https://behindthenews.co.za/china-is-ready-the-us-is-not-part-3-of-a-3-part-series/
11 Today
Revolution in military affairs -RMA
Although Iran is the most technically sophisticated adversary the US has fought directly since the Cold War, the country is a middling power suffocated by decades of sanctions. Americas military cannot keep up with Iran’s counter attacks or China’s technological leapfrog and cost advantages. For illustration, Iran’s 2025 GDP and defense budget were $356 billion and $9 billion. Iran doesn’t have a real air force or navy. It doesn’t have a modern integrated air defense network (IADN) or significant space assets. Iran’s battlefield achievements are the result of asymmetrical warfare with low-cost drones and short-range ballistic missiles. These are clear indications that the US is militarily incapable to have a “great power” war with its dated technologies, low magazine depth, and high-cost low-density weaponry. Furthermore, China has moved away from the traditional platform-centric combat doctrine of the US military to a new system-of-systems doctrine. The new doctrine emphasizes high-attrition, high-tech, low-cost unmanned systems powered by artificial intelligence to complement high-value manned platforms. The doctrine is supported by deep supply chains, civil-military fusion, superior industrial scale, and surge capacity that are lacking in the US’s private, profit-driven, just-in-time boutique military industrial complex.
Iran’s successful implementation of coordinated drone swarm and ballistic missile attacks created a flywheel of cascading impact on US defenses. – By destroying these critical air defense nodes, Iran “blinded” US defense and reduced the interception rate of Iran’s missiles. – By weakening the US’s ability to “see” and “intercept”, Iran paved the way for its drones and missiles to eliminate high-value assets such as the E-3 AWACS and the KC-135 tankers. Without such “force multipliers”, the US ability to generate sortie into the Iranian airspace is truncated. In addition, the threat of Iran’s anti-ship missiles has pushed the USS Lincoln carrier to retreat over 1,000 km away from the Persian Gulf. As a result, carrier-based air sorties were also reduced as the average “strike reach” of Lincoln’s air wing is only 700-1,000 kms. Lincoln’s primary combat jets are F-35C Lightning II, whose max combat radius is approximately 600 nm, and F/A-18E/F Super Hornet with a combat radius of about 390 to 450 nm. Neither can carry out missions inside Iran without air refueling. Saturation attacks by drones and missiles have also disabled all 13 US bases in the Gulf, rendering them uninhabitable. This forced the 50,000 US personnel stationed in the region to hide in civilian buildings and stay in civilian hotels, which were defenseless and further targeted by Iran. Iran has proven low-cost and mass-produced weapons can effectively overwhelm the most expensive air defenses. Another lesson from Iran is that innovative low-tech solutions can be used to defeat expensive high-tech platforms. On March 19, Iran used its indigenous 358 missile to shoot down a F-35 stealth fighter over central Iran. The 358 missile is an inexpensive “loitering surface-to-air missile” (costing $30-$90 k) – a hybrid between a drone and a traditional missile. The 358 is responsible for taking down most of the 24 MQ-9 reapers the US lost so far. Iran used passive tracking rather than traditional active radar to bypass F-35’s stealth. Stealth aircraft are designed to be invisible to radar, but they still produce significant heat from their engines visible to infrared detection. Iran used passive infrared sensors to track the jet’s heat signature without alerting the pilot’s radar warning receivers. Despite Trump’s fake assurance of “air dominance” over Iran, the Iranian airspace is hardly safe for even the most advanced jets, forcing them to consume expensive stand-off weapons. Iran has imposed a disproportionate cost exchange ratio on the US through asymmetrical warfare. The Pentagon and Wall Street is eager to hide this from the American public and its potential buyers in other countries. The Iran war is also showing that modern wars are moving away from technological superiority to industrial capacity. For example, thousand-dollar drones are deployed in the thousands while million-dollar interceptors can only be made in the dozens. Their respective production cycles are measured in days vs. months, even years. The high-cost low-density long-lead-time weapon platforms deployed by the Pentagon are fragile against saturation attacks such as drone swarms and missile salvos. In addition to “quantity is a quality of its own”, cost symmetry is a weapon in itself.
Norinco, a major defense company in China, has mass produced and exported Feilong-300D drone at $10,000, which has a range of 1,000 km and a speed of 220 km/hr. Hundreds of these drones can be used in a single, AI-powered swarm attack. Another example is the YKJ-1000 hypersonic missile (mach 5-7) made by China. It is priced at $99,000, with a range of 1,300 km, and can be launched from standard commercial shipping containers, allowing it to be concealed in civilian trucks or ships. This missile is nicknamed “cement missile “because it uses non-traditional, civilian -grade materials- as a heat coating to survive the extreme temperatures of hypersonic flight. YKJ-1000 is much less sophisticated than the mainstream Chinese hypersonic missiles such as DF-17, DF-21D, DF-27, JY-19, YJ-20, and CJ-1000, state-of-the-art products of the public defense sector. However, it’s extremely low cost makes the YKL-1000 perfect candidate for saturation attacks and as strategic decoys to exhaust enemy air defense interceptors before the high-end arsenal delivers the final punch. China leads the world in hypersonic missiles both in technological sophistication and cost efficiency.
