Aug 1, 2022Liked by Noah Smith

In the short run, Russia is important. In the long run, Russia is China's gas station.

Ironically, I think the Ukraine invasion has hurt China's strategy almost as badly as Russia's. Yes, Ukraine currently distracts our attention from China. But it's also taught everybody, especially Europeans, that dictators still launch stupid wars, and democracies still have to deter them from trying.

Thanks to Putin, a Chinese invasion of Taiwan no longer sounds like a ridiculous hypothetical to Europeans, a catastrophic Chinese stranglehold on a key economic resource sounds awfully familiar to them, and Europe doing their part to deter China isn't a crazy idea that has to be killed in committee.

In other words, by legitimating fears of a "New Axis," Putin may have done more for anti-Chinese unity and deterrence than any American President.

Expand full comment
Aug 1, 2022Liked by Noah Smith

1. Reshore as much as possible

2. Much more immigration, especially STEM

3. 1 billion Americans

That will win. Can we do it ?

Expand full comment
Aug 1, 2022Liked by Noah Smith

Most developing economies might not be with “New Allies” who seem to assume that their problems are the world’s problems. Pls also understand that despite ongoing India-China diplomatic confrontation, China remains India’s large trading partner. So it might be naive to assume that India will go with New Allies just because there’s a boundary dispute with China

Expand full comment

This is an important piece. It seems to be missing one big thing: China's food supply.

Edward Luttwak has been claiming that China is so dependent on food imports from the US and its allies (such as Australia) that it would quickly run low on food during a war, or even just an embargo. He uses this in support of the claim that, if rational, China will not launch a war over Taiwan:

>China imports much of its protein from US/allies (150 million metric tonnes/annum of meat, soy, not easily smuggled) It can reduce fuel use + increase fuel imports from Ru/Kazakh .But today's Chinese would starve on a Mao diet & its vast rice stocks will not do. Empty threats


So I've looked into China's meat consumption:

>... in the 1960s, the average Chinese person consumed less than 5 kg of meat annually. But as in comes soared following Deng Xiaoping’s market-driven “reform and opening” of the late 1970s, consumption rose to 20 kg per capita by the late 1980s and has now reached 63 kg. Today, China consumes 28% of the world’s meat, including half of all pork.


Meat tends to be more expensive per calorie, partly because it requires more land per calorie.

What would most likely happen if the Chinese government tried to abruptly return the populace, not to its Mao-era famine diet, but its late 1980s diet? How would the populace handle the drastic change? How quickly could Chinese farmers switch from producing meat to vegetables and grains? (Factory farming implies a lack of space available for crops.)

Have we learned anything relevant from countries whose financial crises slash their food imports? Perhaps Lebanon in recent years?

Expand full comment
Aug 1, 2022Liked by Noah Smith

I wonder if India could be the wedge the divides the Axis (even as some kind of loose grouping) in similar ways that Vietnam was able to leverage the Soviet-Sino split and if the "Allies" could do anything to exacerbate that. e.g. if India could by virtue of its trade with both, put pressure on Russia to slow or reduce shipment of fuel while also putting pressure on China to not just become Russia's manufacturing center.

I think Western observers often overlook how much China distracted the USSR during the Cold War. (c.f. the undeclared war in 1969 between them that lasted 7 months and involved the mobilisation of 1.5 million troops.)

Expand full comment
Aug 1, 2022Liked by Noah Smith

Would Vietnam join the New Allies? I understand the China-Vietnam relationship has become rockier. Would be nice to ally-shore some manufacturing there.

Expand full comment

Informative analysis as always, thank you Noah!

It would be a lot of fun to design a board game involving this situation.

Any other Axis & Allies fans out there?

Expand full comment

Lingering thought of mine - for what reason would China delay attacking and attempting to take Taiwan this year? Russia has made its move - the longer China waits the longer the west has to prepare. Chinese demographics are only set to get worse and we all know that the Chinese economy is likely far worse off than what's officially being reported. Michael Pettis has done a great job documenting the looming issues for the Chinese economy - and if China decided to develop and implement policies aimed at increasing consumer spending it COULD turn things around in the medium and long term.

BUT...in the short term it has a HUUUUGE property sector implosion and nowhere to allocate supply side stimulus in a productive fashion. Ongoing Covid lockdowns continue to suppress the economy and the recent reports showcase their economy limping along on exports (record trade surplus - flatlining imports indicating minimal consumption growth). So Xi doesn't want to give out money to stimulate consumption because of inflation and possibly also sees creating a legitimately large middle class with GDP per capita closer to Estonia as a threat to his power as well (Perhaps when people are wealthier they will ask more questions, feel more empowered, be less concerned with living day to day, etc).

If I'm China I need something to unite the country, direct it's attention and focus (away from lingering internal concerns - Covid, Housing, aging, no safety nets, etc), and launching an attack on Taiwan in October would really fit this bill...

Expand full comment

Due to demographic collapse, it’s very likely that all of these strengths of the new axis won’t last. As China’s population dwindles to as low as 600-700 million people by 2100, it will lose global manufacturing share and its’ relative economic strength and population size. Even if China’s GDP passes that of the US, we would likely repass them sometime later in the century.

However, this isn’t something to be optimistic about. As Chinese elites begin to take a pessimistic view of the future, they may feel compelled to lash out now and attempt to take what they can before the window of opportunity closes. To quote foreign affairs “it’s a decade of living dangerously”.

Expand full comment

So what would induce India to join the Western alliance and stick with it ? As far as I can see, India's best move would be to stay neutral and play each side off against the other. Each bloc would be forced to offer India better deals for it's goods and services to keep pace with the other. The worst position for New Delhi to find itself in would be to be locked into a monopoly supplier for vital materials, finance or technologies.

