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USA, Israil, Iran, Middle East, world politics, Geo Politics
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00:00So, today I want to discuss something that I think almost nobody is talking about.
00:04Everyone is focused on the war between America and Iran.
00:08Everyone is asking, who is winning?
00:10Will America bomb Iran into submission?
00:12Will Iran close the Strait of Hormuz and destroy the global economy?
00:16Will ground troops be sent in?
00:18These are all important questions, and we have discussed them in our previous classes.
00:22But today, I want to ask a completely different question.
00:25And the question is this, while America and Iran are fighting each other,
00:29while they are bleeding each other, who is actually winning?
00:32Okay, now I know what some of you are thinking.
00:35You're thinking, Professor Jiang, China is not even in this war.
00:39How can China be winning a war it is not fighting?
00:41And that is exactly the right question.
00:43Because the most brilliant strategic move in geopolitics is not to fight at all.
00:48The most brilliant move is to let your enemies destroy each other while you quietly build your power.
00:53And that is exactly what China is doing right now.
00:56So let me walk you through this carefully.
00:57I want to show you first what China gains if America wins this war.
01:01Then I want to show you what China gains if Iran wins this war.
01:05And then I want to show you the deeper historical pattern at work here.
01:08Because this is not the first time in history that a rising power has watched two great forces
01:14exhaust each other and then walked in to collect the prize.
01:17Okay, so let us begin.
01:19First, I want you to understand something about how China thinks about strategy.
01:23Because it is very different from how America thinks about strategy.
01:26America's strategy is what I call the hammer strategy.
01:29If there is a problem, you hit it.
01:31You hit it hard.
01:31You hit it fast.
01:32You hit it with maximum force.
01:34This is why America always reaches for bombs first.
01:37This is why the military industrial complex is so powerful in America.
01:40Because Americans believe that the solution to every problem is more force.
01:45China's strategy is completely different.
01:47China's strategy comes from a book called The Art of War, written by Sun Tzu about 2500 years ago.
01:53And the most important lesson of The Art of War is this.
01:57The greatest victory is to win without fighting.
01:59Let me say that again.
02:00The greatest victory is to win without fighting.
02:03You do not waste your energy, your soldiers, your money on direct confrontation.
02:07Instead, you position yourself correctly.
02:10You let the situation develop.
02:12And then when the moment is right, you move.
02:14And by that time, the outcome is already decided.
02:17This is Chinese strategic thinking.
02:18And right now, China is applying this strategy perfectly in the Iran War.
02:23Okay, so now let me show you how China wins in every possible scenario.
02:28Scenario 1.
02:29America wins this war.
02:30America bombs Iran successfully.
02:33The Iranian government collapses.
02:34America installs a new friendly government in Tehran.
02:37America controls Iran's oil.
02:39America controls the Strait of Hormuz.
02:41America has won.
02:43Okay, so in this scenario, does China lose?
02:45Let us think carefully.
02:47Thoughtful.
02:48The answer is no.
02:50China does not lose.
02:51Here is why.
02:52Even if America wins in Iran, America will have spent an enormous amount of money to do it.
02:58We are talking about trillions of dollars.
03:01The Iraq War cost America two trillion dollars, and America did not even win that war.
03:07An Iran war against a much larger, much stronger, much more prepared enemy will cost far more.
03:13America's national debt is already over 36 trillion dollars.
03:18Its yearly deficit is enormous.
03:20It is borrowing money just to pay the interest on its existing debt.
03:25Every bomb America drops on Iran is a bomb paid for with borrowed money.
03:29And here is the key insight.
03:31Curious.
03:32Who is America borrowing this money from?
03:35Who holds American debt?
03:36China holds over one trillion dollars in American treasury bonds.
03:40Japan holds a similar amount.
03:42When America goes to war, it borrows more money, it prints more dollars, and the value
03:46of the dollar goes down over time.
03:49This means that China can see very clearly that the more America spends on war, the weaker
03:54the American financial system becomes.
03:56We already know that America's military industrial complex is designed not to win wars, but to make
04:02money.
04:02The F-35 fighter jet cost 100 million dollars each and took 26 years to develop.
04:08The Gerald Ford aircraft carrier cost 13 billion dollars and had to retreat from the Persian Gulf
04:13in three weeks.
