GOOD MORNING FROM LONDON
20 OCTOBER 2026. CHINA POST #643
CHINA AND THE FOREIGN MEDIA
———————————–
TOPICS TO BE ADDRESED
- CHINA – THE MACRO AND THE MICRO
- CHINA AND GENERATIONAL WEALTH
- ROBOTICS AND POPULATION DECLINE
- UKRAINE – IS THE WEST WINNING OR LOSING?
- CHINA’S ECONOMIC GROWTH TODAY
——————————–
#1 THE MACRO AND THE MICRO
GRAHAM PERRY
When viewing China, it is always recommended to be strategic and tactical at one and the same time. Always see the big picture; the ebb and the flow; the pluses and the minuses; the strengths and the weaknesses.
To be sure China adopts this approach; a meeting of the Standing Committee of the Politburo has a study session before they get down to business. It maybe Mao or Marx or Lenin or even Harvard Business Strategists. The Chinese approach is methodical, analytical and a blend of the Macro and the Micro.
And the absolute priority? Know your opponent. Know the make-up of the opponent’s strong points and their weak points. Otherwise, you are vulnerable. Deceiving Yourself is Hastening Your Defeat.
People tend to be one sided and see just the good or just the bad. China is a mix. Some things are wrong and should not be overlooked – The Property Sector and Youth Unemployment. But, by the same token, some things are good – Exports and Robotics – and they should get the attention they deserve. So, two qualities are suggested;-
- Eyes Wide Open – this depends on how open-minded you are. It’s up to you. A famous historian of the 20th Century, E.H. Carr, advised “Know the Historian before you study his/her History”. What is the inclination of the writer? Does he/she have a prejudice? Are they partial or objective? Have you prepared your head for the perspective that requires your analysis?
- Spread Yourself Wide – there is considerable daily information available about China. The FT, the South China Morning Post, and Nikkei Asia. There is also the Wall Street Journal and the New York Times. UK publications have been found by the Lau Institute of Hong Kong to be low down the list of objective reporting but occasionally carry a relevant insight – but not too often. The U.S. publication Foreign Affairs is also recommended.
With China, people tend to have prejudices that they allow to get in the way of balanced and objective assessment. Objectivity is so valued but so elusive. And Subjectivity? Avoid it – Big Time. It is destructive. Your prejudice cannot be allowed to obstruct your intellect.
——————————————-
#2 CHINESE PRIVATE WEALTH OVERSEAS
NIKKEI ASIA
“Since China began to clamp down on assets being moved overseas and overhaul its tax rules on offshore trusts, the reverberations have not only been felt among the nation’s wealthy. The new regulations are also making waves 4,500 kilometers from Beijing in Singapore, Southeast Asia’s financial hub.
Singaporean banks have long been suitors for Chinese wealth and the city-state had become a popular location for rich Chinese to set up single family offices, or SFOs, asset management organizations that steward fortunes of high-net-worth individuals and their kin.
In May of this year, China moved to stem illicit stock trading on overseas brokerage platforms, erecting a barrier for its citizens to invest in foreign equities. Its overhaul in July of tax rules on offshore trusts stoked unease about a crucial wealth-planning tool for the country’s high-net-worth individuals who want money managed overseas, and cast uncertainty over the strategy of building trusts in non-Chinese jurisdictions like Singapore.
GRAHAM PERRY COMMENTS;-
The issue is not so much about the strategies adopted by China’s Billionaires to protect their wealth by paying big professional fees to accountants and tax advisers. There is a bigger issue – Power. Looking ahead 40/50 years will the Party control the Billionaires or will the Billionaires control the Party ?
We all know that Xi took on Jack Ma and won. The Beijing Oligarchs failed in 2022 where the Soviet Oligarchs had succeeded in 1991. And the prize? The future direction of Chinese Society – even Chinese Socialism. It remains in the hands of the Party.
Don’t misunderstand me, it was a wise and far-sighted move by the Party to give the Billionaires the freedom to make money, to develop the economy and to help Xi and the Party to bring prosperity to China.
Xi had observed a Head-To-Toe examination of the Soviet failure led the Chinese Party to two main conclusions;- first, the Party had to stay clean, political and in charge – hence the constant anti-corruption campaigns. Second, the economy had to allow more power to the Provinces – there was a role for centralisation but there was also a role for decentralisation. Some problems here and there – but in the main Xi’s approach has succeeded. Prosperity is increasing.
