Today began with some basic musings on the Moon of Alabama site that prompted thoughts about the premonitions and preparations undertaken by the Outlaw US Empire’s three main opponents—Russia, China and Iran. Those musings follow:

Bessant’s lies no longer manipulate markets. Sean Foo’s latest deals with that. Yesterday, I linked to the podcast about the diesel crisis and how electric trucks are making a difference for those who invested early in them. Today, Kevin provides a follow-up on mining sector electric trucks and the vast cost savings they now provide. Some are even driverless. The two podcasts combined are fewer than 20-minutes. The EIA inventory page was finally updated as of 28 August. I suggest keeping that page open as you read Larry Johnson’s latest summary (“I am indebted to a reader — a gent named Bryan — and Karl Miller for the following analysis. I have condensed and summarized their arguments.”) What it proves is Big Oil’s ability to price gouge on all fronts and rake in Monopoly excess profits. Within the Empire, if we actually had a diesel crisis that was causing huge prices for that product, the inventory levels would show that supply side of the crisis. But inventory levels have remained steady, so no genuine crisis.

China’s foresight regarding NEVs (New Energy Vehicles) in the heavy commercial markets utilizing electric and fuel cell powered vehicles shows a degree of Capital planning and implementation that’s unmatched and gives the SCO/ASEAN regions/blocs an advantage, particularly the new sodium-electric powered heavy mining trucks seen in the second podcast.

An important article surfaced at Guancha today, Dialogue with Lian Ping: Developing offshore finance is the only way to build a strong financial nation—China must earn back the “money that should be made.” Here’s its preamble:

China is a major global trading and shipping powerhouse, but compared to its massive trade and shipping scale, China’s financial sector still holds a limited share in global high value-added businesses. A large amount of insurance, reinsurance, shipping finance, offshore trusts, and other businesses have long been undertaken by Western financial institutions.


Now, this situation is reaching a new breakthrough point. With the release of the “Shanghai International Financial Center Development Offshore Finance Action Plan,” Shanghai is accelerating the construction of an internationally competitive offshore financial system. What does this mean for building a strong financial nation and elevating Shanghai’s status as an international financial center? To what extent can it promote China’s participation in global financial competition and gain more share of core businesses? How will the offshore financial system be built, what will be the focus, and how will it be advanced in the future?


Focusing on these issues, this issue of “Opening Up Ideas” specially invited Lian Ping, Chairman of the China Chief Economist Forum and Director of the Institute of International Finance, for an in-depth analysis.

This is one facet of the planned Powerful Financial System Xi Jinping outlined in his February 2024 speech that was made public with the opening of its many aspects this year. Yet another step in the process of constructing an alternative international financial system not dominated by dollar or western institutions.

China’s aim BRI-Energy-wise is to provide nations with the tools to create their own energy. Look at the Green Hydrogen Project and how it will be used to power fuel cell driven vehicles–in China the emphasis is on busses and long-haul trucks. China is also working on using stratospheric wind power as this article describes, which is my preferred method of wind power production. It’s easier to now see why Big Oil wanted to wage war on alternative energy systems–they have the potential to put them out of business and to destroy their political leverage. This area of China’s work has been hard to battle politically within the Empire because it’s very hard to explain to the public why so much effort’s being put into keeping Chinese alternative energy production systems out of the country when so much new electricity generation is demanded by data centers. And it’s not just an R-party thing as the Duopoly is totally controlled by Big Oil and has been for 100+ years.

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In 1955, an attempt was made by Global South nations to formulate a new international economic order (NIEO) at the Bandung Conference hosted by Indonesia in West Java and attended by nations that at the time consisted of 1.5 Billion people, or about 54% of the global populace, most of whom had very recently gained their freedom from their colonial masters or so they thought. The key point of the conference was to organize an alternative to the Bretton Woods international financial system that was imposed on the world by the Empire in 1944 and was clearly seen and even admitted by a few in the West as a neocolonial means of control, with the goal being to gain complete sovereignty of their national affairs as the UN Charter guaranteed. The world had yet to be completely decolonized with many colonial masters tenaciously and often violently resisting those wanting their freedom, and there was no nation or bloc strong enough to challenge the Empire’s hegemony. There were some positive outcomes but not the primary goal of constructing an alternative.

Finally in 2015, the beginnings of an alternative began to emerge—China’s Cross Border International Payment System (CIPS)—that was made to specifically process payments in RMB/Yuan to facilitate Belt and Road Initiative development projects and payment for general Chinese goods. CIPS is faster, cheaper, and far more efficient than the Swift/CHIPS system controlled by the Collective Western Empire. It also makes those transactions invisible to Western intelligence so they can’t track things or halt the transactions to enforce illegal sanctions—the weaponization of finance done by the Outlaw West. How/what the Outlaws were doing to continue their global control was made known in the early 1970s by Michael Hudson’s Super Imperialism, who provided not just a history of what had been done but also the mechanisms of what would now be done since Nixon made the dollar100% fiat, and no longer backed somewhat by gold. At about the same time, the global energy markets were roiled by the 1973-4 Oil Crisis that resulted from the Arab-Zionist War. Two keys emerged: OPEC was told by the Outlaw US Empire that they could charge whatever they wanted for their oil—Big Oil was deeply involved—as long as the dollars collected were recycled back into the Empire’s financial economy, not tangible industrial assets. So, Big Oil was ensured the collection of monopoly/excess profits and the ability to gouge the public whenever they felt the need, and the petrodollar was born that has greatly contributed to the Debt Bubble and Stock Asset Price Bubble. For Americans, that ended the era of low prices for most goods particularly cars and housing as prices began their inexorable rise—the $25,000 tract house now costs $250,000 if you can find one, while the $4,000 car now runs $34,000.

Big Oil is often also Big Gas, although the latter hasn’t been as important for the global economy over the last 120 years. The emergence of the petrochemical industry has changed that along with gas (methane) being seen as having a smaller ecological footprint than coal. A difference in attitudes is seen between Russian oil and gas companies and those of the West—Russian companies prefer to make long contractual arrangements at low fixed prices because their costs of production are lower than Big Oil’s which seeks to maximize profit at every opportunity. However, because of its geographic location, Russia is very well aware of the Climate Crisis and its effects, so its oil and gas sectors don’t actively campaign against alternative energy sources unlike Big Oil. Big Oil’s attitude towards fracking is an excellent indicator of its environmental stance—as with all Capitalist extractive ventures, Big Oil wants to keep any environmental costs external to its operations and pass those costs onto the public and government. I have a book in my library, Petrotyranny by John Bacher, that examines the Dark Side of Big Oil and its fascist influence on the Outlaw US Empire, which is considerable. Aside from learning about Standard Oil and John Rockefeller and the power he amassed, an investigative article from 2000 published by The Nation, “The Secret History of Lead,” is a much shorter but just as provocative read. This note can serve as a motivator:

People have been mining and using lead for thousands of years. Descriptions of lead poisoning date to at least 200 BC, while efforts to limit lead's use date back to at least the 16th century. Concerns for low levels of exposure began in the 1970s, when it became understood that due to its bioaccumulative nature, there was no safe threshold for lead exposure.

Pterotyranny is clearly seen in the Trump Gang’s policy from its actions against Venezuela, negation of all alternative power generation subsidies, tariffs against electric vehicles, and its illegal war on Iran, which are the most obvious. Before Trump we saw the Biden Gang blow up the Nord Stream pipeline that provided very low-cost gas to Europe, primarily Germany, but even before that act of terrorism both Biden and Trump in his first term pressured Europe to cease reliance on Russian hydrocarbons. Generating artificial crises globally to drive up energy costs so they’ll benefit Big Oil is a primary feature of Outlaw US Empire policy. Do note the degree of protestation made by Big Oil to Empire policies.

The paragraph I wrote above outlines China’s anti-Big Oil policy, which is more correctly seen as an anti-colonial, anti-imperialist policy aimed at providing Global South nations with the ability to produce their own energy instead of being dependent on costly imports. Russia has a similar policy in the nuclear power realm that makes the nation its own master of the nuclear plant by educating those to construct and manage it. And since Rosatom has mastered the fuel cycle, there’s no longer a waste problem. IMO, Green Hydrogen and higher altitude wind power generation are technologies needed by Global South nations since they don’t rely on imported fuels and no forests of huge windmill towers are required. Capital outlay for both is quickly recouped, which is critical for poor nations, who can then use their foreign exchange earnings to purchase other products instead of overpriced oil, gas and other petrochemical products like diesel. The cost breakdowns shown by Kevin in the second podcast I linked to above are startling in their magnitude. And then there’re the advances being made in solar voltaic efficiency and energy storage that will help many African nations produce electricity. Yes, China gets to sell the basics to establish the infrastructure, but then the receiving nation gets the power generated to help repay China and benefit its populace. Many nations that now export no value-added unrefined resources because they lack electricity to power basic refining capabilities will greatly benefit from China’s policy. And electricity can power their railroads instead of coal or diesel. Extractive processes are very difficult to make green, so doing what’s possible needs to be policy. Enabling Global South in particular but all nations to ween their dependance on fossil fuels is a laudable goal. Petrochemicals, however, will continue to be with us for many more years because of the myriads of products they provide feedstock for.

The fewer sales by Big Oil the fewer dollars are recycled into the Empire’s system to fuel its imperial policies and exacerbate its debt crisis. And in this case, we also have the self-inflicted injury made by the grossly illegal war waged on Iran, which had the great good sense to attack the Empire’s bases in the Persian Gulf region as well as Big Oil assets, which essentially operate and own a portion of all hydrocarbon extraction and refining in the region except for Iran’s. Now, the war itself was supposed to be the culmination of the Clean Break Strategy formulated prior to but finally published in 1996 which is the plan for Greater Zionism to control the entire region. Hubris caused no thought about what would occur if Iran won the war as it did in 2025. The lack of dollar recycling combined with the need for many to sell their US T-Bills to generate cash for daily operating expenses (Japan is the current outstanding case, but there are others) has created a very powerful financial crisis for the Empire since it has far fewer clients buying its debt, a situation the Empire brought upon itself when it weaponized the dollar, which actually was done well before the theft of Russia’s overseas foreign exchange holdings—Libya. What was done to Russia was a huge wake-up call for all entities holding dollar assets—they were no longer safe. Bessant has even tried to prevent sales of T-bills; but if you can’t sell them when you need them, then why have them at all?!? The Bond Market is now sending an unmistakable message to the Trump Gang—those incapable of controlling their spending beyond their means will need to pay much higher rates of interest. Perhaps the most ironical aspect of the Empire’s Blowback Crisis is it could be easily solved if Trump were to obey Iran’s MOU he signed and allowed the free flow of traffic through Hormuz which would restart the flow of petrodollars back to the Empire.

Because they retained their honesty and adherence to International Law, China and Russia can be trusted as alternative safe repositories to the dollar or euro. Indeed, Panda Bonds are currently very hot items as are Russian development bonds. Putin again said Russia was willing to sell gas through the remaining Nord Stream pipe and all Germany needed to do was to push the button and thus stand up for itself. The Grand War against Russia, Iran and China is seen by them as an attritional war they have the resources allowing them to win and in the process create a new world order somewhat along the lines proposed at Bandung. Another goal is to make the saying There’s No Free Lunch a reality by ending all rentier activities which entails making the global financial system dedicated to development and uplifting of all people, not just the Epstein Class. And that will require a replacement of the Bretton Woods system and its institutions which will happen eventually as their use ceases. Yes, many other actions must occur within individual nations like making their financial systems into public utilities and adopting political economies that promote people-centered development. All that can be done without obtaining permission from the Empire. China’s goal of attaining a global community with a shared future is shared by the vast majority. Hopefully, the very deep crisis the Outlaw US Empire and its vassals will experience will promote some much-needed introspection that produces the new set of values needed to become a member of the global community.

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Image from “China’s Evolving Strategic Trade Settlement Framework” by Einar Tangen & Warwick Powell

Reporting on the efforts to dedollarize the global economy has been a Gym staple since its inception. What’s different today than in 1971 when the Outlaw US Empire’s dollar went from glod-backed to a 100% fiat currency is the advancement of technology that allows for competition to occur within the international financial system such that the dollar’s essential monopoly can now be challenged by an alternative whose pragmatic goal isn’t to eliminate the dollar but to offer another pathway. The need for an alternative was noted at the outset during the Bretton Woods Conference in 1944 that established dollar and Outlaw US Empire financial hegemony as WW2 came to its conclusion with JM Keynes proposing his Bancor System that avoided dollar dominance. In the years since 1944, many nations have suffered mightily from that dominance as meted out by the IMF or World Bank, as well as from the illegal sanctions—economic warfare—employed on select nations deemed “wrong”. A recent study by The Lancet reports 38 Million deaths from illegal sanctions from 1970-2021—a veritable holocaust caused by Outlaw policy because there was no alternative available to circumvent the sanctions. The end of that utterly gross fascist tyranny by the world’s supposed Guiding Light will be one of the most positive outcomes of the alternative system. There’re several well-known studies that have illuminated that horrid reality and informed a global public deliberately kept in the dark—The Shock Doctrine and Confessions of an Economic Hitman are two that ought to reside in every household.

Drs. Einar Tangen and Warwick Powell collaborated on “China’s Evolving Strategic Trade Settlement Framework,” an essay published at Mr. Tangen’s Asia Narratives substack. They report this and its mechanics:

Beijing is not building a single replacement for SWIFT or the Dollar. Instead, it is deploying a modular, layered settlement stack.

Yes, my short note is actually a promotion, an advertisement, for their outstanding essay. And it’s also a further promotion of their substacks, which I already recommend.

The transition from the Western Hegemony Era to what is promoted as the Multipolar Win-Win Era is already generating changes and conflict as the Exceptionalist Outlaws try to delay the inevitable. As one might expect, China is being very Chinese as it works to end Western Hegemony, a project that began 115 years ago with the 1911 Xinhai Revolution. Someone echoed an observation I made several years ago—China’s system is Capitalism with Confucian Characteristics.

Do, please, visit and read their essay so you can be up to speed and ready for what might emerge from next month’s BRICS Summit.

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At the outset of the Gym on 5 December 2023, I updated an article I wrote and published at my VK space that urged nations to Just Say No to Illegal Sanctions: “Russia & Iran's Counter Illegal Sanctions Agreement”. That was based on this document published on 12 May 2023: “Declaration of the Russian Federation and the Islamic Republic of Iran Ways and means of counteracting, mitigating and compensating for the negative effects of unilateral coercive measures,” which is translated in full at the initial article. Sixteen main points were made after the preamble of which the initial four are paramount and based on International Law:

The adoption of unilateral coercive measures by any State is illegal, contrary to the Charter of the United Nations and international law, and would entail international responsibility;

Unilateral coercive measures, including those of an extraterritorial nature, carried out by a third State, group or association of States in violation of the Charter of the United Nations and international law should be neither recognized nor adopted;

States are urged to refrain from promulgating, spreading and applying unilateral coercive measures that impede the full achievement of economic and social development objectives, particularly in developing countries;

Any decision of a foreign court arising from the application of national laws, decrees and orders providing for the adoption of unilateral coercive measures against other States should neither be recognized nor enforced by national courts;

Clearly, states are not obliged to obey such illegal decrees and must refrain from abetting their enforcement. At the time the document was drafted and signed, there was finally a way to bypass the West’s primary enforcement mechanism, which is the International financial system reliance on the dollar and Western banking institutions including their messaging systems, SWIFT being the primary institution—CIPS: Cross-Border Interbank Payment System and eMbridge. And traditional currency swaps remain a useful tool. China clearly hasn’t sat on its hands waiting for the SCO or BRICS to provide a solution to the weaponized dollar and illegal sanctions.

To end Outlaw US Empire hegemony, its control over the international financial system must be eliminated by erecting a parallel system that eventually sees replacements for the IMF and World Bank too. Several recent Gym articles address that issue and China’s efforts.

The best current report updating this issue is by Kevin Walmsley of Inside China/Business’ “How China destroyed US sanctions against Iran, Russia, and North Korea” which features a 10-minute podcast along with his printed article I suggest all readers now click to watch. I also highly suggest watching the older video Kevin posted at the end of his article that deals with China’s earlier actions with the dollar and Outlaw banks after Russia’s funds were stolen in 2022. There’s no need for me to remake the wheel when Kevin’s done such an outstanding job. Sanctions are now blanks when aimed at many states with their numbers growing. If monies don’t flow through Western banks, there’s no way to steal them, which is what sanctions amount to—theft—akin to the piracy being practiced at sea. In closing, I also suggest reading this powerful Global Times Editorial, “China will not play along with the US’ ‘reckless games’ on the Iran issue:”

The US war against Iran has now entered its sixth month, with both sides now locked in a stalemate - unable to escalate the conflict further yet unable to reach a negotiated settlement. The so-called "economic D-Day" operation is less a new offensive launched by the US against Iran than it is yet another attempt by Washington to cut its losses as quickly as possible and extricate itself from the quagmire of the Middle East - a move to change tactics and keep gambling after military means have proven ineffective.

Well, Iran can escalate; it’s the Outlaws who are stuck in the muck they created.

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Colonel Wilkerson concluded his chat with Danny Haiphong warning that the Outlaw Empire’s disarmed to the point where all that remains are its nukes, an unwelcome yet honest assessment. So, the grifters and rent seekers who thought they’d use the Empire’s military to extort the world now face the impossibility of their dreams because the use of nukes means the end of their party. IMO, that spells Checkmate for the Empire. So, it can surrender and change its behavior or kick the chessboard over and use its nukes and cap off its madness by igniting global destruction and the likely end of Humanity. The current situation that generated my conclusion isn’t going to change aside from worsening and confirming it,

Does the “Finish the Job” crew understand what it advocates? And the Russophobes? And the Trolls?

I wrote the above shortly after watching and closely listening to what Mr. Wilkerson had to say and posted it to the current MoA thread. He’s not the only person with some insider access and knowledge who has come to a similar conclusion. The question posed by my title is does the situation’s reality warrant the raising of public outcry to the level of Chicken Little Hysteria. (Chicken Little is known as Henny Penny in Europe. The linked Wiki entry is worth skimming.) I’m sure readers have differing opinions on this issue which are based on a realistic assessment of the Outlaw US Empire’s motives and the depleted level of its most important offensive and defensive munitions and the inability of manufacturing a great mass of them over the next decade given the choking of vital supply chains. Of course, one needs to watch the podcast with Colonel Wilkerson and those of others having similar assessments—Colonel Macgregor, Colonel Davis, Alastair Crooke, John Merscheimer are just a few. Just as important are the Empire’s geopolitical goals, which are simple, easy to find, and haven’t changed since the mid 1990s based on the Wolfowitz Doctrine and the Clean Break Strategy since the Empire’s plan for global dominance required Zionist control over West Asia.

The 911 False Flag attack was an integral part of that strategy and showed the willingness of the Zionist Imperialists to sacrifice American and other lives in their quest treating them no better than Palestinians. The difference with using nukes is the Zionist Imperialists will also become victims and their use of the world as a toy evaporates in nuclear fire. Most analysts predict any use of tactical nukes swiftly escalating to ICBMs and thermonuclear destruction, although there appears to be some disagreement when their use is initiated by the Zionists against Iran and the presumption that Iran will be able to retaliate and utterly destroy the Zionists thus negating a nuclear exchange between the Empire and China/Russia. Trump has made several threats to completely destroy the Persian Civilization, which could only be done with thermonuclear weapons, with those threats remaining thankfully empty. But the Big Problem was the very few denunciations of those threats and their implied usage of such weapons from within the Empire and its vassals. IMO, that displayed a high degree of weakness to confront a clearly criminal president and his regime.

Legacy media did very little to inform the public of Trump’s criminal threats or to pushback. And since many are now controlled by Zionists, I doubt the American public can rely on the media for anything of importance. The many hundreds of unreported War Crimes are proof of media complicity. And much the same can be said of alt-media too. So, is there any vehicle capable of airing Chicken Little’s warning, or has the Doomsday Clock been at 23:59:30 for so long the public is now inured and incapable of being roused to any action and certainly not hysteria? Perhaps some media person will summon the courage to ask Trump that since he’s out of weapons when he plans to use nukes, although I won’t hold my breath.

I believe such concerns are on many people’s minds but few have the courage to share them because they don’t want to be labeled Chicken Little. Yes, it’s a very uncomfortable topic and requires some thought before conversing about it. Yet, it’s also a very real component of our reality. I recall asking students in early 2021 if they’d heard of someone named Father Berrigan or the Plowshares Movement and not a soul raised their hand. I wonder how many Gym readers will know. My point: few know because of how well the anti-nuke and anti-war movements were erased by media and textbooks. We’re living with that result now.

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Today, Moon of Alabama had this as its lead, article—”War On Iran: – ‘New’ Iran Demands Repeat MoU Conditions”—which was also the main topic of discussion by most alt-media podcasts. What was new was the tougher rhetoric and greater detailing of what was vaguer in the MOU, such as where combat is supposed to cease—Lebanon, Palestine, Yemen and Iraq. Also, as Alastair Crooke was keen to note, the Iranians are now hip to the Trump Gang’s method of market manipulation, so a tanker was attacked just prior to the 9am Eastern opening time as a reminder that Hormuz isn’t a waterway open to all traffic as Trump continues to boast. I’ve recently been looking into the levels of oil product inventories within America as reported by the Energy Information Agency (EIA) in an attempt to confirm or rebuke the idea that the Empire faces a fuel crisis when the Strategic Petroleum Reserve (SPR) reaches a level beyond which no further exports can be delivered. Yes, the SPR’s been depleted to supply the Empire’s vassals with oil at the rate of roughly 4.5 million barrels per week. The SPR is not being used to keep inventory levels static because the Empire continues to import enough heavy sour crude that’s required to make jet fuel and a series of distillates. The proof is in the continually static inventories of those products despite the hefty rise in diesel and jet fuel prices—traditional gouging just as with what’s called motor gas, which is refined from the massive amounts of light sweet crude provided by fracking. What follows is what I reported based on my investigations on Sunday 9 August and several previous days:

I’m calling out Bessant’s gloating that Iran’s economy is in tatters. Iran has three main trade partners–Russia, China and Pakistan–and lesser partners in EAEU, all of which use currency swaps and systems outside Outlaw control. Iran is also self-sufficient in many goods thanks to the years of sanctions. War production and reconstruction work are employing many Iranians, while millions still find time to hit the streets to protest–and those people look well fed and healthy, not emaciated and sickly as Bessant dreams. As with Russia, sanctions have failed to cause great harm to Iran as its military abilities prove.

IMO, the current state-of-affairs regarding Hormuz can continue until 2029 and Trump’s exit, somewhat similar to the much shorter hostage issue that kept Carter from reelection. The world knows who the criminals are that started the war, and thus most back Iran’s Hormuz position. I know it’s a month away, but this year’s UNGA “Debate” session will be very hot, and I foretell Trump’s attempt to ban many nations from attending. Many continue to say SPR depletion will be the camel breaking straw, but I differ. The inventory items to watch are jet fuel and distillates, which you see have remained very steady despite the SPR’s continual drawdown. Those two products fuel the Outlaw economy along with mogas, which also remains steady because plenty of oil to make it is extracted domestically. It’s the importation of sour crude that’s required to keep the other stocks even. SPR contents are mostly being exported, not used domestically if we are to believe the oil analysts. If its drawdown continues at the recorded pace, then the current level is about 297-6 million bbl. The point is the key fuels can continue to be produced at the current level because enough sour crude is being imported. So, the importance of the SPR reaching its drawdown limit will affect those nations benefitting from its export. Thus, the “magic” that’s supposed to occur domestically won’t happen in the way many have predicted. The big hit will be felt by those nations dependent on SPR exports, with Japan, RoK and Philippines being the most vulnerable followed by EU. But IMO it’s very doubtful their pain will influence Trump. And he won’t do anything demanded by Iran because doing so is an admission of defeat and that’s something he’ll never do.

I’m sure many are perplexed by my comment since it’s contrary to the alt-media narrative saying a fuel crisis will occur within the Outlaw US Empire. I suggest looking at the history link at the right end of each inventory fuel line to see the historical levels of inventory, and to make it easy here’s jet fuel, all distillates, and 18ppm sulfur and under diesel. There’re two other types of diesel listed that are produced in much lower amounts that have also remained even in their production. Clearly, the Empire continues to import enough sour crude to refine into those key products even with Gulf exports halted. My argument is that won’t change when oil can no longer be exported from the SPR

Given what the inventories tell us, we can conclude all refiners and their distributors have colluded in raping the US public over fuel prices since there’s no discernable drop in production that would warrant higher prices. Here’s the total gasoline inventory history. The only historical inventory graph that shows a dramatic drop is the SPR. Do look at the rest of them. Average Outlaw Empire fuel prices are 30% higher now Y/Y yet there’s very little change in supply to cause such a dramatic increase.

So, why all the obfuscation? IMO, it’s the standard oil industry gouging to create excess profits by pointing to the rise in international oil prices while domestic inventories remain steady. People look at the paper price, Brent is now $81.47/bbl, and inventory levels and legitimately ask why the hell they’re paying so much for fuel. (Now $86.95) Fuel inventory levels are really of no concern compared to the paucity of standoff weapons and almost useless AD interceptors. Big Oil has long held the Duopoly by its balls, which allows it to gouge at will, although I expect fuel prices to rapidly drop as we get closer to mid-terms.

So, why is the War Criminal Trump Gang so worried about the Hormuz closure when domestic fuel amounts other than price are a non-issue? The lack of dollar recycling to fuel Outlaw Empire debt and current operations because GCC is unable to sell its products for those dollars to be recycled is the genuine issue. That continual shortfall is driving the Bond Market and potential interest rates in a critical direction that the Gang can’t really manipulate, while T-bill and other dollarized asset holder economies enter fiscal crisis and need to generate cash via selling those assets. Thus, the emergency bail-out of Japan that merely kicks the can down the road as the underlying problem remains unresolved. (Yes, the Gulf issue is big for Japan.) Iran has no problem keeping Hormuz closed for as long as it takes for the Empire to squeal its surrender. But that’s anathema for Trump. It’s been suggested that Congress needs to remove Trump so Vance can do what must be done since Trump won’t. IMO, the Bond Market holds the axe.

Guess I’m singing solo. I accessed the IEA–International Energy Agency–monthly publication, “Oil Market Report” for July (since August won’t be released until the 12th) to see what light it might shine on the inventory issue. What I read is a fantasy land report consisting of wishful thinking not hard evidence. As you’ll see, the report focuses on June’s activity, which was slightly better than the March-May period. One of the major aspects not specifically mentioned was the increase in Saudi Red Sea Exports, “Total Gulf oil exports, including volumes bypassing the Strait, surged by 6.5 mb/d in June, to 16.1 mb/d…” [My Emphasis] What’s helpful in the report are the OPEC+ crude oil production numbers, but they don’t include the amount exported. Also lacking is a quantitative listing of product inventories, although a discussion of refining activity is provided. At its conclusion is a sentence reflecting reality:

Renewed exchanges of fire in the Gulf this week highlight the risks of not reaching a lasting peace agreement, which is a must for the normalisation in oil markets.

No mention of market manipulation is made although the price swings were noted.

So, is a fuel crisis actually on the way, has it already happened, or is there some mixture of those two possibilities, or is something else lying in wait? I’ve provided the most current data from the two main global energy agencies. Global inventories are smaller with a few exceptions where inventories remain stable. Keen and Jermy have both provided very good analyses about how the global economy will react to a reduction in energy inputs and suggest a drop in global GDP will result, which seems very logical. What neither address is what happens to the petrodollar and the US Bond Market given the very sharp decrease in dollar recycling and related increase in bond and stock sales, plus the cessation of cash flow into US AI Corporate investment as well as the attacks and destruction of its infrastructure in the Gulf region. IMO, Professor Marandi is a good sounding board for Iranian attitudes towards the GCC states and how they should be treated over the next several months. And ultimately, IMO China’s role mustn’t be forgotten along with Russia’s in the reshaping of Gulf Region relations.

As for the Zionists, Netanyahu is clearly trying to provoke a strike by Iran through his actions on the other fronts. IMO, he will soon get his wish.

And so ended my Sunday oratory. Before moving to Monday’s, one last bit about the SPR. I suggest the very curious look at the SPR’s history as reported by Wiki. Several interesting facts are presented: The SPR was intended to hold 1 Billion Barrels of oil, just a tad less than China’s, but it never came close to being filled to the authorized level with Why? being a very valid question (just under 75% is the most it ever held.). The writer of the Wiki report makes the following gaff:

Approximately 60% of the crude oil in the reserve is the less desirable sour (high sulfur content) variety.

We know that the most crucial fuels for the economy’s smooth operation are derived from that sort of oil. 1977 was when the first oil was injected into the SPR, but there’s no publicly available data for its level prior to 1982. It also appears that no oil was drawn from the SPR during the 1979 energy crisis. Indeed, all drawdowns appear to be politically motivated not related to any emergency (Covid-era demands close examination). IMO, the 1979 crisis was industry generated and directly contributed to the ongoing economic crisis. And today, it’s clear the drawdowns aren’t being used to benefit the people who paid for the SPR to be filled just as the tariff gouging’s won’t be returned. The Seven Sisters have long been key drivers of Western Imperialism and still retain great political power.

Now for today’s musings again using the MoA article as a foil:

IMO, it’s useless for Iran to talk to the Outlaws; they only understand the language of force just like any ordinary Mafia goon. As my research into the levels of fuel stocks within the Outlaw Empire show, there’s no real danger in them running short for domestic consumption. What is running short are inflows of petrodollars into Outlaw debt and tech investment. The global fuel shortage is a much bigger problem for the Outlaw’s vassals as Japan is now revealing. The curtailing of Saudi Red Sea exports is crucial for exacerbating the fuel crisis. The idiot sanctions bill just passed by the Outlaw Senate that will sit until the House returns in September will cause great blowback resulting in further Outlaw isolation when its passed and signed before October.

Netanyahu as most know craves more war with Iran and everyone else and is predicted to launch a big attack sometime soon. I expect combat to resume, but I don’t see Iran attacking GCC assets because they’re effectively non-operational and not providing the petrodollar flow the Outlaws must have. IMO, Iran’s best move will be to support its allies by retaliating against the Zionists and the Outlaw assets now stationed in Occupied Palestine. Hormuz will remain frozen in its current status until the Outlaws relent, which could take years during which the geopolitical chessboard will be greatly rearranged with the Outlaws isolated, broke and unable to produce any modern weapons because it lacks the needed resources.

IMO, it’s well beyond the Trump Gang’s limited brain capacity to understand that every single American military asset anywhere on the planet is a legitimate target for Iran and whoever declares as an ally since that Gang started two illegal wars on Iran and has continually abetted genocide in Occupied Palestine for 50+ years making the Outlaws an enemy of all Humanity. Let that sink-in for a moment. As W Bush admonished, you’re ether an Outlaw or a member of Humanity seeking justice for many decades of criminal activity by the Outlaw US Empire and its vassals. There’s no middle ground: “You can’t be neutral on a moving train” as Zinn famously observed. There’s a very good reason they’re called Crimes Against Humanity because that’s precisely what they are. Yes, all the above is aimed at those in the pay of the Outlaws or trying somehow to say they aren’t Outlaws and are thus allied with W, Clinton, Obama, Biden, Trump, and those Outlaws that came before them and served them. Most of Congress isn’t exempt either for they are the enablers.

The above are the Truths that all too many cannot bring themselves to think, write or say. Yes, a few are coming close, but those few must become tens of millions just as angry as the millions of Iranians seeking revenge.

I’ve entertained the following notion for a month or so: Once Iran degrades the air forces of its enemies and their AD capacity, the only way to resolve the regional Zionist infestation is to march westward liberating Iraq, Syria, Lebanon, and Jordan along the way while continually pummeling the Zionists with missiles and drones. Realists know if the Gulf region is to ever know peace and development, the Zionists and the Outlaws must be completely evicted, and there’s really only one way to ensure that’s done as I described. China, Russia, and others may not like that reality, but nevertheless it’s the only reality--there can be no compromises for as we’ve seen again and again, those entities are not agreement capable, have no honor, and thus their word cannot be believed for a moment.

Yes, such an undertaking risks the employment of nukes, but that risk is constant as things now stand. And as most understand, any use of nukes effectively ends the viability of any Zionist entity--the Sampson Option was always suicide for Zionists.

But what might otherwise happen once such an offensive began rolling? Might it induce a political sea change amongst Zionists who understand they’ve sinned greatly and move them to promote negotiations and thus save themselves by agreeing to a one-state solution? How might such an offensive ruffle other nations nearby like Azerbaijan, Armenia, Turkey, and the GCC? What if the rallying cry was Decolonization and an end to Imperial mandated borders?

IMO, there are Iranians who’re pondering such an action. We had a Barfly--Yeah, Right if I recall correctly--who also advocated Iran using its formidable land army--and that was just after 7 October. The drawback then was the Outlaw regional military presence that’s now mostly degraded.

As I stated, I’ve pondered this notion for well over a month and am now sharing it. Yes, it goes against the Universal Soldier’s advocacy, but in this case negotiations will never alter the situation and establish a new paradigm for the reasons stated above. I know China will frown, but it must admit reality and it’s not being asked to enter combat. I see China’s hand behind the Pakistan, Saudi, Turk compact and ponder what else it’s cooking in the back kitchen. Even if China cements a Persian Gulf regional security agreement, there’s still the massive problem of Zionist and Outlaw presence in the region, and China can’t merely sweep them out of the way.

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There’s not much to add to what’s written above. The 12-Day War and what’s being called the Ramadan War were both wars of aggression—the #1 War Crime—initiated by Zionists and Outlaws in concert. Both have suffered strategic defeats which the Zionists publicly admit but Trump and his Gang continually deny. The aim of the wars was the complete destruction of the Iranian state to the point where it would become possible to replace its government and turn it into a vassal state along the lines of Iraq and Venezuela thus cementing total Outlaw Zionist control over the Persian Gulf and Levant Regions of West Asia that would guarantee the completion of the Palestinian Genocide and that of Shi’i Lebanese at a minimum, while the Greater Israel project promised many more would fall victim to the Zionists and their Outlaw allies. That’s what Iran and the Arc of Resistance confront as does all of Humanity. Yes, it’s a horror much like the Nazis perpetrated during WW2. Recently on 6 August a photo comparison was made between Gaza and Hiroshima. Yes, it was hard to tell the difference in the level of destruction. Some have termed that slow-motion nuking.

Geopolitically, the threads of almost all conflicts are tied to the Outlaw’s attempt to retain global hegemony/primacy by denying the advancement of China and Russia in Eurasia and Africa. (All the terror and conflicts you hear about happening in Africa are generated by the Outlaw US Empire’s Terrorist Foreign Legion.) China’s strategy to curtail the Empire has been long in the making—its entire rare earth monopoly is one component that is now showing excellent results as the Empire cannot replace the weapons it’s used in its loss and Europe can’t help either. The financial power of China and Russia is now coming into play as the new international financial system comes online bypassing dollarized choke points that enforce illegal sanctions. The starvation of Wall Street, the Fed and the US Treasury of petrodollar returns is having an impact as Bessant proved by having to use euros instead of dollars to bail-out Japan’s yen crisis, a move that resolved nothing. Undermining Outlaw financial power removes its last major coercive tool now that its munitions are essentially gone and a large portion of the US Navy are close to mutiny. Delivering a financial coup de grace will take close coordination of the Global Majority since it involves the repudiation of dollarized debt as odious. I don’t see that happening until 2027. But plenty will happen in the 4+ months remaining in 2026.

I’ll conclude by promoting Kevin Walmsley’s Inside China/Business substack where he posts a short usually 15-minute solo podcast along with the complete transcript that includes charts and cited articles on what’s usually a trending topic. I’m sure many already know about him, but I’m sure there are some who don’t.

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China’s Huangyan Dao Ecological Reserve in South China Sea

Global Times Editorial Cartoon 2 August 2026

Unable to get Iran to bend or to admit its defeat by Iran, the Outlaw US Empire yanks on the strings of its puppets globally as we’ve seen over that last several days from one side of the planet to the other. Filipino boss Marcos isn’t much different from his father and is all too willing to dance when needed to aggravate China. Marcos doesn’t just dance for Trump; he was just as willing to dance for Biden with over a dozen incidents during Biden’s last two years in office, thus proving it’s an Empire thing. As a former US colony, the Philippines has never truly been free of its grip except for a brief period during Aquino’s presidency. Provocations over China’s islands began in 1997 during the Ramos presidency and have continued ever since. Those provocations led to ASEAN and China adopting the Declaration on the Conduct of Parties in the South China Sea in November 2002 where all disputes are to be settled via negotiations. This 2024 Global Times investigation provides the key historical context:

Huangyan Dao, which is located at 15°07'N, 117°51'E, is formed of coral reefs and is the only island exposed above the water among the Zhongsha Islands. It was recorded in the biography of astronomer Guo Shoujing in Yuan Shi (the History of the Yuan Dynasty) when Guo was commissioned by the Emperor to perform a land and sea survey in 1279. This confirms the discovery of Huangyan Dao by China as early as during the Yuan Dynasty (1279-1368).

Records show that Huangyan Dao is an inherent territory of China, and China continues to exercise sovereignty and jurisdiction over it in a peaceful, and effective manner. In January 1935, the Lands and Waters Mapping Review Committee of the then-Chinese government approved and published the names of 132 islands, shoals, reefs, and sand bars in the South China Sea. Huangyan Dao was registered under the name of Scarborough Reef, belonging to the Zhongsha Islands.

