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Who benefits from Xi Jinping's victory at the 20th CCP Congress?

China is not a monolithic, cohesive ethnic state. A huge number of nationalities, speaking different languages and sometimes not even understanding each other, live within its borders. It also lacks a single economic and, therefore, political leader – the “emperor”.

According to the leading sinologist N.N. Vavilov, China's economy is divided between three main clans, with different degree of political influence. The northwestern “Xi'an” “communists” clan led by Xi Jinping controls only about 10% of China's economy. Although, it covers the military-industrial complex and the rest of the business associated with the army and security forces. Therefore, the “Communists” are also called the “Victory Party” or the “War Party”. They are not in the mood for building friendship with the United States, however stand for the annexation of Taiwan by military means.

The more southern “Komsomol” clan, led by Hu Jintao and his henchman Li Keqiang, controls about 60% of the economy and is oriented towards good relations with the United States. And does not want to fight Taiwan.

And the “Shanghai” clan, although being pro-American, stands “for” the war with Taiwan. It controls about 30% of the economy.

But from the results of the 20th Congress of the CPC we can see that Hu Jintao is being led out of the presidium by hand, and his protege Li Keqian, with whom they control 60% of the economy, is not even elected to the CPC Central Committee. And Xi Jinping, who controls only 10% of the economy, gets almost monopolistic political power. Although, with the support of the “Shanghaies”. Still, pro-American.

From the point of view of a science called “political economy”, this is a little strange. Figuratively speaking, imagine that a tiger weighing 100 kilograms killed a tiger weighing 600 kilograms. Although, with some support from a tiger weighing 300 kilograms.

And the fact that the pro-American “Shanghaies” support the pro-Russian Xi Jinping is highly debatable.

It seems to be impossible! But that's exactly what happened.

But could it be that we just do not see the other players who quietly participated in the fight? Figuratively speaking, maybe there were 3-4 other tigers, weighing several tons each, only invisible?

Let's try to look at this situation in the financial and economic point of view and analyze the financial and economic interests of the four largest world players: the US military-industrial complex, the US hydrocarbon business (Seven Sisters), the US financial sector and Russia (weapons and hydrocarbons).


What is beneficial for the US military-industrial complex: peace or war? Can Boeing, General Dynamics, Lockheed Martin, Raytheon and others maintain and increase their revenue during peacetime? Of course not. They need war.

But there is already a war in Ukraine. And there is a war in Syria. Maybe that's enough? No. Both Ukrainian and Syrian wars are ground, waged on land. These wars will provide orders for tanks, aircrafts, aerial drones, ground-to-ground and air-to-ground missiles. But orders for aircraft carriers, destroyers, underwater drones and anti-ship missiles will decrease. Does it suit the US military-industrial complex? No. Ergo, a war at sea must be organized.

The explosion of the Nord Streams, most likely carried out with underwater low-noise drones, was the signal for it. And although this event gingered orders for underwater miner drones, sapper drones and anti-drones, this is not enough to seriously load the factories of the Pentagon naval contractors. They need a serious naval war.

But with whom? Russia is 90% a land country, and Syria is in no way the player of the rank for which military appropriations for the rearmament of the fleet can be received. On the other hand, China is a very rich half-naval power with great macroeconomic and, therefore, geopolitical ambitions. The military conflict held by wealthy China, supported by militarized Russia, against US-friendly Taiwan is just “manna from heaven” for the naval part of the US military-industrial complex.

Thus, the Xi Jinping’s victory at the 20th Congress of the CCP is much more profitable for the US military-industrial complex. If “comrade Xi” wins, he will start a war for Taiwan. Then several hundreds of billions of dollars could be extorted from the US Congress for the rearmament of the American Navy. The “allied” Japan, South Korea and Australia will also fork out. And if the war on land in Taiwan drags on, the land part of the US military-industrial complex will receive additional orders as well. In short, the US military-industrial complex benefits from the victory of Xi Jinping at this historical stage. Benefits a lot. In five-year horizon, the benefit will reach no less than a trillion dollars.


What is beneficial for the US hydrocarbon business (British Petroleum, Exxon, Gulf Oil, Mobil, Royal Dutch Shell, Chevron and Texaco): peace or war? As I wrote in the “Are the US our enemy in the war in Ukraine?” article:(1)

«The average cost of oil production is $20 per barrel. How to explain consumers why this oil must be sold for more than $90 per barrel? During normal peacetime, profits from sales of minerals can never be 300%-400%! 20% maybe. Maximum 30%. But not 300%!