But there is a ‘But’. Are the Billionaires playing a long game? Are they biding their time until they are ready to challenge the power of the Party – even to the extent of becoming the new power base of China? It raises big questions. Whose hands will be on the levers of power?
Xi is strong. The Party is strong. But that is today. What about tomorrow? And here tax planning and holding profits overseas and paying advisers large sums to ring fence accumulated profits are looming large in the future. Is there a danger that the Billionaires will have too much freedom to store their wealth believing that – in the years ahead – the Party might soften its attitude to them and allow the rich Capitalists entry into the citadels of power? Will the Party bend?
Xi has warned many times that the Party must stay in control but are the Billionaires merely nodding in agreement today in order to be able them to strike tomorrow?
——————————
CHINA’S ROBOTICS TARGET
FOREIGN AFFAIRS
“China’s robotics achievements have become central to its evolving national AI strategy. Whereas Washington and Silicon Valley focus primarily on scaling large language models and digital AI applications, Beijing is concentrating on combining its strengths in software and hardware to develop robots that incorporate the advanced cognition of AI with autonomous physical movement. These robots, often described in China as “embodied AI,” could eventually operate factories, perform manual labor, (added GP) and even replace human soldiers on the battlefield.
If AI-powered robots develop enough autonomy to carry out sophisticated tasks in the real world, they could become a general-purpose technology, like electricity or the Internet, that is able to transform physical work across broad swaths of the economy.”
GRAHAM PERRY COMMENTS;-
Where China is concerned, we often read about two topics; both big but separate and not linked in public discourse. They are these; China is facing a declining population; China is also experiencing rapid development in AI and Robotics. Question? – Are machines being prepared to take over an ever-increasing share of jobs presently carried out by people and, if so, has this entered into Chinese calculations about its optimum population size?
Considering population figures, Chinese women are giving more thinking time to careers, individual fulfilment and academic achievement. They also benefit from improved birth control options. Norms are changing – here in the UK as well as China – about the place of women in the work force going forward. It is impacting on reduced birth rates and an ageing population.
Side by side, is it the case – like the Luddites in the UK after the Napoleonic War – that the people will see increasing mechanisation of industry as the cause of growing unemployment? And does this impact upon China’s State planning about the birth rate most suited to an economy increasingly inextricably interlinked with robotics and artificial intelligence?
A separate topic re women. What is the explanation for the constant absence of women from the most senior positions in the Party? The point is made every time the all-male Standing Committee of the Politburo makes its way – in line one by one – to their allocated seats in the Great Hall. There has to be a reason, But, what is it? Prejudice? Protection of Male Power? And for how long will the Women of China be content to be unequal?
—————————–
THE UKRAINE WAR
THE WEST IS RUNNING OUT OF IDEAS
THE FINANCIAL TIMES
“Russian activity should be understood as a pattern, not isolated incidents. It needs a new forum of allies to co-ordinate a response, using both Nato and EU structures.
A united response could include creating joint counter-drone units, expanding protection of subsea cables, conducting joint exercises in maintaining critical infrastructure and creating a grey zone response centre for allied co-ordination. The shooting down of drones and missiles over western Ukraine should be an option. And proposals from Poland and Estonia to restrict access around Europe for Russian diplomats and tourists should be adopted.
Trump dreams of deals and will become ever more erratic. Putin has a strategy and it is centred on this winter. Europe, including Britain, needs to prepare to defend itself.”
GRAHAM PERRY COMMENTS;-
Is NATO losing the Ukraine War? Four years on and the momentum is with Russia not Ukraine. And yet the Western media continues to inform us that Russia is on its knees with unacceptably high levels of deaths and casualties. Maybe Russia is hurting but is it losing? Is it retreating?
West European leaders meet regularly; they visit Ukraine; they promise to fight to the last Ukrainian; they supply more weapons. Zelenskyy demands the latest technology. And more Ukrainians die. The Russians can be defeated – so they say. But the losses mount. The body bags rise. Ukrainians not Europeans.
There is another point;- And here I am indebted to the right wing American political theorist – John Mearsheimer, a hard-nosed US patriot, with a strong independent streak when it comes to assessing the right and wrong direction of Trump’s foreign policy.
Briefly, Western observers such as Jonathan Freedland view the Ukraine War as a fight between Western democracy and Russian authoritarianism. The thinking goes like this;- Russia is expansionist and is a threat to the West; Ukraine today, the Baltic tomorrow. Russia must be stopped because the threat to Western Democracy is head-on.