In October 1947, the then-Chinese government reviewed and published a list of name changes to the islands in the South China Sea, in which the name Scarborough Reef was replaced by Minzhu Jiao, still as part of the Zhongsha Islands. In 1983, in a published list of names of the South China Sea islands issued by Chinese national geographical names authority, the island was referred to as Huangyan Dao, with Minzhu Jiao as an alternative name.

The official maps published by the successive governments of China have always marked Huangyan Dao as Chinese territory. Huangyan Dao has been continuously under the jurisdiction of Guangdong Province and Hainan Province. Subsequent Chinese government's announcements and declarations regarding the sovereignty of the South China Sea islands have all stated that the Huangyan Dao belongs to China.

China’s actions at the time were in response to repeated Filipino transgressions and provocations. The investigation further notes:

Experts noted that the Philippines' assertion is a deliberate and absurd distortion of international law. The UN Convention on the Law of the Sea (Convention) allows coastal states to establish a 200-nautical-mile exclusive economic zone, but coastal states do not have the right to infringe upon the inherent territorial sovereignty of other countries. The practice of using the Convention to change the ownership of territorial sovereignty is a violation of international law, and negates the purposes and principles of the Convention.

In 2016, China published a White Paper, “China Adheres to the Position of Settling Through Negotiation the Relevant Disputes Between China and the Philippines in the South China Sea,” The historical roots of the dispute are documented and notes that prior to the 20th Century there was never any dispute over China having sovereignty over its entire South China Sea realm. That ended in the 1930s when France and Japan invaded some of the islands, France being the leading culprit. IMO, any rational, neutral person will conclude based on the evidence and UNCLOS that China retains sovereignty over its longstanding South China Sea realm. But as with the One China Principle, there are forces refusing to obey law and will go to great lengths to provoke an incident, such as what was concocted in the Gulf of Tonkin, to justify a kinetic response to enforce “Freedom of Navigation,” which is what LBJ invoked in 1964.

The current Global Times editorial says this and more:

What is absurd about the so-called "baselines of the territorial sea"? China was the first to discover and name Huangyan Dao and has continuously, peacefully, and effectively exercised sovereignty and jurisdiction over it. The territorial boundaries of the Philippines are defined by a series of international treaties, and Huangyan Dao has never been included in them. You are in no position to delimitate "baselines of the territorial sea" around an island that has never belonged to you. If a neighboring resident barged into my home, drew a line on the ground with chalk, and attempted to claim everything within that line as their own, is that not outright theft?

As usual, China has a very strong case in its favor and knows what’s being done is just another attempt to provoke. Well, a very strong reaction was made as the editorial reports. It’s clear the Outlaw US Empire can’t give up trying to provoke China. As I’ve noted for years, the Empire’s policy is totally flawed and a vast waste of resources. China is not at all like Japan which was defeated in WW2 while China was one of the winners. The peoples of East Asia and the ASEAN nations want peace and the prosperity that comes with trade and development, and that includes the Koreans and Japanese.

As my reporting on Japan has noted since the election of Sanae Takaichi as Prime Minister, that event and her subsequent actions sparked a great rise in concern of Japan’s potential return to Militarism, although this time at the behest of the Outlaw US Empire and against Japan’s national interests. That the Empire is against Japanese public opinion is reflected in recent polling over the nuclear issue, its overturning being one goal of current Empire policy in its confrontation with China. This report informs us:

Seventy-six percent of people in Japan support upholding the country's Three Non-Nuclear Principles of not possessing, not producing, and not permitting the introduction of nuclear weapons into its territory, Kyodo News reported Sunday, citing a nationwide opinion poll, according to the Xinhua News Agency.

A Chinese expert said the poll shows that the majority of the Japanese public remains highly wary of and firmly opposed to any form of nuclear armament or "nuclear sharing," reflecting that the country's Three Non-Nuclear Principles have become deeply rooted in Japanese society as a broad consensus for peace and a fundamental security red line.

According to the poll, which targeted 3,000 people aged 18 and above, conducted in June and July by the nationwide opinion poll organization Japan Association for Public Opinion Research, which is affiliated with Kyodo News, in addition to 76 percent of respondents said Japan should continue to uphold its Three Non-nuclear Principles, 77 percent said Japan should not pursue "nuclear sharing," under which US nuclear weapons would be deployed in Japan and jointly operated, the Ryukyu Shimpo reported on Sunday.

This result when combined with recent Korean polling and China’s excellent relations with most ASEAN nations instill hope The East Asia/Western Pacific region will continue to be a bastion of peace despite all attempts by the Empire to sow conflict wherever it can. Marcos has big problems at home and needs to direct attention away from his inability at obtain solutions which are a direct result of his master’s wars. China could provide some solutions, but provoking China isn’t the way to ask for help. And China’s actually happy to help provided the prospective partner shows that help is indeed wanted via its actions. [My Emphasis]

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This was posted by Simplicius and needs to be seen by more than his readers, although the Gym contains many.

The current Persian Gulf conflict’s been brewing for decades. I recall very well the Iranian Revolution, expulsion of the Shah and capture of the US Embassy and those who were unable to escape. I was very aware of Iranian history to that point and felt Iranian actions were completely justified given Outlaw US Empire crimes to that point. That the Empire‘s first choice was a kinetic response to alter the situation instead of negotiate was no surprise. That cemented Carter’s defeat by Reagan since Iran wasn’t going to release the hostages to allow Carter to be reelected. Reagan didn’t prove any better and IMO was the eviler administration both domestically and imperially. The Empire’s descent into darkness has worsened the global situation and West Asia immensely. The conflict to redeem the situation and bring peace to the long-suffering peoples of West Asia is now global as that remedy can only be obtained by ending hegemony and the exceptionalism that powers it.

So, share the image as billions globally would like to get their hands around Trump’s throat and those of his Gang too.

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Capital is a fundamental component of economic development regardless the political-economic system that employs it. What renders Capitalism deadly is the lack of regulation and not dedicating its purposes for the good of the general public, which could easily be done via corporate charters and business law.

A few articles ago, I informed readers of an English language Chinese publication called The China Academy that provides another source for Chinese views on critical geopolitical and geoeconomic issues. The most major distinction between China’s system and the West’s was its relegation of finance to the public realm at the outset of the New China’s existence in 1949—perhaps the most important aspect of Communism/Socialism the privatized West can’t stand and will wage war to overturn as we’ve seen with USSR/Russia/Cuba and a smattering of others. Financial control as I noted in my last article is the primary pillar of the Class War between Creditors and Debtors that’s been ongoing for 4,000+ years. One of the reasons the Kuomintang was so poor at governance was its very deep level of corruption—easily as deep as the Trump Gang’s—and is the primary reason for its being overthrown. The Chinese are outstanding students, and they’ve studied the West and the Outlaw US Empire for decades to see what China might use and what China must avoid. China decided it must avoid the accumulation of great wealth by individuals for political usage. The Jack Ma example is the best available. China’s been extremely protective of its financial system because they knew it was weaker than the West and that the West has tools at the ready to undermine and capture it setting the clock back to 1900. In 2024, Xi Jinping gave a landmark speech at a closed venue about making China into a financial powerhouse and outlined the steps to take. That speech was kept classified until February 2026 when it was published and I reported it in-full. What many didn’t know was that China had already been working hard for two years and had already instituted some of the required steps. China learned that its industrial success would attract Capital wanting to benefit from that success, and so it has. Several articles I’ve read speak about the entry of Big Capital into the development funding mixture augmenting what the CPC funds via the budget. IMO, it’s very possible that Hong Kong and Shanghai displace New York and London as the planet’s main financial centers—yet another reason why China’s being targeted by economic war. Now that the table’s set, let’s read what Dr. Yu Bin has to say about the issue:

Why China Doesn’t Have a Wall Street and Why It Doesn’t Want One

Western market design relies on post-hoc tax extraction to balance private asset ownership with public goods. China, through public ownership and robust market regulation, flips the script:

Finance is usually presented as a technical subject: interest rates, credit, stock exchanges and risk. But beneath all of these mechanisms lie political questions.

Who owns the productive wealth of society? Who receives the gains when finance succeeds? And when it fails, who is left carrying the losses?

China’s answer is neither the abolition of markets nor their elevation into a ruling principle. Financial markets are permitted to grow, direct investment and reward innovation. But they are expected to remain subordinate to public goals.

That distinction is central to understanding China’s socialist market economy.

Public Ownership Changes the Equation

In a conventional capitalist economy, most productive assets are privately owned. Governments can reclaim part of the resulting profits through taxation, regulation or voluntary donations, but the wealth belongs first to private owners.

This creates a permanent political struggle. Governments need revenue to fund healthcare, education and social security. Companies and wealthy individuals, meanwhile, have strong incentives to reduce their tax burden, move assets abroad or shift profits into low-tax jurisdictions.

Public ownership changes this relationship.

When the state holds major assets on behalf of society, the public does not need to rely entirely on taxing private wealth after it has been created. It already possesses a claim on the income generated by publicly owned enterprises.

China’s state-owned companies operate across banking, energy, telecommunications, transport and heavy industry. Their profits can be reinvested, paid into public budgets or transferred to social funds. In 2017, the State Council formalized a program transferring portions of state-owned capital into social security funds, explicitly linking public ownership with long-term welfare provision.¹

This does not mean that every hospital, school or pension payment can be traced directly to one state-owned company. China’s fiscal system is far more complicated than that. The point is structural.

A government that owns productive assets has sources of revenue beyond taxes on private capital. Public welfare does not depend entirely on persuading private owners to surrender part of their gains. [Russia also enjoys this.]

That is the practical meaning of socialist ownership. It is not merely a legal label attached to a company. It gives society a permanent economic claim on part of the country’s productive capacity.

The contrast with a social-democratic welfare state is important. Northern European countries also provide extensive public services, often funded through high taxes. But taxation and public ownership are not the same thing.

Taxation asks private owners to transfer part of their income to society. Public ownership begins from the position that society already owns part of the income-producing asset.

The Ant Group Test

The limits placed on Ant Group offer a clearer view of how this principle operates in practice.

In November 2020, Chinese regulators suspended Ant Group’s planned dual listing in Shanghai and Hong Kong, which was expected to become the world’s largest initial public offering. The Shanghai Stock Exchange cited changes in the financial regulatory environment and concerns that Ant might no longer meet listing requirements.²

Outside China, the decision was widely portrayed as a political attack on private enterprise. But this reading ignores the financial structure beneath Ant’s rapid expansion.

Ant used data collected through Alipay and its wider platform ecosystem to assess borrowers, market credit products and facilitate consumer and small-business loans. Yet much of the underlying money was supplied by partner banks and other financial institutions.

The platform could therefore earn technology and service fees without carrying the same proportion of credit risk as a traditional bank. If borrowers defaulted during an economic downturn, a significant share of the losses could fall on the regulated banking system.

This raised a basic question: was Ant primarily a technology company, or was it performing banking functions while avoiding the capital requirements and regulatory burdens imposed on banks?

Chinese regulators ultimately chose substance over branding. A company does not cease to be a financial institution merely because it describes lending as technological innovation.

The broader issue was not opposition to innovation. It was opposition to a model in which gains could be privatized while risk was shifted toward banks, depositors and the wider financial system.

Ant also represented a second problem: the commercial use of personal data.

Digital platforms collect enormous quantities of information about identity, purchases, location, social connections, health, travel and personal habits. That information can be used to generate credit scores, advertisements, lending decisions and financial products.

The company receives the commercial value. The individual whose life produced the data is rarely compensated.

At the same time, users bear the risk of surveillance, discrimination, data leaks or misuse. The platform profits from the information, while part of the potential cost remains with the public.

Economists describe this kind of imbalance as a negative externality. A factory that pollutes a river keeps the profit from production while passing part of the cost to nearby communities. A digital company can operate in a comparable way when it monetizes personal information without fully bearing the social cost of collecting and controlling it.

China’s Personal Information Protection Law, which took effect in 2021, strengthened requirements governing consent, data processing, sensitive personal information and the responsibilities of large digital platforms.³ The law reflects a broader principle: technological innovation does not give companies unlimited ownership over the lives and behaviour of their users.

This principle matters far beyond Ant Group. In the digital economy, data increasingly functions like labour, land or capital. It is an input into production. Yet the legal and economic rights attached to it remain unsettled.

Who owns personal data? Should individuals be compensated when companies profit from it? How much control should platforms have over information that users cannot realistically avoid producing?

No country has fully answered these questions. But China has shown a willingness to stop companies first and settle the rules before allowing them to become too powerful to regulate.

Markets as Instruments

China did not always possess modern capital markets.

Under the early planned economy, state institutions allocated investment directly. Enterprises did not need to raise capital through public stock exchanges, private equity or venture funds.

Reform and opening changed that system. Private companies emerged, state enterprises became more commercially oriented, and new industries required more flexible forms of financing.

China consequently built stock exchanges, bond markets, venture-capital networks and specialized institutions such as Shanghai’s STAR Market, which was created to improve financing for science and technology companies.⁴

The existence of these institutions does not, by itself, determine the nature of the system.

A stock market is a mechanism. It can finance productive investment, but it can also reward speculation. It can help innovative companies grow, but it can also concentrate wealth and political influence. It can serve industrial development, or it can draw talent and capital away from the real economy.

The relevant question is not whether a country has markets. The question is what those markets are expected to do—and what happens when they cease to perform that role.

China’s position is that finance should support production, innovation and national development. It should not become an autonomous power capable of dictating policy to the state.

The Real Divide

The divide between capitalism and socialism is often reduced to whether private companies, billionaires or stock exchanges exist.

That is too shallow.

China plainly has all three. The deeper issue is whether private wealth can translate itself into unchecked political power.

In many Western economies, large financial and technology companies influence legislation, fund political campaigns, shape public debate and negotiate with governments from positions of enormous strength. Regulators are often expected to bargain with the industries they supervise.

China’s model rests on a different claim: capital may contribute to growth, but it does not possess an independent right to rule.

That power can be applied inconsistently. Regulation can create uncertainty, and state authority is not automatically wise simply because it is strong. But weak government is not neutral either. When the state retreats, private power does not disappear. It fills the space.

China therefore allows finance to operate but reserves the right to define its boundaries.

Markets may help decide where capital is invested. They should not decide what society is for. [My Emphasis Bolded Italics]

Endnotes

[1] State Council of the People’s Republic of China, “China to Transfer State Assets to Social Security Funds,” November 18, 2017, https://english.www.gov.cn/policies/latest_releases/2017/11/18/content_281475941833500.htm.

[2] Shanghai Stock Exchange, “Decision to Suspend the Listing of Ant Group Co., Ltd. on the STAR Market,” November 3, 2020, reproduced in Ant Group, “Announcement—Suspension of Listing,” HKEXnews, https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1103/2020110301888.pdf.

[3] Standing Committee of the National People’s Congress, Personal Information Protection Law of the People’s Republic of China, adopted August 20, 2021, effective November 1, 2021, official Chinese text: https://www.gov.cn/xinwen/2021-08/20/content_5632486.htm.

[4] Shanghai Stock Exchange, “STAR Market,” official English-language portal, https://star.sse.com.cn/star/en/.

As we discovered, the article’s title is misleading since China has stock and bond markets. The main difference is Capital and its influence is heavily regulated and not allowed to go beyond the set boundaries. Capitalists are to remain capitalists and not meddle in China’s political affairs. We do see human failure often enough where some official is caught taking bribes, an offense that can merit the death penalty that proves China’s seriousness on the matter. One possible reasoning is political involvement takes business away from concentrating on what it’s supposed to be doing—innovating, modernizing, opening new markets, etc. China has a massive very well educated political class that’s proven itself very adept at governance, although like all humans it errs occasionally. There’re several instances in US history where to promote the public welfare the federal government needed to intervene in markets, energy production and electrification most prominently during the Great Depression. There’s also what was known as the American System promoted by Federalist then Whig politicians that called for government investment in fundamental infrastructure projects like roads, bridges and canals. (It’s a shame railroads weren’t included at their outset.) The Anti-Communist Crusade was all about the preservation of private ownership versus public ownership of Capital and related assets. It’s easy to see the very strong anti-public bias of the wealthy who fueled the Crusade and its propaganda. And with deregulation government was captured by Neoliberal Dogma where the public domain is seen as something to devour to the point where nothing much is owned by the general public—even your house and car are owned by the bank that provided the credit for that purchase. The Empire currently has 25%+ of its people living with their parents because they can’t afford housing. And those people have no incentive to procreate. In his Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy, published in 2015, Dr, Hudson described where Neoliberalism and adherence to its dogma would lead, and we’re living it now. The nations that rejected the West’s prescription have prospered, which is fundamentally why they’re targeted by economic and/or kinetic warfare. China avoided that by adopting what seem to be rather simple ideas related to the common good that provide the foundation for avoiding societal unrest and raising almost a billion out of poverty. It’s easy to see why the West doesn’t want the Global Majority to emulate the Chinese model of development.

The test for China is to keep private capital closely regulated. Chinese history is filled with tales of landlords exploiting the peasantry while corrupting the local government charged with disciplining them, while more recent examples during Chaing Kai-shek’s rule and what transpired on Taiwan during the dictatorship there remain living memories for many. I’m sure some readers were surprised at China’s view of personal freedom versus corporate designs and the asking of fundamental questions regarding that relationship that certainly aren’t being asked in the West to the same degree. The question being asked by a growing number of people is will we have Socialism or Barbarism and how do we get to the former from the latter.

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Several drafts of the idea for this essay sit in the drafts file because they were destined to become books, far too long for the Gym. Readers who’ve digested the items I’ve provided about China know what Xi Jinping’s goal is and that Russia and most of the Global Majority agree with that goal which is to eliminate hegemony, which means Imperialism and Colonialism must die. However, the roots of those isms aren’t addressed, a problem that surely annoys FM Lavrov who insists that the roots of problems must be examined and solved for the problem to be put to rest—period. The root beneath those isms is another—Exceptionalism—a problem that’s plagued Humanity for a vast number of centuries and likely predates the emergence of modern humans 1600+ centuries ago. Exceptionalism differs from the distinctions present in Nature like sexual dimorphism (odd that has the ism suffix) or the existence of trophic systems while what appear to be contradictions like symbiosis exist. Exceptionalism is a socio-cultural trait where one group considers it to be superior to another and treats that other as inferior. When and how it arose isn’t as important as knowing about it and what it makes possible—it provides the fundamental rationale for warfare and slavery. The idea that Humanity consists of a plethora of different races is now rubbish making racism a psychological deviance that can only exist if it’s taught to others. Many have read me write “You have to be carefully taught to hate and fear,” words penned in 1948. And for centuries, all too many people were carefully taught and that deviance—crime—continues to occur daily. It feeds the Genocide in Palestine; it feeds the war against Iran; it feeds the war against Russia; it feeds the war against China; it feeds social turmoil within India; it feeds racism everywhere; and it feeds the Class War. I recently listened again to an Anti-War song from the 1960s, “Universal Soldier,” written in 1963 by Buffy Sainte Marie whose lyrics are worth reading for those who need to remember it while introducing it to those who never heard of it:

He’s five foot two
and he’s six feet four,
he fights with missiles and with spears.
He’s all of thirty-one
and he’s only seventeen,
He’s been a soldier through a thousand years.
He’s a Catholic, a Hindu,
an atheist, a Jain,
a Buddhist, a Baptist and a Jew.
And he knows he shouldn’t kill
and he knows he always will
kill you for me my friend and me for you.
And he’s fighting for Canada,
he’s fighting for France,
he’s fighting for the USA.
And he’s fighting for the Russains
and he’s fighting for Japan,
and he thinks we’ll put an end to war this way.
And he’s fighting for democracy,
he’s fighting for the Reds,
he says it’s for the peace of all.
He’s the one who must decide,
who’s to live and who’s to die,
and he never sees the writing on the wall.
But without him, how would Hitler
have condemned him at Libau?
without him Caesar would have stood alone.
He’s the one who gives his body
as a weapon of the war,
and without him all this killing can’t go on.
He’s the universal soldier,
and he really is to blame,
his orders come from far away, no more.
They come from here and there and you and me and brothers can’t you see,
this is not the way we put the end to war.

Donovan sings it here.

Sixty-three years later there’s been very little effort to put an end to war. Until those three isms are neutered and hegemony is eliminated it will be very difficult to put an end to war for those isms are cited by those with power to continue to make war because they benefit from it. Yes, it’s one of the fundamental components of the Class War that’s been raging ever since the institution of private lenders and their ability to charge interest on the monies they provide to debtors roughly 5,000 years ago. It’s amazing considering its importance that very few historians have written about the history of this ongoing Class War with the task falling to anthropologists and economic historians. David Graeber and Michael Hudson are the two top investigators who’ve published several thousand pages to inform us. Tied to the Class War is a psychological malady—the need to dominate—that arises in some. Some say it’s related to the Alpha Male trait that exists in Nature. IMO, it’s a personality disorder, the epitome of which is displayed by the behavior of Donald Trump and many members of his Gang—Sociopathology, which can easily lead to far worse behaviors if the sociopath is able to acquire power, like megalomania and pleonexia. For centuries a class of people in the West with that behavior were able to gain power and wealth and became what’s known as the Ancien Regime who didn’t become an organized menace until the formation of the Roman Empire and its institutions, the most diabolical being the Catholic Church, which immediately became an exceptionalist, imperialist and colonial entity upon its becoming the Roman Empire’s “State” Religion. Upon it becoming an institution, a class of people within it became the basis for what we know today as the Epstein Class or Globalist Syndicate. One could call it a sociopathic institution. I write the above to show the depth of depravity Humanity must overcome to deal with our now ongoing Third World War.

One of the drafts explains why the war’s being waged—the Collective Western Empire is rapidly declining and desperately trying to retain its power—its Exceptionalism—and that also includes its #1 proxy—the Zionists who are charged with denying the land bridge between Eurasia and Africa to the rising Eurasian powers who want to link the two continents and thus remove the last Maritime Power’s ability to control commerce and deny it any further Imperialism and Colonialism. That’s what the Greater Isreal Project is all about and why the West has supported the Zionist’s genocide of the region’s people’s—not just the Palestinians, all of them, especially the Persians. The war being waged on Russia is for the same longstanding reasons—to eliminate Slavs, their religion and capture their resource laden lands and seas. And the war against China is to keep them from connecting the Eurasian and African nations into one interconnected market that benefits everyone, not just the top class. It’s too late to prevent China from becoming the world’s leading economic and moral power. That last provision—moral power—is why we’ve been subjected to so many narratives about China’s immorality and cruelty, which are actually projections of longstanding Western behavior. The key fundamental China did was to keep finance as a public utility until it became developed to the point where it could control any private finance it allowed to operate. China is a keen student and has learned a great deal from the West, mostly what not to do if a stable society is the goal. The West was very hopeful when it allowed China to become a WTO member since they thought it would soon succumb to Neoliberalism Dogma. Instead, China beat the West at its own game so quickly that once the West realized what was happening it was too late.

China is trying to end war without directly fighting a war. Its Global Initiatives have inspired the Global Majority and those in the West who know of them and their intent. I’ve noted that Russia and Iran (there are others too) by defending their sovereignty have become China’s tools in its quest whether they wanted to or not—Fate has made them so. Lots of chatter has stated that after Russia and Iran are defeated China’s next on the menu, and that seems to be a correct assessment. If you’re like me, you’d think that the West would be much better off if it collaborated with China and the Global Majority to elevate Humanity in the Win-Win manner that creates Harmony—if you can’t beat them, join them. But the West’s too addicted to its megalomania, pleonexia, and Zero-sum behavior to even contemplate such an arrangement. So, it appears that we’re stuck with war, at least until the West runs out of munitions because it is denied access to the materials required to make modern weapons—rare earth metals and other key resources that are controlled by China and Russia. The key question: Can the nuclear genie be kept in its bottle? If the level of hatred was less, I’d say there’s a good chance it will remain contained. Unfortunately, there are some very deranged and very hate-filled people within the Zionist, Neocon, Neoliberal, and Christian-Zionist world that have access to nukes and might use them as a means to show their Exceptionalism.

How long will this war last? Too long is all I can say. If the Outlaw US Empire goes Full Fascist with Trump and civil war erupts here, the war will end when that civil war ends. If the Empire remains as it is now, perhaps by 2033 after two more presidential administrations. Unfortunately, the danger of full-blown fascism taking over the Empire is a very real possibility given those now too close to power. And if the Zionists use their nukes, all current predictions become useless.

It’s more than the Universal Soldier. Some will say it’s Human Nature that drives war and that it’s impossible to remove from our beings. IMO, it’s something that can be solved albeit with lots of work and enlightened global leadership—and some careful teaching.

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While we usually learn more about the state of the world from presser Q&A sessions, we learn more about who Mr. Sergei Lavrov is through the interviews he gives, sometimes only a little while at others quite a lot. This interview is well balanced between the two areas. There are times when I get the impression from him that he doesn’t think of himself as anyone special, that he’s merely a creature of circumstance. And while that’s true for most people, he now has the reputation as being the world’s #1 diplomat having been Russian Foreign Minister since 2004. He’s now 76 and recently finished his latest tour of several African nations. Russian media in their interviews seldom ask about the nature of current familial relations and this interview is no different, although we do learn something of his youth. I tend to like that approach, but then I’m not looking for gossip material since there’s plenty of dirt to explore in geopolitics. And now, Mr. Lavrov:

Question: Mr Lavrov, you are the person with whom our citizens certainly do not need to be introduced. But I know how to surprise. Your Sinhalese language. Here, say hello in Sinhala.

Sergey Lavrov: (speaking in Sinhala).

Question: This is the second time you have been in the pre-election federal “five” of United Russia. [The top five candidates on the party's federal list for the State Duma elections.] What is it for you? Of course, it is a team effort. Someone, probably, is the only one responsible. You probably know exactly who. Is it a trust, an assessment or an additional burden for you? Or a reward?

Sergey Lavrov: That’s for sure. Probably, there is no need to talk for a long time here. But the main thing for me is the decision of the leadership to recommend me to this “five”, which was approved at the congress of United Russia.

I have good relations with the leaders of all parliamentary parties without exception. Having relations with all factions and parties that are represented in the State Duma, of course, we are interested in them helping to make decisions and approve laws that enshrine our foreign policy so that it is as effective as possible and enjoys broad support.

My presence in the “five” by the decision of the leadership also reflects the circumstance associated with the very difficult period that the country is now going through, which depends to a decisive extent on how we conduct a special military operation against those who unleashed a war against Russia. I mean both our fighters on the front line, and the rear in all their senses.

On the other hand, of course, foreign policy and diplomacy are also called upon to play a major accompanying role, given how all our Western interlocutors are trying to deceive us: they promise one thing and do another. But we are already used to it. We should have gotten used to it. But every time you want, you know, according to the state of the Russian soul, to believe in the best.

But once patience breaks. It is not for nothing that shortly after the start of the special military operation, Russian President Vladimir Putin, commenting on our relations with the West and Europe at one of the events, summed up: “It will never be the same as it was before February 2022.”

Question: The West has gone crazy. No one is going to follow any old agreements that have worked for decades. Of course, everything is being scrapped. We know and feel it. In this situation, do we have anything to offer the world as an alternative?

Sergey Lavrov: First of all, we must first defend our legitimate interests. In order to offer the world something, we must win. The world is watching with great attention, some with bated breath, how this war imposed on us by the West, in response to which President of the Russian Federation Vladimir Putin announced the start of a special military operation, will end. It’s not that we’re surrounded by unscrupulous people on this planet, but it’s life. Everyone wants to understand, paraphrasing S.S. Bodrov: “where is the strength, brother” and “where is the strength, brother”?

You are absolutely right when you say that now they are not even trying to hide, disguise or make up anything. First, they openly announced a “strategic defeat” to be inflicted on Russia. Then, observing the situation on the line of contact, in fact, at the front, they moved away from this rhetoric.

Now, when Vladimir Zelensky, constantly retreating in Donbass and other areas of the front, has moved from hopelessness to openly terrorist activities, and they see how many of his long-range weapons are reaching their goal, they have begun to promote this phase of what is happening as a “turning point.” Like the fact that “the Ukrainian character can still defeat Russia”, which, they say, is an “aggressor” and wanted to conquer all of Europe after Ukraine. The slogan of inflicting a “strategic defeat” on Russia appeared again. The slogan of “decolonization” of Russia has appeared, which once again openly means the “dismemberment” of our country. The revival of hopes that the West also experienced at the stage of the disappearance of the USSR, looking at how separatist movements appeared in the Far East, in the Urals, not to mention the Caucasus. They cherished the hope that all this would fall apart now and it would be possible to “pick up” piece by piece. In my opinion, they were already figuring out who should get what.

Question: One step before that. We had “Ural francs” from the “Ural Republic”.

Sergey Lavrov: Yes. Everything was on the verge.

The fact that Boris Yeltsin found the courage to hand over power ahead of schedule, and the fact that he handed over power to the man who at that time was the only one who was able to preserve Russia, is a historical turn that means that Russia has been “marked” by God. When it is really hard, we are helped from above.

Now that they are again talking about a “strategic defeat”, when they are actively supporting our relocators, who are organising all sorts of anti-Russian communities in Europe and raising funds to continue some kind of “underground struggle” for the split of the Russian Federation. They no longer hide it at all.

Our central channels show everything that the West is up to. Probably, it is important for everyone to see this in order to understand that the situation is serious. President of Russia Vladimir Putin does not hide this. The entire “civilized” world, which calls itself that, has taken up arms against us.

Question: Until 2007, before Vladimir Putin’s Munich speech, they “loved us, their souls are in their arms.” Now at least everything is more honest.

Sergey Lavrov: They thought that we were “in our pockets.”

When President Vladimir Putin came to power, he was absolutely open to an equal strategic partnership with the West. The fact that now our former allies, namely the Anglo-Saxons, with varying degrees of frenzy (London is larger, the United States a little smaller) are fighting against us through Ukraine, pumping it with the most modern weapons, announcing that they will produce new lethal and high-tech anti-missile systems specifically for Ukraine, this has never happened.

We started the special military operation in conditions when society was calm, comfortable, and generally satisfied with its standard of living.

And the fact that this also did not suit the West is a fact. They did not want society to be calm, they wanted to stir it up against the authorities, they were preparing provocations. They cannot compete fairly. They are afraid of fair competition in everything.

Hence the sanctions – to maintain positions that are irretrievably slipping away after five hundred years of Western domination.

Therefore, once again about the state of our society. This is important for me as a citizen, as the Minister of Foreign Affairs, who conducts the foreign policy of the President of Russia, which should reflect the mood of the people. Of course, they want to “build” trouble here. President of the Russian Federation Vladimir Putin recently mentioned this. We are making progress on the front line every day, not as fast as we would like, but saving people. They make up for their failures on the very line of contact, trying to undermine the way of life to which people are accustomed with terrorist acts. Unmanned attacks are already being felt in Moscow and St. Petersburg, and in the border areas and regions of the Russian Federation, people are experiencing all the hardships of martial law. To be honest, I am very proud that the people perceive this correctly, as history and those who defeated Nazism told us. Moreover, now we are at war with the direct followers and descendants of those Nazis. In the same composition. German Chancellor Frank Merz openly says that they will again be the main ones in Europe. If you are so frank, be ready.

Question: You said that before offering the world an alternative world order, we must ensure our national interests, and for this we must win. What are our national interests in the foreign arena?

Sergey Lavrov: That we should be an independent power, an independent civilisation. So that our borders are reliably secured. So that no one even tries to think about advising us on how to arrange our lives inside Russia. And so that all the peoples of the Russian Federation continue to have the rights guaranteed by the Constitution: to education, to the preservation of their culture, traditions and religious beliefs.

In this capacity, Russia will be interested in cooperating on an equal footing with other major centres that are being formed, such as China and India. These major players, of course, will stand up for justice together with us in the hope that the West, and Europe in particular, will also come to their senses one day and will be ready to integrate into the new systems of relations on an equal footing and honestly. So far, the West is not ready for this. The United States is also absolutely not ready.

And while this wait is dragging on, the new centers of power are forming their network structures. One of them is BRICS, where the leading economies of the world majority are drawn together and resolve issues differently from the same NATO, where America commands, and everyone else obsequiously tries to somehow appease the hegemon. And this, of course, is not the European Union, where the Brussels bureaucracy has usurped the rights of national governments.

Neither in BRICS, nor in the SCO, nor in the EAEU, nor in the CIS, nor in the CSTO, can anyone give a single example when Russia, China (if we talk about the SCO and BRICS), or anyone else would demand something. Always frank, mutually respectful negotiations with an eye to compromise.

Question: 35,000 sanctions. Probably, in general, a historical record for the existence of mankind and the state. How do we manage to survive? Thanks to what?

Sergey Lavrov: Of course, first of all, thanks to our ancestors, who created such a country. The richest, largest country in the world, with access to the seas and oceans, which makes it possible to develop trade and ensure our security, including with the involvement of the navy. Of course, industrialization, which nevertheless began in the Russian Empire. There is a lot of talk about this now. Both the railways that connected the whole country were laid then, and many of the foundations of ferrous metallurgy. Industrialisation was already achieved in the days of the Soviet Union, when colossal successes were achieved in the shortest possible time, in a decade or 15 years before the start of the Great Patriotic War. And this largely helped to prevent a disaster.

But still, our main national quality is something that the West does not have. In our civilization, there is respect for those who created it, built cities, defeated enemies.

We also had the time of Alexander Gorchakov, who, after we were defeated in the Crimean War for reasons that makes no sense to talk about now, said: “Russia is not angry, Russia is concentrating.” We don’t need to be angry now, either. Being angry, wasting your nerves is the worst thing. We need to concentrate. But healthy anger is quite appropriate. Not to be angry, but to gain healthy anger.

Anger, including from the point of view of the need to accelerate in everything, in the direction of a technological breakthrough (there is a lot of talk about this now). And “maliciously” decide that we must do this. To be angry with myself – I want to achieve everything as soon as possible. And we need the same healthy anger on the external front. Do not fall into any hysterics, but just conclude inside yourself: “Just check!” Trust – we’ll see later, but first – check, and most importantly – bend your line.

Now, again, our Turkish neighbours say that they are ready to help in Ukraine again, but at the same time they immediately sign NATO documents, which say that it is necessary to restore the territorial integrity of the Kiev regime. There are other proposals: the current US administration is again saying that they will only “deal with Iran“ and will help us again. We have an army and a navy, and now we also have aerospace forces (however, they have existed for a long time) and troops of unmanned systems.

And we have people. When they say, let’s “resolve” it somewhere, let everything remain as it is, we will freeze on the contact line, and then think about how to find a compromise. First, we have a sense of historical continuity, our historical identity and national, multinational pride.

The West is now telling us that they will think about when it is worth resuming talks with us, but these will be talks where Europe, America, Vladimir Zelensky and President of Russia Vladimir Putin would sit at the same table. And before that, it is necessary, in their opinion, to declare a truce, a ceasefire. After that, they, the Westerners, will bring in multinational forces led by France and England and then, therefore, they will sit down to talk. What does this mean? This is an ultimatum. If we freeze on the line of contact, the Nazi regime will remain. They will not recognize any territories where there were referendums.

But the quality of our people is still unique in that, for example, do you remember how V.V. Mayakovsky in his poem “Broadway” had the following line: “The Soviets have their own pride”? This is not because the Soviets had it, but because the Russians have always had it. This pride remains.

Question: What were you like in the yard? You just spoke about healthy anger. Did you beat or “turn on” diplomacy? We have a familiar principle, “if a fight is inevitable, strike first.” We know whose principle. And what is yours?

Sergey Lavrov: I grew up in a village, in the city of Noginsk, formerly Bogorodsk. Now I am actively working with the Moscow Region, with my friend, Governor of the Moscow Region Alexander Vorobyov, to restore the name Bogorodsk. There are already some toponymic changes, but the city itself is still Noginsk. And the part in which I lived was a clean village. From the railway station, to the left is the city, and to the right are two rows of wooden village houses with all the amenities as they are equipped in the villages. And we, to be honest, as boys, when the trains came, ran where the freight train was left, and looked at what was brought in the cars. If there were watermelons, then we were hooligans.

Question: We know a lot about you. But they never asked about your grandparents. Who were they? Whose genes, abilities, talents are in your blood?

Sergey Lavrov: Mom and dad divorced when I was just a few months old. They both graduated from the Institute of Foreign Trade, which is now part of MGIMO. Actually, that’s why my mother lobbied for my attempt to enter MGIMO and did it not without success. After the distribution, my parents went to work at our customs in Brest.

Fate decreed that then I began to live only with my mother. My grandmother was in Noginsk. She was the head nurse there. My grandfather was the head of the railway station in Noginsk. He was responsible for sending echelons to the front throughout the war. Two of his brothers were at the front and both returned.

My grandfather died early, when he was very young. He was 67 years old. And my grandmother lived longer. Later she moved to Moscow with us. And I loved them very much. They were truly friends to me. They defended me when they felt that I had done something that my mother might not like. As it usually happens.

Roots play an invisible role. You don’t think about the fact that you have so many generations. That’s not the point. The fact is that you already live for them. Just as we are now fighting for those who defeated the Germans and the whole of Europe along with them.

Question: You are engaged in rafting. Is it true? Are you still studying?

Sergey Lavrov: Probably, sometime in 1984-1985, our company decided to have a wild holiday. One of our friends, who studied a year older at MGIMO, was from Ufa. He invited us, together with another of our friends, to go to Ufa for a week, for the summer, to go to the river, to fish. We went to the river, there are lakes there too. We took a boat, went for a ride, fished on the Belaya River. It does not flow at all. Smooth, calm. And we decided to come next year, gathered a team of five people. We chose the Biya River, already in Altai. The river flows out of Lake Teletskoye. But before going there, we learned that several rivers flow into Lake Teletskoye, including the very turbulent Chulyshman River.