And such reasonable profit remained up to the Arab-Israeli conflict. Only the military actions from the Arab side with the support of the USSR, and, accordingly, the Israel side with the support of the United States, increased the oil price by 4 times. And since then, this war has been used by the United States, Russia and the Arab world for a “non-transparent” increase in the oil price. When the Arab-Israeli conflict began to subside, new alleged enemies of the United States in the Arab world were “accidentally” found: in Iran, Iraq and even in Afghanistan. And now the Seven Sisters are in dire need of a major militarized power, whose geopolitical actions would be a convincing pretext for raising oil prices. For the oil and gas sector, war is no more just a mother-in-law, but also a necessary ingredient for business. Therefore, for the United States military-industrial complex and oil and gas industry, unipolar world is unacceptable. The victory of “peace all over the world” will lead to a sharp decrease in profits in these sectors and, accordingly, a change in the economic, and hence, political elites in the United States, as well as throughout the world. They desperately need an enemy that can be shown to American (and not only!) citizens.».

They need a war. Both the Ukrainian and the Syrian wars are not enough for them. Both Ukrainian and Syrian wars are ground, waged on land. But what fuel amount does a tank consume, comparing to a destroyer? Naval warfare requires much more oil than land warfare. The demand is growing, as well as prices, due to rising of social psychosis. The naval war is necessary for the US hydrocarbon business. Therefore, Xi Jinping's victory is also beneficial for the US hydrocarbon business at this historical stage. In the five-year horizon, the benefit will amount at least several trillion dollars.


What is beneficial for the US financial sector: peace or war? During peacetime, the markets are stable, and there is no one to “take-freeze” money from. But if a war between US-backed Taiwan and Russia-backed China breaks out, there are at least two benefits to be gained.

On the one hand, the markets will be in fever. You can earn a lot on the stock market with sharp price fluctuations. Moreover, if you receive information from lured senators and congressmen about the upcoming embargoes in advance, you can “earn” lots of money at a very low risk.

On the other hand, it will make possible to “freeze” Chinese assets. Not only the money of the Chinese government, but also the accounts of Chinese businessmen, politicians and their “wallets”. Which is amounted in 3-4 trillion dollars in total. Then, in a few years, some of this amount will be given to the “Government of Taiwan in Exile”, not directly, but through the Pentagon. One or two trillion dollars will “stick” to the hands.

Therefore, the US financial business also benefits from the Xi Jinping victory at this historical stage. In the five-year horizon, the benefit will amount no less than several trillion dollars.


What is beneficial for Russia (weaponry and hydrocarbons): peace or war? The answer follows from the above analysis – Russia will have opportunity to sell China lots of weapons at a high price and will gain a much larger share in the supply of hydrocarbons by land, since the United States will most likely try to block sea exports of hydrocarbons to China. Therefore, Russia will also benefit greatly from Xi Jinping's victory. In the five-year horizon, the benefit will be no less than several trillion dollars.


What do we get in the dry residue? We can see at least four players who will gain at least $10 trillion from China-Taiwan war. And we have not yet analyzed the interests of other, smaller weapons, hydrocarbons and financial services suppliers. And they all together will “earn” non the less.

Figuratively speaking, now, looking at the financial and economic “battle of tigers”, we can see that there were 4 other tigers of several tons in weight each and a couple of dozen large wolves in the fight. And they all stood for the 100 kg tiger. They were just not visible. Simply because the vast majority of people do not look at the world in the financial and economic range.

Moving from a figurative financial and economic vision to financial and economic modeling, we can very logically assume that the American “friends” gave the “Shanghaies” instructions to support Xi Jinping. And sacrificed the “Komsomols” to the “Communists”. How did they do it is another question. Maybe they provided a killer compromising evidence. Or maybe they promised to block their assets outside of China. Maybe even threatened. But most likely, the impact was complex and coordinated. As Aleksey Edrikhin (Vandam) said: “There can only be one thing worse than enmity with an Anglo-Saxon – friendship with him.”


What is the most mutually beneficial scenario for all players in China and Taiwan? How should the war develop so that everyone maximizes their “earnings”?

For the US military-industrial complex, it is necessary that the Chinese sink at least a couple of aircraft carriers and 20-30 smaller ships of the US Navy. Quite possible to achieve this with hypersonic missiles of the “Kinzhal” type, which will suddenly be found even with hieroglyphic markings on all the details. It is also necessary that the Chinese shoot down 20-30 US Air Force aircrafts. This can also be achieved using S-400s, which have been on combat duty in the Chinese armed forces for the last several years. It will also be beneficial to lose 100-200 tanks and a corresponding number of artillery installations in battles in the mountains of Taiwan. The US Air Force and the US Navy will use up 300-700 high-yield non-nuclear missiles and 3-4 thousand cruise missiles on their own. In addition, 100-200 surface and underwater drones. This active war phase will last no more than six months. But the longer, the more profitable for the US military-industrial complex. Therefore, there can be several active phases.

