With this evening’s news that Japan and the USA are ‘backing down’ from a planned ‘joint security drill’ to recapture a remote ‘uninhabited’ island in Okinawa province (apparently amid concerns of backlash from Beijing); and chatter of the PBoC gauging demand for reverse repos (instead of flooding us with newly minted Yuan which everyone believes is just the remedy), it seems very clear who the world’s super-power is (militarily and economically). Furthermore, as The Diplomat explains, multi-faceted challenges to the new leadership — possible economic stagnation, social unrest, elite disunity, and a revival of pro-democracy forces— will make it more distracted and less politically capable to maintain discipline on numerous actors now involved in China’s foreign policy. The effects of such accumulated internal woes, while not necessarily aggressive, are certain to be an erratic pattern of behavior that both worries and puzzles China’s neighbors and the rest of the international community.
