Recently I’ve found myself thinking a lot about the role of aesthetics and beauty in politics. And I have come to the conclusion that aesthetics has always been a central political matter.

Aesthetics in political contexts is often regarded as a frivolous indulgence. A political movement that not only has good aesthetics, but that talks and cares about beauty is usually criticized as superficial.

We live in an era where beauty as a political concept has become relegated to the margins, dismissed as superfluous decoration, when not directly attacked. However, the negation of beauty is nothing less than a civilizational crisis.

Here when I speak of aesthetic beauty, I do not mean the continuous slop of seemingly beautiful images and videos that bombard us in social media. That is just inert beauty that we forget the moment we scroll past them.

The vitality of powerful aesthetics emerges from the harmonious integration of form with purpose. Beauty speaks to something deep within ourselves, a fundamental need for meaning and a spiritual connection to the eternal. When we encounter true beauty we witness life expressing its fullest potential, as God’s gift.

Beauty is indeed the most common connection that humans can have with the eternal, and the fear of losing such connection, is what makes us inherently value and to be attracted to powerful aesthetics.

I believe that post-modern artists are right when they say that defying the rules of aesthetic beauty always provokes a reaction in the observer. However, ugliness rarely provokes inspiration for a higher calling. That is something only beauty can do.

More often the natural response when faced with the grotesque is repulsion, and even the immediate desire to expunge it from Earth or put as much distance from it as possible.

True aesthetic beauty must always be a call for greatness. A beautiful body reflects inner vitality, or at least the potential for it. When we walk down the streets of a beautiful city, we sense that—if not in the present, then at some point in history—that city was inhabited by a people with an expansive spirit, who could give form to their highest aspirations in their environment. And thus beauty generates in us the desire to imitate and embody such a state of mind in our own pursuit of greatness.

With this perspective in mind, we can understand that aesthetics, far from being a mere matter of taste, is a fundamental way of engaging with existence. Aesthetics is a lens through which we assess the value not just of physical forms, but of entire ways of life.

This means that beauty is not an ornament to human life, it is not only a pleasant enjoyment, but life's highest expression, and thus the pursuit of beauty is a political goal in its own right.

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The lesson here is that beauty is a vital political goal, not a luxury reserved for prosperous times, but rather the precondition for creating prosperity worth having.

Today the pursuit of beauty has become an act of political defiance. We inhabit a world increasingly characterized by what might be called aesthetic poverty.

Ugly functionalist buildings, language stripped of flavour, degraded public spaces, unhealthy and unharmonious bodies. All together generates an environment that starves the soul.

This systematic uglification is not an accident. It reflects deeper currents of technocratic, managerial and utilitarian thinking that reduces human experience to its lowest end. It is a way to separate us from the eternal.

Schools of thought obsessed with equality have always waged a war against beauty, because beauty is inherently unequal. And that is what makes it special. Some are born with natural beauty, and apart from a few exceptions, to maintain it and to cultivate it demands great efforts.

That's why the proponents of the Great Flattening have found in imposing the cult of grotesque aesthetics the only way to suppress the natural human attraction towards beauty.

Against this scenario, creating and defending beauty becomes an inherently political decision. It represents a refusal to accept that human life should be ruled by the tyranny of the mediocrity of aesthetics of subsistence.

Even if today the movement has been largely obscured, early 20th-century Catalan Noucentisme understood the connection between aesthetics and politics with remarkable clarity.

The whole idea of Catalan Noucentisme was aimed at integrating reason and life through classical values and the concept of beauty. For its philosopher-in-chief, Eugeni d'Ors, it was clear that the cultivation of beauty was inseparable from the assertion of Catalan greatness.

The Noucentists understood that a people's capacity to take the reins of its own destiny must be demonstrated through their ability to create lasting beauty.

All of this comes down to the fundamental question: if your politics cannot create beauty, then why should we follow you?

However, not all of those who today claim to oppose the managed decay of the West truly understand the political importance of aesthetics, even if they do realize the importance of defending beauty.

Without an aesthetic dimension, human communities lose their capacity to inspire loyalty, to transmit values across generations, and to justify the sacrifices that meaningful collective projects require.

In the present moment, to reclaim beauty is not to frivolously escape from political reality, but to reclaim the foundation of politics itself.

Losing is not something I'd recommend to anyone. But losing is as much a part of life as winning.

Even if we have a track record where victories outnumber defeats, the human psyche and the way the business of power is set up means that those defeats—and how we handle them—are what will really define us in most cases.

So, because we are going to eventually face defeats, it's important to learn how to lose well, so that defeat does not become permanent. That is something I learned during the failed attempt at independence in Catalonia in 2017, where its leadership, from all the different options they had for losing, chose the worst one—one from which the independence movement may never recover.

There are many who throw away their careers after, for example, a surprisingly good electoral result by a new and young candidate that is just not enough to win an election or secure a seat. Instead of turning what is objectively a difficult achievement into a solid foundation for a future political victory, they can't be patient.

They do not understand that miraculous meteoric victories are called miraculous for a reason. That way they often waste the political capital gained, blaming the electorate for not being smart enough to support them, quitting from the public eye, and allowing the defeat to stop their political activity entirely.

There are, however, also many stories of the opposite, where a charismatic leader knows how to turn a defeat into the foundation of an enduring victory. The one that has captivated me most since I learned about it in Tobias Harris's The Iconoclast is Shinzo Abe's historic comeback in 2012, after his abrupt resignation in 2007—you can follow Harris’ Substack in Observing Japan.

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Shinzo Abe first took office as Japan's Prime Minister in September 2006, but just one year into his term he presented his letter of resignation. He had been dealing with an unending list of challenges since he took office.

His administration was simultaneously rocked by political and corruption accusations, including his Agriculture Minister's suicide amid corruption allegations, and a difficult economic situation.

Despite the political scandals, Abe was ultimately defeated by his own body. His ulcerative colitis had deteriorated, especially during a tour he took around Southeast Asia, making carrying on with his duties increasingly difficult.

This might have been what hit him hardest, and what could have demoralized anyone in his position more than anything else. It wasn't some bad decision or an external event of force majeure, but his own physical weakness.

The bad results of the Liberal Democratic Party in the upper house elections that same year delivered the final blow to Abe, severely constraining his ability to govern effectively, which prompted his resignation.

Rather than accepting going down in history as one of the shortest-lived Japanese PMs, Abe approached his setback in the most strategically savvy way possible. He used the time to rebuild his body, his party, educate himself, and keep up the cultural war his opponents in the party didn't want to wage.

Lesson. Defeats are inevitable, but becoming a loser is a choice. A leader who treats setbacks as opportunities for growth can turn them into the foundation of future victories.

Abe first prioritized his health, adopting new medication that successfully managed his condition. That was not only important because without a healthy body he couldn't govern, but also because the leader of a nation cannot be a sick man. Abe understood that a leader is the physical embodiment of a nation, and his health is a reflection of the health of the nation itself.

During his years in the political wilderness, Shinzo Abe methodically rebuilt his support network through a meticulous grassroots approach.

He focused on regaining support from the Liberal Democratic Party's conservative and nationalist factions, which had been disappointed by his first resignation, traveling across Japan to meet regional LDP chapters, business leaders, and right-wing interest groups to reassure them of his commitment to their agenda.

Working closely with younger LDP politicians, he positioned himself as a mentor who could guide Japan through economic and geopolitical challenges. He used his long-standing ties with right-wing intellectuals and media figures who helped promote his ideas to conservative voters, becoming increasingly vocal about historical revisionism and the need for Japan to recover its national pride.

His strategy extended beyond internal party politics to direct engagement with the public, as he traveled extensively to rural and suburban areas where LDP support had weakened under the Democratic Party of Japan government.

Abe held town hall-style meetings, where he listened to local grievances about the struggling economy, security concerns, and dissatisfaction with the then-ruling DPJ. This way Abe built personal connections with voters who had felt abandoned by the political establishment—laying the groundwork for his triumphant return to power in 2012.

Most significantly, Abe used this period to develop "Abenomics," the economic strategy that would define his second administration. He attributed many of the problems of his first administration to his lack of knowledge of economic policy, and he made sure that he wouldn't be facing the same problem again.

He crafted an economic vision combining monetary easing, fiscal stimulus, and structural reforms while refining his positions on national security and constitutional revision. When public opinion turned against the DPJ over economic stagnation and perceived weaknesses on the international front, Abe was ready to offer the alternatives the country needed.

Not only was it important that Abe used his time outside office to rebuild his political figure, but also how he integrated his present and promise of future with his previous failure.

While he acknowledged mistakes and expressed regret for his abrupt departure, he focused primarily on demonstrating growth as a leader rather than on apologizing. He redirected the public's attention from his past mistakes to Japan's future challenges, positioning himself as the only one qualified to address them.

When he secured the LDP leadership again in September 2012 and subsequently won the general election that December, Abe returned not as a politician seeking a second chance but as a transformed leader with clear direction and purpose.

His second term would ultimately span nearly eight years, during which he implemented significant economic reforms and elevated Japan's global diplomatic presence.

Abe's journey teaches us that political defeat—even when compounded by personal health challenges—need not be definitive. His strategic use of time away from power allowed for genuine renewal: physically, intellectually, and politically.

Rather than rushing back prematurely, he ensured his return was supported by a renewed power base, with strengthened policy ideas, political alliances, and improved personal and physical capacity.

Abe's comeback shows that how we respond to setbacks often determines our legacy more than our initial success. By treating his defeat as an opportunity for personal transformation rather than dragging himself down, Abe transformed what could have been a footnote in Japanese political history into a launching pad for one of its most important administrations in decades.

Abe's story reminds us that true resilience is not merely about mere survival, but about strategically extracting lessons from our failures and having the patience to prepare thoroughly for a historic second act.

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If the higher man must remake himself, the same logic applies to civilizations. The drive for transformation scales upward.

Change always involves the same essential choice: what deserves to survive and what must be abandoned. National overcoming requires grounding in something more fundamental than shifting circumstances: a fundamental inner truth. 

Every great polity has been built upon the transformative will of those who seized power and imposed their vision—not through building a democratic  consensus concerned only with the greatest good for the greatest number. 

Sometimes those visions are forgotten, or the stories told about them miss their deeper meaning. This is why real change often starts with going back to the origins.

Great powers honor their tradition but are not obsessed with preserving it for its own sake, or managing decline with nicer language. The ones who prevail are those with the courage to burn away what has become exhausted and decadent within themselves. 

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But this doesn't mean believing in aimless change or rejecting foundational truths. On the contrary: real change is only possible when rooted in strong, eternal principles. Heraclitus said that we never step into the same river twice—but we step into a river nonetheless. 

Only by distilling what essential inner truth and distinguishing it from circumstantial decisions can a people transform itself in ways that unleash its deeper energies, instead of tearing itself apart or becoming a deracinated faceless mass.

One of the most transformative decisions that a people, can take is indeed, a turn to become a sea state power. 

Since humans are land creatures by nature, no people is born to the sea. They must make a fundamental choice to embrace it, which is why maritime powers tend to always embody such powerful vitalist energy. 

Venice began as a Byzantine outpost on the edge of empire, but broke decisively from dependency to carve out a maritime republic that claimed the legacy of both Rome and classical Greece. Yet even as it built its own empire, it never ceased to honor its Roman-Byzantine roots.

England, was once a land of sheep-farming islanders with little naval tradition, made a fundamental decision for the sea and through centuries of ambition and adaptation rose to become the greatest sea power the world has ever seen.  But beneath the sails, England preserved a distinct identity anchored in the ethos of its freeholding rural gentry.

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Lesson. If a nation stops reaching beyond itself, it will forfeit its reason for being. A culture that fears expansive change will collapse into ritual and repetition. A state that denies any higher purpose will collapse into mere technical administration.

What matters the most here is timing. A polis needs to understand when the moment has come to be willing to cut what no longer serves its life. 

Nations and civilizations decay just like individuals do. They get scared of their own potential. They settle into rituals, into habit, into fear. And once a nation believes its best days are behind it, once it decides it has nothing left to grow into, it starts to rot from within. We know this is true because that is what the West has been experiencing for decades now. 

But here lies the paradoxical illness of our time. The liberal managerial state has institutionalized surface-level transformation as a way to protect real power structures.. 

We live under an ideological regime that glorifies constant change—fluid identities, shifting norms, redefined values—yet behind this performative dynamism lies a decision not to change anything fundamental. 

Real transformation, whether personal or societal, requires rupture. And rupture threatens those whose power depends on managed continuity and decline. This is why genuine change gets displaced by spectacle. 

However, a polis that no longer believes it must become something greater turns inward and eventually against itself. It will begin to question even its right of existence, and others will do to.

No state lasts without a reason to keep going. No culture survives if it stops asking what it’s meant to become. Without that drive, all that’s left is bureaucracy, repetition, and rotten flesh. 

This is why we must reject the idea that any era of meaningful greatness belongs to the past—that we've reached the horizon's end for our people or civilization. The very notion of the End of History is a selfish lie told by a narcissistic generation.

To accept this is to strip ourselves of any purpose that could echo in eternity.

The truth is that the world will always exist not as a finished sculpture but as perpetual work in progress, shaped by our decisions. Great artists keep working until they die, often leaving unfinished works behind. This isn't tragedy but testament to their strength. Their refusal to be "completed" becomes their power to leave a legacy others must continue. That is the example we should follow.

I first learned about Simon Mann about a decade ago when I was in college, doing research on private security and private military contractors. Simon Mann passed away on May 8th—an adventurer and a mercenary, a rare figure in our times.

I still remember watching a documentary—though I’ve sadly forgotten the name—about Executive Outcomes and being glued to the screen, fascinated that a story like that could be real in our age.

For those unfamiliar, Executive Outcomes was a private military company founded in South Africa that participated in multiple conflicts across Africa, particularly in Angola and Sierra Leone during the 1990s. Unlike other private security firms that mostly provided logistical support or guarded installations, Executive Outcomes took on full-scale combat missions, reconquering territories and stabilizing governments that had nearly collapsed.

I came across Mann again through the interview Ash Milton did with him for Palladium in 2023. Both Mann’s interview and my article about the Mirage of European Sovereignty were featured in Palladium Magazine Volume 9.

I keep the physical copy on my living room and often find myself revisiting that interview because there's something deeply compelling and motivating in Mann's words. When I learned of his death, I immediately grab the magazine re-read the piece.

Swords for hire are as old as war itself, but they have always carried a tarnished reputation. It’s not my intention to change anyone's mind about them—whatever opinion you may hold.

Yet, they have always been objects of romanticism—I recently spoke about the Almogàvers as an example. Because despite narratives of mercenaries often veer toward the tragic or the grim, but there is another side to that coin, adventure, risk, and the raw pursuit of opportunity. 

Mann embodied that spirit, and that is what I find inspiring.

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From the excellent interview that Ash conducted with him, Mann's answer to the closing question offers a key lesson we can extract from his life:

"It seems like history gives us these periods when a lot of people all seem to do interesting things. Today, it seems like there is a kind of pessimism everywhere, and in the UK especially. It seems to be declining. Is pessimism warranted?

"I don’t think it’s true. I think that the real stuff is going on all the time. And it’s just a question of which lens you use. I very, very clearly remember Tony Buckingham—my friend and one of the big players in this whole story—saying to me, 'God, Simon, it would be so much better if we could have been Elizabethans. We could have been pirates! We could have sailed the seven seas, we could have been catching Spanish treasure ships!'

And I said, 'No, no, no, Tony, don’t think that way.' Because the opportunities are out there. Obviously, it’s not going to be a sailing boat and a Spanish treasure ship. But it’s going to be something. It’s there. We have to be ready to grab it when it comes. I think the opportunities are always there."

I think he's right, and his words serve as a powerful antidote to nihilism and Decadentism. Yes, there are many things we can criticize about our era, and our age certainly has its faults. But in truth, this could be said of any period in history.

No matter where we look in history, if there were eyes to bear witness, we would always find inspiring stories of adventure and heroism, proof that those who have a spirit strong enough can always find their way.

The lesson: Golden Ages do not simply descend upon us through the works of others. They are actively shaped by our own choices and actions.

The only difference between a Golden Age and a Dark Age but the vision and actions of those who inhabit it. Borrowing from Mann’s own metaphor, even in the darkest times, there have been those who have found their ship full of gold. 

Of course, that does not mean that everyone can, should, or even will—despite their desires—become a mercenary like Simon Mann. And he was pretty clear about it: "You can’t just become a mercenary. You have to be a soldier first."

But perhaps many more should be open to pursuing life paths that entail greater risks and adventures than merely filling spreadsheets.

Sometimes people with relatively uneventful professional lives, when confronted with stories like Mann's, may react with a mix of distaste, envy, or even resentment. But there's something valuable in knowing that people like Mann still exist, even if we may never follow in their footsteps.

