America’s Death Spiral

 

When Americans entered the polling booths to elect their 47th President in November 2024, they had only a Hobson’s choice between two mainstream candidates — Donald Trump and Kamala Harris. One was a crook; the other a dumb-dumb.

The US as a country was no longer capable of thinking, which is hardly surprising. Trump ushered in the decline when he was the 45th President, and the semi-demented Joe Biden sealed the country’s path. And the return of Trump was another godsend for China.

Each time China was mentioned by the Western and pro-Western press, it was invariably described in terms of the “Chinese Communist Party”, rather than simply the Chinese government. We all know the sinister intent, not to mention the ignorance. (The correct name is the “Communist Party of China”, if you want to be exact.)

I am always contemptuous of politicians with serious character flaws. Trump is the personification of this.

In 1994, when Trump was struggling with the Riverside South development in Manhattan, a consortium of Hong Kong businessmen led by Henry Cheng and Vincent Lo came to the rescue. They acquired a defaulted mortgage of about US$250 million for roughly US$90 million and provided the financing that kept the project alive. Trump even retained a 30 per cent interest in the profits. It was, by any reasonable description, a rescue at a particularly difficult time in his business career.

He was given extraordinary treatment when he visited Beijing in November 2017, including a reception at the Forbidden City. Within the following year, the United States and China were in a full-blown trade war. On 6 July 2018, Washington imposed 25 per cent tariffs on US$34 billion of Chinese imports.

Gratitude is totally absent from Trump’s worldview. Those who have read the book written about him by his niece will also tell you how unkind he could be even to his own folks.

Then came Huawei.

On 1 December 2018, the Canadian toyboy Prime Minister Justin Trudeau arrested Huawei princess Meng Wanzhou in Vancouver at the request of the US. We all knew the three-year detention was totally uncalled for. Her release was perhaps the only good thing Biden had done in his whole presidency!

The last eight years taught China one thing about the Americans and the Whites in general: Never trust the US leaders, regardless of political affiliation. China cannot count on the Whites and the pseudo-Whites.

Then came 2 April 2025 — “Liberation Day” — when Trump announced his sweeping global tariff decrees.

But too bad: China was already ready. While the lesser countries were crawling to ask for favouritism, China totally neutralised Trump’s foolishness.

Even his own court ruled him wrong.

Yet the tariff gun has hardly been put away.

Trump would undermine — for his own ego and personal interests — the enormous strategic advantages that America spent three-quarters of a century building: trusted alliances, an open economy, world-class universities, the attraction of global talent, confidence in the dollar, and the belief that when Washington gives its word, that word means something.

Trump seems determined to spend that inheritance.

While Sleepy Joe and his eunuchs — Antony Blinken, Katherine Tai, Nicholas Burns, etc. — were still coming up with all sorts of sanctions to try to retard China, Trump was mobilising a bunch of nincompoops — a harebrained chap called Pete Hegseth, an economic truth-distortionist called Auntie Scott Bessent, fellow Epstein-buddy Howard Lutnick, and all — to strengthen and glorify his supreme-ness. Meanwhile, China was transforming its entire landscape in economics, the military, science and technology, and what-have-you, to surpass every nation on earth.

Yet the Western and the pro-Western press keep telling the ignorant world that China is facing unprecedented woes in the real-estate sector, youth unemployment, etc., etc.

They simply do not — or refuse to — understand that China is correcting these issues in the most fundamental, albeit difficult, way.

Again, I go back to Trump’s character flaws to celebrate.

Look at Canada, one of America’s closest friends and trading partners. As recently as 21 August 2026, Washington imposed new 50 per cent tariffs on some US$20 billion of Canadian goods after negotiations collapsed. Prime Minister Mark Carney suspended the talks and announced dollar-for-dollar retaliation.

Is this how a great power treats its closest neighbours? Trump seems to confuse fear with respect, and submission with friendship.

Notwithstanding all this, the President of the European Commission, Ursula von der Leyen, is still trying hard to suck up to Trump, although it is very obvious that he DOESN’T like this blonde! Ditto Sanae Takaichi of Japan.

But in global politics, there will always be clowns like them and minions like Ferdinand Marcos Jr and a couple of others.

Venezuela
On 3 January 2026, US forces entered Venezuela, captured Nicolás Maduro and his wife, and carried them to the United States. Maduro is now being held in New York awaiting a trial scheduled for June 2027.