Wrong says Mearsheimer. Russia’s approach to Ukraine is conditioned by Napoleon’s invasion of Russia in 1812, Winston Churchill’s intervention on the side of White Russia in 1918 and Hitler’s invasion of the USSR in 1941.
People today are familiar with the failure of Napoleon and Hitler but know less about Churchill’s strong advocacy for British and Allied military intervention to support the White Russian forces against Lenin’s Bolshevik Red Army during the Russian Civil War (1918–1920). Churchill was Secretary of State for War in 1919. He viewed communism as a mortal threat to European civilization and famously described it as the “foul baboonery of Bolshevism“. Under his leadership Britain provided weapons, supplies, and naval support to White Russian commanders – Admiral Kolchak in Siberia and General Denikin in Southern Russia. Churchill’s push for a major crusade against Bolshevism was opposed by Prime Minister David Lloyd George (who preferred trade) and international allies like US President Woodrow Wilson. Facing waning public will, heavy war weariness, and declining troop morale, Britain withdrew its remaining military personnel from Russia by March 1920, leaving the White armies to collapse. But Russians have long memories even if the Churchill episode is sandwiched in between Napoleon’s invasion in the 19th Century and Hitler’s invasion in the 20th Century.
The three events – Napoleon, Churchill and Hitler – have given the Russians a mindset which was revived by the events in Europe after the fall of the USSR in 1991. “Not An Inch More” became the rallying call of the Yeltsin Government and its successors as NATO grew from six countries in 1991 to 32 countries in 2025. Russia saw itself as being increasingly surrounded. And the issue sharpened when NATO pressed to allow Ukraine to join the organisation – placing NATO on Russia’s border.
The West dismisses the Russian narrative as a cover for Soviet expansionism and there are echoes here of 1945 when the U.S. argued that the USSR needed the buffer states of Eastern Europe – Poland, Czechoslovakia, East Germany, Bulgaria and Hungary – as a base from which to launch an invasion of Western Europe. This misconceived U.S. narrative was discredited in a widely applauded book by a right -wing British journalist, Andrew Alexander, in a book published in 2011 entitled “America and the Imperialism of Ignorance.” The USSR in 1945 was too weak, emaciated and exhausted to consider any intrusion into W Europe.
The most important skill in warfare and politics is To Know Your Opponent. Be dispassionate, objective and cool and ensure that you have properly read and understand your opponent’s intentions. The most important word is “objective”. Be clear-headed, detached and analytical and not impetuous, subjective and angry. It has taken four years for the Russians to secure a modest intervention into Ukraine – the idea that for Russia it is Kyiv today and Brussels tomorrow is quite fanciful.
GRAHAM PERRY
———————————
CHINA’S ECONOMIC GROWTH
THE FINANCIAL TIMES
“China’s economic growth picked up pace in the third quarter, as rapidly expanding exports supercharged by the AI boom offset weak retail spending and investment. For the nine months of the year to September, growth was 4.6 per cent, the National Bureau of Statistics reported on Monday, thanks to a stronger rate in the first quarter. China’s official full-year growth target is 4.5-5.0 per cent. “This will likely keep the year’s growth target on track,” said Lynn Song, chief economist for greater China at ING.
Mao Shengyong, deputy director of the NBS, noted that, while the third-quarter growth rate was among China’s lowest in decades apart from the Covid-19 pandemic, it was one of the strongest among the world’s largest economies. He said this came despite a “complex and constantly changing” international environment and “insufficient domestic demand”, adding: “The foundation for stable and improving economic performance still needs to be consolidated.”
China’s leadership is grappling with a two-speed economy, with the AI boom and investment in high-tech industries and manufacturing driving strong exports while a prolonged property sector slump has undermined domestic demand.”
GRAHAM PERRY COMMENTS;-
China’s critics will continue with their decade long narrative that China is in serious difficulty. They have been predicting the downfall of the Communist Party government ever since 1949 and they have been wrong every year. We – China Positives – should not, however, conclude that all is well and plan sailing in China. Administering a Top Two World Economy is a big challenge which faces China ahead. But its record is good. Its government has no illusions about the future but the prevailing attitude throughout China is “We Are On The Front Foot.”. And ask yourself the question – where do you think China is likely to be in 2046?
GRAHAM PERRY