Knowing that there are still individuals living lives of adventure, braving the unknown, and seeking fortune where most wouldn't dare to look brightens the dullness of everyday existence.

Their existence proves that in our increasingly sanitized world there are frontiers that remain to be crossed and meaningful risks to be taken.

Even if such paths seem unlikely or unadvisable for the many, it's worth celebrating that this spirit of adventure persists. It demonstrates that even in our own small way, we too can carve paths toward discovery and opportunity.

It will always be better to live a life that knows that hope and adventure are not merely relics of the past but exciting possibilities in the present.

The lesson that Mann's life teaches us is that Golden Ages do not simply descend upon us through the works of others—they are actively shaped by our own choices and actions. And no matter how settled or chaotic the world may seem, "opportunities are always out there."

Glory manifests not only in the creative act of wealth acquisition, but in the deeper transformation of being itself. What unites both ends is their shared foundation: the refusal to accept a present limitation as final, and the embrace of power as the highest expression of human potential.

The higher individual begins from the same foundation as others—sharing common human experiences and societal conditions. Yet what distinguishes such a person is their capacity to transcend these origins.

This separation represents an existential imperative: to break away from conventional limitations and inherited values in order to realize one's unique nature. Not to escape the world, but to remake it. The journey isn't motivated by contempt for common conditions, but by the vital force that cannot be contained within them.

One of the most successful narratives throughout history is the story of someone rising from rock bottom to a new, often magnificent life—even today, most bestselling self-help books revolve around this arc.

It resonates because it’s a story as old as humanity. It is the eternal path of the awakened prophet: Buddha, from a good-for-nothing prince to an enlightened being, or Abraham, a settled man in Ur, embedded in his father's household and culture that breaks with everything to become the founding patriarch of a new people.

Or the path of the convert—like Saint Paul, who turned on the road to Damascus after viciously persecuting Christians, or Saint Augustine, who moved from hedonism to Christian theology.

Even prophets against all prophets follow this path. Leo Séra, in his study of vitalism, makes an argument about Nietzsche that is rarely raised: Nietzsche is compelling not because he claimed to have become the Superman he praised – he always said that it is a figure that is yet to come – but because he embarked on the journey to become one.

This can be seen throughout his works, in the way he becomes more confident and embraces the totality of his ideas with each new volume. His readers are invited not just to admire his conclusions but to witness, and potentially mirror, his transformation.

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Lesson: True greatness requires radical transformation, not inherited status, but the will to become something beyond the given.

Awakened prophets and converts possess a unique advantage: they speak the language of both worlds. They know intimately what seekers are trying to leave behind, because they once inhabited that world. They’ve wrestled with the same doubts and confronted the same void.

To a certain extent, any personal transformation that aims toward higher ends is a struggle against a former self. This struggle requires strength—the will to overcome what one has been.

It also explains the excesses of what’s called the “zeal of the convert”: the transformed individual has tasted both slavery and freedom and knows, with the certainty of lived experience, which he prefers. He has little patience for the person he used to be.

The elevated man recognizes that his former state was not simply different but weaker—less capable of imposing his will upon reality. His new state is not merely alternative, but superior in its capacity to affect the world.

What makes the higher man powerful is precisely the pathos of distance he creates. He has established within himself a hierarchy of values not based on inherited morality but on the evidence of his own becoming.

We listen to stories of personal change not because we admire where the hero ended up, but because we relate to the fight they endured. They’ve vanquished their former selves—just as we are trying to do.

That is what makes them charismatic leaders. They don’t merely point to a destination—they embody the journey itself. They show that transformation is not only possible, but necessary.

It is indeed an aristocratic privilege to create meaning not only for oneself, but for others who lack the strength to do so. The heroic transformation becomes a map, a myth, and a challenge to those who remain.

The higher man does not seek comfort. He seeks force, order, and the freedom to rise above. He separates himself not to escape the world, but to shape it.

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Throughout history, the surest sign of a civilization's decline has been its transformation from celebrating wealth to condemning it.

The West today has grown deeply distrustful of private accumulation of wealth – "something in which Xi Jinping's China seems to be converging.

This perspective can be difficult to grasp because our society appears obsessed with acquiring wealth—or rather, with what wealth can buy.

Yet this fixation stems not from admiration but from the anxiety of perceived deprivation, a fear of missing out fueling a mainstream narrative built on resentment. Wealth is consistently portrayed as something tainted, a source of guilt that must be confronted rather than celebrated.

That younger cohorts only see opulent consumption through the often tacky lifestyle of influencers and celebrities of questionable renown helps to reinforce that view.

Through social media, we often see displays of exuberant consumption more than of wealth itself—related but distinct phenomena. Consumption is immediate; wealth implies some sort of permanence.

But we find a rhetoric of opposition to wealth also permeating all official government and cultural institutions. 

After the Trump-Musk alliance took form, we find their opponents embracing a quasi-socialistic attitude against the influence of "the rich" in politics—as if the influence of wealth in politics began in 2024.

We can even find a discourse of distrust for wealth coming from the most unexpected corners. 

The EU administrator-in-chief, Ursula von der Leyen, has shamelessly said that in the EU "we don't have bros or oligarchs making the rules," as if it weren't commonly known the extensive networks of lobbyists operating in Brussels – or her own considerable private wealth.

Despite the fact that the pursuit of material success is in theory the foundation of Western capitalist societies, in the West, the distrust of wealth has become hegemonic in cultural discourse since the sixties and has become part of the mainstream since the Financial Crisis of 2007 and the 2020 pandemic—a distrust that is more acute in Europe than in America, but that has also taken hold in the U.S. more than I as a European would have ever imagined.

For the past decade or so, this contrasted with the vibe in China, where the praise of wealth had become a defining feature of the Reform and Opening Up era.

However, the mood shifted when Xi Jinping took office. The explosive growth of the Reform era gave way to more moderate economic conditions, social mobility froze, and the middle class began demanding corrections to the inequalities that had emerged during the reform period.

This shift culminated during and after Covid with Xi's crackdown on tech, his push for 'common prosperity,' and a growing social backlash against ostentatious displays of wealth.

The transition from an economy of limitless opportunity to one of structural limits has transformed how developed consumer societies view wealth accumulation - from a symbol of national progress to a source of social tension. China had caught up with the West again.

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Lesson: Societies flourish when wealth is seen as a virtuous pursuit tied to creative power, and decline when wealth is treated with suspicion and resentment.

This convergence of attitudes against wealth led me to reconsider Deng Xiaoping's famous quote "To get rich is glorious" (致富光荣). Though he may never have said it, the phrase became popular because it captures the spirit of his era. And for what it is worth, it is as if Deng said it, if not the real, the mythical Deng that history will remember.

I may have read this quote hundreds of times, however until now I never stopped to think about why it is so powerful. Deng's phrase is not "to be rich is good" but "to get rich is glorious." 

To "get rich," instead of "to be rich," shows a goal, a horizon for the future. And glory is not just a socially accepted behavior, but a socially recognized metaphysical virtue.

In legends of old, the hero often brought back wealth home after achieving the glory of slaying a dreadful monster, as an enduring proof for him and his descendants of his mythic victory. And the Calvinists believed that earthly wealth indicates salvation in the afterlife.

Deng’s slogan here is framing prosperity as a spiritual achievement. Glory is not the goal of a professional career, it is the goal of an epic quest. Glory isn't a material goal, glory is the transcendental manifestation of will to power.

There may be a meaningful distinction between wealth as glory and wealth as mere material opulence. However, the current hegemonic narrative fails to make this difference. 

In this context, a culture that accepts even unvirtuous wealth might serve us better than one that sanctions the very idea of wealth indiscriminately. 

We understand the risks of pursuing wealth for its own sake, but rarely consider how discouraging wealth accumulation damages society's soul. Unequal wealth generates immediate envy, but systemic distrust of wealth creates spiritual stagnation.

Accumulation of wealth is not the only worthy goal to pursue in a society, but societies that view wealth accumulation as unworthy rarely leave open avenues for greatness.

That both China and the West are responding to broken systems by concentrating power and distrusting private wealth under the banner of equality should not surprise us. This shared phenomenon, despite manifesting through different forms and mechanisms, springs from the same foundations.

Modern nation-states, especially the late 20th-century managerial state, treat private wealth with suspicion because it represents autonomous power. The logic of centralized states taken to extremes seeks to eliminate any internal alternative power sources. 

The logical consequence of securing the monopoly on force is to pursue a monopoly on wealth—justified through the lofty ideal of social equality but in reality producing state and para-state bureaucratic and corporate factions, often competing to have control over the sources of monopoly of wealth.

Indeed, the narrative of opposition to wealth is a stream of the narrative of opposition to power. And again the irony here is that it often comes from the structures that aim to monopolize both, power and wealth – which are to a certain extent different dimensions of the same.

Yet the distrust of private wealth ultimately serves as a mechanism for expanding state control. By framing wealth accumulation as inherently suspicious, authorities redirect frustration with broken systems away from paths that might generate independent bases of power. This ensures that the status quo remains unchallenged, as alternative centers of power never coalesce.

Let me be clear: defending wealth accumulation as a worthy pursuit doesn't mean ignoring the reality of our flawed economy - one often built on outright fraud, where not all wealth is deservedly earned, and where mass-produced luxury consumption has become a grotesque caricature of true prosperity.

The generation that has drifted into adulthood amid broken promises and diminished expectations deserves more than a sterile choice between bureaucratic control and nihilistic consumption.

We need horizons that inspire greatness, not narratives that constrain possibility. The path forward requires reclaiming the idea that to get rich can be glorious—both as material achievement and as the expression of creative power that builds civilizations.

Without breaking the taboos around the pursuit of greatness in the form of wealth and power, we condemn ourselves to mediocrity, relegating glory from the realm of aspiration to mere memory.

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In the year 1303, the Great Catalan Company of the East entered Constantinople at the request of Byzantine Emperor Andronikos II Palaiologos. Their mission: to support the crumbling empire in its struggle against the rising power of the Ottoman Turks and other Anatolian beyliks.

This feared army of Almogàvers—battle-hardened Catalan mercenaries—was led by Roger de Flor (born Rutger von Blum, known in Byzantium as Rontzerios). Roger had already earned military fame during the War of the Sicilian Vespers, serving under the Crown of Aragon.

The Almogàvers were brutally effective. Their guerrilla tactics and fearsome discipline devastated Turkish forces across Asia Minor. But their success soon made them a liability. Once the Turkish threat was mostly contained, the Catalan Company was increasingly seen as a destabilizing force within the empire.

Roger de Flor, was loyal, but had grown too powerful. As tensions rose, co-emperor Michael IX Palaiologos—son of Andronikos II—plotted to eliminate him.

In 1305, Roger was invited to Adrianople under the pretense of planning a new campaign. Bound by honor and ignoring his wife’s advice, Roger accepted.

There, during a banquet hosted by Michael IX, he was treacherously assassinated by Alan mercenaries in Byzantine service. His body, according to chroniclers like Ramon Muntaner, was dismembered.

Cut off from any hope of reconciliation or return, the Catalan Company now resembled the Greek mercenaries of Xenophon’s Anabasis: stranded in a hostile land, surrounded by enemies, and with only their discipline and resolve to guide them.

The Almogàvers gathered in assembly to decide their fate: surrender, flee, or avenge their fallen captain. They chose revenge.

Their response was brutal. In what became known as the Catalan Revenge (La Venjança Catalana), the Company launched a devastating campaign across Thrace and Greece.

They razed towns, looted churches, and left a scorched trail that shocked both allies and enemies. For generations, the Katallanoi were remembered in Greek lands as ruthless, near-mythical invaders. The term itself became synonymous with terror.

But the key to their success was not just their savagery—it was a deliberate act of will. The Almogàvers chose revenge not just out of honor, but because it was also their best strategic option: to preserve the prestige of their Company, to protect the gains they had already accumulated, and to survive in a land where retreat now meant annihilation.

Once committed, they knew there could be no mercy. The only path was forward. Any hesitation would have destroyed them.

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In one critical moment – it is said, likely before or during the Battle of Gallipoli – when they faced a Byzantine-led coalition including Genoese and French forces, they made a decisive move: they burned their ships.

They had the option to retreat by sea. But by destroying that path, the Almogàvers forced themselves into a binary choice: victory or death.

As The Art of War teaches, soldiers with no way out fight with unmatched ferocity. Sun Tzu warns commanders to always leave the enemy an escape route—because an enemy with nothing to lose is the most dangerous foe.

We can’t be certain what mercy, if any, the Almogàvers might have expected from their enemies—or whether escape was truly viable. But the psychological impact of burning their ships was real. Even the possibility of retreat can erode discipline. The illusion of a safer path can sap the will to fight.

By eliminating that illusion, the Almogàvers secured a victory that turned an unplanned and treacherous campaign into a historic conquest.

They would go on to seize the Duchy of Athens in 1311 after defeating Walter of Brienne at the Battle of Halmyros. Later, they founded the Duchy of Neopatras. These territories remained under the dominion of the Crown of Aragon and the House of Barcelona for nearly a century.

Their deeds were immortalized in the Chronicle of Ramon Muntaner, and their name remains in the pantheon of Catalan glory.

The lesson: Victory demands the courage to eliminate your escape routes

There is a teaching here that transcends history. When faced with a task of enormous cost or a decision clouded by uncertainty, the best path forward may be to eliminate the possibility of turning back. Only then can one summon the clarity, resolve, and ferocity to see it through.

If we leave the door open—even slightly—to giving up, we risk sabotaging ourselves. This holds true for life’s most consequential choices, whether by nations, companies, or individuals. Even for something as trivial as a New Year’s resolution.

When we take a bold gamble, sometimes the best way to follow through is to create conditions where retreat is no longer an option. In that moment, the will to power thrives, and so does victory.

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The myth of sovereignty tells us that nations operate independently of each others. However, nations do not think in silos. Even if your goal is to preserve the autonomy of your nation as much as possible, you still need to pay attention to other countries' politics. That’s not a product of social media or globalization, this has been a logic operating in the world for centuries.

In an era of Revolution, Prince Klemens von Metternich understood this. The Austrian diplomat and statesman who shaped European politics throughout the 19th century operated from one foundational belief: there is no national policy distinct from international policy.

I have long admired Metternich since I was in college. I have read some of his works and also Henry Kissinger's seminal book, A World Restored. Recently, I read Wolfram Siemann's excellent biography of Metternich and I have been quite obsessed with the character and the similitudes between the time he lived and ours.

Metternich’s strategy: geopolitics as domestic policy

After Napoleon's defeat, Metternich was the architect of the Concert of Europe. He created a system of alliances and diplomatic protocols designed specifically to suppress revolutionary movements across the continent.

Metternich understood that to hold Vienna, you had to watch Paris. Even if his loyalty and main concern was towards protecting Austria's internal stability, he aimed to prevent any revolutionary current from disrupting the entire continental order.

Metternich's genius was to treat geopolitics as part of domestic politics. He didn't see Austria in a vacuum, but as part of a fragile balance where movements, ideas, and unrest were shared currency.

A successful revolution anywhere in Europe, threatened the order Metternich sought to preserve. For example, the nationalist revolutions of 1830 and 1848 perfectly show how movements centered on national identity and often hostile to one another could nevertheless fuel each other without any formal coordination.

When Metternich advocated to suppres a revolution in Naples, France or Spain, he was protecting the monarchy in Austria.

Despite Metternich's efforts, revolutions eventually spread throughout the continent. Defeating Napoleon wasn’t enough. However, revolutions weren’t contagious because of the diffusion of revolutionary ideas but by the existence of widespread grievances that compeled the people to rebel against established orders.

Yet the system Metternich built delayed their progress and provided time for alternative paths to emerge—paths more aligned with the aristocratic Enlightenment that had dominated 18th century Europe and which Metternich himself represented.

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A transnational struggle for power

Today, our world is vastly more interconnected than Metternich could have imagined. Information and ideas travel instantly across social media in a predominantly English-speaking global cultural sphere, increasingly capable of transcending language barriers.

Since 2016, the logic of interconnected political systems has intensified with the confrontation between the populist right and the coalition of liberal centrist and leftist parties of the establishment.

The forces of the right are highly interconnected in a mostly spontaneous way through social media, sharing narratives, memes, and common themes.

President Donald Trump's victory in 2024 has provided momentum for analogous movements across the globe. However, Trump's administration has yet to develop a coherent strategy for supporting sympathetic parties abroad. And no, Elon Musk's endorsements before an election neither have meaningful impact nor constitute a diplomatic strategy.

Consider how the recent wave of tariffs targeted not only US partners but also governments friendly to Trump's administration, which can be easily mobilized by establishment forces against domestic populist parties.

