The Only Country That Wins No Matter How This War Ends | Prof.

Jiang Xueqin Analysis

So today I want to discuss something that I think almost nobody is talking about.

Everyone is focused on the war between America and Iran.

Everyone is asking who is winning.

Will America bomb Iran into submission? Will Iran close the straight of Hormuz and destroy the global economy? Will ground troops be sent in? These are all important questions and we have discussed them in our previous classes.

But today I want to ask a completely different question and the question is this.

While America and Iran are fighting each other, while they are bleeding each other, who is actually winning? Okay, now I know what some of you are thinking.

You are thinking, “Professor Jen, China is not even in this war.

How can China be winning a war it is not fighting?” And that is exactly the right question.

Because the most brilliant strategic move in geopolitics is not to fight at all.

The most brilliant move is to let your enemies destroy each other while you quietly build your power.

And that is exactly what China is doing right now.

So let me walk you through this carefully.

I want to show you first what China gains if America wins this war.

Then I want to show you what China gains if Iran wins this war.

And then I want to show you the deeper historical pattern at work here.

Because this is not the first time in history that a rising power has watched two great forces exhaust each other and then walked in to collect the prize.

Okay.

So let us begin.

First, I want you to understand something about how China thinks about strategy because it is very different from how America thinks about strategy.

America’s strategy is what I call the hammer strategy.

If there is a problem, you hit it.

You hit it hard.

You hit it fast.

You hit it with maximum force.

This is why America always reaches for bombs first.

This is why the military-industrial complex is so powerful in America because Americans believe that the solution to every problem is more force.

China’s strategy is completely different.

China’s strategy comes from a book called the art of war written by Sununsu about 2500 years ago.

And the most important lesson of the art of war is this.

The greatest victory is to win without fighting.

Let me say that again.

The greatest victory is to win without fighting.

You do not waste your energy, your soldiers, your money on direct confrontation.

Instead, you position yourself correctly.

You let the situation develop and then when the moment is right, you move.

And by that time, the outcome is already decided.

This is Chinese strategic thinking.

And right now, China is applying this strategy perfectly in the Iran war.

Okay.

So now, let me show you how China wins in every possible scenario.

Scenario one, America wins this war.

America bombs Iran successfully.

The Iranian government collapses.

America installs a new friendly government in Thran.

America controls Iran’s oil.

America controls the straight of Hormuz.

America has won.

Okay.

So in this scenario, does China lose? Let us think carefully.

The answer is no.

China does not lose.

Here is why.

Even if America wins in Iran, America will have spent an enormous amount of money to do it.

We are talking about trillions of dollars.

The Iraq war cost America $2 trillion.

And America did not even win that war.

And Iran war against a much larger, much stronger, much more prepared enemy will cost far more.

America’s national debt is already over $36 trillion.

Its yearly deficit is enormous.

It is borrowing money just to pay the interest on its existing debt.

Every bomb America drops on Iran is a bomb paid for with borrowed money.

And here is the key insight.

Who is America borrowing this money from? Who holds American debt? China holds over $1 trillion in American Treasury bonds.

Japan holds a similar amount.

When America goes to war, it borrows more money.

It prints more dollars.

And the value of the dollar goes down over time.

This means that China can see very clearly that the more America spends on war, the weaker the American financial system becomes.

We already know that America’s military industrial complex is designed not to win wars, but to make money.

The F-35 fighter jet cost $400 million each and took 26 years to develop.

The Gerald Ford aircraft carrier cost $13 billion and had to retreat from the Persian Gulf in 3 weeks.

The Patriot missile defense system costs billions and cheap Iranian drones fly right past it.

All of this money goes into private military contractors.

It goes to Boeing, to Loheed Martin, to Rathon.

And all of this drains the American treasury.

And China is watching this very patiently.

So scenario one, America wins the war.

China does not fight.

China does not spend a single UN.

China does not lose a single soldier.

But America is financially weaker.

and a financially weaker America is a gift to China.

Now, scenario two, Iran wins this war.

Or more precisely, America fails to achieve its objectives and is forced to retreat from the Middle East.

In this scenario, what happens? This scenario is actually far better for China than scenario one.

And let me explain why.

If America retreats from the Middle East, the entire architecture of American global power begins to crumble.

And at the center of that architecture is something called the petro dollar system.