Analysis of US Weapon Platforms
The US has taken the best weapons in its entire conventional arsenal to the Iran war. This includes attack platforms including the USS Gerald Ford carrier strike group, F-22 and F-35 stealth fighters, F-15E Strike Eagle, F/A-18 Super Hornet, A-10 Warthog, B-2 and B-52 bombers, E-3 Sentry AWACS, KC-135 tanker, MQ-4C Triton and MQ-9 Reaper drones, and more. The US military has also deployed its most advanced defense systems including ground-based THAAD and Patriot, and ship-borne Aegis systems. In terms of firepower, the US has deployed all primary precision stand-off munitions in its offensive and defensive arsenal. While these weapons delivered massive firepower over an adversary with limited air defense, there are multiple vulnerabilities. The most noticeable vulnerability is the low-density and low magazine depth, meaning the US simply doesn’t have enough hardware to prosecute the war, even a medium-intensity one, beyond a few weeks. Every loss of key weapons and munitions will take months, even years, to replenish and replace. This makes the US military essentially a force that punches hard at first but without no stamina or resilience. In boxing, such players are called “glass cannons”. They are known for having tremendous early punches but poor staying power. The US military has turned into a “glass cannon” power. And it is irreversible. The US solution to this vulnerability is not to innovate and build low-cost and massed modern weaponry, but rather to double down on buying more of the same. The $1.5 trillion war budget proposed by the Trump regime is an affirmation of that corrupt system.
Another less talked-about aspect of the exposed US vulnerabilities in the Iran War is the outdated technology and weapons the US military still relies on today. Many primary weapons used in the war, still considered the best in the US arsenal, were actually developed decades ago in the Cold War. They are limited, by definition, by the technologies of the time, especially in sensor, radar, and data links. They also suffer from wear and tear of decades-long high-frequency deployments, maintenance deficits, and astronomical operating costs as parts & components are often no longer produced.
Comparing with China
One main challenge in any Pacific conflict is the “tyranny of distance.” To provide meaningful command and control, a US AWACS must fly close enough to the front lines to detect China’s low-observable threats like the J-20 or GJ-11. However, China’s development of “AWACS-killer” missiles, such as the 400 km PL-17 and the 6,000 km scramjet-powered CJ-1000, has created a “no-go zone” that extends thousands of kilometers. On the other hand, China’s AWACS, including KJ-3000, KJ-700, and KJ-600, can safely operate within the A2AD bubble protected by a fully integrated air defense network (IADN). The network includes land- and ship-based mid/long-range defense interceptors (HQ-29, HQ-19, HQ-9B, HHQ-9) and terminal defense (HQ-11, HQ-20, Bullet Curtain barrage gun, and Hurricane-3000 anti-drone microwave weapon). Since the US has long relied on stealth as the “tip of the spear” to establish air superiority, China has built an anti-stealth network of radars. China has moved beyond single-radar detection to a distributed sensor fusion model that combines multiple specialized technologies into a unified “kill web”. In drone tech, China’s lead is even wider. Compared with Iran’s low-cost suicide drones, China fields the world’s most diverse and advanced military drone fleet. China has also deployed the world’s first drone mothership – the Jiu Tian drone carrier – a UAV that can release 100 smaller drones or loitering munitions.
The US has long been lax, never expecting anyone to dare strike its bases directly. The US had floated along on its aura of “invincibility” for so long that its core had been hollowed out; by the time Iran struck, the once “feared” US was a shell of its former self, and its bases were vaporized with little effort. The entire Imperium is disintegrating at the peripheries and the US no longer has the tensile strength left to keep hold of it. All its remaining resources are wasted to be shuttled back and forth, plugging gaps and putting out fires, here in Ukraine, there in the Gulf region. The Empire has no clothes, as has been revealed almost daily, with the latest affirming news from the GAO that the latest batch of F-35s are in fact now being delivered to the US Marine Corps without any radars- 6 F-3s just delivered- with no radars! Not only that, most of the F-35 fleet has to spend more time undergoing “maintenance”, than flying missions. That means only 25% of all F-35s are able to perform all their missions at any given time, while the rest suffer through various forms of “maintenance”, refits, etc. The program has turned into a veritable joke at this point. In any high-end conflict with China over Taiwan or in the South China Sea, the US will run out of ammo, lose, and capitulate in less than a few weeks. Even we charitably assume the US is not defeated outright the country will be bankrupt in no time. Simply put, the US doesn’t have the muscle to coerce Iran, let alone be the “world police”. Another key takeaway of the war is the dated technology that is used by the US military. Chinese military observers have noticed the majority of the weapon systems relied on by the US forces are relics from the first Cold War. Many are 5 decades or older. China can defeat the US military with overwhelming firepower and modern technology.
China does not need the US
The cold hard truth is China doesn’t need anything from the US; it just needs it to not destroy the world on its way down. See, China is not in the process of developing or becoming: it is a mature, well developed and extremely advanced giant which is ahead of the US in so many metrics it will take too long to enumerate here. China doesn’t need American technologies to grow: it conducts research and manufacturing on a scale the West has never known. And it doesn’t depend on American capital either; China is a rich country today, with huge independent financial resources to invest in whatever it needs. And the American market? It doesn’t allow Chinese cars or phones in, leaving very little economic leverage for any US administration over Asia’s superpower. China gets its energy from Iran and Russia, and self-educates. No need for American assistance. China doesn’t need the US for any material reason. The only thing it does need from the US is not to destroy the world on its way down, or potentially out.