Populism’s strategic blind spot

MAGA, as a nationalist movement, has an inherent America-centric attitude. The drive to dismantle the liberal institutional order—which indeed reinforces the status quo—has somehow led Trump to place on a secondary plane the fact that opposing "globalism" requires presenting a global path of action.

This could be a costly mistake in coming years. Since the populist wave began in the 2010s, establishment forces have appeared more conscious of Metternich's lessons than their populist counterparts.

They have demonstrated greater coordination in their responses to populism on both sides of the Atlantic. The European establishment have shown willingness to use all available means to counter populist forces despite their continuous growth. Lately has become fashionable to push the narrative that all the problems of Europe began on November 5th 2024.

There is a limit, of course, to how long voters can accept blaming all their problems are caused by a president in another country rather than the domestic political parties that have been ruling for decades.

As long as structural problems stay unaddressed even if specific populist governments fail, the conditions generating populist insurgencies in America and Europe would remain unchanged.

But a coordinated external response can limit the consolidation of populist forces in power, even remove them from office or prevent their reelection—just as Metternich managed to contain revolution in Europe for almost twenty years.

The truth is that elections are not national affairs anymore. In an interconnected world, no political movement is truly isolated. Metternich's lesson is thus today more valid than ever: your politics doesn’t stop at your border.

Those who recognize this reality—and act accordingly—will be better positioned to navigate the turbulent currents of political change, whether they seek to accelerate or restrain them.

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Perhaps the worst consequence of the hegemony of liberal ideas is the inability to recognize and anticipate the exercise of raw, uncompromising power—even when all signs point clearly in that direction.

This intellectual blind spot, born from idealistic assumptions about published opinion, the need for consensus and institutional constraints, repeatedly leaves observers shocked by what should have been obvious.

One episode that saw this in play was the 20th National Congress of the Communist Party of China in 2022. Xi Jinping's firm grip on power caught most China watchers off guard. Many expected him to throw a bone to rival factions—maybe hand out a few key positions as a gesture of goodwill.

Instead, he steamrolled the opposition and filled the Central Committee and Politburo with loyalists, and brought us the scene of Hu Jintao removed from the camera under still unclear circumstances. 

But such expectations failed to acknowledge the fundamental political reality Xi faced. Why would someone who had already secured near-total control over the party—and dismantled his rivals' power bases—choose to give any of that up?

Speculation around incorporating moderate technocrats, or even keeping around Li Keqiang's in some capacity illustrates this point perfectly. With his own support base, popularity and political profile, Li was exactly the kind of figure Xi wouldn’t want to keep around. In this kind of political environment, people like Li aren't allies to be included—they're threats to be neutralized.

The expectation that Xi would include opposition forces—especially during a pandemic with his controversial and socially costly Zero-COVID policy in place—stems from a moralistic belief that power must be exercised with magnanimity, that acknowledging errors confers moral high ground rather than ammunition for opponents, and that appearances matter more than control.

The idea that Xi would share power or show magnanimity just for appearances doesn't hold up. What would he gain by appeasing Western media, who'd just spin it as a sign that "reformers" were gaining traction or that Xi was losing control? When has he ever cared what Western or any other media think? That kind of PR logic just doesn't apply here. 

The key difference between Xi and most foreign commentators—myself included—is that he's the one with skin in the game. Especially in China's unforgiving political ecosystem, he understands power dynamics far better than those commenting from the sidelines.

By refusing to create space for potential challengers, he eliminated vulnerabilities that could later be exploited. Ego may play a role here, but this wasn't just about personal vanity, it was about survival.

Now, Xi's approach doesn't come without shortcomings. The succession question remains unresolved, because Xi knows there is little chance he can safely step away from power. And when you've cleared the room of challengers, you risk ending up surrounded by yes-men who don't push back even when something clearly isn't working.

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Does it mean that compromise should always be refused? No. A good leader knows when compromise is necessary or when a complex coalition requires management. But compromising when unnecessary can be as damaging as refusing to compromise when needed.

It is a common pattern in successful leadership to begin compromising when one's personal power base is still weak, and then slowly play different internal factions against each other to consolidate authority until compromise becomes optional—as Xi himself did.

In the business of power, decisive action often proves more effective than half-measures. Xi's total victory over rival factions wasn't merely personal ambition at work. It was a strategy to keep a stable leadership to move forward with a plan of deep economic and geopolitical restructuring.

Risky structural changes, like bursting a real estate bubble, reshaping global trade dynamics or shifting a decades-long business model in a company, must be executed from a position of strength. Compromise here may later prove costly. And sure, that comes with the danger of groupthink, but from a leadership point of view, the bigger danger is losing control altogether.

The lesson is clear: consolidate power first. Everything else comes after. A leader can only afford magnanimity when their position isn't on the line.

No one gets policy 100% right the first time. Some specific measures with proven success can be implemented immediately, but any transformative or emergency response will need tweaking. You try something, you adjust. One step back, two steps forward. 

But you can only do that safely once your grip on power is secure. A leader can only afford pragmatism or magnanimity when doing so doesn't translate into a direct challenge to their position. Leaders under pressure, devote all attention to preserving power rather than refining policy.  They only care about survival. 

We saw that after the Congress. Xi eventually adopted policies more associated with his opponents. Most notably, ending the Zero-COVID policy following the White Paper protests —but again, only after suppressing them— and recompensing Hu Jintao's son with a higher position.

This is what many analysts miss nowadays, especially in the West. They're trained to look at symbolism, headlines, and the way actions play out in public debate. And that makes sense as those things do still matter to a certain extent. But sometimes, a raw display of power cuts through all the noise and reminds us how politics really works.

In a time of “great changes unseen in a century,” as China's CEO would put it, we will see incentives and even a popular mandate for strong leaderships that take swift action to address the mounting challenges that advanced societies are facing

Their decisions might not always be right or bring positive outcomes, but they will be much more willing to take the gamble things than preserving a crumbling status quo. Between looking good or looking tough, many will decide for the later. 

Xi's uncompromising actions may have shocked some at the moment, but they followed a timeless political maxim: when achievable victory must be absolute.

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Toward the end of the Republican period, Rome controlled Italy through a network of alliances rather than direct rule. The socii—“allies”—were Italian cities within Rome’s sphere of influence that retained internal autonomy, including their own laws, coinage, and language, while Rome managed their foreign policy.

This alliance system provided a framework of stability and security that fostered economic growth among the socii. War between allies was prohibited, and disputes were resolved through negotiation or Roman arbitration.

The socii benefited from Rome’s protection against external threats like Gallic incursions, though they were required to contribute significantly to the collective defense—providing around half of Rome’s annual military levies. It was a considerable war effort, though still proportionally less than Rome’s, given that the allies were a group of cities.

The Italian allies not only fought alongside Rome in its wars, but were also integrated into its economy and culture, with many of their wealthy patricians residing in Rome itself. Still, they were not Romans. Roman citizens enjoyed more rights, better spoils of war, and tax and economic advantages over their allies.

More importantly, sovereignty belonged solely to Roman citizens. The socii had lost political agency: they couldn’t decide which wars to fight or with whom to trade, and their fate increasingly hinged on the turbulent politics of the late Republic.

The Italian allies still controlled the internal affairs of their cities, but as more Romans began to live in socii cities and became involved in their domestic political life, the socii began to realize what it truly meant for them not to be Roman citizens.

As tensions grew, Roman senators like Marcus Livius Drusus proposed extending Roman citizenship to the socii. But this threatened the existing balance of power among political factions in Roman society, as there was a widespread fear that whoever granted citizenship to the socii would gain their political loyalty.

The accumulation of grievances had laid the groundwork for revolt, but it was the assassination of Drusus in Rome that struck the match. His death in 91 BC became the spark that ignited the flames of what is known as the Bellum Sociale—often translated as the “Social War,” though, without intending to correct Classical scholars, I believe it might be better understood as “the War of the Allies.”

The Bellum Sociale

The Samnites Quintus Poppaedius Silo and Gaius Papius Mutilus emerged as leaders of the confederation of Italian allies opposed to Rome. The allies established their own confederate government with a capital at Corfinium—renamed Italica—where they created a parallel Senate and even issued their own coinage.

The socii had tied their destinies to Rome for decades—some for centuries. Yet the alliance they formed to oppose Rome mimicked it in nearly every way. Even the motto of the Italian revolt, Civitas et Libertas—Citizenship and Liberty—revealed the contradictory nature of their political goals. They claimed to seek sovereignty, yet many still wanted access to Roman citizenship and a voice in the grand vision Rome had built.

Despite their stated desire for independence, they had become so deeply intertwined with Rome that it may have been difficult to imagine a future entirely apart from it.

The Italian allies became Rome’s greatest threat since Hannibal, fighting close to home and with a comparable number of troops. Although the Roman legions remained superior, the Italian armies were trained in Roman methods and tactics, making each Roman victory hard-fought and costly.

Rome was winning the war, but at the risk of a Pyrrhic victory. It faced three options: first, to return to the status quo ante bellum and risk new uprisings in the near future; second, to restore sovereignty to the socii, which could lead to instability—or even rival powers—within its immediate sphere of influence; and third, to fully integrate the socii into Roman society by granting them citizenship. The Romans decided to go for the third option.

Roman historians had little doubt that the socii’s primary goal was to gain Roman citizenship rather than independence. Modern historians, however, challenge this view, arguing that once the war began, the socii aimed for full independence and that the demand of citizenship emerged was just a compromise solution.

The truth is that the Italian confederation was loosely held together, and the only thing that truly united its members was their relationship with Rome, even if it was a conflicted one.

In the end, once Rome offered citizenship to those who laid down their arms, the alliance quickly crumbled. Only a small remnant continued to fight for full independence. They were eventually crushed by the Roman legions.

Res publica non vicit

The Bellum Sociale is rarely mentioned in generalist accounts of the Roman Republic, but the war marked a defining moment that inaugurated the long transition from the Republic to the Empire.

Figures like Sulla, Pompey, and a young Julius Caesar made names for themselves during this conflict. Moreover, the shock of extending Roman citizenship throughout Italy only added to the growing instability into which the Republic was already descending.

Despite gaining access to citizenship, the Italian socii remained largely subordinate to the Romans. Although they would be mobilized in the civil wars to come, their direct political influence was limited, as most of them lived outside the city.

Culturally and ethnically, they did not significantly alter the Roman population, as they came from closely related Italic tribes—very different from the citizenship expansions that would come in the later periods of the Roman Empire.

The Bellum Sociale was a conflict the even the Romans struggled to understand. They found themselves fighting their own allies, whose pursuit of sovereignty seemed half-hearted—because, deep down, what they wanted was not to break away from Roman rule, nor merely to remain close to Rome, but to become part of it.

The war was difficult for the Romans to grasp because they had not yet come to terms with the new nature of Rome itself. The idea of Rome had already outgrown the limits of a city-state—not in physical terms, but in spirit—as the Republic had been administering territories far beyond the city’s borders for decades.

However, this was the first time that Rome’s clients were accepted as full members of the Roman polity. This is why I believe the change brought about by the Bellum Sociale wasn’t merely legal or territorial—it was spiritual. By extending citizenship rights to the Italian elites, Rome was forced to admit that the vision on which the Republic had been built no longer reflected what Rome had become.

Rome now required a grander vision. And perhaps it was the Roman Republic—not the Italian socii—that was truly defeated in the Bellum Sociale. But the socii were not the ultimate victors either. That role belonged to the Roman Empire, which would rise under Julius Caesar and Octavian Augustus just fifty years after the conflict’s end.

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The lesson for today:

A power that outgrows its origins must adapt or be torn apart by those who rely on it

The lesson of the Bellum Sociale is that successful peoples, companies, or individuals can reach a point where they transcend their original condition and become larger than themselves—at which point they must reinvent themselves to reach greater horizons or risk fading into irrelevance or persihing.

Since president Trump won his second term and talk of tariffs and the need for U.S. allies to take more responsibility for their own security began to get serious, the themes of the Bellum Sociale resonate with the present.

America now plays the role of Rome, exuding a sense of superiority, while its allies,  while its vassals respond with contempt. Europeans and Canadians gesture and beat their chests, threatening to assert their sovereignty, while at the same time lamenting any barrier to access to the American market or any downgrading of protection under the American security umbrella.

The Trump administration may find it necessary to offer ways for America’s socii to save face. But we should not forget that many of their reactions are rooted in pride—a pride wounded when the reality of their subordinate position is laid bare.

Their calls to sovereign pride ring hollow, especially when it’s clear that if Washington offered Canadian or European leaders a meaningful seat at the table—on Ukraine, trade, or China—they would jump at the opportunity, forgetting all their talk of independence from America.

The paradox of a peripheral actor that resents an imperial core while simultaneously wanting to be acknowledged by it is not new. For instance, the opening paragraphs of the U.S. Declaration of Independence remind us that Americans did not initially seek separation, but rather a greater voice within the British Empire.

This tension is difficult to accept—both for the aspiring periphery and the reluctant core. Surrendering sovereignty is rarely a good idea. Yet sometimes it is the only way to preserve a fragment of autonomy or to formalize an otherwise unequal but unavoidable reality. In some cases, that may be less damaging than maintaining a hierarchical relationship under the illusion of equality.

The Italian allies had long ceased to see themselves as separate from Rome. In fact, tensions among them might have exploded the moment they gained full independence. Rome’s story had become their story. So powerful was its mythos that they were willing to wage war not to escape its rule—but for the privilege of being fully absorbed into its fold.

In the end, the only durable solution was an unequal yet organic and mutually recognized hierarchy. Perhaps, someday, something similar will emerge between America and the rest of the West.

The greater challenge, however, lies with the core, when it fails to realize that it has become more important than itself. These lessons go beyond the fate of nations. Businesses that operate as integrated conglomerates often find that their parts can no longer function independently, even as decision-making becomes increasingly dislocated from where its consequences are felt.

Charismatic individuals who become larger than life may also struggle to recognize that thousands of followers will search for meaning in their every minor action—only to find they have lost the ability to live as private individuals.

Misreading this transformation can be fatal, as the grievance that arises from those who depend on you but feel neglected can leave a lasting wound. We see individuals resort to extreme actions just to be acknowledged—from public stunts to acts of violence—all in a desperate attempt to be seen by someone they feel both connected to and excluded from.

More importantly, recognizing when someone has reached their upper limit is essential to breaking through it and undergoing the transformation needed to reach greater horizons.

Rome might have survived without its Italian allies, but in truth, without making the socii part of itself, it could never have begun the transformation that made Rome the empire we still think about every day.

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Donald Trump has secured a second term in what appears to be a landslide victory following one of the toughest electoral campaigns in years.

Policy-making capacity was one of the main constraints of President Trump’s first administration. However, Donald Trump in 2024 is not the same as in 2016; he has brought figures like J.D. Vance, Elon Musk, and Bobby Kennedy Jr. into his circle, shifting away from reliance on the traditional GOP apparatus.

This new coalition has boosted Trump’s political platform and may also provide him with more effective policy-making tools. Still, while the campaign has ended, the true influence of those who accompanied Trump over the past few months remains uncertain until key appointments are made in the new administration.

The U.S. election is THE political event of the year and will have an impact far beyond America's borders. Donald Trump’s second administration will shape the world’s geopolitical and geoeconomic agenda for the coming years.

As we know, many of the policies President Trump highlighted during the campaign will be subject to the realities of practical politics. Bearing that in mind, here is my take of what we can expect in key policy areas with geoeconomic impact:

Foreign Policy

• Foreign policy has been one of Trump’s stronger fronts in the campaign, running on an anti-interventionist platform.

• Trump pledged to pursue peace negotiations for the conflicts in Ukraine and the Middle East, aiming to reduce U.S. military involvement overseas and decrease NATO funding.

  • In Ukraine, Trump stands a good chance of persuading Zelensky to negotiate with Putin for a settlement.

  • However, the Middle East conflict presents a far more complex scenario, with its outcome ultimately depending on the actors on the ground – Israel, Iran and the Gulf States.

    • Over the past 20 years, the Middle East has been a source of trouble for every U.S. president, and it won’t be any different for Trump this time.

• With reduced U.S. foreign intervention, funding cuts may impact NGOs, the UN, and other institutions promoting the liberal order and values abroad.

• Tensions with China are likely to rise in the short term, but this time, Trump seems more open to negotiations with Beijing, particularly in terms of trade policy.

• Trump has suggested that Taiwan should fund its own security, and his stance on a potential Taiwan-China conflict remains unclear, contingent on domestic factors and the broader U.S.-China relationship.

Be smart: Peace talks with Russia could create tensions between Washington and some Nordic and Eastern European nations, while others, like Hungary and Germany, might welcome them.

However: If Trump secures a peace or truce between Ukraine and Russia, it could help ease tensions between the EU and China, given Beijing’s support of Moscow.

Trade Policy

Tariffs will be the defining word in Donald Trump’s trade policy.