I have no fondness for Maduro. Anyone who wears his type of moustache is usually one who carries a complex. But here is the larger question: Can we keep allowing the US to enter another sovereign country, seize its leader and carry him to the US for trial?

Military power can remove a man. It cannot by itself create legitimacy, prosperity or stable government. America should have learnt that lesson from Iraq and Afghanistan.

Apparently not.

And Now Iran
The same hubris is playing out on a vastly more dangerous scale in Iran.

Ayatollah Ali Khamenei was killed on 28 February 2026 in the opening US-Israeli strikes. Washington evidently hoped that decapitating Iran’s leadership and smashing its military infrastructure would produce either capitulation or political collapse.

Nearly six months later, where is the triumph?

Iran has been badly damaged. Thousands have died. Its economy is under enormous pressure. But the war continues, the Strait of Hormuz remains severely disrupted, and Tehran retains enough missile and drone capability to keep the region dangerous. It is a costly standoff rather than the quick strategic victory Trump might have imagined.

It is not that Iran is “winning”.

The much more important point is that America is expending enormous military, political and economic resources simply to prevent itself from losing control of the situation.

The United States is now racing to rebuild its missile inventories. American high-end munitions stocks have been severely strained by Ukraine, the Middle East and now Iran.

But where will it get the rare-earth elements?

Despite all the sanctions, China continues to buy the overwhelming majority of Iran’s exported oil. Reuters puts its share at around 80 per cent. China simply doesn’t give two hoots about Trump anymore.

There are also growing signs of deeper Chinese-Iranian technological and military links. US officials say China’s SMIC supplied chipmaking equipment and training to Iran’s military. Reuters has reported prospective Chinese missile supplies to Iran, although Beijing has denied some of these reports.

The point is not that China controls the Middle Eastern battlefield. The point is that the US can no longer simply issue an order and assume that the rest of the world will fall into line.

The US$40-Trillion Debt
Meanwhile, back home, the numbers are becoming frightening.
The US national debt has now crossed US$40 trillion. Long-term Treasury yields have risen sharply; on 21 August, the 30-year yield ended at about 5.28 per cent, around its highest level in nearly two decades.

Auntie Bessent can explain, reassure and pontificate as much as he likes.

But he cannot talk away US$40 trillion.

Nor can America permanently borrow its way to prosperity, cut taxes, fight expensive wars, maintain military forces across the world, subsidise favoured industries and somehow expect the arithmetic never to arrive.

Wall Street, of course, remains extraordinarily good at keeping the music playing. AI enthusiasm has sent valuations skyward.

But musical chairs is an interesting game.

It works wonderfully — until the music stops.

And China?

Here, too, I think much Western commentary remains stuck in yesterday.

First, let us settle one argument.

If GDP is measured at market exchange rates, the US remains the world’s largest economy. But that is merely of statistical interest. You go to America and straightaway you can conclude that it is nonsense.

GDP has to be measured by purchasing power parity — unless your country is still very dependent on the US dollar — and China is No. 1. Period. World Bank data put China’s 2025 GDP at roughly US$41.3 trillion in PPP terms, against about US$30.8 trillion for the US.

So simply shouting “China is still No. 2” without specifying the measure is increasingly meaningless.

China certainly has problems, but its leaders are fully aware of them and fully committed to solving them. Anyone who cannot see China’s industrial power is looking in the rear-view mirror.

The New Technology Juggernaut
My own shorthand has always been this: America and the West have, in modern history, been superb at 0-to-1 innovation — creating something radically new. But China has become extraordinarily good at 2-to-10 — engineering it, improving it, scaling it, driving down its cost and manufacturing it by the millions.

And in the real economy, 2-to-10 matters more.

Consider electric vehicles and batteries alone. In 2025, China produced roughly 16 million electric cars, close to three-quarters of global output. It accounted for more than 80 per cent of global battery-cell production, around 85 per cent of cathode active material and more than 90 per cent of anode active material.

That is not propaganda.

That is industrial capacity.

In robotics, an extraordinary pattern is emerging. Chinese companies increasingly demonstrate an ability to produce breakthroughs and industrialise them cheaply and rapidly. Their “robot dogs” will knock out the US ones with both eyes closed.