What the US actually needs from China, though, makes for a long list: help with the self-made Iran entanglement; rare earths; keeping its huge market open for American products (while the US bans Chinese cars, phones, and a great number of Chinese products and services). The most vital thing the US needs from China is not economic or purely political: it is China’s agreement to being politically dominated as an internationally contained and controlled power, leaving the fate of the globe and every country in it to be managed by the US alone. The know the score, and they can give only one answer to this – No. China is not stupid, occupied, or addicted to domination, like so many other systems that seem all too content living on all fours and tamely serving the Judeo-Christian apparatus of murder and theft. China doesn’t like humiliation (and therefore it doesn’t like to humiliate others).
When Trump visited Beijing on 14 May, accompanied by top American industrialists, the optics told their own story. Washington came armed with tariffs, secondary port fees, and threats over maritime chokepoints. But the executives at Trump’s side revealed the weakness behind the pressure campaign – the US cannot cut China out of the global economy without cutting into itself. After the very private meeting with Xi, a photo was taken showing Trump looking dejected.
China’s “Century of Humiliation” began in 1839 with the First Opium War. The Qing Dynasty was in decline, and foreign powers began stealing territories and extorting trade concessions through wars and military expeditions. It was a long century that only really ended in 1949 with the establishment of the People’s Republic of China. But even then, there was unfinished business: Macau, Hong Kong, and Taiwan. Macau and Hong Kong have now been returned to China. But Taiwan remains unredeemed. Indeed, Taiwan exists to deny victory to the People’s Republic. To this day, Taiwan claims to be the real China, asserting sovereignty over the rest of China under the protective umbrella of the United States. It is clearly a sore spot for Beijing. Until the Taiwan Question is settled, the rise of the People’s Republic didn’t really end the Century of Humiliation. Trump never should have made this trip to begin with, because he threw away a lot of the cards, he planned to play in Beijing by starting—and losing—a war with Iran. Trump, however, is simply in denial. He is prolonging the war—and thus increasing the negative consequences—apparently hoping for a miracle so that he does not have to admit defeat.
Let’s talk about what actually happened. Trump’s Beijing summit looks like the first 36 hours of America’s Century of Humiliation. We saw Trump buttering up Xi, praising him as a great leader. Trump does this with Putin and Kim as well. Contrast that with the insults he delivers to America’s allies. He takes his friends for granted while chasing the approval of his enemies. Xi did not repay Trump’s flattery in kind. Instead, he spoke the truth. He came right out and said that the United States is a declining power. Trump, of course, deftly pivoted, saying that it applied to Joe Biden’s America, not to Trump’s. In truth, America has been a declining power long before Biden’s presidency. Biden was just a symptom of decline. But Donald Trump has dramatically accelerated it. But the Iran War feels like a turning point. America lost the Iran War on day one, because there was no way that the United States could emerge from this war more powerful than when it went in. Iran demonstrated that the US could not protect its Gulf dependencies. That protection, moreover, was a quid pro quo for the petrodollar system, which is the key to keeping the globe’s biggest debtor government solvent. That system is now unraveling.
The Gulf monarchies are turning to countries like Ukraine and others to help secure themselves against Iran. Cargoes are now being priced in other currencies than dollars. The United States is now making huge loans to the cash-strapped United Arab Emirates to forestall them selling off US Treasury bonds at a discount. The US Treasury has begun to raise interest rates on new bonds, which means that the US will be paying more to creditors and less to clients to keep the whole system afloat. The US has no cards in the Gulf. If it continues to attack Iran, Iran will continue to retaliate against the Gulf states. There is no reason to think that the US could cripple Iran’s retaliatory capacity before the complete destruction of the Gulf—and what remains of America’s global credibility as a superpower. The Strait of Hormuz will remain under Iran’s control. The world will be forced to accommodate Iran, beginning with the Gulf States. Some crowned heads may have to roll. America’s regional military bases will probably be abandoned. Iran will emerge as the new regional power.
America didn’t just lose power by attacking Iran. Power does not disappear. It simply moves about. In the Gulf, America’s power will go to Iran. But America has not been weakened in the Gulf alone. The US has lost so much equipment and materiel in the Gulf that it cannot credibly protect Taiwan and South Korea. That’s China’s back yard. Thus, China may be the biggest winner of the Iran War, because she did not actually fight. Trump lies so much now that the world tends to tune him out. Another surprising fact is that the US has become the largest recipient of loans from Chinese state-owned banks, having borrowed over $200 billion in the last decade to finance infrastructure, energy and data center projects. The amount far outstrips borrowing by Russia or any BRI countries.
