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China



Every gift discarded, every device rejected

Such is the final symbolic act of the American state visit to Beijing (13-15 May 2026). Nothing gifted by the Chinese diplomatic counterparts was allowed on board Air Force One. The measure of mistrust just cannot be higher. The ostentatiousness of the act boggles the mind. The symbolic failure of the gesture cannot be overestimated.

Gifts may be poisonous. No doubt about that. Think about the cell phones that Palestinian leaders purchased, the cell phones that were tampered with by the Israeli secret services, the cell phones that were detonated, killing or maiming the users of those cell phones.

Think about the notorious infected blankets that the European conquerors of North America presented to the Indians. The purpose was to do away with the indigenous peoples in a surreptitious and efficient way. Or, for that matter, think about the alcohol generously sold to the same Indians for the purpose of weakening their health and paralysing their will.

Why, think about China itself, about the opium that was forcibly sold to the Chinese in the 19th century. Two protracted wars were waged over the right of the Europeans to bless the indigenous people with this good!

Think about the Trojan Horse. Legend or no legend, the principle was known and well established in antiquity. Gifts may be dangerous, and oftentimes they are.

Hence an interesting development of the meaning of the German word Gift, whose initial sense overlapped with that of the English word gift, but with time came to denote… poison!

Think about drug dealers who gift or give freely the first few doses of a drug to hook the person on the substance, to make him addictive.

Also the English language has an expression showcasing the troublesomeness of receiving gifts. The expression is to receive a white elephant, i.e. to get a gift that costs a lot to maintain but provides no usefulness (white elephants were considered sacred, hence one could not use them for any kind of work, but one, obviously, needed to feed them).

So, who knows, the Chinese may have concealed spying malware or whatever malicious things in their gifts, down to biological material. The American delegation acted verbatim on the old maxim: Timeo Danaos et dona ferentes, which in our context would be: Timeo Sinae et dona ferentes, meaning: I fear the Chinese, even those bearing gifts (The Aeneid, Book II).

How should that act on the part of the American delegation be construed? A message of mistrust of the Chinese? Real, palpable fear of being threatened by Chinese technology? How was that gesture perceived by the managers of the Middle Kingdom?

Almost a century back the Chinese were American allies in Washington’s fight against Japan. After the war came a split: Americans backed Chiang Kai-shek, the leader of China’s nationalists, against Mao Zedong, the leader of China’s communists. Chiang Kai-shek lost to the communists and found refuge on the island of Taiwan. Americans recognized Taiwan as ‘China’ and tried to ignore mainland China in the hope of reversing the historical process. Nothing came out of it. Communist China, poor and backward as it was, showed no signs of disintegration, so much so as it was backed by the Soviet Union. But then the fate smiled at Americans: Nikita Khrushchev, the USSR’s leader, fell out with Mao Zedong, which later even culminated in border skirmishes. That was something that Americans had been waiting for. Washington reversed its political course and did its best to win Beijing over to its side against Moscow. Americans withdrew recognition for Taiwan and recognized mainland China as… China proper. Much later came the years of economic cooperation in that American businesses were for a large part outsourced to China. The fall of the Soviet Union – history’s another gift for the United States – seemed to seal the fate of the globe: the United States emerged as the only dominant power, Russia – the Soviet Union’s political heir – was assigned the role of the provider of resources, while the Middle Kingdom was supposed to happily accept the role of the world’s manufacturer.

Things may have stayed that way till this day but for America’s greed and arrogance. Gradual military encirclement of Russia in terms of expanding NATO and engineering unrest in the post-Soviet area (Ukraine, Belarus, Armenia, Georgia, Kazakhstan) along with a simultaneous political assault against China as America’s most dangerous political and economic rival pushed Moscow and Beijing in their mutual embraces. Khrushchev’s political mistake has been corrected: Moscow and Beijing have begun to cooperate against the West, against the United States, though openly no such declaration has been issued.

The political sine wave for the United States could be traced something like this: from friendly China (Chiang Kai-shek) to unfriendly China (Mao Zedong), to friendly China again (Prime Minister Zhou Enlai), and again to a rather unfriendly China (Xi Jinping). The discarded gifts and the rejected devices merely illustrate the current state of affairs. 

The demographic crisis in China

The birth rate in China has reached a record low. The economy is already feeling the demographic pressure. Experts point out that this could lead to a significant slowdown and even a decline.

