Red dragon collapse

China might face an economic collapse similar to what Russia experienced.

The day China blocked Ant Group, the parent company of Alipay, from entering the stock market, marked a significant moment in the ongoing tug-of-war between state control and private enterprise. This action raised numerous questions about the motivations behind the Chinese government’s decision and the broader implications for the country’s economic future.

Fear of Modern and Private Banking Platforms

One of the primary reasons for this move appears to be the government’s fear of modern and private banking platforms potentially taking over the traditional, state-controlled banking system. Ant Group, with its innovative financial services and extensive reach through Alipay, posed a substantial threat to the old, outdated banking infrastructure that has long been under the purview of state-owned enterprises.

Potential Consequences for the State Economic System

The integration and dominance of such private financial entities could lead to a paradigm shift in how financial services are managed and delivered. This could undermine the state’s control over the financial sector, which is a cornerstone of its economic strategy. A diminished role for state-owned banks could lead to a loss of economic stability and control, potentially resulting in a failure of the state economic system.

The Future Remains Uncertain: What’s Next?

The future of China’s economic landscape remains uncertain. The government’s intervention in blocking Ant Group’s IPO is just one of many moves that highlight its cautious approach toward financial liberalization and technological advancement. This decision, however, may have broader implications not only for the Chinese economy but also for global markets.

Predicting an Economic Collapse

Some analysts predict that China might face an economic collapse similar to what Russia experienced. This potential collapse could be triggered by various factors, including internal economic imbalances, mounting debt, and external pressures such as trade wars and geopolitical tensions.

Recognition of New Countries

In the wake of a potential economic collapse, the geopolitical landscape could also undergo significant changes. There might be increased calls for the recognition of new countries such as Taiwan, Hong Kong, and Tibet. These regions have long been points of contention and aspirations for independence, and a weakened central government might lead to a shift in their status.

Taiwan

Taiwan, with its robust economy and democratic governance, has been a focal point of US-China tensions. In the event of China’s economic decline, the push for Taiwan’s international recognition might gain momentum, leading to a significant realignment in East Asian geopolitics.

Hong Kong

Hong Kong, despite its recent political turmoil, remains a crucial financial hub. The potential collapse of China’s economy could further exacerbate calls for autonomy and independence, particularly from the younger generation who have been at the forefront of pro-democracy movements.

Tibet

Tibet, with its unique cultural and historical identity, has long sought greater autonomy. Economic instability in China could provide an opportunity for Tibetans to intensify their demands for recognition and self-governance.

Broader Implications

The potential recognition of these regions as independent countries would have far-reaching implications for international relations, trade, and security dynamics in the Asia-Pacific region. It would also challenge the existing norms of sovereignty and territorial integrity, leading to a new era of geopolitical realignments.

The future remains highly uncertain, with potential scenarios ranging from economic collapse to significant geopolitical shifts. As the global community watches these developments unfold, it is crucial to remain prepared for the recognition of new countries and the subsequent changes in the global order.

Raghu Kondori