12 How China & Iran beat US Sanctions
Since Iran came under heavy sanctions, Beijing has been developing modes of trade that bypass the sanctions laws of the western financial system. Because China rejects the legitimacy of unilateral sanctions – overwhelmingly wielded by the US – it has now created a legal precedent to respond with counter-sanctions. Crucially, this framework now reaches Hong Kong, long treated as too sensitive to fold fully into Beijing’s countersanctions system because of its role as an international legal and financial hub. Secondary sanctions have turned Hong Kong from a financial exception into a national security question for Beijing. Out of this pressure has grown a complex network engineered by China and Iran to settle oil payments outside the international banking system. It is, in effect, an oil-for-infrastructure arrangement that blends economic barter with strategic investment, similar to China’s arrangement with Venezuela under President Maduro. In return for Iranian oil, Chinese state-owned companies support Iran’s transport, energy, and infrastructure sectors. Intelligence estimates suggest roughly $8.4 billion moved through this channel in a single year. Iranian oil reaches China via convoluted maritime routes involving shadowy ship-to-ship transfers and then blends the sanctioned oil with other Asian crude grades, making source tracing difficult. In return, China pays by financing long-term construction projects inside Iran, including airports, refineries, and highways – effectively converting infrastructure into indirect payment for oil shipments. This cooperation between China and Iran reflects a quiet economic alliance aimed at reshaping the global financial system toward reduced western dependence – generating a parallel economic order based on goods, projects, and alternative financing instead of hard currency controlled by Washington. The US has not sanctioned China as a whole; since China is so crucial to world trade, it would be equivalent to sanctioning most of the world. China’s trade weight is becoming an umbrella for states subjected to weaponized US sanctions, which are no less destructive than direct acts of war. If this approach continues to expand, it could become a cornerstone of the global shift away from dollar-centered finance toward multi-track economic systems.
Hong Kong and the shadow-bank corridor. The system reportedly works like this. Money from oil sales moves through a web of front companies, often routed through Chinese financial institutions, to Hong Kong, before it is then converted into other currencies. Much of the cash from oil sales to China remains in bank accounts abroad, in financial hubs such as Hong Kong, Dubai, and Singapore. Iranian importers and exporters then trade foreign currency among their various front companies on ledgers maintained in Iran. These payments are largely routed through smaller Chinese banks that have limited global operations and less to lose if they are sanctioned. Front companies established by Iran in Hong Kong and elsewhere help manage the proceeds. One such bank, is the Bank of Kunlun. In 2012, Washington cut Kunlun off from the US financial system for allegedly providing hundreds of millions of dollars in financial services to Iranian banks, including moving money and paying letters of credit. That punishment only solidified Kunlun as a preferred channel for facilitating trade with Iran in China’s currency. The bank grew rapidly. A “significant portion” of Iran’s oil revenue was deposited at Kunlun as of 2022. Front companies in Hong Kong and elsewhere have been used to convert Chinese yuan into dollars, euros, and other foreign currencies that Iran needs.
Shadow fleets and maritime chokepoints. The shadow fleet is the transport arm of this system. These vessels change names and flags, report false GPS signals, go dark, report as different ships during their journeys, and even duplicate transmissions to create ghost ships. There are now more than 1,470 tankers classed as being part of the shadow or dark fleet, according to the ship monitoring website TankerTrackers.com, which represents approximately 16.3–19.6 percent of tankers currently transporting oil, oil products, and chemicals around the world. Russia’s shadow fleet has also been trading oil in either rubles or Chinese yuan, further undermining the petrodollar. Shadow fleet vessels typically change ownership multiple times, reportedly relying on shell companies in places with loose registration regulations, such as Dubai, Hong Kong, and the Marshall Islands, to disguise the identities of their ultimate owners.
Panama becomes the Pressure Point
In fact, the flag of Panama appears to be the second most prevalently used flag amongst shadow vessels. That is a major clue to the real story behind US pressure on Panama to oust Hong Kong-based CK Hutchison from its two ports in the Panama Canal. These vessels are called “shadow tankers” because they have ignored the maritime rules imposed by Lloyds- the primer Rothschild maritime insurance firm. Ships from Iran, China and Russia belong in this category. US sanctions are not working as intended. Washington has increasingly resorted to enforcing unilateral sanctions through military force, as seen in recent months when US forces seized shadow tankers. If the US controls major maritime chokepoints such as the Panama Canal, it can enforce unilateral sanctions by force while reserving the right to charge selected vessels. This is the deeper logic behind BlackRock (a Rothschild entity) and MSC’s (a Rothschild entity) attempt to purchase 43 of CK Hutchison’s 53 ports internationally – and why China blocked the sale. Under Chinese law. Beijing reserves the right to respond with sanctions of its own. Panama would not be the first country to unlawfully seize major Chinese assets. China is preparing to respond if the US pushes further after kidnapping Maduro from Venezuela, cutting off Cuba’s access to oil, freezing Iraqi oil revenue, and waging an illegitimate war on Iran in the span of only a few months. If Washington escalates its economic carpet bombing, Beijing now has a legal arsenal with which to answer. Alongside its rapidly growing Cross-Border Interbank Payment System (CIPS), which can operate outside SWIFT, China is moving toward an alternative financial system in which states can trade with whomever they choose, free from the western financial diktat that has long functioned as the monetary architecture of imperialism. The war on Iran has dragged a parallel financial system into view, exposing an architecture already built through years of sanctions pressure and now pushed further into the open by every new US threat. In short, China simply has a much lower trade dependency on the US than the other way around. At the big picture level, China sits on top of the global supply chain (as producer) and the US is at the bottom (as consumer). China can cause as much, if not more, pains on US businesses and households.