For decades, the Middle Kingdom was regarded as the world’s factory. The vast pool of cheap labour, low production costs and ease of transporting goods led to a situation where Western companies massively relocated their production lines to the country. Beijing benefited from this situation as GDP grew rapidly. A symbol of the developing nation was the massive investment in infrastructure, which aroused both admiration and envy in the West. It seemed as though nothing could stop the Chinese dragon.

Meanwhile, although the economy continues to grow at a pace that is unattainable for most Western countries, it faces a serious problem that could significantly weaken it. Birth rates are at an all-time low and, unless the situation changes radically, the demographic crisis will lead to rising labour costs and prices for manufactured goods.

In 2023, China lost its title as the world’s most populous country to India. In 2025, Beijing recorded its fastest annual population decline since the great famine of 1960, which took place during Mao Zedong’s rule. Falling birth rates and rising mortality rates have reduced the country’s population by 3.39 million. In 2023, the birth rate fell to 0.99, well below the replacement rate of 2.1. This means that there must be 2.1 children per woman for the country’s population to remain stable. In practice, this means that one in three women must give birth to at least three children.

According to statistics, the number of people of working age in China (aged 16–59) has been declining over the years. In 2025, people in this group accounted for around 60.6 per cent of the total population, whereas ten years ago this percentage stood at 70 per cent. The demographic situation in China is exacerbated by migration, as more and more citizens are leaving the country. This unfavourable trend, as the analysis shows, could significantly weaken economic growth in the long term and dash Beijing’s hopes of overtaking the US.

One-Child Policy

Many experts point out that the current demographic crisis is, to a certain extent, the result of the ‘one-child policy’ that has been in place for decades. Since 1949, the Chinese population has grown rapidly. This led to food shortages and a housing crisis. For this reason, the government introduced the policy, which remained in force from 1979 to 2016. Children born as the second or subsequent child in the family were denied a hukou, i.e. an official registration that grants access to social services and other benefits. Families with an “excessive” number of children were also persecuted by the state apparatus and fined. As a result of the one-child policy, sons were favoured in most Chinese families. For this reason, women were forced to terminate their pregnancies when it became clear they were carrying a girl. This led to a gender imbalance. Although the ratio has stabilised in recent years at around 104 boys for every 100 girls (by way of comparison: in 2000, there were 118 male births for every 100 female births), there is still a shortage of women of childbearing age in China.

Beijing is now attempting to reverse this unfavourable trend. In 2025, China’s first national childcare subsidy scheme came into force. Every family receives 3,600 yuan, or approximately 503 US dollars, per year from the state for each child aged up to three. A decision was also made to raise the retirement age. However, it remains to be seen what the results of these changes will be. Another decision designed to encourage the Chinese to start a family was a change in the law allowing them to marry anywhere in the country rather than being restricted to their place of residence. The initial results appear promising: in the third quarter of 2025, the number of marriages rose by 22.5 per cent. From 1 January 2026, Beijing has also removed contraceptive pills from the list of tax-exempt goods and services. The government is also calling for a reduction in the number of ‘medically unnecessary’ abortions. It should be noted, however, that after many years of practising forced abortions, Chinese society is currently the most tolerant in the world when it comes to this procedure.

One of the most significant factors driving this demographic decline, which is affecting the economy, is the loss of productivity. According to recent forecasts, the proportion of the Chinese population aged between 16 and 64 is set to fall from 69.33 per cent in 2024 to 59.14 per cent in 2050. Unless this can be offset by technological innovation, stagnation in the Chinese economy appears inevitable.

Another negative factor is the weakening of domestic demand. Young people and middle-aged people are the two groups with the highest levels of consumption. The smaller their numbers, the lower domestic demand. The decline in the birth rate leads to a situation described as ‘still poor and already old’. In this scenario, China could fall into a ‘middle-income trap’, which refers to a situation where a country that has reached a middle income (measured by GDP per capita) is unable to effectively transform and modernise its economy (for example, due to a lack of innovation, stagnant productivity or institutional rigidity), leading to long-term economic stagnation and making it impossible to advance unhindered into the ranks of high-income countries. According to the World Bank, China’s gross per capita income in 2023 stood at US$13,390, placing China among the group of middle-income countries. If the demographic crisis persists, it will be difficult for China to rise to the ranks of the wealthiest nations.