We began to work out options. As a result, they agreed. From Lake Teletskoye we climbed twenty kilometers along a very difficult river. We were “thrown” into this lake. We all miraculously remained on the rafts, did not capsize. We were dragged by boat along Lake Teletskoye, and then rafted down the Biya River. After that, we got to Katun for the first time. We drove it from top to bottom.

First, the middle course. Where the Rafting World Cup is held. The rapids are about 4-4.5, there are elements of the fifth category. Once we rafted from Mount Belukha itself. A very interesting route. You need to stay on the plateau for the first day. Everything is barely moving. And then it plummets down. And there are five fantastically difficult rapids on this section. Adrenaline is produced instantly.

Question: Did you turn over?

Sergey Lavrov: My raft did not. We sailed on two rafts. Colleagues turned over a couple of times. But they pulled it out.

We spent almost 20 years on Katun. I mean, not winters, but years. We have a lot of friends there. Fantastic land.

Question: In the evening, you moor to the shore, take out a raft, make a fire, and pitch a tent. And then the guitar and the song?

Sergey Lavrov: Guitar and song, yes.

Question: Approximately how many songs do you play on the guitar? I know that they probably did not count.

Sergey Lavrov: I love Vysotsky and Boris Okudzhava very much.

Question: Do you play and sing?

Sergey Lavrov: Yes.

Question: Will we ever hear it? It is necessary.

Sergey Lavrov: I will take advantage of your opportunities in our media space. Without any fees, if anyone is interested. I accept your opportunities.

Question: Interesting. I really want to hear.

Everything is interesting to us. Because journalists like not only to spy on you, but also to eavesdrop. Especially when you think the microphone is muted.

If you registered the trademark “morons, with one word”, then you would probably become a rich person. Because this T-shirt was worn by almost all my colleagues, and so was I. It was sold in thousands of copies. Is this your character? Or does it pop up, just based on some situation?

Sergey Lavrov: It jumps out. We are all living people.

Question: But your colleagues say that you do not allow such words at all at work.

Sergey Lavrov: Liars. I’ll remind them. This, of course, is a hypocritical statement. When something suddenly does not upset you, but unexpectedly somehow and incorrectly someone does something, there is a hot word. I have never thought about the trademark.

By the way, after Alaska, where I appeared in a “USSR” sweater, they called my assistants and thanked them. They said that they were ready to impose these sweaters on my friends.

See, when it draws people... Now there are many examples. They never disappeared. There was a special wave of nostalgia for the USSR.

The Soviet Union – it is, in essence, about our origins. People do not simply yearn for a prosperous, comfortable existence. There is a profound sense of belonging to what one’s ancestors accomplished under the most arduous conditions. They built this country. They lifted it out of poverty. They established the conditions for the coexistence of hundreds of languages.

And when people put on these sweaters, they feel that... Even those who did not live in the Soviet Union were told by their parents and grandparents. Therefore, it seems to me, as Vladimir Putin said, that those who do not regret the Soviet Union have no heart, and those who want to return it have no head. As for the heart, all this is preserved. And about the head, thank God, in the current situation in Russia there is a head, and it is sober.

Question: You have already mentioned that our country, the Motherland, is kissed by God and protected by God. Are you a believer yourself?

Sergey Lavrov: A believer. My grandmother baptized me secretly from my mother. My mother was a communist. She herself went to be baptized at a very mature age, after the situation with the collapse of the Soviet Union took place.

My grandmother carried me to be baptized in Noginsk. On the bank of the Moskva River, there is still a temple. God grant that he will continue to operate there. I still have the cross that was put on me then. It was a good time.

Question: Has anything happened in your life that cannot be explained by anything but a miracle, except God?

Sergey Lavrov: Probably, it has happened. I would not like to recall some stories.

But it did happen. We were on a canoe trip down the Katun River. At a certain point, we got out of the boats, got horses and took them to the mountains. I have been practicing horse-ridding since my university years, so I had some skills, which was not the case for others. All of a sudden, when we were riding back from the mountain, the horses broke into a gallop. We were squeezed between a mountain to the right and a deep abyss on the left. And one of my friends lost control of his horse. He had every chance of knocking me down. The fact that I was able to avoid this was a true miracle.

As for political upheavals, I would probably refer to the putsch. [August 1991] Going back to where we started, the thinking at the time consisted of saying: “Well, Russia is a toothless, obedient nation, but it must also do everything we tell her.” When it turned out that Russia is disobedient and that it has its own pride, but this began to manifest itself even before the Munich speech of 2007, which you mentioned, when Vladimir Putin simply very frankly and honestly presented everything in the context of a discussion that was largely permeated with hypocrisy. Before that, there were also moments, but we did not lose hope that the West would come to its senses, that all these were just temporary relapses that it had to suppress in itself.

Here is the Baltic States. When I first took over as minister in 2004, they began to drag the Baltic states into the next wave of NATO expansion. President of Russia Vladimir Putin asked them why they were doing this, we had agreed on it. We were told that, as you know, they have the feeling from the period of being part of the Soviet Union that they were occupied, enslaved, and they still have this fear, and we will take them into NATO and the European Union, and they will calm down.

So what, have you calmed down? They are now the main “warheads” who are set against us, knowing their “hot temper”, these Estonian guys. Lithuania and Latvia have now announced that they are lifting the ban on the deployment of nuclear weapons on their territory.

This is to say that we can only rely on ourselves, just as our President has said many times. What is happening today has led to dire consequences. But let me reiterate that we are finishing the job started by our grandfathers and their fathers who defeated Nazism. But our former allies did not let Nazism perish and revived it. There were Wehrmacht generals who settled in the West. Today, the effort to revive Nazism is unfolding in the open. Who would have thought that this could happen? No one is even trying to hide it. This is to say that we have no other options if we want to preserve our Russian civilisation.

Question: Final question. What do you mean by the word “Motherland”, “Russia”, “life”? What is the most important thing for you?

Sergey Lavrov: Russia is life, and life is Russia. [My Emphasis]

The final paragraph, the reiteration, is the most important message within the interview. I’m fairly certain that the putsch Lavrov refers to is that of 1991 that ultimately killed the USSR. There’s little new information provided about current events that Lavrov hasn’t already expressed in press conferences. He laments the far too trusting “Russian soul” that should have learned better earlier. Conviviality is something Russians are known for, but the lesson learned is a hardened realist cynicism is best when dealing with the Collective West. Lavrov could’ve further explained the “alternative” Russia offers to the world; for example, what does it mean for Russia to win—is it merely in the SMO or the elimination of NATO and global hegemony now that the global conflict’s expanded and are one, not two or more. Lavrov has said the West will mostly be ignored until it has an attitude adjustment. It might be many years for that to occur, and Lavrov has reconciled himself to the fact that the war against NATO will be settled on the battlefield. He wasn’t asked about Iran or any other problem areas like Armenia.

Will Lavrov retire and become a musician? I knew of his love for rafting and futbol but didn’t know he pursued equestrian skills. I hope nothing forces him to retire, illness and such. I wonder if he still likes watermelons?

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Ms. Matviyentko’s report skimmed over the yearly results of the Federation Council she heads and focused on several topics that are very important for Mr. Putin as well as for Russia, the primary one being progress made on the attempt to staunch the demographic crisis, reverse it, and thus ensure the basis for a prosperous viable Russian future. I’ve followed the Russian demographic issue since Covid made its solution a priority and have reported on it several times annually when it gets discussed by the Russian government. Gym readers will find several long articles related to demographics in the archive, with this meeting of the State Council on Family Support being foundational since it spells out Putin’s views on the crisis and potential measures to solve it. A year before, Putin decreed 2024 as the Year of the Family which essentially said having big families is patriotic and needs to be actively promoted. It began with this celebration, “Year of Family Opening & Meeting with Participants and Winners of All-Russian Family Competitions.” And it was. In fact, the entire issue of demography became a national project that will probably continue until the birth rate climbs beyond 2.3 or so above the replacement rate. Now, the report:

V. Putin: Valentina Ivanovna, good afternoon!

You passed over 300 federal laws during this session, as I can see from the documents.

V. Matvienko: Yes, Vladimir Vladimirovich, in seven months. The session was quite intense and dynamic, but we worked normally and implemented all the plans we had set to achieve the national development goals that you approved, as well as your other instructions, including those you gave at the St. Petersburg Economic Forum.

It is important to note that more than a third of the more than 300 laws are social laws aimed at providing social support to citizens. In accordance with the established procedure, senators have developed and submitted 130 additional bills. All of these bills, Vladimir Vladimirovich, are a response to the requests of the heads of the constituent entities and our citizens. Some of these bills have already become laws.

If we look purely at the statistics, the senators are in the top three in terms of the number of legislative initiatives submitted. This is a noticeable increase in recent times.

The most important topic, as I wanted to report to you, Vladimir Vladimirovich, is demography, which has been a priority for us. You have identified it as a strategic issue, and this is indeed the case. I would like to objectively confirm that the measures taken on your behalf are already yielding results. I can honestly say that the atmosphere in society towards families, children, and family values is changing for the better.

According to the results of last year, the birth rate increased in 18 regions, and the number of large families is also increasing. Over the past year, which is particularly encouraging, the number of student families has doubled, and half of them are already families with children. This is a response to the support measures that were developed by the Ministry of Science and Higher Education, and those measures [according to which] higher education institutions have created conditions for student families with children.

You know, among higher education institutions, there is already a competition to see who has more families with children. [Excellent!] We held the II Festival of Young Student Families at Moscow State University with the support of the esteemed Rector [Viktor Sadovnichy]. And you know, it’s impossible to describe this atmosphere with words; you have to experience it firsthand. As you mentioned, these festivals have set the trend for families and children.

In addition, the number of social orphans decreased by 17 percent last year. Speaking generally about the atmosphere that is improving, the number of children whose parents have either been deprived or limited in their parental rights has decreased by 25 percent. The number of children in orphanages has also decreased. [This is a critical social indicator linked to societal wellbeing.]

What is also encouraging is that the number of abortions has been steadily decreasing over the past two years, with a decrease of more than 11 percent to almost 12 percent over the past two years. For example, the most positive result is that the number of abortions in the Vologda Region has decreased by 45 percent. This is also a result of the measures taken by the regional government. These are all facts.

I won’t go any further. I regularly report to you on the situation with demographics. I know that you keep this under your personal control. At the end of May, we held a meeting of the Presidential Council on Demographics. You know, it was a very interesting and creative discussion, with many new proposals. The members of the Council were actively involved in the work. We have prepared and sent you a number of proposals based on the discussions at the Council, and we are waiting for your new instructions, which are currently under consideration.

But you know what is good, Vladimir Vladimirovich, not on paper, but in reality? The whole world has joined the demographic agenda. This includes regions, authorities at all levels – regional and municipal authorities, ministries, government agencies – all of which have sectoral programmes. [This is precisely the level of response Putin hoped for, and Russia badly needed.]

Business has been actively involved, unexpectedly actively. We have already referred to it as the “club of demographic millionaires.” Approximately 200 companies have adopted the “golden corporate standard” and are paying 1 million rubles and more for the birth of each child of their employees. These companies have also implemented various social programs, including childcare facilities, flexible work schedules for women, and more. These corporate standards are not imposed; they are voluntary responses to the importance of their businesses’ future. Public institutions, including the Popular Front and non-governmental organizations, have been very active. I think we should continue to keep this topic afloat, so that everyone can understand its importance. [Large corporate involvement in societal promotion was mandatory during the Soviet Age. Its very abrupt discontinuation in the 1990s generated a holocaust. Business learned such support was in their interests and with prodding by Putin has steadily increased. It’s tospy-turvy to imagine a people friendly Capitalism.]

Of course, one of our traditional priorities is to support participants, veterans of the special military operation, and their families.

I would like to thank you for your Decree, dear Vladimir Vladimirovich, which is aimed at ensuring equal support for the participants of the special operation and their families in all regions of our country. This was an expected decision. During this session alone, we have approved about 50 laws related to the overall goals of the special operation, and since 2022, we have reviewed and approved over 400 laws, including more than 160 measures to provide social support for our heroes, such as assistance with education, employment, and more.

You know, it would seem that so many laws have already been passed, and we can stop there. They may be more targeted now, but they don’t lose their importance, because even the small issues that haven’t been taken into account (raised by the participants of the special military operation, with whom we are in constant dialogue) are important to clarify and adjust to ensure that all social rights are reached by every hero in every location.

Another topic that you supported at the time is the Council of the Federation’s focus on modernizing the infrastructure for children’s recreation and health improvement. In just four years of implementing this program, 336 new residential buildings have been constructed in 70 regions using the limited funds allocated to the federal budget for support. Additionally, the infrastructure has been extensively renovated, including kitchens, medical facilities, and other amenities, providing opportunities for over 200,000 children to receive annual health care. First of all, these are the same children of participants – heroes of a special military operation, children of doctors, teachers, [from] large families. And we will continue to do so. And as you instructed, the Government responded: 2 billion a year is allocated, and the rest is added by the regions. But the main thing is that we are restoring the previously lost database.

During the session, a number of traditional days of the Federation’s constituent entities were held. We have introduced the practice of “Open Dialogue with the Minister,” where senators gather and engage in an open and interested dialogue, as well as government hours.

The Council for the Integration of the Reunited Regions, which was established under the Federation Council, is actively working. The federal laws are all good. You have set the goal of ensuring that the residents of all the reunited regions live according to all-Russian standards by 2030. However, in practice, there are some issues that have not been taken into account in the law, such as regulations or simply some problems that arise. We are holding a council with the participation of the leaders of Donbass and Novorossiya, and we are discussing what needs to be completed in practice, as this is an interdepartmental issue involving members of the government. This council is very useful, as the governors of all the newly reunited regions have stated. In some cases, legislation needs to be clarified, and in others, deadlines need to be adjusted. The council is developing this practice, and we are implementing it.

But the Federation Council, as you know, is not only a legislative body, but also a representative body of government, and we are trying to introduce new formats and work in different areas. For example, we held a broad dialogue with cultural figures, artists and directors of regional theaters. They raised many vital questions. We solve them all. We never have a meeting [just] held. We work out and finish it.

You know, what didn’t surprise me pleasantly, but confirmed it, is that everyone has a very correct, patriotic attitude. This is reflected in their work. We even raised the issue: we want to go on a concert or performance tour to our participants in the special military operation, but we don’t know where to turn. We worked with the Ministry of Culture and the Ministry of Defense to create a “one-stop shop” to support this initiative and ensure that they can travel there.

The Russian-Belarusian Regions Forum in Minsk was very successful and productive, with a large number of agreements signed. Thank you and Alexander Grigoryevich for your greetings. Our regions have become very close friends in the broadest sense of the word. Vladimir Vladimirovich, there are many joint projects, joint products, and so on, as you know well.

The forum is the platform where we held the Memory Train event for the fifth time this year, when high school students from all the CIS countries, including Ukraine, Moldova, and all the former Soviet republics, as well as this year from the countries of the anti-Hitler coalition, which includes 20 states, traveled through Russia and Belarus for 15 days to visit places of military and labor glory.

You know, they come back as different people, as if they are being “vaccinated” against all manifestations of neo-Nazism. And most importantly, it is the historical truth. You can read a book or watch a movie. But when you see it all, that emotion is everything. A very successful project. Thank you to [Oleg] Belozerov and Russian Railways, who actively support him. For them, this is also, you know, for the soul, as they say, a project.

In the Year of Peoples’ Unity, we have already held the II Forum of Women of the North. Vladimir Vladimirovich, believe me, everything is held together by women: they are so active, so creative, and so business-oriented. All the indigenous peoples were represented. You issued a Decree and established a new holiday, the Day of Indigenous Peoples, which we celebrated for the first time this year. Following the first Forum, we adopted a number of very important laws for the indigenous peoples at the initiative of the Federation Council.

For example, the professional standard “Animal Breeder” includes a new profession, “Nomadic Dwelling Worker.” This decision officially recognizes the hard work of female nomads and provides them with the same pension rights as other workers in the Far North. This law has been positively received by our citizens who lead a nomadic lifestyle. The law on nomadic education, for example, is also a long-awaited law, as they have mentioned, as well as several other laws. What is also encouraging is that several women spoke at the forum, and there is a trend towards specialists, doctors, and teachers moving to the regions of the Far East and the North. In general, this trend should be supported in every possible way.

Now, one of the important tasks that you gave us is to support and preserve folk art crafts. You know, this is the code of our culture, our traditions, and so on. The Federation Council has taken this issue under its wing as the Chamber of Regions. I would like to thank the Ministry of Industry and Trade, and Minister [Anton] Alikhanov in particular, for their support. First of all, we have developed and implemented systemic measures to support folk art crafts, rather than just focusing on specific projects.

Also, your Decree established the Day of folk arts and crafts. This year, the Government, on our joint initiative, established a national award for craftsmen and enterprises of folk arts and crafts. This year, we presented it for the first time. Artists, craftsmen – for them, this was a really big event. This is legal regulation and financial support. The Government increases such financial support every year, this year it is already more than 1 billion rubles, for craftsmen this is good support. There is also a response, at the end of last year, 9 percent was the growth of this industry. This, of course, is not the limit. I am sure that it will increase every year.

We have now agreed with the Government that we will create a personnel programme in the field of folk art crafts, so that as many young people as possible are involved, so that master craftsmen can pass on their skills, so that our folk art crafts do not disappear, but rather develop. By the way, business has also taken the initiative and is investing, understanding the importance and prospects of this area.

Vladimir Vladimirovich, of course, as the Chamber of Regions, together with the Ministry of Finance, we are in contact with the governors and heads of regional parliaments, and we are monitoring the state of regional budgets.

I would like to thank you for the decision you have made, which was a very good and timely support for the regions – to postpone the repayment of budget loans to 2030. The situation is under the control of the Ministry of Finance, it is difficult, but there is no panic, there is a normal working regime.

Our international relations have been developing very actively. In fact, there have even been more of them. This year, we have held 77 meetings with our foreign parliamentary colleagues in various formats. And these are not just meetings with CIS countries; our Interparliamentary Assembly is actively working.

We held a very good joint Inter-Parliamentary Commission with China, and the Chairman of the Parliament came.

This includes South Africa, Indonesia, Mozambique, and many others. Recently, the President of the South African Senate visited us, and it was a very productive visit.

In general, I would like to express my sincere gratitude, Vladimir Vladimirovich, for your attention to the work of the Federation Council, the Chamber of Regions, and the regions in general, and for the support you always provide for the constructive initiatives that we are trying to introduce.

Thank you very much.

V. Putin: Valentina Ivanovna, I would like to thank you, on my part, and all the senators, members of the Federation Council, for their active work. It is not just that more than 300 laws, including two constitutional laws, have been approved, but also that the senators are actively engaged in the legislative process, as you have already mentioned, and are taking legislative initiatives and addressing the fundamental issues that shape our existence and the challenges our country faces.

Of course, the demographics and support for our military units and their families on the battlefield are extremely important. This is one of the most crucial tasks for all branches of government. I have been talking about this all the time, and I hope that the Federation Council, as the upper house that represents the interests of the regions, and we have many units that are directly formed from the military districts, which are regions of the Russian Federation, and all the government bodies, should do their part to support our soldiers and their families. However, this is a huge undertaking that involves a large number of people. We need to do everything we can to ensure that our soldiers don’t need anything and that their families feel supported by the government. As with any major endeavor, there are challenges and injustices that arise. We need to respond promptly, work with the “Defenders of the Fatherland” foundation, and pay attention to every detail, recognizing that there are no small issues in this context.

And of course, all the other topics that you have just mentioned are extremely important. These include support for the industry and individual sectors of production, as well as social issues, which you have already mentioned. I will not repeat myself, but I will say that Russia has never closed itself off from anyone and does not intend to do so. Our contacts with friendly countries and their respective authorities are extremely important.

Finally, on September 20, elections will be held in many regional authorities in the Russian Federation. This, in turn, will have an impact on the composition of the Federation Council. There are representatives from both the representative and executive branches of regional authorities. I believe that this is also a very important process, given that the Federation Council is being updated. I assume that the Federation Council will be staffed by experienced people who are focused on achieving a common goal: the development of Russia, providing assistance to our citizens where it is needed, and achieving national development goals.

Thank you very much for this work.

V. Matviyenko: Vladimir Vladimirovich, if you allow me, as far as the elections are concerned, our political system is such that on the Single Voting Day, 20 to 30 percent of senators are replaced, and this is very good. That is, fresh blood is being poured in, new people are coming in, with a fresh perspective, from the ground. We are very carefully and attentively monitoring that the representatives of the regions are worthy and so on.

V. Putin: I hope so. I am sure.

V. Matvienko: Thank you. [My Emphasis]

For those wanting to learn more about Russia’s Federation Council, this English language webpage is a good place to start. With 170 members, when compared to other nations, it’s a very large upper house, while the Duma has 450.

The demographic report was quite good and needs to continue such reports for at least a generation—20 years. That Russian business has made their involvement into a contest is very Russian as are the various days dedicated to the many different groups that comprise Russian society as well as the awards. The response by higher education institutions to Putin’s suggestions over the last four years to provide for family housing and changing focus to family building instead of career building have also been heeded. The ability of both Russian women and men to spend long periods of time devoted to raising their child(ren)—3 years and two years, respectively—and still be able to return to their career spot is praiseworthy. Other benefits also exist and are quite substantial when compared to the paucity provided within the Outlaw US Empire. Facilities like on-campus daycare allow for young mothers to continue their education while building a family.

The other accomplishments mentioned are also beneficial and improve Russia in many ways that also promote Russianness amongst the 100+ ethnic groups which solidifies a core aspect of national security. It’s taken some years for the Council to become an effective body since it was crafted out of thin air and the laws governing its structure and operations were continually changed until a solid basis was established in 2011 with Valentina Matvienko elected as Speaker. In Russia’s constitutional order of succession, she is #3 after the president and prime minister. We’ll need to await 2030 to see if Mr. Putin does this:

The President of the Russian Federation who has ceased to exercise his/her powers and decides to serve as a senator of the Russian Federation shall submit a written application to this effect to the Federation Council. An application of this kind can be submitted only once.

And he’d serve for life. Under Ms. Matvienko, the Council has become very productive as it and the Regions it works with become more familiar with its operations and possibilities. The reality is it’s just becoming a teenager and still has lots to learn.

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When I reported on Putin’s words to the Duma, I made an error and omitted what in print seemed mild/meek, but when seen on the video was anything but that. Go to minute 39 and start viewing. Here’s the text of what he said:

Let me say just two words to conclude our ceremony and today’s meeting.

We are all involved, deeply involved, immersed in the fabric of what is happening, each in our own way, but we also understand what is happening in the country and in the world as a whole, and we understand the situation that Russia is in, the historical stage that it is going through, and that it is going through it with dignity.

Of course, this is not the time or place for a discussion, but I will say a few things. Of course, over the past 3-4 years, we have outperformed other developed economies in terms of economic growth, and Russia continues to hold the fourth place in the world in terms of purchasing power parity (after China, the United States, and India, and the first place in Europe), and we are also ahead of the European Union in terms of economic growth. However, we would like to see more progress. There are risks associated with rising inflation and its consequences. There are big advantages to today’s policy. What is the main advantage? It is the stability of the Russian economic and financial system. This is the most important aspect, as it allows us to address issues related to the development of industry, defense sectors, and social issues.

Of course, I’ll reveal a secret, and my colleague won’t be offended. During the awards ceremony, one of the awardees whispered to me: “We will win. But we need to be bolder.” I really want to. [Putin replied] However, the question arises: “Should we be even bolder?” Just like in the economy, there are risks involved, and the price is our losses on the battlefield. Therefore, we will proceed with caution but persistently and consistently in achieving our country’s goals. And we will achieve them.

And finally, here’s the bottom line. This is a challenging and crucial historical period for Russia. This is evident, and it is understood not only by members of the State Duma, the Russian Government, the Administration, and regional leaders. It is understood by every ordinary citizen of the Russian Federation. [My Emphasis]

The bolded paragraph corresponds to the animation Putin displays as he informs the audience, and none of that’s prewritten. For more on this, Dan Davis has an excellent 32-minute podcast about this very event and what it signals where he also shows the same video clip with English overdubbing. IMO, this is very important and I’m really angry with myself that I missed it the first time by not watching the entire video. Dan Davis caught it and discussed it, but only 33,000 have viewed it so far which is too few given the podcast’s importance.

IMO, it’s very important to view Putin’s body language when saying the bolded paragraph, for that’s a very, very rare display, then add the context and audience, and you have a seminal political moment. What will it generate? I noted Putin signed an order to increase the military by 25,000 which is far from the 500,000 Zelensky has touted and Ritter’s 300,000. Is another order to come? And Putin didn’t just say those words to deflect criticism of the SMO’s pace as that’s not the way he works. Note too the reaction by the Duma members. Dan Davis integrates a few things Putin said to Naval personnel prior to his address to the Duma members, specifically this paragraph, and how Ukraine might later be divided:

By the way, I am sure that sooner or later Ukraine will lose these western lands. And what belonged to Poland, what belonged to Hungary, what belonged to Romania, sooner or later, not tomorrow, maybe not the day after tomorrow, a year, two, 10, 15, but everything will fall into place historically. There was only one guarantor of Ukraine’s territorial integrity, and that was Russia. [My Emphasis}

If Putin orders a mobilization of the reserves, they can go into action rather quickly, which translates to within one month or even sooner. They won’t be used to further batter the remaining fortified cities within Donetsk, so the speculation turns to Kherson and Odessa or the Northern Sumy/Kharkov regions that are lightly fortified.

Putin noted the risk of increased casualties. Russian civilian casualties caused by NATO Terrorism can best be forgotten by increasing offensive action that the general public’s been clamoring for. Davis also noted some other considerations.

I’ll close by adding this not I made at MoA earlier:

I suggest taking 90-minutes to watch, read, and reflect on the wisdom supplied by Colonel Wilkerson and Alastair Crooke. Wilkerson details the “trap” Trump has ensnared himself while Crooke suggests the trap ends thusly:

So the imperial hubris of Trump is beginning to face the fact that he will find it hard – possibly impossible – to find a solution to the Middle East, because to see the world from the purely Apollonian perspective is essentially male and exclusivist and fails to understand ‘otherness’; but rather relies on exceptional privilege. It simply does not – and cannot – recognise a plurality of minds.

The U.S. has lost the war. By adopting such uncompromising Manichaean language, Trump effectively has severed himself from any prospective diplomatic solution. By widening the war (Lebanon, Yemen, Syria and Iraq) he has severely complicated any diplomatic track. All elements are interrelated, yet they also have separate agendas. Thus a solution involves a complex matrix of issues, rather than a binary dispute between the U.S. and Iran alone. The U.S. ultimately will have to capitulate, with the result that Iran becomes a regional power (strengthening Russia and China), whilst the Region slowly will come to terms with this new West Asian reality.

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Most here certainly don’t keep track of such things but the Russian Duma is completing its eighth iteration with elections to determine the composition of the ninth occurring in September. Today, Putin addressed the Duma in the St. George Hall of the Grand Kremlin Palace providing a summation of its accomplishments over the past five years prior to awarding state awards to legislators. Several tracts by Putin and some from awarded legislators merit reading, and the official English transcript is almost finished and is completed to the point where those main tracts can be read. However, the following tract IMO merits being reproduced for Barflies to learn some important aspects of Russian governance and its primary goals the Info War attempts to obfuscate and denigrate:

Our multinational people responded to historical trials and external aggressive pressure with internal unity. This has always been the case, and it is happening again today. The deputies of the State Duma have fully justified their high status as representatives of the people, demonstrating their unwavering loyalty to their homeland, their competence, and their determination to quickly and effectively develop and implement complex decisions and laws that are essential for our soldiers and commanders, defense enterprises, factories, the domestic economy, the social sphere, and, of course, society and the state.

In difficult circumstances, you acted professionally and confidently together with your colleagues from the Federation Council and the Government, the Presidential Administration, and the regions of the Russian Federation.

All the deputies and all the factions of the State Duma have made a significant contribution: the Communist Party of the Russian Federation, A Just Russia, the Liberal Democratic Party of Russia, New People, and, of course, United Russia, the party of the parliamentary majority, which, as the party of the majority, has a special responsibility for organizing the legislative process and ensuring its rhythmic, constructive, and consolidating nature. [See State Duma Speaker Vyacheslav Volodin’s words on this matter.]

In this regard, I would like to emphasize the unity of representatives of various political forces. For example, two-thirds of the nearly three thousand legislative acts adopted over the years have been supported by all factions.

A comprehensive system of legal guarantees has been established and continues to develop for participants and veterans of the special military operation, as well as for the families of defenders of the Fatherland.

The parliamentarians also acted as a united front, passing laws on the reunification of Russia and our four historical regions: the Donetsk and Lugansk People’s Republics, the Zaporizhzhia and Kherson Oblasts. They have been integrated into a single, native country as full-fledged federal subjects.

The genuine choice and will of the people, the citizens of Russia, lie at the heart of all our strategic decisions. We have no other goals. This is precisely what those who deny other nations their right to self-determination and their own free path do not like. When it suits them, they always remember the Charter of the United Nations, but they prefer to forget the first article, which guarantees the right of nations to self-determination. Those who view other countries not as equal partners, but as submissive and voiceless vassals, always benefit from such double standards. But we understand perfectly well what is happening.

We have been facing illegal restrictions, attempts of containment and pressure for a long time: both after the Russian Spring of 2014 and before that. But since 2022, the West has already launched the Russophobic machine at full speed, just setting “world records”. Moreover, according to two criteria at once-both the number of so-called sanctions and their uselessness. The damage that these sanctions cause, first of all, to their authors and initiators, to the peoples of some European and other countries.

Wanting to shake the Russian state and provoke a social split in our country, they tried to strangle our economy, financial system, and banking sector, and undermine the potential of science, industry, and education. Moreover, unable to defeat Russia on the battlefield, they are already resorting to openly terrorist methods of fighting our people. But no one will ever be able to break the people of Russia. This has never happened and never will happen. [My Emphasis]

The overarching theme emphasized by Putin and others who spoke is support for the wellbeing on the Russian people and their society. Unlike Trump and other Western politicos, those true words actually have meaning and can be honestly reported by media. As Putin said yesterday to Navy personnel and many other times, there will always be problems that need to be solved, which is where the public participates in its governance by reporting those problems so they can be solved, which is the entire point of good governance. IMO, Russians have learned much from their past experience and will continue to make Russia a better place for Russians and those wanting to join them.

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The annual Navy Day holiday had Putin engaging in a number of events in St. Petersburg but not the annual Fleet Parade which was cancelled in St. Petersburg over security concerns, the first year of the SMO that’s occurred there. The meeting with the Naval command was held but that didn’t produce any important verbiage aside from the status reports given by the commands. What did produce some important statements far longer and complex than mere sound-bytes was Putin’s meeting with Naval servicemen, both Naval and Marine. It must be mentioned that Russian Marines have proven to be elite units and have thus upheld their historical repute. The format for the chat has Putin making very short introductory remarks before asking those attending to sit comfortably and say what’s on their mind. There’s a video of the event at the second link above for those wanting to see the expressions and the signing ceremony at the end. I do want one of those pens Putin used.

V. Putin: Dear comrades, good afternoon once again!

We have met with many people today. I would like to congratulate you once again on this wonderful holiday, the Day of the Navy. I have already mentioned in my opening remarks at the meeting with the fleet commanders how important and popular this holiday is in Russia, among our people, and how much respect is held for the people of the naval profession, and for sailors in general, but especially for military sailors. The sea is always associated with risk, and military sailors face double or even triple the risks.

And there is a certain culture in the naval environment. It has been developing for centuries, since the time of Peter the Great. This is because naval affairs require knowledge. It is clear that modern living conditions certainly have an impact on everyday life and behavior. However, everyone in Russia understands that sailors are a special family, a special caste in the best sense of the word.

Therefore, I would like to once again extend my heartfelt congratulations on the Day of the Navy. I wish you and your loved ones all the best. And, of course, I wish the same to your comrades-in-arms. Let us now turn our attention to those who are currently on duty. I wish them all the best.

We started discussing some issues with some of our colleagues after the awards ceremony. If you have anything you would like to share with me, ask me, or tell me, I would be happy to hear from you. Please feel free to ask any questions.

I understand that all military people are used to standing, but we’re having a family conversation, so let’s sit down.

You are welcome.

A. Ulyanenko: Comrade Supreme Commander-in-Chief!

Captain 1st Rank Ulyanenko, Pacific Fleet.

Of course, for the Navy, for the Ministry of Defense, and for the entire country, the main task is to achieve the goals of the special military operation. As sailors, we also perform other tasks. For example, the ships of the 36th Division of Surface Ships often carry out missions in various parts of the world’s oceans and participate in international exercises. The number of these international exercises is increasing every year. It is crucial for us to receive your feedback on the role of military sailors in ensuring the national security of our country.

V. Putin: There are a few points I would like to draw your attention to.

The first. You have just mentioned international exercises. Still, this suggests that attempts to isolate Russia, even in such a sensitive area as defense and security, are failing completely. There are a large number of countries that are friendly to Russia and understand the tasks that we are solving in terms of ensuring our security and strengthening a multipolar world. This is important for the vast majority of participants in international activities. And the fact that we have a growing number of joint exercises speaks volumes.

As for the importance of the Navy, it is enduring. Since its founding, the Russian Navy has always played a crucial role in ensuring the security of the Russian state. Russia is primarily a land-based, continental power. At first glance, this may seem true. Even after the collapse of the Soviet Union, Russia remains the largest country in the world by territory. However, 60% of the Russian Federation’s borders are water-based, consisting of seas and oceans. Therefore, even from this purely objective perspective, the importance of the Navy is enduring and very significant.

And besides all the rest, the Navy is of great importance in the nuclear triad, which I can tell you, military people, in the presence of the Commander-in-Chief of the Navy. It would be redundant to say how important the submarine fleet, equipped with intercontinental ballistic missiles, is for deterring any enemy and causing unacceptable damage in the event of direct aggression against the Russian Federation and threats to our country’s sovereignty.

Therefore, the navy has been, is, and will remain for a long time to come the most important element in ensuring the country’s security. In addition, there are other aspects that are not directly related to military affairs. Many achievements in the field of military shipbuilding are also used in civilian industries, and not only in shipbuilding, but also in electronics and many other areas. As for the importance of the navy, there is no doubt that we will do everything possible to strengthen the naval component of the Russian state.

Yes, we are currently forced to allocate a lot of resources, and this is justified, to ensure the success and achievement of the goals of the special military operation, but we have plans for the development of the fleet and the far and near sea zones, and they will certainly be implemented. 60 percent of our borders are maritime, so what can I say?

You are welcome.

N. Kharziy: Comrade Supreme Commander-in-Chief!

Captain 2nd Rank, Northern Fleet.

As you carry out your combat missions, you can’t help but notice how the world’s oceans are becoming an arena for interstate rivalry and confrontation. Just a few years ago, the Arctic was seen as a region of peaceful and close cooperation with Russia, but now it is characterized by an increasing potential for conflict with Russia. At the same time, the Western countries’ policies are characterized by a clear focus on militarization and competition with a distinctly anti-Russian agenda. What should we do in such circumstances?

V.Putin: You know, we feel very calm and confident, because international law is on our side, and we have full opportunities to protect our interests. Yes, at some point, a lot was missed.

Nikolai Platonovich, you were the director of the FSB, and you took the necessary steps to strengthen the state border at that time. Where did you station the border guards?

N. Patrushev: [Archipelago] Franz Josef Land and Alexandra Land.

V. Putin: Yes, Franz Josef Land. These are Russian islands. And at the time when we began to restore our presence, foreign tourist routes had already been established there. When telling tourists about these territories, the guides spoke about anything but the fact that this territory belongs to the Russian Federation. Everyone began to get used to the idea that Russia was not there. But it is ours, and we are there. We have established border posts and are gradually restoring our presence.

And when I said that international law is completely on our side, it means that this is a legitimate part of Russia’s sovereign territory. We are developing economic activities there. It is extremely important to act carefully in terms of ensuring economic interests in the Arctic, as you know. The Arctic environment is very fragile, so we need to use the latest technologies for resource extraction, which our companies are doing. This is the first point.

The second is the logistical capabilities of the Northern Sea Route. However, this requires the development of ports and coastal logistics. It also necessitates the provision of appropriate services for the rescue of ships and their crews in case of emergencies. Additionally, it is crucial to ensure security, including through the use of the Russian Navy. We are actively working on these issues and will continue to do so.

At the same time, we have never sought any kind of confrontation in this region of the world. On the contrary, we have always invited everyone to work together in a spirit of international law. We are ready to do this with everyone, but we must remember that these routes belong to the Russian Federation. We have the technical capabilities to do this. As you know, no other country in the world has such an icebreaker fleet. In fact, I don’t think anyone else has nuclear icebreakers. And we do have it. Starting with the Lenin icebreaker, and now the so-called Leader is being built, which will break through unprecedentedly thick ice of several meters. Don’t you remember, Andrey, up to three meters, I think? [The sole USCG icebreaker broke-down in Puget Sound a few days ago and had to be towed to Port Angeles.]

A. Belousov: More than four or five.

V. Putin: Four meters, right?

A. Moiseev: Ice in the Arctic?

V. Putin: No. The Leader will inject.

A. Moiseev: Up to three meters.

V.Putin: Yes, three, three and a half. That is, no one in the world has anything like this. And if someone says that they are going to build something somewhere, then probably high-tech countries can do it, but it will take years. Maybe decades. God bless them, let them work, we don’t mind.