13 The Financial Trap
As the ceasefire in the Persian Gulf falters and the U.S. deploys more forces to the Strait of Hormuz and the Indo-Pacific region, analysts warn the conflict is part of strategy to sever China from its economic oxygen. The logic is straight forward. The conflict is used as cover to implement a blockade of the Strait of Hormuz. The blockade is then extended back to the Straits of Malacca and the vital chokepoints controlling entry to the South China Sea. The real attack on China is simultaneously more complex and more subtle. The real plan is a meticulously constructed financial trap whose components are being assembled in plain sight using the architecture of an emerging multipolar financial system. The visible military theatre—the carrier groups in the Gulf, the Western media narrative of overstretched US naval capacity, the carefully maintained façade of a transatlantic split—is not the operation. It is the cover story. The real assault proceeds elsewhere. It is in the strikes on refineries and export terminals, in the sanctions architecture that forces Russia into the Petro yuan, and in the silent consolidation of the financial infrastructure that governs the price of oil. The carrier groups are the feint. The trap is the physical destruction of supply infrastructure and the financial arsenal of the United States.
This trap consists of three interconnected stages
This is the blueprint for an invisible blockade.
The Road Map
Stage 1: The Kinetic Squeeze. The long-term constriction of physical energy supply through the systematic destruction of production, processing, and shipping infrastructure. This creates the underlying condition of real, physical scarcity.
Part 1: The Kinetic Squeeze – Manufacturing Scarcity
To set a trap, you must first shape the environment for it. In this case, the initial conditions are the deliberate, long-term constriction of global energy supply. What we are seeing around the world are not random acts of destruction. We are witnessing the systematic degradation of the world’s energy production, processing and logistical infrastructure. The evidence from 2026 alone is staggering. In the Persian Gulf, the damage has been strategic and precise. Meanwhile, a parallel but equally destructive campaign is being waged against Russia. Ukrainian drone strikes have become a persistent and devastatingly effective tool of energy warfare. The nominal, proximal, motivations of the actors on the ground may vary but the effect is cumulative. A growing amount of energy infrastructure—export terminals, pipelines, refineries, and tankers—has been damaged or disrupted this year resulting in a structural, long-term reduction in energy supply: oil, LNG, and shipping. Crucially, this physical scarcity is not a temporary blip. It is intended to be a structural feature.
Stage 2: The Financial Mirage – Hiding the Scarcity
The artificial manipulation of energy price signals, enabled by a concentrated ownership of the world’s primary oil futures exchange, the CME Group to hide the true severity of the scarcity, lulling China into complacency. With real-world supply under physical assault, the next stage is to ensure the financial markets do not accurately reflect this new reality. Instead, they must be made to send a false signal of calm and that this is a temporary disruption. This is achieved through control of the world’s most important oil pricing mechanism: the exchange where the West Texas Intermediate (WTI) crude oil benchmark is traded. The price discovered in Chicago doesn’t just stay there. The powerful financial force of arbitrage acts as a transmission belt that almost instantly anchors oil prices around the world, including futures contracts traded in Shanghai. If a trader can buy a barrel of oil on paper in Chicago for $60 and sell a contract for the same barrel in Shanghai for $65, they will keep doing so until the prices align. This makes the Shanghai International Energy Exchange (INE) a “net receiver” of the price signals established at the CME. If the CME price is artificially depressed, that false signal of ample supply is transmitted to China. Chinese and global refiners and planners, looking at their own domestic market, are lulled into believing the current high prices are a short-term spike. They delay critical purchases by drawing down strategic reserves.
This raises a critical question: Who controls the price?
The ownership of the CME Group is extraordinarily concentrated among institutional investors, who collectively hold nearly 88% of the company. At the very top of this structure sit the “Big Three” asset managers: Vanguard (9.98%), BlackRock (~8.64%), and State Street (4.47%). Together, they control nearly one-quarter of the voting power of the exchange that sets the benchmark price for global energy. This is not a conspiracy theory about traders in a dark room. It is about structural governance. The interests of these massive, passive fund managers are tied to the stability of dollar-denominated capital accumulation, not the efficient pricing of a physical commodity. The final stage is the most devastating. It is no longer about the price of oil; it is about attacking the financial foundation of the target itself—its currency and its finite reserves.
The Target: China’s Dollar Fortress.
The trap does not target China’s ability to print yuan. It targets its finite stockpile of US dollars, its foreign exchange reserves. In March 2026 alone, those reserves suffered the largest single-month drop ($50 billion) in a decade. This is the ammunition China needs to defend its currency and pay for many of its essential imports. When the “Physical Squeeze” hits and the “Financial Mirage” evaporates, China—and everyone else in the world—is forced to scramble for oil at the real, massively higher physical price. China will need to spend vast amounts of its precious dollar reserves at an alarming rate to fill the supply shortfall. The collateral societal damage created by the global energy panic will be profound as energy prices double, perhaps quadruple, overnight. The ensuing physical shortages will cause widespread social dislocation especially in the Global South. In the West, COVID was dry run at population control in an era of economic upheaval.
The Battlefield: The Dual Life of the Yuan.
This assault is made possible by a unique and critical vulnerability China created for itself: the dual structure of the yuan market.
CNY (Onshore): The yuan inside mainland China. It is a “high-walled fortress,” with its value strictly managed by the People’s Bank of China (PBoC) within a narrow 2% trading band.
CNH (Offshore): The yuan that trades much more freely in global centers like Hong Kong. This is the “wild frontier,” with its direction of movement determined by global fear, greed, and supply and demand. (The PBoC does retain tools to manage this value and at time does intervene to prevent too large a spread with the CNY market.)
Stage 3: The Currency Ambush. A massive assault on China’s economic sovereignty in the form of currency warfare that exploits the dominance of the US dollar and, with devastating irony, weaponizes China’s own ambition to make the yuan a global Petro-currency.