 

Thucydides’ Trap

In recent decades, the US strategy towards China has been based on economic opening towards the Middle Kingdom, which was particularly evident in the outsourcing of American manufacturing there. This was made possible by the reforms of Deng Xiaoping, who facilitated and advocated this opening. The subsequent leaders of the People’s Republic of China (Jiang Zemin, Hu Jintao) zealously fulfilled Deng’s legacy, although the current leader, Xi Jinping, has violated one of his predecessor’s most important teachings: the famous 24 character-mantra. Deng’s testament read as follows: Observe coolly and calmly, secure your positions. Gain trust, conceal your capabilities, bide your time without stepping out of line, do not raise your head if you wish to retain your leadership.

Xi broke ranks: he flooded the West with cheap goods of ever-improving quality, sold US Treasury bonds, hoarded gold, built artificial islands for his bases in foreign waters in the South China Sea, expanded his fleet, developed hypersonic missiles, landed on the moon, helped the Serbs, Iranians, Russians, won over half of Africa, and built the world’s longest bridges, dams and cities. A colossal emperor!

Meanwhile, the US empire survived only thanks to innovation and increased productivity. That is not enough. The Americans know this and, in response to China’s abandonment of Deng’s policies, have sent Emperor Trump to the front line. The guns are now thundering against Beijing’s allies; tariffs and sanctions are being imposed. But… if this continues, it could well end in a kinetic, direct conflict between the US and China.

Many political scientists see parallels here with the so-called Thucydides Trap. The ancient Greek historian Thucydides wrote a famous work, The History of the Peloponnesian War, which describes the conflict between the two greatest city-states. The aforementioned “trap” suggests that ancient Sparta, seeing its position in Hellas under threat, sought an escalation with Athens, which claimed the role of hegemon. At that time, the Greek world was bipolar, which threatened to escalate. This occurred in 431 BC. According to Thucydides, this war was inevitable precisely because one of the city-states wanted to retain the status of hegemon and the other wanted to attain that status. However, the war ended with both the Spartans and the Athenians losing their influence.

The historian Graham T. Allison has expanded on the concept of Thucydides’ Trap and, in his study, described 16 examples of it, 12 of which ended in war, e.g.:

[1] Late 17th to mid-18th century – Kingdom of France vs. Kingdom of Great Britain – war

[2] Mid-19th century – France vs. German Empire – war

[3] Mid-20th century – United States vs. Empire of Japan – war

Allison’s concept has been criticised by many political scientists, such as Hal Brands and Michael Beckley. They argued that in many of the cases identified by Allison as the Thucydides Trap, it was not the impending overtaking of an old hegemonic power that triggered the war, but rather the rising power struck first when its rapid rise turned into stagnation.

At present, however, we are seeing that the Chinese economy may be stagnating in the face of the new oil crisis and tariffs.

The Dragon’s New Plan

We are talking about Beijing’s new five-year plan. The term ‘AI’ appears 50 times in the document. Artificial intelligence is to be implemented across all sectors of the economy: the aim is to achieve 90% saturation in areas such as industry, social security, public administration and the military. Although China has a population of over 1 billion, it faces demographic challenges. These are to be addressed through the use of humanoid robots to support industry. Robot production is expected to double within five years and be deployed in companies affected by labour shortages.

Other key technologies are also mentioned:

– Quantum networks for Earth-space communication (ultra-secure information transmission system);

– Nuclear fusion;

– Communication between the brain and the computer;

– 6G.

In order to develop the above-mentioned sectors effectively, Beijing intends to increase R&D spending by an average of 7% per year. China anticipates GDP growth of around 5% per year, and the document also outlines plans to develop self-sufficiency, not only in technology but also, for example, by increasing grain production capacity.

When you read such a plan, you can see just how much China’s political philosophy differs from that of the West. Donald Trump says “Let’s make America great again” without setting out a long-term strategy. And European politicians and strategists are unable to present a unified plan that could make Europe great again. When one compares the West’s current political turmoil and war games with China’s methodical, long-term approach, it becomes clear who is best suited for the struggle for global hegemony.

Sources: Merics, GTAI

 

Cat turned mouse

Three weeks into the war and it has emerged that the predatory cat – the United States (and Israel) – has turned into the mouse, while the mouse – Iran – has become the cat. What a turn of events! The United States has stepped into a quagmire and now has difficulties extricating itself from it. Is this the beginning of the end of the global superpower?

