Wednesday, September 10, 2025

Q4 2025 Outlook: Geopolitics, Geoeconomics, and Investments | Simon Hunt

Amid a cascade of geopolitical and economic developments, the Shanghai Cooperation Organization (SCO) summit—along with bilateral meetings in Tianjin and Beijing—emerged as the pivotal moment. President Xi’s opening address concluded with a clear message: “It’s time for action.” 
 
Simon Hunt, British economist and CEO of Simon Hunt Strategic Services, is a veteran global 
strategist with 50+ years of experience advising governments and institutions on macroeconomics, 
copper markets, China, and geopolitical risk, and a pioneer in industrial metals intelligence.

Multipolar Ultimatum: SCO Summit Signals Global Realignment 
This marks a new era of geopolitical posture—one of confident unity among the East, and a tacit ultimatum to the West. BRICS is ready, but not seeking a fight. Despite the growing strength of this bloc, their message remains: “We don’t want war, we invite partnership. But if you refuse, we will proceed without you.” This stance was echoed during a high-profile military parade showcasing next-generation hardware (HERE, select English audio track). 

» The wars in the Middle East and in Europe will escalate. «
 
The West has effectively pushed Russia and China together—and now India as well. This fulfills Brzezinski’s warning that a Russia-China alliance would mark a fatal blow to US global dominance. The realignment is now irreversible.

India, once diplomatically dancing between the West and the East, has now aligned itself firmly with BRICS. The SCO summit made this unmistakably clear through images and interactions between leaders. With China and Russia already unified, India’s inclusion forms a powerful axis comprising the world’s three largest countries by population and resource depth.

Within the SCO framework, India and Pakistan—traditionally adversarial—may find common ground. Russia maintains strong ties with India, while China supports Pakistan. Pakistan's historical alignment with the CIA may now be shifting toward China, driven by strategic and economic incentives. Even Pakistani defense leaders have acknowledged the transactional nature of their past Western alignment.
 
US Can Adopt Multipolarity Or World Will Split Into Two Blocs
The coordinated body language, messaging, and preparedness of Xi Jinping, Vladimir Putin, and Narendra Modi made it clear: Washington and its allies are being asked to join a multilateral world. Should they refuse, the world will split into two irreconcilable blocs.  
 
Historically, empires have accepted only victory or defeat, and the United States may not shift until crisis compels it. The refusal to accept a multipolar order will lead to escalating global tensions. The window for peaceful integration is closing.
 
BRICS Currency Incoming: Gold-Backed Alternative to Dollar Imminent
Within ongoing BRICS meetings, particularly between Russia and Brazil, a new currency is being discussed—one expected to be gold-backed. The Shanghai Gold Exchange is building vaults across BRICS countries, including Saudi Arabia, enabling energy trade in yuan and its conversion directly into gold, bypassing the dollar.
 
China is already settling oil trades in yuan, which Saudi Arabia converts into gold via the Shanghai exchange. A physical gold vault in Saudi Arabia would streamline this process, and with a narrowing trade imbalance, this yuan-for-gold mechanism is becoming systemic. Russia and China have already maintained such a balance for years via vaults in the People's Bank of China (PBOC).
 
Russia warns "US will use crypto to escape its $35 trillion debt". 
 
Gold at Record Highs: Short-Term Pullback Before Next Bull Leg
Gold futures reached $3,673, with silver touching $41.92. However, a short-term correction to $2,800 may occur due to the Treasury’s need to lower interest rates. This is seen as a deliberate move to accumulate gold cheaply before an eventual revaluation.
 
Silver Rising: Central Banks and BRICS Nations Accumulating
Saudi Arabia recently bought $20M worth of SLV shares. Russia has opened its first silver reserve. The US added silver to its official list of critical minerals, indicating institutional recognition of its strategic value alongside gold. The deeper message: central banks no longer trust paper assets.
 
