China: Angry, Isolated, and More Dangerous Than Ever

Socially, economically, diplomatically, politically…

The past few years have been extremely difficult for China. 

That’s not to say I sympathize, of course. 

I don’t. 

Because pretty much all of its travails are the country’s own doing. 

China’s economy has been flagging for the past decade.

Once lauded for its double-digit growth rates and hailed an “economic miracle,” China’s economy expanded by just 3% last year.  

That waning growth is part of a larger trend that dates back to 2007, but the pandemic has obviously taken a toll as well.

Of course, that pandemic began in China, and now it seems we’re openly acknowledging it came from a state-run lab rather than a wet market.

That’s bad enough, but China’s response to the pandemic it unleashed upon the world was just as bad. 

Excessively harsh lockdowns completely eviscerated China’s domestic economy and even resulted in civil protests rarely seen and hardly tolerated in the communist country.

Those restrictions have since been softened, but China’s economy is still only expected to grow 5% this year, beset by weak trade, anemic domestic consumption, a real estate crisis, and regulatory crackdowns.

Russia hasn’t helped matters, either.

Vladimir Putin’s blundering invasion of Ukraine has put even more economic and political pressure on Beijing. 

China has been supporting its ally by buying up Russian energy resources and selling back industrial goods and tech components to compensate for Western sanctions.

But that hasn’t exactly endeared it to European countries that have come to view Russia as an existential threat. 

Meanwhile, the Ukraine crisis has drawn Europe even closer to the United States, which has been able to use the continent’s military dependency as leverage.

The Netherlands, for example, just announced export restrictions on semiconductor manufacturing equipment as part of a U.S. initiative to deny China advanced technology.

China has been working to bolster its domestic semiconductor industry — which lags behind the likes of Taiwan, South Korea, and the U.S. — but the Biden administration imposed export controls to block certain semiconductor chips last year.

That ban wouldn’t be as effective without cooperation from Europe. But with America standing tall as the guarantor of Western democracy, it’s much easier to get allies on board with U.S. economic policy — even if it means antagonizing China. 

This hasn’t gone unnoticed, and it’s made the United States a convenient scapegoat for China’s party leaders.

“Western countries — led by the U.S. — have implemented all-round containment, encirclement, and suppression against us, bringing unprecedentedly severe challenges to our country’s development,” China's president, Xi Jinping, recently lamented to a crowd of politicians and businesspeople. 

Meanwhile, China’s foreign minister, Qin Gang, warned: “If the United States does not hit the brakes but continues to speed down the wrong path, no amount of guardrails can prevent derailing and there will surely be conflict and confrontation.” 

Again, the United States has done its bit to draw China’s ire.

The trade war initially launched by Donald Trump has been carried on by Joe Biden.

American politicians (most notably Nancy Pelosi last year) have been climbing over each other to visit Taiwan in a show of solidarity with the besieged island.

And there’s been some excessive rhetoric from both sides of the political aisle. 

But again, China did this to itself. 

Americans, and the world at large, have suffered greatly from the pandemic that originated from China. 

But rather than take accountability,China has only lashed out and evaded responsibility. 

China didn’t have to support Russia’s invasion of Ukraine. It chose to tether its fortunes to those of a global pariah. 

Cyberattacks, spy balloons, bombastic threats…

It’s no wonder Americans’ perception of China is at a record low. 

Just 15% of Americans view China favorably, according to the most recent Gallup poll. That’s a 5% drop from just last year and a 38% decline since 2018.

More than eight in 10 U.S. adults now hold a negative opinion of China, the poll said. 

That’s a lot of animosity that’s accrued. And it will (rightfully) be exploited and acted on by U.S. politicians.

That, in turn, will drive China further into the same corner Russia has backed itself into. 

And that makes confrontation increasingly likely. 

Make no mistake, relations between China and the West are headed in the wrong direction. 

War seems inevitable.

This isn’t a new threat, of course. But it’s one that’s coming closer than ever to becoming a reality. 

And that’s one of the many reasons I recently launched a stock trading service that specializes in tracking the defense industry through government disclosures, patent filings, and insider contacts. 

It's called Secret Stock Files, and I send out monthly video recommendations discussing all of these technologies and more.

You can find out more about that here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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