04:14The Patriot missile defense system costs billions and cheap Iranian drones fly right past it.
04:21All of this money goes into private military contractors.
04:24It goes to Boeing, to Lockheed Martin, to Raytheon.
04:27And all of this drains the American treasury.
04:30And China is watching this very patiently.
04:34So scenario one, America wins the war.
04:37China does not fight.
04:39China does not spend a single yuan.
04:41China does not lose a single soldier.
04:44But America is financially weaker.
04:46And a financially weaker America is a gift to China.
04:49Now scenario two, Iran wins this war.
04:53Or more precisely, America fails to achieve its objectives and is forced to retreat from the
04:59Middle East.
05:00In this scenario, what happens?
05:01This scenario is actually far better for China than scenario one.
05:05And let me explain why.
05:07If America retreats from the Middle East, the entire architecture of American global power
05:12begins to crumble.
05:13And at the center of that architecture is something called the petrodollar system.
05:18I have talked about this before, but let me explain it again because it is so important.
05:23Since 1973, all oil in the world has been traded in US dollars.
05:27This was a deal between America and Saudi Arabia.
05:30The Saudis would only sell oil in dollars.
05:33In exchange, America would protect the Saudi regime.
05:36Because every country in the world needs oil, and oil can only be bought in dollars,
05:41every country must hold dollars.
05:43This creates permanent global demand for the US dollar.
05:46This is why America can print money and run huge deficits without destroying its currency.
05:51Without the petrodollar system, the US dollar loses its special status as the world reserve.
05:57Currency.
05:58And without that status, America cannot finance its military empire.
06:03Now, Iran has effectively closed the Strait of Hormuz.
06:07The Strait of Hormuz carries 20% of all the world's oil.
06:10About 75% of Japan's oil comes through the Strait of Hormuz.
06:15About 60% of China's oil comes through the Strait of Hormuz.
06:19South Korea, India, Pakistan, they all depend on the Strait of Hormuz.
06:24The entire Asian economy is tied to this tiny waterway.
06:28And Iran is now demonstrating to the entire world that it, not America, controls this waterway.
06:34Every day that Iran controls the Strait of Hormuz, the credibility of the petrodollar system is damaged.
06:40Because the petrodollar system is based on a promise, America promises to keep the oil flowing.
06:46If America cannot keep the oil flowing, why should anyone trust the dollar?
06:51And this directly benefits China.
06:54Because China has been building an alternative to the petrodollar for years.
06:58It is called the petroyuan.
06:59China has been negotiating with oil producing countries to sell oil in Chinese yuan instead of US dollars.
07:06Saudi Arabia, Russia, Iran, they have all been discussing yuan based oil trade.
07:12If the petrodollar collapses, if the world loses faith in America's ability to protect the oil supply,
07:18then countries will start moving to yuan based trade.
07:21And that is an enormous shift of global financial power from America to China.
07:26So scenario two, Iran wins, America retreats, the petrodollar weakens.
07:31This is a massive victory for China.
07:33Again, without firing a single shot.
07:36Now let me go even deeper.
07:37Because I want to show you that this is not just about the petrodollar.
07:41It is also about trade routes and about the future of the global economy.
07:45China has been building something called the Belt and Road Initiative for over a decade now.
07:50This is the most ambitious infrastructure project in human history.
07:54China has been building roads, railways, ports, and pipelines connecting China to Europe,
08:00to Africa, to the Middle East, and to Central Asia.
08:02China has invested hundreds of billions of dollars in this project.
08:06And at the center of this entire project is Iran.
08:08Iran is the geographical pivot of the Belt and Road Initiative.
08:12For China to connect to Europe by land, it has to go through Iran.
08:16For China to access the Persian Gulf and the Middle East by sea, it has to go through Iran.
08:20Iran is so important to China's Belt and Road that China signed a 25-year comprehensive
08:26strategic partnership with Iran in 2021.
08:29China agreed to invest 400 billion dollars in Iran's economy over 25 years in exchange
08:35for guaranteed access to Iranian oil at discounted prices.
08:39So think about what this means.
08:40America is bombing Iran.
08:42America thinks it is hurting Iran.