Two-Tier US Currency Model Anticipated
The US is already in recession, and Europe is close behind. Real money supply is shrinking globally—one of the most reliable indicators of economic activity. Liquidity injections may not be enough to revive growth given looming structural banking pressures. 
 
A previously disclosed forecast from over a decade ago suggested the US could eventually introduce two dollars—a gold-backed domestic dollar and a floating offshore dollar. Technical models predict the DXY will fall to 50 by 2028, effectively doubling gold prices in dollar terms.

A potential short-term dollar rally—DXY rising from 98 to 103—could temporarily deflate gold prices. This would precede the next wave of the precious metals bull market. Treasury-driven rate cuts and liquidity injections will aim to stabilize the system ahead of 2028's deeper crisis.

 American pension funds and institutions may be compelled to absorb US debt, given the exodus of foreign buyers like China. Watch India’s actions closely in this space—they will serve as a bellwether for BRICS monetary divergence. 
 
» The contrast between Chinese dynamism and the total rot and death cult of the West and its vassals defies imagination. «
 
Ukraine Escalation Risk: EU3’s Miscalculated Strategy
The EU3—France, Germany, and the UK—appear poised to intensify the Ukraine conflict by inserting troops into the country, backed by US-supplied weapons and funded through European debt. This move, driven by strategic delusion, risks widening the war and deepening economic instability across Europe.

Should EU3 forces move into Ukraine, expect immediate capital controls in Europe, with global spillover via interconnected banking systems. This would shortcut any inflationary cycle and thrust the world directly into recession.
 
A leaked directive from France reportedly instructed hospitals to prepare for mass casualties in 2026, tied to potential direct conflict with Russia. Sources close to French military and intelligence circles confirm the plausibility of this scenario, citing deployments as “peacekeepers” that will effectively function as combat troops.
 
Iran-Israel Tensions Rising: Preemptive Strike Scenarios Loom
Parallel to Ukraine, the Middle East simmers. Iran is reinforcing its defenses with aid from Russia and China. Intelligence hints at potential preemptive strikes by Iran against Israel, marking a dangerous turning point. Iran’s foreign minister has dismissed negotiations with the US as traps, citing repeated betrayals masked as diplomacy.
 
» Globalization is coming to an end, the Spring and Autumn period is over, and the Warring States period is about to begin.
[...] From now on, the possibility of reconciliation between countries on this planet will increasingly cease to exist.
The entire Eurasian continent is about to engage in a battle royale, where every nation must firmly
choose sides in the process: either become a servant of the United States or be its enemy. 
[...] They can only choose to stand with us or face destruction. «
Chinese opinion regarding Israeli bombing of Qatar on September 9, 2025.
 
Despite its proximity to conflict, the UAE may be spared thanks to deep trade ties with Israel, cultural links with Iran, and the presence of a modern Iranian community. Any Iranian retaliation may be surgically limited to American military installations, avoiding broader damage in the UAE.

Climate Shift Confirmed: From Warming to Cooling
Melting Greenland ice is releasing cold freshwater into the Atlantic, disrupting ocean currents. Though silenced by institutions like NOAA, internal research suggests we are entering a cooling phase, not warming. The agricultural and economic implications are immense.

Food Inflation Crisis: Cold Weather, and Dust Bowl Patterns Collide
Food prices are already spiking. The FAO food index rose 7.6% YoY in July. Fertilizer shortages and extreme weather may cause one of the coldest winters in 50 years in the US Midwest. Add to this the return of the 90-year Dust Bowl cycle, and the outcome is severe crop failures and soaring food inflation.
 
Demographics vs. Growth: Global Economic Model Faces Existential Challenge 
The world's demographic peak (around 9 billion) and subsequent decline challenge the existing economic model based on infinite growth. However, this transformation will unfold over decades—not in the immediate 5-year cycle.
 