We are open to cooperation in this area, but we will certainly protect our interests, as well as the Northern Sea Route, because the most efficient and cost-effective route is the Northern Sea Route, which largely runs through our territorial waters or the special economic zone of the Russian Federation. In other words, it is almost entirely under our control. The closer to the coast, the more efficient and safer it is. The further away, the more difficult and almost impossible it becomes. Alexander Alekseevich [Moiseev] knows that only submarines can “crawl” under the ice, and you probably know that too. However, there is no merchant fleet or tankers that can do this.

Is it possible to do without icebreaking for five months?

A. Moiseev: From June to early October.

V. Putin: From June to early October. The most favorable time is the middle of August. And we still need icebreakers.

In addition, we know that the routes of ballistic missiles pass through the Northern Sea Route, where our submarines are on duty, and other countries are also trying to enter. We have a developed region, and we will continue to develop it, which is very important from the point of view of our economic interests.

We all know Lomonosov’s words that Russia’s wealth will grow from Siberia. Now, without exaggeration, we can say that Russia’s wealth will grow from the Arctic. It is difficult to measure the quantity and value of the resources in the Arctic. [A very important geographical formation in the Arctic is named for Lomonosov.]

In addition to everything else, we have already developed a whole program, and we will continue to do so: creating conditions for people to live and work there. This includes the improvement and creation of good conditions in the key cities of the Arctic zone. This is a lot of work. And, of course, the presence of our Armed Forces there, which do not threaten anyone but ensure the interests of the Fatherland, is a very important component of all the work in the Arctic.

Thank you very much. Good luck!

I ask you to.

M. Kislov: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Captain 3rd Rank Mikhail Andreevich Kislov, Black Sea Fleet.

The realities of modern warfare have brought to the fore the use of multi-medium unmanned systems. According to experts, the future of naval warfare lies in the so-called mosquito fleet. Large ships are supposedly out of the picture. Is this really the case?

V. Putin: This is what those who work in the mosquito fleet industry say, those who earn money from it, those who plan to earn money, or those who simply assert themselves in this field, a very important field.

First, what is a mosquito fleet? I don’t think there is a definitive definition.

We are in St. Petersburg, and not far away, in the Gulf of Finland, there were battles with the Swedish fleet in the past. And God bless my memory, what year was the Battle of Gangut? Who remembers? I think the Battle of Gangut was fought here.

Replica: The 17th century.

V.Putin: 17th? Maybe, yes. And after that, by the way, Peter I lived on ships for two years. Russia didn’t have large ships back then, only small ones, relatively small compared to the Swedish ones.

What did Peter and our naval commanders do? They successfully moved small ships from one combat zone to another and achieved success. And then it began to develop: these are boats, small vessels, and so on.

Look at what is happening in the Middle East conflict zone. Those who use this mosquito fleet are quite effective.

It has always been there. The question is about new technologies. We already have small ships with a low displacement and tonnage, but they are equipped with modern weapons. The Kalibr missiles are firing accurately from small boats and ships. We can make them even smaller. We also have new weapons that can be used to equip these ships and boats, and we have the necessary technologies. Take the Poseidon missile, which we have discussed several times. This is also, in fact, a crewless underwater vehicle, and it is already at the final stage. We are moving towards completing it and putting it on combat duty. In other words, we have the technology, but we need to develop it further and apply it to specific water areas and combat operations.

The question is how to assess the situation in a timely manner and respond to it. Throughout history, we have succeeded and failed in this regard. However, I would like to emphasize that we have always understood what needs to be done and have done it at the highest level.

And this is happening now. We have both underwater and surface-based BEKs, which are very effective, including in combat zones. I can confidently say this. We will definitely develop this area. [BEK is unmanned boat in Russian.]

I repeat, this can be a very effective means of armed struggle in the near zone, especially since the development of weapons that can be placed on these ships and boats. However, when it comes to large ships, they are still the basic component of the fleet. I am not even mentioning nuclear submarines, which carry serious intercontinental missile technology, or surface ships such as frigates, cruisers, and so on.

The only question is that they, like aircraft carrier groups, for example, must be reliably protected. They must have modern means of detecting and combating the enemy.

Our naval commanders, who created the Russian Navy in the past, said that the Navy should be balanced. And now, it should be even more balanced. We need to understand which areas should be effectively used.

But for large ships – both submarines and large surface ships – there is not only a place for them, but they will certainly remain the basis for the development of the fleet as a whole. Moreover, large ships are also equipped with new weapons and defenses, such as the Zircon hypersonic missile. It still needs to be tested and evaluated for accuracy, but recent applications have shown that it is becoming increasingly precise. The Zircon is a hypersonic missile, and there are only a few countries in the world that possess such a weapon. And we not only have it, we are improving it and will continue to do so. The fleet must be balanced. And it will be.

Thank you.

Ask you.

V. Suchkov: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Senior Sailor Suchkov, Caspian Flotilla.

It is a great honor to meet with you here today, on the Day of the Navy. Just a short while ago, I could not believe that such a meeting would be possible for me, a mobilized soldier.

My question is this: the whole country is following your extremely busy work schedule, but you still find time to meet with us, with ordinary people, with fighters, with members of our families. Please tell me, what do such meetings mean for you personally?

V.Putin: The answer is very simple. First of all, I am meeting with you, with people who have shown themselves in the best possible way in combat conditions, not only in such a festive atmosphere, but also in the course of such everyday work.

When we meet, I want to show and emphasize the importance of the cause you serve, which is the most important thing. First.

The second task is to listen to you. I understand that there are certain limitations, and military personnel are very reserved, sometimes not saying much. However, I will still learn about what is happening on the front lines, what is lacking, how the use of armed forces is evaluated, what equipment is lacking, and how those who use it assess its quality. This is valuable feedback.

The third is social issues. I can honestly say that I and many people who work with me, such as the Minister of Defense, the Chief of the General Staff, and the Commander of the Armed Forces, always think about solving social issues. Surprisingly, there is always something that is overlooked, something that is missing, or something that is not taken into account, and it is not because someone does not want to. Life is complex and diverse, and often people don’t notice when they make decisions, sitting somewhere on top, while people below live within the framework of those decisions.

And [another] component is the assessment of social issues related to the participants of the special military operation themselves, to helping the victims and wounded soldiers, and to helping their families, including the families of our fallen soldiers. There are many questions that arise. Every time I meet with them, there is always a question. I think we’ve already talked about everything, but no, something always comes up. This is very useful and important not only for those directly involved, but also for the country as a whole.

Because the country, both now and in the future, must understand that the state will pay the utmost attention and take care of the interests of the people who risk their lives and health to protect the interests of the state.

Therefore, from all these positions, I believe that meetings like today’s, but not for festive occasions, are of great importance. And I will certainly continue to do so.

Thank you.

T. Naumov: Comrade Supreme Commander-in-Chief of the Russian Federation!

Senior Sergeant Timur Nikolaevich Naumov, Northern Fleet.

The marines have been on the front lines of the special military operation since the very beginning. We have seen a lot and are not surprised by much, but what we cannot comprehend is the enemy’s brutal treatment of civilians. They are still abusing Ukrainian citizens. Why are the soldiers of the Ukrainian armed forces, especially the nationalist formations, so cruel? Their combat tactics have not changed. They continue to use civilians, Ukrainian citizens, as shields. But we used to study from the same textbooks, watch the same movies, and admire the same heroes.

V. Putin: Do you know what the matter is? I myself, to be honest, am also thinking about this issue.

First, what would you like to say? That the Marines are always ahead. Even this year, in my opinion, more than 20 settlements have already been liberated by the soldiers of the Marine Corps. These units were created by Peter I even, God forbid, in my opinion ‒ in 1705 the first marine infantry regiments were created. It was created, the Marine Corps, as an elite part of the armed forces in general and the Navy in particular. By the way, at Gangut, the marines also played a big role, because the ships were boarded, the Swedish ships were captured, and so on. I may be wrong, but I think that’s how it happened.

The important thing is that the Marine Corps is undoubtedly the most important part of the Armed Forces as a whole, and it is still working effectively in all areas where you are fighting. This is true.

It’s no coincidence that I said I’m always in the lead. And so, of course, you can see what’s happening or has happened when you’re the first to enter liberated settlements. The question is, why is this happening? Is it because of Russia’s aggression? The so-called aggression? No, of course not. There’s no aggression at all.

Because, as I have said many times, I want to emphasize once again that we did not start any war. We only began to respond to the hostilities and the war that the current Kiev regime, supported by the West, has unleashed against the southeast of Ukraine, which has always been oriented towards Russia.

You know from history: Ukraine has always been divided into left-bank and right-bank Ukraine. The left-bank has always been considered not just Russia-oriented, but part of Russia. And the Donbas – I’ve already mentioned it... I’ve read archival documents where the Soviet government decided, at the request of the Donbas representatives, to include them in the RSFSR, and then Bolsheviks from the more western regions came and persuaded Vladimir Ilyich Lenin to give this part to the emerging Ukraine. And when the Donbas representatives asked: Well, we agreed that Donbass should be with Mother Russia, and we decided that it should be with Mother Russia. But now we have to change our minds. Now we have to bring everything back to its normal historical course.

I am now coming to the answer to your question. After all, what happened, for example, after the Great Patriotic War? After the Great Patriotic War, some of those who fought on the side of fascist Germany, Nazi Germany, ended up overseas. And the so-called anti-Russian, then anti-Soviet centers, very actively used those who fought on the side of the Nazis, and then their so-called successors, descendants. But they fought on the side of the Nazis.

You know, yes, they’re guided by nationalist considerations, like the interests of Ukraine and the Ukrainian people, but what’s at the core? It’s the Nazi ideology. And it’s no coincidence that they’re now publicly reviving this Nazi ideology. They’re using the name of the UPA to honor their armed forces and rebury Nazi criminals.

I’ve heard many times that Ukraine is searching for its identity. But the question arises: why should this identity be based on Nazism and neo-Nazism? Now I’m getting to the main point. This neo-Nazism, which has migrated to the so-called anti-Russian and anti-Soviet centers, and nationalism, and neo-Nazism, have become very close to each other and have intertwined. And when the current regime began to rely on this part of society and this ideology, it automatically transferred to the minds of those who are fighting. In other words, this is a regime based on the ideology of neo-Nazism and extreme nationalism. Nationalism, as we know, is not about oneself, but about others. Patriotism is about one’s homeland, but not against others, while nationalism is about oneself, but primarily against others. This extreme nationalism and neo-Nazism form the basis of the current ideology of the Kiev regime.

Therefore, there is nothing surprising here. You know, I won’t reveal the secret, in my opinion, I even once said... Even at the beginning of my report I read from the battlefield, there was an interception on the battlefield, you are familiar with this. The guys listen and fix it. A tank column enters one of the settlements of Donbass, and two Ukrainian tankers are talking to each other, and an interception is underway.

I read it later. A man in a tracksuit came out of a residential building, just came out. One of the tankers put him down with a machine gun, shot him, killed him. The second one asks: what are you doing, why did you do that? And the first one, who killed this man, says: they’re all criminals here, bandits, and pro-Moscow, pro-Russian – it doesn’t matter. The man didn’t do anything, just came out of his house to see what was going on, nothing. He was wearing a tracksuit. They killed and moved on. This is the basis of extreme nationalism, which is the foundation of neo-Nazism. This is the breeding ground for today’s regime. This is what we are fighting against.

D. Pryanikov: May I?

V. Putin: Yes, please.

D. Prynikov: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Lieutenant Colonel Dmitry Nikolaevich Pryanikov, Black Sea Fleet.

The 43rd Separate Guards Naval Assault Aviation Regiment of the Black Sea Fleet’s Naval Aviation has been participating and solving tasks as part of the special military operation since its inception. There is a lot of work to be done, and the number of combat sorties is only increasing, so the personnel value every moment of respite to carry out routine maintenance and repairs on their aviation equipment, conduct flight reviews with their pilots, learn new skills, and simply get some sleep, wash themselves, or even just stay quiet.

The question is simple. Today, with your schedule and workload, do you have any way to recharge in five to seven minutes when you’re completely exhausted?

Thank you.

V. Putin: We need to save our strength so that we can always be in the ranks. This is the first thing.

Second. You know, what I do is such a peculiar activity, it is associated with a large number of heterogeneous tasks. Now only Andrey Ramovich reported on the documents that he had prepared. Even at the level of the Minister, this is a huge layer of work in the interests of the state. We have just discussed financial, organizational, and international issues. But this is only within the Ministry. But it’s the same in the country: there are social and cultural issues here ‒ all sorts of things.

What am I getting at? I’m getting at the fact that during the day, I have to meet with different colleagues, different people from different industries. All the time, sometimes I have to switch from one topic to another, from one thing to another. And in general, it’s a bit of a relief. Because, as a famous person once said, rest is a change of activities. And this happens all the time.

Of course, there should be physical activity, sports. When I have the opportunity, I listen to music and do something I enjoy. I try to do this as much as possible. And of course, it’s important to maintain a regular sleep schedule. I recommend the same to you. I’m hitting the mark, right? I understand.

You are welcome.

O. Solomakha: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Commander of the Assault Company, Major Solomakha.

We were brought up and taught by the heroes of the Great Patriotic War. The question is: will our great-grandchildren learn from the examples of the heroes of the special military operation? Will the heroes, our Donbass guys, who stood to the last, be displayed in the textbooks?

V.Putin: There will be. And not only will there be, and it is already happening. I think you must have noticed it.

We try to support all kinds of creative endeavors: people write songs, make movies, and write books. Moreover, certain sections are already included in history textbooks.

You know, the river of time is endless, and every era has its own heroes, like you and those who are no longer with us, unfortunately. But they are writing history. You and our comrades-in-arms who gave their lives for Russia and their homeland are all writing history. But the country must know its history.

Therefore, for example, the Ministry of Culture allocates special funds to support filmmakers who work in this field. But we need to, and I keep thinking about this, we need to instill in our society and the people the importance of the work you do. And you serve your country. What could be more important than your country?

Now, your colleague was talking about a schedule, about my work schedule, about his work schedule. But what could be more important than what you’re doing right now? Nothing. Because you’re defending your country, you’re on the front lines, and it’s even more challenging for you than it is for me. Despite the difficulties, you’re risking your lives almost every day. And of course, the country needs to know about it.

I ask you to.

E. Borko: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Guard Captain Borko Yegor Dmitrievich, Baltic Fleet.

As you know, you receive daily reports, briefings, and updates on the operational situation in the special military operation zone. I wonder if you also receive information from so-called public accounts. Do you watch videos from the front lines?

Thank you.

V. Putin: I am in a position, in a place where all the information that is available is being drained. Therefore, from officials, from your commanding officers, from you or such guys, fighters like you, commanders, with whom I manage to meet at some point. It doesn’t happen often, but nevertheless. Information from the special services that control the situation in all areas of combat contact, and in general, throughout the country, information from the media. Publics, bloggers, and various individuals. There are bloggers that I sometimes even enjoy ‒ there is no time, but when they come across-I watch and, frankly, sometimes I am happy. Great, well done, they hit the nail on the head. There are people like that. There are some who pursue, in my opinion, their own personal goals. I won’t go into details. But there is all sorts of information, it also gets to me.

As for publics and so on: it’s not entirely useless, but it’s dangerous because there’s a lot of information junk. And if a person isn’t prepared and doesn’t have a basic understanding of what’s happening, these publics can mislead anyone. For me, it also has a certain significance and creates a certain background, referring to various sources of information. This allows me to evaluate the publics accordingly. Of course, there are some that are misleading. However, I primarily rely on information from official sources, although I draw my final conclusions based on the analysis of all the information I receive.

V. Suchkov: May I?

V. Putin: Please.

V. Suchkov: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Senior Sailor Suchkov, Caspian Flotilla.

I know that I have already asked a question, but it is very important for me to say this. I was drafted into the Armed Forces in September 2022 through mobilization. Without hesitation, I stood up to defend my homeland, and I have been on the front lines for almost four years. During this time, according to my commanders, I have mastered the new profession of a missile and artillery officer. Today, on the Navy Day, in the circle of my brothers in arms, I would like to sign a contract with the Ministry of Defense and stand in line with the real professionals of the Navy. I want and I will defend my Motherland.

I finished my report.

V.Putin: I can’t say anything but words of gratitude. This is a very good example of a person who came to the mobilization, but found himself. You know, when I look at what is happening with you, when I meet guys like you, what is the thought that comes to mind? People who lived a very modest life, were completely inconspicuous, fulfilled their duty in some service, in the state service, even in the military service, and now many people feel differently, because they understand that they are carrying out the most important function of protecting the state.

There are many important things that stabilize the country and help it develop. Today, the strength of the state consists of many components, including the economy, finance, information security, and industry. However, the direct protection of the state places those who do so at the forefront of those who not only defend the country but also strengthen it and shape its future.

So I wish you success, and thank you very much.

You are welcome.

Y. Malafeev: Comrade Supreme Commander-in-Chief of the Armed Forces of the Russian Federation!

Junior Sergeant Malafeev Yuri Mikhailovich, Northern Fleet.

In 2026, we will simultaneously celebrate the 330th anniversary of the Navy and the Year of National Unity in Russia. This is symbolic for us, as the Navy has historically united people of all nationalities. Moreover, the frontline is a true international front. We don’t think about who represents which nation; we are one people, one family, fighting for our common homeland, just as our grandfathers and great-grandfathers did 80 years ago.

By the way, I am very proud that my son Ivan was born on May 9, the Day of the Great Victory. And I would like to say on behalf of all our guys, on behalf of all the personnel of the Navy, Comrade Supreme Commander-in-Chief: we will do everything to ensure that, as before, the enemy is defeated and victory is ours.

Thank you.

V. Putin: This is what will happen, there is no doubt about it. I have no doubts about it for a single second.

You said, by the way, that your Vanya was born on May 9. And what year was that?

Yu.Malafeev: In 2023.

V.Putin: How old is he, three years old? Where does the family live?

Yu.Malafeev: In Severodvinsk.

V. Putin: In Severodvinsk.

You said that we have a Year of National Unity, and that we are a single nation. You know, this is extremely important, this feeling of unity. And the fact that people who are in special conditions, in combat conditions, on the front line, feel this unity, this brotherhood, despite their different ethnic backgrounds and even their different religious and confessional backgrounds, but still feel like a single family, is extremely important for any country, and for a multi-ethnic country like Russia, it is doubly important.

From this unity, from preserving it... When the special military operation is over, and it will be over sooner or later, we need to preserve this quality, this sense of unity. You know, I meet with some people who help you in the rear, work somewhere, women weave nets, children weave mittens, and so on. People do this from the heart.

Several times I heard amazing words: The SVO will end ‒ what will we do? That is, they are so carried away by this, they do it so with their heart, and they feel their involvement in a great, huge, necessary for Russia, that they have a feeling of anxiety: and we will be in demand, just as now? This is important. And we need to think together on the topic of how to preserve this for the future, without any doubt.

Look at what’s happening in the neighboring country. They’re all fighting and bickering like spiders in a jar. They’re dividing up the money they’ve stolen from the Ukrainian people or from their Western sponsors, and they’re trying to kill each other, running away, hiding, coming back, and so on. Where is the unity there?

Among other things, there is the western part of Ukraine-a gift from Joseph Vissarionovich Stalin after the war to Ukraine. It was Stalin who gave these lands to Ukraine. But he gave it as a gift within the framework of a single state. Apparently, it hadn’t occurred to him that there might be a situation like this.

By the way, I am sure that sooner or later Ukraine will lose these western lands. And what belonged to Poland, what belonged to Hungary, what belonged to Romania, sooner or later, not tomorrow, maybe not the day after tomorrow, a year, two, 10, 15, but everything will fall into place historically. There was only one guarantor of Ukraine’s territorial integrity, and that was Russia.

They considered it necessary, possible, and beneficial for themselves to declare Russia their enemy and to declare the Russians in Ukraine as a non-titular nation, which is nonsense and dog-eat-dog, but they did it. They made an official decision that the Russians in Ukraine are a non-titular nation. Well, here we are. What is it then? Oh, well, God bless them.

After all, the modern world order was established after World War II, after the Great Patriotic War, on the basis of the Charter of the United Nations, which was formed by the victorious countries: the Soviet Union, the United States, and Great Britain. This Charter is the foundation of modern international law. It was created, and certain rules were established.

Then, when the Soviet Union was collapsed, one of the founding states of the United Nations, one of the founding states of the United Nations and the creators of this international law and system of international relations, ceased to exist, and the so-called victors in the Cold War — not just the United States, but the entire collective West — suddenly decided that something needed to be corrected. Why should Russia, no longer the Soviet Union, but Russia, which had lost a certain amount of its potential, enjoy the same benefits as the victorious country in World War II? And they began to rule, and they began to rule immediately in practice.

Remember the events in Yugoslavia. I won’t give any assessments now, as it is a complex process. However, the division of the Serbian people into different national quarters and so on... Decisions were made that were completely contrary to the United Nations Charter. They simply let the genie out of the bottle. Moreover, they promised us, Mikhail Gorbachev, that they would not expand NATO, but they did so one after another. Despite our numerous protests and so on, they didn’t care about their promises or the security interests of the Russian Federation. They kept moving forward, eventually reaching Ukraine. At that time, the President of Ukraine advocated joining the European Union but opposed joining NATO. What did they do? They staged a bloody and unconstitutional coup d’état, and the entire West pretended that it was all part of the plan.

And it was precisely these actions, which were absolutely aggressive and escalated from year to year, that led to the current conflict in Ukraine and forced us to launch a special military operation in an attempt to complete the fighting that had already begun on the part of Ukraine controlled by the West and the Kiev regime.

But what you said about the unity of the Russian people, and the fact that you feel like a single family on the front line, in the combat zone, is an extremely important achievement of the special military operation. This is very important for us, and it is our common task to preserve this sense of unity among the multinational Russian people.

I would like to congratulate you once again on the Day of the Navy, and wish you all the best. Take care of yourselves and the teams you are in charge of. Good luck and victory to all of us!

Thank you.

A. Moiseev: Comrade Supreme Commander-in-Chief!

Undoubtedly, this conversation and meeting are important. The guys made a personal request, if possible, to get an autograph. There are photos and a banner. If it’s possible, we’ll ask them to do it.

V.Putin: Of course, we are all here together.

What should I do, where?

Replica: May I?

V. Putin: Of course.

A. Moiseev: Guard Senior Sergeant Naumov. Please.

T. Naumov: Comrade Supreme Commander-in-Chief!

On behalf of the 61st Guards Brigade, I would like to ask you to leave a commemorative signature on our brigade’s flag.

Thanks

V. Putin: Thank you very much.

Happy holidays again! Have a nice day! [My Emphasis]

After providing an excerpt about Nazism explained by Putin to the Barflies at Moon of Alabama, I made a few comments. First, “And as I’ve written many times, we know the nation that gave succor to the OUN and other Nazis post-WW2 and continues to lead the primary Anti-Russian organization–NATO, which the EU is bound by with a leash. The Outlaw US Empire did that and continues its promotion while allying itself to the Genocidal Zionists in Occupied Palestine. IMO, it’s clear when you listen to what they say that the Outlaw elites are essentially the same as the Zionists and Neo-Nazis. Trump and most of his Gang are members of that cult. As Putin noted, Russia is repelling aggression, and not just since 2022 but since 1945–archival documents prove that truth. The Collective West is The Aggressor; there’ll be no planetary peace until its hegemony ceases or is at least vastly curtailed.”

The second was in response to this:

So Putin thinks this thing will go on for 15 more years?
Posted by: ed4 | Jul 26 2026 19:37 utc | 15

No, my guess is that he believes the fight against nazism will go on forever.

Posted by: Liolia Paluzas | Jul 26 2026 21:14 utc | 26

Liolia Paluzas | Jul 26 2026 21:14 utc | 26—

Nazism, like all isms, is an idea and ideas are very hard to kill as it’s possible for them to be resurrected in what’s usually a modified version as we see today. And it’s very easy to see which national elites strive to preserve Nazism as recorded in the annual UN vote against the support of Nazism. It can be said that American Exceptionalism is a hybrid form of Nazism, as is Zionism, and Neoliberalism can be shoehorned in also. The thought of Leo Strauss should also be included since the world is busy battling it, which Crooke somewhat explained to Danny Davis recently. We must also acknowledge that Nazism existed in other guises prior to Hitler’s rise and use of the ism. So, yes, it will take many years before Nazism can be deemed to be truly dead. Meanwhile the Global Majority is in deep conflict with the states that practice and abet Nazism. One of the reasons why Russians know the great importance of factual historical recall is because it’s understood just how long Nazism has lasted and Russians have seen the efforts made to keep it alive. When the Russian government says another nation understands and agrees with Russia’s positions, it’s affirming that nation knows the main conflict is with Nazism and its supporters. And that’s a crucial factor in our Global Conflict to end Hegemony.

IMO, it’s important to watch at least one of these sorts of meetings when Putin shows he’s a normal human in his responses, some of which are hard to admit. Putin made a very strong assertion about the difference between nationalism and patriotism that caused me to pause and think:

Nationalism, as we know, is not about oneself, but about others. Patriotism is about one’s homeland, but not against others, while nationalism is about oneself, but primarily against others.

IMO, that’s a crucial distinction readers ought to ponder. For an example, we can look at Trump whose clearly an exceptionalist nationalist having no cares whatsoever for the country or its people as he’s said many times. And the American people completely misread what Trump truly is and voted for him. IMO, it’s been a very long time since America had a genuinely patriotic president, certainly none in my lifetime so far.

Putin clearly describes what and whom Russia is fighting without directly saying the conflict is existential; his indirect references to the Great Patriotic War do that well. His cause and effect for the ongoing conflict since the USSR’s demise is both proper and powerful. His allusion to the massive narrative Info War campaign being waged to erase Russia from its victorious triumph over Nazi Germany and reminder that began with the war to dismember Yugoslavia. The immediate task is the SMO; the secondary task that supports the first is ensuring Russian economic success. The next task is support for Iran, which is intertwined with the overall global conflict to rid the world of hegemony and hegemons.

In an odd way, Putin thanked Russia’s enemies for making Russia strong again.

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Note the publication date at upper left—1687.

When I saw the title of this Dragon TV, “This is China” production, I was very curious to learn what the distorted translation called The “Kaftin Canyon” of Western Political Civilization, which was made even harder when it was also called a “gorge”. At least there was a clue—the term was associated with Marx and one of his observations: “The Krafting Canyon” which referred to the shaping process a society undergoes when subjected to Capitalism that’s possible to avoid as I discovered thanks to Yandex. By the time I’d read far enough to answer my initial question I was fascinated by the history and interpretations being presented and determined that I ought to share this transcript with Gym readers. So, lets dive right in with the program’s preamble:

In China’s political civilization, bureaucracy is an organic part of the overall state system, serving a higher “political path.” But Western bureaucracy is more of a tool-based “technique,” extremely immature and prone to deviation or regression.

On July 13’s Dragon TV’s program “This Is China,” Professor Zhang Weiwei, Director of the Institute of China Studies at Fudan University, and Professor Fan Yongpeng, Deputy Director of the Institute of China Studies, observed the governance challenges of Western politics through the lens of Western bureaucratic systems.

Prior to the adoption of the Civil Service System within the USA, we had what was then called correctly The Spoils System where the election winner needed to replace all the previous people, which was somewhat easy when the federal government was small—spoils because lots of corruption occurred throughout the Federalist System (Federalism), which was the national system of governance, not just at the Federal level. Other Western nations have their own systems that citizens often curse without really knowing why. Hopefully a lesson lies in what follows:

Fan Yongpeng:

In recent years, various chaotic phenomena have emerged in Western political arenas, reflecting that Western political civilization is undergoing a serious crisis. Today, I will discuss the challenges faced by Western political civilization from a very specific perspective: the issues of the American bureaucratic system.

From recent news reports, we often hear about all sorts of bizarre phenomena exposed by the American bureaucratic system. In fact, it’s not just us “onlookers”—Americans themselves are anxious, with people constantly criticizing the government’s bureaucracy, inefficiency, and corruption. However, the U.S. government’s approach to solving problems is different from ours; its approach is very unconventional. They do not diagnose rationally or reform in an orderly manner.

For example, when Trump was first elected, he started harshly criticizing the bureaucratic system as a “deep state” because he couldn’t handle the bureaucratic machine, which is understandable. But in his second term, his approach became increasingly outrageous. First, he teamed up with Musk to carry out sweeping reforms, cutting many institutions they considered useless, laying off a large number of officials, and destroying many people’s iron rice bowls.

Then these two fell out on their own, and the “Government Efficiency Department” stopped doing it and directly treated the government as their personal attendant. The White House is full of nepotism, calling deer a horse, flattering, and singing praises, all about “winning the classics,” almost to make Trump a king.

After all this turmoil, America’s bureaucratic politics have become even more complex. Old problems remain unresolved, and new ones have emerged. In summary, I think there are currently several main symptoms.

First, the traditional principle of “civil official neutrality” has failed. Over the past few decades, many in the global political science community have promoted a core value of the Western civil service system, called “political neutrality” and the principle of promotion based on “merit.” But today, Trump is pushing for “de-neutralization” reforms, making personal loyalty to the president a core criterion, and so-called “neutralization” and “depoliticization” are increasingly becoming a joke.

Second, old bureaucracy and new fascism coexist. Traditionally, inefficiencies, incompetence, and waste caused by rigidity have not been resolved and may instead be exacerbated by newly emerging politicized reforms. For example, Trump used the Bureau of Immigration and Customs Enforcement to carry out political enforcement, leading many to criticize the bureau as Trump’s “Gestapo,” believing the U.S. is heading toward fascism.

Third, the loss of professional experience and the foundation of national governance are undermined. Trump’s large-scale political purges and the loss of talent in the U.S. government are undermining the government’s ability to formulate policies and effectively manage the country. In the past, this civil service system accumulated extensive professional experience in international economics and law, but now all has been replaced by personal loyalty.

Fourth, old corruption is stacked on top of new corruption. First, there is the old bureaucratic corruption, which is now completely unsolvable. These new officials, who rose to power through personal political loyalty and nepotism, acted with even greater brazenness, openly and innovatively, driving corruption to the highest level in the United States.

In short, the current American bureaucratic politics is undergoing a “sick transformation.” I believe it is not just a general, age-related “disease,” but a strong regression, regressing back to a pre-modern state. It’s not just the United States; looking at today’s Europe, Japan, and South Korea, their bureaucratic systems show signs of stagnation, rigidity, or even regression.

So, the question arises: why has the Western bureaucracy, long touted as “advanced, modern, professional, and resilient” for over a hundred years, decayed so rapidly and possibly regressed to a pre-modern state? I believe it must be placed in history to see clearly. The West is very different from China; its bureaucracy was very underdeveloped before modern times. Later, influenced by China’s bureaucracy and the imperial examination system, it was only in the mid to late nineteenth century that bureaucratic systems gradually emerged.

However, Western bureaucracy is very different from China’s original system. For example, over two thousand years after the Qin unification, China’s bureaucracy went through repeated cycles, tug-of-war, and evolution, and by the mid-Qing dynasty, it had basically reached perfection with a very solid foundation. [Approximately 1760-1800.] In contrast, the Western fast-track bureaucracy has shallow foundations and is underdeveloped. Therefore, a preliminary comparison reveals that the bureaucratic system of ancient China differs greatly from that of the modern Western bureaucracy in the following aspects.

In ancient China, the bureaucratic system was inseparable from imperial power, together forming a unified centralized state structure. In contrast, Western bureaucracy means civil servants cannot participate in high-level politics and can only carry out legislative laws and political officials’ directives. This is because, from its inception, it was embedded within the so-called electoral representative system and multi-party system, thus originating from a highly feudal system of bestowal and distribution of spoils. Consequently, the entire system remains a dependent and instrumental institution.

Second, the bureaucracy of ancient China was the “skeleton” of a unified country; without bureaucracy, there would be no unification. In contrast, Western centralized and unified states emerged very late, with insufficient vertical bureaucratic systems. Some countries implementing separation of powers do not have a unified bureaucratic system horizontally. Moreover, a basic logic of electoral politics also determines that its bureaucratic system can only act as the executor of local representative bodies, making it difficult to form a nationwide bureaucratic system, or, as we historically call “appointed officials.”

Third, there was no strict distinction of status within the ancient Chinese bureaucracy; from county magistrates to prime ministers, there was no fundamental distinction in status. Western bureaucracy is based on identity distinctions, with strict distinctions between political appointees and administrative officials. Political appointees are those appointed through elections or political positions, who bear political responsibilities and usually stand side by side with leaders or cabinets; while administrative officials are permanent, recruited through open examinations, responsible for specific tasks.

Fourth, China’s bureaucratic system had high moral standards, such as obeying both the ruler and the Way, as well as requirements for “self-cultivation, family management, governing the country, and bringing peace to the world.” Western civil official politics does not have these things; it mainly emphasizes the bottom line of “professional neutrality.” They only enforce laws and policies. Strictly speaking, it is different from the Chinese term “official”; it is more like a type of clerk.

Comparing these two systems, we can see that in China’s political civilization, bureaucracy is an organic part of the overall state system, serving a higher “political path.” However, Western bureaucracy is more of a tool-based “trick,” and its development is very immature, making it very prone to perversion or regression. This led me to a proposition: the problem of Western political civilization “crossing the Kafdin Gorge” [“Krafting Canyon” as I discovered.] This so-called [Krafting Canyon] is an ancient Italian location where the Romans are said to have suffered a humiliating defeat. Later, Marx borrowed this term to refer to the bloody and brutal stage of capitalist development experienced by Western European countries. When Marx said “crossing the [Krafting Canyon]” he meant whether Eastern societies like Russia could bypass the painful process of capitalism and directly cross into socialism.

Today, I will attempt to borrow this concept to apply to the development of political systems. The emergence of Western bureaucracy was inspired by China during the development of Western capitalism, resulting in a kind of “compression” development. Therefore, it lacks the resilience of historical accumulation, as well as a spontaneous and fully developed holistic and systematic approach. Therefore, Western bureaucracy and its administrative state construction are insufficient, modernization achievements are easily regressed, and various shortcomings are occasionally exposed.

In recent years, as Western economic and social development has stagnated and Western global hegemony is nearing its end, the inherent shortcomings of its bureaucratic system have become even more apparent, leading to the chaos I mentioned at the beginning. Of course, the overall changes in various aspects of Western society today are fundamentally caused by the inherent contradictions of capitalism. But when it comes to the crisis of bureaucracy, it is clearly determined by the fundamental contradictions of capitalism and the historical synergy formed by multiple forces.

The {“Krafting Canyon”] proposition I proposed for Western political civilization may reflect an important part of historical synergy. If this proposition holds, it will help us explain many issues. Most importantly, it reminds us to face one question: Is the Western system really that modern? Is it really an advanced system?

I call on everyone to break free from misconceptions about Western systems and the traps of traditional Western bureaucratic theory, and to observe, understand, study, and diagnose the development of Western bureaucratic systems and even their entire political civilization from new perspectives. In other words, we observe it from an equality, even a condescending perspective, which will help us understand Western institutions more scientifically and rationally, and also help us more clearly understand the path we should take.

So in today’s program, we’ll focus on the issue of the [‘Krafting Canyon’] in Western political civilization to discuss with everyone.

Roundtable discussion

He Jie: Just now, Teacher Fan gave a speech. As I mentioned at the beginning, today we will observe Western politics and some of its characteristics from a perspective that is rarely discussed in daily life—the operation of the Western bureaucratic system. Mr. Fan said that in fact, a significant part of the Western bureaucratic system, including the civil service system, was learned from China. What did they learn?

Zhang Weiwei: The West borrowed from China, and now there is no dispute. Because European bureaucracy at that time couldn’t be called a bureaucratic system; the entire government was hereditary and favored, leading to severe corruption. After some missionaries arrived in China, they began introducing China’s civil service system, what we call the imperial examination system, selecting officials through these exams and introducing them to Europe.

Especially Enlightenment thinkers like Voltaire believed Europe should adopt such a system, calling it the fairest and best system. The earliest practice is generally considered to have been in Britain. At first, in Britain, they didn’t dare to do it or were unsure, since it was all hereditary aristocracy. If you change the system and commoners pass the exam, what then? Worried that something might go wrong. Later, the East India Company in Britain began implementing it, starting around 1830 with civil service examinations, which proved very effective and were later promoted within Britain. By around 1870, it had spread to Germany, France, and the United States [1871].

Later, due to the reform and opening up, we suddenly realized that the Western civil service system seemed quite good. The Chinese government sent personnel to investigate, and they [the West] said, ‘We first learned from you, and then we began to re-examine this history.’ It proves to be true.

He Jie: Just now, Teacher Fan made it very clear in his speech that in Western bureaucratic systems, even those called bureaucrats are divided into several categories. Some may be officials brought in as new leaders take office and form cabinets, while others are transactional officials. “The camp is iron, the soldiers flow like water”—they are that “camp.”

Fan Yongpeng: The division between administrative officers and administrative officers exists outside of China, in all Western countries and most countries that practice representative systems. This system is fundamentally different from ours: historically, from county magistrate to prime minister, for example, all cadres in today’s system have equal status, right? They are strictly separated, with firewalls in between. [In the West]. the top group of government officials follow the political party or politicians, have the support of big shots, or have capital to back you in elections. The lower group of officials are just tools. For example, in the United States, federal civil servants aren’t called ‘officials’ but ‘federal employees’—in other words, they’re just workers. These people can be hired through exams and promoted based on performance, but there is a ceiling above them.

Over the past few decades, including in Chinese political science, the vast majority of theories have believed that this represents a modern, rational, professional, and neutral bureaucratic system. Officials cannot be politically involved, cannot follow elections, and cannot have party leanings; this is to maintain government stability. There is some truth to this, because the parties above it change back and forth, so a relatively stable bureaucratic system is needed. Overall, the idea that it is “neutral and advanced” is wishful thinking.

