Does China look at Russia’s war as good?


Will China turn to war as fiscal stimulus to occupy idle hands? TS Lombard with the note.

With other exits from China’s balance sheet squeeze variously discussed above, the outside prospect of military linked fiscal response is also worth considering. Christopher Granville director of Geopolitical research notes that until recently, the standard debate about the chances of China deciding to invade Taiwan in the present decade has hinged on political arguments.

Taking relative economic decline as a given, such risk assessments focus on the temptation of foreign military adventures as a way of reversing – through nationalist fervour – the damage caused by the ailing economy to the legitimacy of the Communist Party’s rule. This kind of analysis is flipped around by the injection of economic reasoning. The idea here, runs that the attraction for China of going to war may not merely distract from economic setbacks but cure them.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.