Short-Term Strategy: Long-Term Investment Now Extremely Risky
In the current fractured world order, long-term investments—by individuals or institutions—are hazardous. A global recession or depression is likely by 2028, with paper assets poised for a collapse. However, if geopolitical escalations are avoided, equities and base metals may experience a bull market from mid-2025 to 2028.

Hungary and Slovakia are likely to resist full EU alignment and avoid deeper conflict involvement. These countries, being semi-detached from Brussels, may serve as safe havens during broader European turmoil.
 
Individuals should prepare immediately. Stock deep freezers, convert garden space into vegetable beds, and plan for prolonged food cost spikes. This is a practical, immediate defense against inflation and disruption.
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Tuesday, September 9, 2025

September Seasonality of US Stock Indices | Jeff Hirsch

With Fed scheduled to make an announcement on September 17, the 12th trading day, it appears the market is pulling typical mid-month gains forward.

 Average September Market Performance 204-2024.
 
Once the market gets the interest rate cut it expects, it still may not be enough to avoid historical end-of-Q3 weakness.
 
 
 
 
2025 S&P 500 Equal Weight Cycles Composite (One-Year Seasonal Cycle, 
Four-Year Presidential Cycle, 10-Year Decennial Cycle, 1928-2024), 
Ned Davis Research, August 8, 2025.
 
September in post-election years exhibits a bearish trend with an overall average decline of -1.0% since 1950 and -0.93% from 1928-2024, driven by a -0.36% average in the first ten days and a steeper -1.13% in the last ten, reflecting policy uncertainty and late-month weakness. 
 
 
The market often starts with Day 1 showing a bearish tilt, down ~58% of the time since 2008 with an average decline of -0.3% to -0.5%, influenced by low post-Labor Day volume.

Days 2–5 display mixed performance with a slight downward bias due to portfolio rebalancing and "window dressing" by fund managers, while mid-September (Days 6–15) sees amplified losses, with Day 6 at -0.17%, Day 7 at -0.22%, Day 10 at -0.26%, and Day 15 (quadruple witching) at -0.25%, marked by heightened volatility averaging -0.48% in post-election years. 
 
S&P 500 average performance per day and daily percentage hit rate (1928-2024).

This mid-month weakness is tied to market adjustments and quadruple witching dynamics, contributing to a cumulative bearish shift.
 
S&P 500 seasonality first ten sessions and lst ten sessions of the month since 1928.

Late September (Days 16–20) offers a modest 0.2% bounce, though inconsistent and often fading into choppy trading by Days 25–30, which remain neutral to slightly bearish due to end-of-quarter portfolio adjustments. Hit rates drop below 50% mid-to-late month, and a 4.2% standard deviation in early September peaks mid-month, underscoring volatility.
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Sunday, September 7, 2025

State Central Banking vs Private Central Banking | Wen Tiejun

Let's delve into the core reasons underlying the strategic confrontation between the People's Republic of China and the United States of America, as this unveils a significant systemic discrepancy: [...] The issuance of the renminbi (RMB) is fundamentally based on the authority of the Chinese government, specifically through the People's Bank of China (PBC). The basis for the issuance of the renminbi is definitely not gold. The reason this money is valuable is because it is a sovereign currency issued by the state and backed by state authority. Empowering a sovereign currency establishes credit. The currency creates credit, and the sole resource available is political authority. Thus, political authority, governmental power, and the administration in control align with the currency system.
Wen Tiejun (温铁军) is a Chinese agricultural economist and a professor at the Renmin
University of China, best known for his studies on the Three Rural Issues in Mainland China.
 
On the other hand, the source of the US dollar's credit is an institution established by private bankers, not a country. Pay attention, this difference matters: The US dollar is actually issued by an institution called the Federal Reserve. The Federal Reserve is neither an official entity nor a government institution; instead, it is an organization operated by private bankers. This particular organization possesses the authority to issue the national currency and determines the financial policy of the United States, which the government then implements.
 
 
» The root cause of global chaos is financial capital globalization, which is
supported by military hegemony. « Wen Tiejun's complete discourse video.  
 