• A universal 10-20% tariff has been proposed on all imports, including those from Japan, the EU, and other partners.

Tariffs on Chinese products would have remained regardless of the election outcome, but Trump has pledged to raise tariffs on Chinese imports to 60%.

• Trump aims to use tariffs to attract investment and manufacturing back to the U.S.

• Trump mentioned that foreign companies establishing production plants in the U.S. will have open doors — even Chinese firms!

Reminder: despite a gentler tone compared to Trump, the Biden administration hasn’t been particularly considerate of the interests of U.S. partners.

• The IRA subsidies for green manufacturing raised concerns among European industries, as did the obstruction of Nippon Steel's acquisition of U.S. Steel in Japan.

Bottom line: Tensions between America's tech and industrial interests and those of the EU and Japan were likely to grow regardless of the U.S. election outcome.

Deal will be the second most important word in Trump’s trade policy in his second term.

• Tariffs might serve as a bargaining chip in broader trade negotiations, potentially involving other areas like defense spending by U.S. allies.

Be smart: Deal-making is difficult, especially in international settings. Tariffs may incentivize partners to accelerate negotiations, but even the author of The Art of the Deal can only accomplish so much in four years.

Elon China Factor: Tesla relies on China for a significant portion of its EV supply chain. Given Elon Musk’s influence in the campaign, he might be a mediator in U.S.-China relations.

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Economic Policy

Tax Policy: Plans to extend the 2017 tax cuts, reduce the corporate tax rate to 15% for domestic production, eliminate taxes Social Security benefits, and reverse Biden's tax increases.

Energy: Pledged to expand oil and gas drilling on public lands, offer tax incentives for fossil fuels, and accelerate pipeline approvals and flexibilize permitting.

• Although Trump previously opposed EV promotion, this position might shift due to Elon Musk’s influence in the campaign.

Tech Sector: With Elon Musk on the team, Trump’s administration will likely be tech-friendly, with expected government support for sectors like AI and favorable (de)regulation.

Industrial Policy: Making it easier for industries to build and produce in America has been a policy focus for Trump since 2016.

• In contrast to the Biden administration, Trump is expected to pursue a more market-based approach rather than relying on large-scale public spending initiatives.

However: To pursue an ambitious reindustrialization agenda, America will need access to foreign supply chains, including those linked to China.

• Balancing manufacturing supply chain needs with tariffs will be crucial for industrialization plans to succeed.

• Some tech companies may raise concerns about potential restrictions on access to skilled migrant workers — won’t be an unsolvable challenge.

Bonus Track: Curious to see Robert Kennedy’s role in Trump’s administration and whether he might influence regulations in the pharmaceutical and food industries.

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Final thoughts

Globalization is not only an economic reality but also a political and cultural battleground, with the U.S. at its epicenter. America’s internal dynamics will polarize electorates in other countries along similar lines as in the U.S.

Despite Trump’s clear victory, a certain degree of internal turmoil can be expected, depending on how the Democratic Party responds to the defeat. This will not only influence domestic policy developments but also impact the political climate in other Western societies and shape China and Russia's perception of the U.S.'s capacity to respond to their actions.

In Europe, for instance, President Donald Trump’s victory will likely boost right-wing nationalist parties’ momentum while signaling a green light from Washington to Brussels for strong measures against illegal immigration – we’re also likely to hear a lot about “European autonomy,” though it’s unlikely to materialize into meaningful action.

In the coming weeks, we will see how business and world leaders adjust to the new reality and how volatile fronts in Ukraine, the Middle East, and Taiwan play out in the final months before Biden passes the baton to Trump.

Soon enough, President Donald Trump will also face the challenges of translating his campaign promises into practical politics. We can expect more preparedness than in 2016, but navigating the waters of Washington will still be no easy task.

But one thing is certain for now: Donald Trump’s 2024 comeback will be the defining event of the decade.

Paternity kept me out of the business of power for a while, but this is the year’s big event, and I wanted to share my thoughts on it. As always, I’d love to hear yours.

Miquel

Turkey and Somalia signed an oil and gas exploration and drilling deal targeting hydrocarbon reserves in Somalia's exclusive economic zone, which hasn’t been developed since the collapse of the Somali government in the early 1990s.

The numbers:

• Estimates suggest Somalia may have at least 30 billion barrels of oil and gas reserves, requiring investments that could take three to five years.

• The deal could potentially involve Turkey spending up to $500 million for exploration and successful drilling operations in Somali waters, with further development estimated to cost at least a few billion dollars.

• Turkish President Recep Tayyip Erdogan's administration has invested over $1 billion in humanitarian aid to Somalia since 2011, establishing the largest Turkish embassy in Mogadishu and training more than 16,000 Somali soldiers.

The geopolitics of the Horn of Africa

On top of that, this deal on oil prospecting has also been accompanied by a security treaty between Ankara and Mogadishu. That is relevant in itself. However, things take another tone if we add that Somalia already had a security treaty with one of Turkey’s rivals in the Muslim world, the UAE.

Erdogan eyed a security treaty with Somalia before the past elections. However, the Turkish opposition made clear that they didn’t want to maintain Erdogan’s ambitious foreign policy. Somalis believed Erdogan might be out, so they turned to the UAE as their security guarantor.

However, Erdogan's reelection – which surprised many but not me – altered Somalia's options. Turkey could be brought back on board to counterbalance potential Ethiopian threats due to its military presence and anti-piracy efforts.

Here, I would like to remind you that Ethiopia recently signed a memorandum of understanding with Somaliland to gain access to the Red Sea. That was a historic agreement for both sides. Ethiopia fought a thirty-year-long war to preserve its coastline and gain access to the sea with Somalia and Eritrea when it seceded.

For Somaliland, this means a tacit recognition as the legitimate sovereign over its territory, but for Somalia, that is a violation of its territorial integrity. Given the country's weakness, Somalia needs something to back them in case they would like to take action against Somaliland or further external and internal threats.

But if the drums of war began to beat in the region, Erdogan might be playing a risky game.

Erdogan’s great game.

If we put this in a broader perspective, taking into account the Red Sea Crisis, Turkey securing a partnership with Somalia is strengthening its position in one of the most strategic global geopolitical shock points.

Erdogan’s standing in the Muslim world has improved thanks to his strong support of Palestine, which has rebalanced Turkey’s position vis-a-vis Iran, Saudi Arabia, and the Gulf States.

Although all Eastern Mediterranean nations, Turkey is suffering from the disruptions in the Red Sea, but Erdogan has remained supportive of the Houthis.

For example, Erdogan has not only refused to join NATO allies missions but has also criticized the US and Britain for attacking Houthi positions in Yemen. Besides, Turkey is an essential financial hub for the transfer of funds to support Houthi operations.

With a rather friendly tone with the Houthis and with the Turkish navy already involved in anti-piracy missions in Somalia. Cementing its position in Somalia, Erdogan is setting a firm foot in the region.

Bottom line:

The security and energy deal with Somalia serves Erdogan’s long-term geopolitical goals: expand its influence in Africa and the post-Ottoman space and Tukey’s role as an energy hub.

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Conversation with Peter Ryan: Multipolarity, Industrial Policy and Populism

invited me to the Ryan Research podcast to discuss the connections between geopolitical change and the rise of multipolarity, the resurgence of industrial policy in the West and the rise of populism.

Here is a clip of our conversation about Populism:

And you can listen to the whole conversation in here:

Ryan Research

Business of Power - Miquel Vila - Ryan Research Podcast Ep. 17

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2 years ago · Peter Ryan

And don’t forget to subscribe to his podcast!

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Is China telling the China story right?

It is March, which means it is Two Sessions.

For those who have lived in Beijing, this is the time of the year when the sky is always clear, pollution disappears, and your VPN doesn’t work very well.

The "Two Sessions" is the annual meetings of the National People's Congress (NPC), the legislative body of the PRC, and the Chinese People's Political Consultative Conference (CPPCC), an advisory body without legislative power but that to a certain extent serves to hear the opinions of selected citizens.

The Two Sessions is not interesting for the discussions on the legislation passed – which has already been agreed upon – but because it sets the agenda for China's political and economic direction for the coming year.

This year, the Chinese government set ambitious goals given the current economic situation: a 5% GDP growth target. It is unclear how China will meet that target without a stimulus trying to combat deflation and doubling down on industrial policy all at once.

With the horizon of a potential conflict in mind, it seems that for Xi, securing industrial capacity takes precedence over stimulating domestic demand.

China’s PR problem

Nevertheless, another interesting element that we have seen during the Two Sessions is the acknowledgment by Chinese authorities that China has a PR problem.

This is not new, but things now have gotten worse, and that seems to have been a relevant topic of discussion in the CPPCC – at the end of the day, is one of the most important organizations of the United Front, and expanding the CCP message is part of their function.

For example, the decision to scrap the traditional news conference during the Two Sessions had a much more symbolic impact than whatever real value in terms of transparency could come out of it.

Less willingness to provide information brings more policy uncertainty, and that not only harms China’s diplomatic capacity but also impacts the trust investors can have in the country.

The Chinese scholar Jia Qingguo, who was part of the CPPCC, talks about this problem in a recent article translated by in Pekingnology:

Pekingnology

Jia Qingguo calls on Beijing to relax control to encourage non-govt efforts to tell China's story

The annual sessions of the National Committee of the 11th National Committee of the Chinese People’s Political Consultative Conference(CPPCC) and the 11th National People's Congress are ongoing in Beijing. Jia Qingguo, Member of the Standing Committee of the 11th National Committee of the CPPCC, Professor of the School of International Studies at Peking …

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2 years ago · 15 likes · Zichen Wang

the favorable perception of China among the populace of some countries has not increased but decreased. A Pew survey conducted last year revealed that in many countries surveyed, negative views of China reached a 20-year peak, with significant declines in countries around China, such as Japan, South Korea, and India.

Some may argue that this is a problem of the West and that the “Global South“ loves China. One thing might be its leaders, but for example, this is not the case, in countries like Mexico, Brazil, or Argentina, which have had governments friendly to Beijing.

Jia Qingguo also points out the dramatic decrease in people-to-people exchanges due to COVID-19, especially in the academic world due to raising concerns about academic freedom and potential consequences of sensitive research:

3. Academic research: Issues such as the emphasis on political correctness in the anonymous review process for master's and doctoral theses increase the uncertainty for foreign students with different political and cultural backgrounds. Additionally, the absence of implementation details following the introduction of some laws concerning foreign affairs leads to confusion. For example, the recently introduced Anti-Espionage Law still lacks detailed implementation guidelines, leaving unclear what information collection and methods do not constitute a violation, leading to misunderstandings externally.

Eliminate concerns about academic research. Consider conducting separate anonymous reviews for the theses of foreign students, using adherence to the Chinese constitution and laws as the standard for political judgment.

But what does Wang Huning, the person presumably in charge of creating the China story, say about these problems?

He mentioned some ideas in his speech during the opening of the CPPCC to address this issue. You can find parts of it translated by for Tracking People’s Daily:

Tracking People's Daily

Breakdown of Wang Huning's Speech at CPPCC Session

Hi folks, With the Two Sessions kicking off today. I’ll try and cover as much as I can manage over the course of the week. To begin with, I presume most of you have already heard that we’re not going to get a premier’s press conference this year. This had become a tradition, which is now falling by the wayside. To me, this is a reflection of the changed …

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2 years ago · 6 likes · Manoj Kewalramani

In his review of 2023’s work of the CPPCC, he mentions:

He also says that a “special consultation meeting on ‘Enhancing the Spread and Influence of Chinese Civilization’ was held to provide research and suggestions on the protection, inheritance and promotion of China's excellent traditional culture, the construction of an all-media communication system, the development of the digital cultural industry, and strengthening the integration of culture and tourism to serve the construction of a cultural power.” 召开“增强中华文明传播力影响力”专题协商会，就保护传承弘扬中华优秀传统文化、全媒体传播体系建设、数字文化产业发展、加强文旅融合等调研建言，服务文化强国建设。

In other parts of the speech, he also mentions part of the work the CPPCC has done to engage foreign institutions or think tanks.

We can see that in Wang Huning’s speech, there are indeed concerns about the need to tell China, but it doesn’t seem that there is much guidance on how that should be told; beyond that, it should be told according to the party line.

However, something worth paying attention to is the emphasis on the idea of Chinese Civilization. Although talk about China’s civilization has always been around, it now seems to be taking much more centrality on China’s international discourse to stress the difference from the West.

Next China will still be China

That relates to Wang Yi’s words, China's top foreign relations official, during the Two Sessions, using a relatively new slogan, “Next China will still be China, (下一个中国还是中国), that Xi already used during his visit to San Francisco during the APEC Summit.

The catchphrase can be seen under civilizational exceptionalist lenses. We could understand it as, despite modernization, China is going to remain true to its civilizational values and unique character.

However, we can also interpret this catchphrase through a much shorter temporal frame, conveying an economic message: despite current hardships, China is still the center of global manufacturing. That is to say, the China of quasi-miraculous economic growth that everyone had in mind during the 2010s hasn’t ended.

As Manya Koetse says on What’s On Weibo, the catchphrase could imply that neither India nor Vietnam is going to be the next China. Only China is going to be the next China.

However, although this may serve to ease worries about economic woes, I can’t fail to notice a taste of nostalgia for this framing. Trying to make foreign audiences think more about the China of ten or twenty years ago than the one of today.

The important question here is not only “Is China telling its story right?” But more importantly, does the post-Reform and Opening Up China era have the right story to tell?

My book: The End of the Chinese Alternative

And that’s precisely something I explore in my new book, The End of the Chinese Alternative [Original: La fi de l’alternative xinesa].

I am tremendously happy to share with you that I have published my first book, which condenses the work of years of research and thinking about China’s contemporary history.

The book explores how China has built its version of modernity and how, at present, China once has reached a late stage of development, along with the rest of thing a point where no one has really figured world, is enter out what to do.

China hasn’t found an alternative to deal with the problems of technological and digital societies, and despite the political distance, Chinese society increasingly finds itself dealing with problems similar to those of Western societies.

For now, the book is in Catalan, but I will talk more about its contents in the future and translate some fragments. And maybe I’ll work on an English translation down the line at some point. Don’t have any doubts, this is not the last time you will read about my book.

Those of you privileged with knowledge of the Catalan language can find it in bookstores in Catalonia from March 18th onwards or online here.

I am sure will make a great (self?)present for Sant Jordi!

This is all for this week; I hope you like it. As always, likes, comments, and shares will be appreciated.

Miquel

Share The Business of Power

Populism is the central political event of the early 21st C.

To understand the epochal political upheaval we are witnessing worldwide, we need to understand Populism.

As it happens, 2023 ended with the victories of Javier Milei in Argentina and Geert Wilders in The Netherlands. This year has already seen the electoral success of Nayib Bukele in El Salvador and Prabowo Subianto in Indonesia.

With nearly sixty elections expected to take place in 2024 around the world, we will keep hearing a lot about Populism.

Once a Populist Titan emerges to rally the politically orphan masses of "deplorables" (sic) against the crooked elites, the nation's political board will revolve around them.

The media, always hungry for attention, won't talk about anything else. Promptly, the foe and friend division will be drawn along the lines of support and opposition to the Populist Insurgency. Establishment parties will realign their political programs and discourses to compete against the populist challenger.

Nevertheless, despite the centrality of Populism today, it is still a largely misunderstood phenomenon. The label populism remains confusing and is more often used as a pejorative term than an analytical one.

How couldn't it be confusing to use a label that can be used for candidates so different from each other, such as Hugo Chavez, Javier Milei, or Donald Trump? But what makes it confusing is when the same label is often used to (dis)qualify leaders with little to do with Populism, like Vladimir Putin, Viktor Orban, Xi Jinping or even Emmanuel Macron.

The pejorative use of Populism doesn't really help to understand the power of the phenomenon. For many, a Populist is just a post-liberal strongman that "we don't like." But confusion about Populism does not only come from its detractors but also from their sympathizers.

A new breed of dissident conservatives and nationalist analysts now use it as a positive category to fit anyone who seems to talk for the main street conservatives against the "globalist elites" and sometimes negate the category of Populist to those movements with whom they don't share a political program.

However, we need to be cautious because ideologically rigid definitions don't allow us to understand the diversity of social movements covered by the umbrella of Populism and how they can differ from other political forms.

Given the centrality of populist movements around the world, it is crucial to have a clear understanding of their nature and centrality in contemporary politics. That's the only way to grasp the potential political risks and opportunities that emerge from Populist insurgencies.

In this first installment of my analysis of Populism, I'll focus on defining the components of Populism and understanding its use as a political strategy. In a future second part, I'll focus on presenting how a populist performs once in power, checking both their transformative potential and their limits.

What is Populism?

The first point we need to understand is that Populism is not an ideology or a program; Populism is a form of making politics.