I have talked about this before, but let me explain it again because it is so important.

Since 1973, all oil in the world has been traded in US dollars.

This was a deal between America and Saudi Arabia.

The Saudis would only sell oil in dollars.

In exchange, America would protect the Saudi regime.

Because every country in the world needs oil, and oil can only be bought in dollars, every country must hold dollars.

This creates permanent global demand for the US dollar.

This is why America can print money and run huge deficits without destroying its currency.

Without the petro dollar system, the US dollar loses its special status as the world reserve currency.

And without that status, America cannot finance its military empire.

Now, Iran has effectively closed the strait of Hormuz.

The straight of Hormuz carries 20% of all the world’s oil.

About 75% of Japan’s oil comes through the straight of Hormuz.

About 60% of China’s oil comes through the Strait of Hormuz.

South Korea, India, Pakistan, they all depend on the Strait of Hormuz.

The entire Asian economy is tied to this tiny waterway.

And Iran is now demonstrating to the entire world that it, not America, controls this waterway.

Every day that Iran controls the straight of Hormuz, the credibility of the petro dollar system is damaged.

Because the petro dollar system is based on a promise.

America promises to keep the oil flowing.

If America cannot keep the oil flowing, why should anyone trust the dollar? And this directly benefits China because China has been building an alternative to the pro dollar for years.

It is called the pro-uan.

China has been negotiating with oil producing countries to sell oil in Chinese yuan instead of US dollars.

Saudi Arabia, Russia, Iran, they have all been discussing yanbased oil trade.

If the petro dollar collapses, if the world loses faith in America’s ability to protect the oil supply, then countries will start moving to yuanbased trade.

And that is an enormous shift of global financial power from America to China.

So scenario two, Iran wins, America retreats, the petro dollar weakens.

This is a massive victory for China.

Again, without firing a single shot.

Now, let me go even deeper because I want to show you that this is not just about the petro dollar.

It is also about trade routes and about the future of the global economy.

China has been building something called the Belt and Road Initiative for over a decade now.

This is the most ambitious infrastructure project in human history.

China has been building roads, railways, ports, and pipelines connecting China to Europe, to Africa, to the Middle East, and to Central Asia.

China has invested hundreds of billions of dollars in this project.

And at the center of this entire project is Iran.

Iran is the geographical pivot of the Belt and Road initiative.

For China to connect to Europe by land, it has to go through Iran.

For China to access the Persian Gulf and the Middle East by sea, it has to go through Iran.

Iran is so important to China’s belt and road that China signed a 25-year comprehensive strategic partnership with Iran in 2021.

China agreed to invest $400 billion in Iran’s economy over 25 years in exchange for guaranteed access to Iranian oil at discounted prices.

So, think about what this means.

America is bombing Iran.

America thinks it is hurting Iran.

But every bomb America drops on Iran is also a bomb dropped on China’s $400 billion investment.

China has enormous economic interest in Iran.

And China has enormous geopolitical interest in making sure that Iran survives this war and remains a functioning state that can serve as the anchor of the belt and road initiative.

This is why China is quietly supporting Iran in this war.

Not militarily, China is too smart to fight America directly, but economically, China is buying Iranian oil.

Despite American sanctions, Chinese ships continue to purchase Iranian oil through various methods.

The Iranians have found creative ways to sell their oil to China through different intermediaries, through different ships, through different payment methods.

And China continues to buy because China needs the oil and Iran needs the revenue.

And here is a fact that is truly extraordinary.

Before this war started, American sanctions meant that Iran could barely export any oil.

The Iranian economy was struggling.

But this war, this war that America started to destroy Iran has actually lifted the sanctions in practice because America had to unsanction Iranian oil to keep global oil prices from going too high.

and China immediately started buying more Iranian oil.

The Iranian oil revenue before this war was very limited.

Now Iran is making billions of dollars more per month from oil exports.

A lot of that money goes directly to China in exchange for goods and technology.

So America went to war to weaken Iran.

But the result is that Iran is now more deeply embedded in the Chinese economic system than ever before.

This is a strategic catastrophe for America and a strategic windfall for China.

Now, I want to talk about something even more important.

I want to talk about what this war is doing to the world’s trust in America because this is perhaps the most important thing China gains from this war.

Think about how countries around the world are watching this war.

Think about what they are learning.