It was in 1979 that the Soviet Union deployed its troops to Afghanistan. The Western world condemned the action. The Soviets stayed in Afghanistan for a decade and then withdrew. They withdrew on the eve of the collapse of the first state of the workers and the peasants.

The same seems to be happening to the United States. Its troops have not put their boots on the ground as yet, but its air force and its missiles are operating against Iran, while Iran is striking back, and striking back successfully. Targets are hit not only in Israel but also in all the Persian Gulf countries that have American military bases. The leaders of those countries must have nurtured hopes of security once they had invited American soldiers on their soil, now they must regret it. It is also a signal to other countries having American bases: a warning to Poland, Romania, Germany, the United Kingdom, and Italy. Safe are they not.

In an attempt to save face, the American president has recently talked about negotiations with the Iranian leadership. The problem is that Iran denies ever taking part in any negotiations. President Donald Trump has issued a forty-eight-hour ultimatum, threatening that if the Strait of Hormuz was not made accessible to vessels from around the world, American troops would destroy Iranian power plants. The forty-eight hours did not elapse and the American president extended the period by a further five days. He is losing face. Worse, the American president is divorced from reality. And still worse, the American president has unleashed a war on purely ideological or religious grounds of ‘destroying the enemies of Israel, God’s chosen people.’ Wasn’t it the same in the case of the Soviet Union, whose military intervention in Afghanistan was dictated by the ideological urge to come to the aid of Afghan communists? Afghanistan did not threaten the Soviet Union at that time, nor is Iran a threat to the United States nowadays.

Tehran has become self-confident and daring. It is not waiting for the Americans and the Israelis to propose a ceasefire. Rather, Tehran has laid down conditions, and these are conditions of a victor:

[1] the US must withdraw from the region its military units,

[2] the US must unilaterally put an end to the hostilities,

[3] the US must pay Iran compensation for all the material damage and loss of human life. 

One might say, it is Tehran that has issued an ultimatum rather than the United States.

It is not merely that Iran seems to be gaining the upper hand: almost the whole world is on Iran’s side. Why? Because the whole world saw that the United States and Israel attacked Iran unprovoked, during the negotiations; because the whole world perceives the hostilities as a war of aggression on the part of the United States and Israel; because the whole world has had enough of American bullying, of American policing.

Iranians have surprised the world with the missiles that they have at their disposal. Some of them develop speeds of more than 10 Mach. Some of them have a reach of 4000 km (Iranians attempted to hit the American base on Diego Garcia Island on the Indian Ocean). Iran has decentralized its command centre; Iran has learnt to strike back asymmetrically. Iran is militarily supported by Hezbollah in Lebanon, Hamas in the Gaza Strip, and the Houthis in Yemen. Iran is also backed up by Russia and China, both of which supply it with satellite data.

What if? What if the United States will be compelled to admit its defeat? Will it be another Vietnam or worse for America? The image of a superpower will have vanished in thin air. The Gulf states might as well demand that Washington withdraw its troops from their territory. Why should they have them on their soil? To further expose themselves to attacks? Iran – in league with China – might begin the sale of its oil and gas in return for the Chinese currency. That might lead to the end of the petrodollar. And if the dollar stops being in demand worldwide, the United States will spiral into a position of a country that will have difficulties solving its financial problems. Without the dollar as the international currency all American economic might will shrink. Till now, for decades nations would have bought dollars – i.e. sold goods and services – to stock them and to have currency for purchasing oil. Once this scheme comes to an end, America will cease to be flooded by foreign goods and services: America will be compelled to manufacture things on its own. Due to the outsourcing, there are not so many factories, engineers and skilled workers in the world’s most admired democracy. Rebuilding will take time…

The war against Iran was to be a walkover. The United States has already handled, in one way or another, Libya, Syria, Iraq, and Venezuela. Americans thought that Iran was to be yet another intervention of the same small calibre. How wrong they were!

When you drink alcohol, you feel good after the first couple of drams. Then slowly but surely the substance begins to impede your speech and motor activity. Eventually one of the drams becomes one too many. They say proverbially: one over the eighth. Was the attack on Iran – after Venezuela, Libya, Syria – one over the eighth?