This occurrence is quite rare across the globe, both in terms of nations and systems. In the majority of countries, it is the political power of the state that grants authority to its national currency, forming a sovereign currency. In a select number of nations, such as the United States, institutions are established by private banking entities, and the government subsequently enacts the policies of these private banker collectives.

[...] Therefore, throughout the extensive history of the United States, numerous influential presidents have attempted to reclaim monetary authority. All of them ultimately failed. Almost every president who was resolute in their determination to reclaim monetary authority ended up deceased, including the widely recognized Kennedy assassination. These events all share similar demands to restore monetary rights back to the government, yet none of these plans have been fully realized.

[...] China continues to maintain its national control over financial capital. For what specific purpose? In recent years, when China faced global crises and a decline in exports, the Chinese government mainly relied on national finance, investing in infrastructure that may not yield immediate profits. A straightforward example is the allocation of funds for the construction of roads and railways in rural, mountainous, and even desert regions. All these investments cannot be recovered in the short term, and it's also difficult to recover them in the long term. So, should we invest? We should, because if we don't, businesses will have no market and workers will become unemployed. On the other hand, the government would have to use its finances to pay for unemployment benefits. Rather than doing that, it's better to invest. 

» The United States exploits the world's wealth with the help of "seigniorage." It costs only about 17 cents to produce a 100 dollar bill, but other countries had to pony up 100 dollar of actual goods in order to obtain one. It was pointed out more than half a century ago, that the United States enjoyed exorbitant privilege and deficit without tears created by its dollar, and used
the worthless paper note to plunder the resources and factories of other nations. The hegemony of the US dollar 
is the main source of instability and uncertainty in the world economy. «
Ministry of Foreign Affairs of the People's Republic of China, 2023. 

[...] I perceive this as one of Trump's most proactive and forward-thinking policies—to focus on the advancement of infrastructure development. His most significant challenge is that the US lacks the so-called state-owned enterprises (SOEs) similar to those in China. Additionally, it doesn't have a state-owned banking system. China's system uses state banks to receive currency from the government, which is directly paid to state-owned enterprises. These enterprises then directly engage in infrastructure construction, maintaining China's economic growth and sustaining employment. The US uses private banks to issue more currency to buy government bonds, which then leads to a virtual capital expansion, with two hands shifting the crisis to the whole world.

[...] Analyzing this with American theory suggests China's state-owned banks and state-owned enterprises are inefficient. They don't provide tax revenue and occupy a large amount of capital. But just because financial resources are utilized doesn't mean nothing is produced. A significant amount of wealth is indeed generated, but this wealth manifests in the form of airports, seaports, train stations, highways, and high-speed railway systems. None of these investments can generate returns in the immediate short term. Consequently, a substantial amount of capital in China's state-owned banks is currently tied up. According to general free-market economic theory, those that can't be recovered soon should all go bankrupt. As long as you genuinely and sincerely execute what is purportedly stated in the media today, China's economy should have gone bankrupt long ago because its large investments can't be recovered quickly.

» I think he [US Fed chairman Jerome Powell] is a very stupid person, actually. «
Not-calling-the-shots POTUS, July 13, 2025.
 
[...] How Trump might approach the situation? He doesn't have China's methods. So, how will he do it? By relying on private bankers to reform America's railways? How long will it take to recoup the investment? Why would private individuals invest in rebuilding American roads and airports? Private investment is dropping. This is similar to what's happening in China: whenever there's an economic crisis, China's private investment decline is inevitable. So, how do you counter it? You have to rely on state investment to push it up. One goes down, the other goes up. That's how it is. 
 
» The US uses private banks to issue more currency to buy government bonds, which then 
leads to a virtual capital expansion, with two hands shifting the crisis to the whole world. «
 
A significant number of individuals are critical of China's system. I don't intend to imply anything else; I'm merely suggesting that you observe the actual impact. I also don't wish to defend this so-called closed system of China because I equally dislike this bureaucratic system, but it actually maintains the nation's foundational employment and crucial economic development.
  
