On April 17, the Ministry of Defense updated a message that at the invitation of the US side, the Chinese and US defense ministers had a direct video call for the first time since 2022. This phone call illustrates one thing, and that is that the game between China and the United States is about to reach a climax. The United States wants to pull China into talks because it has recently frequently played its cards and wants to test China's reaction to see if it hurts China and whether there is room to take advantage.
The reason why China talks with the United States is that the next move has already been prepared, and it is necessary to prevent the United States from flipping the table in advance. The latest round of game between China and the United States is directed at the lifeblood of the United States, the oil dollar. China has prepared a set of "combination punches" for the United States.
First of all, from a geopolitical point of view, the situation between Russia and Ukraine and Palestine and Israel in the spring and summer is likely to usher in a new round of escalation. Needless to say, Russia has a large area of swampy land in eastern Ukraine, and the window period that can be used to mobilize large-scale armored forces is only the months between spring and summer and autumn and winter.
U.S. Secretary of Defense
Russia, which has the initiative on the battlefield, will certainly not miss this spring in front of it. The assessment of the Ukrainian side is that before the "Victory Day" on May 9 this year, Russia will fire the first shot of the counteroffensive, and the location is likely to be selected in Chasov Yar, a highland next to Bakhmut.
After the Russian army takes the high ground of Chasov Yar, the logistics center of the Ukrainian army will face a mortal threat. Once the war in eastern Ukraine burns more and more, global oil prices will inevitably usher in a new round of rise. If the standoff between Iran and Israel escalates further at this time, then the price of crude oil is even more likely to rise to the sky.
Although Iran announced that it would stop after completing its retaliatory actions, there are all signs that Israel is unlikely to abandon its retaliatory actions. If he does not want to step down from power, or even die like Rabin, the Zionists, then Israel's war machine must continue.
Russia-Ukraine conflict
Second, first Hamas, then Iran, Israel's image as a "military bully" in the Middle East has been completely destroyed in this round of Palestinian-Israeli conflicts, not only suffered defeat in Gaza, but was also directly beaten by Iran to the mainland. The Israeli army's performance in this series of conflicts has directly shaken the theory of "cumulative deterrence" practiced by Israel.
The key to "cumulative deterrence" lies in avenging revenge and winning all the time, so as to form a "deterrent" against the enemy and ensure one's own security. Today's Israel can't win, and if it wants to cover the fig leaf, it can only do revenge. If this cannot be done, and then the resistance forces in the Middle East will rush forward, and the southern and northern fronts will fully blossom, then Israel will really face an existential crisis.
To sum up, there is a good chance that Israel will fight back, and Iran has already drawn a red line, and as long as the homeland is hit, it will immediately launch a larger-scale missile attack, which will make Israel suffer. Allah has already said that Iran's next missile launch will be ten times more than the first strike.
Israel, Iran
If this conflict does escalate, it is difficult to say who will win or lose Iran and Israel in the end, but global oil prices will surely soar. If oil prices soar, inflationary pressures in the United States will increase, and the Fed will face a dilemma. On the one hand, if you choose to stabilize inflation, you must stick to a high interest rate policy.
In such a situation, the liquidity in the market will dry up, and US banks will face a serious liquidity crisis, which is likely to explode again. Moreover, long-term interest rate tightening will inevitably lead to economic weakness, which will be very detrimental to Biden's re-election bid in an election year. On top of that, if the Fed sticks to high interest rates, Japan will face serious economic challenges.
The yen has already begun to plummet and is currently trading close to 155 against the dollar. JPMorgan Chase and Bank of America have successively said that the exchange rate of the yen after this round of depreciation may hit a low of 160. Japan is the bridgehead for the United States to project influence in the Indo-Pacific, and if the yen plummets and Japanese bonds explode, the United States will be tantamount to destroying the Great Wall.
Chairman of the Federal Reserve
On the other hand, if the Federal Reserve restricts its head, the United States over-issues currency, maintains its high tariff policy on China, and global oil prices rise, US inflation is likely to get out of control, and it is not impossible to repeat the hyperinflation of the last century.
At this time, if China promotes the establishment of an independent settlement system within the BRICS at the BRICS summit in the second half of the year, engages in local currency settlement among member countries, and even directly launches the "BRICS currency" to comprehensively promote de-dollarization in third world countries, it will definitely be a "hammer" to the US economy.
A large amount of dollars that should have been absorbed by third world countries and helped the United States share the pressure of inflation and over-issuance of currency will have nowhere to go but to pour back into the American market. At that time, if the Fed wants to die, it will either blow up interest rates and collapse the economies of several allies, or it can only look at the value of the dollar and the yen, and ride a roller coaster and start sprinting downward.
Yellen
China's pockets are already on the fence, just waiting for the United States to come in. The United States has recently played a series of cards to try to die and see if it can cause a financial crisis in China before it explodes. There are two main cards thrown out by the United States, one is to desperately advocate China's overcapacity.
A few days ago, the fourth meeting of the China-US Economic Working Group was held, and Yellen said that she believed that solving overcapacity would help China's economic development, which China refuted. Dai Qi has publicly threatened to use tariffs and other trade tactics to "counter China's unfair competition." The other is to advocate China's aid to Russia and Iraq.
This is to prevent Europe from choosing China, which holds a large amount of US dollar foreign exchange, to support the bottom line when it is desperate, so that the United States will not even be able to pull its allies to survive. These tactics can basically be summed up as the United States is using all the tools at its disposal to force China to explode before the "showdown" between China and the petrodollar. Because only in this way can the petrodollar be saved, and the trick of the United States in global bloodsucking can be played.
U.S.-Philippine military exercises
The frequent visits of high-level officials to China by the United States should be to see if these tools are working and to decide what to do next. But it is clear that these cards are not working, and the decline of the United States can be seen all over the world. The recent rush of European visits to China and Vietnam's announcement to deepen its security cooperation with China in the South China Sea are evidence that the United States has failed to do so.
Against this backdrop, there is only one card that the United States can play at its disposal and that really poses a threat to China, and that is the military card. At present, the US military medium-range missile has been stationed in the Philippines. If the United States is desperate to run to the first island chain to ignite the flames of war and pull China down the quagmire, then China will really face many uncertainties and add more variables to the Sino-US game.
For China, compared with a military showdown, the best choice is to "win without a fight" in the Indo-Pacific and let the United States "lose without defeat". The biggest possibility of the defense minister's election and the United States on the phone at this critical moment is to press Biden on the opposite side of the chessboard to curb the adventurist tendency of the United States to flip the table.
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