I disagree. Why? For a commoner’s child, an ordinary citizen, what is your best way to participate in politics? It is through elections. Elections require capital investment, which ordinary people cannot access. It needs media promotion, but ordinary people can’t get it. And it needs the sponsorship of big shots, which ordinary people can’t get.

For children of ordinary people, the best way is to pass the exam. But this system strictly limits the officials who pass the exam to the middle and lower levels, and you can never interfere in upper-level politics. Therefore, essentially, it is an anti-democratic institutional form.

He Jie: If you look at Japan’s bureaucratic system, you’ll find that it’s actually full of aristocratic clans and factions, all of which are inherited from the same lineage.

Zhang Weiwei: On the surface, it’s called the civil service system, but in reality, especially in the US and Europe, the differences are quite significant. For example, in the United States and the United Kingdom, a common complaint is that a new U.S. president must replace 3,500 to 4,000 appointees, while in countries like the UK, no more than 100 may be replaced. Every U.S. appointment is done after half a year, a year, or even longer, with many positions still unappointed.

He Jie: Trump’s term is very obvious. Halfway through, many secretaries are still vacant.

Fan Yongpeng: They are still missing more than a hundred ambassadors.

He Jie: From this perspective, would a political scene like the UK appear a bit more stable than the US?

Zhang Weiwei: Generally speaking, representative systems like this and British parliamentary democracy were invented by the UK and are more stable than the US presidential system. Because the ruling party holds the majority in parliament, it selects the prime minister. In the United States, it may be that the president is one person, and many representatives in Congress belong to different parties, resulting in constant arguments and instability.

Fan Yongpeng: Western bureaucracy—just now you discussed the differences between the US and Europe. Historically, Europeans have always believed that the US system is lagging behind in many ways. For example, Max Weber, the pioneer of bureaucratic theory, sharply criticized the American bureaucracy. He said that the United States is run by a group of outsiders, private attendants, and party factions. If it weren’t for the country’s unlimited resources and youth, it simply couldn’t withstand such turmoil. Objectively speaking, Germany’s bureaucracy is clearly much more advanced than America’s.

Why did countries like Britain and Germany develop civil service and bureaucratic systems in history, which seems quite good? I think a very important reason is that emerging capitalism, with new vitality, had just emerged. When such progress first emerged, the economy and technology developed rapidly, the country quickly integrated, and a modern nation-state was formed. Even in the twentieth century, we saw that these countries, including those after World War II, had been devastated, but the advanced and progressive nature formed in their history still remained, so what we see seems very beautiful. On the other hand, these countries are small and medium-sized nations, and their bureaucratic systems face much worse challenges than ours, and also much worse than the United States. Within a population of tens of millions, it achieved rational state management, precise control over national resources, and even unified language, culture, weights and measures, and currency. Over the past one or two hundred years, it has accomplished many things. But looking back today, it’s already behind.

He Jie: The reason the Western political system is facing such challenges now is due to its own nature. Its essence brings what may initially be new, but with the development of capitalism, it reaches an extreme state, leading to the decline we see today.

Fan Yongpeng: Its development was incomplete from the very beginning. It is hard to imagine how backward the Western bureaucracy was before modern times, and likewise, Westerners at the time could hardly imagine how advanced China’s bureaucracy was. Let me give an example: Marco Polo talked about what China’s bureaucracy is like, telling Europeans that they didn’t believe. Until Marco Polo’s deathbed, because Christians cannot lie and go to heaven, a priest came and told him, “Admit it, you have been lying your whole life.” But Marco Polo’s final words on his deathbed are: “I do not admit it, much of what I have seen, I have not said.” This shows that even with the imagination of Europeans at the time, it was impossible to imagine it.

Voltaire, upon reading records of the Chinese bureaucracy, said: “This is the only system I know of that ruled without relying on ignorance and superstition.” He said, “I can’t imagine a better system than this.” So, Europeans are especially eager to implement this system.

But as I mentioned in my speech, a very important point is that it originated from feudalism, with a historical stage roughly equivalent to our Warring States period, so its ability to overcome feudalism is very weak and insufficient. Therefore, the development of Western bureaucracy has never become an organic part of the fundamental system of the state; it has always been a subsidiary instrumental institution, subordinate to government officials and elected officials. Therefore, many instrumental phenomena appeared among its officials, because it was a deformed, “compressive,” and localized development that did not form a systematic state system. So when Western development stagnates today, decline immediately begins. Our bureaucratic system, due to a revolutionary transformation of the traditional bureaucracy by the Chinese Communist Party, has become a modern cadre system in the country, completely unlike the West.

He Jie: We have preserved the excellent parts of the traditional bureaucratic system, discarded the bad parts, and injected modernity into it. This is the source of the current official system in China, its effectiveness and efficiency.

Zhang Weiwei: From a macro perspective, I agree. The Western civil service and civil service systems have not yet accumulated enough and are not yet fully developed. This system suddenly appeared, and after it arrived, it coincided with the rise of nation-states, industrial development, successful industrialization, and colonies. After success, it suddenly became wealthy, resulting in the so-called “one handsome covering a hundred flaws.”

But you realize that once its economy fails and declines across the board, its civil service system becomes less secure.

Fan Yongpeng: Let me add something. For example, in the process of modernization in the United States, the bureaucracy played a significant role. We all know that China was promoted by Qin Shi Huang to implement “unified writing and unified carriage tracks.” When did the United States achieve this? In the late nineteenth century, after the civil war. Relying on what? It was precisely after the emergence of bureaucrats that these bureaucrats to some extent promoted a unified time system, a unified geographic system, and unified standards in the United States, including the chamber institutions formed at the time.

He Jie: Although the entire Western bureaucratic system learns from the East, its own flaws mean it has not fully learned it either. But with the rise of capitalism, even if not fully learned, it played a significant role in social integration and organization—this is the history we see in it.

In your speech, you specifically mentioned that during Trump’s term, especially his second term, everyone should clearly see the bureaucratic system, particularly the American bureaucracy, how severe its flaws are, as if rationality has disappeared, and science has become barren. As Trump’s term ends, it will inevitably come to an end. Can these flaws and loopholes be patched up a bit, or will the crises this system face become increasingly apparent?

Fan Yongpeng: After Trump leaves, many aspects of the U.S. may improve, at least not as constantly as it is today. These are some very peculiar practices. The bureaucratic system most wants policies to be predictable and to do things their own way. But overall, it is difficult to return to its golden age.

Zhang Weiwei: One of America’s biggest problems is its rigid system. The U.S. has become a country unable to reform, which is its biggest problem today.

For example, the Americans proposed universal health insurance over a hundred years ago, during China’s Xinhai Revolution, when Roosevelt [Theodore Roosevelt’s 1910 “The New Nationalism” speech] proposed it, but it has yet to be realized. Why? The system has become rigid.

China realized the seriousness of this problem and had some financial resources, and within ten years built a preliminary universal healthcare network. The US still hasn’t been able to build it. The so-called “rule of law” has ended up being “lawyers governing the country,” where the entire country is ruled by lawyers, with vested interests behind the scenes. “Legal fundamentalism” leads to constant constraints and numerous vetoes, making the establishment of a universal medical insurance system a distant prospect.

Fan Yongpeng: The excessive rule of law in the United States ultimately led to the dysfunction of the bureaucratic system, and a large amount of power was taken over by lawyers. That’s why lawyers particularly want to pursue that kind of abstract, extreme rule of law—they have the power. Civil servants, these administrative officials, because they don’t bear political responsibility—I’m just a worker, I don’t enjoy much political power, but I have executive power. So you’ll find that these people have a big problem: they have no faith, no moral integrity. They can unite with the military-industrial complex, special interest groups, and those who deal with gender and race issues, even the lawyers mentioned earlier, forming a special interest group. Then it becomes: you are the “flowing” officials, and I am the “ironclad” clerk.

So, as I just mentioned, these people are more like clerks than officials. This phenomenon also exists in Chinese history. Below the county magistrate and county head, clerks were extremely ruthless and controlled local political power. There’s an old saying, “Weak officials, strong clerks.” The United States also has this problem, but it doesn’t start below the county level; it starts below the cabinet minister level. This kind of clerk-controlled power exists throughout the country.

Q&A session

Audience: Hello, both teachers, hello to the host. Fukuyama once proposed the “end of history,” arguing that Western freedom and democracy might be the last form of governance in human civilization. However, recently he warned that American democracy is in decline, and he affirmed the feasibility of the Chinese model. Does this kind of reflection mean he is breaking through the limits of ideology? Thank you.

Zhang Weiwei: It should be said that Fukuyama has made progress, but he still hasn’t completely changed his ‘conclusion at the end of history.’ Because he still insists that he is discussing the end of history in the sense of Hegel’s “absolute spirit.”

“Absolute spirit” is an idealist philosophical tradition that upholds a consistent, transcendental truth. You say it has already failed, and looking back a hundred years later, it might still be correct, and so on. In fact, by Nietzsche’s time, this philosophical tradition had already ended. Nietzsche said, ‘Go back to nature, return to humanity, and stop pursuing these metaphysical absolutist ideas.’ We should return to China’s position: Chinese philosophy is like this—a philosophy centered on people. Only then can it be called true philosophy—a philosophy of solving problems, a philosophy of seeking truth from facts.

What predicament has Fukuyama fallen into? This is what we often discuss: the tradition of Western political culture believes in ‘political systems’ rather than ‘political ethics.’ “Political system” is a distinct form, starting from Plato. A few people form a regime—this is monarchy, this is autocracy, this is democracy. Which is good and which is bad? They are deterministic in “political system.” We are guided by “political paths,” exploring a form of government suited to the people’s and national conditions.

Fan Yongpeng: There are indeed some people in the US reflecting now. Several think tanks, including the UK’s Financial Times, have recently published several articles showing some aspects of China’s path being correct.

But just like historically, it learned our bureaucracy—after much study, it only managed to develop an exam system from the imperial examination system. Today is the same—no matter how much it looks, it can’t see the whole picture; it can only see that one specific aspect is correct. Why? Under the capitalist system, unless there is a fundamental revolution that rejects the capitalist system, the overall framework cannot be broken; it can only make some patchwork within it.

Let alone scholars like Fukuyama. Of course, he made progress, but when he proposed the ‘conclusion of the end of history,’ he was not a serious scholar. He was capable, but not a scholar with deep knowledge of politics or deep knowledge. Why? He started from philosophy and idealism, and in fact, he was also a defender of Western values. Especially as a Japanese American, he had a deliberate motivation to cater to and convert to Western liberal democratic culture. So today’s reflection is nothing more than a slight return to a somewhat normal state of mindset—a pragmatic mindset.

Audience: Hello teachers, I am a financial professional. Today, I would like to ask the teachers a question: In recent years, with geopolitical conflicts intensifying, are the inherent shortcomings of Western political systems leading to constant changes in international conflicts and the intensification of various conflicts? In this situation, how should China face this increasingly uncontrollable international situation and external conflicts?

Zhang Weiwei: China’s decisions are extremely cautious. As we mentioned earlier, when the U.S. Security Strategy Report was released, we said Trump acknowledged his strength, didn’t dare to touch Russia and China, but was ready to bully all other countries except Israel. In other words, the U.S. recognizes its strength the most, so we must continue to demonstrate our powerful hard and soft power. No matter how much we move, it won’t be able to move us—this must be acknowledged first. But we hope he won’t touch other countries either. No matter what, by holding this area, we have preserved a vast area of peace, which is very important.

Fan Yongpeng: The chaos in today’s world is very directly related to the decline of the Western bureaucracy. Part of it is due to the decline and rigidity of Western bureaucracy, which has left it speechless in international strategy. Take the Russia-Ukraine war for so many years, with many driving forces behind it being military-industrial and capital groups making money, while ideological groups are waging a new Cold War. But look, whether it’s the U.S. Department of War or the European Department of Defense, have their officials played a serious role? In many European countries, so-called defense ministers even have no political experience, essentially “infants commanding troops” to manage life and death. This is a very frightening matter. [Plus Hegseth.]

Second, it’s unprofessional. For example, if the U.S. attacks Iran, if the U.S. decision-making system is traditionally a more professional and somewhat mature bureaucracy, it might not adopt a war form. But look at today—within the US, the West, and Europe, its bureaucratic system does not serve as a ‘ballast stone’ for national stability and foreign policy stability.

So, in today’s world, it is largely because these countries are truly unprofessional, rigid, and corrupt, leading to this outcome.

He Jie: Even if there are a few scattered majors, they see the bigger picture, but it’s useless and powerless. In the end, they might choose to resign early. That’s called self-preservation.

Fan Yongpeng: There have been a lot of resignations lately.

Zhang Weiwei: For example, I recently saw a report that King Charles of the United Kingdom visited the United States, and the flag displayed in the US was that of Australia. This was very unprofessional and a negligence by the protocol department. Then look at this U.S. president’s banquet, and then another shooting incident. This shows that national governance has problems in many specific areas, with too many loopholes.

Audience: Hello teachers, my name is Li Xu. I once worked as a volunteer under the Western Program in grassroots service in Xinjiang for two years.

He Jie: Salute to you. Where in Xinjiang?

Audience: At a township government under Urumqi. I would like to ask the two teachers: What lessons and lessons does the predicament caused by Western systems offer for our current development of Chinese-style modernization?

Fan Yongpeng: I think we can look at it from several aspects. First, in human history, the fundamental driving force of history is the people. But when it comes to key matters, there are a few key few who play a leadership role. You see, within our cadre team, there are always some excellent cadres who serve as role models and can inspire this motivation in our hearts.

We must also recognize that the bureaucracy, as a historical phenomenon, is naturally prone to inertia and rigidity in its function and nature. It is not an expansionary social mechanism, but a vertically stable social mechanism, which I call a negative feedback social mechanism.

How do you break this stuff? In human history, the countries and civilizations I have studied mainly rely on two methods: first, faith; second, supervision. Whether it was the group of people in Chinese history who emphasized Confucianism and scholar-official sentiment, or officials from the Arab Empire and Islam, or officials from Christian and Catholic countries, when they acted, they faced two standards: first, as a bureaucrat, I could do or not do this matter; but as my faith, I have to do this. The tension between the two is a factor. The second factor is supervision, which China is the strongest in this regard. China has had a system of supervision since ancient times, so there must be faith and supervision. Even into modern society, every country remains like this: first, officials or cadre systems must have ideological beliefs; Second, you need a strong supervisory mechanism to push you forward. Always solve problems dynamically.

Today, most countries and societies in the world mainly have two models of governance: one driven by capital, and the other by bureaucracy. Capital-driven ones are likely to ultimately lead to social division and social collapse while Bureaucratic drivers are very likely to become rigid. Therefore, China is neither driven by capital nor bureaucracy; we are represented by the Communist Party of China and the Chinese people. We are a political force with ideals, beliefs, and a mission-driven force, pushing society forward.

Zhang Weiwei: Let me add one thing. For a country like China to rise so rapidly, there must be a group of people, a group of industries, a group of enterprises, a group of companies, and a group of outstanding cadres doing different, first-class work. The entire country’s appearance changes rapidly.

Fan Yongpeng: I’d like to add something, and I’d like to say one more thing to young cadres. We’re currently conducting a study campaign on the correct view of performance evaluation. Looking back on my own youth, I truly understand the mindset of some young cadres today. Back then, as a passionate young person, I had lofty ideals in mind, but when it came to the actual work, after just a couple of setbacks, I gave up and felt frustrated. But many years later, looking back, I recall a quote from Wang Fuzhi that perfectly captures this: “Do not be impatient for success or achievement.” What does that mean? It means that if I believe something can be done, I immediately want to do it; if I believe it can be done, I immediately want to start doing it. He calls this “impatient desire,” the kind of restlessness that comes with being impatient. Real life isn’t that simple, is it?

So it’s normal for young cadres to encounter setbacks at work. When facing setbacks, I recall Wang Fuzhi’s words: Being a leading cadre, including being a Communist Party member, is a process of self-cultivation. In serving the people, we must constantly improve ourselves, enhance ourselves, and shape ourselves into a different kind of person. To overcome this impatience, give yourself time to reflect, improve, and then elevate yourself.

He Jie: Actually, it’s normal for everyone to have confusion in their work, but the greatest joy is standing up amid confusion and ultimately surpassing oneself. On a broad scale, governing a country requires a “Way,” which we call “governance and Dao.” But for individuals, faith is also very important; when you have faith in your heart, it’s different. Today, we are discussing the United States, including the Western bureaucratic system, its operational shortcomings, and its structural deficiencies and problems, which also help us gain a deeper understanding of Western politics.

But from the bureaucratic system, we can also observe our own daily operations. I think that saying is true: we must always consider where our sense of social responsibility lies—whether it’s for the welfare of the people. Additionally, we must always consider what kind of work we want to do and how to do it well. If you answer this question well, many of the issues you just mentioned may be easily resolved. Thank you both again and thank you to all the audience at the venue. Thank you all, goodbye. [My Emphasis]

The goal of a governance system ought to be he maintenance and uplifting the wellbeing of all people within the nation and beyond to all Humanity. That’s the basic philosophy of Xi Jinping’s Global Governance Initiative. It’s also Russian governance philosophy as managed by President Putin—uplift the people, solve their problems by involving them in both pursuits and a strong nation will result. Of course, it helps when such an ethos is deeply embedded within society. The shared emphasis by Russia and China is to seek out the problems you know will exist and solve them with the people, while also asking them to tell government what the problems are—don’t be shy since the people are the main actor in the governance system beyond the government itself. Other nations have or are trying to implement such a governance system. The political-economic system as noted is also a determining factor with the problems created by Capitalism sketched somewhat. The lawyer observation was very correct and something griped about by many Americans. Proper governance was also a major factor in Xi Jinping’s speech announcing the initiation of the World AI Cooperation Organization that this editorial covers. A showcase example of bureaucratic wall building can be read here and also involves AI. The bureaucratic complex needs reforming in most nations since many are patterned on the dysfunctional Western model and its immoral ethos. Many have seen that need for 170+ years and not just Marx and Engles. Well, that’s not quite correct. That was known by Aristotle and others from his era. It’s time for the world to emerge from the Krafting Canyon and adopt a different, better path.

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Given the decidedly positive promotion of Chinse and Russian integration and development by the two academics featured in the last two articles, this idea and its promotion is no surprise as events are making the obvious more visible than ever. The proposed idea published by Russia in Global Affairs isn’t solely for the use of Russia and China, but can be adopted by many nations as the author states:

By deeply integrating energy, technology and finance, we are opening up what can be called an "efficiency dividend" and a "green premium" – a true new space for growth, which requires not the development of new lands, but only a new way of thinking. [My Emphasis]

The author isn’t the only person to articulate the formation of such a relationship. Where he differs is in his ability to actively promote this formulation given his position. It’s also clear that the Outlaw US Empire will not surrender its hegemonic position peacefully—there’s no real “contraction.” For those running that Empire, its benefits far outweigh anything else as we see through continued neglect of very serious problems within the Metropole and the rejection of law and morality. So, this new growth region or ecosystem can be seen as a way to circumvent hegemony and hasten its demise. Now for the essay:

For decades, globalization has followed a familiar pattern. Energy served as a tool of geopolitics, technology became a source of fragmentation, and finance was increasingly used as a weapon. However, this scheme has come to an end. The question is no longer how to strengthen the old model, but where the next horizon of high-quality development is.

The answer should not be sought in some uncharted territory in the corners of the map. It is located in the gaps between sectors. Today, inefficiencies arise from working in isolated areas. The greatest opportunities open up thanks to interweaving. By deeply integrating energy, technology and finance, we are opening up what can be called an “efficiency dividend” and a “green premium” – a true new space for growth, which requires not the development of new lands, but only a new way of thinking. These are not technical nuances for specialists. It is a strategic imperative for any economy that wants to grow without being held hostage to the old rules of zero-sum competition.

For China and Russia, this is of particular importance. Both countries are rethinking their role in a multipolar world. Both face the need to diversify their economies and external partnerships. And both have complementary assets that, if properly integrated, could transform the abstract idea of a “new space” into a concrete engine of mutual benefit.

Why the old model no longer works

Let’s be honest about the current situation. The traditional model of globalization assumed that energy could be secured through territorial control, that technology would flow naturally across borders, and that finance would remain a neutral facilitator of trade. None of these assumptions were realized. Energy supply chains have become hotbeds of rivalry. Advanced technologies are blocked by export controls and security barriers. Financial systems are used for both punishment and assistance. As much as we regret this development, it cannot be ignored.

As a result, we get a world with a high degree of conflict and a low level of trust.

There is a temptation to withdraw even more into oneself – to accumulate energy resources, ban foreign technologies, and use one’s own currency as a weapon. This temptation must be resisted, not because it is morally wrong, but because it is economically self-destructive. [That’s precisely what the Outlaw US Empire’s doing.] The real cost of fragmentation is unseen, but enormous. Every hour of downtime for a renewable energy source because the grid can’t keep up with its variability, every year that a promising energy storage technology waits for funding because it doesn’t fit into the banking table, every ton of carbon that doesn’t count because countries can’t agree on who should pay, are integration failures. And that’s where the new space for growth is.

For China and Russia, this logic is especially relevant. Russia has vast energy resources, including natural gas, oil, and critical minerals for batteries and renewable energy. China has the world’s largest capabilities in solar power generation, grid technology and digital infrastructure.

No country can complete the energy transition alone. Russia needs to diversify its exports beyond traditional markets and the simple sale of crude hydrocarbons. China needs reliable, affordable, and clean energy to power its industrial machinery. The obvious answer is not just to buy and sell, but to build together.

Energy and Technology: From Volatility to Asset

Let’s start with the relationship between energy and technology, where friction is most obvious. The rapid development of wind and solar power has created a familiar problem: renewables are working intermittently, while our power systems need stability. For decades, the industry has operated on a “source follows load” model, where generation passively regulates demand. A cloud casts a shadow on the solar power plant, and the gas turbine should spin. The wind is dying down, and the coal-fired power plant has to make up for it. This is becoming more expensive as the share of renewables grows beyond what traditional power systems were designed to do.

The solution is to change the passive model to the active one, from “source follows load” to “source-load interaction.” That means using artificial intelligence to predict weather and demand, deploying smart inverters and distributed energy storage, and sending real-time price signals that encourage factories and households to shift consumption to times when the sun is shining and the wind is blowing.

In other words, the energy system is turning from a one-way main to a two-way market.

In this context, the partnership between China and Russia has the potential to be transformative. Russia has rich reserves of natural gas, which can serve as a flexible transitional fuel while energy from renewable sources increases. More importantly, Russia has a huge untapped potential for wind and solar energy, especially in the southern and Far Eastern regions. China has the manufacturing capacity for large-scale production of solar panels, wind turbines, and energy storage systems, as well as the digital expertise to build smart grids. By combining Russian energy resources with Chinese technology and manufacturing, the two countries could create an integrated, low-carbon energy system that neither of them can achieve alone. There is no charity or ostentatious rhetoric here. Pure economic pragmatism. As a result, such a system would be more stable, efficient, and sustainable than any other system built on simple resource extraction.

Technology and Finance: The Case for Patient Capital

But technology cannot scale without the right financial architecture. Material technologies–-green hydrogen, fusion, advanced energy storage systems, next-generation solar power–-require long development cycles, large upfront investments, and allow for high failure rates. Traditional lending institutions avoid them because they measure horizons in quarters, not decades. Venture capital can help, but it’s focused on software, where failure is cheap and scaling is fast. With power equipment, it’s the opposite: failures are costly, and scaling takes years.

As a result, there is chronic underinvestment in the technologies that are most important for decarbonization. Simply buying finished products abroad is not a solution. This is expensive, does not create domestic capacity and makes the buyer dependent on foreign supply chains. The alternative is a closed loop linking technology, industry, and finance. The tools are known: securitization of intellectual property, hybrids of lending and equity participation, as well as risk hedging instruments adapted to different stages of technological maturity. A change of mindset is needed. We can’t evaluate next-generation batteries in the same way as a coal mine.

What the world needs now is patient capital, not short-term capital.

In the case of China and Russia, the financial aspect of cooperation is often overlooked. Both countries are exploring alternatives to trading in dollars, including settlements in local currencies and digital currencies. Energy trading is a natural area for piloting these tools. Imagine a Russian energy company selling natural gas or green hydrogen to a Chinese buyer, not in dollars, but in a digital currency backed by a basket of commodities. Imagine, too, that a portion of the proceeds goes to a joint investment fund to develop next-generation energy technologies. This is not science fiction, but a logical continuation of existing experiments with central bank digital currencies and bilateral swap agreements. The key is to move from non-systematic mechanisms to a systematic structure.

Energy and finance: accounting for the “green premium”

Energy and finance are a couple that is often given too little attention. The carbon footprint has not yet been fully monetized, and it remains unclear who should bear the costs of the “green premium” – the additional costs of producing something using clean energy rather than fossil fuels. Until the premium falls to zero or lower, there will always be a temptation to take the cheaper, dirtier route. However, the premium will not fall on its own. This requires active financial engineering solutions.

Finance should act as an indicator of the energy transition, not just voting machines. Several mechanisms can help with this. Cross-border clean energy certification creates a global market for clean electricity. Working with blockchain-based carbon assets reduces fraud and double counting. Transition financing frameworks help high-carbon industries decarbonize in an orderly manner. When reducing carbon emissions becomes a lucrative balancing act, the energy transition is no longer a burden and becomes a new room for growth.

China and Russia have an interest in forming these mechanisms, not just adopting rules written in other countries. A joint Sino-Russian carbon market, linked to broader Eurasian initiatives, could create a regional price signal that would reward emissions reductions while hedging against the volatility of the global carbon market. This would make the “green premium” real and cost-effective.

Successful implementation: standards, risks and talent

For the successful implementation of all this, specific institutional mechanisms are needed. First, mutual recognition of standards. China and Russia could take the lead in developing common standards for green energy projects, from hydrogen certification to network protocols, offering a model for broader Eurasian cooperation. Secondly, risk-sharing mechanisms. A bilateral technology transformation guarantee fund focused on early-stage AI projects in the energy sector could alleviate initial uncertainty and attract private capital. Thirdly, the mobility of talents. The real breakthroughs will come from financiers who understand Russian energy data and Chinese grid technologies, and engineers who are versed in the financial instruments of both jurisdictions. These specialists of related qualifications need to be educated through joint educational programs and the exchange of scientific research.

Conclusion: Symphony, Not Solo

None of this can be a solo performance by any one country. High-quality development is a symphony of global value chains. For China and Russia, the opportunities are clear.

Russia has energy resources, land, and a strategic location connecting Europe and Asia. China has the scale of production, digital and green technologies, and financial depth. As part of a broader energy diversification and de-dollarization agenda, there should be a focus on using technology to improve the efficiency of energy transportation and using new financial instruments – local currency settlements, digital currencies – to create a new space for energy trading. This is much more productive than arguing about how to divide an already finished pie.

The new space for high-quality development is not far away. It’s right here – and it comes at the very moment when we decide to break down the barriers between energy, technology, and finance.

For China and Russia, this moment presents a chance to move beyond traditional buyer-seller relationships and toward genuine, complementary growth. The challenge is not to compete for what already exists. It is necessary to use these three areas as a prism, focusing sunlight to ignite the next wave of growth. This is now the main frontier in need of development. [Bolded Italics My Emphasis]

I recall President Putin speaking about the sorts of relationships discussed above. Rosatom’s arrangements with its clients have a similar synergy, and AI advancements increasing basic industrial efficiency levels are moving very fast. Xi Jinping’s newly announced Global AI Development Initiative needs to be integrated into these ideas. EAEU will be very interested in pursuing the discussed ideas, and constructing a Eurasian smart grid given the continent’s very sizable breadth would be championed by all its members—I can only think of India and Europe being naysayers to such a project. Russia and China both have the financial power and investment acumen to launch such a project, and Russia needs to quickly increase its electrical output to accomodate the growth of AI. Another space where both China and Russia can combine efforts is in Africa where both are deeply involved in its development processes. Despite its need to vastly and rapidly ramp up its electricity generation, Trump and his Gang are decidedly against any investment that doesn’t provide an almost instant profit thus ruling out any investment into its energy production and grid improvements regardless the need to keep Wall Street’s AI Bubble inflated. Neoliberal Dogma doesn’t allow for any real long-term investment, which is precisely why the Outlaw Empire’s declining. Will that Dogma be overthrown when the very real risk of falling ever further behind the leading technological nations can no longer be ignored? IMO, the earliest that might happen is 2029 when the next administration arrives. I expect this issue to be discussed at this year’s Far Eastern Economic Forum that begins at the start of September roughly ten days prior to the BRICS Summit.

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The gist of the second part of the discussion is encapsulated in the title. Here’s Guancha’s preamble prior to the discussion:

On June 30, Dr. Li Bo, Director of the Shanghai Spring and Autumn Strategic Research Institute, had a conversation with Distinguished Professor Huang Jing from Shanghai International Studies University….

Facing the blockade by the US and Europe, why has the Russia-Ukraine conflict lasted into its fourth year? What is the deeper meaning behind Putin's strategic moves in both the "Arctic" and "ASEAN"? In the Asia-Pacific region, the U.S. strategic retreat has triggered a "band for warmth" between Japan and the Philippines. Can this security alliance last? Facing unprecedented changes unseen in a century, how can China uphold the core bottom line of "never allowing war to enter the Asia-Pacific," and use this strategic window to seek steady progress? [My Emphasis]

As we’ve seen since Covid, China’s been active in many areas many of which were unseen at the time. IMO, China’s under no illusions when it comes to dealing with the Collective West which includes Japan. My continuing assessment of China’s goal is to eliminate Western hegemony without having to fight a major war with the Empire. That point-of-view holds Russia and Iran to be both partners and proxies in that quest. We’ll now see how these two academics explain their view of the situation:

3. Russia’s Grand Chessboard: Putin’s “Endurance Battle” and Global Breakthrough

1. The Russia-Ukraine conflict lasted longer than World War I—what does Putin want?

Li Bo: Our attention shifts to the most “hated” major power in Eurasia—Russia. Not long ago, Ukrainian drones attacked Russian oil and gas facilities, and Ukrainian data indicated that Russia’s refining capacity was severely affected. There are also claims that Ukraine and the US company Palantir have developed a “gamer” system, using AI to lock onto targets and fire—some say it’s Palantir’s soft advertising—there are various theories, but it’s a psychological deterrent. Russia’s frontal progress is actually quite steady, but it is rarely reported, with public attention focused entirely on the attack by Ukraine.

Huang Jing: Ukraine’s will and capability to resist are indeed strong. It has now become Europe’s strongest ground army, with 800,000 troops, and its drone technology has reached its peak. But Zelensky’s large-scale attack on Russian interior at this time is not aimed at expanding the war—he lacks the capability; drones alone cannot fight the world; the decisive victory must be on the ground, and Ukraine lacks this capability.

Ukraine is doing this to escalate the war situation: first, to tell the West that I can fight. Second, you must continue to support me. I fight for you, and I have real combat value. Third, for himself—because if he doesn’t do so, once the war ends, his political career will end.

Li Bo: Just like Israel’s Netanyahu, if we don’t fight, we’re doomed. For political survival, we must keep fighting.

Huang Jing: Yes, if you don’t fight, you’re ‘dead.’ Playing this way can produce some effect, but it’s hard to maintain sustainability. With his strike, Russia began to respond in kind. Peviously, Russia fought a “charity war,” deliberately avoiding attacks on civilian infrastructure, bridges, energy, refining, power plants, and civilian factories. [The emphasized not new, nor were avoided.] Now they’re starting to play equally, and they’re playing very hard.

The power of public opinion is in the hands of the West, so they only report on how powerful Ukraine is. [An interesting way of describing the Info War.] Looking at the battlefield situation, Russia’s strike capability is no less than Ukraine’s—when Ukraine fights, Russia retaliates twice as strong, because the war machine and strength are in place.

So, how should we view the war reaching this point? In the end, it all comes down to Russia. To be honest, Russia is indeed in a very difficult situation now; this war lasts longer than World War I.

Li Bo: That’s right, this war has been going on for four years.

Huang Jing: I have communicated with some Russian scholars, including Fyodor Lukyanov, Andrey Kortunov, and Sergey Karaganov—you know, all of whom are senior advisors to Putin. Although the three had different views on the situation, one thing was very firm: they all agreed that Russia would never lose and would ultimately win this war. Ultimately, this comes down to a matter of scale.

Why did Russia still continue to fight at this point? When Russia launched military operations against Ukraine, its goal was to neutralize Ukraine, thus aiming for denazification and demilitarization. But the initial goal of “neutralization” now seems to have basically been achieved. Trump has already said that Ukraine will not join NATO. As for what comes next, that’s another story.

It is now clear that Putin’s goals and “asking price” have increased.

Looking at the history of Russia and even the Soviet Union, the worst strategic situation for Russia was the US-Europe alliance. As long as the US and Europe unite, whether it’s the Soviet Union or Russia, it will be very difficult to deal with them. However, if the US and Europe split and they fought Russia one-on-one, Russia could handle it. Especially when facing Europe, the two most formidable military buildups in European history—one against Napoleon and one against Hitler (which almost equated with the unification of all Western Europe)—were ultimately defeated by Russia. As long as the US and Europe don’t join forces, Russia has enormous strategic space.

So Putin’s first goal now is to completely eliminate the possibility of US-Europe alliance. He knows very well that as long as Trump is on stage, the US-Europe conflict will exist and only widen. [But is this really the case?] He uses Ukraine as a lever to keep pressuring. Because the US and Europe have huge divisions over Ukraine: from his first day in office, Trump has been clamoring to end the war quickly, putting Ukraine on the menu, hoping to negotiate a good price with Russia through Ukraine to get Russia to follow.

So as long as Putin maintains military pressure—he’s not in a hurry to win immediately—keeps pressuring without ceasing, and the US-EU conflict will become increasingly exposed. This is his first goal—ideally to prevent the US and Europe from ever coming together.

Li Bo: And with two and a half years left until Trump’s current term ends, this conflict will continue to ferment.

Huang Jing: That’s right. The second point, as we all see and Putin can see, is that Europe’s biggest current problem is fragmentation, fragmentation, and economic failure. Even if Russia is sanctioned, it can still grow its own grain and won’t go hungry. Europe is different. Europe can’t meet its own demand for grain and other raw materials, so they have to buy raw materials and export products. Russia’s idea is, “I’ll endure with you and see who can outlast whom.”

Putin’s goal is to regain control of European politics and bring Russia back into European politics. Because Russia’s two proudest historical highlights were sitting in the seat of European rule-maker, dominating European politics: one was after defeating Napoleon and establishing the Vienna System, reshaping European politics for 40 years; Another time was during the post-World War II Soviet era, when USSR became the main architect of the Yalta system and managed it for several decades.

This time, Putin saw another opportunity. His negotiations with Europe were fake; the real goal was to force Europe to regain its status as a major power in Europe. So now Putin has stated that he is willing to negotiate with Europe. Trump said he was willing to talk, and Putin also said he was willing; But when facing Zelensky, Putin’s attitude is, “I can talk to you, but I’ll talk after you come up with a concrete solution.”

Zelensky doesn’t have any concrete solution. His specific plan needed to be written by Brussels, but now even Washington doesn’t have to write it out. So since Europe is willing to talk with Putin, Putin is naturally proactive. This is his second goal: to return to the center of European politics.

The third goal is that Putin wants to use this war to regain control and establish Russia’s status as a major power in the “multipolar world”—in other words, to take the table. The last goal that accompanied him to the table was to push Europe off the table.

It’s hard to imagine that if China and the United States were at the multipolar world’s table, plus Europe and Russia, Russia would be in a very passive position. So he wants to beat Europe so hard that it loses its right to play at the table. If Europe is to be at the table, it must sit together as a whole; no single European country has the capacity or right to sit at the table. If Russia breaks up the EU, it doesn’t need to completely collapse; once it does, Europe won’t be able to join the table.

Li Bo: The possibility of the EU being crushed or broken is actually quite high. For example, if Germany’s far-right takes power, or France’s far-right comes to power, the EU will collapse immediately.

Huang Jing: Yes, for example, if the AfD comes to power, or France’s Le Pen comes to power, the EU would collapse immediately. They will immediately exit like Brexit. If Germany and France leave the EU, can other countries still hold out? Putin can see all this, so his strategy is to “endure” and see who can endure whom.

Therefore, in response to the current Western narrative that “Russia seems very passive,” [Gawd, do they actually believe that when the narrative is the exact opposite?!] I want to say: Russia certainly carries a heavy burden, and it is certainly difficult, which is beyond doubt, but Russia can definitely endure. Its territory is vast. When Russia conscripts, it mostly takes place in peripheral areas like Siberia, with very little conscription in the core areas.

2. Russia’s first major move: playing an Arctic strategy

Huang Jing: What happens next will show even more of Putin’s formidability. Putin has recently made two major moves: the first is to reveal the Arctic card.

At the St. Petersburg Economic Forum in early June, Putin’s envoy and head of the Russian Direct Investment Fund Kirill Dmitriev publicly revealed to the media: “Since April 20, 2025, I met Trump’s envoy Steve Witkoff and Trump’s son-in-law, former White House senior advisor Jared Kushner, and we have been in contact. One of the key points we discussed was cooperation and development in the Arctic.” [The “Spirit of Anchorage” is now dead as declared by both Putin and Lavrov with the two grifters now seen as such.]

As soon as this stone was thrown, Putin’s Arctic card was revealed. [The NSR has long been a Russian ambition and began to take substantive form in 2013 when the NSR Administration was founded, well before the arrival of Trump.] Why is that? First, let’s look at the Arctic. According to environmental organizations, the Arctic ice sheet is melting at an accelerated pace, and ice-free weather will become the norm by summer 2050.