That means that Populism is not confined to a particular right or left ideology but is a discursive strategy that various political movements across the ideological spectrum can adopt.

Although I am presenting my own views here, I am going to work with Ernesto Laclau's definition of Populism, which more or less goes as follows:

Populism is a form of political discourse that articulates the demands and interests of a "people" against an established "elite."

Ernesto Laclau was a post-structuralist academic born in Argentina who developed most of his career in the UK. He was a hardcore Peronist and a political advisor for the Kichners. I am curious about what he would say about Milei. He would definitely hate him on ideological grounds, but Milei's victory has indeed validated most of Laclau's theories about Populism.

I have my differences with Laclau's sociological and political views, but he is by far the author who has influenced my understanding of Populism the most.

The people in mass politics

To understand the appeal of Populism, we need first to understand the power of the word "The People" in modern societies.

A key element that distinguishes the Old Regime from the New Regime is that almost all modern political systems are legitimated by the appeal to the people's rule. That is as true for the "We the People" that opens the American Constitution as "all power in the People's Republic of China belongs to the people" of the Chinese Constitution.

We can say that almost all modern political regimes have a populist founding myth where the People rose up against an Evil Other – a colonial power, a dictator, the king, a social class, etc. – and took the reign of their destiny and legitimated the new form of government.

The founding populist moment passes when there is a process of institutionalization. That means that the symbolic sovereign power of the People is transferred to the State and will be mediated by a political, bureaucratic elite according to a certain set of regulated practices.

The fiction of the unity of the people is then fragmented into different interest groups, and politics is channeled through ordered administrative procedures. Depending on the nature of the political movement that gives birth to a new regime, that process of institutionalization lasts longer, and sometimes it never fully occurs.

This process does not necessarily need to be "real," but most founding myths of modern political regimes rely on this kind of narrative. The legitimacy of "popular" governments lies in their ability to express the will of the people. That naturally creates an inherent tension around the question of how true it is that the people are in power and the existing power serves the interests of the people. Such tension between the people's will representation and institutionalized power is what can allow for the formation of populist uprisings.

Populism vs Institutionalism

In an institutionalized regime, when a group of citizens have a problem, they usually present their demands to the existing administrative channels. If there is a strong institutional regime, the government will be able to absorb the demands of the concerned citizens without affecting the system or cracking down on dissent if they are seen as a danger to the established regime.

When the system cannot absorb a growing number of demands, and there is a widespread feeling that the ones in charge do not act on behalf of the many, but for the benefit of the few, there is a window of opportunity for a populist insurgency to form.

Populist movements will argue that the founding pact has been broken and a corrupted elite has captured the institutions that were supposed to represent the people.

Opponents of Populism usually present an Institutionalist narrative, defending that the existing institutions are already the real representatives of the people's will. In democratic regimes, we will see an appeal to the transparency of the existing institutional procedure, the rule of law, and the need to trust experts to channel the "will" of the masses.

In more extreme anti-populist reactions, for example, during the Brexit referendum, the masses will be directly deemed as irrational and untrustworthy and thus shouldn't be trusted with a direct say in live-changing matters.

To a certain extent, all modern politics have a component of tension between populist elements and institutionalist or elitist rhetorics. We can find traces of Populism in all modern mass political discourse, but of course, not always with the same centrality or force.

In this sense, Populism might be better understood in terms of a gradation, and we could add a new political axis apart from the classical Left and right division, opposing Populism vs institutionalism.

The Populist articulation

However, here I am more interested in those social eruptions that are more clearly populist, instead of the ones that just introduce some populist gestures in their discourse without really embracing a full-on populist form.

Let's focus on how a populist insurgency emerges. The expression that better condenses the feeling of the populism moment is "Enough!." The people are just fed up, and they want to get rid of everyone who has anything to do with the current State of things.

But the "People" will still need to be given form so the shared feeling of grievances can find mutual understanding and be translated into political action.

What makes Populism different from classical political coalitions is that a populist articulation aims to dissolve the different groups into a unified idea of the People. Where populist movements are really good is reaching out to individuals not already organized in some kind of political group or union, breaking traditional allegiances to form new ones.

That doesn't mean that a populist coalition in the real world won't have to deal with political representations and quotas of different groups that will be part of the movement – and usually will be the ones offering technical knowledge and grassroots organization muscle. However, there is a tendency to work around a system of institutionalized factions.

So, we can say that a successful populist narrative will be organized around three elements.

People vs Elite

The populist movement organizes the political arena around the lines of People vs Elite instead of traditional Left vs Right. All existing political parties are presented as different sides of the same coin. This is an important step because traditional Left and right divisions must be broken so the political conflict is not kept organized around the lines comfortable to the establishment.

Even if, like in the case of President Donald Trump, he runs for the Republican party, he has a rhetoric opposed to the traditional establishment of the Republican party, lumping them together with the Democratic party elites. That is also what helped him in 2016 to attract part of the Democratic electorate, or at least convince them not to vote for Hillary.

An important caveat is that substituting the centrality of the Left vs. Right axis for the People vs Elite axis doesn't mean that the populist movement doesn't have an economic or social program that could be considered Left or Right. For example, Javier Milei was very vocal about his Libertarianism and opposition not only to the Elites – Caste – but to the Left specifically.

Nevertheless, changing the way the boundaries of the friend/foe distinction is done allows to reach out to disenchanted citizens with the political system that, if they were following their traditional Left/Right allegiances, wouldn't vote for the populist candidate.

A classical discursive appeal would be: "Even if you have been a Left/Right voter all your life, now is the moment to leave those differences aside because the real conflict is not Left or Right but between the People against the Elites. And we are the People."

Institutional challenge

Here comes a proposal for change. The existing regime needs to go.

The critique against the establishment takes the form of a critique against the current institutional setting and a desire to shake down the system. There are different gradations of how deep that proposition of change could go, but there is always a clear goal of deep reform or even the founding of a new regime.

Sometimes, that is crystalized in a call for new constitutions, elimination of certain institutions, exiting international organizations, or reform of the electoral system.

The institutional challenge usually goes beyond the formal bureaucratic powers of the State. That also can encompass breaking with perceived pernicious economic monopolies, academic and media cartels, the configuration of the party system, etc.

Charismatic leader

Because a Populist movement wants to articulate a multiplicity of disperse citizens, sentiments and groups, it needs a great leader that helps to give coherence to the movement. Taken to an extreme, sometimes supporters of a populist movement may only agree in that they agree with their leader.

For example, Juan Domingo Perón would be the greatest example of a populist leader able to build an extremely extended coalition. From communist guerrillas like the Montoneros to anti-communist armed groups like the Triple-A – eventually, things got out of hand, and both factions ended up killing each other.

Ussually, the pure breed populist leader is a political outsider, maybe someone famous or successful in a career outside politics, or a politician that has always been known for expressing his own ideas without caring about the official party line.

Doesn't really matters if the leader in question comes from a plebeian social class, but he needs to be able to relate and naturally move in a popular cultural setting. It is important that he is someone who can create a direct and special relationship with his supporters without the intermediation of institutions, organizations, unions, etc.

To summarize, a successful populist strategy is the use of the force of the Many, led by the One against the Few:

Why Populism works? (to win elections)

Populist movements have always existed, and as said earlier, some kind of populist element can be found in all modern mass political discourse.

However, some dynamics of contemporary societies make Populism especially successful today. 

Fragmented Societies

In my opinion, social fragmentation and the rise of a low-trust society is what explains why Populism is today the most effective political strategy to challenge an existing regime.

Back in the day, social institutions had more strength than they do today; most citizens in modern societies would be attached one way or another to churches, workers' unions, political parties, clubs, companies, etc.

Families and organic communities were stronger. Today, we live in a low-trust society with high feelings of social anomia, a loneliness that makes traditional ways of organizing politics more difficult.

However, the feature of 21st-century societies is their internal fragmentation, which is more profound and difficult to manage than in earlier decades.

Populism is a good strategy for fragmented societies because, thanks to its nimble and malleable identity, it makes it easier to give form and unite a diverse set of discontent groups. That is also why the nationalist element is very important for populist movements, because it provides the shared identity that allows homogeneity among supporters beyond ideology or class.

Institutional Obsolescence

We cannot separate the current social fragmentation in developed societies from the decay of its existing institutions. Especially the loss of capacity of the nation-state to impose a shared identity among all its citizens. 

Higher immigration is part of this problem, but growing digital forms of socialization are also to blame because online socialization spaces tend to produce niche cultures. And the current institutions are just not ready to deal with this. Inclusivity policies have often eroded any strong common identity that institutions could use to integrate diverse groups of citizens.

To that, we should add another different set of crises and technological developments that states are having problems keeping up with, and problems like corruption and state cooption that fuel the feeling that current institutions just don't work.

Because this institutional crisis is felt all around the Western world and beyond, Populism finds a suitable environment to grow.

Entertainment Politics

Populism is much more interesting and entertaining than conventional politics. I don't say this as a critique; I say it as a fact.

Electoral politics, nowadays, have become mostly a show business – another day, we can talk about the problems of that. But that is not the fault of populist candidates. Spectacle politics was already there, Populists just do it better.

Populist candidates usually speak their minds in ways that grey career politicians don't often do that connect much better with the public. Also, even if the candidate is not very good at this, populist movements are much more naturally connected to popular culture, producing memes and jokes difficult to meet by agencies working with establishment candidates.

In this sense, Populism is to institutional politics what guerrilla warfare is to conventional war. And as happens with guerrillas, they won't always win, but they will change how war is fought.

Here, I must say that the entertainment populist candidates produce is not only for their supporters but also for their detractors. Just think about how central Donald Trump is to the liberal media. Some journalists have made their entire careers around his figure, and they don't even want you to vote for him!

And that happens every time a populist candidate begins to gain traction. A populist candidate doesn't need to win an election to revolutionize his country's political landscape. If he or she is good, they will just dominate the conversation without the need to sit at the table.

The centrality of Populism

Because Populism is not an ideology, it is a form of doing politics, anti-establishment political movements with very different agendas can take populist forms. Some common elements include nationalism, protectionism, and the use of executive state power.

But as Javier Milei shows, not all populist candidates need to support a social protectionist economic policy, especially when that's the policy that represents the existing political establishment, as was the case in Argentina.

So, as I might explore in a future piece about the "geopolitics of Populism," expressing sympathy or trying to tie together political movements just because they are Populist might not always make much sense.

Populism, if done well, can be an effective political mobilization strategy. But not every candidate incorporating some elements of populist strategies is a pure breed populist. In Europe, for example, not all right-wing nationalist parties are populist movements, even if they adopt some populist forms and share talking points.

The fact that Populism is a form of doing politics and not as much an ideology doesn't make irrelevant the question of "who is a real pure breed populist candidate". I think authenticity is important for a populist leader to succeed, and you can feel the ones who are playing the Populist instead of being genuinely Populist.

I have a method, what I call the Punk Bar Test, that helps me distinguish pure-breed populist candidates.

Try to picture that leader in an old-school punk, rock bar, or pub. You know, the kind of places I have in mind. Poorly illuminated places that play good music, where passing the mop might do more harm than good, and where a hole in the ground would be much more hygienic than whatever they have in the bathrooms.

If you can picture the prospective Populist candidate in that setting looking comfortable, with a beer in his hand, having a good time chatting with the regulars there, then no matter their upbringing, background, studies, or how much money they have, you will have found here a genuine Hero of the People.

If you don't believe me, try the test by yourselves and let me know your opinion in the comments. 

This is all for this week, I hope you like it. As always likes, comments and shares will be appreciated.

Have a great weekend!

I am fascinated by this crisis because it shows us, at the same time, the fragility of the arteries that connect the global economy as a separate segment but the resilience of a worldwide trade network as a whole.

Industries in Europe expecting components from Asia have been facing delays due to Houthi attacks, and companies like Volvo had to cease production in Europe.

While the surge in shipping prices is what gathers the most attention, the real threat to global logistics lies in delays and bottlenecks resulting from unexpected route changes and overwhelming unprepared ports and manufacturing plants.

On a positive note, as Maersk's CEO indicated, shipping firms are adapting to the Cape route for the next few months. While this keeps cargo prices high, it may alleviate supply chain disruptions, restoring regular schedules around Africa.

So, the global economy won’t collapse because of the Houthi attacks, but someone will have to pay for the price of the added disruption – though it seems we are not yet comparable to 2021.

Nevertheless, even if the Red Sea crisis is resolved, we shouldn’t expect a return of long-term stability in maritime trade routes.

A lasting consequence of the Red Sea attacks is that everyone sees that disrupting maritime shipping is a relatively low-cost, high-impact strategy. More state and non-state actors will invest in operational capabilities to replicate the Houthi attacks in the future.

After the Houthis episode, if anyone still thinks they can do business or investments without paying attention to geopolitical risks, I wish them luck!

A divided West

Not everyone is being impacted the same way by the Houthis attacks. Europe has been more affected than America. In Asia, China is already feeling container shortages – which can contribute to generating logistics bottlenecks – but emerging economies are feeling the pain, for example, Bangladesh’s garment industry.

The Houthis attack has put the West in a challenging position. On the one hand, the crisis begins as a side plot of the Israel-Palestine story, which has already European countries and the US quite divided. On the other, the US, as the country with the most powerful navy in the world, seems compelled to carry on with its self-appointed mission of protecting freedom of navigation.

At the same time, most cargo ships going through the Suez Canal do not carry a US flag, and the companies operating them – which are making some money out of this – are European.

As a result, we have witnessed a divided response to the Houthi attacks.

The US and the UK launched Operation Prosperity Guardian, directly targeting Houthi positions – also with the support of Greece, Denmark, and the Netherlands – while countries like France have preferred just to escort the ships under EU flags and not directly engage with the Houthis – taking down missiles and drones once the attack began.

Despite its efforts, the joint mission between America and Britain hasn’t been effective in deterring the Houthi’s menace. And some would say it only helps to make things worse. For now, the US and UK-flagged ships have been rewarded with an extra risk premium cost on their insurance if they try to cross the Suez Canal.

Strategic bombings are not going to take the Houthis down – the Saudis tried that for years with not much success – and we know there are not going to be boots on the ground in Yemen. Also, being made enemy number one of “The American Empire“ has given the Houthis more street rep among the so-called “Resistance Axis.”

The EU has taken its time – maybe waiting to see if the situation cooled down by itself – but it is finally assembling a mission that will be under Italian leadership and will count on the strong participation of Mediterranean navies like Greece.

I am curious about what Spain is going to do. Due to Pedro Sanchez’s administration's pro-Palestinean position, Spain refused to participate in Operation Prosperity Guardian but also vetoed the use of resources from the EU’s Atalanta Mission – in charge of countering Somali pirates – against the Houthis.

However, regardless of where they stand on the Israel-Palestina issue, all Mediterranean nations are being harmed in one way or another by the Houthi attacks.

I wrote an article about this for World Politics Review:

Support for de-risking from China and the extra cost it may incur on European consumers is usually based on the idea that the jobs and industries currently in China will be brought back to Europe. If, however, instead of re-shoring to domestic manufacturers, European companies simply near-shore to Morocco or Turkey, that could provoke the wrath of European voters. Add to that the tensions over migration from these countries to Europe, and near-shoring could easily become a source of strain in North-South Mediterranean relations. With a series of important elections in 2024, this is a political risk to watch, particularly against the backdrop of the current surge of right-wing populist parties across Europe.

Amid the increased uncertainty surrounding extended maritime routes, Mediterranean nations can capitalize on the preference for shorter supply chains and the de-coupling of Western economies from China. Nevertheless, in a tightly interconnected system of logistics networks, significant disruptions in the Suez Canal are likely to undercut the significant advantages these new patterns of connectivity bring to the Mediterranean, especially given the possibility of escalation between the U.S. and the Houthis.

Please let me know if you don’t have access to the article.

There are many other angles in the Red Sea crisis, so will go back to this in the future.

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Bukele made El Salvador Safe. Can he make it rich?

President Nayib Bukele achieved a sound victory with 87% of the votes for him. These numbers might be hard to believe, but it is easy to see why a majority of Salvadorans would be supporting him.

The international press has pointed out the possible human rights abuses of his government. Still, when gangs rule and a country lacks a minimum level of security to be a functional society, few liberties can be enjoyed.

Bukele’s methods can be harsh, but the numbers seem to back him, with murder rates down 70%. El Salvador has indeed passed from being the country with the highest murder rate in the world to the one with the largest incarceration rate.

Still, I can see that as a change that most Salvadorans can welcome – even if we ignore that El Salvador is now also the country with the lowest murder rate in the Western Hemisphere.

Securing the monopoly of violence is the sovereign's first source of legitimacy, but can it be the only one?

Juan David Rojas and Geoff Shullengberger approach this question in their analysis of Bukele’s revolution. I share their conclusion that once El Salvador has achieved a decent degree of stability, Bukele will have to back his position with a sound economic policy.