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Wednesday, September 3, 2025

Hurst Cycles Notes on the S&P 500 and Bitcoin | Christopher Grafton

General outlook: Gold, EURUSD both in 40 day cycle peak zone. US Dollar, Oil, Copper, USDJPY forming pro-trend 20 day cycle troughs. SPX E-Minis, 10 Year Treasuries at 80 day cycle peaks. Nikkei to 40 day cycle trough zone. Bitcoin 80 day cycle trough forming. 

S&P 500 E– Minis (ES, daily chart) - 80 day peak zone. Down.

 Bitcoin (daily chart) - 80 day cycle trough zone. Up.

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J.M. Hurst's Valid Trendlines (VTLs) | Christopher Grafton

Valid Trendlines (VTLs) are unique to Hurst cycle analysis. They pertain to specific cycles and indicate where and when the next longer cycle in the nominal model has formed either a peak or a trough in the past. By extension, they can also be used to estimate future peak and trough locations.

For an up-sloping VTL, we simply plot a straight line joining two adjacent troughs of a particular cycle and project it forward in time. For a down-sloping VTL, it is a straight line joining two adjacent peaks of a particular cycle, again projected forward in time.
 
EURUSD (daily candles - September to October 2022). 

The up-sloping 10-day VTL was crossed down by price on 20 September X(1), indicating that the last peak on 12 September was that of the 20-day cycle. Looking at this cycle's representative semicircle, you can see that the peak is strongly pulled to the left of the semicircle. This is called peak left translation, which tells us that the underlying trend is down—this will be covered in a later section.

The down-sloping 10-day VTL was crossed up by price on 3 October X(2), indicating that the last trough on 28 September was that of the 20-day cycle. (Note: the labels next to the VTLs (8.6 day) refer to the average wavelength of the nominal 10-day cycle. This value is also shown in the bottom left corner of the chart in the 10-day cycle diamonds row.)

 Gold (weekly bars – March 2021 to February 2023).

In the longer-range weekly Gold chart above, both the 18-month cycle and the 20-week cycle VTLs have been plotted. In the week of 16 May 2022 X(1), price crossed down through the 18-month VTL. This means that the last peak was that of not only the 18-month cycle but also the 54-month cycle. One could argue that the signal is rather late, but VTLs are not the only way we place peaks and troughs and establish their magnitude—more on other methods later. Additionally, it is valuable to know the size of that big peak because it tells us a lot about the underlying trend.

The gently up-sloping 20-week VTL was crossed down by price in the week of 11 July X(2). This tells us that the 20 June peak was that of the 40-week cycle. Notice how strongly pulled to the left this peak is, another example of peak left translation and an indication that the underlying trend is strongly down at this point.

Finally, in the week of 10 October, near the right edge of the chart, we can see that price rose up to the down-sloping 20-week VTL but failed to penetrate X(3). Thus, we still cannot say for certain that the most recent price low is that of the 40-week cycle by just using VTLs.
 
Summary: VTLs are trendlines associated with specific cycles. If price crosses down through an up-sloping VTL, we can say that the peak of the next longer cycle is in. If price crosses up through a down-sloping VTL, we can say that the trough of the next longer cycle is in.

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J.M. Hurst's Future Lines of Demarcation (FLDs) | Christopher Grafton

A Future Line of Demarcation (FLD) is a replica cycle plotted half a wavelength forward in time from the original cycle. If you can picture a semicircle representing a cycle, the FLD is a copy of that semicircle overlaid on the original, but offset forward. In effect, there are now two overlapping semicircles. 
 
