The World Overall: In Depth

Intra One | Andrei Wogen| finance.wogen@gmail.com| 01-11-16

Chinas War
There is a reality that is unfolding before me that is troubling and
concerning while at the same time exciting and interesting to
think about and consider. The reality I see is this: Chinas
economy is weakening and the Chinese government is losing its
grip on trying to manage its fall, both in its financial markets but
also its overall economy while at the same time the geopolitical
sphere is becoming more and more unstable, not only in the
poster child of conflict, the Middle East, but also in other areas of
the world including Europe and the Americas and in North
Korea, which is the country that I want to narrow in on for this
paper.
As Chinas economy continues to weaken further and further I
can see the government continuing to step up their efforts to help
stabilize and revitalize the Chinese economy through policy
measures and economic measures with the goal of spurring
growth and investment back into the country. Whether this will
work or not, only time will tell though in my view the Chinese
authorities are losing their grip on the country and there are
really three ways that I can see this ending as: (1) China loses
complete grip on what it is doing and in its efforts to help
revitalize and spur growth back into the Chinese economy as
well as to save face with the rest of the world and investors in
particular, they decide to go the military and war route,
solidifying its dominance in different areas of the world (South
China Sea, North Korea) while at the same time revitalizing its
economy as it produces the things needed to be successful in its
war and military endeavors; the second (2) scenario I can see
happening is that the Chinese authorities lose control over what
they are doing to reform and grow the Chinese economy but
instead of having the time and strategic planning and execution
of war to help change things, the economy and the government
in particular both collapse, following roughly the same path as
the Soviet Union followed right before and when it collapsed;
and then theres the third (3) option and this option of the three is
the one that I see least likely as happening, is that China turns a
corner, the government is successful in not only implementing
the reforms it needs to do and wants to do but also at the same
time revitalizes the economy and all ends well, so to speak. So
three scenarios that I see playing out but only one that I see really
playing and that has the highest odds of actually happening, at
least in my view. That option is the option of military might and
outright war.

First off, I want to go back and talk about North Korea for a
minute. About a week ago from the time of writing this paper
(January 11th 2016), North Korea completed some sort of nuclear
test that caused earthquake-like conditions for its neighbors
while at the same time causing fear and concern from its
neighbors as to what the North Koreans were actually doing. The
North Koreans claim that they had successfully denoted a
hydrogen bomb while the US and its allies in the area (Japan,
South Korea, etc.) claim otherwise and think it was s a nuclear
bomb of a smaller degree than what the North Koreans claimed it
was. As a side note, between a nuclear bomb and a hydrogen
bomb, a nuclear bomb is the betteroption of the two so to
speak in terms of its danger and destruction level. Hydrogen
bombs carry much more destructive powers then nuclear bombs
do due to how they are built and so forth. But that is for another
discussion. Going back to North Korea, after the country
detonated whatever they detonated (nuclear or hydrogen bomb),
one of the more interesting aspects of the aftermath of the North
Koreans actions was in what China said. They, in essence,
publicly denounced North Koreas actions calling instead for
stability in the region and for North Korea to turn from its
ways so to speak. So, why is this important that China did this?
Well in short form it is because if there was one country in the
world that had the key to shutting down North Korea and really
forcing it to change its ways it is China. China is North Koreas
biggest trading partner and, up until the current North Korean
leader anyway, Kim Jong-un, has been to a large degree a
political ally of North Korea including in North Koreas efforts to
build a nuclear bomb. Now, China never said North Korea, its
okay to build a nuclear bomb but they never came out against it
either. Until now. This is interesting and a bit concerning to me.
Up till now, most have figured that the reason that China has not
done anything to deal with North Korea and its leader, is because
China has wanted stability in the region and they know that any
sort of action against North Korea could very well in fact cause
instability not only for the Eastern Asian region of the world but
for the whole world in general. However, could this desire by
China for stability in the region be changing? Could we actually
see more rhetoric from China against North Korea and, dare I say
it, could we see China actually coming to the table in terms of
trying to negotiate with North Korea and the members of the
world that are trying to keep Kim Jung-un from building a
nuclear (or hydrogen) bomb, the US included? Maybe, but be
careful in assuming that China would really want to negotiate
with North Korea. Going back now to the three scenarios that I
said I could see happening with China as its economy struggles
and continues to weaken, one of those scenarios included
basically had China causing and/or some sort of conflict in the
region and/or world at large in order to not only boost its
military and political presence in the world, but also to help
revitalize its economy. Maybe this rhetoric against North Korea is
Chinas way of beginning to stir the pot so to speak. Maybe
China is realizing that North Korea is really a threat and that the
only way to really deal with them is to go at them, not only at the
negotiation table, but also militarily. And what better time for
China to try and pursue such a strategy, once again pointing to
its weakening economy. This then is the scenario that I can most
see playing out. I think the odds are stacked in favor of the

hypothesis that China will eventually turn to military might to

help solve its economic woes, thereby causing or joining some
outright conflict or war in the world.
Now, how big are the odds of this scenario happening? Im not
completely sure. Though Chinas authorities came out publicly
against what North Korea did a week or so before today (January
11th, 2016), it is difficult to gauge just what the Chinese
authorities and its leaders are thinking privately. I think at this
point, China will continue along with the policy option, both
economically and politically and militarily and only when things
are going really bad do I expect them to become desperate. When
could things get really bad in China, particularly with its
economy? Debt crisis, currency collapsing are just two of the
biggest and more probable scenarios that I can see playing out at
this point. But we shall see.
As of now the idea of China turing to military might and efforts
in a bid to help prop up and revitalize their economy is a weak
one I admit. But it is the strongest of the three scenarios provided
above and that is concerning to me in itself and so is something
to watch for to see if it begins to unfold. Who knows, maybe 2016
is the year that things (finally?) start to really explode on the
global sphere.