Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

by Ray Dalio

Basically China does not want to be contained and the United States (and some other countries) want to contain it. What does that mean geopolitically? As you know by now, countries’ boundaries have constantly changed over time, they are often in dispute, and international law isn’t worth a hill of beans relative to power in resolving these disputes. In 2009 China declared to the United Nations that it has “indisputable sovereignty over” an area in the East and South China Seas. The area is marked by a “nine-dash line” on a World War II era map presented by China; it covers offshore waters east of Vietnam, north of Malaysia, and west of the Philippines, which include a bunch of islands, are important for shipping that China needs, and are believed to have undiscovered oil reserves, which I imagine China would love to have given its huge imported oil needs and the risk of oil imports from the Middle East being cut off. If you read the World War II case study in Chapter 6 and saw how the US cut off resources to Japan, you know the issue: China has a great need for oil and other imports that currently come through a choke point at the Strait of Malacca. As a result of all of this and other assertions, the perception of China as a threat/enemy has emerged, globalization has reversed, and “wars” have intensified, starting with the trade and economic wars, expanding to the technology and the geopolitical wars and, most recently, to the capital war. All remain relatively mild in r...