For the US hydrocarbon business, it is necessary to use at least five aircraft carriers, 100-200 smaller ships and a thousand or two of small escort ships. As well as tankers and cargo ships to the maximum quantity. In addition, the cargo air fleet must make several thousand flights from the United States to the bases in Japan. This forecast is also valid for the half-year active war phase. But as well, the longer it takes, the more profitable it is for the oilmen. They also want several active phases.

US financial business needs to freeze at least $2 trillion of the Chinese government, officials and businessmen assets. In money, securities, real estate. As well as in Chinese-owned enterprises in the United States. They also need to “earn” at least a trillion on exchange speculation.

In order to achieve this, the war must proceed with varying success, that is, the Chinese must win in the beginning, then the Taiwanese, then the Chinese again, etc. And in politics, many different embargoes should be inflicted first, then the period of easing, then tightening again, and so on. All in all, these “gentlemen” want a long war. At least for three years, preferably.

For Russia, it is necessary to sell weapons to China for half a trillion. More would be better, but the Russian military-industrial complex is unlikely to manage it. Even in 2-3 years. Being destroyed for so many years, it cannot be set up again shortly. To raise and keep at least 30% share in the supply of hydrocarbons would also be desirable. The longer the better. It will be very good if Russia improves logistics ties with China during this time, including transit logistics to Europe. Technically it is possible, organizationally – only in the case of severe repressions among the bureaucracy. It would also be great to “return Kazakhstan to its native harbor” on the sly, but again, the intellectual level of the Russian officials does not allow us to hope for such a success.


In summary. The “Invisible Tigers” need a long war. From a year to three years long.


And what will China gain?

  1. China will eventually get Taiwan.
  2. China will get consolidation and unity of the Chinese people in the face of external threat, comparable to the unity of the Chinese during the Second World War. It's worth a lot, and things like that aren’t done quickly. At least a year of war, preferably two or three are needed.
  3. China will gain reorganization and “hardening” of the army. This requires several years of war.
  4. Xi Jinping and the “Communists” will reorient the country's financial flows into the military-industrial complex of China controlled by them. It's not a fast process either. This will require no less than a year, two or three years preferably.
  5. In addition, the “Communists” will take away 30-40% of China's economy from the “Komsomols”. It’s also not a fast process, you may need more than a year.


In total.

All major world players need a “treaty” war between China and Taiwan for at least two years. Better 3-4 years long.


It makes sense to assume the following scenario:

  1. China's breakthrough to Taiwan, the destruction of the Taiwanese fleet and 80% of aviation, securing a foothold.
  2. Long and tedious fights in the mountains of Taiwan.
  3. Taiwan will receive “assistance” from the United States and capsize China at sea, strike at the China coast.
  4. The Chinese base on the Solomon Islands will be destroyed at the cost of a fair number of American ships.
  5. China will announce “rallying” and “mobilization” and keep continuously firing missiles at Taiwan and the adjacent sea.
  6. A long and tedious struggle between underwater drones and anti-drones.
  7. Another breakthrough to Taiwan.
  8. Then a new twist.

By and large, it will be the same as in Ukraine, but longer and with sea and local color specifics.


It is also quite realistic to assume an international “carousel” of wars. What does it mean.

Now that the parties have entered the static phase of the war in Ukraine, the price of gas has fallen down to $1,000 per 1,000 cubic meters. BUT. Suddenly, the Kurds attacked the tourist street in Istanbul. Nobody asks, why would Kurds kill foreign tourists. The public outcry is great, the Americans are blamed, but the Americans do not mind. Türkiye declares the “Claw-Sword” Special Military Operation, strikes at the American base. The Americans do not mind. The gas price returns to $1,400 per 1,000 cubic meters. Now there will be a ground operation of the Turks and Iranians in Syrian and Iraqi Kurdistan. Oil fields will burn, and the oil price will rise.

When the Turks run out of steam, active hostilities will have to move to China. If China is not ready by this moment, then they will fight more in Ukraine. This is how the “carousel of wars” will be waged between the battlefields in Ukraine, Kurdistan and Taiwan. In total at least 5 years, rather 10 years of international war.


The agreements that will be reached during the war will decide, whether it will be nuclear or not. Most likely, if everyone “urges” to use nuclear weapons, they will only be used in Taiwan. Or choose another island. For example, the Solomon Islands, where China still has got a military base. As a last resort, they will shoot each other with tactical nuclear weapons in Australian desert. Nobody in the world cares about the Chinese, neither about the Australians.



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