This brings two major changes. First, if the Arctic had no ice, sailing north from Asia (like China) through the Bering Strait directly to Europe would reduce the journey by nearly 5,000 nautical miles! Previously, we had to pass through the Strait of Malacca, then the Suez Canal, making a big detour. Wherever an accident occurs along the way—for example, if Egypt has an accident, you won’t be able to get through; if something happens in Southeast Asia, you’ll be blocked. But if you take the Arctic route, you can get through in no time, and the economic value is enormous. [To use the NSR, the Arctic Ocean doesn’t need to be ice free; it’s being used today.]

Li Bo: This is indeed a huge strategic and commercial value.

Huang Jing: Second, let’s look at the seven Arctic countries. Russia is the largest country in the Arctic, followed by Canada, Alaska in the United States, as well as Norway, Iceland, and Denmark (because it owns Greenland), and Finland (Sweden has limited role due to lack of an Arctic outlet). Ice-free Arctic summers are a huge economic boon for Arctic countries. Moreover, the Arctic holds vast economic resources, including energy, rare earths, and extremely abundant fishery resources.

Third, the Arctic is the pinnacle of the world. Once you control it, national defense and security are in your hands. Think about it: if the U.S. builds a military base in the Arctic Circle of Alaska, how fast would it be to reach China? We often fly and know that flying from the US to Shanghai on the Arctic route takes only 10 hours, while cross-pacific-Pacific flights take 14 hours.

So, when Trump took office and implemented strategic contraction, he also made sure to focus on core strategic strongholds and high ground. He longed for Greenland, wanted Canada; as long as he controlled half of the Arctic, half of the Arctic would belong to the United States. Trump is not stupid; he knows the Arctic is crucial in terms of security, economy, and energy. The U.S. is retreating in other regions but aims to strengthen and consolidate control over these strategic high grounds. [To properly challenge Russia in the Arctic would require many trillions of dollars the Empire doesn’t have, and currently it has very few Arctic assets.]

Li Bo: China has also made significant investments in the Arctic, and recently its willingness to participate in related agreements has been strong. Recently, Professor Zhang Yongle from Peking University spoke at a meeting in Moscow on how China and Russia can strengthen cooperation in the Arctic.

Huang Jing: Yes. The Arctic is the last “frontier” of our world, the last undeveloped virgin land. Whoever controls it seizes the throat of security, economy, transportation logistics, and energy resources.

So at this moment, Putin played the Arctic card. Because in the Arctic, Russia is the strongest. It not only has the largest territory and the most investments, but also the strongest military. Russia has more than 50 nuclear submarines, two-thirds—about 30 long-term deployments here. Russia has more than 40 icebreakers in the Arctic, eight of which are nuclear-powered. Compared to the total number of icebreakers in other countries worldwide (the U.S. Coast Guard currently has only two one active polar icebreakers). So, Russia’s Arctic card is its most formidable and valuable trump card.

Putin’s second attempt to play the Arctic card is to have the U.S. establish an Arctic G2, which is not only to control the Arctic but also to break NATO’s blockade. Currently, seven Arctic countries, six of which are NATO members, have formed a siege against Russia. If Russia aligns with the U.S., the blockade of the other five “dwarf” countries will be instantly broken. [The Empire is in charge of NATO!!!]

Moreover, someone in Putin’s government (Russian Presidential Special Representative Kirill Dmitriev) proposed a grand vision to develop a “Putin-Trump Tunnel” from Russia across the Bering Strait to the United States. [That idea was first proposed in the 1890s.] The Bering Strait is 53 miles wide and 59 meters deepest at its deepest point, making either tunneling or caisson passages feasible. The tunnel investment is over $200 billion, and if you add the traffic roads connecting both ends of the tunnel, the cost is even higher. He made it clear that China can join because China has capital and strong infrastructure capabilities. [There’s absolutely nothing to connect to on either side of the Strait making such a project utterly nuts.]

It is clear that with Putin’s Arctic card played, he can negotiate with the West, with the U.S. and is also highly attractive to China. For China to enter the last virgin land of the Arctic, it cannot be without a fulcrum. For China to truly enter the Arctic, it must firmly grasp the “China-Russia Comprehensive Strategic Partnership for a New Era” and cooperate with Russia. Although we have good relations with countries like Norway, Norway is still too small. For example, when you eat more expensive salmon in restaurants, it’s mainly Norwegian, but there are also Canadian and Mexican ones. We also have our own salmon bases in Sichuan and Xinjiang, but the production is still relatively low.

I previously worked as an advisor to the Norwegian government. Because of the 2010 Nobel Peace Prize issue, relations between China and Norway were very tense, so Norway invited me to be an advisor. Back in the early 2000s, did you know how many salmon Norway exported to China at that time? 72 tons per week. Now, among China’s imported premium salmon, 50-60% actually comes from Norway.

So, economically, we do have good cooperation with Norway, but on major strategic issues like Arctic security, shipping, and development, we still need to deeply bind and cooperate with Russia.

3. Russia’s second major move: moving south to lay out its layout in ASEAN

Li Bo: Let’s return to Russia’s grand chess game. What about the second big game?

Huang Jing: The second big game is ASEAN. Let me first tell you a bit of history. In 2002, China and ASEAN signed the Comprehensive Economic Cooperation Framework Agreement, and since then, ASEAN has developed rapidly. The China-ASEAN Free Trade Area is the world’s first free trade agreement signed between China and multiple countries, and also the largest “one-to-many” free trade agreement among developing countries, which is something China can be proud of. This has greatly promoted the development of China and ASEAN; for example, in recent years, trade volume between China and ASEAN has increased nearly 16 times compared to 2002. ASEAN’s total economic output has increased nearly fivefold since then, and China is even more formidable, increasing more than tenfold. This is beneficial for both sides.

In 2018, Russia seized the opportunity to elevate its dialogue mechanism with ASEAN to a strategic partnership, and we welcome this opportunity. By 2020, Putin had further promoted dialogue on establishing a strategic partnership between Russia and ASEAN.

But then, the Russia-Ukraine conflict put it on hold. We know that among ASEAN countries, there are at least “two and a half” U.S. allies: Thailand, the Philippines, and Singapore. Among them, Singapore also announced sanctions against Russia. So at that time, Russia and ASEAN did not take further action.

Since last October, Putin has keenly noticed that the global situation has changed. On October 30, Trump met with President Xi at the Busan summit. At that time, it was already clear that China-US relations were stabilizing and becoming more stable—this was the first change that occurred. The second change is that the U.S. is contracting. Although the Iran war had not yet begun, it was already clear that the U.S. was shrinking. The third change is that he saw the U.S. lose strategic focus, its strength decline, and split from Europe, while China grew stronger.

Seeing these major trends, Putin seized the opportunity. On March 20 this year, Russian Foreign Minister Lavrov convened a meeting with the ambassadors of ten ASEAN countries stationed in Russia to “prepare for the Russia-ASEAN Summit.” Later, things developed extremely rapidly. Shortly after Putin returned from his visit to China, on June 18, the Russia-ASEAN summit was held in Kazan.

Li Bo: That’s pretty fast. They only summoned the ambassador on March 20, and by June 18, the leaders of these 10 countries had aligned their schedules and rushed to Russia for a meeting. This is much harder than simply gathering foreign ministers. And it seems the media barely reported on it. [This was the 6th Russia-ASEAN Summit, the 1st was held in 2005.]

Huang Jing: Yes, from Lavrov’s meeting with the ambassador to holding the Ten-Nation Leaders’ Summit (note, this is a leaders’ summit, not a foreign ministers’ meeting), it only took three months. This is very unusual.

First, this year, the Philippines is the rotating chair of ASEAN, so this summit was co-hosted by Putin and Marcos. Of course, Marcos took the opportunity to smuggle in his own agenda and talk about maritime security.

Li Bo: That doesn’t really suit us.

Huang Jing: It’s not quite appropriate, that’s the first point. Second, this summit was held in Kazan. Kazan is a city bordering the Islamic world. Visiting ASEAN countries like Indonesia and Malaysia brings a natural sense of cultural closeness.

Russia has immediately convened the ASEAN summit, which surprised both the US and Europe. No one expected that, given ASEAN’s very complex internal structure, including US allies and even countries that sanction Russia, how could they dare attend? But when the situation in the U.S. changed, they all went in unison. [The summit resulted in the adoption of the Kazan Declaration, “Russia–ASEAN: Unity in Diversity—35 Years Together,” along with a Comprehensive Plan of Action, and Joint Statements on cooperation in culture and in energy.]

Li Bo: This also reflects a certain mentality in ASEAN at present.

Huang Jing: The basic underlying logic of these 10 ASEAN countries is to have two major powers in the Asia-Pacific region to form a balance. On this balance, they maintain what they call “controlled confrontation” or controllable competition. As long as the situation is controllable and cannot be triggered, ASEAN countries can “not take sides,” playing tricks on both sides and engaging in strategic hedging.

The so-called ‘not picking sides’ can be explained as: whichever country offers me more benefits, I contact them more. In the past, they formed a tacit understanding: relying on the U.S. for security and China for the economy. But now the problem is, the U.S. has withdrawn. Once the U.S. withdraws, ASEAN becomes anxious. Because ASEAN countries have histories of colonization and invasion, they fear the emergence of a single hegemon. If the dominant is too strong, they will live in constant fear. [What, they didn’t already fear the existing hegemon?]

So with a wave of Putin’s hand, they immediately went there. Why choose Russia? Because for ASEAN, Japan is not suitable; it is a defeated country, too weak to hold up, and Japan faces two major powers: China and Russia simultaneously. India is also overwhelmed and hasn’t truly risen yet; And Russia can provide hardcore strength no matter what. That’s why some say Russia is passive internationally, but the 10 ASEAN countries don’t see it that way—they still see Russia as a major power with strong core capabilities.

This way, Russia naturally came in.

So, what agreement did Russia and ASEAN reach at the Kazan Summit? Because Russia and ASEAN are too far apart and lack strong financial and industrial bases, deep integration between the two sides is still very difficult. But they have established three directions for cooperation:

The first direction is energy. Due to tensions in the Strait of Hormuz and Iran, from Singapore to the Philippines, Thailand, Vietnam, Malaysia, and Indonesia, these ASEAN countries all need energy security. Russia has decisively decided, “I will provide you with energy.”

The second direction is food security. Russians are unwilling to eat rice, and Southeast Asians can’t get used to wheat. How can we cooperate in this situation? This applies to fertilizers. Countries like the Philippines, Thailand, Indonesia, Vietnam, Myanmar, and Laos are all major rice-producing countries that require large amounts of fertilizer, and their own output is far beyond what they can provide. Previously, they mainly relied on China (nitrogen and phosphorus) and Canada (potassium), but now they have Russia as a new source. Isn’t that good for them? ASEAN essentially brings in Russia as a strategic hedging.

The third direction is somewhat shocking—the peaceful use of nuclear energy. Nuclear cooperation among these 10 ASEAN countries is too complex; Vietnam, Indonesia, and Malaysia may all have nuclear ambitions. Once nuclear energy utilization is started and the process of disposal and recovery is mastered, the next step is enrichment of the fuel, and this process proceeds step by step. Most nuclear states in the world started with the peaceful use of nuclear energy, including Iran.

Li Bo: Moreover, Russia is relatively advanced in small nuclear reactor technology.

Huang Jing: Yes, although China is the most advanced in fourth-generation nuclear technology, this time Russia broke the tacit understanding and broke through that barrier. It took the initiative to propose nuclear energy cooperation with ASEAN. Energy, fertilizers, and nuclear power—once these three hardcore chips were brought out, Russia immediately captured ASEAN.

So, the West keeps saying Russia is collapsing, but at least from these strategic actions, Russia still has the courage and experience of a major power. It has a clear strategic vision, because by seizing the ASEAN card, it can both pressure the U.S. and gain another leverage for cooperation with China. We are implementing the “Belt and Road”: if we go by sea, we must pass through Southeast Asia; if we go by land, we must pass through Central Asia.

In Central Asia, Russia has already cooperated and connected with us. The most important point here is the Eurasian economy led by Russia. The biggest cooperation project during Putin’s visit to China is the complementary alignment between the Eurasian Economic Union and China’s “Belt and Road” initiative.

Li Bo: Historically, Russia has always longed to seek access to the sea in the south. This was true in the Black Sea, and in the 1950s, it was the same in maintaining good relations with India. Later, there was Vietnam. Why did Deng Xiaoping decide to launch a self-defense counterattack against Vietnam? It was because Vietnam handed over the strategically located Cam Ranh Bay to the Soviet Union, and all of Vietnam used Soviet weapon systems. Therefore, it is entirely understandable that Russia is now moving south to lay out its layout in Southeast Asia.

Huang Jing: Yes, because Russia’s weather is so cold, they have always longed for warmer southern places. Look at Hainan Island—the largest group of foreign tourists is Russians. If you go to Bali in Indonesia or Phuket in Thailand, you’ll see Russians everywhere.

Back to the main topic: Southeast Asia, as a massive political entity, has begun to make plans and layouts amid the U.S. strategic contraction. Putin’s current overall strategy is: to confront Europe in the West, hold you firmly, suppress you, and hold out with you to the end. In the North, he played his biggest trump card, the Arctic card, to counterbalance the U.S. and win over China. [Putin has long won over China.] In the South, he precisely exploited ASEAN’s urgent need to win over a major power to achieve geopolitical balance. Russia has everything ASEAN urgently needs—energy, fertilizers, even nuclear power—so both sides have reached an immediate agreement.

Moreover, at this summit, Putin put forward a message: he hopes ASEAN will strengthen ties and cooperation with the SCO.

That’s impressive. SCO member states more or less oppose the U.S. hegemonic stance. And ASEAN has American allies. If Russia brings ASEAN in, from our perspective, the SCO will be diluted. So Russia plays both the China card and the ASEAN card. In this area, Russia has seen far ahead and taken the largest steps.

This is something China must firmly grasp. We must grasp the “China-Russia New Era Comprehensive Strategic Partnership of Cooperation,” because we know that among our strategic partnerships with all countries worldwide, only Russia’s positioning adds the word—”cooperation.”

Li Bo: Yes, there is collaboration. We need to coordinate and work in various directions, such as Southeast Asia and the Arctic.

Huang Jing: Exactly, we need to collaborate and communicate. Whether in Arctic development or in connecting with ASEAN, we must coordinate and cooperate. At the upcoming APEC summit, Putin is planning to visit China and may discuss this topic. This is the sector of Russia’s layout.

Moreover, if we can negotiate with Russia and North Korea to truly resolve the Tumen River estuary issue, it would be of great significance. The Tumen River’s estuary actually has a small volume, but its “three-way junction” is very important. Our northern port cluster—Tianjin, Dalian, Dandong, Yantai—is relatively less developed compared to southern ports like Ningbo and Shanghai. If When the Arctic shipping route is opened, we can also take advantage of the situation to address the Tumen River outlet, and China’s northern logistics and trade sector will be established, and our Arctic strategic base (Hunchun-Zarubino-NSR) will be established. By then, not only will there be the Yangtze River Delta in the south, but the north will also form an economic golden triangle in the Beijing-Tianjin-Hebei region, greatly enhancing the competitiveness of the Bohai Rim European route.

Li Bo: That place could actually be developed into a special financial zone, creating a ‘Northern Hong Kong’ where people can invest and interact.

Huang Jing: If we look at the map, if the route goes downstream from the north, one place becomes especially important—North Korea. Because Japan definitely won’t cooperate with us. So if we deepen cooperation with North Korea, combined with the opening of the Tumen River estuary, our Tianjin, Dalian, Yantai, and the entire Bohai Bay will all open to the ocean, and the whole plate will come alive.

Li Bo: I’ve read some scholars at Peking University, and now Russia, also want to break free from the so-called ‘landlocked country’ fate described in Mackinder’s geopolitical theory. He not only wanted to consolidate land power, but also strengthen maritime power, aiming to integrate land and sea power.

Huang Jing: Yes, you mentioned Mackinder’s theory, and it’s especially clear when you compare it to a map. China is in the middle; if we go south, it’s ASEAN; if we go north, it’s Russia. Russia cooperates with us on land, and the “Eurasian Economic Union” and the “Belt and Road” initiative have been merged; At the same time, Russia has taken control of the Arctic in the north and ASEAN in the south. Both land and sea power must be pursued. Therefore, facing this pattern, China must also prepare in advance and make its own strategic arrangements.

4. Asia-Pacific Situation: How Should China Respond During the Strategic Window of Opportunity?

1. Japan-Philippines band together for warmth is destined to be a castle in the air

Li Bo: Next, let’s talk about the Asia-Pacific sector. In the Asia-Pacific region, one of the events we are focusing on is the Japan-Philippines summit on May 28. Japan and the Philippines signed a military intelligence reciprocal agreement, are planning to negotiate a maritime delimitation agreement, and even threaten to form a security alliance. It is clear that against the backdrop of the U.S. contraction strategy, Japan also has strong ambitions. Let’s hear Teacher Huang’s analysis on this topic. [The marriage between Japan and Philippines is being arranged by the Empire.]

Huang Jing: Here’s the thing. In reality, America’s strategic contraction is a two-way contraction, retreating both in the Atlantic and Pacific. No matter what, at least the Atlantic has the EU and NATO as a backup. Meanwhile, when the U.S. contracts in the Pacific, its little brothers are left alone. The Asia-Pacific region lacks a multilateral mechanism like an “Asian NATO.”

This has led to a rather peculiar phenomenon: since the U.S. established its alliance system in 1945, it has never been a case of two junior brothers surpassing the big brother to form military alliances under the superior. Countries like the UK and Germany would never do this. [SEATO]

This is the first time Japan and the Philippines have joined forces for mutual support. Because they panicked, seeing their eldest about to leave, about to leave them. Europe has the EU and NATO supporting it, while the Asia-Pacific lacks any multilateral framework. [The bilateral frameworks remain in force and are very active. Overall Empire doctrine in the Western Pacific hasn’t changed.]

From Japan’s perspective, it cannot win over South Korea, as there are many historical and current conflicts between Japan and South Korea. So, it could only go to Manila. Marcos of the Philippines is also trying to band together for mutual support. Sanae Takaichi and Marcos even wanted to involve Indonesia, Malaysia, and Australia to form a faction.

But I think it’s pointless. Why? Because if you want to build an “independent security system” capable of confronting China, the leader of this system must have a strategic deadly weapon and a safety net—namely, nuclear weapons. Japan has no nuclear weapons, and neither does the Philippines. Of course, the international community must never allow Japan to possess nuclear weapons. Since there is no nuclear weapon as a backup, this system is a castle in the air.

So why does Japan insist on doing this? First, naturally, banding together for warmth and boosting one’s courage; Second, to show the U.S. a position in the Asia-Pacific. It has that kind of vibe of ‘The big shot doesn’t want a concubine anymore, but the concubine still has to help you look after the house.’ Japan’s signal was: America, you have contracted, but I am still working hard to keep this stall under your watch and manage well. He thought that when the U.S. returned to the Asia-Pacific in the future, he would see that the foundation was still here. This shows that Japan’s right-wing (such as Sanae Takaichi) is calculating very well. Third, Japan must build a trump card for itself. With regional discourse power and strength, it can negotiate with China and the U.S.

So, looking at Japan’s current actions, it’s both infuriating and laughable: what’s infuriating is that they actually want to go against China; The ridiculous thing is, can it really handle it? There are three major obstacles to Japan’s cooperation with the Philippines that can never be overcome.

First, huge economic and technological barriers. The economic development level and strength of the Philippines and Japan are vastly different. For example, when Japan aided the Philippines with a relatively advanced warship or coast guard vessel, the Filipinos couldn’t even operate it and had to retrain it. What Japan can offer, the Philippines cannot accept. And what the Philippines can give Japan (such as rice) is something Japan doesn’t need to protect its own farmers. The Philippines also lacks the energy urgently needed by Japan.

Second, both sides are only pushing the situation through a portion of the ruling group. It makes sense to separate Japan’s right-wing Sanae Takaichi from all of Japan and separate the Marcos family from the entire Philippines. Both countries have strong internal opposition, and how long this cooperation can last remains uncertain.

Third, and most fundamentally, they don’t have much real strength. [Which is why they’re combining.]

Additionally, if the U.S. withdraws from the Pacific, we should note that in this “constructive strategic and stable relationship” between China and the U.S., one crucial component is the joint safeguarding of peace and stability in the Asia-Pacific. This consensus also benefits the United States, because the U.S. no longer wants to go to war. [My Gawd, that’s so wrong!] Although China and the U.S. have different core objectives, their bottom line is consistent when it comes to maintaining peace and stability in the Asia-Pacific. [Or so it seems.]

2. The true red line in the Asia-Pacific: Japanese militarism must never be allowed to resurrect

Li Bo: That’s very important. So as mentioned earlier, Trump changed “Indo-Pacific Command” back to “Pacific Command” and removed the word “Indo-Pacific,” which is very important. At that time, NATO and European countries wanted to follow the Indo-Pacific strategy and come to Asia to join the fun. If the U.S. now abandons even the “Indo-Pacific” signboard, then Europe will have no legitimacy to come and establish a “small NATO in the Indo-Pacific.”

Huang Jing: Yes. Back when they tried to build a “small NATO in the Indo-Pacific,” I conducted careful research and concluded that it was simply impossible. Because if NATO extends into the Indo-Pacific, it faces a fatal problem: who decides the shots? Is it Brussels (Germany/France) that calls the shots, or is it Tokyo Japan? The conflict over power and profit was enormous among them. [The Empire calls the shots since Indo-Pac is its creation.]

Moreover, South Korea firmly opposes it. Why? Because South Korea’s alliance with the United States was a “regional alliance,” initially targeting the Soviet Union, China, and North Korea. After the collapse of the Soviet Union and China’s reform and opening up, the US-South Korea alliance essentially targeted only North Korea, so South Korea’s status within the US alliance system was actually declining.

On the contrary, Japan’s alliance with the U.S. is a “global alliance,” meaning that as long as there are enemies of the U.S. worldwide, Japan can help. For example, it went to the Afghanistan war, and the Strait of Hormuz escorted the U.S. also demanded Japan go. The U.S. will not send South Korea because South Korea is not a global ally. Therefore, within the alliance system, South Korea is naturally a tier below Japan’s. South Korea has always been trying every means to elevate its status and match Japan, but if NATO gets involved now, its standing will fall again. Therefore, South Korea firmly opposes and remains silent.

Japan’s attitude is also ambiguous and hesitant. Japan might wonder: If NATO goes to the Asia-Pacific and forms an Indo-Pacific NATO, will I be the one to decide, or will Brussels decide? Since everyone has their own agendas, and now the U.S. has retreated to the Western Hemisphere, the ‘Indo-Pacific Mini NATO’ issue is completely over.

Since neither China nor the U.S. currently wants a major war in the Asia-Pacific and wants to maintain peace and stability, our policy is very clear. In 2024, Minister Dong Junjun proposed the “Three Prohibitions” at the Shangri-La Summit, the foremost being “never allowing war-torn forces to enter the Asia-Pacific,” which has been our consistent policy.

So who is violating this policy now and undermining peace and stability in the Asia-Pacific? The main saboteurs are Sanae Takaichi from Japan, Marcos from the Philippines, and Lai Ching-te from Taiwan. The Taiwan issue is our own family matter, and Taiwan’s return is also an important part of the postwar international order. [And the conductor of their policies is the Outlaw US Empire.]

Currently, our focus of prevention and strike is definitely on the Japanese right wing. As I said last time on this program, in the entire Asia-Pacific region, only Japan has the ability and willingness to act as both a proxy for the United States and suppress China’s rise. The Philippines has the willingness, but it completely lacks the capability; The Taiwan authorities are even less certain. So the only real threat is Japan. [Without nukes as stated above, Japan is no threat.]

Here, we want to clarify the issue of Japan’s nuclear weapons. Countries like Pakistan and even India possess nuclear weapons, but they are relatively controllable. Why is that? Because their bodies are weak and their industrial foundation is weak, even if you give them a big knife, they won’t be able to wield it. India now possesses nuclear weapons, but achieving the launch of nuclear vehicles into the skies still requires a long journey. Pakistan is even more so, as it lacks a complete military-industrial system.

But Japan is completely different. Japan is a long-established industrial powerhouse with a strong physique. Given a big knife, it can swing it immediately. If you give them nuclear weapons today, they can weaponize and deploy them tomorrow, instantly achieve underwater launches, and their nuclear delivery capabilities might even surpass those of Britain and France.

Li Bo: Yes, according to media reports, some former Japanese ambassadors, former officials, and even current officials have hinted that they still want to break through the “Three No Nuclear Principles” and overtake by developing nuclear weapons. Because, as a former great empire, they did not want to be suppressed by China. Regarding the United States, they admit they were defeated by its nuclear weapons, but they are not convinced in their hearts.

Huang Jing: Yes, they always present themselves as victims, repeatedly emphasizing that they are the only country in the world to have suffered a nuclear strike.

Li Bo: But mentally, they felt they hadn’t lost to China in World War II, and that they had lost to the United States and the Allied forces. Because due to the civil war, China did not send elite troops to occupy the Japanese mainland, which made Japan psychologically unsure of China’s status as the victor. As Professor Zhao Hongwei observed in Japanese society, many ordinary Japanese people have no idea that China now has such advanced sixth-generation fighters and such powerful weapons. Therefore, right-wing politicians like Sanae Takaichi do not win votes in the House of Representatives by improving the economy, but rather by firmly challenging China to gain political capital and votes, thereby sustaining their political lives.

Huang Jing: Yes. So, if we were to give China advice, the first red line is: absolutely must not allow the resurgence of Japanese right-wing militarism, and even less allow Japan to possess nuclear weapons. That’s for sure. So look at Putin’s visit to China: China and Russia signed more than 30 agreements, and the joint statement explicitly stated three times that “China and Russia will never allow the resurgence of Japanese militarism.”

Pay attention to the changes in our diplomatic language now. Since establishing diplomatic relations with Japan in 1972, both sides have shared a tacit understanding: for a long time, we rarely mentioned “defeated countries” or “postwar order.” But now, we have begun to emphasize the “postwar order” high-frequency approach, and what we are discussing with Trump is also about “jointly maintaining the postwar order in the Asia-Pacific.” Because the post-war order in the Asia-Pacific is the fundamental foundation for maintaining peace and stability. Without this foundation, everything would be in chaos.

One of the most important cornerstones of the postwar order is: Japan, you are the defeated nation. As a defeated country, you cannot possess military power that breaks through self-defense. In this regard, China and the United States also share a historical tacit understanding.

Even when the U.S. handed over Okinawa and the Diaoyu Islands to Japan in 1972, it was only a transfer of jurisdiction or administrative authority, not sovereignty, and sovereignty was still undecided. Therefore, we must now loudly recall the postwar order and emphasize its identity as a defeated country, so that the defeated country cannot make any military impact.

In the past, we said the Taiwan issue was the red line within the red line, and now Japan’s nuclear weapons are also the red line within the red line. If Japan really wants to cross this red line to confront nuclear weapons, China will never stand idly by. We often emphasize balancing kindness and force in our strategy against Japan, but now I always emphasize the order to be reversed—”using both authority and kindness.” You must first establish authority; if you don’t, where does ‘grace’ come from?

Li Bo: There is now a view that we have imposed export controls on dual-use items and key rare earth metals on Japan, which has caused major trouble for several Japanese companies. If this leads to a further slowdown of Japan’s economy and makes life difficult for ordinary people, could it in turn fuel Japan’s adventurism? After all, the Japanese have a history of risk-taking genes.

Huang Jing: I actually have to give the Chinese government a big thumbs up for Japan’s recent rare earth and commodity controls. If you look closely, this set of countermeasures truly achieves “reasonable, beneficial, and moderate.” We didn’t strangle him all at once, but doing so would actually be detrimental to our own supply chain. We take it step by step, marking a line for you to see if you follow the rules. If you follow the rules, that’s how it is; If you don’t follow the rules, I’ll tighten the lasso a bit; If you don’t follow the rules soon, I’ll tighten it even more.

There is also the most critical countermeasure that everyone has noticed: because Japan has participated in sanctions against Russia, Japanese airlines can no longer fly over Russian airspace over Europe and must pass through Chinese airspace.

Li Bo: Yes, now they declare their flights separately every time they pass through Chinese airspace.

Huang Jing: Previously, for airspace overreach, maybe once a year for coordinated approval would be enough. But now we require case-by-case processing: for every flight you fly, you must declare it to us separately. The signal is clear: if you don’t cooperate or follow the rules, I can make you lose your way at any time.

This series of sanctions is merely a tactical technical task; the real strategic aspect is elevating the “post-war order” to a very high and serious status. We must promote cooperation among the three great powers—China, the US, and Russia—to maintain the postwar order, because the victory in World War II was built on the foundation of these three powers. [You can’t build deep cooperation with a rogue power, which is what the Empire became.]

As an ally, Trump also internally recognized the postwar order. China’s display of strength in facilitating the US-Iran negotiations is essentially telling the US: without China’s cooperation, Trump cannot accomplish major things.

Therefore, in this regard, China will never allow Japan’s right-wing militarism to be revived. For right-wing figures like Sanae Takaichi, China will certainly firmly suppress her momentum. This is completely “focusing on the issue, not the person.” What kind of person Sanae Takaichi herself is has nothing to do with us, but as long as you dare to raise this broken flag and try to restore militarism, then you’re sorry. Don’t think Chinese people only know how to smile and shake hands; we have our own iron fists.

Recently, our Shandong and Liaoning carrier fleets have approached the waters near Japan, and the American satellites can see everything clearly from above. We are serious about maintaining the red line.

3. Negative Example: India’s Strategic Wavering

Li Bo: Can India make a difference in the current process of the U.S. implementing its contraction strategy? Or is the situation more awkward?

Huang Jing: India is currently in the hardest place. First, such a large country has very little clear strategic development goals; it doesn’t know which direction to go and is always wavering. After India gained independence in 1947, Nehru quickly launched the banner of the “Non-Aligned Movement,” declaring he would not ally with anyone. This policy has supported India’s development for decades.

But when did it start to change? After Modi came to power, these people wanted to “rely on the US to resist China,” so they changed their non-alignment policy. At that time, some of my Indian friends (some veteran diplomats) said we would stick to “Non-Aligned 2.0,” but the Modi government actually took sides. He wanted to pull the U.S. into dealing with China, but the result was clear: not only did he fail to deal with China, but the U.S. also kicked him when he was down, leaving him disappointed. The US thinks India is of little use to them; if both sides cooperate, you earn more than I gain. That’s why Trump publicly accused India of being the “king of tariffs.”

India’s biggest problem is not knowing who it is or which direction to take. Look at its dumbest move: everyone clearly saw the US was about to take action against Iran, yet Modi went to Israel to visit and tried hard to cozy up to Israeli Jews, saying things like “India has many Jews, Israel is the father, we are the mother,” making things very awkward.

Li Bo: He actually still wants to use Israel to ease relations with the United States. Unexpectedly, once the Middle East war broke out, relations between the U.S. and Israel clashed. [Evidence?]

Huang Jing: Previously, India’s largest arms supplier was Russia. With the outbreak of the Russia-Ukraine war, everyone knows that not only is Russia’s weapons supply lacking, but its performance on the battlefield is also not very good. Finally, Israel has become an important source of advanced weapons and technology for India. Moreover, the maintenance of weapons purchased by India was previously handled by Russian engineers and technicians sent to India for repairs, which not only cost a lot but sometimes technicians would disappear after drinking.

However, after the collapse of the Soviet Union in 1991, a large number of Russian Jews immigrated to Israel. These people were highly educated and highly skilled; many of them had participated in the research, development, and manufacturing of these weapons back in the Soviet Union. So now, most of the maintenance, servicing, and modification of Russian weapons in India are these Russian engineering technicians in Israel. This has become a big deal for Israel, being both the largest arms distributor and the source of the most advanced technology for maintaining its weapons. [No mention of the joint arms production being done by Russia and India and transfer of technology.]

Li Bo: This is also very beneficial for Israel.

Huang Jing: Adding to the AI field, Tel Aviv is known as the “Little Silicon Valley,” so India quickly joined in. This echoes the old saying: “Cherish your own life when doing great things, forget your life for small gains.” But after all these maneuvers, he still couldn’t find his proper position.

Coupled with the tacit understanding between China and the US on the Iran issue, Pakistan played a major role. From a geopolitical perspective, India really can’t swallow this humiliation. India’s wavering and unclear strategy is the first point.

Second, internal social issues have remained unresolved for years, especially the caste system. Third, to consolidate his position, Modi pursues populism and Hindu nationalism, suppressing Muslims. To the northwest of India lies an “Islamic Belt,” with Islamic countries ranging from Turkey to Saudi Arabia, and most countries opposing it.

Li Bo: So, India’s banner of “non-alignment” has completely fallen.

Huang Jing: The banner of “non-alignment” can no longer be raised. The United States no longer wants him. Europe signed a major agreement with India, only to find that it was nominal and brought little benefit. Muslim countries opposed him. As for China, they constantly compete with China. Although we also want to maintain good relations with India, China’s current attitude is “If you want to compete, then so be it.” So it’s not that India is unimportant—it’s a major country, the most populous and full of potential. But the key issue is that its strategy is unclear. If you can’t find the North, it’s hard to comment on it, so just keep letting it find no way.

4. Strategic Window Period: How Can China Seek Progress While Maintaining Stability?

Li Bo: So the show is now in its final minutes. Could Mr. Huang Jing talk about Trump’s remaining two and a half years in office? He has accomplished a lot during this year, and there is still considerable time and room to firmly implement the contraction strategy. How should China use the U.S. strategic contraction period to better take the initiative internationally, stabilize world peace, and at the same time focus on China’s own domestic development?

Huang Jing: First of all, I think this “window period” might be longer than we imagine. Because as I mentioned earlier, America’s core foundation—manufacturing—is gone, and finance is developing in a distorted state. Therefore, it will be much harder for the U.S. to regain strength than the previous two contractions. This is the first point.

Second, the alliance system that the U.S. relies on to maintain global hegemony is also collapsing. Japan and Europe are both in decline, with no upward momentum, and severe population aging. Therefore, if the U.S. wants to recover, it will not be something that can be accomplished in just two and a half years. By 2028, no matter who is elected as the new U.S. president and takes office in the White House, they will face several ironclad realities:

First, the U.S. is indeed weaker than before. On the current basis, it is difficult for the U.S. to pursue further expansion.

Second, China and the U.S. are major powers with equal strength, and this trend cannot be reversed.

Third, the unipolar world of dominance is gone for good. If we look at all the major powers, the only remaining major power in the world today is the United States. China, Russia, and even India are all part of the Global South. After the Industrial Revolution, major powers were all in the Atlantic and in the West, but now, countries like Germany, Britain, and France were all great powers fifty years ago. Which of them can still be considered true great powers today? None of them are anymore.

The overall picture has already been decided: America’s strategic contraction cannot be achieved in 5 or 10 years; it requires a considerable historical period. During this period, the U.S. needed to maintain stable relations with China because it feared China would continue to grow too big; its only option was to stabilize China. This is America’s grand strategic direction. I don’t believe that if the Democrats come to power in the future, they will just expand instead—after all, “circumstances are stronger than people.”

Another point is that recently, U.S. Treasury Secretary Scott Bessent has made consecutive speeches. He proposed an important principle: deeply linking economic security and national security. In the past, the U.S. rarely talked about economic security; it was entirely market-driven, pursuing the lowest cost, highest efficiency, and maximum profit, which led to globalization. But now Bessent says, “Economic security is national security, the foundation of national security.” [Utterly destroyed by Neoliberal Dogma and unlikely to be replaced.] Once this concept is established, it shows that the U.S. must focus on developing its domestic economy going forward. This is similar to China: since it wants to focus on economic development, it certainly does not want to cause political or military security trouble. He demanded stability and stability. Since the U.S. is seeking stability, this is also an opportunity for China, because China also needs stability. [Stability isn’t found by engaging in war crimes.]

So first, maintaining stability remains China’s strategic direction. Here, internally, we still need to focus on our own affairs. China is currently undergoing economic transformation and structural adjustment, and it is necessary to further deepen comprehensive reforms. As General Secretary Xi said, “To forge iron, one must be strong oneself.”

Li Bo: Yes, there are less than 10 years until the basic realization of socialist modernization by 2035, and this development period is extremely important.

Huang Jing: We must develop; our tasks are heavy. In recent years, the most important bottom line for maintaining development domestically and externally is to never allow war or conflict to enter the Asia-Pacific. This bottom line must be upheld. We suppress Japan’s right-wing and clowns like Marcos all to maintain stability in the Asia-Pacific. We must firmly hold this strategic high ground.

Second, externally, it is truly necessary to maintain the stability of major power relations. But the stability of this major power relationship must be beneficial to us. It cannot be said that stability only benefits the United States; that is wrong. Therefore, our commitment to maintaining “constructive strategic stability” for the U.S. shows that this stability is at least mutually beneficial.

Li Bo: Although conflict is inevitable, it must be controllable. It means having a consultation mechanism to avoid malicious interactions.

Huang Jing: Yes, avoid malicious interactions. For example, did you notice Trump’s visit this time? We clearly drew four red lines. The first red line is the Taiwan issue. This is not asking Trump to make concessions to us, but rather “do not say you were unprepared,” clearly telling you in advance that this is a red line. Second, there is no need to talk about human rights and democracy anymore; he really hasn’t discussed them anymore. Article 3: Roads and systems. The path chosen by the Chinese people and the political system led by the Communist Party of China are legitimate and successful. Please stop demonizing and attacking us.