The job of Hurst cycle analysis is to back-engineer the composite cycle (i.e., the price action we observe over time on the chart) and resolve it into its constituent cycles. The goal is to find their troughs and peaks, then determine our position within the cyclic scheme at the lower right edge of the Bitcoin chart below. An FLD can be generated for any cycle in the nominal model. Among other things, the interaction between price and FLDs allows us to estimate the future time and price of peaks and troughs, and to gauge future trend direction. The following examples should clarify this.
 
In the Bitcoin chart, a 20-week FLD has been generated by offsetting a line to the right of price at each date by half the wavelength of the 20-week cycle (the wavelength is 22.7 weeks, as shown at the bottom right of the chart, so the offset is 11.3 weeks). The FLD is an exact duplicate of the original price line. 
 
Bitcoin's 20-Week Cycle and FLD (from June 2021 to January 2022).

The horizontal arrows stacked down the left-hand side of the chart show the offset in action. You might notice a slight difference between the FLD inflections and the original price; this is because FLDs use the median price (high + low)/2. Notice also that as the FLD falls in future time, for example in August, the price is rising at that time; and as the FLD rises in future time, for example in December, the price is falling.

The primary use of the FLD in the Hurst Cycle notes service will be as a target measurement tool and to confirm the magnitudes of recent peaks or troughs. Let's start at the 22 June diamond stack marking the time location of the 40-week cycle trough. The 40-week cycle is represented by a light green diamond, and our cycle of interest, the 20-week cycle, is the dark green diamond just below it in the stack. The arc of the entire cycle has been plotted, and the next trough is estimated to occur in the last week of January 2022.

The origin price is the 22 June low of 23,894. Price rallies with the new 20-week cycle and meets the falling 20-week FLD on 7 August at 43,546 X(1). With these two pieces of information, we can now estimate an initial target for the 20-week cycle peak. We do this by subtracting the origin price from the FLD cross price and then adding the difference to the cross price. This generates an upside target of 63,198, which turns out to be 92% of the actual peak price, which came in at 68,789 on 10 November. The reason the FLD projection fell a bit short is covered in the next section.

Now, let's consider the downside target. Using the 10 November peak as the new origin price (68,789), price falls and meets the rising 20-week FLD on 24 December at 50,918 X(2). Subtracting the FLD cross price from the origin price and then subtracting the difference from the cross price generates a downside target of 33,047 (the actual low was 33,184, i.e., a little lower).
 
Next, we are looking at the 20-day cycle and 20-day FLD in the E-minis chart below. The start of the 20-day cycle is the low of 20 May (3,807.5).  
 
E-minis 20-Day Cycles and FLD (from 20 May to 21 June 2022).

Price rises to meet the FLD on 26 May at 4,012.8 X(1), generating an upside target estimate of 4,218.2 (as a reminder, we subtract the origin price from the cross price and add the difference to the cross price). The actual peak came in somewhat lower at 4,202.2. Why it undershot should become clearer when we examine the downside leg, but basically, it's because the 20-day cycle was under downward pressure from longer, falling cycles. When FLDs either exceed or miss their targets, it tells us something about the bigger picture.

It gets interesting on the downside leg now because price is actually falling into a major low, that of the 40-week cycle trough. In real time, this would have appeared on the chart as a nest of lows shown by circles and whiskers. We would have known the magnitude of the upcoming trough and been prepared for a sharp sell-off into it.

The origin price for the downside leg is the 4,202.2 top, and prices fall to meet the rising 20-day FLD at 4,053.95 X(2). However, this only generates a downside target estimate of 4,053.9, which is clearly too short. In real time, you would have expected a price overshoot to the downside because of the looming big trough and not just randomly closed out at X(2). You would have needed to step up to the next longer cycle, the 40-day FLD. So, let's look at that now.
 
For the downside leg, the origin remains the same as for the 20-day cycle at 4,202.2, and price declines to meet the rising 40-day FLD at 3,913.0 X(2), providing a downside target estimate of 3,623.7. The actual 40-week cycle trough came in at 3,661.5.
 
