Dragon's Gambit: How the West Can Checkmate China's Economic Siege, By Paul Walker
Placed on in the grand chessboard of global trade, China plays like a grandmaster with a stacked deck — command economy fiat allowing overcapacity dumps, rare-earth chokepoints, and supply-chain strangleholds that bleed Western jobs and industries dry. As 2025 closes with Beijing eyeing a record-shattering $1 trillion+ trade surplus (up from $992 billion in 2024), the CCP's playbook is clear: Flood markets, hoard leverage in critical minerals and pharma precursors, and weaponise dependencies to extract concessions. Yet, as the article below astutely notes, this "leverage" is a mirage sustained by Western complacency — political inertia, regulatory red tape, and a addiction to cheap imports. The US, world's No. 2 manufacturer with unmatched consumer clout, holds the real endgame: Reshore, ally up, and exploit Beijing's domestic dragons (debt bomb, demographic cliff). From a hawkish free-market lens, here's how the West — led by a Trump 2.0 White House — can flip the script, turning economic warfare into a rout. No more playing defence; time to counterpunch.
The Battlefield: Acknowledging the Asymmetric Assault
China's edge isn't tech wizardry; it's top-down tyranny. The CCP funnels state-bank cash into unviable factories, subsidising steel, solar, and EVs to flood globals with below-cost goods — gutting Mexico's auto sector, India's textiles, and Europe's green dreams. Rare earths? Beijing processes 90% of the world's supply, turning a dirty necessity into a diplomatic dagger (wielded against Japan in 2010, now eyeing Taiwan hawks). Pharma APIs? 80% Chinese-sourced, a "convenience" vulnerability that could spike US drug prices overnight. Critical infra? Huawei backdoors and Volt Typhoon hacks pre-position sabotage in US grids.
But here's the rub: Unlike rare-earth refining (pollution nightmare barring domestic scale-up), pharma and tech are fixable. India/Europe can surge generics; US fabs can onshore chips. China's "irreplaceable" myth crumbles under scrutiny — it's laziness, not lock-in. And Beijing's vulnerabilities? A $6T local debt crater, 300% GDP leverage, youth joblessness at 14% (post-fudged stats), and a shrinking workforce (first pop decline since Mao). Trump's tariffs already slashed FDI 51%; double down, and the dragon wheezes.
The West's counter? A multi-pronged blitz: Diversify, invest, isolate, and incentivise. As Foreign Affairs warns, half-measures like Biden's "selective protection" falter without bipartisan spine — 2025's transition demands a "fit-for-purpose" hammer.
Strategy 1: Diversify Chains – Break the Chokeholds
First, map and machete the dependencies. Rare earths: Stockpile (US reserves hit 2MT in 2025), fund allies (Australia's Lynas up 30% output), and onshore processing via DOE grants ($500M in 2025 for Mountain Pass revival). Pharma: Fast-track FDA nods for Indian/EU suppliers — waive EMA equivalency in crises, as the article below suggests. India's $50B generics hub could absorb 40% US demand in months; Japan's sterile tech fills gaps. Infra: Ban Huawei outright (CHIPS Act 2.0: $100B for domestic 5G/routers by 2027).
Lever: Tariffs as stick — 60% on EVs/solar (Trump's pledge), forcing reroutes to Vietnam/Indonesia. Hinrich Foundation: This "de-risking" already cut China's global export share 5% in tech.
Strategy 2: Reshore with Will and Wallet – Rebuild the Arsenal
The US could build anything — it's done so before (WWII Liberty Ships: 2,700 in four years). Political will: Trump's "America First" mandates 25% federal procurement domestic, slashing China's $400B US surplus. Funding: CHIPS/IRA extensions ($500B total by 2030) for fabs, batteries, magnets. Dereg: Axe EPA hurdles for rare-earth mines (Nevada's Thacker Pass online 2026); FDA emergency waivers for pharma scale-up.
Accept pain: Prices up 20-30% short-term? National security premium — beats Beijing's veto. Heritage: Target allies like Colombia for lithium pacts, starving CCP coercion. RAND: Counter with "economic deterrence" — mirror tariffs on Chinese luxuries, hitting elite wallets.
Strategy 3: Alliances and Isolation – The Global Squeeze
Solo? Suicide. Rally the Quad (US/Japan/India/Aus) for "Friendshoring" — $200B joint fund for diversified chains. EU's Carbon Border Tax (2026 rollout) slaps Chinese steel 20-35%; extend to EVs. AUKUS: Sub tech swaps for Aussie rare earths. Small Wars Journal: In LatAm, fund export div (lithium to US, not China) to blunt coercion.
Exploit cracks: Sanction CCP banks funding dumps; amplify youth unrest via Voice of America Mandarin. CFR: China's RMB push falters without USD access — freeze $3T reserves if escalation. TIME: Weaponise leverage — tariffs for IP theft concessions.
The Endgame: Will Over Wallet
China's warfare thrives on Western hesitation — Al Jazeera's right: It's profit protection, not patriotism. But with resolve, the West wins: Reshoring creates 2M jobs (Brookings est.), secures defence, and starves the dragon's debt beast. AEI warns of chaotic policy — 2025's test: Unified strategy, or fracture?
I say: The CCP's bluffing with a weak hand. Call it — diversify, build, ally — and watch Beijing blink. The fruits? A resilient West, not a vassal.
https://www.thegatewaypundit.com/2025/11/chinas-economic-warfare-us-has-options-its-just/
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