The New Cold War Intensifies

We all know about American sanctions. They are enforced by removing people from the US/EU banking system, and the SWIFT transfer network.

Because this system was used by almost everyone for international transfers, the US could forbid trade between third parties: “you can’t buy or sell from Russia/Iran/whoever because we’ll cut you off from our system.”

American law only applies in America. If Russia and Nigeria want to trade something, that should have nothing to do with the US and it should have no say. But it has and entire countries have been devastated by it.

China’s had enough:

This week a Singaporean shipping company received a hefty fine in China, the fine was just short of 5 million RMB. What happened was, they had refused to fulfill a shipment from Shanghai to Panama and returned the goods because the Hong Kong shipper was included on a U.S. sanctions list. I hope you heard that, a Singaporean shipping company, nothing to do with the USA, refused a shipment that was sent from Shanghai, in China, to Panama in Central America, of products that were being shipped by a HK company that is sanctioned.

Had the goods been going to the USA, then this would not have been illegal, because the goods, or the company shipping them are sanctioned there and Chinese domestic law can’t change that.

However, the Shanghai Maritime Court ruled this as a breach of contract, China has not sanctioned this company, the US had nothing to do with the product, the shipping or the destination so, based on Article 12 of the new Anti-Foreign Sanctions Law, the court ordered compensation for the loss of over RMB 4.99 million plus interest. It went on to the Supreme People’s Court which subsequently listed it as a typical case, stating it was the first judicial judgment confirming the mandatory applicability of the law.

What this means, if it continues, and the supreme court of China’s language indicates that it will, is that you’ll be forced to choose: you can either obey US sanctions, in which case you can’t do business with China, or you can obey Chinese law and that means you won’t be able to do business with America or its vassals.

It took China a long time to do this. Only recently did China decide that the US can no longer stop its technological and industrial progress: China is ahead in almost all techs, and in the few it’s behind in it doesn’t feel it must have US goods. China forcing even AI companies to use domestic chips was a tell.

Last decade I predicted that a likely outcome of the rise of China and America’s fall was a new cold war. There’s an entire topic category “New Cold War”.

And here we are, with it reaching the serious stage.

The bottom line is that while China is happy to sell to the US and wants to keep doing so, it no longer absolutely needs to. Nor does it need parts from the US. It’s the West that needs tech transfers from China.

And there’s no upside to helping the US other than sales because everything that makes the US stronger is used to hurt China or its friends. Notice that BRICS includes two countries currently at war with the West: Russia and China, America is trying to flip Brazil back to the hard right, and Trump is constantly sanctioning South Africa.

Helping America, if you’re China, is as stupid as it gets given America has clearly treated China as an enemy and is assaulting China’s friends.

In the last cold war Russia was the weaker side, economically, from the start to the end. In this war China is stronger in every way that matters: militarily, industrially and technologically. It also has a larger population.

The smart money is “always bet on the stronger side”. Sure sometimes they lose. But not often. And the West is now the weaker side.

Welcome to the end of the European centuries. We had one hell of a run, but our leaders pissed it away. Let us hope that China is a kinder hegemon than Europe or America ever were.

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