 

Roman-Parthian Wars – a Repeat

The Roman-Parthian Wars were a series of wars that took place between the years 54 BC and 217 AD. The Parthian Empire covered a large area, among others of today’s Iran and Iraq. Sometimes the Romans were victorious, sometimes the Parthians. It was a clash of civilisations, a clash between occidental Rome and oriental Parthia. Today’s war between the United States and Iran appears to be a continuation of that old conflict that extended over centuries. The United States is a descendant of ancient Rome. The names of state institutions like Senate, the names of certain buildings like the Capital, the architectural style – all testify to it. Also, the English language whose vocabulary is almost 80% ultimately of Latin origin (including such common words like money, tender, nice, car, train, pay, peace, pound, face, battle, soldier, navy, missile, message, digital, computer, autumn, dinner, office…) shows in no uncertain terms (with the two last words also being of Latin origin) that the American-Iranian hostilities are a prolongation of that ancient feud.

The American-Israeli Operation Epic Fury, which began on 28 of February 2026 with a launch of 900 strikes within the first 24 hours marked the beginning of something that we do not yet know how it will develop. The United States had hoped for a quick and spectacular victory, a victory guaranteed by the decapitation operation in which Iran’s highest religious leader Ali Khamenei (and his daughter, and his son-in-law, and his granddaughter) was killed. But Iran rather than surrender has struck back and has struck back successfully. Sure, the Persian state cannot stand up to the American might in an old-fashioned duel. It can, however, bite back where it hurts most, and compel Washington to reconsider its policy. Iran is smaller than the United States, both in terms of population and territory, but – as unforgettable Aesop wrote in many of his fables – even a mouse can have its revenge on a lion.

So, Iran struck where it is most painful: Iran struck at the oil refineries, and effectively blocked the Straight of Hormuz. The Strait of Hormuz is the world’s most important choke point through which more than 20% of the global oil trade passes. The incapacitation of oil supply translates into higher prices of anything that is connected with oil, which in turn triggers a chain reaction of price rises, which is actually happening around the globe.

Washington appears to be surprised by Iranian resilience and Iranian defiance. The Americans had hoped for Iran to capitulate within days. Washington had hoped for a repeat of the 12-day war that took place in June last year. Nothing like that is anywhere in sight. Iran is launching missiles against American and non-American targets in Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, Qatar, Jordania, and Israel. The targets are American military bases and the important infrastructure of those countries which host American bases. The oil refinery in Haifa, Israel, that is said to be hit processed 40% of Israel’s oil.

Two facts testify to America’s miscalculation and America’s second thoughts. First, Americans – Americans! – have proposed to Iran a ceasefire through a third party; second, President Donald Trump has called President Vladimir Putin to talk about… the war against Iran. What they discussed is not known: we can only guess that Washington is looking for off-ramps from the conflict.

Now, Iran seems to be to the United States what Ukraine has been to Russia for the last four years. For years the West has been sending munitions of war to Kiev; now it is Russia which is sending munitions of war to Tehran. The deal about selling Iran the advanced Russian S-400 antiaircraft and anti-missile complex has just sent shockwaves around the globe. The United States is about to taste its own medicine.

It is popular in the West to assume or even believe that Iranian people are against the religious ‘regime’ as the Western journalists are used to saying. Let us assume that it is true. If so, then the savage attack on Iran and the murder of 170 girls by the American Tomahawk missile compelled Iranians of all political persuasions to rally around the same ‘regime’. A historical repeat, again, just like it was in the thirties of the previous century in the Soviet Union. At that time there were many Soviet citizens who hated the Stalinist regime till… till the same regime was brutally attacked by the armies of the Third Reich. Precisely the same phenomenon was triggered in the Soviet Union which has been just triggered in Iran: those people who disliked communism and communist regime rallied around the communists and their leader.

The current Roman-Parthian war is going on. It is not merely a war between present-day Rome and the present-day Parthian Empire; rather, it is a war whose economic and political repercussions afflict the whole globe. India, China, South Korea, and Japan – they all depended very much on the oil supplies from the Persian Gulf. The said countries may wish to remain neutral in the ongoing hostilities, but if push comes to shove, if their economies become strangled by inadequate supplies, they may reconsider their policies and exert pressure on the participants. When Romans and Parthians fought against each other, either side would have looked for allies. Much the same is true of the present conflict. The American-Israeli alliance is facing the solidification of the political, economic, and military cooperation between Russia, Iran, and China. How long will the other countries watch from the sidelines? 

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