In semiconductors and AI, yes, the US does possess some technological advantages, but we should describe them correctly.

The world’s dominant advanced-semiconductor foundry is not American. It is TSMC of Taiwan, which accounts for more than 70 per cent of global foundry revenue. America’s strength lies elsewhere in the semiconductor ecosystem — in chip design, AI accelerators, software and intellectual property, together with crucial allied capabilities in Taiwan, Japan, South Korea and Europe.

How long that advantage lasts is another question.

And AI contains another delicious irony.

America’s greatest advantage has always been its ability to attract the world’s cleverest people. Chinese talent forms a remarkable part of that strength. Data on leading AI researchers show just how deeply the American AI establishment depends upon foreign — and particularly Chinese-trained — scientists. MacroPolo’s latest talent tracking finds that 38 per cent of the researchers it studied received their undergraduate education in China, with a very large proportion subsequently working in the US.

My oft-used description — “Chinese Chinese versus American Chinese” — is not entirely without basis.

The strategic lesson for America should be obvious: if you make talented foreigners feel unwelcome, you may eventually send some of your greatest intellectual assets straight into the arms of your competitors.

And the Military Balance?
China has been flight-testing at least two new-generation tailless combat aircraft — the J-36 and J-50 — since late 2024. These are real and impressive.

The Pentagon claims that its new “Trump” stealth fighter — the F-47 — will fly in 2028.

Let’s wait and see.

The battleships are languishing everywhere. One was even left adrift after it lost power. All these speak volumes. America is NO longer enormously powerful.

China is MORE than an equal.

The seas within the 2nd Island Chain will become the graveyards of US and allied fleets if a war were to break out there.

Xi Is Coming to Town
Xi Jinping is expected at the White House on 24 September 2026. He will be in town for only one day.

And you can bet on this: Bessent and Lutnick will certainly come up with some new sanctions the moment Xi’s plane takes to the skies.

But does China care?

The relationship has changed.

Xi comes as the leader of the only country with the industrial scale, technological depth, military resources and economic weight capable of toppling the US across every dimension simultaneously.

That is the reality Trump should understand.

Instead, he still seems to believe that every international relationship is a Manhattan property negotiation: frighten the other fellow, threaten to walk away, squeeze him for the last dollar and announce victory.

At the end of the day, Trump is actually a weak President. The acronym TACO — Trump Always Chickens Out — is most apt for him.

And that is why I continue to regard Donald Trump as something of a godsend for China.

Conclusion
The Statue of Liberty no longer shines as convincingly as the symbol of freedom and democracy it once was. The model of predatory economics that the West has spent decades preaching to the rest of the world is also coming under increasingly serious question.

There is, of course, another model emerging from China. Unfortunately, it is not one that can easily be replicated elsewhere. China’s system is the product of its own history, culture, institutions and extraordinary capacity for long-term planning.

But the larger lesson is much simpler.

The problem is self-denial. Too many Western and pro-Western leaders remain blind to the most basic principle of government: leaders must work for the people. Whatever one may think of China’s political system, its leaders understand that legitimacy ultimately depends on delivering for their people — building infrastructure, raising living standards, reducing poverty, strengthening the country and planning for generations rather than for the next election cycle.

Certainly not leaders like Trump.

Perhaps the greatest consequence of the changing world order is that countries, large and small, are discovering that they no longer have to kowtow to an international tyrant. They need not accept lectures, threats, sanctions and bullying simply because these come from a country that once regarded itself as the indispensable nation.

Every country has the right to safeguard its own interests, choose its own path and take pride in its sovereign dignity.

I am afraid that, under Trump, the US is suffering from a terminal illness. Power without wisdom, leadership without responsibility, and arrogance without self-reflection can only accelerate the spiral.

And that, to me, is America’s death spiral.

End

 

P/S
Some friends have been asking whether I have lost steam with my blog, as they have not seen any new articles from me for several weeks.

Far from it. I have simply been totally consumed by the preparation of two books.

The first is Following the Chinese Footprints: A Journey through the Chinese Diasporas Across Five Continents. It is now in PDF format and available on request.

The second is More Than Friends and Acquaintances: Remarkable People I Have Met Along the Way. This will come in two versions: a digital edition, which will be available free on request, and a printed edition, for which I will charge only at cost.

So, no, I have not lost steam. I have merely been spending it elsewhere!