The fourth red line is our right to development. What is the right to development? You can’t keep sanctioning me unilaterally. You punish me, and I will definitely fight back. For example, the U.S. recently sanctioned five of our “teapot refineries” (referring to independent local refineries in Shandong and other areas), and we immediately responded based on the “Measures for Blocking the Improper Application of Foreign Laws and Measures Extraterritorially” (hereinafter referred to as the blocking order). The blockade is not challenging U.S. political authority, but American financial hegemony! Because we know that the most effective and damaging U.S. sanctions are secondary sanctions that exploit the dollar financial system. If you do business with me, as long as you use US dollars, they can mess with you. We have issued the blocking order precisely to challenge this financial hegemony.

Therefore, we must maintain basic global stability, but this stability has two foundations: one is multipolar, the other is multilateral. Global governance through multilateral mechanisms and strategic stability in a multipolar framework are things we must strive to maintain.

Li Bo: And the premise is that our core interests must not be harmed.

Huang Jing: Of course. We must never allow war to enter the Asia-Pacific—this is our core interest. 61% of the world’s population is in the Asia-Pacific, over 60% of its economy is in the Asia-Pacific, and 75% of the world’s economic growth is driven by the Asia-Pacific region. As long as Asia-Pacific doesn’t go to war, we’ve won. The reason the United States has become a superpower in just 250 years since its founding is because the Western Hemisphere has hardly fought any major wars.

Madeleine Albright, America’s former most tough female Secretary of State, once had a famous saying. At the time, she advocated sending troops to Iraq, but Chairman of the Joint Chiefs of Staff Colin Powell disagreed. Albright confronted him directly: “We have such a powerful army as yours. If we can’t use them, then what’s the point?”

China has such a powerful military fundamentally to safeguard national interests. If someone refuses to listen, the final solution will naturally be non-peaceful means to cover the fallback. But with China’s vast scale, once non-peaceful measures are used, it is absolutely not a matter of moving a finger. So we still say: “Do not say you did not anticipate it.” In summary, we must focus on internal self-improvement and resolutely maintain strategic stability under a peaceful framework externally.

Finally, we must truly promote the construction of the Belt and Road Initiative. On the basis of the “Belt and Road,” promote the building of a community with a shared future for mankind. The Global Development Initiative, Global Security Initiative, Global Civilization Initiative, and Global Governance Initiative that we propose must all be solidly carried out. The Chinese model is to seek common ground while reserving differences, and is by no means the Western approach of ‘seeking common ground and attacking differences.’

Specifically in terms of geopolitics: First, it is essential to protect its surrounding regions, including Russia, Southeast Asia, India, and others. Especially the sea routes of Southeast Asia and the land routes from Xinjiang to the west of Central Asia. The surrounding area is key and must be firmly protected.

Outside the periphery, we still have to do our best to hold back Europe. Because Europe is extremely valuable in terms of technological intensity, capital intensity, and socio-political and market stability. Our main theme with Europe is not to fight, but to compromise and cooperate. But if you insist on fighting, we’ll fight with you. After the fight, as long as you’re willing to reach out, we’re still willing to shake your hand. As I mentioned earlier, Europe no longer has much initiative in its relations with China.

The initiative is ours. Our door to cooperation is always open. If you want to compete, we’re not afraid. To be honest, Europe doesn’t have much capital to wage a large-scale trade war with China. Let him fight, but in the end, he’ll realize he can’t win at all. Ultimately, European countries will come out one after another seeking compromise, eventually reaching an overall compromise. For the United States, it means resolutely maintaining “constructive strategic stability.” With such strategic planning, I believe China’s future prospects are very promising.

Li Bo: Alright, thank you, Teacher Huang Jing, for your optimistic outlook and analysis at the end. The theme of our program is “What is happening in the world after the U.S. strategic contraction?” Just now, Mr. Huang discussed Europe and Russia in the Asia-Pacific, and also conducted an in-depth analysis of India, systematically outlining the internal logic behind U.S. strategic contraction. One of the most inspiring points is the “constructive strategic and stable relationship” between China and the U.S.—this stability is not just our demand, but actually a pressing need for the U.S. right now. Because the U.S. is shrinking and licking its wounds, it is equally desperate for stability.

The United States needs to recuperate, while China is also at a critical stage of development. Before fully resolving the issue of dollar hegemony and the various challenges of our internal economic transformation, we also need a stable and peaceful development period. Therefore, the “constructive strategic and stable relationship” reached by the two heads of state is crucial, arguably the most significant diplomatic achievement of the year.

Under this premise of overall stability, we must focus on our own affairs and balance the interests of the surrounding area. Especially when facing Russia, a new-era comprehensive strategic partner back-to-back with us, we should engage in meticulous communication and coordination.

Huang Jing: Yes, in summary, our foreign strategy is to firmly grasp four key areas: first, grasp the major lever of “China-U.S. constructive strategic stability”; Second, deepen the “China-Russia Comprehensive Strategic Partnership of Coordination for a New Era”; Third, consolidating the “10+1” free trade system between China and ASEAN and the RCEP agreement; Fourth, expand and strengthen the SCO and BRICS countries—several multilateral mechanisms we have led ourselves. On the basis of focusing on these four areas, we will solidly advance the construction of the “Belt and Road” initiative, implement the four major global initiatives, and ultimately promote the building of a community with a shared future for mankind. This sounds like official language, but it is indeed our core grand strategy.

Li Bo: So after hearing your analysis, I feel that although China is undergoing unprecedented changes unseen in a century, our actual position and the situation we face are still quite good.

Huang Jing: It’s very good. This is a great situation that the Chinese people have achieved under the leadership of the Communist Party of China and through generations of hard work—truly hard-won.

Li Bo: Because tomorrow is July 1st, the founding anniversary of the Communist Party (live broadcast on June 30). On this special day, we can comfort our ancestors and fathers: our country is now at an unprecedented historical height, and you may rest in peace.

Huang Jing: This is the result of generations of hard work. It truly was a sacrifice of their lives and shedding blood; our ancestors and martyrs all shed blood for the revolution.

Li Bo: Yes, that’s exactly why today we sit here and talk about the great trends of the world, daring to say, ‘We are worthy of our predecessors.’ Once again, thank you to Teacher Huang Jing for sharing so wonderful today! Thank you to all the listeners, and to all the friends who care about Observer Network. That’s all for today’s episode of ‘Thinkers Speak.’ See you next time! [My Emphasis]

It’s clear from the outset that the academics have a very different analysis of NATO’s war against Russia and the Outlaw US Empire’s role in that conflict. They also don’t see that EU/NATO is now a colony/vassal of the Empire paying tribute and doing its work in Ukraine against Russia—facts both Putin and Lavrov have admitted. Gawd! Putin doesn’t want anything to do with Europe. Putin has often said he’s willing to listen to Europe provided they have something concrete to say that’s not divisive, and so far Europe has proven unable to speak properly. Europe has taken itself out of the game just as the Outlaw US Empire has via its never-ending hegemonic wars. Putin himself has said many times he doesn’t aim to be “master of Europe” as his aim is to protect Russia from Europe. And Russia’s already a major power in the emerging Multipolar World. Lavrov’s recent tour of Africa just reiterated that reality. As for an EU “collapse” if the center-right neoliberal parties are ousted, I don’t see that happening since the inhibiting structure is NATO and its command/control by the Empire. Cease the Anti-Russian crap, drop the War on Russian speaking Ukrainians, and concentrate on the economy while reinstituting business relations with Russia, and reforming the authoritarian powers of the EU Commission, then the EU can become the economic vehicle it was supposed to be. Europe must do a better job of working together as a whole without using war as the means to reunifying.

As a few commentators have noted, the idea that the Outlaw US Empire is “contracting” shows how well the Empire’s new security strategy has duped some otherwise smart people who want to believe the hegemon is retreating when in fact it’s issued a very sly ruse to confuse. The Empire’s war against Iran signals expansion, not contraction, while it’s losing that war signals incompetence and military weakness, which aren’t the same as contraction. The concern over Japan and nukes is understandable, but they need to understand the policies they see unfolding are prompted by the Empire as it hasn’t given up its desire to control the planet. The continuing friction with India is also noted. India’s hosting the BRICS Summit will reveal more about both India’s and BRICS’s direction. Very little was said about China’s relations with Iran and the Gulf states. They are correct to be proud of China’s accomplishments and to continue the path they’re on. There’s a new Initiative dealing with AI that was just announced and can be read about here and here.

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With 1.4 billion people, you’d expect there’d be many media outlets engaged in publishing academic dialogs of the sort featured by Dragon TV’s “This is China” program the Gym has featured recently. Some are print while others are video formats similar to podcasts. Guancha often provides both at the same time—video and transcript. It’s difficult for many outside of China to get honest Chinese views on world events since most media are tainted by Western biases, are Anti-China, and often misrepresent the Chinese POV, both academic and government. Fortunately, with the internet we can now get direct views from both China’s government and its academic community. The programs being translated are both 90-minutes long and will be broken into two parts.

While researching for this article, I discovered a Chinese English language publication, The China Academy, that’s related to the Guan Academy that produced the article’s talks, which also has a section called Thinkers Forum, which is akin to the Thinker’s Talk program that produced the articles. Those trying to make sense of today’s geopolitics need as many sources as possible to glean information from, and IMO this is a worthy addition.

The first part of this long discussion looks at what the academics see as a “strategic contraction” by the Outlaw US Empire from Europe and other portions of the world, a repositioning that many Western analysts have debated and discussed. Here’s the discussion’s preamble by the publisher:

With the establishment of a constructive strategic and stable relationship between China and the U.S., under Trump, the U.S. is now set to adopt a strategic contraction. The U.S.’s strategic contraction has created significant uncertainty for all sectors of the world and the future situation. How will the major powers respond?

On June 30, Dr. Li Bo, Director of the Shanghai Spring and Autumn Strategic Research Institute, had a conversation with Distinguished Professor Huang Jing from Shanghai International Studies University, providing in-depth analysis of recent developments in the United States, Europe, Russia, and the Asia-Pacific region, with a wealth of information.

Much has occurred in the two weeks since this discussion was held and the world situation has changed with Trump re-escalating his illegal war on Iran by refusing to fulfill the commitments he agreed to in Iran’s MOU. Clearly, Trump cannot allow himself to face reality and surrender and instead has decided to continue both the Iran war and the war on Russia. With that in mind, here’s the discussion:

1. The Great Contraction of U.S. Strategy

1. Trump’s “250th Anniversary Package”

Li Bo: Hello readers, welcome to ‘Thinkers Speak.’ In this issue, I will host and invite Professor Huang Jing, distinguished professor at Shanghai International Studies University, to discuss what is happening in the world under the U.S. strategic contraction from four perspectives: the United States, Europe, Russia, and the Asia-Pacific.

July 4th marks the 250th anniversary of the founding of the United States and also marks the milestone of a year and a half in Trump’s second term. According to Mr. Huang’s previous statements, Trump should “bring out the beef” to deliver his results—how many pieces did he deliver?

Huang Jing: I think there are a few of them.

The first is hyping up the stock market.

Trump will definitely use the US stock market as a topic — the S&P and Nasdaq repeatedly hit new highs, making the economy look good. There are two key support points: first, U.S. companies have high profitability[?]; second, the dominance of the dollar still provides a bottom. But this piece of “beef” is quite hollow.

The U.S. economy is currently “superhot.” Wall Street’s total market capitalization has already surged to $73 trillion, while the US GDP in 2025 is less than $31 trillion, about 240% of GDP, far exceeding the “Buffett Law”—according to Buffett, 70%–90% of GDP is the time to short the market. So how big is the US bubble? Even more astonishing, out of the 73 trillion, seven companies in Silicon Valley account for 21 trillion, which is even greater than the entire European GDP (19 trillion). Seven companies equal one European company—if that’s not a false fire, what is?

The second is signing major orders with China.

The greatest achievement of Trump’s visit to China was not the number of paper contracts signed, but the laying of a foundation: China and the U.S., as equal powers, compete in equal competition, and both sides recognize this new type of great power relationship, which can be put into a more practical sense—”constructive strategic stability.”

“Strategic stability” was first proposed by the Americans; we added “constructive.” Why is stability necessary? Because if the U.S. is clearly stronger than China, it will pressure you to attack. Now that both sides are evenly matched and China has a slight advantage, the zero-sum game is no longer working, so Trump has turned to a “long game”—a long-term game and a coexistence game. Coexistence requires mechanisms; from military security to trade and economics, there must be channels for consultation. “Constructive” means continuous construction and repair, because conflicts will inevitably arise.

Here’s a basic logic: Iran is willing to sit at the negotiating table, China plays a key role, and Pakistan is the intermediary. At that time, Trump threatened to “blow Iran back to the Stone Age,” which was a blatant nuclear threat—of course, the probability of the U.S. military actually using nuclear weapons against Iran is low, but Israel does have nuclear weapons. At that time, Iran sought help from Moscow and Beijing, but neither China nor Russia could provide nuclear protection. Our approach is: in the Islamic world, Pakistan has a nuclear-armed friend, and Pakistan has close ties with China.

Pay attention to the timing—not long before the Iran-US officially sat down, Pakistan’s Deputy Prime Minister and Foreign Minister first came to Beijing to meet Wang Yi. Afterwards, Wang Yi spoke twice with the Iranian Foreign Minister before the table was set up. Trump later repeatedly emphasized that “China and the U.S. do not want Iran to have nuclear weapons,” but there is actually a tacit understanding: China is responsible for persuading Iran to return to the negotiating table, while the U.S. is responsible for keeping Israel under control. Israel is not at the table; Netanyahu is the biggest loser. If he keeps stirring things up, negotiations won’t go through. Keeping Netanyahu under control is a tougher issue for Trump than negotiating peace with Iran.

Back to the “big orders” on the China and US side. Trump’s visit to China in May did not sign a specific agreement, for two reasons. On the technical level, details need to be discussed: “constructive strategic stability” itself requires a series of specific arrangements to safeguard the situation. On the political front, Trump insists on inviting Chinese leaders to visit the U.S.—his small calculation is to leave the big deal in Washington for signing, so it looks good domestically. “Look, China signed the deal for me,” and can also use the opportunity to give a positive explanation for the last round of trade war (he actually suffered quite a bit in court), serving as a good way to build momentum for the November midterm elections.

The third is reshaping global trade rules.

Last April, Trump pushed the global trade war as a “killing two birds with one stone”: first, pulling Japan, the UK, and India into bilateral agreements to isolate China. Second, to break down the WTO’s multilateral mechanism and start a new furnace that benefits the U.S. But China held firm. So far, it has only signed 18 bilateral agreements, 3 of which have not yet passed Congress, resulting in very little gain.

Trump finally admitted it: China is the largest trading and manufacturing powerhouse. If you don’t sign with China, no matter who you sign with, it doesn’t carry weight. So now he wants to do the opposite—leverage China’s strength to break down and rebuild the old system, returning to the “G2” path he has long cherished.

Currently, there is a six-month trade extension arrangement, and the specific agreement is still under negotiation before November. What China wants is nothing more than two: finance and trade. The tightest thing in trade is “stability”—tariffs at 10% are 10%, 50% is 50%, we can accept them, but we must be certain. We are confident about this, because Trump needs our support right now. Finance is more complex, involving RMB internationalization and how to handle dollar hegemony, requiring more negotiations.

Li Bo: So the stock market is one “beef,” the big orders with China are another, and the end of the trade war is another?

Huang Jing: Yes, these three together form the “250th anniversary package” Trump wants to propose—blowing up the economy [bubble], signing big deals, and using the “G2” to reshape the world order in his favor.

But in terms of tone, whether with Venezuela or Iran, Trump is strategically contracting with offense and defense. During the contraction period, he focused on three things: control over key resources (seeking stability), high-tech leadership in industrial chain restructuring, and major power relations—and these major powers were none other than China and Russia.

2. Three strategic contractions in the United States

Huang Jing: We will discuss major power relations later. For the United States, strategic contraction is neither new nor a new issue. After World War II, the U.S. experienced a period of strategic expansion, whose greatest contribution lay the foundation for US-Europe cooperation, the establishment of NATO, and the construction of the “transatlantic bridge.” The U.S. pursued strategic expansion through initiatives like the Marshall Plan, but this expansion encountered major problems in the 1970s. After supporting Europe and Japan, these countries began exporting large quantities to the United States.

Li Bo: When the US dollar was the world currency back then, the US actually had a surplus. It was not until 1971 that a trade deficit appeared for the first time.

Huang Jing: Yes, the US used to have a trade surplus of billions every year, but by 1971, it had a deficit of $1.5 billion; Later, fiscal deficits emerged.

The main reason for the fiscal deficit was the Vietnam War. The Vietnam War lasted nearly ten years, and from the Beibu Gulf incident to 1971, it lasted almost eight years. The fight worsened, military spending soared, and the trade and fiscal deficits resulted in a “double deficit.”

The third crisis is the oil crisis. These three crises caused major problems for the U.S., so the U.S. began its first contraction.

· First contraction: abandoning the gold standard + Soviet détente + troop withdrawal

Huang Jing: The first sign of contraction was financially, where the US completely abandoned the gold standard. Although the US was under great pressure at the time, the advantage was that after abandoning the gold standard and recovering, dollar hegemony was established, and global dollar settlements were implemented.

Li Bo: Also, diplomatically, contraction was a form of easing relations with the Soviet Union.

Huang Jing: Yes, the second was to pursue détente with the Soviet Union. The third is the withdrawal from Southeast Asia. At that time, the U.S. had six military bases in the Asia-Pacific capable of docking aircraft carriers: two in the Philippines, two in Japan, and one in Taiwan—in 1979, before establishing diplomatic relations with the People’s Republic of China, Taiwan was the U.S.’s second largest military base in the Asia-Pacific, second only to Japan. In addition, Thailand has another one. The U.S. has withdrawn from all of this via contraction.

Li Bo: It’s equivalent to the Philippines withdrawing both of the two central treaty organizations. [SEATO}

Huang Jing: Yes, the Philippines has withdrawn two countries, and Thailand has withdrawn. After the United States established diplomatic relations with the People’s Republic of China in 1979, Taiwan disappeared completely. Currently, there are only two bases in the entire Asia-Pacific that can accommodate aircraft carriers: one is Yokosuka in Japan, and the other is Changi in Singapore.

The ugliest and lowest point of U.S. contraction this time was during the Carter era, when Iran experienced the Islamic Revolution and took 66 diplomatic hostages from the U.S., leaving the U.S. completely helpless.

But this time, the US contraction was successful. Why? The United States has grasped three points. First, it focused on the economy. At that time, U.S. manufacturing accounted for 22% of the U.S. economy, which was very strong. Second, control the debt. Third, the U.S. has accelerated cooperation with Europe, and Reagan and Thatcher have joined forces to overcome difficulties.

· Second contraction: Failure to finish

Huang Jing: The second contraction began during Obama’s second term. Because after 1991, the U.S. globalist strategy pursued three types of globalization: values globalization, market economy globalization, and democratic political globalization. America has been engaged in color revolutions for ten years, like the Rose Revolution, the Arab Spring, and so on.

Li Bo: As a result, Iraq’s democratic reconstruction also failed.

Huang Jing: Yes, everyone resists the globalization of values. After these globalization efforts, the losses outweighed the gains, costing huge amounts of money. Moreover, market economy globalization instead contributed to the rise of a great China, and the U.S. failed in its attempt to block China’s rise.

So during the Obama era, the U.S. couldn’t hold on and began to recycle it. During Obama’s second term, he implemented an “Asia-Pacific rebalancing” in the Asia-Pacific. What does rebalancing mean? The previous balance has been broken. At that time, Obama was considering contraction, and soon after, he stepped down.

Trump started his first term with a firm contraction, typically manifested as various “withdrawals”—withdrawing from the Paris Climate Agreement, the Iran nuclear deal, and the TPP—and the WTO no longer cares. But back then, the shrinkage ended up being ‘sandwiched undercooked.’ Why? Because Trump’s first term team was all establishment, and these establishments were reluctant to step down, as their entire political careers were built on strategic expansion in the United States.

Li Bo: If you ask them to shrink back, they can’t stand it. It’s like ruining their whole life. So people like John Bolton have done many shady things behind the scenes. Trump’s first term lasted four years, and it wasn’t easy.

Huang Jing: Yes, his Secretary of Defense Jim Mattis, former National Security Advisor Mike Flynn, as well as John Bolton and Pompeo—all of them are undermining him. He can’t stand it. So Trump has made up his mind to replace all his people for his second term.

But strangely, Biden has inherited this strategic contraction. Biden took office and continued strategic contraction. Look at the U.S. withdrawal from Afghanistan, just like the Saigon withdrawal back then—bruised and battered. His firm purpose in tightening is to suppress China. But Biden made a fatal mistake: while contracting, he was also pursuing expansion.

Because Biden realized that the power of the United States alone could not suppress China, he sought to form alliances: to win over the G7, promote transatlantic cooperation, and also form AUKUS to form cliques to suppress China. He declared that “America is back” and wanted to revive the alliance, and that winning alliances over is itself a strategic expansionist act.

Biden is shrinking on one hand and expanding by pulling in allies, which has led to huge internal conflicts, manifesting as a lack of ability and a huge gap between what he wants to do and what he can do.

Li Bo: That’s indeed difficult. Biden is the last “Atlanticist,” and at heart, he has been an internationalist at heart. However, this half-doubted contraction strategy is a failure with China.

Huang Jing: Yes. Putin is truly very perceptive; he has keenly grasped the inherent contradictions between U.S. strategic contraction and expansion. Since 2019, when Putin took the initiative to settle Belarus, the country faced difficulties and launched a “color revolution” but it didn’t cause much of a stir. Then, around the 2022 Spring Festival, Kazakhstan also experienced a “color revolution,” which he took action to deal with. Next came the military operations against Ukraine in 2022.

For Russia, this crescent-shaped zone, stretching 2,000 kilometers from Belarus to Ukraine and then to Kazakhstan, is a strategic buffer zone. It is only 800 kilometers from Russia and is crucial to Russia’s security. Without this buffer zone, Russia would face security threats.

Back to Biden, his strategy has not been successful with China either; instead, it has made China stronger. Biden created an “Indo-Pacific Economic Framework Agreement,” which is a completely empty shell; once he leaves, it’s gone. Biden is essentially no longer capable and still has to push forward, causing even greater failures for the United States.

In my view, the Biden administration is the weakest government in the U.S. since World War II. The fewest things have been accomplished, the most slogans are shouted: Democracy Summit, Values Alliance, Semiconductor Bill, AUKUS, the Quad Dialogue among the US, Japan, India, Australia, and the G7. In the end, he achieved nothing and stepped down.

· Third contraction: Fortune and misfortune are uncertain

Huang Jing: This time, with Trump winning a second term, he firmly contracted. Trump’s firm contraction is reflected in three aspects: first, he abandons his allies. He pursued “Don-Monroe Doctrine,” focusing on the Western Hemisphere. Allies in the Western Hemisphere who can help come to help; those who can’t, leave. These allies are all under the U.S. military umbrella. Now, Trump first asks for money—whether it’s Japan or Europe, they have to pay, or else the U.S. soldiers will leave.

In the Asia-Pacific region, the contraction in the United States is very evident. You can compare U.S. Secretary of Defense Hergseth’s speeches at the Shangri-La Dialogue in 2025 and 2026, and you’ll see a big difference. Especially when Japanese Defense Minister Koizumi asked directly: “The Asia-Pacific is very unstable now, with the threat from China. What should we do?” Hegseth said to his face, “You fend for yourselves! ‘America First’—America must focus on its own affairs.”

This is evident from Hegseths’s behavior: First, the U.S. can only manage itself, especially with the Iran war escalating to this state. Second, only after managing myself well can I manage you. Third, I can’t control you anymore.

Li Bo: At the same time, Trump and China have already set the tone to maintain a “constructive strategic stability” relationship with major powers. These are actually manifestations of the U.S. strategic retreat.

Huang Jing: This is a very obvious retreat. Let me give three examples.

The first example: Sanae Takaichi from Japan was going to visit the United States, but ended up accomplishing nothing, getting nothing, and even investing 70 billion dollars for nothing.

Second example: After Sanae Takaichi left, at a State Council reception, someone asked Secretary Rubio, “China and Japan are currently tense. Japan is our ally. What should we do?” Rubio’s answer was very straightforward: “Our top priority now is to maintain good relations with China. If we improve relations with China, your China-Japan relations will improve as well.” This is clearly placing US-Japan relations under China-US relations.

The third example: Trump left China in May very satisfied, meeting with Chinese leaders for over nine hours. On the return flight, Takaichi Sanae shamelessly called him, and Trump only spoke with her for 15 minutes. Later, at the G7 meeting, Sanae Takaichi tried to bring up China again, but no one paid her any attention. It is said that Trump even argued with her, bringing up the Pearl Harbor incident and saying, “I remember your Japanese account of Pearl Harbor,” so he abandoned his allies.

Finally, the former “Indo-Pacific Command” was renamed back to the “Pacific Command.”

Li Bo: This has made both Indians and Japanese feel awkward, because the ‘Indo-Pacific’ was originally proposed by former Japanese Prime Minister Abe. Now the Pacific Ocean has been cut in two.

Huang Jing: Yes. The Indo-Pacific Command is no longer needed; it will be restored as the Pacific Command, because the United States has clearly declared itself a Pacific nation. “The Pacific side is mine. I only care about my Pacific. I don’t want you Indo-Pacific anymore.”

In such circumstances, the contraction of the United States is very obvious. But will this U.S. contraction succeed? I think it depends on three factors.

First, can he maintain the stability of relations with major powers? He thought that if major powers like China and Russia took advantage of the U.S. contraction, that would be a disaster. Therefore, for him, China-U.S. relations are of utmost importance, and he must stabilize China.

Second, can the U.S. economy recover? Today is different from back then. Back when the US contracted, manufacturing added value accounted for 22% of the US economy, which was very strong. Now, it’s less than 10%, about 9.4%.

Li Bo: Moreover, the education and training systems were still in place at the time, and manufacturing workers could still be produced and reproduced. Now, the U.S. mainland has lost the reproduction system for manufacturing workers. Furthermore, at that time, the U.S. had less than $2 trillion in external debt, but now it has reached $39 trillion.

Huang Jing: Another major factor, the third factor, was that the U.S. contraction at the time, as Biden said, was to shrink by seizing allies, but now Trump doesn’t even want allies. Looking at these three points, it’s still unclear whether this US contraction will be a blessing or a misfortune. But there was one thing he grasped correctly: seizing the relationship between major powers. As a result, when the U.S. contracts, the space for a multipolar world emerges. In the past, the U.S. managed the world; now the U.S. no longer cares.

2. Europe: The United States Moves from “Protective Umbrella” to “Greatest Threat”

Li Bo: Now let’s talk about the second sector, Europe. Trump’s intention to tighten his strategy is already clear. How do you evaluate the performance of these European allies and the EU?

Europe now seems to be strongly advocating for a “crippled” Russia. Just before Zelensky bombed Moscow with drones—I happened to be in Moscow that day, and the explosions were loud in the morning, startling the tour guides. Although everything was orderly by the time they arrived at the airport, the EU immediately approved 40 billion in aid, then gave over 40 billion in loans. Zelensky “earned” 80 billion in this attack. Germany is reportedly developing ground robotic systems, and many AI companies are forming joint ventures with Ukraine in Munich, even conducting field tests; The UK has also provided 150,000 drones for assistance. What exactly is Europe doing?

Huang Jing: Using 80 billion to fight this war is actually a minor matter; in the end, the Russia-Ukraine battle is about strength. During the contraction of the United States, Europe went through three stages.

The first stage is firm opposition, crying and shouting, “You must not forget that I am your steadfast ally.” At last year’s Munich Security Conference, then-CDU chairman Merz, then-Chancellor Scholz, former Chancellor Schröder, and Macron all shouted: “We are your allies; you can’t do without allies.” This is a firm opposition.

The second stage is disbelief, which then turns to anger. For example, when Trump proposed buying Greenland, Europe was furious and threatened to retaliate.

The third stage is overwhelmed. Now, European polls have already ranked the United States as the “number one threat.” In just two years, the United States has transformed from an “indispensable protector” into a “greatest threat,” a shift that precisely illustrates Europe’s predicament.

To be honest, Europe experienced a period of hardship and two good times after World War II. The hardest days were the Suez Canal crisis from 1945 to 1957, when Britain and France suffered humiliation. After 1957, things recovered. The first good days were thanks to the Marshall Plan, and with the first strategic contraction and détente with the Soviet Union, Europe also relaxed relations with the Soviet Union. The second period of good times was after the collapse of the Soviet Union, when Europe expanded eastward and absorbed Eastern Europe. That period was very strong, with rapid economic growth. By the late 1990s, Europe was the world’s largest economy.

Li Bo: Yes, I still remember that in the late 1980s, Germany’s economy was actually very bad. My doctoral advisor said, ‘Germany has become Europe’s sick man’—before there was the ‘Sick Man of Britain,’ Thatcher cured Britain, and the last ‘Sick Man of Europe’ was Germany. But once Germany was reunified, the ‘sick man’ was immediately restored.

Huang Jing: Germany is a typical example. Germany has received three major positive signs: the security threat is gone, East Germany is reunified; The euro was established, and it was essentially an extension of the German mark; The Soviet Union collapsed. With these three factors combined, Europe’s foreign trade volume surged by 240%, with 180% of that growth coming from intra-EU trade—Germany absorbed Poland, the Czech Republic, and Slovakia. I have visited Poland, which is full of European factories, most of which are German. The Skoda sold in China is a Czech brand, but Germany has also taken over it. Germany has made a dramatic comeback.

These good times lasted from 1991 to the 2008 financial crisis and the 2009 euro crisis. These three major dividends are now all gone.

1. The disappearance of Europe’s three major dividends

Huang Jing: First, U.S. security protection. Europe’s long-term military spending has been less than 1% of GDP, and now the US can’t even tolerate 2%, let alone 4%. There were 40,000 troops stationed by the US in Germany, which meant spending $30,000 to hire a US soldier to stand guard while he focused on economic development. So Trump called them “freeloaders who eat and drink for free,” and that’s not wrong. Trade is also unequal—Europe’s average tariff on the US is 8%, while the US only gives Europe 2%. This dividend has been reaping since the Marshall Plan began.

Second, a large amount of cheap Russian energy, which German heavy chemical industry relies on. From the Cold War to the post-Cold War period, Russia can export only weapons and energy. Europe does not buy weapons, but energy. Europe previously had three major energy guarantees: the Middle East, Russia, the UK’s North Sea, and Norway (including light and heavy oil).

Third, China’s vast market. Back then, a Santana sold for over 200,000 units in China, and Volkswagen’s passenger car market share in China once exceeded 50%. In the 1990s, Volkswagen’s annual profits in China were levels it found hard to reach domestically in Europe. European brands have all benefited—Bosch, Siemens, home appliances, automobiles, chemicals—all have joined.

But now, all three major dividends are gone.

First, the security protection of the United States is gone. Trump threatened to withdraw troops without paying protection fees, and the large-scale withdrawal from Europe is already a certainty, leaving Europe to face Russia on its own.

Second, Russia’s cheap energy is gone. Europe has destroyed its best channels, completely blown-up Nord Stream, leaving only a few countries like Hungary secretly buying some oil. Moreover, Germany shut down its own nuclear power plants and blew up advanced thermal power plants, which ultimately forced Germany to rebuild its thermal power plants. The U.S. took the opportunity to sell liquefied natural gas at high prices, two to three times higher than Russia; The light oil from the UK and Norway is useless for Germany’s heavy chemical industry.

Li Bo: Also, the Chinese market is still large, but China itself has risen. Smart home appliances and new energy vehicles are now dominating Europe, dealing a huge blow to German brands.

Huang Jing: Yes. In March 2023, I was invited to attend the “Belgdorf Roundtable” in Germany, and was the only Chinese person invited at the time. A German guy was still saying China was stealing German technology, but I couldn’t stand it and warned them: “You need to be careful, Chinese cars might change lanes and overtake.” “At that time, everyone below mocked me. But when I went again last year, no one laughed at me.

Having discussed the loss of external conditions, I will now talk about internal Europe. Why do we say there is little hope for Germany or even Europe right now?

First, political integration is nearly impossible. The EU’s eastward expansion forcibly unites countries with vastly different economies, cultures, and systems, and even established a “unanimous agreement” rule—Hungary can block the issue with a single vote. Previously, people thought that after Hungarian opposition leader Magyar replaced Orbán, he would support the EU, but it turned out to be a new bottle. Now, Slovakia has also joined the opposition. Europe is fragmented internally and policy efficiency is extremely low.

Second, the economy cannot be sustained. The dividends are gone, and the most critical frontier is missed—AI. Europe has fallen far behind in chips and AI. Although there is a Dutch ASML, it is overall lagging behind.

Third, Russia faces enormous security pressure. Some say Russian forces are passively attacked in Ukraine, but I don’t see it that way. We’ll discuss the Russian sector in detail shortly.

2. Europe’s last way out: compromise

Huang Jing: So, what is Europe’s ultimate way forward?

Europe is now anxious and angry, hating the US and Russia even more, and has started picking fights with China again, shouting about a trade war with China. But when they actually sat down to talk, they found there was no real prestige at all. Germany, Italy, Spain, and France—these industrialized countries—all rely on China, and in the end, the EU summit resolution didn’t even dare mention the word “China.”

I predict that Europe’s way out can be summed up in one word—compromise.

Compromise will definitely be made with the United States. They also have to compromise with Russia and sign a Russia-Ukraine ceasefire treaty—Europe’s original stance was “absolutely not to talk to Putin, go to Zelensky,” but now it has put aside its pride and is willing to negotiate with Putin. This is also why Zelensky is now desperate—afraid Europe will abandon him, so he is desperately fighting back. During his visit to China, Putin said he “hopes China will play a constructive role in peace talks”—only talking with Zelensky will not make China effective. Direct negotiations between Russia and Europe give China more room to negotiate. Finally, compromise with China even more: if you are willing to cooperate, China will wholeheartedly cooperate with you. If you want to start a trade war, China isn’t afraid at all—it can keep you completely under control.

Li Bo: But right now, the European establishment—Macron, Merz, and Starmer, who just announced his resignation—are struggling in domestic affairs and still maintain an extremely hardline anti-Russian stance toward Russia and Ukraine. They even have the idea: if domestic demand is weak and they can’t outcompete China, then they should shift the contradiction abroad, adopt “defense Keynesianism,” and use war to stimulate employment and drive the economy. For example, German defense company Rheinmetall saw its stock multiply many times after the Russia-Ukraine outbreak, with its market value once exceeding Volkswagen’s by 50%. Wouldn’t Europe save itself by using a state of war?

Huang Jing: Explain them one by one. Let’s first look at these people. Leading the “anti-Russia and pro-Ukraine” stage are von der Leyen, Merz, Macron, Starmer, plus Poland (now the president and prime minister are still fighting among themselves), the Baltic states, EU foreign ministers, and former Estonian Prime Minister Kallas, among others.

But these big shots are all facing serious crises. Germany is severely divided; East Germany supports the far-right Alternative for Germany, while Merz’s approval rating is low. At the time, I said Mertz reminded me of the brothers Yuan Shao and Yuan Shu—ambitious but shallow in wisdom, fierce in appearance but weak within. In a few years, Merz may be Germany’s worst leader since the Cold War. Macron is also facing many crises, and von der Leyen’s days are numbered.

The entire European right wing has turned around—the right wing coming to power may not be good (exclusionary and protectionism), but at least it shows that these “white leftists” on stage are at a dead end. This is also why Trump, Vance, and Rubio dare to blatantly criticize, “You far-left have ruined Europe.”

Why do they cling so tightly? Purely for self-preservation—we call it ‘identity politics,’ and their political lives have long been tied to ‘anti-Russia.’ After fighting the “Russian Bear” all their lives, how can they now call the Bear a friend? If you don’t oppose Russia, you’re doomed. So being tough is just self-preservation, but indeed, his days are numbered.

Li Bo: Yes, they become more realistic.

Huang Jing: The British have long been very pragmatic. Last year, I went to Chatham House for a meeting, and they besieged me, asking, “How does China support Russia?” After they finished, I asked, “I’m not answering yet. Let me ask you—who is the Ukrainian ambassador to the UK?” “It’s Zaluzhnyi, former commander-in-chief of the Ukrainian army.” Zelensky visited the UK three times, but the ambassador avoided meeting him from start to finish, which violates diplomatic rules—when a head of state visits, the ambassador should accompany him from the moment he gets off the plane, so why doesn’t he come out? Answer me.

The entire venue fell silent. Because the British are known for two schemes—Zaluzhnyi is the West’s backup plan.

Li Bo: Reserve him to replace Zelensky at any time.

Huang Jing: Yes. Zaluzhnyi has very high poll numbers in Ukraine. During the summer 2023 offensive, he disagreed with Zelensky’s reckless command—Zelensky wanted a full-scale strike, advocated for focused breakthroughs, and for serious strategic conflicts. According to Zelensky’s approach, he lost badly. This commander-in-chief even privately discussed compromises with Russian forces, but Zelensky caught him red-handed (who gave him the guts is another matter). After his dismissal, everyone thought he would be dealt with, but he went to the UK as ambassador and was “shelved”—behind the scenes is political maneuvering.

When I asked the British, they were left speechless—you are extremely hypocritical, firmly supporting Zelensky with your mouth, but hiding backup agents in the UK.

Macron in France follows the same path. The total European aid commitments to Ukraine account for only 15% of the total, while the United States alone accounts for over 80%; Of that 15% in Europe, France only accounts for 7%—Macron only talks slogans but doesn’t provide real money; in reality, all the weapons and funding come from Germany.

