You go broke slowly at first, then all of a sudden.

All this reminds me of how Reagan rolled the old Soviet Union into it's well deserved grave, without firing a shot and using steadfast will and the irresistible economic power of the United States.

As then, the pressure on Communist China applied by nature and Donald Trump (who is himself a sort of force of nature) is popping huge cracks in their very brittle and unstable society.

First, an overview.  Note that face is very important in China, and the huge protests in Hong Kong that just forced the government to back down is a huge loss of face for the Reds in general and Chairman Xi in particular.  Further, these protests are a huge example to the people in the rest of China of how to fight back against a government whose only legitimacy of rule derives out of the barrel of a gun.

Watch.



Now, Gordon has been predicting the collapse of China for a long time, but this time he might be right.  As with the Soviet Union, few recognize the inherent weakness of the Communist government there, and the fact that it's only held on to power this long is due to its deal with the people: use capitalism to get rich, and in return support us politically, or at least don't oppose us.

If the people's riches go away, the only legitimate reason to keep the commies around does too.

As if that wasn't enough, nature itself is pushing its fingers into the cracks and pulling the edifice down.

Pork is a staple of the diet there, but this year a virus has devastated the swine population, causing the culling of a million pigs so far.

Now the corn crop is threatened by a wiggly worm.  It's attack has been managed so far, but later this year it will arrive on the North China Plain, where 30% of the state's corn is grown.  

At the very least, these two blows will raise food prices, but couple that with the trade war going on with the US and the combination could put huge pressure on a society that already has to import their own food to feed its millions.

Has Emperor Xi lost the mandate of Heaven (Tian Ming)?

And now Trump.  Underestimated by the Chinese, as it seems everyone does, they are suddenly finding themselves backed into an economic corner with no clear exit except through the Orange Man.   And that they cannot do and retain the all important Face.

As Trump probably expected, Xi is now stupidly threatening international business in China, and now that business is rethinking their business there.  It was always a risk of doing business in a totalitarian county, but it was a risk that the global business world was more than happy to pretend didn't exist.


This may well have permanently damaged the willingness of non Chinese business to work inside China, and I'd bet a few bucks companies like Huawei wish they weren't Chinese now, given the huge hammer blows their business is taking from Trump.

So, as with the Soviets, who also ran a weak and tottering empire, the Chinese face a reckoning with their own people and with the world.

Do they have the resources, the stamina, and the imagination to adapt, or will they find it in themselves to toss the Communists on the proverbial ash heap of history, and move forward to truly take their rightful place among the nations of the peaceful Democratic world?

We will watch and see.