Sun Tzu said: When going into battle, to prepare a thousand war vehicles, a thousand heavy transport vehicles, a hundred thousand soldiers, a supply line of a thousand li (approx 500km), daily expenses, travelling fees for messengers, repair materials, replenishment for war vehicles, daily expenses of a thousand gold coins, only then can you march out an army of a hundred thousand.
What the above meant is clear. Before going to war, ample preparation has to be made. That is what you base your confidence for victory on.
In recent months, war has been a constant word in our social media, news and conversations. War is horrifying, war is cruel, war incurs heavy cost and ultimately war is the imposing of one’s will on another through the use of violence. Many of us living in peaceful countries, especially keyboard warriors behind the screen, have no idea about the consequences of war on both the involved participants and to the rest of the global bystanders.
With reference to Nancy Pelosi’s visit to Taiwan and China’s repeated warnings and military preparations, I will state here that as a non-Chinese citizen, I do not wish for war because it harms my very peace and path to financial freedom. But from the perspective of China, China should go for war, having given serious warnings. Failure to follow up on it will affect its credibility. But today’s article will not discuss about why they should go to war, but the preparations needed to go to war.
China is the next most likely country to go to war, and by knowing what to expect we can act accordingly, not to influence the war but to make opportunistic gains. We will assume that when China goes to war, the West will do what they can to crush China but not go to a military war with them directly. On the other hand, China will do what they can to fight back.
The peak of human military powers – nuclear bombs. Nuclear is so high up on the technology tree by today’s standards, that many countries can only dream of it. Those who do not have it struggle to achieve it, with much obstacles laid out by those who have. From media condemnation to financial sanctions, Iran and North Korea have faced very unfavourable conditions to maintain their weapons. Those who have it have an overwhelming advantage, the trump card to activate in a desperate last resort measure.
On top of the number of soldiers, the quality and number of aircraft carriers, fighter planes, tanks, guns, missiles, submarines etc as well as the rate of production of these weapons to support the war are all factors to be taken into consideration. How do your quality and quantity match against your enemy, and will your enemy have reinforcements? Ukraine is able to continually get advanced weapons from Europe and US, but Russia has to rely only on itself, even if it has to take out Soviet era weapons. Will Taiwan be able to receive reinforcements? Ukraine is connected to other countries by land, but Taiwan is an island surrounded by sea, and now also by China’s aircraft carriers.
China is now the world number 3 in terms of military strength (click the link for really nice statistics) behind Russia and US. There have also been unverified sources to say that China is already expanding their weapons production as well as bolstering the number of their soldiers by making certain changes to their service discharge date among other amendments.
Diplomacy not towards your enemy, but towards the rest of the countries. Do you have a valid reason to go to war? Wars are no longer waged in the name of world domination nor in the name of God, but liberation to the people, bringing democracies to the land and fighting terrorism. Whether it is Russia’s goal to protect the people suffering from abuse and genocide by the Kyiv regime or China’s intent to liberate Taiwan, any reason to start a blood bath has to have a legitimate reason. If your reason is accepted (at least on the surface) by others, other countries will shut up about it or make lesser noise. If your reason is not accepted, then you will have a harder time enforcing your will. Do take note that China’s army is called the People’s Liberation Army.
Of course, diplomacy is not just all talk. Diplomacy is usually enforced by practical aspects. How much of your products do you sell to China? How much of your economy is dependent on China? How much of China’s export (eg rare earth) do you need to maintain your industries? The more a country has a hold on others, the more they will be willing to tolerate your actions, just like how the rest of the world condoned US when they went around imposing democracy and freedom.
But even among your supporters, there has to be practical benefits and concessions made. Diplomacy is achieved not by positive thoughts and dialogue, but by realistic gains. That is where we go to the next paragraph.
Trade involves 2 aspects – the buying and selling of resources which we usually do, but also the concessions made in order to garner support.
Trade facilitates the exchange of resources. My oil for your food. My chips for your rare earth. With trade, the country at war can continue to obtain what is necessary in order to keep the country running. Iran did not have medicine nor sufficient food due to the sanctions, and North Korea similarly had to depend on itself. When Russia invaded Ukraine, one of the first things the Western countries did was to sanction Russia, cutting off the trade portion in an attempt to cripple it. With the globalisation we have today, not being able to trade with others to procure the necessary resources can be very devastating, and many countries will not be able to survive long.
The other portion of trade refers to the concessions made to other countries who may be willing to support you to a certain extent. Just like how Russia is selling cheap oil to India which it resells at a profit, or how Russia agrees to open up Central Asia for China to advance their One Belt One Road initiative, every country has their own agenda which they want to advance. By making the appropriate deals, the country which started the war is able to lessen the impact of the sanctions imposed upon it.
If today China is to go to war, we can expect an economic sanction by the Western society. China will be likely to be banned from using the SWIFT system, but they already have their own Cross-Border Interbank Payment System (CIPS), which processed around 80 trillion yuan ($12.68 trillion), with about 1280 financial institutions in 103 countries and regions having connected to the system. For China, if the countries are willing to trade with it, there is already a system set up in place. What may be more important is the concessions China would be willing to give in order to garner support.
What are the concessions China could make? Tone down on the claims regarding South China Sea, giving up part of its supply chain to others (this is another long topic altogether), selling or processing raw materials for others at a very cheap price etc are just some of the concessions China can consider. The more options it has to offer to others, the higher the probability others will be willing to be neutral about their war efforts. Each country has their own specific needs and wants, and targeted concessions have to be made.
