise and constructive diplomacy, but insisting on hegemony. In their belief in the sheer power of empire in of itself to resolve contradictions without the need for further thought and planning, they resemble the court in the apocryphal tale of King Canute, ephemeral emperor of the North Sea (1028-1035), who chatter mindlessly and egg their hapless leader on, ridiculously enthroned as he is on the beach opposite the sea, to resist the incoming tide.

In China, the decaying neoliberal empire thus meets a force of nature. This is not intended as a morality tale, but one that shows a path opening up for humanity, out of the airless cul-de-sac of hegemonic monopoly, into new spaces whose horizons are being deconstructed and rebuilt by new primal geopolitical competitive forces. The challenges being faced on multiple scales promise to drive our path dependent economies down so far unforeseen trajectories. It is a tale that portends especially of the bankruptcy and demise of the American political economy of war, devised under the conditions faced by the Truman administration, that might have led humanity to its current pass but, having been re-treaded at least three times since, no longer has any significant purchase on the events that are now shaping this new world.

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[1] https://www.reuters.com/world/europe/russias-medvedev-warns-west-that-nuclear-threat-is-not-bluff-2022-09-27/

[2] https://nationalinterest.org/feature/cuban-missile-crisis-20-over-ukraine-205077

[3] https://www.washingtonpost.com/national-security/2022/11/05/ukraine-russia-peace-negotiations/

[4] https://www.fmprc.gov.cn/eng/zxxx_662805/202211/t20221104_10800546.html

[5] https://www.globaltimes.cn/page/202212/1282364.shtml

[6] https://chomsky.info/20120214/

[7] https://eng.globalaffairs.ru/articles/dengs-and-gorbachevs-reform-strategies-compared/

[8] https://www.fmprc.gov.cn/eng/zxxx_662805/202210/t20221025_10791908.html

[9] https://web.archive.org/web/20220806043611/https://www.nytimes.com/2022/08/06/world/asia/china-exercises-taiwan.html/

[10] https://foreignpolicy.com/2013/12/17/this-congressman-kept-the-u-s-and-china-from-exploring-space-together/

[11] https://www.globaltimes.cn/page/202207/1269666.shtml

[12] Stiglitz, Joseph E., and Ira Regmi. 2022. The Causes of and Responses to Today’s Inflation. Roosevelt Publications. New York: Roosevelt Institute.

[13] https://time.com/6243120/biden-zelensky-visit-ukraine-support/

[14] https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/09/16/remarks-by-national-security-advisor-jake-sullivan-at-the-special-competitive-studies-project-global-emerging-technologies-summit/

[15] https://www.reuters.com/technology/ceo-dutch-chip-equipment-maker-asml-questions-us-imposed-export-rules-china-2022-12-13/