They are learning that America will go to war based on very thin justifications.

They are learning that America will bomb civilian infrastructure, power plants, water facilities, hospitals in the name of regime change.

They are learning that American promises of protection are worthless if you are not strategically important enough.

And they are learning that American sanctions can be used against anyone at any time for any reason.

Every country in the developing world in Africa, in Southeast Asia, in Latin America, in Central Asia, is watching this and asking the same question.

Are we safe if America decides tomorrow that our government is unacceptable? Will America bomb us too? And can America protect us? Or is American protection an illusion? This fear, this loss of trust in America drives countries directly into China’s arms because China offers something different.

China’s pitch to the developing world is simple.

We will build your roads.

We will build your ports.

We will build your railways.

We will buy your resources.

And we will not bomb you.

We will not sanction you.

We will not demand that you change your government.

We will respect your sovereignty.

Now you might say, well, China has its own problems.

China has its own interests.

China is not a perfect partner.

And that is completely true.

But from the perspective of a small developing country, China looks much better than America right now.

Because America is bombing a country of 90 million people while the whole world watches.

That sends a very powerful message about what American partnership means.

And so every day this war continues, more countries quietly move towards China.

More countries start settling trade in UAN instead of dollars.

More countries sign up for the Belt and Road Initiative.

More countries join Chinese-led institutions like the Shanghai Cooperation Organization and the BRICS Economic Block.

The bricks block which stands for Brazil, Russia, India, China and South Africa has now expanded to include many more countries.

Iran itself is a member of bricks.

Saudi Arabia has been invited to join.

The UAE is being courted.

Egypt is a member.

Ethiopia is a member.

Most of the global south is either a member or wants to be a member of bricks.

And all of these countries are moving towards a world where China, not America, is the dominant economic power.

So while America is spending trillions fighting this war, China is quietly building the institutions and infrastructure of the next world order without firing a single shot.

Now I want to bring in the historical perspective because as I always say, history does not repeat itself exactly but it rhymes very loudly.

And this pattern of one rising power watching two established powers exhaust each other is not new.

This has happened before.

Let me give you the most important historical example.

It is the Pelpeneisian war from 431 B.

CE to 404 B.

CE.

This was the great war between Athens and Sparta, the two most powerful citystates in the Greek world.

Athens was the commercial, financial, and cultural center of Greece.

Sparta was the military power.

They fought each other for 27 years.

Both sides spent enormous resources.

Both sides suffered enormous casualties.

Athens, the more powerful city state at the start, was completely destroyed.

And who won? Who was the great beneficiary of this war between Athens and Sparta? Macedon, a kingdom to the north that everyone looked down on.

Philip of Macedon watched Athens and Sparta exhaust each other.

He built his power quietly.

He modernized his army.

He built his economy and when Athens and Sparta were both exhausted and weakened, Philip moved in.

And within a generation, his son Alexander the Great had conquered the entire Greek world and beyond.

This is the China pattern right now.

America is Athens, Iran is Sparta, and China is Macedon.

Watching, building, waiting.

Let me give you another example.

World War I.

From 1914 to 1918, Britain and Germany, the two dominant industrial powers of the world, went to war and destroyed each other.

Britain won technically, but Britain came out of World War I deeply in debt, its economy weakened, its empire beginning to crack.

Germany was crushed.

And who was the great beneficiary? America.

America came into the war late, avoided the worst of the casualties and emerged as the world’s leading creditor nation.

Within 30 years, America had replaced Britain as the dominant global power.

China is following exactly the same playbook.

Let the existing powers exhaust themselves.

Build your own strength quietly and then when the moment comes, step into the vacuum.

So now, let me bring this all together.

I want to show you very concretely what China is doing while this war is happening.

While America is spending billions bombing Iran, China is building.

China just completed its 15th 5-year plan.

This involved 2 years of consultation, expert committees, think tanks, leading academic specialists across the country.

It is a comprehensive serious plan for the next five years of Chinese development in technology, in manufacturing, in infrastructure, in energy, in education.

What does America have? No plan.

We discussed this before.

The American government has no five-year plan, no one-year plan, no one month plan.

Everything in Washington is improvised from morning to night.

The decision to bomb Iran was made by a handful of people with no plan beyond the initial strikes.

And when Iran fought back, when Iran did not simply surrender as expected, there was no plan B.