Of course the above is only one small example about the trade aspect. How well a country is able to continue its trade with others depends on the diplomacy aspect. The more its hold on others, the better the diplomacy, the more it is able to trade for resources and garner support, the further it is able to go and last in the war.
But in the worst case scenario where nobody is willing to trade with you, then the country will have to survive on its own.
One of the very core and foundational resources during war and peace is energy and food. In war, energy to power up the machineries and weaponry as well as to keep the whole system running domestically and food for obvious reasons. Should a country be insufficient in these areas, any strike to the enemy has to be fast and accurate to capture critical resources in order to support the war. Japan in World War 2 had mainly targeted China, but due to circumstances had gone down to South East Asia to capture resources in order to support the battlefront with China. The day your supplies run out is the day you lose. We all know that Russia is self-sufficient in energy and food, the 2 most basic resources to survive and fight.
China on the other hand is aggressively storing up energy and food supplies in the name of ensuring security amid external uncertainties. But given the current situation, Russia will support China when necessary. In fact, the country hoping China to go to war the most should be Russia, as it will ease off the West’s concentrated effort on Russia, among many other benefits. On top of China’s own store of resources, Russia will still have enough food and energy to give practical support. We can then deduce that at least for core supplies, China should have no issues.
Do not underestimate culture. How much a country’s culture influence others determines how the people of other countries view the war effort. In many democratic countries, the political leaders have to pander to the wills of the voters, hence deciding to a significant extent how the country will act towards the war aggressor. For example, today people will act more angrily towards an invasion of Japan compared to an invasion of Syria, simply because Japanese culture has seeped into many of our lives. From Japanese food to Jpop, from anime to tourism in Japan, many of these cultural influences leave a rather positive impact on us, compared to Syria whom we know nothing about. To give a practical example, the European political leaders know that condemning Russia is a dangerous thing to do, especially since they rely heavily on Russia for oil and gas. But because of the voters, the political leaders have no choice but to clash with Russia and in the process crippling themselves.
That is why the US has been aggressive in their cultural export. It is always the American hero vs the Russian or Chinese villian. The American hero who is upright and just, defending what is right till the very end. When the heroes fight, it was to save others, to bring a ray of hope in the dark world. Over the years, such influence seeped into the minds of the people without them knowing it. America is the hero we all need but do not deserve.
Admittedly China is lacking in this aspect. From games to movies, songs to ideology, China is actively brushing up on each and every of this area. That being said, it will still be a very long time before everyone thinks well of it. Should China go to war, we can expect the mindless population around the world will pile up hate on China simply because, it is China.
What is the real objective of the war? For Russia, it is to prevent Western powers putting soldiers right up their doorstep and to punish Ukraine for its stupidity. For China the intent is always clear – to unify China. In a war, there are definitely casualties. A zero death such as Russia’s annexation of Crimea can be considered an outlier which should not normally happen. Despite this, Russia has been careful in their fight within Ukraine, opting not to kill mercilessly and indiscriminately towards people of their own race (Slavs). When China enters Taiwan, the objective is also not to obliterate Taiwan, but to take over Taiwan with as little casualty as possible. They have no intention to kill their fellow countrymen, nor do they want to take over a piece of wasteland. This is very different from America’s ruthless bombing and war actions across the world as their intent was totally different. The more restrictions the country have, the longer we can expect the war to drag, unless there is an overwhelming difference in power.
That is why in the military paragraph above, China opts to surround Taiwan for now. Whether the war proceeds or not, it serves as a clear warning that should it comes down to war, China will lay siege to Taiwan. Within a few days Taiwan will exhaust its own supplies without reinforcements, paving a way for a victory with minimal casualties.
What Can We Commoners Do
What we do depends on who we think will win the war. In this case, I thought it is pretty obvious that China will win the war, without crippling consequences. Please read what I write below with your own discretion and judgement, and not follow what I say blindly.
The day China goes to war, we can expect sanctions and condemnation from the Western powers. China will definitely take a hit but should be able to recover quickly. For me, I will cut off any Chinese stock holdings which are traded in the Western stock exchange and see if I can buy them on the Hong Kong stock exchange or from within China if need be.
If you are eyeing any Chinese stocks, it may be good also to keep some spare cash at the side to do some shopping when the prices drop in the short term. I am not saying that China will go to war 100%, but that you will want to have the ability to do some shopping when the time comes.
Although RMB may suffer a huge crash in the initial days of the war, I believe that like the Ruble it will bounce back up. That may be a chance to earn some quick money too. You will need to see secure channels of obtaining RMB early on since the Russia-Ukraine war tell us that many banks and money changers shut off the exchange of Russian Rubles quickly.
The above is just a very simplified overview of what has to be prepared and expected in a war. Reality is much more complicated than that with a lot more considerations, and to go through each aspect in detail will take up too much time. But with a broad overview, we can do a quick assessment of the potential outcome of the war. Out of the factors listed above, we can gather that China has been gearing up for a potential war for a very long time. Especially now that they have Russia at the frontlines, China has been monitoring closely and learning important lessons from it.
For us, the objective is very simple. We cannot influence political decisions, and what we feel or think has no impact on the grand scheme of things. Look carefully and find opportunities in it.
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