This week was dominated by geopolitical theater, the parade in Beijing of vast amounts of military hardware to mark the end of World War II. But the history, including the incredible sacrifices of all the Chinese people along the road to the global defeat of fascism in 1945, was almost a sideshow to the concrete—and steel—expression of the determination of Those in Command to have military fighting capabilities second to absolutely none.
The other fascinating factor was the guests and the no-shows on the reviewing stand. Mr. Putin of Russia was there, and Mr. Kim of North Korea completed the triumvirate. But Mr. Modi of India, while in China on the day, chose not to be seen with them at the parade. The coordinated marching was just perfect, far better than what the Russians and the North Koreans can do. So there’s that. A quick ChatGPT check on the relative capabilities of China’s top assets vs. the US, indicated they are still somewhat behind, but there is no other country in the world that can compete, and the determination to have world-class fighting capabilities was blindingly clear. But it’s one thing to have hi-tech missiles and it’s another thing entirely to use them. Do they represent in themselves, simply by existing, a way to win a war without a shot being fired? This is a key lesson from Sun Tzu’s Art of War—the best victory is one that involves no fighting and no destruction. But if one of these weapons is actually used in a live fire scenario, then the world will have suddenly entered a new phase.
Meanwhile, back in the real economy, the China stock markets faltered yesterday, consumers remain cautious, employment is a problem and tariff woes are surely becoming a drag on China’s trade. Our gut feel—we’re moving towards an inflection point of some sort.
Have a great weekend.