The Attack: Shorting the CNH.
This is when the trap springs. Speculators launch a sustained assault on the vulnerable, free-floating offshore yuan (CNH). They borrow massive amounts of CNH and immediately sell them, buying US dollars instead. This selling pressure causes the value of the offshore yuan to plummet relative to its tightly controlled onshore counterpart. This creates a price gap and a powerful incentive for arbitrage—buying the cheap CNH and using it in ways that put downward pressure on the stable CNY. This forces the PBoC into a costly and potentially losing battle. To prevent the onshore yuan from collapsing, it must step into the market and spend its dollar reserves to buy back the offshore yuan and prop up its value. The trap forces China to hemorrhage the dollars it desperately needs to pay for its energy imports at the new, greatly inflated price.
The Amplifier: The Petro Yuan as the Weapon of Choice.
Here is the trap’s final, most cunning irony. China’s grand strategy to insulate itself from dollar hegemony—the Petro yuan system—has become the trap’s primary amplifier. China can print yuan to pay Russia and Saudi Arabia for oil. This seems like a shield. But Russia and Saudi Arabia are not charities. They must eventually convert a large portion of those yuan savings into US dollars or other hard currencies to pay for their own global trade. This conversion process adds a massive,additional wave of selling pressure on the offshore CNH market, accelerating the very currency collapse China is trying to prevent. Russia, completely cut off from the dollar system and unable to act as a global stabilizer by buying yuan on the dollar markets a is forced to become a primary source of this destabilizing pressure. The system designed to protect China’s financial sovereignty is turned into the primary avenue of attack.
The Sanctions Pincer: How the West Armed the Trap
The EU sanctions regime against Russia is a critical structural component of the operation. The official rationale—degrading the Russian war machine—obscures an effect that aligns precisely with the trap’s architecture. The first prong forces Russia into the Petro yuan. Successive sanctions packages systematically sever Russia’s access to dollar and euro-denominated finance. The result is the most dramatic forced de-dollarization in history. By 2025, 99.1% of bilateral Russia-China trade was settled in rubles and yuan. Moscow’s central bank now holds yuan as a primary reserve. EU sanctions transformed the Petro yuan from a geopolitical aspiration into an operational necessity, flooding the offshore yuan market with the liquidity the currency ambush is designed to exploit.
The second prong ensures Russia is structurally incapable of defending the system it was forced to join. Excluded from SWIFT, its dollar reserves frozen, Russia cannot act as a global financial stabilizer. It cannot intervene to support the offshore yuan during a speculative attack. Instead, its energy companies—unable to hold dollars or euros—are compelled to amplify the pressure, converting massive yuan receipts into usable currency and adding directly to the selling pressure on the CNH. EU sanctions simultaneously deepen the Petro yuan system and ensure its largest participant acts not as a stabilizer but as an accelerator of the crisis. The pieces fit. There is no smoking gun or secret plan discovered in a hidden safe, but the circumstantial evidence strongly suggests that the creation of the Petro yuan in itself was not an unintended consequence of Western sanctions but a deliberate, multi-year operation to construct the financial architecture that would later become the primary avenue of attack. Sanctions have created “a permanent geopolitical financial split, accelerating global de-dollarization”. West did not just fail to stop the rise of the Petro yuan—it actively engineered its creation. By cutting Russia off from SWIFT and freezing its dollar assets, the West left Moscow with no choice but to embrace the yuan as its primary foreign currency. Russia “was excluded from the SWIFT payment system” and faced “restricted use of dollars and euros,” forcing its “The Petro yuan was not a Chinese victory; it was a Western trap.
The Tragic Irony
The People’s Bank of China spent decades fortifying the yuan against a currency attack behind strict capital controls. The central logic was that no speculative assault would be able to breach the defenses. So, the strategy was to lure the defenders outside into the open. The internationalization of the yuan in the form of the Petro yuan was the bait. When Russia intervened in Ukraine the collective West responded with a financial firestorm. Sanctions, SWIFT exclusion, asset freezes. By doing so they created an irresistible temptation for China to internationalize its currency in the form of the Petro yuan. China believed it was building the financial infrastructure for a multipolar world; in reality they were inadvertently creating a financial battering ram that would be used to try and breach the walls of the onshore yuan fortress. With every barrel purchased more ammunition is handed to the enemy. The more oil is traded in yuan the less defense the walls of capital controls offer. The trap is now fully armed. The physical scarcity engineered in Stage 1 forces China to print more yuan to pay for expensive energy. The financial mirage of Stage 2 ensures China delays building its defenses. And the currency ambush of Stage 3 unleashes the speculative attack on the exposed CNH, forcing the PBoC to spend its dollar reserves—its own siege supplies—to defend a currency it was deploying beyond its walls. The fortress was never breached. It was emptied.