One can have different positions about Bukele’s bit for Bitcoin, but at least it shows a government willing to take risks and innovate. In this sense, Bukele has been opening El Salvador's economy, attracting foreign investment, and boosting the service sector to cater to the expat digital economy.

If Bukele manages to consolidate El Salvador's position in the digital services economy and preferably goes beyond that, securing long-lasting growth for the country remains to be seen. But now Bukele has the power – and most likely the popular support – to implement whatever economic policy he sees fit.

Bukele wanted to have El Salvador’s future on his hands, and now he has it. His leadership in the economic policy will decide if he is really up to the task of becoming Latin America’s Lee Kuan Yew.

It is important to pay attention to Bukele’s future because he is relevant not only for El Salvador but for the whole region – and even beyond – because his success will prompt other leaders to try to follow his example.

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Japan is back in the Indo-Pacific.

Kishida is not enjoying much popularity at home, but Japan is gaining love abroad.

Like everyone else, Japan is preparing for a potential war with China. The country is reinforcing its alliances in the Indo-Pacific and its industrial capacities at home.

Still far from the pre-WWII era, but Japan seems to be taking the horizon of war much more seriously than most Western European countries – for obvious reasons.

Japan and the Philipines are close to signing a troops pact.

How Bejing blew up its relationship with the Philipines always fascinated me. As you know, I have a thing for populist politicians, so I followed Duterte’s campaign and presidency quite closely. When he was in office, Duterte was more than willing to reboot relations with China and become closer to Beijing.

Xi Jinping, who, as we know, has a neighborhood fond of him, paid Duterte’s opening, doubling down on China’s reclamations in the South China Sea. Now Duterte is gone, and the Philipines are not only back on track on their relationship with the US but also getting close to Japan. All hail the Chairman.

Japan is an indispensable ally for the US security nexus in the Indo-Pacific.

It is well known how Japan became the logistics powerhouse of the US armies in their operations in Korea and Vietnam – and how that helped to fuel the postwar “Japanese economic miracle.”

However, Japan’s role is still vital for the US efforts in the Indo-Pacific. Japan is going to expand its shipyard capabilities to repair US Navy ships. Why is this not happening in the US? Well, there is a cost-effective logistical reason: it makes more sense to repair ships near where they will be deployed. However, a much more troubling reason from the US side is America’s loss of industrial culture and muscle.

And I find here a connection with the case of Nippon Steel's purchase of US Steel. If a country believes that a possibility of war is on the horizon, securing and reinforcing its steel production is a must. Nippon Steel’s CEO used precisely the argument that it is necessary to pull resources to counter China’s steel production to ease the worries of American critics.

As I argued for Unherd, he does have a point, but that is not an excuse for not asking why it is not an American company that is buying Nippon Steel and becoming a global steel powerhouse instead of a Japanese company.

Said that, if this is the turn things are going to take, and Japan is going to be the country repairing US ships and building the stuff that America’s economy can’t, it makes all the sense in the world that Nippon Steel's global production has the means to compete against China.

It is also vital to notice that Japan is reinforcing its military capabilities, signing a deal to buy 400 tomahawk missiles from the US.

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Other things I’ve recently published:

Can Javier Milei be a partner of the US in Latin America against China?

My latest Op-Ed for the Orion Policy Institute explores if Milei, despite the many uncertainties, could be an ally of the US to counter China’s influence in the Americas.

For most Taiwanese China is not the Biggest Concern

My read on Taiwanese election result.

China is not ready to invade Taiwan (yet)

My quick take on the last reshuffle/purge in China’s Rocket division – I wrote it before reading about the rumors of rockets filled with water instead of fuel.

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Sorry for the silence in the past few weeks. A combination of personal matters and a project I had to hand in at the end of January kept me away from the newsletter. But I am happy to share with you that I have already submitted it – I will let you know more about it in the next few weeks. That said, I expect to be here more often from now onwards.

Have a great week!

Best,

Miquel

Writing from London as the city prepares to welcome the new year, I'd like to extend my New Year wishes to all the subscribers of the Business of Power.

Since launching the Business of Power, we've witnessed a surge in events with dirct geopolitical impact, including a series of coup d'états in Africa, China's economic struggles amid post-pandemic diplomatic rebuilding, political instability in Spain and national tensions across Europe, Javier Milei's election as Argentina's president, and the brutal war between Israel and Palestine.

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In my final article of 2023, I constructed a framework to guide us through the uncertain geopolitics of multipolar globalization. Remember this one, as it will be essential for navigating the challenges of 2024.

As we conclude this year, Houthi attacks in the Red Sea are poised to persist, causing disruptions in global shipping at the beginning of the next. You all know I have a preference for the geopolitics of the sea, an often overlooked phenomenon that, when analyzed, is typically done superficially. Working to deepen the coverage of this in the years ahead, focusing on opportunities arising from the evolving security order of the oceans for cities, small nations, and middle powers worldwide. Spending a few days in Barcelona and London is definetly a great source of inspiration for that!

The upcoming year is expected to be marked by high geopolitical risks, stemming not only from unresolved crisis like the Ukraine war and Middle East instability but also due to a historic concentration of elections around the world, starting with Taiwan in January and peaking with the US in November.

In the coming year, I will closely monitor the impact of electoral contests, evaluating how local and international social dynamics converge in electoral processes, influencing global geopolitics. Watch out for the first post of 2024, focusing on understanding the prominent political phenomenon of our time: the rise of populism.

With that said, enjoy the night, and I wish you a successful and adventurous 2024 for you and your loved ones.

Have a wonderful start to 2024!

Miquel

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"From the present time forth, in the post-Columbian age, we shall again have to deal with a closed political system, and nonetheless that it will be one of worldwide scope. Every explosion of social forces, instead of being dissipated in a surrounding circuit of unknown space and barbaric chaos, will be sharply re-echoed from the far side of the globe, and weak elements in the political and economic organism of the world will be shattered in consequence."

Halford J. Mackinder

We can’t escape geopolitics even if we don’t care about it.

You don’t even need to check the news to feel it. Sometimes, geopolitics hits hard on your pocket. Other times, it meets you while taking a walk in the streets.

The recent war escalation between Israel and Palestine hasn't affected the things we'd normally label as "geopolitical risks," like rising oil prices.

The war in Gaza has interlinked with deep political divisions among Americans. We have witnessed protests in the streets of Manhattan and conflicts on American campuses.

But that’s not entirely new.

Our grandparents could tell stories about campus agitation during the Vietnam War, protest for democracy in Europe, or anticolonial struggles in the global south. Still, at that time, there seemed to be a coherent narrative tying all these events together.

Today, that’s not the case. There is a strong temptation to shoehorn current events into recycled old-fashioned discourses. Doing that will make our ship crash with an overlooked geopolitical iceberg.

The world today is at the same time one and many. Homogeneous, divided and fragmented. The certainty of living in a time of fin-de-siecle is the only thing that gives some coherence to what we are experiencing. Then the question is: if geopolitics is unescapable, but our world is so messy, how can we make sense of a world without order?

First of all, navigating geopolitics.

The only way to chart unchartered waters is to sail through them. We should refrain from hiding from the paradoxes of our time but embrace them. Creating the frameworks to understand them and exploit them.

Today, I want to share some ideas of how I am trying to make sense of the world. I want to give you the tools I am building to help you navigate the geopolitics of multipolar globalization.

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Why multipolarity?

Let's start moving away from three common misconceptions about the current state of international affairs.

• The centrality of the US-China rivalry doesn’t mean we live in a bipolar system.

• De-coupling is not the same as de-globalization.

• Global challenges don’t generate global agency.

The rivalry between the US and China is a central feature of our international system. Yet, we don't say we live in a bipolar system but a multipolar world.

Why is that?

To start with, we can explain very little about any of the ongoing political conflicts going on around the world by figuring out if the allegiance of the contending parts is to Beijing or Washington.

The US and China are the actors that matter the most, but not the only ones that matter. The frictions caused by the US and China's competition are already empowering new (re)emerging actors. This reinforces the tendency towards multipolarity.

America's push for decoupling from China feeds the rise of India. Japan, the ASEAN, and other developing nations in South America and Africa are also taking advantage of this dynamic.

That means that our world has little to do with the one of the Cold War. Still, many insist on looking at things through these old googles because are the only ones that can still fit in their heads.

The US and China are fighting an asymmetric conflict.

For example, among recent global escalations, we can, indeed, find countries close to China. Russia, Iran, and now Venezuela with its ambition of taking over Essequibo.

Many analysts try to find coordination behind these actions. A coherent chain of events that would ultimately end with China's invasion of Taiwan. Beijing might still invade Taiwan someday, but not as part of a plan of an axis of evil.

China is not the USSR.

China is not mimicking American-led institutional structures as the Soviet Union did. China doesn't seek to replace the liberal international order with its own. That doesn't make Beijing less ambitious. China is just less concerned about chaos reigning beyond its borders.

The US is still operating at large within frameworks and institutions inherited from the aftermath of the Cold War. They are not entirely obsolete tools, but they were designed to fight the battles of another time.

What Beijing provides to its "allies" is not political and military guidance. But an economic and technological safeguard against Western pressure.

China acts as an enabler, not a coordinator.

The influence of China in the world today is not as much dependent on its actions but on its traction. Its mere existence as a great economic, technological, and political power has been enough to upheave the Western-led order.

The Western-dominated system has already been broken, and there is no way back. A decentered globalism has substituted the old articulation. For the same reason, the idea of bipolarity doesn't work.

Beijing is not yet – and it is not clear it will ever be – the "sovereign" of a coherent bloc of allies. Most of China's "allies" have been following their own agendas. How much the actions of third actors directly benefit Beijing or not is a secondary concern. That's what many analysts aren't able to see.

The US has also grown less dependent on the outside world in terms of energy resources and is keeping Europe closer to Washington than ever before. But everybody knows that America has lost its appetite for overseas wars.

In this topography, international actors of every kind have become less risk-averse. More prone to take military actions and cross lines unthought of a decade ago.

Paradox of Multipolar Globalization

This world doesn't provide for parsimonious one-size-fits-all explanations. Yet, we can still craft the charts to sail through the waters of geopolitics.

To navigate globalized multipolarity, we need first to understand its apparent paradoxes. Multipolar globalization is that it is, at the same time, a unified, polarized, and fragmented system.

Unified because everything happens within an interconnected system. A problem overseas rapidly becomes a problem at home.

Pandemics, climate changes, resource scarcity, economic crisis, demographics, migration, digital alienation, social antagonism, and political obsolescence to mention a few are global challenges with global consequences.

Polarized because the rivalry between the US and China plays a transversal role in global politics. Every country in the world is forced one way or another to navigate through its gravitational forces.

Fragmented because global events are not happening as side-plots of a main geopolitical narrative that ties everything together.

Global political centers have lost the global disciplining capacity they used to have. Increasingly, more actors with their own agency and agendas play a leading role in highly localized contexts that still manage to provoke global shifts.

Think about the Houthis, the Israelis, the Palestinians, the Ukrainians, the Azeris, or the Tigray, to mention a few. They can play the game of the great powers, but they won't let themselves be treated as disposable pawns.

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We can use these features of globalized multipolarity to chart contemporary geoeconomic waters into three interacting dynamics:

• Global Markets

• Bifurcating Supply Chains

• Localized Polities

Global Markets.

For a century at least, we have heard about the advent of the regional self-sufficient economic blocs. However, any attempt to create successful large, developed, closed economic systems has failed.

Markets are global for goods, commodities, technology and innovations like AI. But also, in a broader sense, for cultural and political products or solutions to shared problems.

As long as the material conditions of the possibility for a digitally connected sea-bound global civilization exist, all economies will operate in interlinked global markets. The consequences of disruptions and radical changes abroad, sooner or later, hit domestic markets.

Bifurcating Supply Chains.

The rivalry between the United States and China, coupled with the goal of addressing geopolitical, environmental, and security risks inherent in an interconnected market, is nurturing the diversification of global supply chains.

Economic actors adapting to the risks generated by the US and China decoupling will have to choose one of them: to find creative solutions to work with both or to create totally independent supply chains.

Most likely, that will produce a diversification of supply chains that will go beyond mere bifurcation. In the next decades, we won't be talking only about Chinese or American lead supply chains.

That will allow for new technological powers to rise. We should include India's, ASEAN's, and maybe others. Countries in the middle will adapt to bifurcated supply chains, generating new articulations.

Localized Polities

Problems might be global, but action still remains local.

Economic policy is no different. Global trends are built through a myriad of interactions at local levels. Depending on the issue, "local" can refer to different levels, ranging from companies, cities, states, and regions to even religious and ethnic groups.

The appreciation of shorter supply chains to mitigate global risks will increase the value of localized economies. Even in contexts where there exists degrees of transnational coordination, like the EU or the Belt and Road Initiative, national and local contexts are the ones that decide the eventual failure or success of economic policy.

No matter how much national politics are influenced by global events, they are still decided in "local contexts." International dynamics might influence local actors. However, local actors are still the ones who will have to deal with and use the opportunities emerging from global challenges.

A quick look at the war in Ukraine shows all these three dynamics at play. The war uphealed global energy markets. Russia had to reshuffle its supply chains to get substitute components from China and India. European governments relaxed their green policies, fearing unrest caused by the demand for affordable electricity.

Navigating geopolitical waves

Finding a new order in the world might be beyond our reach, but we can still find orientation within it. The ideas I shared today are all still works in progress. And maybe this is the only way they can be.

Charting contemporary geopolitical waters is still possible as long as we repudiate the human tendency to seek comfortable fictions of order to mask unsettling realities of uncertainty.

To navigate the current geopolitical shifts, we need a navigator’s mindset. We must use charts, compasses, and sextants to navigate, but yet steer the wheel with a firm hand through changing winds and stormy waters.

This is all for today. If you enjoyed this article, please leave a like or share it with your contacts. I’m also very interested in your comments and opinions on this topic!

Have a great weekend!

Miquel

With multiple geopolitical hot points around the world, some distension between China and the US will be welcomed by many and seems the only appropriate thing that Biden and Xi can get out of this meeting.

Xi and Biden can go home happy.

Biden gets a military crisis line, an AI guardrails working group, and an agreement to crack down on fentanyl.

Xi gets to meet US CEOs and encourage them to invest in China to ease the country’s economic uncertainty.

This is overall a symbolic gesture, but symbolism matters, as Wu Xinbo, the director of Fudan University’s Institute of International Studies and the Centre for American Studies, said in a speech weeks before the meeting translated by in Sinification:

Wu calls Xi’s then-potential meeting with Biden “extremely symbolic” (极有象征性), but describes the current easing of tensions between China and the US as no more than “détente” (缓和) or a stabilising of relations, rather than an actual “improvement” (改善).

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Xi-Biden Meeting: Détente or Improvement?

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2 years ago · 1 like · 1 comment · Thomas des Garets Geddes

A shift in China-US relations?

This is not the end of China-US geopolitical tension.

In San Francisco, we didn’t witness a reboot in China-US relations, but more a way to find and manage incompatibilities without falling into an on-all conflict.

One of the main differences between the old Cold War and the new one – if we can even call it that – is that China and the US have strong economic interdependence and interlinked supply chains.

This has both positive and negative aspects:

The positive aspect is that a war would be very difficult to sustain for either economy. This scenario differs from the MAD – which may also apply in a prospective China-US war. It is not that war would be highly mutually destructive; it is that both economies would have to reorganize to be able to wage it.

The negative aspect of economic interdependence creates constant friction connected with geopolitical tensions and generates many more avenues of conflict and animosity. Also, the US is in a weaker position due to its massive policies of delocalization to China.

In other words, the situation is far messier, and agreements on arms control won’t help stabilize the relationship.

There are attempts on both sides to correct the mutual dependence on this relation. Both countries will keep reinforcing their economic capabilities, and their mutual reliance will decrease – which could even be good for easing tensions. So far, neither side has yet gotten there, although the tendency seems clear.

Said that this is the first moment of rapprochement in the last six years. Learning how to manage their incompatibilities is part of the evolution of China-US relations, so any developments in this field should be welcomed.

Bottom line:

Washington and Beijing must be much more creative to find a sustainable way to manage their rivalry. A more balanced relationship will likely need China and the US to be less entangled but not so disentangled that they could afford to destroy the other.

Shifting waves in the shipping industry?

Danish container shipping company Maersk will cut more than 10,000 jobs due to the financial downturn in the third quarter of 2023.

• Maersk plans to decrease the workforce further by 3,500 positions, with up to 2,500 to be carried out in the coming months and the remaining extending into 2024.

• This reduction will bring the global workforce below 100,000 positions, with an expected restructuring charge of US$350 million.