08:44But every bomb America drops on Iran is also a bomb dropped on China's 400 billion dollars investment.
08:51China has enormous economic interest in Iran.
08:54And China has enormous geopolitical interest in making sure that Iran survives this war
08:59and remains a functioning state that can serve as the anchor of the Belt and Road Initiative.
09:05This is why China is quietly supporting Iran in this war, not militarily.
09:09China is too smart to fight America directly.
09:13But economically, China is buying Iranian oil.
09:16Despite American sanctions, Chinese ships continue to purchase Iranian oil through various methods.
09:22The Iranians have found creative ways to sell their oil to China,
09:25through different intermediaries, through different ships, through different payment methods.
09:29And China continues to buy because China needs the oil and Iran needs the revenue.
09:35And here is a fact that is truly extraordinary.
09:37Before this war started, American sanctions meant that Iran could barely export any oil.
09:44The Iranian economy was struggling.
09:46But this war, this war that America started to destroy Iran,
09:50has actually lifted the sanctions in practice.
09:52Because America had to unsanction Iranian oil to keep global oil prices from going too high.
09:58And China immediately started buying more Iranian oil.
10:02The Iranian oil revenue before this war was very limited.
10:04Now Iran is making billions of dollars more per month from oil exports.
10:09A lot of that money goes directly to China in exchange for goods and technology.
10:13So America went to war to weaken Iran.
10:15But the result is that Iran is now more deeply embedded in the Chinese economic system than ever before.
10:22This is a strategic catastrophe for America and a strategic windfall for China.
10:27Now I want to talk about something even more important.
10:29I want to talk about what this war is doing to the world's trust in America.
10:34Because this is perhaps the most important thing China gains from this war.
10:38Think about how countries around the world are watching this war.
10:42Think about what they are learning.
10:43They are learning that America will go to war based on very thin justifications.
10:48They are learning that America will bomb civilian infrastructure.
10:51Power plants, water facilities, hospitals in the name of regime change.
10:55They are learning that American promises of protection are worthless if you are not strategically important enough.
11:02And they are learning that American sanctions can be used against anyone at any time for any reason.
11:07Concerned, every country in the developing world, in Africa, in Southeast Asia, in Latin America, in Central Asia, is watching
11:14this and asking the same question.
11:16Are we safe?
11:16If America decides tomorrow that our government is unacceptable, will America bomb us too?
11:22And can America protect us?
11:23Or is American protection an illusion?
11:25This fear, this loss of trust in America, drives countries directly into China's arms.
11:30Because China offers something different.
11:32China's pitch to the developing world is simple.
11:35We will build your roads.
11:36We will build your ports.
11:37We will build your railways.
11:39We will buy your resources.
11:40And we will not bomb you.
11:42We will not sanction you.
11:43We will not demand that you change your government.
11:45We will respect your sovereignty.
11:47Now you might say, well, China has its own problems.
11:52China has its own interests.
11:54China is not a perfect partner.
11:55And that is completely true.
11:57But from the perspective of a small developing country, thoughtful, China looks much better than America right now.
12:04Because America is bombing a country of 90 million people while the whole world watches.
12:09That sends a very powerful message about what American partnership means.
12:14And so every day this war continues, more countries quietly move towards China.
12:19More countries start settling trade in yuan instead of dollars.
12:23More countries sign up for the Belt and Road Initiative.
12:26More countries join China-led institutions like the Shanghai Cooperation Organization and the BRICS Economic Bloc.
12:33The BRICS Bloc, which stands for Brazil, Russia, India, China, and South Africa, has now expanded to include many more
12:40countries.
12:41Iran itself is a member of BRICS.
12:43Saudi Arabia has been invited to join.
12:46UAE is being courted.
12:47Egypt is a member.
12:49Ethiopia is a member.
12:50Most of the global south is either a member or wants to be a member of BRICS.
12:55And all of these countries are moving towards a world where China, not America, is the dominant economic power.
13:01Curious.
13:02So while America is spending trillions fighting this war, China is quietly building the institutions and infrastructure of the next
13:10world order.
13:10Without firing a single shot.
13:13Now I want to bring in the historical perspective.
13:15Because, as I always say, history does not repeat itself exactly.
13:19But it rhymes very loudly.