The origin price of the 40-day cycle is the same as that of the first 20-day cycle at 3,807.5. Price rallies and crosses the falling 40-day FLD at 4,031.5 X(1), generating an upside target estimate of 4,254.7. This is undershot by 52 points, again because longer cycles are pressing price down into an upcoming 40-week cycle trough.

Summary: FLDs are replica cycles that help the analyst estimate targets and work out the magnitude of recent peaks and troughs. Theoretically, when prices cross up through a falling FLD, we are halfway to the peak. When prices cross down through a rising FLD, we are halfway to the trough. The influence of longer cycles on a cycle of interest can cause price to either undershoot or overshoot the theoretical target, providing us with useful information about underlying trend strength and direction.

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The End of Western Dominance—US Lives in Mortal Fear | John Mearsheimer

Since 2017, when Trump entered the White House, the balance of power has shifted in China’s favor, though the United States remains the world’s most powerful state. China is rapidly closing the gap, particularly in cutting-edge technologies, which Washington fears could tilt global economic and military power. As China converts its economic strength into military might, it builds not just regional forces but also blue-water naval power and global projection capabilities linked to its Belt and Road Initiative. This imitation of US strategy alarms Washington and drives a bipartisan policy of containment.

John J. Mearsheimer, American political scientist and professor at the University of Chicago, best known for his work
on international relations theory, offensive realism, the US Zionist lobby, US–China rivalry and great power politics.

Initially, Chinese leaders argued that economic interdependence would prevent conflict, since prosperity required cooperation. However, survival—not prosperity—is the primary goal of states in an anarchic international system with no higher authority. As China’s economic rise translated into growing military capacity, American fear replaced optimism, triggering security competition in East Asia. Prosperity enriched both sides, but balance-of-power politics and survival imperatives outweighed economic interdependence theory.

» Great powers are ruthless, exploiting weaker rivals to secure survival and expand influence. «
John J. Mearsheimer's complete discourse video. 

Historical lessons reinforce this logic. Weak states like China during its “century of humiliation” (1840s–1940s) and Russia during NATO expansion in the 1990s suffered because they lacked power. Great powers are ruthless, exploiting weaker rivals to secure survival and expand influence. In this system, the optimal strategy is regional hegemony, dominating one’s neighborhood while preventing rivals from doing the same. The US has long acted this way, blocking Germany, Japan, and the Soviet Union from achieving dominance in Europe or Asia, while securing its own supremacy in the Western Hemisphere.

China’s trajectory fits this pattern. As its power has grown since the 1990s, Beijing naturally seeks to dominate East Asia. Yet the US cannot tolerate another regional hegemon, making containment inevitable. From Washington’s perspective, preventing Chinese hegemony is about survival, not choice. From Beijing’s perspective, seeking hegemony is equally rational. The result is a structural clash: both sides are locked in an intensifying security competition driven by the anarchic nature of the international system.

» The United States lives in mortal fear that the Chinese are going to dominate. «

China’s path to hegemony is more difficult than America’s was because regional powers like Japan, Australia, South Korea, and the Philippines—backed by the US—resist Chinese dominance. India participates in the Quad but is geographically and strategically less central to East Asian balance. Russia, meanwhile, has been pushed into China’s camp by the Ukraine war, eliminating a potential counterweight. This complicates US strategy: instead of balancing China together, Washington and Moscow are now aligned against each other.
 
The Ukraine war creates two major problems for the US: it prevents a full pivot to Asia and deepens the Sino-Russian partnership. Trump recognized this dynamic and sought rapprochement with Moscow to peel Russia away from China, but his chances of success are slim. Russia deeply distrusts the US, and Trump underestimated the difficulty of ending the Ukraine conflict. His instincts—to improve ties with Russia and focus on China—align with realist logic, but his reliance on instincts over experts undermines effective execution.