The Architect’s Resume: Bessent and the Currency Wars
Scott Bessent’s presence as Treasury Secretary directly supports this thesis. The current plan requires an individual who understands, at an operational level, how to identify the fatal flaw in a sovereign financial system and apply concentrated pressure until it breaks. Bessent’s career is a catalogue of precisely this skill. In 1992, as a young partner at George Soros’s firm, he was dispatched to London where he identified a critical vulnerability: the British housing market was dominated by floating-rate mortgages, meaning the Bank of England could not raise interest rates to defend the pound without bankrupting millions of homeowners. This insight gave Soros the confidence to amass a $10 billion short position against sterling. The result was “Black Wednesday,” the pound’s forced ejection from the European Exchange Rate Mechanism, and a profit of over $1 billion for the fund—costing British taxpayers billions and toppling the government of Prime Minister John Major. Two decades later, in 2013, Bessent was the chief investment officer who personally orchestrated Soros Fund Management’s short against the Japanese yen, a trade timed to exploit the Abe government’s quantitative easing program that generated nearly $10 billion in profit. His method in both cases was identical: identify a policy-driven distortion, wait until the target’s capacity to respond is constrained, and then strike with leveraged precision. That the architect of the “Black Wednesday” attack and the “Abe Trade” now occupies the office of Treasury Secretary—with authority over sanctions, financial stability oversight, and dollar policy—is precisely what one would expect if the blueprint we have described were being implemented.
The Dry Run: Iran as the Test Case
Before this kind of complex financial operation is deployed it is tested and refined. The collapse of the Iranian rial between late 2025 and early 2026 looks like such a test. It was a miniature, accelerated version of the three-stage trap about to be sprung against China—a proof of concept conducted on a vulnerable Petro-state whose economy was already hollowed out by decades of sanctions and a summer of war. It followed the similar blueprint, compressed into months rather than years. The kinetic squeeze was the twelve-day war with Israel in June 2025, strikes hit the Fajr Jam Gas Refinery and a processing unit at Phase 14 of the South Pars field, the world’s largest gas reservoir. This degraded energy infrastructure created the physical vulnerability. The financial squeeze followed in September 2025, when European powers activated the UN “snapback” mechanism restoring all pre-2015 sanctions and severing Iran’s remaining access to hard currency. The currency ambush unfolded with devastating speed. Before the war, the dollar traded at approximately 600,000 rials on the open market. By the end of 2025, the rate had passed 1.4 million. By January 2026, it crossed 1.6 million. Food inflation reached 89.9 percent year-on-year, with prices for oils and fats alone surging over 50 percent in a single month. By March 2026, year-on-year food inflation had climbed to 112.5 percent. COVID was simultaneously test-run at manipulating futures markets in real time and also for managing domestic populations through the period of imposed, devastating economic fallout that accompanies the plan.
The Plaza Accord
In 1985, the world’s five largest economies agreed to coordinated currency intervention at New York’s Plaza Hotel. The objective was to depreciate the overvalued US dollar. The result, for Japan, was catastrophic. As a result of the Accord and subsequent poor policy reactions the Nikkei lost over 75 percent of its value across the subsequent decade. Real estate fell for fourteen consecutive years. Japan entered its “Lost Decades”—thirty years of stagnation from which it has only recently begun to emerge. The parallels to the present are direct. Japan in the 1980s was pursuing yen internationalization, seeking to establish its currency as an alternative to the dollar. China today is pursuing the same objective through the Petro yuan system. In both cases, the ambition to challenge dollar hegemony triggered a similar defensive response from the US financial establishment. The blueprint endures.
The Feint: Why the Visible Military Theater Is a Misdirection
Western media coverage has fixated on a single narrative: the United States lacks the capacity to enforce a meaningful blockade of Hormuz, let alone the sea lanes to Malacca. The analysis is not inaccurate. It misses the point entirely—and in doing so, serves the operation’s purpose. The visible military posture is a feint. The carrier groups are there to command attention, ensuring adversaries fixate on physical chokepoints while the real operation proceeds elsewhere. The trap does not require a successful naval blockade. It requires only that the destruction of energy infrastructure continues and that the financial architecture functions as designed. Tankers can keep sailing. Refineries and export terminals cannot keep operating. That asymmetry is the foundation the trap is built on. The real operation is not the ships. It is the strikes, the sanctions, and the consolidation of the financial infrastructure that governs the price of everything. China knows what happened to Japan. Chinese policymakers have spent decades analyzing the Plaza Accord. This does not make China immune, but it means Beijing enters this crisis with its eyes open to the dangers of panic-driven policy. The trap is extremely sophisticated and has been years in the laying. Its architects have studied history. But so has its target. The critical variable has not changed since the Plaza Accord: the trap is most effective when the target nation responds to external pressure with suboptimal policies choices. How China responds will determine whether this operation succeeds or accelerates the multipolar transition it was designed to prevent.
The coming war is not a war that will be fought primarily with tankers, destroyers and naval mines. It is a war being fought primarily with algorithms, arbitrage, and structural financial power. The plan creates a grand illusion: the appearance of a short-term, temporary disruption while engineering a massive, global energy shock to force China into an impossible dilemma: whether to divert the dollar reserves it needs to subsidize its energy imports to defend the value of the offshore yuan; or let the yuan devalue and import a tidal wave of inflation that erodes economic and social stability. The pieces are not hidden. They are visible in the burning refineries of Russia and the Persian Gulf, in the ownership filings of the CME Group, in the presence of Scott Bessant at the Treasury and in the quiet, accelerating drain of China’s foreign exchange reserves. The trap is set, and the world is watching it spring.