13:21Thoughtful.
13:22And this pattern of one rising power watching two established powers exhaust each other.
13:27This is not new.
13:28This has happened before.
13:30Let me give you the most important historical example.
13:32It is the Peloponnesian War.
13:34431 BCE to 404 BCE.
13:38This was the great war between Athens and Sparta.
13:40The two most powerful city-states in the Greek world.
13:43Athens was the commercial, financial, and cultural center of Greece.
13:47Sparta was the military power.
13:49They fought each other for 27 years.
13:51Both sides spent enormous resources.
13:54Both sides suffered enormous casualties.
13:56Athens, the more powerful city-state at the start, was completely destroyed.
14:00Pause.
14:01And who won?
14:02Who was the great beneficiary of this war between Athens and Sparta?
14:06Macedon.
14:06A kingdom to the north that everyone looked down on.
14:09Philip of Macedon watched Athens and Sparta exhaust each other.
14:13He built his power quietly.
14:15He modernized his army.
14:16He built his economy.
14:17And when Athens and Sparta were both exhausted and weakened,
14:20Philip moved in.
14:22And within a generation, his son Alexander the Great had conquered the entire Greek world and beyond.
14:27Curious.
14:28This is the China pattern right now.
14:30America is Athens.
14:31Iran is Sparta.
14:33And China is Macedon.
14:34Watching.
14:35Building.
14:36Waiting.
14:36Let me give you another example.
14:38World War I.
14:391914 to 1918.
14:41Britain and Germany, the two dominant industrial powers of the world, went to war and destroyed
14:46each other.
14:47Britain won technically.
14:49But Britain came out of World War I deeply in debt.
14:52Its economy weakened.
14:53Its empire beginning to crack.
14:55Germany was crushed.
14:56And who was the great beneficiary?
14:59Curious.
14:59America.
15:00America came into the war late, avoided the worst of the casualties, and emerged as the
15:06world's leading creditor nation.
15:08Within 30 years, America had replaced Britain as the dominant global power.
15:13Pause.
15:14China is following exactly the same playbook.
15:17Let the existing powers exhaust themselves.
15:19Build your own strength quietly.
15:22And then when the moment comes, step into the vacuum.
15:25Thoughtful.
15:26So now let me bring this all together.
15:28I want to show you very concretely what China is doing while this war is happening.
15:32While America is spending billions bombing Iran, China is building.
15:36China just completed its 15th five-year plan.
15:39This involved two years of consultation, expert committees, think tanks, leading academic
15:43specialists across the country.
15:45It is a comprehensive, serious plan for the next five years of Chinese development
15:50in technology, in manufacturing, in infrastructure, in energy, in education.
15:56What does America have?
15:57No plan.
15:58We discussed this before.
15:59The American government has no five-year plan, no one-year plan, no one-month plan.
16:04Everything in Washington is improvised from morning to night.
16:07Frustrated.
16:08The decision to bomb Iran was made by a handful of people with no plan beyond the initial strikes.
16:13And when Iran fought back, when Iran did not simply surrender as expected,
16:18there was no plan B.
16:19This tells you everything about the relative position of these two countries right now.
16:23One country is planning decades ahead.
16:25The other cannot plan two hours ahead size.
16:29And while America has no plan, China is buying up resources across the global south.
16:34China is the largest trading partner of most African countries.
16:38China is the largest trading partner of most Southeast Asian countries.
16:42China is the largest trading partner of most Latin American countries.
16:45While America was spending two trillion in Iraq and Afghanistan, China was building ports in
16:50Pakistan, railways in Kenya, power plants in Ethiopia, roads in Central Asia.
16:55China was making friends.
16:57America was making enemies.
16:59Now let me talk about the most concrete way China wins from this war.
17:02Curious oil.
17:04China is the world's largest importer of oil.
17:07China needs oil to power its factories, its cars, its cities.
17:11And the Iran war has created a situation where China can buy oil at a discount.
17:16Here is how.
17:17Iran needs to sell its oil to survive.
17:20But American sanctions make it difficult for Iran to sell to most Western countries.
17:24So Iran sells to China at below market prices because China is one of the few buyers willing
17:29to take the risk.
17:30This means China gets cheap oil.