» It's only recently that Putin has brought the Russians back 
from the dead and we now consider Russia to be a great power. «

Since 2017, US policy has shifted decisively from engagement to containment of China, first under Trump and then reinforced, even hardened, under Biden. Yet American forces remain tied down in Ukraine and the Middle East. Deployments against the Houthis in the Red Sea and the prospect of war with Iran divert vital resources away from East Asia, just as China grows militarily stronger. Past US experiments in social engineering—in Afghanistan, Iraq, Libya—ended in failure, raising doubts about new entanglements that sap the capacity to counter China.

Facing escalating global uncertainties, Chinese President Xi Jinping said the SCO is increasingly
responsible for regional peace, stability, and member-state development, August 31, 2025.
 
Ultimately, the US–China rivalry reflects structural realities of power politics. Both states seek survival through maximizing power, and both see regional hegemony as the path to security. The United States, the sole global hegemon since 1900, refuses to share that status, while China, closing the gap, sees dominance in East Asia as essential. The result is an enduring, intensifying contest that economic interdependence or diplomatic optimism cannot erase.

 

See also:
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China's Preparations for Reunification With Taiwan Around 2027 | Jin Canrong

The Chinese government has consistently avoided setting a timetable for resolving the Taiwan question, emphasizing instead President Xi’s call for peaceful reunification with patience, sincerity, and effort. Despite this, American analysts frequently forecast 2027 as the likely point of resolution. Their view is shaped by China’s large strategic reserves, new industrial measures, and visible military procurement, all of which they interpret as signs of preparation for decisive conflict.

Jin Canrong (金灿荣), leading scholar of China–US relations, American politics, and foreign policy;
CCP strategist; Professor and Associate Dean at the School of International Studies, Renmin University of China.

From a military perspective, China faces few obstacles. A Taiwan operation could be carried out through blockade or direct combat, and success would likely come quickly. US intervention is not considered probable, making the true challenges economic and political rather than military or diplomatic. China’s main vulnerabilities are its dependence on imported resources, its lack of a fully unified domestic market, and the influence of elites with assets or family ties abroad. By contrast, Russia’s economy, though smaller, is buffered by its abundant resources, allowing it to withstand sanctions more effectively.

Among many other heads of states, Putin, Kim Jong Un, Park Geun-hye, ex-President of South Korea, and Masoud
Pezeshkian, President of Iran, joined Beijing’s historic victory parade on September 3, marking 80 years since
Japan’s WWII surrender, where China showcased its hypersonic missiles and nuclear triad. 
 
The government is taking steps to address these weaknesses. Grain reserves now exceed two years thanks to improved storage and expanded farmland. By 2027, new oil and gas discoveries together with Central Asian pipelines are expected to reduce import dependence. Coal-to-oil conversion and the spread of new energy vehicles will further narrow the energy gap. The more difficult issue lies in market access, as domestic circulation remains weak due to provincial barriers. Efforts to expand the Belt and Road initiative continue, though China lacks the military and cultural instruments historically used by the West to protect overseas investments.

» US intervention is not considered probable. «
Jin Canrong's complete discourse video.
 
Diplomatically, a resolution of the Taiwan issue would have far-reaching effects. ASEAN countries, seeing the United States as unreliable for security, would likely align with China, turning the South China Sea into an inland sea. Japan and South Korea, highly dependent on maritime trade and external resources, would also face strong pressure to yield. Once the Taiwan Strait and the South and East China Seas are secured, Shanghai and the eastern seaboard would be protected, creating what could be the safest period in Chinese history.

Welcome to the Eurasian Century.
 
Historically, China’s threats came from the north, but industrialization eliminated that danger. Today, the principal threats come from the sea, the heartland of Western industrial power. Once Taiwan is reclaimed and the maritime approaches are secure, China can focus entirely on internal development and raising living standards. The most serious obstacles to this outcome are economic fragility and political complications, not military or diplomatic resistance. The year 2027 therefore stands out as the most likely turning point, a moment that could bring short-term hardship but ultimately mark the beginning of a new and safer era for China.

 
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