Will China Help Stop Trump?

One of the most interesting and puzzling facts of recent months is that China, pretty much on its own, has been keeping global oil prices down. The Atlantic recently had a fascinating report laying out the facts but failing to decide why. All we know is that for some months, China has been drastically reducing its purchases of crude oil on global markets, possibly (no one really knows) by drawing on its own internal reserves, whose size no one outside China apparently knows.

Oil mavens think that, if China weren’tdoing this, global oil prices would rise from their present $90-$100 per barrel range to closer to $200, depressing the global economy. Some think that China’s motive is preserving the market for its manufactured goods, and thereby preserving its own economic health in a chaotic time.

Unless external analysts are completely clueless about the extent to which China has converted to renewable energy, China can’t keep this up forever. So how long will China’s gift to the global economy, likely at the risk of depleting its own strategic oil reserves, continue?

Another way of asking that same question is whether China might gain an advantage by stopping drawing on its own reserves, if only temporarily, at some point.

One of the most attractive features of China’s present government is its penchant for stability. Ever since China threw off its Mongol conquerors, who had conquered most of Eurasia about 650 years ago, a key goal of its rulers has been stability.

Alhtough China’s current government styles itself “Communist,” today it is actually a leading example of authoritarian state capitalism. But in its quest for stability it’s no different from the old imperial China. During its seventy-seven years of existence, it has started no wars (apart from minor border disputes with neighbors). It has only reinforced “buffer states” like North Vietnam and North Korea, when under siege by foreign forces. At no modern time have China's modern rulers contemplated, let alone advocated, continental or global conquest.

IMHO, Xi Jinping is likely the smartest leader of any major world power today. That’s one reason why China is growing so rapidly in economic power and global influence.

At the beginning, Xi probably saw Donald Trump’s presidency as beneficial to China, because he knew it would weaken the US as global hegemon. Now, I believe, Xi is smart enough to understand that the US and its global economic order are collapsing far too quickly for global economic and political stability. Not only has Trump’s whimsical and ever-changing tariffs crippled global commerce and made stable investments in production much harder. He is now, in Iran and the Caribbean, embarking on military ventures just as whimsical and just as catastrophic for stability.

So what will China do? Our spooks believe, with some evidence, that China put a finger on the Internet scale in Trump’s favor during Trump’s first election, albeit not the whole hand that Russia put. But now China has an instrument far, far more powerful than the Internet and social-media propaganda.

All China has to do is start buying oil again six weeks before the November election, causing its price to spike to $200 per gallon and gasoline prices to approach $10 per gallon. The US electorate will conclude, quite reasonably, that Trump and his minions have no idea how to manage the US economy, let alone the global one. The Democrats will gain control of Congress, and Trump’s “lame duck” second-half of his last term will be crippled by impeachment inquiries, if not actual impeachment and removal. It’s even possible that the Dems, along with a few remaining thinking Republicans, will be able to pass some legislation to restore economic and social stability here at home, if not full democracy.

Will Xi do this? On the one hand, he’s smart enough to know that Trump’s erratic and self-focused rule has made the US weaker and is likely to continue that trajectory as long as Trump is in office. On the other, Xi’s also smart enough to know that the sudden collapse of the US as a global hegemon, already well underway, will lead to anything but global stability. It could even tempt Putin to use tactical nukes in Ukraine—a global catastrophe that could not be undone.

As for Taiwan, perhaps a weaker US favors China’s takeover in the precise year (2027) that Xi has planned. But the US is already weakened and its military capacity depleted by its current misadventure in Iran. Could Xi make the calculation that it’s in China’s (and the world’s) interest to prevent the complete political collapse of the US and, at the same time, exploit the massive antiwar sentiment now rising to a crescendo in the US, resulting from Trump’s fiasco in the Middle East?

China’s half-millennial quest for global economic and military stability suggests that it might see such a ploy as worthwhile. And it need only be temporary. China could lower its oil purchases again right after the November election, thereby reducing oil prices, for itself and the world, to a less painful level, regardless of the state of affairs in the Middle East.