14 The Race is On – will the US implode and go Bankrupt first or will a hot war break out between US and China first?
China’s strategy to defeat the US is to force it into bankruptcy before a hot war breaks out, much like the US strategy that defeated the USSR. After falling flat on its face with the trade war and tech war with China, the US will further gear up for a military showdown. China is well aware of US plans to encircle it economically and militarily. It is also well aware of Washington’s use of social media and use it to destabilize and to infiltrate and capture national information space and capture the nation. China has spent decades building up its military, economy, infrastructure, information space to overcome these US efforts. This includes the massive BRI projects, its unprecedented investments in energy of all kinds, investments in education and industry and the development of its military capabilities. China has also built up its own ecosystem of social media platforms to control how information is created/shared/consumed within its own information space- rather than Washington, silicon Vally or the CIA doing it for them. The only reason a hot war has not broken out is because the odds are against the US military and the US regime still harbors the delusion to defeat China economically and technologically. However, as China’s rise becomes unstoppable, and all its cards are dealt and failed, the US will resort to force.
As with the trade war and tech war, China has long prepared for an eventual showdown in western pacific. Whether a hot war breaks out in Taiwan or South China Sea, whether it’s a proxy war or a direct one, China will fight to the end and win. Trump’s tariff war and Pentagon budget have accelerated the pace – the US is facing higher borrowing cost (therefore interest payments) and higher military spending at the same time – the two single biggest expenditures for the US government. In short, China simply has a much lower trade dependency on the US than the other way around. At the big picture level, China sits on top of the global supply chain (as producer) and the US is at the bottom (as consumer). China can cause as much, if not more, pains on US businesses and households.
The Economic Trajectory of the US will not change
With or without the “reciprocal” tariffs, the US will not reindustrialize and bring manufacturing jobs back in any meaningful manner, anytime soon. This is because the tariff policy will not address the real root cause of US’s economic problems today. Deindustrialization is a result of decades of financialization, profit-driven outsourcing, poor domestic infrastructure and education, overregulation, and shareholder-first short-term focused neoliberal economic practices. Technological transformations like AI and automation further erode any prospect of bringing manufacturing jobs back. Today’s US is a high-cost economy. Its infrastructure from roads, bridges, ports, to railways are crumbling and not capable to support large scale industrial production. Its labor force is poorly skilled and not trained to carry out high-end high-tech manufacturing. Starbucks coffee baristas and McDonald’s burger flippers don’t automatically make battery mechanics. And there won’t be “millions and millions” of American workers putting tiny screws on iPhones like Lutnick very helpfully pontificated. Its managerial class is driven by quarterly earnings and repelled by long term investment and risk taking. Its ruling elite are financiers and lawyers, not engineers – they don’t know how to build factories, develop supply chain, design and produce stuff, and manage a workforce. After all, it’s so much easier to make money from the stock market or as talking heads on TV or as online influencer. It is easier to study marketing or law than physics and engineering. The hard work of making things is no longer in the US DNA.
The costs of reindustrialization is simply too high in the many trillions – beyond a country already with $36 trillion national debt (not counting the many more trillions in business and household debt). Traditional safe havens such as US treasury and currency will crumble – de-dollarization will accelerate. Despite loudly threatening any country from de-dollarizing on his campaign trail (“I’ll put 100% tariff on anyone who don’t want to use the US dollar”), Trump has delivered the biggest gift to the proponents of de-dollarization. As a fiat currency, the entire value of the US dollar resides in the credibility of the issuer – the US government. Trump, the chaos agent with his mood swings, incoherent ramblings, irrational decision making, and total lack of basic economic common sense, has managed to do the impossible – driving US equity, bond, and currency down at the same time! The result of his crazy moves is higher borrowing costs, reduced investments, higher inflation, lower standard of living, and accelerated exodus from US dollars by not just US foes but even its “friends”.
Xi and Putin cannot do any of the above. Only King Trump can manage this – turning the US into an economic terrorist rogue state! US rivalry with China will be further militarized and a hot war is more likely than ever. After falling flat on its face with the trade war and tech war with China, the US will further gear up for a military showdown. It is already increasing military spending to a historic $1 trillion (per Hegseth’s profuse thank-you-Mr. President X post). People say Trump is a peace president and doesn’t like wars. I have never bought the crap for a second. If you have learned anything about him, from his public behavior to shelves of books published by people who have interacted with him, you should know Donald Trump has zero moral compass, is a fraud and a belligerent bully through and through. He is not a peace maker. His actions in Yemen and threats against Iran are clear proof of that. It’s a bygone conclusion the No. 1 US regime priority is to weaken and destroy China by any means available. The only reason a hot war has not broken out is because the odds are against the US military and the US regime still harbors the delusion to defeat China economically and technologically. However, as China’s rise becomes unstoppable, and all its cards are dealt and failed, the US will resort to force. As with the trade war and tech war, China has long prepared for an eventual showdown in western pacific. Whether a hot war breaks out in Taiwan or South China Sea, whether it’s a proxy war or a direct one, China will fight to the end and win. Trump’s tariff war and Pentagon budget have accelerated the pace – the US is facing higher borrowing cost (therefore interest payments) and higher military spending at the same time – the two single biggest expenditures for the US government. You can also count on Trump following through the Project 2025 neocon plan to cut taxes for his rich donors. Reducing revenue and increasing cost is a surefire way to go bankrupt – something Donald Trump has plenty of experience with. After all, this is a guy who went broke 6 times and somehow managed to bankrupt casinos! China pursues the Sun Tzu Art of War strategy to win without fighting. Our next article in the RIC (Russia, Iran, China) series is Russia.