This tells you everything about the relative position of these two countries right now.

One country is planning decades ahead.

The other cannot plan 2 hours ahead.

And while America has no plan, China is buying up resources across the global south.

China is the largest trading partner of most African countries.

China is the largest trading partner of most Southeast Asian countries.

China is the largest trading partner of most Latin American countries.

While America was spending 2 trillion in Iraq and Afghanistan, China was building ports in Pakistan, railways in Kenya, power plants in Ethiopia, roads in Central Asia.

China was making friends.

America was making enemies.

Now, let me talk about the most concrete way China wins from this war.

Oil.

China is the world’s largest importer of oil.

China needs oil to power its factories, its cars, its cities.

And the Iran war has created a situation where China can buy oil at a discount.

Here is how.

Iran needs to sell its oil to survive.

But American sanctions make it difficult for Iran to sell to most Western countries.

So Iran sells to China at below market prices because China is one of the few buyers willing to take the risk.

This means China gets cheap oil.

Cheap energy means lower manufacturing costs.

Lower manufacturing costs means Chinese goods are more competitive in global markets.

And this comes at a time when American tariffs and trade wars are already disrupting global supply chains.

So, the Iran war is paradoxically making Chinese manufacturing more competitive.

While American businesses are struggling with higher energy costs and supply chain disruptions from the war, Chinese manufacturers are getting cheaper oil.

This is not an accident.

This is the structural reality of the current situation.

And then there is technology.

China has been cut off from American semiconductor technology by American export controls.

America thinks this will China’s technology industry.

But China has responded by massively investing in its own semiconductor industry.

China is building its own chip factories.

China is training its own engineers.

China is developing its own technology ecosystem.

And while China focuses on building its domestic technology capacity, the best engineers and scientists in the world who see America becoming more unstable, more unpredictable, more aggressive are thinking twice about whether they want to build their careers in America.

The brain drain that America once used as a weapon, attracting the best talent from around the world is beginning to reverse.

Because who wants to live in a country that is engaged in expensive, unpopular wars, where the political system is deeply dysfunctional, where the government cannot plan ahead, where inequality is growing, where the American dream is dead for most ordinary people.

China and other rising powers are the beneficiaries of this talent migration.

Quietly, slowly, but it is happening.

Okay.

So let me now talk about what this means for the future because I want to give you a framework for understanding the world that we are moving into.

We are living through a transition.

The transition from a unipolar world, a world dominated by one power, America, to a multi-polar world.

A world with several major powers competing and cooperating.

This transition is very similar to what happened at the end of the British Empire in the early 20th century.

And in this transition, China is positioning itself as the leading alternative to American dominance.

Not by fighting America, not by challenging America militarily, but by demonstrating that it offers a better deal to most of the world.

Better trade terms, better infrastructure investment, better respect for sovereignty, and better long-term strategic planning.

The Iran war is accelerating this transition dramatically because it is making America look exactly like what it is becoming.

An empire in decline, lashing out desperately, spending money it does not have, fighting wars it cannot win, with no plan and no vision for the future.

And every day this continues, China’s relative position in the world improves.

Not because China is doing anything dramatic, but because America is destroying its own credibility, its own finances, its own alliances, and its own reputation, one bomb at a time.

So when we ask the question, who wins this war? The answer is not America.

And the answer is not Iran.

Even if Iran survives, the answer is China.

Because China is the only country that benefits regardless of how this war ends.

If America wins, China has a weaker, more financially exhausted America to deal with.

If Iran wins, or more precisely, if America fails, then the petro dollar weakens, the belt and road gains strength, and the world moves faster towards a multi-polar order with China at the center.

This is not luck.

This is not accident.

This is strategy.

Ancient Chinese strategy, the strategy of SunSu.

The greatest victory is to win without fighting.

And so I want to leave you with this thought.

The most important geopolitical actor in this Iran war is not America.

It is not Iran.

It is not Israel.

It is China.

The country that is not fighting at all.

Remember this.

In history, it is rarely the countries that fight the biggest battles that win the biggest prizes.

It is the countries that are patient enough, smart enough, and disciplined enough to let others exhaust themselves and then position themselves for what comes next.

America is fighting this war.

Iran is surviving this war.

And China is winning this war.

Okay, I think that is enough for today.

Was this interesting? Good.

Was this clear? Good.