• Maersk aims to reduce selling, general, and administrative expenses (SG&A) cost by US$600 million for 2024.

Is this an indicator of a global trade slowdown or a change in the major trading routes?

According to on Twitter, today, the two most significant container trade routes are those connecting China to the United States and China to Europe.

For the past three decades, major shipping companies have structured their networks and capacity projections based on a model where China remains the factory of the world.

Now, this is changing, with strong shifts in the global economic landscape; thanks to re-shoring and near-shoring practices, there might be new routes that focus on transatlantic trade or the Indian Ocean.

We are still far from a finalized process, but it is always important to pay attention to the shipping industry.

Shipping is the bloodstream of global trade.

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How is Shenzhen adapting to Xi’s China?

In this piece for World Politic Review, I talk about how Shenzhen is adapting to China’s economic slowdown and the end of the Reform and the Opening Up.

Like the country at large, the city of Shenzhen is also looking for ways to adapt to the growing uncertainty of China’s shifting economic landscape. But Shenzhen is not just another city. It was the birthplace of the Reform and Opening Up era, which President Xi Jinping has essentially brought to a close. Chosen for its geographic proximity to Hong Kong and its sea-fearing and merchant tradition, Shenzhen became the first Special Economic Zone where market initiatives flourished in post-Mao China. The city rapidly grew from 300,000 inhabitants in 1979 to 13 million today, attracting talent and dreamers from around China.

In the article, I have researched the strategies that the city is implementing to finds its new space in Xi’s China: identity consolidation, regional integration and internationalization.

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Sanchez survives again

In the first installment of this newsletter, I talked about July’s Spanish elections, and I already anticipated that Pedro Sanchez was likely to become Spain’s PM with the votes of Junts.

Finally, today, it happened.

The fact that Sanchez got Junts votes offering an amnesty law for Puigdemont hasn’t set well in the opposition, and there have been protests for almost two weeks in Madrid and other Spanish cities.

In this quick take I wrote for Unherd, I thought that the protest would keep growing, even amassing enough support to provoke something akin to the Spanish version of January 6th.

However, although the protest continued and may continue for a few days, they seem that have already burned out before they could expand.

The fact is that Sanchez, liked or not, has the numbers in Congress, and there is not much that can be done by the opposition apart from trying to fight the amnesty bill through institutional means.

For external observers, it seems like Spain was on the verge of a new civil war. But this is something actually pretty common in Spain before the formation of a new government.

Sanchez knows that the tone of the protest hasn’t done anything more than reinforce him and force Vox and the PP to compete with each other. Sanchez felt so comfortable and unafraid that spent half of the vote in Congress making fun of Feijoo.

My piece of advice is that while he is still around, in Spanish politics, do not bet against Pedro Sanchez.

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This week’s long-read: How much “decoupling” has been really decoupled?

Nonetheless, we are still far from a full decoupling between China and America’s supply chains. This week’s long-read is a paper written by Richard Baldwin, Rebecca Freeman, and Angelos Theodorakopoulos for the National Bureau of Economic Research, that examines three core elements of these problems: measurement of links exposing supply chains to disruptions, the nature of shocks causing disruptions, and criteria for policy to mitigate their impact.

Here are some of its conclusions:

• Global input-output data reveals that US exposure to foreign suppliers, particularly China, is larger than conventional trade data suggest.

• However, overall exposure at the macro level remains relatively modest, with over 80% of US industrial inputs sourced domestically.

• Recent supply chain shocks have been systemic rather than idiosyncratic, likely arising from climate change, geoeconomic tensions, and digital disruptions.

• The focus of concerns and policies should be on individual products rather than the entire manufacturing sector.

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This is all for this week. As always, feel free to reach out or leave a comment if there is anything here you would like to talk about.

Miquel

Imagine you are Crown Prince Mohamed bin Salman.

Your people have lived on oil revenues for almost a century. Many of your subjects even struggle to understand the concept of taxes. “The government taking money from me, instead of giving? How come?.”

But the times are changing.

The US doesn’t need your oil anymore. America is now a net exporter of oil and gas. And more importantly, Americans have grown tired of wars in the Middle East.

The world will still run on black gold for decades to come, but the call for decarbonization has come to stay. New energy technologies are emerging, and the era of oil is reaching its twilight.

The country that carries your family name cannot run on the mana from the underground forever.

So what do you do?

Luckily, your predecessors were smart enough to foresee this scenario. Saudi Arabia has a sovereign fund, the Public Investment Fund, which has close to $780 billion in assets.

Also, the Saudis have learned a few tricks. You know about finance, commodities, energy, and logistics. Some of the best ports in the world are on Saudi soil. Let’s make the country a global industrial and logistics hub.

With that kind of money, you can become the world’s banker.

You have cash in an era where private investors in the West began to be more weary of putting their dollars in companies that seem only to make money, asking them for “money to make money.”

Let’s flow the world with cash in real estate, cryptocurrencies, Meta, NFTs, fin-techs, AI, and video games.

You are thinking about building a new futuristic city called the Line.

Maybe it can be space exploration. Renewable energies? Yes of course. What about buying the American Open or European first-division clubs?

Money is not an issue, so your imagination is the only limit.

The geopolitical market is more open than ever. The end of the US hegemony means that you need to take care of your own security problems.

But that also means that there are more other countries to do business with. The Chinese need oil. What is even better, is that you can work with both Beijing and Washington. And also with the Indians, Europeans, Africans, and Russians.

Things close to home don’t look that well. Beijing has helped to broke some talks with Teheran. But you are not entirely sure that this will work in the long term.

What about Israel? You certainly do not like the Jews. But you don’t like the Iranians either. And that’s one thing you have in common with Israel. They are the only ones that could one day nuke Iran.

Israel has been around for seventy years. Egypt and Jordan have already accepted its existence. Many other Arab countries have come to terms with them.

The Americans are not as important as they used to be, sure. But they still matter more than most other countries. A normalization between Israel and Saudi Arabia will make them happy – and indeed, we will take something out of it.

Maybe it is time to move on.

What about the Palestinians? They are your Arab brothers, and you should stand up for them.

But what does being Arab mean after a century where every country has gone separate ways? The times when your grandfather rode along Lawerence of Arabia are long gone. Now we are Jordans, Egyptians, Syrians, Lybians, Algerians, Saudis…

Pan-Arabism was a cause of militarist secular nationalist and proto-communist. Never the cause of the House of Saud, anyway.

Still, your family are the sacred guardians of la Mecca. Siding with the Israelites can infuriate the Islamic world. And you want to be seen as a good Muslim.

Nonetheless, you have been trying to downplay the influence of Islamic Orthodoxy in your country. You have pushed for laws that for the West still look far from sufficient but have generated enough internal strife for many to understand that times are changing.

For a monarch, Islamists are like the patriots that Emperor Frederic II feared: “Patriots for me today, patriots against me tomorrow.”

You don’t need your people thinking about holy wars and funding groups that could get you into trouble with America and Europe.

One needs to watch out for popular sentiments on such sensitive issues. But you are a true sovereign for a reason. You don’t let popular whims decide for you. You, and only you, call the shots.

So that’s it.

It won’t be easy. It won’t be soon. But the decision has been made. It is clearly in the best interest of Saudi Arabia and your family to find a way to normalize relations with Israel.

Let’s make history.

You are gonna be Arabia’s Deng Xiaoping.

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You wake up one Saturday.

One of your officials rushes with troubling news from Israel.

Hamas launched an attack—a thousand civilians were killed and kidnapped. Hamas is also documenting and sharing gruesome images of their actions.

As expected, inflamed rhetoric comes from the other side. Israel seems eager to level Gaza. Thousands of civilians are going to die.

Your subjects are furious. Arabs and Muslims are protesting in the streets around the world. Maybe not in your country because you don’t let dirty things such as protests happen under your rule, but you know what’s the feeling of your people.

Everything that you have been building seems to be threatened.

You know that Hamas is Iran's proxy, and one goal of this attack is to derail your conversations with Israel. Once the Israel offensive began, you cannot be seen as supporting the massacre of innocent Arabs.

The Americans are knocking at your door. Maybe Saudi Arabia is not as dependent on the US as in the past, but you still need to operate in a global capital structure ruled mainly by the dollar.

China is not going to help here, and China cannot replace the West. China is a vital oil buyer, but none is interested in buying a Chinese football club.

You face the only question that really matters again.

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What do you do?

You play the game.

Conversations with Israel must be halted. Support for the Palestinians must be shown.

You present yourself as a voice for dialogue, de-escalation, and diplomacy.

International pundits are talking about a regional war. Some even envision a holy war between the West and the Islamic world.

You laugh at them.

You are not getting involved in a regional conflict to save the proxy of your main geopolitical rival. You are already fighting a war against Iran-backed guerrillas in Yemen; it would be foolish to enter a war on their side.

Once you have talked the script, you begin to take action to save what matters.

First, you tell your people to shut up.

Second, you deal with the Americans.

Not with Blinken, though. You can smell weakness.

You want to take the initiative here. If every other Arab leader is showing an angry face to him, you don’t even let him see yours.

You send the message. You only want to talk to the boss. You get Biden on the phone to talk things out.

Then you can say what everyone knew you had to do:

After the war, talks of normalization of relations with Israel will resume.

Third, you keep making money.

You bring 5000 delegates for Riyadh’s Future Investment Initiative conference at the vast and ultra-modern-looking King Abdulaziz Conference Center.

Some say that the war between Israel and Hamas has cast a shadow over the “Davos in the Desert.”

Really? You have the UK Prime Minister, Rishi Sunak, Korea’s President Yoon Suk Yeol, and hundreds of CEOs, politicians, investors, entrepreneurs, and tech gurus. The world is discussing war, but you are making them talk about business.

You try to convince them how good you are for business. Saudi Arabia is open to investment, and Saudi Arabia can play a key role in bringing the desired stability that now seems lacking in the region.

Is the trick gonna work? None knows, but you need to make your move.

You are Mohammed bin Salman. A prime Minister, a prince, a stateman, a diplomat, and overall, you are a businessman.

And you are in the only business that matters, the business of power.

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In an era of multipolarity with more autonomy for middle powers, the demographic rise of North Africa, and, thanks to its geographic connectivity, the Mediterranean is again a key geopolitical hotspot. 

Even when I wrote my thesis about China in 2019, I centered it around Beijing's impact on Mediterranean geoeconomic dynamics. 

More by chance than by design, this edition of the Business of Power Brief focuses on developments that are mainly taking place in the Mediterranean, proving the growing structural weight of the region's geopolitics in world politics. 

The end of the migration consensus? 

Everyone is talking about migration. Migrant crises have become a central concern in a time of upheaval. 

The massive flood of immigrants impacts the fundamental pillars of a community's social fabric. It can deteriorate the sense of shared identity, city landscape, security, and societal trust. But it also has a clear economic impact in areas like job access, rent prices, and the overcapacity of welfare infrastructures. 

Migration is a hot topic on both sides of the Atlantic, and we even see blue territories like New York City backing down on open border policies. 

But rising concerns over mass migration are not a "first-world problem" anymore. Sometimes ignored by Western analysis, opposition to migration has become a central topic in the political discourse in developing economies like Egypt, South Africa, Chile, and many others. 

However, if there is somewhere where the shifting consensus on migration will have the most important consequences, this is Europe. 

Europe is hardening up.

If there is one topic I have noticed a shift in the general discourse over the years every time I go back to Europe, it is migration. 

European nations have been the most affected by the latest waves of migrants from Africa and the Middle East crossing the Mediterranean. 

We have seen a public discourse change in France, Italy, the UK, and even Germany in recent years. In yesterday's regional elections in Baviera, the German anti-immigration party, Alternative for Germany, ended up in second. 

However, the fundamental changes occur when a shift begins in traditionally pro-open borders strongholds:

• Sweden, one of the preferred destinations for asylum seekers due to the country's welfare generosity, is considering deploying the army to confront criminal gangs formed by foreign communities. 

• In Catalonia – one of the European territories with the lowest vote share to parties opposed to illegal migration – medium cities like Manresa and Molins de Rei have witnessed battles and French banlieue-style riots protagonized by migrant groups, prompting citizen mobilization. 

• In Ireland, as reported by Aris Rousinous, grassroots have risen opposing the intake of refugees and migrants. Interestingly, even the Ukranian ambassador complained that Ireland couldn't provide for all the Ukranian citizens they were taking. 

Structural changes?

Focus on the big picture. 

For forty years, the trio of free flow of goods, capital, and people was the mantra of the hyperglobalization era. 

That world is ending. It is natural that once the consensus on the economic policy has shifted, the other pieces of the puzzle begin to move. 

A change in the discourse doesn't necessarily mean a radical shift in the policy. Even when political parties with programs about limiting immigration take office, that rarely changes. Giorgia Meloni recently said that "Italy needs more migrants."

However, we have already seen an agreement between the US and the EU to restrict the conditions for asylum seekers. But that is a cosmetic measure that won't stop the flow of migrants that reach Southern European shores by the thousands every week.

The structural conditions that allow, promote, and incentivize mass migration flows haven't changed. In the technological dimension, it is much easier to move from one continent to another today than a hundred years ago.  

In the same way that we can be skeptical if we can fully decouple Western economies from China without going trhough a profound transformation, European countries would have to go trhough deep changes to deal with mass migration problems. 

Main takeaways 

• The "migrant question" won't be "solved" anytime soon, only mitigated and managed – even when enforcing a policy of stronger border control. 

• It will remain a problem in Europe, implicating security, identity, and economic issues.

• European politics will regularly be dominated by a local/foreign axis that might or might not overlap with a sovereigntist/EU axis – that will depend on the EU policy and relations among EU members on this matter. 

• That might further political fragmentation, having, for instance, anti-migration left and pro-open borders left options in the same elections. 

• We could also see a confluence of interests in new populist upheavals, affecting other shifting consensus like support for green policy. 

• Europe's societal tensions and inter-ethnic conflicts will keep growing. European public discourse will devote more attention to the migration issue, surpassing other pressing problems like industrial recovery and Ukraine. 

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Morroco's moment 

Despite recently suffering a terrible earthquake, Morroco's economy keeps attracting investors.

Casablanca has surpassed Tel Aviv as the third-best regional financial center for investors in the Middle East and North Africa region. 

Despite some hype from Morroco, the country is nowhere near surpassing the Israeli industrial and tech sector – its economy doesn't necessarily play the same role. 

Nonetheless, Morroco's success in attracting investors' interest is proof of its living momentum. 

Morroco has many elements in its favor:

• A growing young population

• A stable government

• A relatively peaceful neighborhood

• An excellent location for near-shoring policies of the EU 

Morroco also enjoys good relations with America. And it could become a major LNG hub, even debunking the Iberian peninsula. 

As is happening with Mexico, many Chinese companies have offshored some of their production in the North African country to better access North African markets and avoid de-risking EU policies against Chinese-made goods. 

Ibero-Morrocan integration? 

A possible trend that we might see in the future is a growing integration between the Iberian peninsula and Morroco. 

Spain recently had to pay painful diplomatic concessions in the Western Sahara, recognizing it as Morroco's territory.

Madrid also fears the attempts of Morroco's reclamation of Spain's North African cities of Ceuta and Melilla and its constant use of migrants to put pressure on Spain's Southern border. 

Nonetheless, some Spanish companies expect to benefit from Morroco's growth, and Madrid has a long-term policy with Morroco to ensure this happens. 

The 2030 Football World Cup will be co-organized by Morroco, Spain, and Portugal. We need to read the organization of this event as part of a larger trend of Ibero-Morrocan integration projects. 

A potential source of tensions

While some industries may benefit from that, Spain's agriculture sector might not be happy with Morroco's growing economic influence. 

In the long term, if not accurately planned, a growth in offshoring to Morroco could entail severe risks for the re-industrialization ambitions of Iberian economies.  

In societal terms, Morroco represents a major migration concern for the Iberian Peninsula and Europe, and it is unclear if a focus on economic growth would curtail Morroco's assertivity. 

If Morroco keeps growing while Spain's economy keeps declining, I wonder how Spanish society will deal with a scenario where Moroccans are not only cheap labor and “underage criminals” but first-division football club owners, real estate magnates, and preferred clients at luxury brand stores. 

Bottom line: 

Regardless of Spanish-Morrocan relations, in the context of growing geopolitical tensions in the Eastern Mediterranean, the geoeconomic balance of the region is shifting Westwards, and Morroco enjoys a privileged position to take advantage of it. 

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Hamas offensive in Israel 

Many things can be said about the Hamas offensive during the past weekend that, at the moment of writing these lines, have already cost more than a thousand lives. 

I'll focus here on the possible geopolitical implications of the situation. 

The situation is still evolving, so anything said here is contingent on the evolution of the events and the performance of the IDF and Hamas and Hezbollah militias on the battlefield. 

Why did Hamas attack?