The only possible deal breaker here is the contested border in the North West between India China and Pakistan. there is a very real possibility that unresolved conflict could lead to war with all three parties armed with nuclear weapons. However, joining an anti-Chinese alliance in order to press it's territorial claims in the Himalayas could very well turn out to be a poisoned chalice for India. I strongly recommend Pravin Sawhney, editor of Force Magazine analysis here.


It's a bit complex, but he has said words to the effect of "China's answer to success on the first front (The USA) may run through the second front (India)".

Basically if Beijing can inflict a major defeat on India then it could collapse "The Quad" by demonstrating that Washington cannot protect them. India hold a very weak hand in the border dispute in the North West. Domestic electoral politics make a permanent settlement highly unlikely but to full achieve it's stated goals, New Delhi would have to seize tens of thousands of square miles of some of the harshest terrain in the world from a larger and stronger army that is dug in and waiting for them.

A strange game. The only winning move is not to play.

WOPR "WarGames" 1983


Expand full comment

Noah, as always, thank you for the insightful analysis. Do you see this as the death knell for Globalization?

Is it possible that there will actually a much more fragmented world than a bipolar Cold War system? If countries “re-shore,” “near-shore,” or “friend-shore” most of their production, it makes sense that they would have far less global interests. For example, if most of America’s manufacture returns to the USA, why would it be interested in East Asia, Europe, Africa, or anywhere really? I think America is a very insular country—as is India. Both nations have a natural tendency to focus on internal matters.

Autarkic policies allow nations to become more self-sufficient but they also make them more parochial. Once a country achieves economic self-sufficiency there are very few incentives for it to venture into international conflagrations.

Instead of bifurcating, I foresee the Global Order shattering into a series of regional orders with regional power blocs competing over regional issues with little interest in events outside their “near abroads”.

Expand full comment

What of the African nations? Frontline has an episode featuring China's massive investment in infrastructure in Africa ("The New Silk Road - China's Belt and Road Initiative"). It says to me that China has been preparing for this new reality for years. In addition, needing to feed its population, Chinese companies own many of the world's largest producers of protein - Smithfield Foods for example. What role will a country's ability to feed it's people play in this new international arrangement?

Expand full comment

I recently finished a book about the war in the Pacific called The Fleet at Flood Tide. It covers the past-Midway, past-Solomon's period until the end of the war. My takeaway from the book is that the US drowned the Japanese empire in a flood of steel and aviation gas. The Japanese and American fleets were of roughly comparable size at the start of the war. America's tremendous manufacturing capacity overwhelmed the Japanese. And, oh yes, also win the European war, too. Based upon that, reshoring basic materials production seems essential. I would say that I have little faith in the capacity of existing military industrial complex to meet these challenges. Boring built the bombers which rained destruction of Japan. These days they can't even keep production running.

Expand full comment

Manufacturing is very important, but I wouldn’t discount everything else as just Napa wine tours and wedding photographers. It’s organizational capacity, logistics, software, design, science research, and so on. And to the extent that it is things that are truly inessential, that reflects a latent capacity that can be mobilized.

I came out with a significantly larger ratio when I did this a while back, but that’s including Taiwan, SK, Canada, Australia, and so on. I don’t think it’s necessary to exclude even wavering countries embedded in the EU, because in practice it’s more important who they trade with. Even if they aren’t churning out artillery shells, they’re making other products to trade with those that do. See Sweden or Switzerland in WWII.

To a lesser degree, the same is true for some countries in the Americas - Mexico most strongly.

Of course that also applies for Russia and China. Kazakhstan could claim to be neutral but they’re not exactly over-supplied with alternative trading neighbors. The same goes for many of the rest of the ‘stans presumably. The problem for China & Russia is that none of those neighbors provides them with any new capabilities. Whereas for the West just having access to low-cost labor is useful. In an emergency the US could simply open the valve for immigration and receive tens of millions of workers from its south.

Most important is not the actual waging of any war, but the demonstrated capacity to do so without breaking a sweat. That does cost money: probably 5% of GDP everywhere is necessary. It also requires demonstrated control of supply chains so there is no ambiguity over the ability to mobilize the economy for conflict if necessary.

The US and parts of the EU also have an enormous but hard-to-quantify advantage in military experience, for complex combined-arms operations, COIN, carrier operations, and large-scale ground operations. Not much against true peers. China has essentially none. Russia has some but hardly seems to be shining.

Both the Atlantic and Pacific are Allied oceans. That’s a great advantage in ability to block trade. And as usual the geographic isolation of the US makes it invulnerable to conventional attack.

The concessions to China since the 1970s have been truly idiotic. Without exports to the US, especially early on through the offshoring of American plants, China could never have grown its current manufacturing capabilities. Even ten years ago the US was in a much stronger relative position, where moves to reduce ties would have hurt China far more than the US. There is still some question of export dependence, but in a true crisis the cutoff of export trade can be handled by repurposing that capacity to military production using printed money. (The handy thing about military production is that it doesn’t result in gluts that destroy prices; I mean really, can you ever have too many tanks?)

Expand full comment

Man, this was the most depressing column I've read in a long time. I'm not saying anything in it is not true; quite the contrary it's quite convincing. It's just that the Internet made me hope I would live out the rest of my life in a world that was increasingly aware of the humanity of people different from ourselves, not another planetwide confrontation between Good and Evil with hundreds of millions of lives at stake.

Expand full comment

Thank you for putting things in such a clear perspective.

Would you elaborate (or point to studies others have done) that will take a closer look at the differences in manufacturing, especially the capacity in the secondary sector of the economy?

For example, China dominates consumer goods manufacturing, but would shifting those low value-add industries elsewhere help win the competition? Or should the US and its allies focus on other more worthwhile things (say, resource extraction, heavy industry, etc)?

Expand full comment