We’ve got them right where we want them (for various values of ‘we’)

by liberal japonicus

Another post, but this is more about energy, oil, Iran, China, yada yada. This Foreign Affairs podcast discusses the Iran Shock, and I’ve consumed so much discussion of all of this so it’s all a jumble, but I have a take that I haven’t really seen put forward, so I wanted to get it down.

Here’s roughly what I think happened. When the Iran War started, lots of people were discussing the traumatic effects a blocked Strait of Hormuz would create. Not only that, a lot of governments took steps to deal with them, especially developing countries. This article, from April, describes some of the policies put into effect.

And while the blocking of the strait has created problems, nothing like the expected collapse has come to pass. It seems that a lot of those problems were alleviated by China allowing oil they would have purchased for their strategic reserve and inventories to go out on the market, cushioning the price shock, reducing demand, and ramping up coal. Yes, China restricted exports of petroleum products, but by holding off the purchase of oil, they prevented global crude prices from spiking even higher than they did. The export ban did put a squeeze on refined petroleum products, but that was a longer run up.

As the podcast notes,

I think the three of us would probably recognize that over the the last decade, you know, a consistent failing of American foreign policy analysts is like anything that China does, we assume it is part of a deep strategy when in case it may just be China responding to what makes the most sense at that particular moment.

Now normally, I’d be quite happy to hear this. I’ve often taken the position that China isn’t some strange outlier, it generally behaves like other countries behave. However, the conundrum they take up, of a China doing something like this but it isn’t with some overarching attempt to defeat the West, is one I’ve heard in a few other places, and none of them suggest the obvious conclusion, which is that having Trump in power is a boon for the Chinese.

In this case, especially with the strategic petroleum reserve, the Chinese did what they did because a huge global crisis would have put more pressure on Trump to resolve the Strait of Hormuz. By reducing that pressure (imagine what would have happened if oil had gone up to $200 a barrel), it encouraged Trump to keep fighting with Iran. In short, they are happy to have Trump in office, fucking up right and left, and they are happy to do just enough of that to keep him where he is. I’ve never seen or heard anyone suggest this. I don’t know if it is they can’t imagine China acting in this way and feel that somehow, the global energy system merrily plods along. China accounts for 1/3 of worldwide primary energy consumption, and putting just enough pain into it encourages investment in renewables (all those solar panels from China) seems like a good play to me. Trump keeps doing whatever, which must have the rest of the world look at the US and think fuck that.

China’s advantage in STEM research means they can keep piling up discoveries while the US seems intent on kneecapping US higher ed. I was particularly interested in Huawei’s new Logic Folding breakthrough. The amazing thing to me is that the breakthrough is thanks to the fact that because the US administration was working so hard to keep advanced lithography machines out of Chinese hands (and has banned Huawei from selling to the US and from getting any exports from the US), it created the conditions to have Huawei come up with this.

This tracks with a lot of other things to me. Everyone was expecting China to swoop into the Middle East and take over the US role. A special group of pundits keep warning how China is going to invade Taiwan because this time, they are going to do it because the conditions are right. China is going to do neither of these things because they are happy the way things are.

Parallel with this is the talk that pops up from time to time that Trump is a Russian asset. Here’s the Punch and Judy show that is The Rest is Politics, and their first question is Trump’s status as a Russian asset. Somehow, all of this is how we deal with individuals, and how individuals behave. No one says Trump is a Chinese asset, but he behaves in ways that mirror how much he seems to help out Putin.

I note that the Wall Street Journal had this article pointing to Chinese imagery guiding Iranian strikes which was echoed in a number of conservative sites. It’s interesting that those sites don’t have much time for discussing how Iran and other state actors are using US based AI. Here is Anthropic’s report on that.

God, this version of the multiverse sucks.