The long-term strategic reason for Hamas' actions and diffusion of disturbing images in its own communication channels is unclear beyond causing a psychological impact on its enemy and maybe gaining the kind of popularity among radical Islamists that ISIS gained in the West. 

Owning the Israelis might be "cool" among Hamas’ supporters on social media for a few days, but it doesn't seem to be a sound strategic reason for such a large offensive.

I recommend Jacob L. Shapiro's insightful emergency podcast in Cognitive Investment, commenting on the situation. The Shapiro's summarizes three possibilities: 

• Desperation due to the dire humanitarian situation in Gaza and the fact that the world seems to be moving on from the Arab-Israeli conflict. 

• Internal infighting, getting ahead of political rivals, and gaining support in the West Bank. 

• Provoking an Israeli overreaction, generating outrage among Arabs, and forcing a regional war implicating Hezbollah and Muslims around the world. 

A regional war won't happen. Thus, none of these reasons seem to be able to bring any good outcome for Hamas or the Palestinians. 

The first outcome is that Netanyahu has achieved a unified and focused Israel after at least a year of internal turmoil. 

The opposition has offered him a national unity government, and despite the intelligence mishap, Netanyahu will come out stronger of this. 

Israel has mobilized 300,000 troops, its largest mobilization in history, and plans to enter Gaza with 100,000 soldiers. 

There is no reason to think that the IDF offensive over Gaza won't be successful in obliterating Hamas. However, it will be brutal in terms of civilian losses and Israeli casualties. Urban warfare in a hostile, densely populated area is never a good option. 

Regional geopolitical implications

• Saudi Arabia

Many highlight that the reason for Hamas to perform this attack was to derail the normalization process between Saudi Arabia and Israel. I agree that is a possible factor, too. 

Nevertheless, Saudi Arabia's statement about Hamas's offensive didn't have an especially harsh tone against Israel. Depending on the impact of Israeli retaliations on civilians, we could see stronger statements. 

However, I think there are strong interests on both sides for a rapprochement, and no war in Gaza would derail the current negotiations – other possible problems seem more relevant for that outcome to happen.  

We are well beyond the times of Pan-Arabism. Saudi Arabia is not going to intervene, no matter what. 

Palestinians are a pawn in this game, and Saudi Arabia will take as much advantage as they can from this situation but won't endanger significant advancement of their interest. 

• Iran 

Several sources indicate that Iran has helped Hamas to plan the attack, which is likely. 

That could reinforce the idea that Iran wanted to prevent Israel from normalizing relations with Saudi Arabia, which would indeed leave them isolated in the region. 

But again, the most likely outcome is a stronger and more united Israel and the crippling of Hamas in Gaza, without any meaningful change in the diplomatic stand of Israel among the Arab world. 

Even if Hezbollah joined the fray – which seems likely – they are likely to suffer substantial losses this time. 

However, the scenario of a long war would also devastate Israeli capacities, which is one of the few reasons I find how this could come out as a win for Teheran. 

Geoeconomic impact 

On Twitter, Marko Papic signaled that the 2006 war between Israel and Lebanon didn't affect oil markets. For now, it seems the situation is similar. 

The natural gas market might be another thing. Due to security concerns, Israel has suspended production at the Tamar gas field and will look for alternative sources, thus likely increasing prices. 

Israel increasing its buying capacity in an already competitive market won't be good for Europe. 

Regarding trade, there are also comments about the possibility that the Suez Canal could be affected by the actions of the combatants or by a flood of refugees from Gaza.

Egypt has a wall on the border with Gaza, and as I mentioned above, it doesn't seem that its population would be especially welcoming of more Palestinian refugees. 

In the Yom Kippur War of 1973, the Suez Canal was affected, but then Egypt was the main opponent of Israel. I don’t think this is a likely scenario, but the risk has definitely increased.

Bottom line 

The Middle East and the Arab-Israeli conflict, specifically, attract a lot of attention and strong feelings. Still, in the grand scheme of things, its implications in the global geopolitical scene are relatively low. 

No major global power has an existential interest that might now be on a course of collision in the Middle East. 

China imports oil and wants stability there, but won't go to war because of that. The US doesn't even import oil from there anymore. Neither China nor the US wants the situation to escalate. They will focus their actions on preventing that. 

Indeed, an increase in the instability in the region might be precisely a consequence of the US's lost interest and power projection capacity there. 

No World War III is coming out from this.

However, linked the previous comments of this Brief: 

• The war could provoke a flood of refugees to Europe, but also Egypt and other neighboring countries in the East and Southern rim of the Mediterranean. 

• Confrontation and tensions between supporters of Palestine and Israel might take place in European nations and America. 

• Possible mimics of Hamas tactics by other Islamist groups on Western soil will be a security concern. If that happens, it will have a tremendous impact on Western public opinion. 

• The growing instability in the Eastern Mediterranean will increase the capacity of attraction of the Western Mediterranean.  

• Nonetheless, the geopolitical importance of the Indo-Mediterranean will remain more central than the Atlantic-Mediterranean axis. 

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This Brief was longer, but leaving Israel and Palestine apart, there have been important developments flying under the radar lately that I think are worth paying attention to. 

As always, many thanks to you all, and I'd appreciate your comments and shares. I am sure you have your own takes on these issues, and I'd love to know them. 

Additionally, I'm contemplating the possibility of introducing a subscription model down the line. Substack has recently introduced a "pledge" feature, signifying an interest in subscribing should I decide to implement a subscription plan.

If you're open to subscribing and showing your support, it would be very helpful to click on the "pledge your support" button in the upper right corner of the page. Rest assured, I won't activate subscriptions without prior notification, but I want to assess the potential interest. 

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China still felt pretty much like China.

I’ve been in Shenzhen these past few weeks to meet my wife’s family and celebrate our wedding in China. To add to the excitement, this was my first time visiting China in four years. And not just any ordinary four years, neither for the world nor for me.

Being back felt like meeting with an acquaintance whom you have only been updated about through social media for years. You both know where you are now, but you can still feel that time has led you down different paths, though not necessarily in opposite directions.

From 2019 to 2023

I decided to specialize in Chinese studies around 2016, and in 2019, I finally spent a semester studying Mandarin and researching for my Master's Thesis at Beijing Foreign Studies University.

Like many others, I went to China to learn and discover a country that was not only supposed to be entirely different from mine but that was going to shape the course of the 21^st C.

On a personal level, Beijing was going to be my last experience as a student.

During my time in Beijing, I spent most of my free time in sketchy-looking places wandering around the hutongs – and, to the horror of my now wife, using their public bathrooms. I managed to talk with a bunch of journalists, scholars, artists, and business people, but what I enjoyed most was chatting with randos and weirdos at bars or on the street.

I didn’t invest that much time eating well. I used to have meals for 10 or 15 RMB and get drunk on baijiu bottles from 7/11. Everyone I know who spent some time in China has gotten fatter. I lost weight. Coffee was my only luxury, accounting for half of my expenses – I’ll always be thankful for Luckin Coffee discount coupons.

Thinking back, my disregard for even basic comfort surprises me. I even used an underwear T-shirt as a pillow cover for a while.

It wasn’t a matter of money; it was more a mindset. Even though my original plan was to go back to China, I felt like I operated under the sense that time was limited. I privileged some weird sense of “adventure” over comfort.

And maybe this carefree attitude is the one that brought me to meet my wife and make things work. Who knows.

I treasure those moments but am glad my life has built on top of them. Now things are different, that is to say, in all objective aspects, much better.

But of course, it is not only me that is different now from 2019. The China I visited was in the world before COVID, another age.

Four years ago, the US-China trade war was in its early steps. Many democrats still championed open trade with China and criticized Trump for decoupling. It was much more uncertain which course Europe would take in its relationship with China. Both the EU and Britain were reluctant to follow the US against Huawei. Ironically, China was seen then as a source to strengthen European sovereignty vis-à-vis the US.

China’s Belt and Road seemed to be the pillar of a new world order. Italy was the star of the II BRI Forum in Beijing, celebrated that year. I remember attending a CGTN show where the Italian Chamber of Commerce representative did some bizarre magic trick, tacking an orange under his seat – he had to repeat it twice. As someone said on Twitter, in 2019, exchanging oranges for high-end manufactured goods was still considered a good deal for a G7 country. Now, Giorgia Meloni is close to taking Italy out of the BRI.

The enthusiasm around the BRI was proof of the self-confidence that China projected before the pandemic. But the day-to-day experiences also felt like China was indeed ahead of everyone else.

I remember that in 2019, China’s consumer economy felt far more advanced than ours, especially coming from Europe. You could access an immense service economy through your phone, almost infinite options for delivery, the use of QR codes to access menus and orders in bars and restaurants, and instant phone payments through WeChat and Alipay. One could believe that the future was on China’s side.

The pandemic has clearly changed that. It is not that China has gone backward – at least in terms of technology and economy. It is just it’s not going that far ahead anymore.

In a price-quality ratio, I’d still say that China offers a superior service economy, at least compared with New York. Still, today, our consumer technology is very similar to China’s. I didn’t find any shocking innovation that struck me with awe as I did in 2019 – indeed, some of the services I used to use weren’t available anymore.

Of course, many of the digital tools we have included in our daily day were directly imported from China when it seemed that China had everything figured out about how to live with COVID. But also, the recent crackdown on the tech sector has clearly slowed down the focus on the digital service economy in China.

Linked to this, four years ago, nobody talked that much about microchips. Taiwan was an important topic but not as much in the spotlight; Hong Kong’s massive protests against the Extradition Law garnered international attention. Discussions focused on Huawei taking over 5 G networks around the world.

I remember that before going to Beijing, Huawei opened an Apple store-style in Barcelona’s Plaça Catalunya—a declaration of intentions of what the Chinese company wanted to represent in the world. The store in Barcelona is now closed, as much of Huawei’s smartphone business in Europe.

Fate wanted that in my second time in China, Huawei returned to the spotlight. The new Huawei P60 has been built with only Chinese indigenous microchips bypassing American sanctions. As you know, Shenzhen is the center of China’s technological sector, and the city was full of commercials for Huawei’s new phone.

Nonetheless, Huawei’s breakthrough microchip development doesn’t feel the same as in 2019. Four years ago, Huawei was seen as the spearhead of China’s technological capacity to dispute US hegemony of global tech markets. Today, Huawei’s achievement is presented as a symbol of Chinese self-reliance.

That presents a country in a much more defensive stand than four years ago. Still a strong country, still confident in its own capacities, but less oriented toward mastering the outside world.

If I had to summarize how different China felt compared with before, that would be it.  

Green Shenzhen

This time, I didn’t come to Shenzhen as a student but as “a family man”.

As you can imagine, my experience has been different in terms of comfort. I only drank the good stuff, had great food at home, and went to the best restaurants in the city—no need to say that proper pillow covers were provided.

This time, I think I might have even added some weight.

To that, we need to add that this was my first time in Shenzhen. So, apart from the time that has passed, there was a geographical difference, and my previous experience in Beijing has likely influenced my feelings about the city.

Leaving my bettered standard of life apart, I definitely liked Shenzhen.

Shenzhen seems a pretty well-managed and ordered city where one can circulate without feeling constrained, especially in the newly developed areas.

Beijing is nice for a while, but I would rather not raise a family there. It is dry, polluted, and dusty, and traffic can be horrible. It isn't easy to walk around. Fences are everywhere, which act as a physical reminder of other constraints.

And more importantly, it is too far from the sea.

In general, Shenzhen felt more relaxed than Beijing. Some could argue that it is a less exciting city than Beijing. I can see that. Shenzhen seems more focused on public services, transportation, and amenities to build its quality of life.

With rain and humid heat, I spent a good deal of time visiting shopping malls. I don’t come from a shopping mall culture, nor am I a shopping mall guy. But with Shenzhen’s weather, I totally understand why people like to spend time there. And they are actually pretty cool malls.

There has been some talk about empty Shenzhen malls, especially in the current doubts about China’s economy. During my stay, most of them felt pretty empty, and luxury stores were desperate to sell you something, although you had to line up a couple of stores to get in. But to be fair, we were going during working hours, off-season, so we shouldn’t expect to find many people. Said that, high-end supermarkets and food courts were always full of customers.

Shenzhen’s coffee culture is very good, too. This is something that already surprised me on my first time in China, and things have only gotten better. That has to do with – leaving Muo Tai Luckin coffee apart –coffee is still seen in China as a luxury and many baristas take their craft very seriously. Which is something I appreciate.

I’d say that Shenzhen's main trait is a lot of space, something different compared with Beijing or Shanghai. Everything is pretty new; the roads are wide, and walking or riding everywhere is very easy. Even during rush hour, the subway felt pretty spacious.

In general, buildings are massive. Sometimes, it feels like a not necessarily dystopian version of Blade Runner.

It is a commonly known fact, but electric vehicles are everywhere, and yes, BYDs are pretty good. There were a lot of Teslas, too – I’d say roughly 30% of the EVs I saw were Teslas. No wonder Elon Musk wants to stay on good terms with Chinese authorities.

One of the things that shocked me was how green Shenzhen is.

There is vegetation everywhere, big trees, big parks and surrounded by green mountains. I wasn’t expecting that. In that sense, I could see how Shenzhen's culture and aesthetics are closer to Southeast Asia than Northern China. In the long term, I believe this is the cultural connection that will matter the most for China. The city is in a good position to exploit future connections and influence throughout the ASEAN countries.

The combination of the sea and mountains makes the city's geography very special. Especially if you get good views on a rainy day and you can see the mist coming down from the mountains. Also, stay in high buildings to avoid floods.

I must admit that I have a preference for sea peoples and coastal cities and cultures, and Cantonese industrious and merchant sea-fearing culture shares many elements with my own. Although Shenzhen is not the most Cantonese city out there, due to massive migration from all around China, geography still matters, and many traits of the original culture of the place have been intermixed to form its unique identity.

I don’t think Shenzhen could have happened anywhere else in China.

Shenzhen after the Reform and Opening Up

Shenzhen was the poster child of the Reform and Opening up, so seeing how the city adapts once that era reaches its twilight will be interesting to pay attention to.

Some of the policy initiatives I noticed make me think that, in a similar fashion to China itself, Shenzhen, more than taking an expansive approach as the “model city” for the country, will push for consolidation of its strengths and unique identity.

Shenzhen's strong entrepreneurial and industrial identity is evident everywhere, and they will preserve that. Not only does the government’s narrative push in that direction, but references to industrial culture are all over the city and have become part of the population's imagination.  

I took a picture of a mural made by some kids in a school, where the representation of the city is linked to Shenzhen’s industrial identity. We see bridges, container ships, infrastructures, etc. The theme couldn’t be very different from what you find in Western countries, but I feel it might also be different from what kids in other schools in China draw.

It is very likely there is a policy promoting this, which is totally fine. Still, I feel some of the details are a good account of the class or the school’s own perceptions.

Contrasting with other accounts of the Chinese economy that people I know have shared, Shenzhen seemed to be holding well. I’ve talked to friends who visited the northern parts of China and told me things there had become very cheap. That is not the case in Shenzhen. 

Even though Xi wants to limit the influence of the digital economy, Shenzhen’s tech sector still represents the parts of the economy that Xi intends to protect. The pulse of the times might have changed, but many economic sectors in Shenzhen will still be able to operate in a favorable central government policy framework.

Based on what I saw and talked about in Shenzhen, I am more inclined to think that China’s economy is going through an adjustment, coming to terms with the end of its years of fast expansion and not to its downfall. I think Tier 2 and Tier 3 cities are the ones that will suffer, and most likely, Chinese investments and wealth will be concentrated in Tier 1 cities. Shenzhen will do better than Shanghai, I think.

But, of course, I am biased.

Final thoughts

I have observed that many people who have been watching China for years have been suffering a certain level of exhaustion.

There's a prevailing sense of futility as we circle around the same issues without discovering anything new, facing cultural and political involution, diplomatic obstinacy, and a lack of room for hope in terms of creative policy-making.

At the same time, while we keep sharpening our knives to prepare for a global conflict that, if it ever escalates to war, everybody knows won’t bring any good, we haven’t figured out how to make our economy work without China – and I am inclined to think we may never do.

Being able to visit China after the pandemic doesn’t change any of this. That’s the times we have to live with.

Nonetheless, being there has helped me reconnect with the human reality of people who try to go on with their lives, face similar problems as we do, and are much more concerned about what is going on at home than grand geopolitical schemes.

I am aware this has never prevented a geopolitical disaster, but it is good not to forget about it.

P.S

A friend of my father-in-law came to our wedding, and he had the kindness to include our wedding in an article about life in Shenzhen for the Financial Times in Chinese. If you can read Chinese, it’s a beautiful depiction of the city, and of course, we feel very flattered by it.

Have a nice week ahead, and I will retake the brief next week

Miquel