Li Bo: Ironically, during the Russia-Ukraine war, Russia was still selling oil and gas raw materials to France. France’s nuclear power depended on electricity, which was then sent to Germany. Moreover, it seems the U.S. only gave $400 million this year, and when Trump took office, he cut off the aid.

Huang Jing: Yes, so these few European political leaders cannot save Europe.

3. Is Self-Rescue in the Military Industry Feasible?

Li Bo: So if defense stocks rise and Rheinmetall takes off, is this path unfeasible?

Huang Jing: The reason is simple—military industry is highly systematic, requiring a massive industrial rear from steel materials and logistics transportation to precision processing. The most successful aspect of the U.S. Marshall Plan was to support European civilian sectors, never military industry. Therefore, Germany simply does not have a complete military-industrial system. Why can’t Rheinmetall do it? It only makes tank chassis and fire control; everything else depends on Italy and Switzerland, and the core firepower barrels are provided by the US. With patents alone, you can’t create a complete weapon system.

Li Bo: Within Europe, only France has a complete military-industrial system.

Huang Jing: France has it, but Germany doesn’t study law, nor does it either—the industrial standards of the two countries are completely different. Moreover, their newly jointly developed FCAS sixth-generation fighter is on the verge of bankruptcy. They can’t agree on how many screws or molds they use, and cooperation is impossible. Britain absolutely refuses to cooperate with France. France, the only country with a complete system, is on its own decline; all of Europe is at odds with it, and national sentiments are unwilling to listen to it. Britain was even more destitute; admirals joked, “The number of generals is three times that of the warships.”

Li Bo: Sweden and Norway’s defense industries seem to have some strength? They previously operated within NATO and were less controlled by the United States, combining the development of some new weapons.

Huang Jing: Sweden’s planes, tanks, artillery, Norwegian frigates may seem independent, but the underlying technology and major shareholders are all American, controlled by America. Japan is the same—the US, the big brother, is quite bad; he will never allow any ally to develop an independent and complete military industry, at most letting you manufacture a certain component.

Li Bo: But with Trump backing down, isn’t that giving Europe an opportunity? Since the US lets Japan take the lead and is willing to provide some technology, and Europe buys some electronic systems, the US will certainly sell them too, forcing them to take on more responsibility. How do you view this issue?

Huang Jing: I have lived in the US for 30 years and know their backgrounds very well. Americans have always sold high prices, and winning over allies depends on two methods: for security, you must absolutely rely on me. Since you’re counting on me, I will never teach you my best skills—chips and military industry are the same. Look at how closely Japan cooperates with the U.S., desperately increasing its military spending. The second thing is to buy 500 Tomahawks from the U.S., because Japan doesn’t know how to do it themselves, and their core technology is tightly blocked. Japan has some engines that are good but lacks autonomous aircraft engines, so it still needs to cooperate with Italy.

Back to your question—the comprehensive development of the military industry is not something that can be achieved in just a year or two; it takes decades or even a dozen generations to accumulate. Look at how many years China has accumulated. Germany’s small military stocks have risen because they only produce a few components and can’t support a complete weapon system.

Li Bo: The systematic approach definitely isn’t enough, it’s not even as good as Sweden, and France itself is on the decline.

Huang Jing: Right, Germany isn’t as good as Sweden, and France’s system can’t be learned. France’s most proud, the Rafale, has now been dominated on the battlefield by Chinese J-10s and similar aircraft, so this path is blocked.

4. What should Europe do now that it has come this far?

Li Bo: As you just said—first, a comprehensive compromise with the U.S. would be completely controlled by Trump. Second, a security compromise with Russia and signing a ceasefire treaty. Third, compromise with China’s economy and cooperate with them; there is no other way.

Huang Jing: In the end, this is the only path we can take. Now, although the outward aggression is fierce, it is precisely the despair inside. “The boss doesn’t care about me anymore. What am I supposed to do?” —The ones who dance the most are the little minions, feeling a sense of apocalyptic crisis.

So now in Europe: it can’t get along with the US, China, or Russia either. Previously, Europe signed a big deal with India, which seemed impressive, but no one helped the other—India was bad, Europe was bad, and the deal had no real effect.

Li Bo: Louis Waissi, president of Sciences Po Paris, recently wrote an article that even he finds it ironic: Europe’s share of global GDP has fallen from 30% to 16% in just 17 years, worse than the Qing dynasty—it took 50 years for the Qing to drop from just over 30% to 16%, while Europe only took 17 years, a decline three times faster than the Qing.

Huang Jing: Right now, Europe’s number one market has no resources, and the second market is being heavily squeezed by China. The worst part is the lack of strong leadership. Let Germany take the lead? Germany carries historical burdens, and Merz is not cut out either. Let France lead? Many people were dissatisfied. It’s truly a mess—the economy is fragmented, political stagnation, governance is a mess, Christianity, Puritanism, and Muslims are all mixed up, and they’re in full confrontation with China, the US, and Russia. How could things possibly get right? [My Emphasis]

I’m sure many readers have objections as do I, but IMO we must take these POVs at face value mistakes and all. I was very tempted to parenthetically argue with their views and correct their many errors in history. Overall however, despite all the errors, they have the general Big Picture correct. IMO, there are other Chinese academics who are better informed and would give us a better recitation of history, but we must consider their viewpoints accurate in a broad sense as I remarked above. The second part of this discussion might prove to be much different since it deals with Chinese policy as it attempts to end hegemony without engaging in war.

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Last week the Gym featured “How to Limit a Global Hegemon Without Expanded Kinetic War” that focused on a “This is China” episode devoted to discussion about the building of a strong Chinese financial system that will allow China to combat global hegemony without engaging in a kinetic war where the existence of a follow-up episode was mentioned that would be translated and published. Much of the preamble from part one is applicable to part two, but there are a few things to add—podcasts and publications. The first are two items involving Dr. Warwick Powell: His “China’s Economic Model Revisited: Updated Reflections” essay and podcast discussion with Radika Desai, “The West is Scared of China, So They Lie About It.” Next is a podcast featuring a discussion between Dr. Michael Hudson and Kathleen Tyson, “All About Gold,” where Ms. Tyson’s work at the New York Fed gave her some very unique insights, with China’s new gold exchange being one of the topics. And last, we have two items featuring Einar Tangen: His latest podcast with Glenn Diesen, “China’s Digital Currency & De-Dollarization” and two recent essays at his substack “Beijing’s RMB Settlement System” and “NATO Ankara, The Rhetoric And Reality.” All are related to the two Dragon TV discussions and will provide readers with a much better understanding of contemporary events, how we arrived here, and where we might be headed.

One important addition relates to the observations Alastair Crooke has shared over several years that were again discussed in toward the end of his chat today with Danny Haiphong about the Greek-tragedy nature of Trump and the direction of the Outlaw US Empire, which caused me to think of Arthur Miller’s great American Tragedy Drama from 1949, “Death of a Salesman,” with Trump being the Willy Loman character. Crooke will remind those who’ve forgotten about the nature of Greek Tragedy and suggests how Trump fits that role. Yes, this addition isn’t directly within the context of the upcoming discussion, but in some ways it’s likely to become a product of the ongoing geopolitical conflict that continues to move beyond Trump’s grasp daily. But now, onto our discussion, “Building a Strong Capital Market Nation:”

How can building a socialist financial power avoid turning from the real to the virtual? How to avoid the trap of American-style chaotic expansion of financial capital and hijacking the real economy is a practical issue that we must answer well on the path of financial development with Chinese characteristics.

Not long ago, “This Is China” recorded an episode discussing how to build a strong socialist financial nation, which sparked heated discussion among viewers after its broadcast. On June 29, on Dragon TV’s program “This Is China,” Professor Zhang Weiwei, Director of the China Research Institute at Fudan University, and Professor Zhang Keliang, a researcher at the National Institute of Financial and Economic Strategy at Central University of Finance and Economics, continued their discussion on this topic.

Zhang Keliang:

I am delighted to be back at “This Is China” to discuss with you the topic of building a strong capital market nation. Last time, we discussed that the essence of finance is the relations of production, and the structure of the financial system must meet the requirements of productive forces development. Historically, every major leap in productivity has inevitably called for and shaped a matching financial system.

The First Industrial Revolution gave rise to the countryside bank in Britain. When Watt’s innovative steam engine technology emerged and countless small and medium-sized factories emerged, the traditional British aristocratic “hoarding” capital and large commercial banks could no longer meet the dispersed and flexible financing needs of many small and medium-sized enterprises. Thus, rural banks, a new financial production relationship close to the local area serving industry, emerged. They absorbed savings locally and served emerging industries such as textiles and iron smelting, perfectly adapting to the decentralized and localized nature of productivity in the early stages of mechanization, and strongly supporting the launch of the First Industrial Revolution.

The Second Industrial Revolution gave rise to Germany’s universal bank. Entering the era of electrification and heavy chemical industries, building railways, steel mills, and chemical plants required enormous and long-term capital investment, and the UK’s decentralized banking system was already inadequate. Germany seized the opportunity and created the “universal bank” model. It deeply intervenes in long-term enterprise planning and governance, effectively directing social capital toward capital-intensive heavy industry, successfully adapting to and promoting the development of capital-intensive productive forces, and supporting Germany’s second leap in productivity.

The Third Industrial Revolution gave rise to venture capital in the United States. In the information technology era, semiconductors, personal computers, and internet companies exhibited characteristics of high risk, high potential, and light assets, rendering traditional bank credit logic completely ineffective. This brand-new financial production relationship of venture capital has taken the stage in history. It takes on high risks in exchange for a high proportion of equity, not only providing funding but also introducing management, market, and strategic resources, reshaping the organizational structure, governance structure, incentive models, and growth paths of innovative enterprises.

Thus, the new productive forces represented by technology and industry continuously place revolutionary demands on the old production relations, ultimately forcing changes in financial production relations. Once a new financial form is established, it will greatly promote the development of productivity during this stage. This is the lesson that capitalism’s centuries-long path of industrialization has brought us. [This history is too simplified and misleading as politics are completely ignored. Neoliberalism was “a new financial form” that’s destroyed industrial societies. However, the first sentence in this paragraph does provide the main dynamic the professor wants to emphasize.]

In contrast, China’s path of industrialization over the past few decades is similar. In the early stages of industrialization in China, rural credit cooperatives and urban credit cooperatives were relied upon to meet the decentralized and flexible financing needs of individual businesses, township enterprises, and urban collective enterprises.

In the mid-stage of industrialization, a bank-centered financial system was implemented, meeting the needs of large-scale investment and making a significant contribution to the advancement of China’s industrialization and urbanization. Since entering the 21st century, the capital market has also made positive contributions to the financing and development of high-tech enterprises.

Human society has evolved from an agricultural society to an industrial society, then to an information society, and now is about to enter an intelligent society. But doesn’t entering an industrial society mean eliminating agriculture, or entering an information society eliminating industry? No, that’s not it. Our society is a combination of three forms: agriculture, industry, and information industry. The former nurtured and created the latter, but the latter, in turn, served and optimized the former. Therefore, our capital market should support both technological innovation and the transformation and upgrading of traditional industries, as well as the development of “specialized, refined, distinctive, and innovative” small and medium-sized enterprises.

These three functions of the capital market are undertaken by the STAR Market, ChiNext, New Third Board, and Beijing Stock Exchange. The STAR Market is a tailor-made financing and development platform for hardcore tech companies mastering core technologies and dedicated to solving “bottleneck” problems. It has formed a strong agglomeration effect in key fields such as integrated circuits, biomedicine, and high-end equipment, filling the “breakpoints” and “bottlenecks” in the industrial chain. Since its establishment and launch in 2019, the total funds raised through IPOs and refinancing have exceeded 1.1 trillion yuan, bringing together more than 120 companies in the integrated circuit industry chain, covering the entire spectrum of chip design, manufacturing, packaging, equipment, materials, and more. It has supported 57 unprofitable companies in going public, with 22 of them successfully achieving profitability, accelerating the process from R&D investment to commercialization.

The STAR Market focuses on “from 0 to 1” breakthroughs in original technology, while the ChiNext focuses more on “1 to 10” commercial applications and industrial expansion. It not only covers technology-based enterprises but also welcomes companies in new consumption, modern service industries, and traditional industries undergoing transformation and upgrading. It supports listed companies in traditional industries, broadens industrial dimensions through horizontal mergers and acquisitions or vertically connects upstream and downstream industrial chains, forming industrial cluster effects. It guides traditional industries to use capital as a link, grafting new technologies and new factors, and helping China’s economic structure shift from factor-driven to innovation-driven.

China has tens of millions of private small and medium-sized enterprises, making us the country with the most complete industrial system in the world. This national condition determines that China’s capital market must be a multi-level and inclusive one. The New Third Board focuses on cultivating and standardizing “specialized, refined, distinctive, and innovative” small and medium-sized enterprises, and recommends outstanding companies to be listed on the Beijing Stock Exchange. Through a “tiered progression and vertical linkage” cultivation system of the New Third Board and Beijing Stock Exchange, SMEs at different stages of development can access capital market services.

In recent years, China’s capital market has made great progress, but it is not perfect. Efforts are still needed in the following areas.

We must build an internationalized capital market facing the global market. China’s development is closely linked to the world, and the Party Central Committee emphasized the need to better utilize and connect both international and domestic markets and resources. Previously, the connection between domestic and foreign markets and resources mostly relied on international trade; in the future, it can also be connected through capital markets. By building an international capital market, it is possible to attract foreign capital to invest in China, as well as foreign enterprises to list and raise funds in China, better supporting the implementation of the “Belt and Road” initiative and the “RMB internationalization” strategy.

On one hand, securities companies need to shift from simply pursuing scale and profit expansion to prioritizing serving the real economy. On the other hand, it is necessary to actively develop diversified investment institutions led by state-owned venture capital, allowing state-owned venture capital to play a pioneering and leading role in areas where private private equity firms dare not invest or do poorly in the “seed stage” and “startup stage.”

The banking system’s advantage lies in pooling capital, but it can only be used through loans, which is a shortcoming in serving innovative emerging industries. The state has begun allowing banks to conduct “equity direct investment” by establishing financial asset investment companies. Through “investment-loan linkage,” they can provide technology enterprises with comprehensive financial services throughout the entire lifecycle, supporting the development of new quality productive forces. On one hand, this leverages the banking system’s cost advantage in capital aggregation, and on the other, leverages the capital market’s efficiency in capital allocation. The combination of the two, with investment and loan linkage, creates a strong and efficient financial system.

Thank you, everyone.

Roundtable discussion

He Jie: Just now, Teacher Ke Liang gave a speech, continuing the discussion on how to build a socialist financial power. Last time, this topic sparked heated discussion. I want to ask again, including Mr. Zhang’s observations, the development history of China’s entire capital market and the history of the socialist financial system. In which parts have been borrowed from the West, and which are its own characteristics?

Zhang Weiwei: Let me tell you a little story. In 1974, Deng Xiaoping went to New York to attend a United Nations conference. I had half a day free on weekends and asked where to visit—the Metropolitan Museum of Art and the Statue of Liberty. He said no, go check Wall Street, that was 1974. Later, people said today was the weekend and Wall Street was closed. He said it was fine, just passing by to take a look. This is important; our leaders knew at that time that America’s development was related to finance. Even if you go to see it, you have to find a feeling.

In fact, in terms of financial system construction, China has learned a lot of experience from the United States and many lessons, including the U.S. registration-based system, the U.S. Securities and Exchange Commission, and our establishment of the Securities and Exchange Commission, all drawing on their experience.

Zhang Keliang: The process of transitioning from a planned economy system to a market economy system is a process of learning from the West. Our financial system must also change accordingly, shifting from a planned economy to a market economy.

This is also true for the capital market. The capital market only began to be established around 1990, with the Shanghai and Shenzhen exchanges being established one after another. From the very beginning, we learned from the United States. For us, we had zero foundation, so we had to focus on what suited us first, and what might be possible after a certain stage. Within the entire market economy system, there must be a capital market link; otherwise, the functioning of the market economy system is actually incomplete.

After we took it over, it was actually just after the reform and opening up. Many of our market entities were still state-owned enterprises, so our capital market initially provided financing for state-owned enterprises to go public. When state-owned enterprises go public and raise funds, you can’t show favoritism. Shandong will get a few spots this year, Jiangsu will do a few this year, and Shanghai will do so this year. So at first, it was an approval system, with a few quotas allocated according to the plan.

But after we developed and gained experience, private enterprises also developed. In 2004, the SME board was introduced. The SME Board targets these private enterprises and serves their IPO financing issues.

When new technological forces emerge, we believe we should learn from the US Nasdaq and have a ChiNext board to support smaller companies with strong technological attributes going public. So in 2009, it launched the ChiNext board. In fact, every step of progress in our capital market has been aimed at solving the problems currently facing China’s economy. But the 2008 financial crisis made us reflect on whether this path was wrong. So we started doing things with Chinese characteristics, insisting on financial services for the real economy and avoiding too many financial derivatives.

He Jie: Leaving the real and turning to the empty. On one hand, we see their problems; on the other, during our own operation, we gain many new experiences. At this point, you could say we’re learning, but also reflecting, building a financial system with Chinese characteristics.

Zhang Weiwei: When we participated in integrating into internationalization, it was very clear to seek benefits and avoid harm, and to stick to our own resolve. At that time, we really couldn’t predict the capital market, so we were cautious.

Zhang Keliang: Deng Xiaoping once said that the market economy can be used by capitalism and socialism. At the so-called ‘artifact’ level or at the specific institutional level, these can be used, but their purpose is different from ours. The Western financial system’s purpose is to make money. It may earn not only domestic money, but also the global financial system to harvest money from the world—it makes money through trading. China’s capital market is not like this; it cannot be profit-driven. Our goal is to support the development of the real economy. Finance is not water without a source, nor is it a tree without roots. If it separates from industrialization and the real economy—which is exactly what the U.S. is doing now—it will periodically trigger financial crises.

He Jie: How can we ensure that the capital market, including the financial system, operates in a way that serves the real economy?

Zhang Keliang: The country actually has an overall plan. For example, when our country wants to develop the new energy industry now, it will support companies in the new energy sector to go public and raise funds; When developing artificial intelligence, it supports industry IPOs and financing; At the same time, you also need that your price-to-earnings ratio for IPO financing cannot be too high. Actually, we do have some regulation.

Even when we detect a possible overheated market, we still pour some cold water on it to ensure the market develops in a relatively rational state. Otherwise, even if it rises, it will definitely fall again. Therefore, the government imposes policy restrictions, such as raising fees or providing guidance through window services. These will all be involved.

Zhang Weiwei: The lessons of the 2008 financial crisis have left a profound impression on the world. At least there are two issues that seemed universally recognized at the time, including those that the U.S. itself would later avoid. One is the proliferation of financial derivatives, a money-making game, addicted to it. There’s also regulatory arbitrage. Various derivative products are rated AAA by rating agencies, making them sell worldwide, but in the end, it’s all fraud. They profit a lot from this process.

At that time, I debated with Fukuyama, and I gave this example. I say in China this is called “financial corruption,” but you don’t use that term; you call it “moral hazard.” I said if you could understand corruption through the lens of corruption, and from the Chinese perspective, perhaps the solution would be more thorough and thorough. But they didn’t listen.

He Jie: Many financial derivatives, including so-called evaluation systems, arbitrage in this situation. In this situation, are there more restrictions domestically?

Zhang Keliang: Yes, we are still very cautious in the field of financial innovation. For these financial derivatives, the subprime crisis back then was just like this: they took out various underlying products, packaged and designed a financial product to sell, and then another derivative was further packaged and sold on the second layer of assets. After all the spinning, you don’t even know what the underlying assets are; everyone is just trading. In this situation, through various trades and packaging, financial derivatives are especially large, attracting a huge amount of capital, and they are prone to defaults. Our country is very cautious in this regard.

What is the difference between us and the capital markets of capitalist countries? Capitalist countries still rely mainly on market allocation, with relatively little state intervention, as long as they make money. Including its cryptocurrency market, our country still needs to study and assess it, while the US may be taking a relaxed and observant attitude. Our market economy is actually a combination of an “effective market” and an “active government.” The same applies to the capital market, with the same methodology: it also requires an “effective market” combined with an “active government.”

Our market economy has state-owned enterprises, but in Western market economies, there are no state-owned enterprises; all are private enterprises. [This is incorrect with public utilities being the prime example.] The role of state-owned enterprises is to provide a safety net in key areas such as the national economy and people’s livelihood. When the economy is bad, private enterprises may stop investing, and state-owned enterprises invest to drive economic growth.

Corresponding to the capital market, when everyone thinks the market is bad and is selling stocks abroad, shouldn’t state-owned venture capital institutions step up to stabilize the market? This is what I think the next step for China’s capital market might be to do. Looking at the development of China’s market economy system, there must be state-owned institutions among market entities, and state-owned institutions should play the role of a “stabilizing anchor.”

He Jie: You just mentioned that our capital markets include the issue of opening the financial system to the world. Over the years, this topic has been discussed a lot. You just said we will definitely open up, but will open up cautiously. What work do you think should be done first during the opening process to welcome the opening?

Zhang Weiwei: For China, I think corporate financing is very important, but on the other hand, it is also socialist in nature. Our country’s economic growth is rapid worldwide. Compared to such a large scale, it contributes more than 30% of global economic growth annually. How to ensure that the vast majority of investors can achieve a guaranteed minimum return from our growth—I think this is especially important. “Dao” and “Shu” must have a “Dao”; this level of “Dao” means we must identify a way that benefits the majority of people as a whole. Of course, investing carries risks, and this must be clearly explained. Moreover, returns are not guaranteed in drought or flood; they depend on the country’s economic development.

From this perspective, I think we should further reform internally. We now have many institutions and large institutional funds entering the market, but the assessment standards are still very short-term: quarterly, half-year, or one-year. The biggest point of the Chinese model is that I can pursue long-termism; what other countries can’t do, we can.

Zhang Keliang: I think the biggest issue here is? When we learned about the US capital market, they often said the “hand” of the state couldn’t be involved, or else it would become a regulated market, and you wouldn’t be market-oriented. [It must be noted that the “hand of the state” is ever present via politics and the resulting policy.] Our capital markets actually face this problem. Capital market used to feel like state-owned market entities couldn’t enter the secondary market to trade stocks because of the risks, so most of the secondary market was made up of private enterprises. Although some shareholders are state-owned public funds, their behavior is similar to that of private ones.

In this situation, if we open up the capital market and international investment banks have a huge fund scale and are very clear about this logic, wouldn’t it turn our entire capital market upside down and stir up so-called “towering waves”? At this point, of course, we didn’t dare let go. Just like at the beginning of our reform and opening up, if we opened up our market, private small and medium-sized enterprises would struggle very much. The entire automotive or television industry might be swallowed up. We called this “dancing with wolves,” but later we bravely took on these things. What is the reason? In fact, our state-owned enterprises have played a huge role in this.

If our capital market is to be opened, I think our market-oriented entities need to become sound and then, when Western capital enters, at least we can compete with them rather than be crushed unilaterally. [Continuing capital controls and proper regulation are key. China’s goal is to promote investment, not make easy profits from hot money.]

Zhang Weiwei: I’ve read some articles recently, and they’re quite interesting. The British magazine The Economist encourages us to open up our capital markets as soon as possible. Its theory is simple: look, China’s manufacturing accounts for 30% of the world, and back then the UK also made up 30%. Its currency, the pound, is the world currency; Later, U.S. manufacturing also accounted for 30%, and the dollar became the world currency. China now accounts for 30%, but the usage rate of Chinese RMB worldwide remains quite low.

But if you look more closely, in reality, the internationalization of the renminbi is progressing faster than we imagine. Mainly after the outbreak of the Iran war, the petrodollar declined while the oil yuan rose. By two weeks ago, 41% of Middle Eastern oil exports were already in RMB. 41% is also a large proportion, surpassing the euro. This means the situation is changing.

He Jie: Openness may be a trend, but in this process, we must be very cautious. At the same time, as we open up and collaborate, we also need to build our own set of protection mechanisms and firewalls.

Zhang Keliang: Previously, at least in the securities or public fund industries, people might think, ‘I’m making money in the market, and that’s what I’m doing.’ But now, with China’s overall rise and the need to open up in the financial sector, and possibly facing a “financial war” with the U.S. in the future, or possibly rewriting the global financial system, we bear different responsibilities.

These requirements are different. In the past, you just needed to know the technique, but now it’s different. You might have to do such things on the international stage. I believe the country is already preparing for this, building a “national team” and creating a world-class investment bank. For example, in Shanghai, Cathay and Haitong merged, and after the merger, they may now be the largest in the country. CICC has also started merging with Cinda and Dongxing, and may merge with others in the future. This is about building our own “national team.” In the capital market, having stronger brokerages—such as going to the US and Hong Kong markets—we conduct roadshows, issue issuances, and handle financial derivatives, strengthening our capital and capital strength.

And then there’s our stabilization fund. In the secondary market, when foreign funds sell or northbound funds call “sell and exit,” do we just follow behind? We actually need to have a secondary market too, which is national venture capital. Once the state-owned venture capital institution does well, it can also achieve similar effects.

Individual practitioners also need to be prepared. In fact, the “Belt and Road” initiative and the “Global South” countries represent a very large market. In the past, we thought financial openness was just about opening up to developed countries in Europe and America. We study the laws of developed countries and learn how to adapt to their laws, but in reality, we must consider another issue: countries in the “Global South” and “Belt and Road” must understand the international legal system and their financial rules. How can we make them invest here? Actually, we are open, but what if their countries have legal provisions to restrict them? What if you don’t adapt? Actually, we should be well prepared for this.

He Jie: You just mentioned an important shift in concept. Openness not only refers to opening up to European and American financial markets, but also to the “Belt and Road” countries and the “Global South”—so many countries and regions waiting to cooperate with us—are actually open spaces for us.

Zhang Keliang: They trade with us and earn RMB, so what then? It also needs investment channels. It’s like when we get the money, we want to invest—what do we invest? Definitely invest back in China.

China should actually open up to these countries to facilitate their investment. China already has some of the world’s best tech companies, and they want to invest. You have to get them to invest. Why has the U.S. capital market kept rising?

He Jie: Actually, global capital is still supporting it.

Zhang Keliang: Yes, once the capital market deteriorates, the US starts fighting and stirs up chaos in the Middle East. Once the Middle East is in turmoil, Middle Eastern capital starts heading to the US. So the U.S. is using capital markets to harvest global “chives.”

He Jie: But unexpectedly, this time Middle Eastern sovereign funds moved elsewhere.

Zhang Keliang: We have also made some preparations; Hong Kong is a very important base.

Q&A session

Audience: Hello, host, and hello, teachers. I want to ask a question about the stock market. A-shares once hovered around 3000 points for a long time, rising to 4000 points this year, but most stock prices are still around 3000 points. How should we view the phenomenon of the capital market profiting but not the index making money?

Zhang Keliang: The capital market is always like this—it’s a 20/80 split, a 19% split. It’s not just our country’s stock market; the U.S. stock market is the same. Look at its rise—most of it is due to the ‘Seven Sisters of Silicon Valley,’ right? The Hong Kong market is the same. For example, Tencent and Alibaba are rising, but many of them have actually become idle stocks. You mentioned “only earning indexes, not making money,” so why not buy index funds? If you buy index funds, aren’t you making a profit from the index?

Actually, the way our country may encourage ordinary people to invest in the future is to have you buy index funds like large-cap blue-chip stocks. They might not be as exciting as a 20% rise in a single day, but throughout the year, whether through dividends or improved profitability, the index keeps rising, with annual returns of 5% or 10%. That’s already very good.

Zhang Weiwei: Most investors in Western countries buy index funds, which is much safer. They also gained experience after many setbacks. But you say this is only earning from the index, not profit. I think an important reason is that the index is compiled mainly focusing on the leading companies, which rise very quickly.

Audience: Hello, both teachers, hello to the host. I am an investor in the catering industry. We often say that the capital market should serve the real economy and support technological innovation. I would like to ask, from the perspective of institutional design and market regulation, what do you think is the effective breakthrough point at present? Thank you.

Zhang Keliang: Let me ask you a bit rhetorically, do you also enjoy trading stocks? It should be. You also like stocks with so-called high elasticity. This stock rose 20% today, and you want to chase that kind of stock too.

Let me give an example: look at the New Third Board market, which you might not understand. What is the reason for the lack of understanding? It barely fluctuates much and may not change much throughout the year, but the company may be steadily profitable. This kind of market is so inactive that no one is hyping it, so no one invests. Therefore, we believe the New Third Board has problems; its liquidity is too poor. How can we improve its liquidity? But if you do value investing, it could actually be a very good market.

Another issue is that some relatively traditional industries went public at the time of their best performance, but later they might not be considered sunset industries. However, shareholders or actual controllers believed that no matter how much money they invested in R&D, it would be difficult to turn a profit or change the situation. They hoped they could maintain their stock price and then sell at high levels to earn profits.

The government has also noticed this problem and started allowing companies in the growth phase to go public. It’s in its growth phase. After it knows the money I’ve raised, I develop new technologies, and I’ll make more money next, and then my market position will be higher. So it doesn’t care about market value; it will definitely invest money in R&D. In this case, if there are more growth companies, this phenomenon will actually become less common.

Audience: Hello, both teachers, hello to the host. I’m from Wuhan, and I came all the way to see my idol in person. My question today is that the dollar holds hegemony, constantly harvesting global wealth worldwide. We now want to build a financial powerhouse. How can we break through when they hold absolute dominance, bringing wealth and well-being to the country and its people? Thank you.

He Jie: Thank you for supporting our program.

Zhang Keliang: Actually, the United States is a country with very strong overall strength. And how did it become a financial powerhouse? Relying on the post-World War II era, the United States became the country with the strongest industrial capability and the strongest military power. It is actually a triangle: military strength, industrial capability, and financial strength support each other, forming a financial powerhouse.

At the current stage of development, the biggest problem in the U.S. is the decline of industrial strength and the beginning of a “shift from real to virtual.” They think making money through industry is too troublesome, and that finance is faster at making money, so much of the industrial capacity has come to our place. The Chinese have enhanced their industrial capabilities and military strength. From this triangle, our weakness may only be in the financial sector.

In other words, the US has already experienced decline in two other areas. Compared to China, we are no weaker than America in those areas and may even surpass it. But we must learn from the experience of the United States and not “move away from the real to the virtual.” I believe it is only a matter of time before we become a financial powerhouse.

China will adopt a new international financial order, such as establishing the AIIB and the Silk Road Fund, which will definitely be multilateral negotiation mechanisms. For example, the BRICS Bank is open to all BRICS countries: if anyone encounters a problem, it will help solve it, rather than be a “weapon” or mechanism China uses to harvest the world.

Therefore, even if China becomes a financial powerhouse, it will continue to achieve the goal of building a community with a shared future for mankind, allowing the entire Global South to enjoy financial services and the role of financial support for the development of the real economy.

He Jie: When we talk about a socialist financial power, we don’t just mean our financial system is strong; it also refers to the international responsibilities we bear, which is also inherent in the meaning of ‘strength.’

Zhang Weiwei: Our program once invited former Greece’s finance minister, Giannis, to speak about a viewpoint. Now Americans still maintain the International Clearing System for payments, saying it feels like an old, rundown highway—many people still use it, still drive on it, but it’s already full of potholes. But the Chinese have developed a cross-border RMB payment system, which is blockchain technology—it’s a brand-new highway.

He Jie: This actually touches on a topic: the internationalization of the RMB. What do you think about a promising and mature picture for RMB internationalization in the future?

Zhang Keliang: To build a strong financial nation, we must have a strong currency, and the powerful currency is the renminbi. Currency has several functions: settlement and storage. The RMB’s settlement function in internationalization is not about becoming an international reserve currency, but about how much currency is needed to do business with your country through currency swaps. Our trade settlement is not settled in US dollars, but in RMB. If points connect into a surface forming a patch, the internationalization of the renminbi may be complete, especially as a trading currency.

But currency also serves as a wealth store. So, will I depreciate if I use RMB? How can you keep your currency value stable? Previously, the US dollar was called tas good as gold meaning that when you received dollars, it was linked to gold and could be exchanged directly. Later, the U.S. separated these two matters, and the Bretton Woods system collapsed.

China actually faces this problem too. When I do business with you, I earn all my money in RMB. How can RMB preserve and increase its value? This involves issues in our capital markets. As mentioned earlier, we discussed why it needs to connect in the capital market. After earning RMB, it invests in China’s stock market. These high-quality high-tech companies and global leaders, such as BYD and CATL, can use RMB to buy stocks or government bonds, essentially trusting our national credibility. With our country’s overall strength strengthening and the RMB’s reserve function established, people will be more willing to use RMB.

He Jie: No matter what, for a country, especially China, to build a financial system unique to socialism, the first priority is to serve the development of the entire country, especially the development of real industries. From a micro perspective, it is about ensuring that every ordinary person truly gains more from the development of the times. Another point is that building a strong socialist financial nation is also contributing to world development, especially the development of countries in the Global South. Thank you both again, thank you to all the audience members at the venue, thank you all, goodbye. [My Emphasis]

The lack of understanding about how the Outlaw US Empire became a financial power is somewhat understandable. I’m actually disappointed in this discussion as it fails to tell the audience where China stands today versus what Xi Jinping said in his February 2024 speech on building a powerful financial system. IMO, these excerpts are where the focus ought to have been placed and substitute for my further critique:

What is a financial powerhouse? It should be based on a strong economic foundation, possessing world-leading economic strength, technological strength, and comprehensive national power, while also possessing a series of key core financial elements. First, it possesses a powerful currency, widely used in international trade, investment, and foreign exchange markets, holding the status of a global reserve currency. Second, having a strong central bank capable of effective monetary policy regulation and macroprudential management, as well as timely and effective prevention and resolution of systemic risks. Third, it has strong financial institutions, high operational efficiency, strong risk resistance, a complete range of categories, and possesses global layout and international competitiveness. Fourth, having a strong international financial center that can attract global investors and influence the international pricing system. Fifth, it possesses strong financial regulation, sound financial rule of law, and holds significant influence and influence in the formulation of international financial rules. Sixth, it has a strong team of financial talent. Although China is already a major financial country, with the largest bank scale and foreign exchange reserves in the world, the second largest bond and stock market scale, and the insurance scale also ranking among the top, overall it is large but not strong. Building a strong financial nation requires long-term effort and persistent effort.

To build a strong financial nation, we must accelerate the establishment of a modern financial system with Chinese characteristics.

First, a scientific and stable financial regulatory system. A modern central banking system should be established, the framework of modern monetary policy with Chinese characteristics improved, the basic money issuance and supply regulation mechanisms perfected, the aggregate and structural functions of monetary and credit policy tools should be fully utilized, and the value of the renminbi and economic and financial stability should be effectively maintained.

Second, a reasonably structured financial market system. We must accelerate the construction of a capital market that is safe, standardized, transparent, open, vibrant, and resilient. Develop a multi-level equity market, improve the quality of listed companies, and deepen the normalized delisting mechanism. Leverage venture capital and private equity investment to support technological innovation, and strengthen the functions of the bond, money, and foreign exchange markets.{Four more points follow]…

To promote high-quality financial development and build a strong financial nation, we must adhere to the combination of rule of law and moral governance, vigorously promote outstanding traditional Chinese culture, and actively cultivate financial culture with Chinese characteristics.

First, be honest and trustworthy, never crossing the line. Outstanding traditional Chinese culture emphasizes keeping promises. The financial industry is based on credit, but must also uphold the spirit of contract, abide by market rules, and professional ethics. We must carry forward the tradition of “iron abacus, iron ledger, iron regulations,” and never falsify accounts. Insist on repaying debts, cherish your reputation, and avoid being deadbeats. Industry self-discipline must be strengthened, and those with serious dishonesty will be banned from business for life.

Second, to seek profit through righteousness, not merely for profit. Outstanding traditional Chinese culture emphasizes that “those who put righteousness before profit are honored; those who put profit before righteousness are disgraced.” Forgetting righteousness for profit has always been despised by gentlemen. Finance has both functional and profitable attributes; profitability must be subject to functional performance. The financial industry must fulfill its social responsibilities and achieve symbiosis and prosperity between finance and the economy, society, and environment. [Three more points follow and the speech ends.]

The main way China can help the world end Global Hegemony is to offer the world an alternative to the current international financial system that was built specifically to benefit the Outlaw US Empire and to a much smaller degree its collective Western/Westernized allies, all of which are now effectively colonies within the Empire’s Neocolonial web and subdued by its hegemony. Note Xi’s very great insistence that China strive for equity, morality, and strict regulation to eliminate corruption as much as possible, all of which are in stark contrast to the way the Empire conducts its activities. There’s an adage expressed by those who are critics of the Empire’s financial system—The stock market isn’t an indicator of economic health—which is very true today. IMO, China intends to lead by example and gain the allegiance of the Global Majority simply by showing it’s nothing like the Outlaw US Empire and is most serious about the values and goals it promotes. Russia has long been of a similar mind but has baggage attached to it that’s proven very difficult to shed that China has avoided despite the recent Western attempts to smear and tag it with its lies and false narratives. With the Collective West guilty of abetting Genocide, launching a second War of Aggression on Iran and with NATO’s war on Ukraine, the Global Majority knows who to favor and who to shun, China should and is finding many nations wanting to participate in its Global Initiatives, two of which—Global Security and Global Governance—specifically aim to eliminate hegemony in all its forms. The required alternative is being built at a faster rate thanks to Trump’s actions, but those of Europe and the Zionists also, all of whom crave hegemony.

Again, do visit the linked items up top. They all integrate.

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