17:32Cheap energy means lower manufacturing costs.
17:35Lower manufacturing costs means Chinese goods are more competitive in global markets.
17:40And this comes at a time when American tariffs and trade wars are already disrupting global supply
17:45chains.
17:46So the Iran war is, paradoxically, making Chinese manufacturing more competitive.
17:51While American businesses are struggling with higher energy costs and supply chain
17:56disruptions from the war, Chinese manufacturers are getting cheaper oil.
18:00This is not an accident.
18:01This is the structural reality of the current situation.
18:04And then there is technology.
18:06China has been cut off from American semiconductor technology by American export controls.
18:12America thinks this will cripple China's technology industry.
18:15But China has responded by massively investing in its own semiconductor industry.
18:20China is building its own chip factories.
18:23China is training its own engineers.
18:25China is developing its own technology ecosystem.
18:27Curious.
18:29And while China focuses on building its domestic technology capacity, the best engineers and
18:34scientists in the world, who see America becoming more unstable, more unpredictable, more aggressive,
18:39are thinking twice about whether they want to build their careers in America.
18:43Secure ease.
18:44The brain drain that America once used as a weapon, attracting the best talent from around the world,
18:50is beginning to reverse.
18:51Because who wants to live in a country that is engaged in expensive, unpopular wars,
18:56where the political system is deeply dysfunctional, where the government cannot plan ahead,
19:01where inequality is growing, where the American dream is dead for most ordinary people.
19:06China and other rising powers are the beneficiaries of this talent migration.
19:11Quietly, slowly, but it is happening.
19:15Pause.
19:15Okay, so let me now talk about what this means for the future,
19:19because I want to give you a framework for understanding the world that we are moving into.
19:24We are living through a transition, the transition from a unipolar world,
19:29a world dominated by one power, America, to a multipolar world,
19:33a world with several major powers competing and cooperating.
19:385. Thoughtful.
19:39This transition is very similar to what happened at the end of the British Empire in the early 20th
19:45century.
19:46And in this transition, China is positioning itself as the leading alternative to American dominance.
19:52Not by fighting America, not by challenging America militarily,
19:56but by demonstrating that it offers a better deal to most of the world.
19:59Better trade terms, better infrastructure investment,
20:02better respect for sovereignty, and better long-term strategic planning.
20:08The Iran war is accelerating this transition dramatically, because it is making America
20:13look exactly like what it is becoming.
20:16An empire in decline, lashing out desperately, spending money it does not have,
20:21fighting wars it cannot win, with no plan and no vision for the future.
20:25And every day this continues, China's relative position in the world improves.
20:30Not because China is doing anything dramatic, but because America is destroying its own credibility,
20:35its own finances, its own alliances, and its own reputation, one bomb at a time.
20:40So when we ask the question, who wins this war, the answer is not America.
20:44And the answer is not Iran, even if Iran survives.
20:47The answer is China.
20:48Because China is the only country that benefits regardless of how this war ends.
20:52If America wins, China has a weaker, more financially exhausted America to deal with.
20:57If Iran wins, or more precisely, if America fails, then the petrodollar weakens,
21:02the belt and road gain strength, and the world moves faster towards a multipolar order with China
21:07at the center.
21:08Thoughtful.
21:09This is not luck.
21:10This is not accident.
21:11This is strategy.
21:12Ancient Chinese strategy.
21:14The strategy of Sun Tzu.
21:16The greatest victory is to win without fighting.
21:18And so I want to leave you with this thought.
21:20The most important geopolitical actor in this Iran war is not America.
21:24It is not Iran.
21:25It is not Israel.
21:26It is China.
21:27The country that is not fighting at all.
21:30Pause.
21:30Remember this.
21:31In history, it is rarely the countries that fight the biggest battles that win the biggest prizes.
21:36It is the countries that are patient enough, smart enough, and disciplined enough to let
21:41others exhaust themselves and then position themselves for what comes next.
21:45America is fighting this war.
21:47Iran is surviving this war.
21:49And China is winning this war.
21:51Okay.
21:51I think that is enough for today.
21:53Was this interesting?
21:54Good.
21:55Was this clear?
21:56Curious.
21:56Good.
21:57I will see you